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tv   Bloomberg Technology  Bloomberg  January 31, 2017 5:00pm-6:01pm EST

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support her nomination. a senate panel voted for linda mcmahon to lead the small business administration. both nominations move to the full senate for consideration. meanwhile, the senate confirmed elaine chao is secretary of ofnsportation by a vote 93-6. she could race morning tonight by vice president mike pence. regrets used in obscure rule to delay the vote on attorney general nominee jeff sessions. counters gave lengthy speeches opposing sessions for several hours until the pro was delayed until tomorrow. democrats went to boycott it both for steve mnuchin and candidates would be approved, orrin hatch said. an online petition opposing trump's to visit has drawn almost 2 million signatures
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prompting what will be a nonbinding debate. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. caroline: this is bloomberg technology. apple sales are at an all-time high. we will crunch the best ever in -- revenue quarter. and sending of message to the competition. the most in vicious move yet in a bloomberg exclusive interview. tech rebellion against the travel ban. we will break down a plan in the pipeline to challenge the administration in court. first, to the lead.
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you can check out 2% higher. that is 3% year-over-year. also encouraging investors to beat on apple iphone sales. the services business includes itunes, apple pay for 18% -- falling 18%. guest is here. the earnings are pretty stellar. it does seem to be about the iphone 7 plus. guest: iphone sales make up the majority of apple's revenue. we look at global smartphones scrubbers that number will grow over the next five years so that is a big
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number. after makes a lot of money selling phones and mike's mother editors. if we look at market they are pursuing which is the middle-class and upper-class growth curve will not be as high. we take all that into account it is doubly impressive the numbers they have posted for 2016. caroline: they said they would double the size of this unit which is as big as a fortune 100 company. they will be doubling met over the next four years. how much do you think services is the right that for apple? guess: it is absolutely the right bed. until they start selling other home appliances there are so many phones and smart watches you can sell. there is an upside in the media ise and areas where there some low consumer adoption but a lot of upside in the services market on that side.
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caroline: if you are looking at the other products they sell there was a slight slowdown, the do trying to say this is -- they need another product? we also expect to see if we look at the adoption of smart watches they are only a fraction s. total wearable there is a lot of upside in the market as we move from 18% of u.s. online adults owning a wearable device. caroline: what struck me is the lack of a mention of china. turkeyis going well and and china destined to be a slowdown area. are they right to be focusing on china or switching attention to india a little bit more? guest: he want to sell phones
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profitably in the -- you have to look at the market where is the most upside. market thatugher they have done well so far. -- where the bigger growth will come from. caroline: will india be the right country given the average earnings power is less than china, do they have as much of an opportunity? look at the growth of smartphone adoption that will grow but in india that will almost double. at each of these markets the middle class and the upper-class are still very large markets, even bigger than the u.s., a lot of upside. caroline: our guest will be joining us later in the hour and we will be sticking on apple, the top story throughout the show. back to another story that continues to spark controversy. travel ban.'s
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amazon's ceo said his company is stateg hand-in-hand with officials on legal options against president trump's executive order. reuters reporting a group of tech companies planning to meet to discuss filing legal documents in support of a lawsuit challenging the immigration ban. among the companies invited, airbnb, netflix, and google. joining us is mark bergen who is covering the story. a concertedo see approach coming from the tech giant? touched a nerve and it is likely they will work together. there is some risk for one company to stick his neck out. the trump administration has been seen as the tell you tory against companies and they are trying to work with him on other issues like taxes and trade and antitrust.
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caroline: you were reporting on how much it touched a nerve for your company. they were demonstrating all of yesterday as well. flex over 2000 employees came out. they came out around the country sergey brin who is one of the cofounders shared his story as he came here from russia. i talked to a lot of people at google who were inspired about what survey is done. done.gey has -- this is notis the only potential executive order they are pushing up against. we are expecting a move on these is that are crucial. what are the other policies that could see tech giants work together on?
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mark: there is a proposal about mark: there is a proposal about visas affecting immigrants and watch -- a lot about h1b. , they are unclear about what the administration will do on a number of policies. they are on their toes anticipating the next move. have one.great to the new pelican head of the federal communications commission declined to say whether the agency will enforce the next new -- net neutrality role put in place by democrats. this is the rule that bars internet service providers from slowing all blocking -- or blocking traffic. that he would not comment. a longtimethat he is critic of the rural. coming up, and exclusive conversation with stewart
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butterfield. how he plans to fend off larger rivals like microsoft and facebook and what he thinks of trumps travel ban. throughout the hour we will continue to follow the apple earnings underway. scherzer meeting up 2.5%. trading on an all-time revenue record for the iphone with more than 78 million sold. you can follow along for instant highlights and analysis. this is bloomberg. ♪
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caroline: slack is taking aim at the corporate sector. they are launching a new product aimed at corporations and other large enterprises. help itform -- they
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use.be easier to this is competition from microsoft and facebook continues. joining us is stewart butterfield. i hear the launch was brilliant today. what exactly are you hoping to achieve with this new platform, how does it change question -- how does it change? with teams.ell once you get into thousands people are only metaphorically one team. what you have is a interconnected tapestry, teams of teams. they are overlapping and interconnected. grid is a new product for administrators to create a structure out of slack that mirrors the shape of their organization. caroline: how will you ensure that the cia's -- the cios will
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adopt this? into companies by stealth. of the products we made were shipped by conversations. about jeff smith, talking october --hrase, operational culture. cio that isf a enabling technology. he has a point of view and has a mission to drive agility across the company. we have talked to dozens of people, heads of i.t. and ceos -- cios and thousands of individual end-users.
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caroline: a lot of startups are focusing on the opportunity, we just had an event from dropbox. google that are the big challenge, are you collaborative? guest: we regard ourselves as having few competitors. the number of software that categories has proliferated. software forialty recruiting and i.t. and marketing, for sales and it goes on and it -- will never able to compete and create products that work in office functions. providing alves as connective tissue layer throughout the organization and whatever products or -- our customers use we want to make the experience that her. tothey use dropbox and want make that better. yourine: is the -- what is
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vision, is it eventually to be to stay independent, what do you say? --st: i can tell you what tell you this. we are part of the original team that made flickr. we are clever and we work hard but we have been -- incredible timing. we brought the product to the market when the world wanted it and capital markets were looking for something like us. if we wanted to see how far we could take something this is a shot. we will never have this kind of opportunity again so i would like to see how far we could take it. caroline: bloomberg llp is an investor. our guest is staying with me. we have to get your take on a top story intact. president trump's immigration order, that is still ahead.
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tim cook said minutes ago the company's services business that covers itunes and apple pay will size of a fortune 100 business. here he is with more. it was our best quarter yet for services with almost 7.2 billion dollars in revenue. customers all-time records during the holiday quarter including $3 billion in purchases in december alone making it the app store single best month ever. ♪
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caroline: sprint shares popping as much as 5% in trading today. the wireless carrier added more mobile subscribers than expected. sprint is the fourth-largest
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wires -- wireless carrier in the u.s. president trump's travel ban has been fueling outrage across the tech sector. all condemning the action and vowing to support immigrant employees. slack's ceo is one of them. stewart is back with us. passionate perspective because you come from polish heritage. what does it mean not only as an individual but the company? us,: it is a disruption for it is something that could have some impact on our ability to hire but we have employees who are affected by this and we have some who are potentially affected. we cannot tell because there is a lot of ambiguity. we're taking care of that.
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this is not a business issue. i also want to make sure that i am clear that while this is a problem and a potential problem for technology companies it is in the back of a lot of changes. ofwere on the verge as -- being able to have a conversation on criminal justice reform. we will back at this as a moment that is critical in climate change. there's a bunch of other issues that are in the background as we talk about this one issue of immigration reform. ban.e travel thing is this is not going to make us any safer, this will make people angrier and the people who are refugees are running and often running for their lives. to sane: you flew in francisco, i watched her video when the demonstrations were
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happening. could -- this is not only the issue of a travel been but what else could hit if we take there iso businesses could -- , the basis that could be looked at, how worried are you about the talent pool? was foundedcompany by a britannic canadian and a russian citizen and another american. we have hired people from all of the world from china, india, pakistan, from the u.k., france and germany and italy. a lot of those people have come in on h-1b visas and in a lot of these are programs that are threatened. absolutely understand the concerns of people who feel like this has the potential to displace american workers but in the technology it is not. these are people who are well compensated and we are bringing them into improve the overall talent pool and innovate at a
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level that would have been difficult. caroline: jeff bezos and other companies are being invited, is this something you are looking to lend support to? guest: absolutely. issue that will have a material impact on our business. it is something that is a harbinger for more changes that could be even more disruptive and more threatening. you name other policies you are concerned about? guest: we have headquartered in san francisco a very diverse employee base, lgbt writes lgbt rights.me -- l the last couple of
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centuries we have made is somewhat under threat because of the level of uncertainty. it is not like we're trading that. i think trump is the most antibusiness president we have ever had not just because of the degree of uncertainty. we have the executive branch ordering executive employees to ignore orders from federal court that undermines the system of laws on which everything is dependent. if you do not have that kind of certainty that the laws will be carrying through, it is difficult to establish contracts. americanrt duties by companies who manufacture outside of the u.s., those duties would not [inaudible] two of foreign country -- company. the fact we have the president saying these things which are impractical at best and impossible most of the time is a level of background risk that
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makes all business decisions difficult. caroline: there is sometimes the carrot that comes with the stick . we will reduce corporate taxes, help you re-patch rate money, that would be a big than two companies such as apple. have you concerned -- been concerned about the way which tech giants have been willing to work with the president are doing a that dialogue? guest: it is hard to say. ofis not -- there is a lot issues, corporate tax reform one of them and repatriation that would have happened anyway or there would have been discussion about without all this needless separation. this travel ban is impacting people who have green cards, who have houses and jobs and their possessions and bank accounts here. the travel overseas and they want to come home and they cannot. people being asked to relinquish those rights in order to not be detained further at the border.
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there's no reason we had to do that to get corporate tracks reform -- tax reform. that is almost the problem. i am fundamentally an optimist and i think the pendulum will swing back the other way. it is hard to know what you should be an optimist or pessimist. givinge: thank you for of your time on a day when you have such crucial announcements as well and we look forward to having you in again. butterfield, ceo of slack. a story we're following. theident trump has delayed executive order as the white house steps up to other legal challenges. the trump administration has not yet determined whether or when it can reschedule the finding.
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anotherad to the break, check on apple as the earnings call continues. mainland revenue in china was flat. apple planning a second retail store in dubai and the first in singapore. we will bring you more details next. this is bloomberg. ♪
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nina: antonio guterres is calling on president trump to lift his band from travelers on seven predominantly muslim
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countries. a french paper says presidential employed two of his children as legislative aides when he was senator. to paper is expected report they earned $91,000 each money as ae earned prone entry assistant. he has been the establishment paths leading candidate in the battle to stop marine le pen's campaign. to win allies from brexit negotiations. they will be given higher status and more staff are lobbying. benjamini -- and
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netanyahu plans to bring up sanctions when he meets with president trump at the white house. saidan and eu officials the launch was not in violation of a 2015 nuclear pact. netanyahu visited the u.s. -- will visit from lori 15. -- will visit u.s. february 15. p.m. after 5:30 i am joined by david ingles with the look at the market. to talk about in asia. we are expecting another slow start of the trading session. three out of three so far this week. we are looking at currencies, just looking at the charts and the commentary. it will be interesting to see if we see a pullback after what
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seems to be a drop in the u.s. dollar the past two or three days. we are seeing a little bit of that, not a lot. decline in again not as bad as tuesday but we're looking at declines that are on the stronger japanese yen. will be tracking within the equity space, tracking suppliers of the iphone. taiwan where a lot of these manufacturers of apple are close to the asset class. it will be busy across asia. just to pick out what is relevant, we have china manufacturing pmi due out midmorning. from bloomberg technology next. ♪
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caroline: this is bloomberg technology. the top story this hour is apple reporting its fiscal first-quarter results. shares continuing to rise in after-hours trading. more than three percentage points. executives on an investor call. they will have all time records of 78 million units sold. also encouraging investors, the revenue growth and its services business and growth outside the u.s. apple did say revenue from human is in anmainland china improvement. we were talking earlier about china and the opportunities there. they're never going to get a --er priced phone, they will or would they? >> they might but they are never going to match the prices of some of the manufacturers in china who are more willing to
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give away or sell products at below cost to gain that market share. apple has a business model of selling hardware and profiting from the sales. other manufacturers may be thinking about ad revenue but no one has the same business model. caroline: it seems to be get the users and make more money from each individual user. onthe ecosystem able to keep luring people and when you have home, how of google do they compete to keep you so intoxicated by the ios? >> the more devices that someone owns within an ecosystem and the more services they use the better the services get for me. the services continue to get better. to owne: do they need
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more hardware? >> to the extent that they have access to the data they can learn about me and provide better services, that works as well. they do not have to earn all the -- own all the touch points. if we did see to catch ration happen, are you expecting it more to go to the shareholders, what sort of companies could they be i in? of burden on the consumer so if i want to use a phone or my tv, you put all the hard work on me. what would have to happen is you need to understand better who i am and anticipate what i need and push that out proactively to me. i would expect to see some kind of acquisitions in that space of making experiences better for me artificialmbrella of intelligence.
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caroline: what is interesting is side, i ams surprised by how little i can use it over here and where i was working in berlin it is almost impossible. talking aboutok apple pay. >> nearly 2 million small businesses are accepting invoiced payments through into it, quickbooks online, stress books and other billing partners and beginning this quarter, comcast customers can pay their monthly bill in a single touch with apple pay. is a much bigger opportunity? >> yes. we see 11% of consumers using apple pay and when they use apple pay the use it all the time. every time they can, at least a third of the time. not if we look at the 89% using it one third of them are interested.
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caroline: i cannot use it on the bus here. at home it is so easy. what are we not talking about on the call, is there any area that you were wanting more information on or areas that you want to see more growth that you did not see this time around? >> as the evolution of digital experiences, we are moving from standalone apps to third party platforms. in order for apple to compete they will have to know more about my day-to-day life and where i am going. it will be interesting to see if that is one of the opportunities they embrace as we get forward. caroline: thank you. principal analyst at forrester research. now to a deal we are following. with ubs struck a deal er.
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details could change to pending on how the self driving market evolves. put thenership could carmaker in a strong position to monetize self driving cars when the technology is ready. still to come. meet the billionaire entrepreneur who is planning a literal moonshot as soon as this year. business of ae letter outfit. as we head to the break another check on apple. the earnings call continues. take a listen. optimistic given what i'm hearing that there would likely be some sort of tax reform this year and it does seem there are people in both parties who would favor beat --
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repatriation. that is good for the country and good for apple. ♪
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caroline: money express made history last year by becoming the first private company to get government permission to fly beyond earth orbit. it got the money to fund the trip with $45 million raised from the likes of peter thiel. we caught up with the cofounder and asked why he is leaving a startup to the moon. >> we live on the spacecraft which is a single point of failure and if we were to get hit by an asteroid the whole comanche would get to stories like dinosaurs did. my goal is to make community a
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multi-planetary society where we can live on the moon and mars and beyond and the first step is .o live on our nearby continent if we can learn to live on the moon we can expand to future plants. the short-term goal is to explore the moon for scientific purposes and from the entrepreneur perspective. the people have estimated worst the sources on the moon. the cleanest fuel and water is the oil for the space economy that could be used for rocket fuel and as for humans. airline: when you have been out there raising funds you had is the reward,at
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how do you make money, it is -- is it from these materials they can bring back and then sell or getting other human beings to the moon? guest: if i could re-freeze john f. kennedy it would go something like we chose to go to the moon because it is easy but because it is a great business. what makes a great business is the natural resources on the mind but also to use the a habitat oncreate the moon and to be able to live on the moon so it is not simply tourism. it is to say community from some potential disaster. even if you want to live on mars the best training places them on because the problems are similar. caroline: would you have to will thee funds or fuel be able to sustain the growth of the business and be able to bring in profits to bring the living about on the moon? guests: yes. we are fully funded to do our
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first, second, and third mission. do, landing on the monitors not just about us. what oneut showing small group of entrepreneurs are doing. not only do we become the first company to ever land on the the, we began -- become fourth superpower. on springer's will be the superpowers, not the nationstate. some of the biggest problems facing him and he will be solved by on screeners whether that happens to be elon musk or the moon express. caroline: usually that is given to someone who is elected. you are just going to have that power through creativity. guest: the idea is that people among themselves are starting to become accountable and just because someone is elected does not mean they have a superpower.
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i am not saying a word after that. caroline: give us a sense of your past. .com boom.ith the you had some companies that rose and exploded light supernovas and then lost their value. how to promise the returns to your investors, how do we know that the moon express will remain a good investment? guest: in the.com boom it did not matter what company you invested in. you can control the stock price whether you invested in yahoo! company.gn or any all the company -- companies lost value. to some extent you cannot control the stock price. you can know great companies and my personal belief is you will -- greatpanies companies, great things happen. my goal is to continue to inspire entrepreneurs to do great things and continue to be inspired to do great things whether it is making the
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humanity a multi-planetary society or creating a health care system that can keep everyone healthy for as long as they live. caroline: sticking with glenn express, that business that you are fueling and meeting, how big will it become if you get to land on the moon in 2017, will this become one of the biggest companies in the world? isst: the way to look at it we fight on [indiscernible] you will see an abundance of land, and abundance of water, and abundance of energy. everything that we value on planet earth is an abundance in space and there is no doubt that someone is going to create a tremendous amount of wealth in the space economy. the space economy will be one of the biggest economies and the company leading it will always amazing largeate enterprise by doing good and doing well.
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caroline: in addition to apple, there's another tech giant reporting earnings. beating earnings thanks to sales over the holiday. investors are paying close attention to where it stands ahead of the rollout of the new gaming console in march. i am joined by peter l stremme ellstrom.eter looked good in some measures. guest: it is a mixed bag when it comes to the numbers. they beat on the net profit number and they also raised their forecast for net profits for the year. for the quarter revenue fell about 25% which is a sign of some of the weaknesses in the business. they cut their operating outlook for the business. this raises the stakes for them
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as they head toward this launch of the switch game console. nintendo has been a traditional console maker for a while. they're are not trying to fuse home game playing and mobile game playing in a way that no one has done so far and it will be interesting to see how this which is received. the price is seen as little bit high, $300. they launch on march 3, they have high expectations for it and they will need that business to take off for things to improve for the rest of the year. didline: the price point not quite work on that particular phone game. everyone downloaded it but not upgrading to pay $10 to get the game installed. needto us about where they to make better inroads into mobile but also the 3ds. is strugglingo with the switch to mobile. people play games on phones like never before and they are part
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of the traditional console world. they came out with their first mobile game and it was downloaded a lot, more than 70 million times but very people -- few people pay them money to play the additional levels. it was only 5%. they are able to put these games out there and they are somewhat popular but the price point was a little bit high for the consumer base. they are experiencing with mobile. they will have other games that come out later this year and we may see play a bit with the pricing and move to some of the models that other people have used to be more successful in these mobile games. use your asianll know-how on the other tech giant. headwinds helping apple. fx tip, talk to us about what we saw in terms of china and asian growth in general. forgetit is easy to
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apple has such a high presence in the u.s., it is very popular in japan. they are important markets where market has little -- were they have little market share. they have been losing share in that market to domestic competitors in particular. there are a few that have come on strong. virtuale a couple of unknowns that have come on strong and taken a bunch of the market share in china. the market has been tough. india which will be the fastest-growing smartphone market over the next five years is another market where apple has a tiny share. they have been trying to boost their share. the price point is high for that market so now they have less than 5% of the market, 2%. they have been trying to get their own retail stores which would help. they are negotiating with the to do manufacturing
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and that market which would help them bring down the price is little bit and compete more aggressively for share but they need to compete in that market if they want to get a slice of the fastest-growing smartphone market in the world. to do manufacturing and that market which would help them bring down the price is caroline: revenue growth in china is flat and tim cook is saying the rate of growth for to theill be similar first quarter. thank you. still to come, more takeaways on apple's record sales quarter as the sales called continues. this is bloomberg. ♪
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directorsin the u.k., and the relatives but more than 700 thousand dollars worth of shares monday and tuesday providing a vote of confidence in the former telecommunications monopoly. when the [inaudible] iniders are showing faith
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bt's prospects. investors appear encouraged by the revenue and continued growth in apple services business. where does the company go next? it seemed how much they are trying to show there was a move toward the iphone 7 plus in particular. >> they said they were not expecting this sort of demand for the iphone 7 plus. a lot of people like it because of the larger screen size and the dual camera feature that lets use them in a bit further than the smaller model. out on theou pointed t live blog that we are seeing other products showing some slow down. perhaps not something to be too worried about. >> apple has this other products category and it came in a little
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bit at a year-over-year decline and this includes the apple tv, and the apple watch. should we be concerned, not really. a lot of the concern is around the apple watch in terms of not being a will to walk into a store and find one. they see the apple watch hit all-time unit sales and revenue numbers for this first quarter holiday quarter. that the apple tv launch at the end of 2015 compared to this end of 2016 holiday quarter really was the discrepancy why revenue dropped in the category. us, ite: kick it on for looks like it is fx, all hopes on the iphone 8? whene iphone eight or the in the september quarter will make up the majority of the worst quarter for it next year. a lot is riding on that. they have been hinting at it for
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since the iphone 7 came out last year. a lot of people are expecting big changes. we report it will have a new glass curved design with a high resolution display with more colors. we will see how it does in a year from now. caroline: you will be there to cover it for us. fantastic analysis. thank you. that does it for this edition of bloomberg technology. we will have an interview with one of the biggest names in tech , the cofounder of reddit joining the program. be sure to watch that conversation. that is all for now. this is bloomberg. ♪ . .
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announcer: from our studios in new york city, this is "charlie rose." we begin with continuing coverage of the trump administration's opening week. we talk tonight about the executive order on immigration, the order restricting citizens from seven muslim majority countries from coming to the united states for at least eight days. he signed several controversial orders last week but this one has had the most explosive repercussions. protesters flooded the nation's airport and over 100 officials signed a dissenting memo. mike morrell served as deputy director for the cia

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