The Rundown - The Real iPhone Story Apple Investors Are Missing | Mark Gurman

Episode Date: September 14, 2025

Apple just unveiled the iPhone 17 lineup, including the all-new iPhone Air, and the reaction from Wall Street was surprisingly muted. But Bloomberg’s Mark Gurman, the most plugged-in Apple reporter in Cupertino, sees it differently. Gurman argues that Apple’s latest strategy is less about chasing AI headlines and more about doing what Apple has always done best: building hardware people actually want.In this conversation, he break downs: Why the new iPhones could boost Apple’s revenue even without a super-cycle.The marketing genius behind the iPhone Air.How Apple’s hardware-first focus is exactly what consumers want.The reality of Apple’s AI and Siri ambitions.The supply chain strategy as tariffs and geopolitics reshape tech manufacturing.This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Public.com/disclosures⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

Welcome back to the rundown interview edition. Today, we are talking to Mark German. Mark German is a tech writer at Bloomberg, and he's known for having all the inside scoops on what is happening at Apple. So as an Apple investor and Apple fanboy, it was awesome chatting with Mark. We talked about the iPhone 17 event,

why Mark thinks that the iPhone super upgrade cycle might not ever happen again. We also get into Apple's plans for AI, their supply chain headache, and some fun questions. like who the next CEO of Apple could be. Mark gave us a name of someone that I had never heard of before. So it was great talking all things Apple with Mark.

Hope you guys, I hope you guys, today we are talking to Mark German, a tech reporter at Bloomberg. He's the most plugged in man at Cooper Tino. Mark has been breaking news about Apple since he was a teenager. Mark, thanks for hopping on the show today. Thanks for having me. Great to be here.

Absolutely. So obviously, big week for Apple. They finally had their iPhone. 17 event. I was pleasantly surprised after watching the event. Curious to hear your takeaways and how quickly did you put in the pre-order for the iPhone air this morning? My iPhone pre-order email confirmation came in at 502 a.m. So pretty quickly, pre-orders open here in California at 5 a.m. So went well for me. I was impressed from the keynote in terms of their focus. I think that the Apple intelligence delay,

and failures a year ago really burned them. And so they're really sticking to the script and going close to the most important things in their keynotes. I mean, they kept it really down the middle with the hardware, really down the middle about design. They didn't do anything controversial. They didn't get into AI or Siri or Apple Intelligence. They didn't get into tariffs or any pricing adjustments of significance. They just focused on the hardware. That's their core competency. look at the 17 Pro and Pro Max, you know, my take is they really just double down on the things that people care most about. I would say there's no bells and whistles in the 17 Pro and Pro Max. It's literally just improving the things people want improvements on. Durability, battery life,

display technology, cameras, design, performance, not overheating. And so they just did what they have to do. And for Apple, I think the best case was them just doing what they needed to do to roll these phones out and get a successful launch at the door. Do you think that the iPhone 17 lineup might lead to like that super upgrade cycle that people thought the iPhone 16 might, you know, after the Apple, after the Apple intelligence stuff that we got last year, everyone's like, oh, the iPhone 16 might be the upgrade super cycle. Do you think that that's in the cards for the 17 or do you think that might happen next year with the potential foldable phone coming? You know, the super cycle in my view was actually a one-time thing. The super cycle came and went.

That was in 2014, 2015. And we haven't really seen a quote-unquote super cycle since then. And I don't anticipate us seeing that again. Just to take a step back, why did we see the super cycle in 2014, 2015? Well, you had the effect of two major, extremely major developments. One, Apple released their first big screen iPhones, the 6 and 6 plus. Remember, by that time, the iPhone screen size at 4 inches was considered pretty minute. Samsung was upending the industry in the phone market with what they called tablets at the time. Apple rolled out the big screen phones and there was a rush of upgraders. That was great for them.

The second thing, this is a little bit more under the radar, but this was perhaps even more important, was they entered China in a big way because they finally were able to reach an agreement with China Mobile, which was at the time China's biggest cellular carrier. And that combination of people buying a bigger phone, holding out for a bigger phone, and obviously the population in China's, you know,

multiple billions, right? So that combination is what created the one and only iPhone super cycle. Since then, we've had successful iPhone launches, right? You can say that the iPhone 12 was a big deal, the iPhone 10 before that was a big deal. But there's no such thing as a repeat because there's no additional market with a billion people that they can tap into for the first time. and there's no sea change as big in the smartphone landscape as big screen phones were a decade ago. Even when they move to foldables next year or release their first foldable next year, I still think the foldable technology is going to be quite niche. I think it's going to come in at north of $2,000 starting price for the foldable iPhone.

So it's going to be compelling, but I don't think it's going to make up the majority or anything close of the phone sales or inspire. the type of upgrades we've seen in the past. But if you're an Apple investor, and I know a lot of Apple investors watch your program, the thing to keep in mind here isn't necessarily the unit sales. That's really not meaningful. But what they've done here is adjusted to revenue being the most important factor. So like when we were talking about iPhone sales 10, 12 years ago,

the data point that we focused on primarily were units, right? And the investment community was just very, very much glued to the units and they weren't really caring about the revenue as much because this was still a product in growth mode. Because the iPhone is no longer a growth product, because the market is saturated, the focus is on revenue. And by releasing a foldable phone, by raising the price essentially of the base phone when they move from the SE to the 16E by $150, by pulling other levers like new storage tiers, And then you have, you know, a tariff impact, which is going to inflate prices.

What you're going to see is a huge jump, I would say, in iPhone ASPs, an overall iPhone revenue for them in the next two or three years. And so from an investment community standpoint, I think that is exciting for investors. Yeah, because I think that's what I've noticed is the iPhone revenue outside of this Q3, which they saw a big jump because of the stimulus they got in China from like the program from the Chinese government. there really hasn't been any noticeable jump or outlier. And so I think the 16 was there was a hope around the 16, oh, the Apple intelligence is going to get a bunch of people to upgrade to it. It didn't happen. Big fat lie. Fairy tale.

Big fat. Absolutely. And I think that caught some people off guard. And I was surprised to see that Apple stock actually dropped after the event. And I wonder if that's just related to the lack of Apple intelligence. Well, okay, not a lot of AI discussion. You know, when they introduced the new AirPods with the Live Translate, you saw stock of Duolingo fall and Apple stock go up because the investment community saw that as an AI feature. And it was certainly a cool demo.

But the reality is they previewed that at WWDC in June as part of iOS 26 and many of the translation features there. So that had been sort of forecast already. And I reported on it like nine months ago. But the reality is that Apple events are sell the news moment. And so that's probably why you saw the stock fall. But I think investors are going to be surprised to see how well these iPhones perform over the holiday season and at the tail end of Q4 and even into the first quarter or the first calendar quarter of 2026. The iPhone design hasn't changed in half a decade. And now they're rolling out two brand new iPhone designs as well as a super compelling baseline $800 iPhone 17.

I would not discount that being a compelling upgrade for people on older models. And so I think these phones are designed to sell, and they will. People don't buy phones because of software features. That's just a fool's errand idea, I think. People buy phones because they want a brand new look and feel, and they want to replace their phone with something more durable, with better battery life or the better screen. And I think these new phones, in terms of their functionality,

hit the nail on the head exactly for what consumers want. So not entirely sure why the investment community is not so ho-hum on these new devices. I feel the same way. I was pretty surprised to see the reaction. That's why I think. I know a lot of tech creators and tech content YouTubers were saying the iPhone air is going to be a flop. My take is after the I, you think it'll be a flop. See, my take was I think it's going to be a better seller than most people are expecting.

And this is anecdotal. after the event my wife's like hey i just saw this pop up on my instagram feed am i am i ready for an upgrade because i'm like this looks really cool she was talking about the iphone air because it because it has like the slick new look and so i was like okay well if this is just happening to normal suburban you know like moms like my wife maybe that could lead to more people kind of wanting to upgrade because it's like a cool new looking phone and like you said people upgrade because it looks different and not necessarily because of like a software upgrade she's like oh this is this looks cool and so like i don't want to get this. And so I thought that was interesting. I agree. It does look cool. What I think is

going to happen is a few things with the iPhone air. One, it's going to get people into Apple stores. It's going to cast the halo effect over the line because that thin in light. It's going to drive people into retail stores and serve as a tremendous marketing engine for the company. And then when consumers, you know, these are not insignificant purchase decisions. These are, you know, $800 to $1,200 purchases, right? When they get down to the brass tax and understand the differences between the different skews, they'll be excited that they came in to see the iPhone air. They'll have enjoyed playing with it. And then they'll go and purchase a baseline 17 or 17 Pro or 17 Pro Max because in my view, it's a much better product.

And it makes just a lot more sense. You don't have the camera issues. You don't have the potential battery life drawbacks. You don't have the single speaker in the earpiece. you don't have if you're international the e-sim-only situation there you get a bit of faster processing on the pro phones so certainly that's one thing that's going to happen it's going to drive people into retail stores two and i think this is the same point you were making it's going to do way better than the iPhone plus models before it and the iPhone mini models before it and so for apple

this device is a complete win. It's going to get people into Apple stores. It's raising ASPs because it's $1,000 versus $900, and they're going to tack on all sorts of accessories on it, right? Battery, the battery standard. And I say battery, you're exactly right. And so it'll do better than the plus in the mini. So the combination of marketing plus doing better than the products it's replacing,

plus the additional revenue, I think it's a home run for Apple. even if this is not a product that 99% of people should buy. This is a nerdy question, but is there a reason why you don't think that they called it like the Air 17? They just called it the iPhone Air and didn't give it like a number moniker? Yeah, I think just from a, again, Apple is a marketing and PR company, right? Name engineer products, they design products, they sell products, they have tech and AI and whatever, but they're a marketing company, right? They can market things better than anyone else. and they create these environments and these naming conventions to make you feel like you need this product and you should have this product, even if it's a waste of $1,000 or a terrible purchase decision.

And I think going just with iPhone Air versus iPhone 17, by the way, I don't think if it's a big difference. But by going with just the iPhone Air name, it's more simple, it's simplicity. It harkens back to the MacBook Air or the iPad Air, and it's just cleaner. The question is, what happens when they come out with the second generation iPhone Air? next year, I would anticipate that they go with iPhone 18 Air, or maybe they just start over and just call it the iPhone Air too, right? So we'll see. You know what it does? It gives them optionality. And if you are a tech company and you're trying to determine which direction you want your business to go, how you're going to shift things, one of the best things you can have in your back pocket is optionality. and, you know, for a marketing standpoint, they're giving themselves that. It may not seem like a big deal, but a lot of people have been asking similar questions.

Yeah. Well, speaking of optionality, I want to pivot a little bit. And now talk more about Apple's AI ambitions or lack of ambitions, right? You just broke a story like just a few minutes before we started talking. Apple is losing another executive from their team. You've also reported that Apple is talking to Google for potentially, for a potential partnership. as well as Anthropic. Mark, you got to give me some hope here, man. I've been an Apple guy for over a decade now. Siri has just been so bad. Tell me they're going to finally figure this out before I turn

50. That's funny. They think they have. Okay. They think they have. They think they've figured out Siri. They're planning to debut an overhauled version of Siri in March. 75% of the new Siri features or features they introduced last year. That includes being able to tap into on-screen personal context to be able to fulfill queries in Siri, which is nice if you want to know like what did Zaid text me a month ago or whatever. you know, that would be able to come up in search results. Then there's like voice-based navigation as well of your phone via Siri. And then the fourth thing, which Apple hasn't announced yet, but I've reported on, is this AI-based web search tool to compete with chat GPT and perplexity.

In addition to that, they rebuilt the underlying infrastructure for Siri using new foundation models. And that's where they're looking to partner potentially with Google or Anthropic, which is to use a white-labeled version of models that they know are more reliable than the Apple models in order to power this thing. And so you should see a bit more reliability. And then in the fall of 2026, they're planning to release a redesigned version of Siri that acts more like a visual co-pilot in your environment, something like Microsoft co-pilot. And then the year after, they're planning to release a conversational version of Siri, something a little bit more akin to Chad GPT voice mode or Gemini voice mode, perplexity voice mode. And that would also include functionality where the assistant, depending on the device you're using it on, in this case it's an Apple home robotics device, could jump into conversation.

So let's say you and I are in the same room having a conversation and we're trying to plan a trip or we're planning to figure out a restaurant for the evening. The voice assistant could chime in and add its point of view, just barging into the conversation. So I do think they have some cool things up their sleeves, but I think limiting the AI ambition, so to speak, to Siri and those types of features, I think is just putting a limit on the power of AI, whereas my sense is that artificial intelligence is going to upend the entire concept of Apple devices, which is the combination of high-end hardware and high-end visual-based software. And so the hardware is going to continue, but AI really should be revamping and reconstructing

the idea of what is an operating system. And I think until Apple does that, they're in a little bit of dangerous term. territory. Do you think they're going to end up making some sort of acquisition? I know there's been reports about potentially perplexity. Anthropic probably doesn't happen anymore because their valuation is crazy. Yeah, their valuations coming up on 200 billion. So you can rule out Anthropic. You know, Apple has so much money, but they had way more money before they started getting their cash back to the shareholders. And so they're probably thinking, like, you know, maybe we should have held back on the buybacks a little bit.

Like, it would be kind of useful to have a spare $100 billion in cash right now to buy someone maybe. So I don't know. They'll figure it out. They've held talks with perplexity. They're not going to buy them. They've held talks with Mistral. They're not going to buy them. So let's see what happens.

You know, they still have some time to figure it out. If they were to announce, like, a deal with Google, like a formal deal or something, I can see the stock just like potentially. I don't think they will. I don't think they will. because basically what's happening here is that Apple has asked Google to create a white labeled version of Gemini models that they can plug in to Siri, right? And so it's not going to be necessarily branded or it won't be branded as a Google product or a Google partnership or a Google integration.

It's just about using, it's basically Apple's paying them. It's like you're hiring someone to do something for you because they're better at doing it than you, right? Like that's what we all do. So it's Apple paying Google to build them a model. Do you think, is there a reason why you think they're going down that route instead of just being like, hey, like we have a partnership with search? Let's do another partnership? They don't, do they just not want to take the L and admit that they're bad at AI? Is it like an optics thing?

I think some of it's an optics thing. I think some of it is that people don't care. I mean, you know, you ask, you know, man on the street, right, to ask 100 people. if they care who makes their AI features or if they just want them to work and everyone's going to tell you they kind of just want them to work. Yeah, that's true.

I also wonder, part of me sometimes thinks, like, maybe we just overrate this AI stuff altogether. It's like, has pixel moved more volumes because of the integration with Gemini? Maybe on like the edges, but like, I don't know if it really has made a huge difference to Google Pixel sales or Samsung sales because they've integrated all these AI features into their phones? I strongly, strongly believe that people are not in any material quantity buying AI features,

or excuse me, buying new products because of AI features. I don't think we're there. I think we're about a year away from people making phone-related purchasing decisions because of artificial intelligence. It's still a little early. So that's probably one reason why Apple's like kind of taking their time, figuring out the landscape and then striking. Well, let me, let's take a step back here. If Apple could invent chat GPT, they would have invented chat cheap tea, right?

To use a famous line from Mark Zuckerberg, or at least from his, the social network movie. And so I think this comes down to they poop the bed here and they're falling into a halfway decent strategy backwards. yeah well i want to i want to talk about supply chains before we before we um finish the the call here apple supply chains huge a huge story this year because of the tariffs you know there's reports that apple is moving some supply chains their production from china to india and then now funny enough like china india is not really looking like a great place to make stuff and because you know the the drama between trump and india um do you think given all this uncertainty is apple Apple going to continue investing in India?

Are they just going to stick with China because they know that they can do it there? What is your take on like Apple's supply chain? And this is the stuff that probably keeps Tim Koch up at night, right? This is the tricky stuff. Yeah, this is the non-fund stuff. This is the tricky stuff. And so what I think is Apple has outlined that the supply chain is basically split into three areas. You have China, which is basically for iPhone, for everywhere but the U.S.

You have India, which is basically iPhone for the U.S. And then you have a combination of Vietnam, Malaysia, Thailand, for things like Apple Watches, Airpods, Homepods, Macs, and some accessories, the lower volume products. And so I think that's the strategy, right? India, South Asia, India, and China. And so let's see what happens right now because the tariffs there's so much uncertainty and there could possibly be this yo-yo effect where it's like you have to move between countries depending on the day of the week, depending on what the Trump tariff is for that day or that hour, right? But something's got to give it at some point. And like the only way to create stability is really just to raise prices so you can offset the movement and the potential margin hit. And so while Apple didn't raise prices other than some.

silent price hikes, meaning the plus being replaced with the air at $100 more, and the 17 Pro starting at $1,100 versus $1,000, but then doubling the storage capacity. I certainly have no inclination that I should rule out price increases next year. I'm talking pre-iPhone 18 iPhone Fold cycle. I'm talking on this generation phone. So something to keep watching. But they have a tariff exemption across the board because, you know, Tim Cook is boys with Trump, gave him that gold-plated thing. So they don't have to pay tariffs as of right now, correct? The exemption that Tim Cook got on tariffs was specific to chips. Okay, okay, okay.

And so the idea was that you have these made in Taiwan processors from TSM into the iPhone. And then when you import the iPhone into the U.S., you pay a tariff on that. And they've gotten an exemption on that because they've created the narrative that they're doing chip production domestically. they haven't gotten a boys with Trump exemption for phones and gadgets themselves. Those, however, are indeed on hold right now while the administration figures out what's best for them and the situation, what have you. But at some point, you have to imagine that hold will release. Even though the tariffs for smartphones and other gadgets aren't in place right now, at some point you have to imagine that those will come back into. place in some fashion.

And so that's what they have to plan around. It's like, okay, we have this exemption for now. We have this relief for now. But then what are our options? What if and when these tariffs come back? Do we raise prices, all those things? Do you think that Apple is ever going to move any sort of production of the iPhone specifically, maybe even some other products to the U.S.

In the next five to ten years? I know it can't happen overnight, but in the next decade maybe? I don't think it'll be, here's what I'll say. Donald Trump is the one pushing this, right? I would say that it's not going to happen while Donald Trump is president. Okay. Okay. But I mean, they still want to kind of diversify.

They don't want their supply chains to be kind of fully relying on all these other countries. I would think maybe they try to diversify as much as they can. Now, what that means is they're diversifying. And so what you'll see is them eventually, you know, right now I said they do like iPhone in India for the U.S. iPhone and China for outside of the U.S. And then they use like Vietnam, Malaysia, Thailand for those tangential products and lower volume products and accessories and whatnot. You know, at some point, they're going to set it up.

And so every country that they manufacture in is basically doing a little bit of everything. Okay. Yeah, that makes sense. I got some couple of lightning round questions for you before we wrap up. You know, one thing that I noticed while watching the Apple event, I was streaming it live on YouTube. I thought that Tim Cook was kind of showing his age a bit, you know? I feel like he looked a little bit, a little bit older than I'm, than like he used to, a little bit less spry. Maybe that was me. Maybe he just had one less cup of coffee. That goes back to like Tim Cook.

He's been the CEO of Apple for 14 years, I think the longest 10-year CEO of Apple. If I was to give you over under five years, Tim Cook remains CEO, are you taking the over or the under? Over. Okay. Okay. So you think he gets past 2030? Yeah. Okay. And and and not much, not much past, but yeah.

Not much. Yeah, okay. Okay. Is there, is there anyone that we should keep in mind as who the next CEO of Apple might be? Is it going to be Craig Federigi at EQ or is it going to be someone that the public doesn't know about yet? There's a guy named John Turnus, who's the senior VP of Hardware Engineering. He's risen through the ranks quite fast over the last several years. And he's responsible. for all Apple hardware and Apple products. And I think it makes a lot of sense to have a product-focused CEO in place to replace an operations-focused CEO.

And so you'll likely see him come in as the replacement unless someone else comes out of left field. He's 50. So he's basically 15 years younger than Tim Cook. And if Tim Cook is there another five years, Ternus can step up and still have a full 10-year window as CEO. So I definitely think that he'll be the guy. Awesome. Well, that's good. That's a name that I'll keep an eye on. I got a couple more questions here just to wrap up.

You know, I call you the Woge or Shams of Apple, with the NBA fans out there, know what I'm talking about here. I'm just curious. You know, I've heard Shams talk about this. I've heard Woj talk about this being like someone who breaks news, who someone who gets scoops. Are you on your phone like 18 hours a day like those guys are? Are you wearing your Apple watch into your shower just to not miss a scoop?

Like what's it like being a scoop guy for the biggest company, one of the biggest companies in the world. It's a lot of work. It's, it's endless. It's a lot of long nights and in early mornings. So it is quite busy. I am tapped into my phone way more than I'd like to be. I'll be honest. That's, that sounds, do you, do you get upset when, like, if another publication out scoops you, where you're like, I was just about to hit the tweet button on this one and then someone else beat me to it by like a minute or like 20 minutes. I don't know. It rarely ever happens, but when it does, it's the worst thing. It's the worst thing. You sound just like Woj and Shamm, man. It's funny. I want to stick with the... I can't handle it.

I can't imagine. I have one more question. I want to ask an NBA question because I know you're a Laker fan, and we're just talking about Woj and Shams. You're a big Laker fan. So, like, with the season coming up, you got Skinny Luca. All right? He seems to be. You seem to be. You're a Laker fan. I'm be motivated. LeBron's still throwing his tantrums, but he's still maybe a top 10, top 15 player potentially. What are your expectations for the Lakers this season? And can the LeBron-Luca thing work or is, are they going to trade LeBron? Like, what is your take here? As a Lakers fan, the only thing I want is a championship. It's the only thing I want is a championship. And so that is my expectation just as it should be there is going into the season. Realistically, they'll be

lucky to make the playoffs. I mean, they need to trade LeBron. They need to. They need to trade. to rebuild and it's time to shift something around. You have Luke on a long-term deal, make some changes. Well, you got Bronny. Don't forget. I think he'll be fine. All right, well, you heard from here. Yeah, I think so, too.

Actually, I think he's going to be, I think he's actually not as bad as all the, all the memes and jokes we're saying. So I'm excited for the NBA season. I'm excited to read all your stuff, Mark. If you guys, if you want to plug anything, you know, I was telling him the intro, you have an awesome newsletter at Bloomberg. Is there anything else you want to plug for the audience? Yeah, please follow me on Twitter at Mark German.

And then we have the PowerOn newsletter at Bloomberg.com slash power on. Thank you all so much. Fantastic newsletter. I read it every time it comes out. So highly recommend it everybody. Mark, thank you again for hopping on the show. Thank you. Well, all right, guys.

Hope you enjoyed that conversation with Mark German. I highly recommend you follow him on Twitter and subscribe to his newsletter called Power On if you want to stay up to date on everything that's happening at Apple. Also, I hope you guys have been enjoying our interview series. We've done like four of these now. And I appreciate all the feedback that everyone has been leaving in the comments. Please keep that feedback coming. Thank you guys again for listening, watching, and commenting. Shout out to Mike and Connor.

For all the work behind the scenes, I will see you guys back here on Monday. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play Ojo, the online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements, instant payouts, and no minimum withdraws. Hey, I just won. Woo-hoo! Feel the fun. Play Ojo.

Honey, forget about the lasagna. Let's celebrate. 19 plus Ontario only. Please play responsibly. Concern about your gambling or that of someone close to you. Call 16-531.2600 or visit Connexonario.ca.ca. The Madamy Holmes bike for brain health supporting Baycrest returns on May 31st for its fifth anniversary

with a new start and finish at the Aga Khan Museum. Join thousands of cyclists as we take over the DVP and Gardner Expressway in support of dementia research and brain health. Riders of all abilities are welcome and both regular bikes and e-bikes can participate. Bring your friends, family, or corporate team

and make an impact. Register today at bikeforbrainhealth.ca.