9. Terry is here joining us. We tackle samsung first this hour. Warning about thirdquarter profits, slashing them by a third as the production eats into their bottom line. Apple, meanwhile, is up 20 over the last month and up several days in a row. Cole windergart hasnote on apple called evidence on iphone strength. Good to have you back. Hi, how are you . How much strength are you assigning to samsungs difficulties . We already thought the iphone 7 would do quite well. In addition to this, the way i think of it, the note portfolio specifically we think maybe does 20 Million Units a year. We think apple can capture at least half of that volume Going Forward because this products now going to be halted. There is a longerterm issue that will be more beneficial and currently underestimating expectations, which is you think of the high end of the smartphone market, 350 Million Units a year. Its a twoplayer market. And what we have found in the past is when market share shifts to apple, the market share gains tend to be permanent because their loyalty rates and retention rates are very high. Remember, theyre in the 90s. So, what you could see is a structural change in market share Going Forward. Samsung had made changed at the top of the division, trying to gain share from apple in the premium space, and thats clearly at greater risk of not happening here. To what degree do you think this is a productspecific problem, and to what degree do you think this is a symptom of a larger, corporate problem at samsung that might be much more difficult to fix . Well i think its an execution problem. I think its widely known in the industry that the next iphone, not the iphone 7, the one that comes next year, calling it the iphone 8 for arguments sake, will be tucked with new features. Samsung the speculation is accelerated to get this out early and misexecuted on. Thats the problem. When youre asking consumers to spend 800 on a mobile phone but is this just a Great Company that rushed something to market and anybody would have screwed it up because they tried to do something impossible, or is there fundamentally wrong with something with samsung, the way theyre structured, their leadersh leadership . It seems to me its a rush problem because theyre the seventh generation of entering the market on this high end and this is first one weve had. I think they were trying to rush, especially on the feature side, ahead of the super cycle we expect of the iphone next year. What can the company to do protect market share at this point . We always see discounts, companies trying to keep people in their product or ecosystem with a voucher of some sort. We havent seen that here. Is that a possible ingredient . Ill theyll try anything. Kulwinder is right, theres a shortterm and a longterm issue. This is their core business, so a mistake like this has a major impact on earnings projections, and thats bad. By the way, the timing with, googles timing with their phone could not have been any better with the pixel, because im sure that will help them gain market share. But i think the bigger issue for samsung is the longerterm issue here thats underneath all this, and that is, increasingly, smartphone penetration is less about feature functionality of the actual hardware and more about integration with software and services in the broader ecosystem. You made the point about retention. Once youre on the apple platform, the iphone platform and youre used to it with all the different features, it sort of sucks you in and its hard to switch back. Guck le google is going to attempt the same thing with google assistant, google maps, gmail, all of these software and Service Functionalities that group together that work bet with the equipment, makes it an ecosystem that makes it a lot stickier. And i think that ultimately will be samsungs bigger issue in the long return. Kulwind binder, a viewer sai this gives Android Users a chance, a reason to jump into apples ecosystem, which he argued they always wanted to do, but at some point, you have to admit the sum costs youve spent buying Android Phones. Do you buy that some. I think the evidence is to the contrary, that the retention rates are so different between android and the iphone. Iphone is in the mid90s and android at best is mid70s. I think the switch now would be relatively permanent. There are some switching costs, but remember, many Android Users are single product users that tend to have an Android Phone and several other types of platforms out there. So, that actually makes the crosses a little less in this case. It will be interesting to see the market change, if, in fact, it does. Thank you so much. Credit suisse talking samsung and apple. App amazon is launching music unlimited. It will cost 80 a year for prime members, non prime members 10 a month. While owners of the echo, 4 a month for a version that only works on that device. Amazon already has prime music, but that only has about 2 million songs. The new service has tens of millions of songs. Terry, they havent discounted the notion of maybe doing exclusives in addition to the standard catalog. Yeah. Listen, i think amazons play here is a big benefit and a trojan horse for consumers. For less than 50 a year i get any song ive ever wanted in the past or in the future . That sounds to me like a bargain. Ultimately here, this is another one of these examples of these plays by the big four, right . Amazon, facebook, google and apple. Theyre looking to garner, you know, again, a trojan horse service thats kind of like a nobrainer, priced as a nobrainer, for massive user persistence. And the key word here i think is persistence. They want you they viewed that music is one of these services, apps thats like a utility. Its like email 20 years ago, where everyones going to want it. And ultimately, its going to be hard to charge for it at market prices. But amazon, john, is the everything store. I mean, it hardly has the sex appeal of apple and the itunes marketing machine that weve seen. Im wondering what you think amazons brand will be in music, if its going to be thought of as more of the columbia house of today, where you get 12 cds half of our audience doesnt even know what you just said. I personally dont care about the brand of the retailer when it comes to music. And i think whats brilliant about what amazon is doing here if youre a prime member and you sign up yearly for this service at 79 bucks a year, thats 6. 58 a month. That is significantly lower, onethird lower, plus a little bit, than youre going to get from apple, spotify and the others. So, amazon, because its got millions upon millions of people as prime members now pushing that into a shared wallet play for the consumer. We normally see this in the enterprise, but now amazons doing it with the consumer. They want to do it with groceries, too, down the line. Its potentially really powerful. Are they having to find ways, though, terry, to justify prime . The fact that you have to buy this separately outside of prime, but you get a preferred price. You get 80 bucks a year. Oh, i think its related. Theyre doing well with prime memberships. And i think thats been an excellent, you know, strategy for amazon. But think about this, right, its going to be very, very difficult for an independent Music Service play to compete against these large players. Apple at least priced their Additional Services to market pric prices. Amazon is not doing that. Theyre subsidize taking to get this massive, ubiquitous scale. And think about it, if spotify is already losing several hundred Million Dollars a year, what does this bode for them as other big giants get into this and use music as a trojan horse . Last thing. I read, someone this morning questioned whether or not an echo is advanced enough to really accept commands for a specific song. Do you think thats going to be a problem . Im sure that there are engineers at amazon working to improve echo as we speak. I mean, i think its a little crude, but with the competition from google assistant, which looks a little bit more refined, i am most certain that amazon will make that thing work great. And amazon doesnt want you buying the echoonly version. I think thats just a little bit of an enticement to upgrade to the full version. Hey, if youve tried it, give it a try. You really want this on your cell phone, dont you . Bring this in the car. Pay us a little bit more, and people will. Terry, thank you very much. Terry kawaja luma partners. Meanwhile, we get the fed minutes this afternoon and well see how divided the fed was at its september meeting. Some tech earnings stories were keeping an eye on. Cybersecurity firm fortnet tumbling after cutting its guidance, blaming a poor macro sales environment. Also, ericsson with earnings that significantly missed targets. Fortnet is down about 12 , ericsson down 20 . And germanys biggest bank is selling an additional 1. 5 billion of debt to raise cash, general corporate purposes. Stock is just about flat. Carl . When we come back, more on tech stocks with the socalled dean of valuations. Where he sees the market right now. Plus, profiting from tesla and the growth in electric cars. A company with charging stations across the country and a lot more on amazon finally launching amazon music, another area of expansion for bezos, should apple, google and pandora be worried . In a moment. Audi pilotless vehicles have conquered highways, mountains, and racetracks. And now much of that same advanced technology is found in the audi a4. With one nota le difference. E highly advanced audi a4, th availle traffic jam assist. Did you know your business doesnt have to suffer from slow internet . Comcast business now offers blazing fast internet speeds up to 250 mbps. Over 6 times faster than dsl. Get internet for as low as 59. 95 a month. Call today. Comcast business. Built for business. Did you know sharing wifi with your customers could leave your business exposed . Only comcast business offers wifi pro. Two separate networks one thats private for you, and one thats public for your customers. Upgrade to wifi pro for only 19. 95 a month. Call today. Comcast business. Built for business. Sprint is preparing to raise 3. 5 billion by selling and leasing back about 14 of its wireless airwaves. The company has significant debt obligations and says its raising the needed cash to fund the business. It is the third time sprint has done Something Like this in the last year, although the first time that its actually mortgaging its airwaves. Stock is up 1. 5 . Its off the highs today, jon, but you can sell and lease back just about anything if you think its worth something. Yeah, indeed you can. And both campaigns amping up the rhetoric with just 27 days from the election. Chief washington correspondent john harwood joins us from d. C. With the latest. John . Well, jon, they are amping up the rhetoric, but one of the challenges over the last few weeks is going to be who is the fight really between . Is it donald trump versus Hillary Clinton or is it donald trump against both parties . Donald trump last night went on bill oreilly and went off on some of his republican critics like john mccain, also paul ryan. He said that members of the establishment, like House Speaker paul ryan, need him a lot more than he needs them. Take a listen. Because he was begging for my endorsement. People are calling, his friends are calling i know, but be the bigger man. Then the first sign of a little bit of difficulty, he unendorses. All right. I wouldnt want to be in a fox hole with a lot of these people, i can tell you that. But mccains a brave man. Hes a brave man. By the way, including ryan. Especially ryan. I got that. Now, Hillary Clinton, on the other hand, was campaigning in florida with al gore, who, of course, lost the presidency in that disputed election in the year 2000. The former Vice President was touting Hillary Clinton as the champion of action on climate change, and Hillary Clinton used that point to make a contrast with donald trump. So, lets remember, lets remember whats at stake. Im running against a guy who denies science, denies climate change, says its a hoax created by the chinese now certainly, you can expect more of the same over the next four weeks, and we have one more debate left. That will be in las vegas on october the 19th. Going to be very interesting to see what strategies the two campaigns come up with for that session, guys. All right. Thanks so much, john harwood. It is definitely crunch time. Coming up on squawk alley, the dean of valuations. Are tech stocks flying too high . Plus, baby boomers and cars. Why a revolution in selfdriving cars may be a boom for a certain generation. Thats when squawk alley returns. Approaching medicare eligibility . You may think you can put off checking out your Medicare Options until youre sixtyfive, but now is a good time to get the ball rolling. Keep in mind, medicare only covers about eighty percent of part b medical costs. The rest is up to you. 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Plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. Remember, medicare doesnt cover everything. The rest is up to you. Call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. Go long™. Check this out, intel out with a new ad campaign, featuring none other than swimmer Michael Phelps. Take a look. Faster. Faster faster. Faster. Ooh. Now, the idea behind this ad campaign, intel saw Michael Phelps hunched over a laptop during the olympics. It was obviously an old laptop, and they figured, man, if the fastest swimmer in the world is using an old laptop, maybe we should use him to try to get people to upgrade. And it comes at a time when gartners just out with numbers showing that for september, it doesnt look good in terms of pc units, down almost 6 . But in the u. S. , its just about flat. And actually, laptops are up. So, i guess the idea here is target the u. S. , target laptops, maybe there is some strength with inventories being low heading into the holiday season. People might actually go ahead and upgrade. And maybe generate buzz with a familiar face to a lot of people that youre trying to sell those products to as well. Not a lot of people dont know phelps at this point. Although were still waiting to see the Pine Brothers throat drops commercial that ryan lochte has been worng on. Oh, really . His sponsor. But well of course wait for that. Now to a new trend in tech aging. As selfdriving Technology Becomes more of a reality, it may not be millennials that stand to gain the most. Aditi roy is at the aging 2. 0 conference in San Francisco and has that story for us. Aditi. Reporter hi, there, kayla. Some of the biggest names in tech are here to showcase innovations catering to the 50plus crowd, which, by the way, accounts for 7. 6 trillion in annual economic activity. Thats according to the aarp. And among the companies that are taking note of this booming senior market, google. While its unclear when googles selfdriving cars will go to market, jennifer haroon, one of the executives of its selfdriving car program, says that when it does, seniors stand to gain the most. Turns out, here in the u. S. , about four out of five seniors live in more suburban, rural communities. Many, unfortunately, dont have public transportation. So when they do have to give up those car keys, it can be really isolating. And we think selfdriving cars can help expand their world, even if they cant physically drive. Reporter in fact, she says that the company has had Older Americans ride in its selfdriving cars to get their feet back. And in cities where googles testing out selfdriving cars, it holds community meetings, and among the place they publicize those meetings, senior homes. While she says Older Americans represent a key degraphic, getting seniors to adopt selfdriving technology could be a roadblock. According to a recent study from the m. I. T. Age lab, only 12 to 15 of americans over the age of 65 said they would use autonomous cars. Haroon says that the key is educating seniors about technology, even getting them to use it and try it out. And by the way, guys, google is not the only Big Tech Company thats tapping into this growing market. Both uber and lyft have also announced programs in recent weeks that cater to seniors. Back to you. Yeah, aditi, i guess this is a tough one. I mean, a lot of seniors feel uncomfortable with brandnew technology. Ive had requests to program unnamed seniors vcrs and dvrs over the years, for example. A selfdriving car seems like a much bigger hurdle. Reporter absolutely. And the key is, i think its a psychological hurdle fro