Core blimey: what’s up at Apple?

No business leader wakes up thinking, gee, I hope I can make some huge trade-offs today. And yet that's exactly what most security solutions ask of you. Trade speed for safety. User experience for control. Trade keeping things simple for keeping them secure. Not so with Okta. Okta gives you a unified solution to protect identity. No friction, no frustration, no compromises. Security that's a launchpad instead of a limiter? It's possible. It's Okta.

To succeed in the future of work, forward thinkers use AI to deliver measurable results. Workday is the AI platform for HR and finance that frees you from the mundane so you can focus on more meaningful work. workday moving business forever forward the economist Hello and welcome to The Intelligence from The Economist. I'm Jason Palmer. And I'm Rosie Bloor. Every weekday, we provide a fresh perspective on the event shaping your world.

A trip to a Chinese city on the border with Russia is a revealing look into the relationship between the countries. In a reversal of historical fortunes, Russia needs China a whole lot more than China needs Russia. And Amanda Fielding was a pioneer in applying science to psychedelics, looking both at how the drugs worked and how people could benefit from their consciousness-expanding effects. Our obituaries editor takes a trip down memory lane to celebrate her life. First up though...

In the all-important race to master AI, Apple appears to be falling behind. Last year, it promised to make the iPhone a more capable digital assistant, effectively giving Siri a brain. But at yesterday's annual Worldwide Developers Conference, Tim Cook, the company's chief executive... Good morning. Welcome to Apple Park. And welcome to WWDC. ...seemed to have very little new to show off about. With more ways to harness...

the power of Apple intelligence, as well as a beautiful new design, our product experiences become even more seamless and enjoyable. So can Apple continue to be relevant? iPhones, Macs, iPads, Apple Watches, Vision Pros are getting shinier and Apple hopes smarter, but the latter part is proving more difficult than the first.

Alex Hearn is The Economist's AI correspondent. The big obvious thing hitting your phone in autumn will be liquid glass, the new design aesthetic. Your phone will look new for the first time since iOS 7 over a decade ago. Behind the scenes, the more important stuff is this is Apple's second year playing catch up to the AI industry and it's not going so well.

Alex, as I'm sitting here on my Mac talking to you with my phone, my iPhone next to me, it seems like Apple's doing just fine. So what's going wrong? Apple is doing just fine. It's still the second largest company in the world. prints money through the innovative business plan of making expensive things that it sells to consumers for cash. Wild in these days of ad-supported media and harvesting data for profit.

But the problem is there's trouble on the horizon, right? The company's AI efforts are floundering, its factories are being tariffed, regulators worldwide are turning against it, even in its home state of California. It's just... snatched a defeat from the jaws of victory in a court case against Epic Games, the developer of Fortnite.

which had tried to push for Apple to open up the App Store to allow rival developers to run their own services on Apple's platform. Apple actually had won eight of the nine counts in that court case, and the only one it lost was a provision about whether or not it could control. the communication of developers to their users. But it skirted the compliance that the court had set so badly and pissed off the judge so much.

that it's been hit with an incredibly punitive injunction, effectively preventing it from having any say on how developers communicate with their users, which in effect means that Apple can no longer guarantee that it collects the up to 30%.

tax it puts on any payments made through the App Store. The App Store is worth $1.3 trillion to the global economy, according to Apple's own figures, which are obviously inflated to make the company's 30 billion that it takes in fees and payments seem paltry by comparison, but that's a 30 billion annual run rate that is at jeopardy thanks to this court ruling.

That's quite a laundry list of problems. Let's start with the first one you mentioned. You said Apple's AI is floundering. What do you mean by that? The company made a big deal about coming to AI. Fairly late even this time last year, it branded it as Apple Intelligence and announced a raft of new AI-powered features coming specifically to iPhones. But what happened in the following year is that...

A good chunk of those features simply didn't arrive. There was a whole swath of features that were supposed to let you ask Siri to plan routes to that restaurant that was mentioned in the last message or text my mum to tell her about my meeting. And Siri simply couldn't do that. It still can't. Yesterday's keynote didn't suggest much changes, actually. Apple is still holding to its proposal that it will ship those features before the end of this year.

But it hasn't announced a timeframe for that. They are still lagging behind companies like Google that's incorporated its top-of-the-line Gemini chatbot into its Pixel phones, let alone the pure-play AI labs like Anthropic and OpenAI.

And can it catch up? In-house, probably not. You know, never say never. And this is an enormously well-resourced company. But Apple's play has never been pure tech. It's always been about taking... stuff that is at or near commodity and refining it perfecting it productizing it the problem seems to be that well firstly the ai industry is moving so fast every day that

if you're lagging behind the frontier, you are really noticeably behind that frontier. And secondly, that the nature of cutting-edge AI today is, it's very un-Apple. These systems, even when you use them from OpenAI, they break in weird ways. They don't do what you expect. It's very hard to polish them into that perfectly shiny sheen that Apple likes to present its products as.

And it doesn't really know what to do with this, with a technology that is extremely powerful and useful 95% of the time and embarrassing 5%. Consumers often talk about how devoted they are to their particular products. Are they now turning away from Apple? confident that nothing is going to collapse anytime soon. Users are sticky. They are extremely sticky.

particularly in the US where Apple has around a 50% market share of smartphones in general and a much higher market share of the premium end of the category, they're not going. They just aren't. They are buying new iPhones maybe every other year rather than every year. This is what the actual slow motion collapse of Apple will look like. It will be less frequent updates, but they're not switching away in any large numbers.

Instead, the fear is that Apple will lose its footing in future product categories. if an increasing chunk of what you do on your iPhone is just open the ChatGPT app and then work from there, that you're not going to care so much in three or four years' time about where your next phone comes from because your phone is just the platform for that. app. In the really long-term future, Apple is clearly terrified about the prospect of AI-native hardware of the sort that

smaller companies like Rabbit AI have already released, that OpenAI is working on with Johnny Ive, former Apple chief product designer. A world where you... may still have a phone, right? But where your most expensive, most valued piece of consumer technology is a headset and fancy headphones. That's a world where Apple just stops being important and gets commodified away.

And what does all of this mean for Apple internally and particularly the boss, Tim Cook? It's hard to say. Cook obviously lives in the shadow of Steve Jobs, but he's been the top man for...

over a decade now, and he's left his own imprint on Apple. Kirk was Jobs' logistics lieutenant, and that's the company that he's shaped, right? It's one that is... relentlessly efficient on things like stock warehouse delivery time and that's been great it's made Apple profitable it's meant that the company is able to

churn out ungodly quantities of iPhones from factories in China but also increasingly in other countries around the world but it's not left the same imprint on the company's software efforts and that might cause concern if Apple really, really needs to improve its ability to deliver on AI and foundation models.

And if the concern of the next decade is less, how many millions iPhones can you make in a one month period and more, can you keep up the pace of innovation in AI when compared to Google and OpenAI? Cook's expertise doesn't lie in that area. It may be that succeeding there requires a different sort of person at the top. Alex, thank you so much for talking to me. Thanks for having me. to succeed in the future of work forward thinkers use ai to deliver measurable results

Workday is the AI platform for HR and finance that frees you from the mundane so you can focus on more meaningful work. Workday, moving business forever forward. No business leader wakes up thinking, gee, I hope I can make some huge trade-offs today. And yet that's exactly what most security solutions ask of you. Trade speed for safety. User experience for control. Trade keeping things simple for keeping them secure. Not so with Okta.

Okta gives you a unified solution to protect identity. No friction, no frustration, no compromises. Security that's a launchpad instead of a limiter? It's possible. It's Okta.

When China's president Xi Jinping stood with his Russian counterpart Vladimir Putin during Russia's Victory Day celebrations, they could have been mistaken for equals. The day before, they'd signed a joint statement. Mr. Putin spoke of how Russian and Chinese relations had reached their highest level in history. Mr Xi said the two countries should continue to deepen practical cooperation.

On the surface, it may look like an equal and equally beneficial partnership. Far from it. The events on Red Square are meant to show that the idea that Russia and China could be split up, as some in America seem to think is possible. is not going to happen. Gabriel Crossley is our China correspondent and is based in Beijing. One of the reasons it's not going to happen is not because Russia and China have such a strong alliance but because Russia is now

utterly dependent on China. Well, flesh that out a bit. How did Russia get to be so dependent? It's been pivoting its economy towards China for some time now, over a decade, but... Everything accelerated after Russia invaded Ukraine in 2022 and sanctions cut off many of its trading relationships with other countries.

Of course, Russia had to maintain a war economy and China has stepped in to help. To get a sense of what the relationship looks like on the ground, I visited Manjoli, which is a Chinese town on the Russian border. As you might expect, it's bursting with symbols of Russia and China friendship. There's a statue of a panda and a Russian polar bear holding hands.

There's Russian restaurants where Russian dancers will spin around and try to get Chinese up to dance with them. Russian language played in the shops. Lots of Russians visit these days to buy consumer goods. Manjoli's had a bit of a trade boom since the war started. You can see it with lots of Chinese-made equipment piling up on one side of the border and timber, coal, commodities coming in the other way on lorries and trains.

And so that's the nature of trades, at least where you went, is essentially consumer goods for commodities. Yeah, basically, Russia creates lots of commodities, mainly energy, lots of oil and gas, which China needs. And in return, it gets consumer goods, but it also gets, more importantly, I think.

Lots of dual-use goods, as they're known. These are ones with both military and civilian uses, and these are helping prop up its war machine. I think what's important to note is that all of these shipments matter a lot more to Russia than to China. China was the third of Russia's trade last year. Russia was just 4% of China's. It's also pretty clear that while Russia really needs buyers for its raw materials, China has a lot more options.

And one of the things that Russia used to provide that China really needed was weapons. And China's got a lot better in recent years at making its own. Its imports of weapons have come down significantly in the last few years. Basically, all of this together gives China a lot of leverage in the relationship.

And how do you think China would or could or wants to use that leverage if it is such an imbalanced relationship? One way is on energy imports. Basically, China gets a pretty good deal, lots of quite cheap gas from Russia. A second pipeline to bring even more gas in is on hold because it seems like China thinks it can force Russia to sell even more cheaply. In the meantime, China's trying to diversify its energy imports. It's happy to buy more stuff from other countries.

And in terms of what Russia's getting out of the relationship apart from a market where it's oil and gas, not that much. Chinese investment in Russia is pretty low. It doesn't seem to be interested in... helping to diversify modernized Russia's economy. And China's also happy to keep a little...

diplomatic distance from Russia with regard to the war. So votes the UN General Assembly, China tends to abstain. So it's happy to keep some distance and Russia doesn't really have any way of forcing it to do otherwise. Well, that's the question. It puts Russia in a weakened position, maybe even a humiliating one in that way, if it is so dependent on China. Do you think that's only going to deepen given the geopolitical context, or is Russia looking for other ways to turn?

I'm sure it would like to, but one possible way that's been floated is if Russia really does make up with America or gets out of the war in some way. that improves its relationship with other countries, maybe it could reduce its reliance that way. But China is happy to keep Russia where it is. And Russia, to be honest, turning West is pretty unlikely. The inequalities here, they are starting to be felt within Russia.

Traditionally, Russians saw China as the younger brother. And recent polls suggest that Russians believe their country still has greater influence in the world than China does. But it's interesting, the number of people in Russia who think the relationship is improving is going down. So there's a sense this imbalance is filtering into the Russian public.

But again, where does that go? Even if people believe it shouldn't be this way or that things are getting worse or that it is indeed humiliating, what happens? Russia seems pretty stuck. It doesn't have any other options apart from increasing dependence on China. And in Manjoli, it's interesting. This town was founded originally by Russia.

early last century when Russia was very much the stronger power. And these days, Chinese locals are looking at Russians with some pity. They're talking about how some of their friends across the border have now disappeared to fight in Ukraine. suggesting that Russians can't get the stuff they need in Russia anymore. They have to come to China. One shopkeeper I spoke to in Manjoli, a Chinese woman, she thinks that this brotherly relationship is now being reversed. The younger brother.

is now ahead of the elder one. And it seemed to me that she'd hit the nail on the head. I think China is the dominant power and it's only becoming more dominant. Thanks very much for your time, Gabriel. Thanks so much for having me.

The feeling wasn't quite what Amanda Fielding had been expecting. Anne Rowe is The Economist's obituary's editor. It was a sort of lightning and lifting. It felt a bit like breathing into a balloon or the tide coming in. Well, there was definitely a tide of something, but it was blood, and it was running down her face and splashing on her white tunic.

but that was only to be expected since she was trepanning herself. She had got a dentist's pedal-operated drill, and she had made a hole very neatly in the middle of her forehead. She was very pleased with her work. She said the hardest thing about it was trying to still up her nerves to do something that her whole body was fighting against. But then she was rather pleased she'd managed to do it.

The reason she had done this was to try to get some lightness into her brain. At the time, she had a lover, a Dutch scientist, called Bart Huges. who thought that much of the mental illness in the world was caused by sluggish blood flow in the brain. So she decided she could perhaps lighten it, she could... improve the vitality and the vital connections between heart and brain, and make sure that the heartbeat could resonate inside the cranial cavity.

She had tried quite a few ways already to expand her consciousness. At 16, she'd smoked marijuana. She found that amazing. Then, when she was in her early 20s, she started on LSD. The first trip was wonderful, like a heavenly funfair, she said. But the second occasion was a disaster. Someone spiked her coffee with about a thousand trips worth of LSD. She had the most ghastly time and...

It took her three months to recover. After then, she went back on it and microdosed and found that quite effective. But she was always cautious about these psychedelics. She'd had a rather bizarre childhood. Her family were bohemian farmers. There was quite a lot of money in the family. They were sitting on a Tudor.

pile and many, many acres, but there was not much ready cash. At school, she won the science prize, but because she was still so keen on mysticism, she asked to be given a book on Buddhism and the nuns would not allow it. So she left school at 16 and continued to ponder over how she could combine her interest in mysticism with her interest in science. And psychedelics seemed to be the answer.

She was horrified by the war on drugs. She didn't see why potentially useful psychedelics like LSD, ayahuasca, ecstasy, magic mushrooms... Since these were non-addictive she couldn't see why they were lumped in with heroin and cocaine and she felt they were very much worth researching if somebody would do it. Well her problem was that she had no letters after her name.

She was not an academic. So she needed instead to have a Trojan horse to somehow work her way into the scientific establishment, and she had the brilliant idea of founding a foundation. She called it... the Beckley Foundation, after the stately home that she'd been brought up in. In 1995, she married a lord. It was not her first marriage, but it was definitely her most useful one because she began to hold international seminars about drug policy in the House of Lords, which was a great coup.

Her foundation, Beckley Foundation, collaborated with Johns Hopkins to find out what effect psychosybin, the magic mushroom psychedelic, would have. on mental illness and found that it seemed to be useful both in dealing with nicotine addiction and with helping treatment-resistant depression. There was definitely some benefit coming from that.

even though it was only very small at this stage. She also was very keen to see images of the brain on psychedelics and helped to pioneer brain imaging, which showed her for the first time, the brilliant orange of a brain on LSD. This was quite something. And she was extremely pleased that psychedelics, through all this research, seemed to be shifting medical opinion. It was not a revolution, but it was still a consensus among many doctors that these drugs could do something for people.

She didn't push them too far. But whenever people came to interview her, she would take them out in the magical garden, as she thought of it, at her home at Beckley Park. She'd take them down the winding paths and to various places where she'd had childhood visions. She would let slip various other questions.

such as whether consciousness was actually everywhere and whether the brain was just a receptor for this consciousness, giving everyone who interviewed her the firm notion that she had a lot more questions to ask and a lot more scientific adventures to go on. Anne Rowe on Amanda Fielding, who has died aged 82. That's all for this episode of The Intelligence We'll see you back here tomorrow

To succeed in the future of work, forward thinkers use AI to deliver measurable results. Workday is the AI platform for HR and finance that frees you from the mundane so you can focus on more meaningful work. No business leader wakes up thinking, gee, I hope I can make some huge trade-offs today. And yet that's exactly what most security solutions ask of you. Trade speed for safety. User experience for control. Trade keeping things simple for keeping them secure. Not so with Okta.

Okta gives you a unified solution to protect identity. No friction, no frustration, no compromises. Security that's a launchpad instead of a limiter? It's possible. It's Okta.