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tv   Best of Bloomberg Technology  Bloomberg  March 4, 2018 6:00am-7:00am EST

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♪ emily: i'm emily chang, this is "the best of bloomberg technology" where we bring you the top interviews from this week in technology. spotify files to go public. on its own terms. why the streaming service is skipping the traditional ipo dance. plus a bloomberg scoop. , alibaba adding to its arsenal. we will examine the e-commerce giant's decision to go all in on china's top takeout app.
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the backlash from nra hesitation, the pressure building on silicon valley to block nra content and pick a side on gun control. first to our lead one of the , most highly anticipated public offerings of the year is here. spotify going public. the company not filing for a traditional ipo, instead a direct listing on the new york stock exchange skipping the roadshow. part of the filing, spotify revealed it is holding on to the top spot in streaming services, with 159 million monthly active users and 71 million paying premium subscribers at the end of september. we caught up with alex in london, someone who knows all about the european tech scene. we were thrilled to welcome back caroline hyde. >> i had to come back. what will be one of the key european coming-of-age, spotify coming to the market, just listing shares and it is interesting because of course,
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we might think it is to save fees, they do not need cash. maybe, they do not want the drama of an ipo hot in their minds? like the previous swedish company that went public, it fell on ipo day? i think this is also very swedish. swedes are known to play it cool. the ceo, chairman, cofounder of spotify, he does not like the limelight. you can hardly find any videos of him stretching back to 2012. this is perhaps a company that wants to do things a little bit different. emily: very swedish, alex. what did we learn from the actual perspective? alex: the coolness factor is not necessarily what investors will look at. because they don't get to go on roadshows, sit in and ask daniel questions, they will be looking at financial results.
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revenue did grow last year to , 1.4 billion euros, the company however continues to lose money. that is something that people will pay attention to. emily: but will it hurt them not to have access to the ceo? alex: when you think about the business, the music streaming business, the big number one question is, is this a viable moneymaking potentially profitable industry? spotify is the leader. they say they are leader by more than double of apple music. that is great. 71 premium subscribers, the folks who pay them money, that is still a small slice of the number of possible people out there who could be consuming music content. so you are going to be potentially getting a lot of deep thought, coming through the 64 page prospectus investors are looking at, as they decide what is the real valuation for the company? because they will be the ones making the decision on listing day. emily: there are giants like apple in the room. caroline what does this listing
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, mean for the european tech scene? crucial: this is because numbers we are seeing bandied about, as a valuation, up to $20 billion, that is significant, much bigger than in recent history than we have seen in the european tech scene. we have to look back to super cell, who sold out to china's tencent. it was bought a couple of years ago and that was just $10 billion. last year, one of the big ones. it was a valuation of $5 billion. that was delivery hero in germany. we think about the recent ones that have come to the market some do not live up to heights , that spotify is going to hit. russia, germany, $4 billion, $5 billion. this is crucial. also more companies want to come , to market. funding circle wants to tap the public markets. this is going to funnel money
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back into the ecosystem for smaller startups as well. vc's willig european cash in on this deal. local deals, vc funded, other companies, locally to london, wellington, axel, these companies will make money as they sell their shares on listing day and they will funnel it back into european tech. it is crucial. emily: alex, we saw dropback, to route.he traditional ipo do you think other tech companies will take this nontraditional listing route or this is an anomaly? alex: i think tech companies are looking at it and it will come down to the evaluation process. the risk is the stock ends up being volatile. the valuation will be set on listing day, depending on how many shareholders want to sell, who wants to buy and what price they are willing to change hands?
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spotify has given indications, they said that since 2017 in private transactions, trading between $6 and $23 billion. that is a big range. depending on how the stock open process goes what the volatility , looks like moving forward, could be something that people watch. when you ask private company ceos, what do you think about being public? a lot of them do talk negatively about the distraction of the stock price. if you have a stock price wildly,g around maybe you go back to the ipo process and get more, granular valuation, discovery process before you decide to lift shares. emily: caroline hyde and alex there. in the meantime, netflix continues to ramp up spending. speaking at a conference, ceo david wells says they are spending upwards of $8 billion on content this year. they will have 700 original shows and movies on the platform over the course of 2018.
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coming up, we hear from josh silverman about how he crafted the company's best order today. quarter to date. fitbit, all-time low on disappointing earnings and forecast. what is next? we will hear from the ceo, james park, next. this is bloomberg. ♪
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emily: shares of etsy rose and for the first time they hit $1 billion in market shares. i sat down with the josh silverman and asked what the company is doing to boost revenue. josh: the market opportunity that we face is enormous. in a sea of sameness, the world needs etsy more than ever. so we are very proud of the fact
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we just had a $1 billion quarter, there was $1 billion of gross merchandise sales and $1 billion of international sales through 2017. we grew faster in the fourth quarter than we have grown in recent quarters. the way we are doing that is by doing the basics better. we are doing a better job of search and discovery. we have 50 million unique items for sale on etsy. finding the right view to show is important. we are doing a better job. we are doing a better job on trust and reliability, so you know things like, when can i expect this item to arrive and what is the return policy? marketing capabilities are better and it is showing up. emily: you've been cutting costs, where and how? josh: what we have been focused on is going faster. in order to go faster, we need an organizational structure that has clean accountability and very little bureaucracy. unfortunately that meant that in the third quarter of last year, we needed a leaner structure and we did a layoff.
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the goal was to go faster and we announced that we have done more than 350 product enhancements just since may, with over 20% higher to demonstrably gms. we're going faster and serving the community better. emily: how are changes coming off internally and externally? ,josh: i think that the team went through hard times over the summer. difficult changes. we are seeing that we are serving the seller community better and the team is feeling great about that. emily: you have giants in the room. amazon, especially. how big a threat are they? especially with their handmade business. josh: etsy is unique in that we have 50 million items, that are made by hand. 1.9 million sellers, you just cannot find that anywhere else. etsy is where you go when you want it to feel special. the traditional role of retail, you have price, convenience and selection. the old saw is, you can only do 2.
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if you think about our space, the way they give you better pricing is by buying 10,000 units of something and then passing along savings. if you can buy 1000 of anything, it does not belong on etsy. they do a good job of convenience by warehousing and shipping it to you next day. many items on etsy are made by hand and made to order, customized for you, and not naturally warehoused. in terms of selection, 50 million items by over 1.9 million sellers. no one else comes close. emily: shareholders raised the possibility of selling. is that on the table? josh: you know, we feel great about the market opportunity. when i joined as ceo in may, i said, i believe we have a big market opportunity and we can grow more quickly. you're seeing evidence of that. we feel great about our trajectory. emily: could amazon be an
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acquirer? could you thrive better in a larger company or an off-line craft store? josh: i think we are thriving really well today and the resulting post demonstrates we are unlocking growth and value, which is great for sellers and buyers and all of our stakeholders. emily: you have given up the b corp designation. that is part of the way that you demonstrated your public commitment to being a socially responsible business, but what does that say about the possibility of running a socially-conscious business? josh: the great thing about etsy is that our day job is socially-responsible. we have 1.9 million sellers 86% , of our sellers are women. they count on us to wake up every day and deliver on their behalf. we are a socially-responsible , socially conscious organization. what has changed is, our focus and our execution. when you are socially responsible you hold yourself to a higher bar in terms of focus and execution and we are. emily: that was etsy ceo, josh silverman. fitbit faces new challenges.
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shares hit a new all-time low this week, so what is the next step? cory johnson spoke with the ceo on tuesday. james: 2017 was a challenging year. it played out a lot differently than we expected. for us, the shift from basic activity trackers to more fully featured smart watches is happening even faster than we anticipated. we did launch our first smart watch, ionic, into the category in q4. it did outsell our prior highest product surge, but it was not the mass appeal unit shipment driver we anticipated. that was reflected in our financials and that is what investors are reacting to. it strikes me as a really interesting problem. when i looked at the apple watch, after fitbit, it was a product in search of a use.
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i feel like fitbit was the use. monitor steps, help people live healthier lives, and sort of an athletic or at least physical fitness-focused product. as you move from bands, that count steps or whatever, smart watches that can do more, do you start to lose that focus? how do you make a mass-market product not just for runners or triathletes but for people who want to lose 10 pounds? james: absolutely. i think we will maintain our focus on health and fitness, even as our emphasis in the category shifts from trackers to smart watches, a lot of that will come in the features. there are specific apps, long battery life over 4 days, helps with sleep tracking. our app is the number one on itunes and android for health and fitness. platform independence plays a key role, especially as we
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try to integrate more deeply into the health care ecosystem. i still strongly believe the focus on health and fitness, regardless of what the type is, is the winning strategy. even in 2017, while ionic was not the success we anticipated, we actually achieved a lot as a company. we did meet our 4-year guidance and earnings, we exceeded our projections for free cash flow, and we are operationally efficient. we ended up over $50 million below our target we had stated to investors. we deepened our reach into health care. and i think one of the more interesting aspects, if you think about not just devices but are active user base, it grew to over 25 million users. cory: what is the dynamic? how do you ship fewer products but have more users? james: one of the things
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investors have been concerned about in the past, what is our level of retention and usage? is this a product that people purchase and put in the drawer after three months? even though shipments declined and the active user base grew, that means we are getting better at getting people to stay longer on our devices and platform. that is actually going to be important as we start to shift the business model from being device-centric to one more around the software services. and ltv. cory: let's talk about the shift in the business model. that was seen as the real leg up in terms of unit sales, might be the corporate market or a big company or getting everyone there to wear a fitbit. in our company, at bloomberg if , you monitor your steps using a fitbit and another application, you get credit toward buying stuff for gift cards and so on. now you're talking about health care. you have been for more than a year. is that different than the corporate focus or are they one and the same?
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james: it is a little different. primarily our enterprise business before had been about selling devices to enterprises. we had large installations, 40,000, 50,000 units, several hundred thousand units deal with target. the difference is, what our business model is behind the health business. we are moving to one more based around what is called pmpm, per member per month, which is recurring in nature and more predictable. one of the interesting things is also looking at risk sharing models where we happen to participate in share of any savings and health care costs, that we achieve for our users. cory: you are getting that now, you have done deals like that? james: there are promising steps. we already have pmpm deals with blue cross blue shield of north carolina. and the recent partnership with health care around management has the potential to move to a risk sharing payment model.
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cory: to that are these the kind , of contracts that will be significant, more than say 1% of revenue per deal? james: you know it is hard to , say what the revenue outlook will look like. i think we are taking a lot of concrete steps in 2018. you can expect to see health care being a more meaningful part of our business going forward. emily: fitbit ceo, james park with our own, cory johnson. coming up, alibaba edging out other investors to be the sole owner of a delivery startup. we will head to hong kong, next. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app and on this is bloomberg. ♪
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emily: in china, alibaba ramping up the competition with
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tencent over food delivery. they have agreed to buy shares that ittartup does not already own. it already has a 23% stake in the company. it was valued at $6 billion last year. lulu broke the story and joined us live from hong kong. this isn't about buying the last -- is buying the last mile delivery network. it is already china's largest delivery platform and an acquisition would give alibaba instant access to 50% of the market. is also benefits the new retail strategy. the company has grocery store lines right now. they're promising to deliver groceries within 30 minutes within a three kilometer radius. and then also they have their that operates a similar neighborhood service, so that acquisition would help them consolidate the businesses and
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really streamlined the resources. emily: how does this impact other players in the market? lulu: sure. right now it is breakneck competition between alibaba and others. another one emerging, set to be valued around $30 billion already and that company right now, they are occupying 40% of the market share, even though in the last quarter, alibaba, if the deal goes through, they still need to put in a great amount of money. it is a cash-burning business. and it's so right now, the company having an acquisition would help them consolidate that business and help them in the competition. emily: how do you see the broader chinese e-commerce market playing out? lulu: right, in the space, remember that baidu wanted to
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join but now, between the companies, alibaba and tencent, baidu will be fading out. they will be focusing on artificial intelligence and their search business, which is their core business. going into the neighborhood, off-line retail business, a cash-burning business, the drag is down on margin and it seems as of now, only alibaba and tencent have the long-term cash to play out the war. emily: thank you to lulu chen from hong kong. amazon has agreed to buy ring, a california-based smart home smarty that makes doorbells and other technology. this helps push amazon into the home market. according to people familiar with the matter j.p. morgan , chase advised ring. we've brought back alex for all of the details. alex: the ceo went into shark
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tank, asked for $700,000, now at $7e was valued million, now fast-forward and they are selling for $1 billion now, to amazon. a nice ending for ring. to look back at the sharks and sigma look at what we have done. but for amazon an important step , as they continue to push into the more consumer-based hardware. we've seen them really try in the past six months to embed themselves in consumer homes. you saw it with amazon key, where you could unlock it for delivery folks. so they can deliver their packages. you have seen it with echo. this seems to fit nicely within that entire ecosystem because, you know what amazon's end goal , is not selling hardware. it is getting the hardware in so they can sell more products on its e-commerce platform. get you to open your pocketbook a little bit more. emily: talk about how this fits
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into the delivery strategy? obviously, amazon has been focused on that last mile. now they have this concierge service key, where amazon can go in your home and drop off packages. how does this tie together? alex: so when you use ring, a smart camera, you can have the person on the ground talk to it. you can talk back on your pc or phone or tablet. you are not a passive watcher, you can actually engage with the person. if it is an amazon delivery person who is verified, you can open the door for them and tell them where to leave something. amazon has been pushing services like housecleaning and dog walking. anyone who's showing up at your door can be potentially be let inside when you are not there, again, so you keep spending within that broader amazon platform. emily: what do you make of this deal? i own a ring doorbell and i was shocked. the product is good, but $1 billion? alex: there are reports from
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last year saying they were valued at $450 million. so that is a two time bump. it is a nice exit. for amazon, a small check. the person familiar with the matter told me that jpmorgan advised ring, amazon didn't have an advisor. they just shelled out the money for the deal. it seems to be another small, bolt-on that amazon is collecting as it continues to fill this set of tools it has to keep getting into people's homes. emily: and they of course did a big deal with whole foods last year. do you think amazon will be more acquisitive in the future? alex: i can tell you now covering tech m&a, they're number one on my list. we are waiting on the next big deal. nothing in the hopper i know about now. that doesn't mean it couldn't change. even the whole foods deal fits into this strategy perfectly. they show up with your food you , talk to the camera, get them in the door.
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emily: that was alex. coming up, the gun control debate hits the tech world. we will look at the growing backlash over the nra and streaming services. that is next. this is bloomberg. ♪ .
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emily: welcome back to "the best of bloomberg technology." i'm emily chang. in the week since the parkland high school shooting that saw 17 teenagers gunned down, gun control activists have managed to get companies to sever ties with the national rifle association. there is one group they have not swayed yet, big tech companies. roku. amazon, see, those streaming services still offer access to nra tv, the free online channel focused on pro-gun content. can activists pick a side in a hot button political debate? we spoke with spencer sjoberg
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and selina wang on wednesday. selina: since the shootings happened in florida, we have seen growing calls from activists and consumers to stop tech companies from streaming nra tv. we have seen one of the student survivors also make strong calls to hundreds of thousands of followers to cancel their prime subscription and stop using fedex. to move over to competing services. emily: i have a couple of tweets, one from alyssa milano saying -- we are calling for a one-day boycott of amazon, apple, and fedex. do not shop, stream, or ship with consumers. a tweet from the student -- we should probably just get ebay instead of amazon. ebay is a government corporation and does not support nra tv.
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#changeiscoming. selina: for these companies like the car rental companies, it is just about ending a financial relationship. they are no longer offering member discounts. for streaming services, they could run into free speech issues by silencing a media source, and there is concerns they could be alienating a large portion of their user base, since a significant part of the u.s. population owns guns. emily: amazon does not sell guns. apple does not sell guns. what do you make of this threat? spencer: it shows how far gun control activists are willing to go in terms of brand ssociation. so yes, amazon does not sell guns or ammunition. but people are taking hombrage to the fact that it is
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associated with the nra merely by offering the nra tv through its devices and services. it is a question of simply association. you can go to and watch nra tv all day long. you do not need apple or amazon, but any association with the nra brand is coming under target from gun control activists who feel like they want to see some sort of action taken to marginalize this pro-gun lobby. emily: roku has specifically said they will not remove nra tv. they would only remove a channel if they were doing something illegal. what response have we heard so far? selina: a lot of them have declined to respond, amazon being one of them. they try to stay politically neutral. obviouslysingly, they do not want to alienate their user base. the past few days, we have seen the calls to amazon escalate. many people are tweeting that they are canceling prime subscriptions and more people are talking about how to buy the products that you want on amazon without going to the website.
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just going directly to the seller. people are tweeting responses from amazon asking them to cancel this nra tv streaming. amazon is feeling the pressure, but i think the response from these companies will be similar to what roku said in terms of being politically neutral. emily: you have been following the conversation on social media. at a certain point, is amazon going to have to respond? spencer: that is what has been fascinating, is their standoff. the people on twitter, on social media are encouraging one another to keep up the momentum, and it has gone beyond one tweet to encourage amazon to stop streaming nra tv. now people are proudly posting photos of the response they get when they cancel their prime accounts. they are even coaching one another on how to buy things online without using amazon. that part is actually kind of funny. you mean, you can buy something
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online without going to amazon? yes, you can. they are strategizing to use amazon for reverse showrooming. you find the product you want on makes it,entify who going directly to the seller. there is a big conversation, not only about boycotting amazon but people boasting about canceling prime memberships and coaching one another how to boycott amazon with minimal disruption to their lives if they have been dependent on the service. emily: thank you. youtube's new moderators brought into spot fake news, misleading, and extreme videos stumbled in one of their newest tests. they mistakenly pulled right wing channels and videos in the wake of the parkland shooting. on tuesday, some youtube channels began complaining about their accounts being pulled
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entirely. youtube said it would reinstate videos removed in error and would continue enforcing existing policies. just how do you spend $100 billion? we head to barcelona for the softbank vision fund. brendan carr joins us about his renewed push for 5g. this is bloomberg. ♪
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♪ emily: this week marked one year since snap went public. sarah frier walked us through the year that was, the ups and downs. sarah: it has been one year since snap ipo, and there are still a lot of questions. it made huge changes. it rolled out a bidding based advertising model which caused the prices to fall, and it redesigned the snapchat application to separate friend posts from posts from celebrities and the media. seenis a move that has
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backlash.public there was one tweet by a social media superstar that wiped out $1.3 billion of snap's market value in one day. they posted their first quarter actually beating analyst estimates, causing it to surge 47%. the fan base is growing steadily, with active users growing to 200 million, but internally snap did not meet its goals so employees did not get cash bonuses. the leadership team has been working to improve, trying to work on their transparency, but evan spiegel has a reputation for not appreciating criticism, and has lost a slew of top executives since the ipo.
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one point analysts keep making in snap's defense -- facebook's first year public was crazy, too. emily: that was sarah frier. when it comes to tech investment funds, softbank's vision fund reigns supreme. with $100 billion in its coffers, the fund has invested in uber, we work, and just this week, door dash, and they are not stopping. the vision fund ceo spoke with caroline hyde at a conference in barcelona, on what comes next in hitting that $100 billion commitment. rajeev: the message is simple. it is not just about the industry. the message is the entrepreneur first, the vision, the passion, the ability to grow, not just grow in terms of revenues but be able to recruit, have the bandwidth to go out and hire senior management. organization. and i believe that they can do it because that is what we push on market capital. how are you create exponential growth using that capital? that is one. second, they cannot be number two because going from number
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two to overtaking the market leader takes a lot more effort than drawing from number one. caroline: market share in a country or globally? rajeev: in a country. and the third objective obviously is they are truly disruptive. and there is a consumer need for them. there is a consumer need to sell used cars for people living in smaller towns, or even living in larger towns where they could not get a better price. or whether it is cheaper homes, with the ability to have an kind of online real estate broker sell your home faster for a better price, etc., etc. caroline: you have $100 billion eventually to put to work. when does it close? rajeev: sometime this summer. caroline: and when you have $100
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billion, you have the rest of the eyes of the vc community on you, worrying about valuations being pumped up. is that a concern? rajeev: it would be good for them if the valuations go up, because they can exit at those prices. a lot of the early investors have exited a lot, predominately, with our investments because we do primary and secondary, including -- buyout secondary shares including in uber and dd and we work, where early investors exited and sold secondary shares. caroline: you mentioned uber, didi, companies in the spain -- in the same space, ridesharing. how does it work when you have competitors? rajeev: they are not competitors
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because didi is in china. uber is the rest of the world. there is a little bit of overlap, but i believe it is quite synergistic because at some point there's r&d to be shared, and the benefits are immense having 30 companies in your portfolio growing to 70, 80 companies over the next few years. caroline: will you merge them? rajeev: they definitely become joint ventures. selling used cars to uber drivers, insurance companies, like selling car insurance to uber drivers. caroline: you are buying insurance at the moment. rajeev: it is early days. caroline: what about the expansion into other areas? where are you not seeing enough, in terms of deals? do you want to see more in the banking sector? do you want to see more from a geographical perspective? rajeev: the thing about deals, our ability to process them is important. we have been in business for 30
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we have made 30 investments. i think we could only desire that we see more from europe. we have made substantial investments in the u.s., which is our number one destination. we made a few investments in china and india. we would like to see more from europe. ♪ emily: that was the softbank vision fund ceo speaking with caroline hyde in barcelona. in just a few weeks, the fcc will vote on a plan to ease federal regulations for 5g wireless equipment. ftc commissioner brendan carr proposed new rules that would install small cells equipment for the next generation 5g networks. carriers will use to
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power the new speedy networks. this is all, in part a larger effort from fcc individuals, wireless carriers, and chipmakers to ensure u.s. leadership when it comes to 5g. ftc chair brendan carr joined us from washington. brendan: we are transitioning and that transition is going to enable a lot of the innovation you are hearing about now, autonomous vehicles, the internet of things, remote surgery, ai, we need to upgrade our network to get it to 5g to support those types of deployments. and we are working with the fcc to cut the unnecessary regulatory red tape that is threatening to hold that back. emily: the regulatory costs are one thing and the financial costs are another. i mean, these networks are extremely costly. how do, you know, how do telecoms handle that? brendan: that's right. we estimate it should take about $275 billion in investment to deploy 5g, and these can make a -- these infrastructure deployment rules can make a big difference in making that economical.
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thereeas we put out streamlining is estimated to cut 80% of the regulatory costs of deployment. that means cell sites that are going to be more economical to deploy to push the 5g network further out and supply service to more americans. emily: how does wireless infrastructure fit into the infrastructure plan overall? brendan: it is certainly a big piece of it. when you look at infrastructure more broadly, broadband is a key piece of that. just like we need to reform a lot of our other infrastructure deployment rules, our broadband deployment rules are right there. and at the fcc we have authority to do that and on march 22 we are voting on a planned it would speed the production of that deployment of broadband infrastructure. emily: a task force that was examining these issues of wireless appointment, saying that local regulators would lose control. what is your response to that? brendan: there is a couple of different issues. the one in march looks at federal, environmental, and
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historic permitting processes. the other goes to the question of state and locals, and their roles in deployments. this first piece goes into environmental and historic. we are also taking a look at the state and local. i think we all have an important role to make sure these deployments are economical. the costs of deploying these networks are high enough. we don't need it unnecessarily going to regulatory red tape. the states, the locals, the i ftc, think we are all looking at ways to streamline the deployment rules. emily: how would you rank the u.s. when it comes to global competition? obviously, we know there has been progress in south korea, for example. we have been talking about it at the conference in barcelona. where does the u.s. fall right now in the hierarchy? brendan: right now, we lead the world when it comes to the deployment of 4g wireless, and that is why we need to update our regulations so we can deploy this next generation of 5g. a lot of countries look to the united states.
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they saw that we lead the world in 4g. they want to lead the world in 5g, so for this global competitiveness we need to step up to the plate and reform regulatory structures. and if we do that, and i'm confident that we are, then we will also lead the world in 5g. so as a country, i think we are in good shape now. we just need to reform our regulatory structures. emily: why do you think the u.s. needs to lead in 5g? talk about the economic benefits when it comes to jobs, when it comes to actual people. brendan: good point. the deployment of 5g is estimated to enable 3 million new jobs in this country if we get it right. it is estimated that at $500 million to gdp. we get a high speed broadband connections to more americans, that gives them access to jobs. it gives than access to economic opportunity. so that's really why we are trying to take these actions. emily: if we do not take these actions and the u.s. does not lead in 5g, how might you see u.s. citizens be harmed? brendan: there are countries that are more than happy to fill the void and be the first ones
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to deploy 5g. that's going to mean that a lot of these innovative, cutting-edge services and devices that we are talking about will be deployed in other countries first. i want to see all those products that consumers are reading about launched here first. i don't want to sit back and watch that happen in another country. and at the fcc we are certainly not doing that. we are moving quickly to make sure we can enable that private sector innovation and investment to take place here. emily: that was fcc commissioner brendan carr. coming up, the heavyweights take center stage in the fight for cell phone supremacy. we weigh in on the battle between the iphone x and samsung galaxy s9. this is bloomberg. ♪
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♪ emily: some revolving doors in tech. pinterest has named its first chief operating officer. company is aiming to scale its the ad business ahead of a potential ipo. they are hiring a former executive at square and google. she was most recently square's business lead, overseeing the company's revenue products, international expansion, customer support, and partnerships. she joined the electronics-payment company in 2018 after several years at google. and another revolving door story. francis frei, the woman who were brought in to a punishingin
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eightis leaving after months. she was on the management committee until the fourth elected ceos replacement. frei will continue to serve as an advisor to uber as she embarks on her own project to design a leadership program for executives centering on women and minorities. turning now to the battle of the smartphones. samsung has come out to its response to the iphone x. the galaxy nine has new emojis, upgrades, and stereo speakers. it was unveiled in barcelona. off the heels of the announcement, bloomberg reported apple is planning to release a trio of new smartphones later this year, the largest iphone ever, and a less expensive model with some key features. according to people familiar with the matter, apple is already running production tests with suppliers. an official announcement is expected this fall. bloomberg tech's mark gurman broke the story and joins us with more. mark: apple is working on three new phones this year. the big story is the bigger phone, a 6.5 inch phone, the biggest they have done and the largest mainstream smartphone on the market. topping the note 8.
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there is also going to be an update to the iphone x design, the current screen size, plus a new, cheaper model with many of the features people like in the iphone x. this compare to 8+?8 and the mark: if you look at apple's strategy right now, they have the high-end phones and the two low-end phones, but the problem is the eight and eight plus, while they are new and have some newer tech inside, outside is what many consumers care about extremely outdated. and is those designs are the same ones that came out in 2014, so this will alleviate that. a cheaper price with face id, the edge screen, and a lot of the new, outward-facing, flashy features. emily: why do they think we want a bigger phone? mark: that's a good question. one, it appeals to markets in asia, where a lot of consumers are single device users. that means people who only have one piece of technology in their life. they watch tv from it, they do their email from it, they do their homework from it. people who do everything on one device, versus people who spread
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their workload across the phone, tablet, tv, so this is appealing to those people, especially business users as well. emily: what will competition be like between the two phones? mark: the samsung s9 is not a big update from the s8. it is sort of a a midcycle refresh. and why that is, i think it because samsung is holding its fire for this fall when it will come out with whatever they choose to call it, the galaxy x, the true successor to the samsung galaxy the big feature will be this flexible, foldable, high-tech digital screen, which will be a new, unprecedented step in the industry. so apple, with the new iphone, will be going toe to toe with that, so the apple-samsung war will be a significant moment to watch. emily: you often hear tim cook and apple talk about getting new users from the android platform. you know, how many users are actually switching platforms, whether it is from android to iphone or vice versa?
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mark:, its interesting, because tim cook dodged this question on the last earnings call. and typically, they like to tout those numbers. maybe it means the switching was not as frequent as they would have expected, or they do not have the data. but we do know that this bigger phone, the 6.5 inch phone will appeal to android users who are on the note 8 bandwagon. they want a screen of more than six inches in real estate. the lower-cost model will be bringing down the high-tech to a also lower price, so that could be appealing to android switchers. emily: when it comes to the iphone x, what do we know about the mix, and how do we expect that to evolve? mark: we can glean a lot from past earnings results, from earlier in the month. the iphone asp is north of $700, records an all-time
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because of the $1000 starting price of the iphone x. but we also know that unit sales overall came in below analyst expectations, so even though the asp was higher, unit sales were lower than expected, 1% lower year over year than last year, which indicates to me that people are interested in the iphone x's high-tech features but some people can't afford it. so they are left with the cheaper one which they do not want. so coming out with a lower-cost model around $600 or $700 with new technology, i think that is going to be a really big boon for apple. emily: that does it for this edition of "the best of bloomberg technology." tune in thursday when we bring you top female voices in technology for international women's day. uber, and other ceo's, justmale
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some of the fantastic voices we have lined up for you. tune in at 5:00 p.m. in new york, 2:00 p.m. in san francisco. and remember, all episodes are now live streaming on twitter. that is all for now. this is bloomberg. ♪ mom you called?
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oh hi sweetie, i just want to show you something. xfinity mobile: find my phone. [ phone rings ] look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around.
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carol: welcome to "bloomberg businessweek." i am carol massar. julia: we are inside the magazine headquarters in new york. carol: wells fargo's ceo is done apologizing. julia: in the u.k., the serious fraud office is getting a little too serious for some. carol: how defective guns became the one product that cannot be recalled in the united states. julia: all of that to come on "bloomberg businessweek." ♪ julia: i am here with joel


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