Mark Gurman on Apple's secret Gemini deal, Siri's brand damage, and the race for smart glasses

year something like that and it's a what what is it company so giving away 10%. Absolutely crazy. Um, well, we have uh Markman, the legend, the Germinator in in [laughter] the waiting room. Welcome to the show. Welcome to the show, Mark German. How are you doing? Thanks for having me. Thank you so much for joining.

You know, we to be on here. This has been you're kind of like our like this is the guest we've been waiting for since the very beginning. We you were we were like we've been waiting for this moment for so long. So, uh we're super excited to have you on. Yeah, here I am. Thank you so much.

Uh may maybe since this is the first time we've actually met uh I'd love to go a little bit back in time just to set the table like how did you land on Apple? How did you become uh you know so focused on Apple? Was this like a gradual thing?

I mean I I know you from your reporting it's been fantastic for as long as I can remember. But I imagine that there was a time when you were you had to make a decision. Well I was an Apple fanboy back in the day. I remember when I was uh very young.

I wanted an MP3 player uh for the holidays that year and I was lucky enough that you know my parents were able to to get me one and the the local mall there was a mall in LA called the Westside Pavilion.

It's uh it's actually closed now and and Google I think actually bought the mall to turn into a headquarters in LA and that whole place fell apart. the whole deal fell apart. But it's neither here nor there outside of I think Bloomingdales or Macy's or whatnot. They had a cart, a Dell cart, believe it or not.

And they were touting at the time what they called the Dell DJ. And that was the MP3 player of uh of Note at that time. And so I wanted a Dell DJ for Hanukkah that year. And so I was going to get a Dell DJ. And so my dad, you know, went to Best Buy, went out. He's like, I forget the Dell DJ.

got me a uh blue iPod mini instead. Okay. And got that iPod mini. It was my first Apple product and I fell in love with it. So over time became an Apple family. Got an iBook. Uh then you know that became an iMac and MacBook Air and whatnot. And so I just fell in love with Apple. I was a huge Apple fanboy.

Always glued to the forums uh and the rumor mill and whatnot. I was a commentator uh and sort of fell in love with it and started wanting to do my own reporting on it. And I joined a website back in the day called 9to5Mac. Uh it still exists.

I left that at when I graduated from Michigan in 2016 and join Bloomberg and I guess the rest is history. That's amazing. Uh how do you think you're perceived by the folks at Apple?

Because in one way like you know you're promoting Apple, you're a real fanboy, but at the same time it feels like every time you get a scoop I'm like oh they must not be happy. Yeah.

It's a hard company to be a critic of even even a critic that wants the best for the company because I feel like they I I just have this sense that that they're like they kind of want you to ride with them no matter what. But what's I think they love me personally. I mean they they should love me.

I mean I'm here talking about their products all the time. Uh I think I usually have a pretty good attitude about it.

I think I'm balanced and realistic and, you know, I try not to go down the the the angle of, you know, the skies on fire, everything is burning, Tim Cook should be out of there as, you know, some other news outlets like to do, whether it's it's fair or not.

Uh, talking about their products, keep up keeping people interested in their products. And, you know, clearly some people there like me because, you know, this information just doesn't come off trees, right? Yep. So, definitely uh I think it's nuanced. Do you think Tim Cook's underpaid? Do I think Tim Cook is underpaid?

So, he barely he barely makes about the same amount as this baseball player that plays for the Dodgers. Yeah. Annually. Well, maybe the question is, are athletes overpaid, right? I mean, LeBron is getting like 55 million a year on his contract.

And then you think about how much money do they bring in from ticket sales because of him? They're probably making, I don't know, two or three hundred million a year because of him. So, you know, what's the margin? What should a margin be? Right? And you have Tim Cook. He's what is he making? 70 million a year. 75.

He was make 75. He was making a hundred million a year a few years ago. Then everyone flipped out and he had no choice but to cut his pay because they were kind of sick and tired of the backlash, right? So, he was making a hundred million. I mean, what is the value that he brings to the company?

I mean, obviously, it's multiples of billions. I completely agree. We we were very close to taking a break from the show and going and just doing a hunger strike outside in Certino that would get his pay up because we're on your side.

We think he's clearly just the trade war, like just the fact that he's been so masterful in not becoming a target or staying out of politics like that level of the only real critique you could you could make in my view is the way he waved the F1 flag.

[laughter] Like it just wasn't it was somewhat it was somewhat lackluster. I saw that. It was just a rough wave. You know, he was maybe he's off there thinking about supply chain. You know, maybe he's focused on work. His mind's at work.

He's not he's thinking about he's thinking about how was that flag produced and could have I gotten better pricing on it. Exactly. Exactly. Okay. Uh what uh what what's uh what's your update updated take on uh the new suite of iPhones, John and I? Uh, I had a very funny experience because I ordered my phone.

Uh, I I tried to just order a phone online, walk into the store, be able to pick it up immediately. Wasn't able to. I I paid and they said they were going to ship it to me. John, like a week later, just walked in the store and bought one here in LA. I was [laughter] like I was like, "What is going on?

" Uh, and we've both been, uh, we're not really case guys, and we've both just been amazed at how they could release a phone that, uh, that just gets damaged so uh, intensely, so quickly. Wait, wait. So, you have a case. What case is that? It's the Apple Clear case. I I rotate between the case and not using.

So, here's what happened. case. So, uh, last year they effed around and found out launched this terrible AI service, Apple intelligence, that didn't really work well. Uh, and what they found out is that it didn't resonate with customers as much as prior iPhones. This year, they did not f around and find out.

They did exactly what customers want. Market research data, man on the street conversations tell you what customers want. They don't want their phone to overheat. They want the camera to be incredible. They want the processing speed to be fantastic. Uh they want battery life to be better.

And so what Apple did for the phone this year is they focused on the core competencies. Battery life is through the roof. The phone doesn't require you to use an oven mitt to hold it for extended periods of time. The camera is amazing. I think they hit them hit right on target with the colors.

I think the new design is terrific. They did everything the consumers wanted. They did everything customers want in a phone upgrade. It came at the right time, which is 5 years after the COVID influx. You know, I get a new phone every year. You guys might get a new phone every every year.

Your viewers may get a new phone every year or two, but vast majority of people are not getting new phones for four every four or five years. And so, they set themselves up for uh a pretty nice upgrade cycle.

And you're going to see that with their first $140 billion quarter uh when they report at the end of January, early February. So, I think all things considered, it's terrific. Uh what about the iPhone is still at the center? Yeah. What about the iPhone?

Were you did you expect it to sell better than it has or were you always kind of bearish? I've been extremely bearish on on the iPhone Air. I don't think that there's a significant market for it. See, Apple because of their large numbers have reinvented what a significant market is.

Uh for Apple, the iPhone Air is not a significant market. If that was a Google phone, I mean, Google would be do a lot to to sell Pixels in the numbers that the iPhone air is selling. Uh Samsung would be happy if their iPhone edge sold in the quantities the iPhone air is selling.

Um it's a beautiful piece of technology, but that's what it is. It's a technology exercise to uh really set the stage for an eventual foldable iPhone.

They have to create thinner form factors, thinner batteries, more advanced materials like titanium for the casing in order to create something like the foldable phone to compete where Google has been for 3 years, where Samsung has been for 7 years. And so the iPhone Air gets you on that trajectory.

But in terms of overall sales, they didn't even really mention the iPhone Air as a key driver uh and nor is it mentioned in their 10K. That makes sense. The follow-up question would be how how important do you think the foldable market is? I think it's uh TBD. I think they don't know yet.

I think Apple is in a position right now where they basically have to pull every lever possible to keep people in the ecosystem.

If you somehow have a market of, I don't know, 10, 20 million people who demand foldable phones and they're willing to leave Apple to Google or Samsung cuz they want a foldable phone, that is a bad thing for Apple.

Not because you're losing those 20 million customers on that one device, but because Google has an excellent ecosystem now with all sorts of peripheral products and operating systems. Samsung has the same, the Chinese players have the same.

So if you lose a customer because of one product, you risk losing them uh across the board. You risk losing them for for entertainment services. You risk losing them for your laptop, your tablet, your smartwatch, because everyone has everything now. You kind of need everything. Mhm. Yeah.

How do you think about the change from titanium to it's aluminum on the new phones? Uh does that fit within the framework of like revealed preferences, man on the street interviews? People say they wanted an iPhone that doesn't scratch, but in practice they'll just put on a case or is there more thought to that?

It's okay. So, people aren't asking for aluminum, but aluminum is tried and true. They've used it on laptops for many years. The benefits of titanium is the durability. If you've seen a bend test of the iPhone Air, that thing does not you can't manipulate that. I have a I have a story. I have a story you'll appreciate.

We uh we were having dinner uh with a group a couple weeks ago and uh one person in the group had an iPhone air and was bragging to the whole room of how strong it was. They were saying, "This is the most durable iPhone ever made. It's it's impossible to break. " And he's going like this.

He's like he's showing showing the group. He's like, "I can't even bend it. " He's like, "I dare anyone in this room to try to break my phone. " And this guy raises his hand and takes the phone and puts it down here and just gets leverage it.

a second and the guy's just sitting there in disbelief saying like I'm going to I'm going to email Tim Cook right now. [laughter] This is this is ridiculous. But well, first of all, I I I love that story. Um I'm all for stuff like that. Um but to your point, you know, aluminum dissipates heat so much better.

And it was like a big mistake that they moved to titanium with the 15 Pro and 16 Pro lines a couple of years ago. You could do some interesting color treatments on it. They had some cool colors like the natural titanium, the gold titanium stuff they're not doing with the aluminum. So, it looked nice.

I like that I could drop it without a case onto cement and it would be more durable. It was absolutely incredible. The durability was great. And that's why I used it for the iPhone Air. But if you have to make that trade-off, which clearly there is a trade-off. Titanium more durable.

Aluminum, you know, it's not as durable. You drop this thing, you're going to get a big gash in it.

Y uh the way the color is anodized, it doesn't stick like it does on titanium, but it's not going to overheat and as the performance of these things improves as the chips get better, you need better and better heat dissipation. And so this was a reversal uh that they had no choice but to make.

uh we had this framework for uh Apple's uh strategy right now which is do nothing win with regard to the AI race like cuz people have said like yes they lost and you mentioned it with Apple intelligence and I agree with you I've taken that I've been like ah Siri doesn't work as well as I want it doesn't even it doesn't even have whisper APIs like it can't even dictate the main thing was was promising this magical experience and everyone being underwhelmed the one thing they overd delivered on was humor they were the first AI company to reliably make people laugh through the summarization of summarization is very funny but but basically they didn't get over their skis they didn't invest a trillion dollars in capex and it's a $4 trillion company now like they've done nothing in AI and they've won basically but is that narrative click with you is that taking hold in Certino are they happy with the way it's played out I think they recognize that it's been a disaster I mean still the biggest thing to me is they were completely completely caught off guard by ChachiPT, Gemini, Copilot back at the the end of 22 into 2023 and a company that does this much uh research, a company that has supposedly this kind of understanding of where the world of technology is going to just completely like it's like they had no idea the internet was coming.

It's completely unbelievable to me. Um it's sacrilegious that a company like Apple could have had that big miss. Apple Intelligence like they brought it out and their marketing scheme is always just like we're the best. We're Apple. We're going to do it better. We're correct. Everyone else is wrong.

And that's sort of the message they put out about AI when they launched Apple intelligence. But it turns out no Apple, you were completely wrong. And I think any observer would have understood that people want chat bots. They like chat bots. It is a winning formula.

And to date, they have been completely anti- chatbot, which I think has been a very big mistake. The integration of chat GPT into Siri is very much subpar. Still, they support all the chatbot apps, but they really need first party stuff. The big AI thing for Apple is the revamp Siri coming out in the spring.

They're using a Google Gemini model to power it, which I think is going to make it pretty top tier. I mean, Gemini's models are, you know, pretty excellent as we know for anyone who's used, you know, the Google AI services.

But what really you you have to understand is that the brand damage that has been done to the Siri name over the last 15 years, there's a big question whether or not it's insurmountable.

In my viewpoint, if they've get gotten Siri to a point where this thing actually meets the promise of this AI voice assistant, they have to change the name. On the other hand, Siri, as damaged as the brand is, it is still a ubiquitous name.

So, I'd be curious to see uh I don't think they're going to make a name change, but uh they should. So, Gemini powering Siri under the hood. Who pays who in that scenario? Apple is paying uh Google. Apple, you think it stays that way forever?

[clears throat] Because Google provided a wonderful search engine in the Safari iOS browser. uh and uh and Google paid Apple for the right to do that. Uh well, it's more of a revenue share for the the payments there on the search engine. So, this is completely separate. This is like you're developing something for me.

You're my supplier and I am paying you for it like I'm paying you for it. Y uh whereas revenue share because Google is making a ton of money uh by getting people through the Apple interface.

Won't that be the long-term state of affairs with these I don't believe so this is this is no I think what I know is that this is an under the hood whitelabeled model. They've developed the model here. Uh but if it wasn't for my reporting no one would probably know that this is this is a Google model.

You can be sure pretty sure that Apple's not going to advertise this as a uh as a Google model. You can also bet at some point they'll probably figure out their own model to replace the Google thing. So, I don't think it's a long-term bet. Yeah. How how uh competitive was that process?

I remember it was probably your reporting talking about how Anthropic was in the running as well and they wanted it was a bake off. They Anthropic wanted a huge number for it. Thropic wanted multiples of billions.

Uh I believe starting in a billion in year one and doubling every year thereafter at least for the next three years. Uh Open AI wanted things like an investment and a stake and all sorts of stuff. And so you know they originally were talking to OpenAI then they were talking to Anthropic then they were talking to Google.

They did a bake off of all three. I think they kicked OpenAI out of the running pretty early on until about 2 months ago it was going to be anthropic and then once they got into the financial terms uh it quickly pivoted to to Google.

Uh my belief is that the quality of the Google engine and the anthropic engine are pretty much on par. So I think so what do you think is the is this in your view a threat to chat GBT usage? Is the chat GPT Siri integration gonna exist after this next release?

Are people going to be using this as as a replacement for web search in a browser? Weird because even though the chatbt Siri integration is a little weird, if there are people that are love that then you take that away. That's like they're not they're not taking that away. They're not taking away.

So again, it's an underlying under the hood model to enable the existing Siri functionality and the new Siri functionality. So Apple, let's talk about the new Siri. Yeah.

So the new Siri is what I'm getting at because if I can suddenly use Siri to do deep research and do web searches and stuff like that, that feels pretty significant. Yeah. So So what is what is the new Siri? Well, the new Siri so far, what Apple's announced is three things. Uh one is onscreen awareness.

So you see something on your screen, you can ask uh the voice assistant about it. Uh the second thing is personal context.

So, the ability to um ask questions and have it search through your personal data in order to answer those questions, like make an itinerary uh based on conversations I had with someone who's uh visiting me in town.

Uh and there's a few other bells and whistles related to the new Siri that Apple has uh previously announced. What they haven't talked about is AI web search.

And so the new series is also going to have a chat GPT perplexity competitor for things like deep research and summarizing uh search that is going to be an Apple built an Apple powered system. What is that? That's just a little sound effect we use. That felt that feels significant when there's something super dramatic.

Your significant button. Exactly. You play it again. Yeah. It's like we're going to war. We're going to war. The companies are fighting. [laughter] Yeah. So this is Apple going after chat GPT perplexity at least for web search. Y uh I think it's going to be pretty useful. It's very necessary.

It's one of the main use cases. Uh and you'll see them eventually embed things similarly into Safari and other parts of the iPhone operating system. So it's going to be a big year for Apple AI and that's just the beginning with the rolling out in March, April. They're able to pull it off.

Do you think do you think there's any world where Apple wants to monetize commerce off of this assistant? They obviously because because that's I can see the exact same thing that chat GBT wants to do. Order me a new pair of shoes. Order me some hotels. Yeah. Find me find me find me Yeah, exactly. Book me a hotel.

Book me a flight. It's just not good enough. You're not g So it comes down to this. Okay. [laughter] Will Uber, Postmates, Uber Eats, Amazon, whatever. Right now, you can integrate all of those apps. Uh, it's called an extension into Siri. In fact, this has been a feature for 10 years.

Nobody uses it because it's unbelievably terrible and unreliable. You cannot trust your iPhone to call you an Uber via Siri. Like, you'd have to be out of your mind to need to call an Uber in a pinch and use Siri versus using the app. And so there's really no take me from point A to point B with Uber. Yes.

Taking you to Antarctica. [laughter] So there is really there's really no way for Apple and these companies to come to some sort of financial agreement around that. That's why they haven't yet.

But when this new series starts working, when it has those upgraded technologies that mean that I can call an Uber from my phone and know that it's actually going to happen, then they'll be able to come to those financial agreements because people are going to start using it.

Right now, there's no point in monetizing zero dollars. But once the real money starts flowing through uh in Siri, you're talking about a big business for Apple and AI uh and really what the future of apps and services revenue is for the company. Yeah, I'm I'm pretty bullish on this. Yeah. No, that makes a ton of sense.

Uh, I I guess the question is just like it it feels like Apple the reason Apple is paying Google is because they don't want a situation where I click the Siri button and say, "Hey, order me an order me some paper towels.

" And then Gemini under the hood says, "Yeah, we'd love to process that through Google Payments and Google Shopping and all of our under the hood stack. " And then they start monetizing. Yeah, that's not what's happening. How uh it's it's it's like just hold on one second.

It's like you guys are really really good at what you do. So, I'm paying you to uh to to to to write my to create my podcast for me. Sure. But you guys have nobody knows I paid you to do it and uh I'm the presenter and everything. Pure pure white label.

Y how uh what what's your been your read on Apple's kind of M&A strategy? They've bought a number of companies this year. Mo almost all of them are are I think to my knowledge very small companies that are probably uh talent focused.

There had been some rumors that I have to imagine were were kind of like leaked by Perplexity that Apple was like taking a look at that. That never felt real to me. When you look at Apple's history in M&A, they'll buy they bought Beats for like one or like two times revenue.

like they that when they buy comp that the only times that I've seen them buy a company that for a large price was like a relatively like conservative. We don't just take swings at $20 billion companies with like 100 million in rev. That just doesn't with no underlying. Here's what I could tell you.

First on the perplexity one, I was the one who who broke that. That was real. That did not come from perplexity. The idea there was Apple was sort of scared out of its mind that it was going to lose this Google search deal.

Um there was a very real possibility the judge was going to tear that thing up and Apple would be out of billions of dollars. And so buying Perplexity when it wasn't as big of a a price tag as it is today for that company would have made sense.

It could have been a pretty easy plugandplay to replace Google search on the iPhone and and have a Apple revenue stream there. Oh yeah, that's out of the picture because a per where would the revenue have come from? Oh, they would just integrate their Apple network in perplexity. Yeah. Ads in Perplexity. Yeah.

You go to in, you go to default search on iOS, it hits perplexity and then there are a whole bunch of advertisers that are buying to be at the top of those results.

So similar to the apps app storely, you know, it would have been a pretty buying perplexity would have been a quick plug-and-play painless uh replacement for Google search, but that deal wasn't torn apart, giving Apple more time to build its own in-house AI web search product.

Uh in terms of the M&A strategy, so they really, to your point, have not veered from their strategy. uh biggest acquisition to date even post inflation appears to be that $3 billion beats deal back in 2014. Yeah, I do believe they continue to be on the hunt for smaller AI M&A deals in addition to Perplexia.

They looked at Mistral which developed their own LLM and related technology um out of Europe but would never I I can't imagine France would be like yes buy our national AI champion we'd love to Well, stranger things have happened but given the situation with the EU I'd be shocked as well. Yeah.

Uh what about uh what can you say about their reaction to the new Meta Ray Bands release and and VR broadly? Well, the Apple Vision Pro, have you guys used one? Do you guys have one? I had one for two weeks and then I returned it.

But I did find it like it was remarkable in terms of screen fidelity, but content library wasn't there and weight wasn't there. I like that they put the battery in a pack there. It was a It was a mixed bag. And at five grand, it was like, "Why am I doing this?

" So, I got the Vision Pro on the day it came out back in February of 2024. Yep. Uh, a friend of mine for the first time got one. Does that make sense? It's been a year and a half and finally a friend of mine got one. Totally. Okay. Totally.

And so, I had my first Vision Pro to Vision Pro FaceTime experience actually a few nights ago. Oh, wow. And we tried out this new Persona thing. You can literally like turn on a movie and sit side by side and see the person sitting next to you watching a movie together. Y it's freaking unbelievable.

Okay, here's the problem. Most people don't want to put a pound and a half helmet on your on their head, right? And so Apple is limited by a combination of price uh as well as people just not wanting to use that form factor.

I also think they've done a pretty terrible job marketing it because I'm ingrained in this ecosystem more than anyone else I know and probably most people in this world.

And despite the fact that I've had a vision pro, despite the fact that I'm totally tuned into this, I had no idea what that experience was like that I experienced the other night. And so all that tells me is they've just done a terrible job marketing these features.

Obviously, they've done some, you know, executive interviews about personas in the last few days or whatnot. People don't really care about that. They care about TV ads and they care about um demos and what have you. So they need to up their game. Anyways, long story short, they're full steam ahead on smart glasses.

The first version won't have displays like the older metal ray bands or the base level metal ray bands. Those are coming out in 2027. I think they'll be a non display smart glasses without a display will come out in 2027. Yeah, early.

And I think it'll be early enough in 27 where there's a possibility, they haven't decided yet, there's a possibility they'll be able to announce it before the end of next year.

And people will want to buy that because the Apple assistant is so good that it's Well, I thought you were going to say because of the Apple brand, people are not going to want to buy it because the Apple assistant, but theoretically good unlocks that. Yeah.

Because if it's not good, like I don't need to wear a pair of glasses. But it's a pitches. You don't need to wear AirPods anymore. It's like a substitute for AirPods potentially. It's like AirPods with souped up battery life with cameras. Yeah.

You know, they've also been working on AirPods like I'm wearing with cameras in there as well. And so I think there's actually a bake off going on internally too. Yeah. Between the two form factors. Well, between the form factors or if you need both. I would bet that they'll do both. Weird.

And then well yeah because if you need if you need glasses like for your vision a pair of smart glasses that have a speaker built in. You can do phone calls. You have a camera and you have prescription lens lenses like that. There's a over a billion people that wear that need prescription eyewear.

And those people will probably be like this is amazing. I get to wear I I get to fix my vision and I get all these added features. I'm already wearing glasses. I'll pay the $2,000 to where have another kind of like device on my on my on my person.

Um, and the bet is that the Apple brand is stronger than the Ray brand uh Ray-B band brand. And I would guess the Apple brand is stronger.

And if you had to choose between Ray-B band glasses and Apple glasses, especially with the context that Apple has severely limited the ability for the meta glasses to sync with your iPhone and the iPhone and the Apple glasses will sync perfectly. I think most people are going to lean in the in the Apple direction.

But Meta deserves so much credit for creating a category and making a category so terrific. I have the Ray-B band displays that Meta gave me to test out. Those are amazing and they're like two, three years ahead of whatever Apple's got. Yeah. Do you do you Wow.

So I was with the with the Rayban displays, I could imagine that being having like pretty real product market fit for people in the world that are dependent on WhatsApp and already need glasses, like they need to wear glasses for their eyesight.

is if you have those two things and you can get WhatsApp messages just like popping up, you can do phone calls, like that feels like pretty compelling. And so I can imagine the kind of person that is. Maybe it's a European executive or some Gen Z person in in Europe that's just a WhatsApp power user.

But um but I what what's your read on it? I know it's not your kind of cover. Well, they feel like a prototype. No, I cover all hardware, too. They feel like a prototype if I'm being honest. Uh but like a good prototype, I think they're priced perfectly. I think $800 is totally reasonable for um what their features are.

You give it a generation or two, uh they're going to be amazing. The trick for Meta is beating Apple by a year on something that's a bit lighter and better displays and what have you. See, the current Meta, they have one screen in them.

the the second generation version will have displays in in both eyes, maybe making them a little bit more expensive, but uh Meta is on to something. They have a multi-year head start. What you're going to see is Google come into this space, too.

They're going to launch, you know, their smart glasses with Samsung in a few months, their glasses with Warby Parker and a few other glasses brands in a few months. And there's going to be a lot of competition in this space. I think this is going to be really hot across 26 to 28. We have a question from the chat.

Uh, could you get us up to speed on the John Proser situation? We haven't. Uh, this one I'm not This one I'm not terribly read up on. Okay. Yeah. Well, we'll we'll need to revisit it at some other point. How about this? Put it this way. I I I lied. I'm very read up on it. I don't want to get into it.

It's not my It's not my uh It's not my problem to deal with. That's totally fine. That makesense. What did you What did you read into uh there maybe this was your reporting? So, this is why we were so excited to have you on the show.

It's like it's been so many stories that you've originated, but uh uh uh Evan Spiegel and Snap Snap were saying that they might be spinning out specs uh and raising capital for it. I was a bit surprised to see that given that um I haven't seen a pair of specs, you know, out in the wild like in years.

And uh if I'm an investor kind of looking at this category and you can you can get exposure to smart glasses through Meta, Google, and Apple, like it's hard it would be hard to kind of underwrite, but uh I'm curious if you're more up to speed on on what they've been cooking on. I like Evan a lot.

Uh I'll just tell you that. And I think that they're trying some pretty cool stuff. And their big differentiator there is what these glasses are going to be used for and the social integrations.

In my mind, they might be just better off sort of lowering their R&D on these things by focusing on their hardware, partnering with a company like Google and putting their own social layer over Android XR. Uh, but obviously they have their own Snap OS.

They're trying to get this consumer version of the glasses out on the market uh next year. They look quite a bit different than what you've seen from Meta and Apple and some of the Google prototypes. Uh, so we'll see what happens. It's going to be a multiverse race here. Is true VR just kind of dying or something?

Because you have like camera glasses at Snap. It seems like all the focus is on camera glasses at Meta and then Apple maybe pivoting away from Apple Vision Pro and then Google's really focused on the on the uh Samsung glasses that are again seeth through with a camera on there. Maybe a little overlay, little HUD.

Um but what is there anything exciting going on in just like vanilla VR? I want to watch a IMAX movie on my face. Well, vanilla VR is just incredible. Like, there's no better video watching experience than what you get on an Apple Vision Pro. Yeah. Uh, I've tried all the VR headsets. I've had all of them.

I have all of them. It's just a remarkable category, but it's only a remarkable category for the people who want it. I mean, there's very few people where VR, I think, works. I'm out and about all day. Mhm. I have a family. Yeah. Uh, I go to an office, too.

And when do I have time to put this thing on my head to watch a movie? The answer is almost never because I have people in my life. I have needs around me. I have things I need to do and it just does not fit into my life.

For people who can put on a headset and be secluded from the world for 2 hours, there's nothing better. Yeah. Glasses, you can wear them and use them throughout your day really no matter what you're doing. That's that's the big difference. So there's nothing wrong with VR.

It's just the use cases uh and the people who could use them is just quite a bit more limited. Last last question. I know we're over time, but uh do you think Apple thinks about OpenAI and their hardware ambitions a lot?

Sam was pressed pretty hard on on his uh spend commitments on Friday and one of the justifications that he gave for why like basically like how they were going to be able to spend that kind of dollars was something to the effect of like we have a consumer device coming up and we need a lot of compute for that.

I'm kind of botching the the exact um uh language that he used, but he was seeming to imply like we have a hit consumer device coming and just kind of be right like I can't say more, but he's he certainly is telling the market that they're really cooking.

But I wonder what Apple's read on it is based on what he's saying. This device has to be so amazing that he's confident that they're really going to need that compute.

And to date, we have not seen a single AI device that has either not been a failure or has needed the kind of compute that these dollar numbers are talking about. That's what exactly what I said. That's exactly what I said earlier.

I'm like, every single crack like you can have the every single crack at this so far has not managed to be remotely as yes good of an experience as like an iPhone with even a a physical headset like a like I use wired earphones like all right that's ridiculous but um the Meta the Meta glasses are far and away the most successful AI device brought to market in this era over the last two or three years and In terms of the users, probably is using what 1% of of the amount of compute that Sam Alman is talking about here.

Uh so we will see. In terms of Apple worried, I think Apple looks at this as something where they can be a fast follower.

I don't I think there are hardware products that OpenAI can bring to market that are innovative before Apple, but I don't think there's a product out there that if Apple wanted to copy that it can't copy. So let's see. It's fascinating. Well, well, this has been a fantastic conversation.

Thank you so much for taking the time. We would love to have your show soon. Anytime. Uh, we could have spent another 25 hours talking about this. This is fascinating. Uh, I hope you have a great rest of your day. Yeah, I really enjoyed it, Mark. And thank you for Thank you. Thank you for all your hard work.

Tireless work. Thank you. Yeah. Do you guys do in person? If you do in person, maybe we can Are you Are you in LA? I'm in LA. Come by. Yeah. Let's get Where you guys are in LA? We're in LA. We're in Hollywood. Yeah. Oh, great. Okay. Next time. Come by next time. We have a seat here ready for you. Center seat. Yeah.

Yeah. Can't wait. All right. Okay. Mark German. All right. See you guys. Equivalent yappers. We love it. Thank you. Talk soon. We'll talk to you soon. Uh let me tell you about numeralhq. com.