Friday. Paul manafort and his longtime business associate rick gates will remain on house arrest, at least through the weekend. A trip kicks off on judge declined a request from manaforts lawyer to remove gps monitoring. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Im emily chang. This is Bloomberg Technology. Apple beats estimates for the fourth quarter, just as the most advanced iphone ever begins selling in Stores Worldwide. Details of my conversation with tim cook as the clock winds down to the official start of the iphone x era. Alibaba shatters Second Quarter forecasts on its earnings day and plans to go full steam ahead the rest of the year. How chinas ecommerce kings expansion into new businesses helped nearly double revenue. My wideranging conversation with former twitter ceo dick costolo. His take on holding big tex accountable for the big tech accountable for fake news on their platforms. First, to our lede. Apple out with quarterly earnings. The Company Forecasting holiday sales that exceeded analyst estimates, suggesting Strong Demand and few supply issues for the iphone x. This is apples most important Product Launch in years. Shares hit records this week and continue to rise in late trading. The iphone x going on sale in Stores Worldwide starting now. Weve got live pictures for you of the apple store in sydney. These people have been waiting outside overnight. More than 200 folks waiting for the iphone x. They just opened the doors. Consumers walking inside. Employees clapping. Lots of photographs happening there. People waiting outside of stores in tokyo and singapore to get their hands on this new phone. Joining me in the studio, julie ask. Lets start with the numbers. They look good. Especially the forecast, which means the outlook for the iphone x as of now is strong. Julie i think so. Everything looks to be that way. Its a bold move to sell a device for 1000, but it proves demand for their devices remains strong. Emily weve been looking at wait times of five weeks to six weeks, which is longer than any phone previously and suggests some supply issues, but i did ask tim cook about this when i spoke to him on the phone just moments ago. Didnt seem to you worried about it. He said this is simply the most advanced iphone ever. We are just getting started, but im really happy with how the ramp is going. I think we will make some reductions in wait times today or tomorrow. So, we can expect to see the wait time go down. Julie i think thats definitely the case. No organization builds capacity to hit peak demand. Certainly they have been producing these devices for a while. The other thing apple does well is they meet or beat expectations. While they may be setting of four to six week s, i would not be surprised if consumers start getting them earlier than that. With whats your takeaway people waiting in line for their phones in sydney . Julie i think its exciting for apple. When you look at the iphone x, it represents almost 70 of their revenue. Its going to be interesting to see the details of the earnings release, in terms of whats the other category doing. The number one watchmaker in the world at what point are they going to break out devices like that . Also, there is a keen eye on their Services Business to see what extent that is growing. Emily which, by the way, it grew 34 yearoveryear, the fastest it has ever grown. How long can they keep up that kind of growth . Julie its always hard to get a number, the bigger base there is, but there will only be more momentum in this market. The more devices i own, a watch, a tablet, a computer theres only more incentive for me to sign number, the bigger base there up for Services Like apple music and other services that can work across all these devices. This ecosystem of devices begins to play in their favor. Emily lets talk about china. Apple returned to growth in china. There had been some questions about whether people are going to want to pay up for a phone that is this expensive when you have alternatives that are pr iced less. I asked tim cook about china. He said, the mac was strong, our best quarter in Mainland China ever. Our services hit an alltime high in china. The other businesses are doing very well. Specifically in response to this question of whether people will see,he iphone x, well but i suspect china will really love the iphone x. Julie he will probably talk more about that. This is a bit of a halo device. This is going back to the early generations of the iphone, when people camped out outside of the stores. What i think you may see is, there is a lot of demand for this product, but what we may see is a slowdown in how frequently i refresh that. Costs what my now laptop does. Are we going to see people get closer to a 30month cycle 4month cycle so they can justify the cost . Concerned you at all about the iphone x cannibalizing sales of the iphone 8 . Julie apple is good at this. This is what they do. They bring out a new product. This year is unique in that there are two new products. They are good at adjusting their prices on the products that have been on the market longer. They can still do well with those products. Emily as we watch the rollout happening around the world over the next 24 hours, what are you going to be watching for . Julie i dont know if there is something specific we are watching for, but i will in be interested to see what numbers they release, what the preorders are, how much demand there is for the device. Anecdotally, the demand seems to be very strong here in san francisco. Emily we are listening into the Earnings Call right now. We will bring highlights as we have them. I know you will be listening to that call. We will be catching up with this call throughout the show. Thank you so much, julie ask, Forrester Research analyst. We continue to watch the price of bitcoin move higher. It surged about 7,000. The latest boost to the price comes after the cme group, the Worlds Largest exchange owner, says it plans to introduce Bitcoin Futures by the end of the year. Earlier, Lloyd Blankfein gave his outlook on the cryptocurrency. I have a level of discomfort with it. I have a level of discomfort with anything that is new, but ive learned over the years that theres a lot of things that work out pretty well. Emily meantime, another banking ceo also commented on bitcoin. Speaking at a News Conference in zurich, the Credit Suisse ceo called the Digital Currency the very definition of a bubble. Coming up, we will discuss alibabas continued dominance in the chinese ecommerce market as the Company Turns in another blockbusting gutbuster Earnings Report blockbuster Earnings Report. Take another look. The iphone x now on sale. This is bloomberg. Year of monster growth, alibaba has raised its outlook for fullyear revenue growth. This after chinas Biggest Ecommerce Company blew past forecasts in its latest round of earnings. Its results were boosted the banks its results were boosted thanks to alibaba is a top holding in this index. What was your biggest takeaway from the numbers . Acceleration. Its amazing that a company of that size can grow at the rate its growing, but the growth rate has actually accelerated from a year, 18 months ago, crowing about 40 , last quarter in the low 50s, this morning 51 . Emily what are your thoughts on the new retail plan . i think it makes a lot of sense. You see a lot of the same things happening here now. Amazon has bought whole foods. It gives them physical a more diverse area. And alibaba have been pretty aggressive in this resort regard. Its exciting. A new chapter of online to offline. Emily we are looking ahead to singles day very soon. How big do you think singles day is going to be this year . How significant . The singles day Growth Numbers yearoveryear have not been as great as the annualized numbers for forecasy conservative 20 billion dollars to 22 billion, but it could exceed that. Certainly, it will be at least 20 billion, possibly 22 billion. One of the things that is exciting about singles day now, its not just people buying physical goods. Insuranceve seen an company that went public a couple months ago in hong kong. Alibaba is an investor. They sold 100 million return insurance contracts that day alone, Something Like 13,000 per second. I think it will be an exciting singles day, as it is. I dont think we will have 61 growth as the quarter had. Emily what do you think about the future of alibaba in the context of the chinese economy at large . How optimistic are you that the chinese economy will continue to grow as it has . Kevin c. im very optimistic and confident it will continue to grow. The growth rate will slow down, as weve seen for the last decade. It will go from 6. 5 to 6 to 5 , and thats almost certain. But the breadth of involvement they have in the economy a lot of people dont realize the number of investments they have. Its not just ecommerce with alibaba. Its alipay, payments, physical locations. I think theres a lot of growth sector andfor the for alibaba. Emily the ceo was asked on the call about the outlook for subscribers. He didnt give a straightforward answer, but talked about how the program is different from amazon prime. What is your outlook for subscribers . Right. youre they didnt give very clear guidance. The user base numbers are going to have to flatten out. They have a pretty decent percentage of the population, so i think flattening will definitely be the curve in terms of members. But in terms of the amount spent by members, i think that number is still still has a lot of room to go up. Mily shares have been surging can the share price continue to grow as fast . Kevin c. in the longterm, share prices follow earnings. In the shortterm, they follow sentiment. I think that valuations are still quite reasonable. If you look at the whole sector of emerging markets internet companies, the tea e multiple es maybe 35 to 38 the p multiple is maybe 35 to 38 . Growth basis, its about one. Mid awith the midtolongterm timeframe will do well. Emily how much growth are you expecting in the cloud . How important is that unit to alibabas future . Kevin c. it was just another 100 growth quarter. The cloud, even here for amazon, the web services i think both of those businesses are still very much in their early stages. I know as an entrepreneur, im just about to sign my first cloud related deal with amazon web services. So, i kind of think it is probably still quite early for that business in china for alibaba as evidenced by the 100 growth. Emily kevin carter, founder of emqq. Thanks so much for stopping by. A new chapter in the bitter legal battle between apple and qualcomm. Welcome has sued apple, accusing the iphone maker of failing to abide by the terms of its software license. The chipmaker filed the suit on wednesday in California State Court in san diego. The two companies are embroiled in an escalating dispute over Technology Licensing fuse fees that qualcomm covers for patents that cover the basics of how mobile phone systems work. Apple says qualcomm is unfairly charging too much and leveraging its strong market position in chips illegally. Coming up, House Republicans unveil the tax cut plan today. It impacts big tech immensely. We will give you all the details. Thats next. Once again, take another look at this live shot from inside the apple store in sydney, where current time, just after 8 a. M. On friday, the highly anticipated iphone x on sale now. We will be watching. Emily President Trump said today that Semiconductor Company broadcom will be returning its headquarters to the United States from singapore. The ceo joined the president in the oval office for the announcement, where the president touted the amount of money that will come into the u. S. As a result of the deal. President trump their move back to the United States and to the United States is something very special and very important. Youve been seeing this happen with numerous companies. More thancommitment, 20 billion in annual revenue will come back to our cities, towns, and the american workers. House Republican Leaders rolled out there sweeping tax plan in washington this thursday. Among the highlights, cutting the Corporate Tax rate to 20 and reducing the number of individual brackets, plus eliminating the estate tax. Several of the biggest corporations in the u. S. , including apple, would no longer be able to escape taxes on the trillions in overseas profit they have accumulated. According to an estimate by goldman sachs, u. S. Companies have stockpiled as much as 3. 1 trillion offshore. The largest stockpile the lungs to apple stockpile belongs to apple. Now, with how this impacts big tech and perhaps Venture Capital, mark milian. What does this mean for a company like apple . Mark for a company like apple, they generate a lot of their profits locally, so the 20 tax rate is a good thing, but they also have an immense amount of money overseas. So, the 12 tax on overseas cash is a big source of concern, and theyre going to continue to tax foreign subsidiaries going forward, assuming that this tax plan passes, which is a big assumption. Not great for Big International companies keeping a lot of money overseas. Emily apple has nearly 250 billion overseas. We are looking at a rate of si as 12 , when we thght it would be closer of as high as with how this impacts big tech and perhaps venture 12 , when we thought it would be closer to 10 . I spoke with the cfo of apple just a few moments ago. That, weve always been a very that, weve always been a very strong advocate for Corporate Tax reform. It will drive job creation in the u. S. However, we dont know the details and given the dreadlocked gridlock in washington, what we see now is perhaps not close to what we will see later. Mark they are probably telling investors, dont worry too much right now, this is not even the final tax plan, they will continue to make markups to this, and it may not even pass. This is they have a month and a half to get this through, which is kind of crazy the world of washington. Emily explain the impact you expect this to have on the private market as it stands now. Say this plan we see now is mark its got a lot of great things for private companies. For example, there is a lot of talk, especially during the campaigns, about this tax law called carry interest, which would affect Venture Capitalists bit, because they make a lot of their compensation from these carry interest taxes. The Venture Capital trade group has also told my colleague, lizette chapman, in an interview, that they are expecting changes to the way that startup employees exercise stock options, which allows them to defer when they have to pay taxes on a huge chunk of their compensation, which they get in stock. For startupgreat employees out here. The one unexpected caveat is this tax on university endowments, which are huge investors into Venture Capital funds and hedge funds and private equity. Now going to be paying 1. 4 tax. They are a little freaked out about it, that they are targeting universities. Emily what does it mean for individuals, now going to be paying 1. 4 specifically Silicon Valley billionaires . Mark they tend to skew liberal anyway, and they are not as sensitive to taxes as other wealthy people. But they didnt get the highend tax break that the republicans, and thely the president leaders in the republican and te leaders in the Republican Party, have been pushing for in the senate. Also, the exemption for electric cars, getting tax rates on electric cars going away tax breaks on electric cars going away. Emily what are we expecting in the next month . Just a lot more gridlock, a lot more debate . Mark its going to be a race to the finish. Theyre already describing this as a watered down tax bill. Now that the details are public, especially to the democrats in the house, there is going to be a lot of infighting over what stays in, what gets pulled out. And among the wider Republican Party in the house. Thats just the house. Emily mark milian, thanks for breaking it down. Coming up, big techparty in the. Ceos declined to testify before congress this week. We found out what twitters former Top Executive thinks about this weeks capitol hill hearings. That is next. We will hear from dick costolo. Take another look at the live shot from inside the sydney apple store. Almost 8 30 a. M. Friday. The highly anticipated. Iphone x on sale now. Apple ceo tim cook is currently speaking on the companys Earnings Call. He just said we expect it to be the biggest quarter ever. We will continue to monitor headlines from the call. We are listening in right now. This is bloomberg. Im Mark Crumpton in new york, and you are watching Bloomberg Technology. President trump today chose Federal Reserve governor Jerome Powell to succeed janet yellen, who becomes the first chair of the fed in decades