tv Squawk Alley CNBC May 25, 2016 11:00am-12:01pm EDT
of the new york journal daniel venture as we are looking at the biggest gain in two days, and the nasdaq and the dow putting the tech back in the green which leads us to hp enterprise, and rallying after the posting first quarter revenue, and plan to spinoff the internet services business, and david faber spoke with meg whitman this morning. >> yes, carl. investors are rejoicing a deal that was announced late yesterday according to the hp earnings, and that deal is involving the spinoff services, and two computer science corpse creating $26 billion in overall revenue, and owned 50% by the existing hp shareholders and 50% by the shareholder base, and that deal is going to take some time, and expect it to call in the end of march 2017, but it is
a big deal for hpe, and it is having a positive response not only in that stock, but other computer sciences, because their enterprise value is comprised of the units taken over when they bought eds at $8.5 billion, but importantly, hp did report earn in ings. we had an opportunity to talk to meg whitman about it, because it is left with $33 billion in e revenues, and led ti hardwaby t hardware group. i did ask ms. whitman if she sees the earnings at hpe ramping? >> i feel good about the return business, and we use a return based allocation strategy and we are looking at ways to deploy the capital, and we believe that the shares are a good buy, and we ought to continue to buy shares. >> she of course is making the point that she believes it is
the best way to use the free cash flow that we have generated and in fact, they plan to use 100% of all cash flow to repurchase the shares, and of course, the approach of business in china which adds up to $4.8 billion in repurchases by the end of the year, and they did not buy back stock last quarter as they were ne gosh yating the deal with cse. -- csc. and now, for 1,000 employs now left in $33 billion in revenues and about 50,000 or so employees. she is talking about the focus, and i asked her why. >> this is the focus that we have wanted, and i did not start out that way, david. when i joined the company, i was not sure this is where we would end up, but technology is changing at lightning speed. it is bet ter to be smaller, an it is better to be leaning into the new technology, and it is better to delever the company, and that what we have done. >> that is what she intends to
do, the old shrink to grow, jon. and we have seep nit other business businesses, but she has taken it to heart when you think of what she has done in the last couple of years. >> yes, and meg whitman should have put out the lemonade album, and beyonce did it, but meg whitman on the corporate level has turned it into the science. and sinceage -- agellan, and i will tell you i am not positive, because they are up against the storage and the emc and dell combination coming up, and the servers up against everybody in the cloud including amazon, and ibm trying to come back at the same time, and i don't know how
they do it fwlaushgsz is no piece of the category that is number one. >> well, they had sales in servers in particular that was quite strong which is surprising to people who follow the company, and 7% of actual growth and 10% or more in constant currency. >> you wonder if it is sustainable because of the overall business, and also, the overall sales going to the cloud provideer providers, and google talking about making their own chips and not just the service designs, and you wonder if that revenue is sustainable in the cash flow that is used to fuel new binzs for hp. >> it is true, but jettisoning enterprises is up 1% in constant currency last quarter will have margins that the company left behind. >> it is interesting that they spent all of the money on
shares. the tech company saying that we have no form of investment whatsoever, and we will buy ourself, and it is a remarkable moment i think. >> and kate, there is a broader conversation of the enterprise strength and watching western dij, and upgrades for microsoft and good numbers from the chip, and is this tech rally more broadly starting to take hold in your mind? >> it is. you can see it in performance across the consumer facing, but in particular enterprise facing businesses, and looking at what hp is doing by concentrating and splitting into two businesses, the services piece is really focused on the large companies that are going to custom make their cloud presence for the most part around the world. the business that meg is going to be focusing on the primary which is in a better position to become number one and i agree that they are using all of the cash for buybacks and not the vertically integrate, but it gives them a shot in grow ingin
the self-serve portion that amazon and google has been more successful in. so enterprises are in the early days of converting to the cloud, so this is the time to place the chips squarely on the bet, and they are well positioned to focus is smart ly going to benefit them. >> and that shows in the prices today. and google is about to get bigger. they say they will increase the size and number of apps, and this is google maps, and this is interesting world that you live in. >> interesting. and you say that it is almost taboo to put the ads in the top of search results to begin with, and slowly and surely the dark scenarios of the power of google and not saying a nefarious plot here, but they are monetizing the neo monopoly they have, and of course, facebook is looming in the background, and the
facebook targeting is more power ful than google's ability to make it bigger and shinier. >> they have the real estate, and it is a matter of time before they started to change the way they were using the real estate, and what is interesting to me is that people had been frustrated with somefintimes no knowing what is a ad on the searcher result, and so maybe it is better to make it more apparent what is ad and what is organic search, but on the maps, it is somewhat confusing and busy because of the nature of what it is, and to be adding the advertising there, and do you think that the user experience is going to be ruined? >> i think it is a question about that, because it is interesting that you made the point of what we have been used to from the ad point of view. and it is interesting, because ubers have the google maps up quickly get me to where i want
to go and with the ads popping up, how is this going to be reactionary, because people are looking for a map quickly, and so 50% of the revenue is coming from mobile, and one of the understood lying thing in addition to size is that buyers can buy mobile only, and that is signalling that big part of the business 80% of excited about google assist, and vr, and this is the biggest part of the revenue and the biggest growth piece is mobile and they are trying to optimize with that to buy mobile only, and the search capability which is going to be effective. when you in search, you are looking for something and answer and looking to buy often, but i agree on the maps, i am not looking the buy, but to go, and this is confusing, and they are good at responding to the market, and we will see how the market responds. >> and dennis, two companies looking to monetize the scale with huge strength in mobile, facebook live taking on youtube. >> incredible. >> and this is going to be
making pepsi and coke look like child's play. >> and pepsi and coke is a once a day decision if you are lucky if you are pepsi and coke, and here are the lives led, and walk down the street, and count at the people looking at the phones, and 40%. so as we are moving more and more of the lives to the platforms, the facebook valuation is speaking for itself, and i would bet long term though, carl on the personalization, and the segmentation of facebook perhaps over the search capability of google. >> interesting. microsoft is announcing it is laying off 1,800 works and taking a $13 billion restructuring charge as it is shutting down the last piece of the nokia phone business after it laid off 7,800 workers rerelated to the business last year. jon, surprise or not? >> not really. it is clear that this nokia bet which is kind of the in a way steve ballmer's parting gift to microsoft has not panned otut way that the company a had hoped. what has happened is the
professionalization of the phone and the pc business. you heard intel talking about moving into the higher end chips and pcs there, and microsoft is talking about the phones where they had not been getting success, but now they will be focusing on the corporate market there, and the smaller players in india, and china and the l low-cost devices are commoditizing in phones similar to what happened in the pcs and those who want the margin are having to react. >> and kate, we saw last year that the company is going to be taking a $7.5 billion write down, and i remember john saying that that may not be enough, and when we think of the nokia microsoft el deal, and the businessle school case study were to be written about this, and what should the company have done about this situation, and how they could have spent $11 # bill yont differently?
-- billion differently? >> well, meg may be a little ahead of hp such as the same being done at microsoft. and he is making smart moves. when thinking of $11 billion, they should have been looking at android at 83% of the market from the os point of view, and the bet was interesting, but it was already so far behind that the lesson is to go to the place where you can be number one, and that is is what he is doing now, and they are focusing on where they differentiate in the sector where that i have manageability, and people love them. enterprise is bringing a lotf technology, and modernizing a lot of of the technology, and microsoft can be there for them, and we are bringing our own phones to work, and good portion of those, 80% plus around the world are android devices. so this is going to allow microsoft to reposition itself. sat ya is doing the right thing as meg is doing at hp, and get
it behind us, and move forward. >> and it is a decision, dennis, a decision in a old era? it is bizarre decision, and then ballmer left, and he should have gone to the clippers before he made ta deal, and saved themselves a lot of of trouble. >> dennis berman, and kate mitchell, thank you to you as well. >> and over to dominic chu, and get a market flash. >> bloomberg is out with a report saying that at&t is interested in buying yahoo's core internet business. at&t shares did make a move from the positive territory back to the flatline on the heels of that particular bit of news, and helped along with that, and the story as it is going on right now sh now, the early stages say that the telecom giant had decided against making an offer, and according to people familiar, to perhaps inject back in there
now, and we will keep an eye on the story, and interesting move between at&t and yahoo entering the fray for internet's core business. back to you. >> okay. mossberg apple could lose to both facebook and netflix. and also, in a bizarre story, the funding of hulk hogan against gawker by peter thiel. ♪ ohh. ooh. [ gags ] so when you need a house cleaner or an exterminator, we can help you get the job done right, guaranteed. get started today at angie's list, because your home is where our heart is. ♪
>> after a poor start to the year, netflix is seeing a spring rebound. shares buoyed by a spate of new content deals, but is netflix scripting a turnaround or a simple catchup rally. we are joined by mike santoly, and is it the new content or s risk? >> well, it is a catchup with netflix against other media stocks. you ask how they have to catch up, because the stock is up 70%, and up 130% last year, but most of the gains last year were in the first quarter, and only up 10% in the last 12 month, and also, it usually has a huge january pop, and you got the reverse this year, and that all being said, that is the mechanics of it, and i think that it was underowned and overshorted on the hedge fund positioning, so some of it is fu fueling the catchup move.
>> but the biggest drop was in april after the earnings, and subscriber growth came in weaker than expected and that is biggest drop since october 14th, when the subscriber growth is expected. can that be the culprit? >> well, not much has been resolved and it is about the pacing of the international subscriber growth, and the en ptration of the next couple of years. everybody has brought down the numbers on, that and nobody is lifting the revenue, and the earnings estimates, but it is about that the stock tends to trade on how much people are focused on the indispensability as a service. a must-have? going to bet at the top of the list of the bundle substitute, and the over the top options, and you could say yes. everybody is talking about the exclusivity on disney, and the deal was struck a few years ago, but it is not new information. >> but we got timing on it, and put it more in our face. >> yes, that is how the stock trades, and maybe they can do it, and they will have to raise $1 billion in debt to fund the
free cash flow losses for a while, and that is okay, because the debt market will take it easily, and that is the perception right now. >> does the street want to see the price increase? >> that is interesting, because the bulk case rests on the ability over time to get more pricing. i don't know if they want to e se soo the impact of a big pricing increase right now, because the stock has been like that, and oh, they could turn on the earnings spigot the way that amazon is always said to be able to do, but that is not the case, but people think that they have the potential energy within the business model. >> how much of this is the stock come back off of the february lows, and we have seen names like salesforce, and workday that were beaten down, and people were scared earlier in the year, and to have a bounce back. more hope in the air around a name like this that the good news can be the good news? >> that is the positioning piece, and that is responsible for what we have gotten so far in terms of the rebound. it is not new sponsorship, and not a new fundamental story to
build around netflix except that it is a growth leader, and if you are getting more growth-minded, you want to have it if you are thinking that long term the story is going to be changing for the industry. i will say that the market value is two-thirds that of time warner, and the enterprise is t two-thirds of time warner, and if you think that is the case, you are buying netflix, and if you think it is crazy, you are buying time warner, and not shorting netflix. >> they do tend to do well when the original series comes out, and we have "orange is the new black" coming out in mid-june, and there is a halo effect even though we don't get viewership or the data or the ratings? >> yes, you get the buzz, so netflix is something that somebody in the household wants. and there a feeling of abundanc abundance, and what they are selling is something to watch any time, any place, and not selling a series necessarily, and as long as you have that news around the originals, the
message is going to be reinforced. >> rbc put out a survey of the time spent watching various platforms, and netflix and youtube are fighting for number one, but amazon outpacing hulu in terms of the growth. >> well, it is amazing, and what is crazy about that is that netflix might be as a stock, the beneficiary of that dynamic only because amazon, the stock, it is a clumsy way to play amazon's streaming business, because it is too big and massive, and they don't charge specifically for it not much yet, so i do think that it reinforces the idea of the sek secular shift as opposed to the horse race between all of the different over the top options. >> although, we have not seen the monthly prime video can do, and we will see that shortly. >> and the content is coming out of it which is what people are concerned about, and that is not going away. >> thank you, mike santoli. >> this peter story is bizarre,
thiel is helping hulk hogan defend his case gaiagainst gawk. we will look at what is going on. and another rally onle wall street, street, and this is after the major averages finished up more than 1% yesterday, and right now, little lower than that, but still a nice gain. we are back in a moment. need to hire fast? ) go to ziprecruiter.com and post your job to over 100 of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. (announcer) over 400,000 businesses have already used ziprecruiter. and now you can use ziprecruiter for free. go to ziprecruiter.com/offer6
well, it turns out that hulk hogan has a secret back her the legal fight against gawker media for invasion of privacy, and could be existential threat to gawker, and that backer is tech billionaire peter thiel, and andrew sor kin is going to join with us the details. >> it is remarkable story and revelati revelation, and the country was gripped by the the hulk hogan story many months this past year, but what we didn't know is that there was a secret backer helping to finance this particular case, and finance hulk hogan, and gawker has said
they have spent $10 million defend i defending the case, and the estimates are that on the other side hulk hogan's side, and p e peter thiel's side, they have spent more than $10 million. the history is real. peter thiel had a history with gawker, and they outed peter thiel as being gay, and he has since been open about his sexual orientation, but it stunned him and in several interviews made comment comments to gawker, and compared them to being a terrorist organization. and so there is a little bit of the understanding perhaps what may have motivated him in this particular instance to helped hulk hogan. there was a ho-hum of something amiss, and perhaps hulk hogan was not operating independently at one point, because hulk hogan's legal team removed a claim as part of the case that
would have allowed gawker to use its insurance company to pay for some of the defense as well as the potential settlement, and that struck a lot of observers as an odd thing to do if you were out to get money from the company rather than inflict financial harm on the company. it has ultimately toed this, and now, lots of questions not only about freedom of speech, but big money in the legal cases, and there are other cases, and we should say where there have been benefactors if you will, and hank greenberg's case against the government relating to the aig bankruptcy case was paid for in part by some of his friends including ken lan gone, t of ho depot. so there is a history of this, and the finance litigation world that does participate in some of these cases, but this is a huge revelation, and now the big question is how this is going to be part of or whether it is part of the gawker appeal which is of course forth coming.
they are trying to make the $140 million jury award come down if not overturned entirely. >> and andrew, normally, the financed litigation-type investments are hedge funds or other types of the alternative investors who get a piece of the potential outcomes, and i wonder if this is a gift to hogan or a cut. >> well, we understand that it is to cover the expenses, though, am doing the additional reporting to try to understand the full extent of it. there are ndas and the other agreements put in place, and i will tell you that we have within working on this for some time, and the reporting has been ve very, very difficult to say the least. they did not want this to come out. >> and andrew, this is striking me as one of the few times that silicon valley tech success is used in a way that is this targeted and some would say -- and i don't know how the characterize it, but the paypal mafia, and reed hoffman and the
youtube guys have gone on to do interesting things like starting business and this is the case of somebody trying to take out the media organization, and really kill it. have we seen the zuckerbergs and the ellisons and others of the world do something like that? >> well, peter thiel on the board of facebook, and they are on their own bit of headlines in the past week over their own freedom of speech issues and how the algorithm is ranking different views including the conservative views, and peter t, h and so this is going to be disclosed of how a judge and jury would think about it, and this information is not in front of juries, because the insurance companies and others have known
things like this before, and the judges have said that who is paying for all of it should not be considered. big question mark. >> yeah, certainly those who are the target of gawker are not complaining, and you are right about that. >> and whether there is copycats, and whether this is the beginning, who knows? >> reporting has been fierce. and true, we look forward to your reports. andrew sorkin. and now, the dow in europe. simon? >> well, the dow is outpacing with what is happening here up 3% in 2 to 3 trading sessions. and clearly, here in brussels, it is a lot of the bleary eyes with the breakthrough deal to greece as the eurozone is releasing cash to greece, and they are running the huge budget surplus for so long, that they will be offered debt releaf in 2018 after the jgerman election after the greek election, and the german election, and the
effect is to remove greece or the risk of what would happy to greece off of the political and the market agenda as far as many people are concerned, and the greeks are hoping that the european central bank will re-start accepting their loans as collateral to free up the liquidity in the least. and you have a rallying peripheral debt, and this is a o one-month chart here as you can see, and it is replicated in spain, and italy, and general sigh of relief if you'd like that is originating with the peripheral bomb markets, and the banks are rising substantially. some of the bigger banks, deutsche bank, and also others lock locked in the eurozone if it were to go to wrong decision. and also, for the record there s is the ceo going once again after the job. and also, for those who have
lived inb britain, there is another profit warnings today as of the new ceo admitting that they have not gotten to grip with what is happening with the clothing and in particular, the suggestion is that they may have chased fast fashion to a greater extent than they should have done rare thther than the core, that is why marks and spencer is down in the uk and that is big news, guys. >> and now, the dow is up 1.53, and don't go away.
i'm sharon epperson and here is the cnbc news update at this hour. 29 oil tank ers blocked at sea off of the coast of france as the union strikes are continuing to target the fuel supply. the unions have blocked the oil depots and refin eries around france as a dispute of a new labor reform bill weakening the wo worker protections. iraqi troops and paramilitary troops are targeting isis out sooside of fallujah. they are looking to take back the city west of baghdad. groo back home, the citibank is agreeing to pay $425 million
over benchmark manipulation. the commodities and trading commission releasing the figures. and today, it is national wine day, and so according to a survey, by the wine council, millennials consumed 42% of the wine consumed in this country last year. and carl, who knew? >> well, thank you, sharon. more signs of the rebounding as steve liesman is going to join with us a cnbc wrap it update. >> yes, it is second quarter tracking of the cnbc rapid update, and we have seven estimates up 0.02, because the deficit came in lower than expectations of 40 billion versus $60 billion, and with imports and exports, we have wiped tout decline.
and the range of the cnbc rapid update is the 2% to 3% on the high end, and goldman coming in with the 3% raising from 2.7 to 3.0, and key tracking is the weak 1% number, and the rebound is decent here. these are the numbers off who is where. goldman at 3%, and the goldman sachs at 3%, and more skeptical down is ranaction economics at and could apple pivot to a/i., and win the next battle? walt mossberg is editor of large at re/code, and he has a topic in this week's column, and walt, you made some good points about apple's services track record which is not that great, and al also, the position on the privacy damaging their ability to really enter this space. you think that the sign is maybe
that apple should partner up with somebody like microsoft who has a little bit better track record in services, and in software and has a dog in the fight, and going that route with a/i? >> well, that is an interesting question, jon, i have not heard before. i suppose it is possible. but i think that is not apple-like. apple, and here's the thing, apple has a five-year head start or had a five-year head start or the x-number of years head start on having an a/i voice controlled assistant built into the products which is siri, and what i am writing this morning, and i believe, they have done remarkably little with the advantage. yes, it works, and it is all air device coming to the mac as well
shortly, but it is doing relatively simple thing, and they needed to have done a lot more, and now they really need to do a lot more. >> and does apple have to latch on to every movement, because we were talking about a year ago or two years ago how they missed the social media, and they seem to be doing just fine. >> it is great point. they don't have to latch on to every movement, but i think that actually, this is a fundamental underlying nature of the next phase of tech, and apple, itself, has already plunged into it, as i said with siri with the developers conference which is coming up, they announced a proactive version of it. kind of like the google now which is trying to figure out what you need to know before you know it. so there are already into it, but the problem is that i think that the command of the cloud
services has been mixed, and their very in my opinion, very admirable commitment to privacy is going to be making it hard, and it is going to prevent them from having access to a lot of data. >> right. because you have to share the data if you are going to be making a service like this smarter. quick question on the nature of apple. is there a fundamental weak nes that we are seeing that maybe they are incapable of foe cushion in on more than a couple of projects at a time? i mean, they have not refreshed the beats headphones and they had to buy their way into the subscription music, and the services businesss have not taken off so well, and are we seeing that maybe if it is not their main os's or the main devices they are building off of it, and retail is an umbrella over all of the stuff, they have a hard time to put a great team on it? >> well, i would not go that far, jon.
look, they are a great, great company that has done great thing, and i wind up the column saying they are routing for them, because competition benefits everybody, and in particular, i u like somebodyb in the game who respects privacy. having said that, they have to prove what you said, that they can be excellent across the board in a lot of things. and you know, pivoting from the steve jobs' era, and pivoting from the devices first to services is not to be taken lightly. i am not willing to say they can't do it, but it is is remaining to be seen how quickly and well they can do it. >> and well said, walt mossberg, and tim cook said that the executives have to work together really well in order to win in era, and we will see if nay can do it in this area. thank you for joining us. >> thank you. and coming up next, another
rally today, and the major averages are all in the green, and the dow is doing best of all up nearly 1%, and the s&p is right behind it. and rick santelli, what are you watching today? >> it is about the word non. there is general ly accepted accounting principles, and then the non-generally accepted accounting principles like a lipstick on the pig. we have david trainer who knows a lot about this topic, and it is going on and on, and the s.e.c. is looking into it, and we are going to be looking into it after the break. go pro with oral-b. oral-b's rounded brush head cups your teeth to break up plaque and rotates to sweep it away. and oral-b delivers a clinically proven superior clean versus sonicare diamondclean. my mouth feels super clean! oral-b. know you're getting a superior clean.
lit's get to cme group with rick santelli at the exchange. hello, rick. >> welcome in on the first time of the exchange, david trainer, and thank you for taking the time out on an important topic. >> great to be with you, thank you. >> all right. off camera, i was asking you what is the s.e.c. doing, because there is several articles that they are looking into this, and what did you tell me? >> well, the s.e.c. has a mixed track record on the non-gaap earning earnings, and we saw in the tech bubble, and they were off of the hook back then, and the s.e.c. put out the guidance aing they didn't like it so much, and then in 2010 they loosened the reins saying that we want the non-gaup disclosures in all of the places that you have to public in
addition to the the places that you don't have to pub wilish th information and now they have come out recently saying they want to tighten up non-gahfnon-. >> why is it that investors tend to be paying more attention to gaap and nongaap, and they both have to be released when the company shows to books? >> well, it is a great question, rick. we wonder all of the time why the investors are gullible about the metrics which are in many ways a joke. they will take out the obvious operating expenses like the stock-based compensation, which we know to be a real expense and a peer yad of other expenses that allow the management to misrepresent the businessa and the real problem in going back over history, rick s is that the main reason for the nongaap is that the executive compensation
over $1 million is not tax deductible, unless it is tied to the performance metrics, and the executives said, great, we will create the metrics easy to make so that we will make our compensation over $11 million nontaxable, and this is where the nonhfnon-gaap got the start >> and so now, in this is used to often and this is the norm, why doesn't the s.e.c. clamp down on it. and when i discussed wit with te traders their cynical view is that it is about keeping the rates low, and keep ing ting th market moving, and are they wrong, and silly way to look at it? >> i don't think so, really. the part of the challenge with the s.e.c. is that they are bringing a whiffle ball bat to the gun fight. they are underresourced keeping up with the whiz kids off wall
street. if they wanted to stop it, they would have a hard time enforc g enforcing. the rules right now says that the s.e.c. has to review an annual report once every three years. once every three years, and we are seeing the things on the annual report in the foot foets that are a joke. required disclosures are missing, and the income statements don't add up, and the bottom line, the investors should not rely on anybody but themselves, because you can't rely on wall street, the s.e.c. or fasb. and so, there are all good theories out there, but the only real answer out there is to do your own homework. >> too bad, david, we don't live in a prudent buyer beware society, and the same institutions that we are describing that are not doing the same thing they should be doing, they are getting more control everyday. kayla, back to you.
and nick weaver is the founder and ceo of the company, and you are saying that people should buy three of these units across the home, and it is $500 where the standard wi-fi is between $100 and $200 and how do you convince people that they can spend $500 and solve the headaches that we have had with the home wi-fi? well, the big change that people are experiencing in the homes is that we are streaming video and connecting to devices more than ever in our homes, so when you are trying to get the perfect coverage, the only solution is going from the single router to multiple routers throughout the home. that is what we are delivering with eero wi-fi system. so instead of buying one device that you put in the corner of the home, you buy our system of three, and you plug these units in around the housement. so you will have perfect coverage whether or not in the
kilt ch -- kitchen or the living room or up in the bedroom. >> lots of companies coming after the problem, and google is trying to do it with its own wi-fi router, and shoume is also entering the market, and so what are you planning to do with the market as you got good reviews on amazon, and 4.5 stars, and more than 800 reviews boding well, but that is serious competition that you have got. >> yes, that is what is key with the new financing, because it allows us to keep investing in the product, and keep improving the features delivering to the customers. for example, over the last three months since shifting, we have added a new update every week, and helping the features and we are committed to improve the eero systems for long time. >> and you starting to buy them
on best buy, and in retail this summer, and any earlier indications for the consumer demand for something like this? >> we are building as many units as we k and can, and excited abe distribution across the country. >> and how much wi-fi can you get in the target customer, and the most loyal customer, and what kind of home they have got, and what problem you are solving, and any surprises that people are buying them for smaller places than you would have expected? >> yeah, the customer is a tipple cal cutip ti tip -- typical customer has a home of a home of average of 2,500 square feet, and most of them are hulu and youtube subscribers and as they are streaming more video, they are turning to us to fix dead zones
and buffering and poor connectivity so that all of the experiences just work in every corner of the home. >> is the key problem set up so that people go to the equipment that they are going to have the cable provider to dole out, and often that is not the fastest and most efficient option out there, but if you are wanting to go with the faster, and the most efficient option up until now it is a headache to configure. is that the problem that you areal solving up front? >> yes, it is one of them. the apps, and we have iphone, and -- and the android app to plug it in and be working within minutes, and all of the other units to add to the system. it is a couple of taps, and up and running with more or less professional-grade wi-fi system in a couple of minutes. >> well, the folks are getting funded out there in silicon
valley. thank you for joining us, nick from eero. >> when we come back, we talked about apple's a/i move with walt mossberg a few moments ago, and now we will see if the company has some new direction in that area. [alarm beeps] ♪ ♪ the intelligent, all-new audi a4 is here. ♪ ♪ ain't got time to make no apologies...♪
apple could be getting into the battle or the home smart devices according to information, they are building a rooil to echo complete with a si siri-powered speaker, and setup. and they are planning to open up siri to third-party apps and a kit could be available at a devel developer's world wide conference next month and we spoke to walt mossberg about that moments ago, and it would be interesting. >> yes, and this conference is fgoing to be especially importat for people looking at hints of apple's ambition beyond the phone and the tv as we talked about yesterday. >> and alibaba, the shares are down 4% as the s.e.c. is
investigate ing t investigating the operating data related to singles day as well as investment in another network. certainly something to watch there. >> and we are off of the highs. the dow is up 1.77, and oil is trying to get to $50 where it has not been in the since november. ♪ we are on the road to nowhere ♪ ♪ come on in inside carl, thank you. welcome to the "halftime report." i'm scott wapner, and the stock trade, are stocks dead money or the best for the money as the rally continues. josh brown, stephen weiss, and jon and pete najarian, and also with us on the set is jpmorgan head of u.s. equity strategy, and so it is a great debate, where is the stock market to head with the fed priming interest rates, and the possible brexit looming, and the d