[ National Anthem ] [ star spangled banner ] [ speaking in Foreign Language ] [ speaking in Foreign Language ] you know mr. Rose. Expert welcomes from america. These are the two that actually do the work. They take all of the credit. Nice to see you. Thank you so much. Good to see you again. Appreciate you, sir. Good to see you. Very nice to see you. Thank you. Good to see you, man. Just some remarkable pictures here as the president meets members of castros administration, and vice versa. Ahead of a busy afternoon, a bilateral between the two leaders begins at 11 30 eastern. At 1 50 p. M. This afternoon, theyll each make statements to the media. 4 00, an event focused on entrepreneurship in cuba. Michelleca caruso cabrera, i still remember the news flash we got, i think about this time when all of this was announced in intent and plan, and here we are with these two leaders in the same room. And i can tell you this country, cuba, is transfixed, as well. This is being broadcast on national television, and everyone is quite astounded to see a standing u. S. President here, president obama shaking hands with castro is an event im not sure anybody would believe would happen. Remember, it was december of actually 2014 when the announcement came. And went through all of 15. And now were into 16 before we have finally gotten to this point. It took a lot longer for them to establish diplomatic relations than expected because the cubans were very demanding and would still say we want the embargo lifted and the president could do even more. Certainly he is receiving a very warm welcome here. Not just from the government, but also from the people of cuba, carl. Well, michelle, we have talked to a lot of the ceos who have been traveling with the president to havana. Of course, much of the purpose of this trip is to rebuild commercial relationships. Im wondering what the feel is, what the reception is like from the people of cuba on the ground. Reporter so talking to the people, it depends on, kayla, whether or not they know theyre talking to a member of the press. When theyre talking to a member of the press, theyre very circumspect. They say hes very welcomed here. Theyre very calm. If they dont know, you remember the press, theyre a lot more enthusiastic. Theyre so happy hes coming. They think it means its going to be a dramatic improvement in relations. And a lot of people here speak of it in terms of missing their families. Families have been divided for a long time. Because of the tense situation between the two countries. Theres been some improvement. Cuba finally allowed people to travel back and forth to leave the island. For years, you were not permitted to leave cuba. That has changed in the last five years. There has been more reunifications of families. And now that the cuban government is talking about making changes that in theory would lead to a better economy, i have to tell you, when talking to the ceos, if you saw ursula burns interview, theyve been meeting with the leadership here. The leadership here seems to think they can still maintain complete control of the economy. They can still have socialism while they still have foreign direct investment. Thats going to be incredibly difficult to do. Because there are certain things that investors want to do that the cuban government doesnt want to allow them to do. Ursula burns comments very interesting to you, michelle. As we get more headlines from the bilateral availability, well take you back to havana and michelle. In the meantime, breaking news on valiant. This is a the two leaders sitting down now. Mike pearson leaving ackman to the board. Guidance on the 10k. Scott wapner has that. Carl, ive been able to do some reporting around the situation of outgoing ceo mike pearson and valiant, told by a source that the companys move to replace mr. Pearson was, quote, not a mutual decision. That valiants board of directors was concerned about the organizational tone, and decided to oust pearson during a series of phone calls regarding the board over the weekend that the board informed pearson that this is what was happening. That they were taking a series of steps, including initiating that immediate search for a ceo. And that he was no longer in the companys longterm plans. They did send out that press release earlier today, of course, stating that they were looking for a new ceo and that mr. Pearson would stay on until that person was appointed. We also know that bill ackman personally will take a seat on valiants board. I have attempted to obviously contact mr. Ackman this morning, as well. Thats been unsuccessful. Just a little color for you, in the way that all of this transpired over the weekend, concerned about the organizationel judge tone and that it was not a mutual decision for mr. Pearson to leave his job as ceo of that company, carl. Stock obviously responding in one way. Scott, thank you very much. Our scott wapner back at hk. Meantime, were watching the situation in apple, the product unveiled. Jon fortt. Walt mossberg of the verge and editor at large. Guys, good morning to both of you. Jon, ill just let you raise the curtain on what we should expect in a couple hours. Well, we got to get in the time machine, because the big news is expected to look Something Like this. This, of course, is the iphone 5s. We were on the 6s at this point. But were looking to see something perhaps called the i phone se that on the outside looks a lot like this, but internally, has an upgraded camera, has perhaps an a9 chip and m9 inside. The latest apple designed, applebuilt chips. It could cost as little as 450 bucks. But im here with walt mossberg, who is the dean of this stuff. Walt, if apple were to come out with a smaller phone, would that significantly impact sales overall, perhaps in emerging markets . And what sort of price would make a difference . Well, you know, even 450 for an iphone is cheap. Because, you know, an iphone typically sells for almost 700 at base. And i think it actually i dont know about the word significantly, but i think it actually impacts sales in two ways, jon. Even in this country, and other developed countries, not even talking about developed markets. Number one, theres a significant holdout from going to the bigger screens. The bigger screens, as we all know, produced, you know, giant blockbuster numbers for them. So clearly, they were popular. But there was a holdout. And it was a significant holdout share of the market. Tim cook has said that as many as 60 of their users had not upgraded to the bigger screen. And even at the verge where we have pretty techie users, we did a poll that just said, you know, whats the ideal size of a phone . 22 of the people said 4 inches. So there are those people to get. And the second thing is, the timing. Theyre looking at weak projecting weaker sales for the iphone. This is not the best time of year for the sales of the iphone. So announcing it now and shipping it now could give them a little boost by picking up some of those people. It also seems to me, based on what we know about how the engineering works, if you take this form factor which is a bit thicker, put a more advanced chip inside, and the screen is still small, you should be able to get better battery life out of this than you got out of the 5s, correct . I agree. So it could be a great utility phone. It could be a great utility phone. And ill tell you, i know people who just think this is the right size. You know, i notice your 6s or 6 or whatever it is or plus, doesnt really entirely fit in your jeans pocket. Kind of sticking out, yeah. I cant get my wife to upgrade from her 5s, because she just loves that particular size of the. Get my hand around the whole thing. Im curious, were using the word utility here and im thinking about what facebook is doing. With facebook and facebook light for the emerging markets. Im wondering if we should be getting used to the idea that apple will have parallel product tracks, one for utility and one for entertainment. Are we moving in that direction . Well, you know, i dont know if were moving in as sharp a split as that, kayla. But i think that, you know, they made a tentative move toward broadening the phone line with the 5c. You can argue whether that was a success or not. Clearly they have looked at some numbers here and they say they can broaden this they can broaden this out. I also think this ipad announcement today is quite interesting. Because it has at least the glimmer of hope that it will give people who have been reluctant to upgrade their ipads a kind of new kind of ipad that will appeal to them. Really . What is different, walt . For a household that doesnt need to upgrade unless youre giving the kids your hand me downs, whats so compelling about buying an incrementally better ipad for use at home . Well, i think the key you know, the fact look, there have been key boards for ipads forever. Theyre made by thirdparty companies that not everyone trusts. Im not saying there is anything wrong with those companies. But not everyone trusts them. Heres apple making a keyboard that clips right on. There is no bluetooth setup. The pencil is likely to be something that works on it, and some of the Software Features from the pro work on it. And yet its not a giant 13inch thing that, you know, is not easy to hold for a long period of time. And, you know, i think theres a chance that theyll be able to peel off some of those people who have been sitting on coupleyearold or threeyearold ipads and say, hey, now i can use this for productivity in a way i didnt feel i could before. All right. Well, it seems like either way you look at it, walt, this is not about creating brandnew markets for brandnew products. Its about firming up the core, perhaps. Getting some more price points. Maybe even expanding the possibilities in Growth Markets like india and china, depending on how this se plays. Right. All right. Well, guys, well see how this plays out. Of course, i will be covering it live from here. For now, back to you guys in new york. Yep, weve gotten that standard warning from the apple store that theyre down, so to speak. So we know were in the dark side of the moon, guys. Well see you in a little bit. Walt mossberg and jon fortt in cupertino today. How has the company marketed its iphones . Well get a closer look with andy cunningham. The president making that historic trip to cuba. Google, air b and b, some Tech Companies betting big. And Mark Zuckerberg, will facebook be available in china in the near future . Well talk about that when squawk alley continues in a moment. Blaf trugreen presents the yardleys. Hello . oh, pizza is here oh yeah, come on in [claps] woah lose the sneakers pal. Kind of a thing. Spring is on. Start your trugreen lawn plan today. Trugreen. Live life outside. Welcome back to squawk alley. I am here at 1 infinite loop, apple headquarters. We are looking forward to an event here in just a couple hours that should involve the iphone and ipad. Rumor has it, we should expect a lowerend iphone. Kind of a throwback to the iphone 5s design. Perhaps with upgraded internals and a new ipad. The fullsize, but with more of the capabilities of the ipad pro, including the ability to work with the apple pencil. So what does all of this mean to apple . And what does it mean to apples image, seeing as we have got this offcycle, not the holiday season, a few months later. This offcycle announcement coming at a time when people arent necessarily buying product. Joining us now, on squawk alley, is andy cunningham, who did a lot of communications for steve jobs early on. Youve watched apple recently as its grown into this juggernaut. Now involved in apple versus fbi, questions about privacy and security. And its got this Product Launch. If youre tim cook, what do you want to come out of this event today . What do you want to communicate to the world about apple . I think you want people to be very positive toward apple, right ahead of this trial thing starting tomorrow with the fbi. I think you want to get the public support behind you. And this is kind of a fluff announcement today. I mean, they do every announcement. But this is a happy, fun stuff today in their announcement. So get the happy, fun stuff before you start in on the more serious. How do you think this privacy conversation is playing out, outside of the u. S. . Where so much of apples growth is right now . A lot of people are concerned about u. S. Government being able to snoop in, listen in on communication, data, outside of the u. S. . Is this in a way good for apple, that it appears to be standing up to the u. S. Government, given that its trying to grow in chooin and india right now . I think its great that apple is standing up to the u. S. Government. This isnt a case about privacy. Its a case about precedent. Apple doesnt want the precedent set it has to take directive from our government or any government around the world to write code on somebody elses orders, if you will. On the other hand, the fbi absolutely wants this precedent to happen, because it enables them to have more information, makes their job a whole lot easier. So both sides are kind of protecting their interests, and in a way, protecting the country. Each has their principles and each is defending them. Now, in a way, its interesting. This is the one major situation for apple where i havent heard people say, well, what would steve jobs do in this situation . I mean, i think there is very little question that tim cook, as a leader of apple, has a more measured response to the governments demands than steve jobs would, and perhaps that plays well for apple. How do you think this shifts apples culture the way tim cook is leading the country through this particular challenge . I agree he has a more measured approach to it. Deep at the core, its exactly the same, coming from the same place steve would come from. No government, not the u. S. Or any other government is going to give me a directive to do anything, to write anything. And its a very dangerous thing. If you start to be able as a government to force people to develop products, to force companies to develop products, that leads down a very, very dark path. Because the future could be very negative. So i think theyre doing the right thing for apple and the right thing for american business. Kayla . Andy, this is Kayla Tausche back in new york. Given they have a captive audience today and the audience is for a Product Launch, is it smart pr to address the big issue ahead of a Court Appearance tomorrow . What would the company do if you were advising them . Whats the right messaging . I think theyre doing absolutely the right thing, to move this announcement from a normal tuesday to a monday, ahead of this trial. Because as i said, it gets the momentum of the publics opinion, positive toward apple and in behind the company. This is a fun announcement today. Theyre doing fun things. And as you look at apples product development, up to this point, they have shifted so much toward the holiday season, where the big bang for the buck literally is. Is it a good idea to do some things, some more things, perhaps, in the spring, as well . Do you think just in terms of how it gets people thinking about apple throughout the year . Absolutely. I think an ongoing record continuous announcement stream for the country is great for momentum. And its not just about the holiday season. People buy products all yearround. And you have to keep the company in the news and in the forefront of the Public Opinion. And thats great for apple. All right. Andy cunningham, always great to have you. Thank you. Kayla, back to you. All right, jon, see you shortly. When we come back, air b b has been pushing to get access in cuba for some time now. Now the company is opening up bookings for all nationalities. The co founder of air b b, will join us, next. Trolling for a gig with braindrone . Cant blame you. Its a drone you control with your brain, which controls your thumbs, which control this joystick. No, im actually over at the ge booth. Were creating the operating system for industry. Its called predix. Its gonna change the way the world works. Ok, im telling my brain to tell the drone to get you a copy of my resume. Umm, maybe keep your hands on the controller. Look out ohhhhhhhhhh. You know what, im just gonna email it to you. Yeah thats probably safer. Ok, cool. We have been showing you pictures from president obamas historic trip to cuba, the first by a standing president since 1928. And our chief international correspondent, michelleca rousso cabrera. A lot of these companies are actually able to bring business to that company. Reporter hey, kayla. Yeah, were just learning that google is going to host an event later today. We dont know much detail about that. President obama did tell abc news google has struck kind of deal with the cuban government to improve internet access. They have been trying to get in for over a year. I reported when senator kerry was here in august, google offered to wire the entire island for free and the cuban government turned them down for fear offin filtration of the system. Lets see when we find out later today whats going on. In the meantime, president obama is here for the historic visit with raul castro. And even though the embargo is still on, the president is here, and what is an event that has transfixed this country. And millions of people all over the world who never believed that a standing u. S. President would come to cuba. Certainly not while the embargo is still in place. Hes brought a lot of ceos with him. We spoke with a number of them earlier today. Ursula burns, Arnie Sorenson and one of t one of the co founders of airbnb. Today they have been able to announce that foreigners are also going to be able to book rooms in cuba. He says the growth here has been tremendous. Were going to cuba just this year, in the last twoandahalf months, more visitors in all of last year combined. Easier to get commercial flights, i think you can expect more of that. Our hosts here have said theyre booked out for six months. So i think theres theres no shortage of people who want to come here. Reporter airbnb is incredibly popular here, because theres not enough hotel rooms here. And is so air b and b, like you said, booked out. Its been an impressive growth spurt for them. Arnie sorenson, ceo of marriott is here, eager to do business here and happened to be on the same day hes reached another deal with starwood. He tried to make the case for why shareholders should choose this deal. This deal financially, the proposal we signed last night, is not as good for us as the deal we signed and announced in november. The deal we got in november in retrospect maybe was just too good a deal. And so weve gone back, and obviously there was competing bidder which surfaced last week. And we said what is a fair offer for us to put forward. We made a significant move over the course of the weekend, and decided we are really very interested i