Up 13 . The company sold 39. 3 million i phones in the quarter and that includes about a week of the new i phone 6 and 6 plus but ipad sales are down again. Our editor at large cory johnson and i spoke with Bloomberg Intelligence analyst by asking if apple should be worried about the ipad. The ipads were meant to be weaker than expected. There was a new product refresh coming. Its been relatively stale. And people are starting to figure it out. Theres a phone with a larger screen, theres a pc that can do a lot. And this tab let is stuck in between. So hopefully the refresh helps reinvigorate that trend. I think that there are a lot of things that are interesting. The quarter is really strong for the Biggest Company in the world growing at a pace weve never seen great Big Companies grow. And ahead of the Holiday Quarter. And with only you know, they would have had every excuse to say we only had the new i phone for really one of the 12 weeks. Or for one of the 13 weeks of the quarter for 12 weeks we were selling old product because the consumers knew it was going to be old but we saw a slowdown in sales. And they probably saw that. But it shows you how strong that one week of sales probably was with the i phone which is 56 of the sales. Not only the largest percentage of sales of the thing that is they sell. Its most of the company now and its really strong. Should we be worried about the numbers . Ipad numbers down Third Quarter in a row. And down 13 in a year over year. And i think it is worrisome for the company to its reasonable to wonder now weve seen nine months of declining sales to say is this as big as the business gets . Because it grew so fast are we already into replacement cycle territory not growth territory for the tab let . I find it hard to believe. Lets talk about the picture for apple globally because one of the things i said in the call that demand for the i phone is higher in every country than it was last year and higher than expected. One of the things we ought to do is take a slowdown, take a step back and look at it from sort of a holistic perspective. If you look at the intercon activity of the different products, theres a little bit of something in there for everybody. But one of the things that apple is very good at is promoting this subconnectivity between different products. So as you migrate from an i phone to an ipad to a mac there is seamless integration and i think they make it better than any disparate system. So maybe in 2015 the year ahead we think about what the use case are. What do we use them for. And what screen size do we use. And if you look at it that entire product spectrum, theres an apple product in there for every price point. All premium prices relative to the competition but theres a product at every price ponalt and theres a platform across the board. But lets talk about the other thing, the pricing of mac. The numbers were really strong and the average price is my model goes back to the late 90s and theres no quarter in which the mac price was as low as the 1200 than it was in this price. That was so close to the competition. We expected a profitable thing but the idea that the mac is finally being pulled along by all this other stuff i think is awesome. It made a lack luster i also cover the pc industry and albeit improving. The macs have surprised. Sure. Back to school sales helped but it should have helped the pc guys too but it helped them more. On top they saw sales in china where if anything pc demand has been weak and all of the pc makers have been citing weakness. So this is actually a very noticeable uptick relatively different from the competition. I cant live without my laptop but thats just me personally. What are we looking for . What are you looking for in the coming Holiday Quarter . What should we be watching . I think you want to see the product as a whole work together. I want to see some interconnectivity between these different products. I want to see one dragging the other connecting to the other. I want to see apple pay take off. I want to see i phone 6 and i phone 6 plus sales. This is the first full quarter of those products so that should be very, very strong. And i want to see im really curious to see what happens to the refreshed platform. Another note on apple for an upcoming edition of my show studio 1. 0 i sat down with Hollywood Screen writer and producer aaron sorken been behind some of the biggest hits including a few good men, the west wing, the newsroom. Social network. The next project is a biopick of steve jobs. In an interview he said Christian Bale will be playing the upcoming role. What we needed was a best actor. Its like p the n. F. L. Draft. There are some people who make a science out of exactly where we need to draft a middle inside line backer who is going to do this. And other teams say who is the best another leet on the board . We need it had best actor on the board in a certain age range. So youre excited about him . I couldnt be more excited. Why . He really is a phenomenal actor. Tell me about the audition. How good was he . He didnt have to audition. It was well, there was a meeting. The role is an extremely difficult role. He has more words to say in this movie than most people have in three movies combined. There isnt a scene or a frame that he is not in. And theres a tremendous amount of language. So its an extremely difficult part. Hes going to crush it. My full interview will air in early november on studio 1. 0. Besides that news about the steve jobs movie and apples earnings, apple also released apple pay. Will it change the way we pay for every day stuff . That is next. Welcome back to the best of bloomberg west. Apple pay is here. Am rolled out its long awaited payments platform on monday allowing people to use their new i phones and i pads to pay for items at retailers including Mcdonalds Walgreens and whole foods. Not everything has gone smoothly though. A glitch at bank of america caused some to be charged twice. About 1,000 transactions were affected. For more, we spoke with jonathan wall the cofounder of Google Wallet and coceo of retail data starter index as well as product tonight. How successful apple pay can really be. I think it has a lot of potential. I think theyve done a great job with the eco system. So they control distribution of the handsets. They have the security in their phones. They did a great job with partnerships on the banking side. I think kind of the thing people are asking about is the Value Added Services so its clear they can do tap and pay for terminals that are already enabled. But the question is where is the value at . Where is the improved Customer Experience . I think thats the big question mark. Youve used it. Is there an approved improved Customer Experience . For our users its fasters. Its making it fast and easy. So now its three taps and a thumb print and you can be on your way into your hotel room really quick. What was it before . Before we had three taps and weve got our signature swipe, our swipe that the rest of our users will continue to experience. But from a user perspective its just easier to raise your thumb tap and go. Do you have statistics that how many customers you lose . We dont talk about our conversion but usually our biggest problem is not ultimately getting through that funnel but the faster we can make it for users the better it will be. The comparison to Google Wallet is that google essentially captures all the credit card information, protects it as well as they can and thus far its been fine. But google then does a lot of customer analysis. So they know if im using my credit card they know me, they know where im using my Google Wallet moment, and theyre learning a lot about me and finding new ways to market to me. So apple is not allowing that for themselves or for anyone else. As a user i can see why thats much more attractive, a lot more privacy but there are tradeoffs. Apple cant market to me in way that is they might otherwise. Theres some concern that this will limit the value adds that apple pay can actually provide to these retailers. I think thats one of the reasons youll see some reticence from larger retailers to accept apple pay. It on the so target wont know i moved into a new apartment and im shopping for wall paper and kitchen wares and cant market more stuff to me. I think it will impair their ability to figure those out. Target in particular has a red card. Theres no specks for the red card. Theres no way for them to put the red card into the wall. The impression is it that it didnt really break through. What were the challenges what are the challenges that apple pay is going to run into as well . So i would say at least for google one of the big challenges was the carriers. So the carriers made it very difficult for google to get broad distribution to a lot of different handsets. I think that one of the challenges that apple has overcome is that they control the handsets. They have distribution on all those. But the challenge for them is going to be the adoption side. Convincing march rnts theres a really unique value add for them. If you think about it they have in the form of pass books they have potential, assets, reward cards and loyalty cards. If they can figure out a way to have passbook be part of the experience then you would start to see retailers willing to play ball. But until then i dont see how this is a slam dunk. From a software writing application standpoint how easy was it to work with apple pay either on the pay side . We started a couple weeks ago and able to get the integration done by last week. So it was pretty easy . Our team was down there and we were really helpful and we were working hand in hand with the developers. And when we came up with issues or cases working together to make it possible. What were some of the issues . Just Little Things you dont think about or sometimes when you put software into product you learn new things. So working together to make sure we had all those seams tied up before we actually launched this week which is super exciting. One of the things i was speaking with him about is he said apple pay isnt that innovative. It actually uses a lot of existic systems and just sort of brings everything together. Would you echo that . I would say the trick is where they go from here. What they did is take existing standards, they worked with visa and mastercard. They are using some cool new teck. Tokenization from the networks improves the security. I think the touch id improves it. I think those are incremental steps. I think probably what mark was calling out there is the lack of kind of a breakthrough value add proposition. So speculation also that apple is going to get anywhere from 121 2 to 25 basis points of the transaction. Youve been in those kind of negotiations. No one wants to give up huge dollar amounts like that. Do you think they got it . I think they did and its kind of amazing they did. Why . This is the issuers are, this is their bread winner. For them to give some of that up they had to be afraid of missing out on the experience. They felt they were backed into a corner and had no choice. I think thats probably the case. Why does apple have that much power . Because they do completely control their eco system and it is really powerful. They control the hardware, the software end to end of the handset. So if you were forced to either par take on their terms or be left out, i guess they felt they didnt have a choice. Why didnt google do it the way apple is doing it . I think google has a different philosophy. Look at android its not a closed system, its an open system where the rising tide lifts all ships. I think that maybe with a little patience or apple pin now google will come back to the table and push in that direction. How much of a chance does google stand in this . Its still very early. Apple has a lot of so many more phones. You think they still have a chance to say weve got the marketplace. What do you think google is going to do . I think they have to answer this. This is too important a space. I think apple is going to say were protecting your privacy we have this beautiful experience. Google is going to say were helping these retailers with all these valueadded experiences and we have a huge number of handsets. Well, is she doing enough to fend off her critics . Yahoo earnings and the ali baba impact. Next. Welcome back to the best of bloomberg west. Its been an interesting time at yahoo. The company had a 6 billion windfall after taxes and activist investor star bord value is urging yahoo to break apart or consider a merger with a. O. L. But they showed thirdquarter earnings that showed improvement. Net income 6. 8 billion up more than 2,000 . So is yahoo really on the comeback trail or is it all ali baba . Heres their take on whether yahoo really is making a comeback. Its organic growth, organic shrinkage in addition to the acquisition. So the company has spent over 1 billion in acquisition since Marissa Meyers arrived. We dont know because they havent released theyve done dozens of acquisitions but they havent released the actual cost. So only in a few cases we know how much they spend, 1. 1 billion for tumbler. But just think about that. And then on a year over year basis they see sales increase by 10 million thats not very impressive. So there are other metrics that look better. We saw 1. 5 increase in sales. Up 45 increase in operating profits after you strip out the ali baba gains which were substantial. So there are some signs of things improving. But fundamentally after all those acquisitions only 11 2 Revenue Growth means a lot of heavy lifting. Now tom in new york, whats your initial read on these numbers . And that very same question is it yahoo or ali baba that were seeing . Heres the thing. Sales growth has been very rare. Thats been very elusive for Marissa Meyers. At the risk of sounding too much in agreement with him, shes absolutely getting some of that sales growth that you want to have. Theres also profit growth. She has been cutting jobs. The fact is this is not enough to appease concerns long term. There needs to be substantial movement of the needle and youre just not seeing it yet. It doesnt hurt that there was a big miss as a result of the gains that you saw from the ali baba stake sale. But you have an activist out there saying we want you to return more of this cash. We want it to be more meaningful than just half of what weve got. And theres a lot of concern about whether her Acquisition Strategy is the right one. We heard from a. O. L. Ceo Tim Armstrong saying we dont have any plans to merge with yahoo. We have a whole meeting tomorrow with our Senior Executives and yahoo is not part of it at all. Is it realistic to think thats an option . Its the kind of idea is way out of left field for them and maybe theyre trying to talk up their book to make it suggest something theyre more valuable than it seems. What about the idea of breaking up the company . I dont know if theyre going to break up. Theres some fundamental turns theyre going to have to make. One of the things she talked about when talking about the Acquisition Strategy is theyre going to make smart acquisitions. The suggestion being maybe they werent before. I dont know. Listen to what she said. She did in fact raise this very issue because she knows. We have a Clear Strategy and a principled process for reviewing opportunities. We will continue to seek opportunities here and we will be smart about it. So shes of course smart enough to not say theyre done doing acquisitions but i think she recognizes that criticism and that cash is a fleeting thing for this company. We still dont know yet if the 1 billion plus acquisition that they made, tom, is going to pay off. What do you make of new reports out there of things like snapshot . Well, thats probably a bit beyond their realm at this point. One thing that another silver is a is mobile is now material distribution thats hugely important given the way we all are accessing the internet now not just on our laptops and desktops any more. Just a quick note. Yahoo has closed its funding round with snap chat valuing the company at 10 billion. Scooter is the man who famously discovered a 12yearold Justin Bieber and turned him into the International Pop star that he is today. How did he find bieber . I sat down with him on the latest edition of studio 1. 0. What happened when you saw the video of Justin Bieber . I saw a 12yearold kid who had i think like eight videos at the time. And he was singing at a contest at a church. I was consulting for acon on a different artist and i was watching you tube videos of that artist telling him what i thought of it. And they were singing Aretha Franklin respect. There was a kid in the distance, and i thought it was the same person. When i clicked on it was a 12yearold kid. So it was an accident. And my gut went crazy and i watched another video and then i saw him singing neo so sick. When i saw this little canadian kid with so much soul i just knew there was something there. You were there tirtsbleeber. You flew his mom and him. Illegally i think. Down to live next door. And they were canadians so i brought them over illegally and kept them in the country and put them in a townhouse around the corner so you paid their bills. Yeah. And got a tutor and did the whole thing. They became like my family. Its been a rough year for me watching him because i really care about him and you dont want to see anyone going through stuff. But to see him coming out on the other end of that right now and knowing the plans for next year and the fact that hes a kid. Ive had to learn that its ok to let him step on that rake and let him hit him in the face. And hes learned from those mistakes. And hell be a better man for it. He gets it. He said to me, i went shopping in france and all i wanted to do was walk down the street and just shop. I didnt want to bother anybody, i just wanted to shop and there were 14 cameras around me and 200 people started surrounding and i came to the fact dont get angry, this is your life. And im ok with it and there are blessings that come with this and i think hes become a young man. Im proud o