The u. S. Military has dropped weapons, ammunition, and medical supplies to the kurds. Is once again saying that the company is not going to merge with yahoo , value hasboard encouraged. Have a Board Meeting this week in new york, which i am flying back for tonight. I can tell you what is on the agenda for that Board Meeting. Do wetransformation, how take the next step operationally as a company. And that is a presentation im giving with no mention of yahoo or anyone else in that deck. Armstrong did hence the company may spin off crunched space. Cutting the earnings forecast. In the political situation in russia. What is hurting as the need is in the short term russia, one of our biggest markets. They are coming back to a regular business as usual scenario, which will raise growth in europe. They have made a number of acquisitions to improve their cloud tools. Now to the lead, just like sap, ibm is struggling in the age of Cloud Computing. Theys are plunging after said they will not meet their five year goal to double earnings by the next year. The companys revenue fell 6 in the third corner. Quarter. Ibm is paying the company one point 5 billion to take the underperforming unit off its hands, and entereds out this is onlyhe underperforming ibm unit. So how much trouble are they in . Cory johnson with me in the studio, and a reporter who covers ibm. Also, David Kirkpatrick who set down with the ceo. How much trouble are they in . It sounds pretty big. Several things. If services are going down, that is probably the biggest news item despite the glitzy thing about paying someone 1. 5 billion to take the chip business off their hands. This is a giant, conglomerate in an industry where layers are becoming increasingly specialized or that is a lot of challenges altogether. Left holding the bag . Is this something that was put into play before she took the ceo . I always quoting Warren Buffett. Good manager meets a business with a bad reputation, it is the repetition of the business that survives. You mentioned the prophets, they said they will double profits. They said they would double earnings per share. Have been getting worse and worse for a long time here. It continues to get worse for this company. They have in painting that, they up and trying to have been trying to make it look better by doing sure by backs. Now they have ton of debt coming due. They said they are going to have Free Cash Flow problems. It will impede their ability to buy backcheck shares and have cash flow. They are unable to get the business they want, and investments they want, and they have made that worse by doing the share buybacks and borrowing money to do so. Is ibm going to pull through, or how wrong was word buffet about it was Warren Buffett about it . Days like today were all of the gains that he has had in his investment have been erased, you start to look at that and question. They really need to transform their services business, about 50 of the business. Need to get into the air of Cloud Computing where they are moving so much more quickly than they have in the past. They really have to get to speed. Some are calling for more m a, more deals. Now that jenny is out from under the cps roadmap, the onus is going to be unheard to figure out the next steps Going Forward and how they can keep up in this new, quickly changing industry. The industry is facing unprecedented change. I hear a lot ofs words from her a lot of buzzwords from her. Do you think they are making the right choices to manage that transition . Bought a few companies here and there that are clearly good decisions, but you just did your great interview with marc benioff at dream forest. So many people came to the dream forest conference is indicative that we have crossed the chasm more than on Technology Companies thought we did toward the era of cloud. When theygnificant have such high cost to build the hardware for their infrastructure is expensive. That is why they are paying people to take it off their hands. Toy also have a lot of cost maintain their hardware business which is not selling as much, because people want to buy it as a service. Ibm is a survivor, they have done a great job for a long time. I think they will survive. But they may not be growing in the foreseeable future as much. If youre suddenly told that that youvething been working on, tell people not to buy up but youre rented because you could get it on the cloud, and you are a Service Company and you tell people that you will have a lot of expensive and hard to use hardware but it is the best in the industry into need to use it or you can rent it for a few days in the cloud, the credibility is challenged. It is not as easy as moving our focus to the new place, because it dumps on the old business and makes it hard for people to sell it. We saw them etching semiconductors, and that is the old business, that is the business that is being a problem for them now. They just paid another company to take an unprofitable section. Thank you. Apple pay is rolling out today. Is it relieve the end of the credit card really the end of the plastic credit card . I am emily chang. To the robin hood conference, where attendees a thousands of dollars in ticket to hear advice from the best and brightest minds in the industry. Could affect the future of payments. Stephanie ruhle joins us now live. Thank you. Im here with ari summers, the ceo of Jpmorgan Chases consumer bank. Branches, who is going to branches today . Good question. All thee question i get time. It is very important to our customers, 90 of our customers use our branches, and visit several times a quarter. The way they use him is very different that deals with no. The transactions they used to have to come to the branch to do, deposit, payment, to ask a question about an account, they are using some of the technology that we have developed. Theyre coming for different reasons. 50 of deposits are happening outside of branches, how is Jpmorgan Chase rationalizing that you continue to open new branches . We have continued to build over the last three years, and were proud to do that. Bill because customers build them because customers want them. Financialrm for advisors. To those Retail Investors care . Were an extreme market volatility like we have been in the last week. On it aching of the phone and calling their essay at a cheese branch, or is it not even reached them . Are they picking up the phone and calling their advisor at a chase branch, or has it not even reached them . They care. Less correction was about 14 . This one is around 7 . You could argue whether it is over and are not, but you could say that these are happening for our customers. When we make the millennial argument, they do not even go to banks anymore. Are you catering this whole business to Senior Citizens . No. Consistentkably across all ages, demographics, and income. All of them use them for different reasons. Thisve a worldclass is bank, we are very proud of it. That is one of the segments that is driving our deposit growth. We sell a half of our credit cards inside our branch. Isanches and brent important to our customer across all lines. It took 25 years for the industry to start using atms, and now overnight everyone is using mobile payment. We were one of the First Companies to make a deposit on your mobile phone with our app. Is the whole experience. The way you interact on your mobile phone feels a lot different than it did a few years ago. X is it safe . Nothing more important than the safety, and the reality is it is safe. We tried to give them functionality to bank where they want to beg. They use mobile transactions, and we are proud of that. How big of a deal is apple pay . In is a big deal. Simple, we areis here to help our customers. If our customers want to put their credit card or debit card onto an iphone and use them for payments, we will be there for them. The most and more think for us is just to be responsive to customers. Apple is always the guy who wins, not his order. It is a is it a risk that your giving too much . We are laser focused on our customer. If our customer wants to use apple pay, we will make sure they could do that. Fannie and freddie returning to say that mortgage will be lightning. Ening. Was that scary you . Does that scare you . The home purchase, think about the big thing in your life. What is more important than the first time you buy a home . Officers ande loan our branches to walk our customers through what the perfect loan may be, to work with a banker in lone officer together with their financial advisor. That is what our customers are looking for. Inside a bank, how are you going to capture me or the next generation ago what are we going into the bank to use it for . Financial advisors. In our existing food that we in000 more officers what we have existing today, we have 4000 officers. Loan officers, business card, to make sure we have the right resources to communicate with them. We will continue to do what we did the last couple of years, we build on our Branch Network over the last few years. A look at our Branch Network we have over 5600 branches. We built in california over the last year. With the acquisition of washington mutual, we are very grateful to see the change in those areas. It is time to bring back the past book, deposits in a bank. Do you remember going to the bank to check your interest . No more waiting. From the robin hood conference we will have more from Stephanie Ruhle throughout the day. Carl icahn is getting his way with ebay once again. Welcome back to bloomberg west. Marc andreessen is stepping down from ebays art of direct errors. The move is following a very public data with activist investor carl like on. They have sparred about ebays plans for paypal, and carl icahn has accused Mark Andreessen of abusing interest. Here to break down all the backandforth, cory johnson is with me. We talked about the future of ebay without paypal and vice versa. I want you to take a listen to what he had to say. I asked him specifically if this doing. Ebay has been of change, that the industry is changing, that technology is changing, that there is the opportunity to do better and more if youre smaller and more nimble. Would not likey the indication that they are following carl icahns advice, that they made this decision independently. But this was the best decision. O make off the specific issue, we know the carl icahn bought shares of ebay and demanded changes because he wanted to make more money. But the things that he brought interesting, because the voice of Silicon Valley does not often say that youe is a conflict when have Mark Andreessen on this board. He is the kind of guy i get outraged at because he is preaching fiduciary duty. He absolutely preached it at skype. 18. Aid equal with of they sold it for 8 billion. That money belongs to the shareholders. Numbers, andt the you say who is fighting for ebay here . Mark andreessen turned around and sold it for 2. 8 billion. On some level, as a board member of ebay, carl icon says that his fiduciary duty was to ebay. You would understand what he would be upset. Take a listen to what he had to say about activist investors specifically, and why were seeing more of them get involved. In because coming the companies are cheap, not toause they are expensive the industry has also changed, so fast and if youre one of these take conglomerates and you you want to come up because you will become more aggressive and more nimble. It is a tough job that these Companies Like ebay, age eight, have. Hp is a tough time to be a board member. They gain a lot of insight here. Throw question is if youre a board member of the company, who are you fighting for . Refining for yourself, or are serving the fiduciary responsibility that you have for that company . Thank you. Coming up we will be talking about apple pay debuting today. What does it look like . This is bloomberg west apple pay is here. Apple is adding its Payment Service to the iphone 6 and six plus today. Consumers can now make purchases using apple pay and more than 220,000 Retail Stores and insight apps like inside apps. Some of the countrys biggest brands like walmart are not a part of this initial ro ll out. What will it take to make the first days a success . We have the cofounder of Google Wallet, and the Vice President of products who worked with apple to bring the Payment Service to apps. Update, ipple pay will be downloading it after the show and we will be trying it out. Given that you are the cofounder of Google Wallet, what makes you think how successful do you think they can be . At the get has a lot of potential. They have done a great job with the ecosystem. They have controlled the distribution, they have the fcc securement in all their phones. The thing that people are asking about is valueadded services. Where is the improved Customer Experience . You have used it. Isnt improved is it improved . Absolutely. It makes it fast and easy for you to book a hotel room. It is three taps, and thumbprint, and you could be on your way. Before we had one cap, and that we had a signature swipe, that the rest of the users will be using. Asdo you have any statistics far as customers who get to the point of payment and do not complete it . The faster we can make it for users on the go, the better it will be. The comparison to Google Wallet that i have read is that the recorde captures information efforts exit as well as they cant, they then do a lot of customer analysis. They know if im using my credit card, they know me, where i am using my Google Wallet moment, and they are learning a lot about me and finding new ways to market to me. So apple is not allowing that for themselves or anyone else. I could see as a user why that would be more attractive, more privacy. But apple cannot market to me in ways they might otherwise. There is some concern that this might limit the value adds that apple provides to retailers. And that is why you will see reticence from some of these larger retailers to accept apple pay. So target will not know that i moved into a new apartment and him shopping for wallpaper and kitchen wares and cannot market more stuff . It will impair their ability to roll these things out. No target red card, there is nfc specs for that. Googleimpression is that wallet did not break through. What were the challenges, what are the challenges but apple pay is going to run into as well . One of the big challenges with carriers. Broad distribution to a lot of different handsets. That applechallenges has overcome is that they control the handset. The challenges going to be the adoption side. There is a unique value add for merchants. Potential, reward cards, loyalty cards. Part of thed be apple pay experienced what you be willing to play ball experience you could see them willing to play ball. Workw easy was it to with apple pay either from the Software Side or the marketing side . We were able to get the integration done by last week. Pretty easy . Yes. Our team was down there, they were helpful, and we were working handinhand with the developers when we came up with issues or cases to make it possible. What issues . Things you do not think about, when you put software into production you learn new things. Working together to make sure that we had all of those was tied up before we actually launched this week. Speaking to i was market recent about last week is is he said that appleby is not the innovative. It uses a lot of existing systems and brings it all together. Would you agree with that . The trick is where to go from here. They took the existing standards and worked with the said mastercard and are using new tactics. I think the touch id also improves the security. I because our incremental steps. I think what mark was calling out was the valueadded proposition. They will also get anywhere from 12 when five basis points of the transactions. You have been in those kinds of situations. One wants to give up a huge dollar amount. I think they got it. This is their breadwinner. For them to give some of that up , they had to be worried about missing out on apple pay. Wered sounded like they backed into a corner and had no choice. I think that is probably the case. Controlled ortely ecosystem. It is a really powerful ecosystem. They control the hardware, the and to and on the handset. End to end on the handset. I think that google has a different for loss of the. Android is an open ecosystem, where we see rising tides and shifts. Pay, maybe google will come back to the temple of bush in that direction. Great do you think that google is going to go back to the table . How much of a chance this google stand . It is still very early. Many more phones today that are android. They are going to say that they have the market. What is google going to have to do . Theyre going to market this, answer this. We are they will say hoping these retailers with these valueadded experience, really huge number of going to see a lot of terminals, regardless of apple pay her Google Wallet. Europe theyrs in have had effectively in is more secure, it is just a little chip on the card, and and is moving toward that in the u. S. All of these terminals will be upgraded to support it. Amanda, are you expect thing you said that the payment process you do not necessarily lose customers along the way, but you think that you gain customers because of an improved apple pay experience . That is certainly our goal. One want to make it simpler, easier, we want users that will appreciate the security and simplicity of apple pay. Our product is really about being mobile only and on the go. When you are out there, the it for youan make to not have to reenter your credit card information. Thank you both for joining us. Taking aim at costco and sams club with a mobile app aim and turn the whole business upside down. I am emily chang, and this is bloomberg west. Exploding and slick and new york city becoming a hotbed savvy startups. Very first installment of a new weeklong special. What happens when successful tech entrepreneurs take over a boring warehouse just out right if new york city . You get stock. We wanted to build a service that no one had built yet. We are trying to get ahead of the curve. The ecommerce answer to sams club and browse go. Is about saving tyou shipping and time. The boxes are filled and las strategic locations to reach a large part of the population in little time. Packages arrive in two days or less. Through the general consumer, it seems like we are very traditional retailer. We are still in technology company. Orders, howve the do you find out what is in it . Europe claimed it in our software you have claimed it in our software once you tap it. We are trying these technologies out and were trying to get better. Embracing technology is second nature, who sold his Previous Company to zynga and 2011. What made you want to sell toilet paper after coming from the gaming world . Is nolooks like there overlap at all, but when you dig deeper into it there is quite a bit. We learned how people like to interact with games and other experiences. We brought all of that knowledge to a very smooth experience on it is a Shopping Experience instead of a gaming experience. With 8. 5 million in funding from east coast investors, he has experienced rapid growth. Eight figure revenues just after launching. We are lucky that ecommerce does very well, and we are going to use that. They are going to try to dig a bigger bite out of the 6 billion grocery business. We are going after some of the biggest names and retailers. It is not an easy task, but we will get there. And Shelby Holliday joins us now from new york. I will admit, i would love to not have to pay my cosco membership. But how can a app compete with a warehouse giant . Will i get the same experience . That is the question. This company is trying to do that, genuinely trying to do it using technology, not just to manage inventory and improve their shipping procedures. They are also targeting young shoppers can that next generation of shoppers who might be buying toilet paper now, but will need to buy diapers in a few years. Are also keeping things personnel. Even the updated not have stores and relationships with customers in person, they write notes and send them in the shipments, so someone orders diapers, they say of the baby is doing well. If it is toothpaste, it is a beautiful smile. They are making sure to add this personal Customer Relations aspect. They want to save you time, lot ofand a inconvenience going to those stores and carrying the heavy goods around. The personal interaction, but the impersonal buying bulk online will help them in the future. Thank you. Line coming up at the top of the hour. Mark crumpton in new york with a preview. What do you have . We will continue the coverage of the robin hood investor conference. Our conference deafening rule will have two exclusive interviews with the chairman and ceo of j. Crew, and the chairman and ceo of Starwood Capital group. I will see what the top of the hour. Looking forward to it. Numbers about new its iphone and ipad sales today. We will tell you what to watch for, next. Streaming on us bloomberg. Com. Welcome back. It has been a busy few weeks for apple, the company launching two new iphones, a new set of tablet of and handling security and software crises. Fromelse will we learn todays Earnings Report . Cory johnson, our editor at large still with us. The number one thing you will be watching for an Apple Earnings today . It is going to come down to the iphone. Really how well did the iphone to . Do . Are they going to be able to that just over 38 million number . And then after that, it will be what happens to the ipad . Globally,ng tablets flat Revenue Growth for the whole category this year. So to see how this ipad is trending is an important data point. Margins are going to be huge. This time last year we had 37 , and they creep up to 39 before the new iphone. A new think well get indicative of whether or not a six plus is selling more than the six . What might a lower margin number tell us . Great question. Thats my job. [laughter] standpointargin outside of products it will absolutely speak to this makes of the six plus versus the six. A higherbviously margin products that people want to pay up for. That is going to be a big driver of the margins. Of some oficher mix the ipad products could help, but probably not nearly as much as the phones will help. I think you will see margins hold. Watching today. I just got the update ready to download. Will we beginning any more early details about how it is working . Doubtful. I do not think they will say a lot about it. They may make some statements around some of their partnerships that they have announced, but i think that it is going to be too early to tell. I think we will hear about that three months from now. There may be checkpoints between, but this is a moment in the payment universe that we are going to look back at. Today as they lachapelle pay it is the spot where the lead dog comes out, legitimizes the market, and quite frankly, if any other company that if its from what is happening today, it is google. Because eventually it means that they have to people will start paying a different way, and it will accelerate the whole sector to move forward. It is more of a moment, then a place you will get a lot of data. Clues, ilooking for thought he might drop a new number on us, tim cook at the ipad announcement, but he did not. But he did make comparisons to ipad sales and all the major vendors of the seas showing that than anye sold more major pc maker has over the course of the last year. I think your right to focus on that. I wondered why he did that. This has in a huge part of their business. That is right. But our data suggest that in the roast recent quarter apple broke the top five in the most recent quarter apple broke the top five. That is a huge moment. Were now seeing this huge change in terms of acceptance for the mac. It is not just college classrooms, but it is moving into enterprise through the not the cios office. That is why margins can hold. And now it is time for the bwest byte. How many iphones were sold in the same quarter last year. In a few hours we will know the number for the new quarter. Usis really going to tell what the new iphone is like. . O you know what your number is again, i believe we are pretty close to where you are, right around 38 million, but i think it will come in even higher. All over Apple Earnings in the late edition of bloomberg west. Thank you both for being here and you for watching. I am Mark Crumpton and this is bloomberg bottom line. To our viewers in the United States and those of you from around the world, were full coverage of the stocks in the stories making headlines on this monday. Stephanie ruhle joins us to excuse it just exclusive interviews, making millard drexler. Potential vaccine and serums to