And short form video startup quit be looking to raise another 500 million ahead of next years launch on top of the 1 billion it has already raised. Ceo meg whitman tells us how the servicele streaming will compete. First, major news out of apple. Apples chief designer, jony ive , longtime designer, is leaving the company to form a long time to form his own design company. Ive is responsible for the look of some of the iconic products including the iphone. We got a press release minutes ago from apple. There is a quote from tim cook is a singular figure in the design world and his role in apples revival cannot be overstated from 1988s groundbreaking imac and the iphone. To a certain extent, this is not incredibly surprising. Over the last couple of years, ive has sort of taken a step back from the public eye, from the day today in the design at apple. He was very focused on building apples new headquarters, its circular headquarters in cupertino, california. Cook goes onto to say apple will sntinue to benefit from jony talent by working with him on exclusive projects and the ongoing work with the brilliant and compassionate team he has built. I look forward to working with jony long into the future. , vicew Design Team Leader president of design, Vice President of human interface design, will report to jeff williams, apples current coo designsumably split responsibilities. Obviously, jony ive is a largerthanlife figure at apple and the way we use technology and our smartphones today. How big a deal is this . It is a big deal. Apart from steve jobs, apples cofounder and former ceo, there is no one more associated with the current generation of apple. Han jony ive he is responsible for the look and feel of all the familiar apple products, principally the iphone. He was very heavily involved in apple park, the new apple. Eadquarters design it is a big miss given how important he has been to apples recent history and its resurrection from near bankruptcy. Emily that said, as someone who has covered apple for many years, weve been asking the question, how involved is jony ive . When he took a bit of a break to focus on the headquarters, that was a question a lot of folks were asking. We actually had gene munster on the phone now. He covered apple as a long time as an analyst. What is your take . He is iconic, but at the same time, we have been waiting for this for the past really since 2015 when he moved to his chief design officer role. As that happened, as we started here, you just mentioned his involvement with apple park and and over theere, last few years, he has played less of a role, even with some of his videos announcing products at different events. This is something we have been anticipating. The company has been managing for this and kind of building a team around him. Theyve been adding other outside design talent recently. The simple takeaway is this is more or less to be expected, but that comment, i think, takes away from the impact he has had on apple. Right, certainly he has had a hand in all of apples most popular, most iconic in the last couple of decades. You wonder if he will still be narrating those videos at the apple events. His voice is also quite memorable. Overuestion has been asked the last months or years, can apple still innovate . Does apple still have what it takes . Can apple do that without jony ive . This departure signals the end of the cult of the designer in apple, people andobsess over every bezel the look of the home button. I think the future of technology is not an hardware but in software, the artificial intelligence, the internet of things, and interactions of computing into the fabric of daily life, maybe without even interacting through hardware. I think this is now the era of software and not the era of hardware that jony ive obviously specializes. If i could jump in, let me just address that thought, too. Absolutely agree that we are in the age of software, that ai has an impact, but i feel strongly that apple will continue to obsess over the details of hardware. Apple has made s legacy ofony design is one of its core competencies, but keep in mind where apple is at relative to the rest of tech. That is something that is would expect that kind of attention to detail to departure. Ite jonys emily the first person who obsess over the details at apple was steve jobs, who did that long before jony ive. When i have spoken to tim cook about steves legacy, he always talks about how steves dna is infused in the company, so you wonder if the call of the designer that steve jobs health instill will stay or go, but i wonder you know, we ask if apple willt continue to innovate. The former president of the Rhode Island School of design says the real jony ive now works at google. Do you believe that apple can continue to work on hardware and software in the integration of the two that is so important develop smartphones more incrementally, at least when it comes to the formfactor . The simple answer is i do believe that the medivation that innovation is alive and well at apple. I think the company is going after massive untapped markets around transportation and health care in a think there is a lot of innovation. If you look at their recent hires with the head of ai from google and bring it back doug , i think thosela are examples of the company kind of targeting the next curve. Maybe taking it at the most thelistic level, we had computer, the mobile phone, and now we are shifting into the era of services, which they have a lot of announcements, but if you fast forward 10 years, innovation is going to be around, even transportation and health care and i think they will do just great. One of the ways they can do this is the simply have the resources. I think this they are acquisition is a perfect example of why apple will continue to innovate, because they have the luxury of sitting back and have starto let these things to take off and they can innovate around them. Emily max with us from bloomberg businessweek. He also wrote a book on apple. ,ust to recap, jony ive longtime designer of apple, designer of the iphone itself, will be leaving the company to start his own design company. Played a huge role in the resurgence of apple, kind of the steve jobs era, starting with the imac, those beautiful candy colored computers, and going through the ipod, the iphone. Any applemore than executive decides jobs, he was the most important figure. As apple has matured, i think it is less a company where an Industrial Designer and that is what jony ive is is going to have an impact. It has moved into software, which is not his expertise, and also increasingly services. These are very different businesses. I think if you are somebody who is really into the next new hot looking thing, it is a less exciting company, but it is a Different Company and in that sense, it also makes sense that jony ive would be leaving. Emily the Financial Times week inth jony ive this an excuse of conversation they just published. He says he will continue to be very involved with apple. Apple has already said they will be one of the major clients of his new design company. He says while he will not be an employee, he will still be very involved. This seems like a natural and ,entle time to make this change and he says he is close and remains close with the design team. Brad stone with us now. You have been covering apple for a couple of decades. Not to date you, but, obviously but ive leaving is huge, apple has certainly planned for this. However, it is certainly hard not to look at this is the end of some kind of an era. Brad that is true. In the messaging, they want to make it clear that jony is not going anywhere, that he will still work on apple products, but it is hard to look at this as anything other than a real big bummer for apple. Apple in the to mid1990s was really key to steve jobs turnaround. From the mac pro, i feel like the era of new visual flair with apple products is kind of gone. And imac or macbook from a couple of years ago kind of looks the same as it does today. Said, Industrial Design might be a little less important. Might still working on apple products, i expect this is him really phasing out, working on the next phase of his career. The formerave president of the Rhode Island School of design on the phone now. Obviously, you are one of the leading voices in design. You were actually on the show just last week and we were talking about apples ability to innovate, and jony ive came up and you said the real jony ive works at google. Im curious what you think this means. Is this going to be a big change for big challenge for apple, not having jony ive sitting there in a chair . It is a big challenge because ofcarries the myth, the era. Teve jobs that lineage, that momentum has been carried forward, but in the future, its going to get much harder because software is how we win, not just hardware. That is like that is why someone like ib russ, google like ivy ross at matters so much. Emily as google is making its own smartphones, even though the pixel has a small Customer Base at this point, it certainly could grow. Historically been sort of the Gold Standard in design. Do you think that balance will start to shift . I think it definitely will because Google Hardware is designed with the same European Values and also has superior software on the camera side to start. That said, apples big possibility is in the privacy space. As design is more about privacy, apple devices and software do have value in terms of sheer convenience. Google products have great design and can make a big difference as well. Emily that is a really important point. Apple and tim cook himself has been at the forefront of talking about privacy as a priority, about privacy first in their products. It is certainly a narrative that helps apple and could very well help sell apple products, but if itis not just design or if is not designed, what will differentiate an apple product in the future . It is a Business Model differentiation. They have been very clever, some might say opportunistic, looking about the narrative that surrounds google or facebook where the product is free but people are paying fairly high tolls in the form of their personal information. Premierich sells a products as you pay extra for apple products, but its worth it because they will keep the Information Private and secure. I would argue that the departure has no impact on the narrative. While there was maybe a design component of apples privacy argument, it was essentially a Business Model argument turning a premium price into a strategic advantage. Emily gene munster is still with us. I would love to hear your reaction to the possibility that google could disrupt apples stronghold is the Gold Standard of design. What is your take, especially as google puts even more resources into its own smartphones. The design side, apple will win hands down, and part of it is because to have the vertical both software and hardware because there is kind of a symphony that is played between the two, and they are still the company that can do that. Google has recently backed out of just taken a small step back on some of their hardware around the pixel tablet. ,ust looking at the numbers each collectively had about 150 breakout sessions. It 25 sessions at apple related to hardware and two sessions at google were related to hardware. Clearly even this idea about the future just being software and services, i think there is a lot of truth in that, but i still think the hardware is really an important aspect, and i think for true design, you have to deal in both and i think apple still has the pole position. Is certainly true that apple is a hardware first company, as much as they are trying to diversify their revenue streams. What is your response to his point . Up with apple products, but i know everyone who criticizes googles hardware does not own it. And a pixel and the pixel is superior. This companies in the u. K. Who privacy in the graphics space, so theres good work to be done by apple there, but in terms of hardware and software integration, the pixel is a wonderful experience. Thoughts . , why do they back off of some of the pixel design if they really want to do this combination between hardware and software . Why have they recently exited the hardware piece on the tablet . Emily certainly a fair point. Theres no question apple is a company that is in part transformation as it tries to ofry on the line and legacy the iphone. , how do you see apple navigating that transition . There is certainly a lot of debate, but it is a new Competitive Landscape and google is an upandcoming player. Obviously, there is huge competition coming from smartphone players in china and companies that are making phones that are of quality but much. Heaper than an iphone i think apples principal challenge in the near term is that the smartmarket is not growing anymore. We have seen declining smartphone unit shipments in each of the last kid of or three years, depending on whose numbers you look at, and all of the growth in the smartphone industry is coming from countries where apple has little to no market share. Unless that changes, and it does not feel like it will in the next two or three years, than apples going to have a hard time growing that iphone business. Remember that apple is not dependent on the iphone just from the sales of that product, but the iphone is really the hub around which all of other apples products revolve. If you dont have an iphone, you are probably not buying Wireless Earbuds from apple. You are probably not buying a homepod. You are probably not buying the tv plus upcoming streaming video service. The iphone importance is much more than just sales of those individual units. Emily apples chief designer, jony ive, announcing he will be leaving apple at the end of the year to form his own design company. Says apple will still be a major client, says he will still be very involved with apple, very flattering statement from apple ceo tim cook. Sometimes this is just the cycle of life. These things happen. People move on. That said, youve got a new generation of leaders at apple, the new head designer who will be reporting to jeff williams, the ceo of. The coo. These are names we do not talk about all the time. They are not celebrities like jony ive has become, like steve jobs was. Talk to us about the new generation of apple leaders, who they are and what they do. I want to followup on your point about the older generation. I looked, because i had forgotten, but jony ive joined apple in 1992, has been there more than 25 years, and he was part of this veteran management team. Hil shiller, Bob Mansfield this was a team that accomplished an extraordinary amount, and of course, they do not need to be working at apple anymore. They are there because they love it, so i think this is the beginning of a transition at apple. I dont really know that much about jonys deputies who will be taking over, but theyve worked with him for decades now and really probably have his sensibility. Jony stepped away from the backny in 2015 and came into a management role in 2017, so this next generation really is thatll tested as they come back and really take more responsibility at the company. Emily meantime, we are in a trade war with china. We are waiting for news over the next 24, 48 hours from g20 and a meeting between President Trump and chinese president xi jinping. Apple is one of the Main Companies cut and the crosshairs with that. While way, of course, is the huge smartphone competitor in china that has become the poster child for what can happen in a trade war huawei, of course. Obviously, you are incredibly market inith apples china and the competition apple is facing in china from huawei and others. This could be a design challenge. Can apple do what it does with an iphone design at that level of quality but sell it at a there areice, which smartphone vendors in china who are doing that. Apple has tremendous challenges in the market in china. They derive a tremendous amount of revenue from that market but they have been losing ground against him but is like while huawei, as you mentioned. Xiaomi is another that has come on very strong. Part of that is they have been able to catch up in terms of design. Later on, we have this trade war there is resentment building against u. S. Products and u. S. Companies because of the blacklisting of quality the blacklisting of huawei, which we have talked about on your show floor. Emily we do have this quote from jony ive, speaking with the Financial Times, earlier this week ahead of his announcement. Besays he will still involved with apple he hopes for many years to come. If you are going to do something truly innovative, it is hard to take time. It often requires enabling technology that takes years to develop. Im the on excited i get to continue working on projects and there will test there are new projects to develop and there are new projects to developing contribute to. Talked a bit about google and what you believe is an improved offering from them when it comes , but whatut these companies in china that have made quite successful, decent quality phones at less than half the price . Quickly ons moved so design, adopting international styles, also having made hardware for apple for years. By having a trade war, we are going to isolate china, and that is not going to help us because we all have to innovate together. Consider how japanese carmakers were innovating and there was such a divide, but once Production System lean principles came back to europe, the u. S. Got stronger in the process, so collaboration is still key. Emily obviously, this is an incredibly significant. Evelopment some things will change, but most things probably will not at apple. As we look forward to a new generation of apple products, of which the iphone will still be the centerpiece, but apple trying to diversify its revenue, become more of a Services Company that still depends on apple hardware, what are going to be the Biggest Challenges ahead . Well, first of all, lets recognize that these products are goes take years to develop these product cycles take years to develop. The Smartphone Market around the world is saturated. Generates a lot of profit, but its not a growth busine