[00:00] Apple is finally ready to enter its next big category, the smart home. You know, there's a lot of talk that the Duo might actually be one of the ways that they expand their smart home product suite,
[00:14] where, because you could stand the Duo up on itself, or sort of as like a little teepee or triangle, you could keep some form of display up, like a camera. I will say I have about four iPads mounted on walls,
[00:28] and they have these little just like locking cases. You kind of lock it in there and put the key in a box somewhere else. But anyway, the benefit of that is you can have this iPad mounted to a wall and plugged in with added outlets there, obviously.
[00:40] And so I try to put things up there like clock in, clock out things. So it's sort of like you walk in, like, oh, that's right, I've got to remember to clock in. Right, so you can track your time when you walk into a property, an office, or whatever it is.
[00:53] or I like to keep cameras up. So like your front door, for example, it'd be nice to have a little camera viewer there. But I'll tell you, doing it with an iPad and trying to sort of rig it together with apps on the iPad,
[01:06] not great. You have latency issues. You have timeout issues. You have to kind of restart it all the time. It's really like clunky. You're almost better off just running like a small TV screen
[01:18] with an HDMI plugged in coming off of a network server, you know, an NAS, but that's not convenient for most people. Most people want something that's more plug-and-play.
[01:31] And I think if Apple can get into something that's more plug-and-play of that direction, it would be a game-changer for Apple into getting people to spend more money on devices. Like, I personally, like, the HomePods are cool, I use them,
[01:44] but it'd be nice if they had, like, hey, pull up the camera of the front door or whatever, right? So let's see what they say here. Okay. Apple plans to make its long-delayed push into the smart home market on October 13th,
[01:56] marking a critical product expansion for the company under the new CEO. And this has been a big goal of the CEO. The CEO's goal is, listen, we are going to grind products.
[02:08] And that's actually very smart. I think that products are what people want. They're willing to spend money on them. And Apple can then sell you their sort of one subscription. I mean, everybody's doing this now, and I actually think it's very smart.
[02:23] So remember back in the day Apple had iLife, where they basically bundled together numbers and PowerPoint, you know, their version of PowerPoint, Keynote, and pages, right?
[02:36] They bundled all this crap together. Today, they actually bundle family plans together in a service known as, guess what, Apple One. Apple One bundles multiple Apple subscriptions with a single monthly plan to help you save money.
[02:50] Whatever, right? That sounds like I'm reading an ad here. But your individual plan, your family plan for iCloud storage, Apple Music, Apple TV, Apple Arcade, there are just too many products, and people don't want to check out for all those freaking different products.
[03:03] So if you actually look, Meta just came out with Meta One, which is a subscription service for Instagram, Facebook, WhatsApp, and Meta AI to unlock more limits or whatever. or it's $2.99 a month or $7.99 a month or whatever.
[03:17] Google also has Google One. Do you see where the trend is going with one subscription from a company? Which, can you blame us for doing this?
[03:30] I apologize because we need to keep going on the Apple topic here. But can you apologize, or can I apologize just up front? Yes, I stole this from Meta, Apple, and Google.
[03:42] reinvest one because we're launching this reinvest terminal product in the fourth quarter and I'm like how am I possibly going to sell the alpha membership
[03:54] the trade alert the terminal platform including the whole reinvest stocks rewrite that we're doing which is going to be like Bloomberg terminal for you at an affordable price the homes platform
[04:07] all the nine courses plus the tenth one that we have coming out in the first quarter and the course number last year pro It too much Hence reinvest one
[04:22] So my point is, when we talk about Apple, it's actually really brilliant that the more they can push products, the more they can encourage people to sign up for subscriptions,
[04:34] the more they can increase their high-margin ARR. And that's what you want if you are an Apple investor. I actually think, I'm almost convinced, the Apple Duo is going to sell out. There has been, and Apple saw kind of move down a little bit on this,
[04:49] but there's been some rumoring that the production for the Duo is only about 60% ramped right now, which is bad because, you know, we want the Duo. We want our hands on it.
[05:01] I want the Duo. I know there's some people, I don't know, way to see if the hinge actually works. I get it. But the center of the strategy is a smart home, codenamed J490, according to people familiar with the matter. Apple has also planned to provide its first update to the HomePod Mini since 2000,
[05:19] and a new TV set box since 2022. Okay, so basically three things here. A smart home hub. It really needs to have an iPad-style display. One of the concerns people have with the iPad Duo, or the iPhone Duo,
[05:33] is that the iPhone Duo would cannibalize iPad sales. I kind of disagree because I think there is still a value to a big, full-size iPad. This is not ever going to fit in your pocket, and it's not going to get replaced by a Duo.
[05:50] But what does get replaced by a Duo is the iPad Mini, because I'm going to be able to take that stylus off of here, and I'm going to be able to use it on my Duo, which I'm really freaking excited about.
[06:02] But I'm not going to replace a large one in an office place or somewhere I don't need to carry it around because this is heavy. Like, to put this in a backpack, the darn keyboard case, which is like $400 too, the keyboard case alone, I think, adds like another pound to this.
[06:17] And this is already two pounds. You're looking at like a three-pound device here, which is a lot for an iPad. The Duo solves that. But I love this for at home in an office. But I actually think if they come out with a small screen device that you could use as a smart home controller,
[06:33] you could actually reintroduce the same technology that you're selling in the iPad mini, just repackaged as essentially a smart home controller. Really smart. Obviously, updating the speakers and competing more with Sonos.
[06:46] If they had an exterior speaker, that would be great as well. I have Sonos speakers that I use outside. I think it's the Sonos Roam. and I just drilled them to my stucco and put them in a little metal bracket
[06:59] that I got from Amazon. Hashtag not sponsored. I do own Apple stock, but I'm not sponsored by Apple or Sonos, just to be clear. But anyway, I think they're great because then I could just turn on music when I'm out in the greenhouse or whatever
[07:12] and it's fantastic. But looking more at this, an early test for the CEO who took the reins, Apple famous for that big thing. Of course, Android people just say Apple's way behind. The products also serve as a showcase for Apple's new Siri Assistant.
[07:28] Okay, the new Siri so far kind of sucks because it's really slow. Like, I'll tell it, like, hey, go add something to the calendar, and I just get the pinwheel and the pinwheel and the pinwheel. I did buy, so first impressions of the new watch, okay?
[07:44] I got the new watch right here. This is a brand new watch. I put my old band on it. This is my old watch. I still have to turn this in. Probably need to. I already wiped it, but I should probably charge it.
[07:56] But anyway, here's the old one, the old Ultra. You can see via the orange button on the side. But here's the new one. So far, you don't actually notice really a difference. The battery life is so far, in my experience, maybe a little bit better, but relatively similar.
[08:10] What you're waiting for are the suite of the new health products, the more accurate health integration by taking your variable heart rate more frequently, better sensing for your VO2 Those are some of the improvements suggested here in sort of their Apple Health rewrite which I a big fan of Been a user of the Whoop
[08:34] been a fan of the Oura Ring, been a fan of the little glucose bars. I've done all that kind of stuff. But this, once all the rest of these software features come out, I'm very excited about it. But it's too early to say because we don't have all the features yet.
[08:48] Now, take a look at this. They argue here that the revamped series suffered multiple delays. It's still not good. Just want to be clear about that. The home house will take the form of a roughly 6-inch display.
[09:03] Ah, see? Okay, so, I mean, the iPad mini is about like an 8-1. With versions that can be mounted on the wall. Yes! That is exactly what you want. Somebody said greenhouse in a real house.
[09:15] It's an actual greenhouse. I have marigolds in there, nasturtiums. bell peppers and tomatoes. I have never grown weed in my life, to be clear. But I hear it can be profitable.
[09:29] But anyway, who has not, okay, who has not to be identified. The new HomePod mini and Apple TV, meanwhile, will retain their current designs, but include faster processors to support Siri.
[09:41] It's still slow, man. We'll see. Like, even on the new watch, I have a lot of cases where I'll ask Siri on the new watch, which you're supposed to have on-device theory, and it'll just say, sorry, I'm not available right now.
[09:54] And I'm like, what did I just pay for? So Apple is still way behind, okay? They'll get there. And I'm a big Apple fan, fanboy, and I've got exposure to the stock,
[10:06] so I want to be clear about all of that. But they are still behind. Now defining a feature will be its ability to serve multiple members of a household designed to recognize who is speaking or approaching it. We've heard rumors like that in the past.
[10:18] When a user walks up, for example, the device will show that person's contact messages, calendar appointments, and notes in your preferred layout. Eh, if you want that. It will also have a mode for visitors to hide personal information.
[10:30] Right, exactly. A visitor mode, I guess. The device identifies users by their voice or through facial recognition. Oh, okay, so unlike the Duo, it will actually have LIDAR facial recognition, huh? Apple envisions customers placing several devices on the displays throughout their home.
[10:45] I actually agree with that. I think people would do that. Like, you'll have it by your front door, you'll have it by your back door, you'll have it at your kitchen counter, you'll have it in your bedroom. I totally agree. People will buy four or five of these. It'll be a totally new vertical.
[10:57] But it's not just getting people to buy the device. It's getting people to score more of their photos in iCloud and getting them to sign up for Apple One. That's what they want. This is the high-margin product right here.
[11:10] You know, you get the Premiere. It's $40 a month. You know, that's Apple TV, the music, the fitness, the news, the shareable with family members or whatever. They're trying to get every single household that uses Apple devices to spend money on this,
[11:24] plus the insurance product, which now, which I think they're also very, this is still very early as an ARR driver for Apple, but the new subscription product that they do for the insurance product,
[11:39] Apple Care 1 is what they call it, you could now put multiple devices on it. So, for example, I have my iPhone, an iPad mini, the Vision Pro, and the new Apple Watch covered under this.
[11:53] And it costs $26 a month. So if I damage them, you know, when used or whatever, especially like the Vision Pro, you drop it or whatever. But anyway, they make it very easy now and tempting to just keep adding products to this.
[12:07] And it's very smart because now rather than individually renewing your subscriptions for all these different products, understanding all I need, that's what subscription is, all you have to know is Apple won
[12:19] for the subscription suite, Apple won insurance for the insurance suite. I guess that's sort of like two products. That's being complicated. But this is smart. The more they can drive the ARR, the more they can drive
[12:32] the potential valuation of this company Now the valuation of the company right now is based on Wall Street estimates In my opinion high but based on my estimates it low I think people are not underwriting Apple growth correctly I think what they
[12:50] doing with the Duo and these one products is brilliant. Current growth estimates, oh, they've actually ticked up a little bit. Current growth estimates were about 8.9 on average for the next four years. The four-year estimate right now has gone up to 9.9. So we're already
[13:07] starting to see analysts write up Apple's growth a little bit, but I put Apple's growth at 20% per year over the next four years, average. So at that level, times 8.82 on an
[13:19] EPS level with net margins around 30%, I look at this stock, 8.82, let me actually do this if I'm not correctly, a 20% growth times the 269 for a peg ratio.
[13:34] I look at this as about a $495 to $500 stock, which I know sounds crazy because the stock has already done quite well and is sitting at $337 over here. It was $315 during the Apple event.
[13:49] We actually sent out a buy alert for it during the Apple event. It was like $310 to $315. We're like, oh, no, buy it here. Obviously not personalized advice. We don't give personalized advice. But as part of our ReinvestOne membership, we do send trade alerts when we're making a trade,
[14:05] whether those are sold puts or buying or trimming or this, that or whatever, right? So we think this is very interesting. So what Apple is doing is trying to maximize that ARR, and I think they're going to accomplish it.
[14:23] Devices intended to run stationary, single FaceTime camera, the product has micro... Right, it's not supposed to be like an iPad, which means you're not going to have big batteries on it. Probably you just plug it in, basically. The hub is about as thick as an iPhone.
[14:35] That's cool. The display is surrounded by a quarter-inch bezel. Eh, old iPads, basically. So, kind of a cheaper display there. The device lacks a battery, so it has to be plugged in all the time. That's fair. The product has USB-C for power.
[14:49] Users can manually tilt the device forward or backward with a rubberized bottom to help it stay on the table. Oh, that's cool. perforated speaker holes. So, this is a 2002 prototype over here
[15:03] that I guess they're trying to imply that it looks similar to. That's interesting. So, this is potentially what it could look similar to, just a smaller version, presumably. Apple has developed a second version
[15:16] designed to be mounted on the wall. Ah, a different product would be the wall-mounted one. Interesting. Sits flat on the wall with the version. and it must be connected to power through USB-C.
[15:28] The product has been years in the making. Apple eventually settled on a new product, combining the AI operating system with the HomePod-like product. And the product, slated for release at a later date,
[15:42] does not record video, but I'm assuming you could pay time on it. Another product under development is an upgraded version of the Home Hub, which pairs with a larger 9-inch display
[15:55] and a robotic arm that allows the screen to move through space, I would expect that this is not going to be out anytime soon, the robotic arm one. So we'll see if this comes out anytime soon.
[16:07] The interface is heavily built around photo slideshows, clock displays. Oh, yeah. We really need that expensive clock. Alongside hardware, Apple is developing its HomeKit software. There are a lot of HomeKit products now,
[16:19] and I think they're great. Even the, honestly, the Ecobee thermostat have, in my opinion, blown nests out of the water. So pretty exciting for Apple. I'm pretty excited about what Apple's cooking, and we'll see what they end up announcing.
[16:34] If you like that video, change this around. I think you're going to love it. I really love advertising. These things each one of you, I feel like nobody else knows about this. We'll try a little advertising and see how it goes. Congratulations, man. You have done so much. People love you.
[16:46] People look up to you. Terran Pass Raffia, Financial Analysts and you too, but meet Kevin. Always great to get your take.