tv Bloomberg Technology Bloomberg January 6, 2017 5:00pm-6:01pm EST
people were killed and eight wounded at the airport in fort lauderdale. police say the soul gunmen was taken into custody unharmed. hass official, congress tallied the electoral college has beendonald trump elected president. mike pence hasn't been elected president. obama thousand two publicly --- if republicans have a better plan, they should show their cards. and the government could wrap up on case against dylann roof friday. federal prosecutors are seeking the death penalty after he was
convicted in the shooting massacre at a south carolina church. dayal news 24 hours a powered by 2600 hurdles -- journalists and analysts. this is bloomberg. ♪ i am caroline hyde, this is bank of america --"bloomberg technology,". present himself ordered a campaign against the u.s. election. we dig into the new u.s. intelligence support as donald trump denies of the cyber attack.
first to our lead. a positive lead on wages brings the dow higher. average hourly earnings dropped 3% since the end of the last 2cession back in june thousand nine. that brought the s&p 500 back to record highs with the tech sector leading the way. what is leading the charge? this one it up on percentage point. facebook, amazon, netflix, and google all rallying almost 2% this week. for more we are joined by oliver renick. overall, it was a strong day for tech. >> the dow once again going back and forth around 20,000.
1230.lly popped around it is that there before falling off. is thery of the market largest degree of gains. anytime you have financial and tech stocks rallying together, that obviously helps lift the market when you have gains of upward of 4%. when you are looking at amazon and you are looking at apple, they did pretty well. the fact that these are back also goes in line with the idea that we have seen investors favor some of the higher data stock, some that move with greater swings relative to the market. >> apple helping the dow. analyst,talk to the
give us a sense of whether they think this is going to last. are we ever going to get past that symbolic number? >> the technical people take it more seriously than others. one person we talked to said we are burning out at this level. you may have trouble getting more buyers to take over that. the technical people that rely on those sorts of things take it to heart. but at the same time you have mostly the fundamental people who say, nothing has really changed. if you look at all the math behind anything you would calculate based on where the market is going to go, it does not change. multiples are where they were a week ago. continue to move upwards, all the earnings and multiples come into question. it is not whether or not the
market is getting too high, but again, this adds to the post-trump rally. >> how much does this affect the big tech heavyweights? the dollar being strong does not always help. >> it is not. past year or so, we had a big drop in earnings and a lot of that was due to the strengthening dollar. now the dollar is moving higher. the question is if we are seeing the trade weighted dollar move higher. according to history, it is higher. it is going to be an interesting question of whether or not a higher dollar or higher rate can offset what we do if we have this push toward government spending and fiscal spending. whether that puts a bottom line assistance to companies who will spend the money and build plans and hire people. but we saw the jobless rate is
pretty low already. thanks for being across all of these numbers. now turning to cyber security. released avernment report on u.s. hacking that found that president vladimir putin try to help the donald trump's campaign by discrediting hillary clinton. called theent trump meeting with the head of the fbi, ca and national intelligence quote constructive. and he also said he wants to bring together a team to combat cyber attacks on government networks. ,hris, when it comes to trump we know the intelligence
agencies went into trump tower. has he changed his opinion over whether russia was behind this or not? >> he has not changed -- he has not commented on his opinion. he has said he has a great respect for the intelligence agencies and it is clear that multiple countries including beena has had -- have trying to hack into u.s. intelligence in attention. -- intelligence institutions. at the same time, he is walking back from the edge of where he was. >> sensational statements coming from the support -- this report, saying that vladimir putin ordered this himself. are we going to hear any more details?
>> at this point, now that the c class five report is out, there is more material to dig into. you will see the testimony delve into some of these further details. it is significant that the u.s. intelligence beauty -- community is a naming vladimir putin as having ordered a campaign to meddle in the u.s. election and part of that was to benefit donald trump. >> there seems to be an olive to thegiven from trump intelligence community. is that something you felt on the ground in washington? point of views and the team around him, they feel it is untenable to continue
to have such a negative relationship with the intelligence community. is going to be dependent on the intelligence community to bolster arguments is that he wants to advance. he cannot continue to discredit them and then use them to advance his policies. what we saw today is trump starting to walk back from the extreme racism that he was leveling against u.s. intelligence. >> perhaps not walking back from his anger that he sometimes shows to the media agency and seems to want some kind of investigation about in the leaked report before he did. >> obviously trump will send out all kinds of different subjects and he sent out one today saying there should be a congressional investigation into information about
the intelligence report before he got a briefed on it. this is what we have seen trump do is when he is presented with facts that don't support what he believes, he tries to muddy the waters and raise tangential issues. on theis is is an issue side where he wants to talk about summit news media leaks, when really the weight and force of what happens is the actual intelligence report on russian hacking. of a bloomberg news, great to have you on the show. now a story we are watching, at&t and time warner say there may be an easier route to take to make the merger happen faster. they say they can also avoid scrutiny by not transferring any sec licenses.'s
the company says it is paring down to focus on a new product. heranos announces this after a earlier round of layoffs in october. over the past year, baroness -- they have been plagued with losses and public scrutiny. now back to the biggest tradeshow of the year, cs. microsoft is pushing to be a leader and just recently signed a deal. spoke about the company's plan to get behind the wheel. >> today we are announcing microsoft connected the vehicle platform. it is a set of cloud-based tools
that are going to empower the own aker to develop their car connected experiences. and by 2020, something like 90% of all the eagles on the road will be connected. it is a great opportunity to work with them. >> deepening by 2020 there will be automated driving on the road? 2020, 90% of the eagles on the road will be connected. this presents a great opportunity for us to work with they develops as their own in car experiences. division of the data occurring between microsoft and the auto companies? some of these companies have been wary about the ownership of the data in the car. what agreements do you have in place? >> we are not going to be
building our own autonomous self driving car, but we are in the business of producing software that we believe will enable car companies to reach their goals and ambitions in this space. many of them have turned to us as a partner. we will not be competing with them on that front. we have the tools that they can use to really engage with some of these complex technologies they are dealing with as they go through their digital transformation. things like artificial intelligence. we can combine the data that we have and the data that we have -- data that they have to come up with a new customer insights that will bring some exciting new opportunities for the consumer to utilize the time they spend in their vehicle.
which, for many of us who have long commutes, that time we can use to be more productive in the future as we move toward the world where we are headed where we are fully autonomous driving. we want to be there to get the car manufacturers the tools to produce those experience that it's -- experiences. we don't see any individual is having the same breath and that -- depth that we have in the space. we canproductivity that bring together with our deep knowledge in the artificial intelligence field and combine that in a connected fashion using our new connected legal platform. we feel very good about this position to help the automakers
reach their goal. >> that was microsoft business development chief peggy johnson. also, plenty of innovation on display that will drive the technology sector in 2017. but there are also gadgets that will be hard to catch on. throughout the hour, alex webb will give us a taste of the weird and the wacky side of ces. >> the latest "star wars" film was all about working out how to destroy the death star. now they have come out with this speaker, the "star wars" death star speaker. >> now, another company we have been watching. samsung electronics lost
billions after its samsung fiasco, but now it has reported its best operating data in three years. the salese placed year on the year and you can see just in the quarter, sales were lackluster. down by almost one percentage point. but check out the operating profit. operating income year-by-year up almost 50%. whenould have thought it you see such activation over what happened to the combustible galaxy note seven. you can call it a corporate crisis or samsung, but this does not speak of a big corporate crisis. samsung is not only do when it's on mobiles sell well, but think about cheap competitors in china.
more out, was more about the connected car than anything else. >> increasingly, what we are seeing is the merging of these different industries and the big thing has been artificial intelligence. the way it is being brought into the home come into the car, and what we are going to be able to do with it. >> microsoft really fighting to own the voice of this space within the car. this has been a fierce fight. we have seen alexa dominates but everyoneod, wants in when it comes to personal assistants. >> this is going to be the way we interact with marketers, our light switches and regulators. -- bridges. they want to make this the home in our home.
there has been this hope for artificial intelligence and now we have the gadgets to go behind it. alexa has taken a big lead. ces have been ubiquitous at from what everyone has told me. home make inroads? mark zuckerberg put together his on assistant with morgan freeman. you are going to see more of that and he will pick up more space at ces in the coming years. it seems that apple has dropped the ball here? >> apple does not come to ces. apple isn't mean that not here in some capacity having meetings in hotel rooms. but the question has been more advantage here in
the ai space. siri was the first out of the gate. after that, it has somewhat stagnated. but apple has hired a guy from carnegie mellon who is a big name in the ai space. there is hope that maybe apple accelerates a little bit, but they have ground to regain eventually. >> that was alex webb and tom giles. stuff, covering serious alex has also been hard at work seeking out the back is gadgets of ces. here is a look. >> this is the little robot from auto pets in michigan. in seven detects waste minutes and wicks away the garbage and replaces it with a new cap litter. r. cat litte >> the utopia of technology, i
am sure. the wearables market is looking to pick up the pace. up this monday on bloomberg television, eu commissioner will join my colleagues for an exclusive interview. join us for that conversation at 10:30 in new york. and if you like bloomberg news, check us out on the radio. you can now listen in the u.s. on sirius xm. this is bloomberg. ♪ . . wow, x1 has netflix?
♪ grace and frankie, hemlock grove, season one of...! ♪ show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. anything with a screen is a tv. stream 130 live channels. plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. >> i am courtney collins and you are watching "bloomberg technology." let's begin with a check of your first word news. rick scott says the citizens of florida do not tolerate senseless acts of evil. he spoke today after getting
briefed on the deadly shooting at fort lauderdale airport. spoke to the president-elect and vice president elect who promised to provide necessary resources. a fort lauderdale official says the suspect was a passenger on a canadian flight with a gun in a checked bag. they also believe he loaded the weapon in a bathroom. five people were killed and at least eight wounded. the u.s. senator says the suspect had a military i.d. with the name estimates on to alex: s tavon -- estaban santiago. >> we have the shooter in custody. he is unharmed. no law-enforcement fired any shots. the subject was being interviewed by a team of f.b.i. agents and homicide detectives. >> the u.s. intelligence community released an unclassified report on russia. the report concludes vladimir putin ordered an influence
campaign aimed at the u.s. election. it goes on to say the russian government aspire to help president-elect trump's election chances when possible by discrediting secretary clinton and publicly contrasting her unfavorably to him. all three agencies agree on the assessment. president obama has renewed his campaign to keep the affordable care act in place. criticalerview, he was of the g.o.p. plan to repeal obamacare and replace it. ofsident obama: the strategy repeal first and replace later is a huge disservice to the american people, and it is something i think, whether you are republican or democrat, you should be opposed to. >> the president said if republicans can make obamacare better, he is all for it. the french presidential candidate says the u.k. economy is weathering brexit and thinks france should take the lead next.
the far right candidate says if she is elected, she will immediately put that to a national referendum. minister nicola sturgeon says in response, she wants to keep scotland in the single market. scotland voted overwhelmingly to stay in the bloc. the obamas are throwing a party tonight in what could be the last big bash before they leave the white house. no word yet on official guests. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. >> ♪ caroline: this is "bloomberg technology." i am caroline hyde. we are heading back to ces in las vegas where the fitbit has
rolled out new features for the new year. 2016 withhad a tough a 75% collapse in the share price but is looking to bounce back by adding new social features and offering financial incentives for meeting fitness goals. will it be enough to convince consumers it is a must-have item in an increasingly crowded market? joining us from las vegas is the fitbit c.e.o. and cory johnson. wonderful to have you join us. let's begin with the financial incentives to keeping fit. you are sealing a deal with united health care and qualcomm. how wide will this go? >> it is a pretty big deal for the industry. everyone has talked about when insurance players will connect with wearable companies and provide incentives. this is the first real integration that proves that out. united health care is going to provide up to $1500 in incentives for people to reach physical activity goals using
their fitbit charge. i think this will be the first of many deals of this type in the industry. it is a real indication wearable health technology can drive real health care outcomes and lower costs. caroline: corporate wellness plans made up less than 10% of your overall revenue. can you give us how much corporate wellness will make up in terms of revenue for fitbit? >> it is less than 10% of our revenue today. it is an area of the business we are highly focused on. i think we are inspecting alex: expanding the last expanding on employers to working with insurance companies. it is demonstrated we are continuing to diversify revenue stream sts. cory: do you see the usage differ? do the people use them for a longer time in a less traditional user? >> i think the initial data is
starting to see that. united health care has done a lot of internal research before rolling out this program in a broader way. incentives, $1500, you can earn up to $4 a day. that is a powerful incentive. i think it will be an important tool keeping people engaged and retained on the program. cory: i also wonder what it means for product design. do your product design goals differ and go more towards wellness and less towards running, for example, as you design products for that marketplace going forward? >> i think some of the features might shift. we had to develop some custom functionality for united health care to be part of this integration. we in conjunction with them developed some algorithms for a device that measures things like frequency, intensity, and tenacity of the physical activity of the user. there will be different metrics that will be relevant to the insurance market. caroline: you talk to how this
is an industrywide move. in the u.k., i have seen apple with the smart watches and vitality the health care provider over there. who is the key competition? we have seen smart watches getting cheaper. they are trying to tackle some headwinds. how much of the pie can you keep that fitbit? >> i will challenge the notion our competitors are getting better on the hardware. we still have to see smart watches that achieve more than one day battery life. a lot are still hobbled to the fact they are confined to a single ecosystem. the reason we have such a leadership position, we are number one in almost every country where selling and, is the fact that we are cross-platform. we are focused on health and fitness and have a demonstrated history of working with commercial partners, employers, and now insurance companies to roll out solutions. cory: the last time i went to , last year, it was so much a
show about the wearables and the competitors coming up with wearable devices. everyone from jawbone to under armour and hundreds of others. and yet your market share remains strong. what is helping you maintain that market share? >> there is a lot of players falling out. you are starting to see consolidation in the industry. we were set to pick up a lot of assets of pebble who was an early pioneer in the category. the brand fitbit really stands for health and fitness. we built a lot of loyalty over the years. the fact that we are cross-platform. we have a broad selection of platforms -- products with long battery life, etc. we had a huge community of users. we have shipped over 50 million devices. that community has built a tremendous competitive mode for us over the years. caroline: we have to spend more
--will you have to spend more? >> m&a is important part of our strategy to remain competitive. we are selective in the type of deals. because of our leadership position, we see every opportunity in the category. we have been selective. we have only acquired three company so far. it will be an important tool for us. cory: prison in and commies spent tens of millions of dollars in the suits. spent tens you have of millions of dollars in a lawsuit with java. >> our preference is to compete and win in the marketplace. i think our numbers clearly show that. we are number one in almost every country we are competing in. caroline: what about the software part of the puzzle? i'm intrigued by the deal you have with united health care and qualcomm. at the moment, you are the hardware factor. how much will you be able to boost revenue when it comes to software? focus for fitbit this
year was the software. we did not want hardware this year. that is to signify we are more than a device company. we are a software and solutions company. the things we launch at ces including integration with third etc., ther bicycles, software integration deal with united health care demonstrates the fact our commitment to software will be one of the key differentiating factors in maintaining leadership in this category. and we are excited about it. caroline: the fitbit c.e.o. and editor-at-large cory johnson, great to have you with me. as we wrap up the week that was, alex webb has been showing us some of the best gadgets you never think you need. check out this high-powered tool.
is created in indiana. they say it is the world's first educational rubber ducky. it interacts with an ipad to teach kids about shapes, stories. and they are trying to prove it is not a load of quack. caroline: maybe you need it. coming up, apple's top executives took pay cuts last year. meanwhile, c.e.o. tim cook may have his biggest payday yet. we will explain compensation at the tech giant next. ♪
caroline: there were no details on the pay packages for one of the biggest c.e.o.'s intech. you can see, it is a big jump from 2016, almost double. talk us through it, how they are dividing this up. this is not this year completely. >> that is right. salary and bonus he gets for his performance this year. it comes from a stock award equity in 2011 when he was initially hired a c.e.o. part of it is tied to apple's stock-price performance and divisions paid out. and part of it is paid if he remains on the job. there was a big chunk of this award that bested last year. $136 130 $69 in total -- million in total. caroline: almost doubling the
stock price will since he has taken over, you can argue why this happened. i have the function users can use. in 12thdonald cook came in 2015 when it comes to the most highly, sated c.e.o.'s. if he gets 145 lean dollars, that will parachute -- $145 million, that will parachute him up shy of google and ahead of elon musk. big pay packages for the tech giants. what about a $350 million he has earned? even more uptick when it comes to 2017 and 2018? >> if he stays on the job and apple shares keep doing well, there is more money to be collected for him. he has gotten about $350 million worth of shares since he took over as c.e.o.
the second half of the shares are left to be earned over the next five years so there is more money for him to be made and there could be more big payouts in years to come if apple keeps doing well. caroline: more money for tim cook, not for his top lieutenants. they saw their money go down in 2016. >> it depends on if you consider $22.8 million a lot of money or not. their pay dropped a little bit. salary stayed the same and so did the equity awards at about $20 million. when did go down was the cash bonus -- what did go down was the cash bonus for 2016. link pay toto performance closely, so they do drastic adjustments to bonuses even though the misses in the gulf for net sales and operating are not that great. caroline: the compensation
disclosures did not include everyone. everson is the most important employee at apple, why were his numbers not published? >> there are legal reasons why his pay does not have to be six disclosed. he is not classified as a reporting officer for reporting purposes. apple does not have to disclose how much he makes. covering executive pay is something i have injuries about for a while because he is a very important employee. he has been part of developing the iphone, the mac, a lot of important things. assume he gets a good chunk of change as well. we just do not know how much it is an apple does not have to disclose it. caroline: imagination wonders. thank you. with aides to
caroline: taking you back to our ces, it is hard to think of a company in radio working harder to remake itself than iheartradio. they announced two subscription services as the country's largest radio operator is buckling under debt and struggling to stave off bankruptcy. scarlet fu spoke with the chairman and c.e.o. bob pittman on his plans to fend off competition.
>> iheartradio with the all us as with napster gives unique position because all the other subscription services, the ancestor is the l.p. or c.d.. they are a music collection. we are coming from the radio side. 70% of spotify users discover their new music on fm radio. where people discover new music is where they want to add it to the collection. in the old days, you have to remember you wanted to add it. with our service, you push add replay and can play it again over the air on fm radio which is where the vast majority listen to the radio. for us, it is this interesting way to make radio interactive and connected to the music collection. >> i like the way you talked about there being ancestors. i wonder how meaningful is
on-demand service. is it a primary driver for the changing method of delivery for radio content? >> no. radio contact is at the end of the day companionship. 25% of our stations do not play music. they are taught, sports, etc. it is one more benefit you have and we are doing one more thing. we have events, social. we have free iheartradio service which is fabulous as it is. now you can make radio interactive and come alive, and you can take that music collection and put it with your radio as opposed to their being two separate pieces unconnected. >> are streaming or on-demand services a strong driver of revenue and able to contribute to profitability? >> i think they will be a contributor to revenue at a certain point. we have a lot of revenue. we have over 200 million users every month. we are one of three companies in
the united states that reach over 200 million people. we have a lot of competition for subscription revenue to be that significant. we hope it is meaningful. it is not our primary focus, but it is a nice add-on for us. >> i like the way you put that. one thing your company is struggling with is the $21 billion cloud of debt hanging over you. revenue has been relatively stagnant. if it is a good company with a bad balance sheet. is this something you can grow out of? >> let me talk to you about the revenue. if you look at the iheartradio segment of our business, we have had 14 straight quarters of year-over-year revenue growth. i think there is probably not many traditional media companies that can make the claim and probably not many companies our size in the media business that can make that claim. the operating business has been doing very well from a
standpoint of transforming it from old media into a new media company with digital plays, events, social, etc. this company has always had a lot of debt. when i joined the company, it already had debt from the leveraged eye out done -- by out in 2007-8. for us, we are the first step -- first up is only to get the operating business transformed which is underway and has seen evidence of success. the broadcast audience is up, so we are not being hurt by digital. our digital audience is up. it is a nice add-on and all the other pieces fit together. doingou have a company well, we will figure out how to get the capital structure more normalized. >> understood. i wt to go back to the balance sheet because on the bloomberg we have a function that allows you to see the debt distribution. $21 billion in debt.
almost $10 billion will have to be paid off in the next three years. there is a wall of debt coming due on 2019. how do you plan to address that before you hit the maturity wall head-on? >> i would not be the person to tell you exactly how we will do it. probably something i would not talk about here. clearly, i think it starts with having a company that is valuable and a business that people want. then it is a matter of dealing with the conversations along. >> that was the i heart media chairman and c.e.o. bob pittman. as we wrap up the week that was, alex webb has one more look at some of the wackiest gadgets he found on the showroom floor. after a couple of exhausting days traipsing around i have thevegas, latest product. a $5,000 massage chair.
they sell 100,000 units a year. now they are looking to come to the u.s. all of my aching muscles are being massaged within an inch of falling asleep. that is what i'm ready to do. ♪ caroline: he gets all the fun. alex len reporting on the ground at -- alex webb reporting on the ground at ces. spacex is set to launch 10 satellites on monday. this will mark the company's first flights since the rocket lou up in september -- blew up in september. it's shares plunged in the wake of the last accident and skepticism remains high. short interest on the stock is at a record. the c.e.o. said the company is counting on spacex to take 17 new satellites into orbit in seven separate launches. that does it for this edition of "bloomberg technology."
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: we begin this evening with a series of conversations examining the legacy of president obama. in two weeks, he will leave the white house following eight historic years in august. among his signature compliments or comprehensive health care reform and overhauling financial regulation in response to the worst economic crisis since the great depression. donald trump's election has raised questions about whether these and many other achievements of the obama presidency will endure. joining me from boston is stores kearns goodwin. she is one of