tv Bloomberg West Bloomberg May 24, 2016 11:00pm-12:01am EDT
mark: i'm mark crumpton. you're watching "bloomberg west." let's begin with a check of your first word news. the justice department will seek the death penalty against dylann roof, charge for killing nine black parishioners and a south carolina church. in an e-mailed statement attorney general loretta lynch , wrote the nature of the crime , and resulting harm compelled the decision. president obama says he has concerns about vietnam's human rights records. he made his comments during a speech in hanoi. obama: the united states does not seek to impose its rights on a vietnam. speak of i believe
are not just american values they are universal values , written into the declaration of human rights. mark: three human rights activists were reportedly prevented from attending the president's speech. pakistan will conduct dna tests on the man killed in a u.s. drone strike to determine if he is actually a taliban chief. washington, kabul, and senior taliban commanders have confirmed his death. beginning in 2017, beijing will institute china's toughest fuel quality standards which the government says could cut 50% tons and the city by 20%. global news 24 hours a day , powered by our 2400 journalists in more than 150 news bureaus around the world. i'm mark crumpton. "bloomberg west" is next. ♪
emily: i'm emily chang and this is "bloomberg west." coming up, hpe getting an after our boost, in news they are spinning out a business to merge with another company. what it means for the company and meg whitman. plus toyota gets into car , sharing -- it's the latest car maker to invest in a ride hailing app. we will bring you all the details of its tieups with uber. and pebble out with its first ever non-watch device. can it move into health tech like the apple watch and should -- and fitbit? hp enterprise shares are surging in extended hours. this is half of the old hewlett-packard still run by meg whitman and focuses on storage and servers for corporate customers. the company is spinning off and merging it with computer sciences core in an $8.5 billion deal. the name of the company will be announced at a later date. joining us now for more is our
bloomberg senior intelligence reporter. what is your take away on this deal? is it something that was expected? guest: it wasn't expected, but it makes sense. one part of the entity focused on hardware, predominately networking, storage, and servers. and then finding a network to exit the services business to a company that focuses on exactly that portion of the business. it is a good strategy. it refocuses the company to a smaller piece of the pie. the risk here is that now you have a smaller pie you are focusing on, one that is on relying on corporate i.d. systems. will that be the long-term revenue growth area? and, do we need services to bolster that? that remains to be seen. in the near term, the deal makes sense. emily: what does it mean for meg whitman?
it gives her a sense of focus, and the results bear itself out. hp has done well and after the announcement of the spinoff of its services business, the stock is up and at the end of the day, cash flow has been improving. their debt profile should also get better. these are the measurable results that she has improved or things that have improved under her watch. she gets credit for that. emily: this unwinds a bad deal done under mark hurd. when you look at the area today, years after that acquisition was done anything else that we , should be watching in the new hp? anand: at the end of the day, this is not a company that is either piecemeal or together will post incredible growth rate from a revenue standpoint. this is modest revenue growth at best, coupled with heavy cost
cuts from time to time, coupled with some acquisitions and the best teachers. hopefully, the earnings growth rate is slightly better than the sales growth rate and a good amount of cash flow being thrown off. this is the way we have to think in piece and hp ink, or as a whole. emily: our bloomberg intelligence senior analyst. thank you for weighing in. more automakers are backing ride-hailing apps. toyota is making a strategic investment in uber and will offer car leases to uber drivers. the company did not comment on the size of the investment. this comes on the heels of volkswagen investing $300 million in a company in israel that offers rides for as low as a dollar and includes delivery of goods. they made the investment to move digital offerings and move beyond the diesel engine manipulation scandal.
remember, gm bought a 9% stake in lyft in january. this news comes at a time when sentiment around valuations are cooling. here to help us begin with what 500 startup, cofounder dave mcclure, and in new york my guest host for the , hour, david kirkpatrick. dave, i will start with you because you guys have invested in an uber competitor, the uber of southeast asia. what do you make of these new intoions of capital competitors and uber itself? date i think you see a couple of : things going on. people are recognizing that ridesharing services will be a big business, and that maybe fragmented on a geographic
basis, with multiple winners. david: i think that is one of the things people are finally realizing about uber. one time, they thought it would be a monopolist, but it does not seem to be playing out that way. it does raise questions about that valuation. it does make sense for these automakers to be hedging their bets. they don't know how mobility is going to evolve and they are in the business of selling a piece of hardware that may not be the way the business goes, down the road. does this mean for cooper, in your opinion? do you question the $62.5 billion valuation? dave: it is hard to say how big the valuation is going to get. what do people use cars. that is not going to change anytime soon. but as you see them going into delivery logistics, not just transportation of people, that business seems to get larger
quite a bit. what is really unclear is how much that will eat into automotive manufacturers and other people who are selling cars on a traditional basis. -- withoutstions aretion, those folks fearful and hedging their bets by investing in companies doing ridesharing. emily: what do you make of the fact we are seeing more traditional automakers, not to mention apple, which invested a billion dollars -- it's not the typical silicon valley vcs who have raised billions of dollars but are not spending it just yet. david: we should be seeing this in i think it is to the credit more industries, in my opinion. i think it is to the credit of ford and gm and now toyota and vw, that they are getting in with both feet. they have to understand these dramatic changes digital technology, mobile and these other things are bringing to their industry. as the dave points out nobody , really knows how this industry
is going to evolve. in any industry, despite their size need to be , doing this. emily: dave, we're talking a lot about the vc environment, down round and flat rounds and yet we see these big rounds in established players. are we seeing a bifurcation in the startup funding environment? dave: i think there are people doing small investments early, like us trying to get in very , low valuations when things are just getting started. then there are folks who are little more conservative, who want to get in after the market has been proven, hoping valuations are not going to go down any further. both are reasonable strategies. there are question marks these days about whether companies that are a billion-dollar valuation are going to keep going for ever. there's probably a potential for them to go up and down.
those are not as risk-free as people might like to think they are. emily: tech crunch is reporting snapchat is raising $200 million at a $20 billion valuation. we have confirmed they are raising another round, but do not know the exact numbers. what do you make of those price tags? david: you cannot just overgeneralize. snapchat is breaking out of the pack in consumer communications. and if there's any company you can say is trying to be the next twitter or facebook, that would he it. they legitimately have enormous excitement around them. while they don't have much revenue, they have some very good ideas on how to generate it. i can see how they're getting a lot of investors excited. emily: david kirkpatrick, dave mcclure, you're both a sticking with me. coming up, the internet is abuzz
days after tim cook made his his first trip to india to push launch ofcompanies retail stores there. apple may have hit its first setback. we have a look at apple's plan and why the indian government may not go for it. >> apple ceo tim cook is just back from india. he met the prime minister and opened a new office in bangalore. apple's plan to open local retail stores could help the
iphone maker boost sales in this potentially massive and fast growing market. morgan stanley forecasts that by 2018, india will account for 11% of all smartphone shipments, and the market to grow five times faster than china. right now, india accounts for just 2% of iphone shipments. local iphone sales surged in the march quarter. cook himself has said india is like china was a decade ago, but there are already signs his trip a not have paid off. here is the rub. india has strict rules for foreign companies wanting to do business there. companies have to comply with a rule that says 30% of the components of its devices must be sourced in india before apple can open its own stores. right now, the apple supply chain is based mostly in china. so it does not meet that criteria. apple wanted to be exempted from this rule and india does waivers toives companies with cutting edge technology sources say they , but sources say they don't think apple qualifies. they still could overturn it but if not, apple may need to find
another way to crack the market. emily: turning now to vietnam and president obama's historic tour. the president toward the jade pagoda. dave mcclure is still with us. earlier this year come off hundred start up set up a fund to invest in a local vietnamese companies. david kirkpatrick still with us here, as well. what do you make of the president's visit and highlighting entrepreneurship? dave vietnam is a growing : country and it's great to see president obama visiting other countries where there is , strong u.s. ties and helping to promote a culture of innovation. emily: david, i know you have some experience with the vietnamese market. what would you highlight?
david: i haven't been there, so it doesn't constitute my experience. but we have a writer who has written a lot about it. i have talked to him a lot about it. there's a tremendous interest in vietnam for health tech startups and just like almost every other country in the world, young people are aware of this entrepreneurial upsurge and a potential of getting rich and they all worship mark zuckerberg. there is a very large and growing community in vietnam that would like to have an impact by starting companies. make 500 startups in vietnam. the problem is, while they have good math education and tech education in their schools, the students there generally don't come out of college with the kind of knowledge that would allow them to work in a global tech business context. the companies that have gotten big there are doing their own training. emily: dave, what are the sectors you would highlight? what companies and themes should
be -- should we be watching? dave: education and health care, transportation, real estate, jobs. these are very basic services that pretty much everybody in the emerging economy wants to become aware of and be able to use. that country has a lot of young people, very mobile-intensive, a lot of young people that will buy these emily: what are the services. emily: what are the hottest and most successful tech startups in vietnam right now? david: i think you will see e-commerce startups get traction. people are doing basic food and shopping and other basic services. messaging and communication services will be big. but a lot of things are very transactional in nature will be the first things you pay attention to. emily: david, it is interesting to see the president there. obviously he is there as part of a bigger asia trip.
is this a place you expect to see more silicon valley venture capitalists to explore? david: it is a very connected society, a lot of people there are online. they don't have a big income. even though there is a big appetite for products, there is not a lot of money to pay for them. on the one hand, it is still relatively poor, that it does of a growing middle class, and some extremely well-educated people. i think we will see more action out of there. i think it is great that president obama is there. it is wonderful to see us making up with a country we have such a fraught history with and i think they are excited about the local -- global tech opportunity. have madee vc's a conscious decision not to go global, focus on startups in the and united states. is that a mistake?
dave: i do not think it is a mistake. i think marc andreessen is a smart guy. there are former and recent partners that have launched big funds in japan and there are other folks looking at international markets. just because andreessen doesn't tend to play in the international scene, plenty of others are doing that. tiger global, sequoia, many others in china and asia are investing in growth stories all over asia, southeast asia, india, and vietnam. emily: dave mcclure, cofounder and ceo of 500 start up, recently launching in vietnam. and david kirkpatrick, david is sticking with me. a reminder to check out our podcast -- extra episodes of studio 1.0, the postseason. this week, we hear from the twitter cofounder, biz stone and the makers of "silicon valley" for a chat about the future of
paris have been raided. french police and prosecutors arrived around 5:00 a.m. local time on tuesday morning. it is part of a preliminary criminal investigation into whether have been operating without clearing some of its revenues. france has previously suggested google has $1.8 billion in back taxes to pay. nobody has yet been charged of any wrongdoing, and google maintains to comply with all french laws. just as that was underway, eric schmidt was a few hundred miles away in amsterdam speaking at a start up conference. he spoke about how hard it can be to start up a business.
-- a business in europe. >> there are a billion laws. it is much harder to be an on-chip nor in europe than it is in america. whether regulatory tax policies, the amount of time it takes to grade a farm, and so on. what happens when i meet with governments is they all say yes and listen very politely. they're always very nice. but then they do not do anything about it. emily: this coincides with a separate investigation as -- into whether eu states have preferential tax deals as a way to entice them to do business there. now to yahoo! -- the company's auction process is said to be going well. without going into details goldman says it is well on the , way but declined to give any information. ken goldman is not the only yahoo! executive right now. ceo marissa mayer graces the cover of the latest issue of "variety."
she is portrayed as the doomed savior of yahoo! with the headline reading "the end is nigh." a spokesperson said running that illustration is its own burden to bear. with me now to discuss, bloomberg's intervening editor, david kirkpatrick. let's talk about the cover. do you think that cover is fair? david: i think it is mean. first of all, it does not even look like her. having a skull on the ground in the sideshaving a skull on the ground in front of her -- this , is really harsh stuff. luckily, marissa is a very tough cookie, and she is a little bit teflon. she has done a good job at disregarding this kind of crazy personality-based criticism that has been directed her way through the entire time of her running the company which has , not been a fun process. emily: the article lays the
blame at marissa mayer's feet for at least the last four years. is that fair? david: i don't think it is. i think it would've been very hard for anyone to turn yahoo! around the way some of the market seemed to have been expecting. i don't think it is a crazy idea to consolidated with the verizon or another company like that. it may be the best way to take what is essentially an old media company in the context of the internet, it is about as old as then internet media company can be, that got a little wetted to some old ways of doing things went much more targeted market based on details about the , all at-based businesses, was availing. turning yahoo! into a company like google or facebook was not something anyone was going to do overnight. emily: what about the comments today on the sales process that
is moving on, but not a lot of what was your take away? new information. david: i don't know anything about the inside machinations. the idea that tim armstrong might end up running yahoo! along with aol consolidating them and making a combined old internet advertising business, making up with volume what you can't make up with innovative new technology which is what neither company has been known for, is not a bad idea. over time, that scale would allow them to migrate both businesses together and separately in the right direction. even facebook and google have to go through a major evolution going forward. this is such a fast-changing industry. i do not have any concerns in the short term over facebook or google. but yahoo! probably needs bigger shoulders to lean on.
central bank at its lowest in more than five years. traders are pricing in a better than expected chance of the said raising rates i july. by disrupting the pboc's strategy. it combined with depreciation against other currencies. high in a one-month tokyo, as investors ignore a week profit forecast. they are looking at long-term prospects and emerging projects such as sensors for driverless cars. there is a 46 percent drop in
profit forecast. the controversy surrounding the investment fund has claimed its first major victim. we are talking about swiss kicked out ofbfi, singapore, for breaching money, and laundering. and bsihas resigned, will be dissolved. is the worsts bsi case of gross misconduct it has ever seen. and those of the headlines from bloomberg news, powered by over 2400 journalists and wanted to 50 bureaus around the world. let's get the latest markets right now. haidi, a much better day for asian stocks. it is really this perfect storm of factors. we have oil, building on that rally we had overnight. we are also seeing the yen
weaker, but helping out when it comes to tokyo stocks. of a fed rateions hike coming in in june or july, they focus at even in odds respectively. that is helped out overnight as well. a pretty good space when it comes to potential -- this is what we are seeing across the region. rally, the energy space one of the rear decliners across the region. off by 5% when it comes to new mining as the dollar continues to rally. and people are getting out of his gold rally that we have seen. line,e had that more in in line with expectations. a little bit of a mess, but that is not playing through those energy stocks, as well.
stocks rise the most in eight weeks. when it comes to the hang seng, financial banks, driving those gains. in shanghai, a bit more muted. overall, a green the session here in asia. james: emily: -- , aimingow, the pebble to raise money on kickstarter, in the four hours, they raise first $4.5 million. this follows tim cook's comments about wearables at the start of fest in amsterdam. tim: we believe health is something that is a huge problem in the world, a huge issue, and we think it is ripe for simplicity and a new view. we would like to contribute to that.
that is an area where we are very focused. emily: so what are some of those key health features in the new pebble products and how will they stack up against the competition? joining us now for exclusive eric.iew, what is new? eric: we have created our first non-smart watch product. it is a tiny clip you can clip onto your sure, and go running without your phone. it does spotify streaming and tracks your run using gps and can send an emergency text. emily: how is this better than a fitbit or an ipod? eric: it is a little bit different. it is different than how your phone would do it. this is aiming strictly at the running market. emily: it does not have a heart rate monitor, but you can sync
it up with the watch? eric: this clips onto your shirt but it can talk to your pebble, and it has a heart rate monitor built in. the watch has sensors that learn more about your personal body. this tracks your gps. emily: what iteration is this? eric: this is our sixth smart watch. emily: what is new? eric this one has a heart rate : monitor built into the back. it tracks your heart rate when you workout or sleep. it has pebble health, which is our new health initiative, built-in. it is coming out in january of next year, why skip the holiday season? eric: we wanted to get it out into the world. it is a completely new product. this has never been built before. emily: it is as fast as you can build it?
eric: we built this with the benefit of the 1.8 million people who purchase the pebble in the back -- in the past. we have over 50,000 developers. this is a completely new item and we do not want to surprise people. that's why we've done it this early. emily: let's take a look at some of the numbers. idc says pebble captures 7% of the market share, for smart watchmakers, but that will drop to 2.7% by 2020. apple has nearly 50%, android, 21%. what do you make of those numbers? eric: i don't know if those stack up with the numbers we're seeing. we shipped over 1.8 million couples in the last three and a half years. we are a small company going up against some pretty big giants. in the last three years, we are
taking a special stance. a great smart watch has to start biting a great watch, first. that is why the battery has a life of 10 days, you don't have to charge it every night. it, thehe way they put software platform will enjoy modest growth in the short-term but competitive pressure will , lose share to giants like watch os. how do you respond to that? eric: i just don't see that in the numbers we are seeing. just today, we sold 22,000 watches in the last eight and a half hours. that stacks up well against some of the competitors we are seeing. emily: how do you stay relevant over the long-term? eric: we see a network of devices on your body. this is the first non-watch
product created, it will not be the last. i think there is an opportunity for lots of devices on your body, capturing information, and helping you live a little bit better of a life. emily: you did announce you are laying off 35% of your workforce. what happened there? you say money was tight. what happened and what is the next phase? eric: earlier this year we , structured our company to focus on profitability. there were a couple things we had to do this year. we planned for a bunch of new products on the software side as well as hardware side. we are focused on creating a great smart watch experience. we are planning to be profitable by the end of the year. emily: you've been doing this now for four years. i went to the original pebble garage four years ago. how would you describe the startup funding environment right now?
eric: it is not necessarily something i spend a lot of time worrying about. we funded the business mostly through our kickstarter campaign as well as sales in the last six months, we have veered a little bit into less profitable territory. we are aiming to get back into profitability by the end of the year. emily: thank you so much for joining us. great to have you. now to xiaomi -- the chinese smartphone maker is officially entering the drone business. the vice president took to twitter to announce the drone after he teased his introduction when i spoke with him last week. xiaomi will price the drone at $610, 20% below the price of the market leader. it will record high resolution 4k video just like its competitor. on the earnings front, sony is reporting an annual profit that
fell short of expectations. the culprit is the earthquake that occurred in mid-april. that was an island where it had a factory. what was supposed to be sony's most profitable year has now marred -- been marred by factory repairs, lost sales and slowing demand for smart loan image sensor components. income was expected to climb in the 12 months ending in march 2017. sony is betting on its game consoles and streaming in hope of generating more earnings. coming up, brewing beer takes a lot of water. one company exploring a new way to brew, using recycled water. ♪ emily: for this day in tech
history -- 172 years ago today, samuel morse sent the first telegraphic message by transmitting electric signals over a wire using what is now known as morse code. the message was transmitted from washington, dc to baltimore. it was witnessed by members of congress, it formally opened america's first telegraph line and launched america's first form of instant communication. it is now time for this week's edition of "the spark." this company is taking a renewable approach to the way we brew beer. take a listen. >> the craft brewing industry in california is very big and growing. it has been growing at over 10% a year for over a decade and there are dozens of craft
breweries opening up every month in california. for every pint of beer you four or five pints of water are used in its production. there's obviously the water in -- but water is used in production and cleaning the equipment. we are the only brewery making a beer out of recycled water. sam: that may not sound like much but every day, californians flush 1.3 billion gallons of water down the drain. that wastewater usually runs through sewers, and ultimately out into the pacific ocean. ,but they can be reclaimed, cleaned and used again. , for half moon bay, every ounce of recycled water it uses is one ounce of freshwater it doesn't need to pull from california's already depleted supply.
>> we think it's a chance to help people understand the importance of water and change the entire mindset about recycled water. it is not something you should be scared of, it is something you should think is interesting and different. sam: since recycled water is not readily available in california, half moon bay had to go to an unusual source to test its idea. >> you are using in this experiment, recycled water for your beer. where are you getting it from? >> we source it from nasa. sam: what were they using it for? >> they use it for the space shuttle, the astronauts, and watering plants around the facility. sam: once you've gotten the water to a profile you like, do you work with it the same way you would work with cap -- tap water? >> it is very much like the water we would use in the brewery. we do add a little brewing salt back to it to enhance the flavor
a little bit. sam: would you be adding brewing hops to tap water? >> absolutely. it is the same. sam: for it to work, it has to be as good or better than the original. i sat down with a master brewer and a nearby competitor to conduct a proper taste test. >> cheers. sam how would you describe this : as a master brewer? >> first off, this is a ,ell-balanced, multi--- malty hoppy beer. i'm getting a lot of flavor. sam: let's try this one. cheers. >> right off the get-go, i'm not getting a huge difference. i'm pretty impressed by how good both of them are.
sam: will you reveal the truth we need to know here? brewed with recycled graywater is on the outside. sam: that was the one i drank more of. it is delicious. currently, half moon bay cannot sell the beer it is making from recycled wastewater, but many think it is just a matter of time before they can. >> i think it's going to be a year or two before regulation and all of this is legal to do for consumer consumption. but i would imagine in five or 10 years that the u.s. water system, especially in places like california where we have scarcity and drought frequently, it will be part of the regular system. emily: bloomberg's sam grobart reporting there. to a story we're following, a company suing samsung in the u.s. and china -- the companies were not able to reach a licensing deal over technologies fundamental to how global networks operate.
they claim they infringe on 11 patents on the industry standard for fourth-generation mobile devices. the company is after cash compensation. it is not seeking an order to block samsung in the united states. coming up the startup formally , known as payroll is making moves to take on its troubled rival. we will check in with the head of gusto, next. do not miss billionaire investor ross tomorrow at 7:00 a.m., new york time. ♪ watching,tory we're
she was seen as a key figure, spearheading their revamp. she was pulled out of retirement oversee cost cuts. best buy has yet to return to consistent sales growth and some see it as a sign that improvements from her could be limited. the problem of hr start up zenefits are well known. a compliance issue led to the resignation of ceo, parker conrad. it smaller rival, gusto, is valued at $1 billion, and looking to capitalize on the meltdown. they will sell health insurance plans to customers, more aggressively approaching on zenefit's turf. you have been on the payroll side, but now you are crossing into each other's original turf, so to speak. why get into health insurance now? >> it is derived from our mission of the company.
it as one system. when we started the company about four and a half years ago. we knew it would be the core. we were planning to launch zenefts before it existed. opportunityis an for you to capitalize on their troubles. >> we definitely had a lot of customers who were thrilled about it company that takes compliance seriously. , weour bread-and-butter have 30,000 businesses today across the u.s. using gusto, and we are more focused on that. emily: the new ceo of zenefits went on an epic tweet storm, criticizing the company. lazy comparisons that lumped in zenefits with theranos.
have takeny they responsibility for their problems and ousted executives. they have done a lot of things to try to get back on track. what potential do they have with a new ceo at the helm and that attempted fresh start? >> i don't think culture can be changed through tweets. what i can speak to is this is a long-term mission to us. things like compliance and serving the customer well, building a team that we are proud of, focusing on the long-term, has been in our dna since the beginning. i hope to spend the rest of my life building gusto. about the've talked importance of diversity, especially among engineers. you say you are hiring one woman for every man. how is that going so far? >> diversity for us, the main issue is a funnel issue. we focused a lot of attention and time on making sure we get as much folks applying from as
many different backgrounds as possible. once we are actually interviewing someone, it is the same process across the board. we are proud with the progress. we have a lot more to do and are ahead of the curve in terms of the ratios. it is something we will never be done with. emily: have you been hiring one woman for every man? >> we went through a time where we did do that. ratios, i think you get caught up in the pros and cons. we want to focus on getting a diverse group joining gusto. one for one was a specific project we focused on for about five months. emily: how many new female engineers did that result in? >> exact numbers, i would say we added over 10 engineers. 275, 300 team is about people at gusto. emily: what is the long-term goal? it is a problem the whole industry is grappling with i
, presume it is difficult to continue to do that. how do you maintain diversity in a difficult environment? >> a lot of times it becomes a don't want to discuss, and people think it is something someone else will take care of. for us, it has been opinionated -- focused around the top. we have thousands of candidates applying for jobs and we know where they are more weighted than others. we spend a lot of time with our recruiter teams going to different events and conferences and mentorship programs that target the areas that are underrepresented. we do that because our customers are diverse and we want to have the ability to represent all the perspectives of the folks we are serving. emily: the bigger picture, the business you are in has been dominated by old-school companies like adp. what is your vision where is , this business 10 years from now? >> i would say we are in the
early stages of what we think of as our long-term goal. we want to bring the focus back to people. adp stands for automatic data processing. it's a very transactional approach. if you've watched "the office" i think people are looking for products and services that talk about employee, employer relationships. what is it like when you have a great one-on-one? feel appreciated for their work, when they do something they believe in? that is not just tech companies, but bakeries and cafes and other places across the country. a lot of folks today do it by hand. our focus is bringing it to the broader segment. emily: thank you so much for joining us. it's time to find out who is having the best day ever. today's winner is salesforce. salesforce came out on top of
manus: turkey enjoys a world topping rally for stocks and the currency as the administration completes a cabinet shuffle. rishaad: debt relief, the eurozone approving and saying the bailout program is firmly back on track. manus: apple faces a tricky passage to india as it chases some of the billion smartphone