I just didn't feel like we sat there in September of 2025 and looked at iPhone 17 and thought, man, this is really going to catalyze a big iPhone cycle. I mean the best March quarter for iPhone sales that the company's ever seen, 22% increase in revenue for iPhone. Um I I just I I think that I was listening to an analyst um Horse Dedu who writes uh Simco. It's like a very tech industry newsletter. He was on Ben Thompson's podcast maybe a month ago. They talked at length about Apple. It was a great conversation. They know way more about the company than I do, but they brought a really clean frame on Apple's history that I hadn't really considered before. which is that Apple is fundamentally an underdog company. Like and you know, we look at it now as a four or five trillion dollar company. It had been the biggest in the world for a long period of time. And you think like, oh, Apple's on top. Apple's, you know, Apple has made it, but it is an underdog company. And so uh I think this cycle of they've missed AI in the background, they've actually looked at the center of their business, which is the iPhone business and it has never been um really performing uh more cleanly.

I've actually heard this underdog take before. Like even if you look at sort of the origins of Apple and when Steve Jobs came back. And that's when they like surprised people. Yeah. I mean, yes, the, you know, Tim Cook zing about the iPhone 17 on the call was not something indeed that I would have expected. The other interesting thing to me was the Mac Neo they talked about really strong demand for that product. That one makes a little bit more sense to me because like that came out and I was like, that, you know, I was talking to the team about this this morning. Like I buy my kids cheap uh PCs, right? Because they're young and like whatever. I would like to build to buy them a better performing computer or one that I use for example, but Macs are usually too expensive. So if there's one, I haven't bought the Mac Neo yet, but it is something that I exactly, exactly. And so they said they were just, they thought demand would be strong, but it came out even stronger than they had expected for that product.

Well, and the thing with the Mac Neo, the first is that it's an iPhone chip. So it's, you know, and I think there's like I Apple would deny this is the case, but it's kind of like leftover iPhone chips. What are we going to do with these things? Um lower power chips. So we make this essentially like a Chromebook, right? But an Apple version of a Chromebook. But the second part of why that works, in addition to having that material sitting around, this is uncomfortable, is that um you now kind of look, you can look out in three years. This is maybe like the the bigger brain take. You can look out three years and say, well, your local machine, and we haven't talked about the local machine part of the quarter yet. Your local machine doesn't need to be as powerful if more of your applications are AI, more cloud-based, more um living outside of your device. So all you need to do is be able to get yourself to your AI interface, to Claude or to Open AI, um to Codex even, depending on kind of how powerful these things get. Um and then that's the environment that you're actually really experiencing the highest capabilities of compute is external to the machine. So you don't need a chip that is as powerful as, you know, the company is putting in a Mac Pro or some of the other high-end laptops that other manufacturers will make. And so, um it is an interesting part of the hardware cycle relative to AI.