EP43: How China Built Apple Into a Global Giant

Speaker A: Foreign.

Speaker B: Welcome to the DPW podcast from New York. My name is Herman, CEO of DPW and today with me, Patrick McGee, author of the book Apple in China, the Capture of the World's Greatest Company. He's an award winning journalist. He spent years covering Apple for the Financial Times and he's with us here today at DPW in New York. Welcome, Patrick.

Speaker A: Thank you.

Speaker B: Thank you for being here. How's your experience so far? I know it's short and you're on stage later, but what do you see here outside?

Speaker A: Oh, it's, it's so bustling. There's so many people here.

Speaker B: Yeah.

Speaker A: Um, and I was able to pick up some free swag. Oh, my journal. And some yellow socks.

Speaker B: You got a Yeti cup or something?

Speaker A: Yeah, yeah. Cool.

Speaker B: Well, that's a good start. Um, we're talking about your book today, of course, and about Apple. And here in the audience we talk about AI and procurement and supply chains, of course. And we have a lot of companies here today, uh, and innovation coming from too. Um, your book, Apple in China. What was the thesis of your book to start with?

Speaker A: The thesis of the book, I almost don't like starting with it because I think the thesis sounds a little bit nuts because the thesis is essentially that Apple had a nation building, like impact on China, a country with 1.4 billion people. Um, right. So I've compared it to the Marshall Plan and I actually think that understates the significance, as crazy as that sounds. And what I mean by that is that, um, the Marshall Plan, which if people need to remember from their high school textbooks, 1948-1952, the US spent in $2015, about $131 billion. Um, helping Europe recovery, you know, railroads, food, uh, aid was actually half of the Marshall Plan spending in the first year. Um, ah, a host of things across industries in 16 countries. And Apple was spending double that $275 billion in just a five year period from 2016 to 2020. And that's just in one country and not across industries, but in the high tech industry that Xi Jinping has called the most important thing for China to develop. So, uh, you know, they trained millions upon millions of people, literally greater than the labor force.

Speaker B: 28 million, I believe.

Speaker A: Yeah, it's been updated to 30 million. This is actually a number from Apple. Um, yeah, I first reported this number three or four years ago when it was 23 million. Um, so it keeps going up by two and a half million or so per year. Uh, because there's so much churn in the Apple supply chain within China. Um, and of course just making just magnificently large investments, um, in training people and in buying expensive, ah, machinery and uh, having it live on the production lines of literally hundreds of companies across the country.

Speaker B: Yeah, yeah. And indeed. Basically my follow up question will be the scale. And if you read your book, right, the numbers are staggering. The 28 million, but also from a production perspective, uh, the 1 million iPhones, I think with a thousand pieces, uh, in it. So you can do the math. But also the investments made in the supply chain, investments in machinery, the wages, the innovation push as well.

Speaker A: Yes.

Speaker B: And the technology transfer and the skill set. And maybe the question is already answered, but did Apple grew up China? In a way, yeah.

Speaker A: I mean. Right. That's why I say it's a little bit nuts. So, you know, nobody would, um, sort of blink if I said, you know, Apple wouldn't be Apple today without China. And my argument is the opposite. I mean, that's true, but I argue that China wouldn't be China without Apple. That's, that's how significant the influence was. And you know, once people get through the 400 pages, I haven't really had anyone sort of make a big major disagreement with me. I think it's rather convincing. Um, but I mean, maybe what I would point out is that we're all familiar with the golden age of Apple, uh, products in terms of how they were designed differently. Right. When Apple came out with the translucent candy colored imac, there's nothing equivalent happening at Dell, happening at compaq, happening at HP, etc. Right. But what we sort of failed in the media to cover is that if you've designed something differently, just ipso facto you are manufacturing it differently. And where were all these products made? Well, it wasn't originally China, but eventually it's China. And so if you're designing things and then exporting at, ah, enormous quantity, um, and of course at zero tolerance for defects, so enormous quality as well. Um, you're of course having to have thousands upon thousands of engineers from California, um, go over to China to these hundreds of factories and train everybody up to Apple qualities, uh, Apple levels of quality. So if people are familiar with this sort of Hollywood version of Steve Jobs, who sort of maybe, you know, berates people, but in the process sort of raises everybody's level, uh, of competence up. Uh, that's basically my story. But in China, hundreds of factories like that. Um, so, yeah, I think it's kind of a staggering conclusion. Yeah, I, um, think so. But I like the like, the reason the book format is nice is to sort of hand hold the reader through it because when I speak I sort of, you know, I'm condensing so much work into a few sentences that I think it comes across probably as a little bit, you know, argumentative and direct to the point or whatever. The book isn't like that. The book is stories and anecdotes and

Speaker B: it's a book, it's a story to read.

Speaker A: You know, it's really a pleasure to read. So I'm never arguing anything, I'm just

Speaker B: showing you and how the Marshall Plan, right, um, where the US supported Europe, including the Netherlands for example. Um, and of course there's strong alliances and still partnerships, maybe a bit under pressure at the moment, but they will change hopefully in the future again. But the Marshall Plan, in a way that took also years and years, uh, to invest and basically to get the value from that. And the relationships are still here. How intertwined has Apple become with China? And how would it look like in 10 years?

Speaker A: So the reason the subtitle is the capture of the world's greatest company is because there's no other place on the planet where you could plausibly build 230 million iPhones per year, let alone all the other products that they build. So the dependency that Apple has on China I think is absolutely extreme. And it's really only mirrored by the dependency that they have on Taiwan for virtually every chip that goes into every iPhone. But also AirPods, you know, AirTags, everything you can think of. Um, dependence on, on taiw want is just staggering as well. So, you know, I know that the popular narrative is that Apple is sort of pushing forthrightly into India.

Speaker B: Yeah, that was m. My next question. But, but that's. Maybe they're really not.

Speaker A: I really hope that they're able to, um, but sometimes the Apple blogs think, uh, that we're halfway there. In other words, 25% of iPhones next year might be coming from India. And that gives you the sense that, okay, so we've diversified substantially and no, like, not at all. Like you said 5%. It might be closer to 2 or 3% in terms of what India's Ah, capacity is versus China. So the phones that are coming out of India, you know, they'll say made in India on the box. But that has more to do with like the cleverness of lawyers and the um, leniency of tariff law. Essentially. If there's a thousand steps in building an iPhone and the final one is done in India, it's a trick. It's made in India. It's um, but it's so dependent on the China centric supply chain that I don't think you've actually made much of a difference. Now I want to, I want to say I do hope and there is some reason to believe that that could change. Um, but that's 5, 10, 15, 20 year effort. And the problem of course is that Beijing doesn't want to lose, uh, the status. Um, so they're already doing things like blocking Chinese people with expertise from having visas that would allow them to go to China. If they understand that certain machinery for production process is going from China to India, customs will block it. Um, and actually just in the last six weeks or so, China signed new legislation, um, that effectively is something like a decoupling tax. Like if there are companies western that are manufacturing in China and they want to diversify. Yeah, um, yeah, China is going to like by law make that more difficult for them.

Speaker B: So basically to have a lock in. Yeah.

Speaker A: I mean if you're familiar with the flying geese model, this is some image that I think goes back to the 1940s or so. The idea was that um, nations in particular in Asia were sort of taking their turn at the low end of manufacturing and then they would sort of um, you know, move in the formation of geese where someone else's turn. Right. So Taiwan would be like sort of a typical example where you know, 20, 30 years ago they were doing textiles, they were doing shoes. Right. Nike was famously in Taiwan for more than 10 years and then now they're doing semiconductors. Right. So they're sort of moving up the value chain, if you will. China, um, doesn't want to give up the low value, uh, stuff. So things that you would think are now moving to India aren't really moving to India because China doesn't want to give it up. So China is now a very sophisticated manufacturer of top notch, like anything that has to do with electronics or apparel. But they're also, um, they're also, you know, the, the tamu, uh, country as well. In other words, they're very cheaply made stuff too. China is just so large that it can have very sophisticated stuff and very cheaply made stuff as if it's a series of different countries, but it's just a continent sized country and this whole bullshit.

Speaker B: So the training, the 30 million, and there's high churn of course, but the people that are trained and have the skill set and the technology transfer is still in China. Right. And the push for the supply chain, the discipline there, uh, basically the push and demand to push and pull for innovation with all the suppliers and the subsets of suppliers that are out there. Um, in a way, how did Apple's model and the technology bleed into other industries or other companies rather than Apple?

Speaker A: So the very, um, sort of essence of having a contract manufacturer rather than building things yourself is that you take a fixed cost and you turn it into a variable cost. Which means that the likes of Foxconn operate as, like a manufacturing, as a service model. So Apple doesn't just produce a certain number of iPhones per year, or, sorry, per day over the course of 12 months. They need loads of them in September, October, you know, November, December, and then really not so many in March. And so if you were owning the manufacturing facility yourself, you would of course have to ramp up the manufacturing. You'd have lots of equipment, you'd have lots of people. And then the fact is, is like, what do you do six months later when you don't need that anymore? So the likes of Foxconn sort of solve that problem by you're only paying them for when they manufacture and then they're able to sort of keep the maintenance of those workers, um, you know, up and running, doing something else because they're also providing for Sony or Compaq or whoever. Um, so in a sense, the secret sauce of why China was so helpful to Apple is that they could go from having about 2 million workers in March to 3 million workers by September, year in, year out. So like just the, the coordination at the state level of busing in migrants to man, ah, on an iPhone production line for 12 weeks or 16 weeks was extraordinary. And no other country has the level of population, and certainly not the level of floating population, uh, where these people are sort of going from one factory to another, uh, moving cross country. So, you know, you might say, hey, what about India? India these days actually has more people, but there was a study, I think of 84 countries and India was actually dead last in terms of, um, migration within the country. In other words, there's no real culture in India of 17, 18 year old girls, uh, going from the north of India to Karnataka to take a factory job. You don't have the equivalent of what China has excelled at for the last four decades.

Speaker B: Interesting. And this, well, the skill set, the technology in, uh, of course we talk about manufacturing and app products, but did it also, for example, impact the whole EV industry, uh, in China, or accelerated that one compared to others?

Speaker A: Yeah, sorry, I'm realizing I Partly didn't answer your question there. So the effect of Apple training people.

Speaker B: Exactly.

Speaker A: For months and months at a time, but then not needing them.

Speaker B: Yeah.

Speaker A: Right. The question is, well, what do they do then? And of course, they've got these new skill sets, they've got these new investments, and Apple's not in control of what they will do next. And more, more than that, Apple had an internal rule where, uh, think of the heyday of the iPhone. Like the iPhone, uh, you know, the original, then the 3, the 3D, the 4. They were really reinventing it. You know, totally different material shapes and sizes and stuff. I mean, what was happening is that if they made a design turn and they're a secretive company that's not going to sort of flag that to suppliers, somebody that's been making iPhones for three years, like not Foxconn, but like some component for the iPhone, would all of a sudden realize that they'd made these big investments to win Apple's next order, to find that the thing that they do is no longer necessary. And so they would basically fold, go bankrupt, and maybe complain to a local official. So Apple realized it was bad PR for them. And so instead of having companies become really dependent on Apple, as They grew from 5 million units of iPhones in 2007 to 230 million units by 2015, they actively said to their suppliers, uh, uh, don't be so dependent on us. However fast you're growing with us, you need to grow that fast with somebody else. Never have more than 50% of your revenue be iPhone. Right? And so imagine if you've just trained me up to do the, you know, take, to take Corning, uh, glass, right, Gorilla glass, to cut it, to shape it, to temper it, to make it multi touch for the iPhone. What conceivably else would I do with that skill set? Well, I'm going to just call Xiaomi, I'm going to call Huawei, I'm going to call Vivo and say, look what I can do. Um, and so, in effect, through hundreds of factories, Apple built or birthed the smartphone market in China. And so the numbers are staggering. Right. In 2010, there basically isn't a smartphone market, uh, based on Chinese brands. M. And by 2017, I think in terms of local sales, the Chinese brands are something like 75% of the market. Um, so, you know, they didn't get there just by imagining what they might do. Um, they were the recipients of Apple training. And in fact, uh, Rung Zhengfei, the founder of Huawei, has said Apple is Our teacher.

Speaker B: Yeah, exactly. And also back to the stories in China, right? And if you read your book and the stories, but also the anecdotes, um, um, on selling iPhones, in the staggering number of iPhones from day one before the Olympics, what happened there was. It's an amazing, incredible story.

Speaker A: So I'll just tell you as the journalist, like, I didn't know anything about that when I pitched the book. And there was this big gap that wouldn't have been discernible to the publisher per se, but I knew that I had nothing interesting to say from the birth of the iPhone in 2007 to the political awakening in 2013. So I already knew that part six of the book was going to be Apple's response to, effectively, an attack on Apple that takes place in March 2013, and it leads to their political awakening. But, you know, the growth years of the iPhone, I thought I was just going to have to recap, you know, the standard story that people bought this phone and they made them in bigger volumes. And I thought it was going to be the most boring part of the book. As I described how you, you know, go from a thousand pieces of glass a day to a million or whatever, and instead it becomes this wild story, um, all about, uh, this sort of explosion of demand. I call it insatiable demand in China, where, um, Apple, in effect, by 2010, has four stores in the country. So that's one store per 350 million people. Okay? So that'd be like there being one Apple store in all of America. And these gangsters, called yellow cows in Mandarin, recognize this massive supply imbalance where loads of people want to have this iconic product, right? They want to demonstrate to their friends that they're sort of with it and part of the younger generation. Um, and yet, in a city like Chongqing, population 32 million, there are no Apple stores. You can't buy the iPhone. And so these gangsters are buying them by the, you know, uh, busload, effectively, uh, by having, like 7,000 people line up around the Apple stores that are open in Beijing and Shanghai, paying each of these migrants a little fee, and then trucking them over to a city like Chongqing. And then they have a monopoly on the sale of them. And they're literally finding ways to make more money per iPhone than Apple. And this is the product that makes Apple the most valuable company in the world by 2011. So the sums involved are absolutely enormous. And their stories, like, the general manager of Apple retail gets arrested. Um, right. I mean, just so many things that hadn't been reported. And it was my.

Speaker B: It's.

Speaker A: It's still today. It's my favorite part of the whole book.

Speaker B: And I can really, uh, well, uh, encourage all the viewers and listeners to read those stories in the book. It's incredible. And also there's this Gang of eight. Right. Can you share a bit on the role of the Gang of Eight? And are they still active as they are today, or is there still a body out there that has that role as they had?

Speaker A: Yeah, no. Uh, that's a great question. Um, so as I said, um, the prologue of the book is that within 36 hours of Xi Jinping becoming, you know, I mean, the president, but I was going to say the most powerful leader in China since Mao, um, Apple gets attacked on something called Consumer Day, and they are basically Flummox. They're confused, but they don't feel that it's a big risk because what they're, uh, sort of attacked over is the idea that their warranty policy is different in China than in the rest of the world. And the fact is, is it's not. And so they just sort of clarify, uh, in this sort of, you know, the start of your book, quickly written statements and assume, you know, that's that, um, the attack just begins. And it goes on for three weeks before Tim Cook personally writes a letter, you know, in Mandarin, uh, posted to the Apple China website. Um, and they really begin to realize that, you know, sales are freezing and sales are going down and this is a big deal. Effectively, Apple realizes that we are the biggest retail company, foreign retail company, operating in China, and we're also the biggest operator in terms of building stuff by revenue. But we don't understand China. We don't know the politics, we don't know the culture. And we need some people that are going to help us. So the people that help them are either, uh, transplants from California or new people hired from places like intel, um, and they call themselves the Gang of Eight. They're the first senior people living in China on behalf of Apple. And they, uh, essentially come up with this plan, um, to basically make it clear to Beijing how much Apple is doing in the country. So some of the stuff we were speaking about a few minutes ago, about how much investments they were making, Beijing was essentially ignorant of this because Apple's a secretive company and hadn't seen the political capital that they were sitting on. And so once Apple realizes there's this narrative that Apple is, uh, sort of in it for themselves rather than in China, for China to use Xi Jinping's terms, um, Apple begins to market privately, right? Not singing from the hilltops, but in private meetings. They're telling local officials, they're telling federal officials. You have no idea how much we're doing for your country. We're sending America's top engineers, in effect, and they're sleeping on the factory line to bring up all these, all these companies to our levels of competence. Um, now you asked are they still active? So I think a bunch of them have left the company, maybe all of them. I'd have to sort of go one by one. Um, but effectively they are, in a sense, a placeholder. And, uh, and then they recommend that someone become the head of China. So the, the woman that becomes the head of China is named Isabel Mahy. I think she takes the role in 2017, and she's still in it today.

Speaker B: She's still in it.

Speaker A: So Apple only has a single country head, like a general manager for a country in one country. Right. And that's in China. That's China. And gives you a sense of how important they are.

Speaker B: Fast forwarding, uh, to today. Um, and also the talk here today is about, um, well, the tech line here is building the AI blueprint for the next era. Um, and looking at, um, manufacturing and supply chains, um, but also AI and infrastructure and data centers. Um, all these big companies, and many of them are out here, like OpenAI, Anthropic, Amazon, you name them. They're pouring a lot of capital into data infrastructure and data centers.

Speaker A: Yes.

Speaker B: Apple is not correct. What's happening there?

Speaker A: So I think we're talking as recently as 12 months ago, it would look like this was a strategic blunder on the part of Apple. Um, so I want to be clear that this wasn't some grand strategy on the part of Apple, but right now they're actually looking pretty good by not making these investments.

Speaker B: Interesting.

Speaker A: Now, that could be different in a few years. But effectively what's happening is that if you get really excited about Claude or OpenAI, the chances are you are subscribing through your iPhone. And that means Apple's getting 15 to 30% of every transaction. Right. Every monthly occurrence. So I remember there's a story a few years ago, like a decade ago, that Apple made more gaming revenue than, you know, Nintendo and PlayStation combined. There's a decent chance that that's where Apple will be pretty soon. Uh, in AI, just because people using

Speaker B: their iPhone, using the apps from cloth, in tropical, whatever.

Speaker A: Yeah. So Apple's kind of realized that can be through failure, to be clear Right. Like, like Siri is, was it a strategic decision or. No, that's what they sort of stumbled into this. So Siri is, you know, a terrible product. Right. That sort of, uh, you know, I only use when I accidentally trigger it, but I don't mean to. If I could just display Siri on my watch with uh, Claude, I absolutely would at the moment. You can't do that. But Apple is now working with Gemini, right, The Google division to um, sort of take over Siri with a Google built, um, assistant. And so in that sense you'll still have access to cutting edge models, but they won't be Apple. And Apple's not having to pay for the massive data centers to keep up. They've basically um, said we're not going to compete in this vein.

Speaker B: Now if you reflect on that. Right, because the supply chain manufacturing was also not in a way owned by Apple. They don't have the factories. In a way. They did invest, of course.

Speaker A: Yeah.

Speaker B: Uh, but they don't own the production facilities of Foxconn, for example, and they don't own the data centers.

Speaker A: Right, yeah.

Speaker B: Is that by coincidence in a similar model, you could say.

Speaker A: Yeah, maybe it's an asset light approach to the whole industry. Yeah. Because effectively, I mean the way that you, the way that I would look at it, it's just not possible that OpenAI Claude, or I should say anthropic, um, you know, and three or four of the others are all going to be successful. There will be winners and the other ones are going to have their share prices fall by 60, 70, 80% like over the course of uh, you know, probably just a few years.

Speaker B: Yeah. Ah.

Speaker A: And so Apple has more capital really than any of these companies, you know, maybe barring Google, but they're not deciding to throw tens of billions, let alone hundreds of billions of dollars into this program. They're sort of realizing that we're the hardware maker for I think 2.6 billion active users. So if people just want to use those models and do it through the iPhone, that works pretty well for us. Yeah. Uh, now that could be a massive mistake. I'm saying that's looking good right now. As you might know, Johnny, I've and Sam Altman are working together to build AI first hardware. I don't have the imagination for what that is going to mean, but it would be pretty crazy if they're able to build something where people on the whole, like in the tens, if not hundreds of millions aside, I want this thing not to augment my iPhone, but instead of my iPhone. Like that would be a crisis for Apple.

Speaker B: Yeah.

Speaker A: But like I wouldn't, I wouldn't get to the betting markets and put any money on that happening. That, that's just. I just think that's too tall an order.

Speaker B: Time will tell. But that's interesting. Did you see Johnny if his new Ferrari?

Speaker A: Yeah.

Speaker B: Okay.

Speaker A: I think the interior is beautiful.

Speaker B: It is.

Speaker A: I mean but almost objectively, I'm not sure.

Speaker B: Power?

Speaker A: Uh, yeah.

Speaker B: Oh. Challenging for the brand, I guess.

Speaker A: Well, on this journalist salary of mine, I'm also not about to buy a $650,000 staggering.

Speaker B: 600K.

Speaker A: I think that's what it is. $. Yeah.

Speaker B: It has no horsepower. Well, it has but electric horsepower. Right. Yeah. Yeah. Okay, well, um. On. Okay. Um, back, back to Tim. Oh, back. Tim Cook.

Speaker A: Yeah.

Speaker B: Of course he is moving into executive chairman, I believe.

Speaker A: Yes.

Speaker B: New CEO is coming into place. Um, his legacy. There's a lot of talks about his legacy of course and the market cap of uh, Apple's staggering, of course. Yeah. And how he optimized supply chain and squeeze basically every penny out of what's possible out there. Yeah, basically. How do you assess his legacy?

Speaker A: I mean I don't think anyone in the right mind could actually say that Tim Cook's legacy on the whole like is bad.

Speaker B: No.

Speaker A: Right. He's clearly a rock star. From a shareholder perspective. My biggest sort of biting take is the conclusion of the book, which is that his legacy is actually unwritten because we don't know the future and history is contingent. And the way that things play out could very well be that China engages in war for Taiwan. And uh, you know, we find ourselves in a situation where we're no longer uh, able to access chips from Taiwan who, that we're no longer able to have a fruitful trading relationship with China. And in that sort of scenario there's going to be a whole lot of revisionist history of what happened in the last two or three decades. And I think more and more people will become cognizant of how much Apple played a role in building up the very tech capabilities that became dual use technologies that became military capabilities that allow China to take over Taiwan. So in that scenario, I think all of a sudden Tim Cook's history gets completely rewritten. And so my comparison is that of Jack Welch who when he retired, um, at the start of the century. Right, yeah. GE for, for, you know, I think 21 shareholder returns for two decades straight, like on average was called manager of the century by Fortune. And then literally four days after he retired. September 11th took place. Um, GE immediately got hit in a number of ways. I think. I believe they were the insurers of both the airplanes and the World Trade center buildings. And then the US entered a recession. GE never really recovered. And by the financial crisis when they had sort of got deeply exposed for um, all the sort of financial guarantor work they had done, um, for mortgage backed securities, you know, their share price were 85% below where it was when Jack Welch left. So I'm not saying this is going to happen, but I just think this is a scenario. I just think it's a scenario and it doesn't take a uh, sort of leap of the imagination to see that that's where things would, would go. So, uh, scenarios, other scenarios. Yeah, well, I mean, you know, look, I think there's a possibility that um, Tim Cook has actually played the role of sort of diplomat. Right. Maybe, um, you know, correcting some of the harsher things that Donald Trump has said about China. I mean if you remember when, when, when Trump first campaigned for president, he was talking about the rape of our country on, on behalf of China. Right. So I don't know if there have been closed door meetings where Tim Cook has actually exerted from some leverage and maybe you know, taught Trump to tame it down a little bit. Um, you know, and so possibly Cook and other corporate CEOs have, have played a certain role, um, you know, helping there be certain uh, ties between the two countries. Um, and in that scenario you'd say, well look, as bad as relations might be, we haven't gone to war. Uh, it could be the case that uh, America and Western companies are able to decouple, right. Put more uh, money and investment into India. Um, and that you just have a sort of like uh, you know, non China centric supply chain in 10, 15 years from now. And you know, and this is the ideal scenario, my biggest hope for the book is that in 10 or 15 years the history is still considered really well done history, but that the thesis was completely wrong. Right. I have no ego in this. My hope is that Apple is absolutely, with all their geniuses, able to demonstrate that they can replicate every inch of the Chinese supply chain someplace else. Maybe that's India, maybe that's Mexico. I don't think they can do it, but I want to be proven wrong by these people. And then they can say Patrick was wrong, they were not captured at all. That would be ideal.

Speaker B: I understand.

Speaker A: Yeah.

Speaker B: Uh, and then we have another conversation in uh, 10 years on one more thing on Geniuses, right? And Apple, where it is today, has Apple become dull, Dull, dull?

Speaker A: You know, I mean, yeah, I mean, to be quite honest, I don't actually watch the Apple presentations anymore. Um, and I'm an Apple reporter. Yeah, I just find them boring. Yeah. Um, and they're boring for several reasons. One is that, um, because of COVID they started filming them rather than doing live presentations. And if you're watching a filmed presentation, there's no suspense. Right? It's like watching a car chase live versus watching a car chase from 10 years ago and on YouTube when you already know that the person you know gets away or doesn't like it. Like, there's a capacity for surprise, there's a capacity for failure if something is live. Uh, Steve Jobs never would have filmed his presentations. But Tim Cook isn't sort of a presentation guy. He's an efficiency guy. And so if you take out all the time that there would be for applause, you can get more content into the.

Speaker B: Right.

Speaker A: So I just find I don't really care about the little updates. The fact that the iPad can do math now, I just don't care. And the devices themselves, they're still good. People are still buying them. I mean, I have an iPhone so completely, but it's, it's just a constant iteration. And look, maybe that's the right thing to do. I mean, if you think about what you don't like about your iPhone, it probably is, hey, it could take better pictures. The, uh, battery life could last longer. And that's the sort of things that they're doing iterating.

Speaker B: But we also hope. We hope or we expect first. Will new products ever come out of the supply chain?

Speaker A: Yeah, I don't know. I mean, I don't think we should have the sense that, hey, Steve Jobs like, you know, revolutionized a product every three to four years and that's like some particular thing. Like if I was to defend Tim Cook or the fact that, uh, you know, the argument that Apple has become dull, uh, or predictable, I would say, well, look, to some extent we just reached a sort of like the iPhone's kind of the perfect product. Right. Even 20 years from now, I would put money on people having a 6 inch glowing rectangle in their pocket. Whether they have smart glasses or whatever else, brain implant, it's still just a perfect thing. And so, you know, it's not like they should just come out with a triangle iPhone next year. That doesn't make any sense. So, you know, constant iteration maybe is just the thing to do.

Speaker B: Okay, time will tell, too. Um, thank you.

Speaker A: You're welcome.

Speaker B: Uh, informative. Entertaining. Patrick McGee, author of Apple in China. I joined the session. Enjoy the session later with Spencer, CEO of Light Source on the main stage. And thanks so much for being with us here at DPW in New York.

Speaker A: My pleasure, Herman. Thank you.

Speaker B: Cheers. Thank you, Patrick.