taylor: i am taylor riggs in san francisco in for emily chang, and this is "bloomberg technology." coming up in the next hour, this is it. big tech earnings tumble out all week. , facebook tesla, amazon, all reporting. we start with tuesday's biggie, apple. plus, searching for the cure. biotech may be the key to help cure potential for the deadly coronavirus. we will speak to a company on

the front lines of finding a vaccine. and taking a bite out of competition. tictoc rival bite jumps into the video sharing wars. details, just ahead. first, our top story, the s&p 500 declining the most in almost four months with energy and technologies leading the losses due to concerns about the impact of a major virus that originated in china. and it is rattling global markets. it also comes at the same time as the s&p goes into the busiest week yet for earnings, with some of the largest tech names reporting. joining us to discuss, it is craig johnson. craig, thank you for joining us. i wanted to talk about today's action first. the stocks off about 4%, the nasdaq off now almost 2%. do we expect a bigger correction to start happening? craig: thank you for having me on. i think this market is one where we will get a bit of a deeper correction.

as i look at this entire market, this is a market we have been thinking has been overbought for quite some time. in fact we put out a piece earlier this month and titled it, i will melt with you, kind of a play on the words from a popular song back in the 1980's. from our perspective, all the conditions were right to see this kind of 5% to 10% correction in the market. it is going to be a little bit deeper of a pullback. i would not be surprised to see a pullback toward the 200 day moving average, which would get to you about 3000 on the s&p 500. look for some more profit-taking. taylor: i want to look at a chart i am showing inside my terminal. it is the forward p/e ratio. we have talked a lot about how valuations were really full, particularly since the stocks had run up 60% last year. today's decline only brings us to still over 19 times on the stocks. do we still look fully valued at

these levels? craig: i still think we look fairly fully valued. because if we take not only the earnings for the entire market, but we had negative earnings in q3 and we are on a pace for negative earnings here in q4. two quarters in a row would suggest you have an earnings recession starting to unfold. perspective, it still think there has to be a deeper correction. if you look at our year-end price projection of 3600, that has to see some earnings pick up to get there. the earnings multiple, i am not sure we are going to see multiples in the market expand upwards of 23, 24 times earnings to get to those kind of levels. we will need to see earnings pick up and if not, this market will have to see a deeper pullback. taylor: i want to dive into some of the individual sectors. i found it interesting in your notes that within tech, it is not one shoe fits all. you are overweight tech but then underweight communications and media. so you are not a broad-based

bull on all things tech. what is the difference? what do you like and what do you not like? craig: sure, in the rationale for that is this. we take the entire market and put it into a normal distribution. when we go through that process, we do the trend analysis of what we are seeing, and when we look at the communication media space, we are not seeing as strong of a relative strength trend as we see in regular tech. when i tear apart the regular media space, i look at things like verizon. they are not really putting up great relative performance. they have a nice dividend but it is not one of the most exciting places to be. when i look at the technology sector itself, i see lots of outperformance happening in the semiconductors and lots of things in the drive space, such as western digital. it looks like a constructive looking chart. so i can kind of pick apart these sectors. and i am seeing some clear, relevant strength winners and some clear, relevant strength

losers as i go through our work. taylor: i want to get into some of the individual companies that are reporting this week, apple being the first, coming out tuesday before the bell. thet of people have said rate at which this company has and on aopped 100%, log chart, it does indeed look parabolic, as you mentioned. is this getting ahead of itself head of earnings? craig: from my perspective, i think the answer is yes. when you look at this chart on apple, the one thing that strikes me is, this reminds me of january of 2018. this was a period of time when we raced our hand and said enough is enough. charts like caterpillar, 3m, boeing, were all going parabolic at that point in time. if you look at all those charts today, they have had very meaningful corrections. i look at apple and other tech leaders, they are clearly great, great companies. and i love all the apple products even though my wife is tired of hearing about me buying more apple products. great company, i am just not

sure it is a great stock at this time. i think you could get a deeper correction in this name. taylor: i want to continue on and push forward to amazon and microsoft which will be reporting later. sentiment has shifted from amazon and the web services, not having the cool factor, to microsoft and their cloud business really taking on, especially when the -- with the jedi contracted your thoughts on the cloud business, as it relates to amazon and microsoft. craig: if you look at the charts of both of these. if we first start with amazon, that chart has really been consolidating sideways now for the better part of the last 12 months or so on a relative basis. i like what i am seeing with microsoft. the trend is still much stronger with microsoft than what i had with amazon. so the cloud business at amazon and microsoft, those of been the drivers for these companies. but it looks like microsoft is moving ahead from that perspective and showing better relative strength.

so from a chart perspective, we are better off and generating better alpha with microsoft right now than we are with amazon. taylor: you mentioned parabolic. i think there is another company that you have done some recent work on. that is tesla. it is that rate of change the last six months which has caught a lot of people off guard. what drives tesla forward? is it the fundamentals as we await earnings in february or more the technicals? craig: i am not sure it is the fundamentals. is becoming a cult stock at this point in time. you are getting a lot of hype into this company. a lot of people believe that tesla is going to change the world. you look at the chart, that is fine. clearly a lot of things are happening. but here is another example of a parabolic chart. and so as we go through and look at this and say it is a great company, but is this where you put fresh, new money to work? from my perspective the answer is no. i think we really have to distinguish between the fundamentals, the technology, and where do you put your

hard earned dollars to work? tesla is fine. you have to wait for correction at that price to be more reasonable. it had such a rapid liftoff that it does not look like it is sustainable. we will not see the stock grow to the moon at this point. taylor: i think another thing that concerns people within the s&p 500 is the dominance of the tech sector, that more and more the s&p 500 is dominated by bigger and fewer large names. if there were to be a correction or earnings were not to match some of these high expectations, does it concern you about how dominant the big tech companies are within the broader market? craig: the answer is absolutely yes. and if you just take, again, coming back to apple, most portfolio managers cannot own a full position of apple in their portfolio. risk management will come in and say, you cannot own 5%, 6% of just apple. what you will see happening across the board is they will

buy up to the limit they can buy, then they will turn around and start buying individual stocks that kind of are in that ecosphere for apple and they will build up their position to kind of create a proxy position for apple. to try to keep up with the overall benchmark. so when apple comes out and reports results, if those results are not great and you already have a parabolic stock, a lot of expectations are built into it, then you will see many names inside of tech correct. not just apple, but many names, because people have been trying to play the components for apple and the suppliers as kind of a proxy to get their exposure. taylor: wonderful. craig johnson of piper sandler, thank you for joining us. and coming up, containing the coronavirus. we will speak to the cofounder of one biotech company racing to find a vaccine. all that next. and if you like bloomberg news, check us out on the radio,listen the bloomberg app, bloomberg.com, and in the u.s., on sirius xm. this is bloomberg. ♪

taylor: cisco has named amd ceo and president lisa su to its board of directors. su is now the 11th member of cisco's board. the deadly coronavirus has killed at least 80 people in china and sickened more than 2700. the illness has appeared in more than 15 countries around the

world and researchers are frantic working to come up with remedies. one of the firms trying to do just that is inovio. last week, the philadelphia-based biotech firm received $9 million in funding from the coalition for epidemic preparedness innovation. joining us now from philadelphia is the cofounder, dr. david weiner. in 2014 he was named as one of the nation's top 40 most influential vaccine scientists. doctor, it is great to have you. talk to me first about what specifically you are doing with that $9 million grant to help find a potential vaccine for this. dr. weiner: thank you so much. so, inovio is immediately working to set up a group, a coalition of people to work together to develop a vaccine candidate that can be moved into clinical trials rapidly. and inovio has done this three times recently in outbreaks, including for the ebola virus

outbreak several years ago, and mers, which is another coronavirus which was moved to the clinic with walter reed, and vaccine, which was moved rapidly into the clinic. all three of these produced immuno spots will in human beings with the type of immunity which might be associated with protection against these pathogens. taylor: you mentioned ebola, mers, zika what did you learn from all three of those that you could potentially applied to this new outbreak of coronavirus? dr. weiner: inovio works on synthetic dna that is rapidly creating sequences that mimics a part of these pathogens and through those three trial systems i talked about, from ebola, that took about 18 months to develop from scratch a

vaccine that protected in the right clinical models and was moved into the clinic through the entire safety process. and then mers was about 11 months, also hitting its critical benchmarks. and zika was among the fastest ever, which was just under seven months from no program through development and into the clinic. all three taught us about immune responses. they all had no significant adverse events associated with this rapid translation development. they all had protective theoretical levels of immune responses in those studies. taylor: you know, given that this is a technology show, we often wonder about the technology behind it that you have used to develop some of those other vaccines as well. i just wonder, how do you decide what is effective and what is not?

dr. weiner: i think that is a really important question. our experience through i guess the two most recent. zika really helped us get down selection and translation. the platform that inovio has developed, this synthetic, non-replicating, non-spreading platform, which mimics a small piece of the pathogen, really has gotten a lot of experience. and now we have a lot of confidence in moving these forward rapidly, and how to test them and study what immune responses are directed against which regions that are likely susceptible on the virus, therefore making the most contribution. taylor: it was interesting that china was working on some of their hiv drugs to help use some of those to help treat or

help vaccinate or provide an antidote to some of this. kind of faster in their response this time around relative to some of the other countries. what do you make of the initial response? dr. weiner: i think, just looking at sepi, who you mentioned earlier, how fast they have jumped in and funded groups to make a prototype and first -- and a first approximation of a vaccine that we can test right away, being only a few weeks from the initial cases being -- receiving attention. that is quite a difference from the past. and then working together with the teams to try to accelerate moving that into the clinic in a safe and effective fashion, those are some of the examples. but i think the interest in different approaches, and drug development, reapplying drugs that may be in other situations, is quite heartening. taylor: i wonder in your expert

opinion, what is the best outcome for all of this? are you looking for a cure, an antidote? something to help alleviate the systems -- symptoms? what would be the best end result? dr. weiner: i think the best end result would be similar to programs that normally take much longer times. i mean, vaccines can just help us prevent seeing any manifestation of the disease when they work well. what we are doing here is applying a more rapid technology on a platform that is very rapid to see if we can get to that endpoint faster and provide a tool during this outbreak that people can test right away, and hopefully impact this current outbreak, which would be a major help, and i am sure that is what all of the developers that you are mentioning are thinking right now.

let's get in, let's provide a useful tool, and have it impact and perhaps prevent spread and disease in this outbreak right away. taylor: and finally, through the technology that you are using, how do you determine if this outbreak has pandemic potential or not? do you have the technology to really be able to study these outbreaks? dr. weiner: i think that there are many people around the globe studying how fast it moves. and how fast it spreads. you mentioned there are just under 3000 cases now reported and 80 deaths, which i think is interesting, and lower than the other two coronaviruses. at least in a death rate. sars and mers were higher. i think, how fast it spreads, that will be monitored and kept up-to-date by those global surveillance networks. taylor: dr. david weiner, cofounder of inovio, thank you for joining us.

and coming up, another pioneering startup whose losses have grown with revenue. casper seeking to go public. more details, next. this is bloomberg. ♪

taylor: bird, one of the world's largest providers of electric scooter rentals, is using wintertime, when few people ride scooters, to prep for expansion. they are acquiring a german rival for an undisclosed sum. it is now valued at about $2.5 billion. bird will add more than 300 employees in europe. getting closer in the region to competitor lyme, which is another startup. the firm has struggled to deploy it scooters there due to tight regulation. online mattress retailer casper is seeking an ipo valuation at just over $744 million, a drop from its heyday of about $1.1 billion.

in a regulatory filing monday, the startup plans to sell 8.35 million shares for about $17 to $19 each. this makes its assessment short of that $1 billion needed to be a unicorn. founded in 2014, casper popularized the so-called bed in a box industry. to discuss the first closely watched ipo of the year, i want to bring in bloomberg's liana baker in new york. why the drop in valuation? liana: it is about a 30% drop and it is all about the timing. that $1 billion valuation they had came in march of 2019, for wework debacle and the performance of uber, lyft, pelaton, and all these internet companies that did not impress investors. they are trying to tell the company, look, have a more conservative valuation.

taylor: is this being seen as a bellwether for other companies looking to go public as well? liana: yes. it is still and have a long year january ahead. it is a name we all know, we have all seen the advertisements, casper is everywhere. if it performs well, it could mean that companies like postmates, doordash, and other unprofitable names known by consumers and advertise a lot, they will see if it is warm out on the market to also go public. taylor: the biggest issue is everyone thinks that they have a website so they are a tech company because they want the valuation of a tech company. is this a tech company or a mattress company? liana: that is a great question. if you go through the ipo filing it is a tech-enabled business. there is an r&d center in san francisco, and they are trying to develop new products. the company is investing in technologies.

but at the end of the day, they make mattresses and they have opened retail stores across the country. so it really is one of those companies that is a hybrid, and it is in the eye of the beholder whether it is valued like a tech company or a consumer company. it harkens back to the meal kit craze. you might remember blue apron, hello fresh, and all those companies. were they tech companies or consumer companies? it is hard to say. taylor: should would be heartened by the fact that revenue grew 20% and losses only grew 5% in the same time period? liana: there are some highlights. it has pretty good margins in the high 40% range. so it does make any of these mattresses. its retail locations, they say, are very profitable. so it is making money, it is just right now not able to make a profit. and it says it may never turn a profit, which is something that is pretty common in a lot of these ipo prospectuses. taylor: have they given us any

hint that they could they be profitable if they wanted to? liana: there is no indication but investors may want to look at purple, one of their rivals, which went public a few years i go through a reverse merger ipo, and that company is profitable. so i am sure casper would like investors to look at that as some sort of model for them to base themselves on. taylor: we only have about 30 seconds. i wanted to get your thoughts on another big story today. the rollback of the volcker rule means that you can be a little bit more lenient within the venture-capital world. more moneyme now flowing into vc's and startups, and creating more private hefty, lofty valuation? liana: they have been investing in startups for a long time. this is just a new avenue for them to invest directly in venture capital funds. it has been in the works a long time and we will see. but will goldman sachs be investing as much as softbank in private companies and venture capital? probably not. but it is definitely something to watch. taylor: thank you for joining

us. coming up, tictoc has a rival and it is a reboot of an old favorite app, vine. we will take a look at it, next. this is bloomberg. ♪ hi! we're glad you came in, what's on your mind?

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and get a notification the instant someone new joins your network. only with xfinity xfi. downlaod the xfi app today. taylor: this is "bloomberg technology," where we join "bloomberg daybreak: australia" to bring you the latest in global news. i'm taylor riggs in san francisco. let's take a look at the top global tech stories of the day. paul? >> thanks, taylor. as the coronavirus outbreak accelerates, global firms in china make moves to protect their employees and limit the virus spread. automakers are evacuating workers and their families from wuhan, using chartered planes. retailers and restaurant chains, including mcdonald's and starbucks, have also shut down several stores and warehouses in the region. volvo is counting on tripling

sales of its hybrid models this year as a way to avoid paying european penalties. the car maker could pay up to hundreds of millions of euros for its polluting but popular combustion s.u.v.'s. the ceo says a fifth of all new cars sold in 2020 should be plug-ins or all electric compared with just 6.5% last year. french services company gemini has secured enough shares to go ahead with its plan to take over ultron, another paris-based engineering consulting firm. the c.e.o. said the ultron deal with help address an engineering shortage in europe. those are the top global stories that we're watching. >> paul, thank you. a new rival of tiktok has emerged. and it's predecessor is no stranger to fans of video-sharing apps. it was created by don hoffman, who cofounded vine in 2012 and

sold it to twitter later that year. they have rocketed to the top of apple's app store and still maintains a spot. joining us is tim, in new york for a change. it's great to have you in the studio. we saw twitter having to shelf vine because they couldn't make it profitable. how will byte be any different? >> that's the thing with vine, less than a year. twitter took it over and kind of tried to run it but it never really quite worked out. one of the reason it's considered that vine was shut down is they couldn't monetize it. the people running vine were a little bit opposed to running branding ads and so forth. so eventually it just kind of died a slow, painful death. but it's still really strong in people's hearts and minds. a lot of people have a certain amount of nostalgia for vine so -- it was originally called v2, in alpha mode last year.

it was delayed and now it's hit the streets, so to speak, under the very interesting name of byte. because let's remember that tiktok, their biggest rival, parent company is called bytedance. i think that is not a coincidental name. taylor: talk to me more about that. the name cannot be a coincidence. are they trying to be a real competitor here through the name alone? >> i think the very fact that we sit here and mention the fact that they are almost the same name or very similar name really is the kind of thing they're looking for. they're looking for people to remember vine with nostalgia but also think of tiktok and bytedance, which is really such a strong app now, around the world. it's one of those few examples of a chinese company having a really big impact overseas, especially in north america, such an important market. so the naming, well, maybe it's a coincidence, maybe it's not, but certainly people are talking about it. the formats between byte and tiktok are a little bit different but there's a lot of

similarities. i think what we'll find is consumers will be using both at the same time and over time, they'll have a preference to one or the other, in the same way that people tended to have a preference for snap over instagram. the other thing that's important to remember about byte is that they're trying to get key content creators. so the battle between tiktok and byte to try and get those key creators on will be very intense. >> so what is hoffman's aim in bringing this back? in the guidelines, they keep emphasizing that they have a modest budget. what does this mean? are they really trying to make money off this, or is it just for nostalgia? >> i think he's trying to make money off it, but there is a nostalgia. sense of there is certainly that feeling that vine was operate. when it went away, people were

really kind of heartbroken. it's kind of an older demographic. the people who are really big on tiktok probably don't even remember the vine era, although interestingly enough, the predecessor to tiktok, they bought off musically. very similar age but in terms of demographic of tiktok, it's pretty young. taylor: what are the implications for tiktok in the u.s.? they're trying to search for a new u.s. c.e.o. to help revamp their image, not be seen as a company owned by another company based in beijing. is tiktok really nervous about this new competition? >> well, you know, certainly in the early days. but i think there's a counterintuitive way to look at it. that is if tiktok comes under the microscope about being so dominant in america, having so much control over user data and so forth, they can turn and and say, hey, we're not the only ones in the game. there are others around, new competitors coming along. quite often when you look at it from a regulatory standpoint, it actually helps to have a solid competitor out there. it will pressure them to increase rates that they pay content providers but if they're looking at the regulatory

framework, i think it might actually be a good thing for bytedance and tiktok. >> is the older demographic of byte one of the reasons why its interface is so simple as compared to tiktok? >> it's too early really to know what the demographic for byte will be. it's basically a week old. but i would certainly say there's probably room in that higher demographic, and we're talking like 25 and above. >> right. >> i do think there is room for both. and so i think that they will probably find the demographic that works for them. taylor: thank you. much more ahead, so stay with us. this is bloomberg. ♪

taylor: the official twitter accounts for more than a dozen nfl teams have been hacked, less than a week before the super bowl. a group called our mind claims responsibility for the breach, posting the tweet on the green bay packers' account page. the group has previously been linked to other twitter hacks, including c.e.o., jack dorsey's account. at twitter, a spokeswoman confirmed the nfl hacking and says the company has locked the accounts and is investigating further. now, this week marks the launch of bloomberg green, using data and in-depth reporting to illustrate the scale of climate change. and now we're looking at how amazon employees aren't shying away in their fight with management over the company's climate policies. this time, it was more than 350 workers putting their names to paper, calling out amazon for not doing enough to cut ties with fossil fuel companies. writing things like, it is unconscionable to continue

helping companies extract fossil fuels while trying to silence employees to speak out. if microsoft can do it, go carbon negative, why can't we? joining me in studio now, what is this fight going on? break it down for us. >> employees started organizing more than a year ago to try to push amazon, which up to that point hadn't been very transparent about their environmental goals, to really do more. we've seen amazon step up and take many recommendations to heart but these employees are escalating their conflict, saying, listen, there's much more to be done if we're going to be a truly climate-forward company. taylor: amazon saying they've been trying to do some. they say they pledge to be carbon-neutral by 2040. the employees clearly not saying that's enough. has amazon not done enough, especially when you look at other tech companies that are making similar pledges? >> that's certainly the activist opinion. if you talk to folks, they say there's definitely more avenues amazon could pursue.

employees have made a big point about entanglements with oil and gas companies. amazon's cloud computing division still provides services to big oil and gas drillers. employees are also looking for amazon to sever ties with lobbyists with a history in the oil and gas industry. so there's certainly more on that laundry list, if you look at what the wish list would be for the company. taylor: it's interesting, as we talked to microsoft, he made a pledge not only to be carbon neutral but then to be carbon negative and reduce or take out all the carbon that they had omitted out of the atmosphere in x-amount of years. do you see amazon now feeling more and more pressure to do similar things, to make similar steps as other employees now, when other companies have put more pressure on them? >> it certainly ups the ante. i think what amazon would say, they're very different businesses. amazon will fly packages across the country, far more carbon-insensitive than what

microsoft does. they've said they want to get rid of greenhouse emissions i 2040. >> talk to me about those more specific challenges. when we think of amazon, amazon's main principle here is customer obsession, right? it's all of that, the same-day shipping, three-day shipping. 12 different items in 12 different boxes. how has amazon made progress on that? >> you're right. they face a huge challenge, because their priority is to get you what you want as quickly as you can ask for it, i suppose, which traditionally has not been compatible with green initiatives. so amazon, their first big step is to electrify their fleet getting those packages to customers. but i think there's a lot more to come on how they're going to exactly get there. taylor: and you mentioned a lot of the oil and gas industry as well. that was as well mentioned in some of the complaints that the employees were posting online, talking specifically about the oil and gas industry. how is amazon currently working with them?

what would the employees like to see? >> so amazon's cloud group, amazon web services, like the rest of the industry, is providing services to big oil and gas drillers. the activists would have them sever that relationship entirely. amazon would say, listen, we think our operations are more efficient than what these companies use today. so just by using us, they are reducing their emissions. as the activists would point out, that's still in the service on getting more oil and gas on the ground. taylor: what about the cloud contract that they lost to microsoft, that jedi cloud contract where you see more tensions between management and employees? the employees are saying, we don't want to help them out with this. management saying we're gonna fight because we want to do it anyways. where does that put us in the tension between management and employees? >> it's definitely something new at amazon or new in the public eye. traditionally it's a company where folks keep their heads down and do their business, in contrast to companies like google in the bay area that really have a history of employee activism. i think the ball is in amazon's court for how they're going to react to this latest escalation from employees.

we have not seen this before from the public -- from the companies in workforce. taylor: does this set up amazon on any potential legal battle where you have employees coming out with a 50, 60-page document, coming out, all saying on paper, on the record, we do not want this? amazon saying please don't talk to the press without getting our permission. where does this set them up on any potential legal ramifications? >> great question. we certainly haven't seen lawsuits flying around yet but employees are saying we don't agree with this corporate policies. if it comes to terminations, we'll see. at this point, there's nothing in the courts about it. taylor: bloomberg's matt day keeping us honest on everything. thank you for joining us. as a reminder, as climate change becomes a defining issue of our times, bloomberg has launched bloomberg green which uses in-depth reporting to illustrate the scale of the challenge. find that on the terminal, online and on bloomberg tv and radio. and speaking of leaving fossil fuels behind, general motors, detroit plant, is set to go all electric next year.

they committed to investing $2.2 billion as part of a new waiver deal. g.m.'s president spoke with bloomberg monday about what to expect from the all-electric venture. >> we're redoing the whole plant here to be our highest tech, most forward-looking plant. everything from our battery electric trucks to the new cruise origin, which is our autonomous vehicle that we announced last week. it is a completely retool of the plant, from body shop to general assembly to, you know, the whole infrastructure of the plant. so $2.2 billion in that. and then we'll see a lot of money outside the plant from our supply base to support it. and a lot of jobs. so 2200 jobs will be put back into this plant. we couldn't be happier. it's right down the street from the headquarters. and then if you look in warren, we're developing -- warren, michigan, right up the street, we're really developing all of our new battery chemistry and our new technology with electric

motors and the whole platforms we'll be introducing next year in this plant. >> so when you will be actually rolling those electric vehicles off the assembly line, and what's the fist one going to be? that electric hummer that we've heard talk about? [laughter] >> well, there's been a lot of speculation and rumors on that, david. i think you should watch the super bowl and maybe you'll find out a little bit more about that. but the first vehicle here which is our battery electric truck will be produced late next year. so we're on a very fast time line. we have been. our battery chemistries are ready. we announced a joint venture in ohio which will be some of the cell production for that. and then in brownstown here as well, where we do some of our batteries for our electric products. so it's really -- we're creating, again, a very

high-tech scenario for the midwest and here in michigan. and in ohio. and we've invested billions of dollars, probably $29 billion since 2009. and that's a lot of money back into america and we're just gonna keep doing that. very exciting for us. >> how many different vehicles, types of vehicles will you be making in your new electric vehicle facility there? >> we haven't announced it yet but it will be multiple brands, multiple styles of trucks but not only pickup trucks, there will be s.u.v.'s. finally we'll have our cruise origin, our autonomous vehicle for ride share. it's really going to be something that is both ends of the spectrum in both, you know, the highest technology available in autonomous vehicles but also our mainstream conversion to electric trucks. taylor: that was general motor'' president mark reuss.

still ahead, tech earning season is under way. we bring you a few preview of what to expect from apple. that's next. this is bloomberg. ♪

taylor: apple is heading into earnings doing an about face from a year ago. despite c.e.o. cutting his revenue guidance in 2019, analysts are now bullish on 5g, air pods and streaming. let's bring you the details. >> what a difference a year makes. just one year ago, apple c.e.o. tim cook sent a letter to investors, saying the company was cutting its revenue in china. tim cook highlighted a major shortfall in lower iphone revenue due to fewer iphone upgrades than anticipated. air pod sales were also constrained.

one year later and wall street has done and about face. they have 27 buys on the company and only seven sells. what are they expecting this time around to fuel the bullish sentiment? surprisingly, iphone revenue. despite the company saying it wants to transition to services, 52% of revenue still comes from the mobile device. morgan stanley is the latest to raise the price target into earnings. she says apple customers now seem poised to replace their smartphones sooner. replacement cycles tend to not increase much further. air pods are another big reason for bullyish sentiment. they're set so double to $60 million in 2019. air pods have outpaced the unit growth trajectory of the original iphone and watch. air pods generate $15 billion of revenue in 2020. and finally, apple tv plus.

apple was one of the latest to enter the crowded streaming wars in late 2019 with the service debuting at $4.99 a month. at that low price, analysts think apple tv plus is priced for subscriber gains not margins. but heading into earnings at a whopping one point $4 trillion market cap, anticipation -- $1.4 trillion market cap, anticipation is high to see if apple revenue can meet expectations across the iphones, wearables and services. for more on what to expect out of apple's earnings on tuesday, we're joined by mark, who covers the company. as much as this company wants to say their wearables are a services company, 52% of revenue still comes from the iphone. what numbers do you need to see out of hardware and iphone to make sure this meets those lofty expectations we have going into tomorrow? >> first thing, to your point,

any way you slice it, this is the iphone company, right? you buy the iphone hardware and then everything is built around the hardware. the apple watch and the air pods are 100% unusable and irrelevant without the iphone. you need an iphone to really use either of those products. in terms of services, right, services, the device, the services that are used most are the iphone as well, whether that's apple music, tv plus, apple arcade. regardless of all this talk about services and wearables, the iphone is the company. to answer your main question, the numbers we need to see, we either need to see a little bit of growth or stagnant in terms of hardware unit sales. a year ago, the iphone dropped 19% year over year. this time we're looking at either being no drop, around 0% or negative 1% or 2%, which would be fine and a big improvement from last year's situation. taylor: well, the opposite from negative growth would be exponential growth, something we've seen from the air pods. what numbers do we need to see from air pods?

>> yes. so apple doesn't break out individual numbers for the air pods. but we know the air pods are a big part of their accessory segment, which also includes the home pod, apple tv, watch, a few other things. what we're going to be looking for is an all-time record by a lot, between 30% and 50% for that segment. and i think that's going to satisfy wall street. but what wall street needs to remember is that the air pods ,re so reliant on the iphone and the apple watch as well. the real growth will come when they become standalone products. then that's where the real growth is going to come. taylor: google acquired fitbit. does that put any more pressure on apple and the watch? >> yeah. no, absolutely not. i don't think google has shown an abilities to turn any of its investments and hardware into an operation that can compete with apple on any level, big or small. i think that's gonna continue with the watch. it's unfortunate, because the

more competition, the better. but at this point, the apple watch, along with the air pods, are so far ahead of the competition, both in terms of integration with other hardware, that it really doesn't seem to be any chance of any of these other companies catching up. taylor: i know it's still very early, but i think every analyst is eager to hear about the early few months of apple tv plus and the launch. but at $4.99, i think we agree it's priced for growth, not for margins. what early numbers could we get about apple tv plus? >> that's an interesting point about it being priced for growth, not for margins. i don't know if they're there yet, right? i don't really think there's going to be serious numbers to talk about until maybe a year from now. anyone who really wanted to subscribe to apple tv plus probably would have done it already and probably would have bought an actual product that comes with a free initial year of apple tv plus. i'd be surprised if they give any real numbers tomorrow on how tv plus has fared.

i think they would have done so already if the numbers were particularly great. i've seen statistics out there about how it already has 30% market share in some regions and is approaching netflix in some respects. but, again, it really doesn't matter until the dollars and cents start coming into play. that's definitely not going to be happening for about a year. taylor: mark, the stock is up 90%, 100% in the last year. priced to perfection? >> yeah. i mean, you see their multiples. it's really hard to understand what's going on with apple stock. they're doing way better than their earnings would indicate. but i think it's a lot of optimism. over the next two years or so, apple is going to release about 10 new iphone models. that's going to be the most amount of new iphone hardware they've ever released in a two year or even three, four year period. there's a lot of excitement. taylor: bringing it always back

to the iphone, thank you. and that does it for this edition of bloomberg technology. we're live-streaming on twitter. check us out. this is bloomberg. ♪

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