♪ ♪ good friday morning, john and kayla out today. but sara sizen en isen is pullg shift. >> it is black friday, and we want to get a closer look at what tech companies are watching today. our josh lipton is live at ebay's war room in san jose with more. good morning, josh. >> good morning, carl, i'm here with carl lawton, he is ebay's head of north america, thank you for joining us. >> we were here earl tli

morning. hall, watching the hot products on ebay. so far it's been hoverboards, it's been star wars merchandise. what's your insight when you look at the hot products and categories? what you do you think is going to be popular not just through black friday, but the holidays? >> it's early. but we're excited about the performance today excellent thanksgiving for us. and black friday is off to a good start. toys are hot this year. not just hoover kiloliter boards, but also the barbie dream house, mechanoids, s.t.e.m.-related stuff. game stations and xbox and playstation 4s are always hot. if it says apple on it, it sells so looking forward to getting around those types of items. >> let me switch gears and ask you a few questions. i know your investors have. your gross merchandise volume. single digits, last quarter, around 3%, i know analysts, how

do you grow so it's more in line with the broader e-commerce brands? >> we're focused on executing our strategy, which is bringing the unique inventory that our sellers put on our marketplace to our buyers and shoppers across the globe. we're excited about where we're taking the business and confident that the next 20 years of ebay would be as bright as the last 20 years. >> in retail, hall, the name of the game, it's speed, it's user experience. the people, the distribution centers. how do you think about that competition that rivalry as we head into the holidays? >> we're again focused on execute eeg bay's game plan. over 40% of the items we have on our site get to a customer's home in three days or less. 60% of the items we have on our site ship for free. we've got great values and deals across the marketplace.

every item in our deals platform ships free to a customer's home. backed by the emay money-back guarantee. we're firing on all cylinders, looking forward to the next 12 days of holiday selling season. >> the last question here, hall, how do you think about these loyalty programs? full disclosure, i'm an amazon prime member to get me to buy on ebay. it seems you would have to offer me an item at a cheaper price or offer me an item i can't find on amazon. how do you think about competing with those kinds of programs? >> we focus on offering our shoppers the proposition they're looking for. for the holiday season we have phenomenal values on the iphone 6 s. if you're looking for an iphone, can you buy him an iphone 5 or an iphone 4 that might be used or refurbished and get a phenomenal deal. that's what great proposition

for ebay is all about. over 60% of our items ship for free on our site. you don't have to pay for loyalty program and 40% of our items get to our customers' home in three days or less. >> hall, thanks so much for your time. >> i'll send it back to you guys. >> joining thus morning from washington today, kara swisher, executive editor at re/code on this black friday, good morning to you. >> how you doing? >> good, but not great as the expectation for black friday today. a lot of consumers shopping online. we did talk to macy's ceo, terry lundgren, he talked about retail versus bricks and mortar. >> 90% of all the products that we carry in our stores is still sold in bricks and mortar. last year it was 92.5%. so it's the gap is narrowed to 90%. but still, the significant amount of inventory still being sold in the in the actual

stores. >> so kara, this morning, some people tried to argue that this is the season, where officially black friday as we know it, going to the mall. is a novelty. right? you go because you want to go through that experience. not because you need to. >> absolutely. it's really interesting. you know, i think the retailers that have brick-and-mortar stores are battling a secular trend. an age trend in that millennials and even everybody, i buy all my stuff online now. i can't tell you how much, how little gi to a store. the question is, if you like shopping, if you want to search for discounts, if it's entertainment, you go to stores. right now i think most people are very used to using retail online and it's gotten easier and easier. the sites have gotten better and there's a lot of great stuff using your mobile device which i think has improved rather drastically. >> i like the headline on re/code, dead mall walking. very appropriate to what you're saying.

obviously amazon is a big winner here. how about the bricks and mortar retail stores that have pursued the omni channel as their buzz word for online strategy? is anything standing out to you? >> no, i think they've been slow, most of the big-name retailers have been slow to recognize this trend. some of the furniture stores and specialty stores. one interesting trend obviously is etsy. which amazon is trying to copy. with the hand made goods and the special crafts and things like that. that's an interesting trend. because you can have access to so much more than you can in a regular retail store. and presentation is everything. online presentation has improved so much that people can get a sense of these products really well. i don't know if you've tried some of these sites, they're amazing and the ability to really sample the product, even if you don't touch it i think that's what retailers have, there's certain products you do want to see in person. and maybe that's a great thing. but i don't think anyone likes being in a store unless you find

it a sport, wants to be there on a day like today. really quickly kara, when you think about this dynamic, in your head do you think about ak zom web services and rack space or is this more about the individual retailer? a combination of all of those things? >> i think it's all of it. i think if you're a retailer, it's sort of like being in the entertainment business and not understanding everything is being digital and understanding tv everywhere. it's the same secular trend happening in every other industry, finance, cars, all kinds of things, so for retailers, this has been coming for a long time. there's other exciting retailers like jet.com that are changing the way things are delivered, right down to food delivery. it's just a secular trend. just wait there's a lot of them going on across the, across the broad economy. >> it's been fun to watch. not so fun has been espn, seven million subs lost in two years. the rough news from disney.

the shares are down 4%. currently the worst performer on the dow. we should mention that they're making up for some of that overseas, kara. but again you're talking about disruption, cable is going through it, too. >> it's not a disruption, it's over. i know they all talk about that. but it's just, again, when i say secular, millennials do not watch cable television. argue against that it's slowing down and doing different things. but fact is they're getting their entertainment in different ways, they're not, this has been an enormous money-maker for disney. recently i interviewed on the stage of the "vanity fair" conference, bob eiger about this. what can he do? this is the trend that's happening. and the question is, can they pull more profitability out of these properties. until then, adding different things, they've added a bunch of shows, you know specific niche shows on espn. but it's sort of stops the flow, but it doesn't stop the again the major trend that is happening here. which is declining subscribers.

and the question is, will it hit a bottom? will there be a point where it rests or not? that's the question. >> another question, is disney sort of a stand-out. the stock is up 26% this year. espn is, while subscribers may be declining, it's still the crown jewel, live sports is always an exception. it's got star wars coming out. the theme opening in shanghai. looking at all of the media stocks, wouldn't you agree that disney certainly is a standout? >> i think -- i think bob eiger is one of the best ceos around in the media space. he's been one of the first to embrace digital issues. of course they've got star wars, they've got all kinds of properties, the marvel, and by the way they're opening a theme park in shanghai, that's an experience you don't get digitally. these kinds of things. every other area they're trying very hard. but they were really, they benefitted from espn on the way up and when it was making a lot of money, now that particular and important part of their profitability is declining. and they've got to figure out

ways to make money elsewhere. >> and then they can't grow as quickly. they've got to make up things. so you know, every other area they're doing rather well in. it's a question of what do they do with this again, trend it's not really their fault. it's still a great product. it's just people aren't using it the same ways. >> speaking of media companies having to adapt cara, the new lawsuit calls into question the competence of sumner redstone, his ability to run the boards at viacom and cbs. lawsuit bay former girlfriend demands that redstone be examined to see if he can make decisions for himself. what's your take? >> how many times has this happened with big moguls that this happens at the end of their lives? this is sad. i think the question is, is you know, this has happened again and again and he's quite old. the question is, is he in charge of his facilities, this person is alleging not and all kinds of crazy stuff. he's got a lot of the viacom

side. they pull dplephilippe dumont i charge of his health care. this woman was before. and so is she saying it for the money or saying it for something real. i think it was brooke astor, it was very real, and in other cases it's someone looking for money. it's not great for cbs or viacom to have this stuff out there. it's kind of inevitable at this point given him, i guess and his life. but i think the question is, who is going to take over the company? is it going to be his daughter sheri redstone? who is going to control this post, post when he's not alive any more? i think that's probably where everybody is focused and nobody will talk about that issue. that's the real deal. >> the ownership interest will be taken over by seven trustees, which includes his daughter. the other big picket question is what happens ultimately to viacom and cbs.

given all of these changing viewer habits and if he does leave and retire and something happens, do the companies take a new direction? do they get sold? >> i think that's the big question. you have some very strong executives at both companies. les moon vvemoonves, very exper and philippe dumont, in charge of mr. redstone's health care this stuff is great for new york tabloids, it's like a soap opera. it feels like you're watching "empire" or something and the guy has lived his life like that. sadly it has to sort of end like this. i don't know, it's one of these sad cases that you see a lot. a makes me sad to thing about. >> redstone's attorney did respond to the lawsuit saying it's a meritless action riddled with lies and a despicable invasion of mr. redstone's policy. showing that ms. herzer will stop at nothing.

a claim that she filed this lawsuit out of concern for mr. redstone is preposterous. a tough note to end on, bs that's where we're going to end it, kara, thanks have a great weekend. meantime, russia looking to retaliate against turkey for downing of the war plane by imposing economic sanctions and suspending visa-free travel. during a meeting with french president francois holland, russian president vladimir putin said he's drid to cooperate in the fight against isis. what's the latest, jeff? >> yeah well that's just deal with that meeting with the president of france first. it seemed to go relatively well. even though the body language between both leaders was rather tense. but what we got in the end was an agreement by the russians to cooperate more fully with the french and other nato powers. and it looks as though there will be a focus on isis terror

groups specifically and that there will be a stepping up of bombing campaigns against those groups so that was a step forward farce the war against isis is concerned. now, as far as the issue of the downing of this russian jet bomber, the war of words between president putin and president erdogan of turkey, only seems to have stepped up while both sides have been saying they're trying to deescalate the situation. but let's be realistic here. both sides have a great deal to lose. not only strategically, but economically if this war of words gets worse. four and a half million russians visited turkey last year bringing important revenue for that country and the turks have spent $25 billion over the last 12 months buying russian oil and gas, so there would be considerable fallout if there

were significant economic sanctions from this spat over the downing of this jet. so while there has been talk of leveling some economic sanctions against turkey. so far it's only been relatively low-level talk about projects being suspended. sara, let me send it back to you. >> i want to check markets, investors continue to brush aside earlier concerns in the week about these geopolitical tensions in europe. a mixed session on wall street. the dow is being weighed down a bit by disney. now down just four points, the s&p and the nas are in positive territory. energy is the worst-performing group in the s&p. crude oil down more than 2%. trying to close around 42 a barrel. looking into the s&p 500. shares of hewlett-packard, after hitting a post slip low on wednesday. stock down 26% for the year. shares of hp enterprise leading

the s&p gaining roughly 3% this morning. they had a good quarter. they had a good day on wednesday. >> it feels like a lifetime ago. >> it feels like a friday. >> after the earnings report and after david talked about. when we come back, what tablet trouble? target saying the ipad was its top sell they are thanksgiving. max gereman tells us if that demand could last. and with thousands of people shopping online. how can you make sure your information is safe? we'll talk to the former chief technology officer for the federal government. and disney shares may be struggling but the demand for star wars is strong as ever. more when quack quack continues. being a keen observer of the world has gotten you far, 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.

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apple backing away from direct black friday deals this year. but apple's new bigger ipad pro expected to be a big winner today. joining us now 9 to 5 mac senior editor mark german. >> happy thanksgiving to you. >> we know that apple is not doing direct deals. if you go to target or a walmart even, you can actually get apple products on sale. is that going to move the needle for apple this holiday season? >> they're not doing their own black friday sales is perhaps going to hurt their holiday income a bit. but i think it's worth it because they've really done a

great job outsourcing to resellers. their direct sales might go down a little bit. but the sales through best buy and other third party resellers might go up a bit and it will all balance out or put apple more in the green. overall it's a solid strategy. >> the other thing is we don't have any hard numbers, obviously. but there's anecdotal numbers starting to trickle out. target said it had a great thanksgiving period and apple continued to be a strong product. josh lipton was talking about it with an executive at ebay. saying anything apple sold well. they're talking about the apple watch and apple ipad. two products which analysts have been negative on for apple. >> it's a little surprising given all the negative talk about apple. but target and best buy are having absolutely amazing deals on these products, they're giving gift cards.

rebates. i think through today and christmas it will be huge for both of these products. we'll seal how it affects the bottom line when we announce results next year. >> the debail rages on about the chip orderers and whether or not there's a slowdown in the pipeline and what it means for phones in the december quarter. what's "9 to 5 mac"'s take on all of that. >> apple diversifies its chip suppliers, it's hard to look into the supply chain to get an idea of how many units apple is selling, what their margins and revenues will be. i think it's safest to wait to see how apple portrays their numbers, come the announcement. >> is it your sense that the ipad pro can in fact rescue the tablet category, the way some apple enthusiasts suggest? >> i've been using the ipad pro since the launch date and you've been using the smart keyboard late last week. i think it's a fantastic product it doesn't feel like an ipad. it feels more like a mac with

the big split-screen views. will it save the ipad? i'm not sure. but i think it gives apple a leg up in the future of desk top and laptop computing, it's somewhere more in the middle sort of like a surface, i think it's beyond the ipad, more of them preparing for the future of the mac. >> what about iphones. are those popular holiday i'm i-tems? i wonder if it changes because of the new subsidy plans with the phone makers. >> absolutely, iphone is popular, apple's cash cow. everything that apple does these days in terms of product launches and services and software is all about insuring big iphone numbers and margins. so of course it's still popular, and best buy and target are offering comparable gift card and rebate programs. i don't think the lack of subsidy programs these days really has a big effect on the iphone. when it comes to, talked about

the chip orders. china apple pay, is that going to be a definitive story in 2016? >> we'll see it by march. i like to give a little bit of a month leeway in either direction for prospective apple launches, because things change, there's negotiations with governments and such. so i think apple pay in china will be a big boost for those apple pay usage numbers it hasn't been as strong as people have expected so far in the u.s., in the uk, canada and australia. but i think given the amount of iphones sold in china, this will be a big deal. >> mark, good to see you again. enjoy the break. >> chicago gearing up for massive protests in its luxury shopping area on black friday, after outrage about the video of the police shooting. live on the ground in a moment. working 24/7 on mobile trader, rated #1 trading app in the app store.

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outrage over the fatal

shooting of a black teelker bay white chicago police officer hitting the streets again today. protesters are planning a march on chicago's luxury shopping partner. calling for the resignation of the police commissioner and a federal investigation. nbc's adam reece joins us live from chicago with the latest. >> sara, good morning to you. they're calling it economic justice. they want chicagoans and shoppers alike as they come down the magnificent mile to feel their pain about the shooting. reverend jackson says if police do stop them there will be a civil disobedience which could affect shopping today on black friday. they've got a lot of questions about the shooting. why was it 400 days before the officer was charged? and why was the family giving a $5 million settlement before the video was even released? and they also want to know why is there no audio on the tape? why don't we hear those 16 shots being fired? they're calling for justice, they want a special prosecutor. they want the justice department to get involved. and they want the state's

attorney and the police superintendant here to step down. sara? >>ed a many, thanks very much. for a knew minutes away from the close in the uk and across continental europe, the ftse, the dax, the cac and in spain, flat and mixed action in europe. the swiss franc calling to a five-year low on speculation that the swiss national bank will intervene if the ecb takes action, the big meeting coming up next week. greece reported gdp numbers contracting more than expected. and then french president hollande arrived back in paris from his trip to moscow where he attended a memorial service to honor the victims of the paris terror attacks two weeks ago on november 13th. when we come back this morning, keeping your data safe. while shopping online. the former u.s. chief technology officer for the government,

anish chopra joins us in a moment.

good morning, here's your cnbc news update. authorities are hoping that two men in custody will provide new clues into last week's hotel attack in mali. the attack at the radisson blu hotel killed 20. no word on what kind of role the suspects may have played in that attack. the two gunmen who stormed the premises were killed at the

scene. sony reports its playstation network is experiencing outages. a list of services including the playstation store, music, gaming, social and video. sony has not disclosed how long the problem could last. well the man caught yesterday scaling over the white house fence is now facing criminal charges. it happened as the first family was inside. celebrating thanksgiving. he is the first person to jump the fence since new security measures were put in place this summer. in the wake of shocking breaches earlier. meanwhile a welcome arrival to the white house, first lady michelle obama greeting the official christmas tree, it arrived this morning. no word on what the tree felt about being chopped down. the lighting is next wednesday, december 3rd. that is our cnbc news update for this hour. back to "squawk alley." carl? >> thank you very much. security is a top concern in malls, stores, shopping centers

across the country. in light of the terror attacks in paris a couple of weeks ago. nbc's sara dalhoff is in atlanta with more. >> good morning, carl. while shoppers are on the hunt for good deals, officials are on the hunt for potential threats or problems, increasing security both out here in the open and behind the scenes. black friday itself is seen as a shift with fewer shoppers wanting to brave the crowds and potential long lines. instead choosing to shop from the comfort of their own homes. 50% of consumers say they'll be out here in the brick-and-mortar stores, 60% say they plan to participate in online transactions, overall holiday sales are expected to increase about 3.7% this year. bringing in some $630 billion. consumers on average spending about $830. so what are they buying? >> the hot toys this year are pretty much anything electronic, gaming systems, ipads.

toys making a big comeback. "star wars" toys huge, legos as always. and elsa, anything frozen last year. this year barbie expected to be one of the hottest selling items for little girls. >> barbie is back. thank you very much live in atlanta. as thousands of shoppers of around the country reach for credit cards, will retailers be able to keep all of that personal information safe? anish chopra joins us on "squawk alley." good to see you. we remember the target security breach came during the holidays 2013. since then, more of us have chips in our credit cards, are we any safer? >> well we're safer than we were. but it's important to understand this is the new normal. there's money to be made in taking your personal data and so long as there's an economic return to criminals to have access to that data, they're

going to be ever more vigilant to respond to the defenses that are put in place. it seems like hackers are getting more sophisticated. just as the holiday season is upon us, we get this warning from insight partners about a new mallware, mod p.o.s. undetectible by anti-virus scans and targeting national retailers. do you know anything about this? >> i think the key that we're finding out about this is that in the prior attacks, the level of sophistication and what it would need to become an attacker was relatively modest. the people building defensive systems were ever more sophisticated to face the threat of the simpler attacks. the news here is that this particular attack is much more sophisticated than what we've seen before. and that to some degree it's a relatively good sign. which is that the easier attacks are being defended a little bit more rigorously. it's requiring the hackers to up their game. it's increasing the costs for

them to acquire our data. which hopefully means that in the overall defensive system. we're making it harder and harder for those attackers to get our data. >> anish, are you worried that consumers think i've got this chip in my card, problem solved. and they can get more lax with their security? or do you think we've learned our lesson and we're not taking any chances? >> well no, i think if there's one message for the audience today, it is to be ever more vigilant about the credit card or more importantly debit card transactions that we have on our behalf. the reason is, the credit card companies have done a good job analyzing fraudulent transactions, that's why you get the phone calls telling to you confirm a purchase. but in many cases the debit card transactions are the ones where it's a little bit less rigorously evaluated. if you happen to have a debit card, i would be more anxious about changing your p.i.n. from time to time or monitoring your

transactions statements to make sure there aren't any of those transactions that you didn't authorize. the systems are in place to try to find those. this again is a cat-and-mouse game where the attackers are trying to find ways to avoid those detection systems and the like so please be vigilant. >> what about mobile? what advice would you give for more americans which are doing their online shopping with mobile devices, smart phones or tablets? is that less safe than traditional online shopping? >> in many ways we're finding that some of the newer technologies, mobile transactions, they're encrypted on the from day one. one of the key challenges in our data systems is that if at any point in the chain the information is transparent if someone if they were to hack in could see the data. then whether that's meant for good or ill, that is a risk. what's hamg now is that many of the new mobile systems are starting out with encryption from point to point by default. what that means is even if i was a hacker and i was able to find

and see what was happening in the underlying transaction systems it looks like a bunch of gibberish if is encrypted. you want to look for systems that are point-to-point encrypted. the mobile applications trying to build those security features in are looking to implement those services today. so they're actually very secure. >> one of the things i her is i would not use a wi-fi network at somebody else's house or even retail. i mean would you, do you go to starbucks and use their wi-fi to communicate? >> well the way i would do that, is i would use a secure vpn network so that even if you were on an open network, your specific communications are encrypted. so even if someone was sniffing around to figure out what was the traffic looking like on that network it would look like gibberish if were you using some kind of a, a private network or a vpn service so that your particular communication stream

would be blocked from anybody, even if were you in a very insecure open wi-fi network. >> do the hackers want the same thing they always did? do they just want personal information? do they want credit card data? >> health care data is worth more on the private criminal marketplace, if you will so if you were to look at what's valued in the criminal marketplace, you know health records, social security data. that's with you for your life essentially. credit card data is valuable. because they can try to put these transactions on. but since consumers can swap out a credit card with ease, that's a more temporal advantage to the hackers. in the grand scheme of life, yes they're going to go after those credit card transaction systems, but they know that their ability to use that is limited. and so i actually think that is your health data and your social security data is worth more. unfortunately that's the nature of the beast we have now in the data marketplace.

>> a scary thought, anish, thank you for joining us. >> anish chopra is the former u.s. government cto. when we come back, apple's hop dal hopes, reports that the ipad a top seller at retailers this holiday. and jane wells has the toys of this holiday season. help me, you're my only hope, the force of a great jedi master has descended on the toy empire. up next, how much will "star wars" make and for whom? r2- r2-d2, i'm melting!

i'm bill griffith. coming up on "closing bell." with all the talk about retail, you would think that consumer discretionary stocks would be the big winners in december. think again, we have the three best performers over the last ten years for you for the month of december and drones are expected to be one of the big gifts for this holiday season. we'll tell you why this could be a major headache for regulators and we have the three top sellers in that drone category. melissa lee is with me today, we'll see you at the top of the hour for the most important last hour of the trading day, carl. >> thank you so much, bill griffith. between $3 billion and $5 billion. that's how much merchandise from the "star wars" movie alone is expected to bring in, jane as

well as live in san mateo is live with more. >> mpd says that total toy sales this year could reach $20 billion. up 6%. mostly driven by a franchise that now appeals to three generations. ♪ ♪ >> "star wars" is expected to dethrone the previous toy champ, "frozen" with maybe four times the sales. tim connor wells fargo says it may not be that dominant. but the force is strong with these toys. >> disney has worked very, very well in waving out products as they're introduced. so all of the products have not yet been fully introduced, just because a consumer may have purchased more "star wars" products, doesn't mean they have everything applicable to the new movie coming out.

because it's just not available. >> connor says hasbro, the biggest winner of the "star wars" toy craze says it's running short on some products so you better get your remote-controlled droid soon. other winners include mattel, hot wheels, lego and disney which is getting licensing royalties, estimated by some analysts at a tidy 20%. other popular toys this year like swagway, which costs about $400. and shopkins dolls and drones, how about a millennium falcon drone. and i prefer the odd gifts like the $65 chewbacca jacket. and there's no way to escape the power of the dark side. a $33 darth shader showerhead. i predict only dispenses ice cold water. backpack to you. >> costume enthusiast jane

wells. >> i heard the must-have adult toy this season is hoverboards. do people really use them? i think they're illegal in new york. it's hard to imagine people riding around -- >> i've seen hoverboards. >> the swagway, if you're talking about the swagway, the thing that you're on the ground and you do with your feet like a segway used to be. i thing that i'm hearing from analysts is that there's no one must-have thing. and the swagways are $400. >> back to the future style. the electric skateboards, jane, thank you. >> my favorite outfit of the day for her. when we come back, the season for stocks, what december holds for the markets. a lot more on apple and the top-selling products after this break. but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.

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the dow is down five points as we approach december next week, what stocks and sectors should you be keep kooeping your eye on, dominick chu. >> we talk about re tail stocks this time of year we know about the holiday shopping season but when we talk about consumer discretionary stocks, there's one sector over the course of the last ten decembers that's done better than consumer discretionary. according to our data partners, you're looking at it right there the average returns for the month of december for these sectors, you can see industrials actually the best performing sector overall up by over 1.5%. it's been up eight out of the

last ten decembers, utilities coming in second place, versus the s&p 500 which is up about 1.25%. within industrials very goodwining batting averages in mott of december. if you look at honeywell, it's been up every single december for the past ten years, and it's up on average 5% for the month, and then you have a couple of defense contractors. certainly a big focus given the swreeo blikt risks these days. northrop drummond up in temz of average returns. as some traders gear up for, yes, a lot of the consumer discretionary stocks to be in focus, carl, we're also watching industrials and specifically some of the defense contractors at least for the past ten years. we've had a good history of beating the market. we'll see if that trend, carl, estates true this time around. back to you. >> a lot of trends that are either going to be maintained or broken in the next few weeks. thanks a lot.

we're keeping our eye on apple. one of the most hectic shopping days of the year. an overweight rating. gene minister, senior research analyst over at piper. he joins us on the phone from minneapolis. gene, good morning. >> hello, carl. >> everybody can understand why apple is an important black friday player. >> black friday is about 1% of apple's revenue, which is about three times higher than a typical day. it's 30% of revenue comes in the holiday quarter. >> and any clues that we've gotten so far as to how this is shaped up as a season relative to past seasons? that's what we're doing today. we looked kind of more broadly. apple is not giving black friday

deals. this is the first time -- they haven't done that. now, they may surprise us and do something for cyber monday, so don't rule them out yet. the other retailers are still leading aggressively with apple products. the fact that they're really embracing these as door busters is a sign that the demand is healthy here. so far so good. >> you've been hearing a lot about the watch. i notice that ibm wauts and trends, getting into the prediction game on black friday sales, says the number one most talked about gifts this holiday season is the apple watch. usually analysts like yourselves don't factor that in when it comes to revenues and proufts. is this an inflexion point this quarter? >> unlikely this is an inflexion point in terms of impacting the numbers. it's going to be about 3% of total sales this quarter. what is more important is that the concept of the watch is never going to get off the ground. i think that alone with

investors is going to kick out after the december order. i think that the trend is moving positive, but the real break-out is going to be december 16. i'm thinking of some upgrades on the sell side. i mean, they basically argue that all these things we talked about, the watch, apple pay, apple music, apple tv are adding up to that ecosystem that we've been talking about for, what, a year now? do you get the sense that late players are finally getting religion? the ecosystem is a critical part of that. i think are you going to see a shift in temz of how people think -- how investors think about apple over the next year or two. more people are buying their phones on an annual basis. i was at an apple store today, and they said 30% to 50% of people that buying phones at the

apple store are using this one year subscription thing that they just came out. every. that is a critical impact on their business. >> another holiday question, gene. tvs are popular. how is apple tv doing? is it getting any traction? i also have been noticing on the list that video game consoles are a popular gift, and i know apple has been making a play at those kind of gamers for the new apple tv. >> this is a small part. it's a couple of% of re new this quarter. apple just said it's off to a big start the fist day of sales a few weeks ago.

something like apple tv will eliminate that. you get two $10 games, and you get them instantly, and you are going to have a plethora of games for the -- i think that that's going to be a small positive for apple, but a big negative for the traditional players like wii. >> what's to worry about? is it a matter of apple being over owned? is it about poor cash return? i mean, what is there to be -- what's the bear case that you can build? >> we talked to a lot of investors about apple, and the recurring bear theme is they're going to miss the march quarter. there's no urgency to own apple because buy it lower when they miss the march quarter. i think they're going to make the march quarter. that starts on the iphone starting to slow down. i think it they miss, the stock is probably they go up. we're getting closer to this subscription business and also

the iphone 7. the huge anxiety is there's going to be a disaster moment for the quarter. >> thanks for coming to the phone. happy holidays. disney still the biggest loser on the dow. we'll tell you why in just a moment. you pay your car insurance premium like clockwork. month after month. year after year.

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welcome back. it's a rough day for disney. the biggest loser on the dow this morning. there's still some massive anticipation for star wars, of course, and the force awakens. a new trailer is out. it's all about the bad guys. between $3 billion to $5 billion. investors will have to get over what that said about subs at espn. >> that's the bad news. that's the focus today. it's hurting some of the other media stocks like time warner as well. disney under pressure, 3%. it's been a strong year for

disney. the stock is still up more than 25% so far this year. are they girl toys for star wars? are they just boy toys? this new character, ray, is going to be the substitute for leah. >> i know princess leah, and i have a lot of homework to do. i do have tickets. >> let's get to bill and melissa for the close. >> it is family day at the new york stock exchange. you'll hear lots of voices behind us here. i'm bill griffeth. black friday means a shortened market day, and we are kick offing the last hour of trading right now. while some of the malls and stores are looking much calmer than in previous black fridays, retailers are still optimistic about sales for the whole shopping season. we'll talk