tv Bloomberg Technology Bloomberg July 31, 2017 11:00pm-12:00am EDT
>> i am alisa parenti. you are watching "bloomberg technology." this is first word let's start with a check of your first word news. sarah huckabee sanders says anthony scaramucci has no role in the administration at this time. scaramucci was removed today as communications director after 10 days on the job. sanders says all staff members plan to remain. they will report to new chief of staff general john kelly. meantime, president trump says retired kelly will do a fantastic job as chief of staff. the former homeland security secretary was sworn in this morning. he replaces reince priebus. has shut down a
trial balloon on taxes from top advisor steve bannon. according to a person familiar with steve bannon's thinking, he supports a 44% top income tax rate for americans earning more than $5 million per year. the money was to be used for middle-class tax cuts. sam shepard has died. a spokesman says the pulitzer prize-winning playwright, oscar-nominated actor, and celebrated author died last week of complications on lou gehrig's disease. he was 73. in los angeles, they have reached a deal with olympic leaders that will help them host the summer games. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. "bloomberg technology" is next. ♪
emily: i'm emily chang. this is "bloomberg technology." coming up softbank's end game. ,masayoshi son makes another run at the u.s. cable market, with a direct offer for charter. why the move to acquire america's second-biggest cable company is the japanese billionaire's most ambitious target. plus, the three kicks off a new era in electric cars. but will tesla deliver on his promise to the mass market? i check out elon musk's most affordable car yet and we check out tesla's earnings report. all bets are on after 400 million shares of snap hit the market. we will look into the impact of today's lockup expiration of that the earliest investors have had their opportunity to sell. first to our league, the turmoil continues in washington. anthony scaramucci has been removed from his new job as white house communications director just 10 days after he joined president's staff. the white house said, "mr.
scaramucci felt it was best to give new chief of staff john kelly a clean slate and the ability to build his own team." earlier, sarah huckabee sanders commented during the briefing. >> he does not have a role in the trump administration at this time. we put out a statement earlier announcing that. and i don't have much else to add. emily: we are joined by alex in our washington bureau. boy, that was fast. what do we know about what went down behind the scenes? >> it was a memorable 10 days. here is what we know. either anthony scaramucci decided to resign and offered his resignation to john kelly, the new chief of staff, or john kelly the new chief of staff asked him to resign, exerting his authority over the white house on his first day on the job. something that sarah huckabee sanders said she told an money she wasn't going to talk about it anymore was that john kelly now has total authority over all
other personnel in the white house. everybody answers to him now. that wasn't the case before he came on the job today. even steve bannon, jared kushner report to john kelly now. before him, they reported to the president. emily: interesting. so what moves do we expect john kelly to make? how will he remake the white house team in his image? >> i think this is the big one. sarah huckabee sanders said no one in the senior staff will leave immediately. one outstanding question is sean spicer's future. he quit 10 days ago, the same day anthony scaramucci started his job. we wonder now whether sean spicer might return to some kind of a role in the white house, maybe communications director. that job is open. emily: we have yet to hear anything from scaramucci. any word on his view of how this went down? >> no. you will remember last week, the new yorker published an really inflammatory interview with scaramucci in which he
profanely criticized both reince priebus and steve bannon. that interview didn't go over well in the white house. since then, he has been quiet. he hasn't returned our calls or our emails and text messages. you haven't seen him on television. before that interview, he was a big advocate for the president on television. he has gone radio silent since then, and he is not talking to day. emily: i have his twitter account up. i will let you know if anything changes. alex wayne in washington, thanks so much for the update. now to a story we are watching. masayoshi son wants in on the u.s. cable market. softbank is determined to use charter communications to get get there one way or the other. softbank's planning to make a direct offer to charter. this is after charter rejected an earlier proposal by sprint, which is controlled by softbank. would mark charter
the most ambitious target for a company valued at $101 billion. does softbank have the capital to get the deal done? 'sining us now is bloomberg elstrom.e fro peter, what exactly are his aims? >> he has been looking for a solution to the sprint business. he bought into sprint when it was the number three wireless carrier in the u.s. it has fallen behind t-mobile and is now number four. it looked like the simplest deal was to combine sprint and t-mobile. it looks like there is a more accommodating administration now in the white house, but given that the option is a little complicated, he is looking for something more ambitious, therefore the gambit for charter. charter came out over the weekend and said we want no part of sprint. so now sources have been telling us that masayoshi son is looking for a bigger deal, where softbank and charter would be combined. emily: is charter more likely to
do a deal if it is coming from softbank? >> management has been very clear that they don't want the deal. run by the management team, which has been successful. tom rutledge has been successful as ceo. they think they can push up stock price on their own. they don't feel like they need to buy the struggling wireless business in order to do better. emily: what are you hearing in terms of the willingness or unwillingness on charter's side? >> charter really has no interest in sprint per se, at least not at the current valuation. the question for big cable companies, charter and comcast, is do they need to offer wireless business? if they do, do they need to own the economics of a wireless company or can they partner with an existing wireless company? last week, comcast's ceo said, "we don't need to own a wireless company. we are happy partnering with existing wireless companies." charter has been in that camp, as well. the real question for a masayoshi son deal with charter
and softbank would be, what does john malone want to do? john malone is involved in the transaction. he is a significant shareholder of charter, and the question is, does he want to get in bed with masayoshi son and all the issues associated with that highly levered company in japan. emily: does softbank have the capital to pull it off? with all the debt they already have? >> masayoshi son has been very creative in terms of coming up with capital to do things. just a few weeks ago, he close this vision fund with initial capital commitments of $93 billion. he says he wants to take that to in japan, the banks have lots $100 billion. of cash. they are offering negative interest rate to lots of borrowers and they are able to lead. softbank has been a solid bet in the past. it is possible he would be able to call this together. another important point is that they own a stake in alibaba that is right now worth over $100
billion, so if there is a way to extract that capital, they could use that cash and go after charter and put together a deal. it would be enormous and have a lot of risk built into it, but it seems like masayoshi son would be able to get the cash. emily: how would this shake up the overall ecosystem? >> this would be a big transaction. as peter mentioned, there are four wireless players in the u.s. that is arguably one too many. there has always been a lot of pressure with wireless in the u.s. for those players to get together, t-mobile and sprint. that makes the most strategic logic here, but to the extent that sprint can't get a deal done, it has been looking for any partner whatsoever to do a deal with to shore up its balance sheet to improve its competitive position in the marketplace. charter is the latest name on the list. emily: peter, we have reported softbank plans to take a big stake in uber, that some uber investors wanted this to happen and that travis kalanick started
negotiating this before he resigned. now there are reports it isn't happening. what do we know? >> it is interesting to see how son has been interested in this ride hailing business. he has invested in many of the major players throughout asia. didi is the biggest player in china with $5 billion in the company. he has look at graph in southeast asia, ola in india. uber would add to that and give them a global presence in ride hailing. it is unclear whether antitrust regulators would be ok with that or if uber's backers would be ok with that deal. emily: we will keep watching. peter ahlstrom from tokyo, in town. paul sweeney of bloomberg intelligence, thanks so much for joining us. well snapdeal has rejected a $950 million acquisition from a rival flipkart. the two biggest local players in india's e-commerce discussed joining forces to compete
stake to sirius xm and dismissed their ceo. sticking with music streaming, the number one paid music streaming service, spotify, is expanding their business model again. this time, spotify is eyeing a growing demand for podcasts, a field currently dominated by apple. they plan to experiment with new media, increase the time customers spend on the app, and boost their ad sales. here with more on the european startup is caroline hyde with us from london. tentative steps for spotify. what have they agreed to so far? >> a bit of backscratching so far. they will start to promote podcast. they will do it within the app itself. you might might see advertising on billboards and buses. in return, some of the podcasts will start promoting spotify. the bill simmons podcast, podcast america, there is a deal
going on. if you have your eye field on spotify and are an addict already, you can go into andreessen and horowitz's podcast. they are already available. this is something they have been playing up behind the scenes. they commissioned original content on the music business. they are expanding that and will be commissioning a new batch of original podcasts in the coming months. so clearly this is a key move. about is this all diversifying the business model before an ipo? >> i think it is. the share listing is coming up in october. they are looking to ramp up where they get the revenues from. they have to give away so much
in terms of royalties to music labels. they are looking at new areas of growth and wooing advertisers. no wonder, when the teenagers and adults in america, 15% of them come are listening to a podcast for week. this could be monetized. we understand advertising revenue is set to grow 85% this year. this could be more than $200 million. it not only helps with advertising, but it also helps with addiction to the spotify app itself, because they don't want you going into an apple app while you are using spotify. they don't want you going into soundcloud.s pandora has its own podcasts. it really wants to keep you addicted overall. what is interesting is, music labels want them dabbling around the scenes. they like the fact that spotify has injected growth and the into the music industry. they have played around with television, as well, and video. that hasn't worked, but we will see how they ramp up podcasts. emily: let's talk about
soundcloud, which is also face a force in europe. spotify was at one point eyeing soundcloud. what is going on? >> another desperate attempt, it would seem. this was such a beacon of growth and a standup performer in europe. in berlin, i used to talk a lot, they had real problems. they have been closing offices in london and san francisco. they had to axe 40% of their workforce and they are looking to sell a majority stake to two private equity companies. we don't understand which ones they might be, but we do understand that they are close to deals with selling these two particular stakes. it would hand over control of soundcloud, but it would notably give them some cash to keep funding themselves. this is still a company that is loved by independent musicians in particular. get this, they have something like 175 million unique users per month. compare that to spotify that has 140 million.
it is not always apples with apples, but still there are a lot of people that love the content soundcloud brings. they have never been able to monetize it or charge for subscriptions. they haven't gotten off the ground enough to make money. so now it seems like another area they are trying to push into keep themselves afloat. we understood that spotify wasn't going to take one billion euros that they wanted and say, so now it looks like private equity is the way out. the deal is not done yet. it could all still unravel. emily: all right. thank you so much, caroline hyde, for all the twists and turns from london. coming up, apple complies beijing's requests, removing vpns from china. we will discuss the decision later this plus, here it is. hour. the brand-new tesla model three. the big question is, will this be just another electric car, or a car that will change the future of all cars? ♪
♪ emily: a big takeover in the cable tv business. discovery communications agreed to buy scripps network, the parent of hgtv and the food network. the deal is valued at over $14 billion. this could help discovery cut costs come again negotiating leverage and expand internationally. tesla continues to fall after unveiling its model three. however, optimism about the electric car has contributed to the shares climbing 53% this year. elon musk said ahead of friday's events that tesla took in over 500,000 deposits on $1000 apiece. will the car live up to the hype and appeal to the masses?
ouring us now for more is reporter who covers everything tesla. elon musk drove up onto the stage and jumped out like a rock star. what are the reviews so far? >> the early reviews are very positive. this is part of the tesla dna. it feels like a tesla. it was designed by the same design team. you look at it and compare it to the other cars and it is part of the tesla family. people are happy with this. emily: the big question, here he is, we have to watch. here he is stepping out of the car, lots of applause. the big question of course is, can tesla deliver? there was a moment on stage were he acknowledged, yes, are entering production hell. take a listen to what he had to say. >> frankly, we will the in production hell. welcome to welcome. [laughter] >> welcome to production hell. we are, for at least six months, maybe longer.
but you guys know that. you are veterans. you have been through this. i look forward to working alongside you in this journey through how, and as the saying goes, if you are going through hell, keep going. emily: he is saying they can make 20,000 model threes per month by december? do you believe it? >> that is a steep production ramp. that is why you are seeing shares fall today. the model three launch was supposed to be a big event, like, the car is here. the fact that he talked about production hell after they went through production hell already with a different model. i thought the model three was designed for manufacturing, was going to be easy, they had learned their lessons. he is signaling that the ramp is going to be challenging. he is holding to the volume figures, but will they be produced with consistent high-quality? that remains to be seen. emily: you have reported on turnover at the company,
especially in the executive ranks. how could that impact their ability to get it done? >> tesla has always had turnover, as many tech companies in silicon valley have. i haven't heard high-level production executives leaving recently, but there is a big question about autopilot. you have seen turnover on the autopilot team. the reviews i have read thus far have not included cars that had autopilot, so i'm not sure where that stands or if they are waiting for the next version. there is a lot of risk. there are also a lot of opportunities. that is what makes this so compelling. emily: the majority of people are buying cars for less than $25,000. this car is $35,000. even more if you do some of the add-ons. will this really reach a mass-market? >> that is what investors have held on. it is $35,000 bare-bones. if you want a color besides black, autopilot, premium interior long-range battery, you , a quickly get to $59,500, which is the fully loaded car. mass-market, to me, $59,000 is
not mass-market. then there is the big question of tax credits, which phaseout over time. they are not making the $35,000 car until later this fall. so i think there is a question as to where ever you are in the queue and what kind of car you will get as to whether you will qualify for the tax credit. emily: earnings are coming up. what do you expect? >> kitchen sink. is he cannot talk about china and their plans to manufacture in china? that is a huge market. will he talk about china and autopilot parity? what is happening to the sales of the model x and the model s? are they being cannibalized by the model three? is there an osborne effect going on? how will they get people to buy? you need to sell cars while you are producing this one. emily: at the same time, you have some people say the model three launch could be as big as the iphone. it brings us back to the question that i asked, is this going to be a just another an electric car or an electric car that will change the future of how we use cars? what do you think?
>> it is unheard of an unprecedented in the auto industry for there to be 500,000 reservations for a car that is not out yet. that is amazing. half a million people, largely in the u.s., placed deposits for a car they might not get until that is unheard of. 2018-2019. but are those reservations going to translate into sales? that remains to be seen. emily: dana hull, thanks so much. coming up, snap shares trade at peak volumes as insiders have their first chance to sell. we will look at what is ahead for the company i had of next week's report. if you like bloomberg news, check us out on the radio on the bloomberg radio app, bloomberg.com, or sirius xm. this is bloomberg. ♪
>> it is 11:29 in hong kong. these are the latest first word news headlines. u.k. consumer confidence is steady. indicates a level only slightly higher than the post-referendum low. a backward looking gauge fell housefourth month, while value metrics dropped to the lowest since 2013. shinzo abe's reforms have improved economic conditions, but not enough to achieve a
durable exit from deflation. imf is now recommending structural reforms aimed at increasing inflation, especially policies to boost wages. recent civilian prime minister is in court making her defense. she was deposed by the military, facing allegations of corruption and mismanagement. she poured billions into supportin she poured billions into rice subsidies. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> a check on the markets. like it iss partying
december 2000 seven, extending a rally for regional equities. copper at a two-year high, steel rising for a third straight day, crude above $50, and brent above $52 a barrel, sending shares in sydney higher by .7%. earnings are fueling gains in japan, the nikkei 2%, set to snap a two day drop. and the kospi almost 1% after exports topped estimates and inflation faster than forecast. and the leading gains, aussie dollar edging closer to a two-year high ahead of the rba. you can see the aussie has gained against its g-10 peers, and given the slump in the dollar, even jawboning by the rba will not be enough. for much inot count the current environment of ongoing dollar weakness. ore couldin iron
support moves for the aussie, trading at the highest level since march, extending gains after a one-day surge. ♪ emily: welcome back to "bloomberg technology." now to snapchat. snap shares feeling the pressure. the parent company of snapchat dropped 1% after a roller coaster day of trading. shareholders got their first opportunity to sell since the march initial public offering. joining us now for more is bloomberg technology's sarah frier, who covers snapchat. we have a chart that shows trading volume, 49 million shares of snap traded today compared to an average of 15 million. a lot of activity out there, so what is going on? >> it is the first day that some insiders can sell shares, so when you are going from being a
private company with a very small valuation, now it is public, but i think the reason we haven't seen the stock dropped his many people were buticting it would drop 1%, not any crazy margin. it is already near its all-time low. it is too close to the earnings report, where people will get a lot more information about the company's trajectory. emily: that is coming up in a couple of weeks. >> that is coming up on august 10. so people are trading, and there is a lot of interest, but there is not a lot of new information. emily: what are we expecting to hear on august 10? >> everyone wants to know about growth, both growth in terms of the user base and in terms of the revenue. the last earnings report, i think you remember, stocks dropped incredibly, more than 20% because of concerns that the company was just not growing as exponentially as people expected given the excitement around the ipo. emily: is a typical? with facebook and twitter, did
this happen when the lockup expired? >> yes. there is always a lot of pressure on the stock and there is always a spike in volume. some insiders will have to wait a little longer to sell, so this is one of many lockup expirations we have seen. we don't know how many shares were available to be sold today. there are some estimates out there. j.p. morgan saying it was probably around 400 million. emily: there are concerns over about executive turnover. we heard reports of executives leaving. >> they just replaced their head of hr and the head of legal. this is something we definitely sought facebook after their ipo. a lot of people who have been there for a long time, taking the company public, they feel like they have accomplished something and they are ready to move on. there is always a mix of reasons. we can't say for sure. emily: they have maintained that copycatting is a form of flattery. do we think he will change his
tune when it comes to this quarter and facebook making even more moves on snapchat? >> i think that is top of the line for all analysts covering snap. why isn't evan moore scared about facebook and what they have done to copy the product? the company is holding fast in their claim that they have something completely different. it might be to their detriment. one of the things they have been saying is they don't care as much about people having more friends than they do. they are willing to keep it a small community. they don't want to be like facebook in terms of getting so big that it becomes less intimate and less cool. but what might happen with that is that it might hamper their ability to grow this network, and therefore be a more formidable company in terms of attracting advertisers. so that could be one area that people drill down on on august 10. emily: i know you will keep us
updated. sarah, thanks so much for stopping by. over the weekend, hackers exposed flaws in u.s. voting machines at the cybersecurity defcon.nce the first vulnerability was found within 90 minutes. concerns about election hacking spiked after u.s. intelligence groups said russia had attempted to interfere with the 2016 election. joining us from washington, anthony, senior managing director and head of cyber security at a business advisory firm. anthony, what is your reaction to the fact that in 90 minutes, a voting machine could be hacked? >> thank you for having me on today. i think this is a serious topic. it is a really serious topic involving our electoral process. given the current climate, this exercise, this was a necessary exercise as we work as a cybersecurity community works to understand the vulnerabilities in our electoral process, in our electronic voting machines. i applaud the cybersecurity
community. i think it is a necessary step as we work towards a more secure electronic voting machine. not enough attention is given to has been given to the topic over the years, and i think it is a step in the right direction. emily: interestingly, you have federal and state officials saying it would be extremely unlikely for hackers to try to change votes, to manipulate vote tallies. does that matter? >> yeah, i mean, of course that matters. in reality -- emily: what is the point of hacking a voting machine if you are not going to change the results? >> of course, we want to ensure the public has confidence in the devices they are walking up to and using to cast their ballots. to actually affect an election at the scale that is necessary would be extremely difficult to do without being detected. research has gone into this over the last few years, and certainly leading into the 2016 presidential election, but it doesn't negate the fact that we
still want the community to recognize this as an important topic, and we still want to take necessary steps to ensure that people have confidence, the public has confidence, as they cast their ballot in whatever election, presidential, state, or local. emily: you used to work at the fbi. i'm curious about your thoughts on state-sponsored hacking, especially when it comes to russia. what is the biggest risk? >> there are many risks involved with cybersecurity, and that is one thing we do when we work with our clients. we advise them, you have to understand your threat landscape. what are the attackers, what are these malicious cyber actors, going to try to do to your firm? there are many different malicious cyber threats that exist on the public internet. so of course, including nationstates and criminal syndicates, so of course, the risk is varied. they run the gamut.
it is our job as a cybersecurity community to identify those risks and educate people so they can manage those risks and minimize the effects of the those cybersecurity risks. emily: when it comes to something like voting machines, is there no such thing as hack-proof technology? and if that is the case, what is the best option? >> well, i don't think this is just a voting machine problem. i think, as our technology continues to evolve over the next 10-20 years, remember back when president obama was elected to office, the iphone had just been introduced. instagram was just gaining popularity and bitcoin didn't even exist. now those are now commonplace technologies that we use every day. the reality is, as technology continues to advance, we need to stay one step ahead of the that technology, and we need to identify those cybersecurity risks and try to minimize the risks to certain entities.
that is what we can do as a cybersecurity community. that is what our government can do for their people, is work diligently to get in front of those risks, identify them, and try to get in front of them so they don't actually have any negative effects on the people or the people using the technologies. emily: anthony, senior managing director and head of cybersecurity at fti consulting, thanks so much for stopping by. another hacking headline, hbo says hackers have stolen upcoming programming. according to reports, the theft includes a script from a yet to be aired episode of "game of thrones." hbo's chairman didn't acknowledged in a message to that there was a cyber incident -- excuse me, they did acknowledge that, which included some of its programming. coming up, china is tightening internet access, and that is causing apple to make a change in the app store. we will tell you the details
in a story we have been monitoring. apple has removed some virtual private network apps from its stores in china. this move puts apple in line with china's decision this year to ask all developers operating vpns to obtain a government license. vpns are popular in china as they help users get around the great firewall. apple says the vpn apps remain available in all other markets. these networks are one of the most popular ways for foreign businesses in china, along with visitors, to access banned websites like twitter and facebook. whatsapp.disrupt i recently spoke with adam siegel, senior fellow for the council on foreign relations, about china's tightening of internet access. >> it is part of a long-term trend. we have certainly seen that ever since xi jinping took control, he has tightened control over the internet and civil society more broadly.
so even if this seems to be a temporary bump in front of the party congress coming up in the fall, i suspect it will continue in other ways as we push past that. emily: in one of the more bizarre turns, we are also seeing the blocking of online images of winnie the pooh, some online commenters saying there is a likeness between winnie the pooh and president xi jinping. what do you make of that? >> it is an example of the cat and mouse game that happens between chinese internet censors and chinese users. users come up with a way to get around the sensors, either pictures or homonyms for chinese characters. the censors figure it out and try to block it. it does make the chinese leadership look, if not pathetic, then at least insecure that they feel they have to block pictures of winnie the
pooh, but it is clearly an example of this kind of arms race that happens. emily: whatsapp was the one social networking chat service, u.s. or american chat service, that was available in china. now, even that is partially blocked. what does this signal to facebook and google and the other big u.s. tech companies? >> it is particularly bad news for facebook. facebook has been looking for ways to get into the china market. we know that mark zuckerberg has made numerous visits there. he showed off his chinese. he welcomed chinese leadership to facebook campus. but it is clearly a sign that the chinese are not ready to allow u.s. social media, u.s. communications companies, to do very well in the chinese market, even if they agree to some types of censorship and control. emily: do you think there is anything that can change the course of these restrictions? >> i don't think so, under this
current leadership in china. i think they have made it very clear, not only from a political control perspective, but this vision of what they call cyber sovereignty or internet sovereignty, that the chinese have a right to control their internet and their cyberspace in the ways they see fit, and that involves blocking information from the outside that they see as threatening to regime stability. that is not going away anytime soon. emily: so what is next? >> i think we will see further tightening in the run-up to the party congress. we may see some pushback on the vpn issue and the blocking of the virtual private networks, because they are so important to foreign businesses in china and to chinese scholars and others who use google scholar to keep in touch with the most recent scientific outreach. but even if that were to happen, i think we will see a continuing trend of controlling, filtering, censoring of the chinese internet.
emily: my conversation there with adam siegel, senior fellow at the council of foreign relations. coming up, apple earnings are less than 24 hours away. investors waiting to see any details on the next iphone. we will dig into what you need to know. and a programming note for on tuesday bloomberg tv, oaktree --ital groups powered marks powered marks will be on starting 5:30 a.m. in san francisco. this comes a week after he sounded the alarm about stocks. this is bloomberg. ♪
former senior adviser to president obama valerie jarrett joins eight other board members. "she shares at believe that affordable transportation impact social mobility and improves quality of life in communities. i am thrilled to join the ride." by this time tomorrow, we will have the earnings report from apple, the largest company that will be giving its latest numbers on iphone sales ahead of the newest iphone in the fall. what are we expecting? >> i think the biggest number everybody is going to be looking at is the fourth quarter sales projection. emily: ok. >> the fourth quarter for apple is the three months through september. they typically introduce the new iphone in the middle of september. it might be available for a week or two in shops. as a lot of people have reported, the top of the range iphone, the iphone 8, it's possibly and probably going to be delayed. if the forecast, the sales
forecast, for the next quarter is slightly below expectations, that could be an implied confirmation that it is not going to be around for a few weeks or a few months. emily: right, so a few days are accounted for in the upcoming quarter of iphone sales. if it is pushed, those days will be in the coming quarter? >> exactly. it is backloaded into the christmas quarter rather than frontloaded into the september order. emily: what is the latest on delays? this is all due to supplier issues? >> yes. there'll be three new iphones. upgrades to the seven and seven plus, and these will have lcd screens. that's what the iphones currently have. the top of the range one will have an organic light emitting diode screen. this is technology that is in relatively little supply. it is hard to get your hands on it. there is not enough oled out there to build all the iphones out of the gate. emily: this quarter is where we
typically see a pause, where people might be waiting for the next phone and not upgrading as quickly. correct? >> absolutely. but sometimes people do look at it because the sales numbers, how they correlate to the analyst expectations, kind of serves as an indicator as to how strongly the apple brand is holding up. one of apple's strongest assets is its brand, and sometimes look at it compare to others, how they trend in technology. do people care about technology, or is the brand important enough? emily: what about services? >> services have been the bright spot for the past 18 months or so. what is really important is, it is more profitable than hardware because it is software, and secondly, it builds stickiness. it makes it harder to ditch your iphone. it will be interesting to see if they can keep up with the tear of the last 18 months or if it slows slightly. emily: what about china?
>> apple, as you found with your conversation with tim cook, has message thatll the the seven plus is the best-selling phone in china, and that is the message they are often trying to push. nonetheless, the broader numbers are slightly different or more complex. there has been a drop-off, and they have been losing market share. emily: one thing tim cook says china in the long term. he says they are committed to the market. will growth elsewhere make up for anything that is lost, anything that slows down in china? >> there has been talk about india being the next china. tim cook talked about india being where china was six years ago. india does have a booming middle class. they are trying to bring to india the older models of the iphone, the slightly outdated ones, ones where the software is going to leave behind. and they have brought manufacturing to india.
whether that is paying dividends yes, that is to be seen. they don't break out the numbers for india yet. emily: iphone 8 or iphone x? what is it going to be? or something we don't know? >> if i made the decision, i would like to see the iphone x. otherwise it gets a bit boring. if they go for the iphone x, do they have to start following the logic and then it turns into the iphone xi? emily: thanks so much. you will be all over apple earnings tomorrow. that is it for this edition of "bloomberg technology." we are live streaming on twitter. check us out at @bloombergtechtv . that is all for now. this is bloomberg. ♪ we check our phones 85 times a day.
so it only made sense to create a network that keeps up. introducing xfinity mobile. it combines america's largest, most reliable 4g lte with the most wifi hotspots nationwide. saving you money wherever you check your phone. yeah, even there. see how much you can save when you choose by the gig or unlimited. call, or go to xfinitymobile.com. xfinity mobile. it's a new kind of network designed to save you money.