Some level of that in the numbers. Its hard to say how much when the countries are meeting and talking, it is better than not cook telling me he sees no evidence that his products are being boycotted in china and that he has made no significant changes to his supply chain in response to potential new tariffs. We also talked about services up 18 when adjusted for currency in a onetime gain last year i asked cook about his new Video Streaming Service thats on the way and how he will judge its success by what metrics, cook saying the most important thing is one, the product, and two the number of subscribers and whether we are going to announce that or not, i dont know. We dont aspire to have the biggest audience working in cooks favor for these new services leveraging that massive install base or the number of active guys devices in peoples hands he says the active install base of iphones reached a new high. I asked cook about new regulatory scrutiny here in the u. S. He says he does not have monopolistic share and that there is plenty of competition on his app store including from rivals like spotify. I think at the end of the day facts rule the day, plaarticulal when you are dealing with the law cook says. Josh, back to you. Good stuff. Three straight quarters of declining iphone sales not slowing the stock down there morning. Shares still rising on Revenue Growth and other categories notably wearable and services. Tim cook saying the apple credit card will launch in august quote, apple is not the iphone company anymore. Lets bridge in two apple analysts, krish s a,ankar of co. Ill start with you. Sales of iphone comprising less than 50 of overall revenues good thing or bad . You know, today where the stock is i would say, you know, its not a bad thing a year ago it would have been a terrible thing obviously having better iphone sales is always good but the longer term you look at it, this is a company thats going through a transition iphone was the story for the last ten years i think the next ten years is going to be about services, so but those transitions do take time. Its not going to happen overnight. I think theyre slowly progressing to that where youre exiting a mature Hardware Market to a more growthfocused high multiple Services Unit business. So amit, is that headline right to say that apple is not an iphone company anymore . I mean, its 52 right, correct . At this point at least iphone units at the end of the day is whats going to drive the story, right if the install base starting declining, iphones unit ss is a leading indicator. I do think its notable despite 12 revenue in iphones, the story is shifting from monetization of the ios base versus just the iphone units where its always been. We were just talking about this last hour it is still the iphone company because as you were saying, iphone drives services more than anything else. To me the bright light in this quarter was the realization that this other stuff, the margins on it and the growth in that if apples able to get people to take on multiple services and multiple wearables, that could make up for the drop in iphone, and i wonder if you think we have enough data to really gauge how thats going over the next four quarters. Thats a great point, and i do think theres two parts, right . On the services side, compares actually get really easy for apple for the next four quarters, if you think about all the china bans over there last year that along with the new product stuff josh was talking about should help drive acceleration there, and then on the other side you have wearables right, apple watches are doing fairly well i do think its more about wearables and Services Getting an easy compare as you go forward. Krish, what does apple needs to do with this next iphone lineup what this quarters earnings showed me is that Price Sensitivity really was an issue particularly in china. We saw the vat reduction having an impact reduction there, plus financing, plus tradeins. Where does apple need to price this next lineup in order to keep that goodness going its a great question the one thing i would say is that that has been the biggest challenge last year where it is very obvious that once they crossed the 1,000 price point, the consumers are very sensitive to it. The other thing is the expectation is for a 5g iphone coming out later next year, therefore what you might see is the iphone cycle this year is a little bit artificially depressed with consumers holding out for the next iphone. I think one other thing worth noting even though overall over the last several quarters, apples iphone share in china has been coming down, i think theyre trying to increase it in india and also having local manufacturing there with foxconn having a plant in india. One of the upsides to that is you dont have to pay some of the duties that you have to pay if youre importing it from outside india which actually helps or i should say adds to the pricing of the iphone. I think what youre going to see is a transition of overall over the next four quarters, more india, less china, but the big runup is going to be later next year when the 5g phone comes out. To that point, amit the stock historically starts to price in the new phone about nine months ahead of the launch. Is there any reason to think this cycle might be different either because of 5g, because of global trade, anything like that you know, i would tell you, i think the 5g narrative is going to be powerful, and my gut is, you know, people are going to start debating the duration if youre negative is about two quarters, but if youre bullish you probably need to start being engaged with the 5g cycle in early 2020 i do think thats going to be the overriding factor. China to your point, could have ramifications on apple its a bit less of an aissue these days. I want to dig into services a bit more i realize apples going to be launching new platforms this fall, but how much of that Services Growth hinges on the app store . And i ask that because you have that lawsuit thats moving forward. You also have this antitrust scrutiny more broadly here in the u. S. And europe where the app store is concerned absolutely. I think the td plus and the arcade launching is going to be closely watched for two reasons. Number one is that the pricing is going to determine the consumer interest. You already have the plus at 699 a month, which has kind of set the bar. Realistically going to see how apple can price this the second one is that one thing to look into like longer term is once apple starts creating original content, which they need to do in order to acquire more consumers or customers, thats going to start throwing through the cogs line of the m and l. What youre goi p l the gross profit dollars might increase as the revenue for services increases i think those are two things to keep in mind i think the pricing is going to be very critical that will actually determine if youre going to be still tethered to your hardware installed base or youre going to start getting more new consumers or customers that are not currently like apple users. All right, ill just note that you both have outperformed ratings on the stock thanks for joining us today, krish and amit. Thanks for having us. Our next guest says a war of words over Interest Rates has amassed bigger issues between amassed bigger issues between the white house and fed. Can you do more with less . Can you raise the bar while reducing your footprint . For our 100 years weve been answering the questions of today to meet the energy needs of tomorrow. Southern company. Frankly if we ever got Interest Rates down where they should be, and if they werent raised so fast, you would see another probably 10,000 points on the dow we would have done even better had we had a Federal Reserve that didnt raise Interest Rates so quickly the fed acted too soon i turned out to be right they acted too soon and too violently. Weve had nine increases, i believe, youll check that, but i believe its nine increases. A couple under her and a lot under powell im not a fan. The fed move in my opinion far too early and far too severely it puts me at a somewhat of a disadvantage fortunately ive made the economy so strong that nothings going to stop us its a montage of the president s recent criticism of the fed ahead of that important Rate Decision this afternoon our next guest writes a war of words over Interest Rates are only masking larger issues between the white house and the fed. Former council of economic advisers chairman, glen hubbard joins us this morning to talk about his piece. Good to see you again. Like wise. You say that december was mistake and that a cut today would be a welcome precaution, but more importantly you say th white house and the fed need to arrive at a thoughtful truce what would that look like . I think from the feds perspective being clearer about what it takes to hit its inflation objective and clearer in communication the fed chair has talked a lot about well, maybe theres u. S. Weakness, but were not really seeing u. S. Weakness the problems are from the Global Economy and with the failure to hit the inflation target on the white houses side it needs to understand that a slightly lower federal funds rate isnt really going to change the equation very much. The big issue on business peoples minds is policy uncertainty in tariffs both sides need to calm down a bit. Well, navarro who told cnn if we pass usmca and the fed cuts 100 basis points, he can guarantee dow 30 k its pretty clear what their objectives are, isnt it well, i would question that that piece of math, but it is certainly true that if you weigh the balance of risks probably the last fed rate hike was too much so taking it back would be a good idea. Having said that, i hardly see getting to 30,000 on the dow for Something Like that. We could, though, if we got better trade policy and less policy uncertainty have a firming economy. Thats what the white house should be focused on so glen, is President Trump right to come out and argue that the fed has moved too soon and too fast with this tightening cycle that weve seen . Well, i think the fed has made some mistakes both in substance and in communication, and sometimes white houses point those out. I think the president would be better served, perhaps, by focusing on government policy, trade, things fiscal policy that are more under the white houses control, but i think his criticisms of the fed are not off point. By the same token, i think the fed could learn more by engaging with more divergent views from the Business Community, from economists, and diversifying its own group think. I think theres some light there as well as heat. So glen, is the feds independence at risk based on how the president has been addressing his concerns with fed action and is this sort of listening and engagement youre talking about, if so a way to deal with that well, to answer the last part first, i think yes, if the fed were more engaged in that way i would only help itself, and i think chair powell is wellliked on both sides of the aisle and by the Business Community and could well lead that effort. There is always a worry about Central Bank Independence being compromised, and it would be a huge economic problem if that happened having said that, i think where we are now is they can do well and the communication under their control, this should be fine how should the fed be assessing inflation . Well, given that the fed hasnt hit its 2 inflation target, certainly one reason to have a more accommodative policy is on average defined over some period the fed has hit that target that would be a clear signal to the public the fed however has talked in more evolving measures of data dependence, which are a little bit confusing. I think going back to the First Principles would help it so it seems like a foregone conclusion that the fed is going to cut rates today, but how do you think this plays out as the year progresses . I mean theres also a lot of chatter on wall street, for example, about the Balance SheetReduction Program and what happens to that. Well, i think weit will be to chair powell and colleagues to really communicate how theyre thinking about that. So, for example, are they focused on Economic Conditions in the u. S. . Are they focused on Interest Rate trends and conditions abroad you know, tell people where to look how should people think about the inflation target and the lack of success in hitting it . Those are the kind of communications the fed can do. At the same time, the president and the white house can really focus on getting policy more clear in the minds of Business Leaders and less uncertain finally, glen, you know, since the blackout window began, this Conference Board number was pretty incredible, adp solid today, core pce. I just wonder when peopleargue that theyve locked themselves into this cut and that they need to ask themselves how that happened, what do you say . Well, i think if the fed were to make an argument for a cut, it would be less about current u. S. Economic conditions for the reasons you just said, but more in terms of global weakness in terms of central bank trends outside the United States and their effect on the dollar, Foreign Exchange value of the dollar, and on the feds lack of hitting its inflation target i think thats a better argument than evolving data dependence on the u. S. Economy lastly, glen, and i ask this because of your position within the Financial Sector as well and some of the positions you have held there, the fact that we have seen this prolonged period of low Interest Rates, you do have the fed now poised to follow suit with other Central Banks around the world in easing again, what do you expect that effect to be on the sector, and not only banks but also insurers well, i think, you know, low Interest Rates and low Interest Rate spreads obviously compress margins in the Financial Services sector, but they also lead firms to innovate i think the bigger question Going Forward is whether fiscal policy is positioned to step in and help Central Banks in the future so that not all the pressure is on Central Banks. Glenn, good piece, and were going to know a lot more in just a few hours. Appreciate the time as aulsz. Thanks my pleasure. And we are getting a news alert out of Los Angeles Julia boorstin has that. Jon, thats right, the four Major Broadcast Networks have sued to set down low cast, a nonprofit streaming video app that offers free tv feeds of the four main broadcast networks cbs, abc, Nbc Universal and fox say that low cast transmits their signal without their permission, therefore in violation of copyright law saying the app is not truly a nonprofit because its backed by a half Million Dollars investment from at t and also partly funded by a dish network lobbyist its worth noting that both at t and dish have recommended low cast to their subscribers when certain channels are blacked out during contract renegotiations now, this legal battle at its heart really seems to come down to the billions of dollars in retransmission fees that the Media Companies bring in from the tv distributors for their channels now, the media giants have been earning more for their channels from these retransmission fees which is helping compensate for the declining revenue for advertising thats tied to ratings. The perfect example of this conflict right now cbs channels are blacked out for at ts major markets and at t is directing frustrated customers to download the locast app, which is considered a free and easier alternative to the trouble of going out and buying an antenna. As we see all those four media stocks are down right now. Morgan. Julia, thank you. Its aerial all over again, remember that . Exactly. The little antenna. Jons, its worth noting that ario tried to do something similar to this, a Different Technology on the back end, but it was shut down in a legal battle that was ario, but did not succe succeed. The question is if locast can get it right now several years later. We will be following it, julia boorstin, thank you. After the break, ak a my shares surges. Ceo tom leighton joins us right here here stay with us lets go when i see obstacles, i create opportunities. soft music when i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. Weve got an earnings boost, led by higher Revenue Growth in its Securities Solutions business joining us at post nine and another first on cnbc is akamai ceo tom leighton. So 205 million, up 34 in Constant Currency for your security portfolio, youre arguing that its potentially the biggest Cloud Security business out there how should we be defining Cloud Security for investors, especially in the wake of this capi