Transcripts For CNBC Squawk Alley 20160321

[ National Anthem ] [ star spangled banner ] [ speaking in Foreign Language ] [ speaking in Foreign Language ] you know mr. Rose. Expert welcomes from america. These are the two that actually do the work. They take all of the credit. Nice to see you. Thank you so much. Good to see you again. Appreciate you, sir. Good to see you. Very nice to see you. Thank you. Good to see you, man. Just some remarkable pictures here as the president meets members of castros administration, and vice versa. Ahead of a busy afternoon, a bilateral between the two leaders begins at 11 30 eastern. At 1 50 p. M. This afternoon, theyll each make statements to the media. 4 00, an event focused on entrepreneurship in cuba. Michelleca caruso cabrera, i still remember the news flash we got, i think about this time when all of this was announced in intent and plan, and here we are with these two leaders in the same room. And i can tell you this country, cuba, is transfixed, as well. This is being broadcast on national television, and everyone is quite astounded to see a standing u. S. President here, president obama shaking hands with castro is an event im not sure anybody would believe would happen. Remember, it was december of actually 2014 when the announcement came. And went through all of 15. And now were into 16 before we have finally gotten to this point. It took a lot longer for them to establish diplomatic relations than expected because the cubans were very demanding and would still say we want the embargo lifted and the president could do even more. Certainly he is receiving a very warm welcome here. Not just from the government, but also from the people of cuba, carl. Well, michelle, we have talked to a lot of the ceos who have been traveling with the president to havana. Of course, much of the purpose of this trip is to rebuild commercial relationships. Im wondering what the feel is, what the reception is like from the people of cuba on the ground. Reporter so talking to the people, it depends on, kayla, whether or not they know theyre talking to a member of the press. When theyre talking to a member of the press, theyre very circumspect. They say hes very welcomed here. Theyre very calm. If they dont know, you remember the press, theyre a lot more enthusiastic. Theyre so happy hes coming. They think it means its going to be a dramatic improvement in relations. And a lot of people here speak of it in terms of missing their families. Families have been divided for a long time. Because of the tense situation between the two countries. Theres been some improvement. Cuba finally allowed people to travel back and forth to leave the island. For years, you were not permitted to leave cuba. That has changed in the last five years. There has been more reunifications of families. And now that the cuban government is talking about making changes that in theory would lead to a better economy, i have to tell you, when talking to the ceos, if you saw ursula burns interview, theyve been meeting with the leadership here. The leadership here seems to think they can still maintain complete control of the economy. They can still have socialism while they still have foreign direct investment. Thats going to be incredibly difficult to do. Because there are certain things that investors want to do that the cuban government doesnt want to allow them to do. Ursula burns comments very interesting to you, michelle. As we get more headlines from the bilateral availability, well take you back to havana and michelle. In the meantime, breaking news on valiant. This is a the two leaders sitting down now. Mike pearson leaving ackman to the board. Guidance on the 10k. Scott wapner has that. Carl, ive been able to do some reporting around the situation of outgoing ceo mike pearson and valiant, told by a source that the companys move to replace mr. Pearson was, quote, not a mutual decision. That valiants board of directors was concerned about the organizational tone, and decided to oust pearson during a series of phone calls regarding the board over the weekend that the board informed pearson that this is what was happening. That they were taking a series of steps, including initiating that immediate search for a ceo. And that he was no longer in the companys longterm plans. They did send out that press release earlier today, of course, stating that they were looking for a new ceo and that mr. Pearson would stay on until that person was appointed. We also know that bill ackman personally will take a seat on valiants board. I have attempted to obviously contact mr. Ackman this morning, as well. Thats been unsuccessful. Just a little color for you, in the way that all of this transpired over the weekend, concerned about the organizationel judge tone and that it was not a mutual decision for mr. Pearson to leave his job as ceo of that company, carl. Stock obviously responding in one way. Scott, thank you very much. Our scott wapner back at hk. Meantime, were watching the situation in apple, the product unveiled. Jon fortt. Walt mossberg of the verge and editor at large. Guys, good morning to both of you. Jon, ill just let you raise the curtain on what we should expect in a couple hours. Well, we got to get in the time machine, because the big news is expected to look Something Like this. This, of course, is the iphone 5s. We were on the 6s at this point. But were looking to see something perhaps called the i phone se that on the outside looks a lot like this, but internally, has an upgraded camera, has perhaps an a9 chip and m9 inside. The latest apple designed, applebuilt chips. It could cost as little as 450 bucks. But im here with walt mossberg, who is the dean of this stuff. Walt, if apple were to come out with a smaller phone, would that significantly impact sales overall, perhaps in emerging markets . And what sort of price would make a difference . Well, you know, even 450 for an iphone is cheap. Because, you know, an iphone typically sells for almost 700 at base. And i think it actually i dont know about the word significantly, but i think it actually impacts sales in two ways, jon. Even in this country, and other developed countries, not even talking about developed markets. Number one, theres a significant holdout from going to the bigger screens. The bigger screens, as we all know, produced, you know, giant blockbuster numbers for them. So clearly, they were popular. But there was a holdout. And it was a significant holdout share of the market. Tim cook has said that as many as 60 of their users had not upgraded to the bigger screen. And even at the verge where we have pretty techie users, we did a poll that just said, you know, whats the ideal size of a phone . 22 of the people said 4 inches. So there are those people to get. And the second thing is, the timing. Theyre looking at weak projecting weaker sales for the iphone. This is not the best time of year for the sales of the iphone. So announcing it now and shipping it now could give them a little boost by picking up some of those people. It also seems to me, based on what we know about how the engineering works, if you take this form factor which is a bit thicker, put a more advanced chip inside, and the screen is still small, you should be able to get better battery life out of this than you got out of the 5s, correct . I agree. So it could be a great utility phone. It could be a great utility phone. And ill tell you, i know people who just think this is the right size. You know, i notice your 6s or 6 or whatever it is or plus, doesnt really entirely fit in your jeans pocket. Kind of sticking out, yeah. I cant get my wife to upgrade from her 5s, because she just loves that particular size of the. Get my hand around the whole thing. Im curious, were using the word utility here and im thinking about what facebook is doing. With facebook and facebook light for the emerging markets. Im wondering if we should be getting used to the idea that apple will have parallel product tracks, one for utility and one for entertainment. Are we moving in that direction . Well, you know, i dont know if were moving in as sharp a split as that, kayla. But i think that, you know, they made a tentative move toward broadening the phone line with the 5c. You can argue whether that was a success or not. Clearly they have looked at some numbers here and they say they can broaden this they can broaden this out. I also think this ipad announcement today is quite interesting. Because it has at least the glimmer of hope that it will give people who have been reluctant to upgrade their ipads a kind of new kind of ipad that will appeal to them. Really . What is different, walt . For a household that doesnt need to upgrade unless youre giving the kids your hand me downs, whats so compelling about buying an incrementally better ipad for use at home . Well, i think the key you know, the fact look, there have been key boards for ipads forever. Theyre made by thirdparty companies that not everyone trusts. Im not saying there is anything wrong with those companies. But not everyone trusts them. Heres apple making a keyboard that clips right on. There is no bluetooth setup. The pencil is likely to be something that works on it, and some of the Software Features from the pro work on it. And yet its not a giant 13inch thing that, you know, is not easy to hold for a long period of time. And, you know, i think theres a chance that theyll be able to peel off some of those people who have been sitting on coupleyearold or threeyearold ipads and say, hey, now i can use this for productivity in a way i didnt feel i could before. All right. Well, it seems like either way you look at it, walt, this is not about creating brandnew markets for brandnew products. Its about firming up the core, perhaps. Getting some more price points. Maybe even expanding the possibilities in Growth Markets like india and china, depending on how this se plays. Right. All right. Well, guys, well see how this plays out. Of course, i will be covering it live from here. For now, back to you guys in new york. Yep, weve gotten that standard warning from the apple store that theyre down, so to speak. So we know were in the dark side of the moon, guys. Well see you in a little bit. Walt mossberg and jon fortt in cupertino today. How has the company marketed its iphones . Well get a closer look with andy cunningham. The president making that historic trip to cuba. Google, air b and b, some Tech Companies betting big. And Mark Zuckerberg, will facebook be available in china in the near future . Well talk about that when squawk alley continues in a moment. Blaf trugreen presents the yardleys. Hello . oh, pizza is here oh yeah, come on in [claps] woah lose the sneakers pal. Kind of a thing. Spring is on. Start your trugreen lawn plan today. Trugreen. Live life outside. Welcome back to squawk alley. I am here at 1 infinite loop, apple headquarters. We are looking forward to an event here in just a couple hours that should involve the iphone and ipad. Rumor has it, we should expect a lowerend iphone. Kind of a throwback to the iphone 5s design. Perhaps with upgraded internals and a new ipad. The fullsize, but with more of the capabilities of the ipad pro, including the ability to work with the apple pencil. So what does all of this mean to apple . And what does it mean to apples image, seeing as we have got this offcycle, not the holiday season, a few months later. This offcycle announcement coming at a time when people arent necessarily buying product. Joining us now, on squawk alley, is andy cunningham, who did a lot of communications for steve jobs early on. Youve watched apple recently as its grown into this juggernaut. Now involved in apple versus fbi, questions about privacy and security. And its got this Product Launch. If youre tim cook, what do you want to come out of this event today . What do you want to communicate to the world about apple . I think you want people to be very positive toward apple, right ahead of this trial thing starting tomorrow with the fbi. I think you want to get the public support behind you. And this is kind of a fluff announcement today. I mean, they do every announcement. But this is a happy, fun stuff today in their announcement. So get the happy, fun stuff before you start in on the more serious. How do you think this privacy conversation is playing out, outside of the u. S. . Where so much of apples growth is right now . A lot of people are concerned about u. S. Government being able to snoop in, listen in on communication, data, outside of the u. S. . Is this in a way good for apple, that it appears to be standing up to the u. S. Government, given that its trying to grow in chooin and india right now . I think its great that apple is standing up to the u. S. Government. This isnt a case about privacy. Its a case about precedent. Apple doesnt want the precedent set it has to take directive from our government or any government around the world to write code on somebody elses orders, if you will. On the other hand, the fbi absolutely wants this precedent to happen, because it enables them to have more information, makes their job a whole lot easier. So both sides are kind of protecting their interests, and in a way, protecting the country. Each has their principles and each is defending them. Now, in a way, its interesting. This is the one major situation for apple where i havent heard people say, well, what would steve jobs do in this situation . I mean, i think there is very little question that tim cook, as a leader of apple, has a more measured response to the governments demands than steve jobs would, and perhaps that plays well for apple. How do you think this shifts apples culture the way tim cook is leading the country through this particular challenge . I agree he has a more measured approach to it. Deep at the core, its exactly the same, coming from the same place steve would come from. No government, not the u. S. Or any other government is going to give me a directive to do anything, to write anything. And its a very dangerous thing. If you start to be able as a government to force people to develop products, to force companies to develop products, that leads down a very, very dark path. Because the future could be very negative. So i think theyre doing the right thing for apple and the right thing for american business. Kayla . Andy, this is Kayla Tausche back in new york. Given they have a captive audience today and the audience is for a Product Launch, is it smart pr to address the big issue ahead of a Court Appearance tomorrow . What would the company do if you were advising them . Whats the right messaging . I think theyre doing absolutely the right thing, to move this announcement from a normal tuesday to a monday, ahead of this trial. Because as i said, it gets the momentum of the publics opinion, positive toward apple and in behind the company. This is a fun announcement today. Theyre doing fun things. And as you look at apples product development, up to this point, they have shifted so much toward the holiday season, where the big bang for the buck literally is. Is it a good idea to do some things, some more things, perhaps, in the spring, as well . Do you think just in terms of how it gets people thinking about apple throughout the year . Absolutely. I think an ongoing record continuous announcement stream for the country is great for momentum. And its not just about the holiday season. People buy products all yearround. And you have to keep the company in the news and in the forefront of the Public Opinion. And thats great for apple. All right. Andy cunningham, always great to have you. Thank you. Kayla, back to you. All right, jon, see you shortly. When we come back, air b b has been pushing to get access in cuba for some time now. Now the company is opening up bookings for all nationalities. The co founder of air b b, will join us, next. Trolling for a gig with braindrone . Cant blame you. Its a drone you control with your brain, which controls your thumbs, which control this joystick. No, im actually over at the ge booth. Were creating the operating system for industry. Its called predix. Its gonna change the way the world works. Ok, im telling my brain to tell the drone to get you a copy of my resume. Umm, maybe keep your hands on the controller. Look out ohhhhhhhhhh. You know what, im just gonna email it to you. Yeah thats probably safer. Ok, cool. We have been showing you pictures from president obamas historic trip to cuba, the first by a standing president since 1928. And our chief international correspondent, michelleca rousso cabrera. A lot of these companies are actually able to bring business to that company. Reporter hey, kayla. Yeah, were just learning that google is going to host an event later today. We dont know much detail about that. President obama did tell abc news google has struck kind of deal with the cuban government to improve internet access. They have been trying to get in for over a year. I reported when senator kerry was here in august, google offered to wire the entire island for free and the cuban government turned them down for fear offin filtration of the system. Lets see when we find out later today whats going on. In the meantime, president obama is here for the historic visit with raul castro. And even though the embargo is still on, the president is here, and what is an event that has transfixed this country. And millions of people all over the world who never believed that a standing u. S. President would come to cuba. Certainly not while the embargo is still in place. Hes brought a lot of ceos with him. We spoke with a number of them earlier today. Ursula burns, Arnie Sorenson and one of t one of the co founders of airbnb. Today they have been able to announce that foreigners are also going to be able to book rooms in cuba. He says the growth here has been tremendous. Were going to cuba just this year, in the last twoandahalf months, more visitors in all of last year combined. Easier to get commercial flights, i think you can expect more of that. Our hosts here have said theyre booked out for six months. So i think theres theres no shortage of people who want to come here. Reporter airbnb is incredibly popular here, because theres not enough hotel rooms here. And is so air b and b, like you said, booked out. Its been an impressive growth spurt for them. Arnie sorenson, ceo of marriott is here, eager to do business here and happened to be on the same day hes reached another deal with starwood. He tried to make the case for why shareholders should choose this deal. This deal financially, the proposal we signed last night, is not as good for us as the deal we signed and announced in november. The deal we got in november in retrospect maybe was just too good a deal. And so weve gone back, and obviously there was competing bidder which surfaced last week. And we said what is a fair offer for us to put forward. We made a significant move over the course of the weekend, and decided we are really very interested in this Strategic Power of this combined platform. Reporter he wouldnt speculate on what marriott would do if an bang came back with yet another improved deal. Back to you. Makes you wonder if you dont book now if youll getting to at any time soon. Michelle caruso cabrera, thanks. Mark zuckerberg is making the rounds in china as he pushes to make facebook available in that country. And making friends with retail giant ali banna. Details on that meeting in had a moment. Good morning once again, everyone. Im sue herrera. Here is your cnbc news update at this hour. The top u. S. Nuclear envoy saying korea should refrain in missile tests. It was in response to the norths decision to fire shortrange missiles into the east sea earlier in the day. Two Supreme Court decisions today. First, rejected Electronic Arts bid to revive free speech defense over the its use of nfl player likenesses in the madden video game. And the high court refusing to take up a lawsuit by nebraska and oklahoma over colorados decision to legalize marijuana. The two states which border colorado saying colorados law has caused more marijuana to flow over into their borders, which is a burden to their law enforcement. And youre likely paying 25 cents more now for a gallon of unleaded gasoline. The average nationwide price is now 2. 02 versus 1. 774 weeks ago. Thats the cnbc news update now. Kayla, over to you. Gas prices rising just in time for spring break. I know. Interesting, isnt it . Yeah. Thank you, sue. Meanwhile, Mark Zuckerberg is making the rounds in china, meeting with the countrys propaganda chief. Facebook, instagram and other social networks banned in the region since inception. But zuckerberg has been trying to make friends in the region. Here is a photo at the annual China Development forum to talk about this. Jeff richards, ggv capital, at the event in cupertino. David chow at dcm ventures. Jeff, i know you spent so much time in chooina. This is obviously not Mark Zuckerbergs first charm offensive. Why do you think this is turning so many heads . I think mark is obviously very focused on china and has been for years. This time, obviously, its a very public display. Hes meeting with the top leaders in china, including folks like jack and probably many other tech leaders. And, of course, his run in beijing caught quite a bit of attention. This is a longterm play for facebook. Notably bought whats app a couple years ago, focused on emerging markets, as well. So we believe that emerging markets, china, india, brazil, latin america, are a very big focus for facebook, despite being banned in the country today. David, in reference to that picture of Mark Zuckerberg, as the air levels were deemed hazardous, there was one entertainment site that says if this doesnt get facebook unbanned in china, nothing will. What can facebook do . Is it possible that facebook could get unbanned in china, given the regime there . Well, kayla, i think facebook is really in a catch22. On the one happennd, its been touted by the u. S. Media and government that its a pro democracy tool, like you see in the arab spring. On the other hand, i think facebook has historically been much more flexible about working with other governments, unlike google has been with china. On its filtering issues. And so i think, you know, mr. Zuckerberg has an uphill battle. And i think especially given the current leaders crackdown on the media over the last few years, i think its still an uphill battle. But i think, you know, they are doing all the right moves to make it happen. Well, jeff, if theres one thing that the Chinese Government really has no tolerance for, it is things going viral. And things going viral that are outside of their control. That seems to be a tenet of facebooks product, though. How do you change that . Well, i think jeff . Jeff, well put that question to you. Okay, great. So david makes a great point, which is the approach that facebook and mark have taken to china in contrast to google. And i think thats probably earning a lot of respect and credibility with the country as it works on this initiative. But secondly, i think if you look at the popular social platforms in china, like we chat, which now has over 700 million users, what you see is cooperating with the Chinese Government to make sure that platform works within the rules and guidelines that they have set out. But incredibly popular. So its not like social media is not happening in china. Its just not happening in the way that it happens here in the u. S. And sort of an uncontrolled and very free environment. So, again, i go back and i think what mark is doing is very smart in taking a noticeably different approach than google has in trying to be active in china. At the same time, david, how flexible can you be dealing with the chinese without having your credibility stateside suffer . How much of the equation is that . Well, you know, i think theres the practices already being practiced by the Chinese Media companies, whether its acena, ten cent, we chat, you know, they are governmen governmentcooperated filtering mechanisms so these viral messages dont spread very quickly or could be shut down fairly quickly. And i think the credibility question is a very good one. Which is will facebook comply to the china standards. And i think facebook is willing, but i you know, the devil is in the details. And, of course, you know, i think the more the u. S. Media keeps making social media into, you know, the trojan horse for democracy, i think it becomes really, really it tough. Well, with 700 million Internet Users in china at stake, you have to imagine zuk will keep trying. Stick with us. Theres another topic buzzing in the valley i want to get your thoughts on. In a couple hours, Elizabeth Holmes, founder and ceo of the controversial blood testing startup is hosting a fundraiser for president ial candidate, hillary clinton. Eamon javers joins us from washington with the details on what we should expect. Hi, kayla. This has the feel of a situation thats been handled very diplomatically behind the scenes. The initial reporting, this fund raise e which will feature Chelsea Clinton was to be held at the headquarters. That was based on a draft invitation that was circulated last week or earlier. B by the time we got ahold of a copy of the actual invitation on friday, heres what the invitation said. Its going to be hosted by Elizabeth Holmes, but this invitation is for an event to be held at a private home. Not at headquarters. And you notice Elizabeth Holmes gets her own line, but also on a Host Committee with a number of other prominent female Silicon Valley executives, also participating in this fundraiser. Heres what the Clinton Campaign told us. They said, this was never a health care event. And the location wasnt set. It will not be at theranos. So clearly, guys, some questions over exactly how close the Clinton Campaign wants to be to Elizabeth Holmes and to theranos. They want to raise awareness of female tech ceos in Silicon Valley. But it looks like they dont want to do that to such an extent they want to actually appear there itself, guys. Eamon javers in with that. Thank you. We are joined by Jeff Richards and david chow. Its not uncommon for Silicon Valley to play a very visible role in an election. Im wondering what you make of the specifics of this fundraiser hosted by Elizabeth Holmes at a private residence for hillary clinton. Well, i think youve got a lot of support in Silicon Valley for hillary. She spent a lot of time out here, as has bill, over the last few years. And so not surprising that youre seeing fund raisers hosted by notable folks here in Silicon Valley. I think theres also a lot of very important topics on the docket in this election, including immigration. Which, you know, her primary opponent on the republican side, donald trump, a lot of folks here i think are a bit concerned by his views on immigration, which is a very important topic for Silicon Valley. We need immigrants in Silicon Valley, entrepreneurs. Many of the Top Companies in Silicon Valley are founded by immigrants. And i think a lot of people are very passionate. Interesting to see how that plays out over the course of the election cycle. Of course, half of the unicorns we talk about have been founded by immigrants. Its not surprising to see the valley has been very vocal on that. When you think about the shaping of the election cycle overall, our colleague, ari levi, had a great piece about the role of Silicon Valley from the tech and software that the candidates are using to their lobbying efforts. He had a quote from paul holland. A lot of us have written checks, and it doesnt make a damn bit of difference. How does the valley feel about the issues that matter to them and the way the debate is taking shape . Yeah. I think the from the Silicon Valley lens, i think the h1b immigration issue is fairly unique. I think what the politicians do not talk about is the fact that the h1b issue is a by bifur indicated issue. When Bernie Sanders and trump is against h1bs increasing and when someone like ted cruz completely flip flops from going 300,000 h1bs, more than what rubio was trying to get across, and now, you know, 180day complete review to hillary clinton, who is quite neutral about topic. And the reality is, in Silicon Valley, i think the h1b works. Apple and google wants to hire the best graduating from berkeleys and stanfords. Learning special things they need to fight in the global arena. However, when you look at the outskirts of austin, outskirts of dallas, outskirts of d. C. , atlanta, you know, a lot of u. S. Jobs are being taken away in terms of hiring lower tech h1b visa candidates. So the market is bifurcated, and need to address that, but theyre not. Well see how it shakes out. Jeff richards and david chow, our thanks to both of you today. Thank you. And well be right back. Coming up on the halftime report, were live in cupertino. The stock on the move lately, can it keep climbing. And the latest details at valeant and whether the stock is finally a buy. We are live in cuba, as the president makes a historic visit there. What stocks could benefit from the renewed relations with that nation . Well be right back on squawk alley after this. Owen hey kevin. Hey, fancy seeing you here. Uh, i live right over there actually. Youve been to my place. No, i wasnt. Oh look, you dropped something. Its your resume with a 20 dollar bill taped to it. Thats weird. You want to work for ge too. Hahaha, what . Well were always looking for developers who are up for big world changing challenges like making planes, trains and hospitals run better. Why dont you check your new watch and tell me what time i should be there. Oh, i dont hire people. Im a developer. Im gonna need monday off. Again, not my call. Im spending too muchs for time hiringnter. And not enough time in my kitchen. announcer need to hire fast . Go to ziprecruiter. Com and post your job to over 100 of the webs 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 offer2 man 1 he just got fired. Man 2 why . Man 1 network breach. Man 2 since when do they fire ceos for computer problems . Man 1 they got in through a vendor. Man 1 do you know how many vendors have access to our systems . Man 2 no. Man 1 hundreds, if you dont count the freelancers. Man 2 should i be worried . Man 1 you are the ceo. Its not just security. Its defense. Bae systems. Welcome back to squawk alley. Im jon fortt here at one infinite loop, apple headquarters. Just about an hour away, a little more than an hour, from an event where we expect to see a new iphone, new ipad, but not in the way we have come to expect. Not necessarily at the high end, but perhaps some products that fill in some gaps. Im joined by forhad. What do you make of apple doing this sort of offcycle a throwback product to the iphone 5 design . Is this something you think is going to work well for them as they continue to battle samsung and others in android, and try to get even more traction in some Growth Markets, like india, china . Thats what this is meant for. This is a smaller phone, slightly cheaper. It will be the same price as the current sort of iphone, the older model iphones. And the iphone 5s is pretty old now. So they need to refresh that. I wouldnt expect much excitement from sort of like people like us, like tech press. This is an older device. But, you know, lots of people dont like the bigger phones. They want a lowerprice phone. And this could be, you know, good for those Growth Markets. So what happens in a year . Sure, its the same price now. What happens to a yearold iphone se . Is that then 350, and does that give them more of an entry point into Growth Markets . Yeah, possibly. Or i would expect them to sort of slightly update and keep the price the same. I mean, theyve had this kind of year and twoyearold model strategy for a while. And from what ive heard, works well in Growth Markets. Even an older iphone is pretty valuable in china and india. Seen as a status product. We expect to see a hearing scheduled in this apple versus fbi case. What effect do you think it has to be talking about new product, the day before Something Like that . Now that this case has moved, certainly into the court of Public Opinion . Yeah, i mean, i dont expect it will directly effect the courtroom. But Public Opinion, it does have an effect, right . It reminds people that this is a company that is in their daily lives. It reminds them sort of the positive parts of this company, and how integral it is to most of us and how we work every day. You get a sense that Public Opinion has shifted at all in the month or so that this has been on peoples minds . A lot of the reaction up front was how dare apple not help the government figure out whats on this terrorist phone. Has the conversation shifted . Ive seen some polls that suggest it has. That apple has a slight edge in its case. But also, i think people have just gotten kind of more educated about the about the issue. Tim cook has done a lot of media appearances and that i think has helped hinge the tide in their flavor. We were talking earlier about Mark Zuckerberg over in china. Facebook would like to get in there. As we look at apple versus fbi, at the same time china is an important growth market, does it get riskier . Because china, of course, likes to have control over communications, lots of insight into that. Facebook is fighting with brazil, even with the u. S. When it comes to whats app and access to those messages. Does this give china a stronger hand to say if you want to come over here, heres all of the pots we want our fingers in. Yeah, thats certainly apples argument. If the fbi wins here, governments across the world will be able to sort of get their say. I mean, the kind of counter argument is, well, you know, dont participate in china if youre worried about their government. And thats something that, you know, other countries have chosen to do. Its not really an option for apple, because its such a huge market for them. Is india going to be more and more a market that we hear companies talk about growthwise . It was china, and now we heard apple talk more about india. That was a market out of reach. Should we expect to hear more about that . Definitely. India is seen as the big battleground where no Smartphone Company so far has sort of established dominance. So its still theres a lot of room to grow there. The market is slightly different. Phones are people want phones even cheaper than they do in china. It will be tougher for apple, especially. But i mean, this is why theyre doing these lowerprice phones. Yeah. Tsao me, in particular. We were just in barcelona, and tsao me brought the red me 5. Is that competition in that market, do you think . I dont think apple thinks of tsao me as a main competitor. Many people see apple as a competitor in the high end. And they play at the low end. And i think apple thinks once people get into a tsao me phone over time, they graduate to the iphone. Oh. Well, well see. Well see what offerings they have today to try to push that argument. Farhad monjoo. Thanks. Well get some final thoughts from jon in cupertino as apples big event starts in about an hour. Dont go away. Your financial pn wont keep you up at night. Know you have insights from professional investment strategists to help set your mind at ease. Know that planning for retirement can be the least of your worries. With the guidance of a pnc investments financial advisor, know you can get help staying on track for the future youve always wanted. We are just a little bit from the apple event beginning in cupertino. Josh liptin joins jon fortt. If the goal is to overpromise and underdeliver, they have definitely taken care of the first part. They have. Smaller phone, updated ipad. Not a lot of expectations from apple fans who like to be wowed all of the time. I think if youre an investor, you need to pay close attention. Particularly the iphone se that could have an impact in Growth Markets, particularly because this is off cycle. Samsung has come out with a new phone. If apple could counter that effect, it could lead to positive things. Josh, we have been calling it a throwback. You need to get into a time machine to see it. Do you think thats fair . What are you expecting . Listen, i think as jon i agree with jon. Its an important event. Im not just saying that, kayla, because ive been in a parking lot since 5 00 in the morning. I really believe it. I think it will come down to price point. I think it will come down to listen, theres a lot of people whoin enjoy the fourinch display. I was talking to john munster. His estimates, 20 of iphone users are still in the older models with fourinch displays. By his count, 15 of the companys revenue, or roughly 35 billion in annual sales. Thats a nice chunk of change. A lot of people want that fourinch display, but have been on the 5s since 2013. That is now feeling older. You dont want people to have a bad experience. You dont want to risk those people moving to rival android devices. Stock generally is mixed at best on Product Launch days. But this one is going to coincide with the hearing tomorrow in riverside. Jon, what are you looking for out of that meeting . Im not expecting too much. I think its mostly going to be trying to see if apple has added some nuance to their argument. And as far as the stock on these days, you just sort of have to close your eyes, carl. Because where its playing, three to six months from now, so much more important. Yes. As josh brown asked, is anybody live blogging the announcement today . Guys, well see you in just a little while. Lets get back to headquarters. Scott wapner in the half. Guys, welcome to the halftime report. Im scott wapner. The trade this hour, the apple comeback. Scott on a tear lately. What now . Joe terranova, jim lebenthal, john brown. Less than one hour from the event in cupertino. Team coverage with jon fortt. We have the trade and number one tech analyst, tony sack naggy, as well. Heres the question. Do you sell the newsr