to apple. from my perspective, i have just engaged in a one step transaction with apple. say apple isn and a monopolist and apple is charging a super competitive price by extracting a commission that it can only extract because of its market power, there is my one step. that, but innd proximate cause, the issue is not transactional proximity. the issue is proximity between the illegal conduct on the one hand and the injury to consumers on the other hand. apple's monopolistic overcharge is not the direct cause of higher prices. the direct cause of the higher prices is the app makers decision to increase prices in order to recoup them. >> how do we know that, given that apple operates as a retailer in many respects here? know that the 30% charge is not affecting the price? in the semi that any retailer that adds 30% would affect the ultimate price paid by the consumer. >> you don't know for sure, but that is the whole point. app makers set the final price, they have a choice to make. absorb the o

to apple. from my perspective, i have just engaged in a one step transaction with apple. when i come in and say apple is a monopolist and apple is charging a super competitive price by extracting a commission that it can only extract because of its market power, there is my one step. >> i understand that, but in proximate cause, the issue is not transactional proximity. the issue is proximity between the illegal conduct on the one hand and the injury to consumers on the other hand. apple's monopolistic overcharge is not the direct cause of higher prices. the direct cause of the higher prices is the app makers decision to increase prices in order to recoup them. >> how do we know that, given that apple operates as a retailer in many respects here? how do we know that the 30% charge is not affecting the price? in the same way that any retailer that adds 30% would affect the ultimate price paid by the consumer. >> you don't know for sure, but that is the whole point. app makers set the final price

for apple innovation. so to what degree because of apple's profile and perhaps more important its cash it can hold its breath longer. >> i think it's true it is a religious war for apple. i think the way they talk about it is in those terms i think there are good points made on both sides i think it will be difficult for apple to sit there and argue that they should not pay royalties in the same way that all the chinese players are paying, the same way samsung is paying qualcomm has gone through this big settlement with the chinese government and sort of come out the other side with an agreement that apple seems to not want to pay in similar terms so i see the arguments on both sides. i think there will be a settlement that makes both sides happy and also is probably structured so that it does not jeopardize qualcomm's licensing as well. >> tim, thank you. as always, good to talk to you >> thank you >> mike, we'll see you on "closing bell. "jon, see you soon let's get to "the half." >>> i'm scott wapner st

coming up, apple loses grip as the top earning company. microsoft took over apple in its spot. plus, facebook battles accusations of racism. we hear exclusively from the former employee who wrote a memo about being black at the social network. and it was the biggest shopping weekend of the year. we will unpack the black friday cyber monday extravaganza brought for amazon. but first to the lead. apple's stronghold on the world's most valuable publicly traded company is no more. during monday's trading, microsoft's market capital took the first spot for the first time in eight years. just this month, the iphone makers value topping $1.1 trillion. the share price has been shaved selloffroader tech amidst concerns about weak demand for the flagship iphone. bloomberg tech's mark gurman joins us. mark: it is pretty unbelievable. if a year or two ago if someone said that microsoft would pass apple in two years no one would believe that, especially in the current technology climate where a lot of people think that apple has endless runway of growth. if you look at the past two months,

this is the latest the reason why. >> the market or apple >> apple specifically apple this is the latest headwind. every other thing bounced. amazon apple at some point was due for a bounce it having not stopped going down apple was the last one to be sold off >> it's a cycle and we're through the cycle on an intermediate basis. >> it's not as simple if you loved it when it was a trillion and 50 billion. >> i'll tell you what, joe why can't you like it now? >> the story is not over we reached some sort of peak in iphone sales asps weren't going to be enough. >> i know. i know. >> let me jump in here to me nothing has changed in apple's story over the last two months to be consistent, you have to like apple as much today as you did two months ago with the exception of possibly today's news is certainly different. i don't think -- i think the trade dynamics are very much the same you take 10% off a shipment from apple you still are around 200 units, 205 over the next couple of years that takes about 5% off the sales. still takes you at 12 bucks a share which makes you less than 14 -- >> bu

that would be bad news for apple. and it is a source of pressure on them to reduce the 30% commissions that they charged to app store developers. emily: walk us through the argument. apple takes a cut from the app store. 30%. it has been in contention before. what makes this particular lawsuit significant? mark: right now, apple is pivoting towards wanting investors to focus on its services revenue. revenue, the majority of it comes from the 30% cut. if apple takes any cut on the 30% because of the lawsuit, the services revenue will take a significant impact. that is why the lawsuit has so much at stake for apple. ,mily: greg, you were saying talk to us more about what is behind this particular case. greg: this is a consumer lawsuit suing saying that we are paying too much for apps at the app store. the focus is the commission. what apple argues is that the to this supreme court is whether consumers can sue? there is a supreme court saying thatump 1947 only the direct purchasers of something can claim they were overch

we turn to our conversation on apple. our next guest just gave their call on apple, and it's not good. they cut their price targets to $280 a share, citing concerns about i-phone demand. tom, which of the sad the stories about apple lead you to do this? tom: generally speaking, if you look at what is going on with apple, the company sounded an alarm when they reported in the september quarter they indicated a weakness in emerging markets, brazil, russia, india and turkey. since that point in time and what caused us to adjust our estimates is you had a number of suppliers for apple cut their forecasts. so, it clearly looks like unit sales are weaker than we anticipated. emily: how does this ruling in china and ban on older iphones, apple saying they have to settle with qualcomm. how does that impact your outlook? tom: i would tell you that it is affected. but the way i think about that is, initially, there was a dispute where apple was suggesting that, unlike what qualcomm was saying, it was all systems go. they were still

we turn to our conversation on apple. he's cut the price target to $280 a share, citing concerns about i-phone demand. the sad thef stories about apple lead you to do this? speaking if you look at what is going on with apple, the company sounded an alarm when they reported in the september quarter they indicated a weakness in emerging markets, ussia, india and turkey. since that point in time and what caused us to adjuster estimates as you had a number of suppliers for apple cut their forecast. so, it clearly looks like unit wees, atweaker than anticipated. emily: how does this ruling in on older iphones, apple saying they have to settle with qualcomm. commerce does that impact your outlook? tom: i would tell you that is affected. but the way i think about that is initially, there was a dispute where apple was whatsting that unlike qualcomm was saying, it was all systems go. they were still selling all the devices in china. yes, i think it is important but not necessarily a determining factor in our most cautious tone. em

apple, alibaba vm ware? >> good question >> vm ware were you not asking me. >> i wasn't but you play. >> guy was taking too long to compute. >> go ahead, guy. >> i'm still thinking it through. >> all right. >> i'm going with vm which are you see the outperformance in that in a down market mm relative for the s&p 500 the growth is okay valuation okay but when you see something in a market like this doing quite well, that's the one you want to stick with. >> have you thought about it. >> i figured it out. you have three choices >> yes. >> and the would i rather rather i'll stand by -- i think president trump's tweet about apple a couple weeks ago will put in the bottom. i think that came around 173 or so so in the game you just put forth, apple. >> coming up, the trade truce is on maybe. but will it last we tell you what president trump said that has wall street questioning a real deal. check out the mystery chart. the stock not only ended in the green, but vastly outperformed the market in the last two months

qualcomm said apple uses software updates in some older phones that allows apple to avoid paying fees to qualcomm. the court order impacts older models starting from the iphone 6s which were originally sold with older versions of apple's ios. it's unclear what this means for the same phones with the new version of the software. apple says the decision doesn't affect those phones but qualcomm says it could since it applies to specific features like resizing photos, not the os. the newest models which debuted in september are not affected. apple says it will appeal the decision and pointed out that all the phones are still on sale in china china is a critical market for the company and these older models are important for apple overall sales of smartphones in china are slowing down this year, and one way consumers are able to stay with apple but also cut back on spending is by buying older phones. eunice yoon, cnbc business news, beijing. >>> elizabeth joins us around the december 1/4 more on this. before we talk about the impact on apple, one thing i want to pick up on, and i think the

now, the question remains if apple builds them will customers come? >> the common wisdom on the apple retail stores was that it was a stupid idea that would fail. plenty of computer companies had tried it. dell had stores. gateway had stores. nobody went to them. it was just an exercise in vanity. but this concept of open, airy places where they weren't going to try to sell you stuff but instead you could ask questions about your apple products, you could see demonstrations, you could get your hands on them, is just an unbelievably different approach to retail. and once again, steve jobs figured it out. >> what began the process of taking apple from a niche player to a leader that everyone had to race to catch up to, even microsoft, was the ipod. >> boom. that's ipod. i happen to have one right here in my pocket. there it is right there. [ applause ] >> the ipod was a classic apple device. a chrome mirrored back, a pure white acrylic front. that famous click wheel for dialing through lists and stuff. it was the first mp3 player that really worked and

been with apple? does tim have the currency with the administration to make an impact? mark: that is a great question. i think they do. in early september, apple said that two of their most valuable products, the air pods and the apple watch, would be impacted by the tariffs. on the first $200 billion worth of goods. a couple of days later, the trump administration out and said we are not going to allow tariffs. on the apple watch earlier pods anymore. now they are spending the day with the daughter the president. this will be a topic on the agenda besides the schools they're visiting. i think they had that sway power with the trump administration. i believe they will discuss why this will be bad for apple. despite exporting goods from china, they are a u.s. company. >> tom, let us say that tim is not successful today making his case to the daughter of the president and we do see a 10% tariffs on iphones that have not previously been affected by the trade war. you talked a little bit about how apple c

and speaking of austin and apple we now take a longer look at apple stock with danielle shay of simpler trading which is based ironically in austin although today she joins us from seattle that's ok we'll talk amazon stuck in a moment there of course there in seattle danielle welcome back. thank you so much good to see you again so what do you make of all of this down in austin you and your colleagues there it's simpler trading it's a good thing it's an addition so it's not like it's a big new move but it's a lot of people. absolutely it is a lot of new people and first of all i would have to say that i think that the selection of austin by apple was perfect i mean austin is a great tech hub there's a lot of potential for growth there's a really low cost of living i personally love living in texas and the culture is amazing so i think it's a good selection on apple's part but when you look at it from those folks who are living there it really depends who you are so first of all if you're in the tech industry. it'll be great for you because you're going to have right things salaries and

that's like apple selling the watches again. >> yeah. >> i still love apple. >> that's obvious. >> what do you make of what we've witnessed with apple a definite change in sentiment real concerns about the state of the iphone and the strength in that market. >> no stock goes up forever. apple got to be the first trillion dollar market cap company. it's not inevitable that there won't be some movement in the stock price. it still has extraordinary market share it's a great product it happens through software, in ai, in better cameras. these apple products are worth every penny because you use them so much. so as an investor, i'm a long-term believer in apple. this is a good buying point. as a trader, it could go down more but as an investor, if you're long apple, you're going to have a good ride. >> are you a fan of the argument morgan stanley is the latest one to make it, that for the next five year, 100% of profit growth is going to come from services and wearables, but not the phone itself >> i don't know what the mix will be, but i think the fastest growing seg mgt will be services t

we said, okay, it's apple wine. since wine was that, apple wayne, what a good idea. >> reporter: with its new found success canada approved them to sell ice cider and soon other quebecers spread in and this spread south to vermont where one woman's hobby flourished into a company. >> we went to a couple of restaurants and stores and all of them bought and rebought and wanted more and that's when we looked at each other and said oh, maybe this is not at happy. >> reporter: she founded eden specialty ciders and a year later became the first american ice ciders approved by american regulators. >> it was critical because our whole intention when we started in 2007 was to make ice cider primarily, not hard cider and if we didn't get approval for ice cider, then we weren't going to do anything commercially with it. >> reporter: unlike christian in canada, legere like most ice cider apple-makers picks the apples in the fall, not the winter and later freezes its juice to make the ice cider. >> the fastest we can make an ice

plus, just how bruised is apple? the answers now as "the halftime report" begins on monday, december the 10th. >> good to have you with us on this monday. here to debate and trade the biggest stories of the day, joe terranova, jon najarian, jim cramer, the host of "mad money." we begin, where else, the market stocks took a mid morning turn lower. they continued that slide. the dow hitting correction territory. apple's continued slide, more weakness in the banks. some brexit developments all dragging the majors into the red. you flagged some trading for us saying people are betting on this going lower >> in particular today, scott. they came in aggressively buying the december 260 puts. now this is what the index at about 264 in the spdy. they bought close to 40,000 of these that ran them up to $2.30 as the index fell. these increased in value and i tried to change everything about the way i was doing things, scott, even put my pants on one leg at a time to try out what everybody else does every day. >> tmi >> sorry a

so how is apple going to perform in 2019? joining us now, dan ooifs and tim o'shea early happy new year to both of f you. dan, barring any big acquisitions, the question on apple seems to be do they succeed in shift iing the narrative away from iphone units and towards some i guess general profit growth statistics the idea they can keep iphone prices high. build in services and keep that momentum going what's it going to take for them to be able to do that? >> the big thing here is the services business. they're trying to get the street away from the hardware piece looking at services. but ultimately, i think the way they did it was a disaster in terms of pulling the iphone metri metrics. right here, the first thing they need to do is in december, need to have a cut for march then the street's anticipating and you need to convince the street it's an installed base story for 2019, but it needs to be b about upgrades and right now if i look at ten r, that's ben disappointing in china you need to see the upgrades, specifically i

it sounded like bad news for apple. apple dispute that had saying all iphone models remain available in china apple filed an appeal to overturn that ban. back to you. >> all right thank you very much. >>> markets take a big leg lower after theresa said it will be delayed. we have the latest on that >> yes she has called off what was billed as a make or break final vote due tomorrow because she was staring at a major defeat. she explained the reasons why. >> i listen very carefully what is being said in this chamber and out of it. to what is being said up in this chamber and out of it from members of all sides it is clear while there is broad support if many of the key aspects of the deal on one issue the northern ireland backstop there remains widespread and deep concern >> she now heads to brussells. it is something that seems unlikely to be achieverd. he said we are ready to discuss how to facilitate u.k. ratification it hit a low and ended the day still down sharply on fears of a no deal brexit and question marks abo

. >> apple executives and city officials say this would eventually make apple austin's largest private employer. >> it's a part of a plan we have to expand across the u.s. but a key part. >> reporter: the campus will overlap counties and be planted in williamson county. >> i am real proud that the most important conversation that's been happening over the last year about an expansion of a high-tech corporate office was happening in austin, texas and with apple. >> reporter: jobs at the new site will include engineering, research and development, finance, customer support, and sales. with the announcement of more jobs coming to his district, austin city councilmember jimmy flanagan is looking forward to the future. >> i'm so excited that apple renewed their belief in district six as the home for apple outside of the west coast. >> i went to the store at barton springs late at night, got terrific customer service and i'm back in business with an ipad 11. thank you very much, apple. >> like many people around the globe, governor greg abbott is stated how proud he was to accommodate the te

and 2018, the year apple lost its mojo? we will see if they can reclaim their hype around signature products in the new year. the index gained 35% halfway into 2018 but now looking like they will finish lower than they started. the index made up of popular tech giants including facebook, apple, amazon broke through a key support level. has been theu biggest laggard, falling 30% this year. joining us to discuss, mike regan. walk us through the losses and whether there is expectation this volatility in tech in particular will continue. >> tech gets most of the blame for the stock market selloff by merit of being the heaviest weight in the index. i don't think you need to look at the entire market and blame it entirely on tech. if you look at the performance of all the sectors since the last record of september, it is energy, industrial, consumer discretionary shares that are performing the worst area tech -- the worst. tech is down but it is not just the tech story. we really have to look at the entire market climate in order

emily: how would you characterize tim cook's apple versus steve jobs' apple? tim: well, i don't think about it very much. what would i say? i guess i will point out that steve's dna will always be the dna of apple, or it will be as long as i am ceo. and i think as long as anyone is, honestly. i think it is deeply embedded in the company and we celebrate it. and it should be like that and should stay like that. obviously, things evolve over time in some other areas as they would have if he were sitting here interviewing with you today. that is probably a better question to ask somebody who worked for both of us. emily: you said cars are an area ripe for disruption. how important is it that apple not miss out on cars? tim: i think there is a major disruption looming there, not only for self driving cars, but also the electrification. if you have driven an all-electric car, it is actually a marvelous experience. it is a marvelous experience not to stop at the gas station, or fillings nation or whatever you call it, and so -- plus, you -- gas station or filling st

apple suppliers' woes continue. the latest tos tumble after cutting forecast over worries of iphone demand. it makes audio parts for the loss. recovering some what apple is try to do to sell , mark, yous discovered some pretty aggressive moves that apple is taking, ranging from discounts in a way to reshuffling its marketing staff. how much is the iphone this year discounted? >> to be clear, they are not actually cutting prices per se. they are advertising a lower price, which makes it so interesting. they are advertising the iphone xr $300 less than it actually costs. this is the tactic you would see from samsung or huawei or some of the carriers like at&t. this is a new type of effort apple. this is not something we have seen from them, basically disguising the price are saying that the crisis of the net it is not. in reality, this is a trade in deal that they are boosting. this is a new, aggressive tactic. it was unbelievable to me, following apple for so long, going to their homepage sunday night and seeing a ba

and 2018, the year apple lost its mojo? we will see if they can reclaim their hype around signature products in the new year. our top story, the index gained 35% halfway into 2018 but now looking like they will finish lower than they started. the index made up of popular tech giants including facebook, apple, amazon broke through a key support level. baidu has been the biggest laggard, falling 30% this year. joining us to discuss, mike regan. walk us through the losses and whether there is expectation this volatility in tech in particular will continue. michael: tech gets most of the blame for the stock market selloff by merit of being the heaviest weight in the index. i don't think you need to look at the entire market and blame it entirely on tech. if you look at the performance of all the sectors since the last record of september, it is energy, industrial, consumer discretionary shares that are performing the worst. tech is down but it is not just the tech story. we really have to look at the entire market climate in or

it wasn't good to see apple breaking down the last three weeks. now that it is leading the way higher, i expect that strength to bleed into the rest of the market, start instilling more confidence. >> tom, always great to get your thoughts thanks for joining us. >> thank you >>> and coming up at the top of the hour, bond king jeffrey gund gund gundlach sits down with scott walker >>> first, rick santelli had a busy morning, but isn't done yet. what's on your mind, rick? >> jon, we have to discuss some comments made by peter navarro that's what we're going to talk about after the break. duncan just protected his family with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than a dollar a day. his secret? selectquote. in just minutes, a selectquote agent will comparison shop nearly a dozen highly-rated life insurance companies, and give you a choice of your five best rates. duncan's wife cassie got a $750,000 policy for under $22 a month. give y

we're there on apple. >> apple is the underpinning of this market. it's the individual stock that is the hallmark. you'll have to have someone come out and say, look, this is an opportunity. health care stocks are away from apple but it's the most skittish i've seen in a long time. >> tonight >> we have splunk. they had a monster positive quarter. and rich hume from tech data. >> we'll see you tonight, "mad money" at 6:00 p.m dow down 199 intel, ibm, microsoft, ccois are the only components in the green. ♪ where's the love >>> good monday morning. welcome back to "squawk on the street." i'm carl quintinilla with sara eisen and david faber at the new york stock exchange. dow down almost 200 to start the week as regular issues are front and center this time it's may and brexit. the huawei cfo in vancouver, china, trade, the fed and more. >>> as you can see, stocks slipping lower as investors fear an intensifying trade war between the u.s. and china apple takes a leg lower after qualcomm wins a court order. british prime minister frame is getting read

apple supplier woes continue. tuesday, cirrus logic joined others to tumble after cutting the forecast following worries about future iphone demand. shares of cirrus fell as much as 6% in early trading before recovering some of that loss. we spoke with mark gurman about this and the measures apple is taking to try to sell more iphones. mark: they are not actually cutting prices per se. they are advertising a lower price which makes it so interesting. they are advertising the iphone xr for $300 less than it costs. this is a marketing tactic you might see from samsung or huawei or some of the carriers for at&t. this is a new type of effort for apple. this is not something we have seen from them, basically disguising the price or saying it is something it is not. this is a trade in deal they are boosting, so this is a new, aggressive tactic and it was unbelievable to me following apple for so long, and seeing a banner for a $300 discount that is not really a discount at the top of the page. emily: you do not think ab

that's the apple-qualcomm. qualcomm got in without apple. >> love action this weekend. jim, thank you very much >>> and now to consttessa brewer >> migrants were detained by border patrol officers thousands are currently living in crowded tents in tijuana after a long journey through mexico and those tired of waiting and resorted to crossing illegally. >>> russian anti-aircraft missile systems have been spotted in crimea. their presence highlights the escalating tensions between russia and the ukraine in the wake of a naval clash last month. >>> a lawyer from james whitey bull gur says he plans to sue the government over his prison killing. he was beaten to death in october hours after he was transferred to a west virginia prison >> atlanta soccer fans braving the cold and rain to cheer on their championship team. the first championship for the city since the braves won the 1995 world series and you know atlanta can be paralyzed when there's snow so the fact that so many people turn out when it was so cold that's notable >>> they've gone really soccer crazy down in atla

we think apple may struggle. when it comes to technology companies, how strong are industry growth rates, what earnings can they generate, will revenue growth be strong are margins sustainable. those of what we are looking for when it comes to technology. >> larry, with that having been said, the iphone itself has been such a driver for apple. that's where a lot of questions are. i think it is important to get to a point of being able to calculate a lifetime value of the customer in apple versus looking at the iphone. isn't it possible that stock has turbulence ahead as we figure what metrics to follow going forward? >> i don't think so, jon i think each quarter the services, hardware component of the company will grow. the think investors have to do is look down from 40,000 feet, look at the marginal profitability. as apple collects incremental dollars in those areas, marginal profitability is extraordinarily high they join the apple infrastructure, ecosystem, don't leave. apple locks them in. their services onc

we have 300 folks in apple that are here on daca. and these guys are living one court order away from a problem. and i'm deeply worried about it. i continually push on this and talk about it. i believe, based on my conversations, that the vast majority of people in both parties want to address this. it hasn't been addressed yet. i'm optimistic that it will be. but i'm going to be pushing until it's done. you mentioned inequality earlier, and i just want to comment a bit on that. i am deeply worried about inequality, as well. and i do believe globalization has created more inequality. and so i'm not one of these guys that say, "i'm not involved in this." i think it has created more. and i think it's up to us peop-- us that have benefited -- you and i benefited from globalization in a big way. i mean, your whole show, in a way, would not exist without globalization. >> but so, too, have hundreds of millions of people around the world been lifted out of poverty by globalization. >> that's absolutely right. and i am so happy to have part

microsoft, apple, google andismen we lost apple. and lost -- we lost google right. now we start to see amazon and microsoft give a lot of it back. we have a couple of charts i know steve is all every over the levels usually but looking at these things approaching the prior lows from earlier in the year there are air pockets below these things they are silk winners too. one point, you started by saying it's the worst we can or month since 2008 that was anything but orderly. there was a crisis moment. and i don't care how bearish you have been in the lead up to what he we see in december here no one is expecting down 6% week given what's going on right now. >> so they have to come for the winners. that's why when apple was still up you started to think this isn't over yet because they have to take everything out amazon is still up on the year they're going to erase that. they're still coming for the favorites. they are going to squash them to zero. >> i just don't think people are looking at hey what do i have a couple of gains left in? i do say people don't cut the f

at apple headquarters in coopupertino, california, an 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ ♪ >>> good friday morning. welcome to "squawk alley." i am carl quintanilla with morgan brennan at post 9 of the new york stock exchange. jon fortt has the morning off. we begin with the markets. we have weak china debt overnight, sending stocks down as retail sales, industrial output come in under expectations for the world's second largest economy, as china suspends some tariffs, including those on u.s. auto imports uni >> reporter: china's finance minimum tree will suspend additional tariffs on u.s. made cars and parts 211 items will be effected, with china lifting a 25% tariff on most of those items. the decision takes effect january 1st and lasts three months the finance ministry posted an explanation on its website saying we hope the two sides, the u.s. and china, will intensify negotiations towards eliminating all tariff increases. the announcement came after the economy showed they slowed down further. retail sales, industrial output missed exp

and china, how does this play out for apple? >> i think the stock in order to really perform well, morgan, has to solve the china problem or somebody has to solve the china problem. i think the president gets scored out of negotiating. all of the negotiations, watch washington over 20, 30 years, they always go town to t-- downo the last minute. there will be a deal done, whether it is significant or not, who is to know. it is the fine print, the legalese the chinese government isn't in a particularly good position right now. things are clearly slowing in china. the currency is at the upper end of what is socially acceptable the chinese government basically has to maintain stability. if they don't maintain stability, there's a chance that people may protest as they did in hong kong five, ten years ago. everybody's interest is in solving the problem. i think it is going to take awhile it is kind of sport for the powers that be i think they've already taken the toll on the shareholders the stock down $70 billion that's enough penal

and speaking of austin and apple we now take a longer look at apple stock with danielle say of simpler trading which is based ironically in austin although today she joins us from seattle that's ok we'll talk amazon stock at a moment there of course there in seattle danielle welcome back. thank you so much good to be again so what do you make of all of this down in austin you and your colleagues there simply are trading this a good thing and it's an addition so it's not like it's a big new move but it's a lot of people. oh absolutely it is a lot of new people and first of all i would have to say that i think that the selection of austin by apple was perfect i mean austin is a great tech hub there's a lot of potential for growth there's a really low cost of living i personally love living in texas and the cultures amazing so i think it's a good selection on apple's part but when you look at it from those folks who are living there it really depends who you are so first of all if you're in the tech industry. it'll be great for you because you're going to have right things salaries and yo

qualcomm would like to pay more and apple to pay less. so in that game, they're trying to get their party to the negotiation table with as much negotiating power on their own side this announcement yesterday in china means qualcomm has one win, but not in qualcomm's interest to see iphones in china not available. this is never going to be in the interest of apple to do business without respecting intellectual property of another player these guys are going to negotiate. it is a complex process. they're fighting it shows around the planet so far in terms of legal decisions, it has been more in favor of apple than qualcomm this is a bit of a turning point. i think we're still talking about the $1 billion issue >> walter, the apple, qualcomm thing is who gets credit for innovation apple feels like components suppliers don't deserve an outsized amount of credit, but qualcomm's very business model is based on the idea of pouring money into r&d, and getting a big payout down the line when people need to use their technology as we watch this set

. >> steve came over to apple, sold next to apple for $400 million. he had no ambitions at apple at all. but steve jobs was watching apple flounder. and he just couldn't help himself, and so he remade the company the way he wanted. and there was no one to oppose him because the company was exhausted. >> steve jobs had exactly the abrasive but incisive personality that apple needed at that point. they needed someone to come in and say kill that project, kill that project. that's stupid. consolidate that. and focus the company. >> i'd like to announce one of our first partnerships today, a very, very meaningful one and that is one with microsoft. we're very, very happy about it. we're very, very excited about it. and i happen to have a special guest with me today via satellite downlink. >> i don't think steve jobs has ever experienced, you know, before or after that just people going boo, no! microsoft represented everything that these hard-core apple fans hated. >> if we want to move forward, and see apple healthy and prospering again, we have to let g

microsoft shares past apple, then retreated, then amazon past apple, then they retreated. it is anyone's guess who will be in the lead. joining us, our guest who has followed these companies for years. he is a partner at true ventures. what is the most significant narrative behind this back and forth? we have moved out of the industrial age and into the post information age and theibly add facebook to four companies of this new reality. emily: not google. om: and google, i'm sorry. emily: apple and amazon had touched one trillion dollars and retreated. now all of them are trading around the same amount in market cap. i don't think anything has changed in the last two months for amazon or apple or microsoft and i think if you look at these companies and add google to the mix and facebook, things haven't really changed that much and they don't change that much in terms of growth for these companies. there are dips here and there s, theseonger-term companies are doing well and we will see some changes when , appleannounces the holiday quarter. we don't know which way they go

apple supplier woes continue. cirrus logic joined others to tumble after cutting the forecast following worries about future iphone demand. shares of serous fell as much as 6% in early trading before recovering some of that loss. we spoke with mark gurman about this and the measures apple is taking to try to sell more iphones. mark: they are not actually cutting prices per se. they are advertising a lower price which makes it so interesting. the xr forvertising $300 less than it costs. this is a new type of effort for apple. this is not something we have seen from them, basically disguising the price or saying it is something it is not. this is a trade in deal they are boosting, so this is a new, aggressive tactic and it was unbelievable to me following apple for so long, and seeing a banner for a $300 discount that is not really a discount at the top of the page. emily: you do not think about banner ads and discounts associated with the iphone, however those are being delivered. talk about the marketing shuffle.

apple's business chat, they are integrating businesses with apple pay. basically, you could chat with someone from a business directly, use of payments network if you want to. there is a developed market to give facebook the competition. both are going to different strategies, but what will hold facebook back is this difficulty in striking payment network issues and difficulty -- or delays in striking. emily: will they figure out how to monetize whatsapp? jitendra: i'm more confident about live stories monetization than messenger and whatsapp, at least for 2019. it will take time. first they have to address the misinformation issues. going back to the regulatory aspect of things, those things need to be addressed. then, the monetization aspect would come. investors need to adjust the timeline. , thank youndra waral so much for breaking that down. is not backing down in the midst of a trade war between the u.s. and china. this is bloomberg. ♪ this is bloomberg. ♪ emily: a tobacco giant is spending $12.8 billion for a 35% stake in jull in an effort to

apple supplier woes continue. tuesday, cirrus logic joined others to tumble after cutting its forecast following worries about future iphone demand. shares of cirrus fell as much as 6% in early trading before recovering some of that loss. we spoke with mark gurman about this and the measures apple is taking to try to sell more iphones. mark: they are not actually cutting prices per se. they are advertising a lower price which makes it so interesting. they are advertising the iphone xr for $300 less than it costs. this is a marketing tactic you might see from samsung or huawei or some of the carriers for -- like verizon or at&t. this is a new type of effort for apple. this is not something we have seen from them, basically disguising the price or saying the price is something it is not. this is a trade-in deal they are boosting. so this is a new, aggressive tactic and it was unbelievable to me following apple for so long, and seeing a banner for a $300 discount that is not really a discount at the top of the page.

apple did some test buys and found a majority apple products they buy on amazon were indeed fake. the previous complaints were more like "clean up your house," but not accusing amazon of a deliberate effort. williams-sonoma is accusing amazon of a deliberate effort to pretty much copper -- copy an entire furniture line. emily: we will continue to follow this story. amazon private label brands obviously an important part of the company's future strategy. the next move and i high-profile case involving sexual harassment and a giant severance package to les moonves. a statement says moon best flouted company policy and failed to comply with an internal investigation. my best -- moonves' lawyer called the suit without merit. coming up, after an erratic year, could elon musk begetting the last laugh? and can a home-cooked meal kit recover? this is bloomberg. ♪ emily: the tesla headlines in 2018 have kept coming, so fast it's been hard to keep up, from the fallout from's ceo elon musk's funding secured tweet to shortstop. circlingrt-sellers around the stock. we are joined by the bloom

i have dopamine bag in my pocket called apple. i'm addicted to it. that's okay, i'm at least the way of it but i think i can modulated. they fear is around the addictive nature of these companies that actively foment and put their service called our functions towards that type to promote the type of addiction. they key is, is a bad for younger people who may not be able to modulate? in the last ten years the number of teenagers who see the french everyday has been cut in half. there are some good things. there's less drunk driving, less teen death but i'll become less teen pregnancy with a reason why they are not having sex is because they're in their rooms on the instagram fee. we we're seeing a large spike in teen depression and teen suicide left of an open conversation around whether or not social media really on the whole is good for people under the age of 18. it's an opportunity for them to see what they are not included in. it's an opportunity for them to be uncivil, despite the campaign of connecting the world and this kind of blather, this v

and speaking of austin and apple we now take a longer look at apple stock with danielle shay of simpler trading which is based ironically in austin although today she joins us from seattle that's ok we'll talk amazon stuck in a moment there of course there in seattle danielle welcome back. thank you so much good to see you again so what do you make of all of this down in austin you and your colleagues there it's simpler trading it's a good thing it's an addition so it's not like it's a big new move but it's a lot of people. absolutely it is a lot of new people and first of all i would have to say that i think that the selection of austin by apple was perfect i mean austin is a great tech hub there's a lot of potential for growth there's a really low cost of living i personally love living in texas in the cultures amazing so i think it's a good selection on apple's part but when you look at it from those folks who are living there it really depends who you are so first of all if you're in the tech industry. it'll be great for you because you're going to have right things salaries and you

apple doesn't play the same game -- david: tim cook from apple wint after his buddies in silicon valley. many people thought it was a low blow on privacy issues over in europe, suggesting in fact that we should import the same rules, regs which are much tougher than we have here. >> why do you that? you have apple as i do, and i'm sure you do, it's a different system, a closed system. do they sell data third party? based on my knowledge, not to the extent. they do track a lot of customer data. so they're kind of being brought into this as well. so, again, we have calls out. i put calls into everyone ever those tech companies. they have not gotten back to us. if they do i will update it in the 3:00 hour with liz claman. we put calls into sissel lien's office and doyle and ranking dems on judiciary and commerce but have not heard back. this is story to watch. particularly an investor, at least bad publicity is coming down the pike for these companies. david: very quickly, charlie, what does your gut tell you? are we going to end up with the same kind of laws they have over there concernin

let's check on apple shares. their valuation below the historical average talking about 12 times forward earnings is apple just too cheap to pass up or is sentiment on the street still bearish. >>> stocks giving up a 368-point gain this morning. we'll look at what is taking us lower and why. there's the dow right now trying to make a comeback it might go back into the green before the end of the hour "power lunch" is back in two >>> and now the latest from tradingnation.cnbc.com, and a word from our sponsor. >> daily price fluctuations of individual stocks can offer trading opportunities. however, if you're unhappy with your returns while trading actively, consider taking smaller positions over a greater investment time frame. evaluating trends over multiple weeks rather than hours can help a trad lerocate more consistently tradeable trends while possibly trading less frequently >>> welcome back to "power lunch," everyone i'm sue herera here's your cnbc news update at this hour. first lady melania trump participa

president donald trump has been very vocal about apple creating jobs in the u.s. any chance that this is played a role in their decision. well i mean apple employs about ninety thousand people in the united states but most of the manufacturing is done overseas and that got criticized heavily in the past couple of months again and again by u.s. president donald trump you already mentioned what kind of jobs to get created in the austin area so those are not to necessarily the blue collar jobs that donald trump might be dreaming about and then also especially when we comes to manufacturing for effortful you need seasonal workers who have the right skills for the precision work and those workers actually might be hard found was in the united states so it's unlikely that those jobs will get moved from asia to the u.s. overall but i'm quite certain next time. runs into donald trump you might mention joel's new jobs but i do not believe that donald trump was the main influence for this decision. amazon of course had a similar search for a second headquarters and was crit

do we want to do business with apple? absolutely. iny are a significant player the mobile communications market and if we were to get there through settlement or because one of these mini milestones of these many-- milestones have occurred and that brings parties together, so be it. emily: there seems to be confusion on the pathway to resolution. are the companies in talks? we are not talking about whether we are in talks. the companies having gauged in the past and continue to on some level. there is apparent to everyone they can watch this that the companies are involved in extremely difficult litigation processes and were bound by certain confidentiality requirements, were bound by the things going on in court. the process of negotiation is something we are open to the. emily: the sec has brought an antitrust case against qualcomm. qualcomm has said you are in settlement talks with the ftc. what are the chances these cases go to trial? don: there is a pretty good chance they go to trial. we are anxious to go to trial in san diego

problem that could face apple. liz: well, let's talk about meng wanzhou. she's right now, this huawei executive who was arrested on the ground in china -- in canada, at the u.s. officials' request, she is a star in china and the chinese are furious. they really don't like this. they are furious at the canadians, probably not really happy with the u.s. on this. they are accusing her, the united states officials, of trying to do an end run around u.s. sanctions against iran. they don't want her leaving the country. she's a flight risk. so everybody's wondering, was this court situation giving qualcomm a nice nod or at least winning this round, something having to do with china sending a message, we have got our own weapons in court, too, not just you guys? >> it could be. it also could be getting back good with qualcomm. remember, china actually blocked a qualcomm acquisition of nxp and even after the truce was put forth by u.s. and china, they said okay, now we'll look at nxp acquisition again which qualcomm had alr