# Apple Kicks Off Terns Era with First Foldable Phone

An episode of [Bloomberg Tech](https://invisiblenetwork.ai/podcast/1611767434), 9 Sep 2026, 46 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/41764a4f-fc64-4e11-89ba-ae7c0030ab5e/6783bebe-002c-41a5-b462-b4c0010fc3e8/audio.mp3?utm_source=Podcast&in_playlist=9caafc41-289c-4115-995d-ae7c0030ab75

Bloomberg’s Ed Ludlow is live from Apple Park in Cupertino for what could be the iPhone Maker's most consequential product launch in years, with John Ternus making his first major public appearance as Apple CEO - and all eyes on Apple's highly anticipated first foldable iPhone, marking the biggest change to the iPhone's form factor in almost twenty years. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios. Podcasts.
[0:05] Speaker 2: Radio.
[0:06] Speaker 1: News. Bloomberg Tech is live from the heart of Silicon
[0:16] Speaker 1: Valley with Ed Ludlow in San Francisco. This is Bloomberg Tech.
[0:25] Speaker 1: We're live from Apple Park in Cupertino for what could
[0:27] Speaker 1: be the iPhone maker's most consequential product launch. in years
[0:31] Speaker 1: all eyes on john turnus making his first major public
[0:34] Speaker 1: appearance as apple's ceo since taking the helm on september
[0:38] Speaker 1: 1st and bloomberg reports apple will unveil its first foldable
[0:41] Speaker 1: iphone a device nearly a decade in the making marking
[0:45] Speaker 1: the biggest change to iphone's form factor in almost 20
[0:48] Speaker 1: years we'll bring you the details and analysis throughout the
[0:51] Speaker 1: hour so apple's kind of treading water down a percentage
[0:53] Speaker 1: point on the stock but really the story has been
[0:56] Speaker 1: about a comeback on the shares since late june you
[0:59] Speaker 1: remember in june Apple raised prices on everything apart from
[1:03] Speaker 1: the iPhone, reflecting higher memory costs. A rally of 15%
[1:07] Speaker 1: since then, adding $ 580 billion or so of market cap,
[1:12] Speaker 1: is in part reflective of enthusiasm around this latest generation
[1:16] Speaker 1: of products with the folding iPhone at the center of it.
[1:19] Speaker 1: Let's get out to Bloomberg's Mark Gurman, who leads our
[1:21] Speaker 1: coverage of Apple and consumer technology. And let's just start
[1:25] Speaker 1: with the basics, Mark. You've done a lot of reporting
[1:27] Speaker 1: on what Bloomberg says will be called the iPhone Duo.
[1:30] Speaker 1: What are the specs? What do we need to know?
[1:33] Speaker 3: Yes, so I'm hearing the phone will be called the
[1:35] Speaker 3: iPhone Duo. This is the foldable phone. It'll start at $ 2, 000,
[1:40] Speaker 3: 5.5-inch screen on the outside, 7.8-inch screen on the inside,
[1:45] Speaker 3: dual 48-megapixel cameras on the back, software-based telephoto, so there's
[1:50] Speaker 3: no dedicated telephoto lens similar to the iPhone Air that
[1:55] Speaker 3: came out last year. Come in dark blue, come in white.
[1:59] Speaker 3: There will be storage capacities up to two terabytes and
[2:03] Speaker 3: that model will cost roughly $ 3, 000.
[2:06] Speaker 4: And so at.
[2:07] Speaker 3: The $ 2, 000 price point, they are eating a lot of
[2:10] Speaker 3: the memory costs here and they're going to be passing
[2:12] Speaker 3: it on to international shoppers where the price tags are,
[2:16] Speaker 3: you know, are less influential and less, you know, read
[2:19] Speaker 3: into by Wall Street. They really want to keep the U.S.
[2:22] Speaker 3: prices at $ 19. 99 threshold for effect. And you'll see that
[2:28] Speaker 3: be announced today and go on sale in October. So
[2:33] Speaker 3: slightly later than the iPhone 18 Pro and Pro Max
[2:36] Speaker 3: that are launching this month. Speaking of 18 Pro and
[2:40] Speaker 3: Pro Max, lots of talk about price increases over the
[2:43] Speaker 3: last several months. Here's the deal. $ 100 more on each
[2:48] Speaker 3: of those models. So not that $ 300, $ 500 price increase
[2:52] Speaker 3: that some are expecting $ 100. Why are they doing this?
[2:56] Speaker 3: Samsung and Google, they recently raised prices. They did $ 100.
[2:59] Speaker 3: Apple doesn't want to go past that. They want to
[3:02] Speaker 3: eat these costs. They're chasing market share here at a
[3:05] Speaker 3: time where they really could raise prices substantially.
[3:09] Speaker 5: Right.
[3:12] Speaker 1: Bloomberg's Mark Gurman, stay with us. We have some breaking
[3:14] Speaker 1: news on the Bloomberg terminal out of the U.S. Treasury.
[3:16] Speaker 1: Bloomberg's international economics and policy correspondent, Mike McKee, has those details. Hi, Mike.
[3:22] Speaker 6: Hi, Ed.
[3:23] Speaker 7: Well, all of our bond market friends are getting the
[3:25] Speaker 7: information they were looking for. The Treasury is going to
[3:29] Speaker 7: buy back $ 6 billion in worth of 10- and 20-year notes.
[3:36] Speaker 7: The question had been, would they go above the $ 4
[3:39] Speaker 7: billion that they suggested, which was double the normal $ 2
[3:42] Speaker 7: billion amount? And they have gone over that, maybe to
[3:45] Speaker 7: send a message that they are serious about all of this,
[3:48] Speaker 7: starting on September 10th. They will raise the size to
[3:53] Speaker 7: $ 6 billion. Tomorrow we get the first buybacks of the day.
[3:59] Speaker 7: And you can see the debt distribution right now of
[4:03] Speaker 7: what we have out there that people can pick and
[4:07] Speaker 7: choose to try to sell back. These will be off-the-run
[4:10] Speaker 7: treasuries that the Treasury Department has been buying back because
[4:14] Speaker 7: they say it's a liquidity need. But the market thinks
[4:17] Speaker 7: that perhaps the ramping up of the number to $ 6
[4:20] Speaker 7: billion From $ 2 billion is really more a question of
[4:23] Speaker 7: trying to bring down rates. And as you can see there,
[4:28] Speaker 7: that didn't work immediately. Rates have gone up quite a
[4:31] Speaker 7: bit on the 10-year note. This is just early moments,
[4:35] Speaker 7: but we'll see how this plays out. The rates right
[4:37] Speaker 7: now are higher than they were when they first said
[4:40] Speaker 7: they were going to do this, Ed.
[4:44] Speaker 1: Treasuries falling, UK bonds also extending their drop. Mike McKee,
[4:47] Speaker 1: thank you very much. I'm live at Apple Park in Cupertino.
[4:50] Speaker 1: Let's get back to Los Angeles and Blumeau's Mark Gurman.
[4:53] Speaker 1: We were talking about the foldable iPhone that you've reported
[4:56] Speaker 1: will be called the iPhone Duo. I want to go
[4:59] Speaker 1: into some of the backstory, Mark, if we can. The
[5:02] Speaker 1: idea initially, and this work's been going on since before 2019,
[5:05] Speaker 1: when Samsung came to the market with a foldable, maybe
[5:08] Speaker 1: Apple looked at an iPad form factor. You're reporting details
[5:12] Speaker 1: that Tim Cook made a pretty clear intervention on this
[5:15] Speaker 1: needing to be an iPhone. And then John Ternus more
[5:17] Speaker 1: recently got it over the line. Bring us that reporting. Yeah,
[5:21] Speaker 1: it's exactly what you said, right?
[5:23] Speaker 3: Initially, Apple looked at foldable displays, its core technology teams.
[5:27] Speaker 3: This was over a decade ago. 2019, Samsung launches their phone,
[5:31] Speaker 3: Huawei launches their phones, Tim Cook goes to Asia, Korea, China,
[5:36] Speaker 3: sees that these are popular, gets enthusiastic about the category,
[5:39] Speaker 3: which was rare for him. He really was never close
[5:41] Speaker 3: to product development. Really pushed the hardware engineering team to
[5:45] Speaker 3: develop this into a phone. And around 2023, Apple had
[5:47] Speaker 3: its aha moment. where the core technologies, making the crease slimmer,
[5:54] Speaker 3: making battery life to a better place, durability to a
[5:56] Speaker 3: better place, that intersected with this idea of a passport-sized iPhone,
[6:02] Speaker 3: a shorter display, a wider internal display.
[6:05] Speaker 1: That all came together.
[6:06] Speaker 3: Now, three years later, this is coming to market in
[6:09] Speaker 3: just about a month and a half from now.
[6:13] Speaker 1: We're going to be speaking to Bloomberg's Mark Gurman, our
[6:15] Speaker 1: managing editor for ConsumerTech all day long. Big thank you
[6:19] Speaker 1: to Mark. Joining us here at Apple headquarters is Carolina Milanesi,
[6:22] Speaker 1: president and principal analyst at Creative Strategies. And what was
[6:25] Speaker 1: so interesting in some of the kind of history that
[6:27] Speaker 1: Mark detailed is Apple isn't always the first to enter
[6:30] Speaker 1: a category, but when it does, they're often ready. Your
[6:35] Speaker 1: expectations of how that would play out in the foldable category?
[6:40] Speaker 5: I mean, for Foldable, it's really about taking friction away
[6:43] Speaker 5: so that consumers are ready to take advantage of a
[6:47] Speaker 5: new form factor.
[6:47] Speaker 4: We are so used.
[6:49] Speaker 5: To a slab of glass that we've been using for
[6:51] Speaker 5: so long. So taking the software together with the hardware
[6:56] Speaker 5: and then the ecosystem of apps that will come alive
[6:59] Speaker 5: from a larger form factor. And it reminds me of
[7:03] Speaker 5: the iPad days, right? The beginning, it was like, basically,
[7:07] Speaker 5: it's an iPhone, but bigger. And that was enough for
[7:09] Speaker 5: people to understand what they could do with it. But
[7:12] Speaker 5: then it was the attention to the software and the
[7:15] Speaker 5: application that came optimized for that screen size that really
[7:19] Speaker 5: brought the device to life.
[7:22] Speaker 1: Taking an interest in the software story in two ways.
[7:25] Speaker 1: There's what Mark reported about how Apple has got ready
[7:29] Speaker 1: for the foldable on the software side, but it also
[7:32] Speaker 1: kind of links to Siri AI.
[7:34] Speaker 4: Absolutely.
[7:35] Speaker 1: Why do you think that?
[7:36] Speaker 5: Because I think there is a way for AI to
[7:39] Speaker 5: have all devices, all categories of devices really come together.
[7:44] Speaker 5: So I'll be curious to see if there are going
[7:47] Speaker 5: to be applications that Siri will have specifically on the
[7:52] Speaker 5: Duo or maybe that it plays out slightly differently. I'm
[7:56] Speaker 5: also curious to see if Apple have paid attention to
[7:58] Speaker 5: other devices aiding or coming together. with the Duo in particular.
[8:08] Speaker 5: You know, I don't know if it's something with the
[8:09] Speaker 5: earbuds or with AirPods or with watch that might bring
[8:15] Speaker 5: the ecosystem even tighter together.
[8:18] Speaker 1: Pricing is going to be one of the biggest watches
[8:22] Speaker 1: The Bloomberg reporting is that the Duo will have a
[8:26] Speaker 1: floor of about $ 2, 000, but for higher storage spec, $ 3, 000.
[8:30] Speaker 1: But even the next generation of iPhones being $ 100 higher
[8:34] Speaker 1: than the prior generation, Apple has to do that really,
[8:37] Speaker 1: don't they?
[8:38] Speaker 5: They don't have much of a choice. Supply chain is
[8:41] Speaker 5: what it is. Cost is going up. Obviously, you know,
[8:45] Speaker 5: one choice they could have had is eating into their margins.
[8:49] Speaker 5: I'm sure Wall Street wouldn't have appreciated that very much.
[8:52] Speaker 5: But it's that balance is how much they can give
[8:57] Speaker 5: back from a cost perspective to consumer, but also make
[9:01] Speaker 5: sure that they do have an upgrade cycle that matters
[9:05] Speaker 5: to them. And so it's that balance. And Apple has,
[9:08] Speaker 5: in a way, an advantage over other OEMs, which is
[9:12] Speaker 5: that they have a lot of content. They are generating
[9:16] Speaker 5: revenue from services. And so that's the other part, is balancing, okay,
[9:20] Speaker 5: maybe I'm not raising my prices as much because I
[9:23] Speaker 5: know that I have some money coming in from subscriptions,
[9:27] Speaker 5: which is something that others don't have.
[9:29] Speaker 1: How is Carolina Milanese and Creative Strategies modeling in John Ternus?
[9:36] Speaker 1: How do you do that? On the future, what might
[9:39] Speaker 1: be different for Apple?
[9:41] Speaker 5: I've been saying that at the end of the day,
[9:43] Speaker 5: you're still talking about Apple, right? So you're not having
[9:47] Speaker 5: a wild card that is going to now take the
[9:49] Speaker 5: company into a totally different direction, but it will make
[9:52] Speaker 5: its mark. And so from somebody that is coming from
[9:55] Speaker 5: engineering and product, I think as we turn more into AI,
[10:00] Speaker 5: that to me is really important. I've been saying for
[10:03] Speaker 5: a while that you still need to sell hardware before
[10:07] Speaker 5: you sell AI. And that is where the integration of
[10:10] Speaker 5: silicon hardware and software is going to bring AI to life.
[10:15] Speaker 1: The global smartphone market will probably be a billion units
[10:18] Speaker 1: this year, something like that. Foldables is going to be
[10:20] Speaker 1: a very small part.
[10:21] Speaker 5: Very small.
[10:21] Speaker 1: But if I can take you back to what Apple
[10:23] Speaker 1: said at earnings, it really surprised me. Put memories one side.
[10:26] Speaker 1: They basically said we misread demand. And so we didn't
[10:30] Speaker 1: place orders for the processors. Demand seems really robust around
[10:33] Speaker 1: the world. What are you seeing?
[10:36] Speaker 5: As much as we want to talk about what comes
[10:38] Speaker 5: after the phone, the phone, the smartphone is still our
[10:42] Speaker 5: most precious device. And I think that consumer, especially at
[10:45] Speaker 5: times of economic pressure, rely on this device so much
[10:50] Speaker 5: more because it's everything to you.
[10:52] Speaker 4: It's your internet device.
[10:53] Speaker 5: It's your calculator.
[10:55] Speaker 4: It's your wallet.
[10:56] Speaker 5: So we've become highly dependent. And over time, consumers have
[11:01] Speaker 5: proven that that's where they're going to put their money.
[11:04] Speaker 1: Just to go over the basics, you know, John Ternus
[11:06] Speaker 1: has been on stage before. It's just that this time
[11:08] Speaker 1: he's the CEO. Does it matter what he says, how
[11:12] Speaker 1: he says it? Oh, absolutely.
[11:14] Speaker 5: You know, not that, bless him, not that before it
[11:17] Speaker 5: didn't matter. But, you know, the weight that you carry
[11:20] Speaker 5: when you speak as a CEO versus, you know, a
[11:23] Speaker 5: lead engineer is very different. So yes, we'll be watching
[11:27] Speaker 5: and I'm curious to see what he will anchor himself
[11:31] Speaker 5: on as far as who he wants to be as
[11:33] Speaker 5: a CEO.
[11:34] Speaker 1: Very quickly, you've been on campus for 24 hours or so.
[11:37] Speaker 1: Is it different this time? There's a lot of excitement.
[11:41] Speaker 5: I think people are not just around the foldable iPhone,
[11:44] Speaker 5: but really about the change of the guard.
[11:47] Speaker 1: And what comes next. Carolina Milenanesi, Creative Strategies. Thank you
[11:51] Speaker 1: very much for being with us here at Apple Park Cupertino.
[11:54] Speaker 1: Coming up, we're going to talk through consumers' preference changes
[11:57] Speaker 1: and what it means for Apple with Nicole Peng from Omdia.
[12:00] Speaker 1: We'll be back from Apple Park in just a moment.
[12:02] Speaker 1: This is Bloomberg Tech. OK, let's get back to that
[12:13] Speaker 1: breaking news at the top of the hour. The U.S.
[12:15] Speaker 1: Treasury said it will buy up to $ 6 billion of
[12:18] Speaker 1: longer-dated government debt. This is the first operation under an
[12:21] Speaker 1: expanded buyback program. Bloomberg International Economics and Policy Correspondent Mike
[12:25] Speaker 1: McKee is back with us. I see market moves on
[12:28] Speaker 1: this news, Mike.
[12:29] Speaker 7: We're seeing the kind of moves that the Treasury Department
[12:32] Speaker 7: did not want to see as the 10-year note yield
[12:34] Speaker 7: rises on this news. Originally in August, when Treasury Secretary
[12:40] Speaker 7: Besson said they would increase the size of the Treasury's buybacks,
[12:44] Speaker 7: it was thought that it would bring down the yields some,
[12:49] Speaker 7: and it did in the short run. But then yields
[12:52] Speaker 7: started climbing again as people in the bond market started
[12:56] Speaker 7: worrying about things like the U.S. debt, about inflation. about
[12:59] Speaker 7: what's going on with the war in the Middle East,
[13:02] Speaker 7: and it looks like that is continuing through. Besson's buybacks,
[13:05] Speaker 7: as you mentioned, $ 6 billion, up to $ 6 billion. They
[13:08] Speaker 7: don't have to go that high, but they likely will.
[13:10] Speaker 7: Maturities between 10 and 20 years, and this operation will
[13:14] Speaker 7: take place tomorrow.
[13:16] Speaker 1: There should be a decent enough response to the auction.
[13:19] Speaker 7: Because there's a lot of paper out there that is
[13:22] Speaker 7: lightly traded and could get turned back into the Treasury.
[13:26] Speaker 7: What we didn't get today is any kind of indication
[13:28] Speaker 7: about how this is going to be paid for or
[13:31] Speaker 7: whether this is going to go on beyond this one operation.
[13:35] Speaker 7: They have been buying back regularly in this debt maturity
[13:39] Speaker 7: range $ 2 billion worth. And do they intend to keep
[13:43] Speaker 7: this at $ 6 billion? Will they raise it? Do they
[13:45] Speaker 7: go back to $ 2 billion? Those are unanswered questions right now.
[13:49] Speaker 7: And then the other unanswered question is, do they fund
[13:52] Speaker 7: this by selling more T-bills? Or do they fund this
[13:55] Speaker 7: out of the Treasury general account? It may depend on
[13:58] Speaker 7: how often they're going to continue to do this. So
[14:01] Speaker 7: still questions for the markets to have answers to, but
[14:03] Speaker 7: at least we know what the initial amount is.
[14:09] Speaker 1: That's quite a pop in yields we're seeing. What is
[14:12] Speaker 1: the Treasury trying to achieve here, Mike? What are they
[14:15] Speaker 1: trying to affect with this action?
[14:17] Speaker 7: This is coming under the rubric of the program that
[14:19] Speaker 7: they say is for liquidity help. They want to make
[14:24] Speaker 7: these bonds more liquid, more available to sell. So they
[14:29] Speaker 7: will be the buyer of last resort, which would then
[14:32] Speaker 7: give people in the Treasury market more money to buy
[14:35] Speaker 7: newer bonds. But really, the market thinks that that wasn't
[14:39] Speaker 7: really a problem. And they're just trying to bring down
[14:42] Speaker 7: yields because the higher the 10-year goes, the higher the
[14:45] Speaker 7: whole yield curve goes.
[14:47] Speaker 1: The more they have to pay.
[14:48] Speaker 7: In interest, and it's getting very, very expensive to do that,
[14:52] Speaker 7: plus the fact that we're seeing a reaction because the
[14:55] Speaker 7: debt keeps going up and these added interest payments only
[14:58] Speaker 7: add to that. So it's a kind of a vicious
[15:01] Speaker 7: circle that the market suspects the Treasury is trying to
[15:06] Speaker 7: sort of stop. The question is, can they? Maybe not,
[15:11] Speaker 7: if this is any indication of what's happening today. And
[15:14] Speaker 7: can they afford to keep doing this? Also, there's an
[15:17] Speaker 7: impact on the Fed because they want to take cues
[15:21] Speaker 7: from the Treasury market on what the economy is doing
[15:24] Speaker 7: and what the Fed should do. And instead, they're getting
[15:27] Speaker 7: a market that is manipulated by the Treasury and that
[15:30] Speaker 7: will throw off whatever they're calculating.
[15:36] Speaker 1: Lumos, Mike McKee, thank you very much. Equity is also
[15:39] Speaker 1: at session lows, but Apple on a points basis, one
[15:41] Speaker 1: of the biggest drags. Apple's foldable iPhone is expected to
[15:44] Speaker 1: be the crown jewel of product announcements later today, but
[15:47] Speaker 1: how will it fit into the wider picture of what's
[15:50] Speaker 1: a growing but nascent segment. Nicole Pang, Research VP covering
[15:53] Speaker 1: Consumer Hardware Application at Omdia is with me to discuss.
[15:58] Speaker 1: The pricing is the focus, right? They are going to,
[16:00] Speaker 1: according to Bloomberg's reporting, price iPhone Duo at $ 2, 000, up
[16:05] Speaker 1: to $ 3, 000 for higher spec storage. Where does that sit
[16:08] Speaker 1: in the market today?
[16:10] Speaker 4: Actually, it's not a surprise for us for this pricing.
[16:13] Speaker 8: It seems that all the foldable in the market is
[16:16] Speaker 8: sitting at around $ 1, 900 on the US dollars on a
[16:22] Speaker 8: retail price. And for Apple, we don't expect anything less
[16:27] Speaker 8: than that. It's still three times than the average selling
[16:32] Speaker 8: price of a normal smartphone in the market.
[16:36] Speaker 1: It is a premium market anyway, isn't it? I mean,
[16:38] Speaker 1: if you think about consumers in different geographies, a foldable
[16:42] Speaker 1: iPhone would almost be like designerware.
[16:46] Speaker 8: I will say that if you look at the market
[16:49] Speaker 8: data these days, in fact, China is more than 50%
[16:53] Speaker 8: of all the foldable chips.
[16:55] Speaker 1: The existing foldable market.
[16:57] Speaker 4: Exactly. And US is about 15%.
[16:59] Speaker 8: Then 12% is coming from developed Asia, for example, Korea, Japan. Indeed,
[17:08] Speaker 8: in those markets, they look at such a device as
[17:12] Speaker 8: very much premium and also early adopter. And what is
[17:18] Speaker 8: interesting is in China, the early adopters usually are.
[17:22] Speaker 4: Very high-end consumers as well.
[17:24] Speaker 8: So these fit in very well with what they need
[17:28] Speaker 8: and what they want at the same time.
[17:31] Speaker 1: How important is it that the iPhone Duo, which Bloomberg
[17:34] Speaker 1: is reporting is the name of this foldable to come
[17:37] Speaker 1: later today, is AI-ready, that they've taken into account the
[17:42] Speaker 1: AI age?
[17:44] Speaker 4: It's an interesting question. I will offer.
[17:47] Speaker 8: different perspective here. We did a consumer survey across the world.
[17:52] Speaker 4: Some of the places.
[17:54] Speaker 8: Are really keen to get everything AI, for example, India, China,
[17:59] Speaker 8: and US is somewhat in the middle. And we look
[18:03] Speaker 8: at Europe, it's much more reserved when it comes to
[18:06] Speaker 8: AI feature. We asked them what are the top factors
[18:11] Speaker 8: that influence how they buy a smartphone brand, how they.
[18:14] Speaker 4: Choose a smartphone brand.
[18:16] Speaker 8: More than 50% of the user, they want it from
[18:19] Speaker 8: a trusted company with reliable quality product.
[18:24] Speaker 4: Second factor, best user experience.
[18:27] Speaker 8: Third factors, best specs, top specs. Four factors, security, privacy.
[18:34] Speaker 8: So when it comes to AI feature, cool AI feature,
[18:38] Speaker 8: guess what? It comes down to the eighth of the
[18:41] Speaker 8: 12 factors that we asked them.
[18:43] Speaker 4: So these days, but we can't do without AI.
[18:47] Speaker 8: All the companies coming with cool AI feature, really helpful.
[18:52] Speaker 8: I think it's really fitting into the number two factor
[18:55] Speaker 8: where we're saying the best user experience.
[18:57] Speaker 4: So the AI ready.
[18:59] Speaker 8: What I'm thinking is not just AI feature that.
[19:03] Speaker 4: You're talking about.
[19:04] Speaker 8: Talking about or a GPT or a chatbot. It's more
[19:08] Speaker 8: about how you enhance the user experience. That is the
[19:11] Speaker 8: number two factors that are helping people to choose their.
[19:14] Speaker 1: Phone these days. But those other factors seem important as well.
[19:16] Speaker 1: Bloomberg's reporting detailed that Apple spent a lot of time
[19:21] Speaker 1: on the hinge. on the margin or the fold and
[19:25] Speaker 1: by necessity in a foldable you have to make some
[19:28] Speaker 1: compromise lower battery life lower quality camera yeah to achieve
[19:33] Speaker 1: the aesthetic um how important do you think those that
[19:37] Speaker 1: it will be that apple nails.
[19:38] Speaker 8: That that's why it takes so long so photo bear
[19:43] Speaker 8: is not new and then it's been like 10 years
[19:45] Speaker 8: already but what we're seeing quite a lot of breakthrough
[19:49] Speaker 8: actually only have in this two years.
[19:53] Speaker 4: For example, battery breakthrough.
[19:54] Speaker 8: There is a new battery technology that really enhance and
[19:57] Speaker 8: making it very thin and light at the same time
[20:00] Speaker 8: very durable. Hinge of course and then screen technology is
[20:04] Speaker 8: only just come out these two years and then making
[20:07] Speaker 8: it much better. reliable devices that you can use longer.
[20:11] Speaker 8: So I believe what we are looking at here is
[20:14] Speaker 8: not just the cost of purchasing a device, it's the
[20:17] Speaker 8: cost of owning it, which is actually preventing a lot
[20:21] Speaker 8: of people not buying it at the moment. How expensive
[20:26] Speaker 8: it might be taking to repair.
[20:28] Speaker 1: Nicole, Apple has spent 20 years trying to get us
[20:32] Speaker 1: to live our lives through a rectangle. this foldable iPhone
[20:37] Speaker 1: is going to be short and wide. Yeah. Like a passport,
[20:39] Speaker 1: we keep saying.
[20:40] Speaker 9: Yeah.
[20:41] Speaker 1: Is that what the form factor that the market wants?
[20:44] Speaker 8: I think it's another very interesting question, how we evolve
[20:48] Speaker 8: from a bar form factor that actually comes from a
[20:51] Speaker 8: feature phone.
[20:52] Speaker 4: Do you remember BlackBerry?
[20:54] Speaker 1: Just about.
[20:54] Speaker 8: So you have a screen on top and a keyboard
[20:57] Speaker 8: on the bottom.
[20:59] Speaker 4: But when you're coming to.
[21:02] Speaker 8: tablet how people consuming a lot of video content multitasking
[21:09] Speaker 8: it's a completely.
[21:09] Speaker 4: Different form factor so we are moving.
[21:12] Speaker 8: From actually a phone from a tablet light devices and
[21:18] Speaker 8: other also very interesting when you're looking at immersive experience
[21:22] Speaker 8: everything is about wide and a wider TV that you
[21:26] Speaker 8: got at home, a wider cinema screen, and now it's
[21:31] Speaker 8: a wider phone. So what we look at here is,
[21:35] Speaker 8: we found that from our other devices that you look at,
[21:38] Speaker 8: it's quite hard for people to go back to the
[21:42] Speaker 8: previous experience and when they're starting to experience a much
[21:44] Speaker 8: more immersive experience here. So this is especially important as
[21:49] Speaker 8: well in this AI world because all the interaction has
[21:54] Speaker 8: become much more voice-centric and we are consuming much more information.
[21:59] Speaker 4: On the phone.
[22:01] Speaker 8: So it could be a more AI-ready form factor compared
[22:06] Speaker 8: to previously it was a phone.
[22:07] Speaker 4: It's supposed to do what the phone needs to be doing.
[22:11] Speaker 6: Things like that.
[22:12] Speaker 1: Nicole Peng, Omdia on Bloomberg Tech here live at Apple
[22:15] Speaker 1: Park in Cupertino. Thank you very much. Another big story,
[22:18] Speaker 1: Amazon is tapping yet another corner of the global debt
[22:21] Speaker 1: market to fund its AI ambitions. Tech giant is expected
[22:24] Speaker 1: to raise more than 5.8 billion in its first ever
[22:27] Speaker 1: sterling bond sale, drawing nearly $ 16 billion in investor demand.
[22:32] Speaker 1: That's according to a Bloomberg source. Joining us now is
[22:35] Speaker 1: Bloomberg's Ronan Martin. The hyperscalers keep going and this is
[22:38] Speaker 1: an interesting sterling move by Amazon. What do we know?
[22:43] Speaker 4: Yeah, it is.
[22:44] Speaker 10: It's a kind of another market that the hyperscalers are tapping.
[22:49] Speaker 10: Amazon are following quite a well-trodden path at this point
[22:52] Speaker 10: of coming over to Europe to raise more debt. Amazon
[22:55] Speaker 10: obviously did a Euro deal earlier in the year, and
[22:58] Speaker 10: I think it's their fourth global bond so far this year.
[23:01] Speaker 10: They're following Alphabet into the sterling market. Slightly different deals
[23:07] Speaker 10: to Alphabet. Alphabet kind of tapped the market earlier on
[23:09] Speaker 10: in the year, in February, when demand was still going
[23:12] Speaker 10: crazy for these deals. They even sold that century, 100-year
[23:15] Speaker 10: century bond that really kind of blew it out of
[23:19] Speaker 10: the water.
[23:20] Speaker 1: This one's a little bit more reserved.
[23:21] Speaker 10: We're seeing investors pulling a bit more demand and kind
[23:25] Speaker 10: of placing a bit fewer bids for the deals. We
[23:31] Speaker 10: also see Uber in the market, a debut Euro bond sale.
[23:35] Speaker 1: It's interesting. I don't know that I saw this with
[23:38] Speaker 1: Uber happening. What's our reporting there? Yeah, it's an interesting one.
[23:42] Speaker 10: I think some of the first assumptions were it was
[23:45] Speaker 10: going to be around the delivery hero deal. But we're
[23:48] Speaker 10: hearing that that financing for that isn't going to be
[23:50] Speaker 10: until next year when that all gets approved. So this
[23:52] Speaker 10: is kind of just another diversifying their funding sources.
[23:57] Speaker 1: We're seeing the U.S.
[23:58] Speaker 10: Market has been so well tapped so far this year.
[24:01] Speaker 10: Hyperscalers have raised so much debt there. Even there's the
[24:04] Speaker 10: whole conversations around whether hyperscalers are affecting the Treasury market
[24:09] Speaker 10: with how much is going on there. And so for
[24:11] Speaker 10: these global companies, diversifying some of their debt into a
[24:16] Speaker 10: different market with European investors who typically massively underserved in
[24:22] Speaker 10: terms of tech companies, there just isn't that kind of
[24:24] Speaker 10: same level of tech issuance over here.
[24:27] Speaker 1: So for some investors.
[24:28] Speaker 10: This is a great opportunity to get a new name,
[24:30] Speaker 10: a well-known company.
[24:35] Speaker 1: Bloomberg's Bronan Martin with what's going in corporate debt. Thank
[24:38] Speaker 1: you very much. Coming up from Apple Park, Cupertino, IDCs,
[24:42] Speaker 1: Nabila Popal, with the impact that a foldable iPhone could
[24:45] Speaker 1: have in what is a nascent foldables market. We'll be
[24:48] Speaker 1: right back. This is Bloomberg Tech. Welcome back to Bloomberg Tech.
[25:07] Speaker 1: Let's get back to New York with Bloomberg's chief economic correspondent,
[25:09] Speaker 1: Mike McKee, for an update from the Treasury and the
[25:12] Speaker 1: buybacks and their impact on the markets.
[25:13] Speaker 3: Hi, Mike.
[25:14] Speaker 1: Hi, Ed.
[25:15] Speaker 7: Well, we're having a significant impact on the markets, at
[25:17] Speaker 7: least for the long-dated notes. The 10-year and 30-year at
[25:22] Speaker 7: this point yields are much higher after the Treasury announced
[25:26] Speaker 7: it would do $ 6 billion in buybacks in the 10
[25:29] Speaker 7: to 20-year space. The administration apparently looking to bring down
[25:33] Speaker 7: or at least control yields, and that goal is not
[25:37] Speaker 7: being met at the moment. The latest development is that
[25:40] Speaker 7: they have updated their buyback schedule going forward to show
[25:44] Speaker 7: that future buybacks.
[25:46] Speaker 1: In the 10 to 20-year space.
[25:48] Speaker 7: Will be $ 4.
[25:49] Speaker 1: Billion or greater.
[25:51] Speaker 7: Now, that's what they originally said on August 18th when
[25:53] Speaker 7: they announced this first buyback operation, that it would be
[25:57] Speaker 7: doubled to at least $ 4 billion, and they come in
[25:59] Speaker 7: at $ 6 billion. so they could easily raise those in
[26:02] Speaker 7: the future. But they're going to have to see how
[26:05] Speaker 7: this all plays out and whether this sell-off in bonds continues,
[26:10] Speaker 7: whether it sticks because of the market's concerns about the
[26:14] Speaker 7: overall U.S.
[26:16] Speaker 1: Debt.
[26:17] Speaker 7: It is a concern for the administration because the more
[26:21] Speaker 7: yields rise, the more expensive it gets to pay for this.
[26:24] Speaker 7: and the budget deficit gets bigger. Also, because it's the
[26:28] Speaker 7: 10-year note yield, that's tied to mortgages. Mortgage rates go up,
[26:32] Speaker 7: and that's not very good for a White House that
[26:33] Speaker 7: is trying to convince people to vote Republican in the
[26:37] Speaker 7: midterm election. So, Edward, keep an eye on this all
[26:40] Speaker 7: day and see if we fade this. It's faded just
[26:44] Speaker 7: a little bit, but it's still a big jump up
[26:47] Speaker 7: and not what Treasury may have been expecting. Bloomberg's Mike McKee,
[26:53] Speaker 7: thank you very much.
[26:54] Speaker 1: There's a lot going on in the world of technology,
[26:56] Speaker 1: in the world of AI, particularly when it comes to
[26:58] Speaker 1: the equities market. Bloomberg's Carmen Reinecke joins us now. Carmen,
[27:01] Speaker 1: what you got?
[27:02] Speaker 4: Thanks, Ed.
[27:03] Speaker 9: Yep, tech stocks are the biggest movers of the day today.
[27:07] Speaker 9: Shares of Meta are particularly having a great run. The
[27:10] Speaker 9: stock is having its best day in more than a
[27:12] Speaker 9: month as Wall Street analysts are cheering its Muse AI campaign.
[27:17] Speaker 4: Agent.
[27:18] Speaker 9: So this is something that people have sort of been
[27:20] Speaker 9: waiting for, looking really great here. Mizuho analysts are writing
[27:24] Speaker 9: that the agent marks the start of a substantial product
[27:28] Speaker 9: cycle that's not priced into shares. On the flip side,
[27:31] Speaker 9: we're seeing some big AI stocks also weighing on the NASDAQ.
[27:35] Speaker 1: It's down today.
[27:36] Speaker 9: Some of the biggest decliners are Amazon, Alphabet, and actually
[27:41] Speaker 9: Apple at this point. So Should be noted, Amazon and
[27:44] Speaker 9: Alphabet also have AI agents. There could be some competition there.
[27:48] Speaker 9: There's also the Bond sale, as well as Alphabet's Google
[27:51] Speaker 9: spending more than $ 15 billion in AI structure in Finland.
[27:57] Speaker 9: And of course, we're all watching shares of Apple.
[28:00] Speaker 4: Stock is actually seeing.
[28:02] Speaker 9: Some selling pressure today, heading into their event, obviously, later
[28:05] Speaker 9: in the afternoon. We're going to be watching here for
[28:07] Speaker 9: the new foldable iPhone. Back to you, Ed.
[28:12] Speaker 1: Okay, Bloomberg's Comrade Reinecke, thank you very much. Apple's new
[28:15] Speaker 1: foldable device is expected to come with a price tag
[28:18] Speaker 1: of around $ 2, 000. But despite that cost, a head start
[28:21] Speaker 1: by rival phone makers, IDC predicts Apple's entrance will breathe
[28:25] Speaker 1: new life. into the foldable space. Nabila Popal, Senior Research Director,
[28:29] Speaker 1: is with me. And I really want to dig into
[28:31] Speaker 1: the data here. What's interesting, actually, is we saw the
[28:34] Speaker 1: market for foldables, which is quite small, contract in the
[28:37] Speaker 1: first half of this year. But if you zoom out
[28:40] Speaker 1: for some clarity, you know, a billion smartphone units this year,
[28:44] Speaker 1: it's foldables where we could see growth and Apple's responsible
[28:47] Speaker 1: for it, to your mind.
[28:49] Speaker 4: Absolutely.
[28:49] Speaker 6: I mean, we haven't been this excited for an Apple
[28:51] Speaker 6: event in a long time. And, you know, with the foldable,
[28:55] Speaker 6: as everyone's expecting to launch from Apple, it's going to
[28:59] Speaker 6: reignite growth, right? And not just reignite growth in a
[29:03] Speaker 6: overall smartphone market that's declining, but to a very high
[29:06] Speaker 6: value segment, which currently is only under 2% of the market.
[29:09] Speaker 6: So we're expecting Apple already within the first four months
[29:12] Speaker 6: of launch to grow.
[29:13] Speaker 4: Capture 30% share.
[29:15] Speaker 6: Obviously, it's very small, but still very relevant foldable market.
[29:19] Speaker 1: So Bloomberg's reporting is that the iPhone Duo is what
[29:22] Speaker 1: it will be called, goes on sale in October. Wall
[29:26] Speaker 1: Street estimates vary, actually. 6 million units, 10 million units
[29:29] Speaker 1: in the December quarter. What does IDC think is possible?
[29:33] Speaker 6: We are forecasting about 10 million units in the first
[29:37] Speaker 6: 12 months of launch. So, I mean, we're really, you know,
[29:40] Speaker 6: I think just given those numbers and then by the
[29:42] Speaker 6: end of next year, so Apple will capture about 40%
[29:45] Speaker 6: share and just over 30% this year. So there is,
[29:49] Speaker 6: you know, given the fact that the total foldable market
[29:52] Speaker 6: is about 23 million this year, that's going to, you know,
[29:54] Speaker 6: make up a huge portion. But more importantly, we're excited
[29:58] Speaker 6: about to see how Apple brings more relevance to the category, right?
[30:02] Speaker 6: What are the new elements that it brings to play?
[30:03] Speaker 6: Because it's a very crowded market. Foldables have been around
[30:07] Speaker 6: for eight years now and there's a ton of competition.
[30:09] Speaker 6: So how is Apple really going to stand out and
[30:11] Speaker 6: differentiate the product aside from its obviously, you know, brand
[30:15] Speaker 6: value that it has?
[30:16] Speaker 1: What does IDC feel is most important then for the
[30:19] Speaker 1: product itself? What is it that Apple has to have
[30:22] Speaker 1: got absolutely right when they show us this foldable later today?
[30:26] Speaker 6: Well, considering it's going to be at a banging price
[30:29] Speaker 6: of $ 2, 000 or $ 2, 500, right? We don't know where it's
[30:31] Speaker 6: going to land. We're expecting on the higher end of
[30:34] Speaker 6: that range. And the most important thing is going to
[30:37] Speaker 6: be really the look and feel. It has to feel premium.
[30:40] Speaker 6: They have to get the... decrease, right? It was rumored
[30:43] Speaker 6: to be, you know, invisible. So let's see how they get.
[30:46] Speaker 6: But I think more importantly, to make the product relevant
[30:49] Speaker 6: or really impressive is how are they going to define
[30:53] Speaker 6: and polish the user experience? Until now, consumers are really like, eh,
[30:57] Speaker 6: you know, why do I really need a foldable and
[30:58] Speaker 6: what can I do differently? So the seamless, you know,
[31:02] Speaker 6: the Apple's all really great about, you new things in
[31:05] Speaker 6: a very user-friendly way. So I'm excited to see how
[31:09] Speaker 6: Apple brings, what it brings to the OS, right, in
[31:13] Speaker 6: terms of the extra screen size and what can you
[31:16] Speaker 6: really do with it. So I'm excited to see how Apple,
[31:18] Speaker 6: I'm curious what Apple does about that.
[31:21] Speaker 1: The luxury or premium segment is really interesting in the
[31:24] Speaker 1: context of China. You were cited by Boombox Mark Gurman
[31:28] Speaker 1: in his latest piece, likening the potential of the foldable
[31:32] Speaker 1: phone to what we see in the luxury bag space.
[31:36] Speaker 1: Explain that bit to me.
[31:37] Speaker 4: Right, the Birkin comment.
[31:38] Speaker 1: The Birkin, yeah.
[31:39] Speaker 6: Well, you know, last year, orange of the 17 was
[31:43] Speaker 6: so popular and Chinese consumers were liking it to the
[31:46] Speaker 6: Hermes orange, right? So I was saying, yes, with this,
[31:48] Speaker 6: despite this high price, I won't be surprised if the
[31:51] Speaker 6: new iPhone foldable, you know, or Duo, whatever it ends
[31:55] Speaker 6: up being called, ends up being like the new Birkin
[31:57] Speaker 6: of smartphones, right? So high price, very luxurious, very limited.
[32:02] Speaker 6: And so, you know, that's why I do think that
[32:04] Speaker 6: it's going to be a blockbuster product.
[32:06] Speaker 1: It's We have the IDC numbers and expectations both for
[32:09] Speaker 1: China for the foldable segment, but also just in general
[32:13] Speaker 1: globally over to the end of this decade. What's the
[32:17] Speaker 1: pathway for foldables over the next few years and how
[32:20] Speaker 1: big a driver is Apple of that growth?
[32:23] Speaker 6: So, you know, the two largest markets for foldables are U.S.
[32:27] Speaker 6: and China. China with over 60 percent share and U.S.
[32:31] Speaker 6: with over 20 percent share. Now, Apple is almost 50
[32:34] Speaker 6: percent of the U.S.
[32:35] Speaker 1: Market.
[32:35] Speaker 6: So right there, it tells you that Apple being the
[32:37] Speaker 6: largest number one player in the U.S., for example, and
[32:39] Speaker 6: now number two. um two in china it's going to
[32:42] Speaker 6: um you know launching a foldable device it's going to
[32:45] Speaker 6: really take momentum add momentum to the category um and
[32:50] Speaker 6: increase the share of the foldable space but more importantly
[32:52] Speaker 6: it's going to add a ton of value to you
[32:54] Speaker 6: know apple's proposition um and revenue.
[32:58] Speaker 1: Really quick is there anything else you're watching out for
[33:00] Speaker 1: beyond the foldable Yeah.
[33:02] Speaker 6: I'm actually super excited to see what they do with
[33:06] Speaker 6: the rumored red or burgundy or whatever color it's going
[33:09] Speaker 6: to be launched. I'm a big colors person last year. Yes,
[33:12] Speaker 6: the orange was a big hit, but it wasn't my thing.
[33:14] Speaker 6: So I am really excited to see where in that
[33:17] Speaker 6: range they fall. And then, of course, the camera improvements
[33:20] Speaker 6: with the Pros and Pro Max.
[33:21] Speaker 1: The 18th generation. Nabila Popal, Senior Research Director, IDC. Great
[33:24] Speaker 1: to have you back on the show. Thank you. Thank
[33:26] Speaker 1: you very much. Now, coming up, defense tech startup Covenant
[33:29] Speaker 1: emerges from stealth with a long-range missile built to close
[33:32] Speaker 1: the West's deep precision strike gap. Covenant President Abby Denberg
[33:36] Speaker 1: joins us next. This is Bloomberg Tech. An AI researcher
[33:55] Speaker 1: has resigned from Anthropic and called on other staffers to
[33:58] Speaker 1: rethink their work. In a post on X, Jacob Coxon
[34:01] Speaker 1: cited his concern that the company and its top competitor, OpenAI,
[34:05] Speaker 1: are acting irresponsibly in their all-out pursuit of a technology
[34:09] Speaker 1: that possesses increasing safety concerns, saying, quote, they are racing
[34:12] Speaker 1: straight to self-improving superintelligence and gambling with our lives. Bloomberg's
[34:17] Speaker 1: senior tech editor, Mike Shepherd, joins us with the details.
[34:20] Speaker 1: This is kind of a two-parter as well, because after
[34:22] Speaker 1: that initial post from the employee that had resigned, one
[34:25] Speaker 1: of his colleagues, a current anthropic researcher, weighed in as well.
[34:30] Speaker 11: Yes, and this all stands out, really, because we have
[34:33] Speaker 11: heard for I don't know how long, and you and
[34:35] Speaker 11: I have talked about it from time to time, all
[34:38] Speaker 11: this Doomer talk surrounding artificial intelligence, And the speed at
[34:43] Speaker 11: which it is being developed by all these companies. And
[34:46] Speaker 11: these calls have been dismissed somewhat by the industry to
[34:49] Speaker 11: a point. But now we're hearing the call coming from
[34:52] Speaker 11: inside the house in a way. And it really is
[34:54] Speaker 11: not only a warning to the public, it is also
[34:58] Speaker 11: a warning to AI employees themselves. The poster who just
[35:02] Speaker 11: resigned from Anthropic, Jacob Cox, and really did tell his
[35:06] Speaker 11: fellow researchers to think twice about what they're doing and
[35:09] Speaker 11: whether they want to be associated with something that could
[35:12] Speaker 11: potentially have such grave consequences. And we have heard this
[35:15] Speaker 11: message from other employees within Silicon Valley who work in
[35:19] Speaker 11: artificial intelligence in July 2020. there was that letter that
[35:22] Speaker 11: was signed by 1,100 OpenAI, Anthropic, and other AI industry
[35:28] Speaker 11: employees urging the industry to pace development of artificial intelligence
[35:34] Speaker 11: so that they can reckon with some of the risks.
[35:36] Speaker 11: But now we're in kind of a new phase of
[35:38] Speaker 11: the game, the introduction last week of Astra, which some.
[35:42] Speaker 1: Have hailed, including Jensen Wang, as.
[35:44] Speaker 11: What we would term AGI, the point at which the
[35:47] Speaker 11: intelligence can outpace and outwork humans, That really puts us
[35:52] Speaker 11: in a different territory, and that highlights what Jacob Coxson
[35:55] Speaker 11: posted today.
[35:59] Speaker 1: The specific line that everyone's talking about online on social
[36:03] Speaker 1: media is the likelihood in the next decade that AI
[36:08] Speaker 1: wipes out humanity. Could you just explain that bit very quickly, Shep?
[36:13] Speaker 11: Well, one of the concerns is that AI really does
[36:15] Speaker 11: have this ability now on a cybersecurity front on a
[36:19] Speaker 11: health development front, in all of these areas to potentially
[36:23] Speaker 11: upend security as we know it. Waging cyber attacks that
[36:28] Speaker 11: could disrupt the financial system en masse. Being used to
[36:31] Speaker 11: develop bioweapons that really pose, as you put it and
[36:35] Speaker 11: as the poster put it, an existential threat. Now, that
[36:38] Speaker 11: is prompting some reflection here in Washington and a number
[36:41] Speaker 11: of calls from politicians, including Senator Bernie Sanders himself, for
[36:45] Speaker 11: steps to halt this and really to ban what he
[36:47] Speaker 11: called superintelligence really as a protective measure. We're hearing a
[36:51] Speaker 11: lot of that reaction today in response on Capitol Hill,
[36:54] Speaker 11: but it is important to note that the Trump administration
[36:57] Speaker 11: so far has really looked away from the safety question.
[36:59] Speaker 11: The president himself last week saying in response to safety
[37:03] Speaker 11: concerns that the priority really is continuing with AI development
[37:08] Speaker 11: unfettered because he sees it as essential to propelling the
[37:13] Speaker 11: US economy and also keeping pace against China in the
[37:16] Speaker 11: race to dominate.
[37:20] Speaker 5: AI.
[37:21] Speaker 1: Mike Sheppard with the reporting. Thank you very much. Let's
[37:23] Speaker 1: stay with private markets and startups. Andreessen Horowitz-backed startup Covenant
[37:27] Speaker 1: is emerging from stealth after raising more than $ 250 million
[37:30] Speaker 1: from three different funding rounds. The defense tech firm has
[37:34] Speaker 1: already signed military contracts across the US and Europe and
[37:37] Speaker 1: says it can make cheaper, heavy payload, long range cruise missiles.
[37:41] Speaker 1: Covenant President and Chief Growth Officer Abby Denberg is with us.
[37:45] Speaker 1: Really interesting reading about government. Let's start with the technology
[37:49] Speaker 1: that you're working on. What is this most akin to
[37:52] Speaker 1: in terms of what's already out there in the American
[37:55] Speaker 1: defense industrial base?
[37:57] Speaker 12: I'm joining you at your power production facility in Dallas, Texas.
[38:01] Speaker 12: And behind me, you can see the Anthem, which is
[38:04] Speaker 12: a low-cost, long-range cruise missile designed to fill the deep
[38:08] Speaker 12: precision strike gap.
[38:09] Speaker 1: And we talk.
[38:10] Speaker 12: About heavy payload and long range. There's not a lot
[38:14] Speaker 12: of capability out there that can achieve that, and there's
[38:17] Speaker 12: no capability that can achieve that today at the price
[38:20] Speaker 12: and scale that we're offering.
[38:25] Speaker 1: Abby, that looks to me, all the way over here
[38:28] Speaker 1: from Cupertino, but also from the description, sounds to me
[38:31] Speaker 1: very similar to a Tomahawk missile. Is that fair?
[38:35] Speaker 12: What I can say is that Anthem is offering... exquisite capability,
[38:40] Speaker 12: but at an affordable price point. We as a nation
[38:43] Speaker 12: have relied heavily on exquisite capabilities that at the moment
[38:48] Speaker 12: are not at an affordable price point and not.
[38:50] Speaker 6: Being produced at scale.
[38:51] Speaker 12: And we're eager to be able to bring affordable mass
[38:54] Speaker 12: to strategic range.
[38:59] Speaker 1: Abby, it's $ 250 million out the gate. That's a lot
[39:02] Speaker 1: of money to come out of stealth. I go back
[39:04] Speaker 1: to the note that it's three separate rounds that happened
[39:07] Speaker 1: over time. But talk about the experience of raising those
[39:10] Speaker 1: funds and coming out of stealth right now. Why this moment?
[39:16] Speaker 12: I'll start with the rounds because what I can say
[39:18] Speaker 12: is we have an incredible cap table with investors who
[39:21] Speaker 12: truly understand the deep precision strike gap today. We went
[39:26] Speaker 12: to market for our seed round two years ago. and
[39:29] Speaker 12: that was before deep precision strike was really talked about
[39:33] Speaker 12: in the way that it is today. But we found
[39:35] Speaker 12: investors that really understand the criticality of bringing affordable munitions
[39:41] Speaker 12: into the marketplace. And we have been able to leverage
[39:45] Speaker 12: that over the last two years to be able to
[39:47] Speaker 12: build a and develop the capability that you're seeing behind
[39:50] Speaker 12: me today. And so when we think about that capital,
[39:53] Speaker 12: it enables us to build a resilient, redundant supply chain
[39:56] Speaker 12: and multiple production facilities in order to enable capability fielded
[40:01] Speaker 12: as early as 2027.
[40:01] Speaker 1: Abi, tell me about the team. What are the core
[40:07] Speaker 1: competencies of those of you that are building Covenant right now?
[40:12] Speaker 1: Where have you all come from?
[40:15] Speaker 12: We have, and I'm sure many CEOs and presidents would
[40:17] Speaker 12: say this, but we have the best engineering team in
[40:20] Speaker 12: the world. We have been very intentional about bringing in
[40:23] Speaker 12: only those that are really mission-driven and focused. And the
[40:26] Speaker 12: employee base is made up of reservists like myself. veterans
[40:31] Speaker 12: and patriots who are so driven by this mission that
[40:34] Speaker 12: we have worked tirelessly in order to deliver this capability.
[40:38] Speaker 12: We went from ideation to a full-scale operational prototype in
[40:41] Speaker 12: 11 months at one day. And that stems from having
[40:45] Speaker 12: missile engineers who've been doing this for 20-plus years. Our
[40:48] Speaker 12: chief technology officer was the chief system engineer of Iron Dome.
[40:52] Speaker 12: And we have engineers from across the globe that are
[40:54] Speaker 12: working with us in order to bring forward a capability
[40:58] Speaker 12: that executes.
[41:03] Speaker 1: Let's go to what happens next. You've raised the money.
[41:05] Speaker 1: You're joining us from the facility in Dallas. You're headquartered
[41:08] Speaker 1: in Washington, D.C. What do you guys need to do
[41:11] Speaker 1: to get going? We already talked about the contracts you
[41:13] Speaker 1: have with both U.S. but also Western allies. Where's your
[41:16] Speaker 1: main focus right now with these funds?
[41:20] Speaker 12: The focus is to deliver. A lot of startups can
[41:24] Speaker 12: deliver prototypes, and we've seen that. But the question is not,
[41:27] Speaker 12: can new companies bring forward interesting technology? The question is,
[41:32] Speaker 12: can they produce at scale? And that's what Covenant is
[41:35] Speaker 12: about to do next. We are going to be delivering prototypes.
[41:38] Speaker 12: thousands of missiles. This production facility will be delivering a
[41:42] Speaker 12: thousand missiles next year and is designed to deliver 5,000
[41:45] Speaker 12: a year. The same is true of our production facility
[41:47] Speaker 12: in Germany. And so what's next is delivery, because ultimately
[41:52] Speaker 12: this is a deterrence capability. And the way that deterrence
[41:55] Speaker 12: actually is effective is having munitions at the hands of
[41:58] Speaker 12: our end users.
[42:03] Speaker 1: Covenant President and Chief Growth Officer, Abby Denberg, the startup
[42:06] Speaker 1: coming out of stealth with $ 250 million. Great to have
[42:09] Speaker 1: you on the show. Thank you very much indeed. Now
[42:11] Speaker 1: coming up, a new iPhone and a new era for Apple.
[42:14] Speaker 1: We're counting down to Apple's biggest, probably most consequential event
[42:17] Speaker 1: in years, and it is all about a foldable iPhone.
[42:21] Speaker 1: More to come. This is Bloomberg Tech.
[42:32] Speaker 4: Thank you.
[42:43] Speaker 1: The curtain's about to go up on Apple's big event.
[42:46] Speaker 1: So what's coming and what's going to steal the show?
[42:48] Speaker 1: Bloomberg Consumer Tech reporter Chris Welch is with me here
[42:50] Speaker 1: at Apple Park Cupertino. And let's just be honest, foldable.
[42:54] Speaker 1: And it has a name, according to Bloomberg's reporting.
[42:56] Speaker 2: It's called the iPhone Duo, which is going to take
[42:58] Speaker 2: some getting used to. Not the iPhone Fold, not the
[43:00] Speaker 2: iPhone Ultra, but the iPhone Duo. I guess that, you know,
[43:03] Speaker 2: you have a foldable, right? You are a user of
[43:05] Speaker 2: a foldable. Duo represents that it has two modes. Our
[43:10] Speaker 2: reporting is that when folded, it has one screen size.
[43:13] Speaker 2: When unfolded, it has a different one.
[43:15] Speaker 1: Explain.
[43:16] Speaker 2: So it's got a very wide form factor when it's open.
[43:18] Speaker 2: So that's great for watching movies or showing photos to
[43:20] Speaker 2: your friends or... stuff like eBooks. So it's got like
[43:24] Speaker 2: a lot of great use cases. But when it's closed,
[43:26] Speaker 2: it's kind of like a squat, short form factor, which
[43:28] Speaker 2: people aren't really used to. So I think it's going
[43:29] Speaker 2: to be like a learning curve once people get their
[43:31] Speaker 2: hands on this phone, it's going to feel very different.
[43:33] Speaker 1: We're starting to hear the cheers behind us of everyone
[43:36] Speaker 1: that's gathering at the Steve Jobs Theatre. This market's really interesting.
[43:41] Speaker 1: So IDC says there'll be a billion smartphone units shipped
[43:45] Speaker 1: this year. Actually, foldables are very small. Yes. They're a
[43:48] Speaker 1: very niche market. But there seems to be some hope,
[43:51] Speaker 1: at least in our reporting, that Apple's going to give
[43:54] Speaker 1: this segment a bit of a push. Yeah, for sure.
[43:56] Speaker 2: I mean, Samsung kind of pioneered this category. They've been
[43:59] Speaker 2: in it for years. They've also got Google. friends like Motorola, Huawei,
[44:03] Speaker 2: they've been at this for a long, long time, but
[44:05] Speaker 2: now Apple's here. This is the first John Turner's keynote,
[44:08] Speaker 2: no pressure, here's our first ever folding iPhone. And so
[44:11] Speaker 2: they're gonna come into this market and we're gonna see
[44:13] Speaker 2: how it looks, how they made it, the hinge, the crease,
[44:17] Speaker 2: will there be a crease? Have they solved the crease factor?
[44:19] Speaker 1: That's been around forever.
[44:20] Speaker 2: So there are so many challenges, but I think it's Apple.
[44:23] Speaker 2: It's gonna have some kind of unique spin that's gonna
[44:25] Speaker 2: make it pretty special.
[44:26] Speaker 1: Now you and the team have detailed pretty clearly that
[44:28] Speaker 1: this work's been going on behind the scenes at Apple.
[44:31] Speaker 1: for quite a long time. I guess they must be ready?
[44:35] Speaker 1: You would think so.
[44:35] Speaker 2: I mean, it's going to ship next month, apparently. So
[44:37] Speaker 2: it's going to be somewhat of a wait, but they're ready.
[44:40] Speaker 2: I mean, this has been like a several years long effort.
[44:45] Speaker 2: So we're going to see what it looks like here.
[44:47] Speaker 2: You know, it's got this, this feels like a big event.
[44:49] Speaker 2: It's got that air of like a special day. This
[44:52] Speaker 2: is not your typical iPhone event, so it's pretty exciting.
[44:54] Speaker 1: You've done a few of these. I've done a few
[44:56] Speaker 1: of these. And you should be able to get your
[44:58] Speaker 1: hands on what we think will be called iPhone Duo.
[45:01] Speaker 1: What is it that you check for in the first
[45:03] Speaker 1: instance with a foldable? Just how it feels, how it opens.
[45:05] Speaker 1: Is it reassuring?
[45:06] Speaker 2: Does it feel like high quality? Because people take these
[45:09] Speaker 2: things to the beach, they take them all over the world,
[45:11] Speaker 2: so it's got to be durable, it's got to work well.
[45:13] Speaker 2: This is Apple, so that's not going to be a
[45:14] Speaker 2: huge concern for most people, I feel like.
[45:16] Speaker 1: Chris and the team are going to be very busy today.
[45:19] Speaker 1: We're about an hour from the keynote where we expect
[45:22] Speaker 1: John Ternus, who became CEO on September 1st, to kick
[45:25] Speaker 1: things off. And the main event to be a foldable
[45:28] Speaker 1: iPhone that Bloomberg reports will be called Duo. Bloomberg's Chris Welch.
[45:31] Speaker 1: Thank you very much.
[45:32] Speaker 2: Thank you so much, Ed.
[45:32] Speaker 1: Indeed. That does it for this edition of Bloomberg Tech.
[45:36] Speaker 1: Don't forget, check out the podcast. We had a lot
[45:37] Speaker 1: of interesting... conversations that looked at the foldable market more holistically,
[45:42] Speaker 1: the forecasts for this year, what Apple's impact might be,
[45:46] Speaker 1: and also what the impact of a $ 2, 000, maybe more
[45:49] Speaker 1: than $ 2, 000 handset will be in the foldable space. You
[45:52] Speaker 1: can find the podcast on all the Bloomberg platforms and
[45:54] Speaker 1: on Spotify, iHeart, and on Apple. From Cupertino from Apple Park,
[46:01] Speaker 1: this is Bloomberg Tech.
[46:09] Speaker 4: Thank you.

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