that music you were listening to, the first ad for the iphone 6 starring jimmy fallon and justin timberlake. with us this morning kayla tausche with me. jon for ittt is live having wor on the apple unveiling with us all yesterday. apple shares back in the green today, up 77 cents after closing slightly lower yesterday following the big unveil. joining us this morning the great tony sagonaki. good to have you back, tony. >> happy to be on, carl. >> you stayed very much if line with expectations, but some reason to at least start

thinking about impact on gross margins. explain. >> yes, so i think the phone announcement was pretty well in line with expectations, the apple blog owesphere is increasingly efficient over time. that said, there was a question about pricing on the phones and basically consumers are getting more are for the larger screen. when we put all that math together apple is providing a lot more phone for the same price the base model and a modest price increase. i think that will be an ongoing question for investor. >> of all their products, though, margins are -- they have a little more cushion on the phone than others, is that not right, toni? >> absolutely. the phone is their highest gross margin product. the company average in the mid to high 30s. so clearly the more iphones you

sell, the better it is for the company. but what we saw in the past with the iphone 5 is when apple moved to a larger screen, that screen cost a lot more and put significant pressure on company gross margins. and so when the iphone 5 was first introduced apple had declining earnings year over year because the gross margins were impacted materially. 5. >> toni, two-part question for you. i'll do like the analysts do and ask you a two-part question. first part has to do with the launch. that's the next big catalyst we usually get is the sales from the initial launch weekend and before. since this is the first iphone redesign that doesn't come with a network upgrade, we're not getting china in this launch but we do have some early upgrade plans this time around, is this redesigned iphone going to be enough to give us a bigger number than last year on that initial weekend? and the second part is which model do you think is going to be the most popular? >> right.

>> about 9 million units which was of substantial. without having china one would expect a lower number. that said, maybe the phone will grow about 20% year over year. so we're probably going to be expecting a number for first weekend sales that's not materially different from what we saw last year. obviously all eyes and ears will be focused on that number which will be coming out on monday, september 21, if apple holds the pattern. >> tony, it seems the most intrigue lay with this new payments platt fform and how bit could be. there are reports apple will actually be skimming off part of what the banks use d to earn in terms of interchange fees.

bank executives said good luck getting anyone to tell you how much that is. they're very safely guarding that number. i'm wondering, even acknowledging that it will take some time for the platform to gain critical mass, how big a revenue opportunity is it if they just get a couple basis points? >> so the way that we think about it is that right now the card issuers may earn 1% to 2 percentage points, so 100 to 200 basis points. the networks themselves take about 30 basis points, so that's visa and mastercard and american express. if we take a rough guess and say perhaps apple will get five basis points for its role, and i think apple does have a value added role in credit card transactions because if it makes it easier to pay with credit rather than cash, i think the credit card companies are going to want that, will want to pay

for that. i think apple secure payments may reduce fraud risk for the credit card companies. let's assume apple collects five basis points, .05%. with $2.4 trillion, if apple had 20% of all credit card transactions atfy basis points about $240 million in revenue. so lots of assumptions there. but about $240 million under perhaps a reasonable base case assumption. in the context apple willen $50 billion in operating profits next year, that's still a small number. >> so when people say moving the needle is a challenge, that's exactly what they mean. toni, thanks so much. toni sacconaghi joining us today from sanford bernstein. has tim cook stepped out of steve jobs shadow.

welcome once again. >> good morning. >> you call it a masterpiece of a presentation, brimming with confidence. you say that cook is finally getting apple moving forward again in a big way. what pushed you to say that? >> well, i mean, you were there, i think, a couple things. first of all, the tone and nature of the presentation was really jobsian for the fist time since cook took over as ceo in 2011. it was just crackling in there and he even used the one more thing line of steve jobs which he hasn't done before. and then just talking to senior executives. my sense is their morale, their personal feelings about where the company is going very different than a year ago.

so that's one thing. the other thing i can't remember, and i've been going to these for many years, carl, i can't remember them entering two new categories at once. that takes confidence. >> cook told "usa today" we've all been waiting for it this day for a long time. it felt so great. that coupled with comments that apple executives made it the best product pipeline in 25 years. do you believe they delivered on the best product pipeline in 25 years and that we're at this reset moment for the can company? >> well, i mean, i don't think that eddie was the senior vice president who made that comment to me and kara swisher on stage. i don't think he meant this pipeline is better than everything together we've done over the last 25 years but in terms of what they announced on one day, it's hard to top the iphone. it's hard to top the imac. it's hard to top the ipad.

but i think -- i think that if they execute this right, if they could, you know, become the first company that really does these watches right and god knows all the opportunities there and to change things up in the way people live and the payment thing as well. i don't think you can only look at it as a revenue or profit point of view like we just heard but from a point of view how does it change people's lives and how does it make people want to buy apple products which is, after all, what they're really after. so, yeah, i think if they execute well this could be something we look back on as a huge day. but i think at the very least this is the tim cook apple now and that's what we saw yesterday. >> walt, what do you say to people who are skeptical to begin with but then say that the iphone 6 has a lot of features we saw in nexus phones years ago that they unveil a phone -- a

watch that's still slave to your phone, that they got a lot of glitz but the advances just are not monumental. do you think that's fair at all? >> well, yeah, sure. let me just take the phone first quick ly. it's a catch-up in terms of them going to the idea of bigger screens. but, remember, these new phones are the ones that will allow you to use this pay -- secure pay thing with the fingerprint re reader and, yeah, people have tried that. but that's apple's pattern. people try. people fail. and then apple comes along and figures out a way to pull it together. if -- it's an if -- but if they do that then these phones will have done something different than, say, other big screen phones. in terms of the watch being slave to the phone, all the watches are slave to the phones because you can't get all the

circuitry into the watches yet. that may change over time. but the apple watch will be able to do some things, and we don't know the whole list, when it's not in the presence of the iphone. i'm very clear on that. and this is v1. . you know, unless it's a complete flop, they're going to keep work ing on it. this is classic apple. from someone who knows the company better than most. a great job today. walt mossberg. move away from apple for a moment according to some reports microsoft's in talks to acquire mojang for more than $2 billion. the ceo spoke to "squawk box" earlier in the year. >> we want to create the work environment and the company we would want to work for. and we believe that that requires our independence and we can do whatever we want. we don't want external

influence. basically we've turned down every single offer from different firms and gaming can companies, investors. shawn parker was one of them. >> and here is a tweet from minecraft creator back september 2012. give me $2 billion and i'll endorse your -- you can read it right there. interestingly cramer this morning on "squawk on the street" said he thinks this is a precursor to an xbox spinoff. saying he would love to own a piece of that. >> first you have the ceo saying or implying that xbox is not a core asset. they want to go into productivity. they build a krcritical mass in that unit. we've seen that in every single consumer product. spinoffs, they buy something so that they create a bigger bottom line for the can company. and so i do see some sense in what cramer is saying. it certainly is a departure from

the message willing we've heard from nadella. >> would this be nadella's first big move? >> what a lot of people may not realize about minecraft it makes a the lot of money. revenue was $330 million in 2013 so this isn't like facebook betting on the future. they're doing it right now. it's a king digital type of story except minecraft, what they've been able to do with that brand is much more multifaceted. as to whether they spin off xbox, nadella big on the cloud. it's a big part of that. they'd have to figure out a way to spin it off but keep the services part internally, i think. i'd be surprised if in the near term they do that. hey, i've been surprised before. >> all right, jon. we'll come back to you later on. a big happy birthday to jack ma turning the big 5-0 today. so this morning squawk on the treat. what do you get the guy who in a

week will be worth about $22 billion? tweet us @squawkalley. >> perhaps something from bab p alibaba. the dow is down 24 points. s&p 1985. down three points. nasdaq slightly into the green by two points. investors have started already looking toward the fed and hawkish, potential comments coming out of a meeting next week. ten-year yields up above 2.52. shares of twittering rallying after an upgrade to buy. they say they are seeing positive moment number digital advertising, enough to bid up 3 1/3 percent. shares of ebay slipping after getting down graded to neutral by piper jaffery.

a lot of competitive pressure for the pay pal unit. that's conventional wisdom. we haven't seen a response on the back of that announcement. that stock down, carl, 3% almost. >> one of the biggest lose he is on the s&p. when we come back, the massive impact of the iphone 6 on one of the biggest phone carriers. the ceo of at&t mobile joins us in a cnbc exclusive. plus, he was employee number 66 at apple. he worked directly with steve jobs. why bruce tognazzini says the late apple founder may not have been too keen on the apple watch design. and one of the big questions after yesterday's event can apple change payments forever? we'll talk to one of the companies partnering with apple pay later this hour. the dow is down 20 points. [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked?

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if history is any guide, apple's product announcement will impact the way carriers do business. so with us right now is the president and ceo of at&t mobility and business solutions. ralph, thanks for joining us. congratulations on the promotion. >> it's great to be here. >> you are basically running all of at&t except for uverse that will be combined with at&t. i want to start off asking you about the iphone 6 and the impact of that since at&t was the first carrier to carry the iphone. you've had a long history with it. what sort of a move have you seen in consumer taste toward

bigger phones above 4 inches and how do you expect apple to play there? >> i think apple will play very well in this space because consumers want video today, everything is being driven by video and that requires a larger format. so i think these phones are coming in at the right time. they're a great design. when i used them, the thing that comes through, jon, the great video. i think our cust mess will be delighted by these phones. >> let's talk watches. glenn lurie, who is running mobility for you now said he thinks the real mass market watch is going to be a wireless watch that doesn't have to be tethered to a phone to get the full use out of it. at&t would say that. now that we've all had a look at the watch, what kind of an impact do you expect it to have? are you going to tie at&t services like home security into the watch? >> absolutely. we love to work with apple to tie everything they're doing not only on the watch but in the home so that it works with digital life experience and we think that's a huge opportunity

for people to connect their entire life so it's not just their home, their watch, their car, there's a huge opportunity there. we launched three watches this past week, one with philips, for the youth segment, we launched the timex ironman watch that has 4g connectivity and great for runners and intel. we have a complete lineup of watches for our customers. >> you mentioned the car. we're here and you're about to do a presentation involving in-car technology. i think maybe tesla is involved, maybe gm. give us a hint. >> i will do the keynote right after this. for the first time we have a stingray on the stage. >> what's the technology? what are you going to announce? >> we're continuing to expand what we're doing in connected cars. we connect more cars than anybody right now and the connected cars are really coming onboard with really great safe features to make the driving safer for our customers but also

more entertaining for the passenger. i think what you're going to see today is a panel discussion on the future of the connected car we think and according to strategy analytics and abi research as many as 10 million connected cars by 2017 on the road. that's a huge opportunity for us. that's why we spend so much money investing in the platforms and why we're leading the world in connected cars. >> t-mobile is trying to connect you down and create price competition. what are you seeing in the lower end of the market, in retaining your customers as more price competition in the smartphone space and we're not getting as many network upgrades. >> here is what i love about our position, jon. we just announced we now have the nation's most reliable 4g network. the results in the second quarter were just fabulous. we recorded the lowest turn in the can company's history, near record level for the lowest ever in the wireless industry.

so the combination of the great network we have with great service plans like mobile share value and next and then award winning service in our stores we've won the j. department power award three times in a row. it's great network, great plans, and great service and that wins. >> so way to counter t-mobile on that one. ralph de la vega, thanks for joining us. kayla, over to you. >> speaking of wireless another great guest for you tomorrow, david faber has an exclusive interview with new sprint ceo marcello claure. that all starts at 9:00 a.m. eastern. alibaba is set to go public. how much is the company actually worth? we'll ask the one analyst who knows more with about alibaba than almost anyone. actively issuing notes on the company since early last year. plus, it was one of the lasting moments from yesterday's apple

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we're watching shares of mobileye. deutsche bank downgraded it to a buy citing recent rally. the firm still likes the company's long-range prospects but mobileye shares are down. the stock is, though, up some 70 pest over the course of the past month. kayla, back over to you. >> quite a run since that can company's ipo, dom. long-range prospects. every car will have that technology in the next three years. a map of europe. mixed trade over there. simon hobbs ahead of the close in europe to tell you what's moving. we're struggling for a fourth session in europe today.

the general move towards perhaps rates rising in this country sooner rather than later and that change on the fed language people are talking about possibly for next week. a negative bias though it's no great shake overall. the uk's david cameron in advance of next thursday's scottish refren dull has broken cover and took appeal to not break apart what he called the family of nations. peripheral bond yields continue to rise around europe. if you look, for example, at spain, you'll see that since we got that referendum -- as soon as weigh got the results over the weekend, you saw this rising spanish yield. some will tell you that's about the rich region of spain wanting to break away encouraged by the scotts. you see it equally in the italian yields rising and you also see it in the portuguese yields that have risen in the few sessions as well. i'm not sure how accurate that description is. one of the most powerful men in spanish business has finally -- has died, emilio botin.

the board meeting is under way. it's likely his eldest daughter will be confirmed. he always liked to compare what he was attempting to go do with santander, the largest bank, to j p m jpmorgan. you can see over the years he successfully tracked jpm's stock price until santander has underperformed over here because of all the problems we have in europe. one more before i hand you back, sergio, the man at the helm of fiat, will become the new chairman of ferrari. the chairman is resigning after 23 years after sergio criticized his formula one performance at the weekend. he takes all the crown jewels within the fiat group and will take over as chairman of ferrari on october 13, the same day that chrysler, of course, or

fiat/chrysler comes to trade here on the floor of the new york stock exchange. another big day. >> thank you very much, simon hobbs. a big happy birthday to alibaba chairman jack ma. turns 50 today. our squawk on the tweet question, what do you get the guy who in a week will be worth $22 billion? tweet us @squawkalley. your answers later on. plus, steve jobs would have hated it but thank god it's here. bruce tognazzini on the one polarizing feature of the new apple watch in a moment. location. location.

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we have one are more thing to tell you. >> apple ceo tim cook ushering in his own era at the tech giant with his one more thing moment. bruce tognazzini was employee number 66 at apple, says while steve jobs himself may not have liked the design cook and apple did what was necessary. good to have you back. good morning. >> good morning. >> you call it a magnificent first attempt. you say it's like unveiling the iphone 3 or 4 on your first try. >> yeah. when you look at the totality of what they're doing and the fact if you recall the original iphone had no apps and the apple watch, sorry, i haven't gotten used to it yet, at a much higher

level of initial maturity. >> what would jobs not have liked then? >> i was surprised that apple had the courage to put the digital crown and the button on there. jobs would not have liked it. jobs could be swayed with a tremendous overwhelming effort to add any kind of physical button or control. but they had the courage to understand the problem and to overcome it and they properly overcame it. i think it's just a brilliant user experience design. >> so, bruce, the design is done, but what does the company now need for developers to make it ready to ship come next year? >> well, they're providing a tool kit. some people have criticized what apple is not supplying in their own software, but there is going to be an explosion of outside

software so that you can get close to your front door and it will unlock and on and on and on. it's going to become an integral part of your life and all of that stuff is going to be coming from third-party developers. >> how about payments, bruce? everybody is trying to -- first off, understand how the economics of payments works. how long do you think this infrastructure is going to take to take seed? how long does apple's edge having control over this nfc chip last relative to samsung and android players? >> it's probably going to take a year because i think everybody is going to kick into high acceleration now. they've been putting in these terminals which nobody ever uses. and, in fact, i keep finding terminals that are there but they're not actually even hooked up. now all of a sudden millions and millions of people who are expecting to use them. also, people are tired of

opening their news reader every single morning and reading some other retailer has just lost all their information and the fact that apple has so carefully gone through the entire process and gotten rid of individual merchants ever having your numbers is going to cause people to start applying pressure to their merchants saying i want to use this thing. i don't want to give you my card. >> interestingly, bruce, those retailers that you mentioned that have been targeted by these hacks, namely target, home depot, neiman marcus, we didn't see those retailers included in the slate that also co-announced they would be accepting apple payments. when you look at the slate of retailers that did pick this up, staples, whole foods, sephora, the makeup retailer, does that look like a large enough grouping to actually have this make a difference and have a big impact with this iphone 6 model?

>> it doesn't make a difference, but if you look at the history of apple, they line up some high-end people like top department stores and bmw and so forth and then the rest of the world falls into line. so i don't think the fact that five or six months before they release the product -- or whatever it is, four to six months before they release the product -- they had a relative handful of people that that is really going to mean anything in the long run. i would imagine in a lot of conference rooms this morning a lot of retailers are talking about we need to respond to this. it's finally going to happen. >> that critical mass moment. finally, bruce, every launch we roll out the jobs legacy and we ask what would jobs have thought? do you think this is the first one where, no, that's not going to be top of mind from now on?

that's part of the argument that it really is tim's apple now. >> i think it is. and it's always been my feeling there was more than one good designer at apple with 83,000 employees and apple has always been mecca. i think this is -- they showed a lot of courage in this design in taking what is good about steve jobs' legacy, which is polished to perfection, and not just blindly accepting rules that need to be changed sometimes. >> right. >> so i think we'll see more of this kind of innovation. also, i was very happy to see that they were going to use near field communication instead of trying to impose their own proprietary system that's also different from the long-term history of apple. that's a good thing. >> it's been an interesting evolution to watch, too, over time. bruce, your insight is always so good.

thank you so much. >> sure. >> bruce to gnazzini joining us from san jose today. speaking of that apple watch, stephen colbert getting pumped on his show last night. take a look at this. >> whoo! whoo! whoo! what? what? what does it do? i've got to have the apple watch. >> i think we missed the moment where he slams his watch onto the desk but that was colbert last night. cultural touchdown. >> he is so good at hyperbole and that's what we love him for. we only have a little bit of time left with stephen colbert in that role and, of, could, his take on apple is always hysterical. one of the top moments from yesterday's apple event, tim cook and bono along with u2 on stage announcing the biggest

album giveaway ever. that's their moment right there. what is the story behind that deal? julia has some of the back story. julia? >> reporter: that's right, kayla. apple, u2 and universal music are teaming up to give away u2's new album. >> u2's new album "songs of innocence" is going out for free to a half a billion people in the next five seconds. five, four, three, two, one. >> apple giving its users a five-week exclusive window to download the album which apiece on the user's purchase page in the itunes store. that's before the album will be released to all other retailers. >> reporter: apple is paying universal music alum. the company won't disclose just how much. sources tell me it's far less

than if apple paid per download. the two are striking a deal designed to be a marketing win-win. u2 and universal musical benefit from introducing a new younger audience to its music to sell their other 12 albums and to promote this album after recent sales have slid along with industry wide declines. they also get to promote the n concert tour that's expected to kick off next year. plus, there's the exposure from apple using the album's first single as the centerpiece of its massive iphone and apple watch ad campaign. apple gets to look magnanimous for this high-profile stunt while getting people into its itunes store and in a downloading mode reminding non-apple users of the perks that come with owning apple gadgets. carl? absolutely. although people thought the high-five with a finger was awkward. julia, thanks so much. julia boorstin. as alibaba gets ready to go public, how much is it worth? some someone who had has been

covering the company since early 2013. grocery delivery service agreeing to accept apple pay. the ceo is here later on. [ male announcer ] ours was the first modern airliner, revolutionary by every standard. and that became our passion. to always build something better, airplanes that fly cleaner and farther on less fuel. that redefine comfort and connect the world like never before. after all, you can't turn dreams into airplanes unless your passion for innovation is nonstop. ♪ it's in this spirit that ingu u.s. is becoming a new kind of company. unless your passion for innovation is nonstop. one that helps you think differently about what's ahead,

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coming up at the top of the hour. we're going to talk to the guy who literally wrote the book on apple's design guru. did johnny ives get it right with the company's latest products? and the ceo of zillow sounds off on twitter big time about ipos. he's going to tell us why he went on a 20 post rant and give us the questions from the upcoming alibaba offering. plus, general wesley clark on what our best strategy should be for dealing with the terror group isis. his thoughts ahead of the president's big speech to the nation this evening. kayla, we'll see you there in just a few. all right, thanks so much. fwad to have you in house again, scott. alibaba receiving enough orders for its record breaking ipo within just two days of that road show launch. carlos kirchner joins us. >> how are you. >> it did seem conservative that the company was valuing it self up to $163 billion going into the ipo given how much demand was expected.

how high do you think it can go? >> well, we believe that the company is worth at least $200 billion to $210 billion, between $80 and $85 a share. >> which is a pretty substantial move up from where we are right now. the worry, carlos, does this take the air out of the ipo market? does this take the air out of other tech names like amazon and ebay? what do you think this does to the overall market? >> it's unclear that people will shift money primarily from amazon and ebay. . many have limitations how much they can allocate to china but we believe that the internet wave is here and the can companies will continue to be an increasing value going forward. >> a lot of people getting introduced to the company for the first time and getting to know the organizational chart, the management structure, the

labyrinth of investment entities. do you think that's fairly being accounted for in the valuation right now? >> well, there has been quite a bit of disclosure in the last f-1, on the structure and ownership of other assets and relationships. i think given the potential this business has, it will be the dominant e-commerce business in china, the largest e-commerce business in the world, and with so many options and opportunities you would expect them to have investments in many areas and their fingers in many pac pies. i think that is potentially a positive that they have so many opportunities. >> going into an ipo, carlos, it's usually a 12-month forward looking growth multiple that is given to the can company. give us your take for what we'll see from alibaba as a public can company now that it is mature but still seeing blockbuster

growth across e-commerce in china and potentially internationally if it does decide to go there. what do you see for that company over the next year? >> well, we expect the gross merchandise volume which is the value of retail sales under chinese retail platform to grow above 30% over the next three years and we expect both revenues and earnings to go about 30% next year, in 2016, and we are giving it a multiple that is in line with both 20 to 25 times which gives us -- gets us to our valuation of about $210 billion. we see there's a the lot of growth to come for this company. it has been accelerating over the last several quarters, growing to nearly 300 million in the last quarter, 279 million, to be exact. there's a lot of growth and i think we are only seeing the

beginning of with where this company will be. >> all right. this is certainly the first of many conversations we're going to have about alibaba and its ambitions as a public company but, carlos, we appreciate you weighing in this morning. >> thank you. >> carlos kirjner. we want to wish a big happy birthday to alibaba chairman jack ma. he turns 50 years old today. alibaba, the company, just a young 15 years old today. but today's squawk on the tweet, what do you get the guy who in a week will be worth $22 about billion? tweet us @squawkalley. we'll get to your answers in just a moment. the apple event was quite the talker on social media, as you know. of the three major announcements which won the battle on twitter? blue indicates when the word iphone six was tweeted. green is for apple pay. red for apple watch. you can see how this makes its way across the country. apple pay not getting a whole lot of love on twitter yesterday even though the site continues

to argue it was probably the reason to buy after yesterday. >> well, consumers like something they can touch, that they can feel, that they envision and a payments platform in practice might be a game changer but in theory it's really hard to imagine how it's going to affect your life. >> and not a main stream media story for sure. >> no. and it's complicated, too, to understand the economics and how it's going to get rolled out. it will only be on the iphone 6. as soon as consumers get those in their hands next week we should be able too much at least a little bit of a consumer response to that. when we come back apple's ipod change d the way we listen to music. can they do the same for payments? we'll ask one of the companies partnering with apple pay in just a moment. wait, wait, wait, it's wait, wait, wait...whoa, does she have special powers when she has the shroud? no. guys? it's the woven one the woven one. oh, oh that gives her invincibility. guys? no, no, no... the scarlet king is lord victor's son!!

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there were a lot of people who said tim cook is going to kill the credit card. >> did you? >> i think that we put a dagger in it. >> tim cook on abc last night, putting a dagger in the credit card with apple pay. but now apple needs retailers to sign on with the service, and one of the partners is instacart, a grocery delivery service, the ceo of instacart and joins us this morning from san francisco. good to have you with us, good morning. >> good morning. >> walk me through how this relationship begins. did you approach them, did they

approach you, how long ago? >> they approached us a couple months ago, the relationship was to bring commerce to the forfront of the american household. as you know, groceries are a substantial portion of the american household spend on a weekly basis. with instacart, customers get access to about 75 or so grocery stores across 15 cities in the united states. so it was a very valuable relationship. >> absolutely. and of course, if they're going to make this work, they need high frequency purchases to get the consumer on board. do you have projections as to how much of your business might be apple pay in the next year or two? >> absolutely. so around 30% of our business today comes from the iphone and ipad devices. and so we believe that with the friction of entering credit card and billing information dropping, we believe that to be substantially increased as a result of no more, this checkout

hurtle that every single customer has to go through. this is really just the start and accelerant. giving hard in your opinions was going to be hard to do at this point. >> it's a natural extension of the ipad and mobile orders that you just mentioned, but what about the desk top? do you think a consumer would really click on an apple option to order instacart groceries from their desk top? >> so customers already order a lot of their groceries from their desk top, but what we have found is that ordering groceries on instacart is not necessarily one time decision, what they do, what customers do is they shop on their smart phones, on their tablets, and maybe when they're ready to order, they may decide to do that on the desktop or decide to do that on their commute to work, for example, from their smart phone. really, i think that this will enable more commerce, and if that can be done through one tap, this will really be a

revolutionary for consumers, for merchants like us, as well as as for the iphone. as more and more transactions and more and more purchasing are happening on the device itself. >> anything you can tell us about how the economics work? because there have been some questions about whether the merchant pays, whether amtz pays, whether the credit card network pays. and i was wondering if you could clear that up for us. >> unfortunately, i cannot disclose that at this point in time. but a lot of these things will become more clear when apple actually releases this in october. >> i can assume there are discussions, germinating now with apple's rival players. they're probably going to be coming to you with similar pitches, are you on board with them too? is this a collective tent? >> instacart is available on all platforms, that includes android devices and we're in discussions with them as well and how we could improve the customer

experience on those devices as well. >> all right. thank you very much. fascinating and we're going to watch the impact on your industry and a bunch of others too, thank you very much for your time. ceo of instacart and joins us today from san francisco. we do want to bring in john ford from las vegas, john, recode has breaking news right now on the battery life for the apple watch, john says sources tell me apple isn't yet happy with the watch's battery life which is not going to break any industry standards, quote, it's about a day right now. said one, adding that apple's working on modifications ahead of the launch in 2015, what do you think? >> that doesn't surprise me, carl, but the real issue here is you can't measure it in days, its got to be in hours. in other words, is this, does a day mean 12 hours, does it mean 24 hours? does it mean 36 hours you can get out of it, you just have to charge if you want it to last two full days. that's key. with the 360, which is the best designed watch that i've used up

to this point, smart watch when i bought last week. its battery life got worse if you kept the ann droi phone too far from the watch because it kept trying to get a connection. i think those things are going to be key, but if apple can get up to that 24, 18 to 24 hour range, it's okay so long as they have a charging solution where there's a little watch dock that has a battery in it and i'm not going to an outlet, i can charge the thing. >> we brought up the of working with left-handed, working with the samsung phones you helped unveiled the same made about the dial. is that a legitimate worry? >> well, i have to say it's a legitimate worry because my life is left-handed. of course all of her concerns are completely legitimate, carl. i'll say some people have pointed out that the dial's just a little bit lower in you're using it left-handed. percentage wise in terms of the

market size, maybe they could have a version where they move it slightly, i think it'll be okay. >> squawk and the tweet question, what do you get jack maw turning 50 today. timothy writes a big safe and a body guard and scott writes, not sure. >> i'm guessing he wouldn't want an amazon prime account, that's what he said. i bet he gets anything he wants. >> i think that's true. dow's up 13, of course scott is going to be running the half from post nine in just a moment. (trader vo) i search. i research. i dig. and dig some more. because, for me, the challenge of the search... is almost as exciting as the thrill of the find. (announcer) at scottrade, we share your passion for trading.

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welcome to the halftime show, let's meet today's starting line-up here at post nine. john, pete, jerry are the cofounders, stevewise at short hills capitol. josh brown is ceo of the wealth management. our top story today, reactions still pouring into apple's big unveiling yesterday of a new iphone, watch, and payment's platform. the stock is on the move today as are many of the companies that supply the guts to apple products. the big question today, did tim cook and the company's design chief johnny ive deliver for investors? sk