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tv   Bloomberg West  Bloomberg  July 22, 2016 6:00pm-7:01pm EDT

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fire at a munich shopping mall. 8 people were killed, several wounded in a rampage authorities described as suspected terrorism. dy near the scene is being examined to see if it is one of three gunmen who carried out the attack. lande says that france will loan artillery to iraq. he's moving an aircraft carrier to the region. speaking to paris, president hollande pledge to act "firmly against terrorists." the highest court in france has ruled that christine lagarde will have to stand trial in the case stemming from her time as france's finance minister. she is accused of negligence that pave the way for massive corruption of government payout to a tycoon. virginia senator tim kaine is emerging as the leading contender to join the democratic ticket as hillary clinton's running mate according to two democrats who both cautioned that mrs. clinton could still
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change directions. the announcement of her pick could come today during a campaign event in tampa, florida. just completed republican convention. global news 24 hours a day powered by 2600 journalists and analysts in more than 120 countries, i am mark crumpton. emily: i'm emily chang in this is "bloomberg west". coming up, verizon can see the finish line in the race for yahoo! details on the telecom giant $5 billion pitch. pandora opens up. one million active listeners have tuned out. founder and ceo tim westergren explains why he is not worried. and it's not a michael bay movie without its epic explosions. now you can get to experience
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them and virtual reality. details on how the director is stepping up his v.r. game. first to arlie. verizon is on the verge of winning the battle for yahoo! verizon is nearing a deal to buy intranet assets for $5 billion. at this stage, the deal does not include yahoo!'s patents. the deal may be announcing coming days, ending a month long bidding process. tech editor. o uur sir alistair, when we would know for sure? alistair: so far what we know is that barring any last-minute disasters that verizon has won it, in a combination of more money but also strategic value. put a bit more cash on the block. emily: now, the information reported that yahoo! would not be -- for anyone.
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is this really a good idea for verizon? they already have a legacy asset in aol. they have been transforming that asset. does this combination really make sense? >> i think it does. first of all, you get larger scale in terms of a media asset. secondly, you have some pretty complementary products. verizon's aol does really well with political and entertainment and yahoo! does really well with broader views, finance and sports. finally on the backend, you have the technology ad platform or you can sell that to agencies. and really hit a broader audience. emily: i did speak to ariana huffington and recently -- aol bought "the huffington post." take a listen to what she had to say about the synergy. -- verizon synergy is a huge distribution potential for us. especially, we are moving more and more intermediate. we launched go 90, which is
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have video play and produced and paid for great con tent from many providers. fort hihis fantastic huffpost because it gives us great distribution. verizon plus yahoo! become a great content distribution platform? alistair: they have about one billion monthly viewers. they have a smaller mobile audience that is growing quite fast. that is where they are going to need to improve. top couldh stuff on be a great combination, but really they are paying with aol and yahoo!, they are paying $10 billion to basically cut 1/3 after google-- way, way ahead. it is going to be a tough growth. emily: is a $5 billion price take a good deal?
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we originally reported verizon may not be considering the real estate asset. it includes the core business but does not include yahoo!'s i .t. neil: if you look at what verizon paid for aol. this is a slight premium to that. and you are getting a much larger base of users. basically, a better brand. emily: what happens to the other brands that yahoo!? tumbler, crunchy roll? neil: we have seen with aol when tim armstrong took over, he started to dismantle aol and sell off the brands that were not core to the mission. not making a lot of money, they will sell that had emily: andy cinko at what about marissa mayer? we reported that -- interesting. what about marissa mayer? if verizon was a winner, marissa mayer would not likely stay on. and tim armstrong would run
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yahoo! what do we know? alastair: she had a very tough job, i would argue, running yahoo!. i imagine she is going to be looking elsewhere afterwards. i suspect almost any tech company would have her. emily: exactly, what is next for her? this should become, does she going to venture capital? does she go to run another big tech company? alastair: i think she will probably pass on an opportunity to run a big legacy technology company. she could maybe, she would be a great venture capitalist maybe for a while. i suspect longer-term she is going to be running a big tech company that is hopefully growing this time round. emily: i know she does have a passion for new products. before she joined yahoo! she did a lot of angel investing on the side. neil, what do you think her reputation will be on the street
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after this is said and done? neil: fairly mixed she came into yahoo! with a whole aspiration to really grow this business. all t hat's happened is that revenues have did -- continued to decline. the fact she is able to salvage some value will be positive but her track record is not that great. emily: we are going to be a washing. sometime early next week, we presume we will see some sort of climax after all of this time. thank you. both. well, paypal cofounder and venture capitalist pedal keel -- peter kill became the first speaker ever to declare he is gay in a speech at the republican national convention on thursday. >> every american has the unique identity. i am proud to be gay. i am proud to be a republican. but most of all, i am proud to be an american. night,later in the
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republican presidential nominee donald trump pledged to protect gay citizens after a nightclub shooting in orlando. rights campaign which endorses democratic presidential candidate hillary clinton said it was disappointed with both speeches. the group says keil should have used the speech to push for equality and trump was using the orlando shooting for political gain. coming up, pandora's revenues fall short as listeners tune out. our interview with pen donor founder and ceo tim westergren next. we are watching paypal dropping. on concern about the cost applications of its new agreement with visa. shares closed down 6% from thursday. this is bloomberg. ♪
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interview withur pandora founder and ceo tim westergren catch shares plunged after pandora reported revenue that fell short of estimates. by the end of the day, up over 2%. it lost more than one million previous listeners but listener hours increased 7%. we got started by asking westergren how he make sense of these numbers. een westergren: we've b signally we expected to be flat for a while. really we are surrounded by the blut of -- glut of free on-demand services we cannot compete with yet. we are on our way to do that. but i think the growing engagement of the really positive signal for us. our core listener base listens more and more. hour amonga 24 threshold. that is a reflection of product improvements, our team has grown, more distribution. we feel really good about the
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core product and cannot wait to offer the more complete marketplace to compete. 4 billion by 2020 but revenue growth is decelerating and now we are seeing the listeners fall. why should we trust your plan? mr. westergren: let's start with the base. millionve about 100 people coming to pandora. and their listenership is we have had a huge and spread -- we had a huge investment. wing. are gro as we look ahead as we expand the product and we are diversifying from advertising and inscriptions, we are going to start balancing business warrior optimizing -- we are optimizing, good 20% year on year. i think the business is in good shape. emily: you have made acquisitions. you are working on an on-demand service. what will be the key differentiator? there are so many on-demand services. apple is reinventing its music
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business. spotify is modified. what is going to make yours different? mr. westergren: a lot to bring to the table. this is not going to be a me, too, product. on-demand services are 30 million songs and good luck. that is not what you need for the average consumer. pandora brings this enormous listener base about which we know what time. when you come to pandora's on-demand service we will be able to curate that and make the on-demand service as easy and intuitive as we made radio. the music will magically appear and will be easy to use it which i think is the reduced's problem that needs solving right now. audience and, huge the ability to deliver our products will be differentiated. emily: do you plan to have a tiered service that will keep you engaged with the radio product? mr. westergren: you start with this foundation of 100 million people who listen 24 hours a month about whom you know a ton. this is about adding the upsell
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opportunity. so we can speak to you in the context of your radio experience and say, we have noticed this about you. you want to do this as well, subscribe to pandora. we can find the right place to hook people -- ways to hook people in. the music industry is seeing we are incremental to the business. we are going to solve the biggest problem -- how do you take that mass population and bring them into the services? emily: what are the key sticking points with the industry, with the labels and the artists right now? mr. westergren: the key sticking points, we feel confident based on the progress of the last few months, a great win-win. alternately part of what is taking time is we did not come inw ith a cookie-cutter deal that came before us. -- we offer a more considered product that require additional features. that makes time -- takes time to evangelize and explain. they are beginning to understand the opportunity we bring. emily: there is an ongoing review of publishing royalties
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for streaming services. how could that impact? mr. westergren: the big piece is really on the performance side. that is what we are negotiating directly with labels right now. i think we are also increasingly confident we can sign deals that preserved the long-term economics, which is very critical for us as we diversify the business. emily: on this report from "the wall street journal," that you guys got an offer from serious ex-im. what happened? mr. westergren: the ceo of my job is to look after long-term value, myself and the board. that is the lens that makes all our decisions. we have a strong core business. again, i wish i could show you the product we are going to launch. it is going to be something else. thate bringing so much to product. i think we are going to reinvent the space. emily: this is a question you feel that many times over the years i have asked you this question many times, but are you open to the offers that cross your desk? would you ever consider selling? mr. westergren: again, my job is
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to look after long-term shareholder value. strong, independent board. we take all that seriously. that is how we make our decisions. emily: we are at the height of the political season you once told me that pandora can tell if you are a democrat or republican. how can you tell? combineergren: if you your zip code with the style of music you're listening to, we can predict your political affiliation with a 90% accuracy. it is an amazing platform for political advertising. we see spending on pandora from local and county supervisor races all the way to presidential. it is amazing. the effect of targeting. we have a very strong political foundation, the right product or this year has been unusual. and we signal that in the call. it's reflected in our second-half guidance, because the spending on the republican side has been slow to mature. we expect a strong season hit emily: we reported the presidential campaign, super pacs have been spending on pandora because of the ability
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to get targeted advertising. have seenring if you any interesting trends when it comes to political advertising and how much that has really helped the ad budget? mr. westergren: the visibility of the platform in d.c. has andn across the republican democrat spectrum. candidates are getting more savvy about digital. they know how to use it. and so, it is a tailwind for us from a revenue standpoint. emily: you said half of radio listening occurs in the car. what kind of traction are you seeing in the car in particular? mr. westergren: a lot. north of 190 miles have embedded pandora functionality. 19 million unique type divisions -- unique activations. we are waiting -- the day when you get in the car and turn it on and pandora starts playing. when you get to that point, it is a whole new ballgame for us. them asre lockstep with they develop the technology and helping be part of that development, actually. but we want to be right there
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for when that nirvana arrives where the car is like a rolling computer and pandora can be there easy to use on the dashboard. emily: our exclusive interview with pandora ceo tim westergren. coming up, the apple watch. are down 55%. we discuss what it means for the company next. this is bloomberg. ♪
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new information about the ultra-secretive apple car. previous cars had set a 2020 release date. according to a new report, that date has been pushed back to 2021. little is known about the car. nicknamed project-. it will be an all electric car with a focus -- whatever it ends up looking like, will have to wait longer to see it. watch shipments are down
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for the second quarter this year. according to new numbers, sales have fallen by almost a third in large part due to the apple watch. market share sales for the device are down 55% compared to the same quarter a year ago. andave a research manager joins us now to break down the data. why such a dramatic drop for apple in particular? >> take a look at where we are right now. we had no -- product refresh in of second quarter 2016. rewind the clock back -- that has been the watch launch. that is when the was a lot of anticipation, pre-orders. when you do not have that same quarter kind of fulfillment schedule, you are bound to see that kind of decline year-over-year. so, all eyes are on apple, is it going to be during the third quarter, fourth quarter, if it all? if so, what is it going to look
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like and what is able to do the first generation didn't? emily: did the competitor come out with competing products? did samsung, garmand, they did not see much of a change at all. their 55% drop in a lot of the vendors, samsung, lenovo, they all posted double-digit gains year-over-year. that says to me, even though apple does get more than the lions share of attention, the competition is not staying still and they are doing their own thing to not just remain relevant but also to establish themselves. look, if you took a look at the samsung gear s 2, you can hook it up to your cellular account over at&t, t-mobile, sprint and verizon. you could make phone calls and get. you can make phone calls without having to go through your smart phone. emily: how do you think the next
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generation will change things? >> in terms of hardware, i do not see a lot of changes taking place. this is still a first generation device. i do not think apple wants to alienate or disappoint anyone who got the first generation apple watch with a brand-new body type and change all the physical aspects about it. instead, i am taking a cue from her worldwide developer conference from apple. the emphasis is on software. on having more sensors, having it easier user interface. be able to navigate through a lot quickly. apple is responding to a lot of the criticism that many people had. is that going to be enough to say to a lot of people, this is the watch i have been waiting for? probably not, especially among apple fans who take the approach of, i am going to waste that second or -- wait for that third generation device. emily: the apple watch in its first year still outsold the original iphone in its first year. we are in a different time.
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ch becoming ae wat much larger category, or remaining fairly niche? >> i think for now, it will remain fairly niche. theou take a look at financial results we will see next week, my suspicion is that you will see a lot of the apple iphone accounting for the majority of revenue in vines the othersumes than category where the watches are. if you compare the revenue numbers, the watch in that other category does not hold a candle to what you see for the iphone shipments. for now i think it is just going to be a niche category, among the loyalist fans out there till more user-friendly, mass-market from the. then a lot of innovation goes into it. iche categorys a n for apple. the iphone makes up 65% of business. the watch makes up 5%.
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they are relying more on services and the services part of their business. does it matter right now? does matter. because look, this is a market that is still very much in its initial stages right now. for a company like apple to lure into the market and establish itself as one of the major players, that says a lot. if you think about the overall digital strategy for apple,the apple watch is yet another reason you do to keep you within that apple ecosystem or perhaps to switch over. i think it will be more of the former. even though it is a niche, i think what we were hoping to see this year and into the next couple of iterations to come is show ae that is going to lot of maturity, a lot of innovation and development. so that by the time, 2018, 20 19 rolls around, we can look back on 2015 and 2016 and say that first apple watch looks rather quaint. rather simple. we can make that same argument for looking back on different iphones and ipads.
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folksg to a lot of the within apple, the numbers are very much where they want them to be. and that says to me they did not expect this to be an overnight success. nobody anticipated the watch was going to account for 50% number six he 5% of revenue in its first year. it just was not going to happen. it is a long marathon race ahead . emily: thanks so much. coming up, prepare yourself for the next transformers movie may be in v.r. michael bay is partnering up with a production studio. a production studio. sneak peek of what you can watch for next. i fyou like bloomberg news, check us out on the radio and listen on the bloomberg radio app, this is bloomberg. ♪
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you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. mark: let's begin with a check of your first word news. german police say a munich shooting attack has left 8 people dead along with the ninth body that police are examining
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to see if it was one of the attackers. police are still searching for the city for the shooters. munich is in a locked down the trains, buses and trolley cars halted. president obama responded to the attack. president obama: we don't yet know exactly what is happening there, but our hearts go out to those who may have been injured. it is still an active situation, and germany is one of our closest allies. so, we are going to pledge all the support they may need in dealing with the circumstances. mark: this is the second attack in germany this week. in baton rouge, louisiana, family and friends paid tribute to matthew gerard who was one of the three police officers killed in an attack last weekend. funeral services for sheriff's ofolo will bear held saturday. jackson's funeral is held sunday. hillary clinton was in tampa,
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florida today. as she gets closer to naming her vice presidential running mate, she took aim at the republicans following their convention this week in cleveland, and she mocked republican presidential nominee donald trump. mrs. clinton: donald told us, i am your voice. he speaksn't think for most americans, do you? he does not speak for small businesses like the ones he has consistently stiffed and driven into bankruptcy and financial peril. also visitedinton the site in orlando of the rampage that killed 49 people at the pulse nightclub, placing white flowers at the site next to a candle and a framed picture of across. donald trump says he would not accept ted cruz endorsement even if the texas senator offers it. trump says cruz should have
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endorsed him and he might set up a super pac aimed at defeating cruz if he tries another presidential bid in 2020. on hisys trump's attacks wife and father nullified an earlier pledge he made to republican nominee. one of aviation's greatest mysteries may remain unsolved heard the hunt for the missing malaysian jetliner will be suspended once the current surge area in the indian ocean has been scoured. officials from malaysia, china and australia admit the likelihood of finding the plane is fading. the boeing 777 disappeared more than two years ago. global news 24 hours a day powered by our 2600 journalists and more than 120 countries around the world. i am mark crumpton. emily: i'm emily chang and this is "bloomberg west". there is no stopping pokémon go.
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the reality game set a new record in the itunes app. app downloaded more times in its first week than any other in history. there is no signs of it slowing down as the game appears when it all began, and that is japan. it's local release comes two weeks after the app made his debut overseas. for not --a roadside worldwide phenomenon that added $20 billion to nintendo. go players are struggling to maintain a game life balance, including some journalists. one reporter was called out during the state department briefing. >> as the secretary said earlier today, and i think it is important reminder -- you are playing the pokémon thing right there, aren't you? >> i'm just -- >> did you get one? >> no. the signal is not tracking. >> sorry about that. emily: darn. from a.i. and video games to virtual reality in films, one man has found his call of duty.
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we caught up with pete, the ceo and creative director at the rogue initiative, a studio. they just set up a partnership with michael bay, creator of hollywood's hits like " pearl harbor" and the transformer series. i started by asking about the partnership and how he sees b.r. enhancing michael bay's work -- v.r. enhancing the work. haveis is something we been working on for quite some time. it involves a few moving parts but we got to know each other a few years ago. we had a few ideas we wanted to create. especially in the interactive space. i've always been passionate about trying to find places where hollywood and tech can come together. became that bridge. we have to find a way to bring michael into this. he is a talented person with amazing ways of executing things we never think of. for us to come together and find a place were we can create that and curate it for v.r. is
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what we are pushing right now. emily: there is a question for entertainers as when to start adopting new technology, like 3d. it has been slow, though some filmmakers are going that route. v.r. enhancing michael bay style? pete: he knows how to bring people into the moment. that is what his movies do. that is what i've max is about. this is another version of that. to create character and emotion and alwaysthat is what i've max. this is another version of that. to create character and emotion and always ridiculous, amazingly blowup kind of environment and sequences is what he is really good at. he is the perfect partner. he is someone who is always believed in technology. he is one of the people we want to get in first and create the framework for what v.r. could be. emily: will we see it in the new transformers movie? pete: possibly. emily: what about cost? pete: v.r. is not as cheap as someone would think. the more important thing is how
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do you monetize? so, we are looking at baby steps. episodic content to create bigger experiences as we grow into the space. emily: you're also working with a producer of "interstellar." a remarkable talent. we have a live action division. we have a partnership to work on content. right now her role is to quit working as an advisor of sorts and really helping us navigate some of the hurdles in the production process on the hollywood side. emily: is this something that all filmmakers should experiment with? pete: there are certain aspects of film and some directors know how to make explosive, big special-effects movies. we can make really intimate kind of interactions with people that y would normally, the normally go to movie and see some thing, get to know that character and have the director bring you into that world are into what we call spaces you
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would not see on screen. we can created in a virtual reality experiment or inviting. i wouldory is yeah, encourage a lot of full, especially ones with big worlds to experiment with ringing us into those world. emily: you worked with a number of different distribution channels. gear,oculus, samsung netflix, amazon, hulu. what are the key challenges in producing content for so many different players? pete: a lot of it has to do with how you offer content from the onset. there are tethered high and systems and something for mobile. you have to be up front that either works on mobile or it works as a tethered experience, more costly to make. or create content that you would dovetail out of that. so we have things we are doing internally to leverage assets on both sides. side or the other when you are doing the project. we have projects that work in different places. emily: you were very involved in
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the activision call of duty franchise. a lot of the gaming companies we have spoken to like take 2 and e.a. and even nintendo have been cautious about virtual reality and investing resources that. they say, we are going to wait into the market develops. are they on the wrong side of history? pete: possibly. a loss of what you see is the approach of seeing things, how they pan out. any come in later and do acquisition. we saw candy crushed get bought for billions of dollars and more than disney paid for "star wars." be moreblishers tend to cautious about things which gives us a good spot to create cool ip and build out a portfolio and the slate. i think we are in a good spot for later on. emily: when do you think v.r. will have its mainstream moment? pete: things like pokemon go are showing there is some kind of demand for it. and just the right ip with the right tech at the right time. emily: have you played?
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what you think? does this mean ar is here now? pete: that is a great first step. it is very compelling. here i am. i have kids. we all love it to we go for walks together and things like that. the social aspects are very important. emily: how do you see the futures up a.r. versus v.r. in entertainment different? when we see a.r. in movies the same way that someone will see virtual-reality? virtual-reality will have its own place where it is a very social, in a confined space. you're in a theater, in experience that is very much you are in another world entirely. a.r. kind of does something different, it blends worlds together, which is very good. those two are very separate audiences. i'm not saying that they have to do either/or, that they are different experiences. i do believe a.r. is something that will come from v.r. technology. good gateway. emily: that was pete blumel ceo
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of the rogue initiative. we are wrapping up our series on the multibillion-dollar food tech industry. we will speak with a ceo who wants to make your kitchen obsolete and yes, i got my first taste of -- this is bloomberg. ♪
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we are wrapping up our deep dive into the multibillion-dollar food tech industry up it we have spoken to some of the top disruptors, including nima, a portable gluten center. now we turn to a company that has done away with food altogether. soylent, the producers of a memory placement shake, has taken silicon valley by storm. wildly popular with tech workers, it contains the
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necessary nutrients for a human being. soylent ceo rob reinhardt joins us now from new york. thank you so much for joining us. i got my first taste today. with our floor director mallory. so, it tasted sort of like the milk at the bottom of a cereal bowl. i decided maybe i would like mine cold in coffee or something like that. but, first of all, tell us about the idea and what sparked this for you. >> the idea grew out of a personal need and frustration. i found that a lot of my options for food were not doing the job. a lot of options seemed unhealthy or inconvenient or not really affordable. and moreover, i seemed pretty frustrated by all the waste and processs surrounding it, throwing away lots of leftovers and packaging material. i just thought, could we really design something from scratch to be exactly what we needed to be
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really healthy and then manufacture it in a very efficient format, trying to be very sustainable, very healthy and what we found is really important for consumers these days is convenience. so, it tastes very pleasant. be, doesn't need to refrigerated. shelf life of the year. at lens itself to e-commerce where we do our sales right now could we sell on amazon. and we found that people have taken a liking to it for breakfast or your hurried lunch. makes a lot of sense. emily: so, can this really replace three meals a day? >> that is not exactly the intent. consumers want to eat a variety of foods. i strategy is not to convince everyone to live on this one product but to come out with more great food products that allow people to save time, money. it is a great, quick, easy light meal, 400 calories. subscribers.r we have a lot of excited products int he works.
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emily: what exactly is in it? tell me about the recipe. >> the recipe has gotten from taking a look at the nutritional requirements of your average human and kind of working back from there. we need these vitamins, these minerals, these electrolytes. certain protein sources that are better than others. we use only plant proteins. il because it avoids cholesterol and it is a sustainable source of healthy fats. we use a low glycemic index carbohydrates. it is all the bodies requirements with little subtle sweetness and a little bit of flavor. but a lot of people flavor it on their own as well. emily: how big a business do you think this can be? i was interviewing mark andreessen and he talked about soylent as the one investment that people say, you guys are crazy. obviously, they are big hackers of your company.
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how big of financial opportunity do you think this is? in norma's.y think about it. everybody eats, everyone chooses one food brand over another. trends are more towards packaged foods. i think that we can make debtor, healthier, more convenient packaged foods and save environmental resources -- i think we can make better, healthier more convenient packaged foods. nestlé does more revenue than google. there is an enormous financial potential. this is a huge market. and i think we are seeing the beginnings of major movements in the food space. we want to be on the forefront. this is really popular in silicon valley, popular among folks in the tech industry. i know a few women who drink it. what i had to point out this week from a journalist who said, i tried explaining soylent to my mom and she was like, oh, you mean slimfast? i was like, but now made by and for men.
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this was retweeted thousands of times. how do you respond? there is a big difference between something that is designed for weight loss and something designed to fill you up in a convenient, affordable fashion. there are products of help you lose weight, there is not something designed to maintain your weight and then improve your overall health. if you look at the calories and some of these other drinks, it is clear they used for post workouts supplementation or weight loss. this is something completely different. it is meant to fill you up. you feel full. it is a good way to count calories. but it is not something intended for weight loss. it is a wholly different product. emily: i spoke to, we had soylent presenting at our bloomberg tech conference. the person who was giving out the sample said that the customer base is a majority men. is that the case, and how do you, are you intending to target more women and how so? >> absolutely. i think there are number of ways. couple only our first products.
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we have a lot of products in the works. some released quite soon. for women, there are considerations around serving size. 400 calories and a bottle may be a bit much. so, we have different packaging and serving sizes in the works in addition to other products. there are a good amount of women using the product today. we can capture more of that market through additional flavors, additional serving sizes. everything, all things that are currently in the works. talk about want to the competition quickly. there are some competitors out there. smoylent, schmilk. more established competitors. some people have said to me this is just like another kind of protein shake. what's your response to the competition? >> it shows the appeal of the idea. there are a lot of copycats. flattering, but i'm confident we have the best products at the best prices. emily: rob reinhardt, ceo of
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soylent. thank you joining us today. ok, big tech earnings in the week ahead itq2 is historically apple's slowest. will there be a change of tide? what to expect from the iphone maker. on monday be sure to tune into bloomberg for david cody's interview. this is bloomberg. ♪
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to techooking ahead earnings next week, apple is set to release a report on thursday. the fiscal third cordy is rarely a great one for apple but it could be worse than usual. tim cook says apple will be between $41 billion to $43 billion in revenue. what should we be looking for? alex webb who covers apple for bloomberg. apple has guided us lower
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compared to the third quarter of last year but why so much lower? alex: it is the fact that trough of their product cycle. sixthars sinc the generation of the iphone was introduced. we expect a new one in september, october some time for the flipside is that they are also experiencing a bit more competitive pressure in places like china. h does the dmuc iphone have to do with this? it has been more popular. and analysts have given a good reviews. that may be bringing down the average price of the iphone c. alex: on the one hand, is it going to win new customers and ries,oping count india and china, or cannibalize the average sales price in the u.s.? ideally, apple wants those people to buy the higher and 6s, 6splus. iphone seven and people are
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paying less for the s,e, not great news. emily: let's talk about china. last quarter, sales fell in mainland china. what are we expecting? alex: we are expecting sales probably to fall as apple has telegraphed and analysts are expecting. the problem is in china that localhone is made by competitors are rather good. they are cheaper than the apple phone often. not quite up to the same spec, but if you're paying the price of what you may lay out for an iphone, it is a very appealing prospect. emily: what about some of the regulatory issues, the lawsuits, around ip? is that a serious competition? alex: at this stage, it is relatively minor. that it herald further problems. china has never been an easy place for western companies to do business. a broader start of push, a broader attempt to push the chinese manufacturers and give them an edge, then it could
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play o apple. n emily: on a lighter note, pokemon go is bringing up a good business. not the zombies walking around the streets of san francisco. they have seen the fastest history, apple's announcing this yesterday up in a lot of analysts have said this is the case. thewe've seen the bump in nintendo stock as a consequence. emily: the iphone 7, we are expecting it to be unveiled in the fall. how big a bump are we expecting? alex: it is hard to tell. people go into these things and say, it does not look like the iphone will be that great. then it blows them out of the water. it is a brave man who makes predictions about a phone that nobody has seen yet. the expectation is that next year's phone, let's call it the iphone 8, will be more of a blockbuster. it was ten-year since the iphone would have launched. that gives reason for them to say, look how far we have common introduce a raft of different
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products. there may be some changes, we think. different headphones. some other tweaks around the edges, but i do not think it is going to be mad. emily: we spoke earlier about a not so great outlook for the npple watch, how it's beee performing, sales have dropped 55% while competitors had actually held steady. what does that mean? alex: that might be a function of the same trend with the iphone, namely that it is a while since the apple watch has been introduced. people are expecting a new apple watch this autumn. emily: so, we are going to give an iphone 7 and a new watch? alex: the difference is that the next apple watch 2 will have direct cellular connectivity. you can potentially leave your iphone at home and make calls on your watch. emily: that would be very helpful. what about this news about the car? the car could be delayed until 2021?
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we don't even know if the car -- alex: testing the breeze. the car, apple never confirmed they are making a car. mean, there was talk a couple years ago that apple's developing a television. that product never surfaced. i am sure that there are any number of things they are developing behind the scenes. setting expectations -- when they might arise is, you know, it is reading tea leaves. and maybe that tea -- cory: emily: he'll be covering apple for us next week. thanks so much. that does it for this edition of "bloomberg west.:" " happy friday. we will see you next week. ♪
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charlie: welcome to the program on the final night of the republican national convention in cleveland, ohio. donald trump made the most important speech of his life. he was introduced by his daughter, ivanka. here are excerpts from these speeches. ivanka: one year ago, i introduced my father when he declared his candidacy. in his own way and through his force of will, he sacrificed greatly to enter the political arena as an outsider and he prevailed against a field of 16 very talented competitors. [applause] for more than a year, donald trump has been t p


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