Apple’s Ternus Era Starts the iPhone Duo

SPEAKER_1 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

Ed Ludlow (0:21)

This is Bloomberg Tech. Coming up, it's what everyone's talking about. Apple's first foldable smartphone, the iPhone Duo. We'll break everything down from yesterday's product launch. Plus, the AI chip race is moving to inference. D-Matrix CEO, Sid Sheff, joins us on its new partnership with NVIDIA and the battle to make AI cheaper and faster. And Elon Musk's Boring Co reaches a $23 billion valuation after its latest funding round.

Let's get straight to our top story, Apple's Showstopper.

John Ternus (0:51)

iPhone Duo brings an entirely new design while preserving everything you love and expect from iPhone. It gives you the largest display ever on an iPhone while still fitting easily in your pocket.

It reflects extraordinarily complex engineering, yet feels effortless to use. And it makes new experiences possible.

Ed Ludlow (1:12)

That was Apple's CEO John Ternus making his first official keynote in the top seat, turning heads with the new foldable iPhone Duo. Shares really accelerating gains 90 minutes into the session, up 2.5% now. What's interesting is they were basically flat, bang in line with the average of an iPhone launch day, market performance that we've seen going back at least a decade. Well, everyone's woken up and said, this is a big deal. Let's discuss. And who better to discuss it with than Mark Gurman, who leads our Apple coverage and basically broke most of the details prior to yesterday's event anyway. Start with the basics, iPhone Duo.

We were spot on on the price. That's probably the big news headline, right? Just under $2,000. But the specs as well, your first impressions and the most notable points of the technology.

Mark Gurman (1:59)

My first impression is that this device makes every foldable phone from Samsung, from Google, from Huawei, anyone else before it, look like a toy, look like a prototype, look like a beta test, basically. Because the fit and finish we're seeing here is new to the foldable industry.

The way that they are putting, they call it ceramic inserts into the cellular antenna cutouts. So when you go and try to bend the phone and break it, people who do that, it's not going to bend in half. The way they put a special cover glass over the flexible display to hide the crease as much as possible and make it so your fingernails don't put cuts in the screen. The fact that they're using titanium around the edges to make the phone more durable, the fact that it's water and dust resistant, right? They've hit every checkbox here for it to feel like a normal iPhone, but to also be foldable. This really has very few compromises other than the lack of the telephoto camera on the back and battery life to some extent.

Ed Ludlow (2:59)

It was amazing to get hands on with it yesterday. Everyone's first reaction is to say there's no crease, there's no margin, there's no seam in the middle, not one that the naked eye can see. I do want to talk about the pricing, Mark. You said this would be $2,000. It was in the end, 1,999.

To what extent has Apple eaten some cost in the environment they're operating in? But also, if you look at the higher tiers of storage, clearly, there are some handsets out there up beyond $3,000 too.

Mark Gurman (3:32)

They're eating costs for sure because the memory shortage really is having an impact on so many companies, including Apple, delaying products, paying more for memory, needing to charge customers more. But they've offset it in two key ways. One is on the storage tiers. So you can get the 256 gigabytes for that $2,000 price point. You can get 512 for the $2,200 price point. But if you want to go to the higher tiers, you're talking 2,600 for a terabyte, and then 3,200 for two terabytes. So they're charging massive premiums on that storage. And they're thinking is that most people probably aren't going to get the base level version. This is an early adopter product for all intents and purposes. And that group of people is going to go for higher storage tiers. So they are going to get their margin on that. The other thing they've done is they've really jacked up pricing on the international customers. So in the US, right, the $2,000 price point globally is going to be the one everyone's talking about. But you go internationally, the price is in Canada, the price in Australia, the price in Asia, really sky high. And if you do some of the conversions, the prices in those other countries, it's not a one-to-one conversion for what the US price is. So for instance, in Australia, there's an $800 Australian premium on top of the converted rate.