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tv   Bloomberg West  Bloomberg  October 16, 2014 1:00pm-2:01pm EDT

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pier three in san francisco, welcome to bloomberg west where we cover innovation, technology, and the future of business. i am emily chang. moments away from apple's latest event in cupertino. needll have everything you to know. a live shot there could the company widely expected to unveil two new ipad scared yesterday, screen shots of the new devices, the ipad mini 3 and a user guide're in before being taken down.
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now apple is counting on new ipads to boost tablet sales which a full and for the last two quarters. they are also expected to unveil new macs and the latest version system.ac operating the apple store site has been several hoursast with a message that they will be back soon. kedrosky and paul "wired." entered of and president of the global design firm winner -- lunar. how big a deal is today's event? click not as big a deal as the last event. the ipad is not as much of apple's revenue as it used to be. tablet sales are not going well or anybody right now because of larger phones taking the tablet's place. the ipads will be unveiled and
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the new imacs will be a filtered but they will talk more about yosemite and isa. off the tabletde just yet? >> no, and i think apple is king of teasing us with innovation. but we are seeing them nudge things along, really to respond to what is happening in the market. updates and hardware and software are par for the course. sojust saw the apple watch, we are not going to see a lot of new innovation happening today. >> how big a deal is today's event, and your opinion? >> pretty meh, i think. i not expecting much. >> meh. >> yeah, kind of meh.
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that is technical stuff. i think the leaks yesterday are what people were expecting to hear. and those things -- the fundamental problem for apple is continuing weakness in the ipad market, in part because of what apple has done with itself to my cannibalizing its own products, and because of the different nature of the tablet marketplace compared to the smartphone market. there are not a lot of rabbits to pull out of the hat with respect to new products other than possibly a retina mac book air, but that seems like it will this year orr early next. >> i was speaking to a venture capitalist yesterday about the future of apple, and he was a little bit more optimistic than you. they tear what he said about tim cook and the future of apple. will be extremely
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successful. ofle gaining strength, sort what i talked about earlier, you can kind of deal it. is the company gaining strategic strength are losing it? you can just feel that they are gaining strength. i think they will do a started nearly well. >> is apple gaining strength are losing it? >> gaining strength but not across all areas. saidf the things he yesterday was that apple was not going into tv because it is a low turnover business. it is a similar thing with tablets. people do not update their tablets every year, so it will not be a continuing winner. >> i think the challenge for apple is to keep the ecosystem alive and keep us glued in with the right applications and services. i have got a macbook. to mye got a mac at home tablet, and iphone, and they all work together in a particular way.
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from a user point of view, it is really driven by occasion. for is the occasion particular screen usage? i think it will be incumbent on right spots and also surprise and delight us with things like the apple watch. ofi spoke to the ceo salesforce who worked under steve jobs back in the day. listen to his take on the future of apple. >> i think that tim is doing a great job. we are seeing some great new thisct -- products month. i am reallythat enjoying. apple is a great company, the business.tory in look, steve was the greatest of the greatest. we all know that. being the follow-on will be tough no matter what. just that point makes tim a success. >> on one hand, he says tim cook
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will forever live in the shadow of steve jobs. yet, apple is still the greatest story in american business. how do you respond? >> i thought that was squishy and political. i mean, yeah, he is right, but i do not know what he actually means. yeah, it is tough to follow steve. tim had a good hand to play, and he has played it. he has focused on increment all to thes and innovation margin. that is tim cook's game. my disciplining going forward is not about execution. it is more about expanding. why doesn't apple already own spotify? intensiveemiconductor products. ?hat about tesla they are stuck in this trap of wondering what people will not upgrade tablets properly.
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>> we will have much more throughout the hour about apple and what is to be unveiled. paul could dust great, joe brown, and john ensign, stay with us. with apple launching new devices of all shapes and sizes, can the company find the right fit to make you happy? is apple at risk of cannibalizing some of its own products? also, do not miss a special edition of studio 1.0 when i sit down with the self -- salesforce chairman. that is at 8:00 p.m. and only on bloomberg television. ♪
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welcome back to bloomberg
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west. it i am emily chang it we're live in cupertino from apple headquarters where tim cook is on stage, and he is already making new announcements about sales of the new iphone, as well as apple pay which apparently starts on monday. sam brevard is with us from new york with the latest. >> like a typical apple even, tim cook has started by doing a house -- housekeeping. he did not get into specifics, but iphone cells are apparently through the roof. that was not unexpected giving the whopper opening weekend they had when they were released, selling more than 10 million units. apple pay is available on the +, and it will begin on monday. more than 500 banks and additional retailers have signed
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on. and he talks more about the watch. i will have more when you come back to me later. >> thanks so much for that update. tim cook, joe brown still with "wired." paul kedrosky is with us. when it comes to apple pay, joe, how revolutionary do you think it is? >> it is not the most industry-changing technology. it is like a credit card but works with your phone. notle have said it does have much creativity, but you're going to get people paying in an new way so you have to be conservative because you are talking about money here. i think it is actually good to be conservative. i am a little more lashawn it. >> we will be speaking with some actually yout are eat -- using apple pay. i spoke with mark andreessen about it yesterday.
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he had a similar feeling, that this is not as revolutionary as some people think it is. is revolutionary but it is consistent with existing payment systems. sot is surprising is that many things do not change. you put in your credit card -- >> are you saying it is not that innovative? >> it is innovative, but it is consistent with the way it has been going. >> let's read between the lines -- , i mean, saying that it is innovative in the payments industry is a fairly low hurdle to clear. that is verydustry slow-moving. look at the continuing existence
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of western union as an example. i accept that. you do have to be conservative in the industry moves slowly, but it is an industry that still rises from a credible disruption. there are toll takers at all stages of the payments process including wire transfers and remittances and everything else. do.e is lots to this is a very preliminary step. i think it will work, but i do not think it changes very much. >> let's talk about another ,ndustry that moves slowly television. joe, i spoke to mark andreessen about television, and he is adamant that he does not think apple is making a tv set any time soon and we should not wait for it. thing aboutesting apple with tv as they keep refusing to build a tv. people keep predicting there will be an apple tv for your wall. i think there are a bunch of different reasons for it. i believe the big reason they do not build a tv is back to the
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power of the smartphone. fiveo sevenv's aret years -- the cycles for tv's are five to seven years. it going to happen? >> it is not going to happen. not because of the low-margin and it is really crowded with other people doing a nice job, but it is because people are changing the way they watch tv. a techin the middle of transfer. hpl an ounce they will have a streaming service with no tv required. people will not be watching tv on the wall very much anymore. they will be watching it on tablets, laptops, and a lot on phones. >> what about apple making -- buying a tv network. told that that is one way apple could potentially innovate in television. what do you think of that idea?
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>> i am sure that has been run up and down the cycle many times. i think jobs. before he died that they had solved the technical problem of making tv easy to work with, but then they ran into a brick wall dylan with content owners and licensing of content. the natural step is to say, fine, we will do our own content and we will buy a streaming service like netflix or something else. i do not expect it will happen. i think it is more likely you'll see a device than you see apple by a streaming provider. >> a streaming provider like who? >> i do not think you will see that happen. i actually think it is more likely you will see a device, some type of giant flat thing that will go on the wall, and they will not try to go down the content route.
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it is some thing they have never done. >> paul kedrosky, joe brown, stay with us. we'll all -- we are all over apple. they unveiled two larger iphones last month, including the iphone6+. and the report shows tablet sales growth slowing, while smartphone sales are projected to grow 62% this year. tablet start to become irritable and? be right back with more. ♪
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>> welcome back. we are live in cupertino at apple headquarters where tim on stage.een speaking he reiterated that the apple watch will be coming out next year. sam grobart, give us the latest
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from new york. sales cook updated on figures and then talked about the apple watch. he was talking about it in the context of russian, making a joke about it being for people who know a lot more about fashion than he does. he wears pretty much the same thing for all of these events. then the stage went to the apple software chief who is providing updates about ios 8 and is about to talk about os 10 yosemite. >> tim cook cracking jokes about fashion. a lot of black shirts in the room, appear early. thank you. with every new device comes a refresh of zone cases, accessories, and hardware. how do companies design for the latest apple products and how much money did they lose with the old inventory? back with us is john edson from
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lunar. of designus is the vp at a company that makes cases for iphones and ipads. so what is a day like today like for you when you do not nestle know do not necessarily what is coming but it has an effect on your business? >> everybody here loves the apple announcement spirit we are all in a room and watching the video, anxiously awaiting what they are going to announce. status,you find out the are you right away going into high gear trying to make new cases is to let you have the prepared or do you wait? >> we have been reading the rumors for months and running through scenarios and thingsating any sort of that they might an ounce. we have been running through scenarios. we have heard the rumors about ones, so we thinner
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try to do as much preparation as we can. but we never know for sure until the announcement. airill the new ipad and mini be different from the current ones? >> in terms of design, probably not. we are expecting them to continue their design trend, this very kind of german, graphic, no-frills homage a given thing off that is not needed approach to design. this is a beautiful approach to customization of cases. of these products are begging to be closed and her begging for personal expression that you can bring to them through these third party, you know, plethora cases and ways to customize them. aboutot has been made steve jobs once saying we will never make a small tablet.
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now we are seeing a family of devices and sizes. is this the right direction for apple to be going in, and are we going to be seeing even more? >> i definitely think so. they are slimmer than anybody is starting to figure out what the market needs and what the market is responding to. apple does a great job of experimenting with different sizes of devices to accommodate different types of people. >> would you agree? >> yeah, i would agree. >> when does a become too much. >> they need to be careful. part of the success is in the discipline of creating very few products. not doing what samsung does it we cannot even name all the products samsung is building just on tablets alone. you do not want to fall into the trap of the mid-1990's where you could go and buy a macintosh
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proforma that they only sold at sears. it caused a lot of confusion. they do need to retain that discipline, that there is an opportunity for more tablet , maybe even still. all of the different occasions. being on an airplane now with my wife, maybe the ipad is not big enough for both of us to watch a movie. so there may be opportunities. and also think about content creation may be a bigger ipad is even better. >> what are the most popular cases? what size are people going for when it comes to tablets? is shrinking,rket but what are people still buy in? folio-style cases which is still the number one selling case. to have screen protection and some sort of stand functionality so that when you are generating content or consuming content,
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you can prop it up and use it on a tabletop or in your lap. well, we are continuing to follow just what size apple is announcing today. brian, thank you for joining us, as well as john edson of lunar. coming up, we will speak with -i-am about his latest product and whether ♪ it can take on the apple watch. after the hour, and bloomberg television is on the markets. let's look at where stocks are trading the day after a volatile and negative session. we're seeing a rebound. it took a while to get there. this is on the heels of james bullard of the fed talking about pause of paper, although he is not a voting member at this point. it is still having an effect on the market. the s&p gaining about .6%.
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chesapeake energy am a shares surging by the most in a most six years. the producer announced plans to sail shale fields to southwestern energy for about 5.3 billion dollars. more in 30 minutes. ♪
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>> welcome back to bloomberg west where we focus on innovation, technology, and the future of business. the apple event is going on in cupertino, california. tim cook has been on stage talking about the success of the new iphones. are the bestes phones we have ever created, and the reviews have been off the charts. it does not get any clearer or than this review from one of the industry's preeminent reviewer's come a saying simply
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that it is the best smartphone on the market. you cannot hope for better than that. click for more on what apple has been unveiling, i want to get back to sam grobart in new york with the latest. >> i have been watching the event as it has been unfolding. is still onorite stage talking about the two operating systems apple has. 10k, talking about how closely they're working together more and more and how icloud is providing the link between those two os'. to build aanted single operating system for both mobile and desktop devices. apple has remained. to maintaining two different operating systems, that with all the new things they are announcing, things like continuity and icloud drive, the
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work you do on one device can immediately be picked up on another. you can send text messages on your desktop, have keynote conversations on your phone. the workflow is between the two of them, no matter what you are using. >> we will be back with you throughout the show. apple is launching new today. we're still waiting for the hardware. musician and entrepreneur will.i.am has also launched a product of its own, a wristband -- not a smart watch. it is called pulse. joining me is the creator of pulse and grammy award-winning .inger and artist, will.i.am how long have you been wearing this now? >> for about two years. quick in public you would walk around with a sock on your hands and no one could see what it looked like. quick more people but that was
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about fashion. they did not know i was making phone calls, doing text messages, and e-mails. youhis is the first week are showing it. quick it is the first week i am showing the operating system and letting people know it is untethered. you do not need a phone for it to operate. communicate with e-mails, instagram, facebook. there is voice navigation. i can talk to it to compose e-mails or text messages, speaking into it without a phone. >> over the last two years, how have you honed what the final product is? >> bringing partners into the fold. salesforce are big supporters. they have invested and built a sales force enterprising app on our platform. this is just me and my little team. some engineers. i raised the money after a
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funded the initial build, seven figures and up. a company i started. were created, so you can find the safest route home or the safest jogging route, the scenic route home. is this a safe neighborhood i and in? all of that type of data on the device. streaming is baked into the operating system. you ask anita questions. is a virtual assistant and voice navigator. smart buy this over a watch? >> people want options for the body. if you have a pair of expensive shoes, you have another pair of expensive shoes.
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if you have 80 this, you probably have nike/. body,is something on your you need options. we provide options. when i was a little kid, i used to dream that one day i would go to a michael jackson concert. michael jackson was the king and still is, but that did not stop me from wanting to make music. apple is the king. hats off, the best on earth. a you think we will need family of rich watch devices -- >> you will need somebody to envision a whole new way of what does and what it connects to. we have created jackets that when the sleeve touches the watch, there is two and a half days of power. you can pack more power into a jacket then you could a device it for thousand miller amps -- mps of power. we call it pow-wear.
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?> would you carry in your bag >> i wear my sound and music. device. a bluetooth on thefted, carbon fiber inside. it is an amazing piece of technology. >> where do you think the future of wearables is going? on the one hand, potentially we need the technology to augment what we can do on our phones or tablets. on the other hand, you are wearing it and you want to look good and it is an expression of you. peopleables, right now, are just barely stepping into it. people dictating what a wearable , not a technology company fashion. fashion has not directed what a wearable is to look like.
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that is what we aim to do. yesterday and my dream force keynote, i brought andre leon tally to represent the fashion world to talk about how important it is for fashion people to be in the fold and directing what it should look like. we have done a good job doing that. on my wrist, when people saw it before they knew it was functional, they thought gucci a chanel cuff or wrist bangle. now they know this allows me to communicate. a wholenk you'll see different conversation around wearables within the next five years, and we aim to lead that conversation with our jackets u andur shoes that weigh yo count your steps, backpacks that are sound. an artist, cofounder of beats. you have said itunes is the
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scariest thing in the world in the past. talk about streaming. >> i said it was the scariest thing in the world? did, at leastou according to the hollywood reporter. >> that is a misquote. i believe everything is up for grabs. the unlikely candidate might envision a whole new way of streaming, and we aim to do that . i am real close with beats still . and i am putting my mind on consulting on what beats music is. have my mentor and biggest inspiration. >> do you think apple will be streaming with downloads or is that for somebody else? somebody said, why doesn't apple by spotify? >> because they have beats.
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it is an amazing streaming platform. it is amazing. >> when it comes to streaming and a new way of listening to music, will apple be as big a player as it has been in the music industry? it is up said, i think for grabs. our vision around streaming, i think it is going to be pretty awesome. >> all right, will.i.am, so great to have you and to finally see what you have been wearing around for the last two years. >> i just tweeted from my wrist the other day. >> thank you so much for joining us. well, apple pay is coming to some of your favorite stores. date of a we just learned. so how are retailers preparing for the rollout? that is next. when itay tuned tonight speak with chairman and ceo of --esforce market benioff marc benioff. here is a sneak peak. there you are.
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>> you tweeted, there has been and always will be one ceo at oracle. what do you mean by that? optimistic are you about the co-ceo's? >> i am sure they will continue to do a good job. but we all know larry ellison is a force of nature. what larry ellison wants, larry ellison is going to get. so whoever is the ceo will have to benbd to his desires are quick tonight at 8:30 p.m. eastern and pacific on bloomberg television. ♪
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back.come i am emily chang. we are live in cupertino where a new ipad hasn't just been unveiled at apple headquarters. sam grobart has been following it all from new york. a thinner ipad air 2, i believe. >> that is right. tim cook just showed it off. the first thing i noticed, to
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quote seinfeld, it is gold, jerry, gold. they have a gold one. it looks to be about maybe 30% thinner. it will have all new updates. i will be learning more. >> i am seeing it is eight teen thinnerthinner -- 18% and 6.1 milliliters thick. how about that? >> i guess that is better than seven milliliters thick. >> every .1 milliliter counts. thank you for the update. another major announcement -- apple pay will start on monday. here is ceo tim cook. >> the iphones also get the benefit of another major announcement we made last month. of course i am talking about apple pay which is an entirely new way to pay for things in stores and in apps.
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>> apple pay will be accepted at 220,000 stores including retailers like mcdonald's and nike. how are these companies preparing for apple pay? st joining us hur from boston. panera bread is one of the first places that will be using it. how does it work? excitingk it is pretty . there are two ways to experience it. first is as an app. that asks ifp-up you want to pay with apple pay, so it is really simple. then i can authenticate with my finger or thumb print. or i can literally walk up to a cashier station, place my order, and we have a device in front of the cashier where you can hold
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your phone close to it. it messages -- do you authorize this, and then you authorize it again with your finger or thumb print. you get an knowledge meant back that you just paid, and egg back from apple. acknowledgment back from apple. it is part of our 2.0 strategy. >> when it comes to training staff in getting customers used to it, do you think it will be easy or will there be learning involved? >> i think it will be relatively easy. i will not say there will not be the occasional challenge beard we have actually have those readers in our cafés since early september. we have accepted google wallet and other forms of these types of payments. we have had absolutely no problem reported by cashiers or by customers with it.
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so we do not really think the apple pay version, if you will, which we actually think it's the customer and cashiers, we do not see it as an issue. i guess we will know more by the end of next week. we're just waiting for the formal announcement from apple. >> how did your partnership with apple, about? did apple come to you or did you go to them? tell me about the deal making. >> we have been working on new 2.0 which for panera we have been working on for several years. there has been some reasonable amount of press on it. iohave been working with an and in ipad-baseds app kiosk. we are frankly going out to spend time with apple and did that earlier this year, actually so.une or
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and they said there is a new announcement coming up so would we like to sit down and talk about it? we got briefed on what apple pay was and got briefed on it rather rapidly. so we are ready for monday when the software is actually released. quite looking forward to see how it goes. bread.hurst of panera more headlines out about the new ipad, ipad air 2 with 10 hours of battery life. the chip is 40% faster. it is less reflective. and eight teen percent thinner. we will look into what these announcements mean for apple and its future, coming up. ♪
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welcome back. apple says apple pay will start
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on monday. it has also introduced the new ipad air 2, the thinnest tablet in the world, they say. how important are these announcements? joe brown is here from "wired" magazine and paul kedrosky is here, along with john edson of lunar. this will allow for burst selfies, so not just one selfie in a row. think for a tablet selfies need to be that much encouraged. >> wi-fi and other things -- >> it is easier to unlock the bigger iphones. important for authenticating. touch id is a big deal. faster wi-fi is very good because people are using them as laptop replacements. thinner. they say you can stack two on
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top of each other and it is still thinner than an original ipad. >> paul, are you still feeling meh? >> i am still meh. it has not changed very much. they are going on relentlessly about thinner as if it is the only thing that matters in the universe with respect to tablets. none of this changes the fundamental problem which is the purchasing cycle for tablets is much slower than phones. making these devices thinner is not really going to change that. it does not change the fundamental problem in the market. the thing that worries me is that all of this reminds me of what tim cook is good at which is optimization, making things thinner and improving battery life, and what he is bad at which is doing stuff that makes you say, oh, my goodness, apple is doing what? that is crazy.
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you will not get that from tim cook, but you'll get longer battery life and thinner. watch does not count? >> no, i think it does. the watch was a natural extension of what they did. excitedople are really about it. it is a category that seemed largely stale for a long time. in most of what he's doing the product is saying here is another natural evolution, not here is something altogether new that can drive what is going forward and change the valuation of the company. the future of apple is bright but it is not happening at this event today. will we see surprises? >> i think the rumor blogs will have it 100%. 8.1., yosemite, ios ios 8 was a disaster. then retina imacs.
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better screen, better resolution. >> john? >> i do not think we will see any surprises today. but it do think thin is something. they are making these products better and keeping them at the front. that is exciting. like i said, sometimes it is innovation and sometimes it is evolution. >> i have been using my new, thinner iphone 6. i love it. >> it is fine. >> for you, it is all fine and meh. come on. apple.oid is lapping vanilla ands pretty i think the ipad innovation is fairly vanilla, too.
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but it is good for them. >> where does apple go from here, paul? 20% of still 15% to revenue. what is going to grow? is it all about phones? the watch is supposed to be a niche product. >> it is not clear what they have. i gave the example earlier of not buying some cloud services like spotify and instead ending up owning beats which makes no sense. there are obvious things they could have done and should be doing. they are focusing on some optimization of battery life. >> people are disagreeing with you right here. was think buying beats
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buying somebody who could negotiate with content providers. >> all right, thank you to all of you. stay with bloomberg television. much more from apple. do not forget to watch studio 1.0 tonight. from the sales force to reinforce conference. that is at 8:30 p.m. eastern and pacific. ♪ >> you are watching bloomberg television, and this is on the markets. let's look at what is going on with markets and stocks after yesterday's selloff. the selloff has been going on more or less since marketing a record on september 18. we are seeing a rebound today in the wake of comments from the president of the federal reserve bank of st. louis. said we could see a pause in quantitative easing, the
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tapering of quantitative easing. we have seen a lot of gyrations in the treasury market. ourmore, i am joined by bloomberg news reporter who covers the debt markets. there was so much volatility yesterday. we see a rebound in stocks today and a little bit of a rebound in yields. it seems to have come back to what he said. >> if the fed continues to buy bonds at $15 billion a month, it will not move the needle that much in terms of the demand. what it will do psychologically is a lot more significant, basically saying we are not taking away the punch bowl. stimulating to keep the economy and are not moving that much closer toward ending our stimulus. so i think that is taking hold .f the market
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in the european markets and global markets, there is a lot of pain in continuing negative economic data. it is much more prevalent. there is the flight out of risk assets. the peripheral countries have seen their debt take a dive. yields of ghana pretty dramatically in italy and spain. even in greece. there is a question of whether the ecb can and checked a stimulus program effectively and quickly enough to really .ncrease inflation last month, consumer prices rose at the slowest pace in five years. that is the concern, that you would see deflation and that the ecb to not be able to do much of anything to stem it. there is data, coming out that shows improving economy and some measures. you have jobless claims pouring. the lowest pace in 14 years.
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that officials have even been saying, you know what, the global slowdown may drag us down, too. >> we will see if the rebound today will last. thank you so much to it we will be on the markets again in 30 minutes. ♪ from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line." ♪ to our viewers in the united states and to those of you joining from around the world, welcome. we have full coverage of the stock some stories making headlines on this thursday. su keenan watching crude oil. the question today, how

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