Key Points:

• iPhone XVI Sales: Delayed software and minimal changes may lead to weak sales.
• Chinese Competition: Foldable phones from Chinese brands are challenging Apple’s dominance.
• Increased Advertising: Apple’s need for ads suggests challenges in maintaining market position.
• Also: The smart money is already looking at The Next Nvidia as the best investment today.

Doug and Lee discuss the anticipated release of the iPhone 16, noting concerns about weak sales due to the delayed release of a complementary software feature. Doug criticizes the decision as a significant mistake by Apple Inc.’s (NASDAQ: AAPL) CEO, Tim Cook, drawing a comparison to buying a car without an engine. Lee points out that competition in China, particularly with foldable phones, is intensifying, which could further impact iPhone sales. They also discuss the potential for multi-screen devices to become more popular, contrasting the iPhone’s traditional single-screen design.

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Edited Video Transcript:

[00:00:00] Douglas A. McIntyre: The iphone 16, uh anticipated Every, every time the iPhone comes out every year, there’s a guessing game. And then certain wall street firms, they go out and they say, well, they counted the number of people at a store and you know, then they come up with numbers. Now, right now, and I don’t want to say this is a consensus, but there’s a leaning towards the fact that they’re light.

[00:00:29] Douglas A. McIntyre: And here’s my opinion on that. If you’re going to launch a phone piece of hardware, and it’s not going to have The double a, a piece of software that was supposed to go with it. You’re not going to put that out for another six weeks. Nope. I got to tell you, sales are going to be weak. People want to be able to go into AT& T or Verizon or the Apple store and they want to actually be able to see it.

[00:00:56] Douglas A. McIntyre: It would be like buying a car without an engine, right? I buy the car and it’s like, Oh yeah, this is, this is going to be awesome. And here’s a description of the engine, which Apple’s done, you know, here’s a description of the engine. So you should trust us. They come back and buy it later, which to me, if Tim Cook, the CEO of Apple has made a single signature error in his period at Apple from going from being the successor to Steve Jobs, this is it.

[00:01:31] Douglas A. McIntyre: This is the, this is the big mistake.

[00:01:33] Lee Jackson: Yeah. And you know, again, the data seems skewed because you know, the, the CEO of T Mobile going, Oh, sales are good. Sales are really good. And other people are going, well, you know, the order, the preorders weren’t what we expected. And, um, the followup isn’t what we expected.

[00:01:51] Lee Jackson: And I don’t think there’s enough radical change in the phone versus the 15, even, even at the higher levels, the more expensive levels, you know, it’s the usual thing. Camera’s a little bit better. The screen’s a little bit different, you know, small ancillary things that aren’t going to make me run out and spend 1400 bucks.

[00:02:08] Douglas A. McIntyre: Well, another thing is, is that. People are talking about the United States when you talk about us brokerage firms,

[00:02:17] Lee Jackson: you

[00:02:17] Douglas A. McIntyre: know, the challenge is going to be in China as well, because you’ve now got this new fold foldable phone, the competition in China, which I think used to be, you know, the homegrown phones were okay,

[00:02:31] Lee Jackson: but they

[00:02:31] Douglas A. McIntyre: weren’t iPhones.

[00:02:32] Douglas A. McIntyre: And I think that the, the manufacturers. In, in China, they’re closing that gap when it comes to product.

[00:02:41] Lee Jackson: I suppose that Huawei called Motorola and said, I want my nineties back with a flip phone. But apparently, uh, it’s been very successful, hugely successful. And you know, you can bet, I think that, um, Google has a, a flip phone too, but you can bet that if it’s successful, it’ll be monkey see monkey do with everybody else.

[00:03:02] Douglas A. McIntyre: Well, it’s a very, very good product. It goes from being a, a phone to like a tablet to like close to a laptop. It’s like, you remember the old transformers, you know, There were toys, sure. Dinosaurs. Then they could, you know, they ran the universe. It’s sort of like you can take this thing and you can morph it from one device to another app.

[00:03:29] Douglas A. McIntyre: The iPhone is still basically a single screen product, which is what Americans are used to. But that doesn’t mean that down the road you won’t be able to sell Americans on the idea of a multi screen. And here’s what I’m going to tell you what this reminds me of. Apple was late to having a 5g phone. Do you remember this?

[00:03:50] Douglas A. McIntyre: They were. Yeah. Right. So, so they, they milked that 4g phone as long as they could. Put out their 5g phone late in the cycle. They risk doing the same thing here. And that is sticking to sort of the standard screen sizes, standard templates, I know they always get a little thinner, but basically if you and I had an earlier version of the iPhone.

[00:04:17] Douglas A. McIntyre: And we put it down on the desk and we put down a distressed version of the 16, you know, one that you beat up a little. So it didn’t, I don’t think most people would say, Oh gee, those are radically different products.

[00:04:31] Lee Jackson: Yeah. And you know, it’s interesting. I love you’ve seen these commercials, but they’re running these commercials where there’s the kind of, there’s a girl who looks down the hall and sees a guy and she’s like, why, why can’t I remember this guy?

[00:04:45] Lee Jackson: And then I think she talks to her iPhone 16. Where did I meet this guy? And he goes, Oh, you met him at a party down the street. And then she said, Oh, hi, Steve. And, and, and that’s assuming that the, I guess that the AI factor is in there.

[00:05:00] Douglas A. McIntyre: Well, I’ll tell you something. Apple didn’t used to have to run commercials for iPhones.

[00:05:06] Douglas A. McIntyre: If you said to me, what’s another thing that should make you nervous if you’re a shareholder is why all of a sudden does Apple have to spend. Money on iPhones. If there are two products that I can remember over decades that were no advertising products, they were the Tesla. Yes. And the iPhone.

[00:05:25] Lee Jackson: Yes.

[00:05:26] Douglas A. McIntyre: They were popular.

[00:05:27] Douglas A. McIntyre: Everybody knew what they were. They had a signature look and all of a sudden Apple’s having to spend money advertising the iPhone. Yeah, I think there’s

[00:05:36] Lee Jackson: a series of these commercials because I’ve seen, I didn’t have the audio up, but I’ve seen another one with what looked like the same actress in it, somehow using her Apple iPhone 16 AI to figure something out for.

[00:05:49] Douglas A. McIntyre: I don’t want to see that.

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