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tv   Bloomberg West  Bloomberg  February 22, 2016 6:00pm-7:01pm EST

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he was denied bail. the county prosecutor said he waived his right to self-determination and his involvement in these incidents. republican presidential candidate has asked and mark rubio spokesman to resign for falsely alleging that marco rubio bible. question thell not faith of another candidate. president obama's ask for help to push his free-trade agenda. should tell her congressional delegation about how the pacific rim trade deal could boost business in their states. the u.s. and russia have agreed on a new cease-fire for syria that is scheduled to take effect saturday. the cease-fire does not cover islamic state or any other terroristesignated as
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organizations by the united nations. our 2400ws powered by journalists. newsthe bloomberg world headquarters around the world. i am emily chang and this is bloomberg west. back in the hot seat with the eu. how the search giant plans to --pond to mark zuckerberg plans to respond. mark zuckerberg is going all in r.th villar -- v with tim cookgree or the fbi? we find out.
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now to our lead, a new chapter in the ongoing battle between the european union and google. existingadding on to antitrust investigations into their mobile operating system and shopping services. quizzing people involved about google's behavior. for more insight into this story, i spent the day at the locle plex with hiroshi kheimer. i started by asking if he would have to alter googles business relationship with hardware makers or app developers to navigate heightened antitrust in europe. thee want to work with
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relevant authorities and educate them how android and the industry works. in terms of what is to come, it is hard to predict. we think there is a lot of confusion and how the ecosystem works. it has that existed before. before.er been done it is a new thing and we are learning together and learning with the relevant authorities. i don't want to predict what will happen in the future. emily: our regulators confused? >> i don't know if they are confused, but it is a new thing. there is the template. it requires a lot of discussion everyonegue so that can understand how it works. isly girl is that -- emily:
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that something that you plan to fight? >> i don't know about fight. we are in discussions and that will continue. the eu is taking a hard look at google because of its dominance. useanufacturers choose to android. some manufacturers have chosen in other ways. we talked to regulators, which i do not want to get into now. we think it is an open ecosystem and makes it a choice for everyone. emily: what is your answer for regulators? doesn't the goal of natural dominance put you at odds? there are certain markets
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were other devices do really well. case-by-case and we understand their opinions on this and we work with them to get them our viewpoint. dople have reviewed what we and we have said it is fine. emily: google now, your version initiativeemed a big but we have not seen that much development. is that less of a priority? >> i think it is a really important area. we launched google now with jellybean. it has been a while and one of the ideas hind google now is that typically when people think of google, there is a search box and they enter a query and get an answer back.
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but what if we flipped that around and started providing answers before they asked? that was the original premise. for instance, based on the customer providing access and granting permission, google now can learn -- it seems like every date you drive from this place to that place. maybe that is your home and your workplace. it learns these things without the customer entering information. emily: amazon? is getting -- amazon echo is getting rave reviews but they say why did apple or google not come up with this? >> i don't know if it is better than these other products. it is a very different use case. echo is usually in your home. google now was born on cell phones and tablets that you carry with you.
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doing great.be i think that it is an exciting space. it makes us want to sharpen our pencils a little bit more. want to seeu android in the home like that? >> there are already a lot of android devices in people's homes. there is now a refrigerator that devicesroid and other like your tv that run android. and ouronly happening goal is to interconnect these devices much better together so that the new experiences that can be invented. one of the realizations, if you look through your home, forgetting operating systems for a second, there are many different screens. your microwave has a screen
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screen -- your microwave has a screen, your oven, your thermostat. they don't know how to talk to each other. if they could interconnect, there are a lot of interesting things that can be done. emily: what do you see as the future of android? a lot of these other products whether it is nest or self driving cars or cars in general, what is the future of android in our world? >> if you look at the future of far, we've also announced initiative around internet of things. that is where really interesting things can happen. if your car approaches your home
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, you can change her thermostat to your desired temperature. you can start imagining new things that could happen. emily: you can stay tuned for more of the exclusive conversation where we discussed google vr ambitions. sharing hiserg is excitement for the potential of virtual reality. even just in gear vr, there have been more than one million hours of 360 video. on facebook there are people who watch 360 videos every day. that is happening. that is one part of the content ecosystem. i am pretty excited about that. emily: it wasn't all excitement.
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he expressed disappointment on india's recent decision to block facebook.org as well as his relationship with telecom carriers. give us the highlights of what he had to say. what are the main points? he said the infrastructure of the connected world can handle facebook's plan. that means people coming on the -- rnet for the first time they are deploying this year .round the world on the flipside, he wants to lead the effort for 5g network. white is facebook taking
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-- why is facebook taking the lead? that is interesting. >> they are not experts and don't claim to be but think about what they have done in the data centers. they decide they were not cutting it. now they are building acts that are incorporating virtual reality and live streaming video. he talks about 3-d video and that will need these networks. >> a what did he say about india? >> he said that he is disappointed. it will not stop them from using free basics in other countries. emily: disappointed, but not deterred. sara, thank you for that update. we will leave you with this one photo from the conference that people have noticed. it could be a vision of our future if the oculus rift team
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has its way. ♪
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on the waystock down. that is fitbit after the latest guidance disappoints. between $420 million and $440 million. the miss? slower than anticipated global rollout of the blaze and to be alta.-- the blaze and the are gatheringkers
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at mobile world congress to discuss the future of tech devices. encoding a revamp of the smartphone as the market saturates. i sat down with hiroshi lockheimer for an exclusive interview. i asked him about google's approach to virtual reality and if there are any plans to expand on the low-cost cardboard. >> cardboard we launched over a year ago and i think there are 5 million out there. it's the biggest vr platform in the world from that perspective. one of the important things about the art there is the are the technology and the content that is available. thiswe've enabled with massive reach is developers of started to pay attention. the end, that is what a customer will experience.
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they will experience climbing a mountain in their vr headset. emily: how would you rate the pace? is it fast enough? >> i think it is fast. hypercompetitive. we try our best to keep up and bring new innovations and delightful moments to our customers's life. innovation is high and i think it will continue to behind. there is so much going on which makes it hard to predict what is going on aside from new change in newer things that we cannot even imagine today. emily: what is it like working for your bus? -- a boss? what is his leadership style? >> he is an interesting guy. -- is a lot more grace now guess i do, too compared to 10 years ago. he is thoughtful and an
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organized thinker will stop i think he is exactly what the .ompany needs he is adept at all of that. emily: he can get in the weeds on what you are working on. how does that impact you? >> he doesn't micromanage of that's where you're headed with that but he does know a lot about platforms. he's been doing that for a long time which really helps me. in many ways google is a platform company but also a product company. with platforms we work with partners and he understands both the sides of that really well and i find that helpful. apple is the most profitable company in the world with a closed ecosystem. why not make android closed instead of open?
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>> we think that the open approach is the right one in the sense that it fosters innovation, competition, differentiation, customization, and choice. emily: have you ever considered putting walls around android? considered that. i see it as almost constitutional. we made the source code completely available. ,e provide our services on top just like other companies build their services on top. we really think that the open approach is the right way to go. emily: the promise has always been mass ubiquity, cheaper phones and including india where you have hundreds of people that are not online. how is that going? >> really well.
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we are seeing a lot of growth in all markets like the u.s. and newer markets like india. that is definitely one of the strengths of android. every region has its own unique needs and desires. that is ok. the open model of android enables that. emily: where is it growing the fastest? >> android is growing worldwide, but we do see a lot of growth in emerging markets such as india. worldwide, depending on whose metrics you are looking at something like 70% to 80% of smartphones are android. emily: you know it is dominant it is criticized for being fragmented. >> it's interesting. we hear about that word a lot, fragmentation.
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there are a number of ways of looking at it. at the base layer of the operating system we have created the compatibility test. if a manufacturer wants to participate in the android ecosystem they have to go through a number of tests to prove that their device is compatible and not fragmenting from a developer and user perspective. >> it is an interesting point. the upgrade is something that is really important. there's also a security element as well. in the summer of 2015, we started multiple security patches. devices we were able to push these updates to. also working with the industry's
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they have all publicly committed to doing these security patches on a monthly basis or some sort of regular cadence. is reallyhat important. security is important to anything and that is something we are providing now. >> what are the plans to merge rome os?with chrom >> it is interesting because they started from different design centers and goals. they are successful in different ways. emily: google has been criticized for not making much money on android and it has been said that you will never make as much on mobile ads as desktop ants, is that fair? >> as an operating system, it is freely available. it certainly
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enables customers to do things on their devices that may result in revenue for google and other companies. that is how we look at it. when not going to charge for android itself. for third parties as well. businesses thrive on mobile on top of android. emily: might exclusive cons of -- conversation with hiroshi lockheimer of android. after the tragedy in michigan, we look at what you have to prove to become an uber driver.
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emily: to a story we have been following closely. uber driver jason dalton has been charged with six counts of murder after a deadly rampage
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that left six people dead. uber has said they are how broken but will not be changing screening processes. he had no criminal record and officerschief security had no back rent check would have flagged or anticipated this situation. it had us asking, what does go into a background check? socialt provide their security number, copy of a drivers license, insurance, and proof of a vehicle inspection. an outside company, checker, conducts a background check. that check goes back seven years. they do not meet with them face-to-face. uber does not screen fingerprints which can lead to false positives and discriminatory results. the do have a panic button in their app and india but do not have one in the united states. they say they do not want to add an extra layer to reach law
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enforcement and do not think they can do better than 911. the uber of private air travel just raised new funding. investedy had previously along with rapper jay-z. the ceo likens the company to uber black offering private jet rides you can book from a smartphone. the latest funding he says will be used to expand in the middle east, asia, and europe. when we return, how much does travis see really matter to smartphone users.
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when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them.
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so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. emily: i am emily chang and this is "bloomberg west." we are joined by zeb eckert with a look
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at the stories making headlines in asia. good morning. zeb: it is already the auto industries biggest ever recall and it could still get bigger. investigators are looking into takata airbag makers which means it more vehicles could be recalled among the 28 million already involved. recall itseparing to 2016 civic compact in the u.s. over engine problems just months after the model was put on the market. honda says it is suspending sales for some versions of the car but the retail will not start until it gets approval from u.s. authorities. the impending recall is another justct -- setback to honda 11 years after -- just one year
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after they had to change their president. doubledng pretax profit to a record 666 million dollars in the first half of the fiscal year. it was in the higher range of the company's forecast. cheaper oil helped boost growth. we are tracking bhp reporting and 92% drop in profit due to the commodities slump. the world's biggest mining company is also planning to cut its dividend payout from $.62 to $.16 per share. toly: the loyalty shareholders through dividend payouts -- has that impact of the credit rating? >> it certainly has. you saw standard & poor's downgraded to the lowest level since 2003. they last chose to cut the
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dividend in 1988. that shows how important it is to them but like many miners they are under increasing pressure to scrap their aggressive dividend policy. this first cap was far larger than analysts estimated. it is been cut to $.16 from $.62 a year earlier. emily: zeb eckert in hong kong. thank you for that update. global news 12 four hours a day around the world. from the bloomberg newsroom, i am emily chang. the high-stakes standoff between apple and the u.s. government
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continues to evolve with apple saying monday that officials should withdraw the order. instead apple is calling on congress. members of the business tech community have been supportive of apple. here is what mark zuckerberg had to say about encryption. sympathetic. we believe in encryption and think that is an important tool but honestly people will find a way to get it anyway. rightk it is not the thing to block that from the mainstream products that people want to use that will not be the right regulatory or economic policy to put in place. conference,e same the consumer devices ceo says privacy is a major issue for smartphone makers and he personally supports tim cook.
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industry is backing apple, the american public is split with a new poll from pew research say a small majority sided with the government. are joined with ryan reese and tim higgins who has been covering this story out of washington, d.c.. i will start with you, what do wa make of what way -- of hwey coming out and supporting -- not surprise me overall. i think that their points are right. you have to can -- protect consumer security or it is more detrimental to these technology companies. emily: yet, the majority of consumers do not care. what do you make of this pew research poll? they want apple to help. >> 51% in that pew research
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survey found they would support the fbi. another survey they cannot late friday found 51% as well supported the fbi. but 41% supported apple. if you dig into their numbers you found there was an even split between people who look at the u.s. terror policies being concerned they would go too far or not far enough. is really uncertainty in the american public over where they are on this issue. emily: tim cook has been speaking on this for a number of months. he made this his thing. speaking to charlie rose a couple months ago, listen to what he had to say. >> there happened people that suggest we should have a backdoor. the reality is, if you put a backdoor in, that is for everybody. charlie: does the government have a point that if we have good reason to believe that information is evidence of criminal conduct or national security. lays ahe government
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proper warrant on us today, we will give the specific information requested. we have to by law. encryptede of communication, we do not have it to give. emily: how high are the stakes for apple if they lose this confrontation? >> the stakes are going to be big regardless. given all the publicity that this entire story has received and continues to pick up momentum. they held the right stance from the beginning and ultimately that should reflect well on the company. this as a situation where technology is quicker than security or laws. this is a yesthat or no type of thing. i think something will be worked out but i think tim is right. right now the backdoor opens it
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to the good and bad. emily: apple has said that they did everything they could, they sent engineers to san bernardino. the county changed the password on his phone making it more difficult to help retrieve what was on the phone locally without having to provide this master key. is there a middle ground? or is the middle ground moot? >> that goes into the question about the policy. that is part of the reason why apple is trying to move it from the courthouse to the court of public opinion. when we start to have conversations about what we want as policy, it changes the dynamics and the details that are getting into the mud and can couple kate the issue -- complicate the issue. emily: when we do get into the mud, how does this play out? >> one of the things that you
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will see is that the uncertainty of what the public once will make it harder for any legislation in congress. congress that is already gridlocked at a time when we are circusightened atmosphere. we saw donald trump coming out strong last week in an interview with us, he said tim cook's head would be spinning, he would come down so hard on him. the stakes are so high and the conversation is so heated that it is hard to imagine much a current in d.c. which is part of the reason why you see the fbi pushing in the courts to get resolution. until apple does have february 26 to respond to this court order. tim higgins and ryan reese, thank you, both. apple is said to be encouraging store employees to sell iphones with new rewards programs.
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an estimatedng decline in year-over-year iphone sales for the first time. i want to get back to mobile world congress underway in barcelona. carmakers are on hand to show off their technology behind the wheel. aryl and hide, up with mark fields and asked when will customers not need to drive at all? >> we will probably see by the end of the decade that somebody will introduce a fully autonomous the a call -- vehicle. what we have said when we come the? -- an autonomous vehicle wherea the driver does not have to take control in a defined area. when we come out with one we
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want to make sure it's true to our brand which is always about accessibility. is it you or google or apple? want to makes we sure that we continue to be a leader. were not only a leader in our core business, but at the same time we are a leader in semiautonomous features, features that will keep you in your lane or adapt your speed on the highway. one of the announcements we are making here is that we are tripling our engineering investment. at the same time we are also investing in autonomous vehicles and as we do that we will work with a lot of different partners so our clear goal is to make sure we are a leader in this space. where it makes sense to work
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with others we will. mark fields with caroline hyde in barcelona. coming up, ibm steps up competition in the cloud with a handful of new partnerships. but is it enough to make a dent? >> up next, do not miss bill and .elinda gates on the go
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♪ emily: free shipping is getting more expensive at amazon. now you will need to spend $49 to qualify. previously they had to pay $35 to waive shipping fees. it comes as amazon aims to curb
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shipping costs which have been growing faster than revenue. the giants were to push customers to the $99 prime membership designed to keep customers loyal to amazon's shopping feature. trying to the cloud, ibm is hosting its biggest event ever devoted to that part of their business. as part of it and announced a series of cloud related partners . ibm's seniorith vice president of cloud and asked how they will add to the bottom line. >> we will market sell the vmware portfolio. we will enable the ibm team to sell that capability. they start to move workloads to the ibm cloud, obviously that is revenue for ibm. the marketus open up and what clients can do on the cloud.
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that helps both vmware and ibm as it gives them choice and the ability to consistently and seamlessly move workloads. we think this will help our clients accelerate their notion of the hybrid cloud. >> it is still early innings, but some also say that you are a distant force when it comes to amazon, microsoft and google in the race for the cloud. how do you change that? we don't look at it as a race for size but a race for value. we're focused on the enterprise to help on the clients taking advantage of a heightened cloud. of then take advantage cost advantages and the capability advantages but also connected back to their own private clouds and connected back to the data centers.
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most of the data and applications are running. we say to clients, take advantage and build a hybrid application. our differentiation is different. you think about our wanton cognitive services on the ibm cloud, the ability to take the data and analyze all the bad data that they had, it is very important. i don't view it as a destination but a platform. cloud is enabling is people to do things in new and unique ways with data and information that they may not have had access to in the past. emily: how many developers are currently using ibm services? we have well over one million developers on one platform today. when you add the number of get github andift --
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swift programmers -- they all have access to new services. they can get access to all of our wanton cognitive services. we are starting to see new applications being built by traditional clients and new startups. as we kicked off our conference, i started it with the clients. there is one client who is a startup using the startup cognitive services to provide new unique insight and analytics into the way that traders trade. we are starting to see a lot of people come from different areas. when you look at the number of developers, you have to think about them coming from all of these various sides and all utilizing the cloud. it's become a platform for innovation rather than just the destination. in this edition of our
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tech revolving door, twitter says that it former apple executive natalie charis. in a tweet, jack dorsey announced the higher and confirmed her position as vice president of global communications. this comes one month after significant reshuffling at twitter and seven months since the former can indication's lead left the company. has a big weeko! ahead beginning its search for any potential buyers. and, i have got a feeling. will.i.am is having the best day ever. we will tell you what. y. ♪
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emily: we have a busy week coming up and i want to break down what you should be watching for. cory johnson and mark milian are with me now. i want to start with yahoo!
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we are hearing they could start approaching bidders as soon as today. this could be significant. m&a activity the has been going on for a while. emily: they were getting the cold shoulder. >> now we know that they have been talking to people and have a number of interesting potential acquires. it will be curious to see what they try to take out of it and what kind of cash they think these things could generate and why they want to own these assets that are big and important. >> verizon keeps coming up as the most likely buyer. tim armstrong is supposedly looking into this. about this very thing. >> we believe that our strategy in commendation with what everybody else is doing -- we are also partners.
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to silicon valley and companies like apple or google, twitter,, facebook and we are partners with all of those countries. with a long-term strategy of our own a long-term partnership strategy. from a competitive standpoint we are not so much in direct pertitionon but coo with those companies. >> they have figured out how to monetize users and taken from desktop to mobile. i think they have done a very good job of monetizing and transforming content from an old desktop world to a mobile world. verizon would like that content there are certainly capabilities to see what they want because they have shown what they can make of those assets. at&t isig question with
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whether they see verizon's model is one they want to copy. do they remain as a telecom or do they take the verizon route and see their big brother and say that i want to be more like them? , results on the outlook continue to be disappointing. quarterssee a couple in a row with lower estimates in the lower them again, it's very disappointing for investors. salesforce -- that's the company that's going to be really interesting for these guys to report. you seen a slowdown in expected , of all weeks the apple shareholder meeting is this friday.
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>> apple is already in the news for other topics which will probably dominate part of the conversation there. to knowders will want how these privacy issues affect things how it will affect the company over the next year, but the other big thing they were waiting for is this vote on diversity where they are getting pressured by shareholders to increase diversity in their top ranks. the percentage of african-american and hispanic leaders that the company has been declining in the last year. they are under pressure -- there is this proposal for what they are calling an accelerated recruitment policy to help them wrap up on senior leaders which the company has pushed back on. that coming from one shareholder who owns a small part of the company.
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>> the shareholder votes at annual meetings do not tend to be a big deal. that it is so big maybe the shareholder meeting has less impact. emily: thank you both. it is time to find out who is having the best day ever. i already give you a hint. it's will.i.am. he's teaming up with deutsche telekom to create his own smart watch that combines fashion and technology. caroline hyde cut up with him at mobile world congress. >> when it comes to searching the world's information it is a conversation away. you can have a conversation about the things happening in the world or music and she is knowledgeable about the ins and outs of music like what the artist is up to and being able
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to make playlists and have conversations about the things you are interested in. emily: the smart watch market is .xtremely crowded he may have a lot of competition would let him enjoy this best day ever for today. oft does it for this edition "bloomberg west." do not missed our executive lineup from aol to viacom to armed holdings. that is all today from san francisco. ♪
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charlie: privacy, technology, and national security collided this week when a federal judge ordered apple to create software that would disable security features on an iphone used by the san bernardino shooters that would allow the fbi to access the encrypted data which they believed might include helpful information in the fight against terrorism. otheri says there is no way to get the information from e

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