Latest / Elon Musk Podcast / iPhone Fold - Apple's Two Thousand Dollar Foldable Strategy

Transcript

iPhone Fold - Apple's Two Thousand Dollar Foldable Strategy · Elon Musk Podcast

• 0:00
  A 5% stock plunge just wiped out millions in Apple's market value
• 0:05
  over rumors that they're highly anticipated $2000 foldable phone
• 0:10
  is facing severe engineering delays, and then literally hours
• 0:14
  later the stock recovers when counter rumors claim production
• 0:17
  is perfectly fine. Yeah, that intense market panic
• 0:20
  is happening because, well, this single device is really the
• 0:23
  centerpiece of Apple's overarching 3 phase strategy.
• 0:26
  They are trying to completely overhaul the iPhones design
• 0:29
  across 3 distinct generations, right?
• 0:32
  And we have a stack of supply chain reports, hardware
• 0:35
  schematics, and beta software code sitting right here.
• 0:38
  So our mission today is to figure out if this ultra
• 0:41
  expensive hardware represents A guaranteed market revolution or
• 0:44
  you know, an expensive engineering trap.
• 0:46
  We are looking at the engineering that makes this
• 0:48
  hardware possible, the pricing strategy designed to support it,
• 0:51
  and the intense competitor pressure driving this entire
• 0:53
  shift. So the question we really need
• 0:55
  to answer first is why risk so much capital and market
• 0:58
  stability on a delicate, ultra expensive form factor that
• 1:01
  competitors have already been selling for years?
• 1:03
  Well, the foundation for answering that actually starts
• 1:06
  with a commercial failure, which is pretty fascinating.
• 1:10
  Failure. Yeah, the underperformance of
• 1:13
  the ultra thin iPhone AIR model was really a necessary stepping
• 1:17
  stone for the foldable device. If you look at the adoption, it
• 1:20
  captured a mere 6% of domestic buyers.
• 1:23
  Oh, wow. Right.
• 1:25
  And it moved only 200,000 units in China.
• 1:28
  You have to compare that to the 17,000,000 standard units they
• 1:31
  usually move. Wait, hold on back up.
• 1:34
  They released a flagship that almost nobody wanted to buy.
• 1:36
  Yes, and the reason lies in the physical constraints of that
• 1:40
  design. Like when you compress a device
• 1:42
  down to 5.64mm, you simply cannot fit a high capacity power
• 1:47
  cell inside. Because battery tech just needs
• 1:49
  physical space, right? Exactly.
• 1:51
  Current battery technology relies on physical volume.
• 1:54
  If you want more power, you need a physically larger battery.
• 1:57
  The ultra thin model had a battery that was entirely too
• 1:59
  small for heavy use. Yeah, that makes sense.
• 2:01
  On top of that, the physical depth restrictions meant it
• 2:04
  could only house a single rear camera.
• 2:07
  Modern smartphones use multiple lenses because they need
• 2:10
  physical depth to focus light. You literally cannot cheat
• 2:14
  optical physics. Right.
• 2:15
  I mean, if you were a consumer putting down flagship money, you
• 2:18
  expect flagship performance. You want a battery that actually
• 2:21
  lasts all day, and you want a camera that can compete with
• 2:25
  professional equipment. Squeezing a phone down to 5.64mm
• 2:30
  means it is like thinner than a standard wooden pencil sitting
• 2:34
  on your desk. Yeah, it's while.
• 2:35
  From the outside, releasing a phone like that looks like a
• 2:37
  severe misstep. Consumers rejected paying a
• 2:40
  premium price when forced to sacrifice battery life and
• 2:43
  photographic capabilities. It looks like a misstep, but
• 2:45
  that release actually functioned as a highly profitable prototype
• 2:49
  phase. Oh I see.
• 2:50
  The extreme miniaturization techniques they used to fit a
• 2:53
  processor, a battery, and a screen into a 5.64mm frame were
• 2:57
  directly applied to make the two halves of the upcoming foldable
• 3:00
  device thin left to work. A paid prototype?
• 3:04
  Wow, that makes perfect sense. They essentially used early
• 3:07
  adopters to fund their research and development for the real
• 3:11
  target product. Precisely.
• 3:12
  It's almost like a Formula One team secretly testing next
• 3:16
  season's engine inside a mid tier car during a live race just
• 3:21
  to ensure the championship vehicle runs perfectly later.
• 3:24
  That is a great way to put it. Think about it from an
• 3:26
  engineering perspective. When you fold a phone in half,
• 3:30
  you are stacking 2 pieces of hardware, right?
• 3:33
  If those pieces aren't individually wafer thin, you end
• 3:36
  up carrying a literal brick in your pocket.
• 3:39
  Imagine taking your current phone, whatever you were
• 3:41
  listening to us on right now, and doubling the thickness.
• 3:44
  Yeah. Nobody wants to carry that that
• 3:45
  around. It would ruin your pocket.
• 3:46
  Exactly. The thermal management, the
• 3:48
  custom component placement, and the internal architecture
• 3:51
  required to prevent a device that thin from overheating were
• 3:54
  all subsidized by the buyers of the ultra thin model.
• 3:57
  So they needed real world data. Yes, they needed data on how
• 4:01
  components handle heat when packed tightly together.
• 4:04
  Laboratory testing simply cannot replicate the wear and tear of
• 4:08
  1,000,000 users putting a device through its paces out in the
• 4:11
  real. World OK, let's slow things down
• 4:13
  for a second and look at the actual device we were getting.
• 4:16
  Yeah, so the thin model walked so the foldable could run.
• 4:19
  What exactly are we getting for $2000?
• 4:21
  We were talking about double what most people are used to
• 4:25
  paying for a phone. Right, so we are looking at a
• 4:27
  dual screen experience featuring a 5.5 inch outer screen for
• 4:31
  standard use, OK, and a 7.8 inch inner screen that folds open
• 4:36
  like a book, maxing out at one terabyte of storage.
• 4:39
  A 7.8 inch inner screen is basically carrying a tablet in
• 4:42
  your pocket. Pretty much, yeah.
• 4:43
  And the engineering required to make that folding mechanism
• 4:46
  survive daily use relies heavily on a liquid metal hinge.
• 4:51
  Liquid metal or amorphous metal lacks the crystalline structure
• 4:55
  of traditional metals. Yeah.
• 4:56
  So think of traditional metal like a brick wall.
• 4:58
  If you bend it back and forth enough times, cracks form along
• 5:02
  the mortar between the bricks. Sure, metal fatigue.
• 5:04
  Right. The atomic structure has defined
• 5:06
  boundaries, and those boundaries are weak points.
• 5:09
  Amorphous metal is more like a piece of taffy or glass.
• 5:11
  The atomic structure is randomized with no defined
• 5:14
  boundaries, so stress is distributed evenly across the
• 5:17
  entire material. Oh wow, so it just bends without
• 5:20
  snapping? Exactly.
• 5:21
  That allows the hinge to fold open and close thousands of
• 5:24
  times without degrading. Traditional hinges rely on
• 5:27
  interlocking mechanical parts that wear down, whereas this
• 5:31
  amorphous metal approach fundamentally changes how the
• 5:33
  moving parts handle friction. And that hinge works in tandem
• 5:37
  with an entirely new display panel architecture.
• 5:40
  From schematics, they have built the touch sensors directly into
• 5:44
  the display panel itself, which reduces the panel thickness by
• 5:47
  19%, which is a. Huge space saver, yeah.
• 5:50
  Usually the touch layer sits on top of the display as a separate
• 5:53
  physical sheet. Fusing them together is
• 5:55
  brilliant. And by combining that ultra thin
• 5:57
  panel with the precision of the liquid metal hinge, they achieve
• 6:01
  A crease depth of under .15mm with an angle under 2.5°.
• 6:06
  OK, for the user, this is huge. You finally open a foldable and
• 6:10
  you aren't staring at that awful crease right down the middle.
• 6:13
  Right, you don't feel that distracting valley running down
• 6:15
  the center of your screen when you are scrolling?
• 6:17
  But all this extreme thinness creates a problem.
• 6:22
  It limits the internal space so much that they are forcing the
• 6:25
  removal of facial recognition in favor of a side button
• 6:29
  fingerprint scanner. Yeah, Face ID is gone.
• 6:32
  We really no face ID for two grand.
• 6:34
  I'm sorry but that feels like a severe downgrade.
• 6:37
  I mean you're paying a premium and giving up the most seamless
• 6:40
  security feature they offer you. Just look your phone and it
• 6:42
  opens. Now I have to find a button.
• 6:44
  I thought so too at first honestly, but consider the
• 6:47
  physical motion involved. A side button scanner is
• 6:50
  actually a more natural ergonomic movement for a device
• 6:54
  you physically open like a book. Also.
• 6:57
  Well, your thumb naturally rests on the edge.
• 6:59
  When you pry the two halves apart by integrating the scanner
• 7:02
  into that edge, the biometric scan becomes a seamless part of
• 7:06
  the physical motion. Oh, I see what you're saying.
• 7:08
  Yeah, you are authenticating the device in the exact same motion
• 7:11
  you use to open it, rather than opening it and then waiting for
• 7:14
  a camera array to find your face.
• 7:16
  I guess that changes how you interact with the device
• 7:18
  physically. It removes a step from the
• 7:21
  process. So looking inside that thin
• 7:23
  frame, the internal processing power is driven by the a 20 Pro
• 7:28
  chip. It is built on A2 nanometer
• 7:30
  node, making it 15% faster and 30% more power efficient than
• 7:35
  previous chips, right? And they are utilizing a new
• 7:38
  packaging method to integrate RAM directly onto the chip
• 7:41
  itself. Yeah, and alongside that
• 7:43
  processing power, the manufacturer is finally ditching
• 7:46
  external modem suppliers to use their own custom C2 chip.
• 7:51
  This includes hardware capable of full satellite Internet
• 7:53
  access moving beyond just basic emergency signal.
• 7:57
  Wait, full Internet access. This opens up true off grid web
• 8:00
  browsing. Yes, it really.
• 8:02
  Does you could be in the middle of a National Park with 0
• 8:05
  cellular towers around and still pull up a web page or send a
• 8:08
  high resolution photo? Exactly.
• 8:11
  But this limits their profit margins heavily because these
• 8:14
  smaller, denser custom chips cost 70% more to produce. 70%
• 8:20
  that is a massive jump in cost. Hold on, I need some
• 8:23
  clarification here on the hardware.
• 8:25
  Integrating the RAM directly onto the chip sounds great on a
• 8:28
  spec sheet, but what does that actually mean for me when I'm
• 8:31
  holding the phone? Am I just noticing faster app
• 8:34
  loading? It reduces the physical distance
• 8:36
  data has to travel. In a traditional architecture,
• 8:39
  the processor and the memory sit on different parts of the
• 8:42
  motherboard. Every time the processor needs
• 8:44
  data, electrical signals have to literally travel across that
• 8:47
  board. By bringing the memory directly
• 8:50
  onto the processor package, you eliminate that travel time.
• 8:53
  So the data is already right there.
• 8:54
  Right. Think of it like moving your
• 8:56
  office from across town to right inside your house.
• 8:59
  The commute is gone. This eliminates lag when running
• 9:02
  heavy artificial intelligence tasks directly on the device
• 9:06
  because the data doesn't have to commute.
• 9:08
  It speeds everything up and saves battery power because
• 9:11
  pushing a signal across a shorter physical distance
• 9:13
  requires less electricity. That is fascinating.
• 9:16
  If you shrink the physical distance the electricity has to
• 9:19
  travel, you inherently save power.
• 9:22
  And I imagine you need every drop of power you can get if you
• 9:25
  are pushing a 7.8 inch inner screen and connecting to
• 9:29
  satellites in low earth orbit. Absolutely.
• 9:31
  Let's step away from the circuit boards for a second and look at
• 9:34
  the market. All this custom silicone creates
• 9:37
  a severe bottleneck with supply, right?
• 9:39
  So there is a highly unusual split release strategy happening
• 9:43
  right now. The high end pro models and the
• 9:45
  foldable are launching first, while the base models are
• 9:48
  delayed to a completely different season due to global
• 9:50
  memory component shortages. Wow.
• 9:53
  This strategy contrasts sharply with Samsung's chaotic hardware
• 9:56
  experiments. That major rival just launched a
• 9:59
  near $3000 phone with two hinges and a 10 inch screen.
• 10:04
  Yeah, the two hinge. Model.
• 10:05
  It sold out instantly before being immediately discontinued
• 10:08
  as a mere technological showcase.
• 10:10
  Who needs 2 hinges? Well.
• 10:12
  By splitting the launch, the manufacturer avoids
• 10:14
  cannibalizing its own sales and ensures enough premium parts for
• 10:18
  high paying buyers. While rivals exhaust their
• 10:21
  resources testing bizarre shapes on the public, Apple can secure
• 10:25
  the limited supply of memory chips for the devices that yield
• 10:28
  the highest profit. It's like competitors are
• 10:30
  throwing a dozen expensive experimental darts at the board
• 10:34
  hoping one hits. Apple is taking three years to
• 10:38
  aim a single incredibly expensive sniper shot.
• 10:41
  That is exactly what they're doing.
• 10:44
  They're letting their rivals deal with the messy public
• 10:46
  perception of releasing hardware that folds into weird shapes or
• 10:49
  breaks easily while they hoard the high end memory chips for a
• 10:53
  singular targeted release. And that single highly refined
• 10:57
  sniper shot leads to the final phase of the strategy targeting
• 11:00
  the upcoming Anniversary Edition.
• 11:02
  The goal for this device is A4 sided curved glass screen that
• 11:06
  eliminates the metal frame entirely.
• 11:08
  To achieve this uninterrupted surface, it utilizes solid-state
• 11:12
  haptic buttons that vibrate to simulate a click instead of
• 11:15
  actually moving. There are.
• 11:16
  Distinct software clues pointing directly to this hardware change
• 11:19
  too. Beta operating systems already
• 11:22
  feature Liquid Glass interface rules, forcing developers to
• 11:25
  push their apps into the extreme edges of a wrap around screen.
• 11:29
  Yeah, the. OS is training them the
• 11:31
  operating. System is training developers to
• 11:32
  build for a screen that literally spills over the sides
• 11:36
  of the device and by. Removing mechanical buttons that
• 11:39
  physically depress you eliminate mechanical failure points.
• 11:43
  Dust and debris cannot get trapped underneath a button that
• 11:45
  doesn't move right. Plus it drastically increases
• 11:48
  water resistance by removing physical cutouts from the
• 11:51
  chassis entirely. But.
• 11:53
  We need a reality check regarding the design here.
• 11:56
  While the solid-state buttons are fully verified for
• 11:59
  production, placing the front facing camera completely under
• 12:02
  the display is proving way too difficult and will likely be
• 12:05
  delayed for several more hardware generations.
• 12:07
  Yeah. That parts is struggling the
• 12:09
  physics. Of capturing a clean photo
• 12:11
  through a layer of active light emitting pixels is incredibly
• 12:15
  tough. The display pixels scatter the
• 12:17
  incoming light, which ruins the image quality of the camera
• 12:20
  underneath. It's like.
• 12:21
  Trying to take a crystal clear photo through a screen door.
• 12:24
  Exactly. Until they can invent a display
• 12:26
  matrix that becomes completely transparent on command, the
• 12:29
  dream of an entirely uninterrupted sheet of class
• 12:32
  from installed. So to summarize the key take
• 12:36
  away from all this source material, the company is trading
• 12:39
  its safe, predictable updates for high risk hardware leaps
• 12:43
  using early commercial failures to subsidize the extreme
• 12:46
  engineering required for a flawless folding experience.
• 12:49
  And if we? Are moving toward an era where
• 12:51
  the physical hardware eventually disappears into a single
• 12:55
  uninterrupted sheet of glass. How will software interface
• 12:59
  design have to evolve to fill that infinite space if you're
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• 13:06
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