Key Points

• Apple’s new OS with AI features is delayed until after the iPhone 16 launch, leading to a lukewarm response.
• The iPhone 16 offers only marginal improvements, with AI being the main anticipated upgrade.
• Delays and lack of innovation could negatively impact Apple’s upcoming earnings.
• Also: The smart money is already looking at The Next Nvidia as the best investment today

Lee and Doug delve into Apple’s (NASDAQ: AAPL) surprising decision regarding its new operating system, OS 18, which features AI capabilities. They discuss how Apple has delayed the release to the public until after the iPhone 16 launch, despite initially giving it to developers. They express disappointment that the iPhone 16 will not significantly differ from the 15, except for marginal improvements. The conversation highlights concerns about Apple’s strategy, noting that this could lead to lackluster earnings for the upcoming quarter. They also reflect on how Steve Jobs might have handled the situation differently, emphasizing the potential impact on Apple’s market position.

Transcript:

Apple’s done something extraordinary, and I can’t even fathom it.

They have this new operating system, AI features.

They’ve given it to developers to use and play with.

You and I can’t get it.

And then they said, gee, it’s not ready.

So we’re going to wait until after we introduce the iPhone 16.

And then maybe a few weeks later, you can download it as your new operating system.

I think it’s like OS 18.

Yes.

No, no, no.

You’re right.

It’s OS 18.

They don’t match up.

That’ll be your AI download.

Win it if it’s right.

So the iPhone 16 is not going to be different from the 15.

I’m going to promise you it has a better camera by an amount that you and I can’t understand and a faster processor, and maybe it holds a charge longer, but it’s all going to be marginal improvements except for the AI.

What do you do?

You say, okay, to Verizon AT&T, just tell everybody you’re going to have it soon.

You know, and it’s really interesting because the response was tepid at best.

And this was supposed to be like a watershed event in the life of the iPhone.

And they’re not even able, at least as I’ve seen so far, they’re not even able to give you a specific date when OS 18 will drop.

No, I don’t think they can.

I don’t think they can right now.

And so…

I would suspect that when they do their September song and dance and bring everything out, Cook will be able to show what it does.

He’ll say, look how great this is.

Oh, yeah.

Now, you’re not going to be able to get this right away, but look at how great it is.

And I will guarantee you, if Steve Jobs was alive…

and that integration wasn’t in the 16, they would all be fired, all of them.

They’d all be fired, and quite frankly, I think there’s a chance that he would just say to everybody, look, it’s going to cost Apple a lot of money, but we’re going to only release the 16 when it’s completely integrated and ready.

Even if it cost it, that was Steve Jobs, okay?

That was not…

was not Tim Cook.

And you have to remember the Apple Worldwide Developers Conference, which was in early June.

They talked about all this AI stuff.

Again, they didn’t give you much in terms of specifics.

You remember the stock really rallied.

In a big way.

People said, ah, Apple’s finally, finally got a horse in this race.

Now, after all that excitement, they’ve basically just, they’ve cut all of the legs out from under the tables.

Yeah, and again, you’ve got essentially the same phone you’ve had for years.

And like you said, it will not be demonstrably different because, you know, okay, maybe the camera’s a little better or maybe the charge lasts a little longer, you know, things of that nature.

But again, like when we were talking about other companies, where do they fall back to?

You know, iPads?

No, they don’t.

iWatch?

I mean, that is just not enough support for their bellwether product to put enough air under earnings to keep them going the way they want to go.

Right, which means that the earnings for what would be the calendar earnings third quarter could be very bad.

They’re on a different fiscal, but still, those could be pretty ugly.

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