It will cost a consumer about five dollars a month. How the price and content stacks up against other streaming content companies. And the hits keep coming. Mutual fund giant fidelity reduced its wework valuation by 34 in march, adding to the Office Rental companys preipo woes. But first to our top story, it was a big day for apple as the tech giant launched its newest hardware at its annual Product Launch in cupertino, california. 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. But 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, the iphone 11 pro, and the iphone 11 promax. The iphone 11 is about 50 cheaper than the iphone xr, coming in at around 700. The iphone 11 pro will still hit the same 1100 mark. To discuss, in boston, i joined am by ryan reith and mark gurman. Mark, let me start with you. You have been covering these for years. How did today feel relative to years past . Mark this was, you know another , apple event, but nothing earth shattering. It has been a while since apple came out with an entirely new hardware product that changed the game. The most surprising thing was around pricing, tv plus, apple arcade, the price reduction on the iphone 11 as you mentioned. But in terms of hardware functionality, nothing to write home about. Ryan, let me bring you in here. 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 think i agree with mark. Not to beat this drum, but i think the story line today is all about pricing. On the hardware side, as mark mentioned, you mentioned the 50 price cut from where we were with the xr. Apple, be honest in my opinion, them leading with services, partnerships that came out with arcade, and then getting to lowercost iphone and even watch pricing shows that they see we have pushed the threshold of the average consumer pretty high on price point, 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 at that. Taylor are they maxed out at a 1000 iphone . I dont think we would ever max things out because starting points are never what the highest point actually gets to. We are probably talking upwards of 1500, 1600 for the highest configuration. I think there are going to continue to push things, but they are realizing the audience who will actually pay that price to use those features is smaller than you know it was when their highest iphone price was 800. It is sort of a changing of the times. It is not apple only being affected by that. Their main competitors, samsung and huawei, are affected the same way. It is sort of a just a changing times. I think we will continue to see price points that will sit over 1000 with iphones. Taylor mark, i want to come into my terminal, gtv. What we are taking a look at in white is the average sales price, starting to rise a little bit. But along with that 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 . Mark it tells us that there really has been a combination of rising prices and a decrease in it is ironic given the thing today innovation. , the changes here are all about the camera. If you go to apples website about the iphone 11 pro, 75 is about the new camera functionality. That is what the past few years have been about. The last time we saw a real breakthrough change was the iphone x two years ago. We are expecting bigger changes again next year as prices are coming down, so i think things will start to rebound in about 12 months. Taylor ryan, what do you make of this device no longer being an iphone but really a camera that has some audio capabilities . Ryan it has probably been more than a phone for quite some time. Right . It is a good question. I think the features they have introduced, some of which have met some people say, things like night mode have met up with what google has done and others, and thats great. I think whats important to recognize is what the average consumer actually does with their camera. And i think to be honest, not just for apple but for some of these others, some of the features they are integrating, a lot of that is done through software and not just modules and number of megapixels. I dont think personally everyone is actually utilizing that to the full benefit. Having said that, everybody wants the latest and greatest, so it is important they continue to innovate. Clearly they have been a Market Leader in photography and they continue to be so. Ryan 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 no, 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. There is products we dont know about, continuing the product lines we have. I think the main thing for them though 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 are frustrated with the price points of smartphones in general, how high they have gone 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 that is not going to be priced at the 1000 price point or above and is actually going to be less than the same product line last year with the xr. 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. But if you look at the last five years, the average phone prices have grown so much compared to the 10 years leading up to that, it is a night and day comparison. It has to stop at some point. 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. Not a big deal. The real impact is going to be in china. Taylor wonderful. Idcs 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. That is next. And if you like bloomberg news, check us out on the radio on the bloomberg app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Taylor apple has debuted an always on retina display that never sleeps 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. Us, alllf, it gives 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 to discuss let me bring , in and go over to apples headquarters in cupertino, california where carolina milanesi is standing by. Talk to me how much of a , surprise was the watch five today . Carolina i think from a watch perspective, what was interesting is i think nobody has really thought about the always on screen. A lot of people had complained from the get go that that was a feature that consumers wanted, especially consumers that were trying to switch from a traditional watch to a smartwatch. But 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, they want to stay for the long run, and creating a Health Research app speaks to that. Taylor is pricing it 399 competitive or expensive . Carolina 399 is competitive and even more competitive is the 199 price point of the thirdgeneration apple watch. We always get carried away and excited about the latest models, but when you look at the lineup, i think thats where it is becoming more and more obvious that apple wants to get consumers that are part of their instore base to venture into new devices. You might be an iphone user and have yet to find out what the value add of an apple watch might be. 199 price point is maybe an easier 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. We had a bit of an impasse on the android side as far as android wear and new devices coming to the android 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 fitness bands, but not so many watches. Taylor right. 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 199 price point is super competitive with a device that doesnt feel like you are really 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. And 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. It is not about having a gadget, but it is really having a device that can make a difference in your life. They played a video during the keynote that spoke to that, having 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, very powerful. Taylor that was Creative Strategies principal analyst carolina milanesi. Thank you for joining me. And from a hotly anticipated ipo to will that even happen, that is the concern around weworks public debut. The Office Rental companys biggest backer softbank is pushing the company to postpone its offering amid concern about a drop in valuation. Earlier this year, Goldman Sachs pitched wework as a 65 billion business. Now there is word that mutual Fund Fidelity cut its stake in wework in march. To discuss i want to bring in bloomberg techs ellen huet. The ipo is in flux. Is this because of wework or softbank . Ellen i think it is a log of a lot of different factors. We are seeing confusion at reporting suggesting some divisiveness within the wework and softbank relationship about how to proceed in the highly anticipated ipo. So like you mentioned, this is something wework was planning since they first filed confidential documents to go public late last year, but as things have progressed, it sounds like the evaluation has started to drop below what the company had expected and what its most recent valuation was at 70 million. Taylor how much of it is concerns about wework versus the market volatility and the tough ipo market frankly that it has been this year . Ellen it is probably both. There were timing issues. Earlier in the summer when we were reporting on timing the wework ipo, there was discussion around wanting to get the ipo done while the market was still in a good place. At the same time, some of the 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 their ceo adam , newman. This is a company that had very complicated Corporate Structure as well as a lot more related 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 now for the first time dipping below par, the first time as you mentioned really going back a few months. We are now under par, . 98 on the dollar. Without analyzing bond fundamentals, what does this tell you about the level of nervousness in the market . Ellen i think it indicates bondholders are having concerns about what the future of the bond can look like. This is a bond that wework first started selling early last year. And as you mentioned, it has been above par since about august. That is when the f1 went public. There was optimism an ipo could come and the cash infusion could then help support the bond. And now 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 valuation 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 around some of their holdings they dont , usually make it clear why. I think we can have some guesses as to maybe they were anticipating an ipo and trying to react to the news knowing that the equity could soon be public. It is hard to understand. Has just been a company that 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. I think we are going to have to wait and see. Taylor dont even get me started on how to discount the cash flows of future lease payments. Thank you. That was bloombergs ellen hewitt. Coming up, five dollars. Thats how much customers will pay monthly to stream apple tv, that is compared to 13 for netflix and 15 for cbs all access. We break down the competition in the streaming space, next. And Bloomberg Technology is livestreaming on twitter. And bes out technology sure to follow our global breaking news network tictoc on twitter. This is bloomberg. Tter. This is bloomberg. Taylor as we continue to report, 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 these incredible shows 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. And so starting today when you buy an iphone, ipad, mac, or apple tv, you will get one year of apple tv plus included for free. [applause] taylor so does this new incentive show that apple is really pushing into services or still relying on hardware . To discuss i am joined by Forrester Research analyst julie ask. So julie, Services Company or Hardware Company . Julie it is ever increasingly becoming a Services Company. I think the announcement around apple tv plus is significant for several reasons. I think it is the first time we have seen apple create content. Together apple tv plus arcade fills two gaps in the Subscription Services. You know, it already has news. It has 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 fundamentally changes their Business Model in how they sell. They go from a Device Company that is trying to keep customers excited and get a purchase every 2, 4 years, to a company that is collecting revenue on a monthly basis. The Services Revenue is already 15 to 20 of their revenue and you imagine that these Additional Services make that even stickier. This is a different game apple has been playing and it makes it different for how you think about the company. Taylor how competitive is 4. 99 a month . Julie i think when you look at the 4. 99 a month, 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 its consumers a chance to try it and experience it before they make an even bigger play. Taylor julie, i want to come into my terminal at gtv. Basically all you need to know is we are looking at a massive debt pile of apple. Cash, i 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. But i think absolutely, what today indicates, they will spend more money 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 now get one year free. The shares of their competitors like disney, roku, all started to fall. Does that show apple is still reliant so much on that hardware . Just, ifthink if you you look at their financials, yes, they are reliant on the hardware. It is 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 growing, it is already 50 , the more they can get consumers into subscriptions, the stickier those services can be and the faster the revenue will grow. And the turnover the switching , costs on that and devices will be higher. The other thing you have to keep in mind is the more services, the more consumers they get committed to subscriptions, the more valuable the devices become. And then those two things play off one another. It also shows the strength they are building with a vertical integration of hardware, software, the Services Including content. Each purchase makes Everything Else more valuable for the consumer. Taylor julie, what type of content would you like to see from apple so they are distinguishing themselves from their competitors . Julie you know 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, hey, 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 some of the things Quarterly Business they might do that are more horizontal. Will we see apple go into Subscription Services for things that are nondigital . But not what they do today, not be their core business, but it would be interesting to watch. Taylor wonderful. Julie ask of Forrester Research, thank you for joining me. And coming up, we hear from microsoft president brad smith and his thoughts on the current trade tensions between the u. S. And china. That is next. This is bloomberg. Taylor this is Bloomberg Technology. Im taylor riggs in san francisco. Were getting some headlines now on peloton. It is 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, a lowcost ipad and of course 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. Now remember products like apple watch, air pods, and Imac Computers have already been hit by this months 15 tariffs. So is now the right time to be putting a spotlight on the new products and will they be impacted by the ongoing u. S. China trade war . To discuss i bring in the managing director dan ives, who currently has an outperform rating on the company. And also with me, jun zhang, of rosenblatt securities. Does have a sell on the company. Dan, let me start with you. Can you quantify for me to date the impact of china tariffs on apples bottom line . Dan yeah we view it in terms of , the stock, about 20, 25 overhang. In terms of on the stock. In terms of eps, and turning into fundamentals, those have been tepid. It comes down to that december 15 tariff. Once that kicks in, which we believe absorbs that piece, 4 hit to eps if that goes through. And ultimately, if that continues, they will pass that to the u. S. Consumer. We think at that point, you could lose about six to eight million iphone units in the u. S. , given higher price points. Taylor jun, let me come to you. What is your take on the impact so far on china tariffs . Jun i think the tariff on the air pods, tablets and iwatch has been affected in september 1. So we do see in the supply chain perspective, apple sped up the shipments of those products in august, which we believe after the holiday season, the apple shipments for those products will slow down in q4. And also for the iphone, we think this time apple launched three model at the same time in september compared to last year. They launched iphone xr in october. So we believe that is also a change. Some q3 a little above normal. Q4 will be below seasonal. That is why we have concern, that even before the terrorist tariff happen in december, apple shipment will slow down in november and december. Taylor dan, you said eventually apple could pass these costs at too the consumer the consumer. At 1000 per phone, how much more can they pass on to the consumer . Dan that is the question. We believe it is about 100, 110 the average iphone will go up if the tariffs come in. They continue to be the poster child for the u. S. China trade battle, which is why today was so important in terms of putting growth in terms of iphone 11. Looking at the services piece. As this continues to be a black cloud in terms of the tariffs over cupertino. Taylor jun, were you surprised today that there was no mention of the china tariffs . I thought maybe tim cook would touch on it a little bit or try to brush it off. Any surprise it was a nonevent . Jun i think looking at iphone 11, the price is 50 lower than iphone xr. I think that probably gave room for the tariff happening in december. And also, i think right now, i think they are trying to speed up the shipment to the u. S. Market. So probably before the tariffs happen in december, they can have enough inventory and look for a little bit of for the q1 sales. Taylor when you talk about that price and about seven dollars versus 750, is that getting ahead of tariffs or is that maintaining or defending market share . Jun i think if you look at iphone xr last year, the retail price was about 750. But quickly, in the first half this year, apple dropped the price i think 30 , 35 lower. So actually the iphone xr price is more attractive compared to iphone 11. And i think even you put a 15 tariff in december, i think people would still go for iphone xr instead of iphone 11. But i think yes . Taylor no, thank you. Dan, let me come to you quickly. What do you take of iphone market share, and are we seeing more huawei purchases in china as they start to get defensive and become perhaps a little more nationalistic as well . Dan i think the bark is worse than the bite there. No doubt you look at the price cut, this is focused on china. 60 million, 70 million iphones in china are coming up for an upgrade. Given what you are seeing in china, that is the price cut that apple is doubling down. Going after china, you get xr, fundamentally that was a swing and miss. That is what ultimately china is key to apple moving higher. Not just from a supply perspective, demand will be key. That is why today was a step in the right direction. I think investors, the glass is halfempty. They are going to continue to prove the doubters wrong. Cook in cupertino came out swinging today. Taylor even though they dont have 5g and huawei and samsung do . Dan 5g is 2020. I think it comes down to the install base. You have 1. 4 billion ios devices. This is an install base story. That is why many who have missed the story over the last six to nine months, you go back six, seven months ago, the new york city cabdriver was negative on apple, yet the stock continued to move up. It is an install theme story. That is the golden story. That is the thesis. Taylor wonderful roundtable. Thank you both. That was wedbush security analyst dan ives and the jun zhang. Thank you for joining me. Microsoft president brad smith says the way the u. S. Government is treating huawei is unamerican. As far as he knows, chinas leading maker of networking equipment and mobile phones should be allowed to buy u. S. Technology, including software from his company. Smith sat down with bloombergs interview about china and his tom giles for an exclusive tv interview about china and his new book, tools and weapons the promise and perils of a digital age. Brad the u. S. Is the Digital Technology leader in the world today, but i think one of the important things for all of us to remember is that we dont actually invent or create technology by ourselves. If you buy an American Technology product, a product that is made by an american company, in all probability, it consists of inventions that came from Silicon Valley as well as bangalore, and beijing, and dublin and london, toronto and melbourne and the like. We need to continue that. If we were to try to construct a new digital iron curtain down the middle of the pacific, in all probability, we would hold ourselves back rather than hold someone else back. We need to keep that in mind. Tom but there are some concerns that are probably valid concerns about the transfer of intellectual property across borders. Concerns that the u. S. Has raised about National Security. What happens when theres theft of intellectual property on the other on the part of the other party . Your book is not just about outlining the problems, but youve suggested some solutions. One in particular has to do with allowing for the transfer of goods and i. P. But with limits. Can you talk a little bit about what that might look like, and how in practice we can ensure, we can ensure safety, National Security, but at the same time, allow for this kind of much freer trade . Brad i think that phenomenon is in part of what makes us so complex. Of course there are Important National security and intellectual property implications that need to be thought through, that need to be addressed. We will in all probability have a new generation of Technology Export control rules in the United States. Thats sensible. But they are going to need to work differently from the way they have worked in the past. In sensitive areas, technology that could have more important military uses, for example. Youre still dealing with technology that may have important civilian uses as well. Socalled dual uses. We will need a Regulatory Regime that focuses on how the technology is being used. Who the users are. Only by doing that can we protect National Security while promoting economic competitiveness. And similarly with intellectual property, we need controls to protect i. P. , but we have to strike the right balance. In short the nuances really , matter. Tom do we have the Global Infrastructure in place a lot of people are talking about how the trade system internationally is broken. Do we have the institutions like the wto that could implement these kinds of changes and reforms that you are referring to . Brad i think one of the things we talk about in our book is the need for a new generation of multilateral and really multistakeholder initiatives. We need to learn from the past. Thats one of the points that we made. That is one of the reasons that why we draw on historical stories. The 20th century moved forward because of institutions in part like the wto. Clearly, there are new strains, there are new pressures, there is much more dissatisfaction with the Global Trading system today. But even as we do recognize the shortcomings, we need to build and build by bringing governments and companies together. We probably will need some new institutions to help us through this. But were going to serve ourselves best by focusing on whats broken and not breaking whats fixed. Thats part of the balance we think the world needs to strike. Tom part of your discussion focuses on the different ways u. S. Consumers and chinese consumers use technology. You have some interesting and colorful examples. Can you talk a little bit more about how technology is used differently in the two countries and why that matters to our relationship with china . Brad it really does matter, and i think you make an excellent point. It goes to the multifaceted nature of the u. S. Chinese technology relationship. On the one hand, there are frustrations that American Companies have about a lack of market access. I think those are legitimate frustrations as we describe. But at the same time, we should not overlook the fact there are times when chinese consumers simply have different preferences. This is true of many populations around the world. A market tends to Favor Companies that address the different interests that consumers have. Weve seen this at microsoft, as we share in the book. There is a wonderful innovation that we created in china its a chat bot that is widely used by hundreds of millions of people in china. Bringing it to the United States led to some surprising challenges. And the same is true vice versa. I think you can look at the challenges that a company like amazon or a company like google has had in china. And it, part of it, at least, relates to formidable local competitors that moved in some ways in a different direction to meet the taste of chinese users. Taylor that was microsoft president brad smith. Coming up, here to serve you for just under five dollars. That is what apple is hoping people will pay for its tv and arcade offerings. We discuss whether customers will be signing up, next. This is bloomberg. Taylor one thing is more evident than ever apple wants you to spend your dollars on its services. And whether it is 4. 99 for the ability to play more than 100 exclusive games on iphone, ipod ipad or apple tv, or the same price to watch new apple originals like the morning show, it is clear the future for apple leans heavily on its bevy of new services. To get the lowdown on what this means for the iphone maker, i am going to go back to apples headquarters where founder horace dediu is standing by. Talk to me. What about services and apple excites you the most . Horace what we saw today was finally the pricing on these new services that are apples own creations. We have exclusive games and exclusive video, or film content. What we didnt know was the price. We also didnt know how they would distribute or promote this. We just heard about the idea of having it be at least for movies and film, for having it free for one year for anyone buying an apple device. That number of buyers today would be in the hundreds of millions. The install base of apples customers are about a billion. So we are going to see a really quick trial going on and how quickly people will take up these services, as opposed to waiting for them to discover them on their own as was the case for news and music for the last few years. Taylor i want to come into my terminal here at gtv and show our audience basically Revenue Services and Services Revenue growth, which is good, but it has been slowing slightly on a quarter over quarter, yearoveryear basis. Is Service Revenue growth growing enough . Horace well, there has been a slight slowdown. Some of that was due to china. And comps with china were difficult based on regulations that had been changing. I think we will see, and we have heard already that we are seeing a boost in the growth coming into the third quarter. I think overall though, these new services will provide a sort of quantum leap in the type of revenue that we are going to be seeing. A lot of the revenue to date has been in apps and subscriptions. But obviously now we have apples own content and it is going to be an interesting observation as far as many people will take this. It is again, were looking at a base of a billion users. Herselfjust oprah saying it, a billion pockets is what they are going after. Taylor you mentioned this before. The stock not moved on the 4. 99 pricing but the fact that it came in it is free if you buy a device. Doesnt that show that apple is still heavily a Hardware Company, not a software Services Company . Horace certainly, it is. I think it is a Hardware Company, but services attached more value to the hardware. Microsoft, i want to quickly reflect on microsoft, because it has a crisis of slowing pc sales for over nine years now. And yet, the company has happily converted users to a subscription model, and investors reacted very positively. I think that is what is likely to happen with apple, and we are going to be counting users going forward. Again, you cant do this without a strong hardware base. I think the hardware base benefits by having great content as well. Taylor wonderful. Awesome. Cofounder horace dediu, thank you for joining me. Still ahead, a final recap of todays apple Product Launch. All the hardware and services announcements you need to know about, next. This is bloomberg. Taylor as we have been talking about all hour, apple has launched its newest hardware and at its Product Launch in cupertino, california. A new apple watch, lowcost ipad, three new iphones and a bunch of announcements tied with new Services Apple tv plus and , apple arcade. Finally to bring it all together, im joined by ben wood of ccs insight. What is your big takeaway from today . Ben i think we have seen a new chapter in apples journey. The iphone was still a big part of the show, but we have seen them bring services to the business. Obviously the announcement around what theyre doing with their tv product at 4. 99 a month. And for me, a standout product was the apple watch dropping to 199. That is going to be a big product in the holiday season. Taylor the big thing you noted was the iphone. Huawei and samsung have 5g phones. Apple still does not. Why do i care about todays announcement . Ben i think its kind of interesting. Theres a huge amount of hype around 5g right now. I have traveled all over the world, but we are right at the beginning of the 5g journey. For apple i think they have recognized they dont need to jump on that technology right now. If you think about the profile of a customer who is going to be buying an iphone or this series of products, they have probably got a three or fouryearold iphone, a new camera and better battery life is good for them. One thing is for sure, next year is going to be a big year and delivering 5g on the next iphone is going to be absolutely essential for apples competitiveness. Taylor you are the second person in just the hour on the program to talk about the benefits and what a smart move it was for apple to move the watch price to 199. How nervous are competitors . Ben i should think they are pretty alarmed by that price move. I think having an apple watch starting with a one is a big deal. And i think moving into the holiday season, that is going to be huge news. I think certainly for example, will be looking at that given they were competing in that tier below the apple watch. It is a formidable competitive situation. Furthermore, this is an unbelievable Freight Train of a product for apple. A multibillion dollar category. Who would have thought that a few years ago . Taylor it was released with a lack of fanfare and finally it has taken off. Another thing that really took off today was the apple tv. What do you make of 4. 99 a month . Ben i was really surprised. I did a straw poll before the event started. For most people, they were thinking about 9. 99. Maybe a little bit more. It shows a real statement of intent from apple in terms of the fact they clearly want to get people hooked onto their content. They want to use that hook, that aggressive price point to establish their position there. Add into that with a new device, you get 12 months of apple tv plus, that is 60 in the box. You get the onemonth trial on other devices. I think it is going to be interesting to see whether apple can land it in such a competitive space. Taylor ben, i want to come into my terminal here gtv , for our viewers, and what we are looking at basically is the cash horde of apple which is now topping 200 billion. Where is the next acquisition . Ben you know what, i constantly think they are going to make a Strategic Acquisition here or there, but it doesnt happen. They seem to be more than content with reinvesting in the business making tactical , acquisitions of Small Companies people dont expect. So right now, i dont have an answer to that question. But the one thing is for sure, if they wanted to buy something, they can go get it. Taylor ben, what is the biggest concern when it comes to tariffs . Ben sorry, could you repeat the question . Taylor what is the biggest concern when it comes to tariffs and the fight between the u. S. And china as regards to trade . Ben oh, absolutely, sorry. On the tariff side, the geopolitical situation is a major factor for all Consumer Electronics manufacturers now. It cannot be ignored. And different people are taking Different Levels of pain. Know,k for apple, you they are doing everything they can to make sure it does not distract them from their core business. You can have no doubt theres a lot of lobbying going on to mitigate the risks that can come from that. But, quite frankly, your guess is as good as mine. There are negotiations going on. There are bigger, wider macro issues which apple needs to look out for. But they are in a lucky situation where they do have products that people love. Taylor we will stay tuned. That was ben wood of ccs insight. Thank you for joining me. That does it for this edition of Bloomberg Technology. And Bloomberg Technology is livestreaming on twitter. Check us out, technology. Be sure to follow our global breaking news network, tictoc, on twitter. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . 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