MSFT Challenges AAPL with NVDA Powered Laptop: Will it Win Over Customers?

SPEAKER_1 (0:00)

Time to go deeper on our Microsoft story and our tech spotlight. Looking at Microsoft, Peter Andersen, CIO and founder, Andersen Capital Management is with me. So we have news from Microsoft, the announcement of a new Surface Laptop Ultra powered by Nvidia RTX Spark. Is this great? Is this a monumental moment? You tell me.

Peter Andersen (0:23)

Well, I think Microsoft would like to think it is, yes. I do think there are other issues though.

The main issue is, who asked for this product? We have to go back to just basic marketing, and if there is a need to fill something, then of course, that's the cue for a company to develop something. So I think one of the outstanding questions is, how will this help Microsoft? Will it have early adopters, coders, and animation experts? And if that's the case, that's promising for a signal. But there is a big question mark as to who will be the mid or late adopters, especially say the consumers out there. Do they need something like this at this point?

SPEAKER_1 (1:11)

And it's interesting, right? So the price point, I guess, is somewhat affordable, but really when we think about it, you said, what's the usefulness? It's not just the horsepower. And so we've also had Apple coming out with all of its new things for the holidays in particular.

What makes this a standout?

Peter Andersen (1:30)

Yeah, you know, innovation is always a challenging subject and decision point when you're in a large company like that. You know, it's usually decision by committee.

And so I think Microsoft is doing what I would call like a marginal step rather than something that's very earth shattering.

And it's impressive, of course, that you'd be able to have all this AI capability on a laptop. But people like yourself, if I could be that free to speak about the rest of us, I don't know if we actually need that at this point. As I said, developers were very excited about this. But for us, I think the current arrangement in using remote data centers through the cloud, I think it suits us just fine. And with regards to Apple, I mean, that's another company that some people will say that innovation really has been lagging for a long time in Apple and they're just doing incremental changes. I'm somewhat surprised at this path that they are planning to take with external home owners type apparatus that I think is way off what you and I would have guessed, say, three years ago of the future path of Apple.

SPEAKER_1 (2:49)

Well, I mean, it was also known that you mentioned AI, and I think that's an interesting part. I mean, you can mention what you think about copilot, for example, but in theory, this is supposed to take on Apple, particularly for AI developers, from what I understand, Microsoft and Nvidia together with this to take on the MacBook Pro.

And so, will people really sort of say, this is what I want to do? They does have the serious computer power, and maybe that's something. I mean, we think about the price point. Did you think the $2,500 price point was fair?

Peter Andersen (3:28)

I think it's fair for what the product is, but I think it's extremely steep for, say, the general public, and I don't think it's competitive at all.

But, as I said, for the more sophisticated coder, this is probably very exciting to them, and I do think that this pitch, this launch, was directly targeted at that type of user. And I think, I've thought a lot about this in terms of like, why would Microsoft do this? I imagined, you know, in the strategy room, why would they bring this up? And I think it's fairly simple. I think that they have weak sales in PC, so they want to reinvigorate that, and they make it justifiable by bringing in Nvidia, so that adds to the credibility, and then they're presenting it to the high end user, hoping that they will adopt that. And then the big question though, surrounding this whole topic so far, is the last part of that is, then will the general consumer step in? Now I know there's been jokes about when the PC first came out, people would say, why on earth would anybody want a home computer, and of course, 20, 30 years later, we see why. So maybe it's the same process, but it is quite an analytic leap in marketing strategy to think this will have legs and will be adopted by most people and that they will pay that kind of price.

SPEAKER_1 (4:53)

Yeah, the shipping begins on October 16th, I believe, and can really go upwards. I said 2,500, that's sort of the starting price. It can be upwards of 5,000 if you really load it up. But the support with the power, the unified memory and the AI performance that it can do is supposedly a big deal with these AI models exceeding 120 billion parameters running locally.