good morning, it is 8:00 a.m. at the bill graham auditorium in san francisco, california where in a little under two hours, apple is expected to unveil a new iphone and maybe more. "squawk alley" is live. ♪ ♪

welcome to "squawk alley" for a wednesday. joining us is re/code's co-executive editor, walt mossberg. with our own jon fortt. zillow group ceo spencer rascoff and our own sara eisen. we should mention the dow has lost about 150 points on a failed rally as the jolts data came in relatively strong. we'll start out with apple, here's what we are expecting. to new iphone, the 6 s, the 6 s plus, a revamped apple tv, maybe a pair of new ipads, we could see updates to the mac and new bands for the apple watch. shares of apple have been in a tight range for most of the morning as we continue to wait

for this event. which kicks off just after lunchtime. east coast time. jon, i'll toss it to you and let you bring in walt in terms of what's already been telegraphed and potential surprises today. >> want to talk to you about that, walt, this is unusual in that it's a different place than usual. if we get more than just the iphone this morning, it's a little bit of a different cadence than recent years, apple has had the iphone event. they want to put all the attention on the iphone and another event leader. this sort of reminds me of the digital hub area, when people are saying the mac is your hub and here's all the things you can do with it. is that what they're doing, positioning the iphone as a hub and making the case for this being the best ecosystem by putting the tv, the watch, the ipad all this other stuff around it to build the case? >> yeah. you know it's a good observation, jon, i would slightly alter it. i don't think it's the iphone itself that they're making up. i think it's ios. before with the mac it was os

10, the name of that operating system. i think you know, the apple tv is now going to be a true ios device. what we're hearing. is correct. obviously ipads already are. so if they bring out the new ipad mini and the big one, so yeah, i think that's clearly a possibility. i think, i also think that they want to show tremendous momentum this is one of those s years for the iphone. which is by far their biggest product. they have to have enough new features in it. to get people excited about it. they want to surround it with a whole bunch of things to make people feel like they are on the move. >> certainly a lot of investors, the 6 and 6-plus cycles did well for apple, better than a lot of people thought it would. and there are a lot of analysts who think this could be a down year for apple. but at the same time you've got these new upgrade plans, new installment plans that might encourage people to upgrade

sooner than they would have otherwise. what's your read on the overall environment and whether people are going to be more incentivized or less than usual to upgrade to this phone? >> i hate to say, i hate to be equivocal, i think it cuts two ways. one is, what you just said. that the stranglehold of the carriers, which i think has been a bad thing in general. sorry, carriers. is loosening. and so people don't have to say mother may i to upgrade their phones. but the bad part of it for apple is, there's now transparency. these phones don't cost $199. same for samsung, by the way. these phones cost $650. minimum. and so, yes, you can get an installment plan, which by the way doesn't even have any interest, it's not that bad a deal. but you're exposed to the idea that this is a 650 product they're selling you, not a 199 product. so it cuts both ways.

i would also, the, i would also point out that every time there's one of these s years, one of these in between years, the real question is, are there enough new features in the s version that they bring out to get, to push people just over the hump to upgrading? not necessarily the people who bought the last phone, but certainly people who bought the last couple before that. >> spencer, i'll bring it back to you and ask you as someone who leads a company, what do you do when your biggest rival ends up being yourself as a lot of people are arguing about apple. >> what you do is whatever apple asks, that's what you do as an app developer with our different brands, we're all in on the apple ecosystem. we've been an early leader in mobile across all of ios. >> on the enterprise? >> on the enterprise, no, in terms of marketing our apps to consumers. on the enterprise, bring your own device to work is a real

phenomenon, and plet of people at zillow group, plenty of them use apple products within the office, we support them as well. i'm mostly interested in apple as a way to distribute our apps to consumers. >> how widely used is the zillow app on the iphone? >> massive, totally massive. >> looking at homes, it's not just mobile, it's also when they're on their couch. i mean this two-screen phenomenon, when you're watching tv and using a tablet or a smartphone, searching for real estate information is real. the other thing i'm interested coming out of apple, apple tv and the hardware upgrades but it's also about the battle for search. as someone who runs a web business, who tries to get people to visit our websites directly or sometimes through google or app stores, this is all about really is the google versus apple battle for search. so spotlight search and siri, as a way to direct consumers to a real estate service like zillow or trulia. to me is very interested

compared to google in the search box or google the app. that's what people who run internet companies are also focused on. >> expense centre. >> walt, jon? >> a quick question on apple tv, if they open up the app store, are you at zillow going to build an app where people can look at houses through the tv? i mean i know it's your demographic, part of the reason why you favor ios to the extent that you do. is because people who are higher income are buying stuff, are on that platform. is the tv an attractive app platform for you? >> yes. when apple opens an app store, zillow builds app ace cross all the brands, we did it on the apple watch, the first ipad, the first iphone. zillow builds apps across all platforms. >> i need to know how you think of apple in the grand scheme of things. i, even saw again today, they make more money on iine phone than any other tech company makes on anything, in terms of

sheer revenue. yet thef television as a cord-cutting device, as a gaming device, as more people are talking about. do you think of it in terms of more of these moonshot projects? or are they a phone company and will continue to be a phone company for a long time? >> i don't think they're just a phone company. but i do think it's a problem for them, to get beyond being just a phone company. and the tv thing is something they've struggled with since well before steve jobs passed away. and the, it's not hard for them to reinvent the set top box. which i think we're going to see them do with their set top box this morning. what they actually could have brought this out two or three years ago. and that's whatever we're going to see. they want as you know, to do a service, they want to basically challenge comcast, challenge e vios and do a tv service and they've had trouble with the media companies and they're still struggling with that.

that's the hardest nut to crack, not the technology. >> you mentioned netflix, spencer, you say is this a threat to netflix? >> there's no question that apple is trying to become a service, that's why they bought beats and rolled out apple music. who knows what they'll launch today with respect to apple tv or otherwise, but i do think apple is trying to not just be a hardware or software company, but also be a service provider. >> walt and jon, we're going to be talking to you later on. a busy day to you. our thanks to both of you, spencer is going to stick around for a full hour which is a treat for us. in the markets, a lot of this morning's rally has been lost. at one point the dow was up 177. now it's just up 19 points, as art cashin sent around in the note. not the kind of action that bulls were hoping for, still green arrows across the stream. s&p 500 up three points, fractionally. the nasdaq, which was in the lead driven by tech shares, which were higher. also, losing some of the earlier gains, shares of netflix are soaring after the company

announced it would launch in singapore, hong kong, south korea and taiwan early 2016. the stock is up 7%. but it was breaking up a long losing streak, down seven days in a row and down 17% in the last month. carl, still can say it has the 100% gain for 2015. >> yes. >> still hanging on. when we come back, today facebook making a big push to make money from instagram finally. plus the company leading the way on self-driving cars, working with just about every major company, including ford, gm and tesla, the ceo of mobile eye will join us. a turning point for zillow? we'll ask spencer about that when "squawk alley" continues.

facebook is set to monetize instagram and its more than 300 million active users, julia boorstin is live in l.a. with the details. as you say in the headline on cnbc.com -- finally. >> instagram is finally allowing any advertiser anywhere to buy an ad on its platform as it rolls out its self-serve ad network. now advertisers will be able to buy 30-second video ads as well as photo ads and instagram is offering buttons to encourage people to shop now.

or download an app. it will be able to measure the impact of their ads across facebook and instagram. and instagram is announcing a new tool to drive mass awareness called marquee, designed for marketers to do a launch of gnaw product on introduce a new movie. facebook shares rising on the news which will allow the company to tap into growing demand for mobile ads, video mobile ads in particular. and compete with the likes of snapchat. e-marketer projects that instagram will generate about $600 million in ad revenue this year, about 1.5 billion revenue next year and 2.8 billion in 2017. it makes facebook's acquisition for instagram for $1 billion back in 2012 seem like a wise purchase. investors have been very much waiting for the app to start bolstering facebook's bottom line. the big question is of course -- whether a surge in ads will anow or -- annoy or

alienate users, the company said the fact they spent two years testing and tweaking the ad formats, makes it sure the ads work, boosting awareness of a product or an app download and is sure the ads will not turn off users and will naturally flow into the instagram photo feed. >> talk about a fascinating evolution of a product. spencer they've gone to landscape. we've got zuckerberg, on the cover of "vanity fair" this month. what would you say about how they've executed this product? >> brilliantly. i've been a huge facebook fan boy. it's my largest privately held for full disclosure. people thought they were crazy when they paid $3 billion for whatsapp, but facebook understands the maxim that facebook follows revenue.

incredible. zillow has been an early tester, julia mentioned the testing of the app. julia has been testing ads for the last year plus year or movement it's working. and it's working because the audience is engaging with the ads. if you have a category like real estate where the people that are fans of your brand want to engage with the content like photos, real estate is perfect for this. zillow posts big, beautiful photos of homes to our instagram news feed, both sponsored stories as well as free and consumers engage with the ads. even though they're apps, because the consumer views them as content. >> they don't realize they're ads? >> they mrealize but they may nt mind. consumers view them as useful, so there are a couple of examples on the internet. google, facebook, i would like to believe zillow where consumers see ads for real estate agents and they view that as valuable to contact an agent where ads are content. the holy grail for online

advertising. >> describe to a lay person between return onnen engagement onnen an instagram ad and wherever else you guys go, television, newspapers. >> if zillow buys an instagram ad as a photo of a best listing of the day and it goes into our news feed and into other people's instagram feeds, people comment on it and then they share it with their social and this happens on twitter as well and on linkedin as well. the amplification effect of social media advertising is significant. and the brand-building apps can be very significant, too. because consumers engage with the brand. if i see an ad on tv or in a newspaper or a magazine, i can't engage with it i can't share it with my friends. we spend about $100 million advertising across tv and online and all sorts of channels and on twitter and we love social advertising. >> fascinating. the way that revenue is migrating is just incredible. next up spencer the integration of trulia into zillow is finally complete. has it been like are you glad

this is over with? >> it's a big milestone, we announced the integration of our ad products is complete. an advertiser, apartment building owner or mortgage lender, when they buy ads from zillow group, those ads will now be served on zillow and trulia simultaneously. the reason that's so significant, is never before has a real estate agent been able to reach such a hooud huge audience at scale. between 50% and 70% of all home shoppers in any given market, are using zillow or trulia's websites. it positions us well for 2016. >> the stock has been pretty ugly. >> i prefer to call it volume 2 volatile. >> is there a misunderstanding or do you see it as just some of the growing pains as you integrate trulia? >> we said this would be a transition year. so you know, the, we have a lot

of work to do to integrate the products between zillow and trulia, that's now behind us, we focus on the stock price long-term. i'm confident five plus years nowfrom now, zillow group will be a much more valuable company that it is today. as ad budgets migrate from out of newspaper and offline to online. advertisers follow audience, zillow group has the audience for real estate home shoppers. ad budgets will migrate towards that audience. >> you posted a picture of yourself outside of the exchange wearing mc hammer pants, do you want to explain why? >> i wanted to fit in i took them off. we have fun at zillow. one of our core tenants is win something fun, that's a core value of ours. i made a promise to employees when we achieved this milestone i would have a good time with it. and you know what's more fun than mc hammer pants? what i want to say is would jeff immelt do that? what ceos do for their

employees, at zillow i make a promise and deliver. >> would rupert murder okay och? >> definitely not. >> you're competing with him now. how tough of a competitor is that? >> we have all the assets do under our roof to control our destiny. but zillow and trulia is so much larger than our nearest kpeter that we're well positioned. >> we're going to have jeff immelt on the show tomorrow. i think to talk about the approval for ge. i doubt he's going to wear those, but we will see. >> spencer, we continue to talk to you. up next, how to play apple stock, we talk to a top-rated analyst with his take. daughter: do you and mom still have money with that broker? dad: yeah, 20 something years now. thinking about what you want to do with your money? daughter: looking at options. what do you guys pay in fees? dad: i don't know exactly. daughter: if you're not happy do they have to pay you back? dad: it doesn't really work that way.

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. we are less than two hours away from apple's big event. with the company's shares trading unchanged where they've been up and down around the flat line all morning long. how should investors be approaching today's event.

tony saganaki is an analyst at bernstein, has a buy on the stock and $140 price target. we talk about the different products we're expecting, let's start with the iphone. it's an s year, not a total next generation, what is a realistic expectation of demand. >> i think that's the ultimate question. the iphone is about 70% of the profits from apple and the big debate in the investment community is whether iphones can grow in the december quarter and whether they can grow over the following year. i think consensus expectation is that that will be difficult. our belief is there's lots of opportunity for apple to gain share going forward. particularly from high-end samsung products and it's possible that apple will grow the products going forward. >> what sort of numbers are you looking at in terms of people that would upgrade to a 6 s or a 6 s plus? i think tim cook used the 30%

number. what does it mean for the next upgrate? >> our analysis today shows that about 35% of new customers, of all iphone purchasers have been new to the iphone. so far for the iphone 6. another way to look at it is that about 35% of the installed base of iphones prior to the iphone 6 cycle has upgraded. there's 65% of the installed base out there, that doesn't have, that don't have a large screen iphone. so we, we do believe there's meaningful opportunity going forward. >> tony, i think you're quoting "u.s.a. today" yesterday was that the, the old 30% growth rates were mathematically unsis sustainable. mossberg just made the point about the loosening structure regarding subsidies and the carriers. are people going to get sticker shock down the road when they

realize that upgrade sag lot more expensive than they've gotten used to? >> i don't think so, really what's been happening is that what you're paying for has become more transparent to consumers so what happened before, was that someone bought an iphone and paid $200 for the phone and paid $70 or $80 a month that was a blended charge for service and for the phone. now what the operators are basically saying is, you pay $200 for the phone, and you pay $30, you pay $50 for service. and $30 a month for the phone. when you pay off the phone it's yours. with the total price for the iphone ownership is actually the same or lower than it has been before. because we've seen increased competition among operators in the u.s. >> i'm interested in whether you think apple will ever try to monetize sort in the app stores. you know it seems like

monetizing search where people search for a particular type of app, rights now it's all org organic, something that google is starting to do. do you think it's too anti-consumer for apple to try to do that? >>. >> i think the struggle that apple has with anyone search related is its strong stance on privacy. there's this push and pull around trying to provide an experience for consumers which apple has espoused that protects their privacy. then an ability to use data from consumers and how they search and how they sort. in a way that can be money-making. and that's a real tug of war debate that apple quite frankly is having with google. and it does make it more difficult for them broadly to monetize the install base in search and advertising going forward. in a way that android and google can't. >> it's going to be interesting,

because they're indexing apps now, if you go to spotlight search and type an address and if you have the zillow app downloaded it will take you drktly to that page within the zillow app. so they're starting to move in that direction somewhat. >> tony, on television have you done much work as to what might be available in a package once these discussions with the content owners are finished? and people want to know why will i need a new box, like an apple tv if eventually smart tvs evolve? >> yeah. look, i think there are two stages to what apple is likely to bring. so it's widely expected today. that they'll be a new apple tv box. that will be able to be programmed. and it will afford apple the opportunity or its developers to develop games, specifically for that platform. and you know, quite frankly, that's ecosystem building for apple. but it's not really material to financials. you know, the next, the next iteration is likely to be a television service which is been

again highly speculated, in the press and among analysts, but is not expected to be announced today. that could be material to financials going forward. in the sense that if apple did have a $30 or $40, or $50 a month bundle which in some cases could replace television subscription, that could start to be material. again, i would underscore that apple is a $230 billion company. so even at reasonable levels of penetration, you're talking about something that might be single digits contribution to revenue over the next two or three years. >> we're going into this eyes open, that's for sure. >> thank you, tony, good to see you. markets about to close in europe. markets there again today, up again, but weak economic data, pulling stocks back a bit from the earlier highs, ftse is up 2%, still down 6% this year. led by miners who would be among the biggest beneficiaries if china acts to shore up demand in

its economy. the dax, the cac as well, both solidly above 1%. when we come back, we expect to see a new apple tv. but it probably won't be the full cord-cutting device many were hoping for. it could end the way gaming it done and the co-founder of sling box will join us to weigh in in a moment with the dow's gains now down to just 6 points. there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution. guaranteed. did you see it? in one second, he made a trade, we looked for the best price, and the trade went through. do the other guys guarantee that? didn't think so. open an account and find more of the expertise you need to be a better investor.

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democratic presidential hopeful hillary clinton issuing a hard-line warning to iran. clinton says if she's president, she would not hesitate to take military action to stop that country from acquiring nuclear weapons. while praising the nuclear agreement, clinton told the washington think tank, it's not a step towards normalizing relations. house speaker john boehner says president obama has lost the debate over the bad iran nuclear deal. and house republicans will do all they can to stop it. house democratic leader pelosi says they will fail. meantime, ste steny hoyer, the second-ranking democrat in the house announcing he will support that nuclear agreement. out of 188 democrats notice house, about 120 say they will back the deal with another 50 undecided. lawyers for kim davis say she will return to work either friday or monday. after taking a couple of days off to spend time with her

family. she was released from jail yesterday with a warning not to interfere with the issuance of marriage licenses for gay couples. we'll keep you posted. that's our cnbc news update. back to "squawk alley." all right. welcome back to "squawk alley." i'm jon fortt here at the apple event. and joining me is jason kerkorian, general partner, dcm ventures and a co-founder of sling media. let's talk about the anticipated new apple tv, a lot of people are saying well maybe apple tv is a hobby, how big a deal is it in terms of what it will add to apple financially. interestingly, people are paying for video content through apple at a rate they're not through android from your perspective, someone who has helped push digital video to begin with, how big of a deal is this?

>> if you look at apple's cadence, in terms of their major refresh, it's typically every year, every other year with major products, it's been five years since apple tv got any kind of significant refresh this is the first one, right? i think it's probably the most notable. announcement here, it's not going to have a large impact as as certainly the 6 s, but it's important in terms of furthering their device ecosuspect. so to speak. the it's been eight years since the initial launch of the apple tv and it's been a very closed platform. this entire time, right? so we may forget but there was a time where the iphone existed without the app store. it's about a year. in this case, it's about eight years, it's a long time coming and it seems like from what we've heard the big announcement here is around opening up the platform. to be a truly open platform. >> let's talk about that one of your recent investments is soccer through digital

streaming, over the top. think you got somewhere around 20,000 subscribers on futbol, paying what, $7 a month? >> yeah, are you advising that start-up to jump on apple tv and develop an app for it, if indeed they announce that? >> most definitely. it's been closed to most start-ups, certainly. in terms of a platform now. you know futbol is on row cue, it's on amazon fire tv. apple tv for consumers that's the device of choice. >> why? >> in terms of usage, if you look at some of the channels across different platforms, usage is higher. now some of that might have to do with the fact that it has been a closed platform. right, so there's limited options for the user. discovery, on a given channel is a lot easier. you'll get more usage. usage is going to be concentrated in a smaller number of channels. with apple opening up broadly, think it requires apple to think very differently about what the

user experience is. when they first and foremost. i think when you look at some of what we're hearing that's going to come in the new apple tv, which is a better scaleable, can handle millions of applications, a new remote control that's got touch sensitivity to help navigate and also, you know extensive use of siri, right? for voice input. that's very significant. >> assuming they get that right and they've been pretty good with app store creation, getting people to pay through the phones and tablets up to this point. could this strengthen apple's overall ecosystem? if they come out with an apple tv product that people are interested in, could that encourage people to upgrade their phone if they're already on apple? or if they're on the fence, they don't really know between android and iphone, we see people asking us these questions on twitter and facebook all the time. it pushes them over the top, hey i like that product. >> it's all in the details, can they make these things work together in a compelling way?

the iwatch, right? is the iwatch just a watch? or is it a, is it a game controller? or an input into a new game? you can imagine a gaming scenario. i think one of the outputs questions you should ask when we're thinking about an open ecosystem is what are the apps that will be created, certainly there will be video apps, but gaming is the one that has been rumored to be a key focus. and there's a focus on the remote naturally. but it's broader than that. for your point, it's about the apple ecosystem. if i have an iphone in my pocket, and and an iwatch, an apple watch on my wrist and now i'm holdle a remote control that's got motion sensitivity. i have three reference points, lots of sensors on my body. what kind of apps can you create with that. >> if this succeeds, does it have the potential to increase your investment in start-ups that are doing over-the-top apps, open up a new market? >> there's no doubt. even without this, i think there's a critical mass of

streaming devices now in the home. i mean apple tv, even though it's kind of viewed as a bit of a laggard. i think there's 20 million devices sold. i don't know how active they are. it's hit critical mass there are opportunities for companies like ubo to create new models, but i think the biggest opportunity for start-ups is around innovation, around some of these applications, how can i use the device ecosystem in creative ways that probably large media companies are not thinking of or don't have the dna to support. >> jason krikorian co-founder of sling media thank you for joining us. a lot to look forward to as we get started on this event. >> jon fortt in the center of the action. coming up, our next guest company is at the forefront of self-driving cars, power and technology for companies like ford, general motors and tesla, the ceo of mobile eye will be joining us next.

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it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda. cars capable of sensing their surroundings, navigating without a driver, avoiding accidents could the future be autonomous? our next guest works with a seemingly never-ending roster of clients, the co-founder and president and ceo of mobile eye joins us here on post 9, what a treat for us. every day there's a new headline

from some company getting into the space. elon musk is on the late show with colbert tonight. are you struck with the way it's taken off? >> this is the future. >> this is definitely very big wave, going to be with us a couple of decades. and tesla by the way we are providing the system for autonomous driving for tesla as well at this point is the hurdle the engineering, computer engineering, mechanical engineering? is it go getting municipalities on board? what's the big hill you need to climb? >> in order to provide autonomous driving, there is a huge technological leap that companies like us hav exciting to bring the technology to fully autonomous driving. we have 30 automakers that line up with our technology that we provide for autonomous driving. and we actually work with 90% of

the automakers worldwide so we are the leading supplier in this field today. >> what about the regulations? how far are we from seeing those go into effect to insure when we do have autonomous driving, it will be safe and rigted? >> regulation will follow. the wave is so big and the potential to save close to 1.5 million fatalities, so no one is going to stop this wave. of introducing technology that can actually to minimize the car accidents to zero. it happened with adas systems that followed. the technology is available at a price, the regulators came up with a star rating scheme, where they demand already to introduce auto braking systems and it started in europe. now we hear that united states is about to follow. expected next year. the chinese are about to 2018 to follow similar regulations, the

korean and the japanese announce they're following similar regulations, so the autonomous driving eventually also will be regulated. >> this is something that's very personal to me. i lost my older brother in a car accident. so it's, it's quite amazing how quickly, i mean i know engineers like you have been working on for probably a decade or several decades. >> 16 years. >> to the rest of us, it's gone from a fanciful idea to nearly a reality in a very short period of time it feels like this is inevitable and it's amazing. what's interesting to me is to think about the impact this going to have on all corners of the economy. things that we haven't even fully grasped. you look at real estate if my half-hour or hour commute can suddenly be productive, well all of a sudden the way cities are structured and is going to change or the insurance industry is going to change radically. whole parts of the economy is are going to change. >> we're in the middle of huge revolution. >> what year is that, that spencer is painting? >> it's happening now. this year is going to be first

car which will be semi autonomous, this year. it's not future, we see development, we are talking about this year. we have four automakers contracted with us to present semi autonomous and later autonomous technology. where the next one is next year. so it's happening today. it's not something that we should wait too long for this. >> google was the first one that sort of brought it into the media mainstream and they said self-driving cars, people thought google was crazy. we should look at the first news reports, it was only a couple of years ago and everyone thought google had completely lost their mind. >> google created anorm use awareness, we would not be so early with this technology, on the road. we do not compete with google. google has slightly different concept of what we do. we do driver interpretations, an inexpensive system, looking forward with cam ras and understands the driving scene and while extending the driving

scene real-time we can provide applications, everything by the way done, i brought our system just to show how it looks. everything runs. on this small film. >> wait, wait a minute. you're telling me everything about hold it up -- >> it looks like a piece of chewing gum. >> everything about autonomous driving comes from this? >> the first implementation is going to be this year, is going to be with five iq 3 chips, five. eight cameras are on the vehicle and radar and four ultrasonic. this is the first set-up that almost ready for fully autonomous driving. but this is amazing technological achievement. 16 years of development to get to the market. >> don't lose it. >> no i keep it close to my heart. >> please come back. >> pleasure, pleasure. >> thank you very much. >> we're not done talking about this by a long shod. ziv akiran, president and ceo of

mobile eye. tomorrow we'll be joined by ge chairman jeff immelt. when we come back we're going to talk about the maukts. the dow just turned negative. we're keeping a close eye on the wild swings. united ceo is out, a major federal investigation is ongoing. we're going to talk about that next.

the ceo at united airlines is out. >> so many questions this morning about whether or not united airlines can get its act together and a lot of those questions are facing the new ceo of united airlines -- i should point out, oscar munoz who took over yesterday, immediately he is taking off jeff smizik who is out at united ceo. munoz vows stronger operations and this airline needs improvement when it comes to operations. he wants to improve customer service. here he is on the conference call with analysts last night talking about what united needs to do. >> it's just an absolute and complete point that we need to reach our customers with a better service product. and we need to just convince them that that is our commitment. and that is going to take a lot of time and effort. >> by the way if you look at shares of united airlines which have been hovering around a little bit up, a little bit down

all day long. the cfo, who is new to the job, will be speaking at an investor conference in new york city within the next couple of hours. he will certainly face some questions. but sara, a lot of questions today about whether or not oscar munoz can actually get united to clean up its act and improve its operations, he's got a lot of challenges in front of him. >> after it's been lagging. some of the peers in the airline industry, phil, thank you very much. one of the questions is raises is the relationship between airlines and politicians, it's been a cozy one. eamon javers is here with that angle. >> it can be very cozy in some cases, what you don't see in washington all that often is this case that we're seeing here of a direct personal transaction allegedly made between the airline and one of their officials that they were trying to deal with at the port authority. to personally benefit that official. typically what you see in washington, d.c., is interactions surrounding reagan national airport. and that is a unique situation because it has this restriction

called the perimeter restriction, which limits the number of jet flights long-haul that can come into the airport so what you see over the years are cases of politicians lobbying to get exemptions to that rule so flights from their district or their state can come into washington. of course, that benefits the politician who gets to ride on that flight. but generally it's a more diffuse kind of thing where they argue it's a benefit to the entire state, economic driven. not to benefit one particular senator or member of congress. as you say there is this history of close relationships. and we got one example of that just this spring, when we saw that the head of the house transportation committee told politico, that he was engaged in a personal relationship with a lobbyist for the airline industry. and that was viewed widely around town as sort of an example of just how close these relationships can be and very personal. >> everybody in d.c. likes to talk about this. spencer rascoff, you worked with jeff smisek at hotwire.

>> i did when we started hotwire in 1999 jeff was general counsel with continental airlines and i worked with him closely as we established hotpyre. he was incredibly innovative general counsel, long before online travel had moved to the internet. jeff was at the forefront of seeing it. so it's an unfortunate situation. i hope it works out okay for him. it's fortunate for united they have someone who was on the board previously for a couple of years that can step in right away. i hope it works out for jeff. >> well it might work out for him with the severance package, right? >> yeah, $5 million to walk away and stock not being buffeted too much by the news. when we come back, almost an hour now from the apple event in san francisco. we'll go back there live for some last-minute predictions with jon fortt.

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let's bring in jon fortt from snow. i see eddie q is now on twitter saying it's a big day for the big screen. as they start to dole out these hints. >> does he mean a bigger screen

ipad or a tv or being clever in putting these together? he's probably putting both of these together. also to remember, think this is really about the ecosystem. right? you've got a larger screen iphone on second generation that we're likely to see. that commands a higher average selling price than the rest of the iphones do. you've also got the other products from the small screen watch to the larger screen ipad to the over-the-top tv product they're likely to announce here. all enhance the value around buying an iphone or being in the ecosystem. if apple can pull this off. then i won't be eating your tie in january, carl. i remember he made this bet last week. the argument was whether or not iphones go negative in the second quarter as some on the sell side say they well. jon doesn't believe it's going to happen. if they do, then he will eat not the whole tie, he said, but some of the tie. >> it looks like someone already

ate jon's tie. >> that's going to be tough comps from last holiday quarter. >> i don't think jon has an issue with the fact that comps will be tough, right, jon? >> comps are always tough for apple and there's typically been this skepticism around can they pull it off again. i think the issue here is that so many different metrics are moving in their direction, they're gaining share on android. so many of the carrier plans that are shifting to early upgrades have been more popular than expected. so there's a larger pool than there has been in the past of people who are going to be willing to upgrade. plus you've got ios 9 which has some features we've been talking about for a while but haven't delivered like public transit directions that's going to attract some people. guys? >> jon you've got a busy afternoon ahead. our thanks to you, spencer, thank you for coming in. dow is up three points, let's get to headquarters and wapner and the "halftime report."

let's meet the starting line-up. steve weiss, along with joe terranova and jon and pete najarian. our game plan looks like this. call of the day, big biotechs on the move this hour, the names getting a street shout hp out and whether you should own or avoid them. the apple trade. america's most-loved stock down 10% over the past three months, can today's big event end the slide? we're live in san francisco with the very latest ahead of the unveils, we begin with the markets and what was another