>> the president announced he is sending more troops to fight isis. >> their expertise has been critical of. i havehe success approved the appointment of up to 250 additional u.s. personnel in syria to keep up this momentum.

>> combating isis was one of the topics the president discussed with european leaders. at least 14 people were killed and more than 30 others were wounded. a gay rights who which for the u.s. agency and another man were hacked to death today in english dishes capital. targeted atheist, moderates and fines. the brussels subway station hit by a suicide bombing is reopened. 16 people were killed in the march 22 attack. global news 24 hours a day.

♪ emily: i am emily chang and this is bloomberg west. investors braced for apple earnings yesterday and the question remains, how far have iphone sales fallen. and charter communications approved -- received approval for its takeover of time warner cable. and we embark on the busiest week this quarter. what you need to know ahead of the report. it has been a year since apple released the most significant new product since the tim cook era. the most hyped gadget since the iphone, the apple watch. mr. cook: the apple watch is the most personal device we have ever created. it is not just with you, it is on you. since what you where is an expression of who you are, we designed apple watch to appeal

to a variety of people with different taste and different preferences. emily: apple has not disclosed sales figures but ibc estimates about 11.6 million were shipped in the first month of 2015. they compare that to the first sales of the iphone which were a mere 6 million units in 2007. the iphone went on to be there most important product ever. with that in mind, why is the apple watch still dogged by the idea that it is a disappointment. joining me now is the ibc chief research officer in boston via phone, david kirkpatrick joining me for the hour, and here in san francisco, cory johnson. i will start with you, cory. would you say it is a success? cory: absolutely. if the iphone is a success, than the watch has to be. emily: why are people

disappointed? cory: people are whiners. the phone compared to the ipod in the first year was seen as very successful because the ipod business was smaller than the phone business, but the phone business has become one of the guest in the world. anything pales by comparison. you saw the take rate on the ipad was fantastic in its early years. and the watch compared to the size of a iphone, it is seen as so much smaller because it is. it should be seen as a great success. emily: crawford, when you look at the number that you put out, should it be higher? >> i think that it could have been higher, but it really came down to price point and functionality. i disagree a little bit with cory, i hate to be the king of the winer parade -- whiner parade, but it is a different world.

the world that the watch entered into. it is a word -- world that has been revolutionized by the iphone. i think that it was too expensive and frankly, there wasn't a use case that has emerged so far that made it a breakthrough product. it is, an aspirational product, people wanted, but they are not buying it in the way when we surveyed that they are interested in it. there is a difference there. emily: if you say that the average price of the watches for hundred $50 to $500, -- $450 to $500, that is a most $12 billion. but how does it compare to fitbit? >> if any other company had released the apple watch, some other company, it would be heralded as a fantastic success. but this company is unique and uniquely in need of new revenue

streams and uniquely scrutinized. crawford is right. the price point was an issue. i got one recently when the price went to $300. i said, that is now worth it for me. i don't know why it made a difference for me but i am very happy with my apple watch. i would probably not be as happy as i am given that it is still limited in some functionality if it were more than $300. for some reason, that feels right to me. i really like it and i know tons of people who really like it. emily: it has been limited by battery life, you have to plug it in everyday. your phone does on most everything at the watch can do. crawford, do you think it could become a breakthrough product? does it have the potential to be the next iphone? >> i think that there will be multiple iterations and the

future of the product will be tuned, not only to wide consumer ranges, but to verticals, and industries. to be able to use it in specific industries and use cases. i think you will see the products that to splinter overtime and get tuned by different form factors, different use cases. when you start getting that, a lower price point, and a third thing which is direct connection to 4g networks, then you have something that will see a significantly larger degree of uptake than we have seen so far. emily: we will be watching iphone sales. they still count her 68% of iphone revenue -- of apple revenue. we are expecting the numbers to be down from a year ago. the numbers are dropping.

cory: i think guidance will be important. to understand what they think will happen, with the addition of the new phone and the smaller phone into their mix and what that means going forward. the guidance has been fairly accurate. it is usually a little bit low, but we will see what they tell us about the future. i think it will be much more important. emily: crawford, if not the watch, and putting the iphone aside, what is the next big business for apple? can services make up? >> i think that, obviously the game changer for apple, and what we are watching closely is the augmented and virtual reality space. that is probably at least one year out, if not further. i think that is the next game changer moment for apple. that, again, could be a fascinating opportunity for

them. emily: what do you see as their role in the augmented and virtual reality space? >> from their overall standpoint, they have such an opportunity to drive software development, as well as new, interesting form factors that could not only the entertainment based, but use case and industry based. now you start getting into customer service, and ways that folks do in field service. you get to many new businesses. google started to scratch the surface. microsoft is focused on hololens and facebook with oculus. thinking of the quote from tim cook. that extension of you. this could be a very personal product that include software that apple could differentiate. emily: david, you are nodding.

the san jose news put out interesting numbers suggesting that apple suggest -- accounts for 40% of the profit made by tech companies in the bay area. the we are hard on apple, they still account for a huge piece of the pie in silicon valley. >> in many ways, it is the most successful physical product company that has ever existed as cory suggested before. it is fascinating what crawford is saying about mostly augmented reality. i don't think apple will make a big play and virtual reality. it is clue desk will with google glass and microsoft hololens. i totally agree that this is an absolute inevitability that somehow or other apple will get into augmented reality and that could be a big business for them. they are gigantic and amazingly successful. the problem is that the expectations are gigantic alongside their scale. emily: david kirkpatrick, you're

with me throughout the show. cory johnson, you will be back a little bit later. one stock that we are watching has to be xerox. shares plunged the most in six years off the back of a disappointing earnings report. xerox is struggling with sales declines of printers and copy machines. on top of that a stronger dollar and week market sales have pressured the company to accelerate layoffs. xerox is on track to complete the document and outsourcing companies by the end of the year. on the other hand, the shares of first data gained as much a 6.5% after demonstrating improvement on the bottom line in latest results. the payments processor said the net loss narrowed from $66 million to $112 million a year ago.

beyonce drops an album along with an hour-long hbo special over the weekend. how she is changing the way that educators to business. plus snapchat has skyrocketing user growth but is it enough to warrant a $16 billion valuation? we crunch the numbers later this hour. ♪ ♪

emily: now to music streaming. tidal won a victory from beyonce's decision to launcher of them exclusively on the service after launching a one hour special on hbo. tidal is only 3 million subscribers compared to spotify's 30 million active users and apple music's 11 million.

so who wins, the music or the customers? keith, i will start with you. the album to say the least is powerful, the video special was incredibly moving. it is interesting that the narrative is all about jay-z as we understand it cheating on her, yet she gives the entire album to tidal. what do you make of this? >> i think it is another explosive marketing move by beyonce to seize what is going on in the thoughts across america. her timing is impeccable. her execution is phenomenal. enter content, her store -- and her content, her storytelling is special. this is going back to the super bowl when "formation" came in place. this is a woman who knows how to seize the thoughts and the minds

of young people and make sure it is being talked about across a number of platforms. this drives not only consumption, but avid fandom. she has done a great job. emily: i wonder if this is something that can only work for a megastar like beyonce. someone suggested that because album sales are not what they were, artists are taking more risks. the pressure is off. but not just anyone can do what she has done. >> there are few people who can command the kind of attention that beyonce can command. as keith point sout -- points out, she is brilliant we taking advantage of that and functioning as a genuine, contemporary artist. i am not nearly as big a longtime fan as many people and keith knows her, and all that, but i really blown away by the impact of the video which i have seen, and that ambition of this creative effort.

the tidal element is a weird one, but very few could do it. but anything she does, she gets attention for, and she is utilizing that to make a bigger artistic statement. emily: keith, if you know beyonce, take us into the mind of queen bey, and how she came to this epic decision. >> i don't quite know her like that, but her mind is clearly at a higher level than most. what she was able to do to hold her own during a big weekend in the media really change things around. she is not just building herself as an artist, but also the business complex around her. there is an impact industry, an influence industry. her way to uniquely tap into the core and the heart of her audience. that is something that really makes her transcendent.

she has moved from the old ways of doing the music business to revolutionize how music will be done now. the whole opportunity to lay out the movie beforehand, to get the videos going early. she has really done something transcendent. emily: tidal has a few other exclusive deals, but it is still happening piecemeal. how many subscribers to they get as a result of this? and do you see -- subscribers do they get as a result of this and do you see -- >> they have their own personal communications to their phone, some people are apple, some are android. all of these things come together with music inception. but it moves -- music consumption. it moves tidal up on the priority list. everyone has tv but not everybody has hbo.

when you do "game of thrones," or certain things, that moves up hbo. i think tidal is doing things that are making them relevant and making them the home of fantastic creatives. emily: you know sean parker very well. he learned a lot of lessons from napster about dealing with the music business the hard way. you have spotify and others learning that as well. you have major artists like adele, prince, and when stephani recently not giving their music to these -- and gwen stefani recently not giving their music to the services. >> i have always thought of tidal as a vanity project. but if you wanted to listen to prince in the last few days there was no other way to do it unless you bought the music on itunes or whatever. i have been struggling to find

it like tens of millions of other people in the last week. there is nothing out there to speak of. they can hold onto those exclusives. just like you can be an apple person or android person, you can be a spotify person, but i think it may be that we might want to have hbo and showtime, just like, maybe you need to subscribe to more than one. it's not like they are that expensive. if you are a music person, that could be the future we are heading to. emily: beyonce has certainly made music and video history with "lemonade." thank you so much. up next, the hottest social media company around is facing some monetization issues. how can snapchat turn a big user base into big bucks?

♪ ♪

emily: snapchat is on fire, with a monthly user base of over 50 million in the united states. snapchat is used more than twitter and gaining on instagram as well. why is the company having trouble making money? here to break it down, our bloomberg senior research analyst, plus david kirkpatrick. you put together a lot of information. this is a private company and they don't release all this information, but your conclusion is that snapchat is growing strong but not really making money? >> their projections this year are about $309, but if you look at the -- $300 million, but if you look at the user growth it has been phenomenal. the monthly active users can be anywhere between 220 million to 250 million.

it all skews toward 24 years old and less. when it comes to monetization, especially when you look at the valuation of the company, it is reflecting revenue speed and rocket growth. they are trying to get into advertising, and ad api's and henceforth. emily: how are ad copies responding? >> we are's -- how are ad companies responding? >> we are seeing -- it will be important for snapchat to move on from this a lockhart model -- a la carte model that they have. emily: as the guy who wrote the book on facebook, do you see parallels to facebook's early days when people were saying, we don't know if they will ever make money.

is snapchat different? >> maybe i am just blind, i see it different. but you cannot fight success. it clearly has a cultural moment, right now, just like beyonce in a way. the thing that i think is somewhat different, though i don't know the leadership team at snapchat has well as i got to know them early at facebook, but it was my extraordinary impression of zuckerberg being a uniquely visionary, long-term thinker that caused me to shift my focus and write a book about facebook, "the facebook effect." but i worry about snapchat. it could come up really fast and go down really fast. there are things that it does that nobody else is doing. snapchat stories are not a big deal. not as confident that advertising will be a huge phenomena there. but brands picking stories there

could be a gigantic business for them. on the other hand, people in my generation or even halfway between can'te ven -- can't even figure out where to find stories, the interface is difficult understand. it has a lot of issues and i don't think it is nearly as user-friendly as facebook struggle to be from the beginning. emily: quickly, your response to that. it is fairly user unfriendly. >> all in all, the addressable market is likely a subset of facebook and google. they have to do these execution risks that we talked about. even facebook and hbo had to prove their monetization. it is to be seen on those risk standpoints if they can justify it. emily: interesting numbers that you crunched today. thank you so much. david kirkpatrick, ceo of techonomy sticking with me.

we will take a deeper look into twitter's somewhat anemic user growth and see why numbers have been steadily not looking so good. ♪ it is withholding a $50 million

payment on ib i see. one mdb says it has money, but it's ip ics obligation to pay. japan and germany also submitted bids for the $39 billion tender. the subs will be built in south

australia's capital creating almost 3000 jobs. that debt provisions. this is a move that can help them report larger profits. the head of china construction bank said it would be reasonable and profitable. resultsrt first-quarter and it falls close to the current minimum of 150%. journalistsver 2400 around the world. let's get the latest on the markets right now, here is heidi. we are awaiting on something. the first of the three major bank decisions this week. it's policy decision is out sometime on thursday morning, hong kong time.

we are getting some expectations perhaps even a deeper cut into negative rates. expected tobm's keep rates on hold for this month. seen across the asian pacific deepening losses. a lot money is coming out of emerging markets. down 3/10 of 1%. 3/10 of 1% falling for a second day. we have a little bit of strength in the yen and that is coming into play. take a look at what we are that is down by about 8/10 of 1%. is still up about 9%. this is starting to be reversed given the structural issue with one mdb.

this is tracking gain and we see a little bit of gain. that is not playing out when it comes to energy and oil play in the region. that is how we are looking so far. emily: busiest -- it is an extremely difficult thing once also our editor at large is cory johnson. we touched on twitter a bit earlier and user growth is slowing down. where do you expect twitter to go. cloudone thing for user too slow.

>> we could be focusing on their growth of revenue per user. the fact that last quarter, the inest market declined twitter cannot get more publicity than it got last year. the notion that it actually shrunk was dramatically worry some. we wonder if that will continue and what kind of trend that might indicate and what numbers we may see. twitter has been an incredibly important role in the u.s. presidential election. some people say it has contributed to the rise of donald trump. a longer-terms as way for influencers to get their message out? think of long-term, we have not thinkf twitter --

of twitter in total users. donald trump is twitter's best advocate and marketer. brand is stronger but it has ever been. it is the question of where is the business, and could there be any other business aside from twitter? i would not rule that out. meanwhile, the fact is, they are not really growing. will growhink they their traditional advertising in the tweet stream. to bek the will continue more important for the influencers and the journalist. is an essential tool for getting influencers. >> it is extremely influencer, facebook has -- managed to do it right?

>> they are shrinking. the thing i look at about i call it their conversion rate. a look at monthly active users. dailych are people on it as presented to monthly? morethey turn the corner than 50% of users were on every a. those numbers are a percentage of monthly active users. it is not only a positive thing that most people are on a daily, more and more people are on it daily. votes for their ability to raise advertising rates and >> what did facebook do right that twitter did while -- did wrong? lex they had a better product to begin with.

very visionary in people use it. almost everybody use it -- almost everybody ends up wanting to use facebook. is a bigthink it mistake to compare these two services. i think twitter is a more anduencer oriented platform away for influencers to receive data. facebook is everybody standard information service. that is a big difference. >> linkedin has not recovered from that massive stock slide earlier in the year, which was on the back of an earnings report. you and david were on talking about linkedin that date. the next day investors reacted. they have not changed course. >> it was a very expensive stock because they had great success.

the numbers were not that bad in the quarter and they were not expected. management sounded confused in the conference call. you could hear frankness and linkedin said they were going to dry -- try a bunch of new products. i think that that was sort of the tender of the analyst for the next day. , and howhis business is this business going to grow within the company? all of this mounds of data was there secret sauce. even months and weeks after they watch them. >> you continue to think that is what happening to linkedin is unfair. >> i think linkedin is a great long-term business that is not duplicated by any service. it is for business people globally to connect with one another to find jobs and look for employees and increasingly

to consume content. i think their opportunities long-term really big with a very lucrative demographic. they have a lot figuring things out to do. leadership.isionary honestly, i in a believer in linkedin support. it is the only other social network besides facebook. people just do not step back and look at how distinct the sting -- distinct this thing is. and it might be because of the inoying things they get their e-mail. a lot of people are using it and it is becoming more and more of a de facto platform. >> what about amazon? .> the story about web services it is unlike amazon to have a .ery profitable product

last time around, not only was it very strong, they have been giving us comparisons. previously.om 8% the profitability is creating a flight profitability for the overall company on amazon light. >> what about some of the emerging services like pride as a stand-alone service, as well as echo, your favorite product. >> it is still my favorite product. aws andwith cory about the amazing fact that amazon has a real profitable growth business. thatould have guessed april company would come to redefine in a price software, but that is what they are doing. every company seems to be using it. are bloomberg contributor

editor, thank you for weighing in. we will be on all of these companies. cory johnson, thank you. tomorrow, i will be speaking 11:15ohn ledger at eastern. right here on bloomberg television. it trial could now posture some serious dough. judgesislation would let find jurors up to $1600 for posting messages on social media. jurors could be fined for researching cases on google. current give teeth to ban by jurors. speaking of social media, the u.s. government is looking to secure its own messaging services. the defense department research has issued a call for companies to build a platform for the military to use for communication. they wanted to incorporate block

chain technology and have a self-destruct feature like snapchat. darpa says it may even commercialize the platform. coming up, the charter time warner cable deal wins antitrust approval with one exception. we will break down what it means for the likes of netflix. ♪

emily: from coffee table and meatballs to solar panels. ikea has begun selling them online this week. they will sell them in all of their u.k. stores by the end of the summer. about one third of their customers have indicated they would like to invest in solar and they want to make it an essential part of any home.

the move comes despite cuts to subsidies for homeowners and businesses in the u.k. and the u.s.. charter communications just one bank antitrust approval in the united states for its $65 billion takeover of time warner cable. the deal will create the second largest cable provider behind comcast. the agreement includes a measure to protect one of cable's biggest threats, online video distribution. bloomberg news's tie shields joins us now. talk to us about this important condition. >> not just one condition, but several conditions that we can put into two buckets. on one side, the justice department said that charter, which will be a pretty big player now, cannot discourage programmers, companies such as viacom from selling to online

video services that may compete. on the other bucket, the other side of the equation, the federal communications commission and justice department together said that charter cannot do things like impose data caps. you put both together and it is a big net plus for online video company such as netflix. emily: as netflix responded? what exactly does it mean for them? >> i haven't heard from them yet. they were early in on this and many months ago said that they backed this merger. one opponent of the deal, the dish network, best known as a satellite network, also has an online video network called sling. they were among the leading skeptics. i have not heard from them today. it is not clear what the online providers are saying, but it is clear that the regulators feel this will clear the way for

their service, or make sure the delay is not blocked. emily: what does this mean for the future of cable providers. comcast is still in the lead, but it's business model is under threat with a potentially stronger number two player. >> they would be quick to tell you that the do not compete directly with one another, which is true on the surface. but we will get a taste. charter has to build one million homes in an area with another cable provider. they will test some direct competition. in this field, the deal is really broadband. programming is living outside the traditional cable package. people want to see various videos and don't care whether it is part of the $50 per month, $120 per month universe.

the conditions on this deal are the recognition that the world is coming and your regulators don't what the cable provider to be able to stand in the way. emily: what are the next steps for this to be finalized? >> the department of justice's process is more ore less -- more or less done. the fcc studies to win the vote of three of the five commissioners. the chairman of the sec sent the deal to his fellow commissioners, two democrats and two republicans. there will be some talking and we will see when it gets three votes. emily: todd shields in washington. "bloomberg news." thank you for weighing in. tomorrow, were joined by roger goodell who joines with three days to go for the draft.

if you happened to catch the season three premiere of "silicon valley," you might recognize a few familiar faces. >> the stock jumped 7% on the news that gavin bell is writing down the entire nucleus project. what happened? >> it was a courageous move and he is a straight shooter and wall street is responding to that. emily: don't think that brad stone and i will try to quit our jobs anytime soon, but it was great fun to work with the team at hbo. if you get behind the scenes content on youtube if you want to continue laughing at us. ♪ emily: a story that we are

geeking out about, nasa is heralding a new generation of x planes. that's the name given to experimental aircraft meant solely for research. over the years, these concept

designs have meant some of the biggest strides forward in aviation. last year, nasa announced a series of investments that would help planes to fly on greener energy, use half the fuel, with half as much noise. the first contract was $20 million awarded to the team at lockheed martin to crit a quieter -- to create a quieter supersonic jet. >> today on monday, we ended slightly lower in the red across our major indices, but they were only slightly lower. the s&p was down about 0.2%. the nasdaq was the biggest lagger, but not so bad. this was its lowest in nearly two weeks. looking at the broader look, we are looking at something on the order of 1.3% down.

the drop over the past three days, from the 20th through the 22nd, this is its biggest three-day drop since february. let's look at the nasdaq biotech index. down by about 0.9% this monday. the reason for this is that parago is dragging down finance companies. it lowered its 2016 eps below the lowest estimates to about $28.60. they also named a new ceo, and are expecting even mark a petition. a trifecta of terror when you look at their stock. that is having a ripple effect. when you look at other pharma companies on the nasdaq, you can see it. endo down 6.7% and mylan down

3.2. for both of these copies they are down the most since february. emily: we have t-mobile about to report first-quarter earnings. i will be speaking with john ledger tomorrow, but what is your read on the bullish sentiment? >> let's look at what happened with the stock sentiment. up by 2.4%, closing at its highest since october, 2015. let's take a look at at least four of them that are very bullish. ubs by pacific crest over weight. with ubs, they say that they think t-mobile will leave the industry with net ads in the first quarter of about 950,000 new subscribers.

cowen even going further saying that by the end of the year that maybe t-mobile will get even more subscribers than it thinks it's going to. hop into this very quick, i will show you the a&r function. these are analyst recommendations. the green represents the calls for buy, the hellow -- yellow for holds, and the red for sell. ever since march, the green has been no less than 7% in terms of buy. good news for the company. t-mobile shares have risen six of the past eight sessions in terms of earnings. if past is precedent, maybe we will have another pop. back to you. emily: ramy with the breakdown there.

it is time now to find out who is having the best day ever. today's winner is hot sauce lovers. general electric has teamed up with high river sauces to make hot sauce scientific. introducing 1032 kelvin. it contains two of the hottest peppers in the world. it just went on sale on their website and is one of ge's attempt to show off its technical prowess to a younger generation of engineers. that does it for another generation of the west bank." -- of "bloomberg west." keep watching twitter, we will break down the numbers. ♪

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