thes optimistic about potential of the iphone as e, the cheaper more entry-level iphone.id they are getting a great customer response. obviously it will have an impact, but we are constrained in supply for the iphone s e. demand is above what we were expecting, and where working hard to eliminate that constraint. going to bethere's cannibalization here, other versions of the phone, he said it's too early to tell, all we know is that it is a popular product. additional color to what we are seeing given these numbers in the first iphone sales decline in a decade. great contacts. talking about how people were not upgrading their smart phones quickly as in the past. is this a structural change? if so, what does that mean for apple's upgrade program that it just put into practice? the topic ofeen discussion for the last few months as you started to see more movement away from subsidies to other payment plans with various carriers, so people if youually benefiting no longer have that $30 a month payment, then perhaps you were not upgrade. much of annk it has impact on the upgra

and it was an iphone. eight months earlier, in september 2014, apple had changed the iphone's operating system, adding a new layer of encryption that made it impossible, apple claimed, for law enforcement or the company itself to unlock anyone's iphone without knowing the owner's personal passcode. in addition, a new security feature would erase all the iphone's data if an incorrect passcode was tried ten times. with a warrant, baton rouge police obtained from brittney's cellular carrier a list of who she had called and texted, but they could not get the contents of those messages, or read anything she had stored on her phone, including a diary that brittney's mother says she kept on the phone. >> well let's say she was having trouble with somebody. it could lead us to that, some person, somebody. it could tell us exactly what the problems were about. >> reporter: almost a year later, the prosecutor has not charged anyone with the murder. do you think the answer to who did it is on your daughter's phone? >

and the iphone 7 or the rumors of an iphone 7, it is going to be looking the same, and you can't pluge into it? is that a tradeoff for a better camera strong enough? the question for me is at all times with apple is, you know, are they making us lust for something that basically we want to give our atm cards to tim cook and say, tim, leave us enough money to eat, and otherwise, take everything that you want. >> and guy, what is the answer to that question? >> yes. the answer is that apple has to create a product that was, you know, mcintosh to apple 2 and we need a product to leap to the next curve, and i don't know what it is, but it is not simply making the iphone smaller or the ipad, you know, bigger or sma smaller, and so what is the next leap? that is the toughest question of all. with steve jobs, you know, you were in a reality distortion field so you could believe that making an iphone smaller was a big deal, a revolution. ah, not so convince anythingmore, and so we need a leap. >> and the question though, guy, of whether the revolution now comes from outside, and now tim cook

he talked about the latest iphone, the iphone se. that's opening up a new range of customers who perform the smaller form factor. and he says apple continues to see the record number of android switchers. and we're still in the early innings of the iphone. >>> and more apple reaction after this. you're watching "street signs." >>> welcome to "street signs." trade traders. --. apple suffers its first decline in revenue since 2003 as iphone sales stumble. the pain spreading to suppliers in asia. it is donald versus hillary. >> let's go forward. let's win the nomination and in july let's return as a unified party. >> i started off at 1. i'm down now i'm winning it. it's over. these two guys cannot win. there is no path. so why would i change? you know, if you have a football team you're winning. and you get to the super bowl you don't change your quarterback, right? so i'm not changing o. >> so we've got some preliminary gdp stats out for the uk this morning coming in at .4% on the first quarter. 2.1 on the year. so that is in line with

iphone,version of the that has not quite kicked in yet and there is a new iphone in september.an in between time. sometime.one seven >> there is a concern right now about a global saturation of the smart phone market. if you want a smart phone, you have already bought it i large. not many new people are coming in the market a lot more give-and-take, pillaging each other's customers, samsung and baffled, etc.. what is tim cook doing in order to kind of get apple prepared for the shift in demand? what is the next new thing? the last earnings call, we started to hint at the idea of virtual reality. that is still a ways off. is in the works, but again, it is not something that will kick in right away, so will the next iphone be special enough to reinvigorate demand and excitement over smartphones -- smartphones? the story seems to be they cannot get user growth where they want to be. >> absolutely. it is sales growth and see advertisers excited on innovating a bit and changing the product. when they need to do is get new people excited about it. a lot of people, journalists chief a

mark: is the iphone seven going to jumpstart demand for the iphone? big, big pressure.is tough to say, mark. the rumors are calling for a much better camera. a dual camera system with a potential telephoto lens, a better screen, which i think would help sales a lot, because that little screen means everything to smartphone users. day, i think the again we go back to the fact that apple at some point is going to hit the top of the cycle for iphone, whether it is now or two quarters from now. they still need that encore in the works. frankly, i'm not seeing it yet. mark: is this just apple having to contend with all the issues that the other smartphone sellers have had to contend with? it is just apple finally joining the party to you such a term. john: i think a better way to put it is that the party has joined them. ,hen the iphone first came out they really did not have meaningful competitors. over time, you have seen companies like samsung, lg, , all these companies have come out now with terrific devices. apple on the confederate of front really has its -- competitiv

that acceleration after the size of the iphone.hey are warning of another sales declined this quarter. are left to decide, is this a turning point or a pause before the upgrade frenzy? studio, and our editor at large, cory johnson. what are the main takeaways? we know it is two thirds of revenue for the company. smartphone market is saturated but still growing at 7%. cory: growth in the market and shrinkage at apple. it is a seasonal product story. concern and the reason the stock is down is because of the margin number. ifthey hold market share or they keep getting the prophets, that's great. it's disappointing, although it at the time of the six sd phone that likely has lower margin. you want to see margins stay high and they are coming down. emily: the apple cfo talked a lot about the iphone se. ,e said it's incredibly popular they can't meet demand. , will ituestion is cannibalize? he says it is too early to tell there. what would you say? >> cory makes a good point. i think we will see expectations for smartphones come down. i

the iphone 6 was a blockbuster. a year ago, apple shipped 61 million iphones. he talked about the macro economic weakness and headwinds. the key question for investors is where is the iphone franchise heading from here. cook sounding very confident and very upbeat. he's still bullish on this franchise. he talked about new markets to india. a small market share there relatively. india popping more than 50%. he talked about the iphone se with the smaller form factor, relatively cheaper. he said that's opening up the iphone to new users, and talked about taking market share from rivals. a number of android switchers. also, greater china, you saw revenue down year over year. cook was telling me to break apart that region. hong kong he said was down hard on a stronger dollar. mainland china was down 7% in currency, off a tough comp. he continues to be confident about china, that it's stable. recognizing it's not growing like it did last year at this time. this conference call is just ticking off. i'm going to hop on it and bring you more headlines as they come. >> j

you haven't talked about the iphone seven.at mean you don't of the -- expect something major come fall? >> that is exactly a. we think this will be a nominal upgrade. they will be successful and have the effect of returning the iphone to growth. there is this echo effect were people who bought iphones to years ago will be upgrading at with this cycle. they will also gain some market share on top of that. the big reason why people upgrade their phones is not because of some killer feature. the big reason is because their contracts are up and their phone is getting a little slow and they neither phone. enough to will have keep the momentum going and that high 90% retention rate intact. >> senior research analyst gene munster with lack rocks rick reader earlier on bloomberg . coming up on bloomberg markets, a new threat to financial reforms in the u.s.. how wall street is attempting to chip away at dodd-frank. >> a quick look at a mover today. they specialize in infectious diseases. it is falling over 36% today after a panel

they think that decline in iphone units will moderate and may turn higher when we get that expected iphone 7 in the fall. we'll wait and see whether executives on the call think they're right about that forecast. >> you wonder if tim cook will address the executive who told cnbc yesterday that he felt that apple was out of date. >> yeah, i'd be surprised if he addressed that. again, i did see that report from that chinese executive. there wasn't a lot of data in that report. if cook did address to that he'd point out that apple's share of the smartphone market in china is rising. it went from 8% in 2014 to 14% in 2015. they actually track used iphone sales in china. it's holding up. that wouldn't indicate a brand that's in a free fall as that chinese tycoon made it out to be. we'll see whether cook addresses that on the coall. >> what are you looking for, julia? >> well, kelly, user growth is very much in focus here at twitter after last quarter. the key popularity metric shrank from the corner before. the ceo is under pressure to get the company growing again and to show the tweaks he's m

analysts predicted iphones at 53 million. still that was down 68%. i had the opportunity to talk to apple ceo tim cook. he pinned the pressure on a couple different factors. one he says tough times t. iphone 6 was a block buser. in q2, tough comparison there is for apple. he talked about macro weakness and currency head winds. two questions for investors is where is the iphones franchise head from here? he remains bullish. he talked about new market in india, for example up 50%. he talked about the latest iphone, it's opening up new kind of customers for that smaller form factor. he says they continue to take market shares from rivals, a record football of androids. cook telling me we are still in the early inning of the iphone. let's turn now to dan morgan. he owns more than a million apple shares. despit today's earnings blipper, he says he is bullish on the company and the stock. he is the senior portfolio manager for novus trust. hi, dan, are you disappointed in this report? does it raise red flags for you? >> as you said, it's a kind of a monume

uglyhe iphone 7 is from going to be a better cycle than the iphone 6. betty: why?e are still a lot of users on the iphone 6 platforms, we think they would come by the new version. and there was massive uptake that happened with the iphone 6, the largest screen size. by the time iphone seven, they will be two years out. and they usually start upgrading their phones in two years. the life to be longer, but still between that and 24 and 33 months is when this will happen. betty: people that work pre- iphone 6 awaiting the upgrade, why did they not catch on to the iphone 6 success? >> they were whiting for the -- waiting for the iphone 6 hd. and there are people that just like to wait as long as topple -- as possible for lower prices, longer than two years. ,etty: and from devices to cars there was this report in germany , an article that said that 10 to 20arently has very senior top people or employees working at some secret car. what do you make of this? >> there is clearly something going on. tim cook has made public statements acknowledging they are doing work of t

piper's gene munster chalks up the iphone to two reason, one the iphone was a big success so apple isagainst very tough comparisons, more broadly apple is taking share of the smartphone market. but that's a market that's slowing. idc says it will grow less than 6% this year. that's an issue cook did address on the call with analysts. >> i think that the market, as you know, is currently not grow i ing. however, my view is that's an overhang of sort of the macroeconomic environment in many places in the world. and we're very optimistic that this too shall pass. >> so why is cook confident that the iphone franchise is going to return to growth? he tells me to look at the strength in emerging markets like india, the new users that the iphone se is attracting and the record number of android switchers. but investors aren't so sure at least right now heading into these results that stock was already down more than 20% from a recent high. it's down even harder this morning. guys, back to you. >> okay, josh, thank you very much. for more on apple's earnings and what investors can expect goin

for the iphone seven.here analysts are expecting. it is a big difference. global smart phone sales expected to slow 7%. a broader factor something going on worldwide. there is a question to be asked. have iphone sales heat? phase? the next the iphone makes up 68% of the .usiness i slept in we expect to see coming out of earnings? have we found that enough to determine whether it has been a failure or a success? there are a lot of skeptics out there. people called it a complete flop. analysts are saying, look, probably about 12 million. apple does not say exactly how many and that is part of the problem. it, over theabout last year, they sold 6 million iphones. it is a completely different era. let's say they sold 12 money watches. $500 a pop. in terms of revenue, is three times the size of fitbit's business and the entire business is predicated on a wearable wrist device. >> looking to the future, will we get any signs for the apple cart to appear? >> likely to get zero signs of that. i think tim cook said

, the 5c that is an older, it's like a new iphone but sort of a cheaper iphone. that iphone can be broken, that's the only iphone that can be broken so not the latest five. [bleep] iphones but anything from a 5c older and will have to remember this later because this comes up, can be broken by the fbi's third-party that unlocks it. so again, how does all of this apple versus ios versus fbi happened? here was a tragedy, a mass shooting in the united states. and that occurred on december 2 i believe, 2015. and in it a holiday party was disrupted by two people, one of whom an employee work festive partygoers were attacked and in the shootout and then two people were killed. that picture there, this is a picture of the crime scene. over there is a picture ofthe house , of the suspected perpetrator. stop. and that takes care of the landlord, let them in. there's media running around, reporters in the crime scene and at home . the timeline is going to keep moving. got a little nerdy. so this is from the ios security documents from september 2015, that's the latest one.

about 80 billion of that is not the iphone.o they do 80 billion dollars in sales that aren't the iphone. and they have so much opportunity. and this is not the only tech company that hasn't grown in the current economy around the world. i think the key thing for me is this is a company that has a tremendous track record of innovation. companies like google which we talked about which we also own talk about track record in moon shots but they also have no revenue to show for those categories. apple has five categories that are so large they have to be broken out. so a couple of categories actually grew in the quarter. accessory sales, up 20% year over year. and the services business is doing about 40 billion dollars a year in gross sales and 11 times earnings and 7.8 times earnings at cash, 2.5% dividend yield you are not paying a lot for the prospect that maybe somewhere in the labs at apple is something that will cause companies grow over the long haul. >> yeah. and that's been sort of the oppositic take. optimistic take. they

emily: we will be watching iphone sales.hey still count her 68% of iphone revenue -- of apple revenue. we are expecting the numbers to be down from a year ago. the numbers are dropping. think guidance will be important. to understand what they think will happen, with the addition of the new phone and the smaller phone into their mix and what that means going forward. the guidance has been fairly accurate. it is usually a little bit low, but we will see what they tell us about the future. i think it will be much more important. emily: crawford, if not the wat ch, and putting the iphone aside, what is the next big business for apple? can services make up? >> i think that, obviously the game changer for apple, and what we are watching closely is the augmented and virtual reality space. that is probably at least one year out, if not further. i think that is the next game changer moment for apple. that, again, could be a fascinating opportunity for them. emily: what do you see as their role in the augmented and virtual reality sp

among the reasons for that drop, we know the iphone 6 and 6 plus were big hits.he company is now dealing with tough comps. there is evidence customers are holding on to their iphones for longer. 85% of analysts say apple is a buy, thinking apple can return to growth with the iphone 7 expected this fall. a lot of this news is already priced in, they will argue, with the stock trading at 11 times earnings. rbc thinks apple could raise its dividend by 15% and increase its buy-back authorization by $50 billion. when apple does report tomorrow, also expect a lot of attention paid to that company's services like apple pay, apple music and itunes. drexel hamilton's brian white expects service's revenue to jump 26% to $6.3 billion. back to you. >>> for more on apple, let's bring in the tech columnist for the "new york times." as josh just alluded to, we will probably hear a lot more from apple tomorrow about services. they trying to shift attention i guess away from the growth decline in the iphone. is there any way that that could work given how big the iphone has been

the iphone 6 was the first unsubsidized phone in the u.s.hich means a whole bunch of users over the next year are going to be stopping doing their monthly payments and if you think of the year 6 user, and coming up october, and your carrier bill is going to go down by $35 if you don't upgrade or you upgrade and keep paying the $35, and the view is that most concerns are going to to be looking at the 7 and see one difference of the 6 two generations ago, and that is the iphone jack missing and would ultimately keep the $35 savings so we believe that the replacement cycle is going to lengthen or get worse as toni mentioned well into next year. >> toni, you are the top rated analyst in the space, and when you make a move, it resonates. how close were you to downgrading apple either last night or this morning? >> well, i was not close. scott, i was on the show e yesterday and my sense is that the numbers have to come down and i would not be a buyer of the stock before the quarter, but i believe in the upgrade cycle story, and quite frankly my se

they had plenty of experience rescuing broken iphones.>> how many a month do you get that you have to try to get information from?>> we see up to 300 iphones a month. >> reporter: michael koppel is the director of engineering. >> this is the chip that holds all the data for the iphone 5 see in encrypted four. -- form. >> you have that off the phone. why not just read it?>> the encryption is not so simple to retrieve.>> reporter: accompany the fbi has not identified has found a way around the encryption. try the wrong password too many times, and the phone wipes its memory clean.>> you have 10 are at -- attempts before the iphone gets a raise.>> reporter: to prevent this, they copy the phone, then reset the counter to zero after every 10 attempts.>> would that take long? >> it takes -- depends how fast you can pull the data off and make the copy and make more attempts.>> reporter: over the past 30 years, they have retrieved information from computers that have been burned, broken, and deliberately smash. while law enforcement comes looking for evidence, many of drive savers clients of

they have plenty of experience rescuing broken iphones. how many iphones a month do you get that you have to try to get kformation from? y, you know, we see, actually, anywhere from 100 to 300 iphones a month right now. >> reporter: michael cobb is drivesavers' director of engineering. >> this is the chip that holds all the data for the iphone 5c, ed the encrypted form. >> reporter: so you've got that off the phone. why not just read it? >> ah, well, because encryption is not so simple to retrieve. n reporter: a company the f.b.i. has not identified found a way around apple's encryption. the effort at drivesavers shows what they had to overcome. try wrong password too many times, and the phone wipes its memory clean. >> in the case of the 5c, you only have 10 attempts before the the iphone gets erased. >> reporter: to make sure the chip doesn't get erased, they copy it, then put it in a device that simulates an iphone but lets them reset the chip's password counter to zero after every 10 attempts. wouldn't that take forever? n it all depen

vonnie: and just on the iphone, again, the next iteration of the iphone, so far we have not hurt it will heard it will have anything -- does apple need to come up with something between now and then? jeremy: they do not have another product in the pipeline for immediate launch and then a couple quarters. so, people are looking that and saying, what are they going to do to drive growth in this company? that is one of the concerns weighing on the stock. some people are looking at their other blue sky projects, the car project that has been talked about a lot that apple never confirmed. maybe that is something that could come along. but that is pretty far out there. i think we are looking at drivers of growth being phone sales and phone sales are not very strong. mr. regling: what about -- vonnie: what about services revenue? even music streaming . can apple put a push into that side of things and make a difference? jeremy: it makes a difference at the margin. they can,'s eight -- they can compensate for lost growth and services. they are making a big push. but it is mostly about the phones

the iphone seven or something else? michael: the iphone seven is a big upgrade.l of the features but the innovations and display and battery and style, etc. this year is the anniversary of the apple watch. it was something that did not have a lot of anticipation around it. it has cost about $6 billion in revenues. apples and oranges, or should i say apples and rolexes. rolex to 4.5 billion and that is a brand that has been around for a long time. apple and the first year has done 6 billion. that is also expected to be refreshed. that will likely have meaningful upgrades so it does not need the iphone directly, and other features. -- company also introduced in the last quarter the iphone sce. that should do very well internationally. asia especially, at a lower price point. recently, that will not start to show up in financials until q3. , and thatfor the ipad also, we will not see the financial impact until the next quarter. given those array of products, and we have an interesting product story. the other thing i will say is drawnalso has recently attention on i

extended their iphone production as sales slow. r

could not unlock new or iphones.the government is considering whether to share its findings with apple. discussed the case in ohio. surveyedy of americans know little about the zika virus. suggests manyed people still are not sure whether there is a vaccine or treatment or anyway the virus can spread. tore is no official vaccine see go which has been linked to birth affect -- earth the fact. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. we do have breaking news -- verizon is considering a bid on the web does this. so they are interested? i think it is a bit of a surprise that google is potentially interested. google has not been one of the leading candidates for this business. marissa mayer came from google and i'm sure there's a lot of family or the back-and-forth. carol: it would be an easy fit. has search which is very big in other portions of this country and has a sizable user base. google knows that business well but the people close to this deal tha

what they can't do is access the actual iphone.whatever else is on the iphone the government can't access that without help from apple. that's the issue here. does the government have the right to tell apple to create software so that they can access the encryption in the phone. >> the government has gone off and paid a hack ear million dollars to get sayed farook's phone. >> the government is looking for alternative ways. the government guest these valid warrants and now looking to effectuate these warrants. hey apple who has nothing to do with this litigation get the contents of the phone. apple says no. the government is finding other ways. >> apple's position is look, one, you're asking us to create something we haven't already created which is to break the encryption. two a slippery slope. if we do it for the u.s. government what does the chinese government say. they want this too. what will that do? that impacts you and i as customers because we're thinking the government is peeking through our phone. >> the government now ca

right now, switch to at&t for an iphone and get one free. wow, is that right? yeah, it's basically... yes. that is the current offer from at&t. okay siri, you don't know everything. i know you asked me to call you the at&t hostess with the mostest okay, shut her down. turn it off. right now, buy an iphone and get another one free if you treated your car... ...like greasy, fast food treats your body... you'd have to walk everywhere. so instead treat your body to all-white meat chicken raised without antibiotics. with the new rotisserie-style chicken sandwich. subway. fresh is what we do. by design. that feeling recaptured. is that coffee? yea, it's nespresso. i want in. you're ready. get ready to experience a cup above. is that coffee? >> jimmy: welcome back to the show. tonight, from the new movie "i saw the light," elizabeth olsen is here. then -- this is her debut album. it's called "untamed." tomorrow night, vermont senator bernie sanders will be here. tom hiddleston will join us. and we'll have music from granger smith. and later this week, kristen bell, jo

but that didn't stop people from comparing. >> apple a of the iphone, similar in size to the iphone 5aving people compare the two side by side. >> okay. >> this is the iphone5, obviously. >> all right. >> and tsion of the iphone. >> okay. nice. like i can already feel that -- it's actually a little heavier, i thought it was going to be lighter. it might mean there's extra features which is kind of cool. maybe more battery. >> as far as size, do you notice any difference in thinness? >> it seems a little smaller. >> okay. >> not in thinness. but a little -- i heard it has a four-inch screen, that's new. >> what about screen brightness? >> yeah, they wanted -- the new one seems a bit clearer. >> as far as? screen brightness? >> yeah, you can see the background better. it seems like it's a little bit, you know, easier to notice like the icons and stuff as opposed to the older one. >> i like the way the brightness is. the power doesn't seem like it's going any less than the older one. battery life? >> yeah, it does. >> yeah, seems a little bit faster. i mean, it's like a difference of a m

what are you expecting out of the iphone 7 to turn this around? buyers upgrading to iphone 7.e was a massive upgrade in china. saw this year, they will climb 15. comps are upgrade and easier. there will be some important new features. it will not be as big as the 6. there are some features that people will be interested in. david: you been pointing to the larger context of the tech sector in general. gina: this is really important. what is tech doing for the balance sheet? this sector has the most cash in the entire s&p 500. there was a lot of balance sheet chatter. what is happening with m&a? brian: apple has done 15 acquisitions over the past year. they have never been a company to make massive acquisitions. general -- in tech in general, earnings growth has been week. is a case to be made for more acquisitions, for sure. gina: do you think they would be more software and services based ? ryan: definitely. we were in china discussing looking at software acquisitions. this is a hardware company. i think that is where the mojo is. jon: it is like china saying they will pivot a

they want to look at every iphone and get the data. understand that urgent impulse but that does affect u.s. national security because what happens is if you do not have strong encryption then we get massive cyber attacks, both in the federal government as well as the public sector. last year the office of personal management had a cyber attack over 20,000,000 security records released including my own. i. i notice because a few months ago i got a letter saying your sensitive information was stolen and here's three years every credit monitoring. if you don't have strong encryption you don't have any backdoor. >> host: back to this, maybe i'm getting a little paranoid. i use use my providers text message service, wire the providers providing encryption.e why do we have to go down load and app, they could, i do not know the answer to that, but i will actually asked that question because it's a good issue you just raised.ca >> caller: good morning. i have a question, i've seen on television shows that the goodod wives it because i do not

. >>> iphone users beware. muggers are stealing devices in a popular park but it's what happens next that has some people especially concerned. cbs2's ilana gold reports. >> reporter: a walk along the water in riverside park turned into a frightening one for ross kennedy and his friend when they got mugged at 8:00 last wednesday. >> this is kerrie. >> reporter: two teams on a bench starting talking to them, then suddenly showed knives on their waistbands and demented wallets and cell phones from their pockets. but the robbery didn't stop here, the criminals stayed in contact with the victims were longer than most holdups. >> the entire time, i was just waiting for it to be over. >> reporter: he tells us the crooks made sure the iphones they were about to steal couldn't be traced. they forced the victims to delete find my iphone and turn off their settings. that way kennedy and his friend accounts from another device and find the phoned -- phone location. it's an app people use if their phones are lost. kennedy

sales for the iphone and ipad and the mac were all down by double digits and although you mentioned iphone sales were lower, they beat expectations. however, the key factor here is that the average selling price was lower. that dented revenue as well. now we need to check shares of japanese component makers following apple's earnings results. a lot of japanese component makers help to make a lot of these apple products. u.s. crude prices were a focus and gain. japanese commodity trading houses may also feel the effect. many of them are due to report earnings shortly. that's going to be a big focus for corporate japan as well. >> with all eyes on the fed, tell us what's happening with currencies right now. >> look at that dollar yen. that has seen some volatility. many are keen to see if fed chair janet yellen talks about rising jobs and lesser concerns about emerging markets as well as bottoming out in crude oil prices. dollar yen, that also, 111.19. the argument that feds may raise rates at the next meeting in june. that's boosting sentiment or perhaps for the green back. let's have a loo

how far have iphone sales really fallen?w with the ceo later this hour. >> we begin with market minutes. an eventful week but we do not feel any of that today. the s&p 500 slipping from a four-month high as oil slides. energy shares by far the biggest losers. the only group to fall more than 1%.

the fbi's hack into a terrorist's iphone did not come cheap.bi director has hinted that the fbi paid more than $1 million to break into the locked iphone used by one of the san bernardino shooters. the directors spoke at the aspen security forum in london. >> more than i will make in the remainder of this job, which is seven years and four months for sure. it.it was in my view worth it's a tool that helps us with 9, which is a ios corner kay's increasingly as devices develop and move on to ios's -- it'sand very important. mark: federal officials have said the hacking method was successful, though they haven't revealed what it was. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. back to you. about markets closing in 28 minutes. abigail doolittle is live at the nasdaq trade nasdaq near the lows of the day so far. abigail: the markets are doing better than the other two averages, the dow when s&p. the difference between the other two averages, biotech. another big boos

by the same token, we know there's going to be another iphone come autumn. i've got an iphone 6.g to buy a 6 plus now? emily: is it more pronounced this year than last? alex: we have to see when the earnings come. apple did warn that sales were going to decline for the first time in a decade. emily: shira, apple is in an interesting position with hardware sales expected to decline. they are trying to beef up revenue from other things like services. shira: apple has been stressing, look at how much money we make, $20 billion in revenue in the last year from things like their share of app store downloads, music subscriptions, things like that. but let's not kid ourselves. apple, two thirds of the company's revenue comes from the iphone. this is a hardware company. emily: interesting. you guys talked about how they might make changes to the app store ranking and turn that into revenue. alex: we are hearing they are pursuing kind of google-like solutions, whereby you as an app developer could pay to have your product ranked more highly in the app store. that could be a huge moneymake

cory: iphone units down 18% is the biggest take away.ou've got growth in the market and shrinkage at apple. the secular growth is taken away but the real concern and the reason the stock is down it because the margin number was disappointing. a little slippage in the growth margin is disappointing although it comes at a time of the release of this phone which likely has lower margin so it may not be arable news. -- it may not be horrible news. emily: we spoke to the apple cf though. he said the phone is incredibly popular. there is a question as to whether it will cannibalize sales of the previous phone. what would you say? >> i think we will see market expectations for smartphones come down. i think we are not just at a puse. i think it's a realignment and apple is suffering. i think this will bring margins down further. it was not included in the last numbers and that will bring them down a little bit further. i think it's a challenge because people are finding that the phone that i have a sufficient and i don't need to upgrade that of

apple reportedly extending production cuts for the iphone of mid-slowing sales. can the tech giant move beyond its core product or have we reached a peak when it comes to apple? brazilian lawmakers beginning the impeachment process ahead of the sunday vote. has her presidency run its course? is herballife a pyramid scheme? maker of a new documentary about the victims who have lost thousands. we are one hour away from the close of trading on this friday. ramy inocencio has the latest. it has been an interesting day considering the run up this week. right now, i am calling it flat. it is noncommittal. there has been a lot of data we have been crunching over the day. this is where we stand with about an hour left to go in the trading day and week. the s&p 500 down .1%. the dow not far behind. recently flat. as i was talking about data, u.s. factory output fell, consumer sentiment felt. all of this weighing on the markets. also, oil falling. let's go to my terminal, the bloomberg terminal, and look at what is happening with the sector health of the s&p. as few ase ha

>> it has to be the iphone.ittle bit of upside to that is that the guidance -- we are expecting about 82% guide down. 2% guide down. the return to growth is going to be one of the key factors for tonight. >> you talk about the services side of it. you have not talked about the iphone 7. does that mean you don't expect something really major come fall? >> that's exactly it. we think this is going to be a nominal upgrade. it will still be successful and have the effect of returning the iphone to growth. people who bought iphones to years ago -- two years ago will be upgrading. reason people upgrade is not because of some killer feature. it is because their contracts are up and their phone is getting a little bit slow. i think it will be enough to keep the upgrade momentum going and the high retention rate in touch. ♪ scarlet: we have some breaking news. is facingard redemption calls. investors in the firm has asked to pull $1.4 million from the main hedge fund. we are talking about the master fund which bets on ma

they are to be falling out of love with the iphone. stephen: for the first time since 2007, sales have fallen. apple sells almost 10 million fewer cells so that's fewer phones. the decline pulled apple's overall revenue down for the first time in 13 years. the news wipes $48 billion off the value of the company as shares plunged in after-hours trading. nicholas rushworth reports. nicholas co. apple growth hits the wall. the country has posted its first ever decline in iphone sales since it was launched in 2007. fewer people are opting for the latest model. company sold 50.2 million iphones during the first three months of the year. that was down from system 1.2 million per year ago. investors fear apple may have inked with no new products the lifeline. >> it does not look like there is anything that would drive significant growth for apple from here. as they have been behaving. if they came out with a breakthrough product price, then you might see a change, particularly if it is different than the other smartphone makers. could theory