Welcome back to squawk alley. Joining us as always, john ford. Joining us as well the cofounder of aol ventures. Good to see you this morning. Markets down 148. Simon brought you up to speed on the comments regarding oil and opec and would be Production Cuts. Well keep our eye on that. Bill gates breaking with tim cook in an interview with the financial times. Gates said quote this is a specific case where the government is asking for access to information. They are not asking for some general thing. They are asking for a particular case. Gates actually walked back some of those comments later in interview with the bbc in bloomberg saying he was disappointed with the headlines saying he was backing the fbi. He pushed for tech and government to strike a balance and additionally with charlie rose didnt answer it that plainly. This is right in your wheel house. Thats the general consensus view where you live and then your own view . Its a very thorny issue. You have zuckerberg, cook, dorsey on one side. Gates on the other side. You have a report saying that 51 of americans think they should. 38 think they shouldnt. 11 dont have an opinion yet and the request is narrow its a known terrorist and we want access to his phone but the problem is the solution is quite broad. Were talking about a back door system that has significant downstream privacy effects that make you susceptible to actors and other governments and there in is the challenge. So you believe the risk is broad despite that the fbi director says the legal case is quite narrow. Gates says this is one specific issue, but you think the risk is bigger than that. I agree that the request is narrow. I think the technological solution is significantly broadened. There in is the challenge. Theres no way to make the solution any more specific. Not that ive heard of. Certainly tim cook has gone on record as saying that is not the case and i think with every Technological Advancement we see the tug and pull. We then had the phone and email and i think these are healthy debates and we have done a pretty good job of november gating these unchartered waters and i think were at the point where we need to do that again right now. But theres been a growing divide between Silicon Valley and washington on privacy and security and we always wondered what would be the event that bridged the divide. What brought them back to the table to start figuring out what the solution would be after San Bernardino we thought maybe that would be the issue. Every expert came on our show and said this is going to bring tech back to the negotiating table on this but this morning on squawk box, the former director of the nsa and cia said we dont have clear enough heads yet. The pend you lumbar might swing too far in the other direction. How far do you have to get after an event to actually have a clear headed conversation about this . I think were actually starting to see that. If you look at tim cooks comments hes saying lets set up a president ial commission. Lets get thought leaders in on this issue and lets really wrestle with it but thats the forum where we will make progress. I dont think the fbi versus apple with all the subject activity involved there and the history and the almost at odds relationship is where were going to make progress. Interesting. We had former director hayden on this morning. He said this area is grey. Always has been grey and its not good versus wrong or right versus evil its privacy, security. Two virtues. And Technological Advancements and how the government needs to navigate the private sector advancements as time goes by. Well keep an eye on it. Its interesting to watch the conversation evolve even after one week. Shares of fitbit struggling today. Down about 14 earlier this morning after posting weaker than expected guidance for the current quarter. We talked to james park the ceo about that earlier on squawk on the street. Heres what he said. We try to give pretty conservative guidance to the street and look we had a record year and a record quarter. Three straight quarters where we have beat guidance which is fantastic. For us it was a great year for us and look the guidance that were giving for 2016 reflects the future confidence that we have in the business. So again here john were dealing with the market. Blistering growth if you believe idc numbers today but the promise of these new products keeps getting pushed back to later and later in the year. Where are you on wearables and fitbit specifically . I think they put up a great quarter that nearly doubled both revenue and units sold. So i think the guidance is that they got it coming out. This is more a timing and sequences issue. Its competition with apple. You have samsung and underarmour and fossil and so i think theyre executing well in a tough market. Actually if you look they lost. They had 33 market share at the end of q3 last year. Thats down to 22 . Investors just want to have their cake and eat it too though. They want to see that these Tech Companies are deploying their capital back into the business and innovating quickly enough but they also want them to be profitable and hit the numbers every single quarter and im wondering if you think that Companies Like fit bit and that are market leaders but still in relatively new markets are going to have a hard time serving both masters. They are. Theyre going to have to demonstrate in q1 and q2 that they can investment spend and launch new products that will ultimately gain market share in order to have the confidence from investors Going Forward but as a Young Company they havent shown that. Dominos pizza has a new app. You can order pizza on your watch. Are these things, i assume, where is the point at which these things are impractical on your wrist . I like the smart watch category. I have expensive watches at home that tell the time. I have an apple watch that tells the time and gives me notification and gives me additional information. I think thats a winning formula. We are in inning one or inning two of this but i like apples profits. They have the eco system and the app infrastructure and overtime that will be meaningful. We could get a refresh at this apple event on march 5th. Im wondering what you think apple could roll out for watch 2. 0 or 1. 5 as it may be that you would start to worry about fitbit and competition. The more apps the better. I love what theyre doing with the fashion. I think thats really important because watches are not only functional but theyre also fashion states so Additional Accessories are important and would make me feel good about it. More fashionable than you already are . Thats hard but my wife may disagree. It does feel like we are talking about apple and everybody else. Theres one player and then everybody else. Its probably the greatest company in the world and that is concerning for competitors in every category in which they play. John, always good to take your temperature on some of the stuff. Thanks for coming in. Pleasure. Plenty more headlines coming out of the mobile world. Congress and barcelona. John is there live. Its already been a busy week on day two. Hey, john. Hey, carl. Dig in a little deeper today into the themes behind the keynotes. Whats next for mobile. I talked to a number of ceos about exactly that. Check out that Simon Seagers the ceo of arm has to say about what comes after the smartphone. Smartphone growth rates have slowed down. Everybody has been expecting this for a long time. We still invest in our road map for mobile because every year theres new flag ship devices which require more and more processing. The cpu or gpu. Theyre trying to now use that technology in cars and Virtual Reality and so forth. Then Kurt Mcmaster is really trying to essentially hack android as give it new capabilities including using voice to Access Services or dial directly into skype. He says thats essential to moving things forward. Take a listen. The big thing is creating new experiences that the oems dont have today. So in a world of launching 15 new rectangles it just doesnt make sense. Consumers want services. They want new experiences. Ericson is focused on bringing the next generation as they are here at qualcomm. The next generation of fast wireless to people around the world. Thats 5g. Not clear how people are going to use it yet. What were seeing is an enormous interest from the larger carriers in the world. How fast it will develop. What type of use cases and thats why were also doing some of the tests with our carriers around the world. They need to understand already now what type of use case in industries. And then just a little bit earlier today i caught up with facebooks javier and when you look at facebook, whats app, instagram, they know how to grow in the mobile area like nobody else. He talked about the importance of retaining the users you already have if you want to grow. Its essential. You can only grocer viss that people like and enjoy and i think facebook addresses communication. Therefore i think im lucky to work in a product that people love and help growing it but it is essential that otherwise its hard to grow. You can grow it artificially but overtime its unsustainable. Now notice he didnt say the word twitter but the lesson for twitter is written all over that. We know that twitter has had Trouble Holding on to users. Its interesting that one of the things that twitter has to face up to is in the real time feed the more people sign up, the more cluttered it might get. Thats part of the reason why theyre moving toward algorithms. The big interview is coming up. In the meantime a quick check on the markets. We did have a Consumer Confidence mix and then raising doubts about a Production Cut and whether that would help the oil market from the oil minister in saudi arabia and oil has fallen by 4 and thats dragged the Broader Market along with it. The dow down 171 points back in correction territory. Meanwhile shares of home depot are in the green after beating on the top and bottom lines. The company also raising its dividend by 17 and that stock is up by just about 1 and shares of macys seeing a nice gain after earnings and revenue there topped estimates. Winter weather helped sales of seasonal clothes and accessories. They didnt get that weather until january but when they finally got it, it helped. Better late than never. When we come back an exclusive with the ceo of qualcomm. Plus plenty more on apples fight against the government. The former Deputy Director of the fbi is with us today. One more check of the markets. Down 173 is the low of the session. Back to 1922. Were back in a moment. Welcome back to squawk alley. Im john fort here in barcelona and im joined by the qualcomm ceo. You just signed on yet another licensee. This is something investors were concerned about. How do you feel about the pace of that and we saw samsung, thats a big one. I mean, we talked 12 days ago and since then we signed up lenovo. The top five in china. We add 80 licensees to those terms. On the 820, a lot of really important important devices announced at the show. Samsung, lg, coney and we have over 100 in the hopper so we feel like were building momentum. How much of a driver is 5g going to be for you given that were still waiting for china to move from lte to 4g. Is it two years away . Should we expect to wait a lot longer . Youll wait sometime but well be the leaders in 5g like we were in 3g and 4g. Were demonstrating in here off camera. Its in the hopper and were working on it and its going to be part of the solution at global scale. They have this goal as stated publicly to get to 25 share in the data center something tells me that youll be a real part of that. Should we expect to see a significant foothold by 2017 if its going to happen . We dont talk about our projections for the market but i will tell you that we also think that market is very interesting. Its going to build overtime. Its going to take a slow start for us to get there but we think its going to be an interesting market. One of the things that we heard from facebook here is the desire to get a lot more involved in how future Wireless Networks are actually structured. Is that a good thing for a player like facebook to get into the space where you also play . Any time someone strieing to help people get connected and to really balance this situation where people want more data than they have access to we support it. How are you going to engage with facebook in this process as they try to bring together technology, makers, carriers, et cetera. We already have a Good Relationship with facebook as we do with a lot of the other cloud providers worldwide and its a natural way that we would deal with partners interested in the same real end goal which is getting people connected to the internet. We have a lot of conversations here about the apple versus fbi controversy. Lots of people speaking out in various sides of it. Where do you stand in because security is important even at the chip level when it comes to how you look at mobile and how you architect it. In many respects we dont have a dog in the hunt. We provide technology into people that are more relevant to ask that question too but that being said we do a lot to secure the product and make sure that people have confidence in it and privacy very very important but for us were really one step removed from the big debate that you hear in the press. That must be a comfortable place to be. Finally emerging markets, any interesting insights that youre taking away on what needs to be Done Technology wise at that level where theres still a lot of growth. We talk about how the phone is this Remote Control for your life and theres a lot of other devices that come around it. We talked about that for several years. Certainly thats happening in mobile world congress. If you looked at lgs announcement about friends that are associated with your phone its very important but controls a lot of accessories. Thats a great trend. Youll see more of it. Always great to see you. Halfway around the world. Back to you guys in new york. Up next, four square launching a new product that it says can tell whether an ad is actually driving foot traffic to stores. Theyll join us to explain and another quick check on the markets. Dow is off the lows but down 170 points. Squawk alley will be back in a moment. We built our factories here because of a huge natural resource. Not the land. The water. Or power sources. Its the people. American workers. They build worldclass products. And that builds communities. And a better future. For all of us. Because making something in america means so much, to so many. Weathertech. Proudly made in america. Hey, carl, yeah, you know, listen i was very surprised because the saudi arabia juan oil minister giving a speech and i thought it was going to be blah blah oil and he wasnt going to say anything. Couldnt have been further from the truth. He made very direct comments about Production Cuts basically telling everybody in the room which is pretty much the entire global oil market, by the way, there will be no Production Cuts. He effectively said we cant have cuts because some countries will cheat. He didnt name iran but you kind of had the nuisance there. We cant have cuts because theres no trust. Thats exactly what he said so i think the no cuts which he said by the way about ten times moving the oil market down. Moving the stock market down, carl. He also noted that saudi arabia is not at war with u. S. Shale. Any company or any specific country but his very firm and clear comments about no Production Cuts addressing a frees. Thats what moving the oil market down. Thats why the entire stock market turned down so making some pretty strong headlines here. And leaving very little to the imagination. I know youll have a lot more from houston with a lot of energy ceos. I imagine they have a lot to say about that. Well check in with you in a little bit. Whether its beyonce singing about red lobster, expensive super bowl ads or donald trump calling for a company, foursquare can announce if theyre actually impacting retail. How does it work . So we cant play the beyonce red lobster mention because its not safe for even cable but does Something Like that actually help red lobster or retail . It tremendously helps. Red lobster should be thanking beyonce because weve seen significant traffic increases since the super bowl. The week after the super bowl we saw a 12 increase in foot traffic to red lobster. So she works. How does foot traffic translate into sales or is it just the traffic that youre gauging . We look at foot traffic but places like red lobster youre not window shopping. Youre going in there and eating food and thats going to translate into real dollars for them. Whats the data that youre gleaning this from . Foursquares has the largest Location Intelligence Company and largest foot traffic panel. So we see foot traffic trends and panels all over the world looking at all sorts of different use cases. How much data are you collecting day on day, for whom, and how much are they paying on this . In general were a Technology Company and we look at a tremendous amount of data every single day from our Consumer Base in an aggregate basis so were looking at different trends but were looking now with our new product to see how adds actually drive store traffic. Do ads work and are they actually driving people into the store to purchase. So this data is being bought by by brands and marketers. Theyre going to be using, you know, just like they buy television theyll be look at this for digital. And generally how soon after a campaign can you start to tell whether or not its moving traffic or not . A day . Hours. Real time. Its real time. We can see based on foot traffic patterns that we see, real time. We dont have to wait weeks or months to look at the impact in results. Is it the companies coming to you and saying can you measure this for me . How do you decide what to measure . Theres 200 billion spent in the u. S. On advertising and 60 billion on digital