2025-11-01 06:42:27
Business is booming in Big Tech, and that's now showing up in big (and unique) ways on profit and loss statements, in part driven by their own investments in Big AI:
Alphabet and Amazon were rewarded by investors for reporting better-than-expected third-quarter profits. At both companies, earnings were boosted by the increased value of their stakes in Anthropic PBC, maker of the popular Claude chatbot.
Alphabet said profit included “net gains on equity securities of $10.7 billion,” in part from a private company. That company is Anthropic, according to people familiar with the matter, who declined to be named disclosing non-public information. Meanwhile, Amazon’s third-quarter profit climbed 38%, helped by a $9.5 billion pretax gain from its investment in Anthropic. The higher value was reflected in Amazon’s nonoperating income for the period, the company said in its Thursday earnings report.
This is nothing new – see also: Google's recent rise in "profit" thanks to a mark-up that was seemingly tied to SpaceX – but the scale and speed at which the Big AI companies are raising (and just how intertwined Big Tech is in these deals) are causing these reports to happen in even more pronounced ways, more frequently.
The surge of investment in private-company generative AI is beginning to show up in public-company metrics. Once seen mainly as strategic bets on a fast-moving frontier, stakes in AI startups are now contributing sizable, if still paper, profits to some of the world’s biggest businesses — even as the technology itself is only starting to pay commercial dividends.
The "paper" part is key here. While this is being reported as income per GAAP guidelines, there's no actual profit here. At least not yet. Google doesn't see $10.7B more in cash coming in, nor does Amazon see $9.5B more in their bank account. These are simply on paper markups of their holdings. Yes, it's a little silly, but the alternative is also silly:
Microsoft, meanwhile, said in reporting its own quarterly earnings this week that its net income was reduced by $3.1 billion to account for losses suffered by OpenAI. The software company has backed the ChatGPT maker with $13.75 billion, and holds a 27% stake.
Wait, Microsoft is reporting billions in "losses" while Google and Amazon are reporting billions in "gains"? Even though both are tied to investments being marked up by billions? Yes, it's because Microsoft is using a different accounting guideline – the "equity method" – which states that they should take the pro rata portion of the profits or losses (so, losses) that OpenAI has each quarter.
This is how Matt Rosoff was able to back into the losses OpenAI likely saw last quarter for The Register, even though, as a private company, they don't have to report them. It's just math. (Though complicated somewhat by Microsoft's humorously disclosed 32.5% stake before it was diluted by the most recent OpenAI equity raises – and, of course, taxes. Big companies, they're just like us, getting screwed by taxes.)
Anyway, Google and Amazon are using the fair market value (FMV) rules for their investment, which means they have to show the mark up (or mark down) when something changes the value of their holdings. That's even more complicated if there's no financing event but simply those companies deciding the value of their holdings should be worth less (or more – though it's almost always less if they're determining it themselves, sometimes for tax reasons). This is more common with banks (which is why you see reports around the big ones marking down their holdings in various startups), but certainly can happen with these Big Tech shareholders too.
But wait, why can Microsoft use one method and Google/Amazon another? I'm no accountant, but it seems tied to the relationship the companies have with their investments. While Microsoft obviously doesn't have a controlling stake, they perhaps are deemed to have significant sway over the company given the cloud relationship and the revenue (and profit) sharing arrangements. So even though Microsoft has "just" a 27% stake in OpenAI while my own math puts Amazon at a roughly 22% stake in Anthropic (though this was before a recent funding round, so that's probably been diluted), and Google has/had a 14% stake in Anthropic, they view them as different types of investments from an accounting perspective.
Again, I'm not sure either is particularly useful when it comes to reporting profits and losses – Microsoft didn't actually lose any of their money due to OpenAI's losses just as Google and Amazon didn't make any actual money due to Anthropic's mark up in valuation – but it is what it is. Just be mindful when you see these massive profit gains (or hits) in the quarterly reports.
One more thing: You may have also noticed Meta's massive one-time profit hit this quarter, which they attributed to a change in future tax liability due to the "Big Beautiful Bill", and were wondering why the rest of Big Tech didn't fall victim to this change and charge as well – I know I was! That, it seems, stems from the fact that Meta's peers are better insulated from such changes because they all operate (at least with footprints in different countries and where IP is held) more globally, and have taken steps in advance to dampen such effects...
2025-10-31 22:59:07
Earlier this week, ahead of Apple's earnings:
Apple is set to top $100bn in annual revenues from its services business for the first time this year, despite mounting legal and regulatory pressure on its App Store.
The services unit — which includes iCloud, Apple Pay and AppleCare insurance — is expected to deliver annual revenues of $108.6bn in the year to last month, according to analysts’ consensus estimates from Visible Alpha, up around 13 per cent from the year before.
If Apple hits those numbers when it reports its fiscal fourth-quarter results this week, that would make its services division alone larger than the entire annual sales of Walt Disney, Tesla or Tencent this year.
Well, they surpassed the expectations on Services, coming in at $28.8B for the quarter. So yes, they're well ahead of the $100B run rate. And so yes, that business – again, just Services – is now set to be bigger than Disney, Tesla, and all but around 40 companies in the Fortune 500, which is wild.
Services are forecast to make up more than 30 per cent of Apple’s revenues by the end of the decade, when the unit’s sales could be as much as $175bn, according to Visible Alpha estimates.
By comparison, the iPhone makes up around half of Apple’s expected $415bn in total annual sales in its 2025 fiscal year, with smartphone growth expected to be around 4 per cent.
The segment should be way over 30% of revenues by then – probably past 40% if current trends hold. In fact, the division is on pace to surpass the iPhone business around a decade from now, in the mid-2030s. There's a lot that can and will change by then, but that includes a lot that could change even more in Services favor, including if Apple moves further into advertising, which is already in the works. And AI will be a big wildcard there, of course. It could supercharge Apple Services, or it could hurt the company if they can't get their act together. It could, of course, also boost hardware sales if it's used more as a device upsell and not a Services upsell (it will undoubtedly be used as both).
Of course, it's likely that Services is already ahead of the iPhone in one key metric: profitability:
Digital goods and subscriptions command a high profit margin — even more than Apple’s premium-priced hardware. Gross margins for services are expected to hit 75 per cent in the most recent financial year, Visible Alpha data suggests, compared to 40 per cent for the iPhone. That has helped Apple to steadily improve its overall gross margin from 38 per cent in 2020 to around 47 per cent this year.
In fact, Services remain close to surpassing the profit of all of Apple's devices, combined, as Jason Snell has been tracking over at Six Colors for some time now. That could happen at some point next year – likely in Q3.
Yes, a change to the App Store model, which is under ever-increasing pressure around the world, could change all of these equations. But arguably more important was the saving of the Google Search payments.
And we'll see if/how those change in the Age of AI...
Regardless, it's inevitable that Apple becomes a Services company, at least from a bottom-line perspective. And one day from a top-line perspective too. They'll always tout the importance of the hardware (and broader software), but they'll also need to keep growing the business and that will continue to mainly come from the growth of Services.
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M.G. Siegler
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2025-10-29 03:49:00
Looks like an IPO is back on the menu boys! Actually, probably a number of mysterious "new ideas" for financing well before that happens. Because lord knows that OpenAI will need it. At this point, it's clear that hundreds of billions – if not trillions – will be needed to push the company to AGI (or bust). And now they have a much cleaner path towards at least those financing goals because guess what? There is now actual equity for sale. Not just the nebulous promise of future profits.
Yes, OpenAI is finally converting into a for-profit. Well, sort of. Technically, a Public Benefit Corporation (PBC) that is still actually controlled by a non-profit – now called the "OpenAI Foundation". It's not exactly the structure that OpenAI wanted, but it's the one that works. At least for the states that have to sign off here. And Microsoft.
Speaking of, following the strange announcement of an agreement to agree to an agreement a few weeks back, today Microsoft is back with a far longer post on the matter. The key framing is clearly to let the world know that they signed off on this new structure. And for as vague as all the numbers surrounding OpenAI and Microsoft have been to date, they're very specific here:
First, Microsoft supports the OpenAI board moving forward with formation of a public benefit corporation (PBC) and recapitalization. Following the recapitalization, Microsoft holds an investment in OpenAI Group PBC valued at approximately $135 billion, representing roughly 27 percent on an as-converted diluted basis, inclusive of all owners – employees, investors, and the OpenAI Foundation. Excluding the impact of OpenAI’s recent funding rounds, Microsoft held a 32.5 percent stake on an as-converted basis in the OpenAI for-profit.
That last bit is particularly amusing. I assume it's in there just to let everyone (and their shareholders) know that they were going to get that rumored 33% stake, but the most recent crazy amounts of money coming into OpenAI diluted it down to "roughly 27 percent". Thank you for the clarification there, Microsoft.
Actually, I really do appreciate it because it proves that my guesstimate from just over a year ago was, well, spot-on. Specifically, I tried to back into a would-be cap table for OpenAI upon conversion into a for-profit. While Microsoft technically had the aforementioned rights to 49% of OpenAI's profits (after a 75% share of those profits until they recouped their investments), it simply didn't seem reasonable or tenable that this would translate 1-to-1 into equity.
And it's quite possible that Microsoft wouldn't even want such high ownership – which sounds weird, until you consider the regulatory pressure they'd be under owning just about half of the world's most important AI company. It's the same strange situation that caused them to step back from their board observer role (after Apple perhaps forced their hand in trying to negotiate their own stake in OpenAI – one which they backed away from at the last minute).
Anyway, in simply trying to think through a reasonable equity stake for Microsoft given their $13B or so in early commitments which not only kept OpenAI afloat (after their main benefactor up until that point, co-founder Elon Musk, turned his back on and his wallet off for them) but allowed them to thrive with Big Tech compute power for a then-small startup. And, of course, what Microsoft might think is a meaningful stake for that backing, since they would have to sign off on any conversion. So 33% seemed like the sweet spot, and it was.
It's also, I should note. A larger stake than almost any VC owns in any company from an early round of financing. And certainly a lot more than any VC owns in any AI company. This ended up being a fantastic deal for Microsoft from a pure investment perspective – at least so far. And that's why it was always especially wild to me that Microsoft kept trying to distance themselves from OpenAI. I get that they felt burned by the Sam Altman coup (and specifically the fact that it happened without a heads up), but this deal will go down as a textbook example, I suspect quite literally, of how a multi-trillion dollar company under intense regulatory scrutiny could essentially co-develop the next most important industry by doing it at arms-length with a non-controlled startup.
Does anyone think Microsoft could have developed AI in-house by themselves? Even if they could overcome all the usual Innovator's Dilemma issues, there would have been too much regulatory pressure (certainly before the Trump administration came into power). Just look at Google. Which had all the pieces in place – and, in fact, had all of the key inventors of what underpins LLMs in house – and they still fumbled the bag out of the gate. It's not hard to see why, and the same issues would have fallen on Microsoft, which, honestly, wouldn't have even gotten that far. Both Google and Microsoft are now are where they are with their own internal projects because OpenAI cleared (and showed) the way forward. And Microsoft made that possible! And so now they own a stake worth "approximately $135B" as a result. And if OpenAI really does achieve AGI, it could be worth trillions. It could be worth more than Microsoft one day!
That sounds hyperbolic, and it probably will be. But there's at least a chance that it isn't. And this conversion gives that chance substantially better odds.
Anyway, OpenAI's blog post on the matter is largely about how well capitalized the non-profit will be under this new structure, with that stake worth "approximately $130 billion" (which seems purposefully set up to be just below Microsoft's stake – unless it's the exact same and they just didn't coordinate on their talking points!?), and a $25B initial commitment of capital. In fact, the post doesn't even mention Microsoft! And that's hardly surprising since once they got Microsoft to sign off, the real case they had to make was to California (where OpenAI operates) and Delaware (where OpenAI is incorporated) to make sure their AGs signed off on this new structure. And they're not in the business of protecting Microsoft, they're all about protecting the non-profit and tangentially, the tax-payers of their states.
But Microsoft's blog post has the real deal meat. Beyond the above, we have actually quite clear bullet points! All around the following notion:
The agreement preserves key elements that have fueled this successful partnership – meaning OpenAI remains Microsoft’s frontier model partner and Microsoft continues to have exclusive IP rights and Azure API exclusivity until Artificial General Intelligence (AGI).
It also refines and adds new provisions that enable each company to independently continue advancing innovation and growth.
To quickly take the points one-by-one:
Before, OpenAI's board had the right to make such a declaration (in consultation with Microsoft). Which obviously was a huge conflict of interest. How an "independent expert panel" will be able to define AGI when the rest of the world – including all of these companies – cannot definitely still feels like a problem. But there's at least better structure around the decision now. Who is on this panel?
This is a two-year extension from the prior deal and negates the AGI clause that severed such ties if and when AGI was declared. That's a big win for Microsoft, obviously.
This is more of a behind-the-scenes element of the above. Basically, while Microsoft can still use the models and products through 2032, their visibility into exactly "how the sausage is made" still ends in 2030 (or when the above expert panel declares AGI). But the "exactly" caveat is also key because Microsoft will still have some extended rights here with model weights, for example. OpenAI simply better protects their "research IP" for the long term with this.
Jony Ive and his io team say "thank you" for this one. As they can now work on their "anti iPhone" (not a phone, but a device that they hope will lessen the addiction to smartphones) in peace.
This is a nice win for OpenAI, getting more flexibility to partner with others on products – but any APIs they build will still have to flow through Azure, so Microsoft continues to get some benefit in that scenario.
And this is key for Microsoft's own AI team, which has spent months and months framing it as if they were happy to let OpenAI do all the heavy lifting while they did smaller stuff – when really, they just weren't allowed to work towards AGI under the previous agreement. Now they can.
It would be sort of wild if Microsoft gets to AGI first – and does so thanks in part to OpenAI's IP. This is trying to cover that situation, which seems like it will still be a massive issue if that happens. Especially now that Microsoft would be unnaturally compute constrained by OpenAI in that situation?! Anyway, it's obviously unlikely. But Microsoft's AI group will be trying to go for it, clearly!
This seems like a way to lower the upfront revenue hit that OpenAI has to give back to Microsoft, which is what OpenAI has been aiming for and modeling in their internal documents (this percentage going down over time). Still, it's a win for Microsoft that it's remaining in any capacity.
What's $250B more in commits when trillions are being thrown out there? It's a small price to pay in theoretical money to remove the ROFR on every single cloud/data center deal OpenAI strikes...
This helps both OpenAI and the US government, obviously, as Microsoft is no longer a bottleneck for deals. Though it's interesting that they specifically call out "API access" which is also obviously the thing Microsoft is protecting most dearly in the other points above. So I guess this is a clear carve-out.
Something which, of course, OpenAI has already started doing recently. This alleviates any tension with Microsoft worried they're giving away IP that should belong to (or be protected by) Microsoft, it seems.
So yeah, there's a lot in there. And, you have to suspect, even more finer details that the companies aren't sharing, but will undoubtedly get reported on over time. It's no wonder the two sides took forever to hammer this out, and now they can finally play nicely again. At least until tensions inevitably arise around the margins of all of the above points. Which will obviously keep happening.
But that's for another day. For now, we welcome Microsoft as the newest Big Tech player with an official massive equity stake owner in Big AI. OpenAI and Microsoft are so back.
One more thing: Re-reading my post on the bizarre pre-announcements from Microsoft and OpenAI six weeks ago, I think I nailed this all pretty well, actually (if you'll forgive the long excerpt):
Alleviating the Microsoft portion of this situation is an important step, but not the only one here. But it should help the company continue to make the case for the PBC transition, which they had hoped would happen this year, but reportedly was pushed into next year because of the impasse with Microsoft. Again, that impasse is now being cleared – well, they're working on it. To me, that suggests OpenAI is very much trying to make this happen this year still.
And yes, contractually they're incentivized to do this because as has been widely reported, OpenAI's new big benefactor, SoftBank, had the right not to fund the remainder of their portion of the $40B fundraise if the company didn't transition by the end of the year. Now there's almost no way SoftBank was going to back out of that agreement regardless – I mean, they're buying up secondary shares right now at $500B, which is significantly higher than the shares they're buying in the primary transaction. They'd be crazy not to take the automatic markup of their money which they can still invest at $300B!
But we're too in the weeds now. The key is that solving this Microsoft situation was perhaps the main element in trying to get a transition done any time soon. And even without the SoftBank deal pressure, the pressure from those states is now far more acute. One imagines that OpenAI wants to get this done quickly before they're sucked into endless political hearings about AI's role in the mental health crisis – which is clearly about to happen.
If that's true, one has to wonder what OpenAI conceded to Microsoft here to get them on board, fast. Again, they're not saying because they're still negotiating, but clearly a big part of it is "The Clause". That is, the stipulation in the original contract that Microsoft would lose access to OpenAI's technology if the company achieved AGI. It's decidedly more complicated than that, including in the who gets to decide what constitutes "AGI" (namely OpenAI's board, which is now a totally different board, composed of people will completely different backgrounds, than the one that was supposed to be determining it), and if Microsoft retained access to "older" AI technology, but the high-level was clearly a problem for Microsoft.
And it keeps coming up because Sam Altman on down has kept hinting that the company may be close to achieving "AGI". It was clearly pissing off Satya Nadella, who made that more or less known, and so talk suddenly shifted to "superintelligence", which is totally different, you see.
At the same time, a lesser known part of "The Clause" apparently also blocked Microsoft itself from going after AGI. This undoubtedly didn't matter to the company at the time of the agreement, but since then – well, things have changed. Including "the blip" – the brief moment in time when Altman was ousted from OpenAI, only to be quickly reinstated with the help of Nadella – which torpedoed the trust between the two sides and led to Microsoft inventing the "hackquisition" process (born out of the way they almost hired all of OpenAI during said blip) to take on Inflection AI talent and bring DeepMind co-founder Mustafa Suleyman on board to lead new AI efforts internal to Microsoft.
As for my guess as to what would happen:
"The Clause" "remains" but, it's modified. And my guess would be that it's modified such that Microsoft is also now free to pursue AGI and/or superintelligence, and anything else they wish to call it. I'm also guessing they'll also retain some form of access to OpenAI's technologies beyond 2030 – the other aspect of the contract Microsoft had reportedly wanted to change. Again, Microsoft seemingly holds the cards here with the sign-off sword in hand and with all the other issues swirling around OpenAI...
All in exchange for a 33% stake. Now a "roughly" 27% stake.
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
2025-10-28 03:57:41
As expected, the overtures from Paramount Skydance to buy Warner Bros Discovery is bringing everyone out of the woodwork to also look at the deal. And while it doesn't sound like anyone is as serious as Paramount head David Ellison right now, WBD head David Zaslav would sure like to spur on some other bidders:
Zaslav doesn’t want to do the deal — at least not at that price — and fears the Ellisons will sway shareholders to their side. So, nearly three years after the creation of Warner Bros. Discovery – an unsuccessful stretch that led to this precarious moment — Zaslav is trying to reclaim control over his company and his narrative.
The 65-year-old media mogul projected confidence on the call. Apple and Amazon are interested, Zaslav told staff. And, if you read the press, you’d know that Netflix and Comcast are as well. Whether any of those companies will actually bid for all or part of Warner Bros. is still unclear. But the company will now open its books to any interested parties, hoping to find another buyer or force the Ellisons to offer considerably more.
Shaw's report frames Paramount as the most likely buyer followed by Comcast. But the tech players here remain wildcards. Apple and Netflix have both publicly downplayed the interest, but they're also clearly at least somewhat interested here. Certainly interested enough to have some conversations:
For all of Zaslav’s confidence, executives at Warner Bros. aren’t sure Apple or Amazon will take a real run at the company. Entertainment is a marketing expense for those companies, which make most of their money from consumer electronics, e-commerce and cloud computing. Like every other major technology company, they are more concerned with winning at AI than the Oscars.
Apple services boss Eddy Cue has told people he would at least like to look. Amazon media boss Mike Hopkins is going to take a look as well.
But Apple has generally eschewed major M&A, and it’s hard to imagine CEO Tim Cook explaining to shareholders why his company’s biggest deal ever is for a shrinking media company that would provide a marginal lift to its core business. Amazon, at least, has already made a major investment in media.
It does feel like in a perfect world, Eddy Cue would swoop in to scoop up just the Warner Bros studio plus HBO Max streaming service. He wanted to buy HBO years ago but was rebuffed. And now with those parts of the company on the verge of being split off, perhaps he was sitting on the sidelines just waiting for that to happen... But this Paramount offer may make it so that he can't wait.
But that's an issue because it would have to be a massive deal to buy the entirety of WBD – something probably north of $75B to get it done ahead of Paramount. And are Apple shareholders going to love that at a time when all of Wall Street views them as behind in AI and waiting for them to make a deal there? I'm not saying that's right or wrong – in fact, you could certainly argue that Apple shouldn't do some massive AI deal right now, especially with prices way overheated (but you can also make the case for such a deal simply to re-wire the internal culture and building mentality for the future, if you believe AI is the future).
Regardless, if the stock market opens one day to Apple having spent almost $100B on an movie studio, a streaming service, and some television channels... they're probably not going to be happy. And that's a reality Tim Cook has to weigh here, no matter how much Cue might love to get his hands on HBO (and how much that might actually make sense for Apple TV – the artist formally known as 'Apple TV+' as they go for true streaming scale).
Shareholders of Amazon might be even more annoyed to see the company trying to buy WBD after the MGM deal hasn't exactly gone swimmingly, or done much of anything to help their bottom line – and James Bond's mission in that regard got billions of dollars more expensive recently for Amazon to get full control. This is another company with some real long term questions around AI still at the moment. One that just laid off, um, 30,000 workers.
Netflix? Well, this is not the type of deal that Netflix does. But that doesn't mean they should never do this type of deal. It's certainly more directly in their wheelhouse versus the other tech players...
While Netflix looks at potential deals, it doesn’t pursue them. It built up its own studio while watching rivals waste time and resources on failed mergers and integrations.
This time feels a little different. Hastings is spending more time on a ski resort than Netflix, and co-CEO Ted Sarandos has told friends he is interested in Warner Bros. While Sarandos doesn’t want cable networks, he has described the company’s assets as an opportunity. He would love to own its intellectual property, including HBO’s. (It would be ironic if Netflix, which once modeled itself after HBO, bought the company and essentially shut down its network.)
Not only has Sarandos apparently told friends this – he said as much on Netflix's earnings call! His comments made it pretty clear that if they could just buy Warner Bros and HBO, Netflix would be interested. But if it comes with the other WBD baggage, they'd be less interested. So, the same boat Apple is in (and undoubtedly Amazon too – probably even Comcast as the TV stations would be a regulatory nightmare for them, but they need a streaming service and content to bulk up Peacock into a real player).
So basically, it sounds like if Warner Bros Discovery is able to split themselves into two early next year, there will be a lot of bidders for the studio + streamer part of the business. But this Paramount offer has thrown that path for a loop – which is undoubtedly exactly why they did it: they're far more likely to win against the above larger players if they can dictate that the terms are taking on the entire turkey, not just the good bits.
So can Zaslav figure out a way to just sell Warner Bros and/or HBO Max ahead of that split? The problem with waiting is that Ellison is undoubtedly going to go hostile. And if they have the money...
Forget Netflix's goal to become HBO before HBO can become Netflix. The goal now may be for Netflix to buy HBO before someone else does...
2025-10-27 05:17:57
On one hand, I always thought it might make sense for Apple's first "foldable" device to be a tablet, given that the product line is less critical (and thus, more open to experiments) than the iPhone lineup. And the fact that Apple actually has a tablet business with the iPad, whereas many other companies merely think they do. On the other hand, I thought it would be a small foldable tablet, not a "giant" one. That device, perhaps unsurprisingly, is having development issues, it seems:
Apple Inc.’s effort to reinvent the iPad by adding a giant foldable screen has hit development hurdles, potentially delaying the planned launch.
The company has been working on the device — projected to cost around $3,000 — for several years and had most recently aimed for a 2028 release. But engineering challenges tied to weight, features and display technology have pushed its potential debut to 2029 or later, according to people familiar with the matter.
Remember when an analyst thought such a device would be launching alongside the 'iPhone Fold' in 2026? Yeah... lol. As I wrote in March:
Back to Pu's other foldable he thinks is coming in 2026 (which is not coming in 2026). Even if Apple could figure out a way to create an 18.8" foldable device, how much do we think that would cost? The 13" iPad Pro starts at $1,299. My guess is that the 'iPhone Fold' – again, with a 7.8" screen – will cost at least $1,999 to start. And quite likely more than that. An 18.8" foldable device would undoubtedly be at least $2,999 and probably a lot more than that. Perhaps even beyond the Vision Pro's $3,499 range. And what's the market for such a device?
Yes, many Macs are above that price range, but that's mainly for professionals. Are professionals going to use a first-generation foldable touchscreen? Will it feature a fully touch-based keyboard when folded? I mean, eventually, sure. But not in 2026. And probably not 2027 either.
And probably not 2028 either. Nor 2029...
I'm guessing such a device, if it ever sees the light of day, is more a next decade thing. And that's perhaps, in part, because Apple's actual first 'Fold' is thought to be an iPhone that unfolds into something more akin in size to an iPad mini. So it is sort of a smaller foldable tablet, in a way. Though we'll see how Apple markets it...
But one thing it's not, per Gurman's report:
Apple is working with Samsung Display Co. to develop the roughly 18-inch panel for the device, said the people, who asked not to be identified because the work isn’t public. The screen minimizes the crease seen on foldable displays, matching an approach that Apple is also using with its upcoming foldable iPhone.
I still can't believe Apple is trying to go with 18 inches here. It just seems like it would be comically large, even for a foldable. I mean, I guess that would be cool as a portable external monitor. But who wants/needs a tablet that large? Would it be meant to be used with an external keyboard and trackpad when fully unfolded? And while I know the Huawei "MateBook" (lol) and others exist as a sort of half-fold tablet/laptop thing, this also just seems like it could be the TouchBar debacle on steroids for Apple.
Unlike the foldable iPhone, prototypes of the new tablet — internally code-named J312 — don’t include an external display. When closed, the device resembles a Mac laptop, with an aluminum enclosure on both sides. When opened, it’s about the size of a 13-inch laptop.
Developing the technology for an 18-inch foldable display has proven especially complex and costly, pushing estimated prices to roughly triple that of a 13-inch iPad Pro. Like that model, the foldable tablet would use the OLED standard. The technology, short for organic light-emitting diode, allows for more vibrant graphics and thinner displays.
Engineers are also concerned about the weight of current foldable iPad prototypes. While today’s iPad Pro ranges from about 1 to 1.3 pounds depending on size, test units of the foldable product weigh around 3.5 pounds. That’s roughly the same as a MacBook Pro.
Okay. So it's a MacBook/iPad hybrid that's decidedly thicker and heavier and more expensive and undoubtedly would be more of a challenge to operate as a laptop and as a tablet. Sounds great. But hey, the entire thing is a touch screen. Cool? Maybe for a demo, undoubtedly a great feat of engineering, but for actual usage?
Look, I get the whole "they would have asked for a faster horse" issue here, but really, who is this product for? I mean, my god just let us dual boot macOS on the current iPads Pro. Yes, iPadOS keeps inching closer to macOS, but it's sort of turned the iPad into a "Mac Jr." at this point. Obviously, Apple would be far better suited to simply ship a touchscreen MacBook – which it sure sounds like they're on the verge of doing next year.
Not in the 2030s.
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
2025-10-26 03:33:26
As someone who bought and played the original Xbox simply for access to Halo, it's hardly a surprise to me that they're remaster-chiefing that original version for the 25th anniversary. But where they're releasing it is truly wild:
Remaking a classic video game with modern technology to reach both nostalgic and new audiences has become commonplace in an industry facing financial challenges.
So it was not a huge surprise when Microsoft announced on Friday that it would release an updated version of Halo: Combat Evolved next year, the influential game’s 25th anniversary.
One detail, though, was astounding.
The sci-fi franchise that has helped the company sell four generations of Xbox consoles and generate billions of dollars is coming to the Sony PlayStation, Microsoft’s direct competitor, for the first time. It is the equivalent of Disney letting Mickey Mouse roam Universal Studios.
Yes, it's like that, but with guns.
This is, of course, not an entirely new strategy for Microsoft – they've been slowly but surely releasing Xbox games onto other platforms for the past couple years or so. But this is Halo. The one franchise that truly set Xbox apart.
Of course, that hasn't exactly worked for Microsoft over the past 25 years as they're still far behind Sony in the console race, and now once again behind Nintendo, who (re)found their footing with the Switch (and Switch 2) after the Wii U stumble.
At the same time:
It is an effort to reach more gamers and to maximize revenue after the company opened its wallet to acquire major studios. Microsoft spent $69 billion on Activision Blizzard, which makes Call of Duty and Candy Crush, and $7.5 billion on ZeniMax Media, whose portfolio includes The Elder Scrolls and Fallout.
As of now, this sure looks like it will go down as one of the biggest blunders in Microsoft's history.1 Call of Duty and Candy Crush remain hits, but they're in no way moving the needles as Microsoft had clearly hoped. You don't spend $75B+ to be the third place player that's bleeding money. Obviously. So the shift has been to "Xbox Everywhere", but that's starting to feel like it's not going to work either – and that this Halo maneuver might be the last ditch effort to make it work.
Microsoft leaders hope that bringing its premier franchises to new audiences will ultimately attract more customers into the Xbox ecosystem. Booty said consumers no longer have a strong attachment to the actual devices they use to play games.
“Our biggest competition isn’t another console,” he said, adding, “We are competing more and more with everything from TikTok to movies.”
On paper that makes some sense. But in reality, that doesn't seem to be the case right now with PlayStation and Nintendo. It's more just that the console business hasn't been working for Microsoft.
There are signs the strategy is working.
Between April and July, six of the top 10 best-selling games on Sony’s consoles were Microsoft properties. Near the top was Forza Horizon 5, four years after it was initially released for Xbox consoles.
Microsoft declined to provide PlayStation 5 sales figures for Forza Horizon 5 and Gears of War: Reloaded, a remake that was released in August. Sony did not respond to a request for comment.
By releasing the first Halo and Gears of War titles on the PlayStation 5 decades later, Microsoft is introducing lucrative franchises to loyal Sony gamers. (Games in both franchises, including a 2011 remake of Halo: Combat Evolved, have been playable on computers.) That exposure may pay dividends if Microsoft brings Gears of War: E-Day, which has a 2026 release date, and Halo Infinite’s eventual follow-up to the PlayStation 5.
Okay, but does Microsoft really want to be just a games publisher? Of course not!
Any full-price sales on Sony’s console would be particularly important for Microsoft.
Tens of millions of Xbox owners subscribe to Game Pass, a subscription service whose highest tier provides immediate access to all Microsoft-published games. The company significantly raised that tier’s prices this month amid reports that its decision to include Call of Duty: Black Ops 6 as part of the subscription cost the company $300 million in sales. A Microsoft official confirmed that the company was also conducting internal tests for free ad-supported cloud access to some games through a program separate from Game Pass.
Yeah, they're flailing about here trying to find an way to square this circle. But come on, clearly there is not going to be one. Microsoft will probably give it one more go with Xbox hardware (something which is undoubtedly already well underway) and then we'll probably start to hear about a winding down of the whole thing. There's too much money to be spent on other initiatives like AI, etc.
Unless putting Halo on PlayStation saves them in some way. Which it won't. It's a Halo Mary. And no one is answering the prayer.
One more thing: I think my take from nearly two years ago holds up well:
Feels like a terrible way to go into a new initiative. Microsoft should have more conviction in what they're doing, if they're going to do it. But it almost feels like they're acknowledging that nothing else has really worked to shift the company from the distant third-place player in the console market, so the new strategy now is just "Xbox everywhere" as they put it.
But again, that strategy is a mess, at least right now. They sell Xbox consoles. Xbox Game Pass. Xbox games. And now games for other consoles.
Yes, they've been doing the latter for a while due to acquisitions. And continuing to do that was the key point of the Activision Blizzard purchase. Microsoft already has to keep selling certain titles on other consoles, so now they're just trying it with their own as well, right?
But how will that help Xbox, the console? The answer is that it won't. The best it can do is not hurt it further. And maybe that's the belief since the exclusive titles clearly weren't moving the needle in terms of Xbox console sales anyway. Okay, so why stay in that business? Unclear.
And arguably more unclear now. Also:
But you know what Nintendo doesn't do? *Release their games on other consoles.* Sure, they have some mobile games now. But nothing on PlayStation and nothing on Xbox. And it's basically impossible to believe that they ever will. Again, their strategy works. Their IP moves the hardware. This is also what works for Sony. But per above, that hasn't been working for Microsoft, so they're seemingly now trying to change everything to know what the right way forward may be. But it's too muddled of a strategy with too many pieces moving at once for there to be much of a path to success here, would be my guess.
Good guess. And finally, my footnote from the above:
Never stated in all this talk of the "end of exclusives" is that an exclusive is undoubtedly what put Xbox on the map in the first place: Halo. It's why I bought the first Xbox. Same with most of my friends at the time. Microsoft, for whatever reason, hasn't been able to really replicate that early success.
Now they're trying. On PlayStation.
1 This is where Steve Ballmer can thank his lucky stars (not his lucky Clippers) that the Yahoo deal was blown up back in the day. ↩
