Upgrade - 458: Weaving on a Thoughtful Basis

Episode Date: May 8, 2023

It's time to analyze Apple's financial results, including a focus on India and some substantial declines for the Mac and iPad. Myke reveals the existence of the Secret Myke Hurley Tip Line. And we dive deep into a conversation about how Apple's embrace of keeping things "on device" isn't necessarily enough to differentiate it from the likes of Google and Meta.

from relay fm this is upgrade episode 458 today's show is brought to you by express vpn and uni pizza ovens my name is mike curly and i'm joined by jason snow hi jason hi mike we're like less than a month away now from wwdc i feel like it's all slotting into place i don't know there's something it's been all kind of amorphous up to now but now suddenly i feel like you know it's it's next week we do this and next week we do that yeah week after we do this and like it's it's all kind of forming now it's more real now i think it's coming yeah but tradition remains and i have a snow talk question for you it comes from ramon and who wants to know jason which are your favorite pizza toppings and do you like to eat pizza crust did we have we not covered this oh of course we have but like, you think everyone that's listening now has been listening for the last five years?

That's not how this works. People dip back into the archive for the pizza supercut that we should make now about all of our conversations about pizza. You could have changed. Your topping choices could have changed. People do change, but my pizza preferences remain the same. Pepperoni has always been my favorite pizza topping. Easy.

Yep. Always, always been, which is funny. Cause like my kids, especially my son is like cheese pizza. He doesn't want any toppings on it at all, which I don't understand at all.

But as a kid, you know, really, I think you're offered two kinds of pizza. It's a little more sophisticated today, but back when I was a kid, there were two kinds of pizza, cheese pizza and pepperoni pizza. And you could order special of stuff, but if you're getting something for kids or you're just getting a slice, your choices are cheese or pepperoni. Those are the choices. And I always liked the pepperoni.

I thought that was great. So in college, you experiment as you do, right? In college, it's a time in your young life when you're like, let's try new things. Let's try different things. Put different things inside our bodies and see how it go, Mike. Working at the college newspaper, we would end up ordering pizza late because we were hungry and working all evening on the newspaper until the early hours of the morning. And it was out of there that, and I don't know who ordered it or if I ordered it and thought it was a funny thing. I think somebody must have ordered it and I just had it. Somebody had a pepperoni with pineapple on it. and I just had it. Somebody had a pepperoni with pineapple on it. And again, formative moments in my young life. I had the pepperoni with the pineapple. You got the salty, slightly spicy pepperoni.

And you got that sweet pineapple flavor. The good texture of cooked pineapple too, I feel like. Yes. I was a changed man, Mike. That was the end of it so since then pepperoni and pineapple which which is funny because i did not it wasn't like i had a hawaiian pizza and said you know this canadian bacon on here this ham uh would be better if it was pineapple or if it would be better if it was pepperoni that's not how i came to it maybe the

person who ordered it came to it that way or maybe the domino's pizza we ordered from did not have uh canadian bacon regardless uh it's a it became my favorite so now that's what i get i like other kinds of pizza though i will say barbecue chicken pizza is really good i know that there's some people out there john syracuse who scoff at barbecue chicken pizza i i kind of love it we were visiting salt lake city uh on our way to the eclipse a few years ago uh we did a road trip to idaho to see the eclipse and um we ate at a it was like a underground pizza bar place uh that i think it was the summer so there was not very many people there but i think uh university of utah uh people go to there so it's like a college pizza place and they had a barbecue chicken pizza with gouda with smoked gouda on it was maybe the best pizza i've ever had like it was

amazing so runner up uh barbecue chicken pizza and if if you're in Salt Lake City, find that college pizza dive because, oh, my God, it was great. Do you eat the crust? Crust strategy. Yeah, I like the crust. Depends on how much I'm eating. If I'm ordering. It also depends on the quality of the pizza. Sure.

Right. I mean, lousy crust is lousy. Yeah. the quality of the pizza and yeah sure right i mean lousy crust is lousy yeah um there are times when i will like we will order a pizza and it's nice and hot now and we're probably not going to take it home or it's like it's personal sized enough that whatever is left you're not going to take home and i will then i will often prioritize the non-crust parts because it'll be like well i'm going to fill up on crust and i'd rather have more of the cheese and sauce please so it varies um at home lauren frequently doesn't eat the crust and occasionally if it's a particularly good dough that i have made i will eat her crust because

that's real good crust and i'm not going for another piece that's husband's prerogative man that's what you get yeah exactly it's i made that crust and now i take it back and i'm gonna eat it uh so yeah yeah sure sometimes sometimes not if you're not if i'm not hungry enough and i i like the cheese the pizza itself is is uh filling enough then uh the crust is the first to go i'll put it that way it's optional but i do like it long time listeners will know that i have always been a fan of pepperoni too and you turn me on to the ways of pineapple pepperoni which i think is the perfect combo for a pizza uh i will say the thing that has changed in my life is if you know something like pineapple is not available to you you want to try something different spicy honey serves a lot of the like

oh interesting the flavor balancing for pepperoni so like pepperoni with like a spicy honey it's very good because it adds a bit of sweet and also adds a bit of spice so i'll add that in there too hot honey a little hot honey yeah the hot honey trend it's very trendy the hot honey but i get it i get it i love honey also so that might be an interesting way to do it i'll i'll keep that in mind i don't know if I've seen a pizza place here that offers hot honey as an option. I should say, I eat other kinds of pizzas. I mean, I don't mind mushrooms, and I don't mind onions,

and I don't mind peppers, and I don't mind other toppings, but I'm never going to prioritize them. I'll have them, right? If like, well, we just got this pizza that's mushroom and onion, I be like okay like fine but i i would not choose that if you're you know you're the pizza although you're gonna you're gonna make the decision plan a poor pepperoni right well i mean depends yeah right do you get one of the beautiful things about pizza is in most settings you choose

what your pizza is right it's only if you're like ordering a slice from a limited supply or if you're like at an event or something where they have pizza and it's already been pre-selected for you for you like to choose the kinds and it's similar to having a slice where it's like sorry buddy these are the kinds of pizza we've got then you know you compromise i would like to thank ramon for sending in this question it's a good question ramon according to the uh our show document i think you've said ramona and roman no i said i said ramon the first time and it sounded like a ramon and it sounded like i added an a but that was an unintentional sound that my mouth made just to be clear thank you ramon and also real-time follow-up from dan moran reporting that the pepper that he has a pizza place near him that has pepperoni and hot honey.

So it has penetrated into the United States. If it's not here already, it will reach me soon. The first place I ever tried this combo was in Portland. Oh, of course it was. Well, all right, then I'll look for it. I'll keep an eye on it. But if there's pineapple, I'm going to choose that instead. So thank you to Raymond sending in. I'm keep an eye on it. But if there's pineapple, I'm going to choose that instead. So thank you to Raymond

for sending in. I'm just covering all bases at this point, Jason. Okay. So send in their question. You can send in a question of your own by going to upgradefeedback.com and send us a Snow Talk question

to open a future episode of the show. I have quite a bit of follow-up today. I have a lot of interesting things that people have written to us via the same feedback form upgradefeedback.com we love we love it we love it i actually have some snell talk feedback david writes in says 160 degrees four question marks four question marks does jason have heat shielding in his mouth maybe my ember mug has a maximum temperature of 145 degrees has jason jailbroken his mug to allow hotter temperatures what is happening here so last

week's snow talk question i asked jason what his preferred uh temperature was for his tea and jason said 160 degrees yes i i don't know about heat shielding is that what the is that what the inside of your mouth is not meant to be, is heat shielding? 160 degrees for me is fine. It's a little bit on the hot side, but the thing is, it doesn't stay there very long. And I think David is right here. I didn't check, but I now have a memory of finding my ideal temperature because the Ember Mug prompted me to find it. And I found it, and then I found out that the Ember Mug doesn't go that high, so I set it to as high as the Ember Mug prompted me to find it. And I found it. And then I found out that the Ember Mug doesn't go that high. So I set it to as high as the Ember Mug goes.

So when I serve myself at 160, what I'm basically getting is I can drink it then and it's really nice and piping hot, but then the Ember Mug won't let it go too far away from that, whatever that high point is, if it's 145. And it's not as good at 145 than it is at 160. But the Ember mug, I mean, like I've got half a cup right now. And if I were not using the Ember mug, it would probably be unpleasantly cool. And instead, it's pretty warm. Yeah.

Joe wrote in and said, Jason asked if watchOS 10 widgets will update without the paired iPhone in range. So the idea of if the widgets get added to the watch, would we have to keep them together to get that information? Right, because that's an issue with some current watch stuff. Joe said, probably this will be the case because since watchOS 9 widget kit complications can make network calls and update without an iPhone. So that was one of the things that changed when they went from WatchKit

to WidgetKit. It says, and regarding stale complication data, so the information being out of date, WidgetKit complications vastly improve this because they can make updates themselves. ClockKit complications relied on the app waking in the background to refresh, which would lead to stale

data when it failed. WidgetKit has been a big improvement to watchOS, and I look forward to see what's next. I just swiped my watch, and I am looking at the weather, which is coming from Carrot Weather. And what it is telling me... There it did. Okay, it did update. I swiped over from a different face and it did update. It was telling me the weather the last time that face was on.

And then after about 20 seconds, it updated. So that's good. That's not bad. That's what I want, right? I just wanted to make an effort to stay updated. So this is great news that WidgetKit's already kind of doing this and the idea. I mean, Apple has been trying very hard to get the watch to stand alone and do things itself because that's what you want, right? You

want to be able to set up your watch using your iPhone if need be. And then if you've got a cellular model, walk away and still have everything work. That's the goal here. So I hope that, I hope it continues because I love having that stuff on there and my biggest frustration with my apple watch is when stuff doesn't update especially when those complications don't update it's very frustrating yes i guess the hope would be that widget kit made a bunch of things better uh just kind of a fundamental layer and you would hope that if they're continuing to push in that direction where it's like it's actual widgets now, maybe it would have gotten even better, right?

Like this is just like the pathway is towards more and more independent data gathering from the watch and more reliable updating. Yeah, in fact, I think what we could probably say is watchOS has been on a path in this direction, but there's a bunch of sort of uh technical debt or or legacy tech technical stuff where there's stuff that's just kind of like from back in the day if not the original apple watch from early in the apple

watch we're so dependent on the iphone and new stuff is pushing the platform in this direction which i think is great like again this is this is what i'm sure this direction, which I think is great. Like, again, this is what I'm sure Apple wants to, but the problem is you've got older apps and things kicking around in the system that maybe preclude some of this. So when we look at reports that say, watch OS X is going to be much more widget forward,

the encouraging way to look at that is by sweeping away the old stuff, but really by bringing the new stuff front and center, you're also motivating every app developer to update. And if all of those widgets are self-updating and can reach out over the network and pull their data and don't have to rely on their app, then the net result is going to be that watchOS doesn't have to rely on the apps on the phone either. And the more of that, the better.

So, you know, I'm just a little hesitant only because I've been using an Apple Watch since the beginning, and it has been a painful process some of the time in terms of data not getting, you know, data getting stale on the watch. But I'm hopeful that this is going to do that. I'm really, I mean, it's funny, Mike, you know, we go years where we're like yeah and watch os i guess i'll get an

update whatever and we've spent the last few weeks really kind of like uh nerding out on on watch os but i think for good reason that this is really encouraging news of uh a rethink of parts of watch os and i can't wait to see it and like and i hope that all my expectation might be stuff like this might get better because they don't they're supporting more modern watches now right if they've been able to start letting go some like the series 3 for example maybe there were some constraints with watch os just because of battery life concerns that like if you're constantly refreshing information it's going to kill the battery so also widget kit is a is something that should be familiar to a lot of developers because they're also using it on iOS.

And so that's another one of those examples of Apple. Again, they have to do it, right? Because they can't invent a new API for everything. They really can't. They have to reuse things in different places. But it's also a huge advantage because they'll be like, oh, widgets on Apple Watch. And everybody who's built widgets on iOS should go,

oh, yeah, okay, great. You already know how to do it. Yeah. I've got a couple of pieces of anonymous feedback, some tips from tipsers. I was listening to Connected last week and was surprised to discover that the Mike Hurley secret, double secret tip line had been established.

And I have two more pieces of anonymous feedback via the mike harley tip line uh you could just get in contact with me find a way you know that's what these two people did enterprising.com will also work it will also work and there is also possible to give anonymous feedback but these people we need to create like a signal account for the show can you even do that i don't know if you can i think the thing about these two pieces of feedback is i know who these two people are but they are submitting oh i see you're you're keeping your they're your anonymous sources no to you but anonymous informants and okay good so informant number one wrote in to say in regards to the journal app

being closer in kind to find my rather than remember we were saying about like oh it's not a social network the journaling app or it's more like in the find my department or something that markham was talking about and talking about what capabilities it may have your devices already track which people you have close by to you regardless of whether you're sharing find my with them This happens through a system called Rapport. R-A-P-P-O-R-T. It's French-like.

The underlying protocol used for many things, such as continuity, handoff, and airplay. Currently, it can detect when a contact's device is nearby, but it doesn't do anything with that information unless you activate airdrop it's completely local and relies on blow a bluetooth low energy and or wi-fi and i confirm

that this person this is how you know if you're in somebody's home and you want to get on their wi-fi and the get the wi-fi network password sharing it works through this rapport system so the idea you know like we were talking about well i'd have to have all of my friends on fine mind to see them in the journal app in theory they could do this so like you know maybe i'm not friends with uh bob and mary and alex right look we're not in fine mind together but if we're hanging out our phones will know that we were together because we share contact information so maybe that is a way that i would then be able to add like oh i was with bob and mary and alex today at the park to my job and i would assume that would end up being like an

opt-in thing of like share your proximity information with other people in your contacts list or something like that well maybe but it's already doing it we didn't opt into it well yeah but it's the it's the logging part of it yeah it's a logging that would really require that right because then then it's then you're i think that that would be how they would build it is like you would say yes sure you know you can share with mike that i was near mike when you know when we were near each other and have it be okay you wouldn't want that if you're like spying on somebody from behind a bush or something that would be less good this is one of those things where like when i read i was like oh of course right this system of course it works right because

like how would airdrop from contacts only work like realistically how does it do that you have to yeah yeah you have to exchange with nearby devices and find the ones that are in your contacts which is fascinating this system exists and that it's all local. Right. I wonder how that works. It must be like that there's a unique, like a hash or something attached to every phone number or Apple ID that it saves maybe in your contacts.

And then when it sees that, it knows that that's a recognized device or something like that. I wonder, I mean, it's got to work that way, right? Because you've got to be able to see the devices around you and know what they are, even if they're not known to you. Yeah, I expect you are broadcasting

your Apple ID information and maybe your phone number, right? Like outwardly. It wouldn't be that though. It would be like a hash of it or something. Yeah, that's what I mean. I don't mean like so clearly, but. So when I add somebody to contacts

in the background, Apple is also downloading their unique kind of like blurb thing that they send out. And then when it sees that, it goes, oh, I actually know that one. Interesting. I hadn't really thought about that, but yeah, they've got to be doing stuff like that. Anyway, that would be sure. I then when it sees that, it goes, oh, I actually know that one. Interesting. I hadn't really thought about that. But yeah, they've got to be doing stuff like that.

Anyway, that would be, sure. I mean, being able to log when you were with friends and have it be kind of magical. Sorry, I guess that's a word Apple would probably use. But the idea there that at the end of the day where you spent the day with friends

to have it say you were with Mike for four hours at this location, and then you can choose what you want to do with that. It's pretty cool. It's like your phone knows that already. But like, do you want to write that down and have it be part of the record or not? That's fun. Because for me, I feel like if they want to make this a feature, they have to find a way to do it. That doesn't mean that I have to become find my friends with all of my friends.

Because I don't think that's going to take off. But this could be the building blocks of that. And for people who would accuse this of being an invasion of privacy, I would say when you're present around other people, is it an invasion of privacy? You're all present around other people. You've decided to be together. Exactly. So the physical proximity is different. It's a log of your physical proximity where you already were proximate.

That's very different than I'm going to make you a find my friend and you're going to see where I am forever or until the end of the day or whatever, right? It's a very different kind of thing you're opting in i mean i know people can do bad behaviors here but like when when you're in the same space as somebody you know you're in the same space as somebody and so it's it's basically a public record i would argue so i don't think it's that weird in fact uh yeah the only way that this works is if you don't have to add everybody to your Find My roster or something like that. Mike Hurley, tip line informant number two, says about Keynote. So someone wrote in to ask if Apple uses Keynote for keynotes.

They wrote in to say, yes, we do use Keynote for keynotes, but it is just one stage in the pipeline. Marketing bring their assets into the keynote app they arrange them the way that they want and export them as a video this is then pulled into final cut or whatever the video team is using and occasionally the marketing team does still request new features that get added to keynote so they can use them in their presentations so it is what we expected it's it's i like that we got this more or less right, which is that they build it in Keynote and then they're doing an export because these final videos are a whole production

and the screen isn't there or what's on it isn't there. It has to be part of the movie production workflow, essentially, for these videos that they do. But it starts life in Keynote, which is cool that it still does that and that they still ask for new features in keynote and that's one of the reasons keynote is so good is because it really gets used by the people who make the make the product and that's yeah that's uh that's good stuff love it thank you secret

informants to the mike hurley tip line very exciting. This one is not from my tip line. Ford CEO Jim Farley. Can you imagine? He just hit me up. Hi, Mike. Ford CEO Jim Farley has told Joanna Stern of the Wall Street Journal that Ford is going to be sticking with CarPlay.

Farley says, 70% of our Ford customers in the US are Apple customers. Why would I go to an Apple customer and say, good luck? In terms of content, we kind of lost that battle 10 years ago. So like, get real with it, because you're not going to make a ton of money on content inside of the vehicle. It's going to be safety, security, partial autonomy, and productivity in our eyes. This is such a great statement. I mean mean yes really you couldn't craft a better statement from an auto executive who seems to actually be in touch with reality than this yeah and whereas gm i think and we've made all these arguments before is not in touch with reality

and that's the part so two things i wanted to focus on here. One is, why would I go to an Apple customer and say, good luck, right? Which is so true, right? Which is, you're used to having this thing, but forget it. You don't get it now. We've decided you don't get it now. It is baffling when Apple customers are such an important part of the new auto market in America. Like, what? auto market in america like what um and then the realism of in terms of content we lost that battle 10 years ago to say what we've been saying which is really like people love their smartphones and

their smartphones are up to date and they've got their stuff on it and their stuff it comes from all sorts of different sources and like don't get between me and my smartphone between me and my stuff and then he says quite quite rightly, okay, one, you're not going to make a ton of money on content inside the vehicle. I think there's a level of realism there that GM doesn't share. GM with its history with things like OnStar, it's like, no, no, no, no, no. We offer them services and we charge them and we get them on an annual plan and we make it impossible to cancel it. And we get in with the like insurance companies to say like give them a break when they pay for our services which is a thing they do by the way uh with on

star is that they have like a deal where if you have on star and you're sending all your safety information back to gm your insurance company will give you a break on your insurance because they're looking at the data coming from your car, it's bananas, right? So I think maybe company culture-wise, GM just isn't there. The GM really does think that they've got to be making a ton of money on content inside the vehicle. And I think Ford looks at this and says, nah, it's not going to happen. And I think it's more realistic that it's not going to happen.

And yet, second, it's going to be safety, security, partial autonomy, and productivity. The stuff that needs to be on the car will be on the car. And then CarPlay is for the other stuff. And that is a really reasonable split to me. The idea that your car stuff is in the car and your entertainment stuff is on your phone. And the best car interfaces are going to have places for both, right? Which is what CarPlay already does, where there's a little entertainment spot,

and then wrapped around it is the car stuff. And I think that's perfectly reasonable. It's refreshing and a little shocking that it's so reasonable from a car industry CEO. It's amazing. This isn't really follow-up i'm just gonna put in follow-up anyway uh apple have launched 20 new games for apple arcade and there are some bangers in here and i just wanted to let people know about some of these games so they've done what they've done before where they've added a bunch of uh existing hits you know games like

limbo and temple run get the plus treatment right limbo plus temple run plus it take old hit games removal and that purchase from them make them compatible for all devices that are currently running and put them on apple arcade and it's just like a fantastic way to bolster the service and like you build like a foundation there's a bunch of just really good games in here like I'm just like scoring through the press release now like just a ton of classics that are in here you know they've got like I said Limbo already Hillclimb Racing

Getting Over It, Farming Simulator is in there if that's your kind of thing so there's a bunch of stuff there but there's also new games they've added a few but I wanted to recommend two that I've started playing and really enjoying. One is Disney Spellstruck. It's just Disney Scrabble.

Ah. It's just good. It's just like a good Scrabble game. And as you're playing it, it's like with a lot of these games, you can see where it was supposed to be in that purchase-focused game. But then Apple were like, hey, why don't you put it in Apple Arcade?

Because you can get these power-ups to help you out, and they just randomly give them to you. It's like, that's not how this is supposed to go. I was supposed to buy those, but it's great. The other one is What the Car, which comes from the same people

who made What the Golf. Oh, man. And it is equally excellent. And I'm going to make a prediction here this could probably be a draft prediction i'm just going to say it now uh the the game company behind what the golf and what the car have made a vr game called what the bat and it's available on oculus and like on quest sorry and it's available on playstation 100 it's going to come to this device because it doesn't this is a game that would work perfectly with hand tracking your hands are bats and you just have to just do things like you're just smashing things so this this team

this company uh clearly has a good relationship um with apple? Because this is now two games that have come to Apple Arcade. And their third game is a VR game, and Apple doesn't have anywhere for that right now. And I'm convinced it's going to come to Apple Arcade when games get added to the headset. I'm frightened to try Cityscape's Sim Builder. Ask my next one to try too.

Because I loved Sim sim city so much and i'm concerned that i will be swallowed whole by cityscapes sim builder but i mean if if this is the last you hear from me know me know that i was i died doing what i love which is apparently playing cityscapes sim builderer. If you try out What the Car and enjoy it, then I recommend you give What the Bat a go too. You haven't went to Quest 2, right? I mean, I love What the Golf. I love What the Golf. It was great. I played the whole thing.

What the Car is incredibly absurd. I think it actually might be more absurd than What the Golf, so it's great. That is hard to believe, but great. Yeah, it is great great and there's a lot of the game so i mike i'm still wasting all of my spare time playing marvel snap because of you so really thanks a lot for ruining my life hey anytime oh god anytime it's it's uh yeah yep yep we also wanted to remind the upgradians that we do have a selection of on-demand t-shirts

always available that you can get at upgradeyourwardrobe.com this is probably a really good time to pick up your draft shirt we have the wwc draft coming up pretty soon you can get yourself the upgrade draft t-shirt or hoodie um sorry t-shirt or sweatshirt or tank top or onesie if you know you want to draft your baby you could you could do that uh so you can go ahead and check those out oh we do have sweatshirts and hoodies sweatshirts and hoodies you can get both and that also we have some upgrade logo tees available there and a rumor roundup t-shirt which i am wearing today which is one of my very favorites. It is just the lasso Rumor Roundup.

So that is at UpgradeYourWardrobe.com You can go and check those out and there will be a link in the show notes if you want to go and buy yourself a very cool upgrade t-shirt. This episode is brought to you by our friends at Ooni Pizza Ovens. Ooni is the

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Well, actually, what I was going to say is I am very excited that the weather, well, actually, we're having a little cold and rainy weather now, even though it's May. What I do is the uni goes into hibernation during the cold time, and then I bring it out during the the warm and dry time and um i'm looking forward to that because i have although i can make a decent pizza in my oven the fact is my oven goes up to whatever 500 550 fahrenheit and the uni pizza oven you get it up to like 700 it comes with its own pizza stone the base of it is a pizza stone so that that heats up, you get that really hot. So it's going to radiate out the heat and bake the bottom of the crust. And then that super hot at the top is going to melt the cheese and make everything a little bit burny and a little bit crispy, which is what you want. That's what the wood fired fancy ovens do is they get that hot at a level that your conventional, uh, well, conventional, not in the

sense of electric, but like whether it's electric or gas that your oven in your house is just not going to do. So I'm looking forward to moving into thin, uh, Bernie, uh, beautiful crust. Uh, and it cooked in no time. So you can make like two or three different kinds with different toppings for the people who everybody's got their own topping opinion and you can move them in and out in a it's like a minute or two because it's so hot it cooks so fast that you can also kind of mass produce pizzas beautiful it's a beautiful thing listeners of this show can get 10 of their purchase of an uni pizza oven which could be up to 50 off of an uni coda 16oda 16. Just go to Ooni.com, O-O-N-I.com, and use the code UPGRADE2023 at checkout.

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Money, money, money, money, money, money, money, money, money. It's money time. It's money time. It's Apple's Q2 2023 results. Let me give you some headlines, and we'll dig into it. Revenue, $94.8 billion, down 3% year over year. This is the second largest Q2 in Apple's history. Obviously, you have the clues here to work out which was the largest.

Profit was at $24.2 billion. That was down from $25 billion year over year. So my initial read on that is margins was good though, right? The drop in profit is not the same as the drop in revenue. iPhone, $51.3 billion, up 2% year over year. This was a Q2 record for the iphone my question to you here was do you think that this is the result of some sales being pushed on from shortages in previous quarters that we had so like there was there was some supply chain

stuff right do you think this may have been a push through? It's possible. I mean, they were correcting it, but they did suffer in the holiday quarter from having problems with the pro phones. So it's possible that that's what it is. It's not, I mean, it's basically flat, but in a quarter where everything else was down, that the iPhone was able to do this. I think it's Apple's most important product. So having them be able to do this, I think that you have to look into the past for trying to understand all of these results but for the iphone i'm not sure how much of this is retrieved from out of the past quarter shortages or whether it really is just that they you know soldiered on and yeah so maybe the two percent is just it's up a little bit for that but i don't

know i don't think it was a huge thing because I think that they started to get into balance by the end of last quarter. Yeah. Okay. By the way, I just wanted to note that the change in profit is actually about the same. Oh, really? Roughly 3%. Oh, okay.

Yeah, it is about the same. So I think margins were, although they report their margins. I don't actually know what the margins are, but they were probably pretty similar. Appreciate the clarification. The Mac was at $7.2 billion, down 31% year over year, making it the lowest quarter since 2020. It's a tough compare, Mike. Very tough compare. The iPad, $6.7 billion, down 13% year over year.

So just flip those numbers, 31 to 13. Also the lowest quarter since 2020. Services is at $20.9 billion, which is up 5% year over year. It's also growth from the previous quarter, which earlier in the year, late last year,

that had started to dip, right? Like there was something that I was talking about a lot, was wondering what was going on there, but it seems like they're going back again wearables home and accessories is at 8.8 billion dollars down one percent year over year yeah essentially flat the mac and ipad being way down i think the only way like the mac and the ipad have both been riding really high and i don't look at this and say ah now people have turned against the mac and the ipad because remember it's it's changes in in

growth compared and sales compared to last year it is at a high level but not what it was last year i feel like like i have nothing in my heart that says oh no people are turning against the mac and the ipad I just don't it's very clear to look at the history here and say what happened is one the pandemic which sold a lot of computers and ipads because people were in lockdown and they're like and they're and work adapted and they're like oh geez we need another computer at home or we need another tablet at home or we need to update the old thing. And that drove sales. And that's one reason that the iPad and the Mac have done so well over the last couple of years and that that's tailed off now. I think that there's some truth in that, that the buying cycle was kind of short-circuited

and now it needs to reset. And so you're going to have that place where it's, I think the way that they often describe it metaphorically is that the sales were pulled forward, essentially, right? That you took your three years of sales and it all went in the first year and a half. And I think that there's truth in that. And then for the Mac, you also had the arrival of Apple Silicon, and there was a lot of pent up demand for Apple Silicon. Plus those M1 Macs, especially the reviews were so spectacularly good because they are spectacularly good. And a lot of people bought them and it drove a lot of sales in addition to the fact that there were pandemic changes in how we all worked.

And so the Mac, I think has benefited from that twice. But, you know, the M2 again, nothing wrong with the M2, but if everybody who was waiting to buy a MacBook Pro waited for the M1 MacBook Pro to come out, then you're going to sell a lot of them. And then the next year they come out with the M2 and it's like, well, but so many people already bought the M1, so they're not going to buy the M2. And that was a high number. You do the math and it's like, well, well yeah this is what you're gonna see it's gonna go down because everybody was really excited about it i i think the mac like if you look at the average mac sale like the mac has never been stronger um i think it it will

continue to be strong i think this is an issue where they just have to deal with the fact that they're not going to reach those heights for a little while and they're going to have to wait for the buying cycle to catch up with them. So David in the live chat Discord, which you can get access to if you're a member, go to getupgradeplus.com and you can find out more about that, has said, The narrative is strange to me. Apple had lots of success. Now that makes them look bad. The problem with Wall Street, which is what a lot of this is, right? They look at whatever you're doing now and they're betting on it being a trend, right? Like, you sell loads of Macs.

Because it's all priced into the stock. Exactly. You sell loads of Macs. If you keep doing this, we will continue to be confident in your business to this level. But if it changes, it's going to go down. Right.

They want to see growth. They always want to see growth. And we can debate whether that's right or wrong, whether that's corrosive to how businesses are run. Spoiler alert for my opinion. Yes, it is corrosive. But that's how it works. And it's the same thing I always tell people when they're like, oh, Apple released results and they made all this money and their stock went down. Why is that?

And the answer is because the expectation is priced into the stock. Apple, as we expect it, is priced into the stock. The stock price is what it is because of everything we expect for Apple. So then it becomes what happens next. And if you give them, if they get growth, then that increases the future value of Apple. That increases everybody's estimation and the stock goes up. And if you say, oh, Apple's going to be flat for a while in the doldrums, then the stock will stay steady or go down, which is bad for investors. Doesn't necessarily mean it's bad for Apple as a business if it's throwing off all this profit and it's generating, it's doing stock buybacks and it's generating dividends for its investors, which it is doing. And that's what, if you're a company that makes enormous profits

and you're looking at your growth and saying, our growth is probably going to slow because we've been so successful for so long, this is what you do. giving money back to the shareholders because that's how you kind of counteract some of that fear of flatness is by saying, yes, but we're very profitable and you get to share in the profits. And so they've been doing a lot of that too. Tim Cook introduced a new catchphrase, the parade of horribles, as a way to describe our current socioeconomic climate. Yeah, he's used a bunch. This is apparently something that is out there. This is a phrasing somebody told me that you've seen in other places, but Tim Cook has adopted it, which I find funny just because it was last year we had the cocktail of headwinds, which I thought had a little panache to it. The cocktail of headwinds served to you by Luca Maestri, the CFO.

And he would say probably an Italian cocktail of some sort full of headwinds. Maybe those are bubbles. I don't know. But the parade of horribles, I think it actually sounds kind of Willy Wonka-like, right? Like, oh, there's a bunch of horrible, strange monsters that are coming down. But anyway, Cook used it to say that, yeah, there's bad stuff out there, but we're fine. Essentially, he was like, we have the luxury box at the parade of horribles. So I think that shows you how Apple has kind of gone from it saying,

you know, things are bad out there and we're worried and we're concerned and we're trying to do what we can to being like, things are bad out there, but we worried and we're concerned and we're trying to do what we can to being like things are bad out there but we've been fine and so we're fine and that is again like we see this covering apple like we do and looking to the wider technology industry they're in a very different position and like you know we we have a lot of we've you know many many times over the years we've spoken about the idea of like, why do they just sit on this cash? What are they doing with it? Well, it probably helps them in times

where all of their colleague companies in the industry are laying people off their front and center and Apple's not doing that because they have so much money. Yeah, I mean, that's the truth of it. And I said this during 2020, doing that because i have so much money yeah i mean that's that's the truth of it and i i said this during the um during 2020 let's say we'll put it that way uh i said apple actually looks a little embarrassed because they're doing so well when the world is so terrible yeah i feel like we're coming out of it now where they're like yep we we've survived we did it um and we know that

bad things have happened, but we feel like we're in a good place. I'm not gloating about it or anything, but they're able to say now, I think maybe with a little more confidence than they could back then, just because everything was all messed up, saying, you know,

we're actually in a pretty good place right now. Now, of course, a down quarter is just the time when you need the CEO to say, we feel pretty good, right? Because you want to make everybody feel good. Unless you are literally a bear investor who is out to get Apple because you want them to tank, I don't know how you look at Apple's last few years and not rationally understand the place

that this business is in, especially as we've talked about many times before, the mega cycle of the iPhone, because the iPhone, more than many times before, the mega cycle of the iPhone, because the iPhone, more than half the revenue. And we know that the iPhone buying cycle is very visible because they do major revisions to the iPhone and it kicks sales. And that happens every three years-ish. We'll see what happens this fall because whatever that iPhone is, this is when we might expect a new iPhone that will drive sales. Unclear whether they're going to keep that strategy or whether they're going to kind of split up the new look iPhone into multiple releases over multiple years in multiple iPhone levels, right?

Because they've got more iPhones that they sell now, different models. But yeah, hard not to look at Apple's last few years and say, first off, you wouldn't even tell that there was just a series of terrible economic conditions as well as a global pandemic and that their factories got shut down. You couldn't even really tell and that they're in a pretty strong position here. But if I were a Wall Street investor and I was worried about where Apple was going in the future and where their stock was going, I would obviously be concerned about, is the iPhone going to plateau, in which case they're an incredibly profitable company, but they're not growing anymore or growing very slowly? Or are they

going to have another kick? Can the Mac be taken up a notch? Can the iPhone still be taken up a notch? Can the iPad still be taken up a notch? And I think that that's an open question there, which is why they started talking a lot more about emerging markets, I think, this time, where they did better. Apple actually did better in emerging markets than they did in their existing established markets. And that's a message that they want to send

because they want to say, look, this is where the next growth spurt is going to come from. Especially when one of those emerging markets is as big as India, which is what they're talking about. They spent a lot of time talking about India. They saw double-digit sales growth in the region. Tim Cook says India is a major focus for the company and said, and I'll read a quote from Tim, there are a lot of people coming into the middle class and I really feel that India is at a tipping point and it's great to be there and i will now read a quote from jason smackwald article where jason

says if this sounds familiar it's because cook said a lot of very similar things about china a decade ago but when asked specifically to compare the potential in india to that in china of the past cook demurred a politically wise decision and said, I think each country is different and has its own journey. That emerging middle class line, I felt like I have massive flashbacks to reading that because that was what they said for years about China. Yeah. Yeah. No, it's exactly the same words. And then when pressed to sort of like say, can you draw a parallel between China and India? He's like, no, no, no, no, no. We'll never do that. Don't ever ask me again. No no and it's like well first off china and india don't really like each other and they've got this thing where they're trying to diversify outside of china

including into india and the last thing china wants to hear is apple say yeah india is the next china right like that you no no no no no no so instead he's like everybody's on their journey together but it's very hard not to see the parallels there where Apple is saying that in lots of emerging markets, and they mentioned a bunch of them, that Apple did really well, like set records in the last quarter. So that's what their message is. Now, what are the size of those markets? What's the potential of those markets? Is it just trying to get out some happy news for investors when the truth is that those markets are relatively small? But it seems like India, and I would say Tim Cook's visit to India right before this, cannot have been a

coincidence, right? This is all about making the narrative about Apple right now, about potential future growth. It's kind of brilliant, assuming that this is all sort of part of a bigger plan, that Apple going to India, it's about future growth and diversification. I wonder what message it does send to China, but Apple and China are pretty tight. So it's probably, you know, China knows what Apple's doing, but I think Apple's not abandoning China. It's just diversifying. And that's the message they're sending is we want to be in China, but we're going to be in other places too. And yeah, for if you're an investor and you look at India and you say,

wow, if India's middle class can skyrocket like China's can, all those people are, are Apple buyers. And imagine another market like China's market where Apple can come in and has very little market share. And so there's enormous growth opportunity just by definition. So we're talking about looking at the overall product lines, and you've got the Mac and the iPad are down. But the level, like, you know,

we're talking about like the iPhone as a thing, if the iPhone starts to decline, like this quarter was saved by the fact that the iPhone was up a little bit and services were up a little bit. But it was mostly because the iPhone was up a little bit. So this idea of if the iPhone did start to significantly decline, like we started to see consistent decline, then the company's overall revenue declines just because, right? Again, what was it? 54% of the revenue in the quarter was the iphone like that's what people were looking for so what you know apple want is to sell iphones in india and whatever it's going to take to do that so sava in the discord is a listener who's in india

and they're like well the prices are going to change and like and we've heard of this before of like and it's one of the reasons Apple's continued to push on the SE and had devices that were more price-focused. And so my expectation is if Apple really does consider India to be this growth market, the overall pricing strategy of the iPhone may have to change to accommodate that. But we'll see.

Yeah, whether it's the iPhone SE yeah whether it's the iphone se or whether it's uh bringing down the price i mean they do have this freedom now which they have not exercised but this freedom with the iphone and the iphone pro split to make that iphone more affordable than it's been and what they've really done is sort of make it not really more affordable than it's been. And what they've really done is sort of make it not really more affordable than it's been, but that the Pro one is really expensive. But it does give them the ability to say, look, iPhone whatever number, and sell that into markets that are not seriously going to consider the iPhone Pro.

But the SE is the other way in there. And again, I've been hearing for more than a decade now from people in India who are like, Apple is kidding itself because the prices are just bananas and it doesn't make sense. And they're hard to get and all that. And like, sounds, it sounds like Apple is, is focused on India now to a certain extent. So they're going to have to find a way to figure it out. Right. I doubt that they're delusional about what they're going to do, but what, what is that strategy going to be? And I don't know. I mean, I will also say,

though, there was a time when Apple trying to sell iPhones in China or computers in China was seen as a bananas kind of decision where it's like, you're not going to do that. You're so expensive and this market can't handle it. And what happened in china is that the market changed and grew and it embraced apple and a lot of those people who now had way more money than they used to have spent some of it on apple products so i don't that's where i think maybe the parallel is going to break down with india but again i'm sure apple is paying more attention to it and some of the clueless decisions they've made in the past about india are probably going to change because it's got you know more senior i mean i've heard this before like there's some

people who are involved in apple in certain countries where like nobody cares and so they just sort of drift off and do their own thing uh and then if apple execs suddenly are like no this is a key market for us everything changes right so i would imagine that that's going on with india now yeah if pricing has to change they'll change the pricing if that's what they think will grow the iphone like we are where we are now with the iPhone being what it is partly almost because of the China market. So huge. And so if they can add another one of those, I'd be very

happy. I'm reading again from your article on Macworld. It's become clear that the Mac and iPad are victims of their own recent success, at least when it comes to sales trends. Both products sold well during the early days of the pandemic, and the Mac also got a huge sales boost due to the arrival of Apple Silicon.

Yeah. I think we already covered this. Yeah. But it's just like, I think it's just a nice way of summing it up of like... Well, thank you. They are... It's hard to...

It's that tough compare that we would talk about. There was a big boost, and now we're back down to a more settled level but that settled level was higher than they were before that's it i mean that's the that's the story with apple in the last decade is they get these huge growth spurts followed by a year or two where there's not a lot of growth and everybody wrings their hands about it but if you look at the numbers you can see huge growth spurt followed by flat is establishing a whole new level for the product. And Apple has been really good at doing that. What you don't want

to see is the huge growth spurt, and then it goes back to where it was. But Apple has never, well, has recent times, Apple has not done that. Every time that these growth surges have happened, they've reset the bar. There's been a new level they stay at, which means I think that suggests long-term growth opportunity continues to exist, but that people who are expecting it every quarter are kind of short-sighted. Last thing, this is a long quote, but there was some conversations about Tim Cook in regards to AI. So this is Tim. This is Tim. I do think it's very important to be deliberate and thoughtful in how you approach these things. And there's a number of issues that need to be sorted, as is being talked about in a

number of different places. But the potential is clearly very interesting. And we've obviously made enormous progress integrating AI and machine learning throughout our ecosystem. and we've weaved it into products and features for many years you can see that in things like fall detection and crash detection in ecg these things are not only great features but they're also saving people's lives and it's absolutely remarkable and so we view ai as as huge and we'll continue weaving it into our products on a very thoughtful basis this to me felt really similar about the ways that tim would start talking about ar right of like yeah we think this is really important and we're going to keep working on this like i feel like this is as you would naturally assume would be a front that apple's going to continue to try and do more on and at at the moment, I think they are in,

you know, with how much he went into detail here is clearly a prepared idea. They want to, I think, maybe try and turn the tide on the impression that they don't know what they're doing in this field, where they can talk about, look at all these things that are shipping with what this AI actually is,

which is just advanced machine learning. It's not artificial intelligence. I really wish that that wasn't what we decided to call it, right? AI. It's all just machine learning. It's ML. And Apple has been doing machine learning for a long time, and they're good at it with the things that they're doing.

But the problem is what we consider to be conversational machine learning, which is now what we think of as chatbots they're not so good right they're not doing a chatbot which right like well sir i mean like siri you have a conversation with right that's what you don't well yes the problem but you do with 20 people 20 people you talk to we know this now so i think this is the perfect answer to give if you're tim Cook, because what it says is, yes, there's a lot of potential. We're being deliberate and thoughtful, right? He says, I think it's very important to be deliberate and thoughtful. Translation, we are being deliberate and thoughtful.

There are issues that need to be sorted out, and it's being talked about. It's controversial. We know that too. Then he shifts gears and he says, he says, yes, it's very interesting, but we are already doing this. So now it's, he's sending the message like we have made enormous progress already in our ecosystem throughout. And he uses the phrase that I kind of appreciated. we weaved it into products and features for many years right the point here is like we're already doing this and i in conversations about this i keep bringing this up too people are like oh apple's behind they haven't done any ai

and it's like all the object detection and photos is ai it's ml right all the sensor uh processing and fault detection and crash detection in activity monitoring on the Apple Watch. There's machine learning models there. The ECG apparently is using machine learning models as well. Like Apple has built a lot of machine learning models in a lot of places. What they haven't done is built it into Siri. And they haven't released a beta chatbot on the web. And so then they're accused of being behind.

It's like maybe they're behind. But I'm not sure we've got enough evidence to suggest that. And that's what Tim Cook is saying here. It's like, we've been on this for a long time, but we're being careful and we're putting in places where it makes sense. Now, is he throwing shade a little bit? Yes. Is he doing that because it's an area of weakness for him? Maybe. I mean, maybe, or maybe there's some amazing thing behind the scenes that we don't know about, but we don't have the evidence for that. So we'll say maybe. Maybe he's running down the stuff that's out there where Apple's behind, but pointing out

all the other places where Apple is using this and is weaving it into their ecosystem, which is one step away from the only Apple can do this, right? Which is we have hardware we have software we have our own processors that we design and we weave ai and machine learning throughout our ecosystem instead of just real you know releasing a chatbot that's sort of what he's saying here and then he pivots from that back to we think it's huge we'll continue weaving on a thoughtful basis which is his last little poke of like we know this is controversial we are also skeptical about the issues here you know look at us we we do it carefully but we are doing it don't get upset don't get afraid

it's masterful like whether you believe it or not, like whether you believe that, I mean, I think that what he says is factual, but there's that whole underlying question, which is, yeah, but like Siri is a good example, like, but you haven't woven it into Siri really. And we've seen what happens when you start, start having something that's sort of serious, but uses this tech and you haven't done it yet. So where is that? And maybe the answer is they're still working on it, but it's close. And maybe the answer is they've tried it and failed and it's a disaster he's not going to say that but like that's what's on people's minds but i think he did as well with this question as you could possibly do uh from the perspective of being the ceo of

apple because i feel like from my layman's view, they have done a good job of what is the fundamentals here, which is very large data sets and being able to draw information from them. Because that's what a large language model is, right? But they just don't have a shipping, machine learning, large language model thing. But they are, I mean, mean you know they're doing tons of stuff that their competitors are doing they're doing a very good job in some cases and they're

doing it all on device right so like photo recognition stuff being able to search for things in photos i'm sure that live text is another example of this right so like all of these little pieces of information that come from the ability their abilities in machine learning plus the fact that they create their own silicon which has machine learning processes on it like if they're able to line the pieces up i can imagine that they can have that point on a presentation sometime you just said of like only apple can do this but they've got to do it but i think what is telling to me here is they were willing to answer the question meaningfully

and to me this feels very prepared like to mention fall detection crash detection and ecg like those three specific features out of everything you could have mentioned, they're really good ones. And I think it shows that they're considering it. And if they're considering it and they're willing to engage with it and talk about it's huge and there's a lot of promise here, it feels like they've got their eye turned towards it at least. it at least i don't know if shannon cross who asked this question um who used to be out on her own and now works for credit suisse she's been doing this a long time she's been on apple calls as long as i can remember i don't know whether apple said somebody from apple nudged her and was like you should ask them about ai or not but i wouldn't be surprised if that was the case yeah certainly i wanted someone Yeah. Figuring somebody would ask

about AI, right? Certainly. Because this is, again, this is a setup. It's a perfect setup. I think Tim Cook's answer is very much put together and exactly what needs

to be said here. And then we all can judge whether it's entirely, I mean, everything they do on this call is a self-serving statement. That's the whole point of it. It's the point of it.

Really? Yeah. But I think this was handled very well. Portrays things. Really, the goal here is to say we recognize that this is controversial. We also agree with everybody who thinks this could change the world. We have shipped lots of stuff that uses this and have for a long time. So don't portray us as being behind.

And we're still on it. Next, right? Like that's exactly what Apple wants to say here. And then the question is just, is he saying that while he's hiding a decaying, you know, Siri team behind him? Or is he saying that knowing that they've actually got more stuff that people don't know about

that is going to be great? And I don't know. I don't know which one of those it is. But also I like tying like a different thread through what you said of like oh we we know it's controversial we think and and you know people believe it could change the world but the things he decided to speak about were the things that save people's lives yep that's true so like we believe it can be helpful Like what he's saying to me there is like, we believe that the ways that we will use this technology

is the way we have been and will continue to will have meaningful effect on the world as opposed to just like doing a Google search. The headline is very important to be deliberate and thoughtful. Yeah. That's the message, right? Which is we are deliberate and thoughtful. That's the message, right? Which is we are deliberate

and thoughtful. Here are some examples. He doesn't mention photos, by the way, right? Because he really is leaning into things that'll save your life because AI can save your life. Great. And then thoughtful, he's not only saying, this is why you don't see us out there with stuff right now. We do stuff. But when you're saying, where's Apple's chat bot? This is why you don't see us out there with stuff right now we we do stuff but like when you're saying where's apple's chat bot this is why we're deliberate and thoughtful we agree with all the people who are critics who are like oh no what's this going to be it's like yes it's valuable but you got to think about it and then it's also taking a shot at the people and at competitors who are like just throwing stuff out there and saying is this what we want you know is this the right way to do it? And again, if you're in a position

where you don't have that, that is the right thing to do is to throw shade at that stuff. But it's also the right thing to do if you've got something in the works that you think is better. Like, I don't think we can really detect from this where the state of other machine learning projects

are at Apple, but it's the right answer to give to say we're there, but also we're better than you because we're being more careful and thoughtful. It's a great answer. Great PR. I know this is what I want, right?

Like I am intrigued and concerned in equal measure, sometimes more concerned about some of these AI tools. I would like the largest companies that are involved in this stuff to actually be really thoughtful and not just fast, right? Which I think is some of the problems we're falling into right now. I think Microsoft and Google are just trying to be quick in some cases to be the best rather

than necessarily thinking about what is best for their users and for people at large. And so I hope that Apple will continue down that train, especially because they're the products that I use the most. Like when it comes to me,

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to finish out today's show. The first one comes from Ramon. Ramon, again. Ramon is back. Ramon, yes. And says, or is it a different one? Maybe one was Ramon and one was Ramon. Who could tell? You know what I mean? I don't know.

Anyway, last week's discussion of the rumors of changes to the upcoming health app made me wonder. So this is like the idea of more data, more processing, all that kind of stuff. Should we be concerned about Apple gathering so much of our

data to grow their services business as we've been with google in the past is the on-device argument enough to give them a pass it's complicated this is complicated i would say i don't think Apple gathering data. I think that there is a functional difference between Apple building a profile of us on our device that is with us at all times. And it is complicated, right? Because I feel like, first off, the on-device argument is mostly about we don't need to pass all of your data up into our servers in order for us to know stuff about you. And I think that that's good. And I think that that's a separate thing.

There's the commitment to privacy, the idea that we don't need to upload all your photos onto iCloud in order for us to analyze them and tell you whether there are dogs in them or whatever, right? Which is, I think, the right thing to do. So I'm less concerned about like, ah, yes, but now you're looking at that data on device. And also you've got on-device algorithms that are going to drive me into on-device purchases of services. Like, I'm concerned about Apple pushing services on me that are really things that are just software features, and I went into a whole rant about this last week. The personal data that is being analyzed on devices is not part of my concern about it, I guess would be my answer. I feel like maybe this is, it's interesting, but i think this is a conflation of things that i don't think need to be conflated mike what do you think i think it's complicated i think it becomes

yeah more complicated because of the phrasing of ramon's question to include google in the discussion because as soon as you invoke google or amazon when talking about this stuff people's brains go into a route which is like they are going to take my information and sell it to advertisers like so if you brought meta into this conversation right and you know a lot of people i think have a fundamental misunderstanding of the way that some of this stuff works like people some people believe and i think most of our listeners would know this but like some people believe that like meta and google just gives your phone number out to companies right but that's not what they do because they want they want to build a business where you have to come to them to buy access to the to uh demographics and so they don't share that information they keep it

within google or wherever we've been met that the only people that know that information are in theory the companies you're giving your information to. They're not spreading it out past that. They're using it to sell ads that other people buy, but they're keeping a company confidential. Access to you is being sold. There are places where there are data brokers and there are apps that are leaking information and all that. But generally with these companies like Google and Meta, it is the crown jewels, right? It is that data. They don't want to give it away. They want to set a premium price for you to have access to the knowledge that they've got

about you. So they're selling. In the end, it can still make you feel just as gross, but just let's be clear, they're not selling your data. They're selling access to you. Is that better? It's not, right? I think – It's not. It's a little better, but it's still –

It's different. Yeah, right. It still should probably give you pause, but it's not the same as saying, would you like to know everything? Google is not, I believe, saying, hey, I've got all this information I built about Jason. I've got a dossier. Would you like to buy it? Instead, it's like, would you like to reach people who are like Jason? Because I know who they are. And then

you have to pay to get access to them. Personally, I am fine with that. Me, I'm fine with that. I know that different people have different feelings about it, but I feel like if you really don't like that, don't use those services. It seems pretty simple to me. If you really hate the meta, do that. Just don't use Facebook.

Anyway, that is not the conversation we're having. But my point is, it's not that different, really, fundamentally, what's going on here. Because what Apple is doing is saying, give us all of your information and we'll do what we do with it. And while we may not be selling it to other companies, we're still using the fact that we

have your information to sell you things, whether it's the next Apple Watch, Ace, Fitness Plus, or whatever. So realistically, it's just because Apple doesn't have the business model that Meta and Google do? Let me see if I can draw a line here. If Apple were, and I don't think Apple will do this, but if Apple were to say, we've analyzed your health data on your device, and oh boy,

you really need to get healthier. Sign up for our service where we let you get healthier. Sign up for Fitness Plus or whatever. How far away are we from something like that happening realistically? Well, here's the thing. I don't think Apple will cross that line. So contrast that with Apple just says,

hey, we've got a new service where we look at your health data and it's wrapped into Fitness Plus or it's a different service because we don't know. This is just a rumor that we are talking about. But this question of like, is it a service? Is it part of Fitness Plus? Is it something different? I think that that is actually a pretty strong dividing line, which is, is Apple looking at our data on our device and then using it to sell us

things? Or is Apple just selling us things because we are who we are? And does it matter? Because then the next question is, does it matter that Apple's analyzing our personal data for marketing purposes for its own products on our device? It doesn't matter that it's on our device at that point if they're doing that analysis. And what I would say is, I think this is the lesson learned by the CSAM scanning that was going to go on and that got canned, that was going to go on when your device was about to upload something to iCloud, where it was using its algorithm to scan your photo to see if it was child sex abuse material before it got uploaded to iCloud.

And everybody was like, what do you mean there's a cop on my phone now? And Apple's like, oh, yeah, backing off, right? So that's what I would say here is if Apple's just doing what it does, which annoys people to no end, right, which is marketing its services to you, hey, we added some features to Fitness Plus. Isn't that awesome? You should sign up. Or if you're already a Fitness Plus member, you should opt into this and we'll analyze your data and give you tips and you say yes what they can't do i think is look at your data and then market it to you right like i think that's where i would draw the line is i don't want you saying hey you got a problem and we're the solution and we know it because we've seen your data on this

iPhone. But they do this with App Store ads though, right? Yep, the App Store is not your health data that's on your device. The App Store is in the cloud. Right, but it's still only a step. My point is, if Apple continue pushing into advertising, which it seems like they are,

they are just a trend, they're going into advertising further and it seems like they are, right? There has been like, they are just trend, they're going into advertising further and further. Where does it stop? My point is that I agree with you that these things will be bad. I'm just not confident that they won't do them. Because they're a company that, we've just spoken

about their earnings report. And the services push. Enough incentives align and they'll be like, well, about their earnings report and the services push. Like, enough consent is a line, and they'll be like, well, we're going to start recommending to customers. We don't know who they are because it's all on device, but we're going to start making these recommendations to people. Like, hey, why don't you check out this activity on Fitness Plus?

So that's the question is, what if App Store... I mean, this is not the question that Ramon asked, but let's go down that path, question is what if app store i mean this is not the question that ramon asked but let's go down that path which is what if apple's app store ads stopped being based on your cloud and i cloud and apple id data stuff that apple has on its servers that it knows about and what if it started being that all your ads in the app store were based on on-device behavior, right? Let's just walk down that path. So on your device, your device could theoretically know what's on a home screen versus an app library.

How often do apps get launched? What are those apps? How often are you using particular kinds of apps? And then all on device, it goes, oh, wow, Jason is playing Marvel Snap a lot on his iPad. What are other apps we could push at him that are like Marvel Snap? Because he's playing that one a lot, which is probably more than Apple has off device, right? I mean, maybe not. It depends on device metrics and all that, but they don't seem to be using that level of data to sell me things up in the app store. So let's just go with it for a moment. Does that cross the line where it's like, well, wait a

second. I feel like this about TikTok, honestly, it's one of the things that repels me about TikTok is that if you pause and don't do anything to indicate I like this video, but you watch a lot of it or watch some of it, TikTok will be like, gotcha and log it. And that's what it does. It's watching your behavior, not your chosen. I am going to say, I like this, but literally like, yeah, you said you didn't like it, but you watched it for 40 seconds. So we know you liked it, right? This is that kind of thing, which is my iPhone is now watching all of my behavior and using it to build a profile all on device, all on device, but it's using that and they build

an algorithm so that now they can advertise to me more effectively. I doubt they would do that. I would have a problem with it, but I also see your point, which is, can you imagine a scenario where Apple continues down this path while searching for advertising revenue and services revenue? And I would say, I can envision it, but I feel like we've already learned some lessons about when people start to push back on what happens on device. When on device goes from being a privacy feature to being a surveillance feature, that's when it all falls apart. And I'm not sure Apple really wants to go down that path because they use on device as a shield to say, we do things on device and that means it's safer for you. And if they muddy the waters by saying, no, no, actually on

device is spying, which it was sort of with the CSAM detection thing where, I mean, we talked about it last year. It's a detailed argument. It's very complex, but the idea was people walked away thinking there's a cop on my phone, right? Like the last thing you want is to say, Apple is spying on me. Everything I do on my phone, Apple is watching and turning it into a product on device, but still turning me into a product. Like I think people would really resist that. And I think Apple would probably not stoop to that. But it's worth considering.

Because like the technology is there. You could do it. I agree with you. That situation you've painted. If they did that. That would be terrible. I just feel like sometimes. Some of their ad stuff.

And like the app tracking transparency stuff like i had kind of a problem with that at the time i still continue to because it hasn't really changed anything like yeah except like it's it's made things maybe smaller for harder for smaller companies to try and do tracking i think it's made things harder for facebook but you're right it's also made things harder for anybody who is trying to use facebook to in to reach people with their advertising but like in facebook's most recent earnings they kind of seem to be like oh it's good now like we're sort of it's like oh they've worked out their own thing like whatever this is now to try and work out the segmentation again my point it's like apple does a bunch of segmentation stuff they they do all the same

things right like they're not for like purchases and how they recommend ads and they like they put you into a bucket and they look at that bucket and they sell these buckets and all that kind of stuff so my concern is that as you say like the on-device stuff is a shield hopefully they don't ever try and put ads behind that shield but i do feel like from a fundamental level they are still using your data or to sell things to you they just sell different things yeah they're not they're not selling your your information for necessarily people to advertise to you unless it's apps right they're doing a similar kind of thing there. And a lot of the information that you

put that's on device is weirdly used as a lock-in to sell you more of their own products anyway. So it all comes down to what companies you feel most comfortable with. I feel most comfortable with Apple and giving them all

of my information. I am most comfortable with Apple and giving them all of my information. Like I am most comfortable with them. But the idea that they are like fundamentally different from anyone else doesn't necessarily pass with me because ultimately it's still the same or it's still just your data. They're just using it to sell to you differently. And then maybe you're just happy with that different

this is the yeah this taking a step back the point here is that apple has data that it's using to profile you and sell things like app store ads. Right. And, and, and while Apple's business is different, it's not that different. Right. It's the, it's the thing you and I have talked about a lot, which is like, there's,

there's a lot of reflexive ooga booga, scary boogeyman stuff about Google and Facebook and Amazon. And like, and it's true. Their business models do require a level of profiling and surveillance that maybe Apple's business model doesn't. But app tracking transparency in a way is just a self, although it's a privacy thing, that's how it's sold. What it really does is say, well, you should only collect data as a first party and Apple is the first party. And so Apple, because it runs the app store, knows everything

about your app store behavior and they use that to sell ads. So although it's different than Google and Facebook, not that different. It's not that different. It's different, but it's not as different as you might think. And you need to go in with your eyes open, I guess I would just say, I think there's a point at which it goes from being, you know, we're using your data that you do on our servers to do ads. You know, we're using your app store data to do ads in the app store is different. It's way different from the idea that like, we're watching all your behavior on your iPhone and we use that for an array of different products. So, and I don't think they'll get there,

but I think it's also important to point out that on-device isn't necessarily a panacea. That on-device could potentially go from being this shield of, we don't want to process all your photos unless you upload them to iCloud. You know, we don't want to process all your photos unless you upload them to iCloud you know we don't we don't want to see them and we're going to do things end to end which means that it's going to be has to be on your device and like that's all good but you can

flip that over and say we've built stuff to spy on you for our profit and put it on your device and that's that's the danger of that. So it's something for all of us to watch. Because as you mentioned a minute ago, they got very close to, we built something to spy on you so we didn't have to worry about it. Right.

They got super close to that. So it wasn't inconvenient for us. We made it inconvenient for you. And I should point out, when we talk about app store we should say keep in mind this is literally the only app store you can use right so they they're using their power to say we know everything about all software buying behavior on our platform everything and if you don't like that it's not like photos where you can be like no i, I don't want to use iCloud photo library. And you still get those scanning features and it all still

works because it's on device. With the App Store, you have no choice but to be in their system. And it's a system where they're making money on ads. So I mean, I think App Store ads are offensive. And this is one of the reasons I think they're offensive, is because you can't really escape it. And they degrade the user experience, and they know everything you've bought so that they can customize those ads. Including in-app purchases. So at the point where you as a person have become a customer of another company and are buying things within their app, Apple knows that information and uses that information to make more ads for you. Right.

And doesn't consider you a customer of another company. No. They consider that purchase an Apple purchase, right? That's part of it too. It's like, it's all still first party because an in-app purchase in somebody's app is still a purchase through Apple. So you're still Apple's customer as far as they're concerned. And that's part of the story.

There's a lot here. I don't entirely agree with Ramon's take, but I appreciate him having us explore this because I think that there's a lot of really interesting potential here. Yeah. I think Ramon is just concerned, right? And I get that concern because I think about it a lot. Right. On device, I love the, does the on device argument give them a pass? And I think the answer is no, that on-device can be used for good or

evil, right? And that's something that we all need to watch. And I think, again, I think maybe Apple learned that lesson in the reaction to the CSAM scanning. I think maybe Apple realized there are some things that if you do it on-device, it blows their whole on-device argument and they need to not do that. But you never say never. You get a vice president somewhere who's being given an incentive to maximize revenue and they have enough pull to get a feature installed that does something like never say never.

But I'm skeptical that they'll go down that path because I feel like maybe they learned a valuable lesson from this. But it doesn't change their business model in other places yep chris asks do you think apple's headset will have a cellular connection or will it just be on wi-fi this one wi-fi long-term cellular right because long-term you're going to want to do mixed reality and you're going to be out there but in this one it's just going to be wi-fi right like because this is an inside thing and i think apple considers inside spaces wi-fi spaces if you're in the hotel you

might have to log in with your browser in vr it's putting your room number whatever but like i i think um i think in the long run obviously it's going to have to be cellular but not in the short run now you can have one of those like you know that thing you're in hotels and you had that like pop-up thing you put your room number in massive 70 foot right in your view yeah sure you're gonna climb up on just a little box smash the button type it in uh-huh yep if you would like to send in a question for us to answer on this show as As you can tell, they could be very different. You can ask us anything. Go to upgradefeedback.com and you can send us in a question there. And of course, you can find a link to that in the show notes if you would like to. And you can send us in questions for Ask Upgrade, Snow Talk, and anything else. Maybe you have follow-up. Maybe you have feedback about the

show. Maybe you want to be one of Mike Hurley's tip line informants. You can go to upgradefeedback.com and send that information in. If you want to check out Jason's work and see all of his wonderful charts that he's been generating over the last week, you can go to sixcolors.com. You can also hear Jason's podcasts at theincomparable.com and here on RelayFM FM, where you also find my shows. You can check out my other work at cortex brand.com. You can find us on Mastodon. Jason is at Jason L on zeppelin.flights. You can find me as at I Mike on Mike.social. And you can find this show as at upgrade on relay FM.social,

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