DAGEN: TECH TITANS, TARIFFS,  WHAT COULD THEY WANT?  APPLE OPENED ITS BOOKS AND THE  COMPANY IS RUNNING FOR THE  HILLS, OR MORE ACCURATELY INDIA  AND VIETNAM AS TRUMP’S TARIFFS  LAMB CHINESE MANUFACTURING.  TIM COOK JUST CONFIRMED MOST US  ABOUT IPHONES THIS QUARTER WILL  NOT BE MADE IN CHINA BECAUSE  APPLE COULD GET SLAPPED WITH  $900 MILLION IN TARIFF RELATED  COSTS THIS QUARTER ALONE.  MEANWHILE AMAZON SHARES DOWN  AFTER OF CAUTIOUS FORECAST AND  AWS MISSED THE MARK.  I KNOW YOU LOVE EARNINGS, LET’S  START WITH APPLE.  I WAS AMAZED AT BY THESE  NUMBERS.  A LITTLE WARNING, IPHONE SALES  IN CHINA ARE STARTING TO GO  FLAT AMONG THE CHINESE WHICH  WHAT DO YOU MAKE OF THIS  REPORT?  >> I WAS READING A REPORT FROM  AN ANALYST AT MORGAN STANLEY  WHO SAID THE FACT THAT APPLE,  STOP LAUGHING AT ME, THE FACT  THAT APPLE IS ONLY TAKING ON  $900 MILLION HIT, THEY PULLED  IN $95 BILLION LAST QUARTER SO  TO ME I’M LIKE COOL, WHAT IS  THAT, A ROUNDING ERROR?  THAT DOESN’T MOVE THE NEEDLE  FOR ME.  HE GOES ON TO SAY 170 IS THE  FLOOR ON THE STOCK, SURPRISED  TO SEE THE STOCK TRADE THAT LOW  UNLESS THERE WERE SERIOUS  ESCALATION IN CHINA.  THERE ARE SOME REGULATORY  ISSUES CAN WE TALK ABOUT THE  JUDGE ON WEDNESDAY COMING OUT  AND RETHINKING HOW THEY DO THE  IN STORE APPS AND THE  COMMISSION ON THOSE BUT TO ME  I’M LIKE THEY’VE ALREADY MOVED  HALF OF THE US IPHONE  PRODUCTION TO VIETNAM.  90% OF THAT WAS IN CHINA AND  THE GOAL WAS TO MOVE 100% OF  THAT TO INDIA OR VIETNAM BY  NEXT YEAR.  WE HALFWAY THERE AND IT HAS  BEEN A MONTH.  TO ME I HAVE SAT DOWN THIS  MORNING AND I THOUGHT WE ARE  DISCOUNTING AMERICAN  EXCEPTIONALISM, WE ARE  DISCOUNTING THE ABILITY FOR  LARGE COMPANIES MAYBE NOT SMALL  TO BE NUMBER LAND RESILIENT AND  GUESS WHAT, TIM COOK GETS PAID  TO DO THIS, TO FIGURE IT OUT,  AND TO ME IT LOOKS LIKE RIGHT  NOW HE IS STARTING TO FIGURE IT  OUT.  THAT WAS A ROUNDING ERROR TO  ME.  GERRI: I WANT YOU TO WEIGH IN  ON IT.  LOU:THE MOST UNDERVALUED ACID  IN THE WORLD’S AMERICAN CEO’S  ABILITY TO FIGURE OUT PROBLEMS  AND TIM COOK SHOWING IT, AS A  WHOLE BIG TECH IS LIKE A BOY  BAND THAT BROKE UP, THEY ARE  GOING THEIR SEPARATE  DIRECTIONS.  EVERYONE FOLLOWED IN THE SINK  OR NEW KIDS ON THE BLOCK AND  THEY HAD BREAK OUTS CAREERS AND  THAT’S HAPPENING WITH THE  MAGNIFICENT SEVEN AND APPLE IS  JUSTIN TIMBERLAKE IN INSYNC,  THE BEST SOLO CAREER FOREVER, I  BET MY OWN PERSONAL CAPITAL ON  IT, THE ANALYST’S POINT YOU  READ THE REPORT ON 170 WOULD BE  THE NEXT BACK UP THE TRUCK  BUYING OPPORTUNITY.  I OWN IT BUT HERE IS WHY YOU  CAN COUNT ON IT.  GERRI: YOU HAVE A GREAT INSIGHT  ON THIS.  TAYLOR: LET’S RUN THE COUNTER.  THERE ARE SOME SIGNS THAT I  THINK DO SHOW WEAKENING WHEN IT  COMES TO APPLE BECAUSE TALK  ABOUT SALES WHICH OBVIOUSLY  DOMINANT SALES IN THE US AND IN  CHINA THEY SLIPPED TO NUMBER 5,  TIM COOK SAID IT’S CLEAR WE  CAN’T RELY ON ONE COUNTRY NOT  ONLY WITH PRODUCTION BUT ALSO  WITH SALES BECAUSE THEY ARE  LEADING HERE BUT NOT THERE.  THE BIG THING FOR APPLE, THEY  MAKE A LOT OF MONEY NOT ON THE  SALE OF THE IPHONE BUT ALSO THE  IN APPS SALES AND CONTRACT THEY  HAVE WITH OTHER COMPANIES SO  YOU TALKED ABOUT ALL THE STUFF  WITH THE APPS STORE, THEY TAKE  30% COMMISSION FROM ANY SALE.  WE ARE SEEING AN AI REVOLUTION  EVERY TIME YOU DOWNLOAD YOUR  CHAT GPT OR ANTHROPIC THAT IS  MONEY TO APPLE SO IF THAT  CHANGES, IF THEY CAN’T TAKE  THAT 30% OFF THE TOP THAT IS  BAD NEWS, THE BIG THING IS A  COURT OF THE COMPANY’S  OPERATING PROFIT COMES FROM  ROYALTIES THAT GOOGLE PAYS A  GOOGLE PAID APPLE TO SAY WE ARE  THE DEFAULT BROWSER ON YOUR  PHONE.  RIGHT NOW GOOGLE IS IN COURT,  FOUND GUILTY OF HAVING A  MONOPOLY AN ONLINE SEARCH  BECAUSE OF DEALS LIKE THIS.  DURING THE REMEDIES PHASE, THE  JUDGE WILL RULE IN AUGUST WHAT  NEEDS TO BE DONE, HOW TO  CORRECT THIS MONOPOLY AND IF IT  COMES DOWN THAT GOOGLE CAN’T BE  PAYING APPLE AND APPLE LOSES  THAT REVENUE, THAT IS A HUGE  HIT.  LOU:I DON’T THINK APPLE HAS TO  INNOVATE EVER AGAIN, THEY JUST  HAVE TO ITERATE, $2.5 BILLION  INSTALLED DEVICES,  OUTMANEUVERING.  BRIAN: YOU GOT TO WALK THAT  BACK.  LOU:THEY DON’T HAVE TO.  IT IS ITERATED.  THEY HAVE THE PLATFORM.  SUSAN: THAT THE KODAK STRATEGY.  LOU:THEY STILL INNOVATED.  THEY DON’T HAVE TO COME OUT  WITH THE NEXT BIG THING.  EVERYONE ELSE’ S DO IT AND THEY  ROLL IT OUT OVER THE PLATFORM  JUST LIKE MEDA HAS DONE WITH  SNAP.  THE RECENT SNAP WILL ALWAYS BE  IN THE GUTTER AS THEY HAVE NO  PATENT PROTECTION.  WHEN THEY FIND SOMETHING THAT  WORKS MEDA IS ADOPTED.  APPLE CAN DO THE SAME THING, WE  ‘VE SEEN OPEN-SOURCE THEY ARE,  WE WILL ROLL OUT WITH APPLE.  I AM ADAMANT LEE UNASHAMEDLY  BULLISH BUT I THINK YOUR POINTS  ARE FAIR, YOU HAVE TO FIGURE  OUT HOW TO REPLACE THAT AND I  WOULD BET ON HE’S GOING TO  FIGURE IT OUT.  YOU CAN TELL YOU ‘T THAT YOU  ARE RIGHT, THE STOCK WILL  SUFFER.  BRIAN: I’M WITH A COMBINATION  OF THESE TWO.  I THINK TIM COOK CAN SOLVE THE  PROBLEM WITH VIETNAM AND INDIA  AND ELSEWHERE BUT I’M ALSO WITH  YOU THE UNDERLYING BUSINESS IS  STALE.  BEHIND ON AI.  FROM A GUY WHO HAS A BUTTON ON  HIS IPHONE, THEY HAVE GOT TO  INNOVATE.  NO COMPANY ON EARTH — NOBODY  KNOWS.  >> A CHIP IN YOUR BRAIN THAT  ELON MUSK SAYS HE IS GOING TO  CREATE THE, YOU WON’T NEED A  CELL PHONE.  >> THERE IS A COMPANY CALLED  SECOND SITE DOING NEURAL  IMPLANTS TO RESTORE VISION.  EVERYTHING IN INNOVATION IS IN  ADDITION TO PEOPLE BEFORE IT.  BRIAN: I AGREE THERE’S  INNOVATION THAT CAN HAPPEN, OR  ALL OF THAT BUT I DON’T THINK  THEY ARE FAST FOLLOWING  ANYBODY, THEY ARE SLOW  FOLLOWING A LOT OF PEOPLE.  GERRI: WHAT HAPPENS TO A LOT OF  COMPANIES WE DON’T TALK ABOUT  ANYMORE BECAUSE THEY ARE NOT  AROUND ANYMORE, THESE BIG  BUREAUCRACIES, THEY ARE LIKE A  GOVERNMENT, NOTHING EVER  HAPPENS.  IT’S ALL ABOUT PROTECTING YOUR  SPHERE.  IS THAT WHERE YOU THINK APPLE  IS?  BRIAN: THEY ARE AT THAT SPOT, A  HUGE CASH HORDE.  THAT IS A SHORT-TERM STRATEGY  THAT BOOSTS STOCK PRICE.  APPLE IS A GREAT COMPANY.  >> INTEL CAN’T GET OUT OF ITS  WAY.  BRIAN: THE GUY WHO IS BETTING  ON A LONG-TERM SHOULD ANSWER  IT.  THAT WOULD BE MY FEAR THESE  GUYS FOR THE NEXT INTEL OR THE  GUYS WHO CAPTURED A MOMENT.  THE KODAK EXAMPLE IS  INTERESTING, CAPTURE A MOMENT  BUT THE MOMENT CHANGES BECAUSE  THE PLATFORM CHANGES.  THAT IS A RISK.  ALL THAT SAID IN THE SHORT-TERM  TAYLOR IS RIGHT, THEY CAN SOLVE  A TARIFF PROBLEM.  >> THEY ARE NOT DELETED BIG TO  FAIL BUT YOU SEE THAT  NIMBLENESS THEY HAD, THE FACT  THAT TIM COOK IS SAYING THE  GOAL BY FOLLOWERS TO HAVE,  IPHONE SALES IN THE US COMING  FROM VIETNAM, WHICH WOULD BE  AMAZING IF THAT IS POSSIBLE,  KUDOS TO APPLE BUT I DON’T  THINK, I DO WONDER IF HOW THE  ORIGINAL FOUNDERS OF APPLE FEEL  ABOUT WHERE THEY ARE NOW  BECAUSE I DON’T THINK THEY ARE  AS INNOVATIVE AS THEY WERE AT  THE START.  >> WE CAN HAVE SPIRITED DEBATES  ABOUT IT AND DON’T HAVE TO  DECIDE, THE MARKET DOES IT FOR  US.  WE CAN COME BACK 6 MONTH OR A  YEAR FROM NOW AND I WAS WRONG  IN THIS AND YOU ARE WRONG ON  THAT AND THAT’S THE BEAUTY OF  INVESTING IN THE DYNAMISM OF  THE AMERICAN ECONOMY AND  INNOVATION, THE FOUNDERS  PROBABLY AREN’T INNOVATING AS A  MUCH.  CAN YOU GENERATE A RETURN ON  CAPITAL.  DON’T CARE IF YOU ARE A FOOD  BUSINESS AND MAKE 3% MARGIN  BECAUSE IT IS UNDERVALUED