Month. Stacks price and content up against other streaming content companies. The hits keep coming. Mutual fund giant fidelity review states wework evaluation in march, adding the Office Rental companies preipo woes. It was a big day for apple as the tech giant launched its newest hardware at its annual Product Launch in cupertino. Among the new items, a new apple watch and a lowcost ipad, not to mention announcements tied to its new services, apple tv plus and apple arcade. As always, all eyes were focused on the freshest versions of the iphone. This is the iphone 11 pro and these are the most powerful and most advanced iphones we have ever built in a stunning new design. Taylor apple unveiled the iphone 11, iphone 11 pro, and iphone 11 promax. The iphone 11 is about 50 r,eaper than the iphone x 700. The ipo the iphone pro will still hit the same 1100 mark. I am joined by ryan reith and mark gurman. Mark, you have been covering these for years. How did today feel relative to years past . Event, buter apple nothing earth shattering. It has been a while since apple came out with an entirely new hardware product. The most surprising thing was around pricing, tv plus, apple arcade, the price reduction on the iphone 11. In terms of hardware functionality, nothing to write home about. Taylor ryan, talk to me about the iphone, because it still makes up a decent amount of top line for the company. What is your take away when it comes to the iphone . Ryan i agree with mark. I think the story line today is all about pricing. As markardware side, mentioned, you mentioned the 50 price cut. I think apple, then leading with services, partnerships that came out with arcade, and then getting to lowercost iphone and watch pricing shows that they see we have pushed the threshold of the average consumer pretty high on price points and they have to be cautious of that because the important thing is making sure the base grows, which i think they are still doing a good job. Taylor are they maxed out at a 1000 iphone . Ryan i dont think we ever maxed things out because starting points are never what the highest point actually gets to. We are probably talking upwards of 1500 for the highest configuration. I think there are going to continue to push things, but they are realizing the audience who will pay that price to use those features is smaller than it was when their highest iphone price was 800. It is a changing of the times. It is not apple only affected. Their main competitors, samsung and huawei, are affected the same way. It is the changing times. I think we will continue to see price points well over 1000 with iphones. Taylor mark, i want to come into my terminal, gtv. What we are taking a look at is the average sales price, starting to rise a little bit. But on the righthand column is the number of iphones sold, which is slowly dipping down. What does that tell you about where we are in the cycle . Ryan it tells us mark it tells us there has been a combination of rising prices and a decrease in innovation. The changes here are all about the camera. If you go to apples website about the iphone 11 pro, 70 is about the new camera functionality. The last time we saw a real breakthrough change was the iphone x two years ago. We are expecting bigger changes next year as prices are coming down, so i think things will rebound in about 12 months. Taylor ryan, what do you make ryan, what do you make of this device no longer being an iphone but a camera that has some audio capabilities . Ryan it has probably been more than a phone for quite some time. It is a good question. I think the features they have introduced, some of which have made some people say that things like night mode have met up with what google has done and others, and thats great. Whats important to recognize is what the average consumer actually does with their camera. To be honest, not just for apple but for some others, some of the features they are integrating, a lot of that is done through software and not just modules and the number of megapixels. I dont think personality everyone is utilizing that to the full benefit. Having said that, Everyone Wants the latest and greatest, so it is important they continue to innovate. They have been a Market Leader in photography and continue to be. Taylor the lowest price point comes in at 700. Last year it was 750. Does that concern you as it relates to apple or the industry . Ryan it doesnt concern me on either. To be honest, like i said, if i am apple and i am looking at a longterm strategy, there is many things going on. Products we dont know about, continuing the product lines we have. The main thing for them is making sure they dont lose their install base and, more importantly, they grow it. I think by recognizing there is a large number of users that is frustrated with the price points of smartphones in general, i think it is perfect for them to play into the fact, to say, listen, we are going to continue to innovate. You can still get a new iphone thats topoftheline quality thats not priced at 1000 or above and is actually going to be less than the same product line last year. I think the strategy is right. Everybody has to test the waters in terms of pricing for the average consumer because nobody really knows where that stops. The last five years, the average bond prices have grown so much compared to the 10 years leading up to that, it is night and day. Taylor we wont get 5g until a year from now, so why do i care . Mark 5g in the United States is just rolling out now. The real impact is going to be in china. Taylor ryan reith and mark gurman, thank you for joining me. Coming up, watching your health. While apple is betting on a wearable that will help it transform the health industry. If you like bloomberg news, check us out on the radio on the bloomberg gap, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Taylor apple has debuted an always on retina display as part of its series five watch unveiling. Beyond the screen, apple says it continues to pursue ways to boost health, as ceo tim cook pointed out. We are really excited about the impact a research app can have. It gives all of us an amazing opportunity to purchase a paid in Health Research that could lead to innovations to improve our health and the health of future generations. Taylor let me bring in and go over to apples headquarters in cupertino, where Creative Strategies principal analyst carlee nebula daisy is standing by carolina milanesi is standing by. How much of a surprise was the watch five today . Carolina from a watch perspective, what was interesting is i think nobody has really thought about the always onscreen. And of people have complained that that was a feature that consumers wanted, especially consumers trying to switch from a traditional watch to a smartwatch. Today was really about moving the envelope on the health side and really hearing apple clearly that this is an area where they want to continue to develop, want to stay for the long run and creating a Health Research app speaks to that. Taylor is pricing 399 competitive or expensive . Competitive99 is and even more is the 199 price point of the thirdgeneration apple watch. We always get carried away about the latest models, but when you look at the lineup, thats where it is becoming more and more obvious that apple wants to get consumers that are part of their install base to venture into new devices. User and be an iphone have yet to find out what the value add of an apple watch might be. Easierce point might be to get you to try than the 399. Taylor the 199 for the three that they lowered today, you think that is a good thing the company is doing . Carolina absolutely. It is getting the entrylevel more interesting for consumers. Impasse ont of an the android side as far as android where and new devices coming to the ecosystem outside of fitbit, which i am sure today is going to look worried about the 199 price point. We have not seen a lot of uptake on the watch formfactor. There is lots of bands out there but not so many watches. Taylor you mentioned fitbit. I was looking at that earlier as well. How concerned should other wearables be today . Carolina i think they should be quite concerned. I think apple watch has become the smartwatch that the rest of the industry is looking up to and that 100 99 price point is super competitive with a device that doesnt feel like you are compromising your experience. Thats the core part, you are not getting a device that you feel doesnt give you the key features that you want. So why not try and see what it can do for you . Taylor talk to me finally about integrating services and doing Health Research. What about the future of health and apple excites you . Carolina i think to me thats the next level. It is not just something apple wants to do for the goodness of the human race, so to speak, as far as making us all more healthy. It is really a good way to get people to see value from the ecosystem at a level where it impacts their lives. It is not just about entertainment, not about having a gadget, but really having a device that can make a difference in your life. They played a video during the keynote that spoke to that, people that have had heart arrhythmia highlighted to them by the watch and being able to get to the hospital on time and prevent something that would have changed their life forever. That is very powerful. Taylor that was Creative Strategies principal analyst carolina milanesi. Thank you for joining me. From the hotly anticipated ipo to will that even happen . That is the concern around weworks public debut. Softbank is pushing the company to postpone its offering amid concern about a drop in valuation. Earlier this year, Goldman Sachs pitched we work as a 65 billion business. Now there is word mutual Fund Fidelity cut its stake in wework in march. To discuss, ellen hewitt. The ipo is in flux. Is this because of wework or softbank . I think it is a log of factors. We are seeing confusion at reporting suggesting some divisiveness within the wework and softbank relationship about how to proceed in the eye the anticipated ipo. This is something wework was planning since they first filed confidential documents to go public late last year, but as things have progressed, it looks like the evaluation has started to drop below what the company had expected and its most recent evaluation. Taylor how much of it is concerns about wework versus the market volatility and the tough ipo market this year . Ellen it is probably both. Earlier in the summer when we were reporting on timing wework ipo, there was discussion about wanting to get the ipo done when the market was in a good place. Some revelations that came from the public ipo prospectus in august have stirred up more discussion about conflicts of interest within wework, in particular related to ceo adam newman. This is a company that has a complicated Corporate Structure as well as more transactions than your average company. Taylor i want to come into my terminal at gtv. With ipos, we talk about equity markets. I want to fold this into a high Level Analysis of the bond market. We are for the first time dipping below par, the first time going back a few months. We are under par, . 98 on the dollar. Without analyzing bond fundamentals, what does this tell you about the level of nervousness in the market . Ellen it indicates bondholders are having concerns about what the future of the bond can look like. It is a bond that wework first started selling early last year. It has been above parsons about august, above far since about august. There was optimism an ipo could come and the cash infusion could help support the bond. I think as we are seeing that the ipo plan is in flux, bondholders are reacting with concern. Taylor after softbank, other big investors, namely fidelity, cut their evaluation of wework going back to march. What did they see that the market were wall street did not see until now . Ellen i am not sure we will know. When fidelity reviews their internal evaluations, they dont usually make it clear why. I think we can have some guesses , that they were anticipating an ipo and trying to react to the news knowing that the equity would be public. It is hard to understand. I think wework has been under a lot of scrutiny and as each development has come forward, we have seen some changes. Every time they announce, it seems like they are going to go public, then it seems like not. Taylor dont even get me started on how to discount the cash flows of future lease payments. Coming up, five dollars. Thats how much customers will pay monthly to stream apple tv, andared to 13 for netflix 15 for cbs all access. We break down competition in the streaming space, next. Bloomberg technology is livestreaming on twitter. Check us out and follow our global breaking news network tictoc on twitter. This is bloomberg. Report as we continue to , apple launches products at its event in cupertino, but the tech giant still pushes to become a Services Company. This holds true when it comes to the apple tv. All of this for the price of a single movie rental. This is crazy. [laughter] we are so excited about apple tv plus that we wanted to do something really special. So starting today when you buy an iphone, ipad, mac, or apple tv, you get one year of apple tv plus included for free. [applause] incentivees this new show that apple is really pushing into services or still relying on hardware . I am joined by Forrester Research analyst julie ask. Services company or Hardware Company . It is increasingly becoming a Services Company. I think the announcement around apple tv plus is significant for several reasons. It is the first time we have seen apple create content. Apple tv plus arcade fills two gaps in the Subscription Services. It already has news, music. If you add that up, it is easy to see apple is getting 400 or 500 per year in Services Revenue from any customer. It changes their business model. They go from a Device Company that is trying to get a purchase every 2, 4 years, to a company that is connecting revenue monthly. The Services Revenue is already 15 to 20 of their revenue and these Additional Services make that even stickier. This is a different game and it becomes different for how you think about the company. Taylor how competitive is 4. 99 a month . Julie you have to take into context that apple doesnt have the same kind of library that netflix or some competitors do. I believe it is a Solid Foundation and a good starting point, especially with giving it away with new hardware purchases , it gives consumers a chance to try and experience it before they make an even bigger play. Taylor i want to come into my terminal at gtv. All you need to know is we are looking at a massive debt pile of apple. , should say massive cash pile more than 200 billion. Is that cash they have been storing to now start spending to keep up with netflix . Julie i think thats one of the areas they can spend the money. They could also spend the money supporting Game Development as part of arcade. Today indicates they will spend more money to support and create content and push forward with the services business. Taylor it was notable that the shares reacted not on the pricing of 4. 99 but on the fact that when you buy a new device, you get one year free. The shares of their competitors all started to fall. Does that show apple is still reliant on the hardware . Think if you look at their financials, yes, they are reliant on the hardware, still 70 80 of their revenue. You are looking at something more about the future of what apple will be. If you look at how quickly their Services Revenue is going, the more they can get consumers into subscriptions, the stickier those services can be and the faster the revenue will grow. The switching costs on that will be higher. The other thing you have to keep in mind is the more services, content they roll out and the more consumers they get committed to subscriptions, the more valuable the devices become. Those things play off one another. It shows the strength they are building with a vertical integration of hardware, software, services, content. Each purchase makes Everything Else more valuable for the consumer. Taylor what type of content would you like to see from apple so they are distinguishing themselves from their competitors . Julie it would be hard to say at this point what is missing. Media tends to be the number one thing. Gaming, music, and video are the top three things in that category, so it is hard to point and say there is a media category that is missing. It will be interesting to see further down the road if apple goes beyond payments and clouds and things they might do that are more horizontal. Will we see apple go into Subscription Services for things that are nondigital . That would not be there for business, but it would be interesting to watch. Taylor julie ask of Forrester Research, thank you for joining me. Coming up, we hear from microsoft president brad smith and his thoughts on the current trade tensions between the u. S. And china. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. This is bloomberg technology. Im taylor riggs. Were getting some headlines now on teleton, setting its ipo offering of 40 million shares at 29 a share. We will continue to watch the pricing. Now we continue to cover apples Product Launch which includes a new apple watch, lowcost ipad, and three new versions of the apple iphone. One theme that did not come up, apples current relationship with china or how the companys products have been impacted by tariffs. Products like apple