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tv   Bloomberg West  Bloomberg  September 7, 2016 11:00pm-12:01am EDT

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mark: i am mark crumpton. you are watching "bloomberg west." hillary clinton lead donald trump in the northeastern u.s., although her advantage in some states lies within the margin of error. emerson college's survey showed rhode island, traditionally a strong democratic state, features an especially close race, clinton 44% to trump 41%. the poll indicates new jersey and new hampshire are close. clinton is ahead in connecticut, vermont, massachusetts, and maine. a north dakota judge issued an arrest warrant for jill stein, accused of spray painting construction equipment during a protest against the dakota access pipeline.
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no word yet on whether she plans to turn herself in. secretary of state kerry and russian foreign minister lavrov will meet in geneva to discuss a possible syria deal. russia is a key ally of al-assad andhar the u.s. supports rebels trying to overthrow the syrian president. the international olympic he is promising all cooperation with brazilian authorities a ticket scalping investigation targeting one of its top executives. ireland's olympic committee chief is one of 10 people charged. the openingmissed of the paralympics in rio, where police plan to interview him. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i mark crumpton. this is bloomberg. "bloomberg west" is next. ♪ i am emily chang and
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this is "bloomberg west." apple unveils the iphone 7 and a revamped watch. will the operate night sales growth -- new lineup reignite sales growth? for $4sells to tpg billion as intel sharpens its focus on a leaner data center business. hp enterprise slimming down, announcing a 9 billion deal to spin out software assets. shares are down. we have the latest earnings report. a new suite of upgrades for apple's flagship products. landed.ne 7 has it is water resistant and dust resistant with better battery life and cameras. customers of the series two watch will be able to swim and play pokemon go from their wrist, and apple officially ditched the headphone jack, showing off new wireless headphones called airpods.
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apple shares got a slight boost off the back of the announcement. joining the first of the highlights, a bloomberg reporter who broke several of these developments early, and our reporter from where it all went down in san francisco. corey, what has been the reaction from folks who attended the event? cory: i haven't talked to a lot of people, but reading reactions online, this is a carefully selected crowd of journalists and analysts and members of the technology world, principally apple employees, so their views are not typical of your typical consumer. they are much more likely to be supportive of apple, and more likely to be very excited about developments the average person might not make a big change in their life, a 10% to 20% increase in battery life might not be life-changing to them, but a technologist might see how difficult that is. so we will see what the consumer reaction is. the event was really geared to getting the crowd to be happy,
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getting consumers to be excited. they want the press to walk out in particular, waving apple pom-poms, and i have no doubt the fan boys will aid them in that even as we try to fight that on bloomberg. emily: mark, you were also live blogging the entire thing. you broke a lot of news we saw happen today. updates to the phone, updates to the watch. walk us through the most significant update you see with this. mark: it's hard to answer that question after cory's response, but i will try my best. i thought the iphone 7 plus was a big update with the camera system. it's interesting to me that they are shipping one of the key features of the iphone 7 plus in a software update later this year. i found that quite odd. this was with a sort of map out where people are in a picture and blur the background. i thought the advancement in the processor architecture was very significant, as they weigh what the future of their processor lineup will be. i thought the airpods were very
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interesting. i think the price point came in a little more than people were expecting, at $150. so it was an overall connected suite of products and it made sense to lunch together. emily: interestingly, the dual camera processor, you can only get that if you buy the bigger iphone. cory, what do you think of that move? potentially there's a technology reason behind it, maybe they could not fit it on the smaller phone, or maybe they want people to upgrade to that larger phone. what do you think? inasmuch is people are paying real great attention to the quality of the lenses they use when they buy a phone. once again, outside of the world of the technology press, people will say, that picture is a little better than my phone. i don't think the average user looks for that. that said, i thought some of the hyperbole apple offered was actually backed up, when tim cook described the iphone as the gold standard for smartphones. that's right. i think it's necessary for apple
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to have the phone that can do the best, if only so they can say their products are the best so they can command the operating margins that give them, though not the majority of market share, a vast majority of industry profits. that's the apple image, and they burnish that image by having the top of the line products be top-of-the-line for the industry. emily: let's talk about these new airopds, wireless -- airpods, wireless headphones. are we seeing an important new product category? mark: apple is looking for ways to generate margins, profits, and these airpods will help them with that. as we know, their services and other products businesses are two booming categories of the overall footprint. we saw iphone and ipad sales slow, so showing apple can introduce new products beyond the current lineup is very significant from an investor perspective. speaking of margins, it's very interesting to see that apple increased the prices of both the new apple watch serious 2 and
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the iphone 7 plus by $20 each over their predecessors from the prior year's, so that was interesting. emily: cory, do you see these headphones, and apple announced other headphone makers are making wireless headphones of their own, and they will have an adapter, earpods that plug into the lightning port sold with the phone. do you think these new headphones are working into their overall services strategy around apple music? is the short, no answer. i don't think apple music will be a necessary component of the headphones. i do think the ease-of-use of the pairing process and of giving us is there, in the way that jawbone and the other makers of headphones don't have. if that pairing process is so much easier with these apple devices, that's important, because ease of use has been the calling card of apple, going all
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the way back to the apple ii, let alone the macintosh, but it seems to have fallen by the wayside for a lot of apple products, so if they can make that process easier, they will sell more of these things. they have artie been selling headphones after the beats acquisition, some of the best-selling in the industry, but with this device and the announcement of the q1 chip that is supposed to make the pairing easier and the sound quality better, we're seeing the first big integration of the beats hardware stuff in the apple hardware business. emily: you can start pre-ordering all these products on september 9th. editor at large cory johnson. mark gurman, thank you both. i want to take a deeper look at the new iphones specifically, because apple has been under pressure from investors to brief new life into its flagship product, but in the face of a maturing global market and slowing demand in china, is the
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reversal enough to slow two consecutive quarters of negative declines? joining me are two longtime apple watchers. is it enough to reignite sales? >> i think there's a couple of interesting things. the first is, there's a lot of discussion around, you know, the lifecycle extension of replacement for phones, and that's true. it's happening. ,ut it's moving from 26 months not suddenly going to three years. there's a lot of the install based on the 6 and the 6 plus, and if they hold true to the upgrade cycle they are in line for a refresh in the next two tw to four months. it is a pretty big upgrade, from six to seven. it might not be viewed as big from 6s and 6s plus, but it's a big one. and it's a big deal that they are bringing the installment plans to china and the u.k.
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i think that got overlooked. that is a significant motivator for a lot of customers in these markets who have now seen year-over-year increases and said, might be time for me to join the program. they are doing a lot to make the program makes sense. emily: so they are expanding the upgrade program to china, something only available in the u.s. so far. china is of course where iphones have been struggling, where we see carriers offering iphones at deep discount so they are cheaper in china. and in the u.s. for the first time ever, you know, big picture, do you see these new iphones, and maybe they are different on the outside, but there is a lot of new technology packed in there. do you see them reversing the sales decline we have seen? >> the sales decline is because the year we were comparing it to, we had growth of 30% to 40%, which is tremendous in the saturated market. if we compare against that super cycle, it of course looks worse, but if you look at along term trend it has been a steady
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upward climb, and when we get past the honda of the iphone 6, the large screen, we will see a return to modest 10% growth. i don't think it has that much to do with product. the fact is, we have one billion possible customers, not nearly, but it will be that, who are satisfied, who are upgrading their product, essentially buying more and more accessories to the product. so overall the revenue picture will grow. emily: the camera is better than ever, and we see more and more people carrying only their iphones, not regular cameras anymore. that said, they only have the dual processing camera on the bigger phone. what do you make of that? ben: not many vendors, there are other selling dual lens phones and not shipping in huge volumes. there are capacity problems. a lot of innovation goes into it. it would have been hard, as much as apple may have wanted to bring it to the iphone 7, it may not have been logistically
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possible. emily: how many people actually have the bigger screen? ben: it depends by market, but if you look from u.s. to china, the bulk of that base is on a 6 or 6s. we have seen some moving toward the larger screen. i think they are still part of the market, trying to figure out what size they want. but the bigger phones are not the largest portion of that. bulkyn china, where the status is the 4.7. will the camera be what moves people up, or will people be satisfied with the screen they have and a lot of the internal component upgrades to the cpu another performance? emily: will this change the mix? horace: not really. the reason people buy the bigger phone isn't because it has more processing power. it is the bigger screen. and the people who don't buy the bigger phone are because of the bigger screen. it's a limitation, and also an enabler. some people have that need, and some people don't.
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i think the vast majority don't. so i think that's the way, we saw a surprise when they went to a smaller screen and the product sold better than apple expected, backordered for a long time. so the segmentation is about right. the bulk is in the middle right now. emily: how big is the water resistant, dust resistant part of this? ben: it is a key feature. they are not the first to do this. samsung has done this and others have. it's a challenge to manufacture something of the precision they do and bring that in, to be waterproof, and also the watch. the watch is not just water resistant but waterproof, to a depth of pressure. emily: up to 50 meters. it,ce: not to make light of but in the industry it has become something of a but he has to have, so waterproofing is one of these things, just like having high-resolution displays. emily: and battery life is still an issue. horace: that's a huge issue.
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the battery life keeps getting better, the performance is increasing. talking about two to four more hours of use out of the device, and that's pretty good deal. personally, i don't feel the pain of battery because i'm somehow always in the green, but many do. emily: i feel the pain every day. [laughter] you look at studies we have done around features that drive purchase, like cameras and big-screen, they actually rate lower than 30%. battery, 50%. emily: interesting. ben: and their estimates might be conservative. if you look at the processor, they might get better gains, and consumers caps on to that story, that is a huge pain point. that could be the one thing that might make a real big difference. horace: the big phone by the way does have amazing battery life compared to the others. emily: it does. my husband has that one. horace, ben, we will dive into
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the apple watch coming up after this quick break. much more ahead on apple. plus, hp enterprise confirms in your me $9 billion software spinoff, so what is it investors don't like? we will discuss later this hour. another stock on the move, nintendo getting big boost on the news "super mario run" is coming to the app store. this is bloomberg. ♪
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emily: this is "bloomberg west." as we just mentioned, apple released a new watch today called series 2. mark gurman got a first look at the new watch in san francisco earlier today. here in san francisco, looking at the new
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iphones and apple watches. behind me, you can see pictures of the apple watch serious 2, -- series 2, as apple calls it. new features like waterproofing, swim tracking, walk and run functionalities including gps. a new ceramic casing option in white. it looks very cool. a new collaboration with some new models from nike, a nike+ model, some new watch faces and marketing around this, a host of upgrades to the apple watch in addition to the phones. emily: still with me, veteran horace and ben, breaking of the highlights of apple's latest product announcement. i want to talk about the watch. waterproof, gps tracking, new software and hardware. we didn't know if we would get new and better hardware, but we did. horace, what do you think about the new watch? horace: let me begin with
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something slightly different. they give us a big hint at how well the product is doing, saying it rose in rank and became number two, the second-best selling watch brand in the world, putting it between two, number one rolex and number three fossil. if you look at the numbers for those two companies, you can see the range it is that, so we did that, and it turns out to be between $3.8 billion and $4.5 billion in the first six months. i want to focus on that for a minute, because i had made an estimate already for the first 12 months of its lifecycle, that it was around $5 billion, that is within that ballpark, assuming a little at the higher end, not forgetting we have an extra quarter. but let me put that in perspective. $5 billion from zero, that's more money than tesla makes, and this is a product considered a flop and worthless, generally speaking. emily: that's a great point. while they just tell us what the number is? ben: they have always looked at
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it in terms of, they don't want to give the competition any sales figures, how they are doing, so others might say, look, a great category, you are shipping 3 million per quarter. emily: and then you guys estimate. ben: we can figure it out. you can do enough backwards math to figure it out, and i think they will tell us at some time. horace: they are easing in. i don't quite understand the logic because they are disclosing everything else. this is a sleeper product that i have been bullish on. the thing about it is, look at the performance improvements we're getting here. dual core, gps, waterproof, and what's next? . forget, we are nine years -- don't forget, we are nine years into the iphone and it took a couple years to get traction. let's be honest, it wasn't one billion units right away. so to me this is fascinating, the most interesting product. emily: so here's my question. will this become more than a niche product. we all have smartphones. will we all have smart watches?
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ben: it would be a leap to say that everybody owns one, but we are seeing a growing category around not just fitness, but also the fashion element. i don't think it was insignificant that they position themselves against other watch brands, not against smart watch bands or fitbit or carmen, they are trying to make us think of it as a watch product. horace: i will call it and say we will have smart watches. i was saying this about smartphones back in 2004 when they barely existed, and i'm feeling the same feeling now. this is a product, we want to have a computer on our wrist, or perhaps elsewhere on our bodies, but it's a universal need. emily: i will hold you to that. so next year, year after that, i will not forget. [laughter] i do want to talk about gaming, because a, mario is finally coming to the iphone, b, pokemon go is coming to the watch. there was a big emphasis on
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gaming on the iphone and the watch. what do you make of it? ben: starting with the watch, there hasn't been any breakout games really that took off her pokemon go makes a lot of sense on this product. i will use it like crazy, to catch pokemon on my wrist. [laughter] but the increases in processes and performance are opening up those visual opportunities on your wrist for developers. first the performance of great will give more software opportunities for your wrist, so now the flag it can open for apps -- floodgate can open for apps. and mario is a good example of a franchise, and hopefully this is in the works longer, but hopefully between pokemon go and mario, nintendo is learning how to embrace mobile, and to do it in a way that brings the franchise to more people and places and makes it divisive all -- accessible on devices. emily: does this open up a new category of customer apple didn't have before? horace: i think the nike thing
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is even bigger. nike and the partnership with hermes are just precursors to a whole new game apple is planning, with other companies, which never happened in the steve jobs era. what they are doing as a partner is a big change. emily: very excited about the watch. we will see if it take share from fitbit and job own. always good to have you guys here on the show, on the most important day of the year, what else? thank you for stopping by. coming up, intel is teaming up mcafeeg to spin out it's cyber security unit. details later this hour. this is bloomberg. ♪
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emily: one the stock we are watching today, twitter. shares rose more than 3.5% in wednesday trading after btig analyst greenfield wrote that
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disney makes the most sense as a potential buyer. why? he said disney needs a larger home screen presence on mobile devices. he also noted that the body language of twitter cofounder's ev williams in our interview last week might already signaled there's a bitter for that company. in that interview, williams told us twitter has to consider the right option for the company. another story, snapchat. daily stories features for cities is coming to an end. a curated library of video shot by users doing everyday activities in places like new york and l.a. 15 people pulled together the local stories, and they will lose their jobs, according to people familiar. instead of this, snapchat will focus on trading videos of specific events like the super bowl and fourth of july. still to come, is it worth the upgrade? depends on how attached you are to your headphones. we catch you up on every thing you need to know about apple's iphone 7 next. if you like bloomberg news, you
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can listen on the bloomberg radio app, bloomberg.com, and on serious xm in the u.s. this is bloomberg ♪
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>> top stories this hour. china's exporters enjoyed a cushion from the weaker yuan. overseas shipments fell 2.8% measured in u.s. dollars, but rose almost 6% in yuan terms, the sixth straight rise as the weaker currency boosts receipts. japan's economy is showing signs of life, growing an annualized 0.7% in the second quarter, more than the initial government reading of 0.2%, giving the boj something to think about ahead of its closely watched meeting later this month. at that meeting, policymakers will release their review of the blt's strategy and decide
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whether to extend easing. new cameras, faster processor, better batteries, but knows to prizes. tim cook -- no surprises. tim cook released the new iphone, calling it apple's best ever, but geeks and investors seem less impressed. is water resistant but loses a physical headphone jack. apple hopes the revamp will help stalling iphone sales, especially in china where it is under pressure from cheaper rivals. global news 24 hours a day, powered by more than 2600 journalists and analysts in a more than 120 countries. this is bloomberg. let's get back to david right now with a check of the markets, and all the latest. david? david: you guys are talking about this. let me frame this up, the jump we are seeing. this is how it looks over two months. ofs is basically a gauge liquidity conditions or funding, or the ability to do funding, if you will, in the offshore spot
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market. the spike indicates there is high demand for the currency. it does seem though, at least when you look at the longer-term chart, we are nowhere near the levels of the start of the year, when you really had a lot of volatility out of the country and the renminbi getting pounded lower. we are nowhere near those levels. that being said, it makes you wonder who really needs renminbi this much to make that spike. reason whyrlier, the u.s. is getting bought up is that a lot of people are turning to the offshore rate for their funding when it comes to the renminbi. something to keep in mind. nothing near highest levels but a 388 basis point spike. equity markets look like this. nintendo is one to watch, when it does reopen. qw are ready -- we're ready for that to be opened up, because the pokemon go plus will be made available in most countries next friday, something to look forward to. let me end on this.
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have a look at what we are seeing across the broader markets in the asia-pacific. first time we see meaningful declines. nintendo, by the way, that's how it's doing over the last few months. there's asia for you. , down three quarters of a percent. ♪ i'm emily chang and this is bloomberg west. let's get back to our lead story of the day, apple rolling out updates to its key iphone lineup today, including upgrades to the andra, a faster processor, a new water and dust resistant body in a bid to reignite global iphone sales growth. china has been a drag on apple's performance this year as local rivals introduce cheaper handsets with similar functionality, but the company is making a huge play for the chinese consumer base, extending the iphone upgrade suspicion plan to asia's cap economy. alex webb was at the event today and joins us now here in studio. also with us, crawford del
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prete, who was watching closely. alex, this upgrade program was only available in the u.s., and now is available in china and the u.k. we know that the iphone has been struggling in china. what do you make of this? alex: a lot of global competitors came in with smaller cost phones at much the same level of functionality, so what this does if it achieves any rate of pick up in the u.s., it can help stabilize revenue. the way the system works, you might pay a base level of $32 a month, depending what model you have, and that allows you to upgrade your iphone every single year. quite a smart way of retaining the same customers. emily: crawford, how big of an impact could this have on revenue from greater china and stabilizing that revenue? crawford: alex is right. this could stabilize china. history says are, there are a lot of top-tier customers in china who are
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willing to pay up for the product, and apple is kind of a barbell strategy here. they want to meet the needs of the most demanding customer, and what we saw today was a product squarely targeting that most demanding customer. they also want a full set of products for our kinds of customers in china, but very skewed toward the midrange to the high-end. revenue,t could help because probably in the next few quarters apple will skew more high-end in china, so you could start seeing stabilization. emily: it's interestingemily:, ben bajarin earlier said the big screen is not really motivating chinese customers, at least the so what is? plus, alex: the status symbol. i have been wondering, looking at this new tool lends system -- dual lens on the rear of the
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camera. if you are not willing to get a larger handset and the discomfort which may come with it, this might incentivize you to go for the higher-end model, for the better camera, not for the larger form factor, and i wonder if that might be some incentive. emily: idc has numbers out that apple's global market share is likely to slip to just under 14% this year, compared to almost 16% last year. obviously apple is making big moves into india. do you see india slack here? will india be as big of a buyer of iphones as china has been? crawford: in india, it's much more competitive, and it will be difficult for apple, particularly with what we saw today, for them to make a big push into india and get major traction. i think it's the lower-priced products that we have seen up until now which will be, really, the lead product for apple in india. and i think, over time, that can
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be a better segment. but we stand by our numbers, and that, that is a very price-sensitive base with a lot of competition. emily: the other thing we have been talking about, apple's parts suppliers have been under pressure. apple says, we will buy the parts but pay you less and by fewer -- buy fewer parts. how does that trickle down to what we see? alex: it is there challenge -- their challenge to come up with innovations every year and keep it up the same price point. that is not easy to achieve. we will see that trickling down in the stock in the earnings of these suppliers. a lot of people in the supply chain, say apple is a very aggressive player. they come out of the investment banking world, to give you an idea of what the ethos is like in that part of apple's operation. so it is something which hopefully makes no difference to us, but will make a difference to the suppliers. emily: we have to talk about the samsung recall.
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samsung got a head start getting the new galaxy 7 smartphones out before this new iphone was unveiled, and now sensing is recalling millions of galaxy note tablets. how devastating is this recall, and how do you see that playing into the dynamics of who buys what this holiday quarter? crawford: this is tough news %. by some estimates -- tough news for samsung. by some estimates, the recall could cost them up to $7 billion. and it's very difficult to rework these products. a lot of them was and we have to be remanufactured. so this opens up a big category for apple, opens up what tim cook talked about as switchers, people who apple can woo over to the platform. if you were looking for a large phone, you basically had some doubt now, if you are a samsung customer, and apple gave you a really nice reason to take a look at their product line today. samsung has to move in two ways. they have to move quickly, and
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they also probably have to be price-aggressive, or sort of service-aggressive, to make sure they retain that very profitable customer that is interested in the large formfactor product. emily: and there are still questions about the actual root of the exploding battery issue samsung is experiencing with the galaxy note tabletss. we will be closely following that. alex webb, thanks so much. crawford, stick with me,, because i want to talk to about one more story, hp. shares of hp enterprise are not getting much after the earnings report. staying true to meg whitman's pledge to shrink the company, hp e is spinning off software assets in a deal with u.k. firm micro focus, valued at $8.8 billion. crawford del prete still with me. you spoke with meg whitman after earnings came out. tell us about what her message is, and what is hpe after this?
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pe is basically really focused on infrastructure for the enterprise. if you look at what hpe has done over the last year or more, they have really got out of businesses that were not really strategic. look at the divestiture they did. se spin merger. off of the people hpe laid were associated with that services business. now look at acquisitions like recently. more you are really going after growing parts of the enterprise infrastructure base, so what hpe will be going forward is a company that is about $28 billion, focused on driving either private cloud or serving the needs of the public cloud, or serving the needs of enterprises across their campus,
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their branch office, and data center. that means hpe is about one word. scale. they need to ramp up scale dramatically across the business to be the most cost effective enterprise supplier of choice. quite frankly, she has trimmed the company down to be that going forward. emily: we are going to be dellng about sell in up -- in a moment. the biggest tech deal in history. on the one hand, michael dell says bigger is better, and on the other hand you have meg whitman say leaner is better. how do you suspect history will look upon these two decisions? crawford: again, don't forget, decadea long time ago, a ago that carly fiorina was talking about better together. the strategy clearly changed at hewlett-packard enterprise, and now they are about focus and agility. so when you compare that to michael dell's strategy, which
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is really about going into a company like emc and probably reducing costs significantly in that company. michael gained a significant amount of ip, and hp can unlock ip around the enterprise and focus their strategy in a software area that was comforting a lot of their sales motion -- complicating a lot of their sales motion. how will history treat these? they will treat them differently but i think they are value add moves. michael needs to pay down debt, and he's doing a great job of that with dell, and hp needs to drive cash flow in order to drive scale. so what i think you're going to see is a three-way battle, and that battle is really focused on lenovo, hewlett-packard enterprise, and dell for the enterprise infrastructure business going forward. emily: idc chief research officer crawford del prete. we will look back in history and see if you are right. thank you. coming up, details of the $4
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billion plan to take mcafee security out from under intel's roof again. this is bloomberg. ♪
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emily: a story we are watching. first there was mcafee, then in 2011 the sever security giant became intel security when intel bought it for nearly $8 billion. now intel is spinning out the cyber security firm once again. intel and private equity firm tpg will invest in a spin out transaction valued at $4.2 billion, including debt. cory johnson is standing by with more details. give us some context here. why is intel spinning this out now, for half the price? cory: indeed. one can quibble about what the dollar amount was, what they
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paid, the 7.7 billion total. they acquired a lot of cash. the true cost to intel at the time was $6.6 billion, but it's still more than $2.2 billion less value, so not great for intel. although this will ultimately be a profitable deal for intel, even as it stands now. they have taken so much cash out of the prophets of that mcafee security -- profits of that mcafee secure to business. if you look at how intel breaks down segments, in each of the last two quarters, mcafee did $537 million in value, so that's caught a $2.1 billion annual business. they are selling half of their stake for $2.1 billion, so they are getting two times revenue for the business, about equal the value of symantec, so a decent transaction for intel. and a very competent one, the way it is put together -- complicated one, the way it is put together, resulting in intel getting $3 billion back in their
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balance sheet and maintaining 50% ownership of the new company. so they will still have skin in the game, but the deal will be much more purely focused -- the company after this deal will be much more purely focused on selling semi conductors. emily: how do you see this new unit fitting into the rest of the cyber security industry which many folks have said is heading for major correction and m&a, where we might see smaller players getting snapped up or something not surviving? y: when i talk to people in cyber security, and i do quite often at all different levels, whether providers or the companies buying it, or government groups buying it, what i hear over and over, there are some great little solutions to problems that need solving, but the big umbrella solutions are companies that can handle things in a lot of compex ways to respond to every new threat, they are hard to come by. there's a lot of spending coming into the industry, but who the vendors are who will succeed, it is hard to find. you can imagine.
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i think it's really important here. this isn't a 50 50 deal. it is 51% tpg and 49% intel. tpg will run the show here. the same people running the business unit at intel will run the spun-at unit as part of tpg, but tpg has a lot of financial wherewithal to bolt onto the unit to make it a more fully flexible thing. intel will be on the sidelines, owning 49%, an anchor tenant if you will as a customer of the new entity, but they will be in a position to add what they need to. intel, meanwhile, is now really focused on selling chips, internet of things, from mobile, for pc, but really focusing on chips. security is important, but not their main business. emily: editor at-large cory johnson, live in san francisco. thanks so much. i want to turn to our conversation with john mcafee, the original cofounder of
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mcafee, the company that intel bought. online gaming an come any that was once a penny stock but surged tenfold on the announcement it signed none other than the antivirus group, john mcafee -- guru, john mcafee. the idea is to rebrand as a separate security firm, rebranded as john mcafee global technologies with the cyber security pioneer as ceo. john mcafee joined pimm fox. . wen: mgt, when i became ceo, threw out the existing products and projects and became a cyber security firm, and i think we have one of the best, certainly the most up to date, avagard garde security -- avant cyber security products. >> google became a word meaning to search, and mcafee is a word like that, associated with computer security, online security.
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what is the technology that will set this new venture you joined apart? john: ok. here's the thing. i invented the current technology. it started with antivirus technology, and branched out into a whole system of programs, involved in finding malware. but by the time you find malware, it is too late. it's already in your system. as an example, the office of personnel management for the federal government was hacked in 2013. 21 million records were taken. they didn't find out until 2015. so all our products today are reactive. i am developing an entire line of proactive products. all my friends are hackers. i started off fighting hackers, but as i got older, i guess i got some sort of grudging respect. they asked me to keynote defcon a few years ago, the worldwide hacking convention. and i hired a bunch of hackers
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to help me. why? because they are the ones doing the hacking. i mean, if you are going to build the best bank vault, you want to hire the best bank vault cracjeker, because otherwise you will miss something. so the proactive products are actually catching hackers within the first few seconds as they start sniffing your systems. it takes hackers months to get what they want, and for the first few days they are just probing around. well, since i know how hackers work, and since the people i've hired know how hackers work, within 10 seconds of a hacker sniffing your system, we have identified him, we found out where he lives, we found out what technique he's using, and we sent an instant message to the i.t. manager saying, you have a hacker, from russia, do something. we don't do anything, it's up to them, but we are the alarm company. hacker in your system. emily: antivirus pioneer john
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mcafee, on his new position leading mgt capital. tomorrow on surveillance, don't miss continued coverage of apple with piper jaffray's senior research analyst gene munster, on at 6:00 a.m. new york time. this is bloomberg. ♪
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emily: now for a bit of tech history. the biggest technology deal ever is in the books. dell wrapped up the acquisition of emc, creating a $74 billion business serving 98% of fortune 500 companies. the new company has 140,000 employees, for now. in interview -- an interview, michael dell did not deny the could be job cuts, saying the tie up was more about revenue growth. as we have been covering, apple announced a new and improved iphone 7 and 7 plus. attended the event
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and got his hands on one in the demo room. take a look. mark: i am mark gurman. we are here to look at new iphones. apple has introduced the iphone 7 and iphone 7 plus. overall, it is a significant update in terms of performance, with a new chip/ and a new home button connected to a haptic engine that gives you feedback when you click it. dual lens camera on the larger iphone 7 plus, allowing for deeper zoom. when you open up the camera app, it has a new optical zoom feature, so you can actually zoom. apple announced airpods, a thatess version, a headset we will look at now. this comes in a charger case,
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and you can charge the case with a lightning connector. it will last for about 24 hours. the phone comes at september 15th, with september 9th preorders, and the airpods will come out at the end of october selling for $159. emily: apple was not the only company unveiling new hardware today. sony announced two new versions of the playstation 4. one a slimmer and more energy-efficient version of the ps4, $50 less than the existing model, and the other a high-end device called the pro targeting the most hard-core gamers. sony says it has sold more than 40 million units of the ps4 to date. tomorrow, do not miss the conversation with the sony gaming giant's chief. that does it for this edition of "bloomberg west." this is bloomberg. ♪
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♪ yousef: the fallout spreads from the field coup in turkey. oil is being blamed. angie: signs of stability in china. exports fell less than forecast last month. the trade surplus topped $52 billion. yousef: oil is on the rise as you knew data shows -- as new data shows that oil stock piles have fallen. angi

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