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Speaker 1: P and L is brought to you by proper Cloth,

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Speaker 1: order your first custom shirt today. Welcome to the Bloomberg

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Speaker 1: P and L Podcast. I'm Pim Fox. Along with my

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Speaker 1: co host Lisa Abramowitz. Each day we bring you the

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Speaker 1: most important, noteworthy, and useful interviews for you and your money,

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Speaker 1: whether at the grocery store or the trading floor. Find

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Speaker 1: the Bloomberg P and L Podcast on iTunes, SoundCloud and

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Speaker 1: at Bloomberg dot com. Target is in the spotlight today,

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Speaker 1: or should I say on the hot seat. It shares

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Speaker 1: plunging the most in more than eight years, down more

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Speaker 1: than twelve per cent, after announcing plans to cut prices

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Speaker 1: to get customers back in the door. I want to

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Speaker 1: bring in Burt Fleckinger, man ing director at Strategic Resource Group,

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Speaker 1: for more insight on what's behind the plummeting shares and

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Speaker 1: the potentially UH negative outlook. But did this come as

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Speaker 1: a surprise to you? No surprised Lisa's As we talked

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Speaker 1: in earlier Bloomberg broadcast anyone has seen in the stores.

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Speaker 1: Just problems in Syriotom for example, for Christmas Hanukah, Kwanza

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Speaker 1: through Valentine's Day, finding fashion, jewelry, Department's most important department

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Speaker 1: in the store, unstaff, do you have to ring a

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Speaker 1: bell for service waiting for godo? Nobody comes to serve

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Speaker 1: the shoppers, People walk out, go to Cole's, Walmart, Walmart,

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Speaker 1: Sears Kmart and uh the company's off course and uh

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Speaker 1: the new definition of being rudderless for Target retail, which

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Speaker 1: is very un characteristic for the company. Well, butt, You've

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Speaker 1: got a company, it's got a market cap of thirty

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Speaker 1: two billion, They've got about two and a half billion

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Speaker 1: in cash, their threety one thousand employees. What can Brian

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Speaker 1: Cornell do in order to turn this surround? Is it worth?

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Speaker 1: Is it worth what it's being priced at right now,

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Speaker 1: which is fifty eight dollars a share them it's a

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Speaker 1: good price right now. That Bloomberg Terminals reporting a five

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Speaker 1: year low UH for Target flat over five years compared

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Speaker 1: to the S and P being up over sevent same time,

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Speaker 1: your present point on Target needs to UH take cash

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Speaker 1: off its balance sheet, invest in capex, they're distinct disadvantage Kroger, Walmart, Coles,

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Speaker 1: H and M everybody they compete with because Targets outsourced

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Speaker 1: just about everything. Outsource distribution cost the goods are too

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Speaker 1: high to leass present point on prices. UH. Target spacing

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Speaker 1: a price war, pervasive price war of unprecedented proportions for

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Speaker 1: for the next few to five years. UH, Walmart, Legal,

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Speaker 1: et cetera. Because they're they're cat of goods or lower

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Speaker 1: targets keeps getting higher from outsourcing. Target needs well. But

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Speaker 1: hang on, Burt, But I mean I was looking at

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Speaker 1: Brian Cornelli's biography. He's the chief executive of Target and

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Speaker 1: the chairman. I mean he was the CEO of Sam's Club.

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Speaker 1: He also was the CEO of the America's Food division

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Speaker 1: for PepsiCo. Is he the one that's going to make

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Speaker 1: this happen or do they need new talent in the

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Speaker 1: in the boardroom him? It's uh, Lisa Brownham. What's his

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Speaker 1: Bloomberg hot hot seat up in Minnesota, Brian, Brian Cornell

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Speaker 1: has got one more fiscal to deliver. Uh. It looks

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Speaker 1: look like he's going to bring great new leadership to

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Speaker 1: the company. But with John Stump, who now left on

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Speaker 1: the board other board members of sleep at the switch,

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Speaker 1: kind a Rip Van Winkle routine. Uh, you need new leadership,

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Speaker 1: and regrettably it's almost like a Mackenzie like monarchy with

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Speaker 1: the consultants half running the company and erroneous assumptions, erroneous conclusions.

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Speaker 1: They need to invest in Target dot Com. They need

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Speaker 1: to invest in self distribution. Uh, and they need to

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Speaker 1: invest in staffing instead of cutting hours and and having

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Speaker 1: shells that are too empty that impair the same store

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Speaker 1: sales and operating income. You know, there's there's a quote

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Speaker 1: in the Bloomberg story about Targets results from one analyst saying,

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Speaker 1: we are stunned. We thought they were going the other

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Speaker 1: way with higher margins stuff. I mean, this is sort

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Speaker 1: of what's at stake here. Target was always thought to

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Speaker 1: be the higher quality version, uh, and sort of tried

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Speaker 1: to lure people who had a higher price point than

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Speaker 1: say Walmart. But now Target appears to be putting Walmart

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Speaker 1: and it's compete as as sort of like a competitor,

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Speaker 1: or at least on that level. Is this is this

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Speaker 1: strategy going to work for them? What they're doing isn't working.

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Speaker 1: Lisa's as you Pam, your great producer, Sam Langon, I've

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Speaker 1: discussed offline in the studio for for months. UH. Target

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Speaker 1: has gone the wrong way, and also Targets probably the

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Speaker 1: most vulnerable company to being organized by the ufc W,

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Speaker 1: the Retail Clerks Union, UH, because even even the workers

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Speaker 1: that want to take corrective action on the out of

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Speaker 1: stocks are disciplined and run off. We call it the

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Speaker 1: Volkman rule after Carl Volkman, who was fired for overriding

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Speaker 1: an inventory management system that wouldn't order product for product

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Speaker 1: that was out of stock on the shelves, and the

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Speaker 1: company decided in favor of the consultants and the constructive

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Speaker 1: UH students who are highly rated in terms of productivity,

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Speaker 1: wound up getting sacked in the stores. And UH. You know,

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Speaker 1: for for all the problems that you and Pimm have

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Speaker 1: presently pointed out, least in retail, all Targets problems are

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Speaker 1: self inflicted. And Brian, Brian Cornell's got a got a

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Speaker 1: few quarters to FIXTS. That's not totally fair because we

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Speaker 1: also have this sort of elephant in the room, right,

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Speaker 1: We've got Amazon. How much is this just Amazon creating

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Speaker 1: a food fight among the rest of the brick and

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Speaker 1: mortars Amazon on creating a food fight. Yes, Lisa. Yet

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Speaker 1: yet at the same time, Target dot Com at uh

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Speaker 1: stupidly outsourced Target dot Com fulfillment to Amazon for nearly

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Speaker 1: a decade. So Target dot Com is way underdeveloped that

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Speaker 1: areas growing quickly. But Target got complacent in basic apparel

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Speaker 1: and fashion, especially for boys and girls and young women

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Speaker 1: and men. And even uh, Target and Sears with lands

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Speaker 1: and have better basic fashion as does Walmart for the

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Speaker 1: first time in fifty years, and many key categories in apparel,

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Speaker 1: and Uh that's self inflicted from Target. To Opportunity or

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Speaker 1: stay away bird flicking show for all Chinese sign pim

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Speaker 1: opportunity and danger. I'd bet on opportunity, okay, and as

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Speaker 1: well as with the bonds too for Target. Uh, definitely

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Speaker 1: with the bonds. I would bet against the bonds for Bergdorf, Neiman, Marcus,

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Speaker 1: Grouper and MG. I would bet on the bonds for

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Speaker 1: Target at divis are going to come in. Uh, the

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Speaker 1: consultants are going to go out. You'll have better leadership,

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Speaker 1: better business, better bond prices, better equity prices. Yeah, I'm

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Speaker 1: looking at the Target two point nine percent bonds. Uh.

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Speaker 1: There are a mirror one hundred and two point three

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Speaker 1: cents on the dollar total discount. But this is an

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Speaker 1: a UH and A minus rated company. This is a

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Speaker 1: company that has a study revenue stream. So that's why

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Speaker 1: you're saying they're going to be able to repay their debt.

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Speaker 1: That's not the issue. Yeah, And this is also this

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Speaker 1: is also a company that's neutralized Christmas hank quans and

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Speaker 1: no merchandizing signs, no real good merchandizing activity. And as

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Speaker 1: we've discussed, more vacuum cleaners in the ads in Christmas

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Speaker 1: and hanak and quansa items during the key holiday selling period. UH,

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Speaker 1: companies clearly gone the wrong way. And with a lot

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Speaker 1: of merchants getting sacked and the consultants making the refreshed decisions,

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Speaker 1: that that's a perscription UH for sick company getting sicker.

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Speaker 1: But at least, as you and Tim said, it's fundamentally

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Speaker 1: a strong company founded by the great Dayton family and

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Speaker 1: there's still large shareholders in one way or the other

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Speaker 1: in the honor of founder George Draper Dayton and the

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Speaker 1: late Great Bruce Bliss Daton who passed away within the

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Speaker 1: last year. UH. This this company will come back I'd

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Speaker 1: be much more worried about nord uh than than I

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Speaker 1: would be Target Uh. But Target Target we're gonna have

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Speaker 1: to talk about. We're gonna you know, it's interesting you

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Speaker 1: talk about North because we want to get your views

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Speaker 1: on it. We're gonna have to leave that for another time.

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Speaker 1: Because NORDSTN reported results recently and they exceeded analyst estimates.

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Speaker 1: The stock moved higher. So I'm interested to hear what

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Speaker 1: worked flicking share of Strategic Resource Group has to say

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Speaker 1: about that. It's been yet another stellar by of months

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Speaker 1: for US high yield bonds. Yields on the deck can

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Speaker 1: no longer be considered high. They are low yield bonds

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Speaker 1: at five point six percent, the lowest UH since two

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Speaker 1: thousand fourteen. Has this market gone too far? I want

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Speaker 1: to bring in Henry Peabody, co manager of the Eaton

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Speaker 1: Vance Multisector bond Fund. He is the expert in all

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Speaker 1: things fixed income. Henry, I'm so glad that you're here. Uh, Henry,

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Speaker 1: what do you think? Do you think that the bond

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Speaker 1: that the US hi yield bond market has gone too far?

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Speaker 1: Probably has um thinking about yields in the mid fives,

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Speaker 1: thinking about default rates, UM expected real returns, it's not

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Speaker 1: too compelling. Fortunately, this is a market that active can

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Speaker 1: do reasonably well in UM. For US, we see opportunities

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Speaker 1: in US high yield UM. Not the broad market, but

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Speaker 1: certainly a few UM. But spreading what well, you know,

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Speaker 1: we're watching the retail sector fairly closely. UM. I can't

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Speaker 1: say that we're UH diving in, but we're watching it

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Speaker 1: fairly closely. So just to put this into perspective, a

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Speaker 1: lot of people have been talking about a retailer recession,

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Speaker 1: and we heard Bert Flickints share earlier on this program

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Speaker 1: and analyst of the retail sector saying he thinks Nordstrums

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Speaker 1: could potentially be in real trouble and that the bonds

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Speaker 1: could be in real trouble. Do you agree, No, not necessarily, UM.

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Speaker 1: We're still very early on in this process. UM. It's

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Speaker 1: going to take a little while for this to settle out.

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Speaker 1: You think about energy and you know, post OPAC Thanksgiving

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Speaker 1: of a couple of years ago, and it takes off

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Speaker 1: of us to shake out. So it's it's a slow

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Speaker 1: moving process and one that you need to UM follow closely,

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Speaker 1: establish starter positions UH and watches spreads evolve, but hard

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Speaker 1: to make a distinct call on that credit per se today. Well,

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Speaker 1: what would you be looking for? What are the characteristics?

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Speaker 1: You know? I think you look for companies that have

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Speaker 1: good online presence, UM, good uh footprints in good regions,

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Speaker 1: with good product suites. But how about if you could

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Speaker 1: just give me some number, like what kind of numbers

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Speaker 1: are you looking for? You're looking for a certain amount

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Speaker 1: of cash flow? Or because I mean all every company

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Speaker 1: I know looks for exactly the things that you're describing.

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Speaker 1: No one wants to be, you know, the old shoe.

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Speaker 1: What what are the financial characteristics that you deem a

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Speaker 1: winner as opposed to someone you want to stay away from. Well,

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Speaker 1: I think that's going to evolve, and I think what

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Speaker 1: we look for in any position is a good liquidity runway.

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Speaker 1: You need a company that can weather a challenging environment.

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Speaker 1: You need liquidity, UM. You need assets that are will

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Speaker 1: it that a company is willing to protect good assets UM.

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Speaker 1: Potentially salable assets if those in the case of retail,

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Speaker 1: if that's a real estate UM. So you need a

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Speaker 1: company with a relative mode from a competitive standpoint. But

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Speaker 1: that's all gonna evolve over the next year or two.

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Speaker 1: As this situation. Does you know, Henry and a lot

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Speaker 1: of people talk about rich valuations in the higher bond market.

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Speaker 1: I have to think about the Carlyles and the black

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Speaker 1: Stones and the Kkrs of the worlds that have been

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Speaker 1: seeing money for distress debt funds uh and have a

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Speaker 1: record amount of dry powder on their books. Won't this

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Speaker 1: prevent the higher bond market from falling too far? Or

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Speaker 1: is it? Is it bad to read too much into

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Speaker 1: this sort of stash of cash. Well, you saw that

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Speaker 1: with energy, right, You saw a great deal of capital

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Speaker 1: being raised in the private equity space for energy, and

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Speaker 1: there were fewer transactions because of that. Uh. You saw

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Speaker 1: that valuations between the band and the office side never

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Speaker 1: actually reached a clearing point. But by the same token,

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Speaker 1: you did see a great deal of capital availability. So

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Speaker 1: these companies were able to access the capital they need

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Speaker 1: and come around the other side. So does private equity

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Speaker 1: put a floor underneath it at the margin? Yeah? Okay?

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Speaker 1: So um, what's eaten vances sort of base case scenario

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Speaker 1: for ten year treasuries for the end of the year. Well,

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Speaker 1: it's important to point out that we don't have a

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Speaker 1: top down view form from an economist personally then I

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Speaker 1: think you need to think about the tenure out as

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Speaker 1: a reflection of nominal growth. And so if you believe

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Speaker 1: that Trump is going to achieve nominal growth in the

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Speaker 1: four percent range, then you need to think about a

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Speaker 1: four pressure towards a four percent Okay, so if that happens,

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Speaker 1: if there is pressure towards a four percent ten year yield,

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Speaker 1: what would that do to HILD bonds. Well, you'd have

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Speaker 1: to My guess is with the front end of the

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Speaker 1: curve coming up at the same time, you would likely

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Speaker 1: see negative convexity. You'd see this market extend. You would

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Speaker 1: see HI yield extend away from being priced to call

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Speaker 1: and more to being priced to maturity. So you would

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Speaker 1: see uh duration extend performance be fairly soft. Um. That

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Speaker 1: would be in the context of better growth, which should

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Speaker 1: see spreads contract, so other words, losses, but they'd be tempered. Yeah,

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Speaker 1: I think that's a fair fair assessment um in the

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Speaker 1: multi sector bond income fun right, Uh, what kind of

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Speaker 1: cash position are you holding right now? We're about seven

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Speaker 1: or eight percent today? Is that considered high? That's a

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Speaker 1: little higher than it has been, but we've been as

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Speaker 1: high as twenty UM in mid fourteen. We were, um,

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Speaker 1: when there was are you looking for reasons to get

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Speaker 1: into cash right now? Are you going after? I noticed

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Speaker 1: you've got Australian Queensland government bonds, you got bonds from Brazil, Canada,

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Speaker 1: and you do have a bunch of energy debt in

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Speaker 1: there as well. Sure we have. We still have some

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Speaker 1: legacy energy and materials positions that are doing very well.

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Speaker 1: But we've been looking more towards the e M side

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Speaker 1: over the past handful of months. Um. We think we've

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Speaker 1: owned Brazil for a while and that was a good

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Speaker 1: performer for us last year. But there's been some good

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Speaker 1: corporate issuance recently that, um, you know, we think offers

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Speaker 1: a good deal of return over the next handful of years.

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Speaker 1: We think that dollar strength is probably reaching uh high, Um,

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Speaker 1: you hope, So if that's going to get paid in

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Speaker 1: Canadian dollars. I was looking today one thirty two against

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Speaker 1: the Luna dollar strengthening. Yeah, the dollar has been strong,

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Speaker 1: but our non dollar positions have actually benefited us this year. Um.

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Speaker 1: Aller has rolled over against most major currencies since the

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Speaker 1: beginning of the year. We had that rally post election

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Speaker 1: in a fade since then, all right, I want to

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Speaker 1: thank you very much for coming in and spending time

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Speaker 1: with us. Henry Peabody as co manager of the Eaton

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Speaker 1: Vance Multisector Bond Fund. P and L is brought to

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Speaker 1: great scroup that came out overnight by Bloomberg News is

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Speaker 1: Laura Keller along with a couple of her colleagues talking

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Speaker 1: about how c l s A, the brokerage which is

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Speaker 1: owned by China Citic Securities, dismissed ninety US based employees

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Speaker 1: on Monday. This is basically them closing their US equity

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Speaker 1: research team and for more, I want to bring in Laura,

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Speaker 1: who joins us now in our Bloomberg eleven three, Oh, studio, Laura,

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Speaker 1: First of all, just sort of give us a sense

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Speaker 1: how long has c L s A been in the

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Speaker 1: business of US equity research and how big of a

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Speaker 1: departure is this for them? Right, So, Lisa, they've been

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Speaker 1: here since about two thousand nine, so it's definitely some

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Speaker 1: franchise that's been here for a while. When is that

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Speaker 1: eight years? Um? And they're I mean, they're not small,

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Speaker 1: but they're not one of our huge, sort of bold brackets.

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Speaker 1: Of course. So they had about um, I guess it

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Speaker 1: would be around a hundred sixty people in the US.

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Speaker 1: Were some very well known ones, yes, very well known.

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Speaker 1: Mike Mayo is really sort of their star guy. Um.

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Speaker 1: They also had um some tech analysts as well, obvious

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Speaker 1: Silver and McGuire we mentioned in our story. And Mike

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Speaker 1: Mayo of course being this very prominent, very outspoken bank analyst.

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Speaker 1: Today he's at the JP Morgan conference. He he actually

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Speaker 1: called himself a free agent, um, since he's not working

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Speaker 1: at c L s A anymore, and he was dismissed

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Speaker 1: along with ninety others um as you mentioned, h late

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Speaker 1: in the day, we understand called into a meeting around

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Speaker 1: four fifteen aftermarket clothes and let let known that they

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Speaker 1: would be no longer working there. UM. And we have

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Speaker 1: this image as well, uh and our story of Mike

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Speaker 1: Mayo walking home with this box um of things, you know,

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Speaker 1: presumably from his his desk in his office there. Can

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Speaker 1: you explain why did c ls A decide to do this? So,

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Speaker 1: I mean c ls A has had a lot of

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Speaker 1: trouble with this um Us business, but also with their

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Speaker 1: equities brokerage. I mean they were bought UM by a

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Speaker 1: Chinese firm, Civic Securities in two thousand, goes all the

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Speaker 1: way back to Creditly right, yes, and they bought it

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Speaker 1: from that French bank UM. So they actually had tried

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Speaker 1: to sell um CIDEC had tried to sell these guys

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Speaker 1: and they weren't I guess presumably able to find a buyer.

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Speaker 1: So they've had some trouble since. Back then. You know,

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Speaker 1: we had reported UM. One of our Asian colleagues, I

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Speaker 1: think it was Kathy Chan in UM September reported that

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Speaker 1: the bank actually pulled this sort of it's a very

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Speaker 1: unusual thing where they asked people to voluntarily take unpaid

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Speaker 1: vacations of up to ten days and that's they were

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Speaker 1: just trying to save money, and this is something that

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Speaker 1: they have done three other times when they've gotten in trouble.

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Speaker 1: But I mean that's a very unusual measure, UM, and

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Speaker 1: really not something you do unless you're having a lot

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Speaker 1: of issues on the revenue side and even on the

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Speaker 1: cost side. Well, but c LA say, this might be

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Speaker 1: an idiosyncratic issue, but it does sort of come at

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Speaker 1: a time when on a broader level, research firms across

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Speaker 1: or research units I should say across Wall Street have

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Speaker 1: been cut significantly. And part of this has to do

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Speaker 1: with new rules that are going to go into effect

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Speaker 1: the third of January in two thousand eighteen that require

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Speaker 1: banks to charge investment firms for any research they provide them.

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Speaker 1: I mean, does this play into c LSA's decision at all? UM,

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Speaker 1: I don't think, Lisa from According to the CEO that UM,

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Speaker 1: Jonathan Sloan UM Kathy Chan had talked with him and

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Speaker 1: he said, no, this is not a result of those rules,

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Speaker 1: those my fed roles that you were talking about, UM,

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Speaker 1: this has nothing to do with those. What he said

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Speaker 1: was that they want to really just you know, have

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Speaker 1: execution only framework in the US. That's what he said, UM,

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Speaker 1: And and really focus on those parts of the business.

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Speaker 1: Nothing to do with these new rules, although I will say,

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Speaker 1: I mean, just on a broader level of competition for

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Speaker 1: research has been amped up in a pretty dramatic way,

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Speaker 1: with the worth of it being called into question. There

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Speaker 1: was a Financial Times article that came out over the

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Speaker 1: weekend talking about how different firms are bandying about what

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Speaker 1: the costs scheme will be for this type of research,

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Speaker 1: with some banks proposing ten thousand dollars a phone call

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Speaker 1: for with for for a chance to talk with their

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Speaker 1: senior analysts, um and and basically investment firms saying no way.

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Speaker 1: So it's a huge departure from every which way that

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Speaker 1: they normally have conducted business. I mean, normally you have

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Speaker 1: a big investor who can just call his his you know,

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Speaker 1: his sales up, yes, but also his equity analyst and

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Speaker 1: talk about ideas. You know, if he's I've even heard too.

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Speaker 1: You know, if you're a dead investor, but you want

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Speaker 1: to talk a little bit on equities, you copy your

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Speaker 1: your debt representative, maybe the analysts on that side, and

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Speaker 1: he can bring in the conversation for you a sell

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Speaker 1: side person on the equity side. So it's a charge

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Speaker 1: for that conversation. I mean, I'm just not sure what

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Speaker 1: kind of mechanism you start to get into. And I

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Speaker 1: mean it's almost like billable hours for lawyers or something.

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Speaker 1: Certainly seems that way. Thank you very much, Laura Keller,

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Speaker 1: financial reporter for Bloomberg. You've been keeping us up to

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Speaker 1: date on this story and of course the ongoing changes

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Speaker 1: to equity research. Before I buy any mobile device, I

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Speaker 1: check in with one person, John Butler. He's our senior

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Speaker 1: Telecom Services and Equipment analyst for Bloomberg Intelligence. He provides

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Speaker 1: unique and real time research for the telecoms industry, and

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Speaker 1: he's here in the studio joining us. Now. Thanks very much.

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Speaker 1: Well that's great, Gray of different phones in front of him. Well,

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Speaker 1: he wishes, he wish he's getting as many as pim. Right. Well,

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Speaker 1: I'm not gonna go there. That's not let's not talk

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Speaker 1: about those problems. UM, I want you to talk about

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Speaker 1: Mobile World Congress taking place in Barcelona. You say it's

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Speaker 1: a zoo you go to CS Consumer Electronics show in

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Speaker 1: Las Vegas. Uh. I was reading the reports from Barcelona,

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Speaker 1: and I thought that Nokia was the one that grabbed

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Speaker 1: the head lines for something that I frankly did not

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Speaker 1: expect they really did. They're not even making handsets anymore.

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Speaker 1: They actually have a partnership with HMD, which is a

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Speaker 1: longtime partner there is, and they're manufacturing the phone and

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Speaker 1: licensing the brand. And they came out with the old

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Speaker 1: candy bar that the thirty three ten has been updated,

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Speaker 1: complete with the popular game Snake if you remember that

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Speaker 1: one from back in two thousand is when that was

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Speaker 1: originally launched. Yes, and it sold over a hundred and

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Speaker 1: twenty five million units, which back then was really a

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Speaker 1: big deal. So it was a huge hit. Everyone who

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Speaker 1: had had wireless service at that point at least considered

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Speaker 1: buying one if they didn't known one. So the Nokia

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Speaker 1: thirty three ten is back, it's updated, it's got a

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Speaker 1: color screen. But it's why you think I can I

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Speaker 1: think people are you know, if you look at even

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Speaker 1: TV these days, a lot of there's a lot of

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Speaker 1: retro stuff showing up, and I think it's sort of

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Speaker 1: playing into that trend. But I for Nokia, I really

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Speaker 1: think it's about reminding people that the brand is back,

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Speaker 1: so they I mean, this is not a smartphone. No,

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Speaker 1: I actually I don't know what the price is they

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Speaker 1: say it's going to be something under like it'll be

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00:23:26,160 --> 00:23:30,040
Speaker 1: it'll be two digits, not three. I'm certain of that.

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Speaker 1: Um And they launched the Nokia three, five, and six

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Speaker 1: along with it, which are very moderately priced smartphones, and

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Speaker 1: I think that's where they should play. The brand is

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Speaker 1: very popular, for example, in India, it's a huge brand there.

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Speaker 1: So coming out with a reminder of hey, we're back, uh,

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Speaker 1: you know, sort of welling up those warm memories of

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Speaker 1: the Nokia brand with the three tum But let's a

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Speaker 1: little bit about Apple, because they're going to be having

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Speaker 1: their investor meet egg and we just found out about

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Speaker 1: Warren Buffett's newfound love of Apple and his newfound share

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Speaker 1: or ownership of Apple has increased. Do you expect that

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Speaker 1: to be something that Apple is talked is asked about,

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Speaker 1: or even volunteers. You know, they may talk about the

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Speaker 1: fact that team really is a big year for Apple.

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Speaker 1: It's an anniversary year for the iPhone. What tends to

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Speaker 1: spark upgrades in the in smartphones in general, something really

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Speaker 1: an innovative new feature. So we saw it with the

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Speaker 1: iPhone sex for example, the first large screen iPhone, and

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Speaker 1: that generated what can best be described as sort of

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Speaker 1: a sales super cycle, and I think the hope is

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Speaker 1: building that this year we're going to see a move

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Speaker 1: to a brighter screen technology called oh Lead, and we're

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Speaker 1: going to see true waterproofing with the iPhone and a

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Speaker 1: better on the front and the back. So there's a

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Speaker 1: lot that's being talked about. Uh, they have room to innovate,

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00:25:06,359 --> 00:25:09,280
Speaker 1: and um, you know, I think it could really be

428
00:25:09,359 --> 00:25:13,119
Speaker 1: a big year for them, So fingers crossed, and I

429
00:25:13,160 --> 00:25:15,800
Speaker 1: think that will come up in the shareholders meeting. I

430
00:25:15,840 --> 00:25:17,440
Speaker 1: think they're going to figure out how to get those

431
00:25:17,480 --> 00:25:20,199
Speaker 1: Year buds made in scale so that people can actually

432
00:25:20,240 --> 00:25:22,119
Speaker 1: listen to the phone with I'll happen to be use

433
00:25:22,160 --> 00:25:25,040
Speaker 1: an adapter because they got rid of the uh you know,

434
00:25:25,080 --> 00:25:29,280
Speaker 1: the imp the sound output, the air phone jack. Yeah.

435
00:25:29,600 --> 00:25:33,280
Speaker 1: That actually, of all decisions they've made over the years,

436
00:25:33,400 --> 00:25:37,399
Speaker 1: that one really lets my head. Yeah, I don't get it.

437
00:25:37,520 --> 00:25:42,040
Speaker 1: And um, you know, the move to wireless technology and

438
00:25:42,080 --> 00:25:46,119
Speaker 1: headphones and other accessories is definitely a trend that's in place,

439
00:25:46,200 --> 00:25:49,359
Speaker 1: but it's not really mature enough at this point in

440
00:25:49,359 --> 00:25:52,600
Speaker 1: my mind to have done away with the Year phone jack.

441
00:25:52,720 --> 00:25:56,240
Speaker 1: But it is gone on the iPhone, seven, and uh,

442
00:25:56,280 --> 00:25:59,159
Speaker 1: you know, my hope is that they come out with

443
00:25:59,240 --> 00:26:02,959
Speaker 1: lower cost alternatives than those wireless ear buds, which are

444
00:26:03,000 --> 00:26:07,399
Speaker 1: a hundred. What I was very excited about hearing is

445
00:26:07,400 --> 00:26:10,679
Speaker 1: that Apple may cut the charging chord completely with the

446
00:26:10,720 --> 00:26:14,840
Speaker 1: iPhone eight. That's the rumor sort of circulating right now, right, Yeah, yeah,

447
00:26:14,920 --> 00:26:18,480
Speaker 1: there are better than the earbuds, I mean wireless technology,

448
00:26:18,840 --> 00:26:22,800
Speaker 1: charging technology. It's I mean one of these new things,

449
00:26:22,800 --> 00:26:26,120
Speaker 1: you know, they always come with with some downside. Just quickly, John,

450
00:26:26,160 --> 00:26:27,600
Speaker 1: I just went back. We got to go back to

451
00:26:27,640 --> 00:26:29,639
Speaker 1: this Nokia thing because I found out it's about fifty

452
00:26:29,680 --> 00:26:35,000
Speaker 1: two bucks for the Nocchia thirty three ten. Now it's

453
00:26:35,000 --> 00:26:38,640
Speaker 1: twenty two hours talk time a month long on standby,

454
00:26:38,720 --> 00:26:42,760
Speaker 1: available in warm red, yellow gloss finished dark blue, and gray,

455
00:26:42,800 --> 00:26:46,520
Speaker 1: both with Matt finish, and it supports two point five

456
00:26:46,640 --> 00:26:50,800
Speaker 1: G network technology, which is ancient technology. But my point is,

457
00:26:50,880 --> 00:26:52,439
Speaker 1: how many people you think are going to buy this

458
00:26:52,480 --> 00:26:54,280
Speaker 1: as a fashion access for I mean, this is almost

459
00:26:54,320 --> 00:26:59,000
Speaker 1: disposable at fifty two bucks. Yeah, I actually that's a

460
00:26:59,000 --> 00:27:02,400
Speaker 1: good question. But I think they're really aiming for emerging markets,

461
00:27:02,480 --> 00:27:06,480
Speaker 1: to be honest. Yeah, India, Well, hm d Ye, thanks

462
00:27:06,520 --> 00:27:08,760
Speaker 1: for well, we'll be, we'll be, we'll be heeping tabs

463
00:27:08,800 --> 00:27:12,680
Speaker 1: on him's budding career as a an advocate for the

464
00:27:12,760 --> 00:27:15,800
Speaker 1: Nokia Phones. John Butler, thank you so much for joining us.

465
00:27:15,800 --> 00:27:18,879
Speaker 1: Always a pleasure of senior telecom services and equipment analysts

466
00:27:19,320 --> 00:27:22,679
Speaker 1: talking about Apple's annual shareholder meeting and also uh the

467
00:27:22,760 --> 00:27:33,040
Speaker 1: Mobile World Congress with Nokia's new phone. Thanks for listening

468
00:27:33,080 --> 00:27:36,040
Speaker 1: to the Bloomberg P and L podcast. You can subscribe

469
00:27:36,080 --> 00:27:40,679
Speaker 1: and listen to interviews at iTunes, SoundCloud, or whatever podcast

470
00:27:40,720 --> 00:27:43,720
Speaker 1: platform you prefer. I'm pim Fox. I'm out there on

471
00:27:43,760 --> 00:27:47,000
Speaker 1: Twitter at pim Fox. I'm out there on Twitter at

472
00:27:47,119 --> 00:27:50,119
Speaker 1: Lisa Abramo. It's one before the podcast. You can always

473
00:27:50,200 --> 00:28:01,239
Speaker 1: catch us worldwide on Bloomberg Radio. P and L has

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