they are expecting lower than expected earnings in the first quarter. that's all for "what you missed." bloomberg tech nothing is up next. this is bloomberg. ♪ emily: revising revenue guidance to $84 billion. down from a range of $89 to $93 billion that the company had originally projected. cook writing that the vast majority of the shortfall happened in china with lower iphone, ipad and mac sales than anticipated and fewer iphone upgrades world wilde. joining me now on the phone, we have someone from forester research, someone from bloomberg intelligence. i want to start with you.

what is your reaction to this? >> i think my first reaction is what they're saying is we were too optimistic. i think it's unprecedented if you look at the time right now, just between how difficult it is to get consumers to upgrade their smartphones, it's a harder case to make because the devices are pretty amazing in terms of what they do. and also more products competing for consumer dollars. that's smart speakers and smart watches. there's a lot of devices competing. emily: cook really zeros in on china and says that the vast majority of the short jp fall happened there. -- shartfall happened there -- shortfall happened there. why didn't apple expect this? given the broader economic slowdown the country is seeing? >> i don't know the answer to that. but i do think that is the most interesting question right now. not just for apple, but for the entire global economy. how fast really is china

decelerating? we got a weak manufacturing data before the holiday. i was surprised by how much the market was surprised by. that because i thought this was a well-known story. late in 2018 we got a warning from fedex saying something similar, that the chinese economy was decelerating faster than they expected. i don't know the answer why so many companies are being blindsided like this by the chinese economy. but i do think the implications are huge and it's going to create a lot of anxiety that no one really has a feel for what's going on. emily: apple shares have resumed trading. trading down now about 7%. what is the answer to that question? why didn't apple foresee this? this is a market that tim cook really built personally and apple has deep inroads there given its supply chain. >> yeah. so i think it's also a question that's difficult for me to answer in terms of why didn't tim cook and why didn't his advisors anticipate this down turn, despite the signals in the

market. probably the best comment i can make is that the certainly becoming more complex. it's harder for consumers to make these decisions. i think if you go back a few years and look at what happenle was selling, phones and p.c.'s and maybe tablets, it was predictable, consumers needed those devices. and there's a lot more what i'd say revenue in their mix around smart watches and services where it's less of a need to have and more of a nice to have. i think it's less predictable what consumers will do. emily: what do you think the most alarming thing in this letter? is it china or is it the fact that in general around the world tim, tim cook says that people just aren't upgrading their iphones as fast as they used to? >> for me i would tell you it's not alarming to me, as somebody who studies consumer behavior and studies how consumers make decisions, it's not alarming to me. but it could be alarming for those i think maybe who are calculating stock prices or

forecasting what volume is going to be. but i think it's just getting harder. it's not just about the number of pixels, the size of the phone, how shiney the screen is, how bright it is. it's a lot more nuanced in terms of the utility that these devices provide to consumers and it's getting harder to convince them not only that they need more products but they need to upgrade the stuff that they have today. emily: the smartphone market in general has gotten more competitive and especially in china. you have a lot of local competitors there offering big-screened iphones and cheaper prices. john butler joining us now from bloomberg intelligence. other details in this letter from tim cook. he also mentions that there were supply constraint issues with some of the other apple products like the apple watch. like airpods. the ipad pro. macbook air. other products that apple is betting on to make up for some of the shortfall when it comes to these iphone upgrades. what do you make of some of the additional headlines here?

given that this company is, to be fair, trying to transition to more of a services company. >> there could be strength or i'm sorry, weakness across the product line here. but really i think this is first and foremost an iphone problem. that's how i read it. i think the problems really are centered mostly in china. and if you listen to what apple had to say really, they were kind of hinting that they didn't really predict this weakness. it's something that really emerged during the quarter obviously, which tells me that they didn't hit the right note with the latest iphones in china. in particular. so i'd look at the comments on the other product lines. they're a bit concerning. but again, my focus is on the iphone and what the issues may be there. emily: that goes back to your earlier point. and tim cook says in his letter

here, word for word, we can't change macroeconomic conditions. but we are undertaking and accelerating other initiatives to improve our results. but to some extent, isn't a lot of this out of the company's control? >> that was my favorite line in the letter. i was just going to cite it before you mentioned it. yes. as far as powerful as apple is, they can't change macroeconomic conditions. they can't influence the trajectory of the trade war. but i do think this is going to put the trade war at least back square in the center of investor focus tomorrow and in the days ahead. we heard president trump say today, remember he called the recent market selloff a glitch. and then he said it would be solved as soon as they have these trade deals. we know the president cares a lot about the stock market and kind of sees it as a proxy or report card on his performance. so i do think that this could put further pressure to get some sort of deal from the president because you are going to have this huge stock market bell

weather weighing down -- vane down. they definitely specifically, tim cook definitely did call out trade specifically in this. and so that's going to heighten up the pressure on the upcoming talks. emily: as joe rightly points out this tariff issue still very unresolved. all things considered, what does that mean for apple the rest of this quarter? >> let me add on a point to that. i agree with what joe has said. but i really think it raises another question of how important is the device over the long term versus the platforms and services that sit on top of the devices? because whether it's music or it's content or it's wi chat or instant messaging, all of these services work across a lot of thee devices and i think every device manufacturer has to be thinking around, you know, what's my role? and am i going to be become more commodity-ized because customers

are more loyal to content than the devices themselves. emily: thank you all so much. julie, john and joe. we're continuing to cover this breaking news. tim cook writing a letter to apple shareholders, cutting the company's guidance for the current quarter to $84 billion revenue for the current quarter, that's down from a range, $89 billion to 93 billion. a fairly significant cut -- $93 billion. a fairly significant cut. which cook is saying is due to a shortfall in china and fewer updrades of the iphone around the world. we'll continue to cover this breaking news. i thank our listeners on bloomberg radio and we'll be covering this story on bloomberg television over the next several hours. we'll be right back with more bloomberg tech nothing right after this quick break -- technology right after this quick. ♪

emily: washington has been in a stalemate since december 22 when the federal government partially shut down. while congress and the president try to work out a deal, we're seeing the impact within several agencies. some 800,000 federal employees have either been furloughed or will continue to work without pay. now the federal communications commission will suspend most op operations thursday if the shutdown continues. potentially impacting its agenda for the coming year. a fellow at the georgetown law institute for tech, law and policy is here, as well as a form counselor at the f.c.c. what does a shutdown at the f.c.c. actually look like? >> the f.c.c. is going to give

more details later today. but it really depends on how long the shutdown lasts. the shutdown lasts only a couple of days, if there are filings due of some sort, those filing times will be delayed past the shutdown. but if the shutdown lasts a couple weeks, that could have a huge impact on mergers like the sprint-t-mobile merger, or the oposed merger of tribune and nexstar. filings get delayed. people cannot work so they can't work on the transaction they can't have meetings with stakeholders. so it could have an impact certainly on major proceedings, on major mergers if indeed the shutdown lasts more than just a few days. emily: so are we talking about a delay here? when it comes to these big potential mergers? or could it actually change the

results? >> i don't think it will change the result necessarily. i think delay is the more likely scenario. let me explain how the f.c.c. looks at mergers. they have an involuntary clock. 180-day clock that they give themselves to look at mergers and decide whether they ought to be given the green light or there should be conditions or what have you. we're i guess about 100 days or so into the sprint/t-mobile clock and whenever there's a stoppage of any kind, whether it be a government shutdown or the f.c.c. needs more information they toll that clock. they stop that clock. certainly a government shutdown will toll the clock again. so it just gives the agency more time, even though it's not a mandatory 180 days, but it's a kind of goal that they set for themselves. so, certainly if you cannot work, if you cannot have meetings with stakeholders, you

cannot have internal meetings, if you cannot have meetings with the department of justice, that's going to slow down the f.c.c.'s consideration of this and other mergers. emily: as we understand the spectrum auctions will continue. but more broadly, can an agency's agenda be derailed during a shutdown? >> it has to be derailed because they can't work. other than, the f.c.c. put out a statement on monday saying, if there are issues that effect life and property, for example, there was a recent 911 outage with centurylink across the country. that's a major internet service provider. and the f.c.c. launched an investigation. i would expect that investigation would probably continue. during the shutdown. but if it doesn't effect life or property, if it doesn't effect spectrum auctions, which are funded separately, the auctions basically fund the work of the f.c.c. on auctions, i don't expect that work to continue. yes, if the shutdown lasts a

long time, it absolutely can derail an agency's agenda. emily: and what about the agenda for big tech more broadly? we're looking at the f.t.c. as well, which has a massive ongoing investigation into facebook, which could also be slowed down. >> absolutely. if you're a big silicon valley company right now, you're probably cheering the government shutdown. because when we left congress and the government in late december, facebook, google, other big tech companies were in the crosshairs, particularly facebook. and as we know, the f.t.c. was doing an investigation on the cambridge analytica scandal and facebook and other data and privacy issues around that company. so the f.t.c. shut down its operations, i believe it was on thursday. so that work is stopping as well. so if you're facebook right now, you're pretty happy with the

fact that the government is not proceeding with its work. emily: similarly are we also looking at a delay or could this lead to a different outcome? >> i really don't think it would effect the outcome much at all. it's just a delay. again, nobody can come in and convince anybody at the f.t.c. to look at this differently. because they can't meet with them. they can't work. so i don't know what would change the outcome either here or with regard to the sprint/t-mobile merger. maybe something external happens that could change the outcome. but the mere fact that the government is not working is not going to lead to a change in outcome in my opinion. emily: what does this mean for consumers? what does this mean for users of these services? >> what it means is that you can file a complaint with the f.c.c. or the f.t.c., if you want. if you feel your privacy has been violated or you feel that a company has lied to you. and this is not just about tech

companies. it's about companies across the board. the government can't help you. the government won't help you. that's really one interesting thing the f.c.c. said today that was in "politico." it will not act on any consumer complaints. it will not work to promote competition in the broadband and media space. it will not engage in any consumer protection. the f.c.c. actually told this to "politico." so, yes, if you're a consumer and you're having a problem with your broadband company or your cable company with a tech company or any company that the f.t.c. oversees, which is the entire economy basically, you've got no place to go to when it comes to certain complaints. emily: all right. we will be looking for any break in the stalemate. gigi sohn. thank great to have your perspective here on the show. thanks for weighing in. coming up, will techs tumble at the end of 2018 carry into the new year?

we'll discuss twhees come for big tech stocks ahead -- discuss what's to come for big tech stocks ahead. ♪

emily: for years the tech darrylings that make up the fangs have driven wall street higher. fueled by surging revenue, the prizing of growth over all else, and investor sentiment that the megacap tech companies could do no wrong. that narrative was derailed in 2018, even causing some to say that 2019 could be the year the tech bubble pops. joining us to talk about what's in store for the faangs in 2019. what are we looking at as we head into this new year? >> hi. well, 2019 looks to be a much riskier year for the group overall. there's a lot of different factors. some companies specific and some

that are more macroeconomic that are probably going to be in view. maybe the most obvious example is facebook which is facing a much riskier regulatory environment. you can maybe say the same thing for alphabet, the parent company of google. there are a lot of questions about user privacy, user data, and under a new bipartisan legislature, it's possible that we could see more aggressive stances being taken against these kinds of companies. emily: facebook has made a slight comeback, just over the last week. but still way down from those july highs. what's that about? >> these companies have all been extremely volatile for months now. most of them have fallen deeply into bear market territory. people continue to like them as a growth story. but it's highly likely you're going to see big moves in both directions. really probably for the next several months. emily: i do have a chart here showing the performance of a number of names over the last

year. talk to us about some of these other companies. apple, amazon, netflix. >> all these companies are facing their own unique issues. we'll start with apple. the big issue there is what kind of demand is it seeing for its iphones over the next year and what is it going to look like as it begins to transition from a company built largely on unit sales into one that's geared largely around its services business andriev knew derived from that? amazon, it had a weaker than expected revenue read in its most recent quarter, as did apple. those are concerns that people are going to be looking at. they are going to be looking for the next quarterly results, maybe they'll be able to avert some of that because these are names that are very widely watched. they see a ton of growth. amazon in particular. the like for its web services division, its physical stores are something that's becoming more interest to investors. on and on like that. netflix is a little bit of an anomaly here. it hasn't had the major headline risk that the other ones have

faced but it has such a high multiple that because the market in general has become a little bit less friendly to high growth stocks, it is really seeing some steep declines. emily: actually netflix closed out 2018 as the best performing of all the faangs. they're scheduled to have a big content drop this month. obviously continuing to invest billions and billions of dollars there. can the momentum in the shares continue? >> that's the real question. we're entering an environment that's a lot less for giving for high growth kms. monetary policy is becoming -- companies. monetary policy is becoming tighter. macroeconomic growth is showing signs of slowing. there are more risks of a recession. more talk about that. where that leaves a stock like netflix which trades at such a high multiple remains to be seen. it used to be that investors were willing to forgive a lot based on how fast the companies are growing. now they're not as willing to

forgive that stuff. now it has to show it can stand up on numbers and not just momentum. emily: what about regulatory issues? clearly the last couple of weeks have been an anomaly. well, we hope. we'll see how long the shutdown continues. but we see tim cook, for example, making a concerted effort to engage with the administration. where it's been very different for amazon's c.e.o., who has quite a contentious relationship with the president. do you think we'll see more of that? >> undoubtedly that regulation is going to be a major subject for these names throughout 2019. i'm not sure how much the bezos-trump rivalry or whatever you want to call it is going to impact the shares. i'm not sure that would lead to regulation. but certainly for a name like facebook, that has really been a subject of bipartisan criticism. both parties have things that they have issues with the company. it is more likely there that will you see some kind of action. but again, no one really knows what that action would like

like, how effect tve would be. what it would mean for profits or margins or revenue growth going forward. it's a major question mark. but it is more a risk than an opportunity. i think most people would say. emily: google has largely dodged the media spotlight. when you look at the chart, shares are still also way down. from july. when it comes to alphabet, what does the year hold? >> it's facing some of the same regulatory concerns as facebook because it is another company that is built largely on data, ons i use -- on its users and so forth. if there is an action taken against facebook it's likely to have an impact on alphabet as well. but it hasn't had the kind of controversies that facebook has faced. it's not quite as flashay as netflix as far as its multiple or as flashy as amazon. it's more of a mature company in terms of its valuation. that can provide a little bit of a buffer zone there. but it's another high-growth name in a market that's less

friendly to high-growth stocks. emily: one thing's for sure, there will be lots to talk about in terms of the ups and downs of all of these names in 2019. ryan, thanks so much for weighing in. coming up, what is amazon's brick and mortar strategy for the coming year? the tech giant breaking into new industries, but one analyst sees potential for the company to disrupt another bills as well. we'll tell you where. later in the program, why it might be hard to find an episode of an original netflix show if you live in saudi arabia. that's next. this is bloomberg. ♪

emily: this is "bloomberg technology." tesla tumbled on a first trading day of the year, after his appointing models in delivery and eight across the line price cut raising concern. line pricecross the cut, raising concern. >> this was a tumultuous year we put a close on in 2018 where it on my was all over the place. -- elon musk was all over the place. they got their stuff together from a production standpoint. so for 2019, there is lots of concern how many cars tesla can

make. there is more concern about where demand is, and it remains to be seen how big a concern that is. the question everyone is worried about after today's results is whether the price cut is indicative of a concern on tesla's part with the tax credit of january 31, whether or not that will be a major issue into 2019. emily: if the ev market is only growing, doesn't tesla have first mover advantage? >> that is why i say it remains to be seen. not only is there still plenty of demand for tesla's product, even the bears will tell you this is a company with a hot brand. they also have the ability to pull some levers overseas with the model three. they are bringing that car out to europe and china.

obviously those are markets that haven't been halved yet for the car. there is pent-up demand for the vehicle. it is a concern whether or not we are going to see a peek for this company -- a peak for this company. the price point was of concern. it is not something people were expecting tesla to announce. emily: talk about outstanding issues in the wake of the settlement with the sec. are they still looking for independent board directors? >> that was a story that broke over the holiday break people may have missed. larry ellison was brought in as one of the two new independent directors. he was the big name for them. they also brought in a human relations executive who has a lot of big company experience. there is concern about whether those picks or sort of the right

ones for the company because allison in particular, he is a big name but i think you some people excited, he is also a friend of elon and came out and said as much a few months back and stepped up to speak in his defense, and there was coverage andis take private tweets smoking marijuana. for him to defend elon, and then a couple months later, be picked as one of the two new independent directors, raised some red flags for some. you are seeing that in analyst commentary today that maybe there was a missed opportunity were tesla quit -- where tesla could have brought in someone to serve as a check on elon musk. emily: certainly once to watch in 2019. thank you for stopping. amazon's efforts to dominate in -- to

the consumer experience, they are branching out into speakers. amazon could benefit if they make into a new industry, opening up gas stations. this analyst joins us from new york. we had gene munster talking about how he believes cars will so why gas15 years, stations? >> you could think of it as fueling stations, somewhere a consumer goes to get gas or charge their vehicle. also have the ability to visit a convenience story -- convenience store. the important point for amazon is this could give them 1000, 2000 points of distributional with commercial rather than residential risk -- and resist to lower the cost of shipping. costco, 10% of their sales come

from gas. this could lower expenses on delivery side. both of those are important for amazon. emily: is there any indication amazon is exploring something like this? >> there is none. if you go back in time before they acquired whole foods as if there may have been some consideration or chatter they were looking at bj's wholesale club, and they have locations with gas stations but i haven't heard a lot of speculation that they are looking at this specifically. emily: let's say amazon is interested. how do you think they will roll this out? >> if you look at their historical m&a strategy, it is billed first, by secon -- buy second. they could test and learn. they could see to what extent consumers appreciate the opportunity to save money on gas

when they are prime members. is it having a positive impact generating new members or renewals? or they could make acquisitions like in the case of whole foods after advance -- advancing amazon fresh or like in zappa's shoes. build first, -- buy second. emily: they have whole foods, they will open up more. there is the amazon go store, the amazon for star store -- four-start store. it is disparate. is there more coherence going forward? >> the cohesion will be five years from now when i am calling amazon foods, which is whole foods. after making a number of changes, you will move into amazon foods, and they will have a pharmacy which they don't have

today. they already have the lockers and are giving you lower prices on products especially if you are a prime consumer. this will also have delivery options. we know they replaced in stuttgart with ammo -- placed in cartgart -- placed is to -- the difference is proprietary products in the store year round, not just at holiday. to your point, they have disparate things they are trying in retail physical stores, but i see amazon stores, a transformation of whole foods incorporating everything. emily: what are the biggest risks for amazon? is a hugezon there risk. investors are getting used to the new amazon which we call profit incorporated. if you look at cloud computing, advertising and certain -- and third-party retail, 53% of units

sold in the third quarter, their fastest growing businesses are their highest margin businesses. but if you look at the performance in june and september, earnings per share was higher than expected, double in fact in june, but sales were weaker. that will take time for investors to digest the new amazon, profit incorporated. emily: you mentioned five years from now. what do you think are the biggest challenges on a longer time? >> while acknowledging microsoft is the most valuable, if you look at what has slowed walmart and microsoft, it was decelerating growth and multiple contractions. that is the big challenge. they do have a number of initiatives underway including advancing efforts in gross -- in grocery sales, apparel and b2b outside commerce stuff that could generate higher sales growth and higher profits which

could sustain the stock for years to come. that is the big challenge for amazon, finding that sustained topline growth. , always good to have you. we will be watching. michael is boosting his investment in cryptocurrency in the wake of the bitcoin meltdown. the founder of galaxy digital holdings has acquired another 2.7% of the company. he controls almost 80% of the digital.are of galaxy prices in the digital asset market collapsed last year. we ask the former president john decisionut netflix's to ban an episode of one of its episodes in saudi arabia. this is bloomberg. ♪ is is bloomberg. ♪

emily: fans of a new netflix program will find trouble finding an episode if they live in saudi arabia. they banned an episode of "patriot act" that involved jamal khashoggi. they were taking the relationship between the united states and saudi arabia when he was killed in the consulate. here to talk about this and all other news, the president of the ynx.s -- of vil he was the president of cnn. what do you make of their decision to cave to the saudi arabia and government? n government?ia

>> it is pretty odd. how many subscribers are there? makes you wonder what they felt was at stake, where they could have made a clear statement. get ready for more of this as american companies face the perils, media companies face the perils of expanding internationally. they need to play by the local rules. google has found that in china, and you will see more of it in countries with autocratic leaders. emily: what happens in other countries, let's say south america, asia? all markets where netflix is really banking on international subscribers? jon: we count on america --nging its values with this with us where we do business overseas. if we don't do that, what kind

of world does this become? one of the more fortunate was where netflix said they were taking down the program in light of a valid complaint from the saudi government. they said there is a law against sprees getting -- against speaking your mind or criticizing the government, so it was a legal issue but the atson who, the publicis netflix -- publicis who used that, they have a reason for taking that person out the door. that was unfortunate. government said it violated their anti-cybercrime laws to get more specific. also netflix bringing on a new ,fo, from activision blizzard spencer newman. this is a company that will

spend billions of dollars on new content. we will see a big drop of new shows this month. what challenges is this new cfo going to inherit? jon: winter is coming for netflix in terms of competition and a more expensive operation. they want spencer newman because he has experience with reduction finance. he worked at disney. they will have to be creating more original programs moving forward, because all of the studios in hollywood are pulling movies and tv series off of netflix eerie what netflix is facing -- off of netflix. what netflix is facing, they may be the aol of ogt. aol popularized a new consumer habit, going online, but they were not defensible. when people learned to go online, they found out what they

wanted. netflix has popularized streaming, but now we know how to stream, we can find all kinds of material in all kinds of places. this year you have disney launching a rival, you have at&t bulking up, going to combine hbo and other warner media content for a new over-the-top subscription play, nbc universal, apple. if they have a tough fourth quarter, wait until 2019 and 2020. it will not get easier. it will get more expensive. advantage --g netflix's big advantage is they know how users are using content. they are ai powered to understand user we have years and match that to content. that enabled them to delight subscribers. they know what you want to watch

next. that has been fantastic. the thing is all of the other companies i named are aware they need to become ai ready. i helped to run an ai company that services media companies. rivals are netflix's spending money on matching if not exceeding the ai capabilities of netflix. go ahead. emily: you have two apocalyptic things, that winter is coming and they could become the aol, it is hard to envision that. still become just another studio that makes good content? jon: just another studio that makes good content doesn't deserve the valuation they have been getting. if that is what they become, look for their stock price to take a hit. it was hard to envision aol being the aol of its time.

it was a giant. they bought time warner back then. it is hard to envision. the thing about technology is new technology, with the traditional -- what the traditional media companies entering this space are adopting, it is always faster, cheaper and more efficient than legacy technology which is what netflix is settled with -- saddled with. they were the first to use artificial intelligence, but that becomes a disadvantage when others integrate the latest and greatest. they can spend their way out of becomesy to, but it very expensive. at some point they will stop being valued as a start up and start being valued the way their media competitors are. that's big it of cash -- that got ofe get -- that spi

cash will slow down. it may not happen in 2019 but over the next several years, it will be a stiffer headwind they are sailing in two. emily: i want you to stick around. the former president of cnn speaking with us. using instagram will become more difficult. we will look at the country's social media crackdown. this is bloomberg. ♪

emily: we just told you about of aix blocking an episode program in saudi arabia critical of the country's rulers. in iran there is another digital crackdown, blocking access to instagram. the photo sharing network would join facebook, twitter and telegram as being off graham its two iranian citizens. -- off limits to iranian

citizens. this is not unexpected because the government has been making moves towards this. but you have several government officials and iran who are -- in iran who are fond of social media. >> it is interesting. this is one of the last remaining social network in iran that had any sort of broad relevance. you are seeing instagram considered not just as a place for photos of food or puppies or vacation but also political speech. that is something that came to light with in terms of russia's efforts. never a good thing when a company bans a platform, but it does seem that governments are thinking of it less as a harmless place for beautiful photos. emily: cnn had its own troubles dealing with the iranian government. what is your take on this?

this is stretching to social media. jon: it is so interesting you see saudi arabia and iran, who are enemies, engaging in the same sort of practices. what they have in common is they are unpopular autocratic regimes that have serious internal challenges. it smells of panic in a lot of ways. what we don't know is how effective this can be. in china the censorship with social media has been effective as far as we know. it may be these regimes are able to snuff out the free exchange of ideas by shutting down social platforms. i think the china example tells you unless you are 1000% all in on repression, it is hard to stamp out this kind of exchange. it is disturbing and it is

unfortunate. i think the jury is still out whether it will work for these regimes or not. emily: i was working at cnn in beijing when facebook was shutdown in china. -- was shot down in china -- shut down in china. mark zuckerberg said we are different from a year ago. we have fundamentally altered our dna to focus on preventing harm in our services and we shifted a large portion of our company to work on preventing harm. he talked about 30 thousand people working in safety and security. does that -- does that jive about the internal messaging? the company is thinking pessimistically about how users might use its services. for zuckerberg to say we fundamentally altered our dna, from what i have heard, it is still metrics-based, --

[speaking simultaneously] sarah: the company will look for growth in new areas. the changes to facebook itself to make it a healthier platform coincide with the natural decrease in engagement there. it is going to be hard for investors to separate what is users' general using facebook less because they don't like it, and what is their own decision-making around reducing viral content? facebook will keep trying to tell investors all of this is its own doing. emily: zuckerberg had a more upbeat post, here is to a great 2019. obviously it was a tough year, it will be another one for facebook. what is their view, not just facebook but instagram, whatsapp , and 2019? jon: what come -- what happens

to a company were people said .ey, now they say eew the abstract thing in the air about facebook was it was fun and loose and you could be yourself. how can you be yourself in an environment you suspect everybody is looking in? it is like everyone is going through your medicine chest at your house. it is difficult to attack. what they need is a human face , benignting trustworthy intent. i'm not sure they have that. the person about they brought in from the u.k. to change the image? sarah: that is what they hope. zuckerberg is pointing to the change of face. he also mentioned in his note tot he will give more power

the public. he doesn't say what that looks like, but they will allow content review. that will be interesting. emily: you will be busy, so will we. they do for joining us. thank you all for joining us. see you back tomorrow. ♪

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♪ haidi: good morning very nine haidi stroud-watts in sydney where australian markets have just opened for trade. ramy: i am ramy inocencio. welcome to daybreak asia. haidi: let's get you our top stories. apple shares plunging as they cut first-quarter revenue guidance, blaming and expected slowdown in -- an unexpected slowdown