>> good morning, it's 8:00 a.m. at apple headquaters and 11:00 a.m. on wall street and squawk alley is live. ♪

the markets relatively flat, the lie, a lot of news today whether it's politics, earnings, central banks and apple a strong gain for apple shares profited estimates and company says that iphone and ipad shipments were better than expected. josh lipton talked to tim cook and joins us with more this morning. >> i feel fantastic about how the iphone did. that's what ceo tim cook told me about the products performance in q-3. investors also seem encouraged breathing a sigh of relief this morning and that's in part because the pressure on the iphone isn't getting worse. in q-3 units were down 15%. it's about the same as q-2 and now looking ahead they'll be down 8% in q-4 and the se is

attracting a whole new group of apple fans. one point of concern in the quarter, greater china down 33%. cook acknowledging near term concerns there including economic weakness but on the call he sounded bullish about the long-term. >> we opened our 41st greater china retail store during the quarter and also made a $1 billion investment. switchers and smartphone buyers represented our shares in the quarter and our base has grown by 34% over the last year alone. >> when i asked about china he noted despite economic challenges the china business remains in his words really good. investors also like to hear that cook isn't just spending money on updating his current products.

he said that apple is investing in products that you can't buy yet. couple with that his comments about chuy need ride sharing company where he said there are strategic things they can do together and you can't blame investors for thinking about the possibility of that. >> no, you can't. >> let's take a closer look at the stock and the company. good morning, guys. >> good morning. >> i know you got your overweight. does the quarter remove or wash out worries that there's cuts to come. >> going into this it was anybody's guess in terms of how the iphone was going to be at the end of this disappointing cycle and i think that the guidance that was fractionally prove where the street was at was a sigh of relief and gives investors the chance to think

about what the iphone 7 is going to do and what will happen in 2017 with the anniversary edition. >> there's a couple of things that jump out and the iphone se and more of an inventory draw down and actually sold or more were reflected in the quarter because of the big draw down on inventory. what does that tell you about how apple is surviving, thriving, in this environment where luxury phones, smartphones are doing well. >> >> they can fill inventory in late september when they announce the product so i think that's why they're confident about it. >> there was another draw down

for the first time in two years. we heard josh mention a couple of the investments in the quarter but do you see that trend continuing? apple getting more liberal with the way it uses it's money. >> they have to. and you'll see that trend down. tim cook has been clear that they're being more inquisitive. he said they are making an acquisition about once every three weeks right now. most of those are small. but investors most importantly want apple to do more with their balance sheet to lay the ground work for future growth monthly active users weren't as bad as

expected but overall revenue not great especially on the important advertising line and eps okay. but overall is there anything to take away from this twitter report to make you feel better about the company? perhaps the engagement and content strategy they seem to be pushing now? >> video hasn't gotten traction yet. i'm going to feel better if i see the deals they signed with the nba and nhl and nfl actually result in higher engagement and more time spent on twitter and that's what advertisers are looking for too. >> there's some of those events in the third quarter, do you think that video will pay off in the near term or do you think it's a longer term bet? >> it's a longer term bet. we're seeing price pressure on the missing business because

they're the high priced version of advertising on social media and there's still going to be pressure in the third quarter. >> speaking of companies that are adding users facebook tonight, we already had discussions at this table this morning about the one and i mean one cell that's on the street right now. does that make you nervous? >> yeah it always makes me nervous when everyone is on the same side. that's one of the reasons apple is doing well today is people are so negative going into it. so yes it makes me nervous about how facebook is. the good news they have is everyone knows a lot of big drivers in the future that they haven't capitalized on. instagram is about one fifth what facebook is and they can turn that up. there's so much good that the near term doesn't matter. >> appreciate the insight. good to see you both.

>> thank you. >> when we come back, history in philadelphia. hillary clinton officially nominated for president of the united states. the biggest takeaways and what to expect later tonight with potus. and mondelez in red and the man that got nintendo right. we'll talk to a hedge fund manager that pushed nintendo years before the launch of pokemon go when squawk alley comes back. ♪ bend me shape me, any way you want me as long as you love me, it's alright bend me shape me, any way you want me... shape the best sleep of your life. sleep number beds with sleepiq technology adjust any way you want it. the bed that moves you. only at a sleep number store.

you're here to b great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business.

i am so happy. it's been a great day and night. what an incredible honor that you have given me and i can't believe we just put the biggest crack in that glass ceiling yet. >> a historic night in u. s. politics. hillary clinton becoming the first woman ever to become a nominee for the first major political party for president. former president bill clinton her husband taking the stage last night offering a rebutal to long standing efforts to demonize his wife. take a listen. >> there are clear achievable affordable responses to our challenges but we won't get to them if america makes the wrong choice in this election. that's why you should elect her. and you should elect her because she'll never quit when the going

gets tough. >> tonight the hilary sales pitch kicks into high gear with president obama attempting to help unite democrats as well as vp nominee tim cain and vice president joe bide b and from washington former marco rubio campaign manager terry sullivan that's now a partner with firehouse strategies. we'll start with you because the former president spoke last night from his role as witness to hillary clinton being a change maker throughout their marriage. was that effective in shedding the establishment branding? >> it really wasn't. it worked wonderfully for jeb bush during the primary process. now voters, not just republicans and democrats they want to burn down washington and talking about your experience in washington and government and

getting things doesn't isn't what people want. democrats almost nominated a socialist and republicans nominated a reality tv star so you think talking about experience in government just isn't the way to connect with voters this cycle. >> interestingly, this speech concerned her experience in policy through her advocacy for children and minorities and spent less time on her record in the senate and as secretary of state. why do you think that was? >> well, this campaign, this convention is going to be a process and every night of the convention had a different part of her story being told and they're weaving together the threads of her life to get us to a certain point and now we're talking a lot about the past and you can't run this campaign based on government experience. this is a campaign for change but the question is change to what? are we going to change to someone like donald trump that's arguing that we should pull

apart and blame each other and look at our neighbors as suspicious because they look differently or worship differently or love tirgdiffere? no, we should be pulling ourselves together and love trumps hate is the message coming out of this convention. >> two words haven't appeared anywhere at the convention. one being isis and the second being e-mail and to that end presidential nominee donald trump was speaking moments ago about e-mail in particular. >> russia, if you're listening, i hope you're able to find the 30,000 e-mails that are missing. i think you will probably be rewarded mightily by our press. let's see if that happens. >> your response to that? >> i can't think of a more disastrous way to start this convention than focus on hidden e-mails and just when you think

that the republican convention got as bad of press coverage as it could the republicans figure out a way to trump it. it's a fools errand to stand on stage and try to make hillary clinton likable. it's not going to happen but it doesn't matter because republicans are, donald trump isn't likable either. but the difference is do you have the unlikable crook or clown. >> this is not just about the voters. it's about particular types of voters and for hillary clinton he does have a place to go with white women and there's a lot of women today that woke up and said i learned things about hillary clinton over the last couple of days and a couple of folks talked about that.

and who have daughters and they're talking to each other about what to do in the course of this election and it's incredibly important way to get those voters for her. >> we just heard donald trump say russia, i hope you're able to find those 30,000 e-mails. now from a technology perspective, hackers, is there any risk there. you just called him a clown but he just said something about russian hackers that's a head scratcher. >> look, donald trump saying things that are a head scratcher is nothing new but doesn't seem to hurt him so the voters almost embrace it so yeah he is communicating with the russian government to figure out how to hack the u.s. government. it's bizarre but it works

because he says salacious things and the media covers it and that, this cycle, sells. >> and we don't know what the russians are doing but we do know what donald trump is doing that's going to and it's talking about not defending nato allies. who does that benefit. it benefits vladimir putin and russia so the question is not just does that go down the dark tank of what is happening with this and having less conflict and donald trump is the one that seemed like. >> some of these questions might be answered if donald trump would release his tax returns as we learned this morning.

that would have been flown for candidate mitt romney. >> yeah. or any other candidate. donald trump doesn't play by the same rules and it works for him. it does. trying to assign the traditional rules of politics or public relations just doesn't work. it doesn't matter. >> we will see what night three of the democratic national convention brings. jamal simmons, terry sullivan, our thanks to your both. >> thank you. >> by the way, gop presidential candidate donald trump will take questions tonight at a campaign event in florida along with the reddit ama. we'll bring you any news as it becomes available but he has already made comments which he says are out of date. >> meanwhile they wrap up a two day meeting in washington. the question, when will they next and what role will the election play in it's decision. steve with what to expect.

>> hey, guys, there's little chance of a rate hike today there is some nervousness the u.s. central bank raises the possibility of a september move. the cnbc fed survey sees the next rate hike coming in december on average and just one rate hike this year along with an average year end funds rate of 0.6% but they warn the market is warned and that the fed could introduce the risk and the sharp decline of bond yields and stock prices raised the stakes on getting the fed wrong. the keys to the meeting are how much they upgrade the economic outlook today. since the last statement prospects brightened a bit as did the job's picture though the inflation looks amerimurky. will they monitor the fall out or signal less worry by dropping the word closely.

and does she resume her ways after putting them on hold in june. is she joined by others that want to hike now. finally the fed will never say this but if business contacts are telling them that presidential election creates economic uncertainty. the fed might choose to wait until december before acting. back to you guys. >> thank you. steve, mondelez shares down 1.5%. after a mixed quarter beating on earnings but missing on revenue. coming up irene rosenfeld is going to join us on a cnbc exclusive. we'll be right back. [child giggling] child: look, ma. no hands. children: "i", "j", "k"... [bicycle bell rings] [indistinct chatter] [telephone rings] man: hello?

[boing] [laughter] man: you may kiss the bride. [applause] woman: ahh. [indistinct conversation] announcer: a full life measured in seats starts with the right ones early on. car crashes are a leading killer of children 1 to 13. learn how to prevent deaths and injuries by using the right car seat for your child's age and size.

everyone talks about what happens when you turn sixty-five. but, really, it's what you do before that counts. see, medicare doesn't cover everything. only about eighty percent of part b medical costs. the rest is on you. consider an aarp medicare supplement insurance plan insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it could really save you in out-of-pocket medical costs. so, call now and request this free decision guide. discover how an aarp medicare supplement plan could go long™ for you. do you want to choose your doctors? avoid networks? what about referrals? all plans like these let you visit any doctor or hospital that accepts medicare patients, with no networks and virtually no referrals needed. so, call now, request your free guide, and explore the range of aarp medicare supplement plans. sixty-five may get all the attention, but now is a good time to start thinking about how you want things to be.

go long™. chocolate cravings making a bid for hershey earlier. our own sarah and a special guest. >> i'd like to welcome back to the show irene, the share man and ceo of mondelez that joins

us by phones. >> the question on everyone's mind is what is the status after the rejected offer last month. >> as you would expect we don't have any to make. >> and this timing here, investors are in limbo. >> i think we have a lot of investors and solid quarter in a very challenging macro environment. we continue to return cash to our shareholders and i think our back half will strengthen given some of the investments we're planning to make. >> as far as the results go the deal is interesting because it would give you more exposure to the u.s.

north america is a spot on your report again. it's the only place you saw growth. and it's areas of continued and in emerging markets and we continue to see the long-term growth potential and those markets are quite sizable. >> speaking of long-term growth potential, entering that market and how popular is chocolate in china and what are you looking for in terms of growth at a time when some big multinationals are reporting a slow down in china and starbucks. >> well, long-term opportunity

for us there and it's just about every other market in the world and it's the access of our brand and help the strong profile we have in terms of offering variety of consumption occasions and we see this as a terrific opportunity and biscuit and and you think about it, we just entered the gun market about 3.5 years ago. so we see a similar opportunity. >> what about we begin to ponder the after effects? >> we feel quite good about our momentum in europe and that's an area we will continue to invest in the back half and continue to

be up by half a point driven by chocolate and biscuits and we have great hope for the continuing in our time line in europe and significant margin improvement and increase our margins to 18% up 300 basis points. europe will continue to be an important area of investment for us. >> i have to ask, you're such a big global company, protectionism is on it. and especially donald trump. we know how he feels about oreos. and does manufacturing abroad. do you worry about a trump

presidency? >> and we will stay focused on what we can control. we have a very robust strategy that allows us to source from a variety of countries around the world and we expand the footprint of those brands so that will be our continued focus regardless of the outcome of this election. >> i know the margin improvement is a big focus for you as well. thank you for joining us on the results as always. that is irene rosenfeld. the chairman and ceo of mondelez. >> thank you. let's get a quick market flash here. >> good morning, carl. we'll take a look at a couple of the movers today. down about 16% early trading after their second quarter profits rose about 10% on strong revenues from the cloud security business but the company warns that third quarter results could drop as it's big silicon valley

customers invest in their own infrastructure on that front and shares taking a hit and shares falling 17% in their debut. the drug developer launched by high profile executive opened at 11:55 a share. it priced at $12. it was between 16 and 20 earlier on. they're tracking for the worst ipo debut of the year for ipos greater than $100 million in market cap. remember 49 ipos priced so far this year. that's about 58% lower than the same time last year. 116 deals already priced at this point guys. >> it's a strong close in europe. basically on the earnings. earnings coming through positive for the session overall. we don't know what the u.k. economy is going to do in the wake of the brexit vote. gdp data old.

cpi trends negative but perhaps not everything. what's interest as good the way in which the builders and the housing stocks have rallied today. this is partly because one of the major builders has said it's business is as normal. it's taking precautions but things aren't that bad and what you could argue is the u.k.'s answer to zillow, right move has come through reaffirming their full year expectations so you see how the property stocks rallied strongly. another sector rallying today is the luxury good sector after lvmh reported. it's leather, it's fashion, it's champagne sales in this country are doing well and that's lifted the entire sector as you can see. air france is interesting. the results are not as bad as many people feared but they are explicitly warning now of a special concern that people around the world will have on traveling to france.

the stress tests come out in europe. 5 1 major banks in europe. and the ceo and a lot of reports about the degree of which on monte paschi on friday night. at the same time reuters reporting that the european union has a theoretical plan to wind it down if that's necessary. but the view seems to be that something is going to happen and when everybody gets that data. right back to you. >> more unity on display last night at the dnc. we'll talk to linda sanchez that spoke on stage earlier in the

week. dow down two points narrow range. we're back after the break.

here's your cnbc news update at this hour. injured after a bombing. and syria. isis claimed responsibility for what is said to be a truck

bombing. hundreds march to the american embassy to protest a visit by secretary of state john kerry. and the group was blocked by police in riot gear near the embassy. former house speaker hastert's prison sentence is extended by nearly a month. he began his 15 month term a month ago in minnesota. and california officials say the huge blaze in northern los angeles county is 40% surrounded. it grew slightly overnight to nearly 60 square miles. a hand full of neighborhoods are being evacuated and one death has been reported. that's your cnbc news update. now back to squawk alley. john. >> thank you, sue. and the presidential nominee and

bernie sanders and official and her ability and trump's ability to effect change. here's what he said. >> speeches like this are fun. actually doing the work is hard. so peel say, well, we need change. he's been around a long time. she sure has and she sure has been worth every single year she has put into making people's lives better. >> linda sanchez joins us now from philly. she spoke now on day one at the convention. congresswoman, thank you for being with us. >> yeah, my pleasure. thanks for inviting me. >> my question is about enthusiasm, particularly in the battleground states. what is the plan -- what's your plan as a supporter of hillary clinton to try to translate what they're trying to create there

in philly to actually winning this election? >> well, you know, it's going to take a lot of people turning out to vote in order to elect the next president of the united states and i think the big key is engaging communities that have been turned off to politics that are maybe a little bit jaded that haven't heard the positive message of the vision that hillary clinton has for this country and once that starts to penetrate the enthusiasm is going to build. i think, you know, there's been a lot said about hillary clinton. for 30 years people have criticized her but now she is finally getting to tell her story and people are coming to the convention. they're hearing these amazing stories of how she has invested in families, how she has helped people personally. how she has kept in touch with them over the years. they're telling people the story of the hillary clinton they know that they see when nobody else is watching and i think once that story gets out the enthusiasm is going to go through the roof. >> congresswoman, for a candidate whose negatives are as

high as hillary clinton's are and we have seen that reflected some what in the bernie sanders supporters that have continued to be vocal despite his attempts at unity, do you need to take a different tact than you would in general elections past? >> look, again, i think those bernie folks they were emotionally invested in their candidate but i don't know how anybody listening to the speeches last night could sit back and say that donald trump is a better option than hillary clinton. it was powerful last night. the stories were moving. they talk about the hillary clinton that i know and again i think once that message penetrates people are going to sit up and say hey everybody we have been told about this person is not true. she's actually produced results that make a real difference in people's lives and that's the kind of leader we want in this country. somebody that works tirelessly. who gets stuff done. that doesn't just promise, he does the hard work to get it

done. and lifting each other up and not tearing each other down. >> we learned a lot about her personally but for the two days that the party has left do you expect the conversation to pivot to national security? >> national security will be an issue where hillary's credentials will be highlighted. the fact that she is so knowledgeable about who the players are and what's at stake and her demeanor in dealing with these leaders around the world versus somebody that's thin skinned and somebody that uses insults and bullying and somebody that's tempermentally unfit to lead this country. hilary is the only choice as commander and chief and that case is going to be made in the upcoming days of the convention. >> i'm sure you have seen this gallop poll that shows her

unfavorables and favorables match those of prump trump. should she address these issues that have her so unfavorable head on? >> a lot of the unfavorables, whatever you want to call her rating is driven by untruths and misrepresentations about her past record. i served on the benghazi committee. i went through 8 prior reports and the testimony contained in the reports and i will tell you that the conclusion of it and

once the information gets out there and people begin to hear the truth that's going to drive -- i think that's going to drive her success in november. the unfavor blts that she has are because people are just essentially lied about her and tried to tear her down at every turn and i'm going to tell you, people are tired of personal attacks in politics. they're tired of, you know, accusing other people and blaming other people. they want somebody who has a vision for this and donald trump has not. >> we'll see a lot more attacks from both sides. just a hunch as we draw toward november. congresswoman, thanks for joining us. >> thank you for having me.

>> and make sure to tune in tonight at 10:00 p.m. eastern. carl and kelly and michelle are going to be hosting special live coverage of the dnc. >> when we come back, the man that got nintendo right. we'll talk to a hedge fund manager pushing nintendo toward mobile long before the release of pokemon gone. plus norman lear on which group hollywood needs to embrace right now. what he told us when squawk alley returns. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. i've got a nice long life ahead. big plans. so when i found out

medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it helps pick up some of what medicare doesn't pay. and could save you in out-of-pocket medical costs. to me, relationships matter. i've been with my doctor for 12 years. now i know i'll be able to stick with him. [ male announcer ] with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and virtually no referrals needed. so don't wait. call now and request this free decision guide to help you better understand medicare...

and which aarp medicare supplement plan might be best for you. there's a wide range to choose from. we love to travel - and there's so much more to see. so we found a plan that can travel with us. anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. remember, all medicare supplement insurance plans help cover what medicare doesn't pay. and could save you in out-of-pocket medical costs. call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now - and down the road. i have a lifetime of experience. so i know how important that is.

>> coming up on the halftime report, the very bearish call on apple two days ago is back and analyst is on the defensive today as that stock surges. and the waksals are back. and ceo of kadmon joins us on the day of that company's ipo. looking forward to that. see you in about 15 or so. reason we're watching what's happening right now, we're seeing chairs of abinbev and coors. they are trading now moving to the down side on the heels of headlines suggesting that sab miller was set to order a halt to its integration work of course. this all comes on the heel of the big blockbuster deal to buy molson coors.

we have calls out to all the parties here involved. it's also worth noting here that the reason why coors is down on this news is coors would take over some of the properties had this deal gone through so carl certainly stock moves. bring you more as we move to our side. >> thank you very much. meanwhile legendary tv producer and writer norman lear turns 94 years old today. we sat down with him for an interview for our digital series binge. here's a sneak peek. >> you got the documentary, you got your book, you got multiple sho shows. is this an attempt to make younger people look lazy? >> it's all an attempt to show it can be done. >> how do you stay so present in each moment? how do people fail to do that?

>> i think the two considered small words in the english language maybe over and next. and i live in that moment. this is it. this is the best conversation i could possibly be having. >> so, finally embrace an older demo because for years all we heard is that ad buyers are not interested in those viewers. do you think it's time? >> well i know it's time. but whether they'll think it's time, i don't know. but the way it was at the very beginning of my life in television, if we get them, if we get a young couple earlier in their marriage to buy a chevrolet, the chances are

they'll stay in the general motors family. they'll go to a pontiac and buick and cadillac et cetera. and the other thing i hear often is older people are set in their ways. they're not going to go into a new direction. and that too is [ bleep ], if one can say that. >> norman lear, season two of binge, conversation with content creators is streaming on cnbc.com, apple tv, youtube and hulu. developing a new project with a set of older elderly characters. he believes eventually media is going to pay attention to the demographics of this country and start catering to the viewers. ad buyers too. >> and with the vocabulary of a sailor. >> he looks 74. like in a good way. >> unbelievable. >> anyway, great interview. up next, we're going to talk to a hedge fund manager that's been pushing nintendo to move into smartphones long before the release of pokemon go.

behind his strategy when squawk alley comes right back. i asked my dentist if an electric toothbrush was going to clean better than a manual. he said sure...but don't get just any one. get one inspired by dentists, with a round brush head. go pro with oral-b. oral-b's rounded brush head cups your teeth to break up plaque and rotates to sweep it away. and oral-b delivers a clinically proven superior clean versus sonicare diamondclean. my mouth feels super clean! oral-b. know you're getting a superior clean. i'm never going back to a manual brush.

nintendo trading lower, after recording a loss, despite the massive pokemon go thinking the company has long leg, he joins us. >> thanks, carl. seth fischer, chief investment manager of a hong kong based hedge fund managing about a billion dollars. much in japan, an emphasis on

stocks, long and short side. seth, thanks for joining us today. i want to read something you wrote in 2013 that seems remarkable in hindsight. you wrote, we believe nintendo's historic catalog of gameless go straight to the down charts, open nintendo to the entire china market. a quick look at charts today in terms of pokemon go. seems like remarkable words. how did you come to that conclusion back then? >> well, look, at the time we saw that, we realized that the console you had at home had less computer power than the device in your pockets. first of all, more commuting pourer in your pocket to play a mobile gay. we'd seen knockoffs, business nintendo had not been in, had a poor foll portfolio you could use on your

mobile device. not that they're purists. wanted and liked the console business at home, but the reality, the same way people, may be the best way to watch a movie, watching a movie in imax, the -- phenomenon, everyone's watching movies on their ipads. same, too, maybe the best gaming phenomenon is to play on your console at home, but everybody wants to play mobilely. you can see, people are playing it everywhere right now. >> so, seth, a hit game now, obviously. one thing that's caused the stock to tradeoff, realization, not that it was hidden before, nintendo doesn't have that much participation in the up side so far and we don't know the full details of that. what is your sense how much they're benefit from pokemon go and are they positioned to profit from future games, if this deal is any indication? >> sure. let's start at the beginning. stock prices are still up 70% from when the larger pokemon go. yes, it's actually -- it's off

33% from its actual highs, the high of the stock was 32,700. stock in tokyo today closed at 32,200 and trading down about 10% back of earnings today. yes, the stock is down significantly last couple of days but up a a lot since the launch of pokemon go. this is not just about pokemon go. you're right, that the actual, the booked earnings from pokemon go is going to be something around 12% of the total revenues, and yet we think on a full look-through basis something like 20%, 22%, because they own this in a variety of holding companies, in between pokemon go and down to them. so on a -- a full base, get a larger share than the accounting basis that will report in earnings next year. >> seth, the longtime position, go into the smartphone, detach the intellectual property from hardware you get commoditized.

the question is, is it clear yet how you do this in a way that avoids that eventual outcome, actually diluting the intellectual property in other places you're trying to sell it, on nintendo consoles. are they out of the woods as far as that's concerned? >> i think they're far of you 0 the woods. complete and total proof of concept. nintendo has a number of things. iconic ip not easy for anyone else to copy. taps into the nostalgia we're going through, everyone in the world, especially america now, in terms of mario and luigi and pokemon that's hard to copy. the phenomenon, is larger audience base to buy products. yes, sell to 5 million wii users people, consoles, or sell to 1.3, 1.5 billion smartphone makers. i prefer the 1.5 billion than the 5 million potential purchasers.

>> seth, been a nice run-up for your fund. oasis capital management so far and also perhaps and indication how activism can be successful in japan. thank you for joining us. back to you, carl. >> thank you, kate. when we come back, facebook, as you probably know, set to report tonight after the bell. we'll talk about what to watch for in a moment. . on average, one in 6 americans will get a foodborne illness this year. so, learn the right temperature to cook each type of meat. keep your family safe at foodsafety.gov.

facebook second quarter earnings set for tonight. the social networking giant expecting strong results, pushing to expand mobile advertising and adding users across the board. contrast with twit continuing to tumble today after revenue last night in at the lowest pace than beginning life as a public company and year on year the gains in the u.s. under dorsey's term negligible. really. >> not even twitter versus facebook at this point. even facebook er versus messenger split off more of its own productisher its own development cycle and could be monetized on its own. interesting to see how facebook talks about those areas that are growing and haven't been monetized yet. >> of course, the faocus line, expected to grow 45% to 55%. see if they can come in line

there. otherwise, investors might be disappointed. >> get ready for fireworks tonight. meanwhile, oil inventories took wind outf the market sales mid-session. down about 25 points. a lot to get to with the fed statement at 2:00. over to the jump and "the half." over to the judge. welcome to the "halftime report." i'm scott wapner. top trade this hour, the apple aftermath. that stock surging today after the company's earnings beat expectations on better iphone and ipad sales, guidance also better than feared. our question is this -- are concerns be a the biggest company on earth simply overblown? with us for the hour today, stephen weiss, josh brown and jon and pete najarian, from the new york stock exchange, kevin o'leary, and great have you with us, and you guys here as well. talk about apple. pete. >> hmm? >> does this