OpenAI Conference and Big Tech Earnings | Bloomberg Technology
WITH CAROLINE HYDE AND ED LUDLOW. ED: THERE FROM BLOOMBERG'S WORLD HEADQUARTERS, CAROLINE HYDE IS OFF TODAY, THIS IS BLOOMBERG TECHNOLOGY. OPENAI KICKS OFF ITS FIRST EVER DEVELOPERS CONFERENCE WITH ENGINEERS AND ENTREPRENEURS GATHERING IN DOWNTOWN SAN FRANCISCO. WE GENERALLY EXPECT. WE WISH YOU HAD TO EARNINGS AND GET THE MACRO TAKE ON BIG TECH RESULT AS COMPANIES DELIVER BIGGER PROFITS THAN WALL STREET ANTICIPATED. APPLE IS IN SEARCH OF A NEW GROWTH ENGINE AFTER WARNING ON A SLOWER HOLIDAY SEASON. KEN DIVISION PRO SOLVE THAT PROBLEM -- CAN DIVISION PRO SOLVE THAT PROBLEM? A FOCUS ON THE TECHNOLOGY SECTOR, THE NASDAQ UP, MOST OF THE TECH NAMES ARE IN THE RED.
IT IS THE MEGACAP'S THAT ARE KEEPING US GOING. WE SEE YIELDS CREEP A LITTLE HIGHER UP, BITCOIN WHICH OF COURSE IS OUR ASSET OF CHOICE AT THE MOMENT WE LOOK AT THE RISK SPACE CONTINUING TO HOLD AROUND 35,000 U.S. DOLLARS A TOKEN. I HOPED ABOUT MEGACAP'S, IN SAN FRANCISCO, THE FOCUS WILL BE OPENAI, A PRIVATE COMPANY, BUT OF COURSE, MICROSOFT, PUBLICLY TRADED, A BIG STAKEHOLDER IN AI AND HIS SUCCESS. THE OTHER NAMES THAT ARE IN FOCUS AT THE MOMENT ARE STILL NVIDIA, NVIDIA IS ONE OF THE FEW MEGACAP THAT IS A REPORTER AND YOU HAVE GOOGLE, THE INTENSE COMPETITION IN THE LARGE LANGUAGE MODEL AND TAKING THOSE AND PUTTING A CONSUMER AND BUSINESS FACING GENITIVE AI TOOL OUT THERE. THAT IS WHERE WE ARE FOCUSING. CHATGPT IS ABOUT TO GO THROUGH A
SILICON VALLEY RITE OF PASSAGE. THIS IS OPENAI'S FIRST DEVELOPER'S CONFERENCE IN SAN FRANCISCO. HUNDREDS OF SOFTWARE ENGINEERS ARE GATHERING TO HEAR ABOUT THE BEST USE OF THE COMPANY'S TOOLS AND HOW THEY CAN BUILD OWN PRODUCTS WITH THE UNDERLYING GPT TECHNOLOGY. WHO DO WE HAVE ON THE GROUND? RACHEL IS AT THE DEVELOPER'S CONFERENCE, WHAT IS THIS EVENT SYMBOLIZING? THIS EVENT IS A BIG DEAL FOR OPENAI, THE DEVELOPER CONFERENCE HAS HAPPENED BEFORE, WE SEE SO MANY TECHNOLOGY COMPANIES THAT ARE BIG AND WANT TO BE LARGER, CREATE THESE EVENTS TO GET DEVELOPERS MORE INVOLVED WITH THEIR PRODUCTS LIKE APPLE AND META AND MICROSOFT, AMAZON, THEY DO THESE EVENTS YEAR AFTER YEAR AND IN MANY CASES THEY ARE A BIG DEAL FOR A COMPANY TO TELEGRAPH WHAT THEY WANT TO SHARE, DEVELOPERS AND THE CONSUMERS.
ED: WE WANT TO WATCH THE LUBRICANT KNOLOGY SHALL ADHERE TO THE DAY AND IT IS ALMOST A YEAR AGO TO THE DAY THAT CHATGPT WAS MADE PUBLIC. OPENAI IS DOMINATING THE DISCUSSION AROUND THE WORK AND GENITIVE AI OUT OF THE FOUNDATION RULES THAT POWER THEM. HOW BIG IS THAT LEAD RIGHT NOW? BASED ON ALL THE REPORTING YOU HAVE DONE OVER THE LAST 12 MONTHS? I THINK IT IS BIGGER THAT THERE ARE A LOT OF COMPANIES ARE GETTING IN THERE AND CREATING THEIR OWN MODELS AND COMING UP AT THEIR OWN POOLS OF OPEN SOURCE. IT IS A LARGE TECH COMPANY, PEOPLE ARE INTERESTED IN THIS SPACE AND IT WILL BE INTERESTING TO SEE BOTH WHAT OPENAI BRINGS OUT SO IT CAN STAY AHEAD AND ALSO WHAT HAPPENS IN THE MONTHS TO COME. . ED: THE ONE SIDE IS THERE IS A HUMAN SIDE.
WHO IS WHO IN THE WORLD OF AI AND I EXPECT THAT TO BE ON SITE, RIGHT? THERE ARE A BUNCH OF EXECUTIVES, I HAVE NOT HAD A CHANCE TO WANDER AROUND TOO MUCH AT BUT I BELIEVE WE ARE SEEING PEOPLE HERE, VERY IMPORTANT EXECUTIVE OF THE COMPANY'S AND A BUNCH OF OTHER PEOPLE. I THINK IT IS AN INTERESTING TIME FOR THE COMPANY I WOULD GUESS IF YOU COULD BE HERE YOU WANT TO BE HERE. ED: THAT IS RACHEL ON THE GROUND AT THE OPENAI DEVELOPERS CONFERENCE AND SHE WILL BE REPORTING ACROSS ALL PLATFORMS THROUGHOUT THE DAY. ANOTHER STORY WHERE WATCHING IS
ELON MUSK REVEALING HIS OWN ARTIFICIAL INTELLIGENCE BOT TO CHALLENGE CHATGPT. HE CLAIMS THE PROTOTYPE IS ALREADY SUPERIOR TO GPT 3.5 ACROSS SEVERAL BENCHMARKS, THE FIRST PRODUCT OF ELON MUSK'S I HAD COMPANY AND IT IS BEING TESTED WITH A LIMITED GROUP OF USERS. YOU HAVE TO BE AN X PREMIUM SUBSCRIBER TO GET ON THE LIST.
BUT A SPRING MIKE MASON, CHIEF AI OFFICER OF MOBILE TECH CONSULTANCY FORTE WORKS. THIS IS A MOMENT WHERE WHAT IT 12 MONTHS IT HAS BEEN? WE HAVE TO FRAME IT TO RACHEL TO WHAT OPENAI DID FIRST IN NOVEMBER OF 2020. DO YOU SEE THEM HAVE A CLEAR LEAD IN THE FIELD OF GENITIVE AI? I THINK THEY DO HAVE A LEAD. THEY WERE FIRST OUT OF THE GATE WITH CHATGPT 3.5. 4.0. A MONTH OR SO AGO. GPT IS ADDING VISION TO THEIR PRODUCT.
THEY ARE SCALING VERY STRONGLY FROM THE REVENUE PERSPECTIVE. THEY ARE NOT THE ONLY GAME IN TOWN. WE ARE SEEING FEATURES FROM MICROSOFT, GOOGLE, AMAZON, ALL OF THE PLAYERS ARE REALLY ADDING AI INTO THEIR PLATFORMS.
. I THINK AI WILL BE THE NEXT BATTLEGROUND. HALF OF THOSE LARGE COMPANIES. IT IS ALMOST A BEWILDERING ARRAY OF OPTIONS. WE ADVISE OUR CLIENTS AND HOW THEY BUILD TECHNOLOGY TO SOLVE THEIR BIGGEST CHALLENGES. AI IS ON THAT LIST. WE WORK WITH ONE POINT WHERE WE WERE HELPING THEM WITH THEIR AI STRATEGY. THEY SHOWED US 270 IDEAS FOR HOW JEN AI MAY IMPROVE THEIR BUSINESS AND CREATE VALUE FOR THEM. CLEARLY, HAVING IDEAS IS NOT THE
DIFFICULT BIT. IT IS FIGURING OUT WHICH OF THOSE IDEAS ARE GOING TO CREATE BUSINESS VALUE FOR YOU AND THEN IMPROVING THE VALUE AND GETTING BACK INTO PRODUCTION. IT IS SOMETHING WE ARE SEEING A LOT HAPPENING, THE COMPANIES ARE ABLE TO DO A PROOF OF CONCEPT BUT THEY DO NOT REALLY HAVE MACHINERY IN PLACE TO TAKE THAT THROUGH INTO PRODUCTION AND SCALE DELIVERY VALUE. THAT IS AN AREA WE CAN HELP. ED: A COMPANY WITH IDEAS, I DO NOT KNOW THAT THERE ARE 270 EIGHT LEG WHICH MODELS IN THE MARKET TO CHOOSE FROM, MAYBE THERE ARE THAT MANY. WE ARE TALKING ABOUT THOSE WITH
TENS OF BILLIONS OF PARAMETERS FROM CHATGPT 3.5, THE WORK, AND FLEXION AI, DOING THINGS LIKE THAT. TODAY IS THE OPENAI DEV CONFERENCE.
WHEN THE COMPANY HOLDS AN EVENT LIKE THIS, WHAT DO YOU WANT TO HEAR FROM THEM? I WOULD EXPECT TO HEAR MORE ABOUT MODEL FEATURES. NEW FEATURES THAT THEY ARE INTRODUCING. COGENERATION. MAYBE MULTIMODAL MODELS? THAT IS A MODEL THAT CAN WORK ACROSS TEXT AND SPEECH AND IMAGE AND POSSIBLY VIDEO. BOTH INPUT AND OUTPUT. IT CAN MOVE BETWEEN THOSE MODES
OF INTERACTION. I WOULD EXPECT TO SEE GREATER CLARITY AROUND COSTS OF USING THESE MODELS. ONE OF THE PROBLEMS WITH GENITIVE AI IS THE COSTS ARE UNPREDICTABLE. THAT CAN BE A BIG BARRIER TO GETTING THESE THINGS INTO PRODUCTION AND CREATING VALUE FROM THEM. I HAVE EXPECT TO SEE -- I EXPECT
TO SEE SAFETY FEATURES. SAFETY IS A HUGE FACTOR IN AI. WE PUT OUT SOME CONSUMER RESEARCH A COUPLE OF WEEKS AGO WE INTERVIEWED 10,000 CONSUMERS BY THEIR ATTITUDE TOWARDS AI. MORE THAN 90% OF PEOPLE HAD CONCERNS ABOUT DATA PRIVACY AND USAGE. WHERE THEIR COMPANIES HAVE BEEN RESPONSIBLE AND TRANSPARENT WITH AI. I THINK THERE IS SOMETHING THERE.
TAKING THE PRIVACY FORWARD STANCE CAN BE A BRAND ENHANCING MOVE. ED: WE ARE SHOWING ON THE SCREEN THE CLOUD PROVIDER PERSPECTIVE. IF YOU ARE A COMPANY THAT WAS TO INVEST IN AI, WE ARE TALKING ABOUT COMPUTERS.
THE COSTS ASSOCIATED WITH THAT. I REPORTED THAT OPENAI WILL LIKELY BOOK A BILLION DOLLARS OF REVENUE THIS YEAR. THERE IS A CONCERN ABOUT THE COMPETITIVE PRICING TO BRING CUSTOMERS. THE LONG-TERM PROFITABILITY.
CRUNCHING THE DATA IS EXPENSIVE. HOW CLOSELY DO YOU LOOK AT THAT? IT IS DIFFICULT TO LOOK AT IT CLOSELY BECAUSE THOSE FIGURES ARE A CLOSELY GUARDED SECRET. READING THE TEA LEAVES I WOULD SAY THAT I DO NOT THINK THAT THEY KNOW WHERE THEIR PRICING IS WHAT NEEDS TO BE TO MAKE THE MONEY YOU HAVE SEEN BOTH ON GOOGLE AND MICROSOFT WITH DUET AND OFFICE 365 AND PRODUCTIVITY TOOL SUITES. THAT IS IN THE $30 PER PERSON PER MONTH ZONE. I DO NOT THINK THEY ACTUALLY KNOW WHETHER THEY WILL MAKE MONEY FROM THAT? IT MAY SHAKE OUT IN THE LONG TERM.
RUMORS AROUND CHATGPT FIVE, OF COURSE, THE OPENAI IS FOCUSED ON EFFICIENCY AND EFFICIENCY IT REALLY MEANS BRINGING DOWN THE COST TO RUN THAT. ANOTHER OPTION TO NOT BE OVERRULED IS TO LOOK AT THE OPEN SOURCE WORLD. THERE HAS BEEN AMAZING PROGRESS WITH MODELS THAT ARE LESS BIG, SMALLER, YOU CAN RUN THEM YOURSELF OR IN-HOUSE AND THAT IS ESPECIALLY USEFUL IF YOU WANT TO KEEP TIGHT CONTROL OVER YOUR DATA AND NOT ACTUALLY USE A CLOUD PROVIDER FOR YOUR AI. ED: THE EVENT IS UNDERWAY IN ABOUT AN HOUR'S TIME. WE WILL GET MORE INFORMATION LATER ON. THANK YOU SO MUCH. EARNINGS ARE OUT OF THE WAY, A
DEEPER LOOK AT HOW THE GROUP DELIVERED IN THE PAST QUARTER, WHAT BIG TAX BILLS: FOUR, THEY ON PROFIT. ANOTHER ELON MUSK COMPANY, TESLA, BERLIN WILL BE HOME TO THIS 25,000 EURO NEXT-GENERATION PLATFORM AROUND $27,000. WE ARE SPEAKING TO SOURCES, THE LONG-TERM EXPECTATION IS IT WILL BE SHANGHAIED THAT ONE FIRST BUT IT LOOKS LIKE IN THE BATTLE FOR PORTABLE EV'S, THE BATTLEGROUND FROM TESLA'S PERSPECTIVE WILL BE DONE OUT OF HALF OF THE SET. TESLA DID NOT RESPOND TO REQUESTS FOR COMMENT. TOMORROW, BLOOMBERG WILL
INTRODUCE A NEW PODCAST CALLED ELON INC.. THE MOST IMPORTANT STORIES ON ELON MUSK AND HIS EMPIRE ACROSS THE BLOOMBERG NEWS ROOM. TUNE INTO THAT. THIS IS BLOOMBERG TECHNOLOGY. ♪ ED: TIME FOR TALKING TO, FIRST UP, THE MOBILE PHONE OR STEPPING DOWN FROM HER ROLE AS CEO. SHE FOUNDED THE WOMEN-CENTER DATING APP AND BECAME ONE OF THE FEW WOMEN BILLIONAIRES. SHE WILL BE SUCCEEDED BY THE SLACK CEO IN JANUARY. A TINY START UP HAS TAKEN THE
ARTIFICIAL INTELLIGENCE STORM WITH ITS $1 BILLION VALUATION EIGHT MONTHS INTO HIS EXISTENCE. 0.1 AI WHICH RECEIVED FUNDING FROM ALIBABA. THE START UP DEVELOPED AN OPEN SOURCE LANGUAGE MODEL IN CHINESE AND ENGLISH. A FLURRY OF AI-RELATED HEARINGS ARE SAID TO TAKE PLACE ON CAPITOL HILL THIS WEEK. U.S. LAWMAKERS IN THE HOUSE OUT OF THE SENATE WILL GATHER TO DISCUSS POSSIBLE MEASURES TO REIN IN THE TECHNOLOGY. ESPECIALLY AS CAMPAIGNING FOR
BETWEEN 24 GENERAL ELECTION HEATS UP. THIS COMES AMID PRESIDENT BIDEN'S EXECUTIVE ORDER WHICH WAS ISSUED LAST WEEK. EARNINGS FROM MOST BIG TECH COMPANIES HAVE COME OUT AND WHILE THE GROUP DID A BETTER THAN EXPECTED -- DID HAVE BETTER-THAN-EXPECTED PROFITS , THEY ARE ON SHAKY GROUNDS WHEN IT COMES TO SALES. IT IS SO INTERESTING HOW THE STORY CHANGED. WE GO INTO IT GOING THAT THE MAGNIFICENT FIVE OR SEVEN THAT ARE CROPPING UP, ESTIMATES OR 20 24, WE HAVE COME OUT THE OTHER SIDE AND EVERYBODY IS WORRIED ABOUT THE SALES OUTLOOK? THE THING ABOUT THIS EARNINGS SEASON IS NO MATTER WHAT NARRATIVE YOU WANT TO ASCRIBE TO, YOU WILL FIND BIG TECH RESULTS THAT FIT YOUR POINT OF VIEW. MICROSOFT FOR EXAMPLE HAD VERY STRONG RESULTS, DESTOCKED DID QUITE WELL BUT YOU HAVE CONCERNS ABOUT THE MICRO BACKDROP AND THE FED AND TREASURY YIELDS, IT BARELY ENDED HIGHER ON THE DAY, A PRETTY SLIGHT GAIN. YOU HAVE SOMETHING LIKE ALPHABET
WHICH WAS PRETTY STRONG EXCEPT FOR SOME WEAKNESS IN THEIR BUSINESS AND THAT STOCK IS SINKING ALMOST 10%. PRETTY OUTSIZED REACTION FOR A COMPANY THAT WOULD CLASSIFY AS ONE OF THE CHEAPER OF THE BIG TECH STOCKS BY A TRADITIONAL VALUATION METRIC. WE SAW APPLE COME OUT AND THEY KEEP THE DISCOURAGING FORECAST ON THE HOLIDAY SEASON, ESPECIALLY CONCERNS ABOUT THE STRENGTH OF THEIR BUSINESS IN CHINA WHICH IS A MAJOR MARKET FOR THEM IN BOTH SUPPLY-CHAIN AND CONSUMER DEMAND PURPOSES. THAT STOCK FELL ON THE DAY BUT NOT TOO MUCH CONSIDERING BECAUSE THERE IS OPTIMISM ABOUT THAT POLICY AND THAT PATH GOING FORWARD THERE. A MIXED THING, A LOT OF FOCUS ON THE MACROECONOMIC ENVIRONMENT, OVERALL, THE BIG TECH EARNINGS HAVE BEEN MIXED SO FAR, IT DOES SEEM LIKE PEOPLE OVERALL HAVE BEEN LOOKING PAST THEM AND LOOKING TO WHAT IS COMING NEXT. ED: YOU ARE A MEMBER OF THE
NEWSROOM WHO ARE ZOOMED IN ON THE TERMINAL AND YOU FLAGGED ME BEFORE THE SHOW THIS UBS NOTE SHOWS US THAT NOT EVERYONE AGREES WITH THE FEAR. UBS' PERSPECTIVE IS THAT TECH STOCKS LOOK ATTRACTIVE RIGHT NOW? SOME OF THE FEAR SURROUNDING THE GROUP IS OVERDONE AND THEY SECTOR LOOKS PRETTY WELL-POSITIONED FOR GROWTH ESPECIALLY IN -- THE SECTOR LOOKS PRETTY WELL-POSITIONED FOR GROWTH. IT IS OBVIOUSLY A POSITIVE. IS HE IS A BUYING OPPORTUNITY IN CONDUCTORS AND PRETTY ATTRACTIVE -- IT IS SEEING A BUYING OPPORTUNITY IN CONDUCTORS AND PRETTY ATTRACTIVE OPTIMISM. ALTHOUGH THERE WERE DISAPPOINTMENTS IN PRONOUNCED SELLOFFS, MOST ANALYSTS REMAIN POSITIVE ABOUT THE GROUP FROM A LONGER-TERM PERSPECTIVE AS FOR OUR HOUSE POTENTIAL -- AS WERE AS POTENTIAL.
ED: FOR ME, NVIDIA, IT HAS BEEN AN INCREDIBLE RIDE ON THE STOCK YEAR TO DATE, IT IS SO BIG FROM AN INDEX PERSPECTIVE, THE MARKET WILL PAY ATTENTION, RIGHT? IT IS GOING TO GET ADDITIONAL FOCUS AGAIN FOR ONE OF THE SEVERAL QUARTERS IN A ROW BECAUSE IT IS SO CENTRAL TO THE AI THESIS RIGHT NOW. THE FIRST STOP FOR ANYONE WHO IS LOOKING TO BUILD ON ANY KIND OF AI INFRASTRUCTURE, PAST TWO ORDERS HAVE -- QUARTERS HAVE BEEN STRONG. WILL THEY DO IT AGAIN? IF THEY DO, WHO KNOWS HOW THE STOCK WILL REACT BECAUSE IT IS A NAME THAT BY MANY METRICS IS LOOKING PRICEY. ESPECIALLY WITHIN THE CONTEXT OF POTENTIAL HIGHER RATE ENVIRONMENTS. PEOPLE ARE PAYING ATTENTION TO IT. IF THEY GET ANY INDICATION OF AI
DEMAND IS NOT AS STRONG AS SOME PEOPLE ARE HOPING FOR, THAT COULD HAVE SOME BROADER IMPLICATIONS AS WELL. ED: WE FOCUS SO MUCH ON THE 100, THIS IS COMING DOWN THE PIPE AS WELL. THANK YOU, COMING UP, WE WILL BREAK DOWN EXPEDIA'S EARNINGS AND GET A READ ON THE STATE OF THE CONSUMER WITH PETER, THIS EEO. -- THE CEO. A TIMELY CONVERSATION.
THIS IS BLOOMBERG TECHNOLOGY. ♪ PEOPLE WANT TO KEEP FLYING OUT OF FAMILIES WANT TO GO ON HOLIDAY, THEY DO NOT WANT TO PAY OUTRAGEOUS PRICES. FARES GO UP BY A LOW DOUBLE-DIGIT PERCENTAGE THROUGH SUMMER OF 2020 FOUR, THE THIRD SUMMER IN A ROW WE HAVE SEEN DOUBLE-DIGIT FARE INCREASES IN EUROPE. ED: I WAS RYANAIR CEO ON BLOOMBERG TELEVISION.
AS OUTLOOK -- HIS OUTLOOK TALKED ABOUT THE FUEL PRICES AND DELAYS IN TAKING NEW AIRPLANES IMPACTED THEIR ABILITY TO MEET DEMAND, STICKING WITH TRAVEL DEMAND, WE ARE JOINED BY EXPEDIA'S CEO, PETER, IT IS INTERESTING TO HEAR WHAT HE SAID, THE CHALLENGES ALONGSIDE LEADING WHAT HE SEES AS DEMAND. WHAT KIND OF DEMAND DO YOU SEE? WE HAVE -- THANKS FOR HAVING ME, FIRST OF ALL. I ENJOYED THE CLIP. WHAT WE SEE IS A STEADY DEMAND I WOULD SAY. WHAT HE IS TALKING ABOUT IS WE ARE SEEING SOME SHIFTS AS CUSTOMERS ARE LOOKING FOR A CARRIERS OVER THE MAIN AIRLINES.
HE IS PROBABLY BENEFITING FROM THAT. SEEING A MOVE IN HIS DIRECTION. OVERALL, AIR DEMAND IN WESTERN EUROPE AND NORTH AMERICA IS PRETTY STEADY. WE ARE SEEING GENERALLY PRICE DECLINES ACROSS THE MARKETS.
I THINK WHAT HE IS DISCUSSING IS A SHIFT IN HIS FAVOR. IT IS NOT NECESSARILY THAT IS TRUE FOR EVERYTHING ACROSS THE BOARD. ED: WHAT FASCINATES ME ABOUT EXPEDIA AND THE PORTFOLIO OF BRANDS AND PLATFORMS IS THE GRANULARITY OF THE DATA. YOU CAN TELL ME THE DEMOGRAPHICS OF PEOPLE WHO ARE TRAVELING OUT OF WHERE THEY ARE TRAVELING TO. RIGHT NOW, WHAT DOES GEN Z LOOK LIKE? THAT IS A SPECIFIC QUESTION. WHO IS TRAVELING?
HOW ARE YOU SEEING THE YOUNGER TRAVELER BEHAVE IN THE MOST RECENT QUARTER? I THINK WE DO NOT TEND TO BREAK IT THAT WAY. THE TRAVELERS, LEISURE TRAVEL HAS REMAINED STRONG. CORPORATE IS STILL NOT BACK TO PRE-COVID LEVELS. YOU SEE A LOT OF DIFFERENCES IN GEOGRAPHY TO GEOGRAPHY. WE STILL HAVE ASIA OPENING UP TO
A CERTAIN EXTENT WHICH IS A TAILWIND. IN ASIA AND LATIN AMERICA, THE WEST HAS SORT OF NORMALIZED I WOULD SAY. BY AND LARGE, PEOPLE ARE WAITING FOR TRAVELERS TO TRAY DOWN, LOOK FOR CHEAPER ALTERNATIVES.
WE HAVE NOT SEEN THAT VERY MUCH. AT THE LOWER END OF THE MARKET YOU SEE A LITTLE BIT MORE. AS YOU KNOW IS INTRODUCED OUR NEW BRAND PROGRAM CALLED ONE KEY, PEOPLE ARE GETTING ACCUSTOMED TO THAT, THEY ARE TRADING UP WHEN THEY HAVE VALUE THAT THEY CAN USE TO GET A BETTER ROOM.
THEY HAVE ONE KEY CASH WHICH IS OUR AWARDS CURRENCY. THEY TRADE UP TO A BETTER ROOM OR A BETTER EXPERIENCE OR USE THEM FOR SOMETHING BETTER. ED: ALONGSIDE THE REWARDS YOU FOCUSED ON CONTENT CREATION AND INFLUENCERS ON SOCIAL MEDIA. HAS THAT GIVEN ANY BOOST TO SALES? WE ARE USING ALL OF THE TOOLS WE CAN, IT IS AN EDUCATION PROCESS, ONE KEY, PEOPLE UNDERSTAND WHEN WE HAVE ONE KEY AND VRBO, THE ONLY PLACE WE CAN GET REWARDS AND VACATION RENTALS, PEOPLE WHO ARE INTERESTED IN VACATION RENTALS UNDERSTAND AND APPRECIATE THE BENEFITS.
SOMETIMES OLD-FASHIONED ADVERTISING IS NOT THE BEST WAY. IT IS EASIER TO REACH PEOPLE WITH MORE INFORMATION. YOU REFER TO ALL OF THE DATA THAT WE HAVE ON GEN Z, THAT IS POWERING OUR PRODUCT. AS WE MAKE THE PRODUCT BETTER
AND BETTER, THE FACT WE HAVE ALL OF THAT DATA IS WHAT ALLOWS US TO NOW TAKE ACTION OUT OF THE PROCESS USING AI AND MACHINE LEARNING TO MAKE THE EXPERIENCE BETTER AND THE PRODUCT BETTER. THAT IS WHERE WE ARE FOCUSED. ED: THERE IS THE EXPEDIA AND THEN THE BTB BUSINESS. WHAT IS THE SPLIT OF THOSE TWO? BTB HAS TO DO WITH THE EXPOSURE OF THE BUSINESS WHICH IS EXPOSED MORE TO ASIA AND THE MARKETS THAT HAVE COME BACK MORE RECENTLY. ALSO, WE HAVE BEEN BUILDING THE
TECHNOLOGY AND EXPANDING OUR CUSTOMER BASE. THAT BUSINESS IS SEEING GROWTH IN THE 20'S FOR THE LAST SEVERAL YEARS, 20% PLUS TOPLINE GROWTH LAST QUARTER, IT WAS CLOSER TO 2627. WE EXPECT THAT TO CONTINUE AS A PART OF OUR OVERALL BUSINESS.
WE HAVE DONE A LOT OF WORK ON OUTDOOR CONSUMER BUSINESS WITH ONE KEY AND THE LAUNCH OF NEW PRODUCTS AND CAPABILITIES. WE EXPECT A BIGGER BUSINESS TO ACCELERATE NOW. THE BTB BUSINESS HAS MORE TAILWIND STILL. ED: FRIDAY YOUR STOCK TOOK OFF LIKE A ROCKET, THE BIGGEST JUMP SINCE NOVEMBER 2020. YOU MUST BE HAPPY ABOUT THAT? I DO NOT PRETEND TO UNDERSTAND THE MARKET, I THINK THE MARKET IS UNDERSTANDING ALL OF THE WORK THAT WE HAVE DONE HAS SET US UP IN A BETTER WAY TO GO FORWARD MOST OF OUR COMPETITORS. THAT IS WHAT WE ARE EXCITED
ABOUT. IT IS NICE TO SEE THE MARKET RECOGNIZE IT. ED: THANK YOU. WE RECAP THE FDX TRIAL, WE TALK ABOUT THE INTERSECTION OF AI AND CRYPTO WITH FUTURE PERFECT VENTURES, THAT IS COMING UP NEXT. THIS IS BLOOMBERG TECHNOLOGY. ♪ ED: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I WOULD GET A QUICK CHECK ON THE MARKET. NASDAQ, BEGICH CAPS WERE SUPPORTING TO THE UPSIDE -- MEGA CAPS WERE SUPPORTING TO THE UPSIDE.
BEST RUN SINCE THE END OF JANUARY THIS YEAR. WE WILL KEEP WATCHING IF THE MOMENTUM CONTINUES. THE VAST MAJORITY OF TECHNOLOGY ARE IN THE RED AND IT IS THE MEGA CAPS DOING THE HEAVY LIFTING. RISK ASSET OF CHOICE AS CAROLYN SAYS, BITCOIN.
IT HAS BEEN UP AND DOWN. THERE IS A DEBATE WHETHER ANY MOVEMENT WE HAVE SEEN TO THE UPSIDE IS WE ARE AROUND 35,000 U.S. DOLLARS PER TOKEN HAS ANYTHING AT ALL TO DO WITH THE OUTCOME OF THE FTX TRIAL AND SAM BANKMAN FRIED WHO WAS FOUND GUILTY ON MULTIPLE COUNTS OF FRAUD, SECURITIES FRAUD AND CONSPIRACY. LET'S GET TO SAM BANKMAN FRIED'S GUILTY VERDICT. HE HAS BEEN CHARGED ON SEVEN COUNTS OF WIRED FRAUD, MONEY LAUNDERING BECAUSE ACUTE IS FRAUD AND ACES DECADES IN PRISON WHEN HE IS SENTENCE WHICH WE THINK WILL HAPPEN IN MARCH. JOINING US FOR MORE REACTION ON
THE TRIAL BUT ITS IMPACT ON THE CRYPTO SPIRIT LARGE, JALAK JOBANPUTRA. YOUR REACTION TO THE OUTCOME OF THE TRIAL? IT IS GREAT TO BE WITH YOU. I THINK THIS IS A HUGE SIGH OF RELIEF FOR THE CRYPTO INDUSTRY. WE HAVE MOVED ON FROM THIS FTX TRIAL OR THE NEWS FOR THE LAST YEAR, BUT AT THE END OF THE DAY, FRAUD IS FRAUD IS FRAUD AND IT DOES NOT MATTER WHAT INDUSTRY. IT IS GOOD TO SEE JUSTICE IS SERVED. WE CAN GO BACK TO BACKING AND
TALKING ABOUT THE BUILDERS THAT ARE IN IT TO CREATE A BETTER WORLD USING THIS NEW TECHNOLOGY. ED: THAT IS SENTIMENT ECHOED BY A NUMBER OF OUR GUESTS ON THIS SHOW. THERE ARE THOSE THAT ACKNOWLEDGE IT DID HAVE AN IMPACT RIGHT UP UNTIL THE JURY GAVE ITS VERDICT BECAUSE OF IT REPRESENTED FROM A SORT OF HIGH TO LOW COLLAPSE OF THE INDUSTRY. AS A VENTURE CAPITALIST, HAVE YOU BEEN ABLE TO WRITE CHECKS WITH CONFIDENCE THE LAST 12 MONTHS AND A START IT'S WORKING ON THE UNDERLYING TECHNOLOGY OR EVEN BACKING THE TOKEN OF THEIR OWN? ABSOLUTELY.
WE WERE LONG-TERM INVESTORS. YOU HAVE A 10 FIVE. I HAVE BEEN IN THE VENTURE INDUSTRY SINCE 1999 SO SEEN MANY CYCLES. EVEN WITHIN CRYPTO FOR THE LAST 10 YEARS, THERE HAVE BEEN MANY CYCLES. I AM NOT GOING TO LIE, FTX AND WHAT HAPPENED WAS OF SUCH A MAGNITUDE THAT IT DID IMPACT AND HAVE AN EFFECT ON ALL ENTREPRENEURS, LARGE COMPANIES AND SMALLER COMPANIES, IN THIS SECTOR. BUT WHAT THE JURY SHOWED IS FOUR
HOURS TO COME TO DECISION SHOWS THE EVIDENCE WAS SO COMPELLING THAT PEOPLE ARE NOT GOING TO GET AWAY WITH THIS TYPE OF FRAUD. I THINK ENTREPRENEURS CAN REST EASY. PEOPLE WHO ARE PASSIONATE ABOUT THIS SECTOR CONTINUE TO BUILD AND HAVE CONTINUED TO BUILD. DOWNTURNS ARE NOTORIOUS FOR GIVING BIRTH TO SOME OF THE MOST IMPACTFUL COMPANIES THROUGHOUT HISTORY. ED: NICK CARTER WAS ON THE SHOW FRIDAY AND SAID THEY WERE OFFER THE OPPORTUNITY TWICE TO INVEST IN FTX BUT THEY DID NOT FEEL RIGHT ABOUT IT SO THEY DIDN'T. FOR SHEER TRANSPARENCY, DID YOU HAVE THE OPPORTUNITY TO BACK FTX OR ASSOCIATED GROUP AND DID YOU? WE HAD AN OPPORTUNITY THREE TIMES TO INVEST IN FTX AND DID NOT.
WE ARE EARLY-STAGE INVESTORS. WE LIKE TO SEE GOVERNANCE EVEN FROM THE EARLIEST STAGES IN COMPANIES. CRYPTO IS GETTING MORE AND MORE CLARITY AS WE MOVE OVER THE YEARS, BUT THAT LACK OF REGULATORY CLARITY CREATES MORE NEED FOR DILIGENCE ON THE PART OF INVESTORS BECAUSE WE DON'T HAVE REGULATORS OVERSEEING THESE COMPANIES. SO IT IS REALLY IMPORTANT TO KNOW OTHER CO-INVESTORS HAVE THE SAME INCENTIVES WE DO, THAT WE TRUST THE ENTREPRENEUR IN A SECTOR THAT IS NEW AND THERE IS LOTS OF CAPITAL FLOATING AROUND EVEN RIGHT NOW IN ENCOUNTERING. ED: WHERE DOES THE CAPSULE GO IN THE UNDERLYING BLOCKCHAIN? ON THIS SHOW MOST RECENTLY, WE INCREASINGLY TALK ABOUT IT IN THE CONTEXT OF GAMING AS OPPOSED TO CRYPTO. WHERE EXCITE YOU MOST?
OUR THESIS FROM OUR INCEPTION IN 20 OR TEEN WAS -- IN 2013, CRYPTO, WHICH IS PART OF WEB 3, SO THIS INTERSECTION OF CRYPTO, AI, MACHINE LEARNING, INTERNET OF THINGS, THIS COLLECTION AND ANALYTICS OF DATA AS WELL AS THE DISTRIBUTION OF DATA IS GOING TO BE THE NEXT INTERNET. SO JUST LIKE THE INTERNET HAS IMPACTED EVERY INDUSTRY, THE MEDIA INDUSTRY, FINANCIAL SERVICES, WE BELIEVE WEB 3, CRYPTO BEING A PART OF THAT, WILL IMPACT EVERY INDUSTRY. I WROTE A BLOG POST RECENTLY ABOUT WHAT WE ARE SEEING AROUND DEEPFAKES IN THE MEDIA.
ONE OF THE REALLY GREAT ELEMENTS OF CRYPTO AND BLOCKCHAIN IS THE FACT YOU CAN TRACK DATA PROVENANCE. THAT IS WHY FTX IS A LITTLE IRONIC BECAUSE THE INDUSTRY IS SUPPOSED TO BE ALL ABOUT TRANSPARENCY, NOT ABOUT COVERUPS. AND SO THIS PROMINENCE TRACKING OF DATA, WE KNOW IF WE ARE SEEING A CLIP WHETHER OR NOT THAT IS AUTHENTIC DATA. WHAT WE NEED NOW IS THE INTERSECTION OF MACHINE LEARNING WHERE WE CAN COLLECT AND ANALYZE THIS DATA IN REAL-TIME. WHATSAPP HAS 40 MILLION MESSAGES THEY GET POSTER PER MINUTE WORLDWIDE.
THERE IS NO WAY TO QUICKLY ANALYZE ALL OF THOSE MESSAGES RIGHT NOW IN REAL TIME, BUT WE ARE GETTING THERE. WHEN WE GET THERE, WE WILL KNOW THE DATA IS AUTHENTIC OR AT LEAST WILL BE WATERMARKED IN WAY WE KNOW WHAT WE ARE CONSUMING IS AUTHENTIC. ED: JALAK JOBANPUTRA, FUTURE PERFECT VENTURES, GREAT CONVERSATION. THANK YOU VERY MUCH. COMING UP, WE WILL TALK ABOUT
THE STATE INVESTING IN EUROPE 'S TECH SECTOR. COMING UP NEXT FROM LONDON. THIS IS "BLOOMBERG." ♪ ED: ARTIFICIAL INTELLIGENCE RAISING MORE THAN $500 MILLION FROM A CONSORTIUM OF INDUSTRIAL GIANTS AND FINANCIAL INVESTORS AS IT TRIES TO BUILD A EUROPEAN RIVAL TO THE LARGE LANGUAGE MODELS CREATED BY OPENAI AND GOOGLE. A GROUP AND THE FINANCING ROUND INCLUDED SAP AND HPE. STICKING WITH TECH, JOINING US IS SONALI DERYCKER WHO FOCUSES ON THE NEXT GENERATION FINANCIAL AND SOFTWARE COMPANIES.
CELEBRATING FOUR DECADES OF OPERATING IN EUROPE, EXCEL. WELCOME TO THE PROGRAM MOST OF 40 YEARS OF INTERACTIVITY, GLOBALLY AND IN EUROPE. HOW DID THE FIRM DO IT? IT IS GREAT TO SEE YOU EVEN IF I AM IN LONDON AND YOU ARE NEW YORK. 40 YEARS IS A BIG MILESTONE AND IT IS A REALLY IMPORTANT TIME TO BE REFLECTIVE. WHAT I WILL SAY IS WE HAVE ALWAYS HAD THE DNA AT XL BUILD A RELATIONSHIP AND TO INVEST IN FOUNDERS -- EXCEPTIONAL FOUNDERS REGARDLESS OF WHERE THEY ARE. TYPICALLY, THAT HAS BEEN IN
REALLY FAR-FLUNG PLACES. IT IS A PHILOSOPHY THAT MADE US OPEN UP OUR LONDON OFFICE 23 YEARS AGO, OPENED UP INDIA 15 YEARS LATER IN 2015 AND IT HAS BEEN A CORE PART OF OUR SUCCESS AND WHY WE WERE ABLE TO INVEST IN COMPANIES LIKE IN UTAH, AUSTRALIA, ROMANIA AND BUCHAREST , COMPANIES LIKE FRESH WORKS IN INDIA. TO CONSTRUCT A FIRM THAT THINGS GLOBAL FROM THE GET-GO, SORT OF WALK OUR WALK AND TALK OUR TALK AND HOW ABOUT COMPANIES AND FOUNDERS TO BECOME THESE CATEGORY LEADERS WAS NOT EASY, BUT I THINK IT HAS BEEN QUITE UNIQUE. ED: THE RAPID PACE OF COMPANIES FOUNDED IN FUNDS BEING RAISED IN THE AI CONTEXT, SET OF THIS NICE USA-VERSUS EUROPE DISCUSSION. IS THERE GOING TO BE A VIABLE EUROPEAN MAKER THE BUILDER OF ELEMENTS TO TAKE ON THE LIKES OF OPENAI? YOU HEARD TALK ABOUT ALFALFA THIS MORNING. WHAT DO YOU SEE AS BEING
POTENTIAL FOR EUROPEAN AI BUILDERS? IT IS A GREAT QUESTION. WHAT I SEE IS IF YOU JUST TAKE A PAUSE AND THINK BACK AROUND AI BECAUSE AI -- THE OVERNIGHT REVOLUTION THAT HAS BEEN GOING ON FOR DECADES. WHEN IT COMES TO RESEARCH, WHEN IT COMES TO CITATIONS, EUROPE PROBABLY HAS HAD 50% MORE IN TERMS OF PUBLICATIONS THAN THE U.S.. IF YOU'RE GOING TO DO THE U.S.
VERSUS EUROPE, THAT SAID I THINK A LOT OF THE FUNDING ACTIVITY AND A LOT OF THE START UP ACTIVITY AND EVEN THE INCUMBENT ACTIVITY HAS BEEN MORE IN THE U.S. BUT WE ARE SEEING A LOT OF PROMISING COMPANIES AND ENTREPRENEURS OVER HERE. THE MAJORITY OF THE ACTIVITIES SO FAR HAS BEEN IN THE INFRASTRUCTURE, THE LARGE LANGUAGE MODEL SPACE IF YOU WILL. BUT THE NATIVE APPLICATIONS THAT WILL COME AND REALLY NATIVE TO AI, IT IS TO EARLY.
I THINK WE ARE VERY MUCH A LITTLE LIKE WHAT MOBILE WAS IN IF THINK OF 2007-2008 WHEN IOS AND ANDROID CAME OUT. IT TOOK A WHILE FOR THE DENOVO APPS TO BECOME BIG AND I THINK WE WILL SEE EUROPE PLAY A BIGGER ROLE IN SOME OF THE MORE VERTICAL AI APPLICATIONS. ED: DID YOU LOOK AT ALFALFA OR EVEN MISTRAL THAT MADE A DEBUT EARLIER IN THE SUMMER? IT IS OUR JOB AS YOU CAN IMAGINE TO MEET WITH ALL OF THE GREAT FOUNDERS, AND WE TEND TO DO THIS EVEN WHEN THE FOUNDERS HAVE NOT EVEN STARTED TO BECOME FOUNDERS THEMSELVES. WE TRACK THE BUILDERS, IF YOU WILL COME AS YOU CALL IT.
WE HAVE SPENT TIME WITH ALL OF THE INTERESTING COMPANIES IN THE AI SPACE. WHAT I WOULD SAY IS GENERALLY, THERE ARE SO MANY FLAVORS OF HOW TO THINK ABOUT THESE LARGE LANGUAGE MODELS, INFRASTRUCTURE PART OF THE STACK FROM PRIVACY, LANGUAGE, FROM SECURITY THAT A NUMBER OF COMPANIES THAT ARE SORT OF TRYING TO FIGURE OUT WHICH PART OPEN-SOURCE, CLOSE SOURCE, WHICH PART OF THE BOX WHERE THE PART OF THE MARKET THEY OWN. SO THERE ARE A NUMBER OF THESE COMPANIES. YEAH, WE SPEND TIME WITH ALL OF THEM. ED: THE LAST TIME I WAS IN NEW
YORK CITY WAS IN THE SEPTEMBER PERIOD OF THE IO WINDOW OPENING UP. I WAS LOOKING AT YOUR CURRENT PORTFOLIO. 70 SUCCESSES OF COMPANIES THAT WENT PUBLIC -- SO MANY SUCCESSES OF COMPANIES THAT WENT PUBLIC. WHAT IS THE NEXT TO TAP THE PUBLIC MARKETS? I WISH I KNEW. I DON'T HAVE A CRYSTAL BALL TO FIGURE OUT WHAT IS GOING TO BE NEXT.
I WILL SAY FROM INVESTOR, AND ENTREPRENEUR PERSPECTIVE, IT IS A BIT OF A CONFOUNDING TIME. THERE IS THIS DEGLOBALIZATION. EVERYONE IS TRYING TO FIGURE OUT WHAT THE NEXT MOVE IS FROM THE CENTRAL BANKS. WE HAVE SOME SERIOUS GEOPOLITICAL ISSUES, TWO WARS. REALLY THINKING ABOUT WHAT IS GOING TO MAKE THE IPO WINDOW, WHICH FEELS TENTATIVE RIGHT NOW, IS NOT CLEAR TO ANYONE STUFF I THINK THE OBVIOUS ANSWER WOULD BE A REAL BELLWETHER STOCK TO GO PUBLIC. TIME WILL TELL. NOBODY IS IN A HURRY.
A LOT OF THESE COMPANIES HAVE A LOT OF CASH ON THEIR BALANCE SHEETS, SO EVERYONE WANTS TO MAKE SURE THEY HAVE TIME TO EXECUTE AND REALLY HAVE THAT BE SUCCESSFUL. TIME WILL TELL. ED: ONE PORTFOLIO COMPANY, MANZO, CANDIDATE FOR IPO'S SOME POINT.
WHAT HAPPENS NEXT FOR THEM? IT IS A SPECIAL COMPANY. IT IS THE SEVENTH LARGEST BANK ALREADY IN U.K.? 8.5 MILLION CUSTOMERS? I THINK ONE IN EVERY SIX PEOPLE IN THE U.K. HAVE A MANZO BANK ACCOUNT. MOST OF THOSE CUSTOMERS FIND MANZO PRETTY ORGANICALLY, SO IT HAS GOT TO A SIZABLE POSITION. I THINK THERE WAS A POINT A LOT
OF THE FINTECH COMPANIES WERE OUT-OF-FAVOR AND I THINK MONZ PREVAILED. O DELIVER WITH TRUST AND SAFETY TO THE CONSUMERS. I THINK COMPANIES LIKE THAT REALLY HAVE A LOT OF OPTIONS OPEN TO THEM. I THINK THAT WILL BE THE NAME OF THE GAME WHERE COMPANIES WANT TO CONTROL THE DESTINY.
THAT IS REALLY OUR LANGUAGE WITH OUR FOUNDERS, MAKE SURE YOU CAN CONTROL YOUR DESTINY TO THE EXTENT POSSIBLE. ED: I WANT TO REFLECT ON THE NEXT 40 YEARS HOPEFULLY FOR ACCEL AND MAYBE THE ROLE THAT LONDON WILL PLAY, THE CITY WHERE I WAS BORN, HOME FOR MOST OF MY LIFE WAS UP CAROLINE AS WELL. WE ARE TALKING ABOUT LONDON MORE AND MORE OUTSIDE OF A MORE NARROW SCOPE OF FINTECH. BUT AS YOU LOOK AT THE FIRM'S FUTURE, WHAT ROLE DO YOU SEE THE CITY PLAY IN YOUR PORTFOLIO STRATEGY AND WHERE YOUR WRITING CHECKS? WE BASED IN LONDON BUT WE COVER A VERY VAST FOOTPRINT FROM THE LONDON OFFICE. AT LAST COUNT, WE HAVE INVESTED IN OVER 6880'S, MORE THAN 20 COUNTRIES -- 68 CITIES, MORE THAN 20 COUNTRIES. LONDON IS AN IMPORTANT BASE.
PROBABLY THE SECOND-MOST EXCITING PLACE WHEN IT COMES TO DEEP TECH AI TALENT. ACCOUNT GREATER LONDON IN THAT, TOO. THE ABILITY TO SPEND TIME WITH THE RIGHT FOUNDERS IN THE REGION FROM THE LONDON OFFICE IS GOING TO BE VERY IMPORTANT. THAT IS HOW WE VIEW IT IN THE U.K., A BIG PART OF THE VENTURE CAPITAL SCENE. AS A PRINCIPLES BECOME MORE UNDERSTOOD AND TECHNOLOGY BECOMES PERVASIVE, THERE WILL BE GREAT FOUNDERS COMING FROM EVERYWHERE AND THIS IS THE BEST PLACE FOR US TO BE IN ORDER TO TRAVEL AND SEE THEM AND SPEND TIME WITH THEM. ED: SONALI DERYCKER, CONGRATULATIONS ON 40 YEARS OF VENTURE CAPITAL IN EUROPE AND BEYOND.
THANK YOU VERY MUCH. SOME OTHER NEWS WE HAVE BEEN TRACKING, SEMICONDUCTOR START OF MY MEMORY TECHNOLOGY RAISED 5.4 BILLION U.S. DOLLARS FROM GOVERNMENT BANKS INVESTORS. THE TWO-YEAR-OLD COMPANY SHARES SOME SHAREHOLDERS AND ITS GENERAL MANAGER WITH CHINA'S LEADING CHIPMAKER CHANGING EVERY TECHNOLOGIES WHICH AIMS TO COMPUTE THE LIKES OF MICRON AND SAMSUNG AND IS PLANNING TO FILE FOR AN IPO IN CHINA. COMING UP, APPLE IS IN NEED OF REVENUE GROWTH.
WHERE WILL IT FIND IT? SOMETHING ON DISPLAY IN THAT VERY STORE OR MAYBE SOMETHING ELSE. THIS IS "BLOOMBERG." ♪ ED: APPLE HAS NOT MANAGED TO COME OUT OF A YEARS LONG SLUMP. IT WOULD MARK POTENTIALLY THE FIT STRAIGHT PORTER OF SALES DECLINED IN A ROW -- QUARTER OF SALES A CLIENT IN A ROW.
APPLE IS IN NEED OF A NEW GROWTH ENGINE. CAN THE HEADSET FULFILL THAT? MARK HAS BEEN WRITING ABOUT THIS IDEA. ON THE CALL, THE ANALYSTS ASKED QUESTIONS ABOUT VISION PRO AND HOW IT HAS BEEN RECEIVED WITH DEVELOPERS, THE EARLY SIGNS THEY WILL GET WHEN THEY START SHIPPING AT. YOU'VE ARE PRETTY CLEAR THESIS
OUTLINED TODAY. IT WAS INTERESTING BECAUSE GOING TO THE CALL, WALL STREET AND THE BREATH OF ANALYSTS WERE ADAMANT THAT APPLE WOULD GROW ABOUT 5% IN THE HOLIDAY PERIOD. BUT THE CFO DROPS THIS BIG ANNOUNCEMENT SAYING IT WOULD BE SIMILAR, THE HOLIDAY PART WOULD COME IN SIMILAR TO LAST YEAR WHICH MEANS -- DECLINE OR NO GROWTH.
FLAT FOR THE FIFTH QUARTER IN A ROW. THIS IS A PRETTY INTERESTING SITUATION FOR APPLE WHERE THEY ARE MAKING A TON OF MONEY BUT THEY'RE NOT GROWING LIKE THEY USED TO. WALL STREET AND ANALYSTS AND INVESTORS ARE LOOKING FOR A NEW GROWTH ENGINE.
THERE IS THE STRONG POTENTIAL FOR THIS APPLE VISION PRO THAT MAY BE THE GROWTH ENGINE FOR THE COMPANY. IT IS A NEW CATEGORY BUT STILL VERY NASCENT. AT THE GET GO, IT WILL BE VERY EXPENSIVE. WHEN THEY PUT IT ON SALE, IT WILL BE A VERY CURT 6% REQUIRES APPOINTMENTS, SIZING. [INDISCERNIBLE] IT WILL TAKE A LONG TIME FOR THEM TO GATHER NUMBERS, GATHER REVENUE ON THE DEVICE. COMBINED WITH THE RETAIL APPROACH AND THE PRICE, IT WILL START VERY SLOW.
I THINK THEY WILL MOVE FROM A CURATED EXPERIENCE WITH THE POINTS TO SOMETHING A BIT MORE GRAB AND GO LIKE A MAC, IPAD, IPHONE. ED: I REMEMBER BEING IN CUPERTINO FOR THE UNVEILING. YOU HAVE WRITTEN SO MUCH ABOUT THIS, 3500 DOLLAR PRODUCT, HIGH-END, BUT ALMOST DESIGNED FOR DEVELOPERS, NOT MASS-MARKET. WHAT IS THE PLAN WITH APPLE FOR
SORT OF MORE APPROACHABLE, MAINSTREAM HEADSET FOR A BROADER AUDIENCE? THE FIRST ITERATION OF PRODUCT IS ESSENTIALLY A DEVELOPMENT DEVICE. THIS IS A DEVICE THAT DEVELOPERS ARE GOING TO BUILD APPS FOR AN HOPE AND PRAY THAT COME OUT WITH A DOWNMARKET VERSION, SOMETHING MAYBE IN THE $1000 TO $2000 RANGE THAT EVENTUALLY MAYBE 10 YEARS FROM NOW, COMPUTER REPLACEMENT. THE GOAL IS TO HAVE THE ECOSYSTEM READY FOR WHEN THAT DAY COMES. THE ULTIMATE HOLY GRAIL IN THE FUTURE OF COMPUTING SPACE WITH WEARABLES ARE LIGHTWEIGHT, AUGMENTED GLASSES. IF APPLE CAN COME UP WITH THOSE AND FIVE TO 10 YEARS FROM NOW WITH FULL-BLOWN APP ECOSYSTEM COME GOING TO HAVE A HUGE HIT ON THEIR HANDS, POTENTIALLY SOMETHING THAT RIVALS THE IPHONE. BUT THE ONLY WAY TO LUNCH WITH THAT TYPE OF SUCCESS, INTEREST, AND MARKET IS CONSUMER EDUCATION AND TO BUILD ECOSYSTEM.
THE VISION PRO FOR THE NEXT FEW YEARS WILL BE ABOUT EDUCATING CONSUMERS ABOUT THIS TECHNOLOGY, HOW THESE APPLICATIONS WORK, AND TO GET DEVELOPERS ON BOARD. MANY OF THE APPS WRITTEN FOR THIS DEVICE WILL ONE DAY BE COMPATIBLE WITH OTHER HEADSETS FROM APPLE. ED: TO SUBSCRIBE TO POWER ON BECAUSE IT HAS ALL OF THE DETAIL ABOUT PRESENT AND FUTURE PRODUCTS COMING OUT OF APPLE. THAT DOES IT FOR THIS EDITION OF
"BLOOMBERG TECHNOLOGY." THANK YOU TO EVERYONE HOW THEY'RE READING THE NEWS BUT ALSO LISTENING TO THE PODCAST WHEREVER YOU GET YOUR PODCAST. FROM NEW YORK CITY THIS WEEK, ALL WEEK LONG, THIS IS "BLOOMBERG TECHNOLOGY." ♪
2023-11-10 05:33
