I would have to say that they're either
making things up or getting bad information or just trying to pump the
stock price for their own self-interests.
Right. The reality is that the numbers that
we're seeing in terms of iPhone orders from the supply chain probably indicate
an annual decline on iPhone unit shipments.
Now, an annual decline doesn't necessarily mean a revenue decline.
Right. Because they're adding new features for
these higher end models, particularly bringing making the lower end pro model
even better at that thousand dollar price point.
You may be seeing people who normally would buy the 799 version, go to the 999
version, which could raise overall peace in terms of an iPhone supercycle.
That normally means big hardware changes.
We're not getting that this time around. It also would mean that Apple
intelligence would be ready to go. But I would say it's half baked if even
that a lot of the new features aren't coming until December and many more are
coming until the middle of next year. So if you're anticipating an iPhone
supercycle, if you believe there will ever be an iPhone supercycle again, a I
would say adjust your expectations for 2024.
Maybe focus on September 2025 when the iPhone 17 launches look more significant
in specs. What is Apple Intelligence?
Apple intelligence is artificial intelligence for Apple customers.
Right? So that's the Apple branded version of
their A.I. platform coming as part of iOS 18.1
sometime in October. That's including summaries of
notifications. That's including phone call recording
and automated transcriptions. That's including transcriptions and
voice memos, including voice recording in the Notes app.
It's including John McGee's, which uses artificial intelligence to create your
own emoji characters, a line Dorner loves that, by the way.
Like world is like she takes my phone and does the things and she makes shifts
and all this stuff. Like the young kids, they love it.
I think the gen mortgages are going to be incredibly popular and I think it's
going to be at the center of many of Apple's advertisements for these
features. But that's not coming until December, So
I'm not sure how that can sell new iPhones in September if it's not going
to be available until December. So I have some big questions about where
analysts get their information from, why they say the things they do and why some
of them are considered reputable. So I think that people need to be able
to separate the signal from the noise. And that's why I'm so happy to come on
here and explain and provide a dose of reality.
So dumb question. So Paul gets his new phone in October.
Can he just update the stuff when the cool things like the emoji stuff comes
out? Yes, he can.
Absolutely. And it's not a dumb question.
Right. So what we're going to see are Apple
intelligence features rolling out probably over the course of the next 6
to 9 months with constant software updates.
And this is new for Apple. This is not something they've done in
the past. Usually you get one big software update
every September and you're pretty much safe for bug fixes and maybe a couple of
enhancements here or there until the following September.
This time around, it's going to be a gradual release.
Now, why are they doing that? Because Apple intelligence simply is not
ready. There's a lot of testing that needs to
go into this. And the reason Apple intelligence has
been behind is because they're responding late to this high praise.
They really didn't start getting to work on these enhancements until the second
half of 2022 after they saw launch. Right.
This was really something that was developed over the course of 2023 and
into the first half of 2024. And their development cycles for major
new initiatives like this, these normally can take 3 to 4 years, Right.
But they did it basically in half the time.
So you raised a good point earlier, Marc, that there's a reasonable
scenario, just given the size of the market, that there really are no super
cycles, unlikely to be a supercycle again for the Apple iPhone.
Is that a belief that's widely held out there?
It's widely held by me, and I think it's widely held by people who really
understand this stuff. You know, the last time we got a true,
true iPhone supercycle was back in 2014, ten years ago, with the release of the
iPhone six and six plus two reasons. That was the first time that they made
substantial screen size increases through the iPhone.
That was your first Apple tablet, right? Moving to the 4.7, 5.5 inch screen
sizes, massive. Also, that was the same year where they
struck the carrier agreement with China mobile in China, the biggest wireless
carrier in the world, adding a an addressable market, an additional
addressable market of 1 billion people. Right.
So that is what really elicited that supercycle.
And that was a two, three year thing. So that was great for Apple.
We saw another big bounce in 2017 with the iPhone ten.
Obviously that was major in terms of ASPs raising the starting price right by
$300 from 700 to 1000. That was a big upgrade with this idea.
Then we saw that again with the iPhone 12 5G, all four models at the tail end
of 2020 at the top of Covid when people were splurging on money.
Right. So that was a big one.
But since the iPhone 12 in 2020 and the advent of 5G for Apple, we haven't seen
major, major, major significant changes maybe either coming at the end of next
year, maybe that will create a supercycle.
But I want people to know don't expect one this year.