Harburg: China will not save Apple

Huge quarter for Apple. It also included WWDC and the unveiling of Apple Intelligence. We've been waiting for it to happen. I want to get your take though. What was the driver of this incredible performance this quarter? What do you think led to the second quarter turn around for this name? Well, certainly the AI hype, you know, the obviously the explosion around NVIDIA and, and anything that you know, seems to be able to enter integrate a generative AI into something that's consumer facing is, is doing very well this quarter. There was certainly obviously a lot of hype early on about the Vision Pro, but my overall view is that it's just kind of a rising tide narrative where stock, stock investors are really excited about these types of names that are around this fuzzy industry. All right, so you're saying people got excited about Apple Intelligence, WWDC. What about the Vision Pro? As you mentioned, it goes on sale in China and a couple other lucrative markets in Asia. How meaningful is this product to Apple? Where do you see this going, going forward? Do you think it's going to see big consumer adoption, big enterprise adoption? I mean, what's the future of this product in your mind? Out of the gate, you had a lot of folks saying that this was the best hardware they'd ever put their hands on. And certainly a lot of fight again, I bought one, but I have to be honest, I haven't used it since the initial demo. And I and I think that they're the sales here are lagging. I mean, you know, they're they're hoping to see a rejuvenation out of now opening up the market here in China. My fear is that there are already a lot of Chinese competitors doing similar, albeit inferior types of products. And now with China walling or being walled off against the likes of Open AI, you could also see China AI, you know, potentially being walled out of some of its applications within China. And Chinese hardware makers, headset makers, building products that are more locally integrated, have more app integrations. And so I don't think that China will necessarily be a game changer for the Vision Pro. And overall, I'd be bearish on on Apple's prospects in the market going forward. Really so bearish on the their prospects in the market. When talking about iPhones, the Vision Pro are just everything because Wall Street Journal out with the story saying Apple's looking for a a local partner for its artificial intelligence service. No ChatGPT there. That's right. So again, I wouldn't want to compete against China on any of the hardware fronts, be it handsets, E VS home appliances, all of which they're they're, you know, their dominance now is really truly emerging both at home and abroad. And now with this open AI decision to wall off China again, you're going to have to see the likes of Microsoft and Apple scramble to find local partners, local integrations. And that means that they won't have access to the the most heavily used and highly tuned algorithms coming out of the US. And so I think that there are there are significant challenges and that breeds this walled garden dynamic where the Chinese are going to build competitors. They're probably going to be two years out from building something on par with chat GDP. But it it still means that in the long term, Apple won't be able to deploy its full suite of products the same way it would for Western clients.