Apple Intelligence's Siri feature will change how we use our phones, says Deepwater's Gene Munster

A HIGHER MULTIPLE BASED UPON THE SERVICES COMPONENT OF THEIR BUSINESS AND THAT BALANCE SHEET THAT I THINK IS A LOT OF FLEXIBILITY. >> WE'LL FIND OUT. >> FOR MORE ON APPLE'S GLO-TIME EVENT, LET'S BRING IN "FAST MONEY" FRIEND GENE MUNSTER. GENE, YOU ARE LISTENING TO THIS DISCUSSION. SHRIMP COWBOY, ET CETERA. >> YEAH. >> WHAT IS PRICED IN? I MEAN, IS A SUPER CYCLE IN ANY WAY PRICED IN? >> NOT EVEN CLOSE, MELISSA. I THINK IF YOU LOOK AT THE STREET NUMBERS RIGHT NOW FOR FISCAL '25, LOOKING FOR iPHONE GROWTH OF 5%, 6%, IT'S BEEN BASICALLY FLAT THE LAST COUPLE YEARS. A LOT OF TALK OF A SUPER CYCLE, BUT INVESTORS ARE GENERALLY FOLLOWING THE SAME ROAD MAP AS THE TRADERS ARE TODAY, THAT'S KIND OF A WAIT AND SEE. AND I WOULD JUST SAY ONE PERSPECTIVE OF THIS WAIT AND SEE, A LOT OF THE CONVERSATION TODAY IS ABOUT DETAILS OF ANNOUNCEMENTS, ABOUT SPECIFIC FEATURES, PRICING, TIMING, ALL OF THAT MAKES SENSE. BUT ULTIMATELY IT IS NOISE. TO THINK OF APPLE INTELLIGENCE IS A FEATURE, IS A TRAP. ULTIMATELY, THIS IS A PARADIGM SHIFT. THIS GETS BACK TO THE QUESTION ABOUT WHERE CAN THESE NUMBERS GO? AND I WANT TO QUICKLY FRAME IN THE LAST PARADIGM SHIFT WE HAD, WHEN THE FIRST iPHONE CAME OUT, GOING FROM A FLIP PHONE, A KEYBOARD, TO A TOUCHSCREEN, THERE WERE SEVEN OTHER COMPETITORS OUT THERE WITH TOUCHSCREENS, BUT NONE OF THEM WERE ABLE TO CAPTURE THE POWER OF AN APP STORE. THAT CHANGED A PHONE TO A COMPUTER IN YOUR POCKET. WHAT APPLE INTELLIGENCE HAS THE POWER TO DO IS ULTIMATELY BRING SIMPLICITY AND INTELLIGENCE TO YOUR POCKET. APPLE, 1.8 BILLION CONSUMERS ARE GOING TO WANT THAT. WE'RE GOING TO HAVE A SUPER CYCLE THAT IS GOING TO EXCEED THE 5% TO 7% THE STREET HAS. >> CAN YOU TALK TO, GENE, THE DIFFERENCE IN HOW THE TECH GIANTS ARE PRICING THEIR A.I. PRODUCTS IN THAT? AND I THINK I ASKED YOU THIS QUESTION LAST WEEK IN THAT -- WHY DOES MICROSOFT CO-PILOT, WHY DOES IT CHARGE ON TOP OF, AS OPPOSED TO OFFERING IT AS AN INTEGRATED FEATURE? AND FOR THE iPHONE 16 USERS, IT WILL BE INTEGRATE INTO THE PHONE. SO, CAN YOU SPEAK TO THAT STRATEGY AND HOW THAT MAY ACTUALLY HELP THE REST OF THE PACK, IN TERMS OF SELLING THEIR A.I. PRODUCTS, BECAUSE HERE, YOU'RE GETTING CONSUMERS TO ACTUALLY TRY IT OUT, SAYING A.I. IS NOT BAD AND IT'S HELPFUL TO MY LIFE, SO I'LL PAY FOR IT ELSEWHERE. >> THE WAY THE PRICING HAS BEEN WORKING SO FAR, IT'S A SPECTRUM. OPENAI LED THE WAY WITH THIS. THEY HAVE A FREE VERSION, AND THEN THEY HAVE A PREMIUM VERSION, $20 A MONTH, THAT'S BEEN THE MODEL NOW THAT GEMINI USES, MICROSOFT IS ADOPTING A SIMILAR APPROACH. APPLE IS GOING TO DO A LOT OF THE SAME THING. THE FUNCTIONALITY THAT PEOPLE ARE GOING TO USE, THE PARADIGM SHIFT THAT I'M TALKING ABOUT IS GOING TO BE AVAILABLE IN OCTOBER AND NOVEMBER FOR U.S. USERS. AND THAT'S JUST GOING TO IM IMPACT -- THAT WILL BE FREE, THAT WILL BE FREE IF UPGRADE YOUR PHONE, YOUR HARDWARE, YOUR MAC, YOUR iPAD. AND SO I THINK THAT'S ONE PIECE TO IT. THE PRICING STRATEGY. THE OTHER IS, OF COURSE, AS MORE OF THESE RICH FEATURES COME OUT, AND THAT'S WHERE THERE'S A NEW BUSINESS MODEL. THERE'S A LOT OF QUESTIONS, LIKE, WHAT IS BEYOND AND iPHONE UPGRADE ONE OR TWO-YEAR CYCLE MEAN FOR APPLE AND A.I.? AND THEY CAN HAVE THESE MORE RICH PRODUCTS THEY CAN SELL OPENAI WITH A PREMIUM VERSION THAT APPLE TAKES A 15% CUT OF. I THINK IT'S GOING TO BE A TIERED PRICING MODEL, AND I THINK THERE'S JUST SO MUCH TALK ABOUT A.I., BUT SO FEW PEOPLE HAVE ACTUALLY USED IT. AND I'LL BET YOU THAT ANYBODY THAT EXPERIENCES THESE -- THESE FEATURES ARE GOING TO WANT TO TELL OTHER PEOPLE ABOUT THEM. >> SO, GENE, YOU ARE BRINGING UP A REALLY INTERESTING KIND OF HISTORY LESSON AND POINT ABOUT THE COMPETITIVE LANDSCAPE, AT THE LAST, CALL IT SEMINOLE MOMENT. AND I THINK ABOUT APPLE HERE, WE SPENDING SO MUCH TIME TALKING ABOUT CHINA AND WHY IT'S A HEADWIND, BUT HOW ABOUT THE REST OF THE WORLD? DOES APPLE -- ARE THEY TAKING MARKET SHARE IN OTHER PARTS OF THE WORLD? PART OF THE CONVERSATION WE NEVER HAD. AND WITH THIS BACKDROP, DOES THIS FURTHER CEMENT THEM AS THE LEADER IN THE PLACES THAT AREN'T REALLY CHINA? >> SO, ABOUT 1.8 MILLION ACTIVE USERS, THEY DON'T GIVE THAT NUMBER OUT, THAT'S AN ESTIMATE. SO, YOU THINK ABOUT KIND OF -- 6, 7 BILLION KIND OF ACTIVE DAILY INTERNET USERS, SO, THAT'S BEEN PRETTY STABLE, TIM. THEY REALLY HAVEN'T BEEN ABLE TO GROW THEIR MARKET SHARE MUCH. I COULD SEE THIS AS SOMETHING THAT COULD TAKE THEIR MARKET SHARE FROM 18% TO 20%. WHAT YOU SAID IS REALLY IMPORTANT. I WANT TO EMPHASIZE SOMETHING, THAT -- WHAT APPLE IS DOING HERE, BRINGING HARDWARE SERVICES AND SOFTWARE TONIGHT, I DON'T WANT TO PARROT THE COMPANY'S LANGUAGE, BUT IT IS IMPORTANT, BUT THE REASON THAT APPLE HAS A 95% RETENTION RATE, YOU CAN GET A LOT OF THOSE FEATURES WITH ANDROID, PEOPLE LOVE HOW EVERYTHING WORKS TOGETHER. AND I THINK THEY'RE GOING TO DO SOME OF THAT SAME SIMPLICITY AROUND BRINGING A.I. TO MULTIPLE DEVICES, AND THAT'S GOING TO BE A COMPETITIVE ADVANTAGE. AND I THINK IT'S GOING TO MEAN INCREMENTAL SHARE GAINES, BUT MORE IMPORTANTLY WITH THAT USER BASE, IS THEM SPENDING MORE MONEY WITH APPLE. >> HEY, GENE, IT'S KAREN. DO YOU FORESEE AT ANY POINT A BIFOLD, OR FOLDING PHONE FROM APPLE? >> MAYBE? THEY'RE TESTING SOME DEVICES, CLEARLY, THE BIGGER FORM FACTORS TEND TO SELL BETTER, SO I'M SURE THERE WILL BE SOME EXPERIMENTING AROUND THAT. I CAN SAY FROM A PRODUCT P PERSP PERSPECTIVE, THE PIECE THAT I'M MOST EXCITED ABOUT, AND THIS IS A SHIFT FROM WITH WHAT I'VE TALKED ABOUT BEFORE, I STILL BELIEVE VISION PRO CAN BE 5% PLUS OF REVENUE. I USED TO THINK IT COULD BE 10%. BUT I THINK WHAT THEY'RE GOING TO DO AROUND WEARABLES, AIRPODS WITH CAMERAS, ULTIMATELY, THAT'S A MUCH BIGGER OPPORTUNITY THAN A FOLDABLE PHONE. THIS IS BASICALLY SMARTGLASSES WITHOUT HAVING TO WEAR SMARTGLASSES. SOME OF THE SAME FEATURES THAT STEVE TALKED ABOUT, THE GOOGLE ASTRA, ALLOWING A.I. TO LOOK AT THE WORLD AROUND YOU. I THINK THAT'S A REALLY COMPELLING -- A FEW YEARS AWAY, BUT WHEN YOU THINK ABOUT WHAT'S NEXT IN TERMS OF HARDW