Apple at 50: How the company became so profitable

[0:00] David Pogue, it is an honor to sit down with you. [0:02] I've been reading your stuff for so long. [0:04] Oh, well, you have very good taste. [0:07] But let's just start with your origin story [0:11] when it comes to Cover & Tech and this company in particular. [0:14] How would you characterize what Apple means in your beat? [0:18] I mean, I've been a musician and a magician [0:21] and a musical theater guy from way back. [0:24] And I was in senior year of college, [0:27] uh, never part of the computer clubs or anything like that [0:30] when the Macintosh came out in 1984 [0:33] and they had this half-price deal for college kids. [0:35] So thinking, someday I'll need a computer, I bought one. [0:39] And at that point, Apple had lost the race [0:43] for the corporate world to IBM, [0:45] and they were marketing exclusively to education [0:48] and creative people. [0:50] You know, that was me. [0:52] So I was all over those art programs, the music programs, [0:55] and, you know, it hit me where I lived. [0:58] A few people these days can relate to what computers were [1:02] when the two Steves got together in that garage, right? [1:05] Take us into that world and how radically fresh this idea [1:09] and this invention was for them. [1:10] I cannot stress how important that notion is, [1:14] what computers were before. [1:16] They were for, I mean, when Woz came along, [1:20] computers were for corporations and governments. [1:23] People, normal people did not own computers, nobody. [1:27] So his Apple I and then his Apple II became the first computers [1:31] for everyday, normal people. [1:34] Like the Apple II is the first self-contained, [1:36] one-piece plug-and-play computer in the world. [1:39] And that's why it became such a mega hit. [1:41] And then, you know, the Macintosh was the first one [1:45] that was successful that had a graphic interface, [1:49] menus and windows, so you didn't have to memorize and type [1:53] out commands, glowing amber letters against a black screen. [1:57] They were listed in menus for you. [1:59] And so take us back to that era, that time in 76. [2:03] Who were these guys and what was their special sauce? [2:07] Woz was this super nerdy, shy, gifted prodigy engineer. [2:14] So as a hobby in high school, he used to download the repair [2:19] and service manuals for many computers. [2:22] These are the corporate computers that look like microwaves [2:25] and just study the wiring and the circuits. [2:27] And redo them better on paper. [2:31] He's like, you could use half the number of chips if you did this. [2:34] And then he would do it again on the same machine. [2:37] And again, until he got simplification and elegant design [2:41] down to an art in high school. [2:44] So he fell into a burgeoning computer club, [2:48] the Homebrew Computer Club, which was a bunch of these grubby, [2:53] scruffy nerds who loved computers and their vision was [2:58] to bring the power of computing to anybody, which was in its way, [3:03] a hippie-ish counterculture notion. [3:05] And Woz especially loved this idea. [3:08] So he came up with his very first real computer, the Apple One, [3:12] we call it now. [3:14] It was just a circuit board. [3:15] It wasn't like what we'd think of as a full computer. [3:17] But his intention was to give the plans away. [3:20] He wanted to spread the joy and the power of computing [3:23] to anyone who wanted it free. [3:26] And then at this, through a mutual friend, [3:28] he met this other guy, four years younger, Steve Jobs. [3:31] At this point, Woz is in college, Jobs is in high school. [3:34] And they both have a love of Bob Dylan and pranks and music [3:38] and girls and technology. [3:40] And Jobs saw this computer and he's like, [3:43] you shouldn't give that away. [3:45] You should sell that. [3:47] And so they went into business together. [3:49] And it is really an interesting yin and yang personality, right? [3:52] Because the hacker philosophy of the time is you should be able [3:55] to crack into any computer, go to Radio Shack, customize it, [3:58] do it yourself. [3:59] Whereas Steve Jobs thought, no, we're going to build a closed, [4:02] perfect box and no one should mess with it, right? [4:05] That's right. [4:05] And the two Steves' one and only notable fight was over the Apple II [4:11] and how open it should be. [4:13] Woz believed that slots, expansion slots that let you put [4:16] in a circuit board for additional features, a printer, a modem, [4:21] an electronic instrument, was the key to success [4:25] and making this thing useful to everybody. [4:27] Jobs was like, no. [4:28] Printer and modem, two slots, that's it. [4:30] We are not opening this up. [4:33] And Woz, who's a very sweet, gentle person, put his foot down [4:38] and he said, if that's what you want to do, [4:40] go find yourself another computer. [4:41] So the Apple II had eight slots. [4:44] Woz won. And that was a key to its success. [4:47] That thing kept Apple alive for 10 years. [4:51] Is that right? [4:51] Think about a single computer model lasting for 10 years. [4:55] And that's the thing. [4:56] There's a lot of early flops, right? [5:00] Yes. People forget that Steve Jobs' first stint [5:04] at Apple, except for the Apple II, produced nothing but flops. [5:10] So the Apple II was a mega hit with everybody. [5:13] It was the only computer that could run VisiCalc, [5:16] the first spreadsheet precursor to Microsoft Excel. [5:19] And so whenever anyone from the business world would buy an [5:23] Apple II, they would also buy extra memory, VisiCalc, [5:27] and a card that let you see more text [5:29] on the screen. [5:30] And so at Apple, they were like, well, why don't we build all [5:34] that stuff in, in a new machine called the Apple III, [5:38] so you didn't have to mod your Apple II. [5:40] It was going to be a corporate computer. [5:41] And the key is that Woz did not design the Apple III. [5:48] He designed the Apple II, [5:50] and then the corporation designed the Apple III. [5:53] So it did not do well. [5:56] It was supposed to be able to run Apple II programs backward [5:59] and backward compatible. [6:01] But to do that, they had to, this is getting too nerdy maybe, [6:04] but they installed a little additional circuit board raised [6:09] above the main circuit board on posts. [6:12] And Jobs insisted that the computer would not have a fan [6:17] his whole life to the end. [6:18] No fans. Fans make things loud. [6:21] Fans make things ugly because you have to have slots, [6:24] air vents on the side. [6:25] So he insisted that the Apple III would not have a fan. [6:28] So what happened? [6:29] The Apple III overheated and began to crash. [6:33] There was literally a service memo to the dealers of America saying, [6:38] if your customers are complaining that the Apple III is crashing, [6:42] tell them to lift it three inches off the desk and drop it. [6:46] This is true. [6:47] And what that did was it reseated the daughter board [6:51] and the circuit chips that had started to come out as they expanded. [6:55] Right. Imagine that guidance today. [7:00] If your iPhone is not connecting, [7:01] just bang it against you. [7:02] Exactly. [7:03] Let's talk about numbers now. [7:05] I mean, what's crazy is to look at that origin story [7:07] and then realize the the fruit, pun intended, of their success. [7:12] Yeah. [7:12] Where is Apple's position today? [7:14] Well, it's the dominant electronics company in the world, [7:18] one of the most iconic brands in the world. [7:20] They sell a million dollars worth of product every 90 seconds. [7:25] They they are approaching a four trillion dollar valuation. [7:29] They were the first company ever to hit a trillion dollar valuation. [7:30] They were the first company ever to hit a trillion dollar valuation. They were the first company ever to hit a trillion dollar valuation. They were the first company ever to hit a trillion dollar valuation. [7:31] They were the first company ever to hit a trillion dollar valuation. They were the first company ever to hit a trillion dollar valuation. [7:32] And then two trillion dollars. [7:34] They sell 220 million iPhones a year. [7:37] So those two Steve's launched a force of business and nature. [7:43] Yeah. All right. [7:44] Let's talk about the Macintosh. [7:46] Yeah. [7:47] And how revolutionary that was. [7:48] My first, the first time I touched an Apple product [7:51] was a Macintosh in my college newspaper. [7:53] And I immediately fell in love. [7:55] Yeah. [7:56] Explain why we did that. [7:59] So the story is not as much fun to tell. [8:02] So the story is not as much fun to tell. [8:03] When you realize that all the stuff [8:05] that the Macintosh brought to the world, [8:07] menus, windows, the mouse, fonts, a trash can, icons, [8:12] that didn't begin with the Macintosh. [8:14] That all came from an earlier Apple computer [8:17] that flopped, the Lisa. [8:19] Nobody talks about the Lisa, [8:20] but it was unbelievably ahead of its time. [8:24] Absolutely advanced. [8:25] It had multitasking and memory protection. [8:28] So it didn't crash. [8:28] You could run multiple programs at a time, [8:31] but it cost $10,000. [8:32] And nobody bought it. [8:34] So Steve Jobs' thing was, take the same thing [8:38] and make a $1,000 version. [8:40] And then we can change the world. [8:42] So the intention of the Macintosh [8:44] was to take the beauty and simplicity and artistry [8:47] of the Lisa and put it in a smaller $1,000 package. [8:52] Didn't turn out that way. [8:53] It wound up going on the market for $2,500 [8:56] and didn't sell very well for the first couple of years. [9:00] But eventually, that idea caught on. [9:02] The Macintosh got better. [9:04] Microsoft came along with Windows. [9:06] And now, the stuff on the Lisa is what we all use every day. [9:10] We were just looking at the 1984 Super Bowl ad [9:13] with Donny Deutsch. [9:14] He says that's his favorite spot of all time. [9:18] But it didn't move a lot of Macintoshes, [9:20] it sounds like, in the early days. [9:21] No. [9:22] And part of the problem was that the whole industry [9:26] was in a slump in 1984 and 1985. [9:29] So nobody was moving computers. [9:31] You have to remember. [9:32] People. [9:33] People didn't own computers in 1984. [9:36] I mean, a tiny percentage of Americans [9:39] had ever even used one. [9:41] So it wasn't like, shall we compare the Macintosh [9:44] to Windows? [9:44] Nobody had tried either one. [9:46] But they had some tough times, right? [9:49] What led to Steve Jobs getting sacked by his own board? [9:54] Steve Jobs had played a huge role [9:56] in hiring his own CEO, John Sculley, who [9:59] had zero experience in technology, didn't pretend to. [10:02] He came from Pepsi, marketing Pepsi. [10:05] But Apple needed a marketing guy. [10:07] So Sculley and Jobs were like soulmates for the first year. [10:13] And they oversaw the release of the Macintosh [10:15] and the world celebrated. [10:17] Then there was a computer industry slump. [10:19] They weren't selling Macs. [10:21] And they began to fight with each other about what Sculley [10:24] was spending money on. [10:26] Why was he supporting the Apple II, which [10:28] was still a popular product? [10:30] Why wasn't he pumping more money into the Mac? [10:33] Jobs was becoming more and more irritable and abusive [10:36] to his lieutenants. [10:37] And finally, Sculley said, look, it's him or me. [10:41] And the board voted for Sculley. [10:43] And they demoted Jobs. [10:45] They put him in his own office in a different building [10:48] that he called Siberia. [10:49] And it was so meaningless that eventually he just quit. [10:53] And he was gone for 11 years. [10:55] During Jobs' absence, people forget Apple did not do well. [11:01] They had three CEOs in five years. [11:04] Nobody had Jobs' charisma or leadership or reality distortion [11:08] field. [11:09] The company just began tanking. [11:11] The number of Macs they were selling multiplied. [11:14] There were at one point 70 different Mac models. [11:17] There were fiefdoms. [11:18] There was duplication. [11:20] They had 22 different ad campaigns going on [11:23] when Steve Jobs came back in 1997. [11:27] At one point, two Apple trademark lawyers, [11:31] showed up in court to sue each other. [11:36] That's how dysfunctional this company was. [11:38] They were six weeks from bankruptcy, six weeks away. [11:42] So then, as we know, in a Hail Mary pass, [11:46] the last of those CEOs, Gil Emilio, [11:48] said, we need to buy an operating system company [11:52] because our Macs are still crashing. [11:54] And they bought Jobs and Next and his 300 engineers. [11:58] And that was the beginning of this incredible turnaround. [12:00] And that was the beginning of this incredible turnaround. [12:01] And that was the beginning of this incredible turnaround. [12:03] I think it's probably the greatest business turnaround [12:06] in history. [12:07] In a single year, Jobs fired the entire board. [12:10] He shut down all 22 ad campaigns Apple had going. [12:14] He eliminated all of Apple's products [12:18] and said, we're going to replace them with four. [12:21] Two laptops, two desktops, consumers, and professional. [12:26] That's it. [12:28] And the engineers didn't like that idea. [12:30] They'd been working. [12:31] They're spending millions on R&D. [12:32] Like, dude, this is our project that we're working on. [12:37] And he said, if we only have four products, by the way, [12:39] no printers, no monitors, we're killing all that. [12:43] If we only have four products, then we [12:45] can put our A-list engineers on all four. [12:49] We can focus the entire company on making all four fantastic. [12:53] And the first new machine that came out of that was the iMac. [12:56] And then the rest is history. [12:58] iPod, iPad, iPhone, all from Jobs' return. [13:02] Yeah. [13:02] In a single year, he turned everything around. [13:06] Is that when the stores came around? [13:08] Or was that before that? [13:09] Yeah. [13:09] Well, Apple stores came a little bit after that. [13:11] But that represented the opposite of Radio Shack, [13:15] these museums of simplicity, right? [13:19] The Apple store thing is incredible. [13:21] I mean, Jobs had his flaws. [13:23] But my god, could he see the future over and over and over [13:27] again. [13:28] Jobs saw that Macs were not getting the attention [13:30] from salespeople at CompUSA and Best Buy. [13:33] That the Macs deserved. [13:35] So he said, screw it. [13:36] We're going to start our own retail store chain. [13:40] IBM had tried it. [13:41] Gateway had tried it. [13:42] They all failed. [13:44] Computer stores did not work. [13:46] And there were these fantastic articles in business magazines [13:49] about one year from now, Jobs will be turning the lights out [13:53] on this misbegotten idea. [13:55] Not what happened. [13:57] I mean, the Apple stores became the most profitable, most [14:00] trafficked new retail stores in decades. [14:03] Like, in a year, they caught fire. [14:05] What do you remember about 2007, the first iPhone? [14:07] Wow. [14:08] I mean, that keynote speech where Jobs unveiled the iPhone, [14:11] it was so electric. [14:12] I was there. [14:13] We were all in the auditorium. [14:14] And he said, today, we're unveiling three new products. [14:15] A revolutionary new iPod. [14:16] Crowd loses its mind. [14:17] A revolutionary internet communicator. [14:18] Everybody loses their mind. [14:19] And a phone. [14:20] There had been rumors. [14:21] I mean, it's a new product. [14:22] It's a new product. [14:23] It's a new product. [14:24] It's a new product. [14:25] It's a new product. [14:26] It's a new product. [14:27] It's a new product. [14:28] It's a new product. [14:29] It's a new product. [14:30] It's a new product. [14:31] It's a new product. [14:32] It's a new product. [14:33] Crowd loses its mind. [14:34] And a phone. [14:35] There had been rumors. [14:36] And everybody roars. [14:37] And then he goes, an iPod, an internet communicator, and a phone, an iPod, an internet. [14:43] Are you getting it? [14:45] And suddenly, people realized, it's all the same thing. [14:48] And people just lost their minds. [14:50] Yeah. [14:51] Yeah. [14:52] It was, I mean, once you enlarged a photo like that, you were sold. [14:56] It was absolutely incredible. [14:57] We now take that for granted. [14:59] But in the early days, that was so revolutionary. [15:01] And there were fears. [15:02] You're going to break the glass if you put it in your back pocket. [15:05] That's right. [15:06] I mean, there's a great story. [15:07] That thing, they tried glass. [15:09] And in prototypes, it would crack if you dropped it from just a couple of feet. [15:13] So they had long since switched to a plastic screen that was much more rugged. [15:18] So at that very keynote, when Jobs showed the world the iPhone for the first time, after [15:23] the show, he pulled it out of his pocket and found scratches on it. [15:27] His keys had scratched the plastic. [15:30] And he's like, guys, we're going back to glass. [15:32] And everyone's like, this thing ships in six months. [15:35] What are you talking about? [15:36] He goes, I'm not shipping this. [15:38] They're like, we've done the drop tests. [15:40] We've ordered the parts. [15:41] We've mastered the manufacturing lines for plastic. [15:44] You can't change now. [15:45] But you know, Jobs being Jobs. [15:47] So he went to Corning, this huge maker of industrial glass, and said, you got to help [15:53] us out. [15:54] You got to come up with the kind of glass that will withstand drops and scratches. [15:58] And Wendell Weeks, the CEO, goes, you know, in the 50s. [16:02] We had something. [16:03] We did this ion sublimation kind of glass that we were using in race car windshields. [16:09] And eventually, we stopped making it because the market wasn't big enough. [16:12] And Jobs was like, start a factory and make that. [16:16] We shipped this thing in six months. [16:18] Incredibly, they did. [16:20] They did. [16:21] Can you speak to Steve Jobs? [16:23] What was it about his personality? [16:25] People talk about his reality distortion field and just he could be a real tyrant if you're [16:32] on the wrong side. [16:33] I'm not in a bad mood. [16:34] But explain why Steve Jobs left such a mark. [16:38] Yeah, there's never been anyone quite like Jobs. [16:42] I mean, the entire corporation of Apple to this day kind of exists to execute his ideas [16:50] and his philosophies. [16:51] So yes, especially in the early days, he could be brutal and cruel. [16:56] He would say, you know, whatever you just come up with is shit. [16:59] You know, you don't deserve to breathe the air here. [17:02] And there's two philosophies about that. [17:04] One is that it was pure cruelty. [17:07] And the other is, that's how he got unbelievably great work out of people, work they didn't [17:11] think they could achieve. [17:13] Many, many people told me that. [17:14] Like he told me I had to do it in this much memory, it was impossible. [17:18] But when he told me that, you know, that I wasn't cutting it, I went back and I made [17:23] it work. [17:24] You hear that over and over. [17:26] Also important to note that when Jobs left Apple for 11 years, did Pixar, did Netflix, [17:31] did Netflix. [17:32] And came back, he was much mellower. [17:35] He did much less of that berating. [17:38] But yeah, Jobs was an artist. [17:41] What other CEO sits down with the designer of a piece of software and haggles over the [17:47] drop shadow or the radius of the corners of the icons? [17:51] I mean, Eddie Cue, who's the head of Apple's services said, if I ever write an autobiography, [17:58] it's going to be called Off by One Pixel. [18:00] Because that was the thing. [18:02] That was Jobs. [18:03] It's not the CEO's job to get in the weeds like that. [18:07] But Jobs did. [18:08] Talk about micromanaging, right? [18:10] Yeah. [18:11] Micropixel managing. [18:12] There's an important two-week period in the development of the iPhone. [18:17] Yeah. [18:18] The big problem they had with the iPhone being all screen is how do you type on it? [18:23] And there were people in the inner circle to the end arguing that we should have a little [18:26] thumb keyboard like the Blackberry. [18:30] And there came a point in the development. [18:32] And Scott Forsall, who's the head of iPhone software, tried to type his name, and he just [18:37] could not get the keys are the size of Tic Tacs, and your thumbs are much bigger. [18:43] So he said, all right, everybody stop. [18:45] Whatever part of the iPhone you're working on, quit it. [18:48] For two weeks, all we're going to work on is how do you type on this thing? [18:51] And everybody came up with these weird designs, like only five keys, but you type it repeatedly [18:58] to get the letter you want, like the old flip phones. [19:01] And finally, though. [19:02] Finally, the winning solution was a regular alphabet keyboard like we have on our laptops. [19:08] But as you type, invisibly to you, the keys get bigger by predicting what you could be [19:15] typing. [19:16] So if I want to type CNN, if I type C and N, the only thing the next letter could be [19:23] is another N. So invisibly to you, the landing space for the N key gets bigger. [19:28] So you can be sloppy. [19:30] There's no word that goes C and P. [19:32] Right. [19:33] Right. [19:34] So all the time that you're typing, the keys are getting bigger and smaller, according [19:38] to probabilities. [19:39] And it worked. [19:40] What is the most impactful product or idea to come out of Apple, you think? [19:45] There are lots of old companies, and very few of them are doing the same thing philosophically [19:51] that they set out to do at the beginning. [19:54] Samsung started out as a dried fish company. [19:57] Nokia was a paper mill. [20:00] Apple was founded to take complex, powerful technology. [20:01] It was a paper mill. [20:02] It was a paper mill. [20:03] Apple was founded to take powerful technology and polish it and make it simple and easy [20:07] and joyful for ordinary people to use. [20:10] And I would say that is still exactly what they're doing. [20:13] Some of the stuff that they did on the iPhone, people hated their cell phones. [20:18] Do you remember? [20:19] People hated their cell phones. [20:20] And they turned that into your most cherished, joyous object. [20:24] It's that same trend. [20:26] The other side of this, Apple, is they made it too good. [20:30] Yeah. [20:31] Yeah. [20:33] Jobs famously wouldn't give an iPad to his kids. [20:37] He knew the power of these things over especially developing brain. [20:41] How do you reconcile the cost of their success on society? [20:47] I think everybody involved will agree with this statement that they unleashed something [20:53] they didn't intend to unleash. [20:56] It's sort of a devil's deal because the first year of the iPhone, it didn't sell that well. [21:01] There were only 16 apps. [21:03] They were all made by Apple, and there was no app store. [21:06] You couldn't add apps. [21:08] You couldn't make it a game machine. [21:10] You couldn't make it a radio. [21:13] You couldn't make it a banking tool. [21:15] And everybody would harangue Jobs, you got to open this up, you got to open this up. [21:20] And you know Jobs and his feeling about closed systems. [21:23] He refused. [21:24] And finally, after a year, people had started hacking the phone, jailbreaking it, to make [21:29] it possible to add their own apps to this incredible pocket computer. [21:33] And once Jobs saw that, he knew the cat was out of the bag. [21:37] So they set up this app store where every app would be hand inspected for safety and [21:42] make sure it wasn't hacky. [21:44] And that's when the iPhone took off. [21:46] I mean, the iPhone gave birth to Uber, Tinder, Grubhub, I mean, all these businesses. [21:51] Airbnb exists because of the iPhone. [21:55] And also, screen time, addiction, isolation, all of these things are the regrettable side [22:02] effect of this monster. [22:04] It's a monster that Apple created. [22:06] Has the company come to grips with that as they grew up? [22:09] And how do they adjust? [22:11] They've worked hard on, you know, parental controls and time limit software. [22:17] I don't know how many people use them. [22:20] And of course, now the dominant computer in the world is not the iPhone. [22:24] It's the Android phones. [22:26] And so at this point, it's hopeless. [22:28] I mean, everybody everywhere has the same access to the same thing. [22:32] So I know there are people. [22:34] I know there are people within Apple's upper ranks who think a lot about it and regret [22:39] that aspect of what happened to the phone. [22:43] But what are they supposed to do? [22:45] Stop selling the iPhone? [22:47] So the Android outsells the iPhone today? [22:49] Worldwide. [22:50] In the United States, the iPhone is the best selling phone. [22:53] But globally, because you can get really cheap Android phones, the Android system outsells [22:59] the iPhone. [23:00] Do you think the Android would have happened without the iPhone? [23:02] Oh, no. [23:03] No. [23:04] I don't know exactly how that went down. [23:06] I mean, there's documentation. [23:08] Google was working on a different kind of phone, a Blackberry-like phone. [23:13] And then they saw the iPhone and they're like, no, rip up those plans. [23:17] So how do you think about responsibility for the age we live in now? [23:23] Because they're not Instagram or they're not Snapchat or TikTok, but so many people get [23:29] those apps through iPhones. [23:32] How much responsibility do they bear for the ecosystem? [23:34] Yeah. [23:35] And what's the benefit? [23:36] What's the benefit to both the benefits and the ills of these things? [23:38] There's two ways to look at it. [23:39] One is they invented the world's most amazing tool, like dynamite. [23:46] It has amazing uses to make tunnels to new places, but it also lets people kill other [23:50] people. [23:51] Dynamite, I mean. [23:53] And the other way to look at it is it's a scourge on mankind. [23:57] And it was the beginning of the end. [23:59] And it's ruining our children. [24:01] So I think it's got to be a strange place for the invention. [24:06] I think it's got to be a strange place for the inventors of the iPhone to be in. [24:09] They never foresaw this. [24:10] Clearly, they never foresaw it. [24:12] And Johnny Ive told me that he is moving on to, for example, pendants, they're rumored [24:18] to have a pendant or glasses, things that don't occupy your attention the same way a [24:23] screen does. [24:24] He very much doesn't care for this universe that the iPhone unleashed. [24:30] That's what gives rise, you have to wonder if Steve Jobs was still around whether he [24:34] would have cannibalized the iPhone by now. [24:36] With the next thing, and you see Johnny Ive, he's working with OpenAI, there's been leaks [24:41] about sort of an earpiece you wear called a sweet pea, and I guess it's talking to you [24:46] through the day instead of having to Google and look at a phone. [24:50] Where is this headed, do you think? [24:53] I think in the short term, like the next five years, I think the glasses are going to be [24:58] a big deal. [24:59] If the AI can be perfected to the point where you don't need to see what you're doing, but [25:05] you can speak to it and it's 100% accurate. [25:07] If it's 100% accurate or very close, then there's a lot less need for the phone, there'll [25:12] be a lot less of this, and you know, in the really long term, they talk about that thing [25:17] getting smaller and smaller. [25:20] They're talking about the AirPods could one day have little cameras on them and serve [25:23] all the same purposes as the glasses, and then beyond that, brain implants. [25:28] Although I really want to go in for brain surgery every time there's AirBrain 5.1. [25:33] Yeah, I got to take some time off. [25:37] I'm getting my... [25:38] Exactly. [25:39] My new software and the brain updated. [25:40] But I think even Apple knows that the days of everybody owning a laptop and maybe even [25:46] everyone holding a little phone are probably numbered. [25:50] Let's expound on that a little bit because we're actually going to produce some of the [25:55] first hosted content for the Vision Pro. [25:57] We're going to both the North and South Pole to use these new cameras to capture that and [26:02] hopefully give people a little more immersive thing. [26:05] Wow. [26:06] But as a product... [26:07] Wow. [26:08] I mean, the Vision Pro hasn't exactly caught the world on fire. [26:11] No. [26:12] But do you see it as the beginning of something? [26:14] The way the very first iPod was the beginning of something, that becomes ubiquitous. [26:19] So the Vision Pro was too expensive, too big, too heavy, and too uncomfortable. [26:24] I mean, everybody agrees on that. [26:26] But the technology was insane, I mean, absolutely immersive, convincing, three-dimensional, [26:33] and useful. [26:34] I mean, you could sit in a cramped coach seat on a plane and watch your movie on a 100-inch [26:38] 100-foot screen with perfect sound and picture. [26:42] It didn't sell. [26:43] So the initial plan was, well, let's make it smaller, lighter, and less expensive. [26:47] And then Google and Meta came out with the glasses. [26:52] These don't even have a screen. [26:54] It's just speech recognition and capturing things with the camera and recording things [27:00] with the audio. [27:01] Now there are ones, early ones, that have a small one-inch screen in front of one eye. [27:07] So it's... [27:08] It's a really different concept. [27:10] Apple was going to start with the ultimate and try to bring it down and make it smaller. [27:14] The other companies are starting with something very basic and over time make them more capable. [27:19] So at this point, the rumor is that Apple has dropped the idea of the Vision Pro, and [27:24] they're putting together their own glasses, and they will follow the same track, initially [27:29] no screen, and then eventually there will be some kind of visible aspect to it. [27:35] Yeah. [27:36] Yeah. [27:37] And that's what characterized Tim Cook's stewardship of this brand. [27:42] I mean, he took over in 2011, and since that time, Apple is far more successful under Tim [27:49] Cook than it ever was under Steve Jobs. [27:52] The sad part for nerds like me is that the era of mind-blowing new revolutionary hardware, [28:00] the iMac, the iPod, the iPad, the iPhone, that's over. [28:05] There haven't been any more big new platforms. [28:08] I mean, there's the watch. [28:09] And there's the AirPods. [28:10] But those are fundamentally accessories to the iPhone. [28:15] But there's an argument. [28:17] Maybe that low-hanging fruit was picked. [28:20] Maybe even Steve Jobs would not have been able to keep up that rate of new inventions. [28:26] The whole world has moved toward software services and AI. [28:31] And so it may be that that's exactly where Cook is taking the company. [28:35] Right. [28:36] You mentioned the watch. [28:37] I want to hone in on that for a little bit. [28:39] Because we met a couple of people who credit these with saving their lives. [28:43] But you write really interesting insight into how deep they go in these R&D teams to create [28:49] this stuff and make sure it works. [28:51] Give me some examples. [28:54] Yeah. [28:55] I mean, we should talk about the whole Apple and medical thing, because that is an unsung [28:59] story that is just, yeah. [29:03] Johnny Ive was really burned out. [29:06] He had done Apple's new headquarters. [29:08] He had done all these things. [29:09] He had done all the iPhones and so on. [29:11] He wanted, and Steve Jobs had died. [29:14] So as one last thing, he wanted to leave Apple with one final hit platform product. [29:19] So he came up with the watch. [29:22] It started out as just a glorified Fitbit, just tracking your steps and so on. [29:27] But it could also track your heartbeat, which would be very useful. [29:32] And you know, Apple had very little experience in the medical world. [29:35] So they went to the most unbelievable extremes. [29:39] Learn to correlate what those sensors see of your pulse with the actual heart rate, [29:45] blood oxygen. [29:46] And they would send these volunteers into these rented apartments to live, cook, clean, [29:53] sleep, work, to measure exactly, using professional equipment, what kind of oxygen consumption [29:58] they were doing and correlate that with the pulse information for the watch. [30:03] And as a result of all this hyper-extreme research, they turned the watch into a watch. [30:09] They turned it into a medical device, like, it's mind-blowing how many lives this saves. [30:16] First of all, it's gone way beyond steps and heart rate. [30:19] Now it measures your breathing at night. [30:22] I think Apple has slowly but surely become a medical devices company. [30:27] And they get letters every day, this watch saved my life. [30:31] I mean, I've seen them every day. [30:34] But your watch is always on. [30:35] So it'll tell you, even if you're young and healthy and don't expect this, get checked [30:39] out. [30:40] Your heart's doing this weird stuff. [30:43] And if you know you have it, you can take medicine for it, saving thousands of lives. [30:47] And now hypertension, high blood pressure, sleep apnea, this thing on your wrist is detecting [30:54] medical conditions that take place in your lungs, your heart, and your brain, all through [31:00] this really advanced triangulation of signals on your wrist. [31:05] And they also, I understand, went to great lengths when it came to facial recognition [31:08] to unlock the screen. [31:09] Tell me about that. [31:11] Yeah. [31:13] I would sometimes ask these Apple executives, why hasn't anybody duplicated what Apple has [31:18] done? [31:19] Why can't anyone copy it? [31:20] And the answer from all these employees is no place isn't as intense as Apple in pursuit [31:27] of excellence. [31:28] There's this great story about Face ID. [31:30] When you look at the phone and it unlocks, they wanted to make sure that it would work [31:34] for everybody's face. [31:36] So they would take this prototype to Harley Davidson rallies. [31:39] Yeah. [31:40] They would find creative facial hair. [31:43] They would take it to twins conferences to see if your twin could duplicate it. [31:48] They hired state-of-the-art Hollywood special effects masters to create latex hyper-life-like [31:55] heads, I mean, with pores and whiskers. [31:59] And they would test it to make sure that a mask couldn't fool this thing. [32:03] I mean, they told me this great story about the guy in the mailroom opening up these boxes [32:08] from LA with these, like, decapitators. [32:09] Yeah. [32:10] With decapitated heads. [32:11] I mean, they won't stop at nothing. [32:15] Siri was introduced way back. [32:17] I was there for the Siri launch, and we did a test live. [32:21] I asked if it knew Diane Sawyer's birthday. [32:23] How'd it do? [32:26] It stumbled a little bit, but again, it was just sort of a voice-activated Google search [32:30] back then. [32:31] Yeah. [32:32] And now they've struck a deal, it sounds like, with Google to Gemini to run all of [32:37] this infrastructure. [32:39] Is Siri going to become an AI chat bot? [32:41] Like, how did they miss the boat on that, and where are they going with AI? [32:46] Siri was revolutionary for its time. [32:49] Like many technologies, Apple didn't invent it. [32:51] It was a spinoff from DARPA, our military's advanced research arm. [32:58] But over the years, Siri has gotten weaker and weaker, and Google's assistant has lapped [33:05] it considerably. [33:06] So in 2024, Apple demonstrated a new version of Siri on stage. [33:12] Where it combined AI with Siri's fundamental operations, and it had access to your apps, [33:20] your messages, and your email. [33:22] So you could say, what time do I need to pick up mom? [33:25] It knows from your email that your mother's flying in today. [33:27] It knows the flight number from a text message. [33:29] It goes to a flight tracking website, finds out if the flight's going to be late, then [33:33] looks at Google Maps, looks at the traffic. [33:35] All of that behind the scenes, and in a tenth of a second, it says, you need to leave at [33:38] 1.20. [33:40] That is what we want from AI. [33:42] Yeah. [33:42] You know, when's the last flight out of Chicago? [33:45] How do I blah, blah, blah. [33:46] So then a year went by, a year and a half, nothing. [33:51] They had demonstrated it. [33:53] Apple had demonstrated it, but not delivered it. [33:56] So the rumor was there was a lot of turmoil internally. [33:58] They just couldn't get it to work reliably. [34:01] I will say this for Apple and their AI efforts. [34:04] Apple is not a company that ships stuff that sort of works. [34:08] And AI, as we know, hallucinates. [34:11] It makes up wrong answers all the time. [34:13] And that's not getting better. [34:16] So I do feel for Apple's efforts, everyone wants to know, where's my Siri AI? [34:21] And yeah, so now they have a deal with Google. [34:24] They will use their Gemini technology to underpin the new Siri. [34:29] But that brings up a big question about privacy and the personal private cloud computing that [34:34] they're so famous for. [34:36] Is that even possible anymore if Google is running my questions to Siri? [34:42] Yes. [34:43] So Facebook and Google are fundamentally advertising companies. [34:48] So their whole thing is collecting data about you to target ads. [34:51] Apple is primarily a hardware company. [34:53] So they make a lot of show about, we protect your privacy. [34:59] And they do. [35:00] I mean, all the AI stuff, all the Siri stuff is on your phone. [35:03] It never goes off to the internet. [35:04] It never goes to Apple. [35:06] AI is a bigger problem because you can't have really good AI on a phone. [35:11] It's just not powerful enough. [35:12] So you need a data center. [35:13] So Apple invented this crazy, unheard of system where your request that needs the power of [35:24] full AI goes to these data centers, is processed, the answer is sent back to you, and then everything [35:30] about the request is instantly deleted. [35:33] And everyone's like, yeah, sure it is. [35:36] We're supposed to take your word for it? [35:38] And Apple said, yeah, come and inspect us. [35:42] They literally opened up the code. [35:44] Out of their server farms, two researchers and scientists, to see if Apple's telling [35:49] the truth. [35:50] Now, though, Apple is not providing its own AI. [35:53] Gemini from Google is going to be underpinning this thing. [35:57] So they had to work out some very delicate negotiations so that Apple can maintain this [36:03] privacy. [36:04] So I don't know the technical details, but it'll be some hybrid version of this private [36:09] cloud compute so that Google never sees your requests or the answers. [36:13] That all brings us back to trust. [36:17] And it feels like Apple asked for more trust from the public than any other tech company [36:23] in history. [36:24] Going back to the Think Different ads. [36:25] And we're not IBM. [36:26] We're the pirates, not the Navy. [36:29] But now we live in this age of ice raids in Minneapolis, or post-Arab Spring, where these [36:34] phones can be weapons for or against democracy, depending on who's holding them. [36:40] And I talked to some super fans who are really worried. [36:42] They've lost a lot of trust in this company. [36:44] What do you say? [36:45] What are your thoughts about where they stand politically right now and how that trickles [36:49] down to their fan base? [36:52] Are you thinking about Tim Cook and his dealings with the Trump administration? [36:56] Exactly. [36:57] Yeah. [36:58] Yeah. [36:59] It's a PR disaster for the company. [37:01] Their CEO presenting a trophy to the president and giving him a million dollars of his own [37:07] money and attending the Melania movie on the night that someone was getting shot in Minneapolis. [37:15] I know why he's doing it, is because Trump has threatened these unbelievable tariffs [37:21] that would drive the price of an iPhone up to $3,500. [37:25] It would destroy much of what the company is doing right now. [37:29] So Cook is playing the game, like, okay, give him a trophy to stay on his good side. [37:35] He's not alone. [37:36] I mean, look at the media companies, look at the universities, look at all the companies [37:41] who are bending over to the Trump administration to avoid getting targeted. [37:46] But, man, it's not a good look. [37:52] It's a tough spot to be in. [37:54] I remember they put out an ad that said the FBI wants a backdoor access into the iPhone [37:59] and we're not going to give it to them because your privacy is more important. [38:02] You think they would do that today? [38:03] Yes, I do. [38:05] You do? [38:06] Yeah. [38:07] Tim Cook is so emphatically insistent on this privacy thing because he knows it's an Apple [38:13] exclusive. [38:14] Google can't do it. [38:15] Facebook can't do it. [38:16] Because they're businesses. [38:17] Businesses selling ads and collecting data. [38:19] So yeah, the San Bernardino murder case, there was a shooter who shot up a room full of people [38:29] and then was killed, but they retrieved his iPhone. [38:32] And the FBI asked Apple, please give us a backdoor so we can see who he was and what [38:38] he was planning and get whatever clues we can. [38:40] And Tim Cook refused because that would bring into question the whole thing about how serious [38:45] is Apple about your privacy. [38:47] But he held firm, and in the end, the FBI got a backdoor through a hacker. [38:53] They got in another way, and the whole thing disappeared. [38:56] But push had come to shove, and Cook showed that he meant business. [39:02] Interesting. [39:04] Who are you betting on to replace him? [39:07] Yeah, Tim Cook is 65. [39:10] There's a lot of speculation. [39:12] He said nothing. [39:13] He hasn't said anything about, I'm planning to step down. [39:15] Nobody really knows. [39:17] Nobody really knows. [39:18] I think who Tim Cook's successor will be, it's logical to say it'll be somebody from [39:22] within the company. [39:23] A lot of people are saying it's their hardware engineering head, John Ternus. [39:28] He's a great guy. [39:29] He's been with the company a long time, knows the in and outs. [39:32] But we'll see. [39:33] We'll see. [39:34] All right. [39:36] Has your attitude towards Apple changed over all these years of covering them at all? [39:41] You know, I learned a few things, especially from research and writing this book. [39:47] There really isn't. [39:48] I learned that there are a lot of companies that have a very different style of design [39:50] than any other company in the world. [39:51] And I think that's a big thing. [39:52] I mean, I've always thought of Apple as being a company like Apple. [39:53] I spoke to so many people who've made the rounds in Silicon Valley of other companies, [39:54] and they're all like, man, this company is different. [40:00] Jonny Ive made an amazing point to me. [40:01] He said, we are the only company that says, we are out to design the finest phone, the [40:10] best computer. [40:11] And I'm like, what are you talking about? [40:14] Everyone says that, Microsoft, Google, and he's like, have you ever actually heard them [40:18] say that? [40:19] No. [40:20] I mean, Apple goes through these incredible lengths to make it the finest, the best. [40:27] I think this sums up Apple. [40:29] Starting with the era of Jobs and continuing to this day, they worry about the looks of the circuit board. [40:36] They want it to be attractive and tidy. [40:39] What difference does the circuit board make? [40:41] Nobody's going to see the circuit board. [40:43] And that's what they would say to Jobs and to Johnny Ive. [40:45] Like, why are you spending money on that? [40:48] And as Johnny Ive says, you will feel the care we put into this, even if you can't see it. [40:55] If we put that care into the circuit board, we also put it into the software and the case and the materials. [41:01] And in the end, you, the customer, will sense how much effort we put into that. [41:07] And whatever you think of Apple, you really can't take that away from them. [41:11] They care more. [41:14] And what does Apple look like at 100? [41:16] At 100? Wow. [41:19] I mean, it's an impossible bet to guess where Apple will be at 100. [41:24] But if the culture perseveres the way it does, a very Steve Jobsian culture of obsessing over details and wanting to make the finest whatever it is, [41:37] we can guess that they will move away from hardware unless it's little stuff. [41:42] It will always be easy to use. [41:44] It will always be intended for the vast masses. [41:47] We can't really guess what the... [41:49] What the technology will be. [41:51] I mean, there's talk of brain implants or of earpods that have cameras and full on processing that, as in the movie Her, [42:03] there's a great movie about a guy who falls in love with his voice assistant in his ear. [42:08] It's a near future where their computers are in their ears. [42:10] So that's a closer guess 20 years from now. [42:14] So final big question. [42:16] Apple at 50, net positive for humanity? [42:22] Net positive? [42:23] Yes, of course. [42:24] Because think of the creativity and the power that it brought to ordinary people that the gatekeepers ordinarily would have shut out. [42:35] I mean, Apple came up with GarageBand, an app that lets anybody make music. [42:41] And Jobs said when GarageBand came out, there is some teenager right now playing with this app in her bedroom who's going to become a major Grammy winner. [42:50] Well, guess who? [42:51] At that moment? [42:51] Someone named Billie Eilish was fooling around in GarageBand, and that's how she got her start. [42:56] So on net, yes, Apple raised the bar for simplicity, for beauty. [43:04] Whoever thought technology should be beautiful? [43:08] Nobody until Apple came along. [43:10] And now everybody has to make their stuff good looking just to compete. [43:14] So Apple unleashed the iPhone, which unleashed social media, which unleashed bad things on society. [43:22] But. [43:23] But in the larger world, they elevated the role of technology that we can use to everybody, which was the mission of the two Steves from day one. [43:33] Yeah, we've been we comfort ourselves with the old bromide that all technology is neutral, right? [43:40] You know, the knife can heal you if a surgeon's holding it or take your wallet if a crook is right. [43:45] Yeah. [43:46] But A.I. feels different, you know? [43:49] Yeah. [43:50] And and it's self-learning and evolving. [43:54] And so much of it will come down to trust in the people creating this because I don't even know how to hold A.I., you know? [44:02] Yeah. I mean, yeah, A.I. is is a little hard to predict what's going to happen, but Apple already shows their hand of where they're going with A.I. [44:13] So on the A.I. features they've introduced right now, they can proofread your writing, they can reword your writing to make it more formal or more casual, but it will not write for you. [44:23] They don't want kids cheating. [44:25] So they don't do text generation. [44:29] They have a little app that makes graphics, makes images, but they're all cartoons. [44:34] They will not generate photos that could fool somebody. [44:38] So little by little, they're trying to take the worst of A.I. and leave that behind to give you only the good stuff and put guardrails on it, which I think eventually we're going to have to have. [44:48] Yeah. Excellent, David. [44:50] Oh, good. [44:51] It's an embarrassment of riches. [44:52] Oh, thank you, man.