apple's brand-new headquarters with what else but apple earnings. just got out of a meeting with tim cook i will bring you highlights. let's dig into the numbers. apple selling slightly below estimates. the average selling price was $796. the company hitting an all time revenue record. $88.3 billion. i want to bring in cory johnson in new york. i want to start with a quote from tim cook, there has been concerned about how well the iphone x is selling. he said it was the most popular smart phone launch since november. every week it has been the top-selling iphone in the world. i could not be better. prouder. -- what is your takeaway? >> it sounds solid to me. it is incredibly sophisticated. it has a higher price point. the replacement cycles are slowing. it is a strong number. people like to point to the high price point. maybe it has deterred consumers from upgrading. the hardware is not the biggest chunk, it is the service. emily: we talk about the performance in china. there has been concern the price was too high. when i asked about that he told

apple is working its own chipsets. that's why apple wants broadcom to purchase qualcomm.s the technology that their competitors are able to get into their phones is not as strong as it may be. it gives apple and edge. it's interesting to see how that will develop. scarlet: alex webb, thank you so much for joining us. units in the first quarter, 80.2 million iphones. the market closes next, a look at the major indexes. we have a mixed breed with the nasdaq under pressure. the a team is on deck, all due to report after the bell. ♪ ♪ julia: what'd you miss? stocks missed and treasury selling off. the 10 year yield up more than 3%. i'm julia chatterley. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. if you're joining us live on twitter, we welcome you. scarlet: let's key started with our market minutes. the index is closing little change. the dow still up, at one point it was higher by 157 points. the s&p and nasdaq finished lower. apple amazon, and off a bit report the results. we are keeping a close eye on the route in treasuries. the 10 year yield is that a tie in almos

we haven't her from apple. we'll get to apple at the bottom of the hour. meanwhile letting americans see, sources telling fox news that president trump intend to declassify the gop house intel memo alleging surveillance abuses by the fbi against the trump campaign. house democrats are throwing a fit about it, there is no other word, nancy pelosi calling for removal of house intel chair republican devin nunez. we have a former deputy assistant of fbi's counterterrorism division. terry, i must imagine you love the fbi as much as you love your family, your extended family. some people say if you love the fbi you can't be in favor of releasing the memo. what do you say? >> well, david, you know, when you love your family and you are close to your family members you have to do something that is very hard to do, have some tough talk when somebody has done something wrong. or when there is a question of right and wrong there is some confusion about the perception on. i think the fbi will be far better served to have this memo out. i don't know what is in it. nobo

it is unassailable for apple? no, but apple has a lot of work to do to close the gap.tening to the apple call. tim cook was talking about service revenue. he is talking about babel double service revenue by 2020. it was an impressive quarter and the other category, but to your point, amazon's business here, web services does fantastic. they are also learning about what everyone is able to do on the web. this notion of a completely hardware independent distributor service business in the world of technology, separate from selling people lots of stuff i'm a dropping off boxes, these guys are the leader and growing at a fantastic pace and throwing off a ton of profit. emily: tim cook says we are to have a personal assistant in 1.3 billion people hands, and that is the iphone. let's talk about the cloud. dig into the aws numbers and how quickly this business is growing. cory: it is growing at a fantastic pace at a large scale. i put a couple charts together to show what is happening in terms of margins. amazon loses money basically in the selling of stuff, and yet the marg

but will be owned by apple.mily: i asked tim cook about the so-called batterygate. bloomberg has reported the sec and department of justice are asking questions about the iphone battery replacement issue. he couldn't comment on the specific agencies, but he said there are agencies around the world asking questions and they are cooperating. he singled out the apple watch and how quickly that is growing, that this category would be the size of a fortune 300 company on its own. how optimistic are you about the non-iphone products in the portfolio? >> this builds on the point. there are a couple of things that are key as we look forward on apple's success and as corey pointed out, one is the services. that makes these devices more valuable, and the more devices a consumer owns within the apple ecosystem of products, then it is more valuable that each of these products become more likely apple will be able to sell services like music, payments will become embedded in day-to-day life, things like that. both of those t

foodchain is one of the biggest and apple history. -- in apple history.n you look there has been some concern with iphone sales in the last quarter. the apple iphone is the top-selling in many categories. how much of a concern is it really? trying toare always look for cracks in apple's foundation. there are lots of things to suggest things are going well. for example, home pod is sold out now. 20%,ces revenue has grown and they have a large amount of opportunity in services going forward. at the end of the day come at some of the software changes about making sure people find their phone is reliable and everything they use in the ecosystem is something that the lights them and is reliable -- delights them and is reliable. story out have a today about augmented reality and the company apple is backing and the other has to do with android. >> the android story is the opposite of apple's approach. apple is going for a small feature set, android, google is going in the direction of redesigning things to attract more iphone users, new icons, animations, and w

apple looks more timely in the longer term. it has come back right at the 200. we think it is a decent area to add some exposure. last lastly, alphabet off the lows where it was ten or 15 minutes ago. we put this in context of the pigger picture again, another orderly advance, back to a good level near the 50 we think you buy alphabet, you buy apple and you are a little bit careful with amazon. >> careful with the holder of the throne or the occupant of the throne you should say. should we invite chris over. >> yeah. >> come on over, chris >> karen will bring the chair in thank you, karen >> welcome, sir. >> thank you >> so at what level does amazon start looking interesting? >> i think when we look at amazon, even the last four or five years every single year there is a drawdown at some point. i don't think it's out of the question given the performance of the stock really over the last 12 weeks, 16 weeks, that you fete some type of negative response over the next several days i would be a little bit careful. there is no question it remains one of the greatest

apple has an apple news product which you might be familiar with.ore hospitable to advertising. at the same time they make the browser tougher to do business, they invite media companies to advertise in their product where they might have more advantage and make more money. betty: critics of apple may not like hearing that. -- thering up this chart continued reliance on apple's revenue on the iphone. started tort of level off a little bit. that to start declining or how this tim cook get that revenue backup? we had the three headed cycle -- as well as china demand which is starting to come back, you will see growth. as you go forward, it really is what is in the second act. a $50 billion revenue stream, that is going to be a big piece in the apple growth story. , you know itation is going to be buybacks and dividends. speaks why the stock rebounded after hours. do they make a big acquisition and go after streaming? that is going to be the big nottion, do they or do they make a big acquisition which could be on the table. you mentioned about the numb

to apples comparison.i can tell you is that gap eps is $3.75 that includes the tax benefit. we'll continue going through this release and bring you some aws numbers, some physical store numbers and more back over to you for now >> thank you amazon shares are up about 4% right now. that's just retracing the decline they had in about the last hour of the session no clue what was going on there. initially a positive reaction to these results. >> yeah, just so it's obviously gaining back what you just said for today. i think a lot of people were very on the fence about amazon's quarter because the fourth quarter isn't typically a good one for them, believe it or not. so, i want to see the breakdown on reit, north america retail sales and aws. i'm looking at the guidance for operating income it looks like it's pretty much in line. people were a little nervous that guidance might be on the light side there's that but i want to see the breakdown in terms of what drove the -- what drove the earnings. but it looks

mark: think it comes down to apple's scale. grown in terms of how fromdevices they sell, tens of millions iphones a year, to over 100 million iphones a year. their engineering team has grown from fewer than 100 people to thousands of people around the world. it makes it more difficult to stick to the deadline. things got -- get lost in the development. there is just more opportunity for failure now. they are trying to go back to their origins and focus on the quality that originally differentiated them. emily: michael, what do you make of it? michael: what is most important is 1.3 billion installed base, 1.3 billion people using an iphone today. it is just important to deliver software that is reliable, features that work. it goes back to steve jobs' original mantra. it just works. when you are focused on selling new devices, it is one thing. another is you have to maintain that group of people using it, otherwise they will migrate to android, which has featured faster, better processing, but has been very buggy and not reliabl

these are new users coming to the apple ecosystem. will then later down the road spend money on apps and purchasing through apple software which will bring more revenues to their services as well as potentially purchase the apple care systems and future higher products. so we think it's a very healthy setup for apple and the most critical thing is our new users being added to the apple ecosystem and the answer to that is clearly yes >> jim, you use the word setup there. that for me is interesting has the story gone from super cycle for the iphone to setup to potentially, okay, maybe the next cycle you have not only the x but a x plus and that becomes the super cycle. >> you phrase it correctly the setup in the word of super cycle i think is now going to be something that we set aside and say that's no longer the case for this the smart phone industry overall is maturing. most people in developed countries do have smart phones and so we think that days of double digit growth for the industry are far behind us and the setup is really mo

when china was decelerating meanwhile, the company's service revenue stream apple music and apple data is growing like a weed 18% clip it is now starting to take on the razer blade business model that is so sensational i am insensitive to my apple bill especially since i love to have my pictures backed up on the cloud. the only bills i never bother to scrutinize is my netflix, my costco, amazon prime and apple everything else i just pay it can double the price and hardly anyone would notice and there is all of that apple cash apple cash and they can repatriate it which the company uses the buy back stock yeah, you heard that number, 168 billion. stock selling at 119 -- cheaper than most of informational technology peers i will go one step further, it is actually cheaper than almost every stock i follow and i follow 500 s&p stocks. apple has the fire power to buy back 20% of share count and growing to 1.3 billion users 30% increase in two years. this stuff has high margins. apple had a smaller base during the disappointing cycle. i hate the chase, but the next time the negative analysts

they make the apple iphones. they'll have people to do this because it's a whole new skill we can reduce the price of prescription drugs and ensure that terminally ill patients have a right to try. on board, right to try those drugs, they sit in there for 12, 13, 14 years a person's terminally ill, they have two months left and under the old system, they don't want to give him an experimental medicine because they are afraid they'll be hurt. they're not going to be around for too much they will sign a waiver. we're going to give them the hope of finding something. you have people and i've known people like this they travel all over the world to try and find a cure we have great experimental drugs but it will be years before they come onto the market it's called right to dry and i hope you folks can approve it and i hope you agree with it i think it's so important. it's so important. it's got heading it up the other thing you get is you learn pretty quickly how effective it is. doesn't work we can fix bad trade de

to watch because apple can often create momentum apple's disappointment and the prospect of apple cutting back on so far of itsdz suppliers' orders, hitting chips. chips among the worst performers for the week some of the biggest losers in correction territory, almost near bear market territory some of the chip suppliers, chip equipment players, lam research, applied materials, and finally buy yore tech among the worst performers for the week and sectorwise as we saw health care come under pressure this week. back to you. >> thank you bertha coombs. let's talk about these interest rates now. moving higher in a big way, especially after the jobs report this morning rick san stelly has more from the cme. >> yes, fascinating week think we had a fed meeting and all the fed talk actually sense seems like 4 is baked in the cake next year look at one-week chart of twos, that would be most sensitive, correct? it only closed up two basis points let's surf out to the long end, tens closed up 17. we now have tens minus twos at 69 it closed at 52 at the end of last year. why is this important? becaus

apple sold 77.3 million iphones in the quarter.ghtly on last year — raising concerns the iphone‘s popularity is waning. but remember — many sales were of the more expensive and profitable iphone x and we should put this in context — according to research just out, global sales of all smartphones were down 9% in the quarter — the biggest fall ever — as the market gets saturated. revenues are up 13% because the iphone tent is more expensive. some analysts might be worried the iphone which is two thirds of the revenue could be stalling. if that keeps going up, the company remained strong. in terms of selling the hardware, there is a saturation point being breached and it is worse for other mobile phone makers. that does drive apple towards having to depend on its services. it has to make this work. services was 10% of revenue, usually a larger proportion. this quarter it is high because of christmas. apple is building its services business with 230 million active sub —— subscribers. if there is a risk, where is it? where do they think

apple said iphone units fell from a year ago.osh lipton asked tim cook if the new iphone x with the steep price tag is a mainstream product. cook said you don't become the top selling smartphone in the world by being a niche product we would like it to be for everyone let's bring in cyrus what are your thoughts on that comment? is there a peak in demand because it's such a high-end product? >> yeah. i think all these comments are missing the point. iphone revenues are up 30% if we had a full quarter, another week to compare with other quarters, they would be up 21%. the mix between iphone xs and cheaper phones is less relevant. the iphone category continues to be strong. >> a lot of questions on the call about what they'll do with this extraordinarily big cash pile, give than they're moving more cash back to the states do you expect them to make a big acquisition or buybacks? and the fact they're thinking about using that cash now, is that a benefit for the stock or a concern? >> they stated they're targeting zero net cash balanc

apple has to reinvent itself every two years.hat's the problem of being an iphone company which is what apple has become is coca-cola never had to reinvent itself. it's a trickier play than coca-cola even though it's an incredible cash machine. >> but then you have cover "the new york times" magazine over the weekend where in the case of google you're so large that you are arguably inhibiting competition or squelching competitors at an early age. how much is our system equipped to tolerate that >> i think the problem is unlike prior episodes where competition is suppressed, consumers are benefiting from the competition being suppressed so it's going to be much more difficult to bring in anti-trust laws against these companies because consumers don't seem to mind >> but would the antitrust laws potentially be rewritten or interpreted differently within the courtsystem? i mean we're seeing that sort of -- i realize their laws are different. we're seeing that play out in terms of a potential precedent in europe right now. >> it's ha

the apple season has started now, beginning of september. i don't aim to shake any apples at all.ood lord will let them down. when the apples drop, that's when they're right. this is a hell of an orchard, we have got to pick them up by hand. i used to pick—up apples when i left school, 18, 19 years old. that was the big hessian bags then. years ago, i used to carry them all down on my shoulder, bloody hard work. a lot of people walk away, they don't want work do ‘em? they say, he's out there picking up those apples, i couldn't do that. i would rather be up there, then sat in an office on a bloody computer, isaid. the harvest takes three months, but it's not all sunshine, as roger will be working away in his noisy barn. we cut the bags of apples, we tip them into this hopper. at the top of the elevator, there is a high—speed crusher. the apple pulp comes down through this stainless steel hopper, and into these... into these nylon cloths. that is roughly 100 weight of apple pulp on each layer. when we've built up the 12 layers, we put it on the trolley, put it up under the press. th

so apple was declining into the market decline i believe that apple will rally if the market is going to rally ahead of the market so it's going to lead us out. >> one of the interesting things, steph, is that in this note they say secondhand phones are driving services growth. if your latest and greatest isn't driving what people say is going to be your next big area of growth, how much of an issue is that? >> they have 1.3 billion active devices out there so that's pretty impressive in itself, i think. if you can sell maybe fewer x but at a higher price, to josh's point earlier, the margins actually were a little bit better than expected so this is certainly a story that is changing i don't think the super cycle story is totally dead, but that said, they do have other things that they can rely on. subscriptions are growing, services, margins are growing. to the point on cash, you have $163 billion in cash going to zero, so that means buybacks and dividends, i don't care what they do in terms of buybacks or difficu dividends. i think they'll could both and a little m & a i think the

which apple is putting on the market in a matter of days. that is something tim cook disputes about a personal digital assistant -- that is the iphone, and they have that now in the hands of 1.3 billion consumers around the world. speaker,eve in at home the major use for it is going to be music, and he thinks the experience is in his words, job dropping. also talked about how apple is going to use the cap overseas. amsked if that will impact and a strategy, this is a company not made big acquisitions. they did by beats for $3 billion, by far their biggest acquisition. but there's always talked that apple should buy netflix or tesla. i asked if there is something

apple are still competing relatively well.but making more money on the phones. the question is for 2018 onwards were the sales will keep stable, and whether apple will be to generate more revenue out of every single iphone user. apple has said that there user base has gone to 1.3 billion. it is interesting to see the company is trying in the end not just to say that they are a vendor of products covered also greeting a community of services like apple music and other things that people can then buy subscriptions, cracking ongoing revenue for the company. you can talk about it and say, you know, we have this number of devices out there that are apple, and people need servicing in many different ways, but of course, it may be, i have an iphone, a tablet, a mac to me and they are all apples, and i will only one service to deal with all of those things. that is the interesting thing. and the question is, of course, how many people you count as unique users, and the company did not really specify how many of these 1.3 billion own h

kevin, do we assume it's apple?> you have to assume it's apple, theytor% of the market and higher margin product. you have to think about they are never trying to compromise on the margin, they would rather cut production and not price. that's an important thing to know. liz: and russell, the forced obsolescence, this is infuriating people, including my 16-year-old daughter who is perfectly happy, better be, with her iphone 6. but suddenly miraculously starts to slow down and have you senator john thune asking for apple's answer to this. you have the sec, the department of justice, french regulators, he's going to have to talk about that. >> absolutely. and so this is a communication failure on apple's part. this is kind of a weird psychological thing, you feel your phone is getting slower, then when the news story hit, everyone feels justified in that weird concern that was happening before. but the goal of this technological push that apple made was to make phones last longer by making sure that the battery didn't

guys, important to watch in the aftermath of apple's earnings. cellphone sales in china are higher but units are down which will affect apple's quarter? >> the business is being taken as a read-through ahead of their results later today. >> hopefully some questions answered on the apple fronted and maybe on the amazon front, but cloud, about whole foods, maybe about health care initiatives, right >> going to be a lot of questions specifically about cloud. that tends to be the number that people are watching now. the growth rate of cloud a little bit lower than people expected last quarter. we'll see what it does this quarter. >> after microsoft azure numbers up 98%, we talked about that this morning a lot to pay attention to, keep your eye on the dow which continues to trudge higher on session highs, up 122. let's get over to the judge and "the half. >>> and welcome to "the halftime report." i'm scott wapner our top subject, the state of the rally. can stocks keep climbing even if rates do as well, and is that the key for where your money goes fr

apple got drawn with the overall market it could have been an up day, if the market was up, apple wouldave been up everyone was worried about iphone x demand. purely speculation the average price raised means there was a demand for x the market goes higher next week >> apple was downgraded today on concerns about the x you had a reason, a reason. >> today's tape. >> there were a lot of reasons to sell today's tape apple was not one of them. it has been telegraphed in terms of apple in terms of the rates, this is the preview of what could happen to me this isn't the big selloff. we might get a lib more. what we do know is the market is highly rate sensitive. there is going to be an adjustment period. in 2007 and 2008 you had a year of rate hikes. we have barely done any. he he you have to ask yourself when you are buying stocks did all of a sudden today the economic news that came out today signal the recession quite the opposite in fact it signalled things are getting better you don't need to panic too much we have some downside. i agree with guy look for a bottom next week a. trade. bo

apple wants to come on stage every year and say we have 200, 300, 400 new features coming to apple softwaree going to be part of the new iphone and get people to upgrade, and a mistake that we are this far ahead of google and android. you see android updates over the years have been smaller in scope, smaller in focus, whereas apple is doing so much across the entire system. people are noticing box, you you saw features that were supposed to launch in september with the iphone, the ability to spend money and i message, and the ability to sync information through text messages, but the apple text message feature coming out in march or april will make it six months delayed, and the cache feature of spending money through i message came a month and a half after it was supposed to. apple is looking to avoid that with this upgrading strategy. there's a level of comfort that they don't have to always forced things, and you point out, 90% of users already downloaded the last two updates. -- they can android be a bit more comfortable with it. mark: apple is at the point where they can only hurt them

if apple stabilizes. >> i think apple is psychologically important. together you are alphabet and i am amazon and well, you are apple which one goes off the island? >> i look at what apple's numbers were and where are they going? services and china that to me says they are a winner today was a harsh sell off the opportunity for the up side is apple and throw in the money. >> sky works, i know it is on your list. 40% of their business comes from appear and will they have got a billion dollar business already with nonsmart phones internet of things. >> i think sky works is going to set the tone of maybe apple is inexpensivecy. we have a company that reports on tuesday just a few days before the birthday of bob eyer what happened to the $8 trillion that has been created since president trump has been elected. i am looking at disney as a way for people at home to say i heard this guy cramer saying it is not the end of the world. for our trading friends, i am going to give you one. i have looked at stocks and say where is the relevant trades the one that i

they appreciate the apple ecosystem.cross the seeing products and services the chinese market is strong for them. is piece on the services underappreciated. vonnie: are any metrics out of line here? anything? >> across a variety of metric the shares look relatively undemanding. what i would say is the company has a tremendous amount of cash and a management team that has shown they are disciplined in terms of investments they make and shareholder friendly. what we heard last night is with the recent changes to tax policy the board is likely to remain aggressive returning capital to shareholders. that is another posited in the story that is being somewhat overlooked. vonnie: elsewhere, it is the worst performer in the s&p 500. is this a turning point or are people just taking a pause. google orults for apple that were strong. people were disappointed in the margins and earnings per share. if you look at their growth cloud,, youtube, google this is a company that is well-positioned. welonger-term shareholders want the comp

if we look at the technicals on apple, this helps to complain it away.hile the company has great products, the street had bigger expectations. one-year chart relative to the moving average. the buyers had been in control. on today -- in today's selloff, the sellers are tryin starting o take control about on a one-year basis. $150, which you put it into an official bear market. there are still signals at the bottom of the chart. it seems like the selling pressure can continue as wall street reconciles the idea the growth they were hoping for, hoping perhaps apple would make the estimates, despite the concerns that was not likely to happen. we also had a selloff. for apple, disappointing there from an early standpoint. acquisition costs rising. that is expected to continue. we had weakness for the chip sector thereto. -- there too. we saw some i cap equipment f in a bigselling of way. amd reported earlier this week, the quarter and outlook were good but a little messy in terms of accounting changes, plus the idea that management seeing a little dust being

at apple headquarters it's 11:00 a.m. on wall street and "squawk alley" is live ♪ >>> a busy morning dow bounces back from session lows with tech mounting a comeback of its own. a lot going on today jerome powell begins his first official day as chair of the federal reserve. his predecessor janet yellen joins cbs sunday morning over the weekend to comment on the transition we got a bit of her take on the markets. take a listen. >> this is a source of some concern that asset valuations are so high. what we look at is if stock prices and asset prices were more generally were to fall, what would that mean for the economy as a whole and the financial system is much better capitalized the banking system is more resill yen resilient. i think our overall judgement is if there that there were to be a decline in asset valuations, it would not damage the core of our financial system >> with more on all this let's bring in the professor of finance at the warden business school still celebrating the eagles world championship last nig

at apple headquarters in california it is 8:00 a.m. here on wall street "squawk alley" is live ♪ >>> good morning welcome to "squawk alley." with me at post nine, michelle caruso cabrera carl quintanilla live from the olympics inpyeongchang, south korea. he sat down with gold medalist chloe kim. that conversation is am coulding up in just a few minutes so stay tuned. >> that's going to be super fun. all right. now to the extreme market volatility less funneled which has been a global phenomenon as well for more on what's happening here and abroad, we're joined by stephen roach, former morgue an stanley asia chairman, yale university senior fellow he warned in december that global economies may not be as resill yen resill yent as once thought. we didn't plenmention that you' also an economistist what do you think of the interest rates spa spooked the markets. are they going to go higher or what is your prediction? >> well, i think the federal reserve is clearly got its antenna up, michelle, given not just one data point on inflation but

they make the apple iphone. set for a long time that i want those companies to be making their products here. they went to wisconsin and scott did a fantastic job of presentation. i saw a site that i love. it was an old auto site and i was with ahead of foxconn, great man actually, great businessman, incredible. i said that's a great site for you right in wisconsin. i hear that is where they are going so you have done a fantastic job. this is a common sense and bipartisan plan that every member of congress should support. i look forward to working with them and we are going to get the american people roads that are fixed and bridges that are fixed. if for any reason they don't want to support it, that's going to be up to them. was very important to me was the military and the tax cuts. will is very important to me was regulation. -- what was very important to me was regular some. this is of great importance but not nearly in that category because the states will have to do it themselves if they don't do it. i wo

we have to check that it was apples to apples.t on 8.6 billion compared to 8.4 billion was the estimate. shares up in pre-trading by .1%. alix: mastercard out as well. earnings coming in at $.21 a share. it will be interesting on the call to see what their outlook is in terms of the consumer branch, what they see for fees and taxes. adjusted earnings coming in at $1.14, which beat estimates. the stock down 2% in the pre-markets. an update onget what's making headlines outside the business world. kailey leinz is here. in the another twist story of a controversial congressional memo about how the fbi investigated russian meddling in the presidential election. democrats charge house republicans secretly alter the memo but never told them. the white house is review the document to determine if it will be released. the fbi has said the memo is inaccurate. in virginia, federal safety investigators will spend several days at the site of a crash between a truck and a train carrying dozens of members of congress. one person in the truck wa

tony is with bernstein, the top-ranked analyst on apple. he joins us by phone good to talk to you today. >> thanks for having me, scott >> so you were concerned i think it's fair to say, going into the number and the guidance and now you saw enough to downgrade the stock. why? >> well, look, our estimates fell 8% for 2018 and 10% for 2019 and actually actually would have fallen even more than that had it not been for an even better tax rate than we had expected. and so you know, when your earnings fall, our price target falls. basely, it fell in line and so we know believe the stock is relatively fairly valued that you know is point one i think the second point that's important is we are a little nervous about the fact that apple built quite a bit of channel inventory on a sequential basis this quarter. it was the highest build ever. and when something analogous happened to this two years ago during the iphone 6s cycle, the company ended up draw iing down inventory and disappointing over the next couple of quartz. so we rory a little bit th

on the we hear from all three. >> let's start with apple. the world's biggest publicly traded company. its flagship product, the of course has been a driver of growth. but in the latest quarter, which includ the holiday season apple didn't sell as many as expected. in fact iphone unit sales fell 1%. nevertheless, earnings in the quter topped expectations, revenue did as well, coming in at more than $88 billion, almost a billion a day. but stock whipsawed in late day trading. josh lipton is at apple headquarters in cupertino. >> reporter: 77.3 million. that was the bigumber in apple's latest quarterly report. refers to the nber of i-phones that apple shipped in the quarter. that was a bit light versus expectations. m analystselled 80 million. when people are buying those phones they are paying wemore. know that, the higher price points for the 8 and the 8 plus and the flagshipch iphone x w starts at $99. the average selli cost clocked in at $796. that was better than the $756 that analysts had opted. for "nightly business report" i'm josh lip

than anything else apple has an extraordinary consumer franchise i like tim cook very much. their policies i see how strong that ecosystem is to an extraordinary degree. you were very, very, very locked in, at least psychologically and mentally, to the product you're using. >> need you have anything more than the buffett endorsement on apple? >> that's so outside of consensus. i can't believe he thinks apple is good. >> the fact he continues to buy it >> that's great. i'm a shareholder forever. i think what he's saying is not anything that's like wildly outside of the every day discussion around the consumer franchise and the lock in nature of the apple customer. >> the fact he continues to buy it >> it's a value stock. >> keep wiing it >> he understands the whole ecosystem that we've talked about for so long. i'll give you a new one. services people finally figured out. this growth, i'll give you a new one. wearables. keep an eye on the wearables underneath what's going on at apple as if next thing people are going to look at services now, everybody gets it. now, it's weara

amazon gets almost as much revenue as apple.wn alphabet also saw its sales soar. —— alphabet. so are they likely to challenge apple in the race to $1 trillion valuation. at the close of business, apple was worth $853 billion. that is expected to rise on friday. the owner of goodwill, alphabet, is a fairly close second, that its share sales are likely to fall later as its results disappointed on wall street. amazon isafairway disappointed on wall street. amazon is a fair way off with $669 billion. but it is rising fast. he was dave lee in san francisco. according to its latest sales reports, they are selling your iphones and they were last year. but that might not be as bad as it sounds. for starters, the company said the period measured was one week shorter than the same period in 2016, which may account for that drop of 1%. also, because of the iphone can, its latest smartphone, the average selling price of the iphone has gone up to nearly $800. so while they were selling less of the iphone, they we re selling less of the iphon

as is apple ‘s way, it ties you into apple ‘s walled garden, so instead of accessing streaming servicesctivation, it will only let you use apple music in this way. if you are what of the 70 million spot by subscribers, you have to get into your phone and use airplay as a workaround, turning this starts speaker —— smart speaker into a well, speaker. as people have been discovering, one that might leave a nasty mark on wooden top. their response? choose a different service or get a cloth and some elbow grease. 0ver service or get a cloth and some elbow grease. over the next few weeks we are going to be talking to some of the gods of visual effects world. last week we went behind the scenes of labour on 2049, this week is the turn of guardians of the galaxy volume two and we started by talking about its truly bonkers opening sequence. the beginning of the sequence features a title sequence the sequence features a title sequence where groot is dancing in the foreground, it doesn't cut. it is on the whole time he has got to hold the attention of viewers with his crazy little dance while what

i have never known two better crops of apples.will be another good crop with the blossom. but, two good harvest mean that roger is flooded with cider. i got 33,000 gallons. normally i only sell about 20,000 a year, but because we have had two bumper crops, we got the actual... all of this is cider, here. really, we wa nt all of this is cider, here. really, we want a bad crop, this year. let's get some cider gingers in to drink it. roger also has 120 head of capital, but cider has always been the agricultural lubricant at the heart of the farm. gonna we made it since my grandfather came here in 1917. years ago, if you didn't have cider on the farm, you wouldn't get any workers, because workers go around and tried the cider, and they would have the best cider, and that is where they would go to work, because they got paid virtually in cider, and potatoes years ago. that was the wages. by mid—july, the blossom has turned to apples, and it is the peak season for customs. roger has become a legendary figure in the somerset landscape, a

emily: there are giants in the room like apple and apple music, of course.hat does this listing mean for the european tech scene? this is crucial. some of the numbers we have seen bandied about listing spotted fight anywhere up to the tune of $21 million -- that is significant, much bigger than we have seen on the european tech scene in recent history. to supero go back cell, which sold out to china's just $10and that was billion. last year, the one we got excited about was about $5 billion, and that was delivery hero. we think of the ones that have recently come to the market, and some of them just do not live up to the sort of heady height spotify is going to hit. this is crucial, and also what is crucial is more companies want to come to the market. oflook at the likes .elivering -- deliveroo will they becoming? this will take the way for smaller startups as well because vc's will cashan in on this deal. local ones, ones that were vc founded in sweden. also, locally to london, wellington. these companies will make money if they sell shares on listing day

anna: let's talk about the companies that supply apple because apple the story turned out to be a goodgood one. price rather than volume. response will be interesting depending on what they supply. guest: for apple, everything is great to a certain extent. the higher price indicates people are more willing to buy a $1000 phone, which is fantastic for apple. for suppliers, it will depend on what they make. everything looks great, but if they are exposed to older cheaper iphones, things maybe not looking so good. anna: let's sue the fracking power is. like: you have companies dialogue and ans. they had a great week. we'll have to see whether that has an impact on them. is quite reliant on revenue to move. matt: what's the story with astrazeneca? withw they came out earnings that beat on tax benefits. the fact we are looking, the market wants to know will happen this year. , pretty goodeneca 2017 beat. they are looking to rise a little bit. the main thing is looking into 2018. they are predicting the levels rise. they are facing a lot of generic come rotation -- competition. their drug ha

deidre is looking at amazon and josh lipton will cover apple for us josh, what are you looking for >> kelly, here is what the street's going to be looking for from tim cook's company after the close here earnings per share of $3.86. that will be on revenue of about $87.28 billion that will represent gains of 15% and 11%. iphone units, 80 million with an average selling price of $756. key metric for investors, march revenue guidance, the street expecting $65 billion, meaning a jump of 24%. apple stock is about 7% off that recent high we saw of $180 in mid-january on concerns of demand for the iphone x. though, there are some apple suppliers who are probably saying some of these reports we were hearing about steep production cuts were actually overstated we should soon have a better idea guys, back to you. >> josh, how key is the china number particularly when it comes to the iphone? >> it is very key, wilfred

>> apple today bucking the trend.he stock bouncing back from friday's fraid and fallen to correction territory is now the time to buy >> jay powell sworn in as the next fed chairman. he's handed a stronger economy and a really difficult road to navigate when it comes to interest rates why we could end up with more interest rates than you think. "power lunch" starts right now >>> and welcome, everybody, to the second hour of power i'm tyler mathisen the dow and s&p near but off their session lows the dow by about almost 150 points off the session low almost 500 points down earlier, was the dow. they're both off or have been during this session, 5% from their most recent record highs which was i believe january 26th exxon, pfizer, johns johnson & johnson, are powering the dow lower. apple and intel are the only ones in that index that are in the green, brian >> wow, good stuff there tyler, as always, thank you very much let's get to the markets and your money bob pisani at the new york stock exchange we have lost more t

>> apple, samsung. >> appleby far. >> i have an iphone. >> i do, so an apple guy, but i have an hp computerok fan. >> samsung camera's sucks. >> i've never had samsung so i'd say apple guy. >> neither i've got a nokia ] [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] ♪ good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. talk to one today and see why we're bullish on the future. mvo: it's not necessarily about eating together, but it's about building relationships with one another. because that will manifest change. ♪ i'll stand by you. mvo: anybody can make a difference. it's easy to give back. it's just a little bit of time. ♪ ♪ i'll stand by you. >>> welcome back to "squawk on the street." we're live in minneapolis. you will notice the stadium behind us clearly branded by u.s. bankcorp. they bought the rights as soon as the city was chosen to host the game joining us is andrew cecere. soon to be chairman in april >> thanks for having me. >> we were talking about the time

emily: let's talk about apple shares closing down 4.3%.his is on the back of the earnings report. 77.3 million iphones when analysts were looking for closer to 80 million. i spoke to tim cook and he said he cannot be prouder of the iphone x's performance. it has been the most popular phone every week since it has come out and the average selling price as a result has gone higher. investors not satisfied. abigail: interesting point. on the one hand, we have the company and the iconic, wonderful products, that iphone x that tim cook is so proud of, and the average selling price did rise for apple. those a plus. on the other hand, we have this stock in wall street dictations. sometimes there is a disconnect where it gets a little ahead of itself and they bring back estimates that did happen here around apple. and it was not quite enough. we have discipline and for investors that the growth they had been looking for not quite achieved, puts the outlook for the march quarter not quite enough. there sometimes can be a little separation between e

apple promised to replace batteries on older phones for a cheap price. it's taking longer than expected. >> scott budman joins us with the latest. scott, what's happening here? >> reporter: well, raj, some users are telling us after they get to the store, it's taking longer than expected to get their batteries replaced. they're frustrated and worried because the alternative, buying a new phone is much more expensive. >> apple stores are fast moving places but some iphone owners say the company is moving too slowly when it comes to replacing batteries. >> i got an iphone 7. >> it was an hour. >> apple, you may remember, offered to replace iphone batteries for $29 each after admitting it was slowing older iphones down to improve performance. >> i barely use my phone and it's at 69%. it's only 11:00. >> a random sampling shows some apple users complaining of long waits. some had to return the batteries more than once. >> it's better, but it's pretty slow still. it turns off randomly. >> even the new battery? >> yes. >> reporter: this says a tech watcher lea