Sentiment. Weak pc demand sending revenue down 5 . But they buck the trend. The turn around strategy pays off as it defies a slow down in china by targeting the high end of the market. Welcome everyone to the show. Shares in apple fell in after hours trade after investors ignore the quarter. They focus on weaker than expected forecasts for revenue in the Fourth Quarter and there were some other reasons they turned sour on the stock. Iphone sales came in at 31 billion with shipments 3 billion below estimates. They also bundled other devices. The tech giant would only say june sales were higher than april or may but the lack of detail left some analysts speculating over the success of the newest gadget. The Earnings Report is also weighing on tech stocks here in europe. Investors are also shrugging off a 32 rise in Second Quarter profits from chip designer arm despite earnings being broadly in mind with expectations. Simon cigar spoke to cnbc earlier about a possible apple takeover. Theres rumors all the time but when you look at our Business Model were providing technology to the entire semiconductor industry. The range of customers is growing all the time. We have many oem customers now and for any one company its less expensive to license the technology than to buy the whole company. Our value really is in the fact that were an independent Company Supporting an entire industry and building an ecosystem that means that support becomes very Cost Effective for anyone that wants to use what we do. We believe that our Business Model is a great thing for the industry. It helps lower cost and independent company is the right thing. Microsoft had a loss and weaker demand for windows. Now the company also took a big hit from the stronger dollar. Window sales fell 22 . The company is launching the new windows 10 next week. A lot of focus on whether the enterprise audience will be buying the windows new platform. Yahoo s Second Quarter revenue rose 15 . Thats the highest increase in 9 years. However the cost to acquire web traffic jumped sharply as they started paying them more money. You can see the stock down about 2 . Lets talk a lot more about the tech earnings. Joining us now is the managing director at cm research. Great to have you on set once again. Lets kick things off with apple. It didnt do that much wrong except for the fact that its a victim of its own success and didnt deliver a blowout quarter. Whats your take on the numbers . The analysts are wrong on this one. Apple did broadly in line with what we expected and we see this as a buying opportunity. Its a buying opportunity but then some analysts say we didnt get the break down of the apple watch numbers and that adds uncertainty. Should tim cook have given us more detail . Communication this time was weak by apple. We should know what the apple watch sales are. We dont know whether theyre 2 million, 3 million, 4 million. Some analysts expected 30 million for the whole first 12 months but to me thats not important because we vnlthavent had a full quarter of apple watch sales and its just a breaker into the new market. The internet of things. I mean it wont account for a major part of the revenues the iphone is accounting for 2thirds of the groups revenue. Should we get too worried about what period am watch sales will do or wont do . Are we not too hung up on that . We are. Investors should look at it as an ecosystem company. A bunch of teams that theyre leading in. I want to focus on the tablet division. Ipad sales lackluster yet when we look at microsofts report theyre up triple digits. Does that tell us that apple is not doing a great job in their ipad strategy and microsoft is winning the race . As i said the ipad is one element of its ecosystem. The key is users are using ios as opposed to windows. Now windows 10 that could be a total game changer and the reason is its going to be the worlds first operating system that works on mobile and desktop at the same time and why is that important . It means that developers can write apps that work on both mobile and desktop. When you take a look at microsofts earnings a big write down associated with nokia but tablets doing well. Cloud seeing a big jump in sales over 80 . Is that a big win . We know hes trying to focus on cloud yet theres a lot of competition in that space including amazon and google. Cloud sales are doing well. Theyre in the direction we expect them to be and i expect them to beat analyst expectations. Despite competition. Despite competition. Pc sales are falling so windows has been hit but the key for microsoft is windows 10. We have a buy on microsoft because we think windows 10 will be successful. On the assumption that it does what it says on the 10. Investors can be confident that any app will be across the entire ecosystem. Microsoft and google dont have that. What was the biggest risks to microsofts stock right now. Is it the failure of windows Going Forward. Its the cloud. So can they they transition from their licensing model to a subscription based model and the way i look at the evidence theyre doing just fine. We see the market underestimating the mobile side of microsoft. I wanted to get to that point because we saw that huge write down and i wonder whether mobile will be part of microsofts future. Do you think theyll have to make another acquisition because the last one didnt work as we saw with the major write down . I think theyll continue to make acquisitions probably in areas like Cyber Security but i think windows 10 is what they have invested a lot in. We need to see how it works but if it works as they say it will it will be a game changer that could send the stock up quite a lot. Finally your verdict on yahoo . Are they doing anything right . We dont think they have a vision. We dont think they have a strategy and apart from their Holding Company status we would avoid. Taking a quick step back and looking at the Technology Sector we have been seeing the rally in tech stocks. But the point i was making yesterday, narrow leadership at the top. In fact theres just four companies that now make up 30 of the nasdaq 100s market cap. Thats apple, google amazon and facebook make up 1. 7 trillion. Is that narrow leadership a concern for investors out there . Its certainly a concern for regulators. For investors that will get narrower and narrower. In other words the big guys will get bigger and bigger. Specifically amazon will come into the top five bracket soon. But at some point valuation will become a concern, no . Of course but not anymore soon. You see the stocks continuing their run to the upside. Certain stocks. So i see apple on a two year basis as a buy. Amazon as a strong buy on a 2 year basis. Google probably as a hold from where it is now because its risen quite a bit and microsoft as a buy. Thank you for joining us to discuss the big movers in tech. We want to hear from you on this. Where do you think the tech titan went wrong. Email at worldwide cnbc. Com. Tweet us at cnbcwex. Our personal handles on the bottom of the screen. They set the bar too high and they couldnt live up to the demands out there. What about you . I would have to agree with you. Its tough to always beat every single quarter and then one quarter we actually beat but the beat isnt as strong as the street had expected then youre going to get sold off a little bit and the shares rallied quite a bit. Theyre up 40 since the launch of the new iphone 6 cycle so thats impressive in the fact that the iphones are still selling so well even though theyre nine months old. Thats a very very good takeaway but well see. A lot of people say buy on the report yesterday. Buy on the dip. The question is when you mention iphone six sales thats competition that youre seeing from the emerging market players. Great devices in china and india at a lower price point so when do we see that shift into these new players. Thats something that apple has to waf out for. Absolutely. The slue of disappointing tech earnings is weighing on markets too with apple suppliers in china and taiwan bearing the brunt of the sell. Lets get the full extent of this with sri. That was a big catalyst and it dragged the major indices on wall street overnight and us lower out here but that was also another dynamic. We saw some investors on the Australian Market and in Japanese Equities bank profits because we have seen six fairly solid straight sessions of gains and for japanese shares so routine profit taking in both of those markets but lets just flip the board and show you the damage report because the apple halo effect really seems to be fading over here in asia. That was a big dynamic as we were talking about and if we can flip we can show you what the shares in the Apple Ecosystem have been doing any moment now. We can put some greece on the wheels wheels. Japan will be in the limelight next week. Well hit the stride for corporate japan and well see how capex developments are going and how theyre dealing with the weaker yen and how theyre adjusting to abenomics and how Corporate Governance is doing as well after the toshiba. Thats where we stand. Back to you. Thank you. Lets change gears. Lets talk about the bank of england. Were getting those minutes in about 20 minutes time. Ahead of that interesting comments from one of the mpc members. He says the time for a rate hike is coming and its quote, highly likely that rates will continue to rise over the next few years. Worth noting though that hes not one of the wellknown hawks that have in the past voting at the boe meeting for a hike in rates rates. But still worth pointing out the comments. Huawei bucking the trend with an impressive first half performance higher. 69 despite the slow down in china. This as the tech firm targets the higher end of the market. Its on track to meet shipment growth this year. Were not done with the tech news just yet. Lg electronic shares jumping 15 at one point. Google could be interested in taking a stake of the south korean giant but a spokesman from lg was swift to squash the rumors saying the talk was pure speculation. All right and coming up on Worldwide Exchange falling asleep at your desk . Well, listen up we speak to an israeli based firm looking to cash in on americas 3. 5 billion sleep disorder market. Another day and another headline about donald trump. Find out what the president ial hopeful has done now to draw the wrath of washington. Plus in the last hour in the last hour the full trailer for the latest james bond movie spector has been released. The reaction and reviews. Dont go away. Push your enterprise and you can move the world. But to get from the old way to the new youll need the right it infrastructure. From a partner who knows how to make your enterprise more agile, borderless and secure. Hp helps business move on all the possibilities of today. And stay ready for everything that is still to come. Welcome back to the show. Quick look at european markets and were red today after a slightly negative close in yesterdays trading session. The stoxx europe 600 is off by roughly 3 . The bulls are fatigued after the nine day rally for the European Equity markets. Mainly disappointing tech news from the likes of am. Lets show you the european markets one by one. We have got the xetra dax all right we dont have them just yet. We have the xetra dax down by 0. 2 . The ftse 100 is off by 0. 8 . Really weighing on that index as we just discussed but slight green for the ftse in italy up by 0. 2 . Lets take a look at the big stocks making headlines this morning morning. Better than expected first half numbers. Well speak to the ceo of the Company Later on in the show. The Group Warning competition is hitting the u. K. Broadbay market. Whats going on with your tunnel . Its a net earning of 39 Million Euros. Thats to compare with a small loss of 5 Miles Per Hour euros a year ago. This is due to the traffic increase in the tunnel driven by the economic recovery in the u. K. And increased by 9 . This positive trend will continue through the second half of the year. Its targeting an operating profit of 555 Million Euros for this year and 580 Million Euros for the next one along with this Earnings Report shes asking the french and British Government to pay back almost 10 Million Euros in security expenses. Thats so the company had to obey because of the migrant crisis. 3,000 migrants leaving tents. Some of them tried to board illegally train or truck to join the u. K. Blamed public authorities in france and u. K. For underestimating the migrant situation. Stick with us. Easy jet topping the stock 600 index posting its best day of gains for six months after Third Quarter profits beat expectations. Meanwhile the company upgraded its full year Profit Guidance from 7 to 14 profit growth. Moving on fresnillo trading lower. Precious medals suffered with gold trading near five year lows and you can see the stock down 2 . Sticking with medals bhp bhp billiton hitting the lowest level in nearly a week. They expect full year profits to get hit by write downs in its copper trade. He is seeing reassuring elements coming from the investigation into ges takeover of alstom. If approved the 12. 4 billion euro deal would be ges biggest ever acquisition. Stefen. I understand that the last exchanges have been some what positive. This was just a few days after the ge offered some concessions to the European Commission last week ge submitted it without giving the details of what was at the table. That being said the ceo of the company emailed indicating a few months agatha he was willing to sell off some intellectual properties in order to get the green light from european authorities but say that concessions around the Services Business of alstom was not an option. Did not give further details. Also indicated that a french government remains cautious regarding the deal between ge and alstom and especially pending this decision from the European Commission. The commission is not likely to extend it until mid september so it means that we wont get any decision before the last part of december. So nearly two months to wait. I want to point out a quick economic me trick we were looking at today. French Business Sentiment and manufacturing improving more than expected in july. Was that expected or are people talking about this number . The consensus was at 101 for july. We had 102 for july up from 100 in june from the french Business Sentiment so it goes into the right direction and confirms that the French Economy is recover recovering. Theres a lot of skepticism from the u. K. Theres the labor market. We have the Unemployment Rate at the record level in france. The government hopes to improve the situation on the labor market and actually last week the president confirmed that he would not run for reelection if the labor market would not improve by 2,017. Thank you so much. Moving on to some telecom news. At t is closer to wrapping up its deal to buy directv as they signal a green light for the 48. 5 billion merger. It would create the largest u. S. Paid tv company. The fcc set some conditions for the deal including requiring at t to build out broadband connections to more than 12 million customer locations and share with regulators all Traffic Exchange deals it signs with content companies. Egg mcmuffin lovers rejoice. The wall street journal reports mcdonalds may offer all daybreak fast across the u. S. As soon as october. They have been testing the idea in select markets and feedback is positive. Mcdonalds is also testing other concepts including custom burgers and Healthy Options such as breakfast bowls made with kale and spinach. A pretty good idea but is that going to revival mcdonalds sales . They need innovation. They need to revamp their menu and appeal to the more healthy Conscious Consumers out there but its a step in the right direction but is it enough and have they already lost the Health Conscious consumer thats going to another one. The egg mechaniccmuffin isnt the healthiest choice out there. I was thinking of a great idea. I leave around 7 00 a. M. And go grab coffee. It takes about 15 minutes away from my prep for the show. Why cant there be delivery for coffee . You should talk to them about it. Im sure there would be demand for them. Its cold by the time it gets there. Maybe theres a thermos of some sort. Im sure they can figure that out. It would be a great idea. Im just saying and if they do it they better give me a stake. Totally. Lets stick with the food topic. Chipotle beating forecast but the same store sales rose just 4 less than expected. Chipotle warned it would slow to the single digits. It removed pork from a third of its restaurants this year after firing a supplier for not meeting Animal Welfare standards. Last week it said it would start serving pork again and it should be in all stores by the end of the year. Shares fell in after hours trade but we should point out over the last three months is down about 3 . So keep an eye on chipotle to see how it is today. Did you see the guy eating every single day this guy looked fine and healthy to me. Obviously there was they have done it for mcdonalds as well. You can mix it up. Theres ways to do it. Still to come on the show from russia with love we tell you about the greek Prime Ministers plan b in case talks with creditors break down. Weaker than expected iphone sales and are left speculating over how successful the smart watch is. Appl