tv Bloomberg Technology Bloomberg May 7, 2019 11:00pm-12:00am EDT
♪ emily: i am emily chang in san francisco, and this is "bloomberg technology." coming up, an upbeat earnings report for lyft, its first as a public company. the ride-hailer beat forecasts, but spending also ramped up dramatically. melinda gates opens up. we talk about her new book, where she is putting her money, and what she thinks the biggest priorities for tech should be. and google holds its annual
developers conference in mountain view, where it is doubling down on privacy. we will hear from a top exec. first, lyft shares falling after a quick pop on the heels of first-quarter earnings. the projected revenue exceeded the $782 million analysts forecast, and also an eye-popping net loss of $1.14 billion this quarter, larger than what the company lost in all of 2018. joining us to discuss, mandeep singh of bloomberg intelligence. they also beat on it revenue in general, but why so much spending in a single quarter? mandeep: a couple things. looking at the metrics, there was a topline beat, but they have not shown as much leverage when it comes to marketing and r&d. what that tells me, probably
they are facing some signs of competition, which is why their full-year forecast is a lot lighter. they grew 95%, but the full-year forecast is 52%. if the business is seasonal, that makes sense. but otherwise there are signs they have more competition they are seeing, which is why they are investing. emily: let's talk about the competition. uber planning to go public at the end of this week. i know that investors are scouring the latest earnings report to see if they can get any more clues about market share and lyft's take. do you see those clues? mandeep: i think what uber did was give us a good sense of their core platform, which includes the ridesharing and food delivery business. that has positive, high single digit ebitda margins that they think will grow over time. in the case of lyft, we know the core ridesharing business has negative ebitda, and they don't
have a path to profitability. on the call, i hope they will articulate how they will improve that. because we know that uber's ebitda margins for core business are positive. emily: so how does lyft get spending down and get even close to a profit? mandeep: sales and marketing is easy. what comes into that, the rider subsidies. they try to lower driver subsidies, but then the risk is that the drivers are not employees, there have been strikes. you can only take that so far. and they may have to cut on the r&d side as well. autonomous cars is far out, so if they are allocating a lot of spending on just r&d related to autonomous, that can come down, because the numbers don't look good from an ebitda standpoint. emily: we also have a driver
strike looming. subsidies are a big part of getting riders on the platform. they also offer perks to drivers. it's still not enough. talk to any driver, and they will complain about how much money they are making. of course they are still driving, but they are not happy with what they are paid. how can lyft treat drivers better over the long term without hurting margins? mandeep: that is where i think there is a camp on take rates. we saw the rates have been improving the last four quarters in 2018, but that's why i don't think they can keep improving forever, just because you can't pay your drivers less and less. eventually they will have to normalize that, probably pay drivers more, which puts a cap on their take away. it's kind of an interesting scenario for them.
they want topline growth, but at the same time it comes at the expense of giving drivers a higher take rate, hurting ebitda. it's interesting. i don't think they have an easy answer yet, but i hope they will give more details on the call. emily: how do these new numbers impact uber's ipo this friday and how investors will approach it? mandeep: uber, at least from a disclosure standpoint, they have done well just in terms of highlighting where the core business stands, where they are going with food delivery. one metric that caught my attention, average rides per rider subscribing to uber eats and the core ridesharing is 11, whereas for core ridesharing it is just five. for lyft, average rides per
rider is close to four. that tells me that by adding food delivery, uber has been able to engage riders better, improving monetization. overall, uber's disclosures look better at this point, and investors should be comfortable with how they plan to ramp up the top line and ebitda. emily: mandeep singh, thank you for breaking it all down. meantime, u.s. stocks tumbled the most since march. investors are still on edge over a possible breakdown in trade talks between the u.s. and china, and tech talks were the hardest hit. bloomberg's cross asset reporter sarah ponczek joins us from new york. where was the pain? sarah: very much in tech. it was across the board, but the industries hit hardest were semiconductors and tech hardware. for one, technology stocks, technology companies are very heavily exposed to china. these are companies that get a lot of their sales from over in china. but if you also look at what the threat right now is, the threat
is we might see the tariff rates increase from 10% to 25%. president trump also threatened we could potentially see tariffs on $325 billion more worth of goods. this would include computers, smartphones. many of these consumer products were left off the list. if these get taxed, we will see that filter through the markets. emily: a chart on the bloomberg shows the worst performers of the day. technology at the bottom of the list. what is next? will we see this every day until friday, when we have some possible resolution? sarah: right now the take is that if we don't hear anything else until friday, we are likely to see a lot of volatility
throughout the week. we have to remember that the vice premier from china has said he will come with his delegation to washington, d.c., so there is a sense that china wants there to be a negotiation. but the fact of the matter, if there's no deal reached, and clearly both sides right now have a bit of a hard line, those tariffs will go into effect, that higher rate will go into effect at 12:01 a.m. on friday, as lighthizer said. that, the market would take issue with, because you would have to see that filtering through earnings. as it stands right now, think about how executives are guiding, giving guidance for earnings, and how analysts are forecasting guidance for the rest of the year. right now they have that 10% tariff level baked in. if it rises to 25%, more goods being taxed with a tariff, that has to be factored into these earnings forecasts as well.
ups is saying that we could see profits contracting at least 5%. emily: sarah ponczek, i know you will continue to watch across the various sectors for us. thank you for weighing in. facebook coo sheryl sandberg met with reg leaders at capitol hill as facebook faces a settlement that could cost up to $5 billion. a spokesperson for facebook says that there was no discussion of the pending settlement with the federal trade commission, but sandberg met with members of the committee overseeing the ftc. coming up, melinda gates has written a book on how empowering women can and will change the world. we'll talk to her about "the moment of lift" next. this is bloomberg. ♪
emily: for years, melinda gates has been working on global equality. through the bill and linda gates foundation, she worked to increase access to health care and education and decrease poverty around the world. now she is investing in women entrepreneurs and with her new book "the moment of lift, how empowering women changes the world." i sat down with her for a wide-ranging conversation about what she hopes to be accomplished, where she is putting her money in technology, pending regulations and why the
moment was right for her to write this book. melinda: i have been traveling for over 20 years, and i have heard all these women's voices calling for action. with the me too movement, with some any women running for election, we have this window to really create a quality, but that window can close. i want to make sure we really keep pushing and really get equality for women. emily: you talked about your decision to stop working and stay home with the kids. you said that bill at the time didn't understand, and you also later realized, you had some growing up to do. tell me about that? melinda: when we got pregnant, i surprised bill when i said i wanted to leave microsoft. for him, i think he actually really encouraged me. after the birth of our first daughter, even within a month he said, what else do you want to do? because he knew i had that side of my brain, and that i enjoy
doing work. but we had to work that out over time. i think i came into the marriage with some bias about who does what in a relationship at home. i think maybe i gave him a pass on a few things, because he was the ceo of microsoft. i had to learn over time, you don't get a pass. you are a dad. emily: my favorite anecdote is when you decided division of labor wasn't fair, and he was going to do school drop-offs,, which was actually a lesson to the other parents. if the ceo of microsoft can do it, so can you. tell me about that. melinda: one of those conversations we had at home about who does what. we agreed what school we wanted our daughter to go to, but i could see all the years ahead of traffic and driving, and i said let's just wait until she gets to third grade to go to that school, which was not close to our house. bill felt strongly that she start there with kindergarten, so in my frustration he said, what can i do to help? before i even answered he said, i could drive a few mornings a week. i really had to say, are you serious? that meant a one-hour commute
for him all the way to microsoft. but what we didn't realize, by having that conversation and rebalancing our relationship, sure enough, three weeks in, far more dads started to drive their kids, and a mom said, see what is happening here? we we went home and said, if bill gates can drive, by gosh, so can you. emily: you talk about susan fowler and her exposure of some bad things happening at uber. uber is about to go public this week. where would uber be if that change that she ushered in or helped usher in had not happened? melinda: i don't know. i don't think any of us could answer that question, to be frank. but i do know that what was happening there needed to be called out, and it takes courageous women. when one woman speaks out, other women and men need to say, this is not ok. the way we get change in the workplace or in any culture is for men and women to
transparently talk about what's going on. the reason that is so important in the workforce, if a woman is harassed in the workforce, she leaves her job within two years at an 80% rate. that can't be. emily: you are investing in women in technology and tech firms. one of your strategies is to invest in women. women still account for 9% of investors in silicon valley and women-led companies get 2% of funding. the numbers still look that way. how much progress have you seen the last year? melinda: i would say that the progress is slow. i think we are beginning that flywheel. but this isn't just about silicon valley. if silicon valley is stuck on what they are doing today, we can take a game other places. chicago, i was just there.
they are supporting women-led companies, mentoring and sponsoring, also investing in them, becoming a bigger part of the economy in chicago. we can do that in dallas, in atlanta, in rural areas. for me, the game is changing, and i am excited more women-led businesses are being invested in. and we have to talk about people of color. less than 1% of venture capital funding goes to a woman-led business led by a woman of color. that makes no sense, because i know there are many fabulous business ideas from many women who are of color as well. emily: the reality is that men in positions of power can make a difference here. we have silicon valley visionaries building electric cars, self driving cars, rocket ships to space, connecting the world. is it more the leaders of silicon valley, making hiring women a priority, would that happen? it seems like they can do almost anything else. [laughter] melinda: you set a goal and
reach it, and don't keep making excuses. people say, the pipeline? fine. create pathways in. we know the best universities are getting more women and minorities by changing that first compete or science class. we can do this, but we have to set it as a goal and we have to measure. the good thing, the pressure is on the companies to be transparent. and you have a tight labor market. young women coming out of college with a tech degree say they don't want to go to those companies that don't support women, but look at these other job offers. that creates change. emily: you are also involved with a nonprofit that hopes to get more women into investing, women entrepreneurs. what benchmark should the industry be setting? should the companies be setting50-50? melinda: i think we can
eventually get to 50-50. we need to stop saying that's not possible. we need to stop having excuses. when young women can look up and see three dozen different types of archetypes of women doing all kinds of things, computer science, engineering, biology. when they can look up like a young man can, you will see more women going to these fields in droves. the other thing, the more we talk to young women, these are just tech problems. you are creating the future. these are some of the most creative things going on in society, and these are fabulous jobs. you will start having women vote with their feet and decide where they want to go to create the future. emily: you invested in aspect ventures, one of the biggest women-led funds. you said this is not a charity but you are looking for a big return. how big? melinda: i won't put a number on it, but absolutely looking for a return. all the investments bill and i make, i want a return at first, and over time a larger and
larger return, and we should assume that with our investment dollars. but i know it's important to not just voice our concerns and point out problems, but also to move money. we know young companies need to be financed if they are going to grow, so it is just time to do it. emily: you are also investing in tech ideas that you think will change some of the issues around family care, childcare. how can technology improve childcare, family care, pay inequity? melinda: think if you could go on your phone in every city or rural town in america and be able to have a rating system saying, these are all the caregivers around right now and available, and these are all the people who have rated them. you know how much easier that would make things when you have a sick child, i have to go pick them up at school?
what if we had applications that helped us fill in those gaps over time? another one, a young woman is starting a business where if your child needs extra support, maybe they have dyslexia, eye issues. do you know how hard it is to find specialists? if there was a platform where there would be 15 fabulous specialists, and could see the ratings and whether they were good for other people's kids, that would change things. emily: there is rising concern that technology for all the good it does has too much power. you have senator elizabeth warren saying big tech needs to be broken up, giving support from both sides of the aisle. do you think big tech needs to be broken up? melinda: i think technology has upsides and downsides, so you have to look company by company what the technology companies are doing, and are they creating the most good in society, or
have the downsides gotten too large? then you have to look, should that company be regulated in a different way? emily: increasingly the democratic candidates will take positions on technology. what kinds of positions would you like to see them take? melinda: i would like them to take positions on making it more equal for women. one of the things we know worldwide, women are 40% as likely to have access to the internet. this technology should be for everyone, not just these one-off ideas that help parts of society. emily: do you have any democratic favorites yet? melinda: i do not. the field is so enormous. emily: you have also been pushed to take a stand on some of these progressive tax plans, plans that would involve the rich paying a lot more money. will you take a position on some of these? melinda: it is not our role as citizens to say this is the
right tax policy. that is government's role, and it is important to know that. but bill and i have spoken out vociferously, we believe higher income people should be paying more, but we will not endorse ace pacific tax policy. that is for government to do. emily: melinda gates,, cochair emily: melinda gates, cochair of the bill and melinda gates foundation and author of "the moment of lift." you can catch the full interview at bloomberg.com. later in the show, bloomberg hosting its annual i/o developer conference in mountain view, and the theme seems to be privacy. here is what ceo sundar pichai told the crowd. >> privacy is the foundation for all we do. we will constantly push the boundaries of technology to make it even better for our users. ♪
singapore has been slower in moving forward 5g compared to countries like south korea and the u.s. who have begun offering limited commercial services this year. general motors' self-driving unit attracted more than $1 billion in new investment, including honda and t. rowe price. the business called "g.m. cruise" says it is valued at $19 billion. old line financial firms are helping customers weed out monthly some script and they no longer use. in some cases, the apps can cancel the fees or even renegotiate them, sometimes getting a cut of the take. up next, we sit with goldman sachs' global cohead of investment banking for his thoughts on the recent ipo run in tech.
♪ emily: this is "bloomberg technology." i'm emily chang in san francisco. let's recap a massive selloff in the u.s. markets this tuesday on renewed global trade tensions. stocks capped the biggest two-day slump since early january with the s&p 500 falling 1.7%. the tech sector was among the hardest hit. semiconductor stocks in the u.s. turned in their worst two-day selloff since november. the ipo market has been white-hot this year, as we have been talking about. take a look at one example. beyond meat still making massive gains on top of having the strongest first day for an ipo since at least 2008. for more on the current market landscape, i want to get to ed
hammond at the goldman sachs leverage finance conference with more. ed: thank you very much. i'm here with gregg lemkau. gregg, as we just heard, it has been a pretty brutal day in the markets. we do have a white-hot ipo market. what should ipo investors and companies going public be thinking on a day like today? gregg: thank you for having me and thank you to bloomberg for broadcasting from the goldman sachs leverage finance conference. the markets, it has been a bumpy couple of days in the markets. as i have talked to clients about what is going on and what they think about the markets, they are largely focused on whether the president's tweet from sunday ends up being rhetoric or policy. i think we have seen the impact of the potential for it to be policy in the market the past couple of days. if it turns out to be rhetoric to get a better trade deal, i
think the market will snap back. it turns out to be policy, it will be bad news for the markets more broadly. as it relates to ipo, the ipo market has been the story of the second quarter. it is quite exciting the number of companies that have gone public and a number of companies in the pipeline. most investors are investing for the long-term. they will not be overly impacted by a couple of days in the market. we've seen a wave of companies become public. a lot of focus on these high growth companies, but you have seen a 165-year-old company in levi's. ed: it has been like a faux-meat producer. why do we see that divergence? these are long-term investments for a lot of people. why are some doing so well and some less well? gregg: i think these transactions are quite complicated to execute.
this wave of companies that is coming, you have to be able to explain new business models to investors. you have to decide how they will value these companies in the balance between growth, profitability and market share. that is one complicated element of pricing these things the right way. the other is what the objectives are. are companies trying to maximize in which they can raise proceeds? the final variable is you have a wide range of proceeds being offered. companies with a couple of hundred million of dollars versus billions of dollars will have difference supply and demand impacts. ed: a lot of middle-market clients in this conference. that has been a part of the market that has slumped this year. since december, we had that volatility, we have seen a pullback in middle-market m&a. it is an area that goldman has
pushed hard in putting more bodies on the ground, building these relationships. are you there for the long-term now that this opportunity seems to be coming? gregg: we are. we have david who took over as ceo six month ago. he has been challenging us how to grow the business and deliver better returns for shareholders. we think about growth in investment banking three ways. we can increase the market share. we can have new clients. or we can add new products. this push in the middle market is around adding more clients. again, our definition of middle-market is $500 million to $2 billion. these are substantive companies. today, it makes up a quarter of the companies covering. it is delivering the goldman sachs quality and execution we can to the client base. ed: how do you do that? if i'm someone wanting to come
to work at goldman sachs, it is because i get to work with these major deals. i get these headline clients, high-profile situations. how do you attract people to come in and pound the pavement between new england and san francisco? gregg: i would say in my perspective, people come to goldman sachs to work at a world-class organization and learn in an apprenticeship culture and to serve clients, working on interesting transactions. ed: the m&a market has been booming. transactions, in the middle of one of the more interesting ones in the form of anadarko. what is fueling this extreme confidence in the markets, where we are seeing shareholders step up and be vocally opposed to deals? it seems to be a high level of belief at the moment in m&a.
gregg: we have seen a drop off in the smaller scale, but the big transactions continue to happen. you have seen activity levels in sectors we haven't really seen. you have seen bank consolidation. a lot of activity in energy and more to come. companies are feeling really good about their positions. those sectors that have been under pressure in the past, there was a lot of m&a activity, they are feeling more stabilized and thinking about growth. ed: we have been saying this for years, but do you think we are late cycle and this is one of the reasons we are seeing this wave of big consolidation because we don't do it now, the window may close. gregg: we are definitely late cycle. ed: it feels like we have gone back in time from a year ago when we were saying it was late cycle because it seems better in the m&a market. gregg: you had a shot in the arm in the u.s. economy with the tax cut last year. you saw a wobble in the overall equity markets in the fourth
quarter last year. but the first quarter of 2019 was the best-performing equity market in 10 years. transaction volumes are high. there is always the risk of whether it is a trade war or brexit or fed policy. there is anxiety that gives caution. but companies and boards and ceos are feeling confident about the outlook. ed: let's talk about what has been in the news which is the 1mdb scandal, heavily involved with goldman. how has that affected the bank's ability to do business in asia? gregg: thankfully, very little. outside of specific transactions in malaysia where it is a pending issue and specific companies around that original transaction, it has had very little impact on our business. we have focused in particular, the asia world market share has never been higher.
nine of the top 10 equity deals last year came out of asia and we did seven of them. it has had little impact on our franchise, but we need to be vigilant and serve our clients. ed: if this had an impact that suggests we don't need to change anything, is that the case? if that is not the case, what does goldman need to change? gregg: a lot of self reflection how we could have an employee like this. it is painful for us to look at that. we need to robustly look at all of our practices and policies and do what we can to improve them. ed: thank you so much for joining me. emily, back to you. emily: thank you so much, ed with gregg lemkau. a pixel price cut. google debuts its newest smartphone, but there is a catch for when it comes to what's inside. we head to google i/o's conference, next. this is bloomberg. ♪
emily: google is looking to make its pixel line of smartphones more attractive with a cheaper price tag. this after the entire line of pixel phones failed to sell at larger numbers. the newer models will range from $400 to $479, nearly half the cost of their predecessors. i spoke with google vice president of pixel mario queiroz about the new device at the i/o developer's conference in california. mario: the new phones are really exciting. basically what we set out to do is design a product from the ground up at a much lower cost and really rely on our unparalleled software give abilities to bring premium experiences to that lower price. and, really to make a phone with
premium. his available at half the cost or half the price of your typical flagship phone, including the industry-leading smartphone camera. emily: so my understanding is they are cheaper with the help of slower processes and cheaper materials. what is the argument to buy one of these over, let's say, a cheap competitor? mario: the argument to buy a pixel 3a is we are using more commoditized, lower-cost hardware, but we are in a really, really unique position to have the software capabilities within our company to be able to bring those premium experiences and make them run really fast with really high battery life on the lower-cost hardware. we can bring the world's best smartphone camera which is the pixel camera into this price point. we can bring the assistant. we can deliver security on device. we can offer something that is
not very typical, three years of software updates so your phone get better with each update as opposed to getting slower. emily: you are trying to make privacy one of the selling points here. what is the argument to buy a pixel when you also have apple making privacy one of its huge marketing stance, if you will? mario: privacy is important to us and we built it in through our engineering. the pixel 3a comes with something we call call screens. people are bothered by robo calls. we have capability that takes advantage of our natural language processing and voice recognition to screen calls, and therefore, help you avoid robo calls. and help you determine if a call is from some of you might know is something you want to pick up or leave it for later. this is done entirely on device
and nothing gets uploaded anywhere. the information is gone the moment you hang up. emily: will you ever do a foldable phone? mario: we are working on a number of new technologies and prototyping new technologies, including foldable display technologies. we don't have any new products to announce. we are just excited to bring pixel 3a. it is the first phone to bring true, premium, flagship smartphone experiences to the midrange price point. a price point that is half the price of flagship phones today. emily: so, the smartphone market is slowing. i'm curious, where do you see the global smartphone market going? mario: we have seen the smartphone market slow down. people are holding on to their devices for longer. this has especially happened in the premium segment. those phones have gotten more and more expensive. used to be able to get a premium
phone for $500 a few years ago. they have gone up to $800. some premium phones are $1400. in seeing that trend, we set out to build a pixel 3a from the ground up using commoditized hardware and really betting on the fact that google's software capabilities, which are unparalleled in the industry, can bring those experiences at the right performance, right battery life, the right security to that lower cost point. we believe for these prices, with premium experiences, we will be opening up new possibilities of making the camera, for example, in premium smartphone available to a lot more people. emily: google vice president and general manager of pixel mario queiroz. i want to go back to the i/o developers conference to talk about google's new privacy push.
mark, do you think that customers, given that pixel sales have been falling, will buy into this new pixel at this price with this strategy? mark: this was a software developers conference, the first time they had leaned in heavily with hardware, with their own devices. in years past, they have been doing more experimental hardware. phones that nobody dreamt up before. this is a basic phone. they are competing with all of android's partners -- samsung, huawei, xiaomi. the sales have fallen along with the rest of the premium market. they are pretty aggressive and saying they are clearly spending a lot of hardware. it is a company that has moved from project to project. the only thing that is kind of consistent is their work on search and machine learning. emily: talk to us about what is different at this year's i/o, specifically this focus on privacy.
mark: a big strategy shift. every single thing they came out with, every product they were announcing led with, we are thinking about users, thinking about privacy. they brought in this incognito mode where you browse without being tracked or ad targeting. they are bringing that to maps and youtube and other products. that is a strong trade-off. google makes a bulk of their money with advertising and collecting this corporate data. they are sort of restricting that. at the same time, they see user trust and privacy as aligned with their interests and want people to continue to feel comfortable using google services. emily: so, the question, i guess, will customers buy in? you also have apple pushing privacy as a huge priority. you have a hugely competitive smartphone market. a lot of cheaper competitors out there who have been doing this for a long time.
mark: yeah, google will say they have been doing internet security for a long time as well. i think they are in a similar position to facebook, where there are a lot of issues around data and privacy being dragged in the mud in congress, the elections. what they do have, they talk a lot about being a helpful google. the messaging here is google's utilities -- search, maps, the voice assistant -- helps your life. they are trying to contrast themselves with social media which is now associated with a lot of addiction and negative qualities. earlier today, there was a plane flying around with the banner that says google control is not privacy, which is a strong rebuttal from a group that was supporting local journalism. clearly, they are not with other critics. emily: you have some googly activity behind you, trying to get a good photo. i have to ask the undertold
story of android. only 20-some-percent of devices are running the latest operating system before the latest operating system. that means more broadly for android devices, they are not up-to-date which means these privacy features are not being utilized. how big of a problem is that? mark: it is a problem google has been trying to address in different ways. you could read the pixel strategy, clearly google is saying we have entire control with this. today, the introduced a bunch of new features around privacy and security. introduced a way for phone makers to update android phones in a way they have not been able to do before. unlike apple, what google has to rely on are a bunch of third-party manufacturers. a lot of carriers that have been diametrically opposed to google and this vast business ecosystem that they don't have control
over. the stats are a little bit better but there is still this wide gap and apple has been aggressively messaging we are the company that can do software upgrades. we should trust them. emily: i will let you go back to the googlyness of it. bring back some good photos from the i/o developers conference. still ahead, is apple still worried about its brand building? that is a concern from a number of current and former employees. we will bring you that story next. this is bloomberg. ♪
emily: apple stores are being hit by complaints that customer service is getting worse. current and former employees tells bloomberg that brand building has become more important than serving shoppers. this is the quality of staff has declined during an expansion in which apple opened more than 500 stores. apple announced that the retail chief will be replaced by company veteran deirdre o'brien. joining us now is mark gurman. a lot of interviews. what are these current and former employees telling you exactly? mark: the essence of it is that angela ahrendts tried to really turn apple stores more into luxury emporiums rather than a place permission shoppers. before the apple store used to be a place you go in, grab a
product off-the-shelf and go to a cashier and pay for it. that is simple retail 101. you are also able if you have a problem with your device, go up to a dedicated place, genius bar, and get it fixed. the problem is these days, both of those core things of classic apple stores are much more difficult. the cash registers are gone. it is hard to know which employees are there to help, to check you out. getting things repaired is a lengthy process. times to wait for repairs are adding up. the genius bar experience is gone. now you have roaming geniuses. you have the genius grove. apple stores are all over the place and it seems like the company did not have a vision of what the store should be anymore. now under the new retail chief, the hope is that apple will start to go back to some of its roots which had very successful stores.
emily: on the flipside, the online ordering experience and delivery experience has gotten a lot simpler. does this have anything to do with angela ahrendts' departure? mark: that is a good question. it does not appear like she was fired or pushed out. my interpretation is she was wanting to leave. she gave good reason to leave, spending more time with her family. she is from indiana originally in the u.s. worked at burberry in london for many years and then traveled to california. of course, you want to spend time with your family, but it does not appear like they did everything they could to get her to stay. i think apple realized it was time to shake things up after five years. i think you saw that during the end of her tenure. you saw them going back to that hard push of iphone sales and upgrades. i think you will see more of that as apple reverses the slowdown.
emily: has apple given you any response to this latest report? mark: no, apple declined to comment, but the company, they did hire this new retail chief and i think that is giving a lot of optimism inside the company, especially among the 70,000 retail employees who believe they are going to be positive changes. it should be noted, when you have so money stores across the world, 505 now as of the end of this week -- this weekend, a new store opening in washington, d.c. there are going to be mixed opinions. in recent years, there has been an increase of complaints about customer service. people not really agreeing with the direction. a lot of optimism that the move will shift back to what was so successful. emily: "bloomberg tech's" mark gurman, thank you so much for your reporting. and, that does it for this edition of "bloomberg technology." we are live streaming on twitter @technology.
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