Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live from coast to coast with Caroline Hide in New York and ev love Low into sent Francisco.
This is Bloomberg Tech and Caroline.
Heid in New York.
And am Ed Ludlow live in Coopertino from Apple. Is the company's biggest product launch event of the year, and we're waiting for the next generation of iPhone, smart watches and much more character.
And let's just talk about what Apple is already pricing in from a market valuation perspective, ED, I'm looking at Apple off by six tens percent, as perhaps we brought.
The news into this unveil.
Usually stock does sinc after a product launch, and this one is the iPhone seventeen ED. But let's look at it on a longer term basis. This company has added four hundred and thirty billion dollars in market capitalization since the end.
Of July alone.
We have really not enough to bring it green in a year to date perspective, though, ED. But that's because we continue to worry about trade in so many other overhangs.
The way I think about it was third most valuable company half of revenue as iPhone. Apple's biggest product launch of the year is today in the company, which has fallen behind in the generative AI race, will focus on hardware,
show off the new iPhone seventeen range. Let's bring in Bloomberg's Global Consumer Tech Managing editor Mark German the basics seventeen base model, through Pro and Pro maxin in the middle, a seventeen air per you're reporting, Explain the features that come with the seventeen air mark, but also why does that matter?
The seventeen ear that's going to be the big deal today. This is a slim down phone. On paper, it's a third thinner than the other new iPhones that you're going to see today, and this is an entirely new industrial design. It's something brand new for the company. They have not done an air phone to this point. Obviously there's the Magwook Gear, there's the iPad Air, and now there's going to be the iPhone Air.
This is going to be a pricey.
Phone, not as pricey as the pro models, but it's going to be quite expensive, right somewhere between nine hundred and around one thousand dollars, give or take.
It's going to only have one camera. It's going to.
Have drastically less battery life than the pro models.
But this is going to be exciting.
It's going to get people really interested in the phones this year.
It's going to help draw people to Apple stores.
It's going to give Apple a way to have a big marketing push going to the holiday season. But in my view, as I've written, the most popular phones will still remain the profones, and those prophones will also still be the most practical new iPhones because of the better battery life performance and cameras.
A lot of this, as you told us yesterday, is sort of a warm up act to a foldable phone. Having to make it as slim as possible and redesigning that camera. Tell us about some of the health perks that we're going to be getting. You've got a whole new lineup of smart watches. We've also got AirPods really lifting their game.
Pods Pro three that is going to be a health centric upgrade. Last year they added hearing health features. This year they're adding heart health features, so you're going to have a heart rate monitor in the air pods for
the first time. This is interesting for people who want to work out with their earbuds, which obviously is an extraordinarily common use case, but people who don't have Apple watches right the Apple Watch right, if you're like you have an Apple Watch, it has a heart rate monitor on there, but the total addressable market because of the price and the more ubiquitous nature of the earbuds category, will bring heart rate to more Apple customers, and if
you're an Android user, right, you might find that to be an easier way to get into the Apple ecosystem as well through the air pods.
So definitely a big upgrade there.
The smart watches, you're going to see the biggest overhaul to the Apple Watch lineup in three years. So you're going to see updates to the se which is their low cost of three hundred dollars watch. You're going to see a Series eleven minor after the big Series ten overhaul last year, and then a pretty big update, the biggest update ever the Apple Watch Ultra. Slightly bigger screen, five G red cap so, faster internet connectivity, big thing
satellite capabilities. So if you are on the go in a mountain range without cellular connectivity and you don't have your phone with satellite, now.
Your watch the Ultra Watch will have it.
Apple is going squarely today after Fipit and Garmin Mark.
Pricing is going to be a story.
I've away right, Either Apple raises prices, passes it onto the consumer, or they don't. They eat that cost largely relating to tariffs, and then the carriers come in with trade in deals.
What do we know about those three factors.
Yeah, so the pricing is interesting, You're right. Either way, it's going to be noteworthy. It's interesting because Samsung and Google both recently rolled out new phones and they did not increase their prices. So the precedent is not set there for Apple to raise the prices, even though they do have the air cover of tariffs. If they do raise prices, they're not really going to get into it.
But if they did, my bet would be they explain it away as this is the first redesign, major camera upgrades, new processors, whatever, whatever, whatever. They're not going to blame Trump and tariffs because we as we all know, that is a no no with this administration. In terms of carrier deals, I am expecting an extraordinary amount of trade in specials in deals from all the.
Major carriers in the US.
Apple has been working in the last several months with these carriers to ensure that there are major deals in place. To me, that implies there will be some tweaks to the pricing strategy, and this could be positioned as a way to offset any of those changes.
Bloomos Mark Gunman, who will be with us on the network for coverage out throughout the day.
Thank you very much.
Let's get more Carly in a Millionacy president and principle analyst of creative Strategies. You have a Galaxy S twenty five edge handset. It is the Samsung Slim thin phone. Yeah, it is a segment. So you've got Mark's reporting there on a seventeen air Again, why does it matter for Samsung?
It was clearly a stepping stone to a much thinner fold seven. They didn't put a lot of marketing behind the product. To your point, is a segment, it's not consumers are screaming for finner phones. But we also haven't seen much difference in design for a long time. You know, all the phones kind of look the same. The thing that changes the most is the back where the camera is. So it'd be interesting to see if a rumors are right.
But Apples is changing that part of the phone because it's going to be very obvious that you have a new model of your iPhone. But yes, the thinner phone is something that vendors seem to be doing to lead their way to a foldable which would make me wrong about Apple doing affordable iPad before an iphable phone affordable iPhone, which was always my theory.
Your theory unfoldable, though, is one that we listen to because eventually we do anticipate a foldable phone from Apple, but they lag there behind competition, and of course everyone says they lag behind on gender to AI.
Does that matter to a consumer?
I don't think that consumers are going into a store as in four AI, and I think what plays in Apple's favor or what they don't have a tunnel of time, is the fact that there's the assurance that when they are ready, the software will come with all the phones
that you already have. So if consumers are drawn to this year's models because of a change in hardware design, they know they have peace on minding going in and buy now knowing that when Apple Intelligence redesign will happen, they will have access to it.
Karly, Now, what do we know from third party data from consumer trends about what happened after iPhone sixteen launch, particularly on Pro. You heard Mark explain that whatever happens with pricing, the carriers will come out and say trade in your handset. Lots of people get really frustrated, particularly in the USA, where they say, I only just got a sixteen Pro. Is there going to be enough in the capability to drive me even with a trade in to upgrade?
Yes, last year's upgrade from the carriers were very aggressive. The tradeing pricing was really good for consumers. I think, as always, you have a segment of the market that is going to hold on to their phone no matter what. The Where it really makes a difference is the early adopters that will get that bump. Usually the hardware redesign really drives a lot of upgrades, and I think that between what we've see as room or colors and then
the finn design, people will get into the store. Whether or not they'll decide to buy, we'll see depending on pricing. As you just discussed with Mark.
May I ask in a quick fire around how many iPhone events have you been to?
Oh my god since two thousand and seven, so too many odd time.
We always say this is the biggest event for Apple in the year. I put it back to basics. iPhone is more than half of revenue. But this idea of a seventeen generation with a thin and air thrown in the middle, where do you think that ranks in the history of the sort of storied Apple launches.
I think is to me, if it's true that this is a step in stone to fold, is a moment that is going to really fine the next generation. It'll be interesting to see how much they get into the architecture of the actual device, whatever they change, how they are redesigned. Making something thin is really hard when it comes to the phone, from battery size to not compromise your battery life, which was the biggest drawback for some song,
and then the camera and the camera capability. You cannot have the same camera set as you do on a Promax, so how do you reinvent your camera to make sure that there's no compromise for people that care?
Carolina talk to us about caring on wearables. How important are the new iterations of their pods of the watch is.
Going to be for you?
I think they're really important, and there is the reason why Apple always does these three products together because it is the trifecta of what being mobile is. I do think that the RT rate monitoring on the AirPods, if true,
is going to be a really interesting for Apple. There are people who don't want to wear a watch, or people that cannot afford to add that to their list of products that they own, and so having AirPods allowing you to work out and do what you need, you will see, my guess, is a strong upgrade from regular AirPods to Airport Pro and so nice revenue uptake for Apple.
What about to the bottom line, What about pushing up the price points for.
These It'll be interesting to see if they're pushing up the price point. I agree totally with market that they cannot blame me on tariff if they do. There is the president of both Google and Samsung not raising prices, so it'll be really hard for them to do that. I also do think that they're a moment where they want to make sure that they're install based upgrades to the latest devices so that they have the latest chipset.
That at the end of the day is what is going to matter for Apple intelligence ANYI in general, you.
Know when you're setting the Steve jobs theater, what is the one thing the absolute focus for you in that moment that you're tracking.
I'm still looking at how Apple brings everything together so that consumers stay tied to the ecosystem. That is going to be their biggest ticket to winning when it comes to AI.
Currently in a Milanasy, President principal Analystic Creative Strategies, She's going to be back on Bloomberg again after Apple's keynote this afternoon, so stay tuned. Meanwhile, coming up, Europe's AI infrastructure company Nevious soaring after it said it will provide Microsoft access to GPU infrastructure capacity.
This is putting their tech in video.
It plans to offer a new product design to make certain types of AI work more efficient, such as video generation and software creation. That The product, called REUBENCPX, will debut at the end of twenty twenty six and will be offered in the form of cards that can be incorporated into existing server computer designs or used in discrete computers that can operate separately.
Alongside other hardware in data centers.
Elshore A AI a massive infrastructure deal between Microsoft and Europe's Nebius worth as much as nineteen point four billion dollars. Neocloud nebbiis recently spun off from Russia's tech giant Yandex will provide compute to Microsoft from a data center in New Jersey. Let's get out to Bloomberg's Matt Day, who covers Microsoft for US. And Matt, let's start with what Microsoft gets out of this cloud arrangement.
So they get access to a whole bunch of video GPUs that Nebus is said to receive and fire up in New Jersey. They also get some optionality, right, They've been spending a ton of money on their own data center construction. They've also been throwing some to partners. This is maybe a way for them to grow that portfolio without so much of their risk if they had have been buying all the stuff themselves.
We will Mebbius really making its name in neoc offering extraordinary storied business where it spun out of yan Nex.
Of course, posts.
Russia's invasion of Ukraine, the CEO backs away and now has this new European based juggernaut that's all things AI.
Yeah, out of nowhere, right, and it's a huge vote of confidence in the yandexprass and some of the staffers who who left Russia to set up this rebranded holding company. They are quite quite a bet on a name that just didn't have a whole lot going for it. Here a couple of years ago.
Matt, You've got to get back to your desk because in the time you've been in the seat, some news from Microsoft a change in rto policy.
Do you have the details?
Yeah, it looks like three days a week starting in Puget Sound, rolling out later to the rest of the US and then abroad. Microsoft have been a pretty a pretty lax hand on this sort of recommending two days a week, but it really varied by team. Some teams had an arty oot at all. So looks like they're kind of following some of the some of the folks like Amazon, the who have taken a harder line on getting folks back into the office.
I mean, it doesn't seem to set them back in terms of market valuation, in terms of performance as far, But how much is there the fierce talent wars upon Microsoft weighing as well as some of the other names that we think about.
Well, for sure, and I think for some who would argue that Microsoft's pres arrangements working well. It's been a recruiting advantage for them right particularly here in Seattle, where both Microsoft and Amazon are based. You know, you could say, hey, listen, if you don't want to have to commute the office five days a week, Microsoft's your bet. A little bit less advantage there, but they still are relatively flexible by big tech standards.
Bloomberg's Matt Day all things Microsoft and Nevis, we appreciate it.
Look, let's talk about the.
Dutch chip making equipment company ASML. Now it's investing one and a half billion dollars in France's Mistral AI.
This is pretty unusual move.
It's going to allow ASML to incorporate Mistral's generative AI services in its own machinery and operations.
Makes ASML the larger shareholder in Mistral within a Levember cent steak.
Bloomberg's Benoir Buffalo is here for more from Paris. It is the pin up generative AI business Mistral for France. ASML coming in taking such a stake, what does it mean for the French government.
It's obviously super important to French and I would say to European tech because now Mistral is probably the only European tech startup that's doing language models AI language models and that has a full suite of products also doing computing here, So it's definitely key.
And key is also the fact.
That it's a European tech giant, ASML investing in Mistral.
Mistral previously got back in from US venture funds people who are doubting that they could continue to grow and raise capital with the European backers, and this is the case now, and it's important for Mistral because obviously we've got these giants like open Ai and the x et cetera doing the leading language models now, but there are European companies choosing to cut deals with Mistral because they're European and they see it as a sovereignty or strategic
independence issue to make this contract and it's important for them for this reason. So it's extremely key for that reason.
Yeah, Ben, While SML participated in that broader funding round, valuing Mistrau at almost twelve billion euros, that's the finance part. But there's a technology story here too, right, What is it that each company is partnering on in the technology sense.
So.
In a way they are on both ends of the AI value chain right, ALSML, it is really at the top of the value chain, really doing these very powerful and sophisticated machines, the only one in the world to do these machines, allowing chip makers to do very advanced chips. They have Nvidia, they are powering Nvida for example. Stroll is really at the end selling AI AI products. So Mistral for example, is a customer of Nvidia because they've got data centers that they're building in Europe to train
their models. So what they say of this deal, it's a bit of a surprising deal in a way. What they say on ICML sides is that it's going to be for them a way to incorporate AI into the whole company, and ASML is going to use Mistral AI to improve the scanning of data to improve really it's
core products, to improve efficiency. So that's what they're telling for now, but it's going to be interesting to follow what they're going to do, and they might use other AI companies, but they choose Mistral, and they choose to back this company.
Well and immediately made every one thing.
Maybe SML eventually wants to buy it, but there was pushback from the CEO.
On that.
Yeah, he said.
They don't want to win corporate every technology they use, they don't want to integrate that into their company. So it looks like a put back, a pushback for sure. The founders of Mistrall and employees Mistral says they still have the majority of the company, so for surely it doesn't seem to be undergouts.
It's already a very sizable.
Investment for SML because they haven't done that kind of venture deals before, so it's already something unusual for them in a way to do.
Bloomberg spend war Butelo in Paris, thank you very much.
Attack association funded by the likes of Battle, Google and other major tech companies, when it's launching a new initiative to strengthen the freight relationship between Democrats and Silicon Valley, all ahead of the twenty twenty six midterm elections, and Bloomberg's Emily Burnbaun, who covers corporate lobbying for US, has that story. It looks support for the Trump administration is spiked among tech executives. So what does the Chamber of Progress hope to achieve here?
Yes, they say that that movement, that right word shift in Silicon Valley is in part due to a reaction to the Biden administration's policies, which were much more skeptical and critical of big tech and AI companies. So they say we're here to do some relationship counseling. You know, Silicon Valley was once associated with Democrats. They want to bring us back to that more you know, Obama tech friendly era.
Emily, I'm live here at Apple Park and Cupertino, And in the story we note that Apple is one of a number of technology companies helping to fund this association. In the last week, we've seen Tim Cook at the table with the President discussing the almost quid pro coo of investing in America in return for sort.
Of policy relief. I gave you that backdrop, Souse.
I just want to understand who's involved here on the company side and the democratic side, away from the association itself.
Yeah, the association has hired a Democrat who has relationships with tech companies. So that's Dave Borland from the Department of Defense.
And when I.
Asked which company specifically signed off on this, you know, democratic project held under the Chamber of Progress, they said they couldn't say specifically, but They pointed to their members.
They said, their members have.
You know, they are also interested in looking ahead to a potentially more democratically controlled Washington and they want to start thinking about what it's going to look like when Trump is no longer in power.
I mean, it's going to be quite a major reset because you just go back to the previous administration and how CEO off the CEO really felt that they were either being investigated or being fined. What's the next steps to rectify it?
Well, you know, different people have different opinions on this contest. You know, it's contested within the Democratic Party if this is something to fix, but you know, if your chamber of progress, if you're a tech friendly Democrat, then I think first steps would be at least hearing out industry more. There was kind of a blanket policy in the Biden administration not to even speak to tech on issues that might impact them for fear of corporate capture.
I think it would also be.
You know, not having as strong M and A policies and things like that.
Bloomberg's Emily Burnbound, thank you very much, welcome back.
To Bloomberg Tech. And Caroline heid in New York.
And Amed Lovelow live in Cooper Tino from Apple. It is iPhone day. I think it's worth thinking about the stock carra right, It's normal not just to see the stock treading water in advance of the presentation, but for it to be a seldom used kind of event. Overall yere to date, the stock's down almost six percent, but since the end of July, Apple's had a big rally. Some of the political issues behind it, some of the tariff questions partly put to bed but not completely. And
now the overhang is what happens with AI. We don't expect anything from that today. I'm also thinking about what historically happens on iPhone day. Yes, sell the news, but in the thirty day or sixty day period afterwards, we do sometimes see that stock rally where the handset of that generation has had a warm reception with the consumer. We're in the fiscal fourth quarter, we're entering the holiday
period of fiscal first quarter. That's why we're here tracking the third most valuable company in the world and the latest handsets.
What you're looking at, I'm looking at another stock that's rallied hard going into today, Oracle. It's earnings about after the Bell Bloomberg Intelligence senior software analysts and rag Rana writing that solid recent results from Microsoft and call we've they're mode well for Oracle's own cloud infrastructure business. When are report's earnings, anra joins us now for more?
The key question is.
Whether the news is going to be strong enough to vindicate the run up in the stock. What strength do you want on fundamental.
Zanerag Yeah, I think that is absolutely right. We really have a lot of their solidy baked into expectations going in. But the big question is going to be how much capital expenditures have to go up in order to take care of these you know backlock that is going to be extremely strong. When outicle reports tonight, you know what kind of funding they need? Well, you know when will it go live? So there's a lot of supply chain as well as financing questions, not so much demand issues at this point.
And our Oracle to me has been a bit of a surprise story, the relationship with open Ai and Stargate. It's also just sort of getting a lot of wins. How much has it surprised you when you put it in the context of that broader field of let's call them Hyperscalers.
Yeah, yeah, I know that's absolutely true. So when you go back to twenty eighteen when we started looking at the OCI infrastructure build up, you know, we were surprised that why Larry is spending so much money? Why not just you know, work with the hyperscalers to expand its database business, which is the cash cow and the high
margin business. But frankly speaking, his bet was right because right now the question is where can I get compute And frankly speaking, they are now the fourth largest cloud providers in terms of size. The next few years they're going to generate twenty thirty billion dollars from it, so it's fairly lucrative business. Right now, the margins are low, but over time we anticipate that to improve as well.
I mean, going back to their last learnings, we learned to the thirty billion dollars per year run. Right, we're going to get from one client alone we want anticipate, of course, that was open AI. Are we going to hear any major victories once again in terms of new clients or is it going to be more just showing the proof in AYI infrastructure revenue growth?
Yeah, Oracle is very good at detailing the number of customers it has gained every quarter, so we do anticipate
a long relist of that. But frankly speaking, the biggest question is when can you get these data centers up in live and running, and when do you start recognizing this backlog into revenue and improve on the growth rate which has already gone from you know, there was a time they were growing at subpart five five percent and now it's going to be low double digit's moving towards middle double digit growth rate, So very good for uticle shareholders. And you know management team and.
Rona a Bloomberg Intelligence setting us up for Oracle after the bell, Thank you very much. It is iPhone day here in Coopertino at Apple, Samantha Kelly recently joining Bloomberg's consumer tech team. We have this squad now, but you know how this works. Let's start with the basics. What is it that you are looking out for and that you think is going to be the big story here?
Yeah, thank you for having me.
So Apple is a master of you know, stagery basically, you know, I just walked in a little while ago. Everyone's had enjoyed the show, and I think it's a reminder that this day is as almost about theatrics as it is about the tech aspect. So we're here to you know, listen to what they have to veil go, we test it out and we kind of decipher. You know,
there's a lot of hype around it. Sometimes they might say, you know, a certain feature might represent you know, the whole new wave of what's to expect.
But is that the case?
How does that translate to why is it impactful to people? Will it really impact the industry and does it really actually matter?
When it comes to questioning if it really matters, many feel it's the air that really matters to show the next leap forward in a foldable phone?
Is that right for you? Sammy? Excited to get your hand on the air.
I'm definitely excited to see it, that's for sure. I do think whether or not it translates to whether people actually need something like that. Again, it's going to be a lot slimmer, But what does that mean for battery life? What does it mean for the camera system? Kind of will sit in this like murky spot in between the entry level iPhone and higher end iPhone, But of course, you know, why does it exist anyway? Could perhaps lead the way to thinner perhaps foldable devices down the line.
So definitely interested to see how the form factor impacts the functionality as well.
We perhaps assume or take for granted that everyone knows what's going to happen. But the basics are local time one pm New York time, a keynote, a presentation, take it from there. How does Apple usually do it? Did they just sort of come up front and say, Okay, here's all the stuff. Do they tease things out?
Yeah?
What's interesting is it's changed in recent years. Before COVID, we used to come out here and it was a live presentation, a lot of excitement around that. You know what, will they announce? Will the demo even work? More authentic? During COVID they did. They switched to live streams. A lot of other companies did that. A lot of companies have since switched back, but Apple is still doing the
pre recorded streaming. So it depends. You know, wherever you are in the world watching, you're going to see what we're sitting in the lawn chairs watching. So what's different here is Tim Cook usually addresses the audience, has a few words, We watch the live stream and then we get funneled into another room, we're able to try out have some minutes with the devices for the first time, and that allows us to see sort of what they're conveying and how it translates to touch.
Some people love the people behind these stories, and we know that actually a lot of key talent has been being lost from Apple but largely in the AI sphere. Who are we going to see getting off on a pre recorded stage today.
Who's going to be making an impact? Yes, that's a great question.
So of course it'll be introductions by Tim Cook, who will be throughout the entire presentation, and then the leads around the different products. So again we're expecting new iPhones, we're expecting Apple Watches, we might see some air new AirPods, home pods, so the respective leads will join.
But what's interesting too is.
Sort of before the event, you can kind of see some key players in the audience. Last year, I remember there was some buzz about whether or not there's going to be an open AI partnership. In just moments before the live stream, we saw Sam Altman walking around the grounds. So it's always really kind of exciting to see sort of who might play a part in what that means for the announcements later in the day.
I'm bog Samantha Kelly.
We so appreciate you being live for us from Coombertino today. Re ready to get your hands on some of the new devices. Meanwhile, coming up, we're going to be joined by the Cisco Chief Product Officer discussing the company's latest agentic AI announcements.
This is Bloomberg Tech.
Now, amid the frenzy of demand for AI infrastructure, companies are focused on monitoring its impact, crucially the security and the cost.
Of their AI application stack.
That's including infrastructure but also LMS and agents. Now, Cisco is today unveiling new Splunk enterprise solutions to do just this, eighteen months after Cisco's.
Acquisition are Plunk.
The teams are revealing further product innovation focused on actionable AI, and here to discuss it all, Cisco's Chief Product Officer Gue two Patel a Splunks user conference. G two, what is it that you really think Cisco can offer a world in which AIA agree running left, right and center.
Caroline, It's good to see you again. Thank you for having me on the show. Look, if you take a step back, we are probably witnessing one of the most seismic shifts that we've seen in humanity with AI, and we're now squarely in the second phase of AI, where you're moving from these chat pots that intelligently answered questions to agents that are going to conduct tasks and jobs
almost fully autonomously, to automated workflows. Now, as that happens, you know, we start to think about, like, what are the constraints and impediments that might actually really limit the growth of AI, And we think there are three big constraints. First one is infrastructure where you just don't have enough power compute networking bandwidth to go out and you know,
satiate the demand for AI. The second is a trust deficit where if you don't trust these systems, you're not going to use them, and so you have to make sure that the safety and security is really well thought through. And the third one is a data gap. And in all these three areas, Splunk out he plays a pretty big role. We happen to be at the user conferences Plunk in Boston and we've just made some pretty amazing announcements around what we're going to be able to do,
specifically around machine data in AI. Like, so far AI has been really good with human data and training models and human kind of human generated data that's publicly available on the internet. What they've not been as good at as good at is machine data. And so what we want to do is make sure that we can actually have the time series machine data also be used to train these models. And we're excited about all the all the innovations that we've ad So I mean.
You to as the product innovator here. How is it that you what is the technological feats that you have to do working alongside Splung? What is it that you have to drive it's different from others Now.
I feel like that formula is pretty simple, Caroline. It's like you know, in tech, you just have to be relentlessly obsessed about continuing to innovate and making sure that you keep listening to customers and creating solutions that are at least an order of magnitude better than what's available in the market. No one switches to you for ten percent better. You have to be at least an order of magnitude better. And so we have this rule internally
called B tenex better. And you're going to actually make sure that customers will get excited, and we saw that level of palpable energy today and at the event where all of our customers were just completely excited about the machine data Lake announcement we made. We made an announcement
around an open source model for time series data. These are all really hard problems that actually require a level of assistance so their organizations can harness the full potential of AI because of the way that they can use data.
G Two, is there evidence that Splunk's historic customers are using Cisco's other products and signing on for deals on that side and vice versa.
Since you guys have closed.
We've actually seen a lot of great evidence around it. In fact, just last quarter we closed one of the large financial service or organizations that happen to be a great Cisco customer is also a Splunk customer and now and they had actually we replaced another competitor in that account with Splunk. And let me tell you the reason why.
If you really think about where Splunk shines is correlating data across multiple different sources, and if you start thinking about the kind of data that we have, if you assume that the attacker is already in your network, and what you're trying to do is prevent lateral movement. Who has the most amount of data about the network. Cisco does the telemetry from that network. Hydrating Splunk actually gives Plunk meaningful insights. The telemetry from users and devices, and
the security firewalls that we might have. All of these pieces add value to Splunk. So what ends up happening is customers when they're starting to use Cisco technology with Splunk actually fine. Then not only be able to drive insights that we're not able to be derived, but we also get to be very economical in the way that
you use it. And we made this one big announcement around Cisco firewall telemetry getting ingested in Splunk for free, and so that actually provides incentives from a financial perspective to our customers as well. G.
Two.
When I speak to industry, they say it's you personally that's responsible for bringing Cisco into this AI era. So very quickly to end, I wanted to ask where you feel Cisco is today versus where you want it to be in three to five years time now that Splunk's being integrated.
Well, let me just start by saying that it is not just me. There's a wonderful team of people behind me that do all the work, and so I'm just lucky to be a small part of it. Where we see AI moving forward is we are now a squarely in the second phase and we're helping companies out with massive data center buildouts, whether it be hyperscalers or neo clouds,
or serve providers or the enterprise. And the fact that we serve all those four constituencies helps each one of the constituencies from the learnings that we get from each one of them. So that's the first area that we're really helping in a big way, and low latency, high performance,
energy efficient networking is one of our core value propositions there. Second, we're really helping with making sure that AI is safe and secure, and by the way, what I mean by that is not just using AI for security, but securing AI itself. That's a really, really important area that we've got a tremendous amount of offerings that are helping customers out.
And the third one is this notion of fifty five percent of the growth of data is coming from machine data, and the market has not really gone out and figured out how to use machine data effectively. With AI. That's the problem that we want to solve and that's where we've actually made these announcements with Splunk and so the combination of those three technologies coming together in a unified
platform is where we can really shine. And very few companies in the world have the level of breath and depth of technology that we do, so we feel pretty fortunate about that.
Cisco's Chief Product Officer G two Patel, thank you. I'm joined now buying Nabila Popeau, senior research director at IDC where she focuses on smartphones and consumer electronics. Smartphone is key and Nabila, it's good to see you again. I want to get something we haven't yet discussed in the show, which is upgrade cycle and what it will take the capability of an iPhone seventeen generation the features to drive an upgrade cycle. Have you modeled for that?
Absolutely, that's what we've been talking about for I guess as long as I can you know the past few years, when is the next upgrade cycle going to come? And you know we are right now looking at about a forty plus or almost four year upgrade cycle for iPhones, and this is what primes the iPhone seventeen regardless of obviously there's big upgrades to the phone and device itself in terms of hardware, and of course very anticipated and
exciting excitement around iPhone seventeen Air. But regardless of all that, or on top of all that, the Apple devices themselves are looking at a major upwoid cycle coming up, because we're approaching that four year mark. So that's what we're you know, looking baking that.
In Bluebosmark Gunman reports that an iPhone seventeen Air, a thin five point five millimeters thickness phone, will be eSIM, and he talks about how eSIM in the Chinese market very interesting.
Why is that an important factor?
That's important because that makes it a barrier, right because the Chinese market right now, on top of all the other challenges that Apple is facing in terms of competition being very driven with all the AI features that they have been marketing to the hill, right, that's that's a big, big challenge for Apple, on top of the accelerated growth of Huawei and the support that they have from the government as well as the consumer loyalty the ATH feature.
Despite the excitement that the consumers have with the Ultrasim Ultraslim device. The fact that it doesn't is not going to support that is going to be another challenge. So yes, the Chinese market we're still expecting again regardless of you know, on top of despite the great upgrades that the seventeen will bring, there is the excitement in the Chinese market, but we're still expecting a decline. So it's still going to be a tough, uphill battle for Apple.
And China Narina.
How price sensitive are well China if you even called it an emerging market now, but India they'd be making scale there. How much is price and ability to move higher on some of these newer and the ones you're excited about, the slimmer versions.
So I'm glad you you know, you've brought India and some of these emerging markets up.
I think.
What's interesting is that despite these markets being extremely price sensitive traditionally, right we've seen the opposite trend. We've seen, especially in India, the large ASB growth or in history for the Indian market in twenty in Q two right now we saw ten percent growth and the largest ASP for smartphones ever. And Apple has been seeing double digit growth.
So regardless of where the price, despite the price increases, and even with the new devices that will see Apple is seeing tremendous growth and that is because of the support from financing programs that we're seeing in all.
Of these markets. What will steal the show?
Is it all about the slimmer versions or will the pro still be the standout? Will ultimately people go for more power, more battery life versus trying out something that's incredibly slim but might be better for a next generation.
So again, great question, and you know, for me, I think it depends. It's going to be a combination. I think that's what Apple is doing really well, and it's ingenious move because with the Slim, they've gotten the buzz, the marketing and a great you know lead up to the event. Because the Slim will hit the mark with a lot of consumers, or with a few consumers actually, then the majority of consumers who are looking for camera a better performance, so the Pro will hit the majority
of consumers. We will generate more volume and certainly more revenue for Apple, but the slim device will also hit the mark. So I think combined is what will lead to a bigger upraight cycle for Apple this year. And that's why, as a result, for total. So if you look at the seventeen series, we're expecting them to do bigger volume.
Listening very quickly, trade in how big a fact will that be? Particular in America? Very quick huge, Okay, enormous that sixtinct carry you had it there.
Nada Profile. It's so good to have you back on the show. Senior research director at IDC. We love their number crunching. Meanwhile, and that does it for this edition a Bloomberg Tech.
We got more.
Yeah, stay with us throughout the news day for more on Apple. Special coverage later today. It's very focused on price seeing, bring in the tariffs and the political story. And Zambila just talked about. Huge factor is trade.
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