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tv   Bloomberg West  Bloomberg  October 16, 2014 11:00pm-11:31pm EDT

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>> live from pier 3 in san francisco, welcome to "bloomberg west." i'm emily chang. top headlines -- stocks plunge back after an early plunge. the dow ending the day just 24 points down. the turnaround came after st. louis fed president james bullard told bloomberg the fed should continue delaying the end of its bond buying program. >> the qe program would be open-ended, and we would be able
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to adjusted in response to macroeconomic developments. this is a serious macroeconomic development. >> bullard said economic fundamentals remain strong, and he blamed the downturn on europe. the white house says president obama is focused on getting answers to what happened with ebola transmissions in dallas. the president's cancellation of a political trip shows the sense of urgency to see the virus is contained. republicans have criticized the administration for its response. chipmaker amd is cutting 7% of its workforce as sales slide. revenue was down 2% as they struggle to compete with intel. amd recently replaced its ceo. starbucks is introducing its
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first order ahead mobile app. this feature will be introduced in the portland area by the end of the year, with expansion to the rest of the country next year. starbucks says the mobile app can boost sales because it will make trips more convenient and shorter. apple shows a wave of new products just in time for the holiday shopping season. the ipad air 2, and the ipad mini. tim cook downplayed the recent drop in ipad sales. >> we have sold 225 million ipads around the world. [applause] to put this in more perspective, if you look at the top four by volume pc manufacturers, the number of sales for the last 12 monts, compared to ipad, ipad
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beats them all. >> the event was not just about ipads. apple also introduced a new 27 inch mac, a new mac mini, and updates toios 8 and os x yosemite. cory johnson was in cupertino at the event. you got to try stuff out. what was it like? >> a lot of interesting things. it's hard to cover the events and not fall in. the 225 million number, a classic moment. he said we sold 225 million, the employees started clapping. i dubiously tweeted out, then looked at my models. at the end of last quarter, $225 million. we knew that last quarter. some of it was old news. the products are a little thinner, a lot faster, the
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display is a lot cleaner, but these are things that are hard to see initially. >> is it enough to get people to upgrade or buy it if they don't have one already? >> what we have seen from this, people bought so many right away, it raised growth a lot faster than before. so the little incremental changes maybe aren't enough. take a look -- >> ipad sales are falling. the question is, will the new ipad air have enough innovation to bring the consumer back? here you have the brand-new ipad air 2. it's noticeably thinner. 18% thinner. you can never be too rich or too thin. the display is a lot higher quality, the retina display.
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and the image quality, really impressive. to have a display that works like this you have to have a better chip. you have a much faster, more powerful chip inside this machine. and you wanted to connect fast, so they have a faster version of wi-fi than any other tablet. and for the cellular version, a faster lte chip. and the thingh people have been asking for has been the touch id, to log into the machine using just your thumb. makes it different. it will enable apple pay as well. if this is too big for you, there is a new ipad mini. all the same features, which comes at a slightly lower price. there it is -- >> and you could be a hand
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model. [laughter] >> i'm now officially a paid hand model. i got manicures this weekend. >> what i want to talk about is the fact, we talk so much about how tablets does grow this slowing down, yet this product is still the acting biggest product at apple after the phones. accounts for 15% to 20% of revenues. this talk of the demise of the tablet, is a greatly exaggerated? >> here is my theory. the adoption of this thing was faster than any technological advancement in the last 100 years. more than 50% of u.s. households had this in less than four years, is what the numbers look like. because of that, people had it before they knew what to do with
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it. you could argue the apple software designers are so good that people, the things they do with it, email, manipulate pictures, read stuff like magazines. the new things only and ipad can do we are only starting to learn. because adoption was so fast in hardware, the software has not caught up. that's why we start to see a slowdown. >> will adoption continue? >> yes. that's why the ibm in partnership is so important. they are thinking about specific business uses that only a tablet can do. ibm is writing software just for ipads, and those are new things. that is why the pay of and ali
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is so important. the thumbprint deal. we talk about apple pay. apple pay for e-commerce is a really important thing. the idea you can go to groupon using your thumbprint so groupon never gets here credit card,, that is a big deal. ipad-specific use cases are starting to bubble up. >> you caught up with people at the event, including gene munster. >> we had a little tim cook tim,e not caught on camer, and also some gene munster time. listen to what he thought about today's announcements. >> a lot of increment of things. there was a little surprise in terms of apple pay. that was the real news, how much progress they made in the last month. >> did you wonder when they would come out with it? >> we expected it in the month of october. the 500 banks and 10 retailers, the mid-more progress in two months than ebay has at point of sale. >> but that was not
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point-of-sale, that was connection to the banks. >> the 500 was the banks, but they announced 10 additional retailers at point-of-sale. that is the piece ebay has had a tough time with. >> why do you think that is? is it really the name brand of apple, for something paypal is not executing? >> the brand is half of it. the other piece is technology. having touch id. biometrics makes retailers more comfortable adopting it. apple has an advantage. paypal does not make hardware. this is a classic example of apple using it hardware and combination. >> hacking has become a big issue in this most populous state in the nation. does that affect your sales calls? >> that is something a lot of retailers struggled with. it will be put to the acid test on monday when people start
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giving this a try, trying to hack it. but from a technology standpoint apple should be a in a great place. >> maybe we buried the lede not talking about the ipads itself. is there enough to accelerate sales, to get sales growth back? >> probably not. ultimately there are structural things going on with the ipad. when you had the bigger screen iphones, and they had so much traction so early when they came out, it kind of saturated some of that base. it's critical. apple updated 30% of the revenue today, so this was important, but in terms of really moving the needle it will not change general plays. >> they will keep the older ipads on the market at lower prices. they are getting a lot closer to things like the kindle, the oldest versions of the ipad.
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>> inching the low-end price point down. they have a price point for pretty much everybody. >> is the kindle the right comp in the marketplace, or should we think about the other android powered tablets? >> android makes a lot of sense. the market share as much higher. apple, even with lower prices, is still 20% higher than the comparable android. >> in your notes, you don't have much for apple in terms of revenue contribution. so you say good news about apple pay maybe doesn't move the needle for apple anytime in the near future. >> it doesn't. it does help sell devices. if people use apple pay, they will go by phones. that is how apple impacts it.
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>> you said it was good news for the phone. >> they made a lot of traction in a feature that will be critical to how consumers use the phone. they're off to a fast start. >> cory johnson with gene munster. next, what will demand be like for the new ipad? we look into apple for the new devices. ♪
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>> i'm emily chang, and this is "bloomberg west." just five weeks after unveiling new iphones, tim cook unveiled new ipads and more today, the ipad air 2 the ipad mini 3 and the new imac.
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all of you were at the event. horace, i'll start with you. the impression is kind of underwhelming, when you agree? >> underwhelming, we just cannot have a lot surprises. things became predictable. >> and they released the three shots of the new products. >> they did a whole demonstration about wanting to show how you can use new software. the policy of apple secrecy -- >> they made a gag of it. >> although it is not predictable, i would say it is underwhelming. a solid chip shot, base hit, whatever you want to use as an analogy. moving forward. >> i know the change is incremental when it comes to my phone and i do love it, is that such a bad thing?
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>> it's a great thing. the issue was, the phone was a much bigger change from generation to generation than what we saw today. they were incremental. size is the same, a litter thinner. the ipad mini 3 had to be the shortest introduction in history, five seconds. i think that's in part because the iphone 6 plus represents a serious challenge to ipad mini in particular. it will be interesting to see how that plays out. >> i was struck by every one of the things. it used to mean a lot in the pc industry when you had a fast chip. there was a time when the entire industry would turn around a new chip from intel. they talk about faster chips, wi-fi, faster lte. are we at a point now not just in tablets and phones, but also pc's, where the machines essentially were good enough for everything we do and we are not ticked off we can't process spreadsheets, watch a movie
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faster? >> i think we are. the notion of "good enough" is a real challenge to the hardware industry, not just apple. ironically, the most interesting new demonstration of technology was the retina display on the new imac. that was incredibly impressive, and it was interesting that apple saved that until last. dell has a 5k display, too, and a thinner tablet, believe it or not. but nevertheless, to me that shows there's innovation happening on the computer side as well. >> i spoke to venture capitalist mark andreessen yesterday. he talked about what he feels is a moment -- >> it looks extremely promising. the iphone 6 is a huge hit, and it will be extreme the successful.
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apple gaining strength, you can feel it. is the company gaining strength or losing it? you feel apple is gaining strength. i think they would to extort an early well. >> today's event was predictable, but would you agree with the assessment? >> they are definitely executing on a protectable path. we talked a lot about hardware, but also realize how much emphasis they put on software. we talked the first 15 minutes on os x, yosemite, the 8.1 version of ios. they will work together in an unprecedented way. they are emphasizing integration. and to your point about being good enough, the hardware is getting way beyond good enough, but the software is not there. a lot of complaints people have about apple and computers in
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general is they don't work the way they should. problems with bugs, downtime, iclooud. so as they are fixing those things, the experience gets better. >> let's talk about two competitors. they showed off the integration of maps in the new os. to create an event and you say, i'm going to this address. >> from dropbox, to a lesser degree box, as a consumer. it stores on the cloud service. you see them going after that. >> i am about cloud storage as a means to connect my devices and continuity to connect my devices. being a huge part of that is essential. it was great that they brought in at least the windows pc, so people who don't have all apple, they can communicate across
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these devices. but those cloud-based services will be increasingly important for apple as we move forward. to horace's point, we have hardware innovation slowing down, so let's see what we can do on software and services. >> bob o'donnell we will continue this conversation after a quick break. talking about apple and its future. more next. ♪
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>> we're back on "bloomberg west" talking about apple. i want to talk a little about apple tv. first, let's talk about the macs. they unveiled a new mac lineup. i'm surprised he compared ipad sales to pc sales one pc sales are still a big part of the business. >> they did not compare the mac sales to pc sales. that's about 8 million people who use macs in the world. when you compare that to ipad numbers, hundreds of millions of iphone users, the mac is a niche, and imac is a niche inside that nice, because most people use laptops. >> i thought it was the coolest thing they announced today. >> i agree. a beautiful device. when you have that high a resolution of display, it is on was 3-d-like, which makes the suggestion possibly for apple tv.
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>> mark andreessen told me apple is not making a tv set anytime soon. would you agree? >> i don't think so. >> i don't think so, either. i think the box will get an update, but i don't see them building a big panel. >> that may never have been the plan. the plan may have always been a better cable box. it seems to be a smarter business model. >> not according to gene munster. >> the other thing to remember, apple does not make these displays. they work with lg, samsung to make the displays. apple did make the controller chip in the new imac, which is an interesting innovation for apple to do. >> tim cook continues to say tv is interesting. it remains to be seen what that means.
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thank you both so much for joining us. stay tuned. a special edition of "studio 1.0" is coming up tonight with salesforce chairman marc benioff. more on apple pay, coming up. ♪
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>> he may be the most influential man in san francisco. mark benioff has transformed the way that businesses do business. he has pioneered the flight to the cloud and a new model for philanthropy along the way. he launched a career at apple, became a star salesman at oracle. then he went on to start one of oracle's biggest competitors. joining me, from dreamforce 2014, mark benioff. so great to be here at one of the biggest conferences in the world. how many people are here today? >> 145,000 registered to attend physically. 3 million have already attended


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