We had another development today out of the U S Commerce Department that puts the relationship, you know, more into focus even than it was so. First of all, the basic story was that the top US official overseeing export controls said he expects to deal with global allies to limit further shipments of chip production equipment to China in
the near term. But what also came out of that, and credit the South China Morning Post for splashing this across the front page, that the semi conductor export curbs would be followed by biotech and AI restrictions and and this was the comments coming from Alan Estevez, who's the Under Secretary of Commerce for Industry and Security, and he is that top official UH in this area at the Commerce Department. So it does raise a lot of questions, and it also raises some questions about how some of
those stocks might trade today. Companies like wush Aptech and wush Biologics UH the trade in Hong Kong that are in that biotech sector in China. Be interesting to see how they tread the Nastack, Gold and Dragon Index. By the way, the US listed China starts down three point six in the session today, alright, nine minutes here before the top of the hour. That's a quick snapshot of some of the things we're looking at. The media were shod to you. Okay, let's find out an Apple. It
doesn't immuneto a broader slump in tech. In fact, and managed to avoid the share slump. But otherwise the company did come out and post weaker than expected iPhone and services sales, and that's despite an otherwise upbeat earnings report. Mark German's Bloomberg Technology reporter, Mark, thanks are joining us.
It's a I mean, we're looking at the iPhone delivering what generating forty two point six billion dollars of revenue in the fourth fourth quarter, and Anderson looked at forty two points seven that's really a very small miss ultimately, but the services site perhaps was more of a concern. But let's also not forget that the rest of the report was not too bad. So the I thought miss was about four million dollars, the services missed was about
eight hundred million dollars. So we're not talking, you know, crater of an issue here, right, But investors analysts always looking for more, right, But I think all things considered, given what we've seen from Meta from Google, from Amazon earlier today. This is a pretty remarkable report from Apple. They've clearly dodged the tech route here, but they are worry warning about some sort of holiday slowdown, right, So the growth rate for Q four from the year ago
quarter was eight percent Q one. The upcome holiday quarter there'll be less than that. They weren't clear if that would be the client or just you know, between seven percent growth, but clearly that they are preparing investors and analysts for not the best holiday quarter that they maybe would have imagined otherwise. Very interesting to compare the governance
of Apple versus Meta. That's a stark difference there. And actually Apple's um margins went up, right, So Tim Cook is managing the company and and and managing to cut
some costs as well. That helps the bottom line. I mean, the difference between Apple and Meta at a very fundamental level in terms of margins right now is Meta sort of recalibrating this entire business right there, cre organizing the company around augmented in virtual reality with this Reality Labs division, right And anytime you boot up a new company, obviously that's going to take it's going to be very capital capital intensive process. Whereas you know, Apple is not undergoing
some sort of big transition here. They're popping out new iPhones, iPads, Apple, watches, max, you name it, as they have been the last several years. So that's the difference of why you see sort of the you know, the better margins on the Apple side than the Meta side, and Mark just there looking at Apple. Okay, as we got into the holiday season as it were,
you know, they're warning a little bit about that. Perhaps that's already in the price to some extent, but you know what is the overall read through from these tech all these tech companies, including the likes of Google, Will, Meta and the like. Yeah, you know, they're all bracing for a pretty bad holiday quarter. They're all talking about foreign exchange headwinds, specifically on the Google and Meta storefront. They're talking about digital advertising. Apples AD business remains very small,
although they're planning to expand that next year. So I think of all the apples in the best shape, right, I mean, I think generating nearly at expectations for the iPhone in terms of revenue is pretty strong. You haven't seen a big creatoring of services revenue despite no more stay at home orders, in many parts of the world, So I think you're seeing a fundamental difference there. Mark, I asked this question to a guest earlier, and I want to put it to you. It's a it's a
sort of broad type of questions. Detected very well after COVID hit and really the economy was slammed and everything looked dire, but these types of companies did very well, and and it's it's not going that way this time. What's the chief reason for that? Well, I think we're going in the opposite direction, right, I mean of it. And Amazon did extremely well because they were offering things that you needed from stay at home situations, right shipping services,
cloud video streaming, prime music, what have you. Google people are spending more time online on their computers. They were using more Google services. You saw the transition to digital infrastructure accelerate pretty significantly as well. That benefited Google. Uh, Facebook, Right, Facebook, what they've done over the past two years of sort of integrate that transition of a deeper VR and a R push. And I think that investors are not really going to want to see a capital intensive reboot of
a company going into a recession. So I think it all comes down to timing. Uh, And I think what Apple has proven over the last you know, three years or so, especially during COVID, that its products are really indispensable and the elasticity is you know, maybe stronger than people had anticipated for its devices, and I I seem to think that will continue despite the you know, the poor outlook economically over the next several months. Yeah, it's about we've got them putting up the prices of some
of the services as well. It's chief you Music and Apple Plus. So what you've seen them do is they raised in the US two dollars for Apple TV Plus a month, a dollar for Apple Music. You've also seen some of the pricing of their hardware increase internationally as well. On the music side, there's things because of increased licensing costs. On the TV plus side, because they're saying when they initially launched at five dollars a month, it was a
very limited availability of content. Now there's a lot more content, which is absolutely true. And the international price likes on hardware. That's of course because the foreign exchange had wins when they convert the income there to the US dollar. I heard that actually Apple provided something like a ten billion dollar hit to Meta because of those privacy changes. Yeah, there's you know, an argument to be made about that
ten billion dollar figure. Meta has argued that the that the sales hit there have to do with the Apple privacy changes, whereas Apple might argue that the ten billion dollar hit is related to the reality Labs push, and that ten billion dollar hit was later to be revealed by metas the same amount that they're having been impacted by because of Reality Labs in v R and a R. So it really isn't expect the truth is probably somewhere in the middle, as a typical seems to be with
these types of things. Okay, and we may see some better sales out of China coming up. Has China at some point has to move beyond COVID, one would think anyway. Mark, thanks for joining us, Mark German, Bloomberg Technology. We