tv Bloomberg Technology Bloomberg January 3, 2017 5:00pm-6:01pm EST
administration, the senate will consider a bare-bones bill this week. paul ryan won the post of house speaker with the overwhelming majority of the vote. he called it a once-in-a-lifetime opportunity. the decision comes after criticism from president-elect donald trump. trump suggested that republicans focus on tax reform and health care. three former presidents will attend the inauguration on january 20. george w. bush and his wife laura. bill and hillary clinton will also attend. a spokesman confirmed that former president george h.w. bush, citing his age, will not attend. courtjury will return to
tomorrow to decide whether convicted killer dylan roof will at the death penalty. he was found guilty of shooting -- nine black night black parishioners in 2014. this is bloomberg. ♪ >> i am caroline hyde. this is bloomberg technology. we will follow the path to production as driverless cars make the turn from the labs to the showroom. carmaker's latest delivery numbers miss estimates. -- details behind soku 's plans to go public.
now, c.s. kicks off this week and it will be a convergence of detroit and silicon valley. is sick critical time for cars to move from the testing phase to the mass audience. gmes like google, ford, and are trying to put their best foot forward. tesla moved lower in after-hours trading after the company came up short on production and delivery figures. tesla sold about 20,000 cars in the last quarter, below analyst expectations. in 2015, they produced about 84,000 vehicles and produced -- studio, the tech entrepreneur and privacy advocate, he is now the managing partner of the newly launched firm heroic ventures and a guest host for the hour.
these tesla numbers were pretty high and ambitious. is it about not quite living up to these expectations? >> that is pretty much it. elon musk had such ambitious targets for tesla's growth, aiming to get to 500,000 vehicles in a couple more years. so many analysts and investors on wall street automatically start discounting those. they have achieved incredible things, even the growth this year. it was really impressive that not as great as hoped for as he pushes them to achieve. michael: i agree, but elon musk is elon musk. we are lucky to be alive in the same generation he is in. you have to admire his moxie. he says we will reduce this number of cars, misses it by a little bit, but then he launches a rocket into space and lance it backwards. he is remarkable -- andland las
it backward. he is pretty remarkable. i am not necessarily a big believer in tesla, i am a big believer in elon musk. caroline: full disclosure, i spent the weekend playing with the tesla x. michael: it has a 100% approval rating from consumers. it is all about the gull wing doors. caroline: it is amazing. as far as the market is concerned, this used to be a gadget where mobile was, and dr ones, but it seems to become an auto show no. jamie: it is one of the biggest auto shows in the world. an important day on the calendar every year. but it is still a gadget show and that it is cars and gadgets. thingscool info-tainment in the dash, or autonomous vehicles that are not ready for prime time or public roads, but
people want to see it. it was two years ago this week that keith nonautin was in las vegas and had dinner with mark fields and mark said, in five years we will have an autonomous car on the road. that race is still in suing. we are still on the backstretch, and a few years from anything hitting the market, but there is a lot of jockeying for position. michael: are you seeing trysting new software companies? love the wealth creation -- are you seeing interesting new software companies? looking at the wealth creation, there are a lot of new companies. are you seeing any exciting software cabinets this year? jamie: supply is important to development. a lot of them are providing hardware and software while automakers try to develop their own os outside of google. google is one, wemo is one.
mobileye, they are all key suppliers making it possible for the automakers that are not as big as toyota or gm to stay in the game and stay within breathing distance as a second mover, taking technology off-the-shelf from the suppliers that have developed. caroline: that is what is fascinating, the joint ventures that seem to be going up. by -- was bought by volkswagen. there is a spin out from intel into nokia mapping technology. they just announced an amazing piece of news. caroline: they are now co-owned by the big german carmakers. where is the money going? >> when you're looking at cs as a venture capitalist, do you want to be buying shares in old anthony's like the detroit -- old companies, like the detroit
giants? michael: in terms of startups, don't think that driverless cars are venture capital friendly. it is clean-tech for vc funds. venture is about getting a lot of leverage under capital for a small amount of money. there is exciting opportunities for investors in the private markets. i believe it is one of the most exciting areas in 4017. it is called edge computing -- for 2017. it is called edge computing. there is so much big data in a specific car, that the wireless bandwidth to transmit and comedic it to the cloud is too intense. we need to have all the data sitting in a computer in the car, that is called the edge of the cloud. there will be tens of billions of dollars of wealth created in the next two years around edge computing. caroline: this is where technology is going. today has been such an area of focus in terms of the big giants of detroit.
the push back they are getting from donald trump, president-elect -- how are regulatory issues key for this growth? jamie: it is huge for the auto industry. global trade. the auto industry is so twined with global trade, especially with mexico, post- nafta. also with japan, korea, europe. the threat from then candidate trump, and he said as president-elect, and was tweeting us morning about threatening g.m. with a big import tax if they bring small cars from mexico -- there are a lot of small cars being built in mexico. those are not all for the u.s., but a lot of them are. that would be disruptive on the flip side. they are looking at tax breaks for individuals, high earners who buy most of the cars in the u.s. they are looking at corporate tax reform and the possibility
of seriously watering down, or in eliminating the fuel economy requirements, which as they were member in 2008 -- which as they 2008, theyr, in tried to double fuel efficiency. those are facing a midterm review and are expected to be taken down quite a bit. caroline: from tech to regulation, what a changing landscape the auto companies face. michael, sticking with me throughout the hour. televisionoomberg and ces coverage starting wednesday. we will have interviews with the likes of the aol ceo, the iac chairman, and reporting on the ground from our bloomberg technology team. yearin's rally has a new given a new lease on life?
caroline: we continue to monitor the departures at twitter. kathy chen is leaving after eight months on the job. she announced she is taking time to pursue more international opportunities. chen was hired to seek out more advertising revenue and other business in china and taiwan. michael: maybe she will be working for the government? caroline: we will be debating that now. it looks like bitcoin still has
room to run in this new year. the company is valued at above $1000 for the first time in three years. my guest, who is already energized about moving doors at twitter, will be analyzing for us now the bitcoin movement. up above $1000. is bitcoin the key wit -- clear winner in crypto currencies? michael: so far, bitcoin is the whole action. 95% of what happens are bitcoin transactions. there are other things coming. there are dozens of crypto currencies that have launched. they are called alt-currencies. only a couple have gained real traction. there is one viewers might know ethereum.heory of -- there is another one called ripple. being puturrency
together in conjunction with a bunch of banks looking to do some more oversighted, understood collateral work together. there are others. there is one called monera which is fully anonymous, another one called z-cash which is fully anonymous. what is bitcoin so good? it is simple to understand. it looks like the dollar, it is a piece of script, it is tradable. the plot -- the promise of the block chain is due to the fact that a token, or a coin, in the chain cannot only have a currency value treatable, but can have preset instructions. it can be a smart contract. you can preload the token with a set of rules to sell your shares in a certain way, to get married if we want to get married, it can have if-then statements that are preloaded. caroline: they are rules. everyone in the
contract to know that it is self refuting and self realizing. there is a lot to be excited about with monero, and bitcoin. the one that has the awareness of the public. caroline: china seems to be a real driver of trading in bitcoin. what has fostered the sudden resurgence to three-yearcarolin? is it geopolitical risk? is it the fact that the coin is being used more widely? that currency is open to deflation? michael: if i had to sit here and answer the question, i would say it is probably most a speculative. there could be geopolitical risk that people are buying bitcoin instead of gold. it was in favor for a while and got hot. got too hot and people took money off the table. now it is coming back in favor. the chinese and bitcoin are a big part of the puzzle.
they are mining bitcoin and have so much control of the block chain that there is a sense of risk in the community that china could take control of the bitcoin currency. that worry some people on the front tier. there is also a sense that bitcoin is not truly anonymous. if you are a rebellious believer in the revolution of crypto currency, which you do not have to be, is that some of the more truly anonymous currencies like monero and z-cash, are the way of the future. you have seen a 20% spike in the value of monero just in the last week. it is still very early days. ifoline: rebellious, or not, i am a believer that crypto currencies will eventually come, is 2017 finally the year when we see it become more widely adopted? will it become something that everyone will know? michael: what is so amazing, the real missing part of the link,
so far is when will crypto currency get wide practical adoption. it is still missing, even in san francisco where i live, they used to and they don't. they used to be able to buy coffee in bitcoin. why would you? nobody knows. it is fun, it feels good. now you can't. there has been a rollback of the applications. i think they are coming, as the banks in particular, as the clearinghouses in particular, start to bless the block train, and have all of these activities for the block chain. you will see more and more adoption. does it change my day-to-day life? no. could you spend your life through the coin? no. i have met a lot of founders this year. one fedor i met does not have a bank account, does not use checks -- one founder i met does not have a bank account, does
not use checks or have credit cards, the only way to pay him his bitcoin. his entire financial life is crypto currency. caroline: that is rebellious indeed. thank you. coming up, the first day of trading this company is down 7%. we will hear from the ceo and how he plans to succeed as a standalone company. next. this is bloomberg. ♪
caroline: conduit has officially launched as the world's largest company, yetices the stock price longed. the first a of trading on the new york stock exchange. this after the company split from its previous partner. company, yet the stock>> we are taking a poro approach to our business. we believe we have leadership positions in some areas we will continue to amplify.
as we see those businesses that need to be part of conduent in the future, we will amplify them. >> your competitors and crude many,ies, there are so because it is such a wide-ranging services business. >> it is a wide-ranging business. we will stay focused on transportation where we have edge. we're number one and parking, number one in transit, number one in violations control, we are going to invest in convergence business. we think there is a huge convergence waiting to happen in the health care space between insurers and providers. we are very favorably positioned for investing. there are some businesses that we believe will not be as leverage a bow or -- leverag eable or monetizeable. we are point in time,
investing in all of the business lines we have. >> what is your hunch, what are the businesses you would focus on? >> it is tough to say because we have only been listed today. it is the first a of the company. we have been at it for or months -- four months. that is something we will take a look at. >> what is your concern about the overall technology industry, the services industry, and the macro impact from the president of the united states next year and the political turmoil? >> the technology will continue to disrupt. b2b industryhe being disrupted by over and air being -- by uber and airbnb. technologyes the capability. it is a technology -- a
commodity. that with the introduction and regulatory overhang, with the fact that they will have a healthier business environment as a result of that or reduced in for structured spending, that is a big space for us whether it is in transit. it will be a quick seller for us .n the years to come -- a time walls or barriers are erected, there is a backlash. 80% of my revenue is from the united states, 15% from europe. i feel confident we are in the right industry with the right mix of services. we will have a wide base in a fast growing industry. >> carl icahn has as much as a 9% stake in the company, and he was instrumental in this spinoff
to begin with. what has he spoken with you about? >> mr. icahn has three represented is on our board. we are in touch with him and his board members like we are with every other large investor. to us, it is for us demonstrate performance and i think that is what we intend to do. one of the first milestones is getting listed on the nyse. >> your quoted talking about a 10k margin expansion and $700 million in cost savings in a 2018. green capital says it is not really a slamdunk. how would you intend to prove green wrong? >> we are not saying it is a slamdunk. it requires a lot of effort and it will be done in a delicate fashion. we are already on it.
last quarter, we showed a 50 basis point margin improvement, as well as the action we have taken so far. we arewe are already on it. confident that we have a plan. we have the confidence and execute in the plan. it is not a slamdunk. we will be able to show the results. caroline: that was conduent ceo speaking with vonnie quinn. as we mentioned earlier, it is a huge week for the auto industry. here are a few more headlines catching our attention. chrysler unveiled a battery-powered minivan. software would take care of most of the driving, however it is a concept car and there is no guarantee it will ever be built. intel is seeking to buy a stake in -- they must pass the german antitrust inquiry before the sale can succeed. they will receive the application in one month after time. ford announced it is canceling plans to build it $1.6 billion plant in mexico.
instead, it will spend $700 million expanding an existing plant in michigan. speaking earlier on bloomberg, the ceo mark fields explains ford's dominance in the hybrid and electric market. >> we are the number one seller of plug-in hybrids today and the number two seller overall for electrified vehicles. we want to build on that. keep in mind that we only talked about seven of the 13 electrified vehicles that are coming. there is more to come. caroline: still to come, the top tech products to watch out for at the industries biggest tradeshow of the year. a sneak peek at ces 2017 before it takes over las vegas this week. ♪
turkey was supposed to be followed by negotiations between rebel factions and government representatives. dozens of the nations brightest scientists signed a letter to president-elect trump not to scuttle the obama administration's nuclear agreement with iran. signatories, including nobel laureate and's and manufacturers say it's the best chance at preventing tehran from developing a nuclear bomb. the u.k.'s ambassador to the european union has unexpectedly resigned. a government spokesperson says ivan rodriguez leaving so a successor can be appointed before the u.k. invokes article 50. donald trump has nominated a critic of china to be the u.s. trade representative. was the deputy trade representative in the reagan administration and has previously accused china of unfair trade practices. a panel of judges in haiti has certified the victory of presidential candidate.
no evidence was found of the fraud some candidates have alleged. he will be sworn in on february seventh. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. collins.ney this is bloomberg. it is just after 5:30 p.m. on tuesday, 9:30 wednesday morning in sydney. i'm joined by eva tickling with a look at the markets. david: asian markets are open with a bit of a spring in their step. in new zealand, the markets opened .7% with futures up about the same amount. japan, the futures there are pointing down and we will be watching japan today for the last of the pmi manufacturing numbers. we saw very strong numbers coming out of china and the u.s. and global pmi looks to be
heading to it and level since 2014. japan is also looking at a strong result and we will watch that coming out in about two hours time. in south korea, the current balance coming out later today. a big exporter of cars and phones. they have been labeled a currency manipulator by the u.s. congress. i'm handing back to bloomberg technology now. caroline: this is bloomberg technology. i'm caroline hyde. let's had back to the biggest tech trade show of the year. ces takes over las vegas and offers an early them set atop
tech themes to watch from household items to wearables. this year, it is all about driverless car technology. my guest coast get -- guest host for the hour jointly. get us up to speed with what the buzz is like and how does it compare to last year? you've talked about driverless cars, auto show west is what it is all about. if the auto industry can manage to get outside of the donald trump layer come of that is. the other thing we are hearing a lot about is personal digital assistants. how far are they pushing into our lives and into our homes? how much more can they do and how much of this rivalry between amazon, they are really kind of the leader. have come out in the last couple
days with comments about how well they did at the end of 2016. typical amazon, having given us no specific numbers other than telling us how wonderful and how much demand there is out there. assistance for these in these next five years is expected to rise into tens of millions of people and a couple of billion dollars in revenue. it is a market the industry realizes that they need to get behind, so you will see more from amazon. you heard an announcement rum whirlpool and amazon you will be able to control your devices using your digital assistant. mark zuckerberg stole headlines just a week before christmas with his awkward jarvis digital assistant he is programming. they talk about it as being a sort of hobby thing but i think you will see more from facebook in the coming weeks. google i think is the real focus. how much they are going to try
to steal amazon's thunder. caroline: what about ai? michael: it's very exciting field and deftly one of the hot areas for investing right now. there are two things that these devices do. the trojan horse in your house part in which it will be the nerve center of your home. the ai technology as you are alluding to his facebook, it should live on your phone or your watch. there's no reason that the command or responsiveness should live on a tower device inside your house. you will have a device inside your house that will become the nerve center. on the other hand, the ai will live in your phone. there are privacy concerns because there are our cases emerging that might go to the
supreme court asking whether cops should be able to listen in on it these devices and whether the recordings they make should be housed in the cloud or automatically deleted. very responsible companies doing it but the edges always receding. we were talking about facebook and one of the areas they made forays in the was virtual reality. the are become dominant? michael: i'm not hearing a lot about it. there's -- is it because the headset is still attached by a wire to the wall? the experience is not quite where you wanted to be. being ables idea of to live in a virtual world and being about to experience things, but we've all tried it, i think and you realize i can't
quite reach that. the rope is not quite working, the joystick, the handles for gaming, -- when you have that device on your eyes, your eyes have to focus on a plane is very close to your face. your eyes have to accommodate and then you get a little not show's. it is not clear that you can overcome that. i hope so because i would love to play all of those games that have those virtual experiences, but we are waiting for that thing to happen. but the are just went away. it sat on the shelf or years. guest: that's and other area where we are starting to see advances. caroline: i want to get the level of excitement. is the je nete --
sais quoi element there? guest: we have not talked about tvs. tvs are going to be big. they are hot. you want to see these big screen tvs and we are going to see some interesting announcements from lg, sony, panasonic and samsung. but is it really setting the tech world on fire? it's hard for silicon valley which is about software and services and it's hard to devote space on the conference floor to something that is not a gadget. but the software companies go and sell stuff to the hardware guys. 2016, there was $40 billion of investment capital in the u.s.. the year before, 60 billion. a big decline. silicon valley is rooting for a big ces with a ramp up to investment.
caroline: fantastic to have you on a show. tune in for bloomberg television's ces coverage going through the week. we will have interviews with the likes of tim armstrong, barry diller, plus on the ground reporting from our great bloomberg technology team. coming up come a chinese internet giant sets its sights on a $5 billion ipo. we will discuss that, next. extended lower in trading after selling 22,000 vehicles, totaling just over 76,000 for the year. tesla has been aiming for at least 80,000. this is bloomberg. ♪
caroline: a silicon valley startup says it has raised $140 million in a fifth and final funding round as a ramp set the manufacturing head of its ipo. the electric transit bus maker expects to go public this year or early 2018. gm is said to be a backer. they debuted a vehicle last year that can travel 350 miles on a single charge. sticking with ipo's, on our funding ward, china is planning an ipo, saying it will probably happen this year and could give a of as much as $5 billion, all in an effort to take on the biggest competitor, baidu. post with us is our guest from heroic ventures.
i want to bring up a chart for our viewers. compare it to the five ilion dollars they are aiming for and it is tiny in comparison, but it wants to get bigger. give us a feeling of the competitor. guest: baidu is deftly dominant are some mobile players nipping at its heels. number two is a company backed by alibaba. they are slowly climbing and have about 13% market share. ways to go but it has some competitive advantages. one of its backers merged with 10 sent and its online subsidiaries which show they are betting on them and want to make it succeed as it competes with alibaba.
it's the only search form allowed to use the public comments in its search, so that is a big deal. it's making partnerships with smartphone makers to make sure the devices are shipped with its software already downloaded. it feels like a turf war going on here. is it just more of a proxy war? it feels likemichael: i think t that you can name all three. it's fundamental to have an understanding of the chinese ecosystem. have chosen three or four national championship companies. they own a 40 something percent definitend are at a war level and it is hard to do business in china is you are chinese without doing business
as one of these three. it looks like russia, they have to play by the rules and if they do, they get national protection from u.s. companies. we have a lot of companies going up and down very fast. is exciting thing about 17 there's a backlog of these companies waiting for an ipo. in the chinese case, there's a down draft of chinese companies that may be responsible for delaying the story for two years. we started hearing about it in 2015 and now, the time might be right. 2017 is very promising and there are so many illiquid investments that people have been waiting for these companies to go ipo. we saw it happen in the late 2000 and i hope we have and other way of coming right now. caroline: a lot to be reporting
on. give us a reason that the timing is important. they are not swimming that 30 in china right now. guest: this is a controversial time in china in the online search space. a college student had basically sought out a controversial cancer treatment among the advertisements on the baidu search engine. the procedure failed and before he passed away, he penned a bunch of online posts blaming baidu for the debacle. this led to a tobacco in the search industry and baidu suffered from it because the medical ad revenue makes of a big part of it and competitors suffered from it as well. though was very bad for the entire industry, it was a great entry point to enter the market. it was a time when public
confidence in baidu was very low in the ceo told bloomberg newsy seeing a trend where people are trusting baidu less and less than turning to alternatives and the companies that are exclusively partnered with them previously only partnered with baidu and are looking for alternatives. significant where they want to ipo and what market and what exchange? the u.s. ipo is big for them because it gives them a brand name. and itt as well known would probably be a way to gain recognition and get technology because they want to use the proceeds to invest in machine learning and ai which is big in silicon valley. caroline: thank you so much. our guest post for the hour, thank you. so much energy for the start of 2017.
caroline: tesla hitting some speed bumps. the electric carmaker moving lower in after-hours trading after the latest delivery numbers missed estimates. about 22,000ed cars in last quarter, below expectations. latest is for the bloomberg editor-at-large, cory johnson. they aim for the sky and maybe they hit a tree. they are ambitious targets. there's a lot of distance between trees and sky. the company said we will deliver this.
when the analyst said that seems will deliverid we this. they put the numbers in the press release, shareholder letter -- they did not deliver what they said they would. in the quarter they just announced these numbers for, they delivered fewer model s is that a year ago, fewer than last quarter. so sales are falling by any measure and model x sales are nowhere near what model s is and there has been delay after delay after delay for the model three. caroline: what about the model three? there's a lot of backlog and this is meant to be the more price friendly version. are we worried about them getting off the machine? they have consistently missed virtually every deadline they have set. maybe they will make this latest delay deadline and they can keep pushing it back by quarters and halves of the year. we will see if they actually get to it. we don't know what the price is going to be.
these deposits are a place to be in line because they can't legally take the deposit and they are fully refundable. be tryingthese might to get a foot in the door. a lot of people want these cars, but a lot of people want the option to get the car. -- caroline:oline: after-hours trading down 2%, a massive concern to the market. stock people a want to believe the best in, but the numbers are not very strong. this is yet another company with a short term trade on a market that doesn't reflect the valuation of the company. company does not have the generation of free cash flow or anything here except these announcements that get people excited, but this one is probably worrisome. if it's going to be a big is
this, it's going to have to grow. if their main product is selling less than the last quarter and last year, it is a big business. caroline: expansion for apple looking at india and china. maybe hitting some roadblocks in india. developments in apple for the last 24 hours or so in and are looking interesting. i have to get concessions as far as manufacturing costs. cricket equivalent is, that is what they got. in college football, there's a big award called the heisman. to get ase, they hope break. they've got foxconn and maybe an expectation they will make phones for the iphone. in and they are hiring, it shows they are hiring
operations managers and apple clearly moving into this market and they need to to recapture growth in the iphone which they have not had in the last year. i'm better with rugby, by the way. let's go with google, entering a crowded field. it looks as though the chief executive of google could make some announcements. cory: i think what they are doing here is google interestingly seems to have a focus on not necessarily being first in a classic apple labor trying to be best. them doing it with advertising, trying to be very big in india, a place where they should be doing very well and maybe could be doing better. caroline: when it comes to
moving into this new market, is there a reason to be fearful of the chinese market slowing down? it seems as though the door is already bolted. i think the rules of the road are a lot clearer to do is this in india. you don't have to worry about government sponsorship of some businesses over others. companies know what they are getting into. they've been very close to oracle and there some big efforts to get closer to oracle and get their database and cloud software into india and google has a focus there. it's a huge market with so many people and to recognize this is the best chance to move the lever in growth. cory johnson, great to have your perspective. is out ofstory that this world -- elon musk in the news again.
spacex plans to return to flight on january 8, launching several satellites in california. it will be the company's first since the launch pad explosion destroyed its falcon nine rocket. the federal nation -- federal aviation administration is still reviewing the potential disaster and the largest second phase of the tank. coming up on wednesday's show, we will speak to the ceo of harm in life in las vegas. make sure you join us for that. this is bloomberg. ♪
announcer: from our studios in new york city, this is "charlie rose." charlie: these men and women lived important lives. they enriched our culture through their art and enterprise. they appeared over the last way five years of this program and we take a moment this evening to appreciate them. guest: they catapulted me into a status i don't think i would have achieved if i continue doing r&b or pop. would just have