This could be the biggest ever take over of a chipmaker. Walkon shares are spiking, up a 9 , and we are talking combined company that would have a market cap of around 200 billion and around 35 billion in annual sales. Broadcoms shares, which have been rising on a halo effect from apple, sort of volatile now. They are still gaining by about 1. 6 . If you recall yesterday, broadcom has it was changing its domicile from singapore to the United States. It made that announcement with President Trump as part of the gop tax proposal. Brooke sutherland, on bloomberg gadfly, had a piece out on why she believes broadcom would be moving to the United States in any case and reasons why, and now potentially taking over a chipmaker. There are other implications as part of this as well. Qualcomm is trying to close an acquisition of 47 billion to acquire nxp semiconductors, but that deal has been facing a regulatory examination in europe. Those shares and Elliott Management fell as these headlines cannot. Lets take a look at what is going on with the major averages today. We have the jobs report this morning as well. Stocks initially did not do much in reaction to that. Now we are seeing them climb to the highest in the session. The nasdaq is the outperform are here and the nasdaq 100 doing even better. If you look at some of the best performers on an index point basis in the nasdaq 100, you have apple in the top spot following a strong earnings report. We will be digging more into that in a moment. Those apple shares at a record, and a 900 billion valuation, and amazon shares reminding rising as well. Starbucks is also making a turn around after its earnings to shares fell as comparable sales missed estimates, but they are still having optimism over the growth outlook, the shares and bouncing. Julia thank you, julie. Lets dig deeper into apple as stores around the world were inundated today with customers trying to get their hands on the new iphone x. Apple ceo tim cook personally helped open the doors and greet customers to wait in line for hours at the apple store in palo alto. Joining us now is mark gurman. Great have you with us. 1000 plus price tags are not turning deterring apple enthusiasts. Mark im sure you are surprised that i am not in line, giving our usual apple conversation here. Julia what are you doing, mark . Mark i preordered. It is not surprising that the lines are long. People have been anticipating and expecting this phone for many years. It is finally here for a lot of people. The results are showing the interest. Scarlet the results are showing the interest, but what were surprising was that there is more demand for iphone eight and a plus than people realize. What did we get wrong here, because all the buzz was that the phone was not up to . Snuff . Mark i think it comes down to the different price offerings. The iphone 7 and seven plus pricing started around 650, 800, that is a sweet spot for pricing of the premium smartphones, and that is what people continue to buy. That 1000 threshold is a psychological barrier we have talked a lot about on this program and on the terminal, and that is a line that a lot of people do not want to cross, given the demand and line here we see, there are a lot of people who still do want to cross that threshold. There are price points for different groups of people, and i think apple is appealing to everyone. I do not make we got anything wrong here. They are good phones, just different prices. Julia so all of those excited people getting the phones, how much are going to get hold of a phone here . Because that was kind of a worry here. Mark i have been talking to a lot of people, and the supply has been surprisingly strong, actually. Someone to some people, 250ths 200, 200 50th in line in london, and nobody has been complaining on twitter. I think they loaded up on a lot of supply in their retail stores. There was actually a report last night that someone actually stole 300 phones out of the ups truck shipping iphone xs to the local Flagship Store in San Francisco, so that might have affected apply in the San Francisco score store. But other places in the world seem to be ok. Scarlet i was going to ask what do we know about inventory in asia or europe . A long time ago, it used to be that apple would unveil its new phone at home in the u. S. , and then a week or month later they would debut in other markets . Mark we are seeing a lot theirntries getting phones and markets simultaneously. It is just a lot, and it shows that apple has been tweaking it supply chain and way to do this. Remember the days where they would launch phones in the u. S. First or would do seven or eight Country First countrys first countries first, but now we are seeing one big wave. I think they have pulled off that hat trick so far and it has been successful. If you look at the online channel, 34 weeks is a significant waiting time online. But the people who ordered today would still get the phone before hanukkah and christmas. Scarlet when do you get your phone, mark . Mark mark sometime today, hopefully in a few hours when ups shows up. Scarlet mark gurman, thank you so much. He is leaving to go home to pick up his phone. We will stick with apple, because analyst walterhas had a hi six ter they normally get 50 plus opened at 8 00 a. M. Walter joins us now on his search for the iphone x. He has a buy rating on apple with a price rating of 198 a share. It is a just telling us surprisingly strong inventory in apple stores. That does not sound like the case for verizon or at t . Thatr they took all of inventory that they normally sent to the wireless operators and set them to the apple stores. But the variety of apple phones are sold through these operators. Apple phones represent a small percentage of sales here. Fewou are providing very phones to these operators stores where stores are opening up with no inventory at all tmobile has zero iphones area they still opened at 8 00, but there were no iphones for sale. Verizon had three, less than 18 at at t stores, so the apple stores are getting a lot of inventory but not the operator stores. Do they have them on display where people can play with it or order it and get them within eight weeks . Walter there was not a lot of traffic there, and i think that is part of the story we have been hearing for the past several years. You preorder it and get it shipped. If you have a trade in, you will get that shipped. There was a little activity, but not the type of activity we have seen in years past, at least at the operator stores. From the forecast we got apple, we do not have a real concrete sense of iphone x demand, nor do we have a sense of when supply will catch up to that implied demand. What is your sense of this, and are you concerned or not . Theer i would go back to iphone eight. I am not sure we have a good sense of that demand. I know mark was saying that the quarter showed some indication of growth, but if you look at the asp apple reported last night, it demonstrated a very high mix of the Broad Product line that apple now sells, not just here but theyre are making it more affordable. When a phone launches, the price drops for every other model. So they are making a broad portfolio available on legacy products to a number of people who deliver the numbers. As far as the 10, it is way too to determine based on initial lines or preorders about what that interest is going to be . You worried about cannibalization . When we were talking about this, the since we were getting was that this is a serious issue, do not worry about it. Walter i think what people are worried about is that in order to deliver on the consensus has to gomber, that up. There might be 1000 sticker shock, but lets keep in mind that 85 in the United States of postpaid phones sales are on payment plans. Are not spending 1000 or 1000 or 1100, you are spending 30 a month. That can still build up on a customers bill, but it is another proposition to think about when you are considering the sticker shock concern. Scarlet what is the significance of apple having a 1 trillion market cap . Does it mean anything to tim cook and management . Is this a stated goal of theirs in any way . Walter i am not sure. If you take your company to 1 trillion, that is an achievement executive of the management team, but it has a lot become a distraction of whether it is going to be 1 trillion or not, and is there a jinx related to these large round numbers that sometimes get hit with companies . We prefer not to focus on it. The reality is my price target now is a market cap of over 1 trillion. So we are getting very close to where that might be a reality. Julia and you have 40 billion worth of buybacks in 2018 and that price as well. If you look at the buybacks we have seen in recent orders, they have been faster. Walter they have been. The Company Generates 50 Million Dollars or 60 billion of Free Cash Flow on top of the hundred 50 billion of cash they are sitting on. So if they are spending on dividends, that gives them a lot of money for shared purchase. We would like to be seeing them by 10 or more back in using that capital. Julia is this what you would think or what you would like . Walter that is what we would like. We forecast 10 million for this quarter, they brought back 7. 5 billion dollars, 8 billion this quarter. So the net cash will continue to go up, and people continue to talk about making acquisitions for growth, but they have spent less than 1 billion on acquisition. Im not sure that is a realistic alternative use of cash. What are they going to buy that can use of that amount of cash in the cash flow they are generating . Julia qualcomm. [laughter] scarlet under the new tax bill, they could be taxed up 12 . Is this something to be considered in a big acquisition to use with that cash . Walter if there was a tax abatement for them, what the investors would like to see is that money used for additional share return. If there is an acquisition out there that would help the growth of the company or get them in a new product segment, by all means, all investors want to see them do Something Like that at the right price. But it is not in the pattern of the company. So when investors look at any change in tax law, it is really to the extent of bringing that cash home and returning it to the shareholders in the form of shared repurchase or hiring dividends. Julia walter, great to check to do check with you. Lets get a check on the first word news with mark crumpton. President trump says he is disappointed the Justice Department is not doing enough to investigate Hillary Clinton and the Democratic National committee. The president is in route to asia for a 12 day trip, upon boarding air force one, he denied once again any connection between his campaign and russia. Pres. Trump there was no collusion. There was no nothing. Frankly, that they continue. You want to look at Hillary Clinton and the new book that was just put out by donna brazile. She basically torched the dnc and she stole the election from bernie. That is what you want to take a look at. Mark that new book by the former interim Democratic NationalCommittee Chair donna brazil alleged the clintons control the dnc strategy and finances to secure the president ial nomination. According to a court filing released today, special counsel estimates his prosecutors will need three weeks at trial to present their case against Paul Manafort and rick gates. The two men have pleaded not , includingharges federal money laundering, banking, and foreign lobbying laws. Arrestre placed on house and released on multimillion dollar bonds. Angela merkel said today she remains optimistic about the chances of forming a Coalition Government after an initial round of talks with little bit role visible progress. She is hoping to ally her conservative union block with andbusiness free democrats the traditionally leftleaning greens, but negotiators have struggled to find common ground. Espn is reporting that several nfl owners and officials will give depositions and be asked to turn over cell phone records an emails relating to Colin Kaepernicks collusion case against. Kaepernick filed a grievance alleging collusion against signing him to a contract based on his sideline protest during the national and the last season. Cowboys owner jerry jones and patriot owner robert kraft reportedly are among those to be deposed. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im mark crumpton, this is bloomberg. Scarlet . Scarlet coming up, a super supersize chipmaker deal. More on the news that broadcom is looking to buy all,. From new york qualcomm. From new york, this is bloomberg. This is bloomberg markets. Im julia chatterley. Scarlet im scarlet fu. Julia lets get to a bloomberg scoop. Broadcom is looking to acquire qualcomm. Our reporter who covers the Semiconductor Sector joins us in San Francisco. A huge scoop. Ther exciting, and announcement of the potential deal we are looking at here is just 24 hours after donald trump wasunced that broadcom going to be bringing their headquarters back to the United States. Talk to us about what you think is going to happen here, and too is this in order facilitate a deal for qualcomm, do you think . This repatriation of their business . A lot of the analysts yesterday in the aftermath of the appearance in the Oval Office Said well, this is making maneuvers, making nice with the administration so that the existing deal to buy brocade will get an easier pass through so farcess, which has been holding it up. Lets put the cards on the table here. They have been behind a lot of the consolidation of the chip industry in the past three years, and has made absolutely no bones about the fact that he was looking for more and pursuing that policy. It would be logical to put the two together, yes. Julia so what is going on with qualcomm. They are trying to agree that there purchase of energy is 47ductors, which billion. If you look at the valuation of these two companies, if qualcomm acquiring anl in xp, what would that do to raise the price . To raise the price obviously, that creates a lot of feelhetical situations we are befuddled as this is made, and obviously with how it is received. Is, at leasttant from the point of view of the market, qualcomm is that a relatively weak position, compared to where it has been in the past. It has always been a bigger. Ompany than Broadcom Broadcom has always been the wouldbe competitor to qualcomm because of the issues with apple, the issues with regulators around the world and because of concern that this and xp deal has been held up. Has been price relatively weak, and broadcom has been able to pass it in terms of Market Sentiment or capital, and Something Like this has become potentially feasible. Qualcomm desperately trying to get that deal. En, with your decades of experience covering the chip and a street, technology, and markets overall, talk about the distinctions between broadcom and qualcomm. They are both chipmakers, but what kind of chips do they make . What strategic sense what a deal make . Ian the strategic sense would be in a couple of ways. The industry has been consolidating. There are fewer and fewer customers. That has been a reaction to that shrink its dealing with apple, samsung, so it would make sure why would make sense why you would try to offer them more positions of the technology. Qualcomm is the largest maker of modems. These are the key chips that innect phones to networks the market, and the internet beyond that. Radcom is the largest maker of wife broadcom is the largest maker of wifi chips, which connect phones to the internet. Aboutbroadcom is serious expanding and gaining more scale, the closest to what it does would be qualcomm. Julia so we are showing the qualcomm share price, up 12 prop 12. 5 on the potential announcement. What do you think will come shareholders will be saying to the board if they do receive this big offer in light of the tensions that are going on between apple and the risk that if they lose that dispute with apple, it is their Business Model . Ian exactly. That is a very good question and also a complicated question. Qualcomm has positioned because that is what they have already put out in public, that look, these legal things will take some time. Are looking at potentially years before all of these things unravel and we know and are able to assert that our licensing business is back to where it should be. That is clearly going to be hanging over them for a while and be a hard position for them to maintain in the face of an aggressive bid. Scarlet ian king, great job and congratulations on this scoop. Broadcom reportedly interested in buying qualcomm. Joining us from San Francisco. Julia what an exciting story. Scarlet qualcomm shares continuing powering up, over 13 . From new york, this is bloomberg. Scarlet we have more on the breaking news reporting earlier. Broadcom said you plan an offer of about 70 per share for qualcomm. This offer would be planned to be released or made in coming days. Valueroadcom offer would qualcomm at 103 billion when it comes to market capitalization. Broadcom is bigger than qualcomm, but not by much. Julia this is the share price now. When we were talking to ian king, the share price was up some 12. 5 , now up 15. 5 . 4 , anm there is also up immediate spike and pushing further towards that 17 brought dollar 17 price tag. This did price for qualcomm here, obviously an interesting story. Donald trump announcing yesterday they will be repatching it and make their new home base the United States. That raises questions on whether or not this is in order to facilitate getting a deal for qualcomm done. The relative valuations of these two are very similar. Scarlet only because qualcomm shares have tumbled so much because of the tensions with apple and the dispute over these payments. Julia they are trying t