Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay I'm Emily check in San Francisco and this
Speaker 1: is Bloomberg Technology. Coming up in the next hour, Apple
Speaker 1: share soar after an impressive second quarter records almost across
Speaker 1: the ward, beats on iPhone sales, iPad Mac, an all
Speaker 1: time services record, also for the services business. I spoke
Speaker 1: with Apple CEO Tim Cook and will tell you what
Speaker 1: he had to say. And just as Elon Musku is
Speaker 1: poised to take over Twitter, revenue misses the slowest growth
Speaker 1: in six quarters. This on top of a new report
Speaker 1: that the FTC is investigating how Musk disclosed his purchases
Speaker 1: of Twitter shares as he amassed a massive steak in
Speaker 1: secret and qualcom source as the Chip Giant diversifies beyond
Speaker 1: phones to cars, networks and computers, CEO Cristiano Amman joins
Speaker 1: us later this hour. We will get to all of
Speaker 1: that in a moment, but first we are watching Apple
Speaker 1: and Amazon results. Also out this hour, Bloombriggs Emily Grafao
Speaker 1: joins us now to see how investors are reacting. Emily
Speaker 1: take it away hi Emily Will was a largely green
Speaker 1: day for the US stock marke at the SMP five
Speaker 1: hundred ended up two point four seven percent, and the
Speaker 1: tech heavy Nasdaq one hundred also ended up higher three
Speaker 1: by three point four eight percent. That was the largest
Speaker 1: one day game since March sixteenth. We also saw yields
Speaker 1: higher but didn't seem to bother US equity investors from
Speaker 1: buying up stocks. And of course it was a largely
Speaker 1: risk on day. So we also saw bitcoin finishing the
Speaker 1: day in New York higher. We tend to see that
Speaker 1: risk on trade. Bitcoin tends to get higher. But the
Speaker 1: big story of the day was really all about the
Speaker 1: big tech earnings coming up. We're gonna look at Apple
Speaker 1: right now because the stock is rallying after reported earnings.
Speaker 1: They are up right now about point four seven percent.
Speaker 1: They beat on sales, they beat on profits. They reported
Speaker 1: sales rising to about ninety seven point three billion dollars
Speaker 1: in the quarter. It was largely fueled by demand for
Speaker 1: iPhones demand for their web services. They also announced a
Speaker 1: ninety billion dollar stock buy back program, and so you're
Speaker 1: really seeing that optimism reflected uh in the stock price,
Speaker 1: but it wasn't positive for all of the big tech companies.
Speaker 1: I'm looking at Amazon right now, down nine point five
Speaker 1: four percent in the post market. They missed on sales
Speaker 1: for this quarter, but they also projected um a forward
Speaker 1: guidance that was lower than analysts expected for the next quarter.
Speaker 1: And it was the same thing for Intel. You're seeing
Speaker 1: until down about four uh percent in the post market.
Speaker 1: They also projected that that forward guidance for the next
Speaker 1: quarter was going to be lower than analyst estimates. Twitter
Speaker 1: also reported earnings this morning. It was one of the
Speaker 1: final earnings reports before Mr Elon Musk take the company private.
Speaker 1: They did miss on revenue, but interesting to note they
Speaker 1: did report a six increase in their daily active users,
Speaker 1: so daily active users grew to million, and that beat estimates.
Speaker 1: And then we're also seeing again that Apple shares falling
Speaker 1: lectually a little bit now um in the postmarket. Emily,
Speaker 1: all right, Emily graffe O, thank you. Lots to break
Speaker 1: down throughout the show. I want to start with Apple
Speaker 1: beating estimates yet again, shares rising in extended trading. This
Speaker 1: Apple's biggest non holiday quarter ever. I spoke with Apple
Speaker 1: CEO Tim Cook just moments ago to break down his
Speaker 1: remarks and the numbers I want to bring in. Juliasc
Speaker 1: vice president and principal analyst at Forrester Research, and Tom
Speaker 1: Giles are Bloomberg Tech Executive editor. Thank you both for
Speaker 1: being here. Looking across the board, it is fairly impressive
Speaker 1: to see how Apple weathered the macro environment. On the
Speaker 1: call with me, Tim Cook said it was a record quarter.
Speaker 1: We grew in each of our categories except iPad, where
Speaker 1: we had very significant supply constraints. He said they did
Speaker 1: experience apply constraints, but they were significantly lower than what
Speaker 1: they experienced in December, and that they were all silicon
Speaker 1: shortage related, so chip issue related. And it's of course
Speaker 1: that's an industry wide issue that affected several of their products. Julie,
Speaker 1: what's your big takeaway that despite they supply constraints, despite
Speaker 1: macro economic uncertainty, Apple still blowing it out of the water. Yeah, no,
Speaker 1: it's it's exciting to watch. And I think you know,
Speaker 1: one of the things that we always know about Apple
Speaker 1: is there in terms of like worldwide market share for
Speaker 1: something like smartphones or PCs, they have a minority stake
Speaker 1: relative to Android and some other platforms, so there's always
Speaker 1: going to be a lot of upside and Apple is
Speaker 1: always going in a forward direction. It's very common that
Speaker 1: if I own an iOS smartphone or I own laptop maclaptop,
Speaker 1: are more likely to buy an Apple device with my
Speaker 1: next purchase, a more likely to buy Apple services. So
Speaker 1: the stickiness of their devices and services is very high.
Speaker 1: And so yeah, there's a lot of upside for Apple
Speaker 1: ahead as we look forward, Tom, how don't score this
Speaker 1: with with Amazon's results, which we're going to dig into
Speaker 1: a little later in the show, but sluggish second quarter sales. Uh.
Speaker 1: Tim Cook did say they're seeing inflationary pressure, but that
Speaker 1: in their op X and gross margins you see that
Speaker 1: reflected and they're navigating that as best they can. But
Speaker 1: still these numbers, it's a night and day situation here.
Speaker 1: Apple benefited from the fact they introduced a new lower
Speaker 1: cost iPhone that started to kick in during the quarter.
Speaker 1: iPhone continues to be this big money maker for them,
Speaker 1: and they really took advantage of that. And as your
Speaker 1: other guests pointed out, services they keep they keep adding services,
Speaker 1: and they keep making that an attractive proposition for iPhone
Speaker 1: owners and getting you to come back to it, whether
Speaker 1: it's app downloads, whether it's entertainment, etcetera. So it just
Speaker 1: keeps going on and on and on Amazon huge contrast
Speaker 1: inflation inflation. Inflation seems to be a big issue there.
Speaker 1: You're talking about rising fuel costs. Remember we broke the
Speaker 1: news that they imposed a surcharge for their their partners
Speaker 1: to account for rising fuel costs and other inflationary pressures.
Speaker 1: That took a toll over. Capacity is another important story
Speaker 1: about Amazon, and they really invested in warehouses, they invested
Speaker 1: in people because remember Amazon had this surge in demand
Speaker 1: during the pandemic. We were all at home, we were
Speaker 1: all ordering everything online, and that hugely benefited Amazon. That
Speaker 1: party cannot continue forever, and we are starting to see
Speaker 1: the effects of the trail off in the pandemic fueled
Speaker 1: boom that Amazon benefited from for so long. Now. I
Speaker 1: did ask for Tim Cook for more color on the
Speaker 1: current corn and what he sees through the end of
Speaker 1: the year, when it comes to demand, when it comes
Speaker 1: to supply chain issues, when it comes to Russia. He
Speaker 1: said they'd get into all of that on the call,
Speaker 1: and we are listening in and you can follow on
Speaker 1: along at our t live block. He actually said they're
Speaker 1: going to be giving an number on Russia revenue specifically,
Speaker 1: and what kind of a hit they took their given
Speaker 1: that they paused sales of products. Julie, what is your
Speaker 1: outlook on how Apple will continue to whether supply constraints
Speaker 1: should they persist given an ongoing lockdown in China? Yeah, so,
Speaker 1: well that thing is supply chain analysts. I think, you know, Emily,
Speaker 1: you really kicked it off, and you started the call
Speaker 1: and said, you know, despite whatever happens, whether there's a war,
Speaker 1: there's a pandemic, there's supply chain issue, there's a lockdown
Speaker 1: in China, Apple continues to weather it will. So you know,
Speaker 1: they just seem to be somehow better positioned than perhaps
Speaker 1: some of their competitors and consumer electronics to ride through
Speaker 1: the supply chain issues even though it is impacting you know,
Speaker 1: one or two of their categories today. So I just
Speaker 1: tend to never underestimate what Apple can get done. All right,
Speaker 1: I want to talk a little bit more about their
Speaker 1: services business, because, of course the other big story in
Speaker 1: the business world is streaming and the decline we saw
Speaker 1: on Netflix subscribers. Of course, Apple has a signal, you know,
Speaker 1: a significant position or has made a significant bet there
Speaker 1: with TV Plus, and I asked know how that's doing
Speaker 1: and if they're still as bullish on streaming. He said,
Speaker 1: we're very bullish. Our philosophy for TV plus from the
Speaker 1: beginning and it continues unchanged is to create high quality,
Speaker 1: original content that aligns well with our values and to
Speaker 1: be one of the most desire platforms for storytellers. And
Speaker 1: I feel we're doing a pretty good job of that.
Speaker 1: He highlighted Coda, which of course won the Oscar for
Speaker 1: Best Picture and I think was extraordinary. He highlighted the
Speaker 1: success of ted Lasso. You know, you know, certainly not
Speaker 1: as big a bet on on on streaming as as
Speaker 1: Netflix has made um on streaming. But Tom, what do
Speaker 1: you make of the fact that this is an area
Speaker 1: that they're going to continue to invest in. They're coming
Speaker 1: from behind here. They don't have to prove themselves in
Speaker 1: the way Netflix is the is the player to really
Speaker 1: knock off on this on streaming right now, and we're
Speaker 1: starting to see that happen. Apple is a much smaller
Speaker 1: player there they are, they're coming from behind, and it's
Speaker 1: all upside to them. It's one of many businesses. This
Speaker 1: is a very law overall percentage when you think about
Speaker 1: where they get their revenue from. It's almost like gravy
Speaker 1: for them in some ways, and they're not betting the
Speaker 1: farm on streaming. They are investing in great shows. We're
Speaker 1: all waiting for the next season of ted Lasso, but
Speaker 1: it's not the centerpiece of their of their strategy. I'm
Speaker 1: very curious to hear on the call any more detail
Speaker 1: they can give us about their user numbers, the time
Speaker 1: being spent, and are they getting any of the subscribers
Speaker 1: who are maybe not spending as much time on Netflix
Speaker 1: right now? And just on the supply chain. I want
Speaker 1: to add on something Julie said, think about where China
Speaker 1: is the lockdowns. Are the parts of China that are
Speaker 1: that Apple is really dependent on, are not the parts
Speaker 1: of China that are really most severely hurt right now.
Speaker 1: I was very surprised at how upbeat Tim Cook was
Speaker 1: about the supply chain issue, how much better it's getting.
Speaker 1: The question is if the lockdown spread much more significantly
Speaker 1: throughout China than what happens top All right, we'll be
Speaker 1: listening for all of that on the call. Tom Giles,
Speaker 1: our executive editor, thank you as well as juliask much
Speaker 1: more to come we're gonna be talking about Amazon falling
Speaker 1: after less than stellar results. Break down all of that,
Speaker 1: including what role inflation and the supply chain is playing
Speaker 1: in the miss That is next. This is Bloomberg, Amazon
Speaker 1: tumbling after a less than stellar earnings report, including a
Speaker 1: loss in the first quarter and projected loss in the
Speaker 1: second quarter. I'm joined now by Melissa Burdic, president and
Speaker 1: co founder of pack few, and of course a former
Speaker 1: Amazon employee. Melissa, what's your takeaway here, especially given the
Speaker 1: strong numbers from Apple. I know that's a pretty crazy
Speaker 1: but like the gentleman said, the bore and really is
Speaker 1: apples and oranges. Um. You know, this quarter people return
Speaker 1: to stores. There's also more competition in e commerce. There's
Speaker 1: more sites people are shopping at in addition to going
Speaker 1: to school, is Walmart and Sapart, Target, They all have
Speaker 1: a target on Amazon's back, and they're they're getting better.
Speaker 1: Another thing too, is that you know the supply chain georages,
Speaker 1: of course everyone knew about. Brands are also taking a
Speaker 1: lot of cost increases and spending some time negotiating with
Speaker 1: Amazon trying to get those costs increases through, and sometimes
Speaker 1: they stop shipping during that time as they were doing
Speaker 1: that negotiation, and then the other thing that also happened.
Speaker 1: You know, Amazon did increase crime rate from one nineteen
Speaker 1: a month to one thirty nine. In terms of their
Speaker 1: membership feed and we do you see the subscription revenue
Speaker 1: was slightly higher eight point four billion last quarter or
Speaker 1: eight point one billion this quarter. But that's definitely something
Speaker 1: to watch. So, you know, what about the supply chain
Speaker 1: issues we're seeing Apple, for example, navigating you know, ongoing
Speaker 1: supply issues quite well. You know, what is it that
Speaker 1: Amazon needs to do? And you know, if it's Apples
Speaker 1: two oranges, how are Amazon supply issues different from what
Speaker 1: a company like Apple is facing. It's just so different
Speaker 1: because Amazon relies on merchants, you know, third party merchants
Speaker 1: and brands versus Apple has whole control over just what
Speaker 1: they're selling. So especially with the lockdown in China where
Speaker 1: there's zero tolerance of COVID sellers, you know, there's no
Speaker 1: manufacturing during that time frame, so sellers are not able
Speaker 1: to get their goods. The Amazon is just reliant on
Speaker 1: you know, their party marketplace and retailers or i'm sorry,
Speaker 1: brands that are reliant on the manufacturing supply chains. It's
Speaker 1: it's really Amazon in the marketplace that is trying to
Speaker 1: broker all these things, and it's the brands and the
Speaker 1: third party sellers that are really having struggles and challenges there. Meantime,
Speaker 1: of course, we're seeing wage inflation, rising gas prices. You know,
Speaker 1: how is this all going to impact consumer spending, you know,
Speaker 1: which is like the bread and butter of Amazon dot Com. Yeah,
Speaker 1: I agree, And one one thing, just to correct the
Speaker 1: last gentleman did say that Amazon implemented a fuel searcharts.
Speaker 1: It actually goes into effect at the end of April, UM,
Speaker 1: so in a couple of days from now, actually think today.
Speaker 1: So I don't think that impacted too much yet. But
Speaker 1: I mean, the reality is is that prices are going up,
Speaker 1: costs are going up, so um, there will be some slowing,
Speaker 1: but there are some bright spots, you know. One of
Speaker 1: the things that people are just point about with Q
Speaker 1: two that also had some you know, poor guidance, and
Speaker 1: I think the market light but Prime Day is always
Speaker 1: a shining star, and that's actually going to be in
Speaker 1: Q three this year, and so I do think that
Speaker 1: customers are going to be looking for deals and Amazon
Speaker 1: has the capacity they've built up the supply chain. They're
Speaker 1: going to be having a huge Q three this uh
Speaker 1: this year with Prime Day. Let's talk a little bit
Speaker 1: about about streaming because Amazon also has a bet here
Speaker 1: and it impacts potentially prime subscription. We we saw what
Speaker 1: happened with Netflix. We just heard Apple CEO Tim Cook
Speaker 1: telling me they're still very bullish on Apple TV plus.
Speaker 1: You know, this is a big area of ending for
Speaker 1: all of these companies. Should Amazon continue to be pouring
Speaker 1: money into this and how does it impact the bottom line.
Speaker 1: I'm super positive on Amazon streaming opportunity. They just bought
Speaker 1: MGM that closed last month, so that gives them access
Speaker 1: to senting tholls and TV shows and four thousand films.
Speaker 1: They're gonna have the most expensive show this this fall,
Speaker 1: which sounds pretty cool with the Lord the Rings, and
Speaker 1: then they're also talking about bring an NFL game to
Speaker 1: Black Friday. What's beautiful about Amazon streaming opportunity is also
Speaker 1: their ad revenue that they can get from all these shows.
Speaker 1: This is premium inventory that they can put through their
Speaker 1: advertising network, UM thirty one billion dollars last year and
Speaker 1: uh so that's that's a really great opportunity for them.
Speaker 1: But also speaking about advertising. That also was a slight
Speaker 1: miss for them this quarter as well. Um, it missed expectations,
Speaker 1: but it kind of goes back to you know, brands
Speaker 1: can't advertise what they don't have, so supply chain also
Speaker 1: impacted advertising, So UM, I don't really saw that our
Speaker 1: business all right, Patty's Melissa Verdick, thank you as always
Speaker 1: for your analysis. There will continue to follow the Amazon
Speaker 1: call as well. Onto more earnings now, and let's take
Speaker 1: a look at Twitter revenue missing analyst estimates. And this
Speaker 1: one of the last earnings reports before Elon Musk plans
Speaker 1: to take over the company. We're seeing a slowdown in advertising.
Speaker 1: Musk has signal he doesn't necessarily want Twitter to rely
Speaker 1: on ads and might prefer a subscription model. Could this
Speaker 1: accelerate that plan? Let's ask our next guest, Scott Kessler,
Speaker 1: global head of technology at Third Bridge, how do you
Speaker 1: think Elon Musk is looking at these ad results? Scott Um,
Speaker 1: thanks a lot, Emily. I think honestly, they're largely in line.
Speaker 1: I think when you see uh the m d AU
Speaker 1: number go up so significantly, I think there are positives
Speaker 1: to take from the results, and I think he's probably
Speaker 1: also reading a lot of the tweets about people suddenly
Speaker 1: gaining a lot more followers, um, and they're obviously constructive
Speaker 1: on that. So let's talk a little bit about then
Speaker 1: the broader ad industry. Clearly we're seeing digital ads take
Speaker 1: a toll. We saw it at Metta, we saw it
Speaker 1: at Snap. You know, how do you expect this to
Speaker 1: play out over the course of the year if the
Speaker 1: macro environment doesn't significantly change. Yeah. Well, what's interesting is historically,
Speaker 1: if you had kind of uh um, challenging economic backdrop,
Speaker 1: it would seem like those areas, including historically digital advertising
Speaker 1: would actually perform better because the thought is that the
Speaker 1: shift over from say, legacy or traditional advertising to digital
Speaker 1: advertising would accelerate given that more challenging backdrop. Now is
Speaker 1: a different time though, however, because of the impact, among
Speaker 1: other things, of id f A, which had a negative
Speaker 1: impact on a lot of digital and social media advertising companies,
Speaker 1: and it's one of the primary reasons that we've seen
Speaker 1: meta platforms struggle so mightily, and people cheered, uh when
Speaker 1: the company generated seven percent revenue growth. So, uh, let's
Speaker 1: talk a little bit about this Elon deal. How bullish
Speaker 1: are you on this? You know, clearly Twitter has a
Speaker 1: lot of potential I think everyone can agree that has
Speaker 1: not necessarily been realized from a business perspective, from a
Speaker 1: user's perspective, from uh an influenced perspective, but you know,
Speaker 1: still very controversial whether or not he's going to be
Speaker 1: good for this platform. Yeah. I mean, look, I think
Speaker 1: one of the things that everyone can agree on, and
Speaker 1: there's a lot of different opinions on this proposed transaction,
Speaker 1: is that if Elon Musk ends up buying Twitter, a
Speaker 1: lot of change is going to come to the company
Speaker 1: and to the platform. Now, whether those changes are going
Speaker 1: to be for the good, for the bad, or otherwise
Speaker 1: remains to be seen. But a lot of us who
Speaker 1: have been using Twitter for a lot of time would
Speaker 1: acknowledge that it's largely the same platform that it was
Speaker 1: ten years ago, and that and of itself, I think
Speaker 1: speaks to some of the issues that people have around Twitter.
Speaker 1: The edit button, for example, that Musk has highlighted in
Speaker 1: some of his tweets. That being said, however, I think
Speaker 1: the reality is that I look at it as you know,
Speaker 1: a pendulum, right that sits between Twitter's focus historically on
Speaker 1: health and safety, at least over the last couple of
Speaker 1: years and Musk's indicated focus on free speech, we've seen
Speaker 1: that pendulum swing quite far to health and safety. Musk
Speaker 1: obviously wants to shift it more uh to free speech.
Speaker 1: What that will do, in effect is render less relevant
Speaker 1: or maybe irrelevant. The notion of content moderation, which Twitter
Speaker 1: and a lot of money on, has a lot of
Speaker 1: employees doing, and that's clearly an area that Musk would
Speaker 1: seemingly look to make cuts to help not only fulfill
Speaker 1: his free speech goal, but also to help preserve and
Speaker 1: grow free cash flow. The Information is reporting that the
Speaker 1: FTC has opened an inquiry into how Musk disclosed his
Speaker 1: Twitter steak and whether or not he followed the rules there.
Speaker 1: What do you make of this and potential regulatory headwinds
Speaker 1: to this deal? Yeah, Look, I think a lot of
Speaker 1: people have been looking for potential hold ups in this transaction,
Speaker 1: especially legal and regulatory ones. Um. Look, I don't know
Speaker 1: the specifics of the inquiry, what exactly they're focused on. Um.
Speaker 1: Musk is no stranger to a lot of these types
Speaker 1: of issues. Um, but he's been able to push through them.
Speaker 1: I can't imagine that those types of issues are going
Speaker 1: to hold up this deal. I think at the end
Speaker 1: of the day, a this really comes down to does
Speaker 1: Elon Musk fall through honest financing and consummate the transaction
Speaker 1: and what happens next? And I frankly think there are
Speaker 1: a lot of questions about the financing and the fall through,
Speaker 1: but in terms of legal and regulatory I don't expect
Speaker 1: that to be the primary impediment for this deal going through.
Speaker 1: All right, Scott Kessler, Third Bridge, Global head of Technology,
Speaker 1: thanks so much for joining us. All of us very
Speaker 1: anxious to see how these how this deal plays out. Meantime,
Speaker 1: Snap is trying to make it even easier to take
Speaker 1: a selfie. The company just unveiled this yellow, square shaped
Speaker 1: flying camera drone called Pixie. Snap c e O Evan
Speaker 1: Spiegel said the inspiration for the Pixie was, quote, what
Speaker 1: would feel like if Tinkerbell were your personal photographer? Well,
Speaker 1: now you can have that personal photographer for two dollars.
Speaker 1: The Pixie is available for pre order only in the
Speaker 1: US and France and is expected to begin shipping next month.
Speaker 1: Welcome back to Bloomberg Technology and Emily Chang in San Francisco.
Speaker 1: Anyone concerned about falling chip demand post pandemic need look
Speaker 1: no further than qual Calm for reassurance, posting better than
Speaker 1: expected earnings and a strong sales forecast. This thanks in
Speaker 1: large part to see On CEO Christiano Almond's plan to
Speaker 1: diversify the company beyond smartphones. Aumon joins me. Now, Cristiano,
Speaker 1: great to have you back with us. You know you
Speaker 1: ended the call by thanking analysts for all the questions
Speaker 1: about phones, but reminded them that qual Calm is so
Speaker 1: much more than a communications chip company. Now, how do
Speaker 1: you see these earnings proving that out look? Uh? First
Speaker 1: of all, great talking to you know, Emily. Uh. And
Speaker 1: strategy is working for the companies. It's it's really working.
Speaker 1: We we are now growing across the whole business in
Speaker 1: a number of different in Mark gets hands, It's yes,
Speaker 1: it's a great story, will continue to be a great story.
Speaker 1: I think we're doing well there. Um, I guess like
Speaker 1: no good did go to goes unpunished as by doing
Speaker 1: well and hance it. So I think we're we get
Speaker 1: all those questions, but the reality is the IoT growth
Speaker 1: has been incredible. We grew sixty um and until we
Speaker 1: added three billion dollars to our design when pipeline within
Speaker 1: the quarter. So the company is truly changing from what
Speaker 1: is perceived to be a communication company for the handsOn market.
Speaker 1: It's really a connected processor company for the intelligent edge.
Speaker 1: And uh, you know, hopefully that message came across. You've
Speaker 1: gotten so many questions over the years about your relationship
Speaker 1: with Apple, including from yours truly, but the call focused
Speaker 1: a lot on Samsung. Is it better for Qualcom to
Speaker 1: have Samsung as a customer a successful customer, as opposed
Speaker 1: to Apple? And if so, why, Well, that's a very
Speaker 1: good question, and I think it goes to the heart
Speaker 1: of our mobile strategy is so, here's the reason we're
Speaker 1: doing so well enhance its and we had the outline
Speaker 1: and the call exactually one of the fastest growing uh
Speaker 1: in a revenue for US and and silicon content and
Speaker 1: and of course earnings is on the processor side. So
Speaker 1: we we put the following strategy in place. We want
Speaker 1: to be synonymous with premium and high tier Android. We
Speaker 1: when when you think about a flagship Android, you think
Speaker 1: Snapdragon and snap Dragon eight. It's really becoming the platform
Speaker 1: of choice across every o EM, from Samsung to Vivo, OPO,
Speaker 1: shall me Huawei honor UH to build their phones UH
Speaker 1: in the flagship category. And what's happening go back to
Speaker 1: your question when we sell, When we sell a snap
Speaker 1: Dragon eight series into a ALEXS twenty two from a
Speaker 1: revenue UH and in an earning standpoint, is probably equivalent
Speaker 1: of selling modems to five iPhones. So it's a great trade.
Speaker 1: So and especially when you look at the decision made
Speaker 1: by Samsung as a result of the strategy of being
Speaker 1: very focused, and the snap Dragon been winning in all categories,
Speaker 1: the best oft smartphone camera in the ward, the highest,
Speaker 1: the XO mark scores the fastest AI, lowest power with
Speaker 1: with a graphics and CPU performance. That is driving the
Speaker 1: shift from four percent to seventy. So Galaxys one, we're
Speaker 1: now we're seventy plus. You know, you've been pretty optimistic
Speaker 1: about supply issues easing through the end of the year.
Speaker 1: And I just got off a call with Apple CEO
Speaker 1: Tim Cook, and here's what he told me about supply
Speaker 1: at least over the last quarter. Said, we did experience
Speaker 1: significant can we it experienced supply constraints, but they were
Speaker 1: significantly lower than what we experienced in the December quarter,
Speaker 1: and they were all silicon shorts related, so that the
Speaker 1: industry wide issue with silicon that affected us on several
Speaker 1: of our products. UM. I didn't get a lot of
Speaker 1: color on supply issues in the current quarter, but you know,
Speaker 1: how would you square that with what you're seeing. Look,
Speaker 1: it's very consistent what what he said. If you remember
Speaker 1: we said that in this year of two thou two
Speaker 1: we expect supply to improve dramatically. That it is true.
Speaker 1: We said that the second half who have a significant
Speaker 1: improvements in supply. That is happening. But having said that,
Speaker 1: would still have more demandant supply. We are now not
Speaker 1: the main constraint or supply constraint. And especially for the
Speaker 1: company which is now part of the digital transformation trans
Speaker 1: they've seen enterprise and that's driving a lot of growth
Speaker 1: in our IoT business. UM in addition to all to
Speaker 1: enhance its now you gave a huge target for revenue
Speaker 1: coming from automotive, sixteen billion dollars, and I'm curious how
Speaker 1: quickly we get to that massive total given where the
Speaker 1: business is today, which is it's growing, but it's still
Speaker 1: relatively small. Yeah. No, it's the way to the way
Speaker 1: to think about automotive, and I think that's the reason
Speaker 1: we provide that metric off the design winds UH that
Speaker 1: we have. We're winning the future, UH, you know, silicon
Speaker 1: in in the automobile industry, we're with twenty six brands.
Speaker 1: Now we see traction with our Snapdragon digital chassis. We're
Speaker 1: winning across digital cockpit, you know, connectivity with the cloud
Speaker 1: and now a death and autonomy. And the way to
Speaker 1: think about it is when we talk about a sixteen
Speaker 1: billion dollars design wing pipeline, you'll think about cars that
Speaker 1: are gonna be launching in the twenty four, twenty something,
Speaker 1: twenty and twenty four all the way to twenty five
Speaker 1: time frame, and then they stay in production for uh
Speaker 1: five to six years. So it's it's it's almost a
Speaker 1: contracted backlog. And we just added three billion to the
Speaker 1: metric used to be thirteen billion dollars. In the quarter
Speaker 1: we had three billion more UH. And one of the
Speaker 1: biggest components of that is our contract with still luntis
Speaker 1: now Qualcom. As you've said, you want Qualcom to be
Speaker 1: judged by well by how well it transforms to a
Speaker 1: company far beyond phones, and we have seen Qualcom take
Speaker 1: a little bit of a beating um along with other
Speaker 1: chip companies, though of course the shares sword today. Is
Speaker 1: there something that you think investors still aren't seeing that
Speaker 1: you want them to see in terms of this broader transition? Oh? Absolutely,
Speaker 1: you know. The way, the way I will answer your
Speaker 1: question is investors have the tendency to just think about
Speaker 1: the handsets and just because we're doing well and hands
Speaker 1: it's we did we to on the market that was
Speaker 1: flat to to a negative bias and we grew in
Speaker 1: the year the border. But uh, the reality is there
Speaker 1: is a broader story with Qualcom, which is our technology
Speaker 1: is going to power those billions of devices that are
Speaker 1: really enabling the cloud economy. And we see that happening
Speaker 1: with the growth rates that we have in our IoT business,
Speaker 1: uh across consumer uh the as networking in enterprise. And
Speaker 1: just as I was watching uh you right before you
Speaker 1: made a comment about the new A drone of Snap
Speaker 1: that's our chip. That's one of our many IoT categories
Speaker 1: that we have. All right, Well, it's great when we
Speaker 1: can hear about your customers that I know for a
Speaker 1: long time you haven't been able to talk about your customers.
Speaker 1: So thanks for some of the specifics there. Calcom CEO
Speaker 1: Cristiano Alman appreciate it. Meantime, Microsoft block Ster deal for
Speaker 1: Activision Blizzard just got a bit closer to reality after
Speaker 1: a shareholder vote. So why is Wall Street betting that
Speaker 1: the merger won't actually happen. Bloomberg's Broody Ford joins US
Speaker 1: now with the latest, Sobrity, give us the broader context here.
Speaker 1: There's there was a shareholder vote. Um, the deal seems
Speaker 1: to be moving forward, but still investors are skeptical. Yeah, exactly,
Speaker 1: so the shareholders voted to advance the deal today. It's
Speaker 1: an important step that had to happen. Um, but all
Speaker 1: together not too surprising. So all eyes now are on
Speaker 1: what the regulators do. I mean, this deal has a
Speaker 1: little over a year from now to close, and it
Speaker 1: has to clear through the US, the EU, China, Um,
Speaker 1: I think Brad Smith or Microsoft's at a seventeen countries
Speaker 1: that has to pass through. But I mean really, all
Speaker 1: eyes are on the US competition enforces here and whether
Speaker 1: or not they will move to try to block this
Speaker 1: deal on anti competitive grounds. So what's the likelihood that happens? Yeah, well,
Speaker 1: Ill Street saying that in there in the metric, it
Speaker 1: is three times more likely for a Microsoft Activision deal
Speaker 1: to fall apart than Twitter. UM. So right now, let's
Speaker 1: say you own Activision stock, you will get paid ninety
Speaker 1: if this deal closes. Right now, it's trading in about
Speaker 1: the mid seventies, meaning that you know, people are seeing
Speaker 1: a decent chance that this does not go as planned. UM.
Speaker 1: And that could be either that the FTC sues and
Speaker 1: successfully blocks it in court, or that you know, it
Speaker 1: gets tied up in litigation so long that other reasons
Speaker 1: can creep in that can make the deal fall apart.
Speaker 1: So what are the odds What are the odds of
Speaker 1: deal falls apart? Well, it's really hard to say, right.
Speaker 1: I mean, so the for decades mergers in the US
Speaker 1: were very much just kind of allowed to go through
Speaker 1: is pretty hands off. But agency leaders right now have
Speaker 1: said that big tech companies should not be allowed to
Speaker 1: grow via acquisition. UM. Microsoft has very good reputation should
Speaker 1: in DC, It's escaped a lot of the tech lash.
Speaker 1: That being said, you know, it still is the number
Speaker 1: two company in the country. So the idea is that
Speaker 1: they are really looking for a way to get their
Speaker 1: hands dirty and maybe have some new court precedents about
Speaker 1: big tech mergers. And this could be the case, why
Speaker 1: they or not it works. You know, we'll see, but
Speaker 1: a lot of people think it could happen. All right,
Speaker 1: bloomberks broty for it, Thank you, thanks much. Coming up
Speaker 1: robin Hood dirting is also out and the online brokerage continually.
Speaker 1: It's for into crypto listing more cryptocurrencies like Salana. Our
Speaker 1: Crypto report coming up next with that conference in the
Speaker 1: Bahamas still underway. Is the need of the community dictates
Speaker 1: the development of the protocol because the protocol is owned
Speaker 1: by the community. A lot of the work that Salona
Speaker 1: Labs does and a lot of the work the Salanta
Speaker 1: Foundation funds is around building primitives that are open source,
Speaker 1: that can be taken by anyone and turned into amazing
Speaker 1: products built on the Salana blockchain. It time for our
Speaker 1: crypto report now and robin Hood just reporting their results
Speaker 1: that as it aims to become a bigger player in crypto.
Speaker 1: Here to break it all down, Bloomberg's own Annie Massa, Annie,
Speaker 1: what are the headline takeaways from these results? This was
Speaker 1: a really difficult quarter for robin Hood, and it was
Speaker 1: always going to be a stark comparison between this first
Speaker 1: quarter and last first quarter when we saw the huge
Speaker 1: run up in game Stop and other memestocks, but it
Speaker 1: was worse than analysts anticipated. We saw losses across all
Speaker 1: kinds of product categories, transaction revenue sliding, and revenue and
Speaker 1: earnings both missing Wall Streets estimates. So let's talk about
Speaker 1: how they're trying to grow their crypto play and influence
Speaker 1: in the crypto market as the company you know, faces
Speaker 1: some you know, big challenges up ahead. I mean they're
Speaker 1: going through some pretty big job cuts and the stack
Speaker 1: way down. That's right. The stock has really plummeted since
Speaker 1: the I p O. The central struggle that robin Hood
Speaker 1: is dealing with right now is this question of whether
Speaker 1: it can actually get users involved in more than trading
Speaker 1: on its platform. And in the meantime, it's trying to
Speaker 1: keep up with with investors and go where they're going.
Speaker 1: So on the crypto side, for instance, it's introduced some
Speaker 1: new tokens, including the long anticipated Shiba knew coin, and
Speaker 1: that was a recent development. So so robin hood is
Speaker 1: introducing some new products to trade and at the same
Speaker 1: time trying to grow the types of products that it
Speaker 1: offers to investors in areas like retirement accounts. It added
Speaker 1: crypto wallets, So it's offering all these new products as well.
Speaker 1: So what are you looking for here next? How do
Speaker 1: you expect robin Hood to navigate these challenges? You know,
Speaker 1: well Street Darling often very controverse deal. But but now
Speaker 1: a year into being a public company, a lot of
Speaker 1: big kind of existential issues. It is an existential issue,
Speaker 1: and I think that's something investors will be watching closely
Speaker 1: whether robin Hood can deliver on this message that it has,
Speaker 1: that it can expand with its users, grow with its users,
Speaker 1: and and touch more parts of their financial lives. So far,
Speaker 1: transaction revenues are still the core driver of revenues at
Speaker 1: this company, and it remains to be seen whether customers
Speaker 1: will go to robin Hood for other types of products
Speaker 1: as well. They certainly are going to trade, but the
Speaker 1: issue that robin Hood's facing is that trading activity is
Speaker 1: coming way down from where it was during the pandemic.
Speaker 1: How much do you think that has to do with
Speaker 1: the macro environment, I mean inflation, rising gas prices, not
Speaker 1: a lot of not a lot of money to be
Speaker 1: spending right now on discretionary items like new equities and crypto.
Speaker 1: That's a great point that was something that the management
Speaker 1: addressed in both the earnings call and a call with quarters.
Speaker 1: They said, listen, robin Hood has been a company that's
Speaker 1: mostly operated in an environment for much of its history
Speaker 1: where inflation has been low, interest rates have been low,
Speaker 1: and now we're starting to see inflation, uh, come way
Speaker 1: back and the Federal Reserve trying to curb that. So
Speaker 1: the issue for robin Hood is can it weather that
Speaker 1: storm if people do lose interest in putting their discretionary
Speaker 1: income towards trading. All right, we'll continue to follow that story.
Speaker 1: Blue marx Any Massa, who covers robin Hood for us.
Speaker 1: Thank you. Let's wrap up now by taking another look
Speaker 1: at Apple's results. Dan Ives of web Bush Securities here, Dan,
Speaker 1: you've been listening in on the call. What are your
Speaker 1: what are your headline takeaways? Obviously an impressive quarter Apple
Speaker 1: weathering supply shortages, weathering inflation with some record results. Yeah. Look,
Speaker 1: I didn't get to tell two cities. Demand story remains robust.
Speaker 1: I think demand out stripping supply by about ten million
Speaker 1: iPhone units. But he talked about supply chain. That's the
Speaker 1: big part of the call. It looks like four to
Speaker 1: eight billion terms of a headwind book. I believe the
Speaker 1: street the knee jerk is down in terms of the stock,
Speaker 1: but I believe what they're gonna start to look on
Speaker 1: the other side of it's in a normalized an environment.
Speaker 1: That's really really the streets focused on, even though these
Speaker 1: supply chain issues in China clearly ahead wind. I spoke
Speaker 1: to Apple CEO Tim Cook, and he talked about the
Speaker 1: supply shortages, double down on the fact that this was
Speaker 1: a record quarter and that they grew in every category
Speaker 1: except for iPad, where they had the most significant supply constraints.
Speaker 1: He explained they really had to do with silicon. And
Speaker 1: we're hearing uh Lucamya Street, the CFO of Apple, double
Speaker 1: down on that on the call right now. Um, and
Speaker 1: these are silicon constraints they're saying that go beyond the
Speaker 1: shutdowns in China. How do you expect Apple to continue
Speaker 1: to navigate that in an ongoing you know, COVID lockdown,
Speaker 1: You know, no doubt with China, it's on two parts, right,
Speaker 1: demand as well as supply. Key part of the China story. Look,
Speaker 1: if it's going to happen read happened the June quarter,
Speaker 1: because ultimately this is all the build up to iPhone fourteen,
Speaker 1: which will be in September. And if you look at Apple,
Speaker 1: if you look at the demand trends that we're seeing,
Speaker 1: and it's important demands not softened. So I also believe
Speaker 1: they'll ultimately be able to push the price increases that
Speaker 1: we see over the coming called six months on the
Speaker 1: next iPhone three two consumers. And that's why it's one
Speaker 1: The supply chain issues are well known, but the demand
Speaker 1: stories what investors are really looking at to see if
Speaker 1: there's any cracks from the armor, and Emily, we're not
Speaker 1: seeing them. What is't you a huge reaction in the
Speaker 1: stock And I wonder why that is because it certainly
Speaker 1: seems like App well is uh fairly well insulated from
Speaker 1: the macro economic issues that other tech companies are facing.
Speaker 1: Obviously we're seeing, you know, a big hit to digital
Speaker 1: advertising which not only affected Alphabet on YouTube, but Meta
Speaker 1: and Twitter and also impact on consumer demand. Given these
Speaker 1: sluggish results from Amazon, you know, is Apple different? I
Speaker 1: think there are different and I think what we're seeing
Speaker 1: in tact, there's a narrative that's emerging. Enterprise is strong. Microsoft,
Speaker 1: I think cybersecurity cloud even at the Google parton of cloud,
Speaker 1: and so has Amazon. And you look at Apple more
Speaker 1: tetarn like because this hand up demand cycle for iPhone,
Speaker 1: which I think continues into next year, is underestimated, along
Speaker 1: with on the services side, services beat the whisper. So
Speaker 1: that's really the story that's emerging here that Apple continues
Speaker 1: despite everything. We're seeing demand now strip supply Now, Dan,
Speaker 1: we're getting some new details on Elon Musk's pitch when
Speaker 1: he when he made a pitch to buy Twitter, that
Speaker 1: his pitch featured job cuts and other ways to make money.
Speaker 1: I mean certainly hinted at, you know, wanting to potentially
Speaker 1: move away from advertising, being more interested in a subscription model.
Speaker 1: But his pitch does focus on, you know, turning it
Speaker 1: into a more profitable business, boosting cash flow, monetizing the platform.
Speaker 1: He also brought up his his track record at Tesla
Speaker 1: and spacek Space access proofs his success. What do you
Speaker 1: make of that, Okay, I think from a business model perspective,
Speaker 1: I believe it goes to a paid subscription model. I
Speaker 1: think they'll have a free piece, but ultimately that's probably
Speaker 1: a key part of the strategy going forward. And in
Speaker 1: terms of some of the job cuts with some of
Speaker 1: the cost cutting. I mean, look, this is essentially whoeveraged
Speaker 1: buy out the only given to averaging Testla shares to
Speaker 1: do it. So it's going to create some more uncertainty
Speaker 1: going forward. It's still a long time till this closes.
Speaker 1: But that's why right now for Musk, the easy part
Speaker 1: relatively with buying Twitter, the hard part is going to
Speaker 1: be fixing it. Can you do it? Do you think
Speaker 1: you Musk can do it? Look, I believe it's another
Speaker 1: It's a whole another animal than a Testa, a space X,
Speaker 1: not technology. We're talking on social media. It's been an
Speaker 1: uphill battle for the last decade and I continue to believe.
Speaker 1: I think Tessa Sheryld has believe this is that this
Speaker 1: isn't going to be a hrculean R challenge from Musk,
Speaker 1: and I think that's why you're seeing the overhang on
Speaker 1: Tesla shares because you essentially leverage the position in Testa
Speaker 1: to buy Twitter and ultimately test A share olders that
Speaker 1: are stealing the brunt of this, you know, soap opera
Speaker 1: playing out soap opera and need Dan Ives of wed
Speaker 1: Bush Securities, Thanks so much for your insights. There will
Speaker 1: continue to watch what happens with Twitter. Of course, we'll
Speaker 1: be continuing to follow along the latest on Apple and
Speaker 1: Amazon results. And that does it for this edition of
Speaker 1: Bloomberg Technology. Before we go, I just want to say
Speaker 1: a special goodbye to a very special person on our
Speaker 1: Bloomberg team, Mallory Abelhausen, who has been here running the
Speaker 1: show on the floor of Bloomberg Technology for ten years.
Speaker 1: Ten years, so almost as long as I have. She
Speaker 1: is moving on to her next adventure, moving to New York,
Speaker 1: Bloomberg in New York. She's not leaving the Bloomberg family.
Speaker 1: And we're so so grateful for all of the time
Speaker 1: you have spent with us, and the energy and love
Speaker 1: and heart that you bring to this show and helping
Speaker 1: me us put a show on from my basement for
Speaker 1: eighteen months in a pandemic um. You will be missed
Speaker 1: and we wish you love I love you too. All Right,
Speaker 1: that does it for the show. We'll be back tomorrow.
Speaker 1: I'm Emily checking in San Francisco. This is Bloomberg Op