FOLKS MANY PALMETO STATE HAVE TO
WORRY ABOUT IT.
CALIFORNIA AND FOR THE FIRST
TIME EVER YOU COULD STREAM THE
WHOLE THING LIVE ON TWITTER,
BIGGEST BUZZ CENTERED AROUND A
LARGER AND PRICIER IPHONE,
JOINING ME TO DISCUSS SENIOR
ANALYST ANGELO AND CHIEF ANALYST
FOR DISRUPTIVE TECH RESEARCHING,
THANK YOU SO MUCH FOR JOINING US
ANGELO.
>> THANKS FOR HAVING ME.
MARIA: WHAT TO EXPECT IN THE
EVENT?
>> THIS EVENT WILL BE FOCUSED ON
IPHONES TO BE ANNOUNCED, ONE, OF
COURSE, WOULD BE REGULAR UPGRADE
TO IPHONE 10 THAT WE SAW LAST
YEAR WITH NICE INTERNAL UPDATES
AND SEE A LARGER PRICIER SCREEN
IPHONE, 6 AND A HALF INCHES,
VERY SIMILAR TO THAT IPHONE 10
DEVICE AND THEN WE ALSO EXPECT A
LOWER PRICED LCD PHONE WHICH
WILL BE A 6.1-INCHES, LARGEST
GOT THE IPHONE 10 LIKE I DID
INITIALLY AND THEN I WAS
DISAPPOINTED WITH IT, DO YOU
THINK PEOPLE WILL RUN OUT AND
GET THE PHONES RIGHT AWAY?
>> LOOK, I DO THINK SO, BIGGER
IS BETTER HERE, THE LATEST
RESEARCH SHOWS THAT PEOPLE USE
BIGGER SMARTPHONES FOR MORE
APPS, MORE VIDEO GAMES AND TAPLE
IS TAPPING INTO THAT, TODAY WILL
BE A YAWNER OF AN EVENT, APPLE
DOESN'T INNOVATE MASSIVELY, THEY
NEED TO ITERATE TO GROW.
MARIA: THE COMPANY HAS BEEN
COMPLAINING ABOUT THE TARIFF
FIGHT WITH CHINA IMPACTING ITS
GROWTH, PRESIDENT TRUMP SAYS THE
IPHONE SHOULD BE A SYMBOL
DOMESTICALLY TO AVOID BEING HIT
WITH PROPOSED TARIFFS BY CHINA,
SOME ANALYSTS SAY THAT WILL
RAISE PHONE PRICES BY 20%,
WHAT'S YOUR TAKE ON THAT?
>> WE WOULD AGREE, IF YOU WERE
TO BRING A LOT OF THAT
PRODUCTION IN-HOUSE HERE WITHIN
THE U.S., THE COMPONENT COSTS
WOULD BE TOO HIGH TO MAKE THAT
FEASIBLE, OUR VIEW CAN APPLE
BRING SOME OF THAT PRODUCTION
HERE INSIDE, YES, YOU WILL SEE
SOME OF THAT VIA DISPLAYS WHICH
HAS BEEN ANNOUNCED WITH THE
RELATIONSHIP WITH FOXCON BUT I
WOULDN'T EXPECT ANY TIME IN THE
FUTURE TO CIRCUMVENT TARIFFS VIA
PRODUCING IT HERE IN THE U.S.
MARIA: IT'S NOT THAT EASY TO DO,
APPLE HAS 1.3 MILLION PEOPLE
WORKING ON THE IPHONE IN CHINA,
HOW DO YOU REPOSITION THOSE
PEOPLE TO DO IT IN AMERICA?
YOU DON'T THINK TARIFFS WILL
HAVE MUCH OF AN IMPACT, DO YOU?
>> MAYBE I'M THE CONTRARIAN, YOU
WILL NOT WORK WORK DOMESTICALLY
AND TARIFFS DON'T AFFECT IPHONE.
MAYBE STEVE COOK FITS POLITICAL
GESTURE.
APPLE, YOU HAVE A COMPANY THAT
HAS THE BEST PRICING POWER OUT
OF ANY COMPANY EVER IN EXISTENCE
AND ACTUALLY 50 TO A 100 BUCKS
ON A THOUSAND DEVICE IS NOT
GOING TO DETER BUYERS, IF YOU
HAVE ANY DOUBTS LOOK AT THE LAST
REFRESH, SO MANY PUNDITS WERE
CONCERNED THAT THEY WOULD NOT
BUY IPHONE 10, WHAT HAPPENED THE
OPPOSITE.
MARIA: INTERESTING, HOW WOULD
YOU COMPARE THE U.S. CUSTOMER TO
OVERSEAS, THE IPHONE HAS NOT
PERFORMED WELL IN PLACES LIKE
CHINA, INDIA, WHAT CAN BE DONE
TO UP THAT COMPETITION?
>> YEAH, WHEN WE LOOK AT THE
DIFFERENCE HERE BETWEEN EMERGING
AND EVOLVED MARKETS, APPLE HAS A
GREAT PRESENCE WITHIN THE MORE
DEVELOPED MARKETS SPECIFICALLY
CHARGE THOSE CUSTOMERS, THAT
BEING SAID, YOU KNOW, WE DO
THINK PART OF THE REASON THEY
ARE LOOKING TO LET'S SAY
CONTINUE TO HAVE A LOWER PRICED
OPTION AND FOR THEM A LOWERED
PRICE OPTION WOULD BE 699, TO
TRY TO CONTINUE GRAVITATE AREAS
FETCH TODAY THINK THAT APPLE
WILL BE ABLE TO BE SUCCESSFUL IN
BUSINESS WORKS.
MARIA: HOW DO YOU THINK THE
TARIFF FIGHT PLAYS OUT FOR
APPLE?
>> CURRENTLY WE ONLY EXPECT 5 OR
6% OF REVENUE BEING EXPOSED,
FROM THE PROPOSED TARIFFS THAT
HAVE BEEN ANNOUNCED, THAT BEING
THE WATCH, THE AIRPODS AND WHAT
HAVE YOU, MINIMAL AT BEST HERE,
LEVEL, YOU KNOW, WE ACTUALLY
AGREE WITH LOU HERE IN THE SENSE
THAT THEY'D BE ABLE TO PASS A
GOOD CHUNK OF THE HIGHER PRICES
TO CONSUMERS, MAYBE ABOUT 10% OF
THAT BUT AT THE END OF THE DAY,
I MEAN, WE CONTINUE TO BELIEVE
THAT IPHONES WILL NOT BE TOUCHED
A 25-DOLLAR TARGET.
MARIA: LOU, YOU'RE NOT WORRIED
ABOUT GROWTH GETTING IMPACTED.
>> I'M NOT WORRIED ABOUT GROWTH
BEING IMPACTED.
DOMINANCE IS SECURED, THEY HAVE
THE HIGHEST ASP'S, THE HIGHEST
PROFIT MARGINS, THEY TAKE THE
LION SHARE OF THE SMARTPHONE
PROFITS, THEY HAVE PROVEN TIME
AND TIME AGAIN, TIM COOK HITS
SINGLES AND DOUBLES AND THE
PROOF IS IN THE SCORE BOARD, THE
STOCK IS UP 250%, 300% UNDER
TENURE FIRST COMPANY TO HIT A
TRILLION DOLLAR MARKET CAP, THE