♪ emily: i am emily chang in san francisco. this is "bloomberg technology." coming up, apple first-quarter results slightly below expectations. we also now know the extent of the sales plunge in china, $5 billion. we will dig into the iphone makers results. the cfo of huawei appears in court after new charges filed, while china called on the u.s. to stop the unreasonable crackdown.

plus, apple is not the only tech company reporting earnings. we will look ahead at what to expect from tesla and facebook. our top story, apple's first report since tim cook let investors know the company was it -- ists forecast out. shares are up. revenue was higher at $84.3 billion. the number we were waiting for was china revenue, a steep drop-off. apple brought in almost $5 billion less revenue during the holiday quarter in china been a year prior. $13.1 billion versus $17.9 billion in the same quarter last year. to discuss, we have our guests. i have to zero in on china. how bad is it? >> we have seen a couple of macro indicators collapsing the

last two months of the quarter. november, december. consumption tax down dramatically. let's not forget that apple was up 16% into q3 last year. we went from going up to down 17% or see her -- 70% or so you're on your. it was a dramatic collapse in china. it's not just apple. what we are seeing is a collapse in consumer confidence over all. emily: the question then is why? just because of taxes, broader sentiment across the country? does it have anything to do with the trade war? what is the root of this? >> we continue to think 80%, this is apple, specifically to a mispriced phone that should be 15% to 20% cheaper. i think a lot of that has been a mispriced phone, and also from a technology perspective. you look at the camera technology. chinese consumers, which represent 20% of all the

upgrades for iphones in the next 12 to 18 months, they looked at this phone and walked away. we knew china would be weak, but it fell off a cliff. the positives -- emily: hang on. you are saying the vast majority of this $5 million is due to the miss pricing of the xr? what about the other phones? >> the xr is focused on china. focus inly was there china, xr. if you look at the pricing of africane, combined, 8% -- apple specific, 20% other. but a lot is the mispriced phone. this is a huge iphone cycle, given 20% of all overall iphone upgrades are in china. that is the key.

that is why in this call coming out, is going to be key to how this turns around as well as the pricing strategy, how tim cook and apple are looking at it. emily: we know there are competing smart phone makers who all make cheaper smartphones, much cheaper than the iphone. but what do you attribute this to? >> just to address the last comment. the entire sector in china fell by the same rate apple did. we also had samsung recording huge losses in market share. we have some chinese players rising in market share, but the overall market is suffering, not just apple. emily: why are some rising and apple not? >> apple does have the premium segment. the premium, you would imagine, would be suffering more, but the overall market fell. i think apple is more or less in the middle of an overall contraction in the market.

emily: when you look at iphone sales in other regions, we saw u.s. sales slightly up year-over-year. sales in europe slightly down. so where is the growth going to come from if it is not coming from china? >> china is the linchpin, but fundamentally you don't need to see mega-growth. or minus 5% type of growth is all you need to overtake. you want to see a stable install base. 350,000 iphones are coming up from upgrade in the next two months. the fear weighing on the stock is the install base, that that takes down. we believe you start to see a china rebound, but only if they cut prices more with xr, and that will be the focus of the call.

otherwise, it would be a lost iphone cycle until september. that is the worry of the bears and bulls, and kind of the debate here. do they cut prices? do they take it from a pricing perspective? emily: the call is underway. tim cook is speaking, saying the macro economic conditions were much worse than the company initially thought they would be. they did not break out unit sales for the first time, but they did give us revenue for each product category. $52 billion for the iphone, $7.3 -- $6.7 billion for the ipad, $7.3 billion for wearables and home accessories, $10 billion for services, generally in line. what do you think the significance is of these numbers not having those unit sales for the first time? >> first i want to address one thing. the installed base, there was an update you been during the investor later and it is up 100

million, a 1.4 billion install base. emily: 900 million are iphones? >> yes, that is an estimate. as you cited those figures, in terms of the breakdown by revenue by category, we have the 17%, we have the mac up 9%, wearables growing 33%. the wearables segment up. excluding the iphone, the business is still growing at 19%. that is a smaller portion but it is growing very well. this is aerall healthy ecosystem, a healthy number of users. there is a growing number of users and we have a great services story. emily: reports of apple's demise are greatly exaggerated. >> they have been for many years. as long as i have been following the company. emily: would you agree? >> i would disagree with that comment. in the fact that right now, if

you look at this, the story has changed and the focus is on the install base side. when you look at services, china is a linchpin if customers do not upgrade. so i do think, as someone as someone who has been long-term bull on apple, they are entering a different type of white-knuckle period. i don't think you can compare the two. i think that's why investor reaction has been so negative. i think what you want to see here going forward is that the pricing boost they are going to lose in china, and fundamentally, the services are feeling more comfortable. the biggest number here, the thing that all investors are focused on, the services gross margin above 60%. that is the line in the sand. that, in our opinion, is why the stoxx are up.

-- the stocks are up. that is the first time they are breaking that out. that is key to the fight nation of the services business. >> margins are up on services. during the year ago quarter, when we had a better story for apple, they were 58%. now 64%. margins is not a bad one. i think we will see an increase their as well going forward. the key question on the install base is that in order for that to decline, we would have to have people switching out of apple products. we are not seeing that. if deferrals are happening, they are staying still within the audience of apple. we should keep an eye on it, but i'm not sure loyalty is going in the other direction but up. emily: tim cook is continuing to speak on the call, saying customers are holding on to older iphones longer than in the

past. we will continue our healthy debate. meantime, facebook could face legal challenges from various states over alleged privacy violations. one attorney general filed his own lawsuit last month over the cambridge analytical scandal. he was the first official to take action over use of data obtained by a political consulting firm with ties to president trump. he says facebook violated consumer protection laws. some attorneys general have formed a multi-state group to investigate such claims including new york and massachusetts. facebook declined to comment. speaking of privacy, facetime flaw. a troubling security log that can hijack your phone's camera before you pick up. and, continuing coverage of apple earnings is next. if you like bloomberg news check , us out on the radio, bloomberg app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg.

♪

♪ emily: we are continuing a look at apple's first-quarter report, this as apple's ceo continue to call for greater privacy protections. monday was known as data privacy day. 24 hours before delivering the company's latest results, tim cook tweeted "we must keep fighting for the kind of world we want to live in. but us insist on action in reform for data privacy protection. the danger is real and the consequences are too important." just one problem. hours later, a flaw was expose

facetime that could allow people to see and hear you before you pick up. apple has disabled the feature and said a fix will be available later this week. still with us to discuss, our guests. dan, you get first crack at this one. how embarrassing is this? dan: it is a slippery slope. if you look at tim cook and apple's dna on the privacy side, look, you saw it at ces. obviously the advertisement they took out was a shot across the bow. you put yourself on a pedestal. that is a danger here. but look, i think it speaks to broader concerns and overall tech in terms of privacy and potential regulation, and apple borderline is caught in the crosshairs. that is why this is a big focus for technology investors not

just in apple but across the whole tech sector. emily: look, it doesn't look at good. they are fixing it. these things happen. tim cook has put himself and the company out there. we are on the right side of history when it comes to privacy, taking on facebook and google. when there are some things you could point to as hypocritical. horace: that is true. even a company like microsoft, focused on corporate security, they also get caught up in bugs and issues. in the software business, out of millions of lines of code, you will have failure. what is important is messaging and dealing with it very quickly, getting in front of the problem. they shut down facetime immediately. they will have to push out a fix immediately as well. the quicker you respond is what

matters. emily: let's talk about the messaging and the reality. how much is apple really on our side? horace: i think the core business model is at stake here. what we're talking about with apple, they are saying you by uy our hardware at a premium and we will protect your privacy. that is the bargain being struck, where they don't sell access to the individuals data, which is the opposite business model. apple has had this notion that we are charging a premium for product, but will basically not sell anything else. that is still the case and has not changed. the logic is to preserve that persona, the brand value, premium equals privacy. emily: is there any indication what tim cook is saying is impacting other companies? is it hurting facebook or google? dan: that is a great way of summarizing it. apple, there needs to be a line

in the sand in terms of how they view themselves, the dna. i think it has hurt a bit of tech. a lot of times in the valley, it is a divisive issue in terms of how apple has gone after the privacy. but i do think it is important because it is their business model. you need privacy, especially in today's world, where you are seeing more breaches and other things out there that consumers worry about, their protection, their privacy. it all changed last month. -- last march. once mark zuckerberg went in front of congress, that is where apple and tim cook realized they needed to draw a line of distinction. that's what he has done. emily: apple shares are up almost 6% on the back of these results. i want to dig in to some of the other storylines here, but first, i want to point out you are wearing two apple watches right now. horace: that is correct.

emily: why? horace: i carry two phones. i will lose all the alerts. this is my remote control to my phone. if i don't have it, i don't get calls. emily: you're not worried about privacy? horace: no, i am not. emily: let's talk about what is happening. $7.3 billion for wearables, home, and accessories. what does that number tell you? horace: wearables separate from home is going at 50%. that has been going on for some time. i said this about a year ago, that the apple watch is a bigger business than the ipod ever was. it has overtaken the historic ipod. we are seeing a tremendous growth story there. with the latest version that now has a bigger screen, on board telephone function.

it is just a great product. the health angle is something emerging as well. we have the ekg functionality, probably more sensing there. i think apple is using the watch as their focus. on the other side, the negatives here are that the other category seems to be flat, the home pod and apple tv are not booming. they are steady, but not growing. that may be something that needs to be addressed with services going forward because a subscription service providing unique content, there are rumors they are getting into the studio and production business, and that would mean maybe a boost in that category as well. emily: anecdotally, i have seen more people wearing the apple watch, but how big can this business be? dan: it has been very successful, but ultimately it is

bread at the restaurant. it is an appetizer at this point. over time, it could be more significant, but right now the focus is hardware, iphone-led services. i think the question now is how do you get more services into the flywheel? that is key for apple. you have more wearables, but it comes down to content. we continue to strongly believe that is what is missing in the product portfolio. significant content. they need to drive into the services. when you go through a dark chapter, like they have gone through the last few months and will continue to go through with china, now you have an install base. put a fence around it and drive it with wearables. there is a silver lining out there. i think you saw that again this quarter. emily: tim cook on the call just now saying we are as confident as ever in the fundamental strength of our business and we have a strong pipeline of products and services with exciting announcements later this year. what could those be?

horace: the problem is he says this all the time so i really don't know. deals isontent something people are looking forward to. more health care things are exciting. they are doing trials. i said this also once, that i think more people will have diagnosed diseases through apple products than some of the ekgs in doctor's offices, for example. so we are seeing something there. it may not be a business for a long time to come, but these of the things that drive loyalty and customer satisfaction. we see those numbers in the 90's all the time with apple. this builds fundamentally on the question of, you have an install base that will be liable going forward. 1.5 being people using apple products a couple of quarters from now. 1.5 billion is more than the windows install base, it is on that magnitude. it is a great audience for apple to introduce new products and

services. a really interesting experimental stage here. emily: we will have to leave it there. we will continue to cover earnings. horace, we know if you don't pick up on one line, we will call you on the other. we continue this conversation about apple throughout the hour. you can turn to your bloomberg terminal for more on apple's results. just check out tliv . get commentary and analysis from our expert editors. we are live streaming on twitter. and follow our global breaking news network tictoc. this is bloomberg. ♪

♪ earnings,ying on crowd bookings for the fourth quarter have slowed and the company has announced a restructuring program to compete with salesforce and oracle. they expect 3000 staff to take voluntary leave packages. the company saying it will be

resilient in the face of trade tensions, but gave a cautious outlook. >> there is no question there is tension in the global trade community over the tariff matter with china and the u.s. we are we are hopeful that will resolve itself. i always remind people that we live in uncertain times. emily: google said it is introducing a new process to verify that advertisers for the eu parliamentary election. it will release a report in a few months and a searchable library to make information accessible. the european commission acknowledged big tech companies have made progress, but more is needed to ensure adequate transparency. the ceo of pandora will step down from his role in exiting the company after shareholders approved the deal for sirius xm to acquire the streaming site. other pandora executives including the general counsel and cso -- cfo also exit the

company. jim meyer will oversee the newly combined company. coming up, u.s. ramping up its fight with your way -- fight with huawei as trade talks resume in washington. how will this impact the continued conversation? we will discuss next. we continue to monitor the apple earnings call. tim cook striking a bullish tone, saying exciting product announcements are in the pipeline for later this year and the company will continue to invest. apple shares rising to the highest level in a month in after-hours trading. this is bloomberg. ♪

♪ emily: this is "bloomberg technology's" global link where we are joined by "bloomberg daybreak: australia." i'm emily chang, with shery ahn in new york and haidi stroud-watts in sydney. let's take a look at the global tech stories of the day. haidi: tesla needs a 21% rally by march 1, if not, they face a $920 million bill. that is the amount of debt from convertible bonds issued back in 2014. the electric carmaker can avoid the payout by changing the note

for cash and stocks, but only if shares rise 21% from the current level. it's one of the biggest privacy-related problems apple has ever dealt with.for cash anf iphone customers discovered a software bug that lets people listen on others through the video chat service. apple has disabled it remotely. it earlier said it would release a software update this week. staying with apple, the company projected quarterly revenue that came close to wall street estimates. that suggests a punishing end to 2018 has not gotten any worse. they have set their second quarter revenue will be $69 billion, analysts looking for $58.9 billion. apple reported better than expected earnings in the key holiday quarter. those are the top global tech stories. emily? emily: thanks so much. sticking with apple's first-quarter results, i want to bring in junheng li, jl warren capital head of research, who joins us from san diego. before we dig in, take a listen to what tim cook had to say on the apple earnings call moments ago.

>> our customers are holding on to the older iphones a bit longer than in the past. when you pair this with the macro economic factor, particularly in emerging markets, it resulted in iphone revenue down 15% from last year. our iphone results accounted for significantly more than the entire year-over-year revenue decline. emily: the macro economic conditions are one thing and cook said it was worse than apple anticipated. but you hear him saying that people are holding onto their iphones longer. we all know this, but he for the first time is kind of admitting it. what do you make of that? junheng: i think it speaks for itself. according to the performance of iphone sales, there is very little doubt that the iphone this cycle is a failure. the marketing of the xr, the pricing points, the slew does not make sense. especially in emerging markets

where the trend of commoditization is more evidence than the u.s. and north american markets. they are facing intensifying competition. of course, coupled with the weakening of the domestic economy in china, as well as perhaps in europe, we are seeing the big drop of 15% year-over-year, dropping iphone revenue. shery: iphone prices seem to be falling in the current iphone cycle in china. this chart showing you those numbers. we can actually see some deep cuts in some models, as much as 15% or so. if we are expecting that price to fall from last year to now in january, could we see some help coming from lower prices in other online stores, not necessarily apple stores? junheng: that is right. apple stores never really offered the direct discounts.

it is the resellers, as well as other social e-commerce platforms that offer heavy subsidies to move the unit sales. the good news is we are seeing the volume sales pick up quite a bit when the discounts deepen. the bad news is i believe it will impact the margin for the oem eventually because the resellers are not willing to take all of the loss. as you see on the chart, for some sku's, the discount was almost 20%. according to our checks, apple has been subsidizing high single-digits to the resellers and distributors on those e-commerce platforms. emily: interesting that apple would help there. how much do you think what we are seeing is a result of a

china-u.s. trade war, and will the short-term therefore if a deal is struck? junheng: i don't think this has anything to do with trade war at all. i think it is a product cycle. the iphone's weakness is not just in china. it is pretty evident in the u.s. and europe as well. going back to tim cook's point, they're great phones. they can be used beyond two years, three years. the replacement need has diminished. even at the height of china and the canada tension, geopolitics wise, we are seeing a great sales for canadian retailers. i don't think government p.r. guidance played a role. i think it is a product cycle. iphone needs to ramp up innovation.

and for the same price, the consumers in china have the choice to get the iphone 6 or the current generation of other phones. the value proposition is not in favor to apple. shery: it seems that the trade war is having an impact on apple suppliers. they are talking about moving to india, southeast asia. how can we expect these numbers out of apple to affect asian suppliers? junheng: i think that is a more direct impact of the trade war on apple. the impact is on the supplier and also the manufacturing base reallocation going forward, but that does not have much impact on this current generation of phones. it will have impact for the strategic supply chain reallocation globally going forward. this year, we suspect apple will

gradually move about five to 10 million iphone units of production from china to india. those phones made in india not for the indian market. those are higher end, this year's phone for the u.s. market. just in case, i think they are preparing for the trade war, trade tension to be the background noise for a long time. shery: thank you for joining us. junheng li joining us from san diego. much more ahead, so stay with us. this is bloomberg. time. ♪

♪ emily: as we have been reporting, the u.s. has hit china's largest tech company with a string of charges ranging

from ip theft, fraud. the indictments against huawei come ahead of crucial trade talks in washington. tom mackenzie has this report from beijing. tom: the u.s. department of justice lifting the lid on a more than year-long investigation into china's largest technology company huawei. allegations of bank and wire fraud. allegations the company conspired to deceive u.s. banks into getting around iran's sanctions. allegations that huawei stole technology from t-mobile. and there is the allegation that huawei offered bonuses to employees to pinch technology from other rivals. the u.s. also officially asked for their extradition of the huawei cfo from canada. huawei put out a statement denying the allegations, saying it has no knowledge of any wrongdoing by the cfo. wilbur ross, the commerce

secretary, says these criminal charges against the company will not come up during the talks with his chinese counterpart, that they are separate from the trade negotiations. if they do not come up, they will be the elephant in the room , because one of the key charges against huawei is intellectual property theft. intellectual property theft was right at the heart of this trade dispute. that is what triggered the imposition of tariffs against chinese goods in the first place. emily: now, huawei has reacted to the charges by saying "the company denies that it or its subsidiary or affiliate has committed any of the violations of u.s. law set forth in each of the indictment. it is not aware of any wrongdoing by ms. meng in the u.s. will reach the same conclusion." huawei was ordered to appear in federal court in seattle on february 28 to face charges. the company engaged in a scheme to steal trade secrets from t-mobile. i want to bring it our executive

editor tom giles. what is the very latest in terms of the impact of trade talks in washington? tom: timing is everything. these charges have come down just as trade negotiations heat up. there are two schools of thought. one of them is this gives u.s. leverage. it shows we are serious and gives us a negotiating chip against china. there is another school of thought, and we spoke on bloomberg tv yesterday to a former u.s. trade official who said this undermines the u.s. case. this has the potential to show china we are not serious about either side, either the trade issue or the case against huawei because why would we use one as a bargaining chip against the other? in some ways, it kind of undermines our case to show we are willing to make concessions on this side of things in order to get what we want here. well, how serious were you about this side of things in the first place if you are going to use it as a negotiating chip?

it is a different school of thought. it could go either way as far as u.s.-china is concerned. emily: the u.s. has formally requested extradition for meng from canada to the united states. what is the process? tom: canada has 30 days to assess whether to honor this request. it is a very interesting political situation that canada is left in. canada is paying a high price to be the u.s. ally here. they've had canadian nationals arrested in china, seemingly as a result of retribution for canada's role here. so, it is not working to canada's advantage. you also have to take into consideration the question of countries around the world, including canada and the u.s. want to build out 5g networks. the fact of the matter is a lot of telecom companies say huawei is selling good equipment at a

low price, why can't we buy it? there is all this political pressure from the u.s. against using huawei's equipment. emily: your team has so many stories about every single angle on this huawei story. the title of one of them is u.s. message to the world: do not trust china on 5g. how will others receive this message? tom: they have got a way -- your desire to use huawei's lower-priced and arguably reliable equipment when it comes to 5g, and this assertion by the u.s. government that china can create -- huawei can create a backdoor into china. that this represents a potential security threat for your country, your sensitive trade secrets, possibly your national security. that is a trade-off that a country has to make. do i want this equipment or do i want the potential for backdoor? where we see the u.s. needing to be more forthcoming possibly is

is to -- possibly is to show more why huawei is a threat. yes, they are stealing ip allegedly. yes, they are violating u.s. trade sanctions, but are they a real threat to national security in terms of creating a backdoor for china? are they saying to china's government, come in. listen to these conversations between the u.s. and the allies. that is the open question. emily: still no evidence of that. i want to tie this back to apple earnings because huawei is a big competitor to apple in china. they are not seeing their share fall like apple. in china specifically. they are in perhaps an advantageous position because apple has to outsource chips, intel, qualcomm, whereas huawei makes its own. that is another part of huawei's business. how is their business going to fare amidst this onslaught to the 5g side? tom: it is an important part of their business. we spent time with huawei in its

labs and its factories in china. the message they are trying to send is we are more than just about telecom equipment, telecom networking gear. we are moving into new areas. we are moving into places like, you know, the internet of things. a.i. they are definitely trying to send the signal to the world that we have other businesses we can rely on. we also did this story that their chips are in a lot of security cameras around the world. they are everywhere. so there are other businesses. as you said, they have a mobile phone business that is doing very well in china despite the slowdown. the slowdown is real and hurting many companies, not just apple. where huawei has an advantage is it prices its products at a lower price point, something apple field to do.

-- apple failed to do. that really hurt apple in the most recent quarter and we will see what apple starts to do with its pricing to get around that. another advantage for huawei is local companies, we have heard, are telling their employees buy huawei, buy local, do not buy the iphone. let's see if that is taking a toll and continues into 2019. emily: apple sales in china did fall off a cliff, dropped almost $5 billion compared to last year in the holiday quarter. we have been listening to tim cook speaking on the earnings call. let's take a listen about what he has to say about the strategy going forward. >> apple innovates like no other company on earth and we are not taking our foot off the gas. we will continue to invest in near-term headwinds like we always have and will emerge stronger as a result. emily: where are we going to see that innovation? people want to see a big, snazzy, new product category

which we have not seen in a long time. does innovation look like emily: where are we going to see that innovation? something different at apple? tom: what apple has said, what they are emphasizing is things like their install base. 1.4 billion people have this device and apple has an entree into your life as a result. they can push services, another area they are emphasizing. growth in both of those also slowing. emily: do we call that innovation? tom: innovation happens in a lot of ways, emily. the cfo did talk on the call about new services that are coming down the pipe. the question is do you have the same margin and do you have the same sales volume straight up as you do on hardware? services are harder. they account for a smaller percentage of overall sales. i wouldn't rule out the possibility of innovation in these areas. my question is, how quickly can

they make up for the shortfalls you are seeing in the iphone sales that have accounted for so much of overall revenue for so long for apple? emily: tim cook has also said health will be one of apple's greatest contributions to mankind. we continue to watch how their health effort unfolds. tom giles, thank you for stopping by. still ahead, big tech earnings continued throughout the week. what to expect from facebook and tesla as they report, coming up. this is bloomberg. ♪

♪ emily: a big week for tech earnings continues tomorrow. facebook and tesla up next with their fourth quarter results alongside alibaba, qualcomm, microsoft. will the tone be similar to apple?

joining us to discuss is gerrit de vynck. will there be some similarities? gerrit: yeah, it looks like a pretty mixed bag. we have pretty optimistic views on the big advertising giants, google is not until next week. facebook tomorrow. a big fourth quarter for e-commerce. cast your mind back to black friday and thanksgiving weekend, some great numbers. that will bode well for amazon. specifically on facebook, it will be interesting quarter because they had a tough year, the stock down more than 20%. the company has already come back up a lot of this quarter as people prepare to put that behind them. if you think about how the stock market emotionally reacts to some of these things, sometimes there is a overreaction. if you had to ask me what i think will happen, i think facebook will have a pretty good print, and a pretty good response, as people say all that bad stuff looks like it is

behind us. emily: facebook analysts are expecting something like $1 billion more profit in this quarter than in any quarter ever that facebook has reported. i suppose the bigger question over the longer term, do you think users can emotionally get over some of the distrust of the company and will we see an impact on engagement? gerrit: you have this sort of user concern and the advertiser concern. the advertisers are the ones who decide whether or not facebook gets revenue and gross revenue, but they are obviously concerned about user numbers. the big concern last year was in its core markets -- united states, canada, europe -- the old appebook app, the was not growing anymore. people were not using it that much anymore and moving on to other apps by the company, but also instagram. when you talk to advertisers, they say this was a big quarter

for instagram. it was a quarter -- we know instagram has been growing very quickly but advertisers have really understood it at this point. people really are getting it and pouring money into it. instagram not big enough yet to assuage concerns about user growth, but i think it will show good growth and the market will like that. emily: facebook not exposed to the china slowdown because they do not operate there, neither does google. neither really does amazon. what are you looking for in the amazon side of the story? gerrit: again, i will talk about fourth quarter is the most important quarter for amazon because of all the e-commerce that happens in those western societies. it was a big quarter. e-commerce is growing not just because the u.s. economy is growing, but because people are jumping into e-commerce in ways they have been doing over the years, it is accelerating.

think about all the retail bankruptcies in the news -- that is all good news for a stock like amazon. emily: tesla also coming up. as usual with tesla, there are the fervent bulls and fervent bears. gerrit: tesla had a pretty good third quarter. that was sort of a moment where all this concern about elon musk, what he has been doing on twitter, fighting with the sec, his personal life bubbling into the public affairs of the company. then they posted a pretty good quarter in q3 and that seemed to quiet the critics for a while. the company has been telegraphing this quarter will not be as good as q3. you have seen the stock come down 10% this month. that might be baked in already, but we are always looking for commentary on what the future is going to look like. for tesla, they need to keep raising money, satisfy their bondholders.

whether that is going to be more debt sale or selling more stock, we will have to see. but it is a good position to be. the company needs money to keep funding. that the business is not shrinking. emily: gerrit, thanks so much for weighing in. to recap the top story of the hour, apple earnings. iphone sales fell 15%, but other businesses grew over the holiday quarter. revenue from wearables, home, and accessories jumped 33%. on the earnings call, the cfo gave the order of popularity for the latest iphone. said the iphone 10r, 10s max, 10s -- popularity in that order. that does it for "bloomberg technology." wednesday, we are covering earnings season all over again with alibaba, facebook and tesla on tap. we are live streaming on twitter. follow our breaking news network tictoc. this is bloomberg.

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announcer: the following is a paid programming. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. announcer: the following is a paid presentation for lifelock with norton, paid for by lifelock. tom: look around. so many of us are on our phones or laptops, on public wi-fi, shopping online, filling out forms and applications. in the connected world we live in, our personal information is everywhere. we enter our names, birthdays, passwords, social security numbers, all online. what happens if that information gets in the hands of identity thieves? jamie: i started getting phone