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tv   Bloomberg Technology  Bloomberg  January 2, 2018 5:00pm-6:00pm EST

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in a video, on twitter, he said "every good fighter knows when to hang up the gloves and for me that time is approaching." he opens the door for mitt romney to run or his heat. u.s. and that -- ambassador to the united nations announced -- that the new at u.s. is in range of a nuclear strike from his country. must remain .elichick went -- led to went we will >> never accept a nuclear north korea. when asked about possible talks between pyongyang and south korea ahead of winter olympics, she said carlos correa can talk with whoever they want, but the u.s. is not going to acknowledge it unless they agree to ban the nuclear weapons they have the
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police in brazil say the search is on for 99 inmates who escaped during a prison riot. nine inmates are dead, 14 are injured. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. ," isbloomberg technology next. ♪ i'm emily chang. this is "bloomberg technology." could the biggest company on the planet go on a buying spree. we look at apple's billions of dollars of cash on hand and possible ma and a targets here it plus, bitcoin's hangover. can the currency regain its peak? we will talk about the likely ,uzz around the -- the first
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there were about 2.7 billion dollars of mergers last year, the lowest tally in four years. will 2018 see a new rush of merger mania? anotherill buy yet major brick-and-mortar business in 2018 on top of its recent purchase of whole foods and he says that is target. >> the timing on this is difficult. we think it is 2018, but seeing the combination of value is easy. this is not just a revenue grab, but a demographic grab. om demographic is critical to business. emily: it is said that apple will likely get aggressive in the coming year.
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why do you think apple will be the big buyer? is with the new trump administration, it opens up the opportunity to bring in a lot of cash internationally to the u.s.. invest in r&d as well as other companies, and don't forget stock buybacks. what we do lay out a list of potential shopping targets, we also want to know that stock buy back is probably going to be on the front of most companies out there. you mentioned political uncertainty. we have a chart here showing the relationship between political uncertainty and m&a volume. you think apple has the problem of to much cash, what you think the target might be? jim: it's not only a problem today, but also a problem getting worse. that's a good thing. too much cash growing to the billion per year.
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when you think about m and a, first it is important for a company to invest in itself and innovation. second, what kind of items are they missing. and time talked time again about content and creation of content. emily: so you think about disney? jim: that is one people talk about among others. we believe apple overtime has looked at not only small, but actually large major mergers. emily: they may have looked, but they have never done it. the biggest acquisition they did was of -- which did happen under tim cook, which may be a sign that he is more open to deals in the future, but what makes you think it will be something high-priced? jim: before the tax law, there is a big penalty to bring the cash back, now that penalty is gone and a lot of things may
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open up. but the big thing is artificial intelligence and content were people want to access everything now, immediately, matter where they are. people want to ask us everywhere -- we believe simply apple is going to look at this and artificial intelligence and new ages of opportunities to invest. what about apple buying tesla? jim: people have talked about that. simply put, tesla makes cars. is inoutsources and apple charge of operating systems and user experience. we don't see that as a high probability. emily: they do make phones? jim: they outsource the phones. emily: they outsource manufacturing, but not design. jim: true. emily: when you look more broadly, what you think -- we
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have heard predictions that amazon could buy target. what do you think will happen more broadly with that? of: i think people think tech as being a small area of innovation and now we are seeing these new disruptive innovations coming along that m and a will heat up. we think this will be a year we call merger mania out there and size really isn't create a restraint on things. also stock buyback, a natural creation's to go higher. this will be merger mania. will goou think they through regulatory issues like we are seeing with at&t and time warner? jim: i think so. a lot of the area we deal with as far as hardware in the user experience doesn't see the amount of pricing competition or government scrutiny you raised earlier. emily: you have also reiterated
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your by on apple, you think it could good higher -- go higher. i do. tax reform is one way to bring things up. we expect apple to see growth. people say everyone in the u.s. has an iphone, but that is not true. price phones lower growing. emily: how do you think the tax cut are going to impact some of the giants like google, for example? we laid out a scenario of the actual financial impact. 7% decrease in on lower taxes and 7% for buying back stock. apple fits in the mid-part as far as where the ranking goes.
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some companies who have a lot -- -- thank north of 20% you so much for stopping by. tax penalties are considered on companies like apple and google. u.k. security minister ben wallace says patience is running out fast. but going off to a rocky start, can the cryptocurrency maintain its height? check us out on twitter. this is bloomberg. ♪
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emily: a story we are watching, -- heater teal's amassed investment in bit going. the holdings of value reached hundreds of millions as the digital currency soared last year. meantime, bitcoin made gains in tuesday's trade. in a breakdown, bitcoin -- and
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tax cut leading the rally for the first trading day of the year. we are joined by abigail doolittle. bitcoin rallying, but far off from its cake. tell us what happened. abigail: lots of volatility here for bitcoin. last month we saw lots of volatility. a wide range of bitcoin. below 11,000.g this tells us there is uncertainty about what is next. the bulls will tell you it is the thing of the future, at least blockchain, you have to be in it. the bear is saying it's a bubble, there is mania. lots of uncertainty the wide range in bitcoin last month, we are flashing that uncertainty and we are seeing at in 2018. yesterday it was down 5% on the day, today bitcoin is basic the flat. and after that bullish report about founders, we saw it
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finishing higher about 8.5%. relative to this marketplace, it is handy to take a look at the technicals. at the end of the day you're trying to tell where the sellers and liars land. chart.ook at g #btv almost a thousand dollars this time last year, close to $20,000 in mid-december, but here is that volatility, the wild swings. the point here, emily, we are looking at lower highs here it that tells us the sellers are gaining momentum. we have a lower low today and yesterday to the recent lower lows. that is technical jargon, but a way of saying the battleground is likely to continue between the bulls and the bears. this chart may suggest that to some degrees these sellers are
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going to have their way. anything seems possible with bitcoin, emily. emily: definitely interesting news from peter thiel. talking about technology, starting strong again. day for theullish start of 2018. before we turn to nasdaq, s&p 500 putting in a record high, but this is the first time for the s&p 500 that has happened since 1992. we even nasdaq outperformed in a big way, up 1.5%. interestingly a lot of it was tech, but it was also biotech. and you are looking at the strength of the chip, stocks there that really throw those gains, amd and macron, and the named by bank of america, merrill lynch and other chip
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stocks gaining the month of november in an industry group or . and then relative to biotech, biogen and others gaining in a significant way, for sure. we were talking about apple earlier, but i see green across the screen for apple. what else did you see? abigail: there was another analyst out positive on apple as well. the other analyst was michelson at hyper. pipermike olson at based on a bullish iphone customer survey. there is possibility that the iphone x isn't doing as well as --e might like, but facebook, amazon, netflix, ogle all doing very well. netflix up 5%, a big day after
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the analysts their believing they could take over from a subscription standpoint. and what stands out about the , inc. ofce, last week america -- wobbly. here we have a chart to show that 2018 has started off in a bullish way for the bank stocks. 3382, and look at .he bank index up about 2.3% that was driven by amazon results, breaking this stalemate here we saw back the end of december. some of that could of had to do with investors leading the big gains. now that we are looking at of new year, the bulls are back. all right. bloomberg's abigail doolittle i'm sure you have lot to talk about this year.
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tesla reports fourth-quarter sales and production later this week. will it shed light on the model three production --this is bloomberg. ♪
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emily: chinese internet entrepreneur has defied orders to return home. attackcame to help company he founded resolve crushing debt. he says he needs to stay in the u.s. to work on his electric cars start up. he expanded into smart phones automobiles before coming under increased criticism from authorities. the chinese regulatory commission issued an order for him to return by the end of 2017. instead, he and his brother and wife have been empowered to handle affairs with the shenzhen listed firm. tesla is keeping wall street guessing about sales of its model three sedan. the electric carmaker may have
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delivered four times more model threes and it did in the past three months. other analyst say it may have increased by a factor of 40. our correspondent who covers all things tesla. have non-employees started receiving their cars yet? >> yes. and if you search on twitter you will see all kinds of information from people who have gotten their cars. the first waveng of deliveries going to regular people. these are usually people who also own a model as or and ask. you are starting to see them in the wild. i sell the first one myself the other day. said, they did scale back delivery targets significantly, right? >> they are basically running a quarter behind. elon musk has said it's not
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likely to hit until later much. what everyone is wondering is common a cars did they deliver. i think we are hearing that a lot of cars were delivered in the last two weeks. emily: what are the tweets saying about the model three? >> the first people who have them seem to be pretty happy. issues thate mild are probably software related, but no major issues yet. emily: what are we going to hear later this week, exactly? automakersy most report sales on a monthly basis, tesla does it quarterly. quarterly sales and deliveries are the same thing for them. emily: i'm seeing more model x's,to be clear -- model how is this finally
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releasing cars for the masses? sold by thousand model threes, that would be phenomenal, but most analysts suggested is more like 2900, but i think more portly it is how they worked through bottleneck issues. as long as they are on track to the first quarter, that would be good. emily: what are the production issues? dana: they had issues with their battery module and a number of untold issues they haven't specified. emily: how have investors reacted? dana: stock is up. it is interesting, because it is like i don't care about this quarter, i want to know what's going to happen next quarter. the car seems to be getting positive reviews. were taught about tech merger mania. we talked about the possibility of apple buying tesla, which i
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know has been raised for years now. he didn't think? it was likely, what do you think dana: it is a perennial rumor. it is hard for me to imagine elon musk elling his company to someone else unless he could retain full control. seleka -- so, how would that work? i don't see elon musk reporting to tim cook. emily: you never known. there is also talk about will elon musk hand over the reins, and then stay with spacex. he may step down as ceo of tesla once model three is up and running, however, he has also said he loves tesla like his own child. emily: but it is unclear which one he loves more, right? dana: right. he will always be involved with tesla in some way.
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what is interesting is they in theave a coo, so who company is being groomed for that role, if anyone. emily: so, what is happening with spacex this year? upight dana: they are giving -- gearing up for a strong year. the first lunch is later this militaryecretive payload. and then it first test flight of a larger rocket that has been in development for some time. emily: all right. thank you so much for stopping by. airbnb has won a lawsuit brought on by a management company, one of the largest involving landlords in the united states. the suit alleged that the online home sharing market place allowed tenants to break their lease agreements and sublets.
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1996 law that shields liability for my content users post. coming up, we will hear from chief legal officer about the role of tech in the current administration. if you like bloomberg news, check us out on the radio. this is bloomberg. ♪
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>> urologic bloomberg technology. it is a check of your first word news. own cheung kong continues to grip much of the u.s. to begin 2018. and chicago, the extreme cold
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front part of the chicago river and made for a difficult return from the long holiday weekend. boston has record for the in the colts not ever city. temperatures have been below 20 degrees for the past week. the national weather service has issued windchill advisories and freeze warnings covering an area from south texas to canada and from montana through new england. while al franken's time in the u.s. is officially over, franken submitted his resume to the government of minnesota, his tina smith will resign tomorrow. he was forced to resign after several women came forward with allegations of sexual misconduct against him. meanwhile, michele bachmann said she is considering running for franken's former senate seat in a november special election. ofprotesters crowd district iran, they're calling on iran to social media sites which people have been using to share news about the protests, they will
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use virtual private networks that can gain access to block sites, global news powered by more than 2700 journalists and analysts in more than 120 countries, i am a alisa parenti, this is bloomberg. it is just after 5:30 p.m. here in washington, 630 in the morning in hong kong, we are joined by david ingles with a look at the markets. good morning and happy 2018 to you. .avid: happy new year i am looking at markets right now, uninspired start of the year. it looks like we will get a little more -- a little more momentum and we will make our way toward major market -- markets this was the point. japan is still shut for the holidays but it was trading, we will likely have gotten some gains there as well and we're still seeing some momentum coming through there.
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look at what we are here, the itsar is pushing toward sixth straight day of decline, we are going to christmas, gold continues to glitter as you can see. we are pushing toward the highest level in 3.5 months. retail sales due out here in hong kong later on in the afternoon, this is it for me. i'm david ingles in hong kong. quite this is bloomberg technology, i am emily chang. after many of silicon valley's largest companies protested his
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immigration policies. one of the loudest voices was microsoft and chief officer brad smith. they spoke with brad smith on a special surveillance with president and founder even bremner. they started the conversation by asking smith about the role of technology over the next five years. >> we are seeing technology have several important impacts, with the advent of artificial intelligence or ai. we are going to see an ongoing impact on not just businesses and government but also economies and jobs. i think people are bracing for that, we are looking to the future without a clear sense of exactly which jobs will be eliminated and new jobs will be created, what additional skills will people need in order to take these jobs. i think the other thing to think about is the international level,of this -- at one i teach i doubt it has become
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more global, this is another area where he has been saying that we are seeing the rise of china, we are seeing chinese tech leaders emerge as global tech leaders and at the same time we are seeing fragmentation there technology sector, are longer quite as global and internet. i think five years from now we may see more of that fragmentation. part of your time is you are in silicon valley, you're in the real world -- seattle washington. is a thing out of or washington, how afraid should san francisco and the cliche of google or apple -- you are competitors, how afraid should they be of washington in 2018? when i get tol, washington or new york, most people seem to think that seattle is either just next to silicon valley or part of it.
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think for all of us, there is an increasing tension between the west coast and the east coast, i think we have been seeing this unfold over the last decade, you certainly see political commentators and washington dc identify the tech it is nota piñata, just those on the left, it is those on the right. i don't know that other people have transfer that concern about technology into a defined course of potential political regulation but that could, and i think it really behooves all of us in the tech sector to be listening to that and to be at addressing those concerns and acknowledging the concerns. silicon valley has sometimes been slow to do. let's move to the commonwealth of massachusetts or the english commonwealth and talk to you in about the cap -- tech comments.
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what does this mean? >> you're the president of microsoft saying what will be global tech,'s looks like you'll see fragmentation, you see that in the internet space and as we move from the information revolution,o data it is much more top down. so the space that is being created, the way that people are engaging and the filters that they seek to engage in commerce, those are increasingly either coming from a bunch of fragmenting companies that are competing with each other, very sophisticated in the u.s. or through the chinese government. those are typically different models. that is not the u.s. like globalization we have been thinking about. i think you can make an argument that the facebook's and google's and microsoft's are easily as strategically important for the united states for the economy and the national security as lockheed and raytheon everywhere
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during the cold war. i don't think the u.s. government is prepared to align with these companies that way. i also think the silicon valley epicureanism is problematic. but in china, patriotic corporations? .t is the same thing that will be in a point back to be a leader on. >> to his point, which government is ahead of the curve? if you have all these transformational changes and how you retrain people and educate people from jobs of tomorrow, how do you educate the government? >> when you look at government ai, it or investment in think one would be hard-pressed to find a government that is more focused or determined than the chinese. you can contrast that with what we see in washington dc where
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this administration is more focused on traditional manufacturing and the like then the digital or new economy. so we see an enormous divergence there. when you get into the area of skills, i think it is a lot harder to find a government that is at the forefront. in the united states we are some leadership at the state level which is not surprising, that is where we would expect to see it first. we look at a state like colorado where they have been very focused on this the past couple of years. but that the united kingdom which has been investing heavily in getting coding in schools. it is such early days when we think about what the impact of ai on jobs is going to be. i'll take any government has really formulated a strategy to address it. quite a lot of people is a lot of these changes to happen in the next 10 or 15 years. re: underestimating or overestimating? will it be sooner or later? >> there is no doubt that over
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the next two decades there will be an ai era. everygoing to reshape sector of the economy, it is probably going to touch virtually every other part of the economy in every country in one way or another. >> microsoft president and chief legal officer brad smith on bloomberg surveillance. and a developing story, a china-based financial services group has abandoned its plan to merge with moneygram international. this came after the company failed to win approval from the committee. the national security panel has become more active in blocking chinese investment in american companies, last year, they are $18 per share in cash, value and the deal at $1.2 million. coming up, the bloomberg surveillance team caught up with the analyst. what he has to say about the u.s. china race, next, this is bloomberg.
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♪ ♪ it was pointd billion dollars in taxes with the duck sandwich structure. that is according to filings in the netherlands. this involved shipping revenues for just companies and then onto a bermuda mailbox on by some of the island registered company. pressure fromer regulators around the world for not paying enough taxes. it is a new year which means new potential risks in the world of
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technology, early on bloomberg surveillance, google discussed the biggest risks for 2018. certainly means a lot more internet everywhere and it also means a lot more software and devices with programs running everywhere. you hear the term internet of things, leaving your bees run by software and i am sorry to tell you that a lot of it will have bugs, those bugs will get exploited. if i'm worried about anything, it is being surrounded by buggy software and that is what 2018 will deliver. does the software -- this miracle, this iphone, whatever we do with them every day, it is a job creator and a benefit to ae society or have we become part where it is an advantage tucson but truly a disadvantage to semi-others? quasi-natural i would put it that way.
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devices,are enabled they have definitely done a great doing good for us. true, ithink that is think we just have to be a lot more aware of the potential risks that this dependence is placing on us and i'm sure that is something in would agree with . there is risk here, you'd have to be smart about using the technology benefiting us and that is the part where 2018 will , people have to protect themselves in this online environment. >> talk about the convert between artificial intelligence and they data, and five or 10 years, how that change our world? >> i think the term artificial intelligence is hardly -- probably misleading because it makes people think that these are devices that are like human beings, they can build models in their heads about how things work. it is not that fancy. it is a lot simpler than it looks or sounds.
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complete with in that artificial intelligence. what we are seeing happening is a huge amount of data being processed by these programs that we call artificially intelligent. we use the term machine learning at google because that is closer inexperienced what is going on. of data andrgements deriving inside from it is what some of these tools will do for us but in the end, they are tools. it is important to recognize that is the human beings that use the tools that really make a difference, the told by itself just sort of sits there. >> i agree completely that this is a wonderful and unprecedented time for what technology can do for humanity. washe same way as dumbarton same before, economics right now look so much better than they have over the past 10 years. if it weren't for the politics i would feel so much better about these things.
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the alternative to what the americans are presently driving in is what is happening china and it will play nicely, we know all the efficiencies that are open to create more money for the global marketplace, if the politics don't find ways to help people make that transition then you are going to see a lot more countries, a lot more challenges and i think that is what is playing out in 2018. because of essential government is either not getting it right, they are not seeming to be legitimate or actively fighting in different models that the technology becomes tools for conflict as opposed to what i know you wanted and have wanted and fought for since all of those discoveries you have done, i recently tried to create this as a mechanism to bring more people wealth and sustainability. love the way you put this in a perspective, what i
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see is this anonymous ability to bring knowledge together to allow people to share what they know to work collaboratively, these tools apple by our ability to do that so the good side here is that we are capable of doing things we could never do before because we have help. where as we are being open to buy hardware. on the other hand, we depend things, thereon are people that don't mean us well and would like to exploit our dependence on these technologies to disrupt things. the peculiar situation in china is that it is increasingly investing in artificial intelligence and internet software, they become increasingly dependent on that and therefore, their risk goes up as well just like ours has. so we have a very interesting situation that may become destabilized as a result of would like toia disrupt everything anyway they can. >> if china wins this race for
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breakthrough technology, what does that mean for the rest of the world? >> the rest of the world is going to be washed in chinese and americans investing very heavily in robotics for example, artificial intelligence machine learning and software and everything else, it makes it more competitive -- competitive. we are committed to the rest of the world to take avenge of those capabilities, yes, we can as these tools become affordable and were available and is people learn to use them, the rest of the will be able to take advantage of them and compete. chieft was the google internet evangelist. >> coming up, we will preview the world's biggest gadget show, wife tech companies are returning to the showroom floors after several years of low attendance. and if each i want to bring to your attention, our interactive tv option, check it out at tv . you can watch us live, if you miss an interview you can go back to it, said our producers a
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message, this is for bloomberg subscribers only, check it out at tv . ♪
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>> list is set to shop a fully formed right having service. -- ride hailing service. list and it's our larger u.s. rival are betting that drivers will be a pivotal point. software developers and carmakers to plug into his network of nearly one million rides per day. with them, this year,
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google is setting up a booth for the first time in years. executive from amazon, apple and facebook are expected to be roaming the showroom. joining us now, mark ferguson who covers google. google is going to have a boost in, this year, what can we expect us to marect? mark: there are a lot more competitors, google is pushing out its own version of its home speakers, apple is working on one, samsung is there, a slow chinese companies, but we are seeing this year's a lot of the major tech companies both here and in china are working heavily on ai and they are working on ai features where you have software combining with hardware. >> what is google's interest? mark: they are investing in hardware. they bought a smart tv, google wants to make sure they don't see to the living room and home spaces to competitors like amazon, apple, facebook and
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google is aware that the base -- future is moving toward a world are movingre we beyond dices iphones. they have the big lead on the software side and we want to make sure that they are still involved in every once lives. >> -- everyone's lives. we know that amazon got a real head start with echo on home speakers but obviously apple will be coming to market with one soon. mark: apple is that the market is young, amazon has a big lead with developers which is key. they are having a lot more developers install software's and ask for the echo. that is still premature, i think ,here is a chance that google apple, some coverage coming out of china could make a mark here. >> and was a apple and amazon and facebook, executives roaming the showrooms, what does that mean? >> capital executives don't even wear name tags but we do have a sense that this will be becoming
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a much bigger priority for all those companies. they will be looking for key suppliers, mike kelly wrote a pretty good story about this, you need a specialized chip, a lot more hardware to keep up these advances in software. that is also where the show is major for the car companies, the auto show, it shows the epicenter is gravitating toward silicon valley and vegas as opposed to a lot of car companies are looking at future they are alsod prowling the showroom forces for the same reason. >> what about when it comes to a rna are? another, ar and the art will be a departed right now, ar is not quite there for consumers, magically glitches that they can't start up that showed off a prototype, they told me they're not attending this year. there are a bunch of smaller companies, i'm sure there will be themes, we will be curious to havef snapchat will
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augmented reality spectacles, they aren't really a failure but they haven't succeeded. i think the point is that this is the less attempt to make a mark and get out beyond the news market there in. >> what about eric schmidt smith -- stepping down as executive chairman of have a that. he is still on the board but there are a lot of questions about why this is happening now and it did seem a bit abrupt, is this a bit bigger at play? >> i don't know that something bigger, eric has stepped down from the logical he was in. he was the ambassador of the secretary of state of google for years. the google ceo has become much more the public face. he was very much tied with the hillary campaign so his standing in the sea since the election has fallen a little bit. from what i have heard, he has not been as active, you have the general counsel and government affairs team. you have a big gap there, google does not have a global policy chief. it is unclear if they are really
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thinking about reevaluating their larger strategy in d.c. and globally in politics. >> interesting, glad to have you back. mark covers out of that for us. thank you so much for stopping by. >> be sure to turn into our coverage of the was biggest get his shot including our interview with sony, next to that. that doesn't for this edition of bloomberg technology, might it, we're livestreaming on twitter, check us out on technology weekdays, 5:00 p.m. in york, 2:00 p.m. in san francisco, that is all for now, this is bloomberg. ♪
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♪ >> 7:00 a.m. in hong kong. we are live from the bloomberg's hecklers. i am yvonne man, look into daybreak asia. that with a vengeance, sparking a rally on wall street and signs a similar gain of the last age of three today. bitcoin shrugs off its new your hangover on reports that say it is a founders fund that is aching investor. that was enough to send it so i'm from bloomberg's head were -- global high cordis. it is just after six of p.m. on this tuesday, the white house hinting at new sanctions on iran. why they grow increasingly violent and taking aim, speculation is growing that amazon will


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