we are live in front of the masconi center in san francisco where in just two hours the worldwide developers conference will kick off with a keynote from the ceo of apple, tim cook. joining us this morning i can't think of a panel i'd rather talk apple with. steven levy of wired and our own jon fortt and the others. good morning to all of you. >> steven, do you think this will be better than most wwdcs? >> i was there at the code conference when eddy said that. that was an amazing session. this culture merger between the music industry and apple, where he came out with that really raised eyebrows, whoa. >> he said it twice. 92 think of what they've done in the last 25 years.

a real game changer they've had. are we going to finally see that? that's what we're all waiting for. i don't think we will see the game changers today. >> you used the word "normal" we hate in television. why do you think this will be a standard conference? >> i think at the end of the day, carl, think about it, product line after 25 years, all relative, definitely not from a financial privilege. to replicate the massive success of the iphone and ipad, not going to happen in our opinion. i think there will be nice additions today from an application privilege as well as an operating system privilege, but to do anything near, anywhere near the iphone and ipad, not going to happen. >> jon, this morning, you tweeted about the three things they need to do to reignite the mojo. walk us through it? >> first of all, this is about ios 8. that is the underpinning to the iphone and ipad and major drivers of revenue and profit. they have to keep that front and

center and why they tend not to bring out other zrdistracktive hardware. they want to get the eye pop. the iphone could use software enhancement, not sure whether they will be ready for this conference. that could help react sell rate the revenue growth there. then, there's the narrative. overall, there's all these questions whether apple has still got it because we haven't seen a major product announcement from them. if we see the underpinnings of a new iphone, as mark suggested earlier, that might get people going again. >> kelly, you have thoughts on this? i know you often look at the company and tech through a financial lens. >> i do. a lot of people are talking about the stocks and wondering if this is a recalibrated apple. a big deal, a lot of criticism for the company up until now and nearing fresh highs and you have a big engineering move. you say, what can apple do at

this point to reset the conversation and start on a better foot than a couple years ago. that's the conversation. from those of us watching from afar, the picture and lines going around the block the last few hours, carl, getting the most play, is this one on the inside of the building that says, soul start your photo copiers. i'm wondering, steven, if you wonder if apple has something up their sleeve and that's a clear move to samsung. >> samsung has been their competitor. and the iphone 6 with the bigger screen that samsung says we have and apple doesn't have, among other things. we might see one thing, maybe not a giant thing but one thing that isn't expected. i'd love to see that because the last few events we've been able to predict it and disappointing

you think back to the day, one more thing, they did this and we didn't come up with that. >> any sense what you think that could be today? >> i can guess then it wouldn't be what we wanted, would it? >> that's exactly the whole point. there's been analyst notes, goldman up there, target at 720 the other day on the notion the next thing is not hardware. it will be hard to break people of that habit. you talk to anybody on the street, they want to know what the next hardware item is. >> sure. >> how do we make that transition trying to evaluate the company and the stock? >> sure. basically apple, the financial mod dpel comes to revenue and gross profits and drives the bottom line. software is the key component to the stickiness of the apple ecosystem but not the real driver of pnl. basically what we will see is really strong software and strong service, streaming and subscription and other things. obviously we had a nice acquisition last week. at the end of the day, our view

is that those things will drive high margin consumer electronic devices. that's really what drives the financial model for apple. our target, we're at $675, we have a buy rating. i think we will get there but not based on the entire software, the echo system that will propel tier goods into the market. >> one thing to note about wwec, as you eluded, brian, this is about profits. there's a reason apple devices can demand premium over others. that's because of experience and less to do with hardware than software and services. something you have to watch is based on where we think technology is headed in terms of streaming and services, is apple building in those components into ios 8, into the latest version that will allow them to continue those premiums over

their competitors. >> that's a great point. really, the big war really is how we are going to use these devices and how they all work together. we see things like google now competes against siri, in terms of how these things work into our lives and get us to do all the things for us there that we do, with iphones and also now android phones now. i think that you're looking at what will go on with ios 8, what will happen there and there's a long term trend of having the desktop look like the mobile device there. really, the mobile device, which is running things now, the tail is really wagging the dog. >> has all the attention on the operating systems. the new cfo officially succeeding oppenheimer in the near return. it will be interesting to watch not just how the software refreshes or receives but their

dealings with the street evolves over the next quarter or two. >> this is a company where the cfo took the reins with the meetings and steve jobs tock a back seat to negotiations and we've seen tim cook take a more public view and talk to reporters and be more open what he's doing from where he sits. it's an interesting interplay in the company that is this biggest company in the global academy right now. to have a cfo coming in at a time the stock is splitting, they're borrowing to buy back stock, doing a lot of financial engineering to right this ship. he has a lot of things on that to-do list investors want to see and analysts want to see to figure out how to build their models for an apple that is getting increasingly more complicated and entering a lot of new markets. it's becoming a juggernaut he will have to figure out how to steer. >> two key people up here i want to watch.

one is johnny ive. we will see what he's doing with the user experience in software. remember, he's in charge of that. we've seen ios7 and we get to see his team tweak it and the other is craig federici. we want to see how much the trains are running on time. how many features can they get out at this big moment and show to developers. that this is key to seeing how craig is doing his job. >> even though we pay a lot of attention to the keynote, some would argue it really is craig's show, to a large degree. speaking of the cfo, do you think their world view on mna and world view on capital deployment will change as the cfo changes? >> i think it will a little bit. the new regime is doing things different than the old apple. we saw the acquisition of beats music and beats electronics.

$3 million represent roughly 2% of overall cash and 10% of domestic cash. they're starting to do larger deals. i think they're starting to look at things that aren't small and take it out to the platform. they're actually buying revenues now. it represents, in our view, about an incremental 100 basis points year-to-year revenue for apple. that's a language change in our view. >> a large base. >> steve, as someone who has covered the company through multiple eras, and epepic, what the difference covering apple today other than 20 years ago? >> simple. steve jobs isn't there. one person and just during the course of this conversation we mentioned several changes. another big change, heads of communications, a powerful person at apple stepped down there. we don't know whether her replacement has been named and

more open to reporters and didn't mention angela, who came from berbery and beats and am saying we love this new blood in there and creativity. you're talking about many people who fill various aspects of business steve jobs will fill. >> a lot of transitions. it is a company in transition to a large degree. brian and steven, thank you for stopping by before the keynote and jon and kayla, we will see you throughout the hour. what do you expect today at the developers worldwide conference. tweet us inside at squawk alley. >> there are a lot of people already tweeting through the wee hours and know you will be tweeting to them at san francisco. and we want to send it to dominic on a market flash with the steel industry. >> the stock is dropping on news

the steelmaker will indefinitely idol, halt, two manufacturing facilities affecting 260 employees. the company is blaming business conditions influenced by unfair trade practices for tubular steel products imported. you can see it is down about a quarter of a percent. back to you. when we come back, next in our "q," the guy wit all the scoops on apple, mark gurman. and the mobile's worldwide developer's conference in san francisco. ♪ 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. whether it's building the world's most advanced satellite,

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welcome back to "squawk" alley. we're coming to you live outside the worldwide developers conference in san francisco. jon fortt and i asked the guru mark gurman, editor, and we tell you what he told us. >> today, they will announce a significant update to ios. last year, they did a complete re-design and changed how some

icons look and interphases and apps look. they will change notifications and enhance maps, introduce a new app called health book that would allow people to track their health data, their blood, different statistics. it will be a very nice update overall. the bigger story is the new redesigned mac system redesigned to look like the ios. >> and do you see a new phone coming to fruition at least in part today? >> with apple, always nice surprises. in the pipeline for the second half of this year. they will talk about this today when they have developers and media watching closely. will there be a new iphone or new ipad? i don't think so. they like to save those for the fall. it's possible they will throw a curve product, new watch product or tv product. would i count on it? no. but it's always possible.

>> jon. >> what a lot of people will do is read the tea leaves software-wise and see what hardware they're laying the groundwork on. they make it's easier for developers to redesign their apps for larger screens, hoping for a larger screen later this year. what do you see on that front? >> certainly. apple is working on a new feature called multi resolution mode for the iphone simulator which allows people to develop simulations and could give a hint apple is working on-screen resolutions and larger devices. for the iphone front they're working on new software. it might not be introduced today and allows you to use two apps at once and ipad as external monitor for a mac and could be introduced this next fall. and customers who want to get

their hands on the items this fall could get a tease for hardware-wise the next few months >> there's an indication am is in a reset high end hardware is sort of waning, in general. not every product and have to accentuate with beats and others. do you think it's true? >> apple has this operating system and now they're building components for developers in other companies to take advantage of and build up the already existing brand, the health book and os features and siri features and new ios in the home initiative to allow people more easily to connect to appliances and smart thermostats and lights into their houses via iphone or ipad. >> icloud we saw launched and a lot of people use it and there are a lot of critics how usable

it is. any updates there? >> i think apple will roll out enhancements on icloud on the developer side so developers can make better advantage to take advantage of the storage system in icloud. will they overhaul it to be more like dropbox or boxx? i don't think so. eddy cue kinds of shut that down. it is one of the new legs of apple. >> that was mark gurman of 9to5mac. i don't know if you've seen this, a picture of the number 8 for ios 8, for those wondering, this is not quite marian. i wonder what that means?

>> maybe people were expecting storage commitment or payments coming into play. he seems to be quashing any of that. >> i thought he would dismiss things out of hand like a refreshed set top box. he left the door open and gives you insight how he's approaching the conference overall. >> absolutely. there used to be things you knew apple would do and wouldn't do. they're breaking from the past in a lot of ways. normally, their marketing strategy is we want everybody focused on the os here. there's just a few weeks left before they release this thing. they want all the developers to tweak their apps and be ready for it and consumers to be focused on it. if they roll out a watch tomorrow we will all be about that. they bought beats. everybody knows the old script is tossed out, you never know what they will do. it will be exciting to see. >> over the years they've gotten

good at teasing us for the keynote. somebody tweeted and said miriad is a font. and when we come back, apple's schizophren 66th employee. in a moment. ♪ ♪ no matter what kind of business you own, at&t business experts can help keep it running... seamlessly. so you can get back to what you love. when everyone and everything works together, business just sings.

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in case you missed it, a google satellite could be coming to the airspace above you. they're planning to spend a billion dollars for internet access for underserved regions of the world according to the "wall street journal." it's small but high capacity would orbit the earth closer than more traditional

satellites. >> we'll see how that battle plays out. meanwhile, another story rattling wall street all the way to las vegas is the insider trading investigation that involves carl icahn, golfer, phil mickelson and vegas gambler over a series of trades that go back to 2011. more from billy walters himself. jane, the story keep's getting more and more interesting. >> it does, kayla. i just talked to billy walters who told me he was surprised about this and had no knowledge and found out about it reading the newspaper. i asked if the fbi had contacted him, he said absolutely not. i'm innocent of doing anything wrong, that simple. those who know me best think it is preposterous to think i would involve myself in insider training. few people know walters well and everyone agree he is the best of the best, the man whose money can move the line. he is an avid golfer and loves to gamble every hole and owns

three courses in vegas and plays with phil mickelson who also likes to bet. walters hopes his tombstone will read, legendary gambler. >> people don't realize when you're investing in a piece of real estate or publicly traded company, you're gambling. i will continue to take calculated risk until the day i die. to me, a gambler is someone who takes risk, not just playing the curve in sports or playing golf. >> he gave 60 minutes an interview several years ago saying he prefers vegas to wall street saying he had been swindled on wall street with investments in companies. no one says anything when i lose money or not successful. certainly that has happened, like it has to many of us. the bottom line here is, as i stated before, i'm not involved in any insider trading and never involved in insider trading.

before he got off the phone, i asked if he had ever been involved with clorox and said he has done nothing wrong and can't speak to it right now and as for insider trading charges, they're extremely hard to prove if not true. >> thank you. certainly not the end of this story but we'll wait and see how it develops and bring you on it. across continental europe, the opening a few minutes away, stocks are high and inflation data for may came in below forecast. the results raised more pressure on the ecb to introduce new easing measures on its policy thursday. markets have been waiting for that meetinger for some time expecting some sort of move for the ecb. miners is getting a lift from london trading from anglo american and rio tinto and bhpbilliton rising in may to a five month high.

slightly green in europe and are seeing red in ireland and france as well. for now, all pressure will be on the ecb for that thursday meeting. carl, over to you. >> all right, kayla, thanks so much. when we come back, he created the first interphase for apple. apple employee number 66, when we come back, more from the masconi center in san francisco in just a minute. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. that's keeping you from the healthcare you deserve.

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in my mind, what apple is doing is probably going to go down in history as the smartest thing that no tech -- big tech company is even fathoming right now. >> that's will i am on this program talking about the beats acquisition at apple that some think might be a topic of discussion here at the worldwide developers conference today. when we come back, the annual fortune 500 list is out. where does apple sit on that company? first, what's coming up on the rick santelli exchange. >> todd, what's the best trade you ever made? >> trading my old platform for e signal. weekdays are for rising to the challenge.

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you can fill your prescription at your pharmacy. or, check out viagra home delivery, a convenient place to fill your prescription online and have it shipped at no additional cost straight to your door. viagra home delivery. get started at viagra.com. coming up at the top of the hour, the very latest on the insider investigation surrounding carl icahn and phil mickell son and talk to one of our very own traders who flagged the suspicious options trade in 2011. then we go live to apple's development conference. and shares are up sharply today from just released data from a drug trial. we will speak live with a ceo in an exclusive interview.

all ahead. for now, head out west to carl from san francisco. >> thank you so much, scott. in case you missed it, kara swisher of rico making an appearance in silicon valley last night. and recording the cameo in this tweet. here's the clip. >> you made some really over the top promises about nucleus. can you deliver? >> absolutely. for me, goodness, greatness, these are not simply catch phrases but really the intention of huli from the beginning. >> is it a new operating system? update to the apple tv or smart watch? we're live from wwdc, where apple ceo, tim cook, is set to speak this morning. and what we might expect for today's announcement. joan me is apple employee number 66, worked on the first interphase and also a principal with the nelson norman group. greg, great to have you back on

the show. good morning. >> thank you, good morning. >> i know it's normally a software story. you had comments about the iwatch and said it's matter of when, not if, and would fill a gaping hole in apple's ecosystem. do you think it's coming today? >> that's hard to say. i'm happy it hasn't come before now. i don't think apple has had the technology together. i think it's coming together now. whether we're going to hear about it now or in the fall it will come when it's done and the hallmarks of apple they don't present it until it's finished. wonderful if it comes today but won't if they need more time. >> i'd love to get your thoughts on the beats acquisition last week, their biggest move ever buying a company, keeping the brand name, incorporating a

talent, what do you think that says about the company's evolving? >> i think they recognize it's necessary to keep it young and hip. i think that acquisition will do it, both in the name they bought and the people coming with it. it gives them deep contacts in hollywood and music and probably beyond music. i think it will keep the company pressure. i think it's wonderful. >> bruce, jon fortt here. when you look at some of the human interface elements in internow, what do you think am needs to do with ios and mac os to make things more usable for their customers? >> i think they need to back away a bit from this minimalist design which is making the products more difficult to use. in terms of the mac operating system, there should be a

database at the center of it so that you can have a single depository for everything to do with any one person or any one hobby or any one business activity in stead of everything being split all over the place. in terms of the tablet, it needs to mature. people using it are maturing. they want to be able to do more. the ultimate simplicity steve always had the day products were released is wonderful, one of the things that makes am work so well. -- makes apple work so well. they have to be allowed to mature. you look at it, the tablet has a bigger screen than the original mac. on the original mac, very shortly after it came out, you could have multiple windows open in multiple applications. there should be something equivalent to that in the tablet. people are ready for it. they want it. apple can do it right.

>> hey, bruce, obviously companies go through management changes all the time. there's a lot in the air right now. a new retail chief we're still getting used to, jony ive overseas, lots of hardware and software design. new cfo. does that give you pause? do you think they're in the weeds here or is that part and parcel how executives come in and executives retire? >> i think it's part and parcel. the other thing is that apple is going to really expand and explode now. apple was in a state very much like ford motor company, when henry ford left, where you had a ceo that had to oversee every new product. now, they can have a whole bunch of different products going on and they will need a wider and deeper management system to keep track of that. i think apple is going -- is

poised for filling in a whole bunch of gaps in people's lives. there's any number of place this is a can go. we've been hearing about the home control system just a few weeks ago, they released something for people to wear hearing aids that will actually work, to connecticut them to the world. they essentially have super hearing because they can listen to anybody anywhere in the world. they're going to be filling in all kinds of places. it's a very exciting time at apple. sure, you're going to have some management changes. that's normal. >> bruce, this is kayla back in new york. one place this parlor game has moved trying to figure out what apple has coming down the pipe, in the patent space, there's a lot of work done there and wondering if there's any smoke signals you see that apple has registered patents or especially

active, i wonder if there's any spo smoke signals you see in that market we should expect to see down the line? >> nothing expectant for me. i would hope their patent for power transmission would work out so you could recharge your i iwatts by sleeping in bed. that's the most promising. they also bought a small company a couple weeks ago that can produce a full color highly detailed display that uses one-tenth the power of a normal display. that's exactly what you need for a watch. of all the things i've seen come up recently, that's the most exciting to me. >> finally, bruce, before we let you go, we talk even now so much about jobs and what he brought to this very conference. do you wish the company could reignite the excitement behind

one more thing or do you think they even need to? >> i think that is a phenomenally effective thing to do. the one more thing thing. i'd love to see that tradition continue at apple. i hope we hear one more thing today regardless of what it's in regards to. i'd really like to see that stay with the company. >> bruce, it's always good to get your insight. enjoy london. we'll see you next time. bruce tognazzini joining us this morning talking about the wwdc. let's get to rick santelli. hi, rick. >> good morning and welcome listeners and viewers to the "santelli exchange." you know, greeks, we all had to study. a drama or literary work where the main character is brought to

extreme sorrow, a consequence of a tragic flaw, moral weakness or inability to cope with unfavorable circumstances. i don't know, the way central bankers around the world are treating money and debt and tragedy, seems there is an aspect of greek tragedy unfolding. i'm not sure what the next act is. let's try to put it together. steve had a great set of interviews last week and one was with a banker from philadelphia. i'd like to play and excerpt, places. >> my guess no better than a lot of market watchers, a lot of people a bit puzzled, what's driving that. hard to imagine whether it will continue to fall. whether it's geopolitical concerns, concerns about china and the ukraine, i think we really don't know. >> i tell you what, listen, i'm not picking on mr. plosser because i don't think any

central banker from the u.s. federal reserve or ecb or minister of france knows the future. just because central bankers have the power doesn't seem they don't have the knowledge of the future. what mr. plosser is saying is a bit disturbing on the level of a greek tragedy. they're doing things and not sure if they will work, a bit of experiment and congress isn't taking up the ball. if congress isn't taking up the ball, i think they should leave to it voters versus experimentation and the outcome of the company, we can't parse whether it's weathered or not. we learned our gdp was minus 1.0. you look at several quarters going back in time, there was a good correlation of canada versus u.s. not flawless but not bad. going up 3% there. saw the low water mark equated,

minus .1 and in canada. i don't think canada has what we call florida sunshine and i understand in atlanta there's pretty much all parts of canada can deal with w and dealt with it a long time. i think this augers for a bit of logic that hasn't been applied, that is it's cold in the winter and unseasonable things happened and other than that i'm not seeing anything other than the slowdown that happened based on inventories. back to you. >> thanks to rick santelli. when we come back, the mobile head of yahoo! and company that they bought when we continue live at the apple's developers conference in san francisco. 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. whether it's building

the world's most advanced satellite, the space station, or the next leap in unmanned systems. at boeing, one thing never changes. our passion to make it real. ♪

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it appears there was an error in today's ism manufacturing data. bob. >> i spoke with the ism and said there is an error in stead of 52.2 the correct number is 56.0. according to them there was a software error that applied last month's seasonal adjustment factors to this month's data. i have some subindices as well. new orders were 56.9, a lot higher than earlier reported. 53.3. >> orders 56.9.

production high, 61.0. they had reported 51.2. employment is higher. 52.8. they had reported earlier, 51.9. supplier deliveries, 51.2 and higher than they earlier reported. overall, these are pretty strong numbers. wish they had got them right the first time. carl. >> thank you very much. our senior economics reporter steve liesman has reaction to that and how it might change. people's expectations for a q2 snap back? >> changes just about everything. those changes and what happened was mccarthy saw those used in the may report and came out with their own numbers and these numbers bob just read very much match the numbers that had come out. what i had said when the report first came out, obviously a disappointment, 6 of 7 regional

manufacturing reports were stronger and this was a real puzzle to economists. this puts the number more in line with it -- i'm just getting a call right there, probably from ism, this puts it right in line. the production, 61, the kind of thing that suggests activity and new orders as well points down the road. that 56 number is very strong. the next thing is backlogs and prices paid, very strong. i will get that data and detail from ism and back to you. it does change the picture. we were looking for more evidence of this rebound and this suggests it continues. >> that does not happen too often, steve. interesting story. steve liesman back home. we are outside live of apple's worldwide developer's conference. and an ios app is available. the 16-year-old creator of

summly has concise summaries for top news stories of the day and apple purchased it last year for $30 million. and joins us, and also with us yahoo!'s senior vice president for mobile and emerging products. great to see both of you. thanks for coming in. why is this important to come to, adam? >> more than anything, it's a developer and software conference. for us, it's an opportunity to learn about things apple is bringing out. we have an opportunity to re-imagine our products with the changes. you'll learn about new sensor technologies coming out and what's in the operating systems like ios 8 possibly. when you do that, we re-think every one of our products to say, what can you bring to our users different on these technologies. >> nick, how is the beta, the code handed to you? do you take it straight back and start hacking away? how does that work? >> absolutely. as soon as the announcement is announced we will be on our computers.

usually a software seed a few months and made public in october. we will be deconstructing what is new in the ios and how we can refine our products and you want to be a fast mover. >> give me an example how interand hardware would make a difference. pretend we had a slightly larger iphone in the fall? would you be able to do things you currently are unable to do? >> i think so. last time we saw the m etch coprocessor, a way to passively understand what a user is doing like are moving? are you walking? what are you out to. and that will be another whole new wave of development. and graisks processors, especially gamers and use it in our products and users will notice the difference if you're taking advantage of the latest features. >> there's been so much talk

about news apps in general we're awash in news apps. and there's so much uncurated content you need apps to digest the flow of information. where are we in this scenario? >> we're in state there is a deluge of information and whole new opportunity to add context to news and information that wouldn't have existed 10, 15 years ago with the internet and to cluster and curate lots of different sources all talking about a single-story. by giving different dimensions of a product and the way we tell our stories is through atoms, images, wikipedia information, maps, it gives you a better sense of the story you might otherwise have had in traditional media. as a developer and technologist, it's exciting to see lots of new apps coming out every week. that's why we're here today. >> nick had a big insight that led us to the news digest. it was your question when we're awash in information in a world

of infin nat streams and constant information, how do you actually step back and know you're informed and in the know? nick focused on distilling things down to a finite set, this is all you need to know and foremost important. from that privilege it's still a pretty unique experience. >> we're here to talk about apple. i can't not ask you about yahoo!. we cover marissa so closely and talked about the day of tumblr, what is it like for you? >> i love it. i only joined a year ago from the transition of a start-up i was working on then and coming to yahoo! and given the opportunity to work with an amazing team of designers and engineers rand launch it at ces in january and follow it with an international launch two months ago and android launch a month ago, they taught me a lot of

development and everything else. i'm enjoying my time. >> kayla may have a question. >> my question is for adam. i know you're working on yahoo! weather, the default weather app. there is some question whether it will become the default weather icon. how do you make this mutually beneficial. what is it like to try to be the default on a platform like the iphone? >> so, you know, in general, i'll talk about partnership. i'm not going to suggest there is something specific that we're working on. you know, the thing that's quite interesting about yahoo! in particular is we really do take partnership as one of our core values. we're in a very interesting spot whereas a company we can really work with just about anybody. you will see we are partners with folks like apple and close with microsoft, google,

facebook, twitter. it's a very unique spot for us to sit in. in terms of how we work to make sure things are mutually beneficial, it starts with the users. you ask yourself, can we do something unique for our users and partners' users that really is a product differentiator, something we believe will be a great experience for them. >> nick, people still say apple needs to get its mojo back. do you think that's true? they're in the crosshairs? >> no. i'm a fan. i'm biased, always been a massive fan of apple. think it's an amazing platform and love coming here every year because you get to meet so many people and i'm biased. >> plus the free jacket. >> and the free jacket. >> thank you for coming by and having this discussion. we'll be back in a moment with a lot more from the moscone center in san francisco. don't go away.

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ma sco mass cooscone center in san fra. jon, i know you said they're behind the eight ball and need to step it up today. in the next couple of hours, what should it look like? >> i don't know i said they're behind the eight ball. this is an economic juggernaut. $10 billion in astro payoff is what apple gave a year ago and it will be much higher this year and people want to know what will be the development features so they can be the first out with the features and make that money. >> that's brand new revenue stream for developers everywhere and knowing there's an opportunity for not just some but everyone in attendance at the conference. >> i still maintain the broad populus thinks of apple as a hardware play, it always has

been way but that's not where the growth will come from in the future, john and people will have to be broken of that habit beginning with days like today. >> that's right. software and services make the hardware worthwhile and that's why they're front and center today. >> guys, thanks for helping us get through this hour. we will take the headlines at least as tim cook begins to speak. for now, let's get to hq and scott wapner. scott. >> thanks. welcome to the halftime show. the billionaire and gambler and golfer and the latest on the insider trading investigation into phil mickelson and why it might have hit a snag. and what's in the pipeline for apple and can it keep the stock moving higher. >> and leading the charge, the ceo at