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♪ good morning welcome to "squawk alley." with me at post nine, wilford frost. carl quint is live at mcdonald's new corporate headquarters he will have more with steve easterbrook in a moment. shares of microsoft hitting an all-time high as the company announcing it's buying gib hub for $7.5 billion in stock. microsoft ceo satya nadella will join us in a few minutes wil, there were rumors of a software deal bubbling around. maybe not a huge surprise of 2018 but buying a developer platform based on open source, not many would have seen that. >> $7.5 billion, yes, it's all in stock not really weighing on microsoft's share price at all

only a couple of years ago, the valuation was low with this company. >> developer attention is such a huge asset, as we've seen these kind of cloud-driven platform wars heat up between amazon, google, microsoft and re to have that attention developer attention, is a huge asset. >> and in terms of the acquisition sort of hiy of microsoft clearly there's been some successful recent ones like the linkedin purchase. but in the past less successful ones like nokia's phone business. >> that's what microsoft competitors will argue satynadella, microsoft ceo, great to have you. thanks for being with us. >> great to be here with you, jon. thank you for having me. >> so this is a big deal,

particularly microsoft's traditional approach to developers tell me, you don't buy github to make a lot of money. so, lay out if, you will, the strategic benefit of github for microsoft. how closely do you have to tie it in to things like azure and where do you keep it at arm's length to maintain that open source, neutral rapport with the developer community? >> yeah. the first thing, jon, is when you think about what's happening in the broader world, every business is a software business, a digital business, whether it's precision medicine, precision agriculture, personalized business or personalized banking it's being built by developers there's data from linkedin that says it's growing greater than

software engineer in tech. that speaks to the world that's going to be there going forward, from a secular basis, developers are going to be required everywhere it's kind of like what may be in the early '90s was to knowledge workers with tools and services or what it was even in the 2000s to build services for sales professionals. developer sass is going to be at the center of the digital economy. and that's the real strategic rationale for it it's a secular growth market and microsoft has heritage we were a developer tools company first. and now, of course, we are all in o source. and that's what really brings us together with github we're going to operate it as an open platform for any language, framework or platform whether it's on the cloud or the client and really serve the developers with a sass service that everyone requires just like we

do with office workers with 365 with dynamics. >> how quickly are you guys, is microsoft and the leadership that you're putting in place, going to be able to make visible changes to github, improvement that might bolsteveloper's confidence in what you're going to do with the platform? rivals, including gitlab, are trying to take advantage of this acquisition, the tool that shows their imports now as getting so much traffic how quickly are you going to be able to show how microsoft is going to run this in, perhaps, a way that will make developers happy? >> it's most important with the community asset like github is to stay true to the core ethos of developer first that github has always had nat freeman, a veteran of open

source, he will lead the company. chris, the ceo of github, and i discuss aid lot about the fundamental ethos of the company will remain the same we'll operate it independently be an open platform. and i think most developers out there will judge us by our recent actions and our actions going forward. d we'll have to earn their trust every day. so we are very, very committed to it. but we are excited because i think at the core, microsoft is a developer and tools company. and this is just something that comes very naturally to us and, quite frankly, earning the trust of our customers by our actions every day is what we live by. >> now you said that github will operate independently. but in terms of pricing and the approach to the developer, how many times should we expect to see between github and azure or between github and visual studio-type tools and how soon

>> in fact, already there's some amazing inte between our tools -- one of the most populan open source tool on github we have fantastic integration. we have many azure services, integration. last couple of weeks ago, at build, our developer conference, we showed a lot between azure and github the most important thing is not just azure we welcome every cloud provider to integrate to github in order to reach the github community and audience any cloud, any client, mobile platform or iot platform to us, we'll see us continuously integrate but again stay true to what is the core ethos and value proposition of github. >> satya, i wanted to switch focus if i may

there was a "new york times" investigation over the weekend that suggested that facebook shared data with all sorts of device makers before facebook was in its own position to launch app programs and microsoft is listed in that investigation. did you get data, personal data of faceboousers? what did you do with it? and do you still have that data now? >> i actually am not very familiar with the issue, unfortunately. i'll have to sort of get back to you on that. overall for us, at microsoft, our focus has always been that it's not about our data, it's our customers' data, whether it's the consumer side or the organizational or enterprise side we are just custodians of data and we work -- you keep the data secure and use the data with permission from users. that's been our corporate support, it's how we work with our customers and our platform.

>> would you, like tim cook, differentiate yourself from the likes of facebook and while others may use personal data that that's something that microsoft has never done >> the thing is, for me -- one of the things i find strange about tech company ceos being asked about other tech companies, it's just not relevant to me what i want to stay true to is what is it that we, at microsoft, are in business for and how do we make progress that live up to the promise to our customers? trust is everything to us, whether it is our cloud services, our tools, our client platforms. to that point, absolutely, we'll differentiate on that point. and other companies may have different business models and different propositions and they'll have to make their own choices. >> on m & a, this is a sizeable purchase any more on the horizon? should we expect you to slow

down to integrate this your stock is up on this news. >> overall, jon, i would say we always look for what are growth opportunities? in other words if there's a secular market sment that is going to grow, we'll always be attracted to that. but, more importantly, we need to have a real position that we can contribute something unique to that market n this case, being a developer first company from the very start gives us confidence that we can bring real value to the developer community. and, lastly, you have to be able to integrate and operate what we have done with minecraft. what we have done with linkedin gives us confidence that we can, in fact, acquire, grow and have these communities thrive and that's what will be basically things we'll look for. it's not that we have speeded up or slow down but we'll go by those three criteria is it a growing market, can we add value and can we integrate

it well? >> sounds like perhaps you have room for more. satya nadella, thank you for joining us first on cnbc. >> thank you so much, jon. and with us this morning to break some of this down, ricoh's co-founder kara swisher from san francisco. kara, what do you make of this move by satya nadella and microsoft by acquiring github? from an historical basis it's a little bit of a shocker. this is a huge embrace of open source, but will it work to help microsoft pursue its strategic ends >> it's sort of wrapping up the developer ecosystem. it seems pretty simple this is ther of the developer ecosystem and microsoft has to be seen as developer first. i'm not sure how it helps, say, with the integration of aze or competition with aws but it

certainly is in an area that satya nadella has talked about, which is microsoft's role in the developer system it's not the same microsoft it was 15, 20 years ago. >> is there a risk, kara, in terms of them losing some of the business from these developers that traditionally may want to be with someone smaller, independent, as opposed to a goliath like microsoft >> meaning they don't want to be part of github because microsoft owns it? >> exactly. >> developers will flee the platform, is that -- >> exactly. >> i think that's the worst case scenario in this a lot of people are very imported into this system and use it it's a very vibrant and healthy system i don't know that that would necessarily make them move along just because it's owned by microsoft. if they made substantive changes or advantage microsoft, that would be the case. i don't think that's what satya was talking about when he was discussing that. he's right

they've done a very good job i was just at linkedin recently and talkedo jeff wiener, ceo there. they've done a very good job of keeping hands off. and they should. they shouldn't medal they got into trouble when they did that at skype and some other acquisitions and i think they learned their lesson. >> the battle for talent is important to silicon valley companies. just because you have a lot of money doesn't always mean you can buy what you want. microsoft used to lose out on these kind of deals or not even get that close to the table, to the likes of a google and eventually facebook, et cetera what does it mean that it was microsoft that ended up with this instead perhaps a google or amazon >> microsoft has a different image than they did. we just interviewed brad smith at code. i think it's a very different microsoft that's focused much more on developers on building

these businesses that are core to their business. what's interesting is that everybody else that's battling it out, microsoft has been stickings niche under a. he's not out in the middle of everything making a lot of noise. they're doing things that have adjacencies that make sense given whathey're focused on, which is developers. if you remember, developers, developers, developers in the windows system it's a widespread system, whether it's in ios, android or anything else and microsoft has to play there. >> while we've got you, as wilf was mentioning, facebook back in

the hot seat as "new york times" was mentioning this investigation with 60 device makers, including samsung, microsoft, apple, amazon over the last ten years to what extent does this put heat, more heat on facthe stock recovered. i think the general sense is that facebook has gotten at least a pass for now on this but to what extent does this put scrutiny perhaps more broadly on silicon valley and how it's using data >> well, i don't think it's a surprise that they have these deals. facebook didn't have a phone and obviously tried, as you recall, to get into the phone business they have to have these tight relationships with these phone makers the phone is where the whole business of facebook is at right now, for a long time now and so they had to have these relationships so that they operate correctly on these platforms. and in some cases that's all it is in other cases it's, once again, egregious data sharing that i

think they use in order to have better relationships and better experiences. so the question is, have they been responsible for the data that they are charged with having and are they giving it away unnecessarily to facilitate their other businesses no matter what facebook does, the question here is how much control does it have over its ecosystem, as we discussed with sheryl sandberg? and it feels like not much in a lot of ways. just to have these relationships is fine. they have to they absolutely have to. it's how they conduct them that's the issue. >> tim cook obviously tried to loudly distance himself from this type of use of data and its reveal by the new york times that apple had a data-sharing relationship with facebook is that undermining kind of the tone that we heard from tim cook a month or two ago >> i think that he did say -- i think the quote in the story, if you read it, was that they were

using it to allow you to post photos one of the problems with this is the ability to use these features like to post photos without going into the app and to work with the phone requires a lot of datea the question is, whether it's all over the pce, who is responsible for making sure it's not abused and i think that's more the issue. there's no way you can use a facebook app on any of these phones without access to some of its data the question is how much of its data should be available to these developers and how much is needed to make these features, which everybody like work properly and people giving permission what happens is that the minute this data gets out into the wild it's a question whether we trust these phone makers, these app makers and that's a big issue, i think. >> kara, back when facebook first opened up the facebook platform, they structured it where it was more of an on/off switch either you have a whole bunch of

data or you didn't have any. only over time have they gotten more granular. just because companies had access to this data doesn't necessarily mean they retained it or used it in all the ways it was possible to use it for instance, to tag your friends in a photo from the core operating system, enabled that way, as opposed to having to open up their facebook app is that right? >> in the case of apple, that's how they explained it. fact of the matter is that they did have access to it. here is the problem. this is a data-hoarding machine is what facebook is, really. and the question is, how do they -- to facilitate their businesses they have to share datea. how do they share data do they have responsibility over sharing data it becomes very complex. there was another story in the times that i thought was much more interesting, their inability to monitor california political ads, that people found all kinds of ways around it, and political organizations were able to post on facebook and not identify themselves as political

organizations, even though there's now new rules in place i think the issue is that this stuff comes squirting out wherever and people can find ways to game it and ways to use it that's the issue, this enormous amount of data controlled by one entity that doesn't have its hands around how it's being used or even anticipating how it can be used. that's the bigger issue. i think that's the bigger issue rather than -- i'm sure apple didn't abuse the data. i'm not sure but do you know what i mean? that's not what they wanted. >> i thought you were going to catch yourself there. >> no, i'm not sure. who knows? but they could and what kind of things does facebook put in place to protect this it seems like not much that's the issue. >> not the last time we'll be talking about this. >> no. >> kara swisher, always great insight. thank you for joining us. >> thanks a lot. a big morning. carl is live from mcdonald's corporate headquarters in chicago, where he spoke with the ceo, steve easterbrook, earlier.

hey, carl. >> hey, wilf two dow 30 ceos in the same show with nadella and easterbrook here in chicago. this is one of the big initiatives, sort of flags in the ground that k has planted along wi all day breakfast and redesigning the modern mcdonald's for a new era even as he sort of tries to grapple with and get his arms around these leadership issues that are forming in this new era of the modern krae take a look -- take, for example, what happened to starbucks in philadelphia with that bathroom issue, had to shut down sres for a day for the anti-buy as training we asked easterbrook about all sorts of things but we asked him about those issues in which you have so many daily touches with the consumer. >> every business is under greater scrutiny than any other

time before. social media allows that happen and public expectations of how big companies behave is heightened and that's fair enough for us -- first of all, let me be clear we have absolutelytolerance of any harassment or discrimination right across mcdonald's one of the benefits we do have is the local managers who know how to take care of the customers. we just want to be a warm and inviting restaurant. we don't want anything more complicated. >> pay attention to that and, guys, later on in the hour, the kiosks over my shoulder, we'll show you how they work and what the impact is, what the intent is here as the company tries to balance that relationship between customers in the physical store versus customers and technology sort of the same thing that's happening in retail, as we all know the fact that it's moving into quick service food at such a rapid pace is really, really interesting. it's happening all around the world. back to you guy. >> carl, you mentioned that

particular store does have menu items from around the rest of the world but not the british version of the apple pie, alas. >> you will not let this go until it's fixed right, wilf? yes. the desserts in this one location that has international menu items, these are two desserts from brazil, i believe. really good, by the way. but it will be rotating. every couple of months they'll bring in a couple of new highlights from around the globe. i'll do my best, wilf, to bring the uk apple pie you've done a better job selling this thing than the company. >> well, they don't need my help in the uk. but here it's a little lackluster for the nation that's so famous. >> mcdonald's was mentioned as a cliche when it comes to low-cost labor. with the economic picture being what it is, including walmart talking about raising wages,

what insight did easterbrook give on raising wages? >> kiosks an attempt to get around that some degree. we understand there will bre employment, say, on table service now as opposed to behind the counter as a result of these kiosks one example, jon, is tuition assistance they dramatically lowered the amount of time you have to be working here before you qualify for tuition assistance, the amount of hours you need to put in per week to qualify for tuition assistance and also, as opposed to other companies that are reimbursing employees for tuition, they'll now be giving that money upfront. a lot of that they attribute to the tax cuts we saw at the end of last year pressure, i would say, bubbling but not severe but they're having to make adjustments at the margin right now. >> okay. carl, great stuff. thank you very much for that we'll see carl, of course, again a bit later.

meantime a huge show still to come. largest cancer research conference is under way. we'll take you there live and hear from the ceo of astrazeneca. and apple hitting an all-time high, a lk ooat the anticipated new products much more still to come. much more still to come. don't go anywhere. welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com

the american society of clinical oncology's annual meeting is under way, the

world's largest cancer research meeting. lots of market-moving headlines are being generated. meg tirrell is there and joins us now with the ceo of astrazeneca. >> jon, thank you very much. and pascal, thank you for joining us. >> thank you it's a pleasure to be here as always. >> some of the biggest data has been in immunotherapy to better fight cancer you have a drug in this space. you're competing with bristol, roche and others how would you say you're competitively situated there >> there are two hours that are developing rapidly immunotherapy field the merck team has done a beautiful job and are clearly leading in that metastatic stage of lung cancer.

if you are diagnosed at stage one, two or even three, you're not metastatic, so you have a chance to be cured stage four it's unlikely you're going to be cured. our focus has been on stage three with our product and we're reporting because we've got the data recently but we announced we've achieved survival benefit and there you can start to talk about curative intent. >> we have to be less afraid to use the word cure in cancer because there are certain situations where it's now appropriate and he mentioned lung cancer as one where that's getting close. what is astrazeneca doing with testing. >> if you're diagnosed as a metastatic patient. >> meaning that the cancer has spread to the other areas? >> yes, spread to other areas of the body your chance of being alive at

five years is about 5% so it's very low if you're diagnosed very early, your chance of being alive may be 80, 90% and if we give this patient the right treatment we can actually cure them. so the key is to widen testing and expand it and liken it to look at breast cancer.will the survival rate at five years is extremely high. why? patients are diagnosed and treated early. >> we've seen drug companies have roles in increasing testing before for example, hepatitis c, the drug companies involved there were involved with testing is that what astrazeneca is trying to do >> we'reork iing on devoping simpler tests. today they're done with scanning the lungs. you get a ct scan.

we're also working on diagnosing lung cancer early through a blood test looking at circulating dna. >> there was some data on that at the meeting. >> yes you can imaginif you could diagnose lung cancer early with a simple blood test, screening would be much, much easier, of course but still ct scais best way to diagnose cancer and we welcome folks to improve the quality and they're getting to that stage at some point we will certainly work on promoting early stage lung cancer screening. just to give you a number, in the u.s., the percentage of patients screened for lung cancer is 4% it's very, very low. and despite efforts by the obama administration a fewrs back. there's a lot more that can be done. >> another topic that comes up, especially in recent years, is this financial toxicity, how expensive these new drugs are.

how do you look at what the trump administration has announced recently in terms of drug pricing >> yeah. so, you know, in cancer you have to look at two aspects of cancer metastatic stage, bally yo extend life and you cannot be very specific. but when you t patientthe earlye them, even if your drug is expensive, it can be very cost effective. for breast cancer, if you give it to metastatic patients, national institute in the uk has concluded it's not in the early stage it is one of the most specific drugs that exists for cancer. it really depends what stage of lung cancer you look at. you should think of cost of outcome. not only the cost of buying the drug so i think the discussion has to be what is the clinical effect, cost effectiveness of a drug, w? we also, you know, welcome this

kind of approach in a lot of other areas, committing to outcomes and giving rebates to payers if we don't achieve those outcomes this is the way forward what is the cost of an outcome and is your drug cost effective >> one thing that trump said is that in two weeks we'll see a massive voluntary reduction in drug prices. will you cut your prices in two weeks? >> to a great extent our prices are already -- there are a lot of rebates in the system that people don't see i'll give you an example we have a drug for asthma. the net price after you calculate all the rebates, and that price is the same as -- problem is that we have a list price. same with oncology we help a lot of patients who cannot afford the drug we give these drug force free to them we also give rebates so to a great extent we already have a lot of price reductions

and rebates in the system. >> pascal, we'll leave it there. thank you so much for being th us. >> wilf, back over to you. >> meg, thank you very much for that. >> when we come back here on "squawk alley" fast food of the future how big tech is shaping mcdonald's more from carl's interview with the ceo steve easterbrook. and a check in on the major averages we are higher, dow underperformer of the big three indexes last week. s&p and nasdaq just up .30%. it's green across the screens. hi, i'm joan lunden with a place for mom,

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welcome back to "squawk alley. markets closing in the uk and across continental europe. mostly high. led by spain where a new prime minister was sworn in over the weekend. italy is down about .50% on m & a front, ceo of accor

hotels telling cnbc that they're lo looking to boy a staken ai france meantime, the french bank has deny denied any soc-gen up a little bit. and today at closing bell at 3:00 p.m. eastern time we'll have an exclusive with jes staley, barclays ceo now let's get over to sue herera with the headlines the country's disaster agency cautions people are still unaccounted for in guatemala after a volcano eruption and jordan's king replaces

the prime minister, a former world bank economist ceo of american airlines is warning passengers may face higher fares if oil prices remain high, prompting airlines to removand flights from the market. serena williams has withdrawn from the french open, blaming a pectoral muscle injury which prevents her from serving. she was scheduled to play against maria sharapova later today. we wish her a speedy recovery. that is the news update this hour we'll send it over to carl at mcdonald's new headquarters in beautiful chicago. carl, over to you. sue, we'll show you a live picture of the west loop in chicago outside where they're about to officially unveil their new corporate headquarters and inside, sue, we'll show you how your local mcdonald's will change over the next year or two with these kiosks.

what that means for the business

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it was only one bank that could finance a project this difficult and this large, and that was citi. preserving affordable housing preserves communities. so we are doing their kitchens and their flooring and their lobbies and the grounds. and the beautificationf their homes, giving them pride in where they live, will make this a thriving community once again. ♪ let's get back to chicago where carl quintanilla is at the new headquarters in mcdonald's carl >> it's the big day for mcdonald's as we await the official unveiling if you're looking for signs of generational change you only have to look at these kiosks

which will be in all of u.s. mcdonald's, half of them done by this year, all of them by 2020 mocha with whole milk, let's say, here and then you can choose a large a lot of this will be a learning curve for some customers customit let's add an extra shot, right i'm playing with this. you can add as many as five extra espresso shots, extra whole milk apply those changes and eventually you would either pay using your credit card here. if you want to pay cash, go to the counter. this is a mccafe if it were a full mcdonald's you could take a number, go sit down and table service would deliver it to you over time. this is obviously a change in the way consumers will experience this restaurant over the next few years and the idea is that over time that allows customers to think of it differently, perhaps even price products differently

what we don't know, jon and wilf, to what degree things like this will change the speed of the line, right? as people figure it out, you might be waiting for people in the early days to work with the menu, figure that all out. but we did talk to one owner/operator who said that the average check at some early locations where this is installed is up maybe $1, maybe two, even as much as $3 on an average check because people here are not just ordering, they're kind of shopping, as they're offered all these different menus. fascinating stuff. it's another sign of how easterbrook is trying to bring the chain into the future, guys. >> carl, i know those types of devices and interfaces exist already in some stores because my local one on 6th avenue definitely has it already. i'm very apt at ordering my mcdonald's on it how many have they already rolled them out to presumably once in place, this is something that could lower costs and boost margins. are they in place selectively so

far? >> there are 14,000 u.s. locations and they'll have about 7,000 done by the end of this year they're spending $1.5 billion in cap-ex splitting the expenses with the franchisees. corporate takes care of some of the risk but it's a massive, massive rollout. from an engineering standpoint, having covered this company for 17 years or so, having hard to think of -- maybe back kitchen stuff but in terms of customer interface probably the biggest change we've seen in this era. >> that's big. i've become a low-key expert on that, traveling to barcelona a lot of european locations have had that for, gosh, at least half a dozen years. >> that's right. >> there will be some transition some people just can't get it. >> that's right. uk is pretty much full, canada and france comps there are doing even

better than u.s. we'll see if it pays off over time. >> bright spot of some of those recent results in european markets. enjoy those five espressos you'll be buzzing right through closing bell and beyond. good news to me. carl quintanilla in chicago for us now josh lipton has a look at what's coming up from apple's worldwide developer conference. >> we're here live where tim cook is to take the stage before an audience of 7,000 developers who have come from all over the world to hear about the latest gresgreatest software upad and hardware news, too much more coming up on "squawk alley. don't go away.

welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn.

save up to 15% when you book early at hollidayinn.com the nasdaq approaches all-time high is the best trade of the past couple of years now really back? plus the big call on under armour that might have you thinking twice about the stock details and debate coming up exclusive interview with the ceo whose stock has gone from 86 bucks to 186 this year should you buy in now? you have to watch and decide see you at noon. wilfred, about ten minutes away. >> scott wapner top of the hour. look forward to it apple gets ready to kick off its annual developer show in about 90 minutes from now. joining us from outside apple's worldwide developer's conference event in san diego, long-time apple watcher gene munster plus

david rolfe. good afternoon -- excuse me, good morning to you both gene, i'll start with you, if i may. what's the top of the agenda in terms of what we can expect from apple today? >> maybe even before we get into what to expect, the details, i want to hit the high level, which gets lost, and also tri g triangulates as to why the stock is approaching a trillion dollars. every big tech company has one 8,000 to 10,000 developers at the conference this week, an army of people who are basically enriching the applications, bringing in these phones and devices to life. i don't want to lose track of te the details get pretty geeky what we're expecting today is an improvement in siri, better tools for ai ar kit 2.0 and lastly more around digital health and well-being collectively, when you put all four of those together you get a more sustainable and reliable

iphone business. >> david, your own take in terms of whether today can be a stock price mover or is this just sor the longer game? >> it'important for the stock. it wasn't too long ago that the wwdc made best be described as kind of a geek fest, but if apple, if thk is goingo break out of that 14, 15 p.e. range and hit that nirvana of 18, 19, 20 times, that you see in other consumer related stocks, today, they have to deliver. and i would just amplify everything that gene said. the feedback loop, if developers are excited and we see some significant advances, particularly in augmented reality, that's going to drive upgrades, maybe massive upgrades into the new iphones that's that virtual circle that apple certainly needs. and so for investors, wwdc has become more important each and

every year >> gene, good to see you in san jose they used to have this in san francisco. i'm wondering from a big picture perspective, wwdc used to see software features that hinted he brand-new hand ware we were going to see, for instance, on the iphone and ipad. then you would see features, maybe tuned to drive addictive use, but both of those in a way seem to be out of fashion. we're not getting as much wiz bang in the hardware and addictive features are out of favor. what is the sweet spot for usage, for developer excitement, that apple is going to try to hit here >> well, i think what they're doing around the sear siri, that's voice, they had an early lead but they have given it up, to google that's something that can be a powerful part that gets taken away from today. the a.i. piece, apple takes a different approach a year ago, they announced koerg

ml it runs on device, not in the cloud. there's privacy benefits and speed benefits to that that's something else that app developers will be keenly listening for today. then that third piece, ar, this is a new way that people are going to experience communication between each other. we've gotten a glimpse of it with snapchat, but there is just endless opportunities. porsche, for example, now, is using ar for some of their development. so i think there are a lot of opportunities that even though it might not catch a headline after today, it leaves these 8,000 to 10,000 developers with some excitement to build cool and powerful applications in the future >> and david, a couple years back, apple shifted the way they handle subscriptions on the platform, giving a little more share to the app developer as apple talks more about services and more of its growth potential is in that arena, how important is it that we hear

more about how it's going to drive subscription usage among apps on its various platforms? >> well, it's key. certainly, the subscription business revitalizing the app store with cross platform development between the iphone and mac and the emerging fields of ar and a.i., but you d all that up, i mean, the services side of the business, the subscription side of the business, that's the fastest growing piece of apple it's the high margin piece anything and everything to amplify that is going to be key for apple and key for developers and then hence key for the stock price. >> gene, are you concerned about "the new york times" story that we saw over the weeken suggesting that the likes of apple does have data sharing agreements with facebook, despite trying to distance itself from the whole scandal a couple months ago. tim cook struck a tone that suggested he fement his company was in the clear does this investigation over the

weekend concern you? >> it's not a concern, and the reason being is i still think apple takes the lead in terms of privacy and you're going to hear more about digital wellness and madging the amount of time on your device. it's not a crn of minei think a news over the weekend, great reporting, but as investors weigh that news, i think what they're going to take away here is we're entering a new paradigm in terms of how we think about apple shares particularly, a piece, multiyears of more stable iphone and services growth and collectively, i think those outweigh the stories that we saw over the weekend >> we'll have to leave it there. ve a wonderful morningch well, have a lovely afternoon too. >> on a quick programming note, don't miss my interview with gesstaley on closing bell, 3:00 p.m. eastern time. and you don't nt twao miss the rest of "squawk alley.

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mit be on deckre acquisitions >> what we have done with minecraft, what we have done with linkedin, gives us confidence we can in fact acquire, grow, and have these communities thrive and that's what will basically be things we look for. it's not that we have speeded up or slowed down, but we'll go by those three criteria is it a growing market can we add value and can we integrate it well? >> wilf, sometimes, as you know, ceos say, oh, well, that was a big bite we're going to slow down and digest it. he did not say that. >> absolutely right. i think it was a bit of a hint or maybe it wasn't intended to be, but he let it slip you can see when you get that reaction, a lot of people saying they weren't expecting the price of this being so quite so high, yet the stock of microsoft is applauding it. $7.5 billion in size of microsoft isn't huge, but if there is more of that size, it seems the market would support it

>> some people might need to recognize there is risk here if they mess this up, developers, the wrath of those folks, oh, my goodness they are going to be watching this pretty closely. also, we want to note, apple's worldwide developer conference kicking off this afternoon, 1:00 p.m. eastern ceo tim cook is going to deliver the keynote address. apple has hit an all-time high today. wilf, normally, in the past, software hints at hardware people are anticipating new iphones. what's going to be in them now that apple has shifted away from that big new explosive hardware cadence, i'm curious how this is going to play with markets and with enthusiasts >> if they can really explain updates of the hot areas to us, can siri be as good a product coming up as alexa or home pod, which they have lagged on a bit. apple watch, for example, has lagged a bit in terms of hitting an all-time high, $192.24 is the price it would neat to hit to get to a

billion. it's still five or six percent off that, but ever closer. >> yes, indeed, apple is up. the dow is up nearly 200 points. s&p up fractionally. that is it for "squawk alley." let's turn it over to the judge and the half welcome to "the halftime report." i'm scott wapner our top trade this hour, the tech revival with the nasdaq lessthen 1% from its all-time high, is the sector once again the best place to be for your money? with us for the terrano terranova, stephanie link, jon najarian, and jim cramer, the host of "mad money." our focus is on tech the best performer of the year it's back. jim, here we go gun. all this talk about tech being dead, and here we go >> this is one where i feel it's become a stealth