tv Bloomberg Technology Bloomberg November 6, 2018 5:00pm-6:00pm EST
its ties to saudi arabia amid the jamarcus of the -- jamarcus hergh in -- jamarcus shargh controversy but first, bloomberg has learned that the world's largest online retailer is setting up a possible headquarters in arlington, virginia and long island. amazon is scheduled to make an announcement by the end of the year. joining us to discuss the larger inlications, a fellow washington, brad stone. make of one, but not -- not one, but two headquarters?
worriednk amazon was about grading the same problem it had in seattle, sending home prices higher and if you're going to hire 50,000 people in another city, you're probably bringing the same problem. areasin thing is to have with the technical talent. they probably decided they can go smaller in each city, get the tax benefits and tap the resources of talent, but avoid some of the problems. anchor: the governor said he would change his name to amazon cuomo. these are two well-established metropolitan areas. -- how does that actually change the city? >> these are two of the regions that can absorb a new headquarters more than the other
candidates. they have a lot talent already. there is a good possibility that amazon will hire a lot of local people. what we are concerned with is not the regional impact, but the local impact. where it opens its site will have a big impact on the housing market. anchor: how will it have an impact? >> both new york and washington, d.c. are tight housing markets. both of these are located outside of the central business district, so they slightly foster real estate markets. they allow tall buildings. this is a different animal than a amazon tried to go to neighborhood like georgetown. these are neighborhoods that are used to accommodating tall buildings. they don't have a lot of
residential neighbors who are likely to push back. it is probably a relatively easy landing in both regions. anchor: how do you imagine this will change amazon? is prettyot, it decentralized. i don't know if there will be that much of a difference with teams working across the country versus across seattle. anchor: talk to us about the longer-term implications. obviously, it will take some time for them to move in. the workers have to build up to the projected 25,000. what are the longer-term applications that you will be watching? >> certainly, we will look to andhow the region adapts absorbs more workers. in particular, are they going to build more housing?
in seattle, a lot of the workers are within walking and biking distance. these are broke neighborhoods that can absorb walking and biking, that will probably need to build more. both also have some deferred maintenance on their transportation infrastructure. the new york city subway and washington, d.c.'s subway have ridership problems. the upside is that amazon could put pressure on local policymakers and force them to make investment that are better for existing residents and businesses. anchor: brad, let's talk about the d.c. area. puts him closer, as well as the regulatory scrutiny that could be coming which we always talked about. where the applications? -- implications? >> i don't think amazon -- the
government views amazon as an adversary, but a customer. you could see the v.a. being a huge customer with hospital supplies are amazon wants to do business with so many branches of government. anchor: the government should be well-equipped and departed. >> google is pulling out of the government contract and amazon is still there. there are some regulatory and antitrust problems, but i think the potential upside, particularly in the long-term, they probably take that view and look at the potential long-term opportunities. anchor: thanks so much. of course, it is not confirmed yet, but we will be closely following this. as said they will make a formal announcement before the end of the year. disney will sell some tv
♪ anchor: the bloomberg new economy forum is underway in singapore. the event brings together world --ders regarding the significant changes and challenges. bloomberg spoke with the mastercard ceo about china and likes of wechat. >> we don't connect with the consumer directly. if i were able to offer it in china, i would be a partner [indiscernible] of we are not allowed to operate domestically in china. >> it is not outside china in the sense that alipay and we chat expanding into countries outside. people overseas and
those countries have been pretty good digital offering. different kinds of players. reporter: do you not see those companies a threat to your business? >> i see everybody as a threat. if you don't, you don't survive. the fact is, i see an with them. to work what we bring is connectivity. we can bring billions of people to millions of merchants with banks all over the world. we can do dispute settlements, cybersecurity, all that. almost all of the players come back for partnerships. look at paypal in the u.s. [indiscernible] when it came to be inclusion,
they don't care. we have partnered with apple and google. i think our job is infrastructure in partnership with people. reporter: you talked in your most recent conference call about the need for vigilance and the potential economic impact -- macroeconomic impact of policy shift. -- has mike sicard mastercard trajectory been immune? what you worry about? >> everything. we have had a good run. if you think about the economy , itlast eight or nine years almost seems like synchronized global growth. i think the change in the quiddity and fiscal policy, that could change the way
small business is created and if that happens, the downstream effect is [indiscernible] reporter: do you sense that happening already? >> not yet. the u.s. is doing well under consumer. i don't really see that yet. the issue is more about am i concerned about it? yes i am -- yes, i am. , i bufferspend less my way through that. we have had a bond bull market and periods of rising interest rates. rising long-term interest rates. what you think is going to happen because we are entering a bond bear market.
how is that going to affect the economy? if you get into this situation long-term, you get a curve that is more healthy. banks get more profitability. and people get cash electronically. -- it helps create tailwind and electronic payment. the other side of that is the economy.consumer will that get impacted? a defense. it impacts their mortgage rate and reduces their ability to buy a home. on the other hand, in a , you get boom economy
a constructive [indiscernible] ceoor: that was mastercard in singapore. also spoke with fedex. importants a huge and market for us, but in terms of our overall terrorist eligible revenue, it is about 2.4% of our revenues. hong kong is a little bit more. chinae things to and from from a lot of different places. europe, japan, australia. as opposed to losing the 2.4%, you will make it up somewhere else? >> yes.
are you doing something similar here in asia? >> do you have a suggestion? obviously, we don't talk about it. there is no acquisition we feel we need to make. tnt was a very important acquisition for us, but quite frankly there is not another one on the horizon quite like that. reporter: it would be obvious. >> and to expand internationally, whether in europe or asia, how concerned are you about this hot topic and theftlies trade of intellectual property? cyber risk is something that fedex has experienced firsthand. >> we did. cyberattack was acknowledged by the u.s. government to be either done by a state or state on sir -- state
sponsor. it was very costly to tnt. we have great cybersecurity folks, so it did not get to be fedex side, but it is something you have to work about everyday to protect herself. reporter: are you worried about the russians, north koreans, chinese? >> it may not be the government's. it may be -- governments. it is a tough environment. reporter: you don't think state-sponsored espionage is a big concern? >> it is. it is a very big concern. it is one of the things that the u.s. government has put on its list that needs to be fixed. reporter: amazon is a big fedex customer, also increasingly a competitor in some respects.
aboutay's announcement the new york and d.c. area a good thing for fedex? delivering things from their fulfillment centers. we are delivering things from every person and business in the world to every other business am a so the biggest single provider of delivery services to the amazon fulfillment network is not us, it is the u.s. postal service and they are the ones 's delivery system will take the most bite from. competitor less of a for ground than usps? >> absolutely. reporter: any downside? >> none that we can really see. amazon is a good customer.
we think they will be a bigger customer in the years to, if they continue to grow. they will do some of the deliveries for themselves for many reasons. the biggest single entity that --l lose traffic is amazon is the u.s. postal service. ceo.r: that was fedex groundup, foxconn broke for the first time in the u.s. and it is in desperate need of a workforce. bloomberg tech livestreaming on twitter. he sure to follow our breaking news network tictoc. this is bloomberg -- be sure to our breaking news network tictoc. this is bloomberg. ♪
♪ in september, wisconsin became the home to the first u.s. foxconn factory. now, less than two months later, the maker is struggling to staff the facility. the company responsible for microsoft, apple and sony is china.g in workers from the author of the fall of wisconsin has spent months on the ground studying the deal. he joins us now from new york. of course, this was a huge announcement. president trump included, how big of a problem is it that this factory cannot find the workers to run it? >> i think it is a large
problem. it goes back to the original deal. you have to look at what foxconn proposed. shifted to most of the workers they need our engineers, designers that most of the workers they need are engineers, designers and so on. i think -- anchor: what are the solutions? deniedow the company has they are planning to do this. i don't know if -- i don't know. tohink there is a desire among people in the state to have a lot of money going to
technical education to get people trained in the state. it is also quite near illinois. my article looked at in the new to the stateost citizens of this deal and it was sold as a very different bill of goods. these manufacturing jobs, not the kind of jobs, again, the factory shifted of what they were going to build because they cannot get a glass company to come to make lcd screens, so now they are talking about doing mostly automated manufacturing with these knowledge workers. i don't know. i mean, that is not the central focus of my article, but i think it is a huge problem for them. it is not just the state unemployment rate is low, there are not enough of these types of
people in wisconsin to amend this kind of facility. costr: walk us through the on the people of wisconsin. it was supposed to be great. is it opposite? >> it was also a political move by governor scott walker and donald trump. estimated upwards of $4.5 billion. that is not just state, but local municipalities to buy property to give to foxconn. it is also the roads that need to be improved and so on. this works out to about $1800 hugeousehold, so that is a burden. it only really benefits this one portion of the state, southeast wisconsin, which has lost a lot of manufacturing jobs. cost and there is a
buildsresentment that up, especially outside of southeast wisconsin. governor walker has not raised the gas tax. the roads have been among the worst in the country for several years now. anchor: the political applications will certainly be interesting. that is one of the states that swung to trump in 2016. that is the author of fall of wisconsin. thank you for joining us. coming up, india connects to the digital world, now the second largest smartphone market in the world, but apple cannot even break into the top 10. we will talk about why. what a move means for the scooter sharing company lime.
emily: this is "bloomberg technology." i'm emily chang in san francisco. just eight years ago, only 2% of india's population was online. that number has jumped to some 500,000, and by 2020, it is expected to exceed 700 50 billion.- 750 apple, surprisingly, is not leading the second-largest smartphone market. thisto talk about all
foreign policy, managing editor whose new book takes a look at the country's smartphone revolution. why can apple not break into india's top 10? is it all about the price? ravi: it pretty much is. even morethey are expensive than they are in the u.s. because of import duties -- in india. competing with indian and chinese phones, which retail for $100 or $200, so huge difference in price point. emily: is there anything apple could do? they sell older models of the iphone for cheaper. they have the new iphone xr that is slightly cheaper, but it certainly does not compare to a $50 smartphone. robbie: it really doesn't.
sold refurbished phones, for which they need to open an apple store, which they are talking to the indian government about, the price will still be too high for the average indian. india is still a country that is very poor. if you look at the amount they are willing to spend on a smartphone, especially at the entry-level, for the people coming online now, they are only atking to spend $50, or $200 the most, so apple is nowhere near the end of the spectrum for india, and that is why apple only farms about 1% to 2% of the market.martphone emily: the digitization of india has been fascinating, in part because of what you talk about in your book, how quickly this has happened. talk about the impact of smartphones in india for better or for worse. for most ravi:
indians, it's not just a phone or internet device. it is their first camera, alarm clock, and calculator. you add up all those things for hundreds of millions of indians come most of whom are rural, and it is in everything device that brings all the things to the table that allows more indians to be more efficient. it improves our, improves their ability to access education or into the gig economy -- it .mproves education .here is a lot of that as well as the fact that 300 million indians are illiterate, so if they are too into the digital economy, they are able to speak to their phones, and it speaks back to them -- if they
enter the digital economy. there's an explosion of digital pornography in india. there's also more and more areans are reporting they addicted to their devices. this also the problem of fake news. we know people all over the world have been susceptible, but indians more than most the cause they are jumping from nothing straight to smartphones, and when you do that, you miss a few of the steps and also the cautious mechanisms we have in the west to recognize and deal with fake news. emily: there has also been reports of a sort of wave of violence across the country tied to what they didn't seeing on beenapp -- what they have seeing on whatsapp, in particular.
how serious is this? very serious. most of us have grown up in chain mails, for example, in the 1990's and you would receive an email that if you did not forward this to 10 people, you would be unlucky in love, and we learn from these things, but pcin, only 2% of indians had 's and 1999. now, so many millions of indians are discovering the internet, discovering pc's on their smartphones, and they are not sensitized to computing, being able to deal with innuendo, superstition on whatsapp, and the problem is you tend to trust the person who sends it to you. you trust that person, you see something, you tend to pass it on, and that ripple effect has been very dangerous in india. hinduhave been lynchings,
-muslim attacks, and it is really something the tech community is very concerned about. emily: i want to ask you about a couple of u.s. tech companies trying to break into india. amazon is having a showdown there with walmart, which bought flip card. which of those companies do you think is better positioned to dominate the indian e-commerce market? -- flipcart is older than amazon in india, and it was a time when it had its into the ground, but i think amazon ishanged where essentially an indian company with the mothership's backing here. this week is the great hindu festival of lights, so both
amazon are trying to corner the market. the size of the india market is $20 billion tot 25 billion dollars, so it is tiny in comparison to china and the united states, and both sides are betting on the fact that it will grow in multiples, and they are hoping they will have brand recognition to cash in when the indian consumer, the indian middle class is able to spend more money, so i do not think either side will win in the short term. it just depends on who is willing to stomach losses to be able to profit when india a bigger market. banking on theis indian market, but there are local competitors along with the bollywood scene.
what do you think netflix's prospects are in a very unique entertainment market? ravi: it is a unique market. there are competitors. this also the architect of the big smartphone boom of the last couple of years that they have sort of flooded the market with very cheap phones and almost free data, again, able to stomach losses in the short term to be able to control the long-term market. for all these players, the big challenge is unlike in the west where you were spending somewhere between $50 and $100 on cable tv and netflix came in and undercut them, india is a different offering where cable to begin with was very cheap, so residents who have cable, which is a small subset of the
population to begin with, were paying $10, $11 a month. netflix is still coming in at a or $12.e expensive $11 they are playing a longer-term game of being able to create local content and be able to convince hundreds of millions of indians to sign up for a product where they pay a monthly fee, which as we know indians are not used to doing because they don't like to pay for content. emily: fascinating. you talk about all of this and "india your new book, connected," which is out this week. thank you so much. cryptocurrency startup bit raised $80 million, including an unknown investment merchant -- from merchant
bank. coming up, scooter sharing heating up in cities across the united states, but there seems to be a love/hate relationship with the public. we break down the pros and cons next. plus, softbank is not pulling back on its saudi tied. -- tide. where the japanese bank is backing a huge project south of riyadh despite mobile criticism. this is bloomberg. ♪ this is bloomberg. ♪
exuberant fans. the love/hate relationship with e-scooters and why they might be the future of building a city. >> they can litter sidewalks, menace pedestrians, and endanger riders'lives. at-enabled electric scooters have popped up over the world -- app-enabled electric scooters. it may come as a surprise that e-scooters may be exactly what traffic-choked cities need. this is your bloomberg quick scooters.- download and app, unlock a scooter, find it, go for a ride. when you are done, leave it behind. rides can cost less than two dollars. lyft haveer and scooters now as well, and by
their essence, they are all over the place, so if you are not using them, they get in your way. because people are just learning how to use them, they tend to ride and obnoxious ways -- in obnoxious ways. >> at launch, cities like cleveland banned them. others created a system that cap the number of allowed. lime offer scooters and more than 40 cities. indians urban areas, cars are not the fastest way to get around. many cities have turned to dedicated bike lanes and bike sharing systems because they take up less room and give off fewer carbon emissions. hope would be you would eliminate a lot of shorter car trips that we get a lot of cars off the road, create more protective lanes and so on and the would in turn broaden demand for scooters.
bird and lime each being valued at more than $1 million, it is too early to tell if they will become viable businesses. >> we do not know exactly how it is, but it seems like you can pay these things off fairly quickly, but they also get completely trashed very quickly. you will take care of your own bike and your own car, but as they say, no one ever washes a rental car. emily: lime has hired joe christ to be its new and first chief operating officer -- lime has hired joe kraus. for more, i want to bring in the report are you just saw featured there -- the reporter you just saw featured there. why him? joshua: joe was already pretty involved with line.
you mentioned he was a partner with gb, which led the most recent fund-raising round at , putting them at a valuation of over $1 billion. joe told me he is pretty much already working full-time turn to get the company to keep up with its own growth, and it was a sort of natural development of coo.ole as emily: he talks about how he sees this as more of a transportation provider, not just scooter provider. what does that mean? actually started as a bike company. they are also looking to get into something called transit ,ods, which are miniature cars and they are also looking into car sharing. maine bird, their
competitor, which is entirely scooters, lime thinks it can fight off chunks of a wide range of transportation. emily: there has been a rush to invest, but are these scooters going to be the next segway or the next uber? joshua: a lot of people are betting they will be the next you are hearing a lot of skepticism as well. it's hard to tell at this point. there's a lot of excitement, but on the other hand, it's very clear a scooter will not replace your car. there are questions about what happens in the winter, what happens if you have to carry anything, and these companies are basically saying "we will figure things out." emily: what happens if you are wearing a skirt and you have a big bag? with these rides at two dollars
each, can this be as profitable as investors hope? joshua: the case they will make is the scooters are not very expensive. to payuber, you'll have a driver. someone is getting on it and driving themselves. they are also very popular. most are getting used basically until they run out of batteries every day. so they can cover the cost relatively quickly. on the other hand, the scooters are really getting beaten up. they don't last that long. there was one report that set in washington, d.c., they are only lasting maybe three weeks or so. that should be pretty bracing. it also raises some safety questions. if these things are falling apart from day one, are people ? ing to feel safe riding them emily: as you mentioned, very
discussions could lead to a deal, the discussions are giving investors hope as the software giant struggles to overcome waning interest in its offerings. the founder of softbank announced the japanese tech giant will not be cutting its ties to saudi arabia. instead, it is doubling down in the kingdom. softbank announced lands to develop a 1.2 billion dollar solar plant expected to generate 1.8 gigawatts of power a year. softbank started preliminary even to engage interest amidst the outcry over the murder of saudi government critic jamal khashoggi. this,o talk about all of sarah mcbride. not causingmake of but doubling down in saudi
arabia right now? sarah: it's interesting . just a few days after we learned about people being detained, we learned about their plan to invest in saudi arabia, so they to announce these partnerships, and that appears to be what they are doing now. 18 of gigawatt plant is bigger than any solar plant in existence today, but it is also much smaller than what the saudi's and softbank were talking about earlier this year when they were talking about 200 gigawatts of solar power in saudi arabia. in that sense, it is dramatically dialed down, but still huge in the scheme of solar.
you were listening in to the earnings call, and he got several questions about saudi ties. what do you make of how he responded? we will keepsaid investing because we believe the people of saudi arabia need it, but he also asked government to get to the bottom of it. he did.ight, it is important to know he did not just respond to questions. he proactively started with saying it was a terrible tragedy, that the saudi's needed to get to the bottom of it, that he saw it as his duty to help the people of saudi arabia. if you agree with that response, that position. emily: we talked about another company that has just taken in a new round of funding, but is ? is a concern
>> a think a lot of people are struggling with it morally, but money is money, and i think people really want to see their company's growth. i think it will be the exception rather than the rule that some startup founder decides not to for moralmoney reasons. maybe people are thinking a little harder about it. it reminds me a lot of the situation a few years ago when google have been doing the same thing for years, and suddenly arounding crystallized the google buses. emily: what about venture capitalists? are any of them reconsidering if they take money from the saudi global wealth fund? we often do not have a lot of insight into where their money comes from. sarah: that's right. i'm aware of a lot of vc's his
say this is a horrible situation. many of them had not been aware of all the human rights violations in saudi arabia, so at least they are aware, but i do not know a single one who says they will not take saudi money as a result. i'll think this is making anybody rethink decisions. emily -- i don't think this is making anybody rethink decisions. emily: thank you for weighing in. our colleagues are compiling everything you need to know on this election day at bloomberg.com. it for this edition of "bloomberg technology." i'm emily chang. this is bloomberg. ♪