emily: apple lawyer ted olson. we will hear more from olson on apple's legal strategy.e believes the fbi's fight is a civil rights violation. next. ♪ emily: now back to apple's , impassioned battle with the fbi. we heard from apple's attorney ted olson today, and i asked him what he thinks congress needs to do next. ted: congress should do its job, which is to consider the various different alternatives and the thect on citizens, balance concerns of law enforcement, which we respect, apple has cooperated in every possible way with the government except for throwing out the design of the iphone and redesigning it. congress needs to consider what technological resources exist, what can be done by the government without conscripting private citizens to change the products they make, and things like that. there should be hearings, there should be expert testimony. they may have started yesterday, the testimony, not just from irector calmly of the fbi, have the most in or miss respect for him. a tremendous public citizen. we are lucky to have him. but the testimony from him,

in cupertino, we're watching apple stock. apple a session lows.'re listening to live coverage of apples event in cupertino. they just unveiled a new smaller iphone. they unveiled new apple watch bands, potentially new ipad to come. the first thing that tim cook talked about on stage was apples standoff with the fbi, very important hearing scheduled tomorrow, where we are potentially expecting a ruling from the judge as to whether apple needs to comply with the government order to unlock an iphone used by one of the san bernardino shooters. i want to bring into this conversation and o'connor, ceo of the center for democracy and technology. now. us live obviously a very important day for apple to sort of set the whatahead of this hearing, do you think you're going to be seeing in the courtroom tomorrow? >> this is a momentous case, not only for apple but the whole tech industry. it will set the tone for how much government in truth and we are going to see in our daily digital life, wherever we are using devices. we don't be the judge will rule from

apple has a responsibility.ng asked to communicate with iphones all around the world -- that is a first amendment right. i'm surprised at the attorney general that's he would should -- that she would suggest only people accused of doing wrong have first amendment rights. have a first amendment right and no one is accusing you of having done anything wrong. apple has first minute rights to protect its product, to avoid government compulsion of what it should have to say to its products in order to change the design of those products. it has a responsibility to protect the integrity of all of the people that have been all over the world who depended upon apple. use with respect to these phones -- you can imagine what a karen eckel government can do to individual privacy of individuals wishing to communicate with one another or their neighbor in private. we are talking about the rights of apple to make sure that it's iphone has the integrity that it carefully built into it. all of those are constitutional rights. e

is it the apple tv? is it a car?it owning the living room and doing something like the amazon alexa? gene: think about google glass, and the companies like google and samsung. sony. they have all been very vocal about what they are doing in this space. apple has been making some acquisitions and hiring people, but if you think about the window, it is this mixed reality, different from virtual reality, but this is going to be a paradigm shift in computing. apple needs to nail this to keep the momentum growing, and i think this is the kind of thing that keeps tim cook up at night. emily: interesting. horace, quickly, because i want to talk about encryption before we go. horace: i am still optimistic that the watch has a growth story to it. the margins are good. what we are talking about is an important part of the growth story. it is not just a hardware play, but apple is involved in making money in different ways and not just hardware, and that is a message they are putting out there. emily: tim cook on the world stag

see the techyou industry get behind apple. they recognize this is way bigger than apple.ning moment for tim cook. he can really put his stamp on the leadership and what he wants to do with apple. as a datary company company. what are the broader implications of this? been puttinghas the privacy stake in the ground the last years. they've made a part of their brand. if customers see them backing down, it will have an impact on apple's brand. if they see a company with apple , that kind of clout, if they lose, others will follow suit. emily: the new york times theyeers have reported will quit if this comes to pass. what happens if a judge orders the company to do this? what happens if apple engineers say, we refuse. tim: talk about complicating the matter. areets to the rift we seeing between silicon valley and washington law enforcement. we saw it happen after edward snowden a few years ago. , ithese engineers walk off is a complicated place. o'd, and very sil there are questions about how long it will take to respond bringing in the backbenchers. this morningest said this

what is the functional difference between ordering apple to break its encryption and ordering apple to bypass it security so the fbi can break the encryption? >> thank you you break a member. functionally there is no difference. what we are talking about is an operating system in which the passcode is an inherent and integrated part of the encryption outreach. if you can get access to the passcode it will affect the encryption process itself. what we are being asked to do a california is to develop a tool, tool which does not exist at this time that would facilitate and enable the fbi in a very simple process to obtain access to the passcode. that passcode is the cryptographic key. essentially we are throwing open the doors and we are allowing the very act of ink decryption to take place. >> i was hoping you would go in that direction. let me ask you this, there has been a suggestion that apple is working against law-enforcement and that you no longer respond to legal process when investigators need your assistance, is that accurate? >> it is absolutely false. as i said in my opening s

apple did faced tough questions from the congressman from south carolina, wanting to know what apple'sroposal was, what would apple agree to, and apple wasn't ready to say they would propose legislation at this point. emily: let's talk about the middle ground here. law enforcement and attorney general loretta lynch, we are about to hear her call for a middle ground. i wonder, is there really a balance between security and privacy on this particular issue? when apple says there is no middle ground, it is a slippery slope. >> the fbi would say there is a middle ground, that other companies are able to do this, but it's a business case for apple. that said, apple was talking createow they, if they this tool for the fbi, then others will want it. emily: tim higgins, bloomberg news reporter -- >> from there, the conversation was pointed into the technology and we had an expert talk about how really, what the fbi needs to do is generate more knowledge in the area and develop the skills to crack into these phones. not a lot of feedback on that from lawmakers. day, youhe end of the are hearing

the latest apple designed, apple-built chips. it could cost as little as 450 bucks.with walt mossberg, who is the dean of this stuff. walt, if apple were to come out with a smaller phone, would that significantly impact sales overall, perhaps in emerging markets? and what sort of price would make a difference? >> well, you know, even $450 for an iphone is cheap. because, you know, an iphone typically sells for almost $700 at base. and i think it actually -- i don't know about the word significantly, but i think it actually impacts sales in two ways, jon. even in this country, and other developed countries, not even talking about developed markets. number one, there's a significant holdout from going to the bigger screens. the bigger screens, as we all know, produced, you know, giant blockbuster numbers for them. so clearly, they were popular. but there was a holdout. and it was a significant holdout share of the market. tim cook has said that as many as 60% of their users had not upgraded to the bigger screen. and even at the verge where we have pretty techie users,

special access to apple device. that is an iphone that's at the center or at the periphery rather of a methamphetamine distribution case in new york city. susan, can you quickly tell us what's going on? >> this is the case that you might have heard of over the past couple of days of a new york judge says fbi can't force apple to unlock an iphone. you might be confused that are multiple cases going on. this is a case in new york in the eastern district. what's really important to understand about that case is its in iowa's seven but the difference between an ios seven, there's a number pashtun ios seven. how the device is grid. important to understand is apple has the capacity to unlock the phone that to bypass the locking mechanism to extract the data. they maintain that capability voluntarily. they provide a service to the ios approximately 70 times in the past pursuant to an all writs order. they declined to do so in this case. they are challenging the use of the all writs act to compel the kind of assistance at q

apple made a very spectacular request publicly for apple to -- the fbi made a request publicly for appleone in the san bernardino case, and i think they chose that case because it made apple feel pinned against a wall, quote unquote, helping the terrorists. asked apple to ite the request sealed, but became public. it starts to feel like a hot and public debate where apple says, we stand up for customers, and the fbi says, are you accidentally on the side of terrorists. of course, no one actually think that apple is on the side of terrorists. what is actually about is about resources. the fbi could crack the iphone themselves. it is possible. the chinese government has already done so. the nsa has already done so. the fbi is of the asking apple to do so. here is what will probably happen. apple is raising the bar. they say, you are relying on an perhaps979, very old, obsolete. congress has not come up with how to make these kinds of requests mandatory. let's have that debate today. instead of having to reply to every single request from a da, let's raise the bar so there really truly is o

apple's help. that's go to matt larson for the latest as well as paltrow -- paul kedrosky will join us for much of the show. like the fbi has successfully been able to access the information it was seeking from the iphone without the assistance of apple. it looks like there was a third party involved that gave them a technical capabilities to do that, likely some kind of mobile forensic expert that had contracted with the government in the past. as of right now, it looks like the fbi is dropping the request to have apple right additional code to circumvent security features of the existing software. cory: do we have any idea who did this? >> the rumors that i have seen so far are the company celebrite. an israeli contractor that works with the government on similar requests, and are kind of savvy in some of these backdoor hacking around security features to access data. cory: what do you think of this, paul? doesn't look like the fbi had access to this all along but was looking for something to giv

it is a business decision by apple. icloud goes, the icloud is only obtained if the person selects it to be backed up. to phone cannot be backed up the icloud upon your discretion. you have to agree to that. you seem to know a lot about this. why is that? i amr: put it this way, very familiar with apple and their devices and i am intimately aware of law enforcement's concerns. only suspects we cannot access, it is victims. family victims whose members do not have access coats and are unable to give it to law enforcement. we do not know the intimate details of their family member'' death. this is a major issue. thank you for your perspective. eli dourado? guest: it is true that the verizon data is metadata and not necessarily the data. very often enough to follow up on new leads. they would know for instance who the shooter was texting with and so on. the leads are preserved to the verizon data. again, it is true that icloud backups are optional. apple walks you through a process when you set up the phone and the default

it would remain in apple's hands and apple headquarters. emily: alex, take us into the bigger context in regards to the business. apple is predicting sales to decline. yet, all of these thing are happening at once. >> we had a piece that came out little bit earlier talk about the interest in apple. it has reached lowest since april 2012. that implies that perhaps, all of the doubts having priced. lot of people are expecting the stock have to recover. there is going to be a decline. lot of people are predicting that. the question is, whether it's the first or second big step, second big decline, where we are now. emily: all right, alex webb and tim higgins and cory johnson. yahoo! add two new board members. we'll take a look. ♪ emily: former apple executive named coceo of bridgewater associates that oversees more than $150 billion. the news comes as investors look to cap stocks. ruben will replace greggenson. now to yahoo!s to revolving door. the company appoint the two new directors. returning the size of the board to nine. the newly appoin

that asks a question why is apple apple. we begin this evening with the ceo tim cook. >> it's the people and the culture. and the culture here is this very unique blend of idealism that anything is possible that we can be bold and humanity. everybody's fear wants to change the world and we do that through our product. >> rose: politics and apple when we continue. >> rose: funding for "charlie rose" has been provided by the following: >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: the 2016 presidential election could be remembered as one of the most bizarre and unpredictable in american history. a new series on show time seeks to capture its jaw dropping head scratching moment in real time. it is called the circus inside the greatest political show on earth. show time president david nivens says it aims to expose not just the nitty gritty about campaign work but al society peopl

right now he's talk ing about apple tv. 5,000 apple tv apps right now.hey're talking about the ecosystem there with video. we're going to continue to bring you the updates as they come from this event here in cupertino. back to you. >> look forward to it. thanks, jon. gold prices are closing now. let's take a check on where gold is settling out. 1244. 70 an ounce. green arrows across the board with the biggest gains seen in palladium today. >>> technology stocks getting a low start for 2016. there you are. our next guest has three tech names you should buy today and hold for the next 12 to 18 months. let's bring in brian bellski. brian, always good to see you. your three names are really unfamiliar to me. i've never heard of any of them. apple, one called google and then a third one, i can't even remember. it is so obscure. what is the third one? >> really obscure. i think our strategy has been for several years, we want to buy big brand companies that everybody knows, that isn't going to surprise anyone. remember, we're all still kind of waiting around

an apple device. and that is an iphone that's at the center or periphery, rather, of a methamphetamine case in new york city. susan, quickly tell us what is going on there. >> right. this is the case that you might have heard of over the past couple of days of a new york judge says fbi can't force apple to unlock an iphone. you might be sort of confused that there are multiple cases going on. this is a case in new york in the eastern district. what's really important to understand about that case is it is an ios 7. the difference is there's a number of detailed, technical differences in terms of how the device is created. the important thing to understand is that apple has the capacity to not unlock the phone but to bypass the lock capability and extract the data. they have provided that assistance to the fbi about 70 times in the past and declined to do so in this case and so they are challenging the use of the act to compel the kind of assistance at question. it's important to sort of understand whe

the other reason is the fbi has sought from apple and apple has cooperated and given the fbi the icloud back up. apple has turned that information over to the fbi. reseti made a mistake and the password on the icloud account so we do not have the very latest information from the account. the other reason is the fbi has sought from verizon, the carrier associated with the phone, the phone call and text messaging data from the phone, even for the period that is not covered by the icloud back up's. the fbi has quite a bit of information on what is on this phone already. i think this is not being brought to further this particular investigation but i think it is being brought as a test case, because the facts are so conducive to the issue that you talked about, the public opinion, does this is a very rare terrorist case, national security case. it is the kind of case that is most favorable to the fbi. at the same time, over the same period the fbi made a similar argument in a case in new york and a judge ruled they did not have the authority to ask apple to create a back door into the iphon

if governments like china ask apple to do the same thing, would apple do it?> so this is actually a really complea verycomplex question. i think there's a lot of attended the sake apple can create the technical conditions and that would allow them to say no to other countries. nobody except apple and the chinese government know what apple's relationship with china is like. what the apple general counsel test of the estate is that apple has complied with chinese localization laws. so that means all data stored within chinese service. it's common understood that the chinese government maintains access to all data within china. google, for example, rather than comply with david localization laws elected to withdraw from that market. so while it's difficult to know, it's not, it's apples and oranges because the relationship to the date in question is very different. that said, certainly china is looking to what the united states is saying. certainly is operates, this offers you his company's abilities to negotiate with chinese government as sort of, they tend to p

moved to throw their support behind apple.he fbi director james comey testify before congress, calling encryption the hardest problem i have seen in government. joining me now is max levchin. he is currently the cofounder and ceo of a firm at a financial and technology company. he is on the board of directors at yahoo!. thank you for coming. rather than asking a specific question, let me ask you a broader question. let me ask a broader question. we've seen this coming? tell me more. >> consider the fbi director comey has advocated for essentially backdooring encryption software -- that is built into apple and other systems. that is easy. but that is a terrible idea. there are simple things to it, bad guys do not abide by our laws, good guys will weaken encryption which bad guys will take advantage of. good guys will have weak systems and bad guys will use the strongest thing they can get their hands on. off, it will be better off. they will be better off. charlie: bad guys can be criminals and nationstates. >> anyone. anyone o

apple's help?s a huge victory for the technology industry. they have stuck their neck out and basically said, we will support apple on this. this lets them in a good framework for newer cases to come as for which weight you can expect these companies to respond in a case like this. cory: what clever thing should i say about this story when it is a day old tomorrow? paul: that it really doesn't matter anymore because the whole story has moved to europe. that is where the action is with the legal ramifications about iphone in a access. cory: paul is sticking with us. thank you very much, we appreciate it. this is part of the dell i.t. division. $3 billion. that is almost $1 billion less than dell paid for it. why the fire sale? ♪ cory: sri lanka's government plans to turn the island nation into one big wi-fi zone. google's project beams down internet to remote areas from high altitude balloons. it could be cheaper than undersea internet cables. the government says it is working to blanket the company

apple does not know how that was done.y cannot be sure that hundreds of millions of iphone customers are safe from a similar attack. claims iti newspaper was a tel aviv firm which helped the fbi. it has already developed software to crack the code to older iphones. the company refused to comment. apple upgrades its software when it discovers holes in its defenses. one security expert said this time it is working in the dark. in an ironic position where the fbi know about a letter ability -- a vulnerability in the iphone that apple doesn't known. they have not been cooperating. if apple doesn't know about this problem and what the fix needs to be, they cannot fix it for their customers. >> as they try to make the customers more secure, apple is in an arms race with hackers probing their defenses. this time it is the u.s. government that is ahead in that race. katty: a short time ago i spoke with the editor of cnet. ok, the government is not saying who did it or how. what is your speculation? >> there are a lot of theories t

include apple in it. get their help.t say to the government you cannot have this, good luck with you protecting our nation. the constitution is not a suicide pact. it is a constitution that was built to defend this nation. if all of a sudden we are saying that we do not have to do this, i think we are in the wrong place. emily: is there a technical solution that actually is a middle ground? apple was being asked to create a key that could become a master key to all iphones. tim cook says it is like cancer for iphones. it will put everybody who owns an iphone, hundreds of millions of people, at risk. does that give you pause? >> what i would say is there a way to create a solution that can be held by a body or something that does allow the government and others to look at communications that they need to stop a terrorist attack? i would go to google, facebook, apple, ibm, the tech community. i would get some of the best experts in the world, and say can you come up with a solution? kid get folks like jeffrey stone, who is

apple made it's engineers available to advise law enforcement but apple will not write new software thatns it's own devices. that he said could risk the security of millions of iphones and set what apple is calling a dangerous precedent. there doesn't seem to be any middle ground in this show down right now. the next date to circle on your calendar, march 22nd. that's when both sides will be in court at riverside, california. carl back to you. >> thank you, josh. meanwhile the secretary of defense ash carter also weighing in on the apple case. aman joins us with that part of the story. >> good morning, carl. the secretary of defense is here in san francisco this week for the rsa cyber security conference. he's doing a bit of a good will tour here meeting with a lot of the top silicon valley executives and in a speech last night he touched on the apple versus fbi controversy saying he couldn't weigh in because of on going litigation but he did say this. the right way is partnership. it's easy to see the wrong ways to do this. one would be a law hastly written in anger or grief. another wo

has responded to apple's motion to vacate the order to unlock the apple iphone.n -- belonged to a san bernardino terrorist. they are extending the order. the court has the power to order apple to help unlock the iphone. these are headlines so far. it looks like it has delayed a step in the back-and-forth between apple and the u.s. government over this issue of what apple says is privacy and with the u.s. government says insecurity. -- is security. and we got news from apple today on the product side, march 21 is the next time we will learn about the newest in the apple products line. bonnie: a lot to happen in this case, in response to the initial court order from february 16, where prosecutors won the case requiring apple to help the fbi. and of course, we had the technology community chiming in. we want to go to the san francisco bureau, talk to an expert on all things encryption. corey, the fbi's response, does it have anything substantial? corey: the government is arguing in their response to apple, in a that theated inquiry, government is arguing this is lim

like apple are making.ut that the best protection in terms of both law enforcement and long-term security in the united states. >> that's right. i don't think there needs to be more authority but more view of how it needs to be done. there is authority in terms of how do you handle it for state and local but state and local do not have the resources. there is some sort of sharing in tools and that is a jurisdictional issue and also, you know, an issue between bureaucracies that have to work out and work out before law and policy. in terms of creating the authority, the fbi has that authority. but it useets it at a much lower level than it should and fund it at a much lower level and they need to move from the situation they're in to dealing with the 21st century technologies in the appropriate way. >> thank you, mr. chairman. i yield back. >> you bet. chair recognizes -- >> could i ask just one quick question, mr. sewell. i forgot when it was my turn. someone asked mr. comby about the changing of the pass w

is this a win or loss for apple? >> i think it's a huge win for apple.and have seen how good tim cook and apple have handled this. they held up on principle. they said privacy and secure data on an iphone was something they would stand behind. they said they were not opposed to a third party coming in and helping the fbi, which i believe the israeli company called celebright, a mobile forensics software company has been able to do. it's a very, very big win for tim cook and his team. >> all the same now, john, the public and any users, any potential customers who are concerned with this issue first know these phones can be cracked. >> here's what's important. there will always be better encryption and always be better hackers. this is not going away. tim cook said we need clarity in the law going back to the old r tsht t pwrits law is not a good thing. and this was a 5c, not the most recent model. apple did not gave in to giving the fbi a back door into the iphone. remember, most of apple sales of the ifsh iphone are in the u.s. encryption will get bette

good morning. >> apple pie sounds good this morning but stick with apple.event taking place today and as kiet do was talking about the possible products we will see, not expected to be a big stock mover for the company. the smaller iphone 5 follow-up the 4-inch phone, mainly there to keep people in line with apple who don't want the bigger phones and the 6 lineup that we have seen and have been very popular. overall smart phone growth is slowing. the iphone in the recent quarter for apple saw its lowest growth and the company is expecting revenue to decline in the current quarter for the first time in 13 years. a newer ipad also coming in and ipad sales really have been slumping. they were down by more than 20% in the recent quarter for apple. the stock for the company is down about 20% over the past year, although it has been rebounding after starting out the year in a bit of a hole with the rest of the stock market. coinciding with president obama's visit to cuba, more opportunities for americans to travel to cuba. priceline.com announcing that it's struc

in fact, apple helped open-- joining me now is adam, who covers apple or bloomberg news.dam: there are a lot of things in multiple coast. in california, you have the case involving the san bernardino shooter and in new york apple is battling the government. it shows what operating system was on the phone in question. in san bernardino, it was software called ios8. it has hefty your encryption. this one is ios 7. what the government is saying is with this software system, apple has the capabilities to do it, they have done it in the past, and they should be helping. emily: it seems the government should be changing its rhetoric because it is just this one phone they are talking about and now we know there are 12, 14, multiple phones across the country where the government is asking apple to do this. you think they are trying to point out the -- i don't know, the hypocrisy in apple's own argument? adam: they are trying to show the inconsistencies. about howck and talk as far back in 2008, when the original iphone came out, there were some cases involving some crimes where t

that customer is the county whose employees lost their lives and they asked for apple's help and appleaid we're not going to help you in this case so we're using lawful course process and a court order to obtain the information we need to answer all the questions about this case. >> the governments argument is its one solution, one phone, one time and apple's push back on this and we heard tim cook say if i write this software there's undue risk that that code could be stolen by hackers or cyber criminals or foreign agents and i could be putting millions of iphone users at risk. what is your response to that? we share the belief that strong encryption is important. we need to keep those safe. but at the same time in this particular case i believe that apple has the ability to technically assist. it will take a couple of weeks for them to do that. they say that's a burden. we'll see what the courts decide whether two to four weeks to try to find answers in a case where 14 people lost their lives is an undue burden or not. that will go to the courts but they can do it on site. we don't n

the fbi and apple about how that exactly played out. it is a separate question question from the one that is presented here which is, should apple comply with that magistrate's order not. >> i think there's no question they made a mistake. i think also to be fair every investigation will not be conducted perfectly. putting that aside, i think the reality is that if we have a device that is likely not going to contain useful information, that probably could have been accessed without this mistake, is this really the hill that we want to create a huge new precedents allowing law-enforcement to essentially force the building of weaknesses and backdoors into devices? i think not. i think this is a discussion that should go to congress and should continue on past this court proceeding. >> those issues that you raise a key point came out on monday, it was a poll only one pole, this poll said 51% of americans sided with the fbi, 38% sided with apple. is apple losing this in the public court of opinion? >> i don't think so. perhaps i'm an optim

what is it about apple? why apple? tim: it is the people, charlie.e do have a little bit of money. we have some ip and so forth. it is the people that make apple. it is the people and the culture. is this veryere unique blend of idealism that anything is possible. that we can be bold. and a deep humanity. everybody here would like to change the world. we do that through our products. tools thative people make them do things or allow them to do things that they could otherwise do. that is the thread that ties this altogether. charlie: by? why because of the feeling? tim: that you get when you are making a difference -- altogether. charlie: why? tim: because of the feeling that you get when you are making a difference. after you get that feeling, you become incredibly selfish -- you never want to give it up. you know how special it is. i have never encountered it in other places. i hold it dearly. charlie: different mindset or attitude about products? ethos about perfection? tim: it is a different mindset. it needs to be insanely great. great, ity has

apple is fighting the order. today, we have an extraordinary story that predates the apple conundrum. in fact, it predates what most understand to be the beginning of widespread surveillance of u.s. citizens after 9/11. in october of 1997, joseph nacchio was ceo of qwest communications, a major phone company out west. one of his vice presidents told him he had an unexpected visitor. joe: he came in and he said, joe, we have a general downstairs who wants to meet you. which i thought was pretty surprising, because you know generals don't just drop by. it was a 3-star. sharyl attkisson: who was the general? joe: well, his ne is classified, believe it or not. who it was, i'm not, i'm still not allowed to disclose. sharyl: the general was from a u.s. intelligence agency interested in paying qwest to use its cutting-edge global fiber optics network for classified programs. but to learn more, nacchio first needed a top-secret security clearance. joe: i had my clearance by january of 1998. we received that contract shor

apple maintains that this is not one thing. throughening a door pandora's box of a lot issues that relate to privacy and the right of a company not to have to do the work of the government. you know so much about the loss surrounding security. your company operates everywhere. what do you make of the government argument versus apple argument. 'su think the government argument is stronger. michelle: they are still recovering lawyers. this is a really hard situation. it in the media. it is important to understand. on one side, the law enforcement agencies need to do their job. day americany citizens and need to have tools to do their job. everyone can understand that. apple represents a technology company, one of many. this isare saying incredibly personal. it has all of your personal information. security is fundamental to trust with people using our product and making our consumer lives better. we're not going to do anything to undermine the security of that phone. it is a hard balance to strike. you are seeing the crux of the

and now risk/reward is not on apple's side. >> looking at b.k.'s chart over his shoulder. >> you draw a line. >> like the use. crayon. >> get a camera back here. off of that real quick. look at the performance in intel today up a couple percent and qualcomm up, not nearly as much and qualcomm is rolling over. i think intel is break out to the upside so if you want to play the downstream, i think you get long intel and short call couple. >> you said it's hard to buy. the context of the market. >> you never -- you were never positive on apple. >> you're negative on the market. >> right. >> exactly. >> so -- here's what i will say. i think there's a good risk/reward to short apple because i know exactly where my stop is. my stop is basically going to be 106, maybe 106.50, so i have half a point risk for some downside and in termsch risk/reward i would short apple. >> we've got a crew here. >> can we see. >> i draw lines and when you draw lines it means you know a lot of things. >> i'm glad you doingled away from the youtube channel you're watching. >

liz: we have apple breaking news.ernie sanders if he doesn't win vermont, he is expected to, or doesn't win massachusetts, do or die? >> he is getting to the point he has to make a decision. he has to decide if he has the money to go along with a. liz: ready to have you, coming at the bottom of the our, speaking to bringing the mayors of three strong american cities in crucial supertuesday stilles and one of them in just said a few days, mich. to see what they need to hear from the next president of the united states and we guess it is not the insults that are going back and forth but real issues, 37 minutes before the closing bell rings, but get the green on the screen, apple is joining that party has the second-best performer up 4% right now. they are coming off of a big win in new york on a drug case but the bigger cases is going on on capitol hill this second. we are waiting for, it looks like james comey just finished his testimony, coming up caps attorney will be coming up. grave consequences to talk about but o

as for the apple watch, we understand that there's going to be a apple watch 2, a redesign with many new features, around september in the fall. but for now, we're going to see another refresh, sort of like the one we saw last year. new colors, new bands, new software features. it's going to be a light event, but there's going to be some refreshes across the three major apple platforms. emily: now, with regard to the encryption part of this debate, i was speaking with michelle, co-founder of cloud flair. take a listen to what she thinks is going to happen on monday. >> another way to look at this, there's a security vulnerability on the phone. apple's going to close the security vulnerability. and there's going to be an update in the future operating system where it's not possible. it might be right now, but that window's closing. and if i was a betting person, i think on monday at the apple event, the biggest announcement there is the update to their operating system. emily: so, mark, there's been talk of an unhackable phone. is that going to happen on monday? are we going to see a

what makes apple apple.onight a conversation with tim cook, the ceo about new products including the apple watch. >> the apple watch. >> yes. charlie: is that your baby? >> is it my baby? you know, there were lots of people that had a lot to do with. i absolutely love the product. i'm all in on it. i think -- i talked to a kid a few weeks ago. senior in high school, that got a watch wearing it during football practice, noticed that his heart was elevated. most ever us don't wear heart monitors, you put a strap across your chest, nobody wants to do that. he happen to see that his was a bit high, 140. he mentioned to the trainer. you begin to see the power of what wearing something -- this is not one person that i know that found this. it's now many. between that and the motivation of tapping every hour so that you become more active measuring your 30 minute of exercise or whether you're achieving active calories. these things are incredibly motivating. you don't really wasn't to let yourself down, so to speak

let's stick with apple.nment saying apple's arguments about security and privacy in the san bernardino case is simply diversions. the company's reply due by tomorrow. ahead of the response, apple's lawyer, ted buttrose joins us and josh lip ton in san francisco. hey, job. >> reporter: hey, carl. ted, thank you for joining us this morning. >> thanks again for having me. >> reporter: you know, since i last spoke with you, ted, only about a couple weeks ago, it seems like this fight between apple and the u.s. government has just gotten a lot more hostile. we saw department of justice call apple's rhetoric false, and corrosive. apple firing back that the doj's latest brief is nothing but a cheap shot. why has this confrontation escalated so quickly, ted? >> these are tough issues, difficult issues. we are working on a reply to the government right now, and i think that there is some disconnect from -- between the rhetoric we saw in the justice department's brief and what you've heard from director comey, what yo

of apple.: futures virtually unchanged. the rally in oil, can it last? ♪ matthew: security shattered. the fbi cancels is iphone hearing. they may have found a hack to unlike terrorist phones. a cleansing apples launch event. eventipsing apples launch . the ecb and the boj are using negative rates to push down the value of the euro and the yen. >> the bloomberg stock exchange -- doing business. moving in a way. mahnke the ceo of ferragamo distances -- manus: the ceo of ferragamo distances -- more of that to come. ♪ manus: welcome to countdown. anna: 7:00 here in london. manus, a quick look at the futures. that was broadly positive. japan is playing catch-up because they were closed on monday. manus: a little difficult to interpret. you have seen the fair values we have here in london did up three point percent. -- davidbbs come stubbs making the point he thinks the u.k. is one of his favorite takes for a variety of reasons. the brexit, not so much a sideshow, but the revenue within the ftse 100

at apple headquaters and 11:00 a.m. here on wall street and squawk alley is live. ♪ >>> thank you for joining me on this tuesday morning. kayla and kelly back for more. always great to have you. first the justice department saying it found a way to unlock the iphone without apple's help dropping the case entirely. aman is live in washington with more. >> good morning, what a dramatic turn of events as the u.s. government said it's dropping it's case here. and iphone of san bernardino shooter and instead the government saying it found another way into the iphone, a mystery way from a mystery 3rd party it will not reveal. the u.s. government and it's process all of that now raising questions will they be able to use the same technique in other cases going forward? other law enforcement cases? i have been talking to law enforcement officials about that and they tell me why there's two reasons why that might not happen. one is this is a labor intensity and resource intensive process. it's not scalable. they can't do it over

the other reason is the fbi has sought from apple and apple has cooperated and given the fbi the icloud back up. apple has turned that information over to the fbi. reseti made a mistake and the password on the icloud account so we do not have the very latest information from the account. the other reason is the fbi has sought from verizon, the carrier associated with the phone, the phone call and text messaging data from the phone, even for the period that is not covered by the icloud back up's. the fbi has quite a bit of information on what is on this phone already. i think this is not being brought to further this particular investigation but i think it is being brought as a test case, because the facts are so conducive to the issue that you talked about, the public opinion, does this is a very rare terrorist case, national security case. it is the kind of case that is most favorable to the fbi. at the same time, over the same period the fbi made a similar argument in a case in new york and a judge ruled they did not have the authority to ask apple to create a back door into the iphon

. >> apple.he government, yeah. >> the government. it's also interesting that even if the government has found a way into this phone, that they might be taking the pressure off of apple for an issue that will likely come up again. trog see where this goes. >> unless it's a third party that can do it over and over again. >> that's positive in terms of that apple -- apple afears have won the public relations where we protect our customers. >> i'm not sure that they have won anything. i think a lot of people think they should. >> maybe, maybe, maybe, but more importantly i would say i'm questioning now, okay, so is the apple phone hackable? that's the bigger question? if the third matter can do it -- >> had that been a concern though for most people out there? >> for me clearly not a concern. you can get into my phone all you want. you can hack away. >> your passsword 1, 2, 3, 4. >> from a public relations standpoint we in the media have blown this up quite frakely. i don't think the stock sold off

emily: if apple does this for the u.s.to say they can't do this for the chinese government or the russian government? keith: if we come up with a solution that we the united states can put forward a , balanced solution, perhaps that is the solution that we can help apple, facebook, and google in europe, asia, and other places. we have had too big a disconnect between industry and government. i am not for a backdoor. i am for a transparent front door that tells the american people first how to solve this problem. and then second, take it to our allies and say, is this an international solution that we can work with? emily: you say there is a middle ground between apple and the fbi. and i would love some specifics. if there is a middle ground, where is it? >> we feel the middle ground is rain apple and the fbi, or law enforcement and any company, is the court. that is who we go to to arbitrate these disputes. we have a difference of opinion as for what the law means, we go to court, and that is what we think is the current s

by apple.ad "an we haven't awful parade of [indiscernible] both sides are using colorful of language in this case. resubmit thet will new york case. that ruling came against the government and for apple earlier this week. thank you for joining us. we will watch out for more on d youd you miss -- "what' miss?"the close of trading 13 minutes away . the gains. vonnie: this is bloomberg markets. markets close in about 10 minutes. julie: march tens to be a positive month for stocks. nevertheless, this is a blockbuster start to the month by any account. we have not seen the highs we have seen today in quite some time. stocks bouncing back also sharply from the lows they closed at on february 11. if you look at what is rally today, you can take your pick in terms of the sectors. utilities are lower. but otherwise, everything is up. we haven't seen many big rallies without the participation of the two groups. individually, you also see the tech and banks represented. apple, microsoft, jpmorgan are cont