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tv   Best of Bloomberg Technology  Bloomberg  January 14, 2017 6:00am-7:01am EST

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♪ caroline: i am caroline hyde. this is the "best of bloomberg technology". , the president elect meets the press. donald trump faces reports from hacking to the media itself. making sure tech titans play by the rules, our exclusive interview with eu competition minister. mary terview with
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barra, ahead. president elect of donald trump tackled one of the most controversial issues plaguing his administration, russian hacking. he has previously cast doubts and the accuracy of u.s. intelligence. he did again wednesday. >> i think it was russia, but we also get hacked i other countries and other people. >> if putin likes donald trump, i consider that an asset. trump vigorously announced reports that the russian government has gathered compromising information about him.
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was amongst the first firms to identify this group. take a listen to our layrasation with more gallant galante. have seen is a journalistsargets, in chechnya, defense at -- a so a variety of different
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targets we have seen this group go after. they will breach networks using malware. data, frequently emails. we are seeing another side to these operations that play out on wikileaks. combination of network intrusion and the ability to change the narrative through leak data that has been so par 4. powerful. mediane: and using social as the means to do this. is there a risk of this is still going on. ? >> it isn't just going on. tos group is taking it europe next. we will see this occur around policy issues in the u.s. the elections were one of a
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variety of targets this group has gone after. when we look at it elections in the netherlands, france, germany, we are seeing the same mechanism, ability to push , auments to journalists focused ability to change how the conversation in the press plays out. they do this very flexibly. they don't need to change the malware. they just need to change the flavor of how they get their message out, and that is what is so powerful here, and also easy to deny. or it actually the narrative operations. there are clear operations with the forensics behind it that link this back to a russian government effort. eliminate howyou you managed to track them back? >> there are hallmarks in the malware that give us these
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indications. the compile times, the marks that show when malware was held, continue to go back to the time zone that moscow and major russian cities are in. samples we have tracked are a line the working hours when this malware was compiled. we also see the marks of a well resourced effort. the malware shows a certain techniques to evade detection, that people can't unpack it and understand it as well. signs that the developers behind these tools are thinking about how to do it. they aren't just buying tools online and applying them. this is a state effort that takes years of planning, and the ,argets say so much about this
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caucus agencies, agencies in .eorgia, defense and tash that is what has led us to believe that the russian government is the likely sponsor of the group. idea hackersad no cap a 9:00 to 5:00 regime. institutions, is this a game of whack a mole? is where is the line between acceptable state espionage and aggressive measures that interfere with the internal affairs of a state? so what is sovereignty in cyberspace? do we consider cyberspace or information space? that is the question at hand between russia and the u.s. right now.
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on the u.s. side and other nato countries, they thought about this in terms of networks and systems. do you take an expansive view or think of this in a more traditional technology approach? when we hear from president elected donald trump saying he does not think he will be at attack while he is himident, should we believe or pour cold water over it? >> we have long said it is a matter of when, not if. whether the department of defense come against companies, and what has changed is the type of actors and intrusions. hasn't changed is to go after key government
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targets in the u.s. now, while trump is claiming he is the victim of fake news. facebook is taking steps to curb it. they announced a stronger partnership with media companies and to educate users on how to avoid hoaxes. year of debate over facebook's role in the media and whether the network is biased. members of the media will be updated on a new facebook journalism project page. , and ak ma-trump reminder that all episodes of bloomberg technology are live streaming on twitter. check us out. this is bloomberg. ♪
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caroline: jack ma met with president-elect trump monday. the two men discussed how alibaba is focused on creating one million u.s. based jobs. >> very productive meeting, helping small businesses sell things through the alibaba platform to china and asia. smallked mainly about business and young people and american agricultural products to china. we think the china-u.s. relationship should be strengthened, friendly, and better. caroline: the visit is the latest from a growing list of business leaders eager to work with the president-elect. foraught up with mary barra an exclusive interview at the
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auto show and spoke about the upcoming administration. have more in common with the administration and president of than we have at odds. we are looking to strengthen the country, business performance, because we are a big provider of jobs and provide over 100,000 and lookingjobs, for reforms, regulatory are allning, so those things that will improve our business and allow us to invest. >> there is an opportunity there for you? >> i believe there is. this is a complex business with long lead times. the volt and the traverse are built and lansing, michigan. we need to look for the opportunities. >> let's talk about autonomous vehicles.
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where does that projects it right now at gm? everyone is announcing some sort of autonomous venture. we feel good about where we are at. vehicles getting real-world experience in san francisco, arizona, and a trite. it is about experiencing all the different situations. downtown san francisco, there is not a better place to experience things that come into the roadways, so our vehicles are learning a lot and you will see movement early this year. there was talk of changing from a model of selling cars to buying a service for a fee, almost like a subscription service. is that realistic? >> as we get to autonomous believe ite
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will start in a rideshare environment. we are also excited about what we launched with cadillac. a subscription opportunity for people who want ondrive that performance car the weekends, but need the functionality of an escalade. those of the things we are experimenting with. >> a record deal for vehicle sales, 2016 beat it. what does 2017 hold in store? a we think we will have strong year, much like 2016, and we are looking to continue to improve. goal, build on the momentum of 2015 and 2016 and carried that into 2017, and we think we can deliver another strong year. >> you have a great product people want to buy. as you look at the factors that could drive 2017 to the upside
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or downside, what is most important to you? wages? income?sable >> consumer confidence is important, but we are seeing household wealth go of. if the indicators stay in the direction, we will have another strong year. >> one of the topics much discussed his wages. we just had numbers on friday. .ou are a big employer are you seeing wages go up materially? >> they are going up as expected. it is important we manage that. ofm proud of the fact that good00,000 jobs, we have paying jobs that allow people to live a good life. caroline: still ahead, our exclusive interview with margrethe vestager, her
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regulation battles with tech giants from google to apple. plus, high profile hacks are on the rise, a $40 billion industry. speak with the ceo of cloud flare next. this is bloomberg. ♪
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as 2017 gets going, tech giants cure up for hurdles in europe. google headook, and to court to settle cases regarding taxes and privacy. david gura spoke with margrethe vestager, who has targeted these tech titans. take a listen. >> i consider this an important issue.
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we cannot do our jobs if we do not get the right information from the businesses in question. here is thate have facebook did not give us the right information during the merger procedures. problemcourse is a huge if that appears to be true, because if we are not told the full story, we will not be able to take right decisions and enable competition on the other side of each and every merger, and that is why it is important as a concrete case and the take away from the business community that we will police are procedures to make sure we get the right information. astry to do that as best possible within the short deadlines we work within. >> you have been looking at google as well. the european union has gotten a reply from google.
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how satisfied are you? of theot the last part android answer, so we are analyzing it, and therefore it is too early to say what will be but we areecision, in the process of going through it. it is very substantial of and there is a lot of data to go we have the now working material, the answer from google on the cases in question. >> you have seen the rise of populism, the shifting political ferment, and i wonder what that means for you and looking at competition in general? >> it is important that people see that we do our best to do makeob ahead of us, to sure that citizens are not being cheated when they are in the marketplace, that businesses do not agree on prices in the back businesses doat
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compete with products, prices, services that they can offer customers. because i think for every citizen it is important to see the of authorities do their job, and they do their job to service the citizens and on behalf of the citizens where the individual might be too small, but where we can do good together, and in that respect, it is important what we do. how pivotal d.c. the apple --land case to your office? pivotal do you see the apple ireland case to your office? how do you make the relationship a better between your office and tech firms in silicon valley? >> we have tried to make it clear that we have no issue or grudge against any company. what we are aiming at is
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behavior. for instance, the thing that happens if one company or a group of companies given aid that is not available to other companies, that seriously makes the playing field no longer level, and that is the issue. i don't think as a company when you are a competitive, when you have a competitive culture, you want to innovate, present the best products to your customers, well, how can you approve of your competitor having benefits that are not open to yourself? in that respect, of course, the business community is served by enabling their competition. caroline: margrethe vestager there. cyber threats remain a major concern for business and government agencies. this week, we got reports that mario draghi and matteo written
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rinzzi were among those hacked. our next guest says it is time to build a better internet. he is cloudflare ceo matthew prince. >> we have seen what 2017 will bring, large cyber attacks against firms, then attacks against presidential campaigns. they were a big part of the and we don't see that decreasing in 2017, so we are busy at cloudflare. caroline: does it matter particularly where they are coming from, regions, groups? we always seem to be saying china, russia, but there are
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many different countries. attacks are incredibly democratize. we see some of the largest attacks by what turns out to be 15 kids in the u.k., while at the same time nation state actors as well, so it is hard to attribute to the attack is being launched by. we often have circumstantial evidence based on who is reading attack, but regardless, we want to be able to stop it. spots will weak become more plentiful as the internet of things becomes a reality. what are the key threats when it comes to the building up? everyone thought why does it matter if my toaster gets hacked?
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but if you're toaster gets it can be commanded to launch attacks against critical infrastructure, that means if we don't have security devices, that will make us more vulnerable to attacks that's one of the things we are thinking about at wrap thee, how to security around the devices and the big corporations that we help protect. caroline: talk to us about the demand? who is wanting of your services? are on the ipo trail as well. >> we have not raised money since december 2014. we are on the path to being a public company, but they either go public because they have to and need more cash or because
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they want to. we are in the position to pick and choose the timing right for us, so we will pull the trigger when it is right for us. cloudflare has a 6 million customers, 15,000-20,000 a day. companiesom and pop to fortune 500 companies, 16 presidential candidates were a cloudflare customer,anfact, everybody but hillary clinton used cloudflare. caroline: an interesting line you could use. why would you want to become a public company when you want to? youuse you have more people would have to answer to? zendesk said it best, at some point you have to
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move out of your space. there is a bright time and place to be just a couple of people in a garage and take funding from venture capitalists, larger private equity institutions, and eventually you have a responsibility to investors, employees, in order to take the company public. we will do it when we think the time is right for us, but something we are working towards. caroline: in 2017? in 2017. won't do it i think 2017 will be a distorted year for a lot of reasons, especially the changes around tax policy, the repatriation of cash to tech firms. lt in distortions in the market, and often times volatility is not good for entrance into the marketplace. techine: the health care industry has grown dramatically
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since 2010, how the industry will fare if president-elect trump repeals the law. next. if you like bloomberg news, check us out on the radio, the bloomberg apps, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪
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♪ grace and frankie, hemlock grove, season one of...! ♪ show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. theline: welcome back to "best of bloomberg technology". am caroline hyde. president elect donald trump said he will repeal the affordable care act, then thursday, the senate took the first step in repealing the act. obama care helped to connect the health care system to technology. changes undere techniqu the law? goals was to main bring u.s. health care into the digital age. then, investment in digital help technology has exploded. venture funding rose from $1
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billion to $16 and 2015. that money is going towards electronic health records and computer modeling to track spending. major companies want a piece of the action. ibm launched its watson health unit, and since then, spent $4 billion on related acquisition. last year, general electric expected its i.t. unit to grow more than 20% over the next two years. now the industry is bracing for a shift in u.s. health care policy. trumpent elected donald promises those changes will come as soon as possible. isas soon as our secretary approved, almost simultaneously, shortly thereafter, a plan. it will be repeal and replace. was bloomberg reporting.
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so will there be a slowdown if obamacare is repealed? joining me now are our two guests. and fact the affordable care act be fully repealed? can it be fully repealed? to be fullyikely repealed without an alternative. over 20 million people have been added to the system, many from states that tump one. before the affordable care act, more than 14% were uninsured in those states. further, i think there are many aspects of the affordable care act that will continue and flourish that health care investors have been investing
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in. heard the views. you are at the heart of helping and making more efficient the infrastructure behind health care. that ifsomething repealed would be moved away from the efficiency search on the drive for it? .> i completely agree many of the market drivers for technical innovation are not going away if aca is repealed. the shift in the cost to the ift that ishe sh followed by the insurance industry. that is not going away. caroline: the underlying factors are still there. does it change your opinion in the ability to invest in health care and terms of certain verticals, because there is uncertainty at this time? is a level of uncertainty that is causing
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the buying process, but i don't think in the long run this will be a big impact. lower cost and higher quality alsoeen the mantra, and within the trump approach. whether the payments or theumerization or shifting fight of care come all ofhat will continue and maybe accelerate. even when you think about the digitization of the medical system, the money allocated to move medical records from paper-based to electronic-based, that has been a foundation for software and applications that have been developed. innovation and disruption will continue within health care. technology investing, regardless of how this shakes out. caroline: has it slowed your decision-making process in any way? >> no, many of the pets that bets were made prior to
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the aca and will continue. from our perspective, and the only point where i will differ, even with economic stimulation and the adoption of electronic medical records, merge of that is written on circa 1990 software. see we are expecting to from this administration and investment to infrastructure is a commit into modernizing health care in the u.s. for the first time. opennies are creating software development platforms to bring these products and solutions to market quickly, health care systems, insurers, they have made their bets. they are starting to deploy on platforms like ours. the spectrumt does look out there when you are analyzing the environment?
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who will be interesting to invest in? which parts of the system are more likely for disruption? >> the intersection of health care and technology, where people are developing applications at a higher quality and lower cost. the foundation has been laid with the digitization of medical records, so we find that to be robust. we have companies that are within these clinical communication workspace and they're all mission is to improve outcomes and lower costs , and they are benefiting from the trend we are seeing, even as you look shifting site of care from hospitals to home-based patients would rather be. we have companies where they are at the center of that, and so almost across the board, we are seeing innovation and disrupon a
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repeal, there is some uncertainty created, so we could see some pause and buying. when you looking at her suppliers, those you are working with, how are those discussions? >> health care as the longest enterprise sales cycle known to man. we have not seen a slow down in that sales cycle. at the same time, we have 10% week on week growth, and emerging companies coming to our platforms and signing up and building product in production today, so that has not slowed down. here and certainly here in the industry from other companies that they are experiencing somewhat of a slow down. we go in, i think most recognized that the aca, that is not going to impact what they
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are doing today. it will not impact the out-of-pocket costs for the consumer driving these innovations or new access models , but it will have some affect for sure. caroline: where is the competition when you're looking at startups? they must be coming out of asia, europe? companies that will be adopted by u.s. health care providers? >> platforms like ours that softwaren open development platform allow companies from outside the u.s. into the u.s. market. is other thing it allows other industries to insert themselves into the health care workflow, financing, banks who want to offerinancing to consumers, or supply chain companies like amazon that want to start providing different goods and services to health care. we will see a lot more of that
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as we come into this year and as there is a move to the cloud across the industry. ,aroline: still ahead, london the official media giant banking on the u.k. ahead of its ipo. this is bloomberg. ♪
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caroline: there were a few deal headlines that caught our eye this week. fitbit focusing on luxury watches following its acquisition of pebble, stepping up wearables beyond fitness devices. airbnb is investing $30 million in an app for securing
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restaurant reservations. this is another move to expand offerings to travelers, making it a one-stop service. months toke a few integrate its app fully. square has integrated its system with a cloud-based plot form with 100 million users. mainly focused on brick-and-mortar businesses. the parent of the snapchat londonng app has made its international headquarters this week. the move is a win for the u.k. as it attempts to lure businesses in the wake of the brexit vote. the road ahead for snaps public offer. up for itsgearing ipo. the parent company of snapchat much $5 valued at as
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billion. once famous for disappearing rebrandingis now re-bandin itself. growsile, snaps user base at breakneck pace, and although the 150 million daily active users are based mostly in the u.s., it is gaining ground in europe. it is showing revenue growth. it is on pace to bring in under $2 billion by 2018. investors want the ceo to prove he can grow snapchat beyond its young demographic. caroline: for more on the choice of london as international headquarters, we checked in with our reporter and asked him if this was a smart move by snap. somethingormalizing
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that has been going on a while, up to 75 people in the city come up from six. having this as their tax have is because companies have been taking better advantage of lower tax rate elsewhere. catching the ire as a result of that. companies have been spooked by what they have seen from the european commission and other regulators going after tax havens, but at the same time, we should not put snap on a pedestal too much year. the tax rates in the u.k. have been coming down. there is some optimism tax rates
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will come down further. they could be trying to get in ahead of all of that. caroline: certainly an upside for the nine to kingdom. there's been a lot of uncertainty surrounding the brexit vote. snapchatnly, but for this is a logical help because the global advertising industry is headquartered in new york and london, so it makes sense for them to have a big office here. they are in the soho neighborhood and they're looking for another building. headine: is this a race of of what is expected to be their ipo as soon as march this year? ceo, part of his pitch to investors for the ipo will be the company's global opportunities. it is clearly done well in the united states, but to justify
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the valuation of 25 billion dollars or more, it will have to show it can resonate in other countries. users, 10 50 million million in the u.k., so that number will have to grow rapidly to justify that i valuation. let's get an investor's take. expands, what does wall street want to see from the versioning company? welcome to bloomberg technology. u.k. headquarters a smart move? >> i think so. having worked in soho, it is the hub of the creative industries in london, advertising, tech talent in startups, that local market, so as a hub , icreativity and advertising
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think soho is a great place to be. caroline: we are seeing expansion in europe and asia as well. this is a scaling up ahead of the ipo, isn't it? >> you have to understand your audience, local influences, in each different territory. they are not a homogenous group. people are different in how they communicate and visual messaging they choose to express themselves with, so this means being close to your audience. caroline: what do they have to do a head of the ipo is drum up the excitement that they are worth $25 billion and they have growth potential. how are they doing this at the moment? the ceo is 26 years old and has stayed authentic.
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messaging, itd has been showing itself evolving , snapchat stories, lenses, etc. an excitingality is area for snapchat, increasing activity with with brands and analytics will fuel the revenue machine. a whole host of other things on that similar trajectory, but augmented reality is probably the most exciting. caroline: in the same way facebook leveraged an ecosystem, targeting you and i. how much is facebook copying them? the biggest and most egregious pycat move was from instagram, copying instagram stories. it is the same product as snapchat stories. there has been a whole host of
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efforts from facebook ripping off features that have performed well for snapchat. the difference is that when you are going mass-market, shoving ads and monetization efforts down the throats of your audience, it is no longer naked and natural. the one thing snapchat has for it is that it is authentic and people want to be associated with it. caroline: well that give the revenues the investor base was to see? seen.t remains to be when companies focus too much on monetization, the original if those those companies -- the ethos, so the jury remains out. caroline: will they always tackle -- >> if they come up with new
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ways to express themselves, it is a safe bet that if they keep refreshing themselves, i think snap to docles have been a way that, genius piece of marketing. up your aftern the camera, they view the world the way you want them to see it, and what you choose to overlay on top of that is similar to the original isps. caroline: so much has been hoped ecosystem, will they live up to the hype. path towards the ipo the right one at the moment? showing metrics growing quickly, that is what they have been able to do.
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there has been speculation that some of those metrics have an slightly falsified. look at where spchat is compared to where facebook was when it went public, they paint a different picture in terms of actually getting dollars in revenue. its firstthis week, annual revenue decline down 2.5%, the taiwanese company assembles apple iphones. hai is the world's biggest contract manufacturer of electronics. the iphone turns 10. we will look at how it became apple's most important product and if the company can ever re-create it success. this is bloomberg. ♪
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>> today apple is going to
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reinvent the phone. years ago, steve jobs unveiled the iphone. at the time, it was seen as the heir to the ipod. it hashen, revolutionized the smart phone nokia andstroying blackberry, and inspiring a handful of rivals around the world. apple has sold over one billion iphones to date. appleslped to drive up stock price 850%. in 2016, strategy analytics reported that operating profit hit $9.4 billion worldwide. ,pple alone made of 91% of that but with these numbers come high expectations. the iphone is now apple's most crucial profit comes 63% of revenue. that is worrisome, because annual iphone sales fell for the
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first time last year, and apples operating system held on to 12.5% of the market versus android 87%. analysts remain bullish on apple ura believes the iphone eight will shatter all previous records. now, since the iphone took off, apple has been under pressure to prove it can re-create that kind of sales success. take a listen. with over one billion iphones being used today around the inld and 100 million of them the united states, they are poised for a large percentage of that base to upgrade to a new have aeight, and they lot more coming. it is likely they will have much more integration with siri.
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message will have bot s built-in. apple party has everything they need to be successful, and they don't have to have all of the market. they can skim off the most profitable customers, the ones who will not only by their phones but participate in the itunes and app store. decadee: over the past since they launched the iphone, the market has been bullish. analysts recommendations on bloomberg back to 2007 have always said buy. the green here shows how many analysts say by this stock. 80% at current levels. the lowest they ever got was 65% in 2008. apple and looky
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through the gloom. what about their movement into the emerging markets? is that lower margin profits or were they just go for the growing middle class in india and the likes of china? >> where apple comes out with lower cost products, they don't do as well. once again, they can go after the premium customer, the people who want to have the entire apple experience. all they have to do really is get a large percentage of the $1 one billion people who carry an iphone to continue that growth. they have new products like apple tv products, a new operating system, that will allow them to get more revenue out of this, not just sales of the phone. caroline: that does it for this edition of "best of bloomberg technology". we will bring good latest in
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tech throughout the week. tune in each day at 5:00 p.m. in new york. tune in on tuesday. that is all for now. this is bloomberg. ♪
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♪ carol: welcome to "bloomberg businessweek". deep entangled relationship between hollywood and president-elect trump's pick for treasury secretary. bever: net look once to amazon, google, and facebook combined. carol: how sleepless nights led to the birth of one pillow king. oliver: all that ahead on "bloomberg businessweek". ♪ oliver:

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