Stephen Carroll

And what that would allow them to do is tap into a new app store section they're building, and then that would allow them to take 30% or whatever the slice is that they agreed to with that AI provider to up their subscriptions to the higher end tiers on those devices.

So they're going to make money there.

And so this is them doubling down on their hardware as a platform, doubling down on their services strategy, really slightly bowing out of the AI race here as they continue to see how this is going to end up developing.

And as I reported earlier this week, they're also working on some new first-party features like that Siri app, the ability to access Siri from the keyboard more easily.

And so they are continuing to push forward there.

And as we've talked about numerous times, they are rebuilding their underlying models using technology from Gemini.

You broke another story about Apple, but what's happening internally with comp, super interesting.

There seems to be a return to a sort of bonus or incentive structure for the teams that work on design.

What do we need to know here and what are the kind of numbers involved?

Yeah, one of the biggest issues Apple is grappling with are companies sort of circling it like sharks given the AI situation there and the AI crisis they've really been facing.

And different companies, OpenAI in particular, wanting to poach their best hardware engineering talent.

And so what Apple is doing is trying to respond to that by giving one-time bonuses, RSUs, these vests over four years.

to some of the key talent, particularly this week, it was the iPhone product design team within the hardware engineering group, incentivizing them to stay and not jump ship to open AI.

It's difficult to tie those two stories together because as you've just outlined, the bonuses are going to the iPhone design team, but the bigger environmental picture is AI talent.

What about those AI teams?

talent per se.

So what OpenAI is doing, they are building hardware, they are building devices.

And as you know, Apple has some of the best hardware engineering talent in the world for building devices.

And so what OpenAI wants to do is they want to marry that fit and finish of Apple.

They want to marry that hardware engineering capability of Apple with their own AI models that they consider industry leading.