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The other big story here in the world of technology is Apple. The US Justice Department and sixteen Attorneys General sued Apple, accusing the iphonemaker violating antitrust laws by blocking rivals from accessing hardware and software features on its popular devices. The stocks trading off about three and a half percent here today. It's certainly been an underperformer versus some of the other big tech names that are really riding in
the wave of AI. There's concern here about Apple, not just with these legal issues, but also with China as well in terms of demand and supply chain. So let's check it out with anarag Rana along with man Deepca. He's our leader of our technology coverage at Bloomberg Intelligence. An Rock, what do you make of this latest legal challenge from the US Justice Department against Apple.
So it's been long time coming. There's been, you know, so much pressure, legal pressure on them from all over the world. Apple is a closed system. Everybody knew that, so but you know, it's going to be fun to see how these things get proof that they were anti competitive. But having said that, big overhang on the stock headline risk, nothing good going on for them right now, iPhone saying is blowing down, So there's this is going to be a tough year for Apple.
What paulm I were talking about earlier is that what problem is this trying to solve for me as a consumer?
Basically saying, you know, we have a closed system and you can't transact outside the system. But Apple would argue that that's what makes the iPhone and the Apple ecosystem far safer than the open source or the open ecosystems. And that's really what a lot of the fight is about.
Frankly, And it's also like it's easier, Like it makes our life, it's easier.
Don't we want that one click?
Just just back on the redis story indication a little bit higher here. They raised the indication.
Forty four to forty eight. It was forty two to forty six.
So pushing that indication up a little bit will stay on top of that. So we've seen this play before, and I know you have ANURAG with your research coverage of Microsoft. Is this something where Apple, you know, over the next several five ten years, pay some fines, write some checks, maybe put some workarounds in their business. How do you think this plays out for the company?
I think you called it right. That's exactly what's going to happen. And it could even pressure their services revenue a little bit, their app store fee. They'll have to figure out to reduce that in certain areas. But I would argue that they have the capacity to do make it from you know, advertising revenue that they really don't generate that much at this point. So you know, the ecosystem is there. I don't think you can shake that.
But it's going to be, as I said, a headline risk for the stock for for a long time.
Now, what do you think resolves it? Like if they fix this issue is or something else? What else is going to happen? How when is the bottom for this?
Yeah, I think it's going to be a mix of a little bit of fines plus some compression in the feast that they charge. But I don't think any structural change is going to come out of how Apple does it.
I mean, that doesn't sound good though, does it? Like that's that feels like a big overhang to have to reevaluate.
Now, this is something that and Honor I've remember is this. I mean, this is something that I think the market learned from the Microsoft See situation, which was a twenty twenty five year issue that at some point and even to the tobacco industry, you just kind of power through this this overhang. What's the company saying on I mean when when they talk about these issues.
Yeah, they're going to find that. And you know, it would have been a different story if iPhone sales were really good. But the problem is iPhone sales are also not good. The product sales are not there, so there isn't much to hangle your hat on. If you're an investor, you're looking at, you know, two percent growth in terms of top line, maybe five percent bottom or EPs. So
it's not that exciting right now. Now that may change if by summer roared by the end of this year, we find out they've done to deal with Google and they are able to use Google's large language model on their phones, and that leads to foster refresh cycle of the iPhone so there is some hope, but you know, there is a lot of different butts in between.
So if I'm looking at this valuation real quick, is it worth twenty six times estimated price to earnings?
There I try not to look at estimated earnings. I try to look at free cash flow one hundred plus billion growing at three to five percent for a long period of time. You know, there isn't a company that has better financials than this one. So I you know, if I was to look at from that point, you know, the yardstick is a bit different.
Yeah, it's interesting.
I think this June Developer conference is going to be key for Apple. They need to try to get an AI narrative.
Out there for the company.
On rag Rana, thanks so much for joining us on a rag Ruana Senior Technology annels for Bloomberg Intelligence. Just talking about the Justice Department suing Apple. They got some issues that they're gonna have to work Workaround's going to be a long drawn out process, as they typically are. The question is, you know, how does the stock perform with that overhang.
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All right, now we all turn to Reddit. Here Man deep sing joints and sees a senior technology anels for Bloomberg Intelligence.
Reddit.
Is this just another social media company, like a Pinterest, like a I don't know what, like a smaller meta.
What is Reddit?
Yeah?
I think the best way to think about Reddit is it's very similar to Twitter in the sense that it is a community interest based platform. But the difference is obviously if you've heard about Wall Street bets and you know how meme stocks really originated and the whole trend originated on Reddit. So it's got a different type of community aspect to it. And in terms of user base, it's very similar to Twitter or pinterest or Snapchat, so
it's of the same size. The one big difference is reddits engagement when it comes to DAUS to MAUS, which.
Is daily active users to monthly after users.
You want them to be more active, right exactly, And so that's where they have struggled over the course of their fifteen to Eighteen years is years, folks, not months.
Yeah, it's been like I mean, haven't they been around for like twenty years?
They have been around for eighteen years.
I mean something.
I'm still still not making money, I know, that's the thing.
So I'm just wondering, like what they want to get out of this. What would success look like for this IPO based in the fact that they're an unprofitable social media company. That's not like a popular sentence to say, yeah, and.
Social media companies, I mean, the ones that have done well are the ones with scale and notably meta other ones snap Pinterest, Stock hasn't gone anywhere if you look at you know, long term eight to ten years, these stocks haven't. Yes, they had their way up during the pandemic, but then they came down sharply. So clearly profitability is a concern for a lot of the smaller social media names, and Reddit is no exception. The thing that excites me
the most is their data licensing part. I think that's the part. The timing of it is quite good with the Genai wave and everyone focusing on these large language models. I mean, at the end of the day, these llms have to be trained and retrained every two three months. And the way you can retrain these algorithms is through the corpus of data like Reddit possesses or like Twitter possesses, And that to me is something that every company will license from them. We know Google already has a two
hundred million dollar license. I wouldn't be surprised if Apple or Microsoft or others start doing the same, and there will be a gold rush for training data at some point, like there is for semis.
So a couple of.
Hours ago, right an hour ago, we had Men Deep in here talking about Reddit to Bailey and I and I Billy, and I asked them to pitch us, like we're a couple of head fund man and why we should buy this thing.
And I did put in ten percent orders. So we'll see how I do today.
Say, but it is all about that data aspect, is Men Deep was highlighting. And so if you're an investor, I think you if you're buying stock this morning, I think you have to buy off that this is a viable aspect to the investment story, that in fact they can monetize their data to people that need you know, that are running these larger language models.
So this would be like a third derivative of AI. Yeah, is that a fair thing to say?
And right now everyone is too fixated on semis and getting the chips. In the end, it comes down to how does AI solve your problem? Whether it's a chatbot or a copilot. What does a copilot need to be intelligent? It needs data?
See this is so interesting because I feel like AI conversation is now broadening out to different sectors. Paul and I talked yesterday. I was just in Houston, and all the energy companies are talking about is power demand for the data centers for AI? And there just isn't enough and like how to solve for that? So now you have the AI craze going to social media, and you have it going to energy and then chips and then software. It's it's kind of.
Cool, it is, And that's why I.
Kind of cool. AI is kind of cool. There we go drop the mind.
I think this Internet thing is it's just it's just gonna pass.
Actually, I actually gave that advice once to an analyst colleague mind who was following the newspaper industry and they asked him and he's a highly ranked analist, and there's this little thing called America Online out there and some stuff that was coming along Netscape and things like that, and they wanted him to drop his coverage where he had a franchise and go do this internet thing. You know what, I told him, stick with newspapers, baby, to be.
Fair, to be fair. Where's Netscape?
Yeah, but I mean aol.
He Fortunately he ignored me and went on to great fame and fortune. So good for landing. Okay, So what's the feeling out there about digital advertising in general, because that still is, at least in the near term, the big driver for Reddit.
It is, and I think when it comes to ads, clearly, Meta has a clear dominance when it comes to showing the users the most targeted ads. That's where Twitter struggle. That's where I think Reddit struggles to an extent as well, is that ad targeting and advertisers go to platforms with scale and the best at targeting. So overall environment seems to be getting better. But what Meta has going for them right now is they're actually applying large angrod models
for improving their ad targeting. It's not possible for a company of Reddit scale or Twitter scale or Snap scale to do that because they just don't have that kapex investment going in terms of applying large angroid models. So that's what it comes down to, scale of investments.
Okay, before we let you go, they also put like what eight percent aside to like regular Reddit users. Are they gonna buy it? Are they gonna short? What are they gonna do?
I think, Given again, Wall Street Bets is such a big, powerful community on Reddit, I wouldn't be surprised if they are interested in buying their own stock. And that's where I feel the IPO was priced relatively attractively when it comes to, you know, a first dapop up, I wouldn't be surprised if if you do end up seeing that kind of pop and the eight percent allocation goes to moderators and the advanced using way.
I'm glad I don't.
I don't have to like moderate the trading this the first few days, like as the bookmaker, because I don't know what these redditors are gonna do. I don't know if they're gonna go crazy like they do for some of these other Why would they.
Shot their own stocks? Give me one good reason.
I agree.
They've been talking about like not buying, they've been talking about it though, haven't they.
I don't know this scene could it could be one of those things where the you know, the marketmakers like, I don't know where these buyers are coming from, but they're flooding me in with these one hundred chair orders left and right. All right, men Deep saying thank you so much for joining us. Man Deep saying he's a senior tech industry analyst for Bloomberg Intelligence. He doesn't melod in, folks. He comes into the studio just like John Tucker, coming and showing up every day.
A big part of life.
Is just showing up every day.
Ain't that the truth? A big part of life is showing It's just showing up every day.
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Well, we get that economic data that came out about fifteen minutes ago, that was the pmis over at SMP Global. That they came in a little light. So what we like to do with you here is get the guy who did the data right after they dropped Chris Williamson, his chief business economist over at SMP Global Market Intelligence, and he joins us Now, what is my read from the uspmis right now?
The April read is one of further solid growth in March ends quite a good first quarter. So we're running at levels that are realy indicted of GDP rising and annualized rate around two percent, which I think matches a lot of other sort of NowCast models. So quite a good quarter. What's interesting is I think the split of data, because we've got signs of demand shifting back towards manufacturing now, which is really doing quite well again. Services growth slipping slightly.
It looks like we're seeing some demand shift come back from services towards goods.
So on the manufacturing side again, it came into fifty two point five. The consensus was fifty two I'm sorry, fifty one point eight, so well above consensus for this month and a little bit higher than last month as well. So is that simply manufacturer saying, hey, we've taken our inventories down, it's time to start refilling and start making stuff again.
No, it's not just that, it's it's overall demand levels as well starting to rise, So the inventory cycle is playing a part in that, but it's also final demand sharing signs of picking up nice So it's a more broad based picture than just turn in the stocking cycle. And if you look beyond that headline PMI, if you look at something like the output index, I mean that was up fifty four point nine.
That's really quite a respectable reading. That's the highest since May twenty twenty two.
So it really does thing look like production is starting to turn around quite quite nicely.
Now, so here's my question then, I mean, let's get to the raid cut situation in the second, but what are prices when it comes to manufacturing and also services? And that really does lead to the FED, right, because if we get cuts, is it just sort of jumpstart demand even more and then jumpstart infletion.
Well that's the kicker, yeah, because the price gauges are on the rise again the manufacturing. So we've got two lots of price gauges. They one is input costs and one is their prices that they charge to customers for manufacturing series. All those gauges rose in March coming and say they're costs a rising because of increasing wages as well as the oil and gas prices starting to come through hitting costs is well, so they're passed these on
to their customers. So rates the selling price inflation they accelerated really quite sharply, in manufacturing at a thirteen month high now and services at an eight month high now. The peer this overall gauge of selling price inflation is around the highest for a year now. It's done a good job of anticipating where CPI is going to go, and it tracked the upturning the downturn through the pandemic
really quite nicely. And this latest reading means that having come down to sort of closed store maybe even passing two percent target, you're climbing back up to a sort of four percent rate again with these numbers.
Hey, Chris, based upon the data that you guys see, do you feel like this recent I guess pick up an inflation?
Is it short term? Is it just a blip?
Or is it maybe something a little bit more longer term?
But there's a lot of speculation, isn't there that there might be some seasonality creeping into inflation numbers. At the moment, it's too early to say, is the honest answer. We've seen gas prices come up and the oil price come up. That's feeding through. So it's fairly obvious where that's coming from.
The wage growth. I mean that that's still being passed through now that The hope is, of course, and this applies to the other central backs as well as the FED, is that as you get your headline inflation numbers come down, then that feed through to wake away weaker wage negotiations. So there's always going to be a bit of a
lag there. So what's hoped is that this little up to him we've got is still a bit of that lag feeding through and as the year goes on, this, as we move into the summer, hopefully you'll see those wage day to come down.
Yep.
Excellent, Chris, thanks so much for jumping on with us. Really appreciated.
Chris Williamson, chief business economist at SMP Global Market Intelligence, joining us from London via zoom.
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I want to get more insight here and sort of how you manage the momentum, how you manage the market. Nicole Web the senior vice president financial advisor at Wealth Enhancement Group, and she joins us, now, okay, you can't get in the way of this momentum, right, No, can't do You buy into it? You do even at these levels.
I'm sorry, but you do. And I think this is where it's really It's an interesting moment and it's supported by the breath we're seeing in the rustle, It's supported by credit spreads, it is supported by earnings. You take fed off the table, you still can look at earnings and profitability. And then you look at the forefront of digitization, and you mentioned Micron, and here we see just so clearly the thirst, the hunger for the next leg of AI.
And it's interesting so storage speed all of these things.
And then we and then we had, you know, for a lot of people. Was another confirming piece of data. Astera Labs comes out public yesterday. The stock just Rips was up seventy percent yesterday on's first day of trading. It's some of the nineteen percent today. Again, I guess you could say, well, it's a cour like one of our reporters sources said, well, of course this sing ripped.
My mother could have taken this public, that's how good a story it was.
But still it's a great performance. We're going to see with Reddit see how that trades today. But the IPO market is maybe a little bit of a confirming factor here.
Yeah, I think the IPO market is really interesting, and I think there's going to be differences in the names that are brought forward. You know, the one thing I want to go back to when we think about going down the cap spectrum, when we think about investors taking bets maybe on names that they don't know at the headline level. In the same way, what we also know
intrinsically is that there's been trimming of positions. If you had a META in your portfolio and it was three percent, it's now nine percent, you trimmed that back to five.
And so you're hearing some of these mega tech names likened to being atm machines for reinvestment, and so you know the amount of cash that was on the sidelines, and then the trimming of positions, and so you're seeing some of this down the cap weighting momentum trade and even that little bit of fade out that we're seeing in momentum around semis and so when we look to the IPO market, you know, redd, it's going to be a really interesting test case and that it's not profitable.
It's been a round for a long time. What is that narrative though? About the deep language that they own, what kind of learning? What can you translate that into? And I think that story is yet to unfold, but we have to see kind of what enthusiasm comes from that.
Now we're just.
Talking about like Reddit being a third derivative AI play because of the language models needed, So that sort of is different than just hey, your unprofitable social media company at the end of the day. Okay, so help me understand what the next catalyst is going to be. Deutsche Bank was talking over the weekend that you know, maybe we priced in sort of higher growth and higher inflation, higher for longer rates now, so it's really going to
be the growth narrative that leads. Others are saying no, straight up fundamental, straight up profit, like what is going to be the now?
Yeah, I think that those two things are intrinsically true. We went from a FED pivot. I mean it was called a pivot. I don't know if it was really the pivot, but back in December a little bit, the wording's a little strong for me. Then we went into the momentum of AI and then all of that was supported by earnings, by GDP revisions to the upside above trend growth expectation. You have Viisa who just continues to say,
the consumer actually looks pretty good. When we put all of that together, what you get is just this fundamental belief that companies will continue to be profitable, that earnings will be there. We were so unsure of the ten percent earnings per share growth that was baked into the SMP at the beginning of the year, and now that sounds likely, and so you have kind of all of this momentum. The more interesting thing, I think is what
is that catalyst to the first pullback here? And then is the pullback of a self fulfilling prophecy for everybody who's been sitting on the side lines feeling like they missed the opportunity, and so it's short lived, And you know, I think that's where I continue to say the same thing. I'm grateful to not be a trader in this market. I am grateful to be an investor in this market. This market has a lot of opportunity for investors.
One of the names is really missing out, arguably on the AI plays Apple, Yes, and that's one of the big issues. I know they're having a developer conference in June, but what's your take on Apple?
Here?
Have they missed AI? I can't imagine, but they're certainly late to it. I guess.
Okay, So I'm not everybody's favorite in our investment committee meetings right now because I am a bullish on Apple. I mean I find a lot. I think they're playing chessnut checkers. I mean not to use that analogy, but when you step away from the production of cars, but you know, below the surface, there's a lot coming with Apple car play that's interesting to me. What if it is more of a technology development and watching the likes of Tesla being there's just nothing positive that's coming out
of right now. The narrative around Tesla is, oh, should we price them like a car company? Right because you know, what if you spin off robotics. When I think about the Apple just saying we're going to use Gemini, well that's natural. You were using chrome already. I already think it's interesting that with Gmail we have so much deep
language learning accessible to Google. So you know, for me, I think the next leg of AI has the potential to really be the ISO operating platform, the hardware sales, and the services infrastructure that goes hand in hand, because if you continue to be the platform for application based technology, then you're going to need the systems behind it to operate.
And the thing with Apple is, as we know, the car thing aside is that they get into all of this stuff, they just get in late. They want to see what everyone else is doing, they want to see the best model, and then they're going to spend money to do it. So would you be buying Apple as a valuation play looking ahead to them, or it is by Apple because you know why not?
We all have iPhones you got to keep it. I think you can buy Apple for both of those reasons. Where it sits today. It's not historically cheap and it's not historically expensive. And I don't think that the last launch of the iPhone. And I say this as an eye statement because again there's a lot of people out there who wouldn't be of consensus with this, but they
launched the last iPhone to buy themselves time. I believe that the next iterations of iPhone are meaningful and they drive sales, and they drive sales globally because there will need to be a platform. When we look at some of these analyst reports out of Meadow, or we hear what they have in store when they build upon the meta platforms, they want to bring in applications that generate revenue, where people can buy add ons to lay over AI.
All of that has to be supported speed, memory, battery life. I mean, you can go on and on, and Apple is the products platform for that.
Are you worried about the China exposure though?
I think the China exposure continues to be incredibly opaque and slightly confusing. And I believe that that the read through from China affects businesses across the board always. But I wouldn't say that's a reason to not invest in Apple.
Interesting.
How about Intel. Let's talk about you know tech one point, oh if you will.
Yeah, Intel and on shoring production of chips is also feels innately necessary, and government support to bring us up to speed to you know, propel that forward quickly seems also necessary. You had the CEO of Navidia a few weeks ago, what was it three weeks ago, now already sitting in Dubai saying we all countries need to be producer, sovereign producers of chips. I mean, it is just going
to be that necessary, you know. I think there was some confusion over some money going to Taiwan Semi, some money going to Samsung, But at the end of the day, to onshore that piece of supply, it's going to take three to four years, and so we also need to continue to have access to the production today.
I mean, just on Apple, it's news crossing tape. US Justice Apartment sues Apple an antitrust case over iPhone thirty seconds.
How do you kind of factor that in?
I think that it's like it's it's a constant. I mean, the anti trust is a constant, especially with all of these big technology names. How you think about that. You don't want the big to get so big that they can own everything. You also don't want to over respond to any of these issues because they will continue to forge forward, and so in that way, I think, you know, to an over response, one looks at it as again not a trader, but an investor, perhaps an opportunity to think about an.
Entry point great stuff. Really appreciate that, Nicole Webb, Senior vice president, Financial advisor at Wealth Enhancement Group. And to the point of like say, for example, TikTok, right, like if you have to divest it, who's buying it?
Exactly?
I mean aside from anution, it's going to be a tech company, So you're gonna let that go through. And then how does that make? So there you know, sometimes one plus one does ant equal five?
Yep, and interesting to see. I mean, Applestock is trading off a little bit here. It's been under pressure all year for a variety of reasons. As Nicole was, youre just mentioning here, but it's Apple, I.
Don't know exactly.
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Let's go to the ag space. So if you eat food, you want to know about this company. This company is Agco. It's trading up by about four tenths of one percent. It's about one hundred and eighteen dollars a share. So it's an American agricultural machinery manufactured company. So it's basically, if you're a farmer and you need stuff, you're going to go to the companies like AGCO, Deer that kind
of thing. It's a huge EG equipment industry, and farmers are it's so important, particularly as we grow the population by billions. Everyone's going to need to eat. So let's talk to the CEO of ag CO joining US now, Eric han Sotia. He joins us. Eric, it's great to get your perspective and everything. So I just want to start macro. Usually, higher rates are not good for farmers. Plus it's been a tough year if you've been a farmer house business.
Well, we've had two or three extremely strong years over the last three years. It's cooling a little bit in twenty twenty four. You know, an ag is not so much tied to general GDP or interest rates. It's more tied to how much grain is in the world and grain prices, and that's cooled off a little bit. Interest higher interest rates is a bit of a headwind because most of these farmers finance their equipment and that costs a little bit more to when they want to finance.
So it's a little bit of a hitd wind, but not the biggest issue.
All right, Eric, I know you guys are involved right now and in acquiring an eighty five percent interest in Trimble. Tell us what Trimble is, tell us what this deal is.
Why are you doing it?
Yeah?
Yeah, Well you know, if you start with our vision of our company, it's to become the trusted partner for industry leading smart farming solutions. And essentially what that means is machines that have sensors on them that can understand their environment, see changes in the soil or the crop, and then make onboard calculations, often using AI engines, to
be able to optimize their own performance. We invest in six tech companies over the last several years, increased our engineering budget for by sixty percent since I've been leading the company, and so we've been gaining a lot of momentum. But then Rob Painter, the CEO of Trimble, and I had this notion of.
We could be better together.
He's got the very best egg tech team that we would be able to add to our team. And so the combination of that group coming together with our ECO group is going to rapidly accelerate our ability to deliver solutions for farmers. Machines can do more for themselves, increase yields and reduce costs.
Eric, So, okay, Eric, are you still an Egg company? Are you a tech? Egg? A tech company? And I know you're going to say you're an agg tech company, but like seriously, like where should the valuation be?
Absolutely for this this type of our work, We're absolutely a tech company.
Uh, there's no question about that.
That's where all of our investment is, That's where our new hiring is, that's where our focus is. Probably two thirds of our engineering budget is now on either smart machines or clean energy solutions.
That's interesting, Eric, do you actually manufacture this the equipment or is this your a technology that you licensed out to other manufacturers?
How does that work?
So this is an interesting point.
We build our own machines, so tractors, combines, sprayers, planters, and those types of things. So we provide all the machines the farmer needs to do their farming all the way through the cropping cycle.
That's what you would expect.
The thing that's unique about ag CO is we've also got this whole tech division that sells retrofit technology modules onto an existing machine, maybe a five year old planter, and it brings that capability of that pl sprayer or combine from where it was from a dumb machine up to a smart machine. And the other unique thing about that is that we do it on all brands of equipment, So we don't just do it on customers that bought
from us in the past. We'll do it on John to the equipment case, new Holid equipment, others.
You know, we do it for every farmer.
We want to be the most farmer focused company in the industry, so we want to serve all farmers either with buying new from us or upgrading their existing machines with technology from us.
Interesting, so it's like a different way of being a services company in essence to farmers. So straight up, so what's demand like, Like, what's your backlog look like, how's demand, what's your visibility?
And the general machinery business demand is cooling. We had incredible demand over these last two or three years. We've been running to try and catch up to it had actually unhealthy long back orders for the last.
Couple of years.
It's still higher than we would target, but it's coming back down to normal back order levels. You know, it's the frothiness is is coming out. So you know, in that regard on the machinery business, it's cooling and getting
back to a more normal backlog level. On the technology business, though, because of this retrofit opportunity, there's a lot of farmers that in this kind of a year where they're not going to buy a big machine, they may say, you know what, I'll upgrade my existing machine with new technology to have that capability. So our retrofit business continues to grow, We're going to have a growing ear even though the industry is cooling.
Give us a sense just kind of how receptive are your customers, the farmer out there, how receptive are they to technology.
Well, the whole thing they don't want to go out and buy a technology, but they want to do is buy an easier solution. So like, for example, on our planter, we've got this thing called smart Firmer. It's a sensor that runs on the planter through the soil. It uses
AI measures soil properties and it can automatically for the farmer. Then, since when the planter is running through higher organic matter, which means more higher fertility, and I'll tell the planter plant more here or adjust the depthomatically to plant into moisture. We're the only one that has that kind of capability.
And essentially that's what the farmer's buying. If buying a new capability that does something automatically that improves their yield and uses less inputs like seed, chemical, fertilizer, things like that. Got a sprayer that uses vision systems they can see the difference between a weed and the plant automatically only spray the weed, not the plant, save seventy percent of the chemical going across the field. That's what they're buying and they're really excited about.
So Eric. In my day as a reporter, I have definitely been on some farms, pig farms. I've done the thing I have. I feel like if I asked any of your peers, they would say something similar about, yes, we provide this kind of technology to farmers now too. It's much more of a tech industry than an egg industry. Where do you differentiate.
This whole area of retrofit is where we differentiate on product. So we have our machines. Fent is our brand that's the best of the best. It's that the premium end of the market. So we really feel like we're growing that segment very fast in North America and South America as we globalize it. But where we big time differentiate is this retrofit upgradating existing people's machine of any brand to have more capability. And then the second thing is
how we think about going to market. We just launched what we call Farmer Core and we're shifting from Instead of the farmer having to come into a brick and mortar store all the time, we want to be able to flip it on its ear one hundred and eighty degrees and do everything on farm using digital tools remotely monitoring the machines. We want to take all of the service, maintenance, repair, all that attack activity out to the farm so the farm can engage, farmer can engage digitally, or we can
remotely monitor and do things. Essentially, it's moving from the mall to Amazon. Instead of the customer going to the store, the store comes to the customer.
Smart pitch the Amazon of ag. There you go. You just did it all right, Eric, thanks a lot, Eric Hanzodia ag co CEO. We appreciate the time. Today.
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