Upgrade - 418: Cocktail of Headwinds

Episode Date: August 1, 2022

This week Jason and Myke take a closer look at Apple's weird quarterly results, which reassured Wall Street while not being altogether reassuring. Then automotive expert Sam Abuelsamid joins Jason to talk about what Apple's WWDC 2022 announcement of a new integrated CarPlay might actually mean if and when it arrives late next year.

from relay fm this is upgrade episode 418 today's show is brought to you by sourcegraph bombus and capital one my name is mike hurley i'm joined by j Jason Snell. Hi, Jason. Hi, Mike. Oh, hi, Jason. How are you? I'm good. That was a very, like, mellow introduction. I just, you know, you said hi. I was ready for a hi, Jason Snell, and I was going to do my hi, Mike Hurley, and then you're like, hi, Jason. I'm like, oh, hi, Mike. Keep you guessing. How's it going?

Sure. I have a hashtag Snell Talk question for you. It comes from Sava who wants to know, Jason, do you brew multiple pots of tea with the same tea leaves or do you replace the leaves after every pot of tea? I replace the leaves with every pot of tea. You can do it. They don't taste as good.

They're weaker and sometimes they can be more bitter. And I've decided that if I buy loose tea in bulk, I can afford to just make another pot of tea with fresh leaves. So the old leaves go in the little compost can and the new leaves go in the tea robot and I make another pot of tea. That's how we do it. La-di-da, look at you, you know. Yeah. Yeah. I mean, I used to not, but then it's better this way.

So I just do it. It's fine. Again, I buy it in bulk. It helps to buy it in bulk. I understand when you are in situations where you have limited tea or you've got a tea bag and you just use it. And like, could I use it again? The answer is you can use it again. It's not as good, but you can.

I don't, though, anymore. it's not as good but you can i don't though anymore if you would like to help us open an episode of the show and learn more about jason snell you can always send in tweets oh boy the hashtag snow talk or use question mark snow talk in the relay fm members discord i mean ultimately it's just what this is right like this is people who want to learn more about you yeah i mean it can really be. It's AMA. It's a world's slowest AMA. Yeah, I like that, actually. That's what it is.

Speaking of AMAs, there's something we started doing for RelayFM members. There's a new show called Spotlight. We mentioned it before. You've done an episode, and Christina Warren's done an episode. This is content which is given out to all RelayFM members in the crossover feed.

But you can get access to this and also Upgrade Plus. If you go to getupgradeplus.com, you will get longer episodes of Upgrade with bonus content, just $5 a month or $50 a year. We have some, I don't know, this is interesting for me anyway, and maybe it's interesting for other people. We have a change here on the upgrade program. I am no longer editing the upgrade program. Hmm. Uh, this,

we are now handed over the reins to Jim Metzendorf. Uh, Jim edits a ton of content, but relay FM like rocket with Simone, Brianna, Christina Roboism of Alex and Kathy Mac power usersism of alex and kathy mac power users david and steven and ton more you record it does some of my shows uh analog and remaster for some of them uh i've edited upgrade for a hundred years or eight years seven years seven eight years

since the beginning since episode one yeah and i need to make some changes in my beginning since episode one yeah and i need to make some changes in my schedule and uh i've we're here until very i'm here until very late every monday and so uh jim is going to be doing it if i sound weird today i'm a little emotional about this jason it's a this is quite a complicated thing for me i just went through this because i edited thecomparable for 11 years. And earlier this year, I handed that off to Steven Schepansky. And it is great. So when you came to me and said, I'm thinking of not editing the show anymore, I thought, well, it worked really well for me. It's going to work well for you. It is one of those things. I know I've told this on the show before, but in January, I did my little offsite in where I went to Sonoma for a couple of days.

And I just thought about my business and like big picture stuff instead of the nitty gritty. And one of the things that I realized is that after seven plus years of doing a small business, there are things you do when you start a small business because who else is there to do it? So you do them all. And then seven years pass and you think, why am I still doing this? I can do this, but should I be doing this? And that led me to divest myself of a bunch of tasks that I didn't need to be doing anymore, including editing The Incomparable every week. And it is the best thing.

And so I think this is going to be really good for you. I think reclaiming that time. It's hard because you're giving away your control of the final product, which was hard for me for the incomparable. We talked about your note-taking apparatus that you have to give yourself notes about what we say and when we cross-talk and all of those things that you're going to have to sort of adapt your process there. But it also means that when we're done, you're done with upgrade. And'll tell you i see these incomparable episodes go out on a friday morning now and i like think to myself oh yeah right because it's just it's that one layer of remove where i haven't spent five hours sweating over it instead it's just it just happens and it's

out there and it's a great feeling so good for for you for promoting your work-life balance a little bit. Yeah, it's a weird thing. I don't want to let it go, but I think I need to. It's just very strange. Yeah, well, that's how I felt

about Incomparable. It's the same thing, which is I really don't, I still don't like the fact that I don't have very specific control over exactly what the episode is. And

Steven and Erica, his wife, went on a road trip and I had to edit The Incomparable the other week. And it was one of those things where on the one hand, it was really kind of delightful. I'm like, oh yes, I can take complete control of this episode again. And also every minute I did it, I thought, wow, I don't need to do this anymore. So it'll be good. Also, as an aside, we did a Verticals episode last week, which was because we couldn't record on the Monday. We pre-recorded the Verticals episode where we interviewed people and that was a lot of fun. And we got a lot of really positive feedback about it from people who were very happy that we talked to our three guests and got a lot of feedback of feedback of like oh that was great you guys should do more guests and more guests guests is

a lot of work scheduling guests is work interviewing guests is work it's a lot of extra work however you know what i feel like we might i'm not committing to anything now but i feel like we're more capable of doing something like having more guests on from time to time now that you're not editing the show oh yeah because we one of the reasons we would so seldom have guests on this show uh is because i don't like to edit guest audio yeah no simple answer right there it is much more complicated you know considering the time yeah because it you know it was the issue for me has always been that the edit starts really late.

The edit starts for me kind of maybe around 8 p.m. on a Monday. And if you added a guest in, you've probably doubled the edit time. Especially if you're waiting on audio to come through with some people. Yeah, so it's just like a whole thing. to come through with some people. It can, yeah, so it's just like a whole thing. And so to not have to have potential issues, I would kind of discourage having guests because I just couldn't add it in very often

unless it was all planned out well in advance. But now that's not so much of a concern anymore, which is why we actually have another guest segment later on in this episode. And then we have some more later on in the month and so yeah so that's that's summer of fun though but we will do more i think we'll be able to do more outside of that yeah i think i think it has been something that we've tried to really limit ourselves to sort of those special apple guest opportunities and some summer of fun stuff um and uh maybe we'll do maybe we'll do some more of it

we're definitely going to do more of it this summer and then we'll just see how it goes and how it progresses. But I know it's a big step. And I know that it probably is uncomfortable for you, but I think it's going to be good. And if the show sounds different and there are weird things about it, you know, we're working on it. It's going to be, it's the beginning of a new era on the production side. Hopefully it just doesn't matter and you don't notice and it's all,

and it's all fine. And thank you to Jim. Thanks Jim. Yeah. Uh, and also to finish follow out this week, everyone here at the upgrade program would like to congratulate the Morin family on the birth of their son.

Yes. Dan and Kat had a baby and Dan also published his book the same week. So why not? What a week. If you're going to gonna do both things why not do them at the same time yeah it means i'm all alone over over at six colors like this is the summer of solitude for me over there now yeah you're the one really struggling right now yeah oh yeah it's really about me. Not about a baby, whatever. You know, whatever. But I am blogging alone. The big problem is that Six Colors podcast that members get because that's me and Dan. And I've gotten guests the last two weeks.

I'm not planning that out as much as I should. It's like, geez, what am I going to do this week? Friends, I don't know what I'm going to do this week. No idea. But we'll figure it out. I i'll figure it out i'm waiting for the call up i know it's going to come at some point yeah oh it undoubtedly will like i mean how many people do i even know they're all going to get the call at some point you're gonna have to run on friday yeah rumor? Yeah. Rubber Roundup, Jason Snell. Okay. Got a couple of little things this week all coming from the sheriff himself

across various avenues. The first is an interview, some tidbits from an interview that Mark Gurman did with YouTuber Max Tech, I think has become a bit more prominent recently in our circle, I think, is doing a lot of the thermal tests right yes computers but yeah very successful youtuber but sometimes these people just come into

our like uh remit somehow and this is it um anyway but one of the some of the things mark said apple had an m1 pro mac pro ready so like that was something that they had set. They were ready to go on it, but decided to hold off until M2. I don't know why they made that decision, but I think that was actually the right decision. Mark is now expecting the Mac Pro with an M2

chip in it, or an M2-based chip in it. Not an M2. Can you imagine? The Mac Pro of an M2. It's like, how's your phone? It was now. But no, Not an M2. Can you imagine? The Mac Pro of an M2. It's like, how's your phone? What's now? But no, with an M2 based something. M2 Extreme. M2 Max, maybe.

This is now expected to be announced later this year, shipping sometime in 2023. Fine. Mark Gurman doesn't expect there to be a redesign of the mac mini um just for there to be spec bumps in the future i think that makes a lot of sense considering the way the mac studio looks yeah the redesigned mac mini rumors were about the mac studio so and to

mark german's credit i think he got that right that when he said it was like a new thing that looks like a tall mini mini mac pro right but there were people that were saying it was going to have like plexiglass on the top and all that kind of stuff yeah no those were the weird rumors but i think german did a pretty good job of of zeroing on on the mac studio even though he i think he described it as a being a tall mac mini or a mini mac pro and uh i think he was probably more right than wrong there so yeah sure mac mini. Mac Mini's fine. It doesn't need to be reinvented. And once again, saying that an iMac Pro is currently in active development and he expects it to be available next year sometime.

Sure sounds like the bigger iMac is going to be an iMac Pro, at least in his mind. I think that there's marketing questions there, but I think it's interesting that that's how he refers to it. I mean, we've had this conversation a million times and we'll have it a million times more. I don't know why you would do a bigger iMac and not call it the iMac Pro. Yeah, no, it makes sense, given how they name their products. It's going to be more expensive. It's probably going to have more capability in terms of chips that are available on it. And sure why wouldn't you speaking of products that might get

bigger and potentially called pro the rugged apple watch apple watch extreme as we've called it around here but could be called apple watch pro apparently it's one of the names being suggested in mark's power on newsletter he gave a few more details about this. So we spoke some time ago, whether it was last week or the week before, I don't remember because we pre-recorded, that the rugged Apple Watch would be made of metal, which wasn't what we were expecting. We were thinking we had Casio G-Shock in our minds, right? Cover that thing in silicon. But no, they will be made of metal and mark is now expecting it to be some adjusted formulation of titanium to make it even more

durable yeah see it's the it's the pro pro materials pro watch i'm listening to um after steve the book about uh i thought it was about johnny ive but it's also about tim cook i don't know why i my brain because the marketing of this i think you're right right like all of the excerpts seem to be about johnny ive and also so it's about about the both of them but one of the things they were i just heard a couple of days ago when listening to it they were talking about how they reformulated like formulated their own gold for the apple watch and i also remember and have heard over time that apple because of the apple watch kind of hired and then created their own like metallurgy team and it's like this is a thing for them like they create new formulations

of metals to do what they need them to do yeah they were already i mean i read something at some point that said that apple might have the best collection of people who understand how to use aluminum in the world yeah that they had already and and it makes sense right like they've been basing their computers on aluminum for 12 13 i mean it's it's been a long time now and i've heard that that that is one of the things that they have gotten very good at is exactly what kind of aluminum they want. And then remember, they started boasting about this specific kind of stainless steel they used in the Apple Watch or in the ring around the iPhone Pro. They have metallurgy opinions and so was it surprising that they might do a reformulated

titanium that they feel they can boast about on stage as being extra rugged and resilient i'm not surprised at all mark also said that this apple watch will be a quote good bit bigger so it might only appeal to a subset of customers i wonder what the story is going to be for the size change because like just as i think about it it's like i don't understand why uh a watch for extreme sports needs to be bigger um so i'm intrigued what they're going to say as to why that is i think it's not going to be that complicated i really don't i was having this chat with somebody else the other day um i think i think that if we think of this as Apple Watch Pro and we think of it as a bigger Apple Watch, everything else falls into place, which is

why is it bigger? Well, because we're giving you three different versions now. There's the two smaller versions and then there's the Apple Watch Pro, which is bigger. It has more battery. It has a bigger screen. You can see more stuff. Yay. I really think that that's all the explanation that there's going to be is now we have three sizes of watch and the most expensive one is this this big fancy one with the great materials and let me tell you the story about you know why it's great but i i don't know if there'll be more of a size change than that then that it's a bigger screen and more battery and those are things that people like. I 100% think that you are right there, but I'm just intrigued if they're going to have some other reason that they, you know, maybe there's something that they're going to do in software

where you can see more of the workout or whatever. I don't know. I don't know. I think the thing to keep your eye on, I think as we're all watching this event, when it unfolds in September, you know, presumably like the 6th, maybe the 13th, something like that. Um, I haven't heard a rumor about that yet, but it's always about the same time. The thing to watch is how they talk about the sport component of it versus the just it's an Apple Watch component of it. Because if it's Apple Watch Pro, I think it's still going to have a little bit of a sport narrative to it, but not the only narrative to it. That they're going to boast about, well, what can we do with this battery life? And the answer is, and we made it more

resilient, which is great for people who use it in sports, which they already use the Apple Watch in sports. You could argue that all Apple Watches are kind of sports watches, kind of. And so this is also that. But if they do something like is rumored where they do a wilderness mode or whatever where it goes into extreme battery saving, but it's still doing logging and you can crank it up and crank it down as needed. And the extra battery life allows it to do that. And maybe this is the one that does the, you know, the wacky kind of emergency signal to the satellite and all of that stuff.

There's a story they can tell about that, but I think they have to balance it with not wanting to come across as this is a sports watch because i don't think they want to do that because i think they probably in that envision that a lot of people are going to buy it because they like the most expensive thing and bigger is better and more battery life and and and they they don't want to turn them away like are you an extreme sports enthusiast no well then Well, then you can't buy our expensive watches. I think you're right, actually. Because also, as I'm thinking, you know, for those of us that have been around for long enough, the aluminium one used to be called sport.

It did. Right. And so, like, the reasoning there was, like, it's the cheapest, the lightest, you can ding it the most. It's, you know, like, it's for sports. So it would be strange now to be like, hey, this one's for sports and it's the most expensive one, you know? So I think I'm coming around now, even though I will always miss it if they don't call it extreme

because I think that's funny. But calling it pro is like, hey, if you're an athlete, you can use this. If you work in 26 hour days, you can use this. And it's going hour days you can use this and it's going to protect your back you know you don't have the battery life that you want like maybe just pro as in biggest bestest is probably what they'll go with because that's what they do i think it's the most logical way to approach this especially if it's titanium and is going to look like a big apple watch and not look kind of weird and

different then it's just an addition to the the product line i think that's all it is zach in the discord says apple watch max which could also fill the fulfill the same thing especially if it's going to be physically bigger because then that matches what the iphone uh will be because it's probably i I wonder what they'll... Do you think they'll call the bigger regular one iPhone 14 Max? Yes. So then that Apple Watch Max could work just as nicely? Could be.

Could be. I also wonder how it's going to be positioned in relationship to the other Apple Watches because you could also say we have three sizes of Apple Watch now, and just say that. Probably not. They'll probably differentiate in some way. So yeah, Apple Watch Max could be. But I think sport is probably not on the agenda for this one. An evolution of the current rectangular shape, no flat size. Yeah. This is just going to be a big apple watch with a big screen and a big uh battery and then maybe some features that are enabled like i said i i'm really

i keep coming back to david smith trying to take an apple watch out in the woods for a week yeah and thinking there's a story there's some software that you add and you use the big battery and now you've got a story to tell about it as a thing you can take hiking or whatever. But it's just one part of the story of like, it's also just an Apple Watch. That's nice. And on a redesign, adding in a new watch this year

gives them another year until they need to do a redesign, right? Like they can just be like, hey, we added a new one and they can just keep pushing that redesign off into the distance, which makes me sad. Yep.

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That's about.sourcegraph.com to find out why some of the biggest tech companies in the world use Sourcegraph and to see what it can do for yours. Or just click the link in the show notes to let them know that you heard about them from this show. Our thanks to Sourcegraph for their support of this show and RelayFM. Apple earnings time. Jason Snell. Charts. I know you love it. Charts day. It's big charts day around here. What day was this? Thursday of last week, I think. Yes. Yeah. Yep, that's it.

So let me give some top line reporting and we can break into some of this. $83 billion in revenue. That is up 2% year over year. $19.4 billion in profit. That's down from $21.7 billion this time last year, this quarter last year. iPhone was up 3%. The Mac was down 10%. The iPad was down 2%. Services up 12%. But for the first time, it is down $200 million in revenue from the previous quarter

I want to dig into that in a little bit in a minute wearables also down 8% year over year it's not the first time by the way two years ago they had a sequential drop between Q2 and Q3 so it's it hasn't gone down but it is not the first time

that it's had a little bit of a sequential drop it hasn't done a year over year drop since we've been watching it okay but it did do a sequential drop two years ago at the same time so it seems to be a thing that happens is that q3 is just weaker than q2 for services interesting it's just interesting to see now because it's been multiple years with this just like massive uh just continual growth that was like a step that stuck out to me and i didn't notice that one so thank you for the correction there jason snow it's a very similar one two years ago they were they were 13 year over year up but down sequentially just a little bit i want it will be i'll be keen to see if this continues the way we

would normally expect it to which is to keep going up and it just for some reason, we just ignore this one that goes down. But it stuck out to me as it's been multiple years then, not never, but it's been multiple years since we've had this. And it's one of those things where I kind of can't put my finger on why. So I think they said that part of services, believe it or not, is ad revenue from search ads.

Oh, I do believe it. So I think that they say that that is where some of this came from, is that there was weakness in the ad market. This makes me annoyed because I hadn't considered this. Because did you see last week that they're adding ads more ads in the app store in more places now yes and now i'm expecting that this is in response to that could be that makes me just just stop apple come on i hate ads in the app store i hate it i shouldn't do they they spin it somebody asked them on the call it was It was in my little Macworld piece. I gave some awards out.

I like to occasionally give awards out to analysts for the various attempts they do to make Apple answer their questions, which they don't answer. But I wanted to give Richard Kramer of Areach Research a little gold star, he asked a very pointed question about app. He may be not asked back after this about app tracking transparency and how it was related directly to Apple's own app store search advertising. Right. Because it's it's not a third party ad if we serve it to you ourselves, right? So that's the argument about Apple's policy toward Facebook is that although they talk about privacy being a human right, the other thing they're doing is basically making the only place you can market apps be in the app store and Apple sells all the ads there. And so this was a pointed question, I think a good question. And Tim Cook's response was he read the boilerplate about privacy being a fundamental human right. And then he said, search ads are great for the developers because they can reach people who are looking for apps. That was it. That was all he said. And I think search ads are awful and they're only good for Apple.

good for Apple. And the reason I think they're awful is because it means that if you're a developer, you can't just develop your app. You actually have to take some of the money that you make from your app in order to advertise on the name of your app in order to have your app come up when people search for your app. And I think it's offensive and stupid. And it's one of my least favorite things that apple does is app store ad revenue and yes they are doubling down they have now added if you scroll down in an app's description page not on search and it's down toward the bottom but you literally there are ads down there there's like other apps from these developer this developer and then right below it is basically these are ads probably for their

competitors but then i think the worst that they are adding is they're going to be adding the ability for somebody to have an ad in the today page so and you can kind of and it kind of looks like apple's official content that they make like it's got one of those big squares yeah and it's an ad this just it annoys me because all advertising is advertising and i i really i don't like these two things happening at once i i don't like the way it looks right like i don't like apple kind of kneecapping other companies and then also increasing their own ad opportunities no it's quite a racket i mean i i i'm sure i i'm aware of the arguments for doing app store advertising but fundamentally i i think it is apple applying an additional tax to its own developers and as much

as it boasts about apple Apple will boast about advertising revenue, and it will boast about the money it gives to developers as part of the, you know, and I phrase it that way, I guess on purpose, because it's Apple does sometimes view it as being that they're giving it to developers, the developers earned it, and then Apple took a percentage, and then the rest of it goes to developers. But my point here is, those two things are related, because all that money that they're getting in ad revenue for app advertising, it's coming out of that pot. It's deducted essentially from what the app makers are making. So it's a way for Apple to eat even more into the business of app developers.

And it's because they've got an increasingly captive audience, right? Because marketing your app on Facebook doesn't really work anymore in the era of app tracking transparency. You really have to go to the source, which is Apple. And while that is more private, it also is awfully good for Apple. But anyway, getting back to the topic at hand, this is the Q3. And this is the Q3, for the Q3 2022 results, 49% of the revenue was iPhone, 24% services, 10% wearables, and a Mac and iPad, 9% each. So this was, again, another record-setting quarter for Apple, but it doesn't really feel like one to celebrate.

Right. It's a, I mean, the wall street response seemed to be relief because there's been so much difficulty in the wall in the in the in wall street in the in the stock market in the tech sector of the stock market especially that apple coming out with results that are fine was a relief because they were afraid they were going to be not fine and the fact that the iphone posted a 2% year-over-year gain, you could hear the sighs from Wall Street, right? I was like, oh, because it's the most important product for the most valuable company.

And it didn't take a dive. And they were really relieved. And if you listen on the call, what Tim Cook said was, if you look at the iPhone and try to imagine what are the macroeconomic conditions, what are the headwinds, as they like to say, what are all the problems? Do we see any evidence in the iPhone that there are lots of troubles globally, economically? And he said, there are none. If you just look at the, he says, I'm not saying there aren't. I'm saying that if you were to look at the numbers, you can't see it.

It was just a good iPhone quarter. Other categories, you could see it, but not wearables. He said specifically, like if they feel like the macroeconomic conditions really are what whacked wearables and wearables had its worst quarter in ages. It's been up every quarter year over year for years now, and it was down. But the iPhone did okay. And honestly, so much of how Wall Street views Apple and Apple's business, rightfully so, because it's half or more of Apple's business, it's iPhone. And so if iPhone did okay, they're like, okay, all right, it's going to be okay. iPhone's okay, everybody. It's

okay. So Apple had previously forecast that they would lose somewhere between four to eight billion dollars in sales this quarter for just stuff they couldn't fulfill but it ended up being just shy of that four billion so it was even bad as is typical for them like they they make a a region and then they always perform slightly better i mean they do some sandbagging i I think that this was legit, though. I think that they were surprised when they made their... It's not really a forecast, but when they made their statements three months ago, they were in the midst of or just coming out of shutdowns in Shanghai. There were COVID shutdowns in Shanghai at the factories there. And they were really concerned

about supply. Because again, this is a number, $4 to $8 billion is what they said. It was literally, there's $4 to $8 billion we're going to leave on the table where people want to buy our products and we can't sell them products because we don't have them in our hands to give them. And what ends up happening, I thought one of the other telling moments in the analyst call afterward is, so the Mac gets assembled there. The bulk of Macs are assembled in Shanghai. So unlike other Apple products that are put together in other places in China, we think of China as a monolith, but it's not. There are factories in all sorts of different places.

Most Mac assembly is in Shanghai. And the Shanghai shutdowns happened is really bad for Apple, really kind of stopped Mac production. We all know it's been, you order a Mac the last few months, it's been like, good luck, you'll get it in two months or three months. It sounds like what happened is that those things have started to resolve and they resolve faster maybe than Apple had anticipated when they made the $4 to $8 billion prediction. And this all comes out of a statement that Tim Cook made when somebody said, geez, the Mac had a really good run there, but now it's down 10% this quarter.

What's going on? And Tim Cook's response was something like, oh, you should have seen it before. We were really happy to get it to 10%. So apparently the Mac was really down. And then at the very end, they kind of pulled it out. And I think that's probably where we ended up under $4 billion in terms of stuff we left on the table. I think that maybe is where it came from, is that the Mac bounced back a little bit faster than they had feared.

And so what a way to spin a 10% down year-over-year number for the Mac is to basically say, look, this is not about Mac demand. This is entirely about Mac supply. And somebody said, well, what's the demand like? And they're like, can't measure demand if you don't have any supply. Like we literally couldn't even, couldn't even tell you, we're just guessing. So, um, so I wouldn't say it was a bad quarter from the Mac in that way, because I think that, that, uh, people wanted to buy Macs and they just couldn't. And then the only question is, did they lose those people? Did those people not buy a Mac and buy something else instead? Or are they just in the queue waiting for their Mac to ship? CFO Luca Maestri created a great band name, Cocktail of Headwinds. That was how Luca described the various issues. the cocktail of headwinds described the various issues it's quite a mixed metaphor cocktail of headwinds how do you put wind in a cocktail and the ingredients of the cocktail it's uh year over

year sales in russia because there's no sales in russia anymore they kept referring to it as like the situation in russia or whatever but it's like they shut down in russia um so that's one uh it is supply chain but that's broken in two it's the factory assembly supply chain stuff that they dealt with that we just talked about and also the ongoing silicon shortage as they call it or as we like to call it here legacy nodes legacy those legacy nodes they're just out there being legacy nodes and it's sometimes hard to get that bluetooth chip that you want or that wi-fi chip that you want or whatever it is that's just a not interesting

piece of silicon but they're hard to come by right now so those are part of the headwinds foreign exchange is a headwind the dollar is very strong right now you may have noticed this mike dollar's very strong right now yeah i got i got a i got a pay bump yeah it's nice nice for you um for me it's bad for apple in the sense that it makes apple's products either more expensive elsewhere or less profitable i wouldn't say it's bad like what i will say yes i'm sure that's a thing for them i would argue that apple way over adjusts sometimes like some of the product prices, when you do the pound to dollar conversion, they are making good money.

I agree, but the point is that when the dollar gets stronger, that good money becomes less good. Yeah, but they just adjust it, Jason. They don't worry about that. This is exactly what I'm saying. Either they adjust their prices in market, which makes the product less attractive, or they're eating profit. And those are their choices. So what they do is they do stuff like they hedge. They buy a bunch of foreign currency so that if the bad stuff goes up, their other stuff goes down.

Or reverse, if the bad stuff goes down, their stuff goes up. And they kind of level it out. They're making a bet on foreign currency basically to just counteract the effects but foreign exchange is a headwind it's in the cocktail and they said it could be as much as like five billion dollars difference to their bottom line next quarter because the dollar is so strong right now and if you're if you're an american company trying to sell products overseas a strong dollar is not the best for you so there yes, they're doing okay, but it is a headwind, right? Because it makes everything a little more difficult because your

product is either more expensive or less profitable. And those aren't good. Those aren't what companies want. And of course, you know, talking about the demand side, they are not aware of the fact right now as if inflation or what do we call it economic downturn is potentially affecting the demand of some of these products right because they can't supply them anyway so they don't even know they don't know right if you saw flagging interest in a macbook air or something like that you would have to have macbook airs to sell otherwise you can't you can't measure that and they're only coming back now to being able to do that. I looked at it, I priced out a MacBook Air today, a kind of middling spec

end of August, before you'd get it. Apple is expecting less supply constraints in the coming quarter, which would be Q4, and that won't include iphones will it uh it will probably only include a very small amount it depends on when they ship but a very small it could include the first orders right it could like the pre-orders depends on when they ship yeah when that quarter closes because that quarter will close in late sept. So probably not a lot. A little bit, but not a lot. And then

the rest of them go into the holiday quarter. Into the holidays. Yeah. Okay. So it could. But what it will include is MacBook Airs, right? Because they're not in this. They missed the Q3 quarter we're talking about. Okay.

Tim Cook told Emily Chang of Bloomberg that Apple is going to be deliberate with spending with the threat of recession looming, but Apple believes in investing through downturns, which I guess you can do if you have all the money. Well, that is a classic Apple line. And it's also, I mean, this is the good investment advice, which is when the stocks go down, if you've got the ability, buy more stock because you're supposed to buy it when it's low, right? And how do you beat your competitors as well? If they're all tightening their belts during the downturn and you've got a lot of cash laying around, you can hire those people and get ahead on the next product cycle and all your competitors

have slowed down and you um are are uh are not i i feel like this is all a an act i feel like this is tim cook wanting to seem like he's responsible for wall street but what they're not saying is that they're laying people off they're saying that they'll be deliberate with hiring and maybe they won't expand as fast. I saw a story that said like Apple- I didn't see layoffs, but I've seen hiring freezes. Yeah, Apple has been increasing headcount by a lot

and maybe they won't do that. I still don't entirely buy that because one, I think it's kind of dumb because Apple has lots of money and it's not like Apple, I mean, Apple should be investing through the downturn. This is when you go for the jugular of your competitors. Like, we got all the money.

We can just sail right through this. So I think it's walking a line of like wanting to be responsible and seem responsible, but also not missing an opportunity. So I'm sure in key areas, they are going to keep hiring as they need to. But maybe in less key areas, they'll slow it down and that's fine. There are a lot of, just in tech right now, there are a lot of company acquisitions happening. So there could be some of that kind of stuff. Apple makes lots of small acquisitions and this is a time to do that. From time to time, as they say.

Actually, that was another little tea leaf reading thing that happened, is they get asked the question about acquisitions all the time. And this time, they got asked that question. And his response was a little different. He was sort of like,

well, you know, we look at stuff big and little, and we continue to do that. It was this weirdly, like, way more noncommittal

than we usually get. And maybe, maybe you know tim was just in a mood maybe he was mad to be there but i definitely saw or maybe he was just feeling feeling fine feeling calm and so he's like yeah whatever but i definitely saw several people on twitter who are like wait a second is that did other people hear what i heard and it's like i heard the tone difference it might not mean anything but if you're reading the tea leaves, you got to at least consider the possibility that maybe what he was saying is, well, maybe what he's saying is, yeah, we are or have seriously considered larger and larger acquisitions. Because that's the other thing they could do, right? who Apple can swallow that normally would be too expensive, but their stock took a hit,

like, I mean, Netflix, they could do it. Please, can we not go back to... I know. I don't want to go back there, but that's the thing. And I think maybe this is the answer, is maybe Apple doesn't want to go back there either,

but you're Apple, you got all the money, Netflix takes a huge stock hit. You got to look, right? You got to kick the tires and say, well, should we do this? And maybe that's what Tim Cook's tone was. It's not like we don't consider it, but we generally don't do it. And Beats was their big acquisition, right? So I don't know. I'm just saying, I thought that was interesting that they talked about it. And when you talk about investing through a downturn that is one one thing you could potentially see apple doing is if there is a uh a competitor or a good fit that looked too expensive for apple and then

they take they get hammered in their stock guess what that's a good time for apple to come in and and swallow them whole which they could do if they wanted to. Outside of Netflix, is there anyone that you would consider for them? I don't know. I mean, I feel like their entertainment stuff, it's possible that they could buy somebody who's got a big catalog of content and intellectual property. They would have to divest of a lot of legacy stuff like tv stations and stuff so that's out there look at areas where

they're interested where they think that they could add something i mean netflix is a place where they are playing so it's possible if you look at um somebody in the discord mentioned mentioned uh uh peloton like maybe right if they're feeling if they're really kind of feeling Discord mentioned Peloton. Like, maybe, right? If they're really kind of feeling crappy and Apple thinks that there's value to sort of suck them in and turn that into more Apple fitness. Peloton already announced

that they're going to outsource the making of the bikes too. So you could literally turn it into a service business and work with partners and walk away. I'm not sure Peloton. I don't think Apple Peloton makes a good fit. I think Amazon Peloton is a better fit or Google.

Yeah. Oh, for sure. Let me just put it this way. I don't think anything's a good fit for Apple. I really don't. I don't think anything's a good fit for Apple because Apple is so specific. Somebody in a, I mean, Joe Steele mentioned Param steel mentioned paramount it's like yes i think that

paramount or nbc universal or something like that where it's like somebody just wants to unload or sell and apple will write a big check although i think i think apple's right now content to write big checks for sports rights and other stuff like that just content in general i don't think they need to buy catalogs i think they're happy just bidding a lot of money for movies and TV shows. Right. The only thing would come if they wanted to franchise, if they wanted to own some franchises and stuff like that. But they don't want to own CBS, right? They don't want that.

They don't want a TV network. So I don't know about that. And yeah, Peloton or Netflix, would they be good fits at Apple? I don't think they would be i'll throw in another one that somebody mentioned in the discord that i think is actually might be a better fit for apple i don't think it'll ever happen but uh it's tesla like if apple really wants to be in cars i was gonna say a car company right like yeah yeah or rivian yeah you know so especially if their stock is really down because the the advantage is well Polestar is owned by a traditional car company, though. I didn't know that.

But Tesla and Rivian are kind of out there on their own. And, again, if the purchase price was right because that stock got hammered for some reason and Apple wants to be in cars, well, guess what? Like, there are already two, at least, tech startup, maybe three, if you throw in Lucid tech startup. Apple's former PR head is the PR head at Lucid, by the way. Natalie, wow, she changed her name back to her maiden name. Anyway, she's there, so she knows all about it. You could do something like that, right? Where Project Titan's like, oh, I don't know. It's like, well, there are other companies that are actually selling cars today that are kind of Apple-y, kind of, but doing their own thing that you could bring in if you really wanted to do that. But I think this is the fallacy of Apple acquisition talk, which is most of them are bad ideas.

I'm sure they all get thrown around in Tim Cook's office, and then they go, nah, and then they move on. And then what Apple really prefers to do is those strategic buyouts, but never say never, right? Like if there is, everything's got a price, right? I am sure, I'm sure there's a stock price at which Apple would say, maybe we should buy Netflix or Tesla or whoever, right? I'm sure there is, but it's probably lower than you think it is. Probably Apple is not willing to go as high as you think because the cost of integration is really high. Apple has a very specific culture.

Apple's really not, you know, has very rarely played that kind of game where they like to buy like people and technology that are smart and integrate them into the Apple machine, not just take something off of a retail shelf and say, oh, it's Apple now. I don't want to be that guy because I'm reading a book, but I just wanted to bring this up because it came up in the book, the After Steve book, where they are talking about the Beats acquisition. And that one made a lot of sense because what they wanted was Beats music because Apple was

starting to fall behind and they apparently were trying to build their own streaming music service and it wasn't really getting far enough and tim cook liked beats music and they just wanted that but uh jimmy i have i wanted apple to take all of it because they could get a lot of money out of that and so they just packaged the whole thing up and bought it and then then they got Beats. And it's just like they've been able to, I think they've actually been able to benefit from that quite a lot. And then they also got Beats Music, which they turned into Apple Music. And so for me, I could only ever really imagine them making a very large splashy acquisition with that idea in mind. That's why I don't think Netflix, because I don't think

Apple owning Netflix would really help them in the ways that they want Apple TV to be. Right. And then they would have to be, you know, then they would be running

the Netflix business. Which I don't think they'll want to do. I don't think is necessary. I agree. In fact, what you just described sounds much more like an electric car company. Yes.

And that's why they've been trying and trying and trying to do, and they haven't succeeded. And they need a follow-up and they need technology and they don't have it. And you could just pick it up and suddenly you've got a, you've got factories and cars and, and a technology stack that you can keep or throw away as you see fit. So Polestar, by the way,

was owned entirely by Volvo and they took it public. So I'm sure Volvo still has very close ties and owns a lot of it, but okay, we'll throw that on the list. That's fine. But like that, something like that is, I don't know.

I mean, we're gonna, our next segment is all about CarPlay and Apple's ambitions in the auto. But I will throw that out there just as an aside that if there's any place I could see Apple making a big high profile acquisition, it is cars just because I think there are some car companies out there

that are kind of independent and sort of what Apple's trying to do and that Apple might use as a shortcut to get where it wants to go. I'm not saying it's likely. I'm just saying that maybe that's a better fit than something like Netflix, which, again, I feel like if Netflix is down in the dumps, Apple looks at it just to say, well, should we? But I don't see why they would. This episode of Upgrade is brought to you by Bombus. Bombus' mission is simple, to make the most comfortable clothes ever and match every item sold of an equal item donated. So when you buy Bombus, you are giving to someone in need.

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They're really well made, and I love that they have this kind of padding at the back on the ankle. It works really well as somewhere to pull your socks up when you're putting them on. But then it also keeps things really comfortable throughout the day. My shoes don't rub on my ankles. I love it. It's fantastic. Go to bombas.com upgrade and you will get 20% of your first purchase. That's bombas.com upgrade for 20% off. That's. That's B-O-M-B-A-S dot com slash upgrade for 20% off. That's B-O-M-B-A-S dot com slash upgrade. Our thanks to Bombas for the support of this show and all of RelayFM. All right, it is time for an upgrade summer of fun vertical about CarPlay. And joining me now is Sam Abouelsamid, who is the host of the Wheel Bearings podcast and somebody who knows a lot about the auto industry.

Sam, welcome. Thank you, Jason. It's a pleasure to be here with you today. It's good. You've been listening to my various podcasts and sending me emails, and we've talked about this stuff. And I wanted to just get you on upgrade to talk about all the CarPlay things that Apple dropped at WWDC, which are almost like science fiction, right? It's like, eventually, at the end of next year, you might start to see cars with whatever this thing is that they didn't really even give a name other than to say it's next generation CarPlay. It's kind of interesting. I guess the timeframes when you're talking about the auto industry are a little bit like that, right? They're more out there than maybe the tech industry is used to. Yeah. One of the big issues with anything

automotive is safety concerns. Compared to a consumer electronics device like a smartphone or a tablet, you have to factor in safety validation for a lot of things because when things go wrong, the consequences of mistakes can be life or death. You know, rarely if you're, you know, if Instagram crashes on you, will it result in you dying? Or at least hopefully. But, you know, if things go wrong with software in a car, the consequences can be very severe. And so they do tend to spend more time on safety validation. And especially when you're looking at something like this new version of CarPlay, there's also regulatory concerns, particularly around the instrument cluster. generation of carplay is going to show it's going to be able to basically control the car and also show status live from the car which obviously modern carplay doesn't really do that right modern carplay is just sort of a phone interface not a car interface if that makes sense and and this is something something very different um what we'll start with what was your first reaction when you saw Apple doing

this? Were you thinking, this is interesting? Were you skeptical of it? I mean, it's so far out there that we have lots of time to form opinions about what they dropped in June. Yeah, both really interesting and some skepticism, particularly as I read what little information they actually provided and rewatched the video, because they haven't actually told us a whole lot. But there are a couple of important details in what they did say. One is the focus that this is still running on your device, and this is where the skepticism comes from. skepticism comes from. The idea of redesigning the interface to enable it to work across different display form factors in the car is an important thing because what we're seeing now as we get

into new vehicles is a lot more variation in the form factor. It used to be that you would have an instrument cluster directly in front of the driver, And then somewhere in the middle of the car, you would have a display screen. Modern vehicles, it's usually a touchscreen, but not always. And one rectangular, usually landscape display in the middle that was used for your infotainment system. And that's where CarPlay and much of what I'm about to say also applies to Android Auto. They project information on there as well as whatever is built into the car is also displayed on there. And the thing to remember about both CarPlay and Android Auto as opposed to Android Automotive, which is something different, is that the way you can think about these two systems is they act sort of like device driver layers. Because different vehicles, you know, a lot of vehicles today have touchscreens, but not all of them. Some of them have some sort of central control knob.

Some of them have gesture controls. You know, you've got a variety of different interface systems. of different interface systems. And what CarPlay and Android Auto do is they translate whatever the control signals are from the driver, whatever bit of hardware they have, whether it's a touch interface or a touchpad or a mouse-like device, into a common set of signals that the phone understands.

And that interfaces with the apps on the phone. And then the phone projects back what is going to be displayed on the screen. So it acts as that intermediary. And my understanding of what little they've said so far, and I don't know if you, from any of the conversations you've had with Apple, they haven't responded to my inquiries. But if they've told you anything different, it's that this next generation is still a smartphone projection system. This same type of approach, but tailored to be able to reformat itself to different display interfaces., to project onto the instrument cluster,

which is more and more often now a digital, you know, an LCD display. And to portrait displays and landscape displays. And even the one, you know, one of the renders they showed that showed a, you know, pillar-to-pillar display across the entire dashboard. Which is funny, listening to a lot of different podcasts, I heard a lot of people express skepticism about that one. Something like that's never going to happen. Well, actually, that's actually already in production now in China on the new

Lincoln Zephyr sedan, and it's coming to other vehicles as well. So that type of display does exist today and will be coming to more vehicles. Yeah. So one of the things about the, I had some theories and I'm curious what your theories are, but I think we should at least touch on Android Automotive for people who don't know about it and the differences there. And the way I got to thinking about Android Automotive and whether Apple would ever consider doing something like that is when I started to think about the fact that you can't ship a car without a brain and say, bring your own brain, bring your own smartphone, right? You can't do it. And not just the low level stuff, but like you can't say this car has no interface unless you bring a smartphone, whether it's a rental car or what, like you need to be able to turn it on and use it. And something needs to run that. And if you've got a big touchscreen on, or even just an,

just a display, that's not a touch interface, all that stuff has to be driven by from somewhere. And what Google did is build Android Automotive, which is this lower level operating system that is integrated into the car. It doesn't come with your phone, right? It's in the car. And that is a different approach. That's the bottom up, I guess, a little bit more than top down approach that Apple has done and that Google has done with Android Auto. Have I summarized it right? Like what Android Automotive is? Yeah. So today, most cars on the road built in the last decade use either BlackBerry's QNX or some flavor of Linux to power their infotainment systems and also instrument clusters.

And these are generally set up as real-time operating systems, especially for the cluster. For the cluster, it has to be a real-time operating system. So that means that everything is tied to time slices. You don't need that necessarily for the infotainment. If something happens a few milliseconds or 100 milliseconds or a second later, it doesn't matter so much for what's on that center screen. But the stuff that's in front of you, that stuff has to be real- time. And this is where the regulatory part comes in because there are certain requirements for things that have to be displayed. Like for example, alert warning, you know, diagnostic warning lamps. You know, when you start up your car today,

you know, you'll see a bunch of lamps that will flash on for a couple of seconds. That's part of the power on self-test. And then assuming everything's okay, then most of those go out. And then when a problem is detected in some system in the vehicle, then it'll turn on one or more of those lamps and say, hey, here's what's going on. That same sort of stuff, that stuff is mandated by law. And so that has to be there. So there has to be, as you said, at least a minimal interface to begin with. You cannot assume that there is going to be any particular device that a driver is going to bring along and plug into the car.

Right. And if I want to turn on my windshield wipers, right, I can't be like, sorry, that's a feature only available with a smartphone, right? Exactly. You can't do it. So there has to be something there. And so what Google did is say, all right, can we get in there? I want to mention, by the way, you mentioned QNX and BlackBerry. And people may laugh a little bit at BlackBerry.

You know, it's the old times. QNX, yeah, it's absolutely used in this. And I'll just point out, Apple set up a whole, this is a story people may forget. Apple set up a whole building next door to QNX. And they didn't ever talk about why. And everybody assumes it's Project Titan, the car project. But Apple definitely at some point was very much interested in people who had experience building real-time operating systems. Whether they still have those people, who knows?

The Project Titan stuff has gone through 80 different iterations. But I'm just saying, it's not impossible that Apple has had a program to build its own version of a real-time operating system for cars at some point. Whether they have it,

whether they did it, whether they gave up, I have no idea. But they set up an office in Canada right next to QNX where they had the QNX people working. So it's definitely been on their radar at least, even if it's, I mean, who knows about today, but it's definitely been out there. Yeah, no, absolutely. And QNX, you know, long before it was owned by BlackBerry, or I think it was still called Research in Motion when they purchased it, when they acquired it. QNX goes way back, and it was designed from the ground up as a super reliable and secure

operating, real-time operating system. So it's used in all kinds of applications that go well beyond consumer electronics devices or cars. It's used in things like nuclear reactors and all kinds of other stuff where reliability is paramount. Where you can't have a bad acting app sort of prevent your speedometer from updating or your nuclear reactor from working properly. Yeah, it's important. It's kind of important. So what do you think? Knowing what we know about Apple, and we don't know everything, right? Because we don't know about Project Titan, and we don't know what their

ultimate goal is, and we don't know what all they? Because we don't know about Project Titan, and we don't know what their ultimate goal is, and we don't know what all they've tried and what they've ruled out. But I have to say, when I looked at this, I thought, are they going to do their own version of Android Auto? And Android Auto is open source, and you can just take it and walk away with it and do stuff with it, and it's a very Google-y kind of thing, and I can't envision Apple ever doing that.

I don't know. Can you envision Apple going to automakers and saying well you know we're not going to let you take the code you know take all or maybe some of the source code but it's not open source but like but we're going to go and say why don't why don't you use our thing instead because our thing is nicer and it still does all the things that android Automotive does. Is that even plausible? I think it's plausible, but I think it's unlikely. And I'll tell you why. The thing, one of the things that they talked about during the presentation was they brought up this statistic that 79% of new car buyers insist on having Apple CarPlay in their vehicles. And that is true up to a point.

What it's implying is that new car, yes, the reality is most of the people that buy new cars probably do want CarPlay. But you also have to consider the fact that the vast majority of people don't actually buy new cars. Most people never buy a new car in their lifespan. Most people only buy used cars. And used car sales outnumber new car sales every year by about three to four to one. And when you look downstream at the market, once you get past the new car buyers, used car buyers are probably, you know, more likely to use an Android device, you know, because they're, you know, they're more concerned

about how much they're spending. And, you know, let's be honest, I'm an Android user, but I know that, you know, cost is a factor and is one of the main factors in why a lot of people use Android. It's, you know, it's not necessarily my main factor, but for a lot of people it is. And they still want to be able to have this kind of capability. And for automakers, yes, they want to be able to sell those new cars to people that want to use iPhones, but they also are concerned about the used car buyers because that impacts what we call the residual value of the car, the resale value of the car. Once the car gets sold, once the new car, the original owner trades it in or sells it, it's going to be bought by somebody else. That person may very well want to use Android Auto.

very well want to use android auto and so if they if they did a full-blown operating system like android automotive if apple did this it would really need to support android auto yeah as well 100 i agree because yeah right you know because if you if it doesn't then that's going to have an impact on residual values which impacts the the automakers in terms of how they can do their lease pricing, for example. Because that's how they figure out your payments for a lease. Because they're knowing the residual value they get back when they put that in a fleet, sell it to CarMax or whatever they need to do after the lease is over. Right. or whatever they need to do after the lease is over. Right.

And I have a hard time believing that Apple would want to support Android Auto on their fancy new operating system. To be fair, Android Automotive does support CarPlay. So I feel like almost there's this universal player thing, which is attaching it to a brain. And that's a great open question. Is Apple, if Apple's going to do this and get car makers to sign on, they got to support Android Auto. I think they would. If that was the only issue, I think they'd be like, it's fine.

It's going to be one of those typical Apple things where it's going to be like, well, it's better with an iPhone. But sure, sure, you can use your Android phone, but it's better with an iPhonehone but sure sure you can use your android phone but it's better with an iphone of course and you should have that all right so so possible but not necessarily super plausible i had a thought which which is like another way where apple could do this which is theming which is like okay apple's showing us a bunch of stuff and they said, oh, you've got all these different controls you can use. And I kept thinking, like, is it all CarPlay or is there a scenario here where Apple basically is going to have its onboard iPhone brain? to have sort of compatible themes that will make it seem like a seamless whole, even though it's actually kind of not.

That was just, I was trying to think like, how else could you do this? And that was one of the thoughts I had is like, it's like, oh, I know that that looks, oh, look, I change it here and it changes it there. It's like, yeah, but is that still CarPlay or is it using the different CarPlay theme that the car maker has installed on their real-time operating system?

Yeah, no, the theming is absolutely a possibility. And actually, that's more plausible, I think, than some of the other things. Because even today, a lot of automakers already provide the ability to select different themes for your instrument cluster. already provide the ability to select different themes for your instrument cluster. And when you go through the drive modes, for example, and you go through your eco mode or your normal or comfort mode or your sport mode, you'll see the instrument cluster completely change the way it looks with different color schemes and everything. So I can definitely see a world where this next generation of CarPlay projects different themes that would integrate with whatever OS the automaker is running.

So all the stuff that's in the cluster is still coming directly from the car. It doesn't have to go back through the phone and then back into the car again. through the phone and then back into the car again. But it's using the phone to figure out what is, for lack of a better term, you know, what is the style sheet we want to apply to this data? And so that I think is a real plausible scenario. Because, I mean, obviously this is not the kind of thing where Apple is going to roll in and say, oh, we've hacked into your system and replaced it right like these are all like we're working with the car makers we're

going to have partners here so this is i'm glad that you think that this is a possibility because that was that was when i was getting into my conspiracy theories about this that was kind of where i ended up is sure it could be project tit Titan and it could be a real-time operating system. I mean, it's possible, but you could do this by making partnerships with automakers and having something like theming and maybe even a special kind of, depending on what operating system they're using and that this is a year out, year plus out, some kind of a data channel or a back channel or something where there's special stuff that the iPhone can pass on to whatever operating system is running. Maybe there's some sort of a, I don't know a lot about those RTOSs, but like a plugin architecture

or a version that has the ability to communicate with the iPhone at a deeper level and give it more detail and have the iPhone send things to it, including themes and all of that, where it's more like we're CarPlay 2.0 or whatever this is, CarPlay Advanced is, you know, more tightly integrated with the car's existing real-time operating system if it's a partner that has worked with Apple on that. If it's a partner that has worked with Apple on that. And the advantage of that for the carmaker is they look good working with Apple without having to give up that part of their car to Apple because it opens up that can of worms of like, well, then what does it look like when the Apple product isn't there? Is it super generic? What about Android? Is that the most plausible scenario of what Apple is not describing when they show this and don't tell us what's happening? Is that the most plausible scenario?

I think so. And to give you an example of how that might work, last fall, GM announced something that they call Altify, which is their new application platform for vehicles. And it's rolling out next year, starting with the new Chevy Blazer EV. platform for vehicles. And it's rolling out next year, starting with the new Chevy Blazer EV. And essentially what this is, if you know how Android is structured, it's running Linux underneath. And there's this layer, this API layer that, and I think iOS is fairly similar. You've got the kernel underneath, and then there's this layer of APIs that applications can get data from and then send commands to. And this is what GM is doing

as they move to a more centralized computer architecture. Today, vehicles, you know, most vehicles have, you know, anywhere from 50 to 100 or more individual computers scattered around the vehicles for all the different functions, because it's been kind of put together piecemeal over the last 30 or 40 years. And so they're transitioning to consolidating that into a few large compute clusters. And running on this for Altify, it's going to be running on Red Hat Linux underneath with this Altify layer that all the applications, all the stuff

that used to run on all these discrete ECUs is now going to be running on one computer. And instead of those applications directly accessing the sensor data or the actuators, it'll do it by an API call to Altify, which will give the data back, and then it'll send a command back for what to do. And I think this is kind of the way that you might see this next-generation CarPlay implemented, where it has direct access through APIs to vehicle data. It can send through style sheets or themes.

And this could also be how you might do things like, one of the things they talked about was operating your climate control using Siri, or doing other functions, other vehicle functions through Siri. You would use your wake word, and then it would send that request into the Altify layer and execute it that way. Right. It's something like, yeah, setting your thermostat on the touchscreen. Another thing where it could be an overlay that is actually from the car, or it could be that if it's something that doesn't really require the real-time component, that it's just, in the end, it's talking to the car operating system and saying,

you know, what's the current thermostat? And now, like, here's a new setting for you, which sounds, again, why you need partners, right? Because unless there's a big standard, which there could be, but, like, it sounds to me more like the kind of thing where they shake hands and say, okay, we're going to follow your spec, or you're going to follow our spec, or we're going to find a place to do that in common. That Ultify thing is really interesting because that's the idea of GM saying, all right, we need to have a tech strategy that doesn't integrate a bunch of OEM parts. Like for the 21st century, what is our car base? And I mean, so many of the reasons, you know better than everyone, as somebody who is focused on the auto industry, the worst user experiences about cars, at least in my, tell me if I'm right or wrong. I find the worst user experience about cars is all because things aren't integrated properly.

And you end up with the proverbial dashboard with three on-off buttons on it. Oh, it's only going to get better, Jason. Right now, there are cars you can get that you can simultaneously run three different digital voice assistants. Oh, yeah, yeah. Oh, right. That's right. Driving a Ford vehicle right now, you can go out and you can use the built-in voice recognition for a whole bunch of functions. They also now have built-in Alexa voice services.

So you can say, Madam A, please raise the temperature. Or Madam A, please play your favorite band from Amazon Music or whatever. favorite band from Amazon Music or whatever. Or at the same time, I can also just say, hey, G, do many of the same things. And GM cars that have Android Automotive now, I can jump back and forth and use any of the three wake words to do this. And, you know, then, you know, if you're, if you have a, an iPhone plugged in instead into an Android automotive vehicle, now you have a fourth with, with, with Hey Shlomo. Yeah. I mean, I, I guess the, the opposite extreme would be something like Tesla, where they've just decided, which on the one hand, Tesla, what I appreciate about that is the whole widget kind of approach that Tesla has taken where it's like, no, no, no, we're doing this. It's going to be unified.

We're thinking about this from the top down, and it's going to be what it is. The downside of that is, yeah, there aren't three voice assistants on the Tesla. I don't think there are any. But they also refuse. There is some voice rack, but it doesn't work very well right well and and uh and they refuse to use uh android auto or car play which i also find infuriating because uh again i think i think it's a user experience problem on the other side which is like look it's my phone like i having driven a tesla for a couple of weeks last year i have my podcast in overcast and i would like to play them with that interface. And Tesla's like, no,

use Bluetooth. Or I have Apple Music. I was like, well, we got a Spotify app here. You could switch to Spotify for your car. No, I'm not going to do that. So that's a frustration, but at least they have that kind of high level of, you know, we're taking care of everything. Whereas a lot of the cars, it feels very much like, you know, for obvious reasons, it's a, it's been built up over years and years and years. And the whole idea of like, I take this part from over here and I take this part from over there. And it's like,

Oh, now we've got a computer in this part. Well, we've got one in this part too, but they don't really talk to each other. And, and, and that gets back to the thing that I get in my mom's car.

And I, I try to turn off the radio and I turn off the air conditioning because there's two identically sized power buttons right next to each other. But they run completely different systems. That integration is something that's starting to happen. And approaches like Altify and some other manufacturers are doing will help with that by bringing it all together on a common computing platform. And, you know, I think that's going to be a key going forward as we move into this era of electric vehicles. You know, in the past, you know, product differentiation used to come through, you know, the way a car looked,

the way a car handled and rode, the way the engine performed and sounded. And at least, you know, from a ride and handling and powertrain perspective, a lot of that falls away with electrification because all electric motors basically feel the same. And so now they want to find different ways to create some differentiation. And part of that is allowing the user to personalize their experience in the vehicle and by giving them options. You know, the reality is that, yeah, you may have three or four assistants available to you in the vehicle going forward, but you're not, you're probably going to pick one and go with that one. And that's fine. And it, and it works just fine using, using, you know, pick the one that you like and that

works best for you. And I think that's actually a good solution. And that extends to doing things like themes, you know, different graphic schemes and so on. Well, in the end, I mean, this is a tech analysis of it, but I think it works when you talk about user experience in general, which is nobody cares. I know there are people listening to this podcast who do care,

nobody cares i know there are people listening to this podcast who do care but for the for most in most part nobody cares about how that happened they just care care that it happened and so like if you step into a car in 2024 and it's got carplay on the dash and it's got the apple design theme that you chose and it goes it lights up all the dashboard items and you're like, ah, yes, CarPlay is everywhere. It doesn't really matter what the underlying operating system is and whether it's that the map that's in that, that screen that I grabbed from the keynote of like Apple Maps is running right behind the steering wheel, but there's the fact that it's in drive and the miles per hour are on it and like okay well those are actually coming from the real-time operating system and and the map is being sent by apple and being

composited by the operating system and like nobody cares if it feels like when i step into my car oh it's my car it's the way i want it and everything is being run based on my settings on my iphone like that's, or your Android phone. But like, that's, I think that's in the end what matters. And I think it's better not to feel like I'm running three different things in three different screens, right? Like that's awful.

So if, if Apple's initiative here ends up having this kind of integrated feel, that's great. It's just like we need to be realistic that there's not going to be if you don't have a phone and you step into a car you know the valet is going to park your car and it's just like a gray screen like you can't it can't be that so it has to be something else yeah absolutely right what what are the what give me some uh odds of uh how you think this is going to go? What's the, is it gonna, is this going to be a thing that Apple makes a big fanfare about and then it kind of quietly doesn't happen? Or do you think that something more than like a handful of car models is going to happen with Apple and car makers? I think something's definitely going to happen. I've been working in the auto industry for over 30 years as an engineer and a writer and podcaster and an analyst., this idea we've moved from, you know, we've had software in cars since the 1970s.

I was working on software in the early 90s for ABS and traction control. You know, we were writing code in Intel Assembler for an ADC-196 microcontroller. Boy, was that fun. And we've gone from software enabled to software defined software-defined. And this idea that I talked about with customizing the user experience and being able to do things, having a base set of hardware and adding software to create new experiences or new functionality, I think is really fascinating. And it's going to be an interesting time. And it's going to be a challenging time for a lot of people too, especially as you've got companies that want to start charging you a monthly subscription for heated seats.

We don't need to go down that path right now. Yeah, tech ruins everything, doesn't it? Hell yeah. Well, thank you so much for being on Upgrade as a vertical guest. My pleasure. In the automotive vertical, a true vertical, not just a sarcastic upgrade vertical, but an actual vertical. I should say, so Principal Analyst for E-Mobility Research with GuideHouse Insights, the Wheelbearings podcast, wheelbearings.media, if you want to check that out. Are those the best places for people to find you?

Yeah. And, you know, just Google my name. You know, I'm on Twitter. I don't do Facebook. I quit Facebook multiple years ago. But yeah, that's probably the best places to find me. All right. Thank you so much for being here. I'm happy to be here. Thanks, Jason. This episode is brought to you by Capital One. Have you ever hit a technical snafu while you're shopping online? Have you ever given a headache by having to fill out payment fields? Has your mobile banking app ever been down when you needed to use it the most? Capital One believes everyone deserves better banking. This means easier access to your money and more security at the same time. That's why Capital One

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with machine learning at the edge. This makes shopping with virtual card numbers smoother and more secure. As technology is based on logistic regression models and running inference in the browser, this will identify payment fields to help make it even easier to use virtual card numbers and faster at the same time. The potential of machine learning is so big. See how Capital One is using machine learning

to create the future of banking. Search machine learning at Capital One. Capital One, what's in your wallet? Our thanks to Capital One for their support of this show and RelayFM. It is time for a hashtag, askupgrade. I have a bunch of questions from upgradians. The first, John, who asks, with the added functionality for the lock screen in iOS 16, do you expect that you'll be changing your background photo more often i did change mine i have used the same image for like two years yeah and it didn't look as good as i wanted and

so i ended up changing to a really good photo i have of my wife adina and i like it way more it just fits way more with the overall aesthetics of what apple's going for, I think. I think that that's really people and buildings, I think. Ideally, what you want to be doing and what I think Apple would like to promote you to do.

I think I'm going to change the picture on my lock screen more often. I wish, and I know that this has changed in the betas but i don't consider the wallpaper behind my home screen the same as my lock screen i think they're very different and they have different purposes and i want like things to appear on the lock screen whereas i want the home screen to be pretty neutral and one of the things that really bothers me about the beta implementation of this feature is that

it constantly wants you to override your your wallpaper when you change your lock screen. And I just want to be able to say no thanks because I kind of like my wallpaper and I don't need it to be changed. It's easier to do that now, but still it makes you do it. And I wish that it did. I hate it. I don't need to go through that every time i change anything i edit a widget and it says great would you like to change your your wallpaper i was like no i if i'm changing my wallpaper fine you can ask me but if i'm editing a widget leave me alone i don't

need to change my background anymore make it stop so so that's where i draw the line but yes i think on the having multiple lock screens with different images on them i think is a lot of fun too and so you like a like apple watch faces you have the ability to switch between them and that that fundamentally will mean that the background pictures change more um and then jay young asks what widgets or complications are you currently using on your iOS 16 lock screens? Oh, I have a scriptable widget that shows my current temperature and conditions at my house. I want to talk, we're going to talk about this in more detail at some point in the next few weeks. I want to get into what you've been up to.

It's early. But yeah, I do have that, which is great. So that's the one right now. I imagine I'll do more. I haven't gotten back to that. But that was the first one where I had a little, there's a scriptable beta where I can actually do widgets that are on the lock screen. now supported in the beta of scriptable and i'm just getting started with that but having the live like temperature the same temperature that's in my menu bar of my mac is now on the lock screen of my iphone and that's awesome so i'm using a bunch obviously you know me the one that goes on top of the time i think it's called inline. It's just text. I'm using Apple's calendar right now. I like it because it tells me the date and my next appointment.

Eventually, I hope to change this to Fantastical. Yeah. I hope that they will also have this same configuration. I like it. I then have weather. I will eventually change this to carrot weather. And that's in the one that's got like a bunch of text. It's like the long rectangle one.

It's given me the current conditions. And I expect that Carrot Weather will let me choose everything that goes there, the same as they do with widgets. And then I'm using a Timery, current time tracker one. And then a pedometer app thing. I'm not saying where because

that's all in beta. The Timery one's in beta but they've spoken about it publicly but I also have my steps being counted as well which I like. That's what I have right now. I don't know what it will look like when I actually get more of these from the apps that I use.

I only have two apps right now that I'm on the base for that have this included in them. One is Timery and then the other is the one that's showing me my steps. So that's what I have right now. And I don't know how much more I'll change except for where I've said like I'll swap things out for the actual apps that I use but well that's that's what I'm waiting for is I'm waiting for the other apps that I used it so that I can browse through those and see if there are ones there that I want to integrate too but I'm also okay at this point I'm also okay with the fact that I can build my own if I need to which is kind of fun yeah but that kind of the kind of information I have there right now is the kind of information that i would want on my lock screen

that's the kind of stuff a calendar thing for sure i'm just i don't want to use apple's calendar stuff so i'm waiting for fantastic al um in the fall and i will definitely add that somewhere a question of where right because that that up by the date is really powerful and yet it's also really limited because it's just that little inline text snippet. I think that for me that's perfect. Because I like that I can also get that added piece of information on the locks read which is the date.

I like that. Sure. I like that being there. Eric asks, I needed to get an M1 iMac for a family member and they are way back ordered or unavailable. Do you think this is supply chain related or do you think there's a pending update?

I think it's supply chain related. I think it's supply chain. It is to be believed they're not even worried about an M2 iMac right now. And maybe, I hope there is an M2 iMac, but I feel like this is supply chain related and factory shutdowns and they were probably prioritizing the laptops and that's why.

Yeah, I think like going back to what we were talking about earlier, clearly the Mac is most impacted right now. And as you said, they're probably, if it's legacy node related, they're probably cannibalizing some chips to go in other places, you know, like. you know like i think yeah i think uh selling a lot of macbook airs that are very very popular is going to take more money off the table than having a bunch of imacs in inventory right so i think that's it i i i mean apple loves all its computers equally but you know if you have to choose getting that new new macbook air out there or prioritizing the imac, I know which one I would choose. And Ramon asks, what do you think about replacing the potential of Apple replacing the 13-inch MacBook Pro with a 12-inch MacBook Pro that has a new design? Perhaps there's some options to put faster chips in, or maybe a better screen, that kind of thing. Don't think Apple's going to do a 12-inch Pro.

12-inch Air, yes. 12-inch Pro, I don't think so. I think smaller, packing more heat into a smaller area, it's just not a thing that they're going to want to do. So I think, I just don't think that's likely. I think that the 14 is the new 13, and the 13 is a weird outlier computer that will go away at some point and then the macbook pro will be the 14 and the 16

um yeah i'm thinking we're more likely to see the removal of that product completely and replaced with more macbook air options uh and bringing the prices down overall over time and then that just reshuffles and that thing disappears. I think that's it. If you would like to send in a question of your own for us to answer on the show, just send out a tweet with the hashtag AskUpgrade

or use question mark AskUpgrade in the Real AFM members Discord. I would like to thank Capital One, Bombas and Sourcegraph for the support of this episode. And of course, thank you for listening and a special thanks to our members

who subscribe to Upgrade Plus. If you want to find Jason online in the meantime, until next week's episode, you can find him at sixcolors.com, theincomparable.com. And Jason hosts many more shows here at Real AFM,

just like I do. You can go to relay.fm slash shows and find a new podcast. Put in your queue. Uh, I am at I Mike, I am Y K E and we'll be back next week until then. Jason snow. Say goodbye.

Goodbye, everybody.