good morning, it's 8:00 a.m. in las vegas, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ good tuesday morning, welcome to "squawk alley," i'm carl quintanilla, courtney reagan joins us here at post 9,

john fortt is live in las vegas at this year's consumer electronics show so much news coming from ces today, bringing us to faang stocks joining us this morning to talk about it, btig's managing director, andy hargreaves, senior research analyst. good morning to you both on ces, so many of these names are presenting this week, are having workshops for developers, and unveiling ostensibly technologies that are going to drive earnings higher. how much of a catalyst is ces this week? >> there's always something that becomes the theme of the show, but it doesn't always necessarily translate into a lot of revenue and earnings growth we talked about artificial intelligence and the goggles that people were wearing a couple of years ago for virtual reality, excuse me, and didn't really materialize in anything that significant for these companies. so it's fun to see new products and hear a lot of the teams

update investors to start the year off, but i wouldn't get too overboard on it impacting 2018 or giving us insights in what's happening in 2018. >> all right so products aside, what is driving the sector, what's your outlook for it this year >> well, for us the wireless industry in general, it's been not that competitive in the united states for the past year. t-mobile just preannounced great numbers again today. the real question is, is comcast going to have an impact and what does that mean in terms of incremental phone sales for investors? upgraded rates are all-time lows, people are holding on to their phones longer than before. there wasn't a lot of promotions in the fourth quarter. you need more incremental competition to help the drives of phone sales asps alone is not going to be enough to be able to deliver the consensus revenue estimates that are out there. >> andy, these faang stonfaang stocks moving higher yesterday

and today. tax reform on some of these names, both with the change in depreciation and, of course, the effective tax rate can you run us through the faang stocks where you should be positioned as an investor in these names? did you miss that entirely can we still move in >> i think you can stillmove in i mean, as we look at these business models, they continue to look like some of the best in the world. these are the companies that are best in class at not just collecting and analyzing data, but turning it into usable products they are all global businesses with extraordinary scale, and if you look at the multiples, a lot of them haven't expanded, despite the market strengths, so from a growth evaluation standpoint, they still look very attractive >> so it's not priced in, some of the tax reform impacts that we could have here going forward for the faang names specifically >> tax reform is certainly a benefit. not as much as some of the other sectors that are more domestic focused, but it doesn't hurt and like i said, if you're

looking at that valuations of growth, they still look really good >> walter, voice interface and connected home seem to be a couple of those trends at ces that are continuing. the frustrating thing is, we don't have unit numbers on how many echoes are out there or a sense of the economic power of this movement, but to what extent do you think some of these voice interfaces, these, you know, alexa, cortana, google home, google-assisted enabled devices could have the same disruptive effect the browser had 15 years ago >> professor galloway touched on this recently. that's a risk that exists for how we interface with our phone, where everyone is staring at a screen and the voice interaction is one of those things that could present risks to apple, but as far as an opportunity, it's very early stage. even the cable companies, which set out boxes in your homes can try to take advantage of this,

given the presence they have in the home siri is something that's going to develop, but i think sometimes people get overexcited about the impact of alexa. to your point, we don't know how many are in people's homes right now. i'm guessing it's fairly limited. in the future there's a tremendous opportunity for whether it's apple or amazon or google or even the cable companies or telecom guys to try and own that presence in your home that will control that voice interface. >> walter, we appreciate your time today obviously, a lot to process coming out of ces, so walter of btig andy is going to stick around. one faang component does find itself in the headlines again today, that's apple defending itself from concerns about the use of iphones and kids. josh lipton has that story josh >> carl, apple now officially responding to these criticisms from a shareholder of calstrs saying in a lengthy statement, apple has always looked out for

kids and work hard to create powerful products that inspire, entertain, and educate children, while also helping parents protect them online. we lead the industry by offering parental controls built into the operating system apple continued by detailing the ways it helps parents right now restrict what their kids see, saying with today's ios devices, parents have the ability to control and restrict content, including apps, movies, websites, songs, and books, as well as cellular data, password settings and other features. effectively, anything a child could download or access online can be easily blocked or restricted by a parent apple went on to say more help is on the way for parents, noting the company has new features and enhancements planned for the future since 2008 apple has offered parents controls for its devices, but calstrs is saying apple could do more, that these devices can do great harm to children, and they are not alone

in the worry tony fidell weighing in on twitter, we need to control our own environment and we need information. step one, we need to know where the line is and when we've crossed over into addiction. two, we need usage habits reflected back to us our smartphone bottle needs to tell us when we've had enough. this debate is heating up. tune into "halftime report" today, barry rosenstein and anne sheehen will be on to talk more about the issue. guys, back to you. >> thank you very much, josh, we'll be watching for the half to what degree is this a threat to apple >> i don't think it's material to earnings in the near term i completely agree that there can and should be more to be done this is a sort of kpis sten shl ri -- existential risk to apple

and society and they need to make sure we and our children are safe, but i think in the near term what's going to term, you know, apple's growth is how many phones they sell and that's not going to depend on child protection >> things they are not doing that they should do, do you have any ideas? >> i think there are studies that have to be done tony put it well, you have to determine where some of the lines are here between helpful usage and addiction, and while apple provides a lot of controls, they don't give us the tools to effectively use those controls, because none of us know what the tools are even, so i think that's where you could see incremental work, in the research process >> interesting, of course, that apple is the one that's being targeted in all of this. certainly not the only one that sells its products with screens that we're addicted to is this the right target >> well, you could certainly point to the social media companies. facebook at the top of the list is probably the headline targets for this kind of stuff, because that's where most of the time is being spent, but that doesn't

mean apple can't do its part >> yeah, guys, as a bit of a gadget geek and, certainly, a parent, i got to say, no software tools are going to save you here if you are a parent concerned about this and you haven't familiarized yourself with what you can do in ios and how amazon has more granular controls that control the amount of time your kids are spending, you are lost. at a certain age your kids are going to do their homework, so don't expect apple to come in and save you it's not going to happen >> yeah. i mean, the point is, it's an issue not just for kids, right, it's adults who are addicted, as well, and continue to text even though we're driving and operating a motor vehicle, so to some degree fadell has broadened that debate today, even though apple's response, clearly, is about children andy, thank you very much, joining us to talk about the apple news today we are getting breaking news from boeing and for that we're

going to turn to phil lebeau in chicago. phil >> boeing out with annual report on orders and deliveries in 2017 and it was a record year that's the key to look at, that's when they booked their revenues, when they turned over the aircraft to a customer, boeing delivering 763 commercial airplanes last year, an all-time high the previous record was 762 in 2015 for boeing it sets up what happened as far as its backlog and the orders last year came in at 912, with a book value of $134.8 billion we talk about the backlog, carl, think about this, it now stands at a record high of 5,864 commercial airplanes that's seven years' worth of production, so if you're a billionaire, gazillionaire and you want to buy an airplane, you're waiting well past 2020 to take delivery. back to you. >> we'll go 50/50 with you,

phil, fly around the country in our own 787. thanks switching gears to intel, the ceo addressed security flaws. john has a complete write through of that. hey, john. >> yeah, addressed onstage at the beginning of his keynote last night they'd rather be focused on other things here's what he said. >> well, our processors, products, introduced in the past five years, intel expects to issue updates for more than 90% of them within a week. and the remaining by the end of january. we believe the performance impact of these updates is highly independent >> now, it is not at all clear the updates, though, are all going to go smoothly amd announcing that microsoft had pulled an operating system

update that was supposed to address an amd issue with one of the specter variants it was not playing nice with amd's older processors of course, we had amd's ceo lisa su with us yesterday saying this is a serious issue, but the industry is working together to solve it i have other questions about other processors, qualcomm, what happens with android people need to keep in mind this is primarily a problem that affects high performance computing systems. that's primarily going to be intel and amd-type systems, but does affect some systems, all iphones, ipads, and macs remember, android is harder to patch. so, you need to check manufacturer by manufacturer guys, back to you. >> thank you very much, john likely an issue that he didn't want to start out a conversation about, but couldn't not address it thanks very much target releasing their

holiday sales number, the first of the big box retailers to do so holiday sales increasing 3.4%, far above 2 #%, which was the growth guidance target gave us in mid-november. shares are higher by almost 3% in reaction today. back on november 15th, target stock dropped 10% on what investors deemed to be disappointing holiday sales guidance and the wide earnings forecast both of those proving to be conservative target now increasing and narrowing its fourth quarter earnings guidance, and subsequently the full year earnings guidance, too, both from the stronger than expected holiday sales and the tax benefit. just about six to eight cents for the fourth quarter when you look into the math, it's the sales that are the bigger beneficiary for the earnings boost for target. target also says stores fulfilled 70% of sales through shipping and pickup and all five categories, including food and beverage, saw the comp sales improve in the holiday quarter or period from november to

december the retailer also giving initial full year earnings guidance far above analysts consensus target will triple its store remodel program to 325 stores, open 30 new format stores this year, key nodes for faster distribution to shoppers, particularly in urban areas. while target doesn't come right out and give us any big plans as a result of the tax reform, they say they are going to continue to use the benefits for the longstanding capital deployment priority, so the dividend, share repurposes and store remodels. >> includes food >> food and beverage as well as home and essentials. that's impressive. still only 20% of the business, when we look at walmart, significantly more, more than half, but still it's a traffic driver which is important. >> go in for broccoli, end up getting something else, as well. >> exactly >> we're watching for sure we have a big show ahead ceo of roku joins us next in a

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we're live at the consumer electronics show in las vegas this morning our john fortt and julia boorstin are there with the ceo of roku.

hey, guys. >> good morning to you, carl and anthony woods, ceo of roku, thank you for joining us here from the floor of ces. you've been making big announcements that are really about voice. how important are these voice and home assistance that's all over ces going to be to your future >> the way we think about it is, televisions are great for watching tv, but also people like great audio on their tvs, so what we're focused on this ces is announcing features that make it easier to connect great audio to your television we view people building home entertainment networks in their house easily by connecting, you know, audio and video equipment one piece at a time and a roku tv would be the center of that so we announced roku connect, which makes it easy to connect audio devices to your tv and announced the roku entertainment system, a system focused on being the best way to control your home entertainment network. >> of course, both google with the chrome stick and amazon with

fire are trying to provide platforms for watching entertainment, and they are also really investing big in this voice space. we see it all over ces, amazon and google have a big presence with that here it's so hard to lock people into your ecosystem when you're competing against them what's your pitch to consumers and advertisers when you're up against those giants >> let's not forget, roku is the leading streaming platform for tv in the u.s., by a large margin, and we achieved that position by having the best content selection, easiest to use, and the best value for customers. our announcement today is about making the roku tv a better tv i'm super excited about innovating in the tv space and making a tv that's built for the modern connected world that's why things like roku connect are essential to the next generation tv ecosystem >> how should investors think about the economic impact of voice and audio? does it make people more likely

to upgrade their equipment more often if they are using those features, do you think is it going to make them more likely to go 4k, more loyal in some way what >> our goal is to be the tv streaming platform we are the leading platform in the u.s., we want to retain that position, so for us making the roku tv platform better is our main goal here our business model is, we grow scale of our active accounts and monetize those active accounts through advertising and content distribution our announcements at ces are around making the platform even more appealing >> is that engagement you're going to measure that by how is an investor going to be able to measure how better is playing out, perhaps because of the voice features, the audio features >> well, by making the roku tv platform better for consumers, powerful, easier to use, better audio, that means more consumers

will buy roku tvs. that's our hope over time. >> a lot of your profitability comes from advertising, at what point do you think ads on the voice platforms will be meaningful to your bottom line sounds like from advertisers i've talked about that they are still trying to figure out how to make those ads work >> well, for us, again, we're not necessarily trying to directly monetize our audio ecosystem. it's really about making the tv a better tv, integrating in the home network, building scale of the roku tv, and monetizing tv viewing experience that's what we're focused on >> your stock has been all over the place. it's spiked dramatically, given up some of those gains now we're hearing analysts say that maybe the stocks moves were overblown. what do you say to people that are concerned roku shares flew too high, too fast >> well, i'm not focused day to day on the stock price what i'm focused on is getting a roku tv in everyone's house. that will build value for our shareholders and that's our

goal >> and how concerned are you about apple watching the home pod and all the other announcements that are coming from amazon and google here, especially in that home space, connected home space >> well, you know, obviously, we have competitors, but we are the number one streaming platform in the u.s. and we've got a great product, a great proposition. tcl, for example, we have nine different oem partners building roku tvs, 150 models, tcl is one of them. they've gone from number 19 in the u.s. to number three since partnering with us, so there's a lot of value to oems and consumers. >> will be interesting to see how your q4 numbers turn out when you announce next month anthony wood, ceo of roku, thanks so much for joining us. >> thank you >> back to you >> thank you very much, julia, john, and anthony wood when we come back, microsoft's president brad smith joins us with the biggest refang tech in 2018. "squawk alley" will be back

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some pretty good macro data out of europe today. seema? >> carl, european stocks continue to participate in this global rally, extending their daily winning streak to five on optimism about growth. the ftse, in fact, hovering around its all-time closing high now, earlier in the session, the broader market stock 600 index surpassed 400 for the first time since mid-2015 so far the index is up 2.5% this year lt is one stock in focus, the biggest gainer, announcing plans to spin off its u.s. unit and revamp its european business altice said if the core of the strategy is an operational and financial turnaround in france and portugal keep in mind, altice's founder and controlling shareholder

shook up his executive team, that stock up almost 11% in today's trade. let's talk retail. uk retailers are helping lead the ftse 100 higher today. the supermarket chain is getting a lift after getting better than expected holiday sales sainesbury also rising on the news all due to holiday sales updates this week. be sure to watch out for that. in the meantime, the prime minister of norway, the first foreign leader to visit president donald trump tomorrow in the new year, the white house says topics will include global security and defense one of the few female heads of state. guys, back to you. >> all right, i'll take it, seema. coming up, the ceo of sony, kazuo hirai will join me sony stock near $50 a share, a level where it hasn't been in a decade we'll talk about sony's tvs,

image sensors, cameras, and more that's coming up on "squawk alley"

good morning, i'm sue herera khamenei warning the u.s. it would fail miserably if it attempted to interfere with iranian affairs again. at least 21 people were killed in the protests and some 3,700

were arrested. french prosecutors have opened an investigation into apple over revelations it secretly slowed down older versions of its iphones. lawsuits against the company have been filed in the u.s. and also in israel apple has offered a big discount on replacing the battery a mafia bust in southern italy and germany leading to the arrest of 169 people and a seizure of more than $59 million in assets. the operation was coordinated by italian military police and conducted jointly with german police and nike and the u.s. olympic committee revealing the medal ceremony uniforms on the "today" show, designed to keep the u.s. athletes warm,since most of the ceremonies will be held outdoors. it's exciting. that's the news update this hour back downtown to "squawk alley." john, back to you. >> i will take it all the way across in las vegas, thanks,

sue. it has been a busy start to the year for tech policy, when you look at cybersecurity, diversity, and more. brad smith is the president of microsoft. he is also head of the legal team there, and he joins us now to break down some of these issues brad, welcome. always good to see you >> good to see you, john >> i want to start off asking you about this issue with chips in high performance computers. there's been a bit of an issue, i understand, with a microsoft update and amd chips how long has microsoft been working on this, and you see all kinds of security challenges no matter how they are targeted this one seems like one that hasn't been exploited yet. how serious is this in the whole ranking of these things we've seen in the past couple years? >> well, you described it earlier in your program, i think, exactly right it's a chip-level issue. that means it potentially affects many, many devices

certainly, all the different operating systems that run on the devices. and job one in these situations is exactly the way you put it, we all need to get out patches and the like before anybody is able to exploit this the good news is that the industry is working together, perhaps even in an unprecedented way to act collectively, to share information, and to get out patches. there's important work ahead of us there's important work across the industry to address this ultimately, it is an issue that it will be important for computer users to be familiar with it just underscores, again, how fundamentally important it is for people to, among other things, update their systems so that as these things are made available, they are protected. >> it sounds like you've got some praise for the way the industry is addressing this, but i think a number of investors might want a little bit more

granularity. are there any concerns you have about the ways chip giants have addressed this or perhaps not addressed this sooner before the security researchers let the public know there was an issue here is there anything that investors should know about the chip giants and the way that they've addressed this, things they could have done better >> well, i always think it's best to let every company speak for itself, and i would be the first to let the chip makers speak for themselves it is a broad issue, because it is a chip-level issue. i'm not here to speak, you know, for them or, frankly, to critique them. i am here to say we got to keep focused on this. we have important work ahead of us it is a broad issue. we all need absolutely to do our best work, and when all is said and done, we should all step back and look back and do a p t postmortem, even if everybody does the world's best work on these cybersecurity issues,

there is always an opportunity to learn and to get better, and that is the only way we are going to stay ahead of a threat model that, among other things, has major governments investing increasing amounts of money to try to exploit vulnerabilities in a very sophisticated way. unfortunately, we live in a dangerous world when it comes to these issues >> brad, this is courtney reagan at the new york stock exchange i understand you've put out a list of the top tech issues of 2018 one of them is diversity in technology but it looks like at ces for the second year in a row there are no women keynote speakers. so, your colleagues in tech at the conference of the year not starting things off on the right foot when it comes to women. what are your thoughts there and what should tech do to change this going forward >> i think you put the nail on the head of this we need to do a lot more to address diversity issues in the tech sector. and i would first say across the

economy, but especially in the tech sector. we need to use the discussion that has arisen out of the me too and time's up points, and not just do the first step, which is reflect on the need to do better, to raise awareness, but i think we need to find concrete steps that we can take in 2018 that will build a foundation for sustained progress i do believe, basically as you pointed out, that there is no substitute for getting more women in more positions of leadership i just don't believe that any institution that has a strong representation of women at the leadership level is likely to face some of the problems we've been reading about, and i think it's fair to say great, when is that going to show up at ces let's hope a year from now >> brad, it's interesting. microsoft had the opportunity to focus on this before a lot of companies did, soon after the

new ceo stepped in based on things he said. and my sense is microsoft made some changes starting then that you're saying have positioned you better now can you give some detail on -- from the top executive level, exactly what you guys did differently over the past few years that has shown some gains for you? >> well, satya has been driving a different culture here at microsoft that bodes well for this, because it's, frankly, all about trying to empathize and understand each other and learn together and this diversity issue, i think, frankly requires that people have courage. so often people are afraid to put themselves out there, they are afraid they are going to say the wrong thing. they are afraid if they take a positive step they will be more vulnerable for being criticized for the things they haven't yet done yet that ends up leading to people being frozen and doing nothing, and so, you know, satya has spurred us further we're changing the way we're

hiring we're changing the way that the senior people like me are paid our pay on an annual basis is based in part on diversity progress guess what, we're now making more diversity progress. in december we took another step we said we don't have a lot of arbitration agreements that would prevent women on a preclaims basis by going to court, but we said we would waive those and support legislation that would require those kinds of provisions go away across the country, so that women's voices always can be heard if they are facing a sexual harassment problem. >> all right it is certainly a time when a lot of focus is on that and changes are being made brad smith, president at microsoft. thanks for joining us. >> thank you when we come back this morning, the ceo of sony is going to join us from ces. dow is up 100. boeing up to 315 this morning. rick santelli, what are you watching >> i'm watching 253 and ten-year

note yields heading towards close to a ten-month high yield. let's see where we close, but we're going to talk to ed lazear, see what it all means. especially in front of ppi and cpi this week. cpi this week. all after the break. well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until yortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

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under armour one analyst comparing it to reebok and urging investors to sell the stock plus, one firm telling clients to buy stocks right now. >> big show, scott, can't wait let's get to the cme group in chicago and get the santelli exchange good morning, rick >> good morning, carl, thank you. ed lazear, thanks for taking the time this morning. >> always a pleasure to be with you, rick, thank you >> all right, so last friday we had what i thought was a weak jobs report, 148,000, but the metrics for wages and hours worked were still pretty solid my question to you is the big question the federal recervical brated much of its policy and removal of policy on the notion that we are at or near full employment 95 million people that could work that aren't working, hoping that isn't true. is that going to be a big deal should we start to draw some of those 95 million back in the

labor force and any type of big way? >> yeah, i think you're exactly right. i would argue that we're not at full employment for a couple of reasons. first of all, the employment rate, which is the thing i always look at, is still too low, and that's particularly true of the age group between 25 and 54, which is the most relevant one the second thing is wages aren't growing at a sufficiently high rate so the only good news there is there is some slight improvement in terms of employment for that group that we think of as critical, namely, the 25 to 54, so we're moving in the right direction, but ironically we're still growing jobs too can quickly to be near full employment it's funny to say when you have 4% unemployment and you say we're not quite there yet. well, you know, when you're growing at three times the rate of the population growth, we know that that can't be consistent with a full employment equilibrium, so we still have a ways to go. that's good, as you point out.

there are people out there that would like to be working and hopefully we'll get them back into the labor force >> all right as i look at the board, i see a 253 yield. the recent high is march of last year at 263. we'll be at some of the highest levels since the summer of '14 my question is simple, with ppi and cpi this week, the market seems to be in a multiyear balance. we see international bind, because relatively speaking we have the juiciest yields, and that has cut a governor on the rise in rates, but should they continue to rise, will inflation be the culprit and can it give sustainability to loftier ten-year yields? >> well, i'd say a couple of things on that first of all, these are points that you've been making for a long time, so, you know, it looks like what you've been predicting is actually coming home to fruition but, you know, what i would say is you've got a couple of things going on here. so you do have the high yield and as you point out, we are

high relative to the rest of the world. i would say at this point probably the most important issue is really the change in the tax law that affects the flow of capital from foreign investors to the united states, because that's significant the fact that we've lowered our corporate rate down to around 20% makes a big difference and now, i think, we're going to see some calibration there so coupled with the interest rate that you pointed out, i think that's actually a significant development moving in the direction of moving capital flows over to the united states, which in the long run is a good thing >> excellent ed, always interesting to hear your views next time you come back, maybe we'll be having a conversation about the approaching 3% for tens thank you and back to the "squawk alley" gang, courtney reagan it's all yours >> thank you very much, rick santelli and ed lazear when we come back, the

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been a busy session for cryptocurrencies this morning. a lot of news points the cofounder of ethereum expects an eventual crash, then consolidation. td ameritrade says it will be a way to bring millennials into the stock market some regret calling it a fraud, saying the blockchain is here to

stay >> i was wondering how soon he'd regret >> the times reporting a few moments ago that president trump plans to go to the world economic forum in davos this morning. our eamon javers confirms that, which will be interesting, make traffic tougher for those attending, but as you remember, xi jinping went last year and ended up being the highlight of the conference >> i would imagine it would be hard for him not to be a highlight, but makes some things more complicated, that's for sure stay with us i believe we have an exclusive interview with the ceo of sony when we come back. dow is up 111. just off session highs back in a minute

pg welcome back to "squawk alley. i am jon fortt here at the consumer electronics show with

kazuo kirai. great to see you. >> great to see you. >> sony stock is up near 50 bucks where it hasn't been for a decade you had a tough task, plashl in tvs getting this thing turned around with the announcements you've done just last night here, where is that business now, and is it -- is it a growth and profitable business for you? >> it's a very stable business for us some markets are still in growth mode and other markets are shrinking and stable so it depends on the territory, but from a business perspective we have really shifted our product focus to the more high end with 4k and so i think going forward from an operating profit perspective it's going to be a very stable business for us. >> you announced a couple of phones here. >> mm-hmm. >> january could be seen as an odd time to announce phones, but the focus is on cameras. >> yes. >> a lot of people might not remember that sony sensors are in, you know, iphones, android phones,ette, not just sony phones. >> correct. >> that's been a focus for you. >> how do you intend to grow your capabilities in that arena

which has been a grower for you. >> well, i think we need to look tat from two perspectives. one is making sure we stay ahead of the competition in terms of the quality of the image sensors, whether it's high resolution, high dynamic range, you know, obviously reduction in noise, et cetera, but at the same time there's a natural growth in the business because of the dual lens cameras certainly on the cameras on the outside and now we're seeing dual lens cameras on the inside as well which means that traditionally we only used to sell one sensor for one phone. now we can do as many as four, and that's something that's a growth business for us regardless of whether there's a growth in the number of actual phones going out the door. >> now, some people might remember man's second best friend perhaps ibo. >> yes. >> is back. >> indeed. >> improved? >> improved. let mow -- let me just introduce you to ibo there he is. >> now, yeah this -- the mtv viewers of a generation ago will certainly

remember ibo from the "real world" house i believe but what's different about that in an era where voice control and interaction with robotics. >> right. >> is now the new thing. >> right. >> that you've been working on for quite a while. >> this new ibo is chock full of ai as well as finer robotics, and because this is connected to the cloud, it recognizes each and every one of its users so it -- it's obviously recognizing your face right now so you need to smile at it to make sure that he likes you. >> there you go, see. >> if i growl or bark at ibo, is he going to remember that? >> he'll remember so it depends on how the owners actually interact with the individual ibo and how he or she turns out in five years time or even a year's time is going to be quite different so each and every ibo will grow to be a different kind of an animal and because it's connected to network it also shares information about, you know, its learnings, so that it can become more smarter and more interactive with the users as we go along. >> big use case for sensors now is in autonomous cars.

>> mm-hmm. >> internet of everything, and you're basically the eyes for a lot of these systems what new demands is that putting on you r & d-wise? what investments are you making to try to push the industry forward for the teslas and ubers, et cetera >> we always make a huge investment in our image sensing technology obviously to stay ahead of the competition in the smartphone business and also because, you know, there's a lot of high requirements from the automobile manufacturers in the tier one suppliers that we work with, and we want to make sure, you know, we're meeting and exceeding the demands from a technical standpoint as well as, you know, environmental issues and -- and so sizable investments in that space and i think, you know, that's proving to really provide us with a lot of tangible relationships that we've been able to forge with the automobile manufacturers in tier one suppliers. >> finally you've gotten an air pod competitor that i announced here will you be able to ship those in volume because apple has had trouble? >> we'll see, you know but we pride ourselves on making sure that we have great

manufacturing and so, you know, we're pretty confident about our ability to deliver a product into the market. >> kaz hirai of sony, this is your big show. >> it is. >> the tv that throws the huge image, $30,000. >> 128 inches but it's 4k hdr. >> ceo of sony here at ces guys, back to you. >> we need one of those, jon our jon fortt at ces we just learned that the president is going to the world economic forum in davos getting a statement from press secretary sanders. >> reporter: that's right, the populace president is going to be going to one of the least populist events on planet earth, the davos world economic forum an here's the statement from sarah huckabee sanders saying the president welcomes opportunities to advance his america first agenda with world leaders. at this year's world economic forum the president looks forward to promoting his policies to strengthen american businesses, american industries and american workers this is not an event, carl, that

american presidents attend regularly. i'm trying to remember off the top of my head when the last president was -- when the last time a president attended davos, but this is a meeting, as you know, of some of the most powerful and wealthy people on theplanet. they gather together to discuss issues, agenda items, the economy around the world the president is looking forward, the white house says, to taking part in all of that, but also pushing his america first agenda, so one of the fascinating dynamics in watching that will be to see how that agenda goes over with the world economic elite that does not necessarily have an america first approach this is sort of globalization meets trumpism, and it will be a fascinating moment to watch. carl >> people doing research on that, eamon. apparently bill clinton the last sitting president to attend in 2000, although bbc says that reagan actually joined the group via video link several times so that's going to be fascinating to watch eamon javers, thanks for that at the white house today.

>> you bet. >> peloton is making this big announcement at ces. diana olick has that story for us. >> reporter: carl, for the past four years pelton has been live streaming studio cycling class eds out of this manhattan studio to hundreds of thousands of riders around the world and growing that subscription. now it's taking a big risk going beyond the bike to, roll it out, the treadmill. it's a $4,000 high-tech treadmill. the screen size is four times the size of the cycle. the ceo john foley says this was never about the bike he always intended to go beyond the cycle and get into other apparatus. the treadmill allows you to get on the tread mill, off the treadmill, do boot camp style workouts on the floor, of course, they will be selling pelton branded weights and other equipment to go along with that as they increase their apparel, et cetera, all about the brand of pelton fitness. foley told me in an interview he's looking to take over the home fitness market. the treadmill, it's big.

it's 18 square feet, but i ran on it. it's interesting they use 3-d printing to do a lot of the technology behind it. they have 59 separate little slats on the treadmill so it's not like a bike. it's kind of cushy when you're running on it and all the controls are on the side so you don't have to touch the screen again, it's about the media content, live streaming the content out of a studio to you at home, interacting on the leaderboard with other riders. should be interesting going forward. this isn't the last item either. back to you. >> our friend over at "the times" writes about it today and says pelton solves the novelty problem in the same way netflix does it creates can't-miss programming so we'll watch pelton very closely. >> you can't process all the news. >> there's so much coming out of ces, from peloton and we've got things for microsoft and the little dog i don't know if it's more dangerous that it takes all my data but doesn't bite me what's more dangerous?

i don't know a lot to process. >> just a lot of information meanwhile, markets continue their tear dow is up 118. we mentioned earlier being led obviously by the higher priced stocks boeing at 315 is up 99% now over the past 12 months. >> the ten-year yield hitting the highest level since march 17th so another one to watch for show. >> big show on "the half "let's get to the judge. and welcome to "the halftime report." i'm scott wapner we begin today with a cnbc exclusive. the group of investors targeting apple over the iphone's impact on children. jana partners along with the california statement teacher retirement system bert known at calstrs sending an open letter to the is capital gain it's not address the issue enough, apple responding to the criticism and promising new features are coming john is managing partner and barry rosenstein is here along with charles person, a partner at jana as well. we're also joined from california by the director of corporat