it is 8:00 a.m. at the think conference in san francisco and 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ good tuesday morning welcome to "squawk alley." i am carl quintanilla with morgan brennan and jon fortt he is in san francisco at the think conference more from jon in a few moments, including an exclusive sit down with ginni rometty back at home, shares of apple after three down days,

investors monitor a number of potential head winds rod hall out with a new note, highlighting one in particular and joins us from goldman's tech conference in san francisco as well good to have you back. good morning >> hi, carl, good morning. thanks for having me >> so everyone has been wringing their hands on unit sales. sounds like you're focusing on services revenue what's the note about? >> we're talking about, you may remember in september we talked about tack, the money google pays apple for search done on apple's platform we're updating that this morning. google's reported again, have a couple more quarters since the last report. people were i think surprised to hear last time we reported on this in september that it is about $9 billion we were estimating for tack in 2018 and in fact foog reports support that we think it was $9.5 billion of revenue to apple that google paid them. really an interesting number to

look at in the services line >> rod, it is an interesting number, it looks like according to the note you expect that to decrease what does that mean for apple? >> we think growth will decrease, don't believe the absolute number will increase, it will grow next year, but we believe the rate they received for that in late 2017 increased quite a bit, and we expect that rate to remain stable into '19 so that means the overall growth rate in services dragged down by tack other things are going on in services that cause it to change they have work cut out for them in services in 2019. >> what's a sustainable number for services growth in the next couple of years? >> it is hard to say what the number is. we are estimating 16% in 2019. slowing from 26% in '18. you know, that's the million dollar question for apple.

what can they do to keep services growth rate from continuing to decelerate a lot of people believe original video content is coming, an apple prime service. those are the things they're going to try to roll out to keep the growth rate stable in our models now, it is accelerating >> you have been working on this, some of your counterparts on the sell side are looking at what iphone units may do, particularly given softness in china. are you more concerned about services revenue slow down or iphone unit slow down or decline? >> iphone units is baked in. we have been below the street awhile, carl we have been estimating that replacement cycle expands to four years in 2019 and i think other people are coming around to that point of view, too. we expect the focus in apple will rotate heavily toward the services line, and within that services line, this tack represents about a quarter of

revenue, maybe a third of profit so it is an important line to look at in services, we believe. >> another important line is the app store. we have a case in front of the supreme court, arguing whether apple's app store is a monopoly. how much risk is that to the services story here? >> the app store is about a quarter of revenue as well, similar in terms of profit splits, about a third of profits. so the app store is important. the thing i would say about the app store we need to think about is the installed base of apple iphones is stabilizing, it is not growing as much. the question is will people keep downloading more and more apps and driving growth we think that growth rate will slow over time it is important but not the thing that's going to move the needle against wall street expectations. >> we spend a good part of the conversation talking about areas in which they have to manage deceleration do you see anything on the

horizon that would be a big offensive move, either new product line, different strategy on pricing, m and a and so forth? >> look, what they've got to do is roll out a new services package or bundle package that's going to drive penetration in that installed base up we think their installed base penetration is 10%, maybe 12% if you look at icloud storage and music in terms of how many people adopted things they pay apple for. they need some bundle or package that moves the number up we have yet to see them announce anything maybe late march we'll see something and have to monitor how consumers respond. >> to bring it home to investors tuning in now, rod, stocks are trading 170 bucks a share. you think it is going where? >> well, we have a neutral on the stock, we think it is going nowhere by definition, so that's kind of where we believe wall

street expectations are adequate don't think apple has opportunity to outperform the expectations, thus the neutral rating on the stock. >> great to have you had heather bellini last hour. talk to you again. >> thank you. >> ron hall, goldman, sachs. lawmakers reached an agreement to avoid another government shutdown. ylan mui is on capitol hill with the latest >> reporter: morgan, there's a potential deal they have to get members and most importantly president trump behind this as well. on the senate floor awhile ago, majority leader mitch mcconnell said negotiators had moved forward productively and framed this deal. >> our democratic colleagues did abandon unreasonable positions and negotiations were able to move forward productively.

>> reporter: democrats to $1.375 billion for physical barriers, up from zero which is what they initially offered. but it is less than $5.7 billion that the president had initially requested. on immigration, democrats backed off demand to cap the number of interior immigration detention beds now there will be a total cap on number of beds on the interior and at the border, that will phase down to 40,500 over time the deal was put together by the top two republicans and top two democrats on the shutdown committee. other members of that committee say they haven't seen the details of this yet. republican representative tom graves said he hasn't signed on and does have questions. we also haven't heard from president trump who literally has to sign off on the deal. we are hearing gop leadership framing it as a win, i think it is clear who they're talking to there. back to you.

>> quickly, anything on the dreamers, the undocumented folks that came here as young people that were thrown out there essentially as a bargaining chip a couple of weeks ago by president trump? >> no. the dreamers are not part of this discussion and that's going to be a disappointment to the business community that fought hard to make this a legislative priority on capitol hill i think what we are finding is that it is simply more than lawmakers can take on at this time, just keeping the government open is difficult enough for them. that's something that still remains out there as potentially an issue that both parties could address down the road. >> we'll keep our eye on word out of the white house or congress appreciate it very much. ylan mui in washington off the developments in washington, a check of the markets this morning some optimism has the dow at session highs, 294 was the earlier high nasdaq exiting correction

territory as well. s&p making a run at the 200, by the way 2743 a few points below that. >> one to watch. as we mentioned, today is the start of the ibm think conference in san francisco. jon fortt is there live with more on his interview with the ibm ceo jinginni rometty at the bottom of the hour jon? >> yeah, morgan. as the cloud moves into an era of mass adoption, ginni rometty has a strategy to gain more share in the cloud for ibm we will dig into that, some of what she will say on stage at think a little later on "squawk alley. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead.

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i work at the network operations center for comcast. we're working to make things simple, easy and awesome. shares of chegg, the stock on a run as you might know, up 20% this year. up more than 110% in the last year joining us, the ceo of chegg, a great guest on post 9. >> good to be here, particularly after earnings. >> beats the alternative, right? what accounts for all of this, how do you explain it? >> i can explain the business. 70 or 80% of kids go to state schools. 40% of them work 30 hours a week or more. 25% of college kids have kids. we have a different% of kids people imagine are in college.

20 million who are working, raising families anything we can do to help lower the cost, make it more accessible, help them master the material, pass the test and get them a job are things they value. chegg has been working on that for nine years only the last couple of years when we transitioned the business model from print to all digital that i think investors are finally understanding highway big this is. it is a trillion dollar market with a trillion and a half in debt and 20 million students and only getting bigger. >> i was in a bookstore the other day in west virginia, they don't sell books, all football merchandise and clothes. are textbooks dead >> they aren't dead, textbooks at the bookstore are dead. when we invented the model, anybody that's gone to college, morgan, you know this, knows textbooks felt like a rip-off and they were. being able to rent at 30 or 32 bucks each, no reason for the

bookstore to sell them they adjusted to selling things like sweatshirts and food and makeup and other things. and we're focusing on programming the education material. >> who are the biggest competitors, mcgraw hills and piersons that had a lock on this for quite a period of time or amazon and some other tech companies getting into the space? >> always a challenge answering this the answer is everybody and nobody nobody is trying to do what chegg is trying to do, we built a platform with 87% brand recognition, over 13 million registered students, 5 million paying customers we go direct to the student. no one else does that. we offer homework help, tutoring, internships and careers. publishers are a partner the dectextbook business is bet because of the relationship we have we use them for con tent, books for consignments, the industry moved our direction. nobody has a direct to consumer

business in the college space with the exception of chegg. amazon does textbook rental, but it is a small part of their business if we can meet them on price, which we do, service and convenience, we beat them, put surprise and slight in the box, we ship 6 million textbooks a year but the real business is digital, homework help, tutoring, math, writing help the more we offer students, the more content we offer, more capabilities, the bigger the market opportunity gets. you're seeing it in results. >> doesn't it seem like a natural target for someone who would wan to buy something in the space? >> if you want direct to consumer, you want high school, college, millions of direct to consumer subs, we're an incredible asset we don't think of it that way. we are saying the market is getting bigger the ability to go global, canada, australia, and the uk and then countries in other languages because stem subjects

are ubiquitous stay out of politics and religion, everything else is ubiquitous we see the market getting bigger. >> gen z, you have data on consuming patterns and the like. >> we do >> what are you seeing in terms of this generation may be different from millennials and the one before it? >> they're interesting in social consciousness. they're interested in their view of doing the right thing they're interested, they have been hurt by the system. they've taken on tremendous debt a trillion and a half in debt. 44 million americans with debt the price of college has gone up, so part of the reason they're struggling with the economic system is not that the economic system isn't great, obviously we think it is, it is because they haven't experienced it everything they have done, someone is taking a toll, textbooks, college spenlss, not able to get a job. 40% have jobs not relevant to the education they got

the curriculum has to adjust they're very into social consciousness, into mental health and well-being, and these are the kinds of things we want to provide for them. honestly, this generation, they work hard, they study hard, but the challenges they're facing are more difficult than the ones we had to face that's why chegg exists. we help them through the process, make it easier, more affordable, more convenient, more relevant in terms of content. we like the generation they like us >> not only up 10%, you have the logo behind your head. some stars are aligned we'll talk broader tech stuff next time. >> look forward to it. thanks for having me on. dozens of high profile tech executives are writing a letter to congress this week in an evident to spur immigration reform and protect dreamers. the letter warning that not doing so could cost the economy $350 billion in gdp, one of the

signees joins us now don graham, former lead independent director for facebook and former publisher and ceo of "the washington post," who is now the chairman of grant holdings. thanks for joining us. >> thank you glad to be with you. >> we have a deal in principle in congress, remains to be seen how it evolves it doesn't include dreamers, but yourself and other tech executives, business executives signed the letter. layout the business case for more permanent legislation around this group of people. >> we do, morgan it is not just tech executives that is signed by people like mary barra, arnie sorenson, doug mcmillan at walmart, many big businesses in the united states saying we know these young people they're terrific they came here as small children i'm the co-founder of a scholarship fund that has 3400 dreamer students, the average one came here when they were

four years old i believe in enforcing the laws. if you go back 50 years, i'm an ex-police officer. i arrested felons and convicted them, sent them to jail, but never arrested a four-year-old i think a judge would throw that case out in a minute they came here as very small children they have never been convicted of a felony or serious misdemeanor, those with this obama administration program called daca. if they're convicted of such crime, they lose daca. what do they want? they want to stay here,to stud and to work and to help this country grow that's why executives like the ones you named and others are speaking up and saying it is time to do something for them. i heard your wonderful reporter ylan saying they're not in the deal once again, you know, it

makes me very sad. the dream act was introduced in 2001, poll after poll, including your own nbc poll says 80 or 85% of americans support it. once again, nothing is being done and we count on the leaders of congress and the president all of whom have spoken up for the dreamers, including president trump, to do something this year. >> don, thinking back to an op-ed in "the washington post" prior to the shutdown and urging democrats to exchange a daca deal for some wall funding obviously didn't work out that way. was that a missed opportunity? >> from the dreamers' point of view it was. that was the first op-ed, the dreamers have republican support and democratic support the president at one point

offered to do something for the dreamers and then the bill he sent up didn't seem to be written by somebody who read the president's speech and took back much of what the president wanted to give but yes. it was a missed opportunity, carl, and another one we put too much pressure on these dreamers. they want a chance to go to school, to eventually go to work, and the opportunity for permanence is offered again and again and snatched away. it is too bad. >> it is a big issue one we're going to continue to talk about i want to shift gears a little bit. >> had a feeling you might >> jeff bezos, obviously in the limelight now for better or worse, given the controversy with the "national enquirer" and ami.

in his letter, he brought up ownership of the post, said it made him a target. is he right? >> well, jeff's letter, a medium published a series of exchanges between him and lawyers for the "national enquirer" and they brought up "the washington post." they were telling him what "the washington post" could and couldn't do in report, that's always a bad idea. lot of people tried to do that over the years, none so far have succeeded. i'm not speaking here on jeff's personal life, but the way he reacted to what -- i'm not using, careful as the next cop, but in layman's terms, looked like extortion or blackmail attempt, and i thought jeff handled it admirably. >> it is a tricky situation. on one hand, you have the billionaire peter teal go after

gawker and now this coming out more will be revealed. in an era where press freedom is under attack we should support bezos or wait for more details to come out? >> people going back all through history have tried to find clever ways to attack news organizations like "the washington post" and like your organization that publish things or broadcast things that powerful people didn't like and i think people talk now as if the trump administration is the first time that presidents or powerful people got mad at the news media democrats and republicans both get mad at the media, goes back to the start of our country, they always have and one of jeff's predecessors, kathryn gray ham, my mother, could tell you about interest ways governments find to apply

pressure when they want a newspaper not to report something. but "the washington post" is going to report on the news in a fairway. >> don, whether it is bezos and the post, jobs in the atlantic, time and there's an open letter to howard schultz advising him not to run for president but buy a slate of newspapers. i wonder if you think the american media, modern american media relies on billionaires to keep it afloat >> well, if you go back 200 years, somebody like ben franklin, a printer, could start his own newspaper in the 1740s and '50s 19th and 20th century, most papers have been owned by people of some wealth when my grandfather bought "the washington post" in 1933, he was buying it after a career in wall street, quite a wealthy person in his day, good thing he was,

he lost money on the post for 21 years before it became profitable and mr. pulitzer, mr. hearst, you used to work on "the wall street journal." people that owned that were pretty well off. so this isn't new but it is a new and different set of owners and some of them will find they don't like it and will move on and some of the ones you named will turn out to be terrific owners i have no doubt. >> don, you're also on the facebook board for six years until 2015 came out last year publicly to defend mark zuckerberg in the cambridge scandal. we have seen more revelations in terms of data and privacy and what's arguably misuse of those. how do you think about it now in terms of facebook and everything that happened in the past year >> good questions, morgan. i don't want to say for a minute that facebook has done nothing

wrong. they have done plenty that they themselves, mark and sheryl sandberg and the board said, they made plenty of mistakes i also think i'm no longer an insider, haven't been on the board since 2015, but i see on my own facebook page evidence that they are working diligently to fix a lot of things that have been wrong it is a lot easier to look at my own privacy settings, see who is seeing information i may post. and they're making dramatic changes around election security they're requiring anybody that puts a political ad to say who it is who paid for it, allow them to see other ads. i think facebook is doing a ton. the people i know at facebook are terrific i admire them, i trust them.

whatever else is done in this country, the people at facebook will be working to fix their problems >> don graham, thanks for joining us appreciate it. always great to get your insights. >> a pleasure, morgan and carl thanks for having me on the program. still to come, our exclusive interview with ibm ceo ginni rometty, less than ten minutes ay more "squawk alley" is ahead don't go anywhere. from insurance to savings to retirement, it takes someone with experience and knowledge who can help me build a complete plan. brian, my certified financial planner™ professional, is committed to working in my best interest. i call it my "comfortable future plan," and it's all possible with a cfp® professional. find your certified financial planner™ professional at letsmakeaplan.org.

good morning, i'm sue herera here's your cnbc news update at this hour. 17 people were killed in a fire at a hotel in western new delhi, four others injured. three dozen were rescued the fire has been extinguished, authorities are still investigating what might have caused it. vatican officials are expected to decide this week the fate of theodore mccarrick, accused of sexual abuse. vatican officials say he will

almost certainly be dismissed from the priest hood that would make him the highest ranking defrokd in modern times. mark kelly running to finish j john mccain's term in the senate he is married to former congresswoman gabrielle giffords who is a shooting survivor. three women who attend yale university are suing the school and nine all male fraternities it seeks to force them to admit women to combat sexual harassment and discrimination. yale had no comment yet on the suit. you are up to date that's the news update this hour carl, back downtown to you >> sue, thank you very much. let's get to jon fortt sitting down with a special guest. jon? >> carl, thanks. here at the ibm think conference, 26,000 attendees, lots of focus on the cloud,

hybrid cloud ceo ginni rometty, thanks for having us. >> thank you for coming. >> two pieces of news to break here one on watson. >> yes. >> watson anywhere now, to run watson in amazon's cloud, in microsoft's cloud, as well as in ibm's cloud. why do this and percentage wise, how much do you think it can grow the cognitive solutions group. >> there's more than two big pieces of news at this conference, you said 26,000 people, 2,000 business sessions here what watson anywhere is about, it is demand of clients. it has to do with data we talk about how much data everyone has, where is the data, do you have to protect it, do you want to move it. this is in response to that. watson can run on your premise, you didn't mention that, on your premise, in any cloud, and connect between them that's what clients are asking for. they may say i want to train watson with my own data, and

then i will run it on a cloud somewhere else, or i want to experiment somewhere, but when it comes to production, my trading algorithms, i want to run it here. it has to do with size, location, protection of data, and ability to run anywhere. we actually had to do a lot of work around the ibm cloud private. that's what watson runs on that's container based, has everything to do with our hybrid position red hat is coming up this allows it to move anywhere out there. it will be a big grow. this is a big piece, not just of watson, a big piece of hybrid cloud. we think that's a trillion dollar market and we'll be number one in it that gives you a good feeling. >> you're announcing cloud integration platform and we heard it from other companies, too, businesses are demanding to get data out of various silos, get them ready to move to the cloud.

how is ibm's approach different than say sales force they told the same story, need to get data out of these places so customers can put it to work. >> very big difference back up. this conference is about chapter two, scaling ai and the cloud becomes hybrid the reason it becomes hybrid, first chapter of the cloud, customer facing new apps went on the public cloud chapter two, mission critical. that's all on prem, has to move, will take containers, open technologies to move those what you start to have to happen is people end up with, we've done studies, 40% in private cloud, 60 public if you're regulated, the other way around then you move data between and amongst those. and then have to manage them that's what we're doing. the integration platform you mentioned as being announced is to allow you to manage data, services and apps, moving between these places and

communicating between them >> when do we start to see if your setup is correct, when do we see acceleration of ibm pulling ahead of others telling a similar story? >> first off, sales force is a partner of ours. they worked with watson. when it comes to integrating apps and modernizing them, chapter two is driven by modernization of mission critical apps. that's in our sweet spot when you say when do we see that, you saw last quarter cognitive solutions, saw that return to growth, hybrid cloud, very strong. ibm cloud private very strong. you saw in services business things like b and p perry bus, biggest bank to the cloud, announce another big financial services to the cloud while at this conference, and you saw with services backlog, 30% cloud. these are indicators that this is moving. >> tell me about ceo confidence.

last time we talked, it was a couple of days after fed chair jerome powell made comments about being patient. the market really took an up swing after that have you seen the confidence of ceos you're trying to get to continue to buy with ibm on a trajectory since then, have things improved or has it been steady >> i think it has been fairly steady and i hear from all of my colleagues that everyone is still planning as i say both ways on one hand, planning down, you can look at growth or efficiency in a curve over time, you would have seen more toward the growth side i see that balances between growth and initiatives i see it staying firm. one foot in both camps. >> the white house along the theme we have been talking about here on ai just put out this executive order on ai. are we behind? >> i heard people talk is

america behind on ai sometimes they liken it to other countries have more data, they can train, have less policy. i want to remind, a lot of data for technology matters but the ai we are working on is to train with less data. next state of the art rev on ai is less data one shot learning gets called. i don't believe data is the only determine ate or, determ in and the. you mention that executive order on ai, it is a good step forward. >> we need more of that. >> i bet we worked with almost 20 countries on ai policies. many countries have national policies around an industrial way they're going to go. this is long overdue but a great step in the right direction and calls out the

right areas to be worked on. part of it, core technologies, r&d. our department of energy that hosts our national labs which have the ibm super computers, those are a great bed to open up to learn skills that are out there. you want to have standards policies that are out there and you want to use federal data so you start training ethical ai, all good steps. >> speaking of these labs, ibm has been a big employer in new york state amazon is trying to move into new york city, facing some push back queens might just say thanks but no thanks. if that happens, if queens says no thanks to amazon, what's the message to business? >> well, i can tell you what we learned over the years, right? we are in 170 countries. and i have always said what i learned out of that, you have to be of the country you're in. for us, we aligned ourselves with the agenda of the country, the city, no matter what it is, and prided our self in being a

great citizen in each of those places when you do that, you're welcome everywhere. >> what does it say about the process you need to go through to pick where you go and how you engage with constituents >> our lesson has been to engage, understand what's important, and some of the basics are important about skills, jobs, aligned to what you're going to do with those. that's a lesson for everybody. >> finally as we look out at what you're doing at think in the multi cloud hybrid environment, what's a win for ibm coming out of this what is different about ibm's approach you want people that are here that might be a dream force, open world, et cetera, to come away with >> chapter two of the cloud is move to hybrid that means you go through a journey to take the applications you have and modernize them. we give them the services. we announce 23 ends to end

services for that journey today. second thing we give you is the software and cloud, public and private cloud and all of the connection for any cloud, including our own, and on prem, and as well software services, public cloud and also announcing the most secure public cloud you'll see an announcement later today that it is the most secure public cloud, something called hyper protect, that's out there. they would walk away, say if i have to modernize mission critical apps, ibm is the only partner to do that >> you heard here first, watson able to run on premises and on any other cloud and also ibm cloud integration platform ginni rometty, ceo of ibm from think in san francisco thanks guys, back to you. >> thanks, jon. dow up 312 "squawk alley" back after a short break. ♪

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welcome back to "squawk alley. undera underarmor surging >> surging after falling after surging. the stock has been all over the place. this morning after a mixed report, overall a better

quarter. here are the keys. margins are improving. companies are relying lesson promotions, costs, inventories that was the highlights they were proud of. there was disappointment around sales, down in north america and in footwear. talked to his number two how they're going to turn it around. a lot of emphasis on franchises. curry really taught us a lot from curry 1 to 6 and 7, we are able to build something on that. with basketball we have been able to expand, with stephen, so kids can get to know the franchise names. in the past, we have been too quick to get onto the next idea. some examples, harper, bryce harper collection, spotlight, cleats the idea is to start to build the brands early and iter ate, not unlike what nike has done with lebron and jordan i did ask the executives about

competition. they're trying to enter the space where lululemon and nike are doing better in north america. everyone and their mother is in athleisure plank emphasized that they have a place in terms of its size he says the $5 billion threshold is a big deal. there's a reason why only a few have made it that big, putting them up with the ranks of adidas and nike in terms of size. the bottom line in the conversation, both executives talked about discipline, about right sizing the business, about creating an under arm or that was sustainable with predictable growth a big switch for this company culturally from where it came from he told me we were not on message all the time with products and brands. so they see this quarter as a step in that direction and they feel good about the fact it is what they told investors at investor day that they can expect. something that underarmor wasn't

always able to do. >> giving them the benefit of the doubt. >> thank you for bringing us the headlines. markets are all in the green. dow up 320 points. s&p up, just below the 200 day moving average nasdaq exiting correction territory earlier in today's session. back after this quick break. his steinway, which met a burst pipe. so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory, and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival. pure. love your insurance.

up next, more from the ibm

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welcome back here in san francisco at ibm think conference joining me is at&t ceo i want to talk about enterprise, some things you'll touch on on stage. sprint is suing you over this

5ge thing that's become so controversial in the wireless industry you still holding to the position that 5ge is the right way to label there service >> yes, the last time we spoke 5g evolution will be available on the iphone as well. i think that as i said, our customers really want to understand the network characteristics they're on we're seeing customer delight with that. we're seeing great feedback. at the end of the day, that's what matters the most. >> we looked at a number of options for the naming convention 4.5, lte plus. customers resonated with 5g

evolution. it's between 2 and 7 times the speeds it's dramatic. >> we'll continue to follow this tussle between the big carriers. you guys are talking about cloud and about the legacy data that you guys are moving to the next phase. how does red hat fit into that a lot of investors are looking at what happens when ibm and red hat get together >> if you look at the situation with at&t and ibm. we are close partners. we supply each other they have a really good understanding of hoour native environment. the complexity of the legacy environment. when you look at moving in a hybrid fashion, some things will be born in the cloud some need to be moved to the cloud. i think it's a combination of

red hat and its technology with ibm's understanding of our operations and some of the things, the assets they have been acquiring it's a really good fit for us as we start to move our legacy environments into the cloud. >> you just are announcing, i believe, that minneapolis and chicago, you're adding those two areas to the 5g list for 2019. you're going to roll out in those areas. you also said you expect the enterprise to be the first big kind of opportunity for at&t as you move to these markets. why the enterprise and what sorts of businesses are going to be the ones you're going to hope will adopt it. >> if you think about each time i bump into you, we have more cities we did 12 in fourth quarter. seems like meeting you is a trigger for launching more

cities they want to take their business and say i want to take this to another level. >> it's not about phones yet >> it's about a business saying can i dot, dot, dot. it will allow them to have massive centers on site. >> it can save them money operationally. >> it might save them money but might create a new experience. if you look at the dlallas

cowboys, we have the first 5g stadium. it got up last week. for some it's revolutionizing their business we're going to provide for end of life care some experiences that will for the folks that they are managing in their care system it will provide them the ability to visit places and travel from a chair, if you will >> right >> we just keep finding more businesses are calling us saying can we our standards response with 5g is yes you can >> john donovan, thanks for being with us. >> thank you >> back to you all right. thanks squawk alley is back in a few minutes. with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com

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do not miss another cnbc exclusive. you can catch the full interview at 4:20 p.m. what a show. >> second best performer in the dow is ibm

it's up 19.5%. >> we're watching the s&p here it's been denied at least a couple of times in the last few weeks. we'll see if it can breakthrough get to the judge in the half i'm scott wapner we're covering major developments from wall street to washington news of attempt of a deal that could avoid another government shutdown we begin with the markets. you can see green across the board. you know the president, if he signs this deal,