Apple crashes CES and the latest 2019 iPhone leak
16:39

Apple crashes CES and the latest 2019 iPhone leak

Tech Industry
Apple trolls CES, all the Apple product look alikes that we've spotted at the show, Samsung and Apple play nice, and is the latest iPhone leak the real deal? Welcome to a live edition of the Apple Core at CES 2019. [MUSIC] It's CNET Editor in Chief, Connie Guglielmo, Editor in Chief of CNET who's actually more qualified than I am to talk about Apple here. How long have you been covering Apple, Connie? Name? I like to tell people, I started covering Apple when I was a small child, during the first and second coming of Steve Jobs. That is correct, and you're gonna give us, just an overview, and break down all the latest Apple news that's been dominating headlines. Despite us being here at CES, and Apple not being here, or at least having a physical presence. Yeah, what's really interesting is that Apple doesn't usually go to CES. For many years, those of us who cover Apple know, you'd go to Macworld in San Francisco. And they would have all of their big events, the iPhone rollout, iPod rollouts, all of that at Macworld. The fact that We talk about them in TS is not a typical because they also dominate. But the fact that they're making announcements here and participating in some of the CES events is super notable and it comes after A very interesting last quarter. Very interesting time. And before we get to this specific CES stuff, let's about the headliines that even with all the CES news coming out, have been dominating the news [UNKNOWN] lately. I'm starting with 2019 iPhone leaks. We're kind of used to seeing leaks All the time for iPhones. But it's surprising that we're seeing them so early on in the year. And this one specifically comes from Twitter user OnLeeks, whose been pretty spot on with renders before from the iPhone. You're seeing on here, on the screen it has a three camera array on the back, but otherwise looks very, very similar to that iPhone 10 design that we see now two years in a row. Except look at that massive camera bump now with the three camera array. some of the phones that have three camera arrays on the back have generally been used for greater megapixels or for optical zoom. There's talk that there may be AR features. What's clear though is that Apple kinda needs that awesome feature that's gonna reinvigorate sales because iPhone is kinda what's Not hurting them right now in terms of sales, and one of the reasons that the other headline has been the financial crisis that's going on in Apple right now. So tell us a little about that. You can put that into perspective for us. Sure, the iPhone is Apple's single most important product. It accounts for more than half of their sales. And anyone who covers Apple I've covered them from a tech perspective, from a financial perspective, for a long time knows. That Apple is a story, even though this might not sound sexy, about profit margins. The iPhone has had an amazing profit margin, more than 50%, which is unheard of for a consumer hardware device. In the past couple of years that has come down. What does that mean? That their profits, even though they're selling a lot of units, they're making less per phone. So if you couple the declining profit margin with the fact that they're selling less and it's their most important product you get what happens a few weeks ago. Or was it just last week? My gosh. It was just last week. That they, for the first time in more than 15 years, had to reset Financial expectations of what's going on with their iPhone sales for the holiday quarter. Which is the single most important quarter of their year, it's their biggest selling quarter. And they have to come out and say, and warn, that they are not gonna sell as many iPhones as people had predicted. And that has huge implications across Apple. What does it mean? It means that people are not buying. As many iPhones as they want they said there was a problem with decline in China which is their third largest international market. And that makes a little bit of sense. Chinese consumers are not as brand aligned as people here in the U.S. But they're also more price sensitive. There's more competition for Apple there. There are tariffs that may have weighed in. They cited some supply problems as well. But what they didn't say, which is what everyone else is saying, is that iPhones are super expensive. Yes. And actually, now, this year, they continue to raise the prices. But what's interesting is that the XS Max is still their best seller. I mean, does that help with the profit margins at all, or? Well, they said the XR was their best seller at last quarter, which was not their top. But again, you're at a time when there's lots of competition in the market. We all have smartphones, people are not upgrading As often as they have in the past, so that upgrade cycle hurts them, the price hurts them. Tony Saganaki, he's the top analyst on Apple on wall street and he says the average selling price on the iPhone is five times higher than non Apple smartphones around the world. Price is an issue. They cut the price though, they cut the profit margin, that makes wall street unhappy. Top selling product, they need to diversify their product line. How are they doing that? And that's what we'll be talking about in the next year. That's what we're already seeing here at CES/. But before we move from the iPhone, there's talk about 5G coming to the iPhone in 2020. There's also talk about different design changes, better camera, AR features. You mentioned that people aren't upgrading anymore. Do you think that now, in our day, there can be that device's feature can reinvigorate the sales or do you think that the era of the smartphone is over and they really need to switch gears? Is there still that wow factor that they could reach with this year's iPhone, for example, or the 2020 iPhone? Yeah, I don't think the era of the smartphone is over. The smartphone is the remote control of our life. I mean, we're all tethered to our smartphones. The question is, what can they add to the smartphone that is gonna convince you must have, right, with iPhone X or iPhone X depending on your point of view Animoji was a big deal and the touch ID I mean the Face ID Face ID etc, those are really nice tech features for somebody who wants to be on the cutting edge Yeah But again for price consious consumers Not so much, so, and you mentioned the designs. I mean adding nice cameras is great, but for a percentage of us, the camera's totally great as it is. Yeah. So Apple's history has been one of giving us tech and showing us things that we didn't even know that we wanted. And so they need to do that. And they might still right? I mean you've been covering Apple they have had so many comebacks and have been suprising us over the years so yeah it is a possibility right? I would definitely not count them out. Even with all of this financial problem and talk about iphone sales etc. They still are one of the Top 3 most valuable companies in the world, they have more cash than most countries in the world. So, if they want to invest and they want to move into new product categories, or really take a big leap, they can do it, the question is do they put their profit margins at risk. While they try to do that. And that's one of the big themes we're going to talk about here at CES. Which is them kind of opening up the ecosystem. But before we, we touch on that. And we're now going to switch gears and talk about CES. Because that is a big theme here. Let's talk about Appletrolling CES. Because we begin CES with a massive reminder that Apple is always watching us. I'm talking about the big sign that says, what happens in your iPhone stays on your iPhone, playing on that what happens in Vegas sign or logo. Yeah, this is a big nod to the fact that Apple does have something that they can tout that some other companies can't. Which is they don't make money off of you by selling your data. They do protect your privacy relative to other companies, and certainly Facebook. Apple CEO Tim Cook has come out and slammed Facebook for monetizing on your personal data. And so that play on the Vegas tagline is also a play on the fact that they don't monetize your data. What happens on your iPhone stays on your iPhone because They like to tout the advantages of privacy. They went up against the FBI, right, to not open up the phones in this famous case two years ago. So they do take a more proactive privacy stance, and they're playing on it in a clever way. Very clever way, especially because it's massive here at the convention center. You cannot miss it so every company had to see that sign before they walked into the convention center, so well played Apple, well played. So let's talk about what we've seen here at CES because even though Apple doesn't have a booth, they haven't had a booth at CES Their presence is known, or is felt everywhere throughout the halls, and you kind of have to do a double take, because there are so many products that remind us of Apple devices. Obviously Apple is not the first in many aspects, but they definitely help to popularize things like the air pods, for example. so they don't claim to be first but there's definitely a lot of look-a-likes that stem after Apple announces something. We've done a lot of double-takes in the halls, or I have at least walking the halls. I'm like wait are those airpods? We saw the Xiaomi air dots that are, sorry, air dots pro had these wireless ear buds that remind us very much like their air pods, and they're on the screen right now. Now they have the pro version which really looks like, which could easily be confused. The difference is the price. $60. So it's a hundred dollar cheaper. Price is a big difference but yeah, I mean Apple's advantage as I say, they surprise us by introducing tech we didn't even know they wanted. Exactly. They make it simple, they've invested in elegant design. That all ties together neatly in a package. Some people don't like that Apple's a closed ecosystem company but that gives you the advantage that you don't have to worry about things not inter-operating, unless there's a glitch and Apple has to fix it. And being secure. These are another Apple product lookalike. Well not lookalike, it's more an accesory for the Air Pods. It's a fidget spinner. It turns your Air Pods. Into a fidget spinner and I, you know, we talk about the air pods. I have to point this out because it's just for comedic purposes. You put it on your air pod case and then you just do it like a fidget spinner. $30. Any takers? So going on with some of the other product look-alikes here, we saw The AirPower Mat that has still not arrived. Griffin has this Powerblock, so very much so taking a cue for the AirPower Mat. This one only charges two devices at once. But it's also $79, which, we don't even have the price of the AirPower Mat yet, but I'm thinking it'll be a little bit more than that. I would expect so, yes. So again, with the price theme that you mentioned before. So the other one The other one I wanted to talk about is Withings came out with the Withings move ECG. It's a smart watch that looks very much like an analog smart watch and has that ECG feature that can take an electrocardiogram. It's FDA pending but that kinda reminds us of the Apple Watch. I think it's super interesting that Withings has done this because at a $130, it's what, a third of the price of the Apple Watch Series four. Which I introduced in the Fall. Right. With the ECG monitor in it. And in a total rebuff to Apple, it does have an analog face. Yes. And so people have that digital brain behind it, with the old school face on it. And they, of course, experimented with designs and colors. And I mean, and Apple wasn't first with the ECG. The KardiaBand had the first You know, on the strap ECG. So you know, Apple's not necessarily always first but any time they come out with a device, we see a lot more of that type of device later on. So now let's move on with, you know, not just Products that remind us of Apple devices, but the CES products that now have Apple integration. So we've seen a lot of Apple accessories over the years. iPhone accessories here at CES. But it seems like this year the theme for Apple integration is home kit. We're seeing home kit come to a lot of smart home devices. We've got light switches, we've got the Curtains from Ikea. Everything now has home kit integration, which was possible before, but I feel like this year, I don't know about you, but I've seen more of that Apple and home kit integration. Yeah, so what you're seeing is, when you have most of your sales coming in from a hardware product And sales of that product are dipping, where are you going to make money? And the big area of opportunity for them is services. And just to bore you again for one second on profit margins, profit margins on services is way high. And Apple's growth last year in services revenue Was great, and so they want to invest and get more people using their platform and tying into it, which is the app developers and other developers being able to play nice with Apple. And we had the Apple Music available on the Echo, that was huge too last year. Apple Music has been available on Android but we're seeing Apple Music open up its ecosystem. Is this a trend that you think that we're gonna continue to see? Yes. And also, the other thing is the TVs, which we have to talk about. Because the first one was Samsung, to announce that it had iTune integration. Which, Samsung and Apple rarely play nice. And now, for Apple to say, here, you can have iTunes without having to buy And Apple TV, that was huge. Again, if you're not buying their hardware, and you're not buying Apple TV, and they're gonna make a big bet on services, right? They're supposed to introduce a new video streaming service later this year. They need subscribers, and if they're not gonna get them on their device, they wanna be where the users are. And if they're on Samsung TVs or LG TVs or any other device manufacturers that they are are now integrating with. Yes! So, LG TVs, Sony TVs, Vizio TVs, they are all getting airplay, and they are also getting Siri. Samsung is the only one that is going to have iTunes integration, but basiaclly on all these other TVs you are going to be able to mirror from your iPhone to these TVs which is It's kind of down played here at CES but I think it just represents this really big change for Apple that we're gonna see in 2019. And it sets the stage for 2019. Yeah, I mean it represents the fact that Apple, I mean depending on your point of view we can pick a different adjective, but has been very arrogant about the fact That they can snap, and everyone will come and buy whatever they want, right? And now they have to recognize that they are not the only gatekeeper of all your access to tech. And that they have to expend Extend their reach, especially in services. They have to reach people where ever they are. And there are a lot of anti Apple people who have never bought in to the Apple eco system. So how do you bring someone to their services eco system, that are not interested in you device? You play nice with other device systems. We synchronize. And this Apple playing nice is gonna be a theme in 2019. I kind of wanna end with a little note to the past. To look back. At 1992, which was kind of the last official appearance of Apple at CES, when the Newton was announced. Here's an ad of that Newton, the PDA device that never quite made it to the big leagues. But that was the last time we saw Apple here Physically, it's a kind of cute reminder. I actually have a Newton, and it is an example of, you know, an Apple fail, and so it's kind of cool. It was ahead of its time. It certainly had tech issues. It pointed toward the direction of the future, but yeah. And also I believe that was under John Scully who Took over Apple after Jobs was fired and then Scully kind of took Apple and went to a direction that was not a positive one. And that actually led to the return of Steve Jobs and the reinvention of Apple that we see today. Another one of the big comebacks of Apple that we've talked about Biggest corporate turnaround in history. Well let's Now without Steve Jobs, though, is it going to be able to have a comeback like that ever again? Well that is the question people have been asking since Tim took over as CEO. It's great operations. In shape. Does he have a vision? And we're looking at the product road map for the past few years and last week, we got the first [UNKNOWN] earnings in the last 15 years. So draw your own conclusions.

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