Got, they are hoping they will look at this new iphone expecting to be released today out of presentation at a presentation here. Not as big a presentation as when they announce the bigger iterations, but a smaller phone what they are offering in the market right now. In addition to that, talk of a new ipad, following up the ipad pro release last year. And yes, hold on to your seats, new bands for the watch. Its exciting. Excited about the new watch bands. Cory johnson, editor at large. Cory its the size of this. Emily exactly. What does this they mean for apple . The company, investors, consumers, and how much do todays announcement even manner even matter . David kirkpatrick and bret taylor, former cto of facebook. The creator of google maps and ceo of quit. And dave warned, dave warr everybody, thank you so much for joining us. I want to start out with you guys who built heavily on the . The apple ecosystem. I Just Launched a new phone. Its probably not huge news, but i think the broader narrative, which is how important the iphone continues to be is a really interesting story. Ipad was goinghe to be huge, and the iphone cannibalize its sales. Without the apple watch was going to be huge and they are releasing numbers but i think it isnt as big as money people expected. I think it just goes to show you that the iphone and all the phone that inspired have continued to be so important that they are essentially cannibalizing every other device on the planet. You see apple releasing big phones and small phones. I think the phone continues to be the mobile device. There hasnt been another one has proven to be the breakaway success of this was pure and him happy apple continues to invest. Emily tim cook has taken the stage and cupertino, apple takes on the fbi. Dave, what do you think about the significance of a smaller phone, if indeed thats what we ae, as well as potentially new or pro and new watch bands come as corey says. Excited about the possibility of a smaller phone. Its a unique and interesting move for apple. In times past, apple listening to customers and going back to a size that they had been doing a pretty newually move. For my own experience, there are people of the small phones, seeing that come back as a pretty big deal. Emily it may be called the iphone se, with a four inch screen. Potentially there are some upgraders who havent done so yet. Take . What is your there are so many people around the world and get excited about these apple events. Is this one as big a deal . David its not as big a deal as the next iphone seven or whatever, presumably that is what it will be called. Called it right. The iphone is now so central to apple strategy and so essential to the global tech ecosystem that a new device makes sense. Its a brand extension, they havent focused on that as much historically. I think theyre trying to keep the excitement about the iphone alive in a variety of ways. Where is historically, it was one way. One phone,vent with now theyre more and more sub brands within the iphone universe. Theres a huge diversion article as people who want to buy phones. Around the world, a lot of them can afford the phones that those of us in the developed countries aspire to carry in our pockets. Tim cook is emily saying on stage that addressing the iphone fbi debate, that there are one billion apple devices globally, and they didnt expect to be at odds with their own government. How important is what tim cook said today, and how much of bearing could this have on the case . Hes using a public stage to state apples position on this issue. Cory i think thats the point. The judge is not going to care what he says here. Reading from our blog, brad stone inside right now, hearing tim cook say we have a responsibility to have you protect your data and privacy, trying to move the Public Relations of this event a long. To what dave was saying with these annual events to launch the phone, its a biennial event, where every other year apple has been able to announce a significant change in a phone with iterative changes on the off year. Pc competitors who have a faster developed cycle, one wonders if the introduction of this phone in the month of march might suggest a Faster Development cycle as well as more iterative Product Announcements in between the major biennial announcements of new phones. Been looking at live video of tim cook on stage at apple headquarters. Tim cook saying we only to our customers and to our country, this is an issue that impacts all of us and we will not stray from this responsibility. And dave having worked at facebook and technology companies, where this could really impact the entire industry, we have seen the industry rally behind apple. Were hearing big cheers from the crowd in response to tim cook. At the same time, the government is saying that apple isnt doing ty to our country and national security. Bret, where do you stand on this . I am most of my colleagues support apple on this. We are based in the united states, the most companies in technology are global companies. While the u. S. Justice department has standards by which they can request these , its not true of a lot of the countries in which apple and other countries operate. Does this mean that apple has to sort of respondent in the same way when china asks for data . Without the same due process . What is the threshold of case by which apple has to sort of given to these request . I do think defining technology were these questions dont, is not a practical issue that can influence a case, think its probably the right direction for our industry. Want to get back to julie hyman whos been watching apple shares. They are up slightly today, julie, how does it look . Julie apple shares are getting a lift. Some thing thats important in the Broader Market before you get apple specifically, and that is Dennis Lockhart, president of the Federal Reserve bank of atlanta, who is speaking right now. The text of his prepared remarks says that the u. S. Economy is Strong Enough to whether a rate increase as soon as april. Thats obviously different view than what we heard last week in the Federal Reserve commentary. Just some to mention today as we watch whats going on with the Broader Markets. Getting to apple, were not seeing much change in the shares. Thats not entirely unusual for what we tend to see on these announcement days. If you go all the way back to the first iteration of the iphone, when it was announced there was a big pop in the stock. That one aside, the average stock is about a 1 decline on the days when the stock is announced. When you look at apple performance over the past year, it has, of course, not been the smoothest run. Mirroring what we have seen in the Broader Market as well. It has bounced from the lows, but still has not retained we saw laste highs february. Elsewhere today, i want to mention the other stocks were watching. Marriott and start would continue to be on our radar as starwood has agreed to a higher bid from marriott that was peting with the bid led by marriott is falling. Its a different file a different story in the timeshare industry. Dham is one of the most one of the worst performers. There was a civil investigative demand from the Consumer FinancialProtection Bureau in october. We are seeing other Timeshare Companies fall pretty sharply in todays session. Again, overall, not a lot of change in stock, we have some interesting individual company stories. Emily julie hyman, watching apple shares for us. You are watching live coverage of apples big events in cupertino. Im joined by bret taylor, former cto of facebook, dave kirkpatrick, editor at large cory johnson standing by at apple headquarters. We are expanding apple to unveil a smaller iphone, a new ipad comments and updates to the apple watch. The head ofackson, sustainability for apple on stage right now, talking about this goal for apple to be 100 renewable company, but of course, a lot at stake here when it comes to the encryption debate. That on aprilting 1, apple is 40 years old. Theyre taking a look back at where they come from and where they are. In advance of that anniversary. Bret, i wonder if i can ask you a question. You guys in developing quip, some adjusting work on the apple platform as well as many others. Apple is going deeper and deeper into services. I wonder if we might expect to look for, what have things you might be looking for in terms of apple discussing services and indeed, how this new phone might fit in to users using apps and services. One of the most adjusting trends weve seen our Services Like siri, the, nation of protective Services Invoice automation. Today, is largely been centrally built into the phone, but not as exposed to record to developers. I would be really interested in seeing if they can expose voice and automation to developers in a broader way. I think it would create a really interesting new class of applications. Olivia lets take a emily lets take a listen to what tim cook had to say moment to go with his perspective the government at this very moment. Not expect toid be in this position, at odds with our own government. Strongly that we have a responsibility to help you protect your data. And protect your privacy. Customers, and we only to our country. It to our customers, it to our country. We will not shrink from this response ability. Emily tim cook speaking at his event in cupertino. Dave, apple is an interesting position with respect to the fbi. At the same time, when you look at the business, there are some real concerns about sales of the iphone going forward. Analysts are saying this is the first year in a decade that we will see sales decline. Are we under overestimating the power of the future of apple . Dave on the privacy debate, this is one of the most fundamental important questions in the world right now. Its about privacy, its also about freedom of speech. Last week, vice Media Release a report that said there has been a Chilling Effect on line since a lot of these surveillance things came to light. Emily meaning what . Dave people are afraid to speak their mind, afraid to talk about the important debates that are a part of civil society. These kinds of questions are extremely important, not just for keeping your own data safe and these important things that tim cook is talking about, but also these are questions of freedom and freedom of speech, which i think are extremely important. Time, davide same kirkpatrick, the New York Times has reported that engineers and apple have openly discussed quitting if this came to pass. If a judge ruled that apple and their engineers would have to make this master key or write new software to enable the government to hack into this phone. At the same time, there are real business implications and Business Concerns for apple. How does the company away these these . H david the country will respond if they are obliged to, regardless of the ethical displays of engineers. Wouldrstand why engineers be reticent to participate in. We may see people resign or be reassigned. I dont think it in any fundamental way undermines apples ability to comply. The company has been clear, they will comply with their order to do whatever they are ordered to do. I think its a hugely complicated issue, this encryption thing. I think theres some degree of posing on everybodys part, including the company. If we have more time as the show goes on, there are subtleties that are worth discussing. I do agree with dave, its an issue of freedom. That is key, freedom of speech. That is what apple is trying to defend. Emily David Kirkpatrick, tim cook is back on stage right now. At their event at apple headquarters. We will be right back with more of live coverage. Mark this is bloomberg first first word news. President obamas meeting with raul castro the revolutionary president havana, the mr. Castro met before. In 2013, they shook hands at the funeral for former South African president nelson mandela. An american president hasnt visited cuba and almost nine decades. We are expecting to hear from both leaders later this hour. About 40 rabbis plan to boycott donald trump speech before the american israel policy Affairs Council today. Comments about israel have led to concern among some members of the user the jewish committee. Democrat frontrunner Hillary Clinton spoke this morning. Her rival, senator bernie sanders, is skipping the event. Senator sanders scored a major primary history among american democrats living abroad. More than 34,000 americans living in 38 countries voted by internet, mail, and in person earlier this month. Sanders earned 69 of the vote, and nine delegates. Mrs. Clinton 131 , picking up for delegates. Four delegates. Of a man wase dna found in a house that was used by the terror group. They say he left through syria in february of 2013. A man was arrested in brussels after a fourmonth manhunt. The Prime Minister says there were hundreds more radicalized people in belgium. The one Weather Agency says hotter temperatures around the globe are now the new normal. Meteorological organization is predicting a warmer weather accompanied by pockets of both dryer and wetter conditions, depending on the region around the world. Im Mark Crumpton, reporting from bloomberg World Headquarters in new york. Emily welcome back to bloombergs special live coverage from apple headquarters for Bloomberg Television and radio, and emily chang in san francisco. Williams is on stage right now, tim cook making comments just moments ago about the iphone lineup. Take a listen. Cook we built the iphone for you, our customers. And we know that it is a deeply personal device. Iphone is ans, the extension of ourselves. Get straight to our editor large, cory johnson outside the event of apple headquarters in cupertino. Lets talk a little bit about the apple watch. This was tim cooks pet project. We still dont know how well the watch is doing, except anecdotally. Apple is not going to come close to breaking that out until they have to. Until its 5 of sales, they dont have to. We listened to these anecdotal things, and one of the things we try to get people to do is look at the different use cases. Behind me an apple headquarters, in cupertino, california, Jeff Williams is on stage talking about Apples Health initiative, specifically about some of the things they are doing with the watch. Talking about researchers at Johns Hopkins are using the apple watch to study physiological feedback from people who have seizures while they are having the seizures and to draw data from that, the data that is drawn from the watch. If not the most complex data that medical science can give us , but the fact that they can roll it out to so many people may allow for a much more robust and faster studies. Its interesting to look at the tools they are trying to use and to encourage people to use that apple watch. Its also worth noting that competitors like fitbit are out there with watches in the marketplace, if you look at the online forums and amazon. Com, theres a lot more excitement about the fitbit blaze than the apple watch right now. Emily perhaps theres nothing to be said for a more specific taylor,arable, bret former cto of facebook and ceo of quip with me. , all of us have apple watches, but none of us are wearing them. What do you think about this product, candidate, with some sort of update, become a musthave, will remain a niche thing . Bret its aboard maintain a longterm view. I worked in the days of the ipod before the itunes music store. The only room is the thing that changed music. No one remembers when it was hard to get your music onto the ipod. You had to rid your music offseason and put it on the ipod. It made it hard to find use cases they liked. Now you look at the ipod and you have great music use cases, people using it in education, for all different kinds of contents, you see the resurgence of podcasting now. I think that when you look at the apple watch, you kind of have to take the same longterm view. Invest, notling to just for a oneyear, two year time span, but only a 10 year time span to turn the apple watch of the something thats fantastic. My hope is that apples focus on health as they are highlighting this morning will become even more and more interesting as time goes on. The sensors will get better, the os will get better, the health use cases will get us to a place where hopefully we are understanding things about her body that we never imagined and we can make better decisions. Emily as a guy who needs to know about all the different platforms . Bret i come back to the fact that the phone was the center of the mobile ecosystem. Emily can watch become more central . Bret i do think so. Its a perfect analogy. Most of us what we switched off from the apple watch, we are phone as our watch again. Were using it for this use case. As a phone and better watch than the apple watch . No. When it comes down to it, i have to have my phone. I dont have to have the apple watch. Ive yet to see a mobile device that isnt niche by iphone standards. New skin be a significant and meaningful business, dont get me wrong. But you are never going to see something in the 2 billion people to 4 billion people using a category. Ive yet to see it. Apple is investing in a lot of different areas, the living room with apple tv, i really believe what dave said, which is i am long on apple. There is one of the most innovative and Creative Companies in the industry. But i think its really hard to have a device that for most people, their phone isnt good enough. I think that the fundamental challenge. Moran,bret taylor, dave are are dave morin, they sticking with us. Julie hyman watching apples stock. Julie apple stock not doing much today. Not unusual. We dont have the actual Product Announcement yet. Typical, apple has been talking about what theyre going to talk about for days. W