tv Bloomberg West Bloomberg May 17, 2016 6:00pm-7:01pm EDT
the u.s. senate passed legislation that would allow 9/11 victims and their families to sue the saudi government for any rolet may have played in the attacks. >> we have a good relationship with the saudi's and we want to keep it a good relationship. if the government participates a terrorism, they should pay price. and it will be worse if they are not brought to justice, because it will encourage others to do it. the white house has promised to veto the legislation, saying it could expose americans overseas to legal risk. to mexican president wants legalize gay marriage. today he signed initiatives to amend the constitution and the federal civil code. gay marriage is already legal in some parts of mexico. bernie sanders looks to continue his winning streak in today's kentucky and oregon primaries. kentucky is considered the bigger prize. front runner hillary clinton has a significant delegate lead. and london's first
muslim mayor have taken verbal shots at each other. he invited donald trump to london to meet his family and the british public. global news 24 hours a day, powered by her 2400 journalists in more than 150 news bureaus around the world. i'm mark crumpton. next is "bloomberg west." ♪ emily: i'm emily chang in this is "bloomberg west." mr. cook comes to mumbai. india is on the apple studios itinerary for the very first time. will britain stay or will it go? microsoft pick sides in the great grexit debate. company chairman john thompson joins us to explain. shares took another dive. but first, to the lead.
apple ceo tim cook set his sights on the massive market potential of india. he kicks off his first visit to the country wednesday. besides and unconfirmed meeting with the prime minister, he's pushing for opening of his first retail store in the nation and announced an accelerator program for ios developers in bangalore. so why now? india is a market too good to ignore. mobile sales declining over a decade but indian shipment rose 66%. it's described as where china was 10 years ago, saying there is great opportunity there. the opportunity could come in potential that's up for grabs. kirkpatrick, david
and crawford come you guys have been doing a lot of work on the potential of the indian market. how big could this market the for apple? >> it could be very large for apple. when you look at the largest market in india in the last quarter alone, with over 560 million shipments, and apple, like old lot of other markets, was focused on the premium end of the market. they ship 90% of their units at $525.points over they need to go down market to penetrate companies like lenovo. they have some work to do, but they are targeting a market where they can grow, but they will have to alter a couple of parts of their strategy to target it. long? why did it take so
it is a huge country, that is obvious. why did it take so long for tim cook to visit india? >> they had a great run in china and they have been busy there. india is a country where there are a lot of barriers to entry. one of the things cook is trying to negotiate is to expedite the process of being allowed to open new apple stores, which the government has to approve. they have a lot of laws that prefer products made in india. there are a lot of barriers that don't exist there. it's a very nationalistic kind of government, but i think the opportunity is huge. but price is a gigantic challenge for apple. emily: part of the hope is that apple can open apple stores in but what difference will it make if the phones are four times more than what customers are willing to pay? >> that's why they have to play the game across multiple
dimensions. it is an aspirational brand. western brands can be very popular in india they will be most popular with the richest people and the most demanding customers. what they need to do beyond that is attractive à la persist start to target, as we've seen in western markets, specific use cases that indian customers have. this is something nokia did very well 15 years ago. understand farmers real-time prices for crop so they could eliminate waste when bringing products to market. nokia did that and got a loyal base in india. need to get developers to study the local use cases. they need products well below the lowest point where there are today, which is $525. $200need to be $150 and
long-term to really penetrate the market. connectivity is still a huge problem in india. so many people are still not online. how much of an issue is that going to be for apple? >> connections and broadband and wireless generally is growing very rapidly in india. to be leftis going behind, especially one as savvy as india. governmentry smart in terms of understanding that connectivity is key to economic growth. that will not be the primary thing holding them back. for apple to build a product for under $150 is a gigantic ship from anything they have done. i don't see why they can't do it, and i've often said that there grow solution in a global world where you have indonesia and south africa and a lot of they countries, nigeria,
are hugely aspirational. the middle class is coming up, but price is going to be a big makeand apple will have to a fundamentally different strategy to achieve that. emily: last question, we talked about the smartphone market in china as well. can india make up for that or are they on a completely different scale, india versus china? >> in terms of total units, they are about half the size, but they're still the second-largest country. a total available market standpoint, they can provide a growth engine for apple. last quarter apple grew over 50%. apple can definitely grow in that area. other premium smartphone vendors are growing. they just need a wider range of products to do it.
crawford, thank you so much, and david kirkpatrick, for speaking with me. trips,g of good well jack ma had lunch with president obama on tuesday. reporters spotted him on white house grounds and a spokesperson confirmed closed-door meeting. they had previously shared a stage last fall and discuss climate change and government support for entrepreneurs. the latest meeting comes just days before obama leaves for a trip to asia. coming up, my interview with microsoft chairman john thompson. his advice for marissa mayer. you don't want to miss it. ♪
emily: microsoft says it should .emain in the eu brits will vote on whether to stay or go. i spoke with microsoft chairman john thompson about the decision and ask how he thinks the ceo is doing given that thompson led the search committee that hired her. >> none of us could've possibly that theback in 2013 perception of our company would have changed profoundly as it has in just a little over two years. i think a lot of it has to do with sasha himself, the fact that he is a very brilliant but very humble man, the fact that he is a very effective communicator who is willing to engage as well as listen as much as talk.
i think the commendation of those things have made a remarkable difference on microsoft in the world perception of microsoft. done when its he comes to changing the culture? what has worked and what has not? it can be hard for a ceo to single-handedly change culture. john: i don't think he has done with the cultural change but i think he's made the right starting position. first it's about thinking horizontally about the companies capability to share those things more broadly. next it's about creating an ecosystem for the company that candidly invites people in who heretofore might've been viewed as competitors or archenemies. third, it's about encouraging our team to take more risk, encouraging them to think outside the normal box of microsoft, to push the edge. he did that when he created
azure. a lot of the things he had is practical experiences in prior roles really set the foundation for how he would like for the entire team to operate. what would you like to see the company focusing on in the coming years? cloud and thed on hybrid model of the cloud, the application services that we can .eliver not just in the cloud if i would like to see something change, it's more about pace. from my days at ibm, we never seem to be running fast snap. that is always the case with an established enterprise. while you believe you are moving fast, you are not moving as fast as the start of who wants to eat your lunch. emily: how aggressive would you want to see the company be in terms of monetizing the cloud, which seems to be the future?
john: it's not common to have something of that size and scale in triple digits, but it could grow it twice that rate. it's possible, given there seems to be a titanic shift going on in the industry were everyone is moving to the cloud. so why should we not capture more of that? if we invested more, how much more would our revenue growth be? that is a topic of discussion we are always going to have. are we moving fast enough to take advantage of this incredible opportunity that's ahead of us. emily: how do you see the cloud war playing out? >> if you look at history, what you see is that in a category typically there are two or three leaders in that category. theind ourselves in interesting and lofty position
of being one of the one or two. the question is, can we sustain that position and move further toward being the number one in the space. emily: can you do it? run fors giving you a your money. john: we have a lot more work to do to catch up. the question becomes, of all the players who want to be number three in the space, can they catch up not just with microsoft amazon? microsoft and byare not going to sit idly and rest on the past success. we got to make sure none of them catch us. start ofu are a big investor. how important is the cloud strategy to the livelihood of any start up today? john: it has to be cloud-based.
no one is looking for a perpetual license model anymore. i can remember mark zuckerberg said to me years ago, i only invest in annuity revenue streams. i thought that was on. that was five or six years ago. well, guess what? if it's not recurring revenue, they are not interested, because it has a predictability that once you capture that customer sustainability, it is pretty powerful. i don't think there will be significant investments made in hardware any longer. hardware will be necessary because all applications run on some hardware layer, but proprietary hardware solutions, i'm not sure that sustainable. came out saying
they are against the u.k. pulling out of the eu. what are the implications for u.s. technology companies if brexit happens? any moren't want geopolitical instability. we have enough instability in the economy as it is. change ins a material the eu consortium, that creates geopolitical instability and that is not good for the at the business environment or the citizens of the european community. emily: what about china? have any technology companies cracked code in china? john: i think you know to the answer to that and it is no. were trying to hold to our standards and principles as a ofpany, but find a set things we can make as
concessions to the chinese government that gives us access to the billions of users that are there. it is balancing the standards we consistency we want as we run our business with the interest that we have been having access to those users. emily: could india be a replacement market for china? john: no. it's early can be a supplemental market but you cannot replace that's 1.8 billion people big and growing at 7%. 11%-12%, butfrom you cannot replace china. you can certainly augment china by having a stronger focus in india, but you cannot replace it. emily: you were ceo of semantic for many years and you're going through another ceo transition. what you think what -- about what is going on there? >> it's a huge personal
discipline. i spent 10 years there and i thought we were on a very good path. obviously we worked. for not justtime the team of the company but the board of the company to do a little self reflection. have we made the right calls? the wrong calls on people, have we made the right calls on ourselves? it's time for a lot more self reflection, but i don't know, i'm not involved in the company at all. yahoo! is going through another existential crisis. what would you say to marissa mayer right now? john: hang in there. fortunately for us, because of the volatility of our stock, carl icahn bought low and sold
out. we never really got the public exposure that marissa mayer has gotten. i think she started with a tough hand that was dealt to her and quite frankly, she needs to play it out. push you an activist to do something you don't strategically believe in. to the extent that her aboard supports her, then hang tough. emily: diversity is an issue with talked about a lot when it comes to the technology industry and the lack thereof when it comes to women and minorities. given how many years you have spent the industry, jorge be seen the most progress and where is there still the most work to be done? >> some of the more established companies have clearly done a better job. older companies like ibm have done a terrific job of at least raising the issue and trying to do something about it. it ultimately comes down to the numbers, not the words.
numbers don't necessarily support the words right now. i was quite shocked when i came to the valley in 1999 and everyone was so enamored of the fact that i was the highest-ranking african-american in the valley. i'm like, what's the big deal? i now recognize that it is a big deal. ofneed to do a better job diversity and inclusion. companies like microsoft and ,oogle are working hard at it but they have to double down or triple down to make real progress. john thompson, microsoft chairman and longtime tech executive and investor. what do you think is the most important thing he said in that conversation? >> the scorecard he gave for , they must do more and faster and the cloud businesses have to continue to grow at an
increasingly rapid rate. this is still a company whose revenue is in decline. emily: obviously the cloud is doing well. >> a lot of those businesses are still reasonably small, compared to microsoft overall. as he mentioned, they are growing more than 100%, but they need to be a larger percentage of the microsoft revenue because traditional software businesses are starting to act or fee at -- atrmajor fee -- starting to ophy. do you deal with the competitors who are trying to catch up in the case of google and ibm. emily: he is two years on the job, he has some time. thank you so much for being with
emily: pandora under pressure to put itself back on the block. a hedge fund managed by carl icahn's protége has taken nearly 10% stake. in a letter to the board, he suggested pandora should explore the pen -- potential value to shareholders. to have themaid the help of morgan stanley earlier this year but with the reestablishment of tim westergren as ceo, the idea appears to be off the table. >> it is full steam ahead. by timhe said he was ron
at least 69 people were killed and three outdoor market and a restaurant in baghdad. amtrak says it will review the findings by the national trance patient safety or on what led to last years fatal derailment in philadelphia. the chairman of the ntsc praise the trains engineer and what blame on the equipment. >> humans make mistakes. humans are the most phone part of the system. mark: eight people were killed in an accident. a bipartisan $1.1 billion measure to combat zika virus has asked the u.s. and it. president obama wanted $1.9 billion. the house debate his own measure tomorrow. police on patrol in the u.k. say they worry britain's policy of utilizing mostly unarmed off
could make them sitting duck in the event of a terror attack. the situationrned to get especially challenging and isolated areas where officers trained in the use of deadly force are miles away. paul allen joins us with a look at the market. >> good morning. some we in the u.s. is trend leading over to the new zealand right now. the market currently of and running for 30 minutes and off a quarter first. off .25%. out of japan, were waiting on order edp numbers, the slightest of gains in texas there, following the .3% contraction we saw last order. japan is that narrowly avoided tech recession there.
in hong kong is a big day there, the chairman othe national people's congress is speaking at an economic conference. 6000 police have been deployed on the treats of hong kong because of the cost villa tee up street protests. the first visit from chinese the original -- official to hong since earlier protest. i'm paul allen bloomberg tv sydney, australia. emily: lending club shares tumble, ending the day got another 10% after falling in the
days since the ceo said he was stepping down. debtmay look at equity or sales to -- to restore investor confidence every new capital or loan. they use invest to gating what happened -- the sec is invest gating what happened. lending club said it was not prize, adding that the company is fully cooperating and has an eight in a productive and orderly dialogue -- the company is pleased with the open and positive interactions that have occurred today. for more on what happened next, i'm joined by a managing partner. thank you so much joining us. david kirkpatrick is with us deal from new york. company goes public so much
fan air, and now this. so much fanfare, and now this. >> there is a lot of excitement about category. it is a huge category that has been underserved by the exist in situations. it is hard for banks to lend to him -- individuals and small business. there was a huge amount of excitement about it among venture capitalists. $3 billion invested last year, devon billion dollars of underwriting against the balance sheet, and as things go up, we also can go down. we have seen this in the past four. post paypal companies that had been created ran into trouble and a number of them are five. there was skepticism around lending club before this happened, just about the risk involved in peer-to-peer lending
. >> it's a good question. if you look at one of the challenges for the business the balance sheet risk is being born not by the companies ultimately with institutional investors of hedge funds, and his third parties have gotten scared, liquidity has gone away from that market. there has been a misalignment between the keepers of the balance sheet and the creators of the balance sheet. the long-term survivors will maintain some of that risk on their balance sheet. emily: david, what is your take away here? david: it's a complex story and it's sad to see a company that carried with it so much excitement and promise really attacked on so many fronts and the stock is one third of what it was.
i was somebody who was looking at this whole industry and thinking, the old banks are in deep trouble. they must be all rubbing their hands with glee at this point. if somebody was investing in the if thedo you ever worry culture of silicon valley, which came out of the semiconductor thestry and software, is possibility there that the companies that are emerging that are disrupting all these other industries now may not really be sufficiently global, worldly, control oriented to play in a game like banking and some of the other industries we are seeing startups targeting at the moment? >> it's a great question. these are financial services companies first, technology companies second. with management
teams with strong credit cultures that understand they are financial services businesses reading powered by a new generation of technology, not the other way around. emily: some of the other players .n the space, shares are down which are the competitors that you think have real potential? >> the companies that will succeed have a combination of shared risk with their investors long-term. management teams that are credit technologyst, not first, and companies that understand how to maintain liquidity on their balance sheet. general, is there a bubble, and if not, what are the bright spots and areas that maybe overinflated? applies not just
to fintech but the venture capital category at large. a tremendous amount of capital has gone into next-generation categories and there have not been a lot of exit. &a has been very disciplined. the result is excess supply versus demand. emily: so how does that play out? >> the best companies will survive and the ones that have troubled is this models will run into real trouble. in the financial services category, trouble could come after because the companies are subject to the liquidity market. there is basically a 12 month clock driven by cash on the balance sheet. they have 12 months to figure it out. emily: thank you so much for joining us.
amazon has entered the crowded industry of new york city restaurant delivery. it is partnering with over 350 350hatton eateries -- over manhattan eateries. charge anyot additional delivery fees but will charge participating restaurants 27.5% of each order. coming up, a fleet of autonomous robotic boat they fix america's failing infrastructure. we will explain, next. ♪
bidders. many said to be interested in the port olio. the firms have requested information about the asset with a combined valuation of about a billion dollars. first round bids are expected by next month. facebook, the ceo mark otherserg will meet with , a former senator will be in attendance and weighed in on facebook, saying facebook and manages algorithm and the government should not dictate fairness to facebook. the problem the senator goes on to say is that if faced is saying it is all algorithm-based but it's not, then that is a problem. willexactly do we know
happen at this meeting, how many people will be there, and will mark zuckerberg be there personally? >> it is a meeting with mark zuckerberg and the senator's right, facebook has no legal obligation to have unbiased trending topics. however as ceo, mark zuckerberg is interested in making sure he does not alienate a large portion of his user base and that he does not ruffle feathers with conservatives in the ad spending.lection emily: another story posted by an anonymous person who said they work in the facebook section, listen to what they had to say. there is no political bias that i know of, we were never told to suppress conservative news. coupled with intimidation, favoritism is the exes him, it has resulted in a deeply uncomfortable work environment.
facebook responded saying facebook provides everyone with a respectful and safe working environment. david, what do you make of that? david: you have to believe that department of facebook is under intense scrutiny. there are a lot of changes coming there. that is a sort of shocking report. maybe it explains where the disgruntlement emerged that led to the original report. i don't know. i think the whole story has gotten very fuzzy because people have the idea that if it is algorithmic, it must be objective and unbiased, but algorithms are as high as does anything created by people. the facebook messaging has been a little confusing and it's not entirely clear what they are
saying in terms of how much people to determine what the ordinary user of facebook sees. there are bigger questions about the mammoth amount of control that facebook has over the information flow of an increasing percentage of the planet. emily: this person talks about joining facebook, they thought it was a dream job but said it was a toxic work environment. is this something that is completely separate from waste of? i understand their contractors, not full-time in lease. >> a pretty high up executive at , he could be reporting directly to mark zuckerberg at this point. leading up to actual employees of facebook, but it is mostly contractors,
some who are not even journalists who are the first line of defense of picking out which stories are trending and they flag it to the journalists and the journalists write the headlines and put them up in the place that they fit. i think what this raises is the issue of what facebook should have in-house versus through contractors. the company has a whole army of contractors testing every aspect of products. there are contractors all around the country. it is a big question. david kirkpatrick, you are sticking with me. , we follow group of engineers working on a fleet of autonomous votes that could help that- autonomous boats
could help fix america's decaying bridges every >> it's no secret that america's infrastructure is crumbling. almost 70,000 bridges desperately need repairs. to secure the future of our infrastructure, we must have timely and effective inspections. currently inspections involve costly teams of divers performing time-consuming, dangerous, and tedious work. today, a group of florida atlantic university engineers are putting something new in the canal. a team of autonomous vehicles. self politic boats that cannot only navigate through the water but work with each other. carl has been working on autonomous boats for 25 years. today he is demonstrating how
these machine learning programs can be used for bridge inspection. tell me about the experiment you are conducting right here. >> we have a team of unmanned service vehicles working with the bridge inspector to look at the condition of the underwater structure of the bridge. one of the vehicles has an underwater acoustic imaging system. it basically is looking at the underwater structure. there is a computer on board that takes in information from the sensors and makes decisions. rather than pre-programmed -- programming the to handle information in a specific way, to follow behavior responses instead, they can handle a wider range of scenarios. the only application for the autonomous technology. it could have huge effects on shipping, construction, and search and rescue.
existing trucks. you both come -- have quite the pedigree. if some people find self driving cars scary, self driving trucks, 18 wheelers, takes it to a whole new level. what makes you think this can be done on a massive scale and safely? >> thanks for having me. scary, trucks are scary, and trucks are also unsafe. we had the knowledge and understanding that the technology can be applied to society sooner than later. if you think about trucks, they are inherently unsafe. we have over 4000 deaths a year on public roads. issues from pollution to
can beion, we believe we a solution for society. emily: are there still things that human will need to do? step is elevating the driver to a supervisor for the truck and basically having the truck drive itself for hundreds of miles. fueling,n is therefore for observation, for supervising the drive. future, but it will take a while. and the need for the trucks to be fueled and safely driven, and areially the drivers
driving nine or 10 hours a day, it will empower them to take the andk and drive it 24/7 finish the job and get back to their family. isly: david kirkpatrick still with us. jump in here. david: i love the idea. public support for this could grow much more rapidly than for self driving cars. most american think that trucks are driven dangerously and we know the drivers don't get enough sleep. we are always surrounded by them on the highway in ways that feel unsafe. the idea that they could be driven with the more reliable manner in a computer augmented approach is a great idea. i'm curious, do you think this kind of thing -- do you agree with this point and do you think this could catch on more rapidly
than self driving cars? >> that is our intent. the intent is to move as fast as we can. we do believe this problem can be solved. that's why we took that on. is a morey concentrated environment. taking a look much further down definitely a problem that can be solved. think about the energy we all use driving in city streets versus driving on the highway , basicallynd hours just trying to keep the car or truck between two lanes. emily: it is a fascinating problem you are tackling. we will keep our eyes on you
guys. david kirkpatrick from a my guest host for the hour, always a pleasure to have you. thank you for stopping by. it's time to find out who is having the best day ever. today's winner is all of us. are not out that gmo's harmful to human health. he comes after two years of research. overall the report sees no correlation between eating genetically engineered crops and cancer, kidney disease or allergies. that does it for this edition of "bloomberg west." kickoff coverage of google i/o. do not miss it. ♪
♪ >> from our studios in new york city, this is "charlie rose." charlie: tom brokaw is here. he continues to report for nbc news as a special correspondent. this past weekend he spoke to the graduating class at ole miss. his book on his struggle with cancer is now out on paperback. it is called "a lucky like interrupted, a memoir in hope." i am pleased to have you back at this table.