Transcripts For CNBC Squawk Alley 20160815 : vimarsana.com

CNBC Squawk Alley August 15, 2016

Elevation partners. Good to have you with me as well. Ceo tim cook speaking at length with the Washington Post over the weekend. Talked about a ton of subjects including the iphone, the fight against the fbi succession and some of his biggest mistakes as ceo. On the iphone he says overtime im convinced that every person in the world will have a smartphone. That may take awhile and they wont all have iphones but its the greatest market on earth from a consumer point of view. He also says running the worlds most valuable company is a lonely job but hes not looking for any sympathy. Well start with you here. People have been dying for cook to be introspective for awhile. This is about as close as we have come. Its an interesting time to do it. Right before the big iphone launch. Its normally a slow season for their products. We now have the Washington Post piece. Its tim cook setting the table for how apple thinks about things. What kind of a Company Apple is. Can you imagine if youre an apple buyer on the sidelines but you like the company, this might spur you to go to an apple store and walk out with something. Theyre being a lot more strategic in their pr and communications, perhaps reflecting the Services Revenue that theyre trying to grow and this is why that could work. Why do they feel cook should be personalized now . Its as simple as were now at five years of tim cook being the ceo of the company so its a natural point to look back and reflect. As john just pointed out theres really serious issues that investors and employees have to be asking because the world looks different today than it did. And its better but he is a really compelling character. Its hard to imagine the company would have done as well with stooe jobs in place. You have to be a diplomat to be the ceo of apple now and in many ways i think tim cook was the perfect person. What about the substance of what he is saying about the iphone. He has to walk this line by saying you have an amazing magical product in your pocket but also saying we he can do more with it. Remind people of how good it is already. I think this is going to be a walk he will have to walk in a long time. This is the biggest product cycle in the history of anything in business and its propelled apple from a large scale, being the largest most profitable business in the world and theres no second act that follows that. There is no way to sustain the kind of growth that they have had. He has grown the company and theres going to be a period of time here where we consolidate and i to think hes right in the sense that they will eventually sell smartphones to everyone at lower prices probably with lower margins but they can build Services Businesses that are very attractive and theres no reason to believe apple will not remain both huge and immensely profitable and be thought leader in the american economy. Those goals are there and well have to get used to it being a value stock for awhile. What you say about there not being a second act theres something i saw in that piece that i thought was interesting. Hes referring to the apple watch and he says were still pulling that string. Weve got the base technology. Pulling that string is a phrase he used to talk about apple tv. I wonder if hes setting us up to see the iphone as a world apart. Smartphones as being a once in a generation, maybe once in a lifetime type product that each person is going to have one but the watch is not going to explode the way the iphone did. Its a spul of the string. Well still be talking about it that way four or five years from now the way we still are about apple tv. Ill put it this way. That would be great news if were still talking about it because it will mean that somebody has bought it. From the beginning you may recall that i viewed the apple watch as really being part of their Services Environment and a driver of things like apple pay, their palt system and i do think the apple watchs best days are still in front of it but theres no way for a product of that type at that price point to put a dent in apples income statement any more than its possible for apple tv to do the same yet they can each play really important roles in driving the services for the Apple Ecosystem and i will point out that apple tv is a terrific product. It took them forever to get there but its a great product today and i cant live without it and a lot of other people feel the same way and i will be surprised if they dont eventually make the apple watch compelling to the people that use it. It may not be 100 Million People or a billion people using it but for those people that do use it i suspect theyll get huge value and that it will drive other things in apples ecosystem that are valuable to everyone. Looking back to when cook took the job someone wrote his greatest invention may have been tim cook. To your point roger. On another topic, 13 filings are out and theres a lot to talk about in tech stocks. Kate kelly is back at hq with that. Good morning. Big tech moves here bullish and bearish. Both sides of the equation starting with leon cooperman 5 million hedge fund. They took a new stake in netflix of more than 370,000 shares during the second quarter. Netflix having a tough year so far. Down about 16 . Cooper man wouldnt discuss exactly what his thinking was so its up to us to imagine whether hes taking advantage of a cheap price. At the same Time Facebook having a great year so far saw lots of activity. Bought almost 4 million shares. No comment on that one either which compared this market to game of thrones and added portfolios matter as much as stock picking. Dissolving a stake of 1. 6 million shares is worth some profit taking. That was a relatively shortterm trade. The fund thats known for its activism jumped into a couple of new names adding about 2 million shares of expedia and 4 million of Hewitt Packard enterprise and elsewhere on tech increased his take and sold off a large position in vm ware. Possibly capitalizing on a stock up 26 so far this year and the filings are still flowing in. Thats a lot of good information. Thank you for that. It comes as the nasdaq is hitting new intraday highs. Roger you have been arguably net cautious on markets for the past couple of years you went through a period where you said technology was taking a breather from massive innovation. What explains this rotation . Its as simple as we have Central Banks around the world, particularly europe pumping new money into the system and theres nowhere for it to go because companies are not investing. Governments are not investing and its all going into the Capital Markets and with a predictable outcome its going into things where there is some and things like facebook and google and amazon and i look at this and this is against the backdrop of weakening demand in china and europe and the u. S. Is a place of relative strength but still our companies also globally and as a consequence when europe is weak and china is weak thats going to keep the numbers in check so its just going into valuation which in the long run is going to make for some trouble and this is great news. Im glad stocks are going up but the wall of worry is very tall. What i also think is interesting is im looking at this list of tech stocks here. Ill call them the dirty 13 yelp is up and a lot of them are relatively unloved. Theres linked in. Etsy, gopro. Gopro is up 27 for the last three months. When you look at stocks like that doing that well in this environment, what is that signaling. The market has been going up now for six months since the february low and you have to have people rotate out. Those were some of those names but also m a has remained relatively active. Certainly in tech. That linked in deal got a lot of wheels turning in peels minds in terms of where else there might be value but something you didnt mention is Semiconductor Stocks have been a Leadership Group for awhile now and thats really something that usually has more of a fundamental basis in it. Its not just the sentiment shifting related to facebooks longterm earnings streak for example. Does this make you want to double down on your net cautious call . No it makes me more cautious. Thats all. Politically the world is in a very awkward situation. When the market is giving a lot of sunshine as it is today you make hay and then you want to be prepared to move quickly to the sidelines if your risk tolerance tells you things arent going to get better for you. I look at this market and im glad its going up. I can see why its going up. Central banks are pumping a lot of liquidity into the system and the fundamentals are not going to support much higher valuations so you have to have an appropriate time. These are trades and i like the trades. Lets hang in there and keep your fingers crossed that they remain accommodated and they up tick before they down tick. Collectively. Those are markets. Those are markets my friend and thats what it is all about. Thats why we get paid the big bucks. Good to see you talk to you soon. Welcome back. I want to see you samba. As we wait lets take a look at the broader markets. Still trading at record levels. Tacking on gains across the board. You see there the dow s p 500 they have obviously never been there before. Sal shares seeing a nice gain and upgrade to neutral. When we come back twitter and its live nfl coverage could be coming to apple tv. Stocks jumping on that news up almost 7 . Well talk about that well talk to the times reporter that broke that story. Plus usain bolt and ryan lochte. The headlines out of rio and then headlines warning trump to step you or hand the nomination over to mike pence. More squawk alley in a moment. There are many things you dont want in industrial strength smash like an administrative assistant. Your 3 oclock is here. But theres one thing you do. Its called predix from ge. The cloudbased Development Platform thats industrialstrength strength since live stream nfl games on sunday night they signed similar agreements with others. Mike isaac is a Technology Reporter for the New York Times that broke the apple tv story and joins us now. Good morning mike. Hey, how are you . Good, good. So you mentioned in your story that the Google Search placement deal seems to have teetered out a little bit in terms of its growth impact on twitter. Is there reason to believe that an apple tv deal might have more legs for them . I think twitter is really betting on many platforms as they can right now to get this sort of big streaming push for them out as widely as possible. I spoke with anthony, twitter cfo when i was reporting this story a few weeks ago and one of the things he talked about was theres a bunch of things they could do to deal with the google stuff which includes keywords against searches for the nfl game where you can find it streaming online and this apple tv deal, which i found out later on which could just bring that audience, widen that audience up to a million more people that wouldnt otherwise be watching it. Now, mike does this solve any of what you see as the fundamental challenges that twitter has . I guess some might say if they wanted to expand it to video they need broad distribution. Organic growth isnt giving that to them so another platform could help but in terms of the way people treat each other on twitter, around the way these Different Services may be periscope are sbi grated into the core product is this going to fracture twitter or bring it closer together . Thats a great point. Right now theyre trying to get people in the door anyway they can and they can sort out the abuse issues later that they seriously have a problem with and have had a problem with for a very long time but, you know, their pitch right now is they have an audience of more than 500 million users. Probably potentially more than go facebook in some cases because they have this huge logged outd yens of people that dont come to twitter. Com to see the product. So the question for them is how can they put twitter into experiences that people know . Whether thats watching traditional tv or, you know, these other sort of apple tv or xbox is another one that they have actually announced and get them to see the value in using twitter along with that tv experience. And in this case, that means literally putting twitter on top of streaming game and, you know, frankly no one knows if its going to work but its a pretty big bet. One thing i like about your story, mike, is some of the history and the explanation of how the debate of what twitters evolution should look like goes back interest well into the ten year. Has this been a tortured process or not . I think everything in twitter is a tortured process to be honest. No, it actually has. There was, in there i read about i think it took like 18 months for them to actually decide were going to build a video product. We need a new player but one of the things the former ceo did was make this phone call about 18 months ago saying we need a content strategy. What is that going to be . Are we going to produce our own . With buying this new site that they ended up not toidoing . And ultimately they did the licensing deals and twitter has a pretty young audience. Some 72 is 18 to 34 and thats pretty attractive to advertisers and the big audience that snapchat is really sort of positioning themselves to be speaking with. Does the fact that they actually set up and have to do the licensing deals and made moves in this direction indicate that management at twitter is no longer settling back on this idea that its just this essential service for civilization . They had a very elevated sense of what twitters mission was in the World Without having that much of a business punch line attached to it. Folks like us see the value in twitter. Were moving along in any president ial debate or basketball game or whatever but normal people dont know why they should use twitter and dont get those instant sort of fun carl and i are bffs on twitter. Its hard for a normal person to come in and see that value. So i think theres a Business Case at least in getting these streaming deals lined up but really, Something Else i noticed was this hopefully trickled down to sort of surface the underserved content on twitter which is all the other moments that are out there, really every single day. I like how you said its hard for a normal person to come in. Were not normal carl. But quite a twitter bromance you have going here. Thanks for joining us. When we come back, google parent alphabet is rethinking plans for google fiber. Where could it be headed . Well discuss that when we come back in a moment. Aying] [crickets chirping] [owl hoots] announcer if you dont fix them, sparks from dragging tow chains can cause a wildfire. And that could be scary. Bye, smokey only you can prevent wildfires. Google parent alphabet is rethinking plans for google fiber. Live in San Francisco with the details. Good morning. Good morning, thats right. The wall street journal reporting that google is, quote, rethinking its high Speed Internet business because its proving too costly and too time consuming. Google fiber is in six cities nationwide. Alphabets high Speed Internet arm launched six years agatha offers web connections up to 100 times faster than their current internet connections. The Company Reportedly spent hundreds of millions of dollars digging up streets to lay fiber optic cables in its subscriber cities and is trying to cut cost by leasing existing fiber or asking cities to build the networks. Google says were continuing to work with city leaders to explore the possibility of bringing google fiber to many cities. This means deploying the latest technologies in alignment with our product road map while understanding local considerations which takes time. And the cfo reiterated the commitment saying we continue to see fiber as a huge market opportunity. Were focused on creating abundant connectivity on networks that are always fast and always open. Fiber is part of alphabets other segment thats come under scrutiny with a string of departures from Google Ventures and its selfdriving car project. Its been a year since they announced the creation of alphabet. Designed to retain Key Executives but the recent challenging are raising eyebrows. Guys, back to you. Thank you. This is so interesting. Especially in light of the way the Telecom Industry responded to this. I should mention that cnbc is owned by comcast that has a dog in this fight but at t executives and others are looking at how quickly google was able to get approval for the fiber projects and now google is running into some slow downs. Well see where they go from here. Thank you. And coming up, new claims about Donald Trumps Campaign Manager and his ties to russia and ukraine. Walter is going to join us on that when squawk alley comes right back. 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