New foldable iPhone will be a hit and sell out; supply constrained but could drive super cycle.

You've got Apple uh actually doing really well here up about 2.3%

Apple's still holding on to a percent despite the rest of the market being a little fussy.

Apple's up about 13.

our take is this phone is going to sell as many units as Apple can produce at least in the near the next 3 to 6 months. but I do think in the near term if Apple can just sell 5% of the install base or 5% of the units to the uh to the dual model that will alone drive about 25 billion of revenues and about five I think work very well u it's supply constraint not demand constraint focus on quality and battery life happen

what Apple has done in fairness, as you look at it, the higher tier models, the 1 TB, 2 TB iPhone 2s, is where the bigger bulk of the price increases are happening. So, I think they're trying to keep the entry level model more approachable, more manageable, especially the tradeins.

It's the higher level models which are I think getting more of a 20% bump up in price on the Pro Max side for example. iPhone deliveries will come out you know as pre-orders start in a week. Uh that's going to be important.

The other part I'll say that you know what's missing in this in fairness is Siri AI. Uh this has been something Apple has talked a fair amount about.

I agree by the way that this is going to sell out. So when he says they're going to sell as many as they can make. Completely agree.

Then we got to talk Apple.

So, a big obvious one to me is Apple, right? So, Apple didn't really trade positively on the news, the announcement, the release of the new line,

I actually think that this is going to be the thing that spurs that super cycle that we've been talking about. Even though it is the higherend phone, it's the most expensive phone they've ever sold, probably the most expensive phone out there, I actually think that this will be the thing that is the catalyst that we've been looking for.

And oh, by the way, there's no AI story to it. I know that Siri is supposed to get enhancements. The watch is supposed to have some agentic quality to it, but realistically, like this whole thing is still underpinned by Google's Gemini, which means then that there's limitations to how much AI can be in the phone and in the ecosystem.

So realistically, it's all about the handset. But I think that the handset changing the way that it has is going to be transformative. Apple's share price You know, typically the stock doesn't trade all that well in September.

It's been, I think historically, a sell the news event on the iPhone launch, which is always in September. Uh and yesterday there was a little bit of weakness around the initial presentation, but then the stock rose later, not up huge today obviously, but it's still green.

And maybe that's an indication in and of itself that this is being viewed in a pretty positive way.

Melius today says the foldable onic is going to be a hit. What stood out to us was how thin the duo was. Each side thinner than iPhone Air, so sturdy, especially at the seam in the middle.

They think it's going to be uh pretty sweet. uh BFA the duo steals the show. They did lower the target by by 10 bucks. Yeah, they're concerned like everybody else is about gross margins because of the component and the memory costs as well. So they go to 370 from 380.

You did obviously have the John Turnis era officially begin as Morgan Stanley's Eric Woodring is is talking about and it's a good segue to welcome Josh into the conversation.

So, you know, you you were pretty early, I think, in in sensing that this stock was going to be poised for a pretty good run. It had that and then it had a post earnings malaise, albeit reasonably brief.

And here we are now after the first significant presentation and roll out from the new CEO. What's your big takeaway from this?

I thought what they announced was way more than what the expectations seem to have been. John Turnis did not go into his first solo keynote um sort of easing into the role. He came out guns blazing.

I think the foldable is going to be a hit. They will not be able to make enough in order for this to move the needle in Q4, but hopefully in 27 it becomes a blockbuster product.

I also think that um what Malcolm was saying about there not being AI is not quite true. The A20 chip which is a two nanometer chip being manufactured by TSM is specifically designed so that Apple can run AI and agentic workflows on the device.

Remember the hallmark of Apple's brand is safety and security and it's very important that we stop thinking about AI as strictly something that takes place in a data center. what Apple is doing on device is far in advance of what anyone else is doing and probably will do and it is incorrect to say that they've not made inroads.

What they haven't uh changed and Malcolm's right about is they don't have their own LLM or they do but it's internal and it's not really in use. I think that's perfectly fine. They didn't have their own search engine either and they still managed to sell a billion iPhones.

So, I think the big picture here is the duo is coming out under $2,000. I think the the consensus amongst the tech bloggers was more like 2500. That's an upside surprise. I think it'll lead to waiting lists.

Um the other thing that's important is the iPhone 18 Pro and Pro Max. Those will be up $100, well within what people expected, and I think they're going to sell a ton of them. So, um the watch is nice, the AirPods are nice, but the big picture here.

Okay, enough of that. Yeah, look, the ondevice AI, I mean, I think the other guy's right. I think this idea, oh, the chip is specifically designed for this. That's the marketing.

There's very little ondevice AI that I think Apple's actually doing here. Uh, in the future, are we trying to optimize for that? Sure. But, uh, no, I I agree that this thing is going to be a supply constrained chip.

It's kind of exciting or product. I think it's a big moment for Apple.