Gain, that income up 13 . The company sold 39. 3 million iphones in the quarter including about a week of the new iphone 6 and 6 plus but sales are down again. Our editor at large cory johnson spoke with Bloomberg Intelligence analyst starting by asking if apple should be worried about the ipad. The ipad were meant to be weaker than expected theres a product refresh coming. Been getting sale. Stablet growth has been slowing. People are starting to figure it out. Theres a phone with larger screen, pc that can do a lot. And this stuck in between. The pad refresh. Sort of helps reinvigorate that trend. I think that there are a lot of things interesting. The quarter really strong for the Biggest Company in the world like weve never seen great Big Companies grow. Ahead of the Holiday Quarter. They would have had every excuse to say we only had the new iphone for one of the 12 weeks or for one of the 13 weeks of the quarter for products. And the old product was old because the consumers knew it was going to be old but we saw a slowdown in sales. They showed you, 56 of sales. Not only the largest percentage of sales of the things they sell. Its most of the company. Should we be worried about the ipad numbers down . Down Third Quarter in the row. And down 13 overall business. I think it is worrisome for the company. Its reasonable to wonder now weve seen nine months of declining sales to say is this as big as the ipad business gets . Because it grew so fast are we already into replacement cycle territory, not growth territory for the tablet . I find that hard to believe but everything about the ipads growth is so hard to believe because it was so spectacular right out the gate and now it slows down. Anand, lets talk about the picture for apple globally. One of the things i said demand was higher for 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 a sort of holistic perspective. If you look at the activity of these 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 interconnectivity between different products. So as you might move from an i pan to iphone to a mac theres seamless integration. So maybe in 2015 the year ahead we think about what the use case for these different products are. What do we use a pc for, a tablet for, and phone and what screen size do we use . If you look at that entire product spectrum theres an apple product for every price point. All premium prices relative to the competition. But there is a product at every price point and there is a platform across the board. All right. Lets talk about the other thing we talked about during a break the mac. The prices of macs. So the mac numbers were really strong and the average price is as low. My model goes back to the late 1990s and theres no quarter where it was as low as the 1200 that it was in this price so much closer to the competition, more so than ever before. The idea that the mac is finally being pulled along by all this other stuff i think is awesome. As you know, i also cover the pc industry, and it made a lackluster start. The mac surprising on the upside. Back to school sales helped them. It should u have helped the pc, too, but it helped them more. On top they saw sales in china where if anything pc demand has been weak and all the makers have been weak. So this is actually a very noticeable uptick relatively different from the competition. I cant live without my laptop but thats just me personally. Anand, what are we looking for in the coming Holiday Quarter . What should we be watching . I think you want to see the products 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 iphone 6 and iphone 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 curious to see what happens to the refreshed ipad platform. Cory johnson again Bloomberg Intelligence analyst anand sr inivasan. Another note on apple for an upcoming edition of my show, i sat down with Hollywood Screen writer and producer aaron behind some of the biggest hits, including a few good men, the west wing, the news room. The next product is a biopic of steve jobs. In an exclusive interview he revealed that Christian Bale will be playing the role of jobs in the upcoming film. We needed the best actor. It was the nfl draft. There are some people who make a science out of exactly where we need to draft a middle inside linebacker who can do this and other teams say who is the best athlete on the board . We needed the best actor on the board in a certain age rank and thats chris bale. So youre excited about him . I couldnt be more excited. Why . He really is a phenomenal actor. This is a 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 with aaron sorkin 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 everyday stuff . That is next. Welcome back to the best of bloomberg west. I am emily chang. Apple pay is here. Apple rolled out its long awaited platform on monday allowing people to use their new iphones and ipads to pay for items at retailers including mcdonalds, walgreens, and whole foods. Not everything has gone smoothly. A glitch at bank of america has caused some users to be charged twice. For more on apple pay, cory and i spoke with jonathan wall, the cofounder of Google Wallet and coceo of retail startup index, as well as Amanda Richardson, Vice President of product at hotel tonight. I started by asking jonathan how successful apple pay can really be. I think it has a lot of potential. They control distribution of the handsets. They have the program if all their phones. They did a great job with partnerships on the banking side. I think on the whole is valueadded services. So its very clear they can do tap and pay for terminals that are already enabled. But the question is where is the value add . Where is the improved Customer Experience . I think thats the big question mark. Amanda, youve used it. Is there an improved Customer Experience . For our users its faster. So its all about making it fast and easy to book a hotel room. So now its three taps and a thumb print and you can be on your way into your room really quickly. What was it before . 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 easier to raise your thumb tap and go. Do you have any statistics about customers that get as far and then dont complete it . We usually our biggest problem is not ultimately getting through that funnel but the faster the bester it will be. The comparison to Google Wallet is that google captures all the credit card information, protects it as well as they can and thus far thats been fine but they do a lot of customer analysis so they know if im using my card, they know me, where im using it, and theyre learning a lot about me and finding a way to market to me. Apple is not allowing that. As a user i can see thats much more attractive. A lot more privacy. But obviously there are tradeoffs. Apple cant market to me. I think theres effectively some concern that this will limit the valueadds that apple can provide to these retailers. I think thats one of the reasons youll see reticence to accept apple pay. Apple pay right now only accepts credit cards. So target wont know that i andd into a new apartment am shopping for wallpaper and kitchen stuffs. I think it will impair their ability to figure those out. Some of the bigger like target also has a red card. Theres no way for them to put the target red card into the wallet. Google wallet the impression it didnt really break through. What were 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 carriers. Made it very difficult for google to get broad distribution. One of the challenges apple has is they control the handsets. But the challenge is going to be the adoption side. Convincing merchants theres a value add for them. If you think about it in the form of passbooks they have potential, they have assets. Passbook has royalty cards. If you can figure out a way to have passbook be part of the experience youll see retailers willing to play ball. But until then its not clear how this is a slam dunk to the retailer. Why move to something new if its not going to help them . Amanda, from a software writing standpoint how easy was it to work with apple pay on the apple side and Software Side . Apples been great to work with. We started a couple of weeks and we have been able to get the integrate done by last week. Our team was down there and were helpful and we were working hand in hand with the developers. When we came up with issues working together, we made it possible. What were some of the issues . Just little cases or things you dont think about. Or sometimes when you put software into product you learn new things. So working together we made sure all the seams tied up before we launched this week. One of the things i was talking about in our same conversation last week with Marc Andreessen is he said apple pay isnt that innovative. It actually uses a lot of existing systems and just sort of brings everything together. Would you echo that . The trick is where they go from here. They took existing standards, they worked with visa and mastercard. Theyre using some cool new tech. That improves the security of the solution, the touch id improves the security. I think those will come in incremental steps. What probably marc was calling out is the lack of a breakthrough value add proposition. Theres thought theyll get up to 25 basis points of the transaction. No one wants to give up huge dollar amounts like that. Do you think they got it . I think they did and i think its actually kind of amazing they did. Why . This is the issuers this is their bread winner. For them to give some of that up they had to be pretty afraid of missing out of the experience. They felt like they were backed into a corner and felt they had no choice. I think thats probably the case. Why does apple have that much power . Because they do completely control their ecosystem, and it is a powerful system. They control the hardware, software, end to end of the handset. So if you are forced to either partake on their terms or be left out of their system, i guess they felt they didnt have a choice. Why didnt google do it the way apple is doing it . They have a different philosophy. Look at android its an open ecosystem where the rising tide lifts all shift ships. Maybe google will come back to the table and push in that direction. Do you think google is coming back to the table . How much of a chance does it stand . I think they have to. Its still very early. I think that so many more phones. Theyve still got 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. I think apple is going to say were protecting your privacy. I think google is going to say were helping these retailers from these experiences and a huge number of handsets. Google wallet cofounder jonathan wall and Amanda Richardson of hotel tonight. Is Marissa Mayer doing enough to fend off her critics . We break down yahoo earnings in the alibaba impact next. Welcome back to the best of bloomberg west. Im emily chang. An interesting time at yahoo for ceo Marissa Mayer. The company had a 6 billion windfall after taxes. And activist investors is urging yahoo to break apart or consider a merger with aol. Yahoo reported Third Quarter earnings that showed improvement. Revenue is up 1. 5 from a year earlier. Net income, 6. 8 billion, up more than 2000 . So is yahoo really on the comeback trail or is it all alibaba . Cory and i spoke with our editor tom giles. Heres their take on whether yahoo really is making a comeback. Its organic growth, organic slinkage in addition to the acquisition. So the company has spent over 1 billion in acquisition. We dont even know how much theyve spent because they theyve done dozens of acquisitions but they havent released the actual cost. So only in a few cases do we know how much they spend. 1. 1 billion for tumblr, but think about that. And on a year over year basis they see sales increase by 10 million . Thats not very impressive. Theres some other metric that is look better. We saw 1. 5 increase in sales. There is a 45 increase in operating profits after you strip out the alibaba gains, which were substantial. So there are signs of thing s improving but fundamentally after all those acquisitions only 1. 5 Revenue Growth means a lot of heavy lifting. Our editor tom giles in new now, i want to bring in our editor tom giles in new york. Whats your initial read on these numbers . And very same question. Is it yahoo or is it alibaba that were seeing . Heres the thing. Sales growth has been very rare. Thats been very elusive. So as cory pointed out 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 ups miss as a result soft gains that you saw from the alibaba 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 aol 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 . It seems like the idea is way out of left field and i think theyre trying to talk up their book to make it suggest that theyre more valuable. What about the idea of breaking up the company . Look, theres some fundamental terms theyre going to have to make. One of the things Marissa Mayer talked about when talking about the Acquisition Strategy, theyre going to make smart acquisitions, the suggestion being maybe they werent making them before. When she talked on the Conference Call she raised this issue because she knows about this criticism. We have a clear m a strategy and a principled process for reviewing the 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 recognize that is critical and that cash is a fleeting thing for this company. We still dont know yet if tumblr, the 1 billion plus acquisition that they made is going to pay off. But what do you make of new reports out there, things like snapchat . Well, thats probably a bit beyond their realm at this point. One thing that another Silver Lining in these results is mobile is now a material contribution. Thats hugely important given the way we all are accessing the internet now. Its not just on our laptops and desktops any more. Just a quick note. Yahoo has closed its funding round with snapchat valuing the company at 10 billion. Scooter braun is the man that famously discovered Justin Bieber and turned him into the popstar he is today. How did he find him . I sat down with him. Take a listen. What happened when you saw the video of Justin Bieber . I saw a 12yearold kid who had i think eight videos at the time. And he was singing at a contest at a church. I was consulting for akon on a different artist, and i was watching youtube videos of that artist telling him what i thought of it. And they were singing aretha franklin, respect. I thought it was the same person. When i clicked on it was a 12yearold kid. So it was an accident. Stumbled upon it, my gut went crazy. 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 the first belieber. You flew his mom and him. Illegally i think. Down to live next door to you. They were canadian, so i definitely brought them over illegally and put them in a townhouse around the corner for rom me in my name so no one knew they were there. You paid their bills. 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 it hit him in the face. 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 surrounded and i came to the fact that dont get angry, this is your life. And im ok with it and there are blessings that come with it. And hes becoming a young man. Im proud of him. Recently Scooter Braun has been making moves into film and tech. You can catch my interview with him on studio 1. 0. Up next,