stock of the day and that is Apple. The company on Tuesday hosted its latest worldwide developers conference unveiling a host of new products, most notably, the new iPhone Air. still with me to discuss all things Apple is Melissa Otto, head of TMT Research at Visible Alpha. So Melissa, let's just start with your high level takeaways from what you saw from Apple yesterday. Uh a pretty busy day. I think on form factor, one of the more interesting events that we've seen uh in some time.

Hi, Miles.

Actually, you know,

we were like,

you know, it felt very iterative.

I tried. I tried.

You know, it was it lacked some of the wow and excitement that I think was starting to get baked into expectations.

That's been reflected in the stock price. The question is going to be, how does the consumer respond this holiday season? Do consumers really want a thin phone? Uh is battery life and performance really going to drive the total addressable market to upgrade? That's the question.

So, what we did not hear yesterday really was anything about AI. Uh that's kind of been the big theme with Apple, right? Where are these guys at when it comes to the AI trade? Um,

They're not.

Yeah, what's what's what's your view on that and like like what's it going to take? What's it going to take for Apple to say, okay, this is our AI strategy because I think yourself and many of your peers are just keep poking around being like, I guys, I don't I don't see it.

I mean, they've they're sitting on 130 billion plus of cash. Let's do something interesting with that, you know, let's, you know, wake up the market and you know, do something exciting. I I think, you know, they're just, you know, talking about like, okay, you're going to get like a couple extra hours of battery life and oh, this is the the glass is harder, it's not going to scratch as much is like a snooze fest in the face of all of this exciting AI stuff that's going on in the background. It's like, okay, great, you know, like so when I drop my phone, it's not going to crack as easily, but like, how are you going to revolutionize my day-to-day life? Like you did with the iPhone 10 plus years ago.

And I'm curious your view on the stock because uh it's it's I feel like a lot of times we discuss the stock as if it's not down 8% this year. But it is down 8%. Like this is you know, this is the second worst performer among the Mag 7 names. Um just what your view is on the story at this point and we talked about it on Monday on this show. Like one of the first things they call out, one of the only things they call out in the press release is the buyback and the dividend. Like that's the state of the Apple story right now so far as I can see, at least around the stock price itself.

Yeah, it's been a meaningful underperformer and I mean, expectations still remain high as does the valuation. Looking ahead to next year, the market is expecting iPhone 17 to sell 160 million units. That's a very punchy number. You know, even for this final quarter of the year, they're expected to sell 27 million. So with those sorts of expectations for an upgrade cycle starting to be already baked into the valuation. Um, it does pose questions about whether or not they can deliver.

Yeah, you know, every time uh we talk about or you think about the upgrade cycle, part of me has this like, it's not 2016 anymore. You know, like everybody's got an iPhone kind of and I might get a new one, but I might not, but it doesn't move. There's no lines around the block. You know, we all remember that cycle and I just feels like the world has certainly moved on. All right. Uh Melissa Otto, thanks so much uh for stopping by today.

Thank you.