mark: you are watching bloomberg west. five northeastern states hold presidential primaries today. if democratic front-runner hillary clinton's suites the 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. work is underway to complete a $2.3 billion long-term shelter over the building containing the reactor. prince's only surviving full sibling 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. ♪

emily: 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. the attempt at a turnaround, will it take time? more than a million for the seventh quarter in a row. ceo john 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%. they 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 quarter. lower than the exceptional year ago quarter when we saw an acceleration of upgrades and 40% iphone sales growth over the previous year. emily: that acceleration after the size of the iphone. they are warning of another sales declined this quarter. investors are left to decide, is this a turning point or a pause before the upgrade frenzy? in the studio, and our editor at large, cory johnson. what are the main takeaways?

cory: we know it is two thirds of revenue for the company. emily: the smartphone market is saturated but still growing at 7%. cory: growth in the market and shrinkage at apple. it is a seasonal product story. the real concern and the reason the stock is down is because of the margin number. if they hold market share or if they keep getting the prophets, that's great. it's disappointing, although it comes 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. he said it's incredibly popular, they can't meet demand. but the question is, will it 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. he says, in 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 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 phones -- 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 about people that -- can apple keep drawing and converting people from android? emily: 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. cameras are interesting, but i think, in fact, just like we saw with pc and like we saw with tablets. cory: 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 one device to pc, phone, tablet, it is starting to stretch out this cycle. people are holding on to all of them longer. it's also interesting that one of the reasons it was hidden before is because apple released products and at a geography. as a result, it was hidden before.

emily: 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. i see china as they be not having the wind at our backs that we want did. but it's a lot more stable than what i think is the common view of it. emily: frank, i want to talk to you about this because we have been talking about growth in the services business. it can be 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. we see sales services up 20% and 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. emily: 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." the margins would be nowhere in 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 woodsaw'd. dropping forecast to somewhere 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 into products. so we are looking for a whole lot more leadership there. emily: will the turnaround just take town? me our editor-at-large cory johnson. so cory, will it just 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. the users declining last quarter was tremendously alarming, particularly in the united states. 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 want more users, they need 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. emily: 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 they 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. emily: 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 video -- 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. emily: 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 public companies 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. emily: how long can jack dorsey

continued to be ceo square and twitter, two public companies, when at least one of them is struggling? will need toint he step away from one of his companies. maybe not the share, but clearly

in 2017. there seeing some of efforts on the user side starting to gain traction but we need to solve this big problem that resurfaced this quarter and get those brand advertisers to at least 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 carrier. 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 slightly at $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 to stem the tide of transition 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. emily: if this continues, what 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.. the 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. those things along with stub hub, that's growing nicely. emily: 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. that is the big push. emily: it just made it easier. >> absolutely. emily: our bloomberg intelligence analyst, thank you

so much. coming up, san francisco housing declining for the first time in four years. what it might say about the health of silicon valley. he hopes verizon "drops a boatload on yahoo!" that conversation later this hour. ♪

greg the the country's hottest housing market may be cooling off. for the first time, home prices down. san francisco real estate market, are we on the verge of a pop? joining me now, glenn. is this the getting of the and or what? market is like san francisco. so many people are not just using income.

they are selling stock, using twitter, facebook. some stocks are down 30, 40%. it used to be that people would bid what the heck i will 100 thousand dollars or $2000 over asking price. for the past couple months, people have been stepping act will stop they are sitting on the bid. we are seeing houses where the appraisal comes in higher than the offer price. it used to being you had to convince the appraiser the house would be worth the money and now it is the appraiser who thinks the house might be more expensive. sometimes we are talking our clients into or out of a deal and then the list agent will say, i do not have any offers so if you are worried about a bidding war, bid whatever you got. market sothe tech tied to what we are seeing in the housing market?

are does it mean if we moving into a tech downturn? a techt used to be that economy downturn was silicon valley but now it is the united states. onhave made so much money helping people from san francisco moved to denver, portland, boston. all of these cities that used to have diverse economies are now having housing prices driven by the economy. san francisco is not as different as it used to be. you saw ago you said investors who still refused to agree. i feel a little vindicated. definitelyces have gone down. peak technology or the ends of time.

they have had to get much more careful about their spending so they can really drive. >> it can be a slow deflation. it is undeniable. significantly down. engineering pay coming down. home prices coming down. hopping than less it used to be and that is a good thing. emily: people looking for a home, still expensive. still crazy. where do you think prices are going to go? are we going to continue to see prices decline? >> i think we will see a softening in prices. there was a time 10 years ago when u.s. housing was highly leveraged. people were borrowing money based on the idea that housing prices would keep going up. must everyone cannot afford the house so you will not see people on a short stale --

short sale or foreclosure. rather go to would hawaii once here then gets a deep on this house. a year ago, they would say the up. with it and did now they will not. emily: what about the rest of the best emily: will they say about the rest of the best bait area? what does it mean if the area is going into a downturn? what does it mean for your exit strategy. >> i do not have an exit strategy. emily: are you going to go public? >> we are never going to answer that question. emily: maybe it is accelerating, that cap. >> i think the company continues to do well and young, tech

friendly people, that population is only going to grow. emily: the ceo of redfin. always great to have you. alibaba'snding board, raised affiliate has $4.5 billion from powerful investors. the new funding is the tech industry's single round of private funding every hand in his $1 billion more than the aiming for.been pay is considering an ipo as early as next year. the most important roadblocks to buy all hacking, the human body. tomorrow morning. more bloomberg westnext. ♪

emily: while hacking. m.i.t. has developed a flexible may fix thewhich issue. let's take a look. have always dreamed of 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? in a basement lab a of m.i.t., a team of researchers at the answers. >> so, what is interesting about the gel, try to stretch this. so, that is a typical gel. break easily. try stretching this one.

>> what? it is like noodles. stop. that was pretty far. >> it is very reliable. it is very stretchy. sam: ok. i will stop breaking it now. >> this has another benefit. it is sticky. so sticky that adhesion test showed 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. the electronics bond to the gel and the gel stretches with the body. >> it is like a super-band-aid. that would deliver medicine. over time, what would that look like? overtime, this medicine would diffuse the medicine when needed.

>> correct. sam: we have long known that electronics in the body could 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. 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. ♪

♪ emily chang: the world's largest 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. the uncarrier 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. >> service revenue is up and, adjusted, 98%.

year over year. and emily we still have less , than 20% market share and the main competitors, dumb and dumber, they are not adapting to the uncarrier revolution and the things we are doing to change wireless. this will continue and we will not stop. emily chang: you summed up verizon's earnings on the call in a rap. how would you sum up t-mo. >> i'm trying to help out verizon. verizon's earnings could be summarized as, we lost topline revenue, we lost out on phones, we walked back on 5g and we still want millennials. is everything you need to know in a form for millennials. i did put it in an auto-rap format and i used fran and put

his words in. is, 12e's summary quarters in a row, we got customers and we are now generating the cash flow growth. this machine is working. stay out of the way. because we won't stop. emily chang: we will add a new talents to the list of things that john legere can do. what is driving this slowdown? >> i talked about a slowdown? if you think about it, emily, we have just about million 66 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 million and i raised that and,

for this year, i raised my 9.1 up to 9.7. and holding cap 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. over to t-mobile. emily: let's talk about that. verizon put in a bid for yahoo!. do you understand what they are doing?

>>here are a lot of things they are doing. what are they running away from? if you think about their intent to portray 5g coming tomorrow and consumer wireless applications have lost their edge. million and has 208 194 million in the low and and we are participating in a low-band broadcast option and we have parity. from a network standpoint. so 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

future and things like go90 are curated content sites that no one asked for. i think it is five and a half billion dollars so far on junk to knowsdy wants and what they will spend? i hope they will spend a boatload and continue this lane. running down this lane. emily chang: john it is colorful, as always. apple and trigger -- apple and twitter are both down after hours. here to break it down, our tech editor. thank you so much for joining us. seven supposedly coming out this fall. will people buy it? or does apple need to do something dramatic? >> it better be something of amazing, that is the takeaway right now. they have this new smaller

iphone coming out. pretty badd a fourth-quarter forecast based on that. the revenue is going down so they need to persuade the people in china in a bad economy to spend a couple hundred bucks on it. that is going to be a free trial order. emily chang: the product is popular. this quarter, tim cook says it is more stable than people are letting on. >> i think part of an is that it is in a placement market now. a couple years ago, all of these new people were getting smartphones. aw, if you have the relatively good phone, especially an iphone, maybe you're not going to get the next one because it is about as

capable as it was before. bar ins a much higher china. emily chang: what about the future of apple? >> they have big acquisitions now. >> i find this interesting and they have more than a dozen with acquisitions focused on technology. alistair: they have always been small and they will try to do something bigger. emily: what about twitter? user growth, and users dick groat which is a good thing. >> the user growth was a good thing and it may be the oscars 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.

the always way you can get it back really is to grow wheat users. so they do have a plan for this but i do not think this short climb is going to 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.

time to find out who is having the best day ever. in the tech industry, some are paying 600 a month with housing and benefits. facebook and e-mail list servers, which company pays the most? is -- it is snapchat, with $10,000 a month. -- $6,000 a month, including housing and benefits. this according to a survey that studying interns and focus groups. so which company pays the most? sigma followed by snapchat. pay atrage monthly is thousand interns dollars a month, or a whopping

to be an intern again. amount per year. to be an intern again. we will watch facebook earnings after the bell.

>> this program is a paid presentation for omega xl and brought to you by great health works. ♪ larry: welcome. i am larry king. and i'm here to report on a significant health-related investigation that has been taking place for the past couple of years. the information i will provide you during the course of the show is related to everyone's health and well-being.