contest, she most likely will be the party's nominee. they determine donald trump's prospects of winning the republican nomination. endorsing a partial cabinet reshuffle proposed by the prime minister that comes after protests and demonstrations by thousands of followers. trying to enlist with islamic state in iraq and syria has dropped by 90% according to the pentagon which says 200 people a month are looking to sign up. a sharp decrease from a year ago when between 1500 and 2000 firefighters were being recruited. the 30th anniversary of the explosion at the chernobyl nuclear plant. ark is underway to complete $2.3 billion long-term shelter over the building containing the reactor.

prince's only surviving full selling said he did not leave a will. she's asking for the appointment of a special administrator to manage his business interests. news 24 hours a day. i'm mark crumpton. ♪ i'm emily chang, and this is "bloomberg west." apple shares dropping after decline since 2003. is it a new era for apple. twitter not feeling the pain. attempt at a turnaround, will it take time? more than a million for the seventh quarter in a row. legere slams the

competition. apple shares slide. slowing demand for the flagship product, the iphone. revenue fell to $56 billion, down 13% from a year ago. earnings per share down 18%. introduced it moments ago. >> there were a number of encouraging signs. over one billion active devices continue to grow strongly. we added a huge number of android switchers and new to mac customers. and we generated strong growth from services. we sold 51.2 million iphones in the corner -- quarter. lower than the exceptional year ago quarter when we saw an

acceleration of upgrades and 40% iphone sales growth over the previous year. that acceleration after the size of the iphone. they are warning of another sales declined this quarter. are left to decide, is this a turning point or a pause before the upgrade frenzy? studio, and our editor at large, cory johnson. what are the main takeaways? we know it is two thirds of revenue for the company. smartphone market is saturated but still growing at 7%. cory: growth in the market and shrinkage at apple. it is a seasonal product story. concern and the reason

the stock is down is because of the margin number. ifthey hold market share or they keep getting the prophets, that's great. it's disappointing, although it at the time of the six sd phone that likely has lower margin. you want to see margins stay high and they are coming down. emily: the apple cfo talked a lot about the iphone se. ,e said it's incredibly popular they can't meet demand. , will ituestion is cannibalize? he says it is too early to tell there. what would you say? >> cory makes a good point. i think we will see expectations for smartphones come down. i think we are not just at a pause. i think this is a serious realignment. i think we will see the se bring

margins down even further. i think it's a real challenge because people say that the smartphone i have is sufficient. i don't need to upgrade that often. i'm going to keep hanging on as long as i possibly can. i think it foretells a very different future for apple. that's where the opportunity is. emily: let's talk about what going on globally. they are seeing more first-timers than ever, more switchers than ever. india, iphone units are up 56%. overall, customer demand is over $2 billion higher than guidance. they continue to see a macroeconomic environment week. so we will be taking channel inventory down.

frank, what do you make of that? frank: i think we are entering a time of uncertainty. i don't quite agree with bob. i think the most important thing is how tough the compare was to a year ago and the huge burst they got off of the large-screen 6s.one 6 and success -- we are coming off torrid growth in a particularly difficult comparison. was interesting to me is the energy around the big screen burst a year ago did not continue this year. there were a bunch of people that cared and then a bunch of people that are pretty easy-going. the idea that the lifecycle of -- as long as you don't drop it in the water or break it. will you see a burst of new innovation? motivate people to get on

upgrade cycles. that is where the question is in my mind. are we entering a seasonal and volatile time where it is less -- can applethat keep drawing and converting people from android? we are getting reactions on the set. i see nothing on the horizon from a component and technology perspective that is going to drive these major upgrades. there is talk of a dual camera or a telephoto lens. but is are interesting, think, in fact, just like we saw with pc and like we saw with tablets. it's interesting, the tablet thing.

we're not talking about the ipad because it is less important. nine consecutive quarters of falling sales for the ipad. the combination of going from tablet,ce to pc, phone, it is starting to stretch out this cycle. people are holding on to all of them longer. interesting that one of the reasons it was hidden before is because apple released products and at a geography. result, it was hidden before. i want to talk about what tim cook said about china. take a listen to what he had to say today. >> china is not weak as has been talked about. as they be not

having the wind at our backs that we want did. stable thanot more what i think is the common view of it. frank, i want to talk to you about this because we have been talking about growth in the services business. part of the future. no movies, can't play those here. you think that's a bigger deal? frank: one of the mistakes we all make is unit shipments and not install base. it is interesting to think about one billion iphone users out there and the power it has for apple. it's also important to say investors are getting all dramatic because they are worried about the stock of apple.

and the importance in the technology ecosystem, it doesn't change that at all. this company is still hugely important for which apps to build, how you engage with customers, the whole ecosystem. 20% andales services up it's interesting. it doesn't have the same margins, it doesn't have the same revenue and volume. it represents the beginning of a shift of how you think about these companies. i've been arguing with ceos for some time. it's about your install base and how much you engage with the customer, not how many iphones you sell to them. bob o'donnell, editor large cory johnson, stick with me. cory: whatever you say. emily: richard windsor says apple will never put a branded self driving car on the market because it would be "

catastrophic for the company's valuation." in margins would be nowhere your the 40% apple earns on iphone and ipad. and sometimes they make no money on the vehicles they sell. he believes they are doing so just to learn how the infotainment products can be better integrated into vehicles. coming up, twitter announcing an increase in monthly users. why is the stock tanking after hours? we will break down the numbers. ♪

emily: twitter shares getting 'd.dsaw

to somewherecast between 590 and 610 million. monthly active users increased to 310 million, slightly more than the 308 million analyst had expected. the search for new board members. take a listen. >> we are proud of the additions to the board. specifically in engineering and -- emily: back with me is cory johnson. will it take time?

cory: sure is taking time. emily: they've been on the job for six months. cory: basically, but they been on the board forever. the turnaround is a positive thing. it is tremendously alarming. they redefine what users are. it's a little bit more of a positive sign adding 5 million and a quarter is the most they had added. , they needore users more revenue per user. that's more helpful. r&d spending has tended to go up. so you wonder what they are thinking about in terms of how far it is.

talking about user growth, victor, there was not so much concern. victor: it is clearly a work in progress. what was positive was user growth coming in above expectations. there were calls it was going to decline. they partly solved one problem but gave us another one. brand advertisers are holding back. a spending on the platform in the first quarter which is where .hey missed as well as the current quarter where they guided below. it's another problem that looks company specific. on the call, they essentially said that the brand advertisers are moving away from one of legacy at units which is a promoted stream.

trying to shift transition over to more video. that will impact the revenue and that's why you saw it come down. they talked about the back half. the revenue coming out of the olympics and other events. i think the stock will be stuck in the penalty box for quite some time. until they sold that one at the back half, it will stay within the range of 15 to 18. cory: there is speculation there

would be a lot less spending on republican sides from the traditional means. it may not be there. that is another form of risk being added. what do you think about periscope? 200 million broadcasts. the idea seems like it could be transformative but it's a long way to get there. you have facebook live, snapchat --eo victor: facebook is putting pressure on them. they have to move faster and quicker to integrate paris go more deeply into the platform and add more functionality

because of the threat of facebook. but it is a great product. jack dorsey, we have to ask this question every quarter, especially if the company doesn't start to do better. how long can he continue to be ceo of square and twitter, two and one of them is clearly struggling. >> i thought he would step away from one of his companies. to stay at twitter so that if implemented, it could work. they are starting to gain traction. and solve this problem, getting those brand advertisers to advocate dollars on the twitter platform. this is through 2016. but in 2017, i think it is one

of the two companies. emily: you are giving them one year. cory: the company needs a ceo and square deserves one as well. emily: from axiom capital management, and our editor at large, thank you both. we break down ebay's quarterly results and if we are seeing the first hints of a turnaround there. coming up. ♪

emily: at&t topping estimates despite losing subscribers and missing estimates for mobile customer adds. the second largest wireless .arrier a below expectations of 283,000 new monthly subscribers. above analysts estimates of $.69.

we will talk with t-mobile ceo john legere later in the show. in line with estimates at $.28 a share while core sales missed -- $2.17 billion . sales missed in both display technologies and optical communications units. ebay shares are up and post market trading. and earnings per share of $.47. it doesn't mean ebay has managed of transitionde visitors. we are joined by an analyst where visitors and transactions this quarter were slightly up. >> ebay growing at a slower

rate, it is a growth rate versus double-digit growth rate in the industry. what ebay is doing is focusing on the trend and trying to simplify products. this structure gives them the ability to beat expectations. what: if this continues, is the future of growth at ebay? >> they are still working on these changes of simplification under the structured data. it will take time. emily: it's been a year from the separation of paypal. what does the next year look like?

>> two things. one is the focus on restructuring and how it is progressing and fighting against a lot of shoppers in the u.s.. program connects smaller sellers to these prime members. just focusing on their own strengths. we are simplifying it. we could probably focus more on profit. with stub hublong , that's growing nicely. how much is stub hub contributing? >> about 10%. emily: and what about improving the seller experience? it's remain fairly unchanged now for a while. >> they are making changes.

push.s the big emily: it just made it easier. >> absolutely. emily: our bloomberg intelligence analyst, thank you so much. san francisco housing declining for the first time in four years. what it might say about the health of silicon valley. verizon "drops a boatload on yahoo!" that conversation later this hour. ♪

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ones had been unlawfully killed. lost two daughters in the tragedy. >> we have always given credit where it is due. we have been faced with slander and insult ads it has all been totally and absolutely unnecessary. visas for tens of thousands of tourists as part of a reform plan to showcase the heritage. the kingdom outlined the vision to get itself off of the dependence on oil. the archbishop is stepping down. ortega played a key role in the normalization of diplomatic relations between the united states and cuba.

carrying the olympic flame in athens, he received the flame from the olympic committee. it is called a symbolic show of support for victims of the global refugee crisis. we are powered by 150 news bureaus around the world. it is just after 6:30 in new york. paul allen has a look at the markets. allen: it is good with a recovery of energy prices. up .1% and expecting gains. dayking with japan, a take for mitsubishi motors after they announced that the emissions 1991 andates back to

the president says that the company may have their existence at risk. local media says the chairman may resign and, on top of all earnings areshi due out this afternoon. we are expecting australian cpi ande benign on the year give the reserve bank of australia the scope to ease when they meet next tuesday. analysts expect that it is unlikely they will do so. i am paul allen. emily chang: the housing market may be cooling off for the first time in four years in san francisco, who were down

year-over-year. it is always good to have you here on the show. is this the beginning of the end? >> let's not go too far. there is the real estate market here and so many are not just using income. they are selling the stock in linkedin and some of the stocks anddown 20 percent-40% people used to say, i will bid on the asking and we have seen people taking a step back. chang: things are on the market longer. >> they used only last a couple of hours. we see appraisals come in higher than the offer price. you used to have to convince the

appraiser the house was worth the money and the appraiser thinks the house may be more expensive. that is a twist. clients into talk a deal or out of a deal and the listing agent says they do not have offers. they say, if you are worried about a bidding war, bring what you have. >> if they are tied to what we are seeing in the market, what does it mean to move into a downturn? in siliconturn valley is a u.s. downturn because the tech economy is the u.s. economy. we made a lot of money helping people move and the cities that used to have diverse economies and housing prices driven by it notogy, we are seeing

be -- emily chang: you said we were in doubble and investors still in not agree with you. >> i think the prices have come down on tech stocks. it does not mean that it is the end of time. it means companies have to get more careful about spending to really drive profit. pop coming? is a you see stocks down and engineering and home prices coming down. hot and that less is good. emily chang: it is still expensive and crazy.

where do you think the prices will go? do you think we will see prices continue to decline? see the basisto for a 20% drop. there was a time where housing was leveraged and they got in over their heads. almost everyone can afford the house and you will not see people on short sale or foreclosure. you will see people say they are not willing to pay that. they say, i would rather go to hawaii versus getting deep on a house. there is a change and it is a real thing that we see every day. > san jose is pretty weak. emily chang: if we are in a slow

deflation, what does it mean for your exit strategy? >> i do not have an exit strategy. we will not answer this question. i think it makes more sense to be on public markets, rather than privates. chang: maybe it is excel a reading? accelerating. >> i think you are putting words in my mouth. emily chang: great to have you here. >> thanks for having me. chang: the funding affiliate has raised money from state-back investors in the single largest round of private financing ever and it is $1 billion more than they had been

aiming for. the financial service is valued at $60 billion and they are considering an ipo. we have a basement research laboratory where scientists are fixing a roadblock to hacking the human body. we will have more of bloomberg west, next.

of biohok at the idea

acking the human body. there is the immune system tendency to reject for material. scientists have made a flexible -- plastic will stop gel. ofwe have always dreamed infusing our bodies with technology, strengthening our bones, and replacing lost limbs. the thing is that there is a problem. >> electronics and bodily fluids do not mix. the environment in your body is corrosive to the materials you would have in your iphone. >> what if electronics he hated like the materials in our bodies. like the materials in our bodies.

m.i.t. scientist and they have the answer. -- scientists think they have the answer. >> so, what is interesting about the gel, try to stretch this. so, that is a typical gel. a break easily. try stretching this one. >> what? it is like noodles. that was pretty far. >> it is very reliable. it is very stretchy. >> this has another benefit. it is sticky. adhesion test show that the bond between the gel and the metal plate is stronger than tendons

and bones and this is the breakthrough they are looking for. gelelectronics bond to the and the gel stretches with the body. >> it is like a super-band-aid. overtime, this medicine would diffuse the bomedicine when needed. >> electronics in the body overd extend and improve human life. this is the first step in that direction and it will not, it in and of itself, cure a disease. it could he the building block of the medicine of the future. emily chang: sam reporting. it be adents in germany plus for coming up with -- some

students in germany get an a+ for running tetris on a building. they dedicated a year to creating the display. the total budget was just under $34,000 and was funded entirely by donations. up next, my interview with the ceo, who is not mincing words about the competition and he will weigh in on the verizon bid to buy yahoo!. we all ought to rethink our day jobs.

largestang: the world's story-sharing is moving to the big screen. they hope to pull revenue from the user base of amateur writers

and they could play a large role in making the company profitable. they have signed deals with paramount and tv five. -- tv 5. rrier raise the profit forecast and gained one million new monthly users. i spoke with the ceo and asked about how long he can keep it up. up and,ce revenue is adjusted, 98%. we still have less than 20% market share and the main dumber,ors, dumb and they are not adapting to the revolution and the things we are doing to change wireless. this will continue and we will not stop. uply chang: you summed

verizon with a rap. how would you sum up t-mo. >> i'm trying to help out verizon. revenue,d say, we lost andes, we walked back on 5g we still want millennials. to-rapput it in an au format and i used fran and put his words and. amobile is, 12 quarters in row, we got customers and we are now generating the cash flow growth. this machine is working. stay out of the way. we will not stop. a newchang: we will add talents to the list of things that john ledger can do.

what is driving this slowdown? >> i talked about a slowdown? have 66hink about, we million customers. when you and i started having these conversations, we had 29 million. i raised my guidance for the year and my guidance for the post-paid subscribers was 3.4 and,on and i raised that for this year, i raised my it to 10.2d i raised ex the same. do you know that 225 million songs a day are streamed for free by t-mobile customers and

is as much video is assumed. the underpinning of what it means to be a t-mobile customer is changing and there is a huge population out there that is considering a move from dumb and dumber and yellow. a bid for puts in yahoo!. do you understand what they are doing? >> there are a lot of things they are doing. what are they running away from? g coming tomorrow and consumer wireless applications have lost their edge. they have 194 million in the low and and we are participating in consumera low-band broadcast opd

we have parity. they are attempting to create a new brand for themselves. if you look at the last few years, here are the numbers. if you look at at&t and sprint, they have lost 3 million in the post-paid phones and they have not added. we have added 10.5. they are trying to find a new arere and things like go90 curated content sites that no one asked for. i think it is junk nobody wants and, who knows what they will spend? i hope they continue running down the slain. -- this lane. chang: john it is colorful, as always.

apple andtrigger -- twitter are both down after hours. here to break it down, our tech editor. the iphone will be coming out this fall. will people by its? will apple need to do -- will people buy it? will apple need to do something dramatic? >> they have a couple of months and they had a pretty bad forecast based on that, because the prices are so low. the revenue is going down. they will need to persuade people in china and the economy and it will be a tall order. emily chang: the product is .opular

cook says it tim is more stable than people are letting on. >> they have talked about it in the past where, a couple of years ago, people are getting smartphones. adnd it isray iphone about as capable as it was before. chang: what about the future of apple? they have big acquisitions now. i find this interesting and withhave more than a dozen acquisitions focused on technology. >> they have always been small they will try to do

something bigger. >> the user growth was a good the oscarst may be and things like that. twitter may say that you do not want to read too much into this and the underlying problem is advertisers and losing confidence in the platforms. i dove a plan for that and not think the short climb in users will help. emily chang: the ceo said there was lower than expected demand and asked if they can turn around. they did not spend as much as they thought and we are in a transitional time.

what do you think? >> they spend on the format and they switch some of it over to video and i think that twitter was expecting it would be raised across the board and the problem that they have is facebook and snapchat have a lot of new avenues for advertisers to go to and it is not a top choice right now. emily chang: they say that periscope has broadcasts. some in which -- so much competition. >> we have been confident we can be number one. it does not mean you can beat facebook. >> thank you. who is havingut the best day ever. industry, some are paying 600 a month with housing

and benefits. and e-mail list servers , which company pays the most? snapchat, with $10,000 a month. interest and twitter are the third and fourth highest paying companies. to be an intern again. we will watch facebook earnings after the bell.

>> from our studios in new york city, this is charlie rose. rose: how did you come to this? weird and i feel like i found a family in my head and i got interested in doing a show without the audience and the laugh track and the need for constant jokes that sitcoms have. what you are left with is a live feeling. it feels