tv Bloomberg West Bloomberg January 26, 2016 11:00pm-12:01am EST
emily: i'm emily chang. you are watching "bloomberg west." vmware on its way up. a path forward with restructuring. and twitter's revolving door is still swinging. we check out the ceos record and tough job she has ahead. lead, iphone sales are stalling. overall sales were 2.9 billion dollars. profits, a 2% increase. the real number to watch is iphone sales. decades,irst time in iphone is forecasting a decline, the market for iphones may be
peaking. a different economic environment around the world, seeing softness in hong kong, a big part of their china business. take a look at what tim cook had to say moments ago. : we are seeing extreme conditions everywhere we look. major markets including brazil, russia, japan, turkey, southeast asia, and the eurozone have been having weakening currencies, falling commodity prices. question to ask, hasn't reached the limits? we have it all down, including our, editor-not-large, cory johnson. cory johnson, i will start with you. take it down.
what do you see. cory: the numbers are solid for apple. iphones theyst have ever sold, the most watches. corey: this is a tech stock. it is supposed to show big growth. the bottom line, in the real world, it should reflect actual growth. but look at this? 1% growth compared to 50% one year ago. that kind of change shows it is not growing anymore. it is hard for stock to show a the rest ison when negative. >> you are facing the worst conditions. even in 2009, we did not hear this kind of catastrophe.
so, in that sense, having been quarter, ando one they state this as a temporary situation due to extraordinary conditions mostly and him merging markets which has been the growth for them in the last few years. i think this is a temporary phenomenon. emily: interesting. i want to dig beeper. continue tod, we see strong business and china, strong interest in our products in china specifically. in the first few weeks of january we are seeing some level of economic softness. not in mainland china, but in hung con. i asked him about the reports into he said he could not comment specifically, but they have provided guidance for the acond quarter which points to
decline year-over-year. we see a different macro environment. he points to canada, brazil, and russia. foreignproblem with currencies which are weaker against the united states dollar. daniel, how alarming are these earning comments? do you think they are temporary? daniel: they are coming out with sincest consumer products iphone 6. they are dependent upon china. i would call it robust, respectable, where you see jinks in the armor. forward, it is about iphone seven. we're going to an interim product cycle. unless you are living under a the iphone number for
march, now it is really to .onvince investors the iphone seven, with china remaining strong, the key very away from their playbook? -- when you go to sleep tonight it is not like feel goodhis quarter for apple. success. i compare the emily: let us look beyond the iphone. can there be another blockbuster product that drives revenue as much as the iphone does? , he said on services in recent weeks we crossed a very important milestone. our installment for active devices is more than one billion. if you look at the size of the
service and how much we are growing, it is a big business not valued the way other businesses are. that our evaluation is not correct in that the stock price does not cart -- reflect the true value of our company. corey, would you agree? corey: we see the other category, nice growth there. a small business. lastpad #down in 11 of the 12 quarters. we are hearing reports they got rid of the car and of the business. have 1000 people working on an apple car there. very healthy things, good growth margins, free flow cash generation. there is hope for services. the other things they have tried have not worked.
andy: outside of iphones services, what are you most optimistic about? >> i still believe in the apple watch. is they sold 5.5 million units in this last quarter. somewhere north of 12 million since large. i think they are on target for 12 million in the first calendar year. we will see a high iteration rate in terms of software improvements. productnched this without anyone doing anything in this space. they actually are creating this market. the march category may not move -- the watch category may not move the needle the way the iphone did, but we of course have the car opportunity. there will be difficulty, speed dust, but it
will be a huge category in day trillion dollar business opportunity there. emily: net daniel, would you think is the future of appleby on the iphone? the game think changers, when you look at streaming, not only is there a speed bump in terms of negotiations, the key west is do they go outside of the label to and use some of the 200 billion for acquisition. time warner, netflix, apple has to do something big here. they are sort of getting into this red zone. the iphone seven will be , but longer-term and coming down to streaming, that is the key and focus. corey? companyple is not a
that does acquisitions like that. .mily: thank you all turning to the broader markets, another day of big swings for stocks. rallying. here we are in new york. >> clawing back from monday's selloff. u.s. consumer confidence for january came in at a three-month high and oil rallied. up 9/10 of100 closed a percent with telecom the t-mobileainer and propelling the sector. , bothg at the hard drive rallied more than 5%. seekings reported to be to buy a stake in western digital. in video streaming, netflix fell for a fifth day, extending
losses after crossed the threshold of a moving average. this is the longest losing streak since september. bottom.d back from the a note from jp morgan impacted tesla because of its inability to deliver 4000 model x suv's in one quarter. share price fell 1.5%. facebook shares were up one third of 1%. emily, back to you. , to the m-where. shares are declining after the company he cleared fourth-quarter earnings. ceo --so named a new cfo. it is part of a larger restructuring plan. vmware has been struggling to
steam. only 500 26,000 monthly subscribers added this quarter. shares word down. finishheading to the line. spiking more than 20% after third-quarter earnings. pledging to fund its debt. whether job cuts and other cost saving measures will be enough to turn the company around. i am joined by jonathan chaplin and our managing technology manager. with you.i will start i listened in on the call today. savings indicate sprints turnaround plan is working? good signse some there. sprint is the most exciting name they stock coverage at
moment. it is either worth zero, or it is worth $10. what if you look at the assets, there is a treasure trove of spectrum there. it comes down to whether the management team can execute. if you look at the last three years, the trek rickard has not been great. been positive signs. this is a business that still has declining revenue. 7%. they are burning cash flow at a vicious rate. they started growing customers again last quarter. the for sign of a turnaround. based on the comments of the call, it looks like the growth and customer strength going into the next order. from there, if you can trace of forward to a turnaround in a revenue, that 0% scenario becomes less probable and the $10 scenario becomes more probable particularly given the
funding they put in place. spoke on the call this morning, i asked how they , say,sitioning for t-mobile is turning this into a price war. what is his strategy? he said, we're going to offer a great product at a good price. the biggest challenge we have is customer perception. they do not believe that and they do not believe in the quality of our product. is that true, jonathan? do they have the best prices? to network? the best jonathan: they definitely have the best prices. they have cut prices dramatically. expiresians are set to in the next couple weeks. we will see if they extend. to expireces are set in the next couple weeks. we will see if they extend.
it is the best network, in some cases the third best network. not nearly as far behind the others as it was. the question is, is a good enough at this price for customers to start switching over? it seems so. i think the story gets more interesting once they get through the next leg of spectrum deployment. they go into the spectrum they have not deployed the yet. they have started a new plan to get it out there. it is a complex undertaking. nobody has done that yet and this will get them to a point where they have more capacity and a faster network they and everybody else. emily: peter, what are the implications for soft bank? softbank has deepened its commitment to sprint but both stocks have been sinking.
>> they have been trading in parallel for a while. the chairman has talked about how telecom can alleviate loneliness and send this. the product is ambitious. they want to roll this out so people can have good coverage wherever they are. the goal is to be able to provide interconnected services. higher quality. the key point, they need to be able to finance those investments. so far, it has been challenging enough that they had a hard time. to get their financing in order and be able to do that will doubt, this quarter was a step in that direction. persuade need to consumers they do have a quality
of language and integration of the country to allow the extent it is a lot easier. you have to understand what makes india tick. say unitedd you states company have not done that well? >> they have succeeded tremendously. hp has been tremendously successful in india. the technical depth and knowledge, bottom of the pyramid, adoption of technology, even if you look at cell phones, and today we have 700 million subscribers. it is huge. it offers tremendous opportunity. in thehe second largest world. emily: what is the capacity? cannot represent meg
whitman. i do not represent hp. emily: my question is, how long can the company remain independent? guests: it is independent in many ways. hp does not interfere. and compromises about 73% of our revenue. we are doing well. hp is supported of doing the right thing with the company. they do not interfere and ask us to make compromises. and most of our business comes from the u.s.. 75% from the u.s.. that is what we are. >> one of the big things this year is concern about jobs being outsourced to india and other countries. where do you stand? guest: this concept of jobs being outsourced is a thing of the past. what is happening is automation, artificial intelligence, robotics.
this is the next wave hitting the industry. it is no more about labor arbitrage. it is about automation and robotics. emily: so that is what we should be concerned about. guest: absolutely. you can't stop it from happening. it will affect every industry. it is coming. emily: what is your vision? where'd you want to take the company? guest: we want to be the best serving our clients. ultimately our digital revolution will happen through our clients. many are in analog businesses and they have to deal with digital. our role is to be the bridge, the enabler. we want to be part of their journey. emily: all right. thank you for joining us.
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10.1 five one million egg unit. the 10 million mark in global sales and it remains as you suspected, the world's largest automaker. ceo says he is prepared to lose customers in asia in the drive to boost returns. to boost theng return on equity and cut cost. anz retains his role and hans becomes ceo of the asian business. and the worst airline performing stock in two months. indigo has lost its lead. a jump in profit in the third quarter. those are the headlines from
bloomberg news powered by 2400 journalists in 120 news bureaus around the world. let's check in on how the markets have been performing. stocks falling. with the exception of shanghai composite. take a look at the 2.8 percent if you add. it is going to be the biggest two-day selloff we have seen. we are right in it. and shanghai. also, the high that we saw, one half a percent up. it gained and should be a good session today. the top 50 has become pretty much flat. we take a look at the shanghai composite. 2500 is that psychological line in the sand. two-week35 the
average. we are very close to hitting that now. we will continue to watch this. confirmed the news of these tweets, saying she is excited to life the amazing team to to bring the power and magic of twitter. with that comes the thankless job. the stock is near its lowest point ever. the ceo has been handling market up until now. most recently, an executive vice president of american express.
building bridges between true judges -- traditional payment and silicon valley. digital wallet. in october 2013, she spoke to bloomberg. interviews in that describing the power of it. >> a very smart and sharp. deepening the lead form. we are big fans of twitter. emily: it joining me now to discuss the significance, brian weser in portland. first of all, how significant is this appointment of leslie? particularlynot important but the overall changes in management reflect a continuation of the appointment of dorsey will stop it obviously
was significant but it is old news. emily: the revolving doors seems to be the norm at twitter. i'm interested in your view because you take an unconventional tactic and that you think twitter is to focus on the mainstream. .> i think this is the big risk i would argue i am more positive about twitters prospects. if they just left it alone, for lack of a better word and did not self-flagellate their failure to become a ubiquitous. that is the biggest threat. to make the market or a hero. when you talk down your own business, you make your client look like a chump. emily: jack dorsey is saying he
more to make twitter simple, more easy to understand. as simple as looking out your window. what is wrong with that? >> it is ok, but it might be a different rhetoric. instagram. something else. emily: what is wrong with that? brian: i can only observe the product is unique. what is also unique is tangible that madison avenue really likes. there is a devoted, committed days of advertisers that is more than committed to make it a stable had platform. the problem is, it is not ace book. they need to realize they are good enough and doggone it, partners do like them.
emily: you have cut your price target and say you are more positive on twitters potential than ever before. given the fact that you seem to disagree with jack orsi's strategy, how positive can you be about the companies outlook? myan: d reason i reduced rice target as i recognize there is added risk. to be in pursuit of ubiquity. it is possible they will get there. will failible they and hurt the platform. it is more likely as they go through this process, there is a devoted cadre of users. who are notrtisers going anywhere. i am reasonably positive the outcome is reasonably positive. stock,s of value of the it is more the point that at these trading levels, $17 a share, if all they did was trade
-- tread water, the stocks were at 40% more and that was with a lot of risk. i am assuming they can grow at 20% which is pretty conservative. emily: message to jack dorsey, stop worrying so much. thank you. thank you for sharing that view on bloomberg west today. 54ember, we are monitoring million members at the end of last year for amazon prime. that means prime reaches 21% of u.s. adults and half of all u.s. households had it. -- habits. shares took a hit of tesla. slower than expected production of the model x. earnings from $.10 a share to $.26 a share. all of this as elon musk tries to woo local regulators. he says china's market has enormous potential given
concerns about pollution and the environment. earlier mosque spoke about china at a is this conference in hong kong. >> china is where i have had a number of meetings with the chinese government. the minister of finance mentioned tesla in a speech that he gave. as a good example. he is -- he likes what we are doing. >> which is a good thing. >> absolutely. last year in an effort to help the industry and be a good neighbor we open sourced our patents. any company in china can use our patents to create electric vehicles. >> oh, well. well. [applause]
>> what you are doing their underscores a theme that emerged. the latest climate change conference in paris. >> china is quite well-developed. china has better highways and definitely better trains they in the united states. by far. ok? [chuckling] i had a great experience taking the bullet train from beijing to see the warriors. it was a great experience. >> yeah. >> so, yes. i think there is a lot of opportunity there. i think the chance for tesla in china, we need to establish a a local partnership. thate to kind of figured out. emily: tesla ceo elon musk speaking in hong kong. up, we will head to the
♪ emily: we are watching lockheed martin shares down the most in five months as investors question their growth prospects. earnings came in below analysts estimates. they predicted greater sales and operating profit. helicopter maker, sikorsky. lockheed also announced it is combining its id division with a $5 billion deal expected to help the company shed its less profitable business. amid growing competition from silicon valley. the cybertek conference is underway in tel aviv. the largest event outside of the united states, they have converged as reports swirl of a possible merger between the two
companies. a bloomberg reporter caught up with them. >> checkpoints were going to buy you. sending to up shares up. is there any truth to those reports? >> obviously, as a public company we cannot respond to rumors. i am just back from a keynote interview. that has always been our mission. i've said that before and i am repeating it today. right now we are on a mission to secure enterprises and we feel like we're just getting started. it appealing to your potential for acquiring? tags a cyber is getting a lot of
attention because of our growth and profitability. from our perspective we're just getting started. something every enterprise and government needs. we have 2000 customers. we're just scratching the surface, embarking on a global financial. >> explained to our viewers exactly what you do. you assume the bad guys get in and then attack it. >> yes. even if they make it inside, we prevent them from getting access to the i.t. systems. total account security. so, a layer of security on the inside. >> quite a big company in its own right. are you in the market for more acquisitions? >> we are here at this conference and we are excited about the opportunity to innovate as we did today with a but we are also
beginning to look at nonorganic options as well. >> we also heard from israel's biggest cyber security firm, checkpoint. we company strategy. >> is there any truth to reports whatsoever? >> we don't comment. >> i will just tell you here you are seeing it for the first time. >> but you do have a lot of cash. 1.4 billion. about you could make in a position of that size. provide more protection, more prevention, and blocking hackers from everyone's networks. >> you have been doing a number
of transactions. some of these some of the young whippersnappers seem to say you are not innovating is much as you should. you are acquiring innovation rather than developing in-house. how do you respond to such criticism? >> we catch criticism from above size. too much growing organically. too much acquisition. we are committed to doing both. you look at the amount of technology, the vast majorities are organic growth. i think it is a very good combination we have now. >> people try to hack cars. what is behind that deal? >> we see the risk to ciber is everywhere. cars one of the devices that can be affected. we are specializing in securing the internals of cars. we have unique solutions to secure the car inside out. we are approaching car manufacturers. we will see where it goes.
we are specializing activity of the internet traffic. unique solution that secures the car from the inside. we will look and see where it goes. emily: speaking with checkpoints cofounder in tel aviv. let's take a look at what is trending. real estate in new york city is getting rough. a man in brooklyn try to take advantage of that during the recent snowstorm building a snowstorm and putting it for rent on airbnb. he listed, boutique winter igloo 424 $200 a night. he called it the snowpocalypse's most popular getaway.
♪ emily: a story we are watching, meredith corporation close to walking away from its pursuit of a merger with media general. that is according to people familiar with the matter. the move would allow the next are two acquire the tv broadcaster after months of negotiations. meredith is close to a termination package that would include a $60 million break up the and know what extra money. amazon and netflix are both
vying for oscars in 2017. they are upping their credit in the film world by outfitting major studios for film rights. amazon with the manchester by the sea starring casey affleck. the final price is $2 million. -- $10 million. not to be outdone, netflix has purchased three films so far including tallulah and the fundamentals of caring with paul rudd. sales declined for the first time in a decade. hundreds of suppliers are dissecting the company earnings for clues about whether there fortunes are poised to rise or fall. so, what is in store for suppliers like sears logic, the maker of audio components that revenuee than 67% of from suppliers like apple?
joining me, tim, how do you think they are reacting to the latest results today? tim: it is really not good news in any way, shape, or form. the outlook for this quarter was weaker than expected. some suppliers could kind of see about but when it is put down on paper, the suppliers are going to feel it. shares may move as a result. one of the big issues, companies rely on apple. apple has been a solid client for the supply channel. of course, other companies have grown higher or faster. xiaomi had a good year a couple years ago. and gone.e come over the years, apple has been a solid performer for all of them over the years. when apple starts to slip up a little bit, slow down. slowdown in arst decade. all of the other suppliers will feel the chill. .he one rock they relied on
it is going to be weak in 2016. the fact that apple has come out and given us these numbers is going to tell the supply chain what they need to expect this year. emily: the bloomberg terminal breaks down how reliable these suppliers are on apple. foxconn gets 52% of its revenue from apple. we talk about apple diversifying its revenue streams. what is beyond the iphone? what is their next plan? how are these suppliers trying to diversify their companies? are they focused on creating new revenue streams outside of apple? >> they are trying desperately. the chairman and ceo of foxconn has for years and years tried to diversify away from apple but he can't do it. there are two reasons for that. they are so good at what they do. they are so good at making iphones, ipads, everything like that. the other thing is, they are
such a reliable partner for them. such a reliable client. they make it for companies on the supply chain. they make the sony. they make ps3's. but as you say, half of their sales come from apple and it is hard to break away from that. they have one million workers churning out products. how do go and find another apple? not one. you try moving cloud services, go deeper into the supply chain, do more. they are making robots. with softbank and alibaba. they are trying to do other stuff. but apple is so huge. they are having a hard time finding a supply that can surpass apple. especially when you are a company likes foxconn or pegatron. it is hard to find a big enough client that can surpass apple. emily: interesting.
bloomberg's covering the supply chain in taipei. thank you as always. it is time now for today's edition of the best day ever. actually today is the worst a -- day ever. sorry microsoft, you get the prize. surface tablets are hitting the big time for the wrong reasons. the devices stopped working in front of 50 million users at an nfl game. windows marketing chief defended the product saying, today, on rare occasions, the stadium has network issues that prevent the delivery of issues to surface devices. although microsoft has a $400 million deal with the nfl. it's surface product has taken a beating with sportscasters, sometimes calling the devices ipads. ouch. big tech earnings continue with reports from facebook, ebay, paypal. full coverage from here in san francisco. we will see you then. ♪