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This is Bloomberg Daybreak Weekend, our global look at the top stories of the coming week from our day Break anchors all around the world, and straight to handle the program, look at key data in the US how it's going to impact FED policy going forward. I'm John Tucker in New York.
I'm Carolyn Hepker here in London, where we're looking ahead to the European Central Bank's upcoming rate setting meeting.
I'm Derek Krisner looking at the rollout of the iPhone sixteen and what it means for Asia.
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg E Loove on three Own, New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, DAB Digital Radio, London, Sirius XM one nineteen and around the world on Bloomberg Radio dot com and via the Bloomberg Business App.
Hi Everyboddy. I'm John Tucker, and let's start today's program with the key data in the US. We're going to get, among other things, CPI data. Wednesday at eight thirty Wall Street time. I was the data going to pack the FED at its September meeting, and for more insight, we're joined by Stuart Paul, us economists with Bloomberg Economics. Doctor Paul. Anyway,
I was all prepared to talk about inflation CPI. That's the back seat, maybe even the trunk of the car, and in the driver's seat, I'm going to gas his jobs data right.
Right, So we have jobs data that just we have jobs data in hand that just came out on the sixth Then they surprised the consensus to the downside, showing just one hundred and forty two thousand jobs added. This is other than the inflation report, basically the last important data set that the FED is going to have in hand.
And with the labor market to terror rating as much as it has, with the unemployment rate climbing to four point two percent, the FED is shifting its focus from inflation to the labor market.
That's what one hundred and forty two thousand jobs created, nonfarm jobs. That doesn't sound too bad. We just reverting back to where we were pre pandemic.
Well, so you're right in a in a typical set of circumstances. The pace of hiring that would be consistent with a steady unemployment rate is about one hundred thousand jobs per month, So one hundred and forty two could sound pretty good by comparison, But with the surgeon immigration, with people considering holding off on retirement, with the unemployment rate rising, we need to find a way to reconcile what we're seeing from unemployment and with what we're seeing
in terms of hiring. So one hundred and forty two thousand just isn't enough to do the trick anymore. We are seeing the labor market cooling. We see just about one point one job openings per unemployed worker. That's down from about one point two openings per unemployed work pre COVID. So the labor market is undoubtedly cooling despite what might seem to be a decent pace of hiring.
The Federal Reserve has this dual mandate full employment and what stable prices, or however they phrase it. It's really difficult, I would imagine to kind of thread that needle.
It certainly is. They are two different prongs of the dual mandate, as you said, maximum employment of price stability. Sometimes those two things can be in conflict, and right now the FED is at one of those moments in time where it has to balance their two priorities. Sure, it wants to really suffocate inflation and ensure that it's on a sustainable path to the two percent target, but
the labor market is showing a bit of fragility. We are seeing the unemployment rate on an upward trend, and as we saw in the July data, the sum rule had been triggered, which typically poortends further rises in the unemployment rate.
Although that's come into question by claudiasamer itself. That's like, you know, but still contends that there is now not necessarily recession in the offing. But the I think she put it a risk now of recession.
That's right. Even with Claudia saying that there's a risk of recession, I would still think that she's a little bit more optimistic than we are here in Bloomberg Economics.
Oh I, I'm.
Sorry to say, but we think that the outlook is a bit more weak than Claudia herself seems to think, and we think that risks are far more notable than Claudia seems to think. Consumers have just been running down their savings they've been saving. They save that a two point nine percent pace, So that's two point nine percent of their disposable income went to savings. That's exceptionally low.
Should we should point in Consumer spending is like the biggest thing in the economy right now. That's what powers the US economy.
Definitely, that's what powers the US economy. And it's consumers willingness to spend that can propagate inflation.
But there's a credit card.
That's right, there is a credit card, But I don't know.
Are they running up debt? And like, does anybody care?
If they are?
They're running up debt. They're also seeing rising defaults, and so we could expect credit availability to become a little bit less available. And look, interest costs are also starting to weigh on consumers, especially consumers at the lower end of the income distribution.
All right, So that brings up the question that everybody's asking the Federal Reserve. It's kind of baked in the cake that the next meeting this month they're going to cut rates. But the question is how much, by a quarter of a percent or half a percent.
The odds slightly favor, just slightly favor a quarter percentage point cut.
But why, I mean, why not just go all the way? We know, as you just said, things are slowing down.
It seems to be that the fear among policymakers is that if they start with a half percentage point cut, markets are going to expect that they are going to be further half percentage point cuts coming down the line, particularly in October, November and then December. And if markets
start baking in that expectation, financial conditions loosen. And it actually, perhaps counterintuitively means that by signaling that things are slowing down and cutting rates rapidly at the start of the cycle, they'll then have to maintain a more restrictive stance because financial conditions have loosened. So the more cautious approach might just be to try to not scare the markets by doing this quarter point cut first, and if they need to catch up later, they'll catch up later.
Okay, so the CPI report coming on consumer pricing into that. Do I care about inflation anymore? For its like a couple of years. We're all afraid of inflation, including the FED. Look, I'm gonna just forget it.
I'm an economist and I can't help but care about inflation forever and always. We are expecting the pace of headline and core inflation to remain about steady on a monthly basis zero point two percent for both the headline and core on a month on month BABS base effects will allow the annual pace of CPI inflation to fall
to two point six percent from two point nine. But if you combine the line items from CPI with the line items from the Producer Price Index, also to be released next week, and you take into consideration the negative base effect in the PCE price Index, which is what matters most for the FED, the pace of disinflation is going to stall pretty notably. So that's one of the reasons why we expect the Fed to be a little
bit cautious in that pace of cutting. Why odds just slightly favor that twenty five basis point cut in September rather than the fifty.
All right, great explanation, I appreciate it. Thanks to Stuart paul Us, economist with Bloomberg Economics. Well, it is a big week in politics ahead. The first president to debate between Vice President Kamala Harris and former President Donald Trump, set for Tuesday at Bloomberg Television and Radio is going to have special coverage of this ABC News debate along with a global simulcast starting at eight pm Wall Street Time. And for more on what to expect, we are joined
now by Laura Davison, Bloomberg Politics Editor. Nice to be with us, appreciate it. So this is going to be a reasonable exchange of differing ideas or a wild free for all.
The idea is that it's a reasonable exchange, but if past is any precedent, it may be a little more raucous. There have been some measures put in place to sort of turn down the temperature on the debate. The first is that there will be no studio audience. It will just be the candidates and the moderators in the room, so they won't have any sort of input from you know, folks on the ground in terms.
Of food, screaming, booing, and cheering, okay correct.
The other thing, and this has been a real point of contention in recent weeks, is that candidates mics will only be live when they are speaking. When they are not speaking, when a candidate's being when a question is being addressed to another candidate that then will have their
mic muted. So this is you know, intended to uh, you know, not have some of the you know, the cross talk and the talking over one another that we've seen, you know, particularly in twenty twenty and debate with with Biden and Trump, we saw it.
Did one campaign or the other insist on this or they both agreed. I mean, they obviously both agreed to it, but was one more persistent about it.
Well, there's a little twist here. So Originally, when Biden was still in the race, this is one of the things that his campaign put forward and said, look, we want these muted mics, and at the time Trump resisted it, but ultimately agreed to it. And that was the case in the in the June debate. Then when Harris became the candidate, her campaign said, no, actually we don't want
muted mics. We think that this is actually an advantage to us to be able to to interject or also, you know for Trump, he'll have like sort of less guardrails on him, less discipline, and he'll be able to sort of interject. So the Harris campaign really pushed to
have the mics unmuted. Ultimately they acquiesced on that, and ABC came out and said, look, there will be muted mics, you know, if we need to at some point, if you know, things get out of hand and it's just completely uncleared the audio, what is happening, We may unmute the mics, but uh, for we can expect that, you know, we won't be able to hear a candidate if they're not you know, it's not their turn to answer.
A question we already heard from Donald Trump. He he contends that Vice President Harris has already gotten the questions. I mean, there's absolutely no evidence of that. Right. It sounds like he's already uh, giving excuses for why he may not do as well as some hope he does.
Yes, and this is a game that he plays before a lot of appearances of kind of you know, beefing up his opponent and sort of you know, kind of downplaying his own potential performance. You know, he did this before the June debate. You know, it was talking all about how what a great debater Biden is, and of course that didn't you know, end up being the case, and that you know, Trump really came out ahead out
of that debate. But he's been talking for weeks about how you know, he sees ABC News as you know, quote fake news, unfair. So he's a little bit trying to sort of, you know, kind of give himself an out if the debate doesn't go super well for him, that he can say, look, I told you so, ABC wasn't.
Going to be fair to Is this going to be the only debate?
It's very likely it may be. You know, there has been discussion about another debate. You know, Trump has said he wants to do one on Fox News, Harris says, he said, you won't do that. We do have a debate for the vice presidential candidate scheduled, but this may be the only time that we see Harris and Trump on the stage together battling it out.
Do debates matter? I mean, I guess they, I should say they. Leading up to this, Joe Biden obviously had a poor debate, really bad debate performance, and dropped out. Thus we have now Kamala Harris. But what is the history of debates the candidate's performance and whether it amounts to people voting for them or against them.
So in recent history, the thinking has been that debates don't matter that much. It may help you give you a little post debate bump of a point or two, but that you know, things may revert back to the mean after you know, a week or so. Obviously, you don't have to look any further than Joe Biden and ask him if debates matter. If you know, a debate this cycle, you know clearly up ended the race and you know, essentially forced a candidate to drop out and
a new candidate to take his place. So there's a lot of a lot of interest in this debate. For obvious reason, this will probably be the largest audience you know that the candidates will have, you know, before people go to the polls. Another thing that's important too is you know, compared to you know, ten or twenty years ago, people are voting a lot earlier than they used to. You know, a lot of states have early ballots that
will start to go out. Early voting will start happening in a lot of places, So you know, people may see this debate and you know, within a week or two be able to vote. So things that happen in October or early November don't matter as much because you know, millions of people will have already had an opportunity to cast their ballot.
We can't wait our thanks to Laura Davidson, Bloomberg Politics Senator ed or reminder you could listen to special coverage of this presidential debay Tuesday on Bloomberg TV and Radio, along with a global simulcast. This all starts at a eight pm Wall Street time. Just a head on Bloomberg Daybreak weekend, I'll look ahead to the European Central banks upcoming rates set ida. I'm John Tucker. This is Bloomberg.
This is Bloomberg day Break Weekend or global look ahead of the top stories for investors in the coming week. I'm John Tucker in New York. Up later in the program, I'll look ahead to a major product showcase from Apple where the iPhone sixteen is going to be center stage.
But first in June, the European Central Bank cut rates for the first time in five years, making the move before its counterparts in the US of the UK, and now traders are betting on a further reduction as policymakers prepared to meet in the coming days and for more. Let's go to London and bring in Bloomberg Daybreak Europe anchor Caroline Hepger John.
When the EU became the second major global economy to cut lending rates this summer. It cited progress made on tackling inflation now in the coming days, a FIT are widely expected to once again reduce boring costs when they
meet in Frankfurt after June's landmark decision. But while the next two or three reductions in the deposit rate from the current level of three point seventy five percent are unlikely to cause major friction, things could get a lot more contentious ones interest rates fall to around the three percent mark if indeed they do. Sources tell Bloomberg that the rate cutting debate could soon run into differing views on both the price outlook and the point where monetary
policy stops restraining economic growth. With European inflation plunging, markets and analysts reckon that boring costs might even be between two and three percent by the end of the year. It's food for thought, isn't it. For Europe's central bankers, who widely agree that there is room to cut rates further now, they'll also need to consider the impact on businesses,
particularly those operating within financial services. Recently, the German government announced plans to dilute their stake in Commerce Bank after high interest rates boosted the bank's profitability. As Bloomberg's European Finance reporters Stephen Aaron's explains, fluctuating lending rates are directly correlated with the bank's fortunes.
I mean, yes, the government would have to achieve a much higher price for it to break even, but you know it's whiter under the rege. Essentially, what they're looking at is the share price rally. It's been happening at Commerce Bank for the past four years really thanks to interest rates rings by the ECB and that share price. You know, it's just much higher than it used to be, and they're seeing an opportunity to take advantage of it and you know, make some money I suppose.
Okay, so it's opportunistic perhaps given the recent history of Commerce Banks share price, even if over the longer term they don't make money here, What does it mean then, even for Commerce Bank itself. You know, when we speak to them about this, and Critty was reminding us we talked to the CFO about this very subject recently. They usually say, well, that's something you've got to talk to the government about obviously, and what does this mean for the bank.
Well, I think if a big investor decides sort of to sell down a stake in a company such as Commerce Bank, it sends a signal, you know, we don't expect the share price to go up much much higher and for longer, and so other investors will probably think
about him. What does it mean for us? We have reported previously that commers Bank is looking for fresh investors, and now that the biggest one is reducing at stake, I think that task is becoming even more urgent for them, and those will be the challenges facing commers Bank CEO Kenov and CFO Olive for the next months and even years.
That was Bloomberg's European finance reporter Stephen Aaron speaking there. So will it be another rate cut in Frankfurt and how will the central bank navigate the uncertain path ahead and how they communicate all of that to the markets in Europe. I've been discussing that with Blueberg's europe Economy reporter Alex Weber.
As you just said, see another cut next week is almost fully priced as investors have little doubt that it's going to happen. We've also heard from policymakers that they're really ready to consider another cut, so that was already a pretty strong signal market. The data on the economic front has developed more and less in line as the ECB expected, and the latest forecast was based on another cut in September. So these two things combined means that it's probably gonna.
Happen, okay, And if policymakers do lower interest rates again, does the path then surely become a bit more complicated.
So from what we heard is that another cut in December looks pretty likely, But then interest rates come closer to a level that economists call neutral, and that means that the discussion becomes a bit more complicated, because on the one hand, ECB officials need to decide whether they want to stop restraining the economy, whether the economy actually needs some help from interest rates, whether they need to
be lower any further. And the other complication is that this so called neutral rate is pretty difficult to estimate and observe, so it's it's hard to base policy upon it. But on the other hand, it's pretty important, So there's going to be the discussion is just going to become a lot more complex as we.
Yeah, as we move forwards. Yeah, absolutely does a right car suit Germany. I mean that has been one of the key issues in Europe, the kind of waning industrial power, the weaker economy in Germany.
Yeah, some economists have observed recently that Germany is actually need of lower interest rates much more than the rest of the Eurozone. Other countries are growing more strongly. Germany, as you know, is very reliant on its industry, and if borrowing costs remain higher than investments are becoming less attractive. It's only one part of the story, but lower interest rates would probably help German industry to some extent.
Yes, what sort of pace can we expect when it comes to the cuts from now? Do you think so?
Economists have long estimated that there will be quarterly cuts. That's for several reasons. One is that the ECB publishes economic forecasts once every quarter. That's also going to happen
next week, coinciding with a likely cut. The other reason is that they're very focused on wage data because the ECB is afraid that elevated wage growth could stoke inflationary pressures and these sort of the sort of information also comes at a quarterly pace, so all of that makes makes it more likely that or points to the baseline as for quarterly cuts in between is not ruled out, but it would probably need some surprises in the data for that to happen.
Well, inflation was two point two percent in August. Is the battle for you know, dominance over inflation complete? Then, I mean that's very close to the ECB's target.
Is yeah, exactly, it's just barely above the target. But one important reason for the slowdown was a dip in energy costs, and that's also because energy prices were so volatile last year, so it's partly a statistical effect. And when you look under the hood, there is still services inflation that's running at twice the ECB's target. That's causing some uneasiness because it's really determined by domestic factors like the wage growth that we already talked about the labor market.
And as long as services inflation stays elevated, then the ECB is not going to sound all clear. So it doesn't have to go it doesn't have to be that all composedonents of inflation go back to two percent, but at the moment there's still too much discrepancy. And we also expect inflation to come back toward the end of the year because these statistical effects on energy are going to become less favorable in.
Terms of the policymakers who make those decisions. How united are they in terms of the strategy.
So they've been relatively united. In recent weeks, we've heard different emphasis from them. So on there's one cohort in the twenty six member Government Council who emphasized the economy, the sluggish economy with that points to a preference for somewhat faster interest rate cuts. On the other hand, we have some who keep emphasizing the components of the inflation baskets that are not are still too elevated. So you
have just a different emphasis really at the moment. So there is some friction, I would say, and that could come depending on how the economy develops. That could even become more pronounced in the coming month.
Okay, that would be yeah, something certainly to watch. What will lower interest rates mean for the European banking sector.
So the banking sector has long enjoyed a windfall from higher interest rates. We've already seen that this is no slowly coming to an end. Interest rates have already been lowered on mortgage credit, so for them, that's it's a new chapter. Then if the ECB goes ahead with lowering interest rates.
And just lastly, what do we expect to hear from policymakers in terms of guidance? It's very cautious obviously from Christine Legarde in a lot of her press conferences. What do you think they will hear from policymakers from their guidance?
Yes, that's a good questions. I suspense Luggard will keep stick to that total openness, because otherwise the risk is always at the ECB stokes market expectations for more cuts, and they're afraid of causing a somewhat an overreaction. So like there's probably little upside in giving much guidance at this stage, So Logard might well stick to to what she said in the past, is that they are going to remain data dependent and the path, especially for the
next meeting, is completely open. Whether she gives any signals for further down the line some something very cautious, I mean that can be ruled out, but my suspicion is she's gonna be very open at this meeting.
That was Bloomberg's Alex Weber speaking to me. My thanks to him for looking ahead to the ECB's interest rate decision on Thursday, the twelfth of September. I'm Caroline Hepke here in London. You can catch us every weekday morning for Bloomberg Daybreak. You're at beginning at six am in London. That's one am on Wall Street.
John, Thanks Caroline, and just ahead on Bloomberg day Break weekend, I'll look ahead to a major product showcase from Apple. I'm John Tucker. This is Bloomberg. This is Bloomberg Daybreak Weekend, our bloob look ahead of the top stories for investors in the coming week. I'm John Tucker in New York. Apple is going to hold a major product showcase on Monday,
and the iPhone sixteen lineup will be center stage. The launch may mean gains in market share for Apple suppliers in Asia, and for a closer look, let's get to Doug Chrisner, co host of Daybreak Asia. John.
The event is titled It's Glow Time. I think the question is whether it will produce a glow for Apple. iPhone demand has been stagnant for nearly three years. Unit sales have been nearly flat, and according to Bloomberg Intelligence, much of that volume was driven largely by the need to upgrade iPhones sold three and four years ago. So with the iPhone sixteen, much of the hype as we know,
revolves around the suite of AI tools branded as Apple Intelligence. Now, analysts at Bloomberg are predicting the replacement of aging phones will continue to be a big driver of sales for the iPhone sixteen, much more so than Apple Intelligence. Our analyst are saying Apple Intelligence will likely have a greater
impact in fiscal twenty twenty six. Well beyond AI, the iPhone sixteen is expected to have several upgrades, larger displays, additional capabilities for the camera, to name a few, and these changes have created opportunities for Apple suppliers, especially since Apple has been working to diversify its supply chain right across Asia, not just in terms of oponent manufacturers, but
among assemblers as well. I spoke earlier with Stephen saying he is see your tech industry analyst for Bloomberg Intelligence in Hong Kong.
Apple does have the tendency to keep only a handful of supplier in certain components, or sometimes even just keep the soul supplier. I think it's better for the control the quality and the delivery. In the near term, we may not see any major increase in terms of assembler But then in certain markets, for example like India, they start working with Tata for the iPhone assembly, so if they are doing a good job, I mean Tata. If
they're doing a good job, then hard to tell. But so far I think we're still looking at three major supplier in the side.
When it comes to the parts manufacturers, are they at a state right now in terms of their production capacity where they can meet what you think is going to be a little bit of a pickup in demand. Do you think that that's probable or we maybe going to have a little too much demand and supply is going to take a while to catch up.
I think in terms of capacity, I don't really see any major issue given that we're not the overall smartpha obviously become a much more mature market as a whole. So the capacity issue to some extents is probably more about relocation as the supply chain is trying to cope with the juopidical tension, so some components supply might be forced to relocate. But so far, for the like a camera, we don't really see a lot of relocation happening. I think component supply are still generally cautious.
He is Steven saying from a Bloomberg Intelligence, Let's continue the conversation on the iPhone sixteen and Apple's supply chain across the Asia Pacific. The let's have office with us. He as Bloomberg Tech Editor in Hong Kong, along with newly Parnell Asia Tech reporter, also based in Hong Kong. Good of you guys to join us. Vlad, let me begin with you. I want to understand how well prepared Apple is for this launch.
Well, an Apple launch is one of the best orchestrated events on the tech calendar. It's actually remarkable. I was thinking recently that every September we get a new iPhone, we get tens of millions of units distributed and prepared across the world. You can never diet Apples preparation. The question, to my mind is how well Apple does in selling this AI pitch. Like we've just been discussing, how well
does it translate to consumers. Apple has been the one company in the tech industry to take these rather elusive things, simplify them, make them relatable to consumers, and make them a reason to buy advice. They've done with so many things, whether it's making the camera more relatable, video recording people who have ditched their actual cameras and replace them with iPhones. The real question is it's one for the entire industry.
How well can Apple sell AI because it will affect not just Apple, put the broader.
Industry newly When you consider AI, this is something that Apple obviously has invested a great deal in. How high are the stakes?
I think the stakes are high, and I think what I'm anticipating and I think others are looking at, is whether sort of easier access to AI tools will really start to translate into real world applications. So, in other words, we see the sort of revolutions that's being created with access to things like chat GPT, which is a sophisticated technology, but it's a chat bock where you enter text and
you get a response. I think if smartphone makers like Apple can start to introduce some of those features into the device that people already use, so you don't have to sit at a computer to use it, or go to a special website or open an app, you can bring some of these features closer to how people use their phones, which are so attached to us throughout the day.
I think we could see more consumer adoption. It could see more real world applications for this kind of nebulous technology that people have been talking so much about how it's going to change the world. If Apple can show some of some of these applications and some of these use cases for this technology right on the device, I think that would be exciting to see.
And the interesting thing to my mind is that will not translate into an immediate surge in sales. One of the fun things what iPhone is that there's a lot of peer pressure that happens. So if these AI features do find an audience, what will happen is you'll notice it in your friends and neighbors and family members using these features. They will write better emails all of a sudden, and is because they're using the AI making them more
concise in their messaging. They will send you fun autogenerated images and you ask where did you get that from, and they will say it's the only on the latest iPhone. So one of the issues that Apple was actually faced in recent years is the fact that after the first surge of people having to upgrade because the annual upgrade cycle, sales just kind of drop off during the first half of the year. Yeah, app we started to struggle. It's had to do discounts and precedented ones in China just
to keep sales going for the iPhone. And one of the fascinating things is the dynamic of people buying the iPhones in the last half of the year, then that translating into more people being attracted by the AI stuff and that potentially lifting sales in the first half of the year where Apple has its difficulties.
Newly, when you look at the part suppliers in the Pacific RIM, does this launch do anything for greater diversification When you build out something like this, do you want to make sure that your supply chain is much more robust than it's been in the past.
Yeah.
And for some time, you know, Apple has been really interested in diversifying its supply chain, particularly in countries like India, where I was based before and where we've done some great reporting on the advances that India that Apple has been making in accelerating this speed with which they can create newest versions of the iPhones in India, so it's not simply lagging behind when they're made in China for Ekple. Now they're getting closer and closer to being able to
release the very top end new iPhones in India. So, for example, you know that that allows them to diversify a bit away from the mainland because of the geopolitical issues between the US and China, and over the years, they've been really trying to build up their network of supply of component makers, suppliers and capacity in India and so so I think that's something really interesting to watch.
And of course India is an important increasingly important market for actually selling its phones, so they're going to export a lot of these from India, but also they want to appeal to this one billion plus person economy as.
Well, glad.
As I mentioned earlier, much of the hype is focused on this AI tool or tools plural with Apple Intelligence. When you look at what companies like Samsung or Huawei even what they are doing with respect to AI, is Apple a little behind the curve?
I wouldn't say so. I think it's still extremely early days. Some of the demos that I've seen from Chinese filmmakers are really fascinating. Their compelling one of them is this idea of turning AI into an agent. One of the companies, Honor, which is a spin off from Huawei. They showed me an AI demo where the AI agent went into all their apps such as we Chat, pay, Alipay, and it pulled out all of the user's pay subscriptions and then you could just tell it by voice cancel all my
pay subscriptions because I'm tired of those. I find that a very interesting and very compelling user of AI, just simplifying a lot of these processes and kind of the fiddly aspects of using a phone and internet services. But that is still so early. It's so premature to say that this is the decisive or the winning feature, whether that's for Chinese manufacturers, whether it's for Samsung, whether it's
for Apple or even Google. I mean, one of the interesting things is that Google advanced the launch of its new Pixel phones earlier this year to go straight up against the iPhone. And that's precisely because Google believes that it has the better AI. But like I say, it's still way too early to tell.
So newly, when we look at Apple products generally, I know that they are considered to be kind of a luxury item. The price point with this new rollout is probably going to be high relative to some of the other smartphones in the market, whether it's China or India. Is there going to be appetite do you think for the market to kind of support what Apple has aspirationally in terms of total units sold.
Well, we've seen in China actually that they've been losing market share with the new Huawei device, which is a direct competitor the May sixty, Huawei's high end smartphone we see Apple. You know, China is a huge market for Apple for selling iPhones. I think there's still appetite there, but certainly they've come under fresh challenges from Huawei and other makers there. And then in India, also a massive market.
For a long time, they've had a tiny market share in India, primarily because the device is so expensive in a market where consumers have less purchasing power. But they have made advances in India over the years, in part because by manufacturing the devices in India, the taxes are lower, so they can bring the price down. And you know, there's been some interesting advancements as well on the retail front, with Apple last year opening its first Apple stores ever
in India. And Tim Cook visiting the country last year. That helps with branding, and when you have actual shops people can go into and see how the devices work, that that's been a boost.
For them too.
So I think certainly in India, and they have, of course a wider variety of devices, the less expensive ones in addition to the newest ones coming out, So I think that they're quite bullish on India. So yeah, China, you know, maybe growing pressure from Huawei and other competitors, but India, I think, starting from a slower base, a lot of room to expand, and I think they're pretty excited about India.
And Apple really might need India because Huiwei scheduled an event the day after the iPhone event. It's literally hours after our reporting shows that it's going to be the world's first commercial smartphone with two photo folds in it. It's going to be groundbreaking device. Huiawe is really making a push. And an interesting thing is that Apple fell out of the top five in China in the June quarter. It has a real chat lynch, as Newla says, in
one of his biggest markets. So it's going to need India. It's going to need to remain strong in the US, and again it all goes back to AI. Just like with and Vidia and all the other companies that we cover, AI is a real critical thing. And I also talk to another one of the Chinese muffle manufacturers this past week and I asked him, do you have a plan B if consumers don't respond well to AI? And the also well just know.
Newly Pernell is Asia Tech reporter. He's based in Hong Kong, and Vladsavov is Bloomberg Tech editor, also joining us from Hong Kong. Thanks so much to both of you for helping us set up the launch of the iPhone sixteen and understanding some of the ramifications for the parts suppliers in the Asia Pacific. I'm Doug Krisner. You can join Brian Curtis and myself weekdays here for Bloomberg Daybreak Asia beginning at eight am in Hong Kong eight pm on Wall Street.
John, Thanks Doug, and that does it for this edition at Bloomberg day Break Weekend. Join us again Monday morning at five am Long Street time for the latest on markets overseas. In the news you need to start your day, I'm John Tucker. Stay with us top stories and global business headlines aren't coming up right now.