WEBVTT - Apple, Amazon, Twitter Earnings 0:00:02.240 --> 0:00:05.600 From the heart of where innovation, money and power collive 0:00:06.360 --> 0:00:10.880 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.920 --> 0:00:26.960 Emily Jay I'm Emily check in San Francisco and this 0:00:27.000 --> 0:00:29.440 is Bloomberg Technology. Coming up in the next hour, Apple 0:00:29.480 --> 0:00:33.880 share soar after an impressive second quarter records almost across 0:00:33.920 --> 0:00:37.040 the ward, beats on iPhone sales, iPad Mac, an all 0:00:37.120 --> 0:00:41.320 time services record, also for the services business. I spoke 0:00:41.320 --> 0:00:43.760 with Apple CEO Tim Cook and will tell you what 0:00:43.800 --> 0:00:46.800 he had to say. And just as Elon Musku is 0:00:46.840 --> 0:00:50.320 poised to take over Twitter, revenue misses the slowest growth 0:00:50.360 --> 0:00:53.000 in six quarters. This on top of a new report 0:00:53.360 --> 0:00:56.880 that the FTC is investigating how Musk disclosed his purchases 0:00:56.880 --> 0:01:00.480 of Twitter shares as he amassed a massive steak in 0:01:00.600 --> 0:01:05.039 secret and qualcom source as the Chip Giant diversifies beyond 0:01:05.080 --> 0:01:09.320 phones to cars, networks and computers, CEO Cristiano Amman joins 0:01:09.400 --> 0:01:11.840 us later this hour. We will get to all of 0:01:11.880 --> 0:01:14.080 that in a moment, but first we are watching Apple 0:01:14.160 --> 0:01:17.920 and Amazon results. Also out this hour, Bloombriggs Emily Grafao 0:01:18.280 --> 0:01:20.679 joins us now to see how investors are reacting. Emily 0:01:20.680 --> 0:01:23.039 take it away hi Emily Will was a largely green 0:01:23.160 --> 0:01:25.600 day for the US stock marke at the SMP five 0:01:25.680 --> 0:01:28.679 hundred ended up two point four seven percent, and the 0:01:28.720 --> 0:01:32.119 tech heavy Nasdaq one hundred also ended up higher three 0:01:32.240 --> 0:01:34.800 by three point four eight percent. That was the largest 0:01:34.840 --> 0:01:38.119 one day game since March sixteenth. We also saw yields 0:01:38.160 --> 0:01:41.400 higher but didn't seem to bother US equity investors from 0:01:41.400 --> 0:01:44.000 buying up stocks. And of course it was a largely 0:01:44.080 --> 0:01:46.720 risk on day. So we also saw bitcoin finishing the 0:01:46.840 --> 0:01:49.040 day in New York higher. We tend to see that 0:01:49.240 --> 0:01:52.120 risk on trade. Bitcoin tends to get higher. But the 0:01:52.160 --> 0:01:54.520 big story of the day was really all about the 0:01:54.560 --> 0:01:57.240 big tech earnings coming up. We're gonna look at Apple 0:01:57.360 --> 0:02:01.000 right now because the stock is rallying after reported earnings. 0:02:01.040 --> 0:02:04.120 They are up right now about point four seven percent. 0:02:04.200 --> 0:02:07.320 They beat on sales, they beat on profits. They reported 0:02:07.320 --> 0:02:11.120 sales rising to about ninety seven point three billion dollars 0:02:11.160 --> 0:02:13.640 in the quarter. It was largely fueled by demand for 0:02:13.680 --> 0:02:17.280 iPhones demand for their web services. They also announced a 0:02:17.360 --> 0:02:20.400 ninety billion dollar stock buy back program, and so you're 0:02:20.400 --> 0:02:23.640 really seeing that optimism reflected uh in the stock price, 0:02:23.720 --> 0:02:26.880 but it wasn't positive for all of the big tech companies. 0:02:26.919 --> 0:02:30.520 I'm looking at Amazon right now, down nine point five 0:02:30.639 --> 0:02:34.040 four percent in the post market. They missed on sales 0:02:34.080 --> 0:02:37.600 for this quarter, but they also projected um a forward 0:02:37.600 --> 0:02:41.160 guidance that was lower than analysts expected for the next quarter. 0:02:41.200 --> 0:02:43.200 And it was the same thing for Intel. You're seeing 0:02:43.240 --> 0:02:47.280 until down about four uh percent in the post market. 0:02:47.360 --> 0:02:50.360 They also projected that that forward guidance for the next 0:02:50.440 --> 0:02:53.919 quarter was going to be lower than analyst estimates. Twitter 0:02:54.160 --> 0:02:56.680 also reported earnings this morning. It was one of the 0:02:56.720 --> 0:03:01.560 final earnings reports before Mr Elon Musk take the company private. 0:03:01.639 --> 0:03:04.720 They did miss on revenue, but interesting to note they 0:03:04.760 --> 0:03:08.960 did report a six increase in their daily active users, 0:03:09.240 --> 0:03:14.800 so daily active users grew to million, and that beat estimates. 0:03:14.800 --> 0:03:17.120 And then we're also seeing again that Apple shares falling 0:03:17.160 --> 0:03:19.920 lectually a little bit now um in the postmarket. Emily, 0:03:20.480 --> 0:03:23.080 all right, Emily graffe O, thank you. Lots to break 0:03:23.080 --> 0:03:25.080 down throughout the show. I want to start with Apple 0:03:25.120 --> 0:03:29.519 beating estimates yet again, shares rising in extended trading. This 0:03:29.680 --> 0:03:34.200 Apple's biggest non holiday quarter ever. I spoke with Apple 0:03:34.240 --> 0:03:37.520 CEO Tim Cook just moments ago to break down his 0:03:37.600 --> 0:03:39.560 remarks and the numbers I want to bring in. Juliasc 0:03:39.640 --> 0:03:42.160 vice president and principal analyst at Forrester Research, and Tom 0:03:42.240 --> 0:03:45.880 Giles are Bloomberg Tech Executive editor. Thank you both for 0:03:46.000 --> 0:03:48.640 being here. Looking across the board, it is fairly impressive 0:03:48.680 --> 0:03:51.640 to see how Apple weathered the macro environment. On the 0:03:51.680 --> 0:03:54.440 call with me, Tim Cook said it was a record quarter. 0:03:54.680 --> 0:03:57.680 We grew in each of our categories except iPad, where 0:03:57.720 --> 0:04:02.040 we had very significant supply constraints. He said they did 0:04:02.080 --> 0:04:05.840 experience apply constraints, but they were significantly lower than what 0:04:05.920 --> 0:04:08.960 they experienced in December, and that they were all silicon 0:04:09.040 --> 0:04:12.880 shortage related, so chip issue related. And it's of course 0:04:12.880 --> 0:04:16.560 that's an industry wide issue that affected several of their products. Julie, 0:04:16.560 --> 0:04:20.080 what's your big takeaway that despite they supply constraints, despite 0:04:20.680 --> 0:04:26.400 macro economic uncertainty, Apple still blowing it out of the water. Yeah, no, 0:04:26.600 --> 0:04:28.640 it's it's exciting to watch. And I think you know, 0:04:28.720 --> 0:04:30.600 one of the things that we always know about Apple 0:04:30.800 --> 0:04:34.960 is there in terms of like worldwide market share for 0:04:35.040 --> 0:04:38.280 something like smartphones or PCs, they have a minority stake 0:04:38.360 --> 0:04:40.919 relative to Android and some other platforms, so there's always 0:04:40.960 --> 0:04:43.200 going to be a lot of upside and Apple is 0:04:43.240 --> 0:04:45.960 always going in a forward direction. It's very common that 0:04:46.000 --> 0:04:49.880 if I own an iOS smartphone or I own laptop maclaptop, 0:04:50.200 --> 0:04:52.400 are more likely to buy an Apple device with my 0:04:52.480 --> 0:04:55.640 next purchase, a more likely to buy Apple services. So 0:04:55.720 --> 0:04:59.200 the stickiness of their devices and services is very high. 0:04:59.320 --> 0:05:01.440 And so yeah, there's a lot of upside for Apple 0:05:01.480 --> 0:05:05.480 ahead as we look forward, Tom, how don't score this 0:05:05.520 --> 0:05:08.080 with with Amazon's results, which we're going to dig into 0:05:08.120 --> 0:05:11.400 a little later in the show, but sluggish second quarter sales. Uh. 0:05:11.520 --> 0:05:15.479 Tim Cook did say they're seeing inflationary pressure, but that 0:05:15.720 --> 0:05:18.159 in their op X and gross margins you see that 0:05:18.200 --> 0:05:21.640 reflected and they're navigating that as best they can. But 0:05:21.720 --> 0:05:25.200 still these numbers, it's a night and day situation here. 0:05:25.320 --> 0:05:29.360 Apple benefited from the fact they introduced a new lower 0:05:29.400 --> 0:05:32.120 cost iPhone that started to kick in during the quarter. 0:05:32.360 --> 0:05:36.000 iPhone continues to be this big money maker for them, 0:05:36.279 --> 0:05:38.800 and they really took advantage of that. And as your 0:05:38.800 --> 0:05:43.000 other guests pointed out, services they keep they keep adding services, 0:05:43.040 --> 0:05:46.640 and they keep making that an attractive proposition for iPhone 0:05:46.680 --> 0:05:49.360 owners and getting you to come back to it, whether 0:05:49.440 --> 0:05:52.599 it's app downloads, whether it's entertainment, etcetera. So it just 0:05:52.720 --> 0:05:57.000 keeps going on and on and on Amazon huge contrast 0:05:57.320 --> 0:06:00.599 inflation inflation. Inflation seems to be a big issue there. 0:06:00.640 --> 0:06:03.760 You're talking about rising fuel costs. Remember we broke the 0:06:03.800 --> 0:06:08.080 news that they imposed a surcharge for their their partners 0:06:08.160 --> 0:06:12.920 to account for rising fuel costs and other inflationary pressures. 0:06:12.960 --> 0:06:16.719 That took a toll over. Capacity is another important story 0:06:16.760 --> 0:06:20.400 about Amazon, and they really invested in warehouses, they invested 0:06:20.440 --> 0:06:24.719 in people because remember Amazon had this surge in demand 0:06:24.800 --> 0:06:27.160 during the pandemic. We were all at home, we were 0:06:27.200 --> 0:06:32.719 all ordering everything online, and that hugely benefited Amazon. That 0:06:32.880 --> 0:06:36.080 party cannot continue forever, and we are starting to see 0:06:36.120 --> 0:06:39.839 the effects of the trail off in the pandemic fueled 0:06:39.920 --> 0:06:43.120 boom that Amazon benefited from for so long. Now. I 0:06:43.160 --> 0:06:45.159 did ask for Tim Cook for more color on the 0:06:45.200 --> 0:06:46.960 current corn and what he sees through the end of 0:06:46.960 --> 0:06:49.840 the year, when it comes to demand, when it comes 0:06:49.880 --> 0:06:52.760 to supply chain issues, when it comes to Russia. He 0:06:52.800 --> 0:06:54.160 said they'd get into all of that on the call, 0:06:54.200 --> 0:06:55.800 and we are listening in and you can follow on 0:06:56.400 --> 0:06:59.360 along at our t live block. He actually said they're 0:06:59.360 --> 0:07:02.320 going to be giving an number on Russia revenue specifically, 0:07:02.360 --> 0:07:04.239 and what kind of a hit they took their given 0:07:04.240 --> 0:07:07.760 that they paused sales of products. Julie, what is your 0:07:07.800 --> 0:07:11.760 outlook on how Apple will continue to whether supply constraints 0:07:11.760 --> 0:07:17.920 should they persist given an ongoing lockdown in China? Yeah, so, 0:07:18.040 --> 0:07:20.520 well that thing is supply chain analysts. I think, you know, Emily, 0:07:20.520 --> 0:07:22.160 you really kicked it off, and you started the call 0:07:22.240 --> 0:07:24.760 and said, you know, despite whatever happens, whether there's a war, 0:07:24.800 --> 0:07:27.280 there's a pandemic, there's supply chain issue, there's a lockdown 0:07:27.280 --> 0:07:31.120 in China, Apple continues to weather it will. So you know, 0:07:31.160 --> 0:07:33.680 they just seem to be somehow better positioned than perhaps 0:07:33.680 --> 0:07:36.960 some of their competitors and consumer electronics to ride through 0:07:36.960 --> 0:07:39.400 the supply chain issues even though it is impacting you know, 0:07:39.440 --> 0:07:42.440 one or two of their categories today. So I just 0:07:42.600 --> 0:07:45.560 tend to never underestimate what Apple can get done. All right, 0:07:45.600 --> 0:07:47.000 I want to talk a little bit more about their 0:07:47.000 --> 0:07:49.840 services business, because, of course the other big story in 0:07:49.880 --> 0:07:52.440 the business world is streaming and the decline we saw 0:07:52.440 --> 0:07:55.080 on Netflix subscribers. Of course, Apple has a signal, you know, 0:07:55.120 --> 0:07:57.680 a significant position or has made a significant bet there 0:07:58.040 --> 0:08:00.680 with TV Plus, and I asked know how that's doing 0:08:00.720 --> 0:08:02.680 and if they're still as bullish on streaming. He said, 0:08:02.880 --> 0:08:05.320 we're very bullish. Our philosophy for TV plus from the 0:08:05.320 --> 0:08:09.400 beginning and it continues unchanged is to create high quality, 0:08:09.400 --> 0:08:12.280 original content that aligns well with our values and to 0:08:12.320 --> 0:08:14.840 be one of the most desire platforms for storytellers. And 0:08:14.880 --> 0:08:16.800 I feel we're doing a pretty good job of that. 0:08:17.000 --> 0:08:21.800 He highlighted Coda, which of course won the Oscar for 0:08:21.840 --> 0:08:24.400 Best Picture and I think was extraordinary. He highlighted the 0:08:24.440 --> 0:08:28.360 success of ted Lasso. You know, you know, certainly not 0:08:28.440 --> 0:08:30.480 as big a bet on on on streaming as as 0:08:30.520 --> 0:08:33.920 Netflix has made um on streaming. But Tom, what do 0:08:33.960 --> 0:08:35.640 you make of the fact that this is an area 0:08:35.679 --> 0:08:38.480 that they're going to continue to invest in. They're coming 0:08:38.520 --> 0:08:41.280 from behind here. They don't have to prove themselves in 0:08:41.320 --> 0:08:44.680 the way Netflix is the is the player to really 0:08:44.800 --> 0:08:48.040 knock off on this on streaming right now, and we're 0:08:48.040 --> 0:08:52.959 starting to see that happen. Apple is a much smaller 0:08:53.000 --> 0:08:56.040 player there they are, they're coming from behind, and it's 0:08:56.040 --> 0:08:59.120 all upside to them. It's one of many businesses. This 0:08:59.200 --> 0:09:02.240 is a very law overall percentage when you think about 0:09:02.280 --> 0:09:05.360 where they get their revenue from. It's almost like gravy 0:09:05.440 --> 0:09:09.000 for them in some ways, and they're not betting the 0:09:09.080 --> 0:09:12.600 farm on streaming. They are investing in great shows. We're 0:09:12.640 --> 0:09:15.720 all waiting for the next season of ted Lasso, but 0:09:15.800 --> 0:09:19.480 it's not the centerpiece of their of their strategy. I'm 0:09:19.600 --> 0:09:22.560 very curious to hear on the call any more detail 0:09:22.600 --> 0:09:25.000 they can give us about their user numbers, the time 0:09:25.200 --> 0:09:28.400 being spent, and are they getting any of the subscribers 0:09:28.400 --> 0:09:30.840 who are maybe not spending as much time on Netflix 0:09:30.960 --> 0:09:33.240 right now? And just on the supply chain. I want 0:09:33.240 --> 0:09:36.360 to add on something Julie said, think about where China 0:09:36.559 --> 0:09:40.240 is the lockdowns. Are the parts of China that are 0:09:40.280 --> 0:09:43.000 that Apple is really dependent on, are not the parts 0:09:43.040 --> 0:09:46.680 of China that are really most severely hurt right now. 0:09:47.520 --> 0:09:50.000 I was very surprised at how upbeat Tim Cook was 0:09:50.120 --> 0:09:53.360 about the supply chain issue, how much better it's getting. 0:09:54.040 --> 0:09:58.080 The question is if the lockdown spread much more significantly 0:09:58.080 --> 0:10:00.960 throughout China than what happens top All right, we'll be 0:10:01.000 --> 0:10:03.680 listening for all of that on the call. Tom Giles, 0:10:03.679 --> 0:10:07.520 our executive editor, thank you as well as juliask much 0:10:07.520 --> 0:10:10.680 more to come we're gonna be talking about Amazon falling 0:10:10.880 --> 0:10:13.760 after less than stellar results. Break down all of that, 0:10:13.800 --> 0:10:16.800 including what role inflation and the supply chain is playing 0:10:16.840 --> 0:10:29.080 in the miss That is next. This is Bloomberg, Amazon 0:10:29.240 --> 0:10:31.880 tumbling after a less than stellar earnings report, including a 0:10:31.920 --> 0:10:34.080 loss in the first quarter and projected loss in the 0:10:34.160 --> 0:10:37.160 second quarter. I'm joined now by Melissa Burdic, president and 0:10:37.160 --> 0:10:39.319 co founder of pack few, and of course a former 0:10:39.400 --> 0:10:43.280 Amazon employee. Melissa, what's your takeaway here, especially given the 0:10:43.360 --> 0:10:48.000 strong numbers from Apple. I know that's a pretty crazy 0:10:48.080 --> 0:10:49.959 but like the gentleman said, the bore and really is 0:10:50.000 --> 0:10:53.560 apples and oranges. Um. You know, this quarter people return 0:10:53.640 --> 0:10:56.880 to stores. There's also more competition in e commerce. There's 0:10:56.920 --> 0:10:59.640 more sites people are shopping at in addition to going 0:10:59.640 --> 0:11:02.520 to school, is Walmart and Sapart, Target, They all have 0:11:02.600 --> 0:11:05.160 a target on Amazon's back, and they're they're getting better. 0:11:05.679 --> 0:11:08.760 Another thing too, is that you know the supply chain georages, 0:11:09.040 --> 0:11:12.199 of course everyone knew about. Brands are also taking a 0:11:12.280 --> 0:11:15.040 lot of cost increases and spending some time negotiating with 0:11:15.080 --> 0:11:18.640 Amazon trying to get those costs increases through, and sometimes 0:11:18.640 --> 0:11:20.880 they stop shipping during that time as they were doing 0:11:20.920 --> 0:11:23.880 that negotiation, and then the other thing that also happened. 0:11:23.880 --> 0:11:27.319 You know, Amazon did increase crime rate from one nineteen 0:11:27.360 --> 0:11:30.160 a month to one thirty nine. In terms of their 0:11:30.160 --> 0:11:33.400 membership feed and we do you see the subscription revenue 0:11:33.440 --> 0:11:36.599 was slightly higher eight point four billion last quarter or 0:11:36.679 --> 0:11:39.480 eight point one billion this quarter. But that's definitely something 0:11:40.000 --> 0:11:45.040 to watch. So, you know, what about the supply chain 0:11:45.200 --> 0:11:48.920 issues we're seeing Apple, for example, navigating you know, ongoing 0:11:48.960 --> 0:11:52.040 supply issues quite well. You know, what is it that 0:11:52.120 --> 0:11:54.319 Amazon needs to do? And you know, if it's Apples 0:11:54.360 --> 0:11:58.200 two oranges, how are Amazon supply issues different from what 0:11:58.600 --> 0:12:03.360 a company like Apple is facing. It's just so different 0:12:03.360 --> 0:12:06.960 because Amazon relies on merchants, you know, third party merchants 0:12:07.000 --> 0:12:10.520 and brands versus Apple has whole control over just what 0:12:10.679 --> 0:12:14.720 they're selling. So especially with the lockdown in China where 0:12:14.720 --> 0:12:18.520 there's zero tolerance of COVID sellers, you know, there's no 0:12:18.600 --> 0:12:21.960 manufacturing during that time frame, so sellers are not able 0:12:22.000 --> 0:12:24.640 to get their goods. The Amazon is just reliant on 0:12:25.080 --> 0:12:28.200 you know, their party marketplace and retailers or i'm sorry, 0:12:28.200 --> 0:12:31.920 brands that are reliant on the manufacturing supply chains. It's 0:12:32.000 --> 0:12:35.040 it's really Amazon in the marketplace that is trying to 0:12:35.120 --> 0:12:37.040 broker all these things, and it's the brands and the 0:12:37.120 --> 0:12:42.640 third party sellers that are really having struggles and challenges there. Meantime, 0:12:42.760 --> 0:12:47.360 of course, we're seeing wage inflation, rising gas prices. You know, 0:12:47.400 --> 0:12:50.720 how is this all going to impact consumer spending, you know, 0:12:50.760 --> 0:12:54.920 which is like the bread and butter of Amazon dot Com. Yeah, 0:12:54.960 --> 0:12:57.360 I agree, And one one thing, just to correct the 0:12:57.679 --> 0:13:01.439 last gentleman did say that Amazon implemented a fuel searcharts. 0:13:01.520 --> 0:13:04.280 It actually goes into effect at the end of April, UM, 0:13:04.320 --> 0:13:06.320 so in a couple of days from now, actually think today. 0:13:06.920 --> 0:13:09.560 So I don't think that impacted too much yet. But 0:13:09.760 --> 0:13:12.520 I mean, the reality is is that prices are going up, 0:13:12.600 --> 0:13:16.520 costs are going up, so um, there will be some slowing, 0:13:16.679 --> 0:13:18.880 but there are some bright spots, you know. One of 0:13:18.920 --> 0:13:20.679 the things that people are just point about with Q 0:13:20.880 --> 0:13:24.559 two that also had some you know, poor guidance, and 0:13:24.640 --> 0:13:27.679 I think the market light but Prime Day is always 0:13:27.720 --> 0:13:29.839 a shining star, and that's actually going to be in 0:13:30.000 --> 0:13:32.280 Q three this year, and so I do think that 0:13:32.320 --> 0:13:35.440 customers are going to be looking for deals and Amazon 0:13:35.559 --> 0:13:38.320 has the capacity they've built up the supply chain. They're 0:13:38.360 --> 0:13:41.400 going to be having a huge Q three this uh 0:13:41.480 --> 0:13:44.520 this year with Prime Day. Let's talk a little bit 0:13:44.559 --> 0:13:47.600 about about streaming because Amazon also has a bet here 0:13:47.679 --> 0:13:51.440 and it impacts potentially prime subscription. We we saw what 0:13:51.480 --> 0:13:54.280 happened with Netflix. We just heard Apple CEO Tim Cook 0:13:54.400 --> 0:13:58.120 telling me they're still very bullish on Apple TV plus. 0:13:58.440 --> 0:14:00.680 You know, this is a big area of ending for 0:14:00.880 --> 0:14:03.400 all of these companies. Should Amazon continue to be pouring 0:14:03.440 --> 0:14:06.000 money into this and how does it impact the bottom line. 0:14:06.720 --> 0:14:10.679 I'm super positive on Amazon streaming opportunity. They just bought 0:14:10.760 --> 0:14:13.960 MGM that closed last month, so that gives them access 0:14:13.960 --> 0:14:16.840 to senting tholls and TV shows and four thousand films. 0:14:17.240 --> 0:14:21.400 They're gonna have the most expensive show this this fall, 0:14:21.440 --> 0:14:24.200 which sounds pretty cool with the Lord the Rings, and 0:14:24.200 --> 0:14:26.880 then they're also talking about bring an NFL game to 0:14:26.960 --> 0:14:31.480 Black Friday. What's beautiful about Amazon streaming opportunity is also 0:14:31.560 --> 0:14:34.440 their ad revenue that they can get from all these shows. 0:14:34.840 --> 0:14:37.520 This is premium inventory that they can put through their 0:14:37.560 --> 0:14:42.120 advertising network, UM thirty one billion dollars last year and 0:14:42.320 --> 0:14:44.800 uh so that's that's a really great opportunity for them. 0:14:44.960 --> 0:14:48.080 But also speaking about advertising. That also was a slight 0:14:48.160 --> 0:14:52.080 miss for them this quarter as well. Um, it missed expectations, 0:14:52.160 --> 0:14:54.360 but it kind of goes back to you know, brands 0:14:54.360 --> 0:14:57.680 can't advertise what they don't have, so supply chain also 0:14:57.760 --> 0:15:01.400 impacted advertising, So UM, I don't really saw that our 0:15:01.480 --> 0:15:05.680 business all right, Patty's Melissa Verdick, thank you as always 0:15:05.720 --> 0:15:08.120 for your analysis. There will continue to follow the Amazon 0:15:08.200 --> 0:15:19.280 call as well. Onto more earnings now, and let's take 0:15:19.280 --> 0:15:22.080 a look at Twitter revenue missing analyst estimates. And this 0:15:22.160 --> 0:15:25.920 one of the last earnings reports before Elon Musk plans 0:15:25.960 --> 0:15:29.360 to take over the company. We're seeing a slowdown in advertising. 0:15:29.560 --> 0:15:32.040 Musk has signal he doesn't necessarily want Twitter to rely 0:15:32.120 --> 0:15:35.240 on ads and might prefer a subscription model. Could this 0:15:35.480 --> 0:15:38.520 accelerate that plan? Let's ask our next guest, Scott Kessler, 0:15:38.880 --> 0:15:42.080 global head of technology at Third Bridge, how do you 0:15:42.120 --> 0:15:47.080 think Elon Musk is looking at these ad results? Scott Um, 0:15:47.120 --> 0:15:51.520 thanks a lot, Emily. I think honestly, they're largely in line. 0:15:51.600 --> 0:15:54.320 I think when you see uh the m d AU 0:15:54.440 --> 0:15:57.560 number go up so significantly, I think there are positives 0:15:57.600 --> 0:16:01.800 to take from the results, and I think he's probably 0:16:01.840 --> 0:16:04.800 also reading a lot of the tweets about people suddenly 0:16:04.840 --> 0:16:08.280 gaining a lot more followers, um, and they're obviously constructive 0:16:08.320 --> 0:16:12.080 on that. So let's talk a little bit about then 0:16:12.200 --> 0:16:15.240 the broader ad industry. Clearly we're seeing digital ads take 0:16:15.280 --> 0:16:17.120 a toll. We saw it at Metta, we saw it 0:16:17.320 --> 0:16:20.560 at Snap. You know, how do you expect this to 0:16:20.600 --> 0:16:23.000 play out over the course of the year if the 0:16:23.040 --> 0:16:29.240 macro environment doesn't significantly change. Yeah. Well, what's interesting is historically, 0:16:29.680 --> 0:16:34.480 if you had kind of uh um, challenging economic backdrop, 0:16:34.880 --> 0:16:40.040 it would seem like those areas, including historically digital advertising 0:16:40.440 --> 0:16:44.280 would actually perform better because the thought is that the 0:16:44.360 --> 0:16:47.960 shift over from say, legacy or traditional advertising to digital 0:16:48.040 --> 0:16:54.360 advertising would accelerate given that more challenging backdrop. Now is 0:16:54.360 --> 0:16:57.480 a different time though, however, because of the impact, among 0:16:57.520 --> 0:17:00.800 other things, of id f A, which had a negative 0:17:00.800 --> 0:17:06.960 impact on a lot of digital and social media advertising companies, 0:17:07.440 --> 0:17:10.639 and it's one of the primary reasons that we've seen 0:17:11.320 --> 0:17:16.280 meta platforms struggle so mightily, and people cheered, uh when 0:17:16.280 --> 0:17:21.720 the company generated seven percent revenue growth. So, uh, let's 0:17:21.760 --> 0:17:25.040 talk a little bit about this Elon deal. How bullish 0:17:25.119 --> 0:17:28.359 are you on this? You know, clearly Twitter has a 0:17:28.440 --> 0:17:30.480 lot of potential I think everyone can agree that has 0:17:30.520 --> 0:17:33.560 not necessarily been realized from a business perspective, from a 0:17:33.680 --> 0:17:37.159 user's perspective, from uh an influenced perspective, but you know, 0:17:37.359 --> 0:17:40.880 still very controversial whether or not he's going to be 0:17:41.320 --> 0:17:45.200 good for this platform. Yeah. I mean, look, I think 0:17:45.240 --> 0:17:47.320 one of the things that everyone can agree on, and 0:17:47.359 --> 0:17:51.520 there's a lot of different opinions on this proposed transaction, 0:17:51.920 --> 0:17:55.520 is that if Elon Musk ends up buying Twitter, a 0:17:55.560 --> 0:17:58.560 lot of change is going to come to the company 0:17:58.680 --> 0:18:01.520 and to the platform. Now, whether those changes are going 0:18:01.560 --> 0:18:04.520 to be for the good, for the bad, or otherwise 0:18:04.840 --> 0:18:07.600 remains to be seen. But a lot of us who 0:18:07.640 --> 0:18:10.439 have been using Twitter for a lot of time would 0:18:10.480 --> 0:18:13.800 acknowledge that it's largely the same platform that it was 0:18:13.880 --> 0:18:17.040 ten years ago, and that and of itself, I think 0:18:17.440 --> 0:18:21.359 speaks to some of the issues that people have around Twitter. 0:18:21.440 --> 0:18:24.879 The edit button, for example, that Musk has highlighted in 0:18:25.000 --> 0:18:28.080 some of his tweets. That being said, however, I think 0:18:28.080 --> 0:18:32.199 the reality is that I look at it as you know, 0:18:32.400 --> 0:18:37.280 a pendulum, right that sits between Twitter's focus historically on 0:18:37.359 --> 0:18:39.480 health and safety, at least over the last couple of 0:18:39.560 --> 0:18:44.080 years and Musk's indicated focus on free speech, we've seen 0:18:44.080 --> 0:18:47.359 that pendulum swing quite far to health and safety. Musk 0:18:47.440 --> 0:18:50.880 obviously wants to shift it more uh to free speech. 0:18:51.320 --> 0:18:55.639 What that will do, in effect is render less relevant 0:18:55.720 --> 0:18:59.720 or maybe irrelevant. The notion of content moderation, which Twitter 0:19:00.000 --> 0:19:01.800 and a lot of money on, has a lot of 0:19:01.800 --> 0:19:05.440 employees doing, and that's clearly an area that Musk would 0:19:05.520 --> 0:19:09.680 seemingly look to make cuts to help not only fulfill 0:19:09.680 --> 0:19:13.640 his free speech goal, but also to help preserve and 0:19:13.760 --> 0:19:17.879 grow free cash flow. The Information is reporting that the 0:19:17.960 --> 0:19:23.639 FTC has opened an inquiry into how Musk disclosed his 0:19:24.320 --> 0:19:28.800 Twitter steak and whether or not he followed the rules there. 0:19:28.840 --> 0:19:32.080 What do you make of this and potential regulatory headwinds 0:19:32.160 --> 0:19:35.280 to this deal? Yeah, Look, I think a lot of 0:19:35.280 --> 0:19:39.840 people have been looking for potential hold ups in this transaction, 0:19:39.920 --> 0:19:44.080 especially legal and regulatory ones. Um. Look, I don't know 0:19:44.119 --> 0:19:47.960 the specifics of the inquiry, what exactly they're focused on. Um. 0:19:48.080 --> 0:19:50.680 Musk is no stranger to a lot of these types 0:19:50.720 --> 0:19:54.120 of issues. Um, but he's been able to push through them. 0:19:54.160 --> 0:19:57.199 I can't imagine that those types of issues are going 0:19:57.240 --> 0:19:59.600 to hold up this deal. I think at the end 0:19:59.640 --> 0:20:02.320 of the day, a this really comes down to does 0:20:02.440 --> 0:20:07.920 Elon Musk fall through honest financing and consummate the transaction 0:20:08.280 --> 0:20:10.480 and what happens next? And I frankly think there are 0:20:10.480 --> 0:20:13.560 a lot of questions about the financing and the fall through, 0:20:13.760 --> 0:20:16.880 but in terms of legal and regulatory I don't expect 0:20:16.960 --> 0:20:20.760 that to be the primary impediment for this deal going through. 0:20:22.400 --> 0:20:27.000 All right, Scott Kessler, Third Bridge, Global head of Technology, 0:20:27.040 --> 0:20:29.080 thanks so much for joining us. All of us very 0:20:29.080 --> 0:20:33.520 anxious to see how these how this deal plays out. Meantime, 0:20:33.560 --> 0:20:36.080 Snap is trying to make it even easier to take 0:20:36.119 --> 0:20:40.320 a selfie. The company just unveiled this yellow, square shaped 0:20:40.520 --> 0:20:44.880 flying camera drone called Pixie. Snap c e O Evan 0:20:44.880 --> 0:20:47.560 Spiegel said the inspiration for the Pixie was, quote, what 0:20:47.640 --> 0:20:51.919 would feel like if Tinkerbell were your personal photographer? Well, 0:20:52.080 --> 0:20:55.159 now you can have that personal photographer for two dollars. 0:20:55.440 --> 0:20:58.359 The Pixie is available for pre order only in the 0:20:58.480 --> 0:21:02.399 US and France and is expected to begin shipping next month. 0:21:10.440 --> 0:21:13.040 Welcome back to Bloomberg Technology and Emily Chang in San Francisco. 0:21:13.280 --> 0:21:16.880 Anyone concerned about falling chip demand post pandemic need look 0:21:16.960 --> 0:21:20.440 no further than qual Calm for reassurance, posting better than 0:21:20.480 --> 0:21:24.159 expected earnings and a strong sales forecast. This thanks in 0:21:24.280 --> 0:21:27.320 large part to see On CEO Christiano Almond's plan to 0:21:27.320 --> 0:21:32.080 diversify the company beyond smartphones. Aumon joins me. Now, Cristiano, 0:21:32.160 --> 0:21:34.600 great to have you back with us. You know you 0:21:34.680 --> 0:21:37.440 ended the call by thanking analysts for all the questions 0:21:37.440 --> 0:21:40.359 about phones, but reminded them that qual Calm is so 0:21:40.480 --> 0:21:44.399 much more than a communications chip company. Now, how do 0:21:44.440 --> 0:21:48.560 you see these earnings proving that out look? Uh? First 0:21:48.600 --> 0:21:50.960 of all, great talking to you know, Emily. Uh. And 0:21:51.359 --> 0:21:55.080 strategy is working for the companies. It's it's really working. 0:21:55.200 --> 0:21:58.480 We we are now growing across the whole business in 0:21:58.560 --> 0:22:01.160 a number of different in Mark gets hands, It's yes, 0:22:01.240 --> 0:22:03.920 it's a great story, will continue to be a great story. 0:22:03.960 --> 0:22:06.679 I think we're doing well there. Um, I guess like 0:22:06.760 --> 0:22:10.000 no good did go to goes unpunished as by doing 0:22:10.040 --> 0:22:12.680 well and hance it. So I think we're we get 0:22:12.720 --> 0:22:16.080 all those questions, but the reality is the IoT growth 0:22:16.119 --> 0:22:20.960 has been incredible. We grew sixty um and until we 0:22:21.000 --> 0:22:23.960 added three billion dollars to our design when pipeline within 0:22:24.000 --> 0:22:29.240 the quarter. So the company is truly changing from what 0:22:29.520 --> 0:22:34.520 is perceived to be a communication company for the handsOn market. 0:22:34.600 --> 0:22:38.960 It's really a connected processor company for the intelligent edge. 0:22:39.359 --> 0:22:43.080 And uh, you know, hopefully that message came across. You've 0:22:43.080 --> 0:22:46.080 gotten so many questions over the years about your relationship 0:22:46.160 --> 0:22:49.720 with Apple, including from yours truly, but the call focused 0:22:49.720 --> 0:22:53.600 a lot on Samsung. Is it better for Qualcom to 0:22:53.680 --> 0:22:57.840 have Samsung as a customer a successful customer, as opposed 0:22:57.880 --> 0:23:02.000 to Apple? And if so, why, Well, that's a very 0:23:02.080 --> 0:23:04.720 good question, and I think it goes to the heart 0:23:05.040 --> 0:23:09.320 of our mobile strategy is so, here's the reason we're 0:23:09.320 --> 0:23:12.040 doing so well enhance its and we had the outline 0:23:12.040 --> 0:23:15.040 and the call exactually one of the fastest growing uh 0:23:15.080 --> 0:23:18.959