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tv   Bloomberg Technology  Bloomberg  November 2, 2018 11:00pm-12:00am EDT

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emily: i am emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, apple shares take a hit after it reports a lackluster results and the iphone maker says it will no longer share how many iphones it's selling. we talk about the tech giants next era. plus, alibaba blames the global economy saying conditions in a state of uncertainty. we hear from their vice chair.
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and mass walkouts at google prompt promises of change, but the ceo says he is still in the drivers seat. we will discuss leadership in silicon valley in the face of employee uprisings. first, to our top story. stocks extended declines. apple's poor forecast hit tech heavy indexes. in its fourth quarter, apple said iphone sales barely grew from a year-earlier. at the same time, apple said it would stop providing unit sales for iphones, ipads, and macs as it takes steps toward becoming more of a service business. while some analysts are praising the move, others are unimpressed. here to talk about all of it, kevin carter and mark berman, who covers apple. mark, walk us through the reaction to apple's surprise decision to not report sales numbers. which is what we as journalists are fixated on. mark: like you said, there are two sides to the spectrum.
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one side agrees with the company line that this does not provide an accurate picture of their business and they are becoming more service focused. on the other side of the coin, which i fall into, they just don't want to report negative year-over-year sales growth anymore. it's not a good look for any company that is so pr and marketing driven. emily: what do you think the implication of this is? we know the industry is rapidly changing. one analyst said it's in recession. what do you think the implications are for apple that they don't want the public to know what these numbers are anymore? kevin: what's most important to a business is revenue growth. whatever that is coming from, products, services, etc. part of apple's mode is its ecosystem. people don't want to switch to
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an android operating system. a premium brand gets premium pricing. it's a blessing but a challenge, mainly in the growth markets for smart phones, which are emerging markets where the consumer cannot afford a $1000 smartphone because maybe they are making $2000-$5,000 a year. android phones are the ones providing the first computer to most of the developing world. emily: what are the signals about demand for the new iphone in the current quarter, the holiday quarter, and knowing we are not going to get these numbers next year in that quarter when that quarter reports? mark: to me, it was a little alarming that iphones year-over-year growth was so small. it was about 0%, rounding down from 0.2%.
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why that is alarming is because we had a week and a half of new flagship iphone sales during the fourth quarter. last year, the iphone x did not come out until the holiday quarter. we are talking about no new growth year after year. last year we had no new iphone. this year we did. emily: what are apple's options now in emerging markets where there are cheaper options and android's competition is fierce? kevin: apple is the operational brand, the premier brand. in eastern china -- in every country, really, there are wealthy people who can afford a $1000 phone. emily: and there are cheaper iphones now. kevin: true. but in africa and india we are talking about $50 smartphones,
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$100 smart phones getting better every year and getting cheaper and cheaper. they may not have a multi-pixel camera or the ability to store videos, but it's come a long way. samsung is facing some petition -- facing some competition from chinese manufacturers, but i think they are going to grow. they have decent growth in china. most of the world will have android phones over the long haul. emily: there are precedents for apple doing this. they stopped reporting ipod unit sales and the ipod slowly became less important. they stopped breaking out mac versus laptop sales. we saw that segment become less important than the iphone. what are the forecasts in terms of how important the iphone will remain for apple compared to services? kevin: for years, there have been discussions about why it's bad that the iphone makes up about two thirds of apple's sales. we had a sense of what that meant given we had the unit
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numbers. now we are no longer going to have the unit numbers. we are not really going to know what that means. i guess the good news, the silver lining, is that revenue is still growing at a remarkable pace. it's also alarming because unit sales were up 0%, revenue was up 29%. the good news is, we should assume people will continue to buy iphones in the same quantity. even if they don't get much growth in the future, revenue is still going to be fairly consistent. we are talking huge numbers. if you look at the bloomberg terminal and look out to 2021 -2022, we are talking about one hundred billion dollar holiday quarter coming up for apple in a few years. they are not going away. this is a very marketing pr decision not to see those negatives on the balance sheet anymore. emily: kevin, given the trends you are seeing in emerging markets, how much can apple grow? kevin: it can't grow that much.
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theoretically there will be a lot -- emily: do you think there is an upper limit? kevin: the next billion consumers coming online in india, china, africa, they are not going to be able to afford an entry-level iphone. it's going to be android-based. that's just the mathematics of it. an iphone is a premium brand, and aspirational brand. and they have an ecosystem. warren buffett has talked about this. a smart phone is an important part of your life, perhaps the most important part of your life. would you gladly pay another $100 or $200 not to have to switch from the apple operating system to the android system? probably, but if you are a first-time digital consumer, the decision is easy just because of the economics of the entry-level smartphones running on android.
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emily: kevin carter, you are sticking with me. mark berman, thanks so much for stopping by today. coming up, alibaba reported quarterly earnings well above analyst estimates, but is missing predictions for year-long sales by about 6%. alibaba vice executive chair weighs in on that. if you like bloomberg news, listen on the radio and on the bloomberg app. this is bloomberg. ♪ emily: alibaba reported
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second-quarter revenue that fell short and it cut its sales outlook for 2019. the chinese e-commerce giant blaming macroeconomic conditions, saying the globe is in a state of economic uncertainty. i asked about the headwinds he is expecting. >> if you look at our sector, overall retail sales are still growing at 9%. e-commerce over the last quarter in the total market was growing 24%. we have just reported our gmd is growing at 24%. we are outgrowing the market. i think what you are seeing is alibaba is not entirely hitched to the economy and consumption trends. what we are doing is digitizing not only our own platform, but also the traditional retailers platform, enabling our retail partners to capture more customers and operate their business more efficiently.
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that's what we call our new retail strategy. that's an area we are very excited about. emily: you are facing rising competition in social commerce. there's also competition in food delivery. what is your strategy a midst the change in currents? >> we have always had strong competitors. to use a sports analogy, competition makes us better. if you play against bad teams, you will not improve your self. i'm glad to have the competition, but they are in different sectors. there is really not a company that can compete with us on an entire platform basis across commerce, entertainment, and local goods and services. we now serve 600 million active consumers doing transactions on our platform annually.
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this is, i think, our strength, and again, as we tap into the new retail space to enable the traditional retailers to capture more of their sales, that is a market that is $5 trillion. we effectively are increasing our potential market two $5 trillion. emily: president trump said he had a good conversation with president xi jinping focused on trade. trade talks have not resumed. bloomberg is reporting he is asking top officials to draft an agreement. what is your reaction? >> any activity that will stave off this trade tension is positive. there is no advantage to either side to get into a trade war because the two economies are so dependent on each other. it's a very symbiotic
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relationship because they are the two largest economies in the world. the future is really joined at the hip. for example, china is buying a lot from the united states, $165 billion annually in goods, and another $40 billion in services. there are trade wars, tariffs, and so forth that are going to reduce business from american exporters selling to china. there are also american companies operating in china that are making very good profits. total aggregate revenue of $600 billion and another 49 billion dollars of profit. you don't want that to go away. it's a good thing the two presidents are sitting down and about to talk. we hope some good things come out of that and the tension will get reduced.
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emily: jack ma said alibaba would no longer be creating one million jobs that alibaba promised to create in the united states. as a result of this trade war. i have to say there was always some skepticism those jobs would be created, but if this drags on, how would alibaba react? joe: remember originally that the job creation assumption was based on the premise of trade, and the trade flow that we would help small businesses in america sell to chinese consumers. in the wake of all of these tariffs and tensions about retaliatory measures, it was impossible to keep that commitment. but if there are ways for the two sides to resolve the tensions, and then we can resume activities to help small businesses and farmers in
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america, we certainly will come back in and be very happy to. emily: the chinese government has led a broad crackdown on the the gaming sector, cracking down on chinese companies making investments abroad. do you think this could undermine the growth that has made companies like alibaba and tencent so giant? joe: i think you have to understand that what you call a crackdown is really enforcing regulatory measures in each specific sector. we do not see this as a general crackdown on the internet. i can't speak for other companies, but in our case, a few years ago, people were cracking down on things on our platform and we continue to police the platform very well. these regulatory measures are
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helpful and meant to protect consumers. we operate in that environment and comply with regulations. emily: coming up is a big day for you. given what happening in the global economy and the chinese economy, how do you think it will compare to the prior one? joe: i think the singles' day, there are a lot of really cool things going on here. there are about 80,000 brands that will be participating in the sale on our platform. it's a great presentation to the consumers. we call this the olympics of brands. they will all be there to compete for the consumers.
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the other thing about singles' day is we are going to implement further our new retail strategies so that we have about 200,000 physical stores that will be partnered with us in 12 cities with consumers that can go to the store or order online. today, mobile phone consumers can be very flexible. they can be in store or sitting at home or the office and order, and you have to reshape your company to be able to serve these increasing demands. these 200,000 stores are going to participate in the single day sales, so we are very excited about that. emily: alibaba executive cochair jo e tsai. i do want to talk more about alibaba with kevin carter. what do you make of the results today and of what is happening
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in the chinese economy specifically question mark kevin: i think the results are great. the company is growing above the top line. the trade wars have had a pretty significant sentiment effect on stocks in the e-commerce sector. they are down close to 35% from the year and highest to the lows this week or last week. if you put it in perspective, 54 % topline growth is incredible. there are very few companies in the world that would not feel good about growing up 50 plus percent. i know they have lowered the estimates for revenue for the full year, but if you put it in perspective, i think things are still quite strong. what joe said on the conference call this morning is how i would look at it. you have 300 million middle-class chinese consumers. that number is expected to grow to 850 million in 12 years.
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a 150% rise. emily: and they don't have debt like americans. kevin: yes. he touched on debt and the ability for the chinese consumer to leverage themselves up. alibaba is competing with all industries in china. because so much of china is state-owned, banks, for example, they are susceptible to losing out to newly digital customers. alipay is an example of that. and what he said about what ties all of this together is the digitization of the entire economy. the one number i felt was most intriguing -- supermarkets which are there big bet.
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kevin: i was there six weeks ago and, it's the one thing i saw on my most recent trip. it's hard to explain to people. emily: it's a unique experience. i was going to ask you to try to ask you to paint a picture for us. kevin: it's like whole foods meets the jetsons. there are tracks along the ceiling and elevators lifting bags up to go through a whole to -- a hole to go on a scooter and deliver it in 30 minutes. what to meet was most striking is that this is still a small part of the business but 60% of their orders were online. i don't know what the whole foods percentage is here in the u.s., but i am sure it is not even 6% if it's even 1%. i don't think people quite understand the leapfrogging going on as entire economies become digitized because they never had bank accounts and a lot of things we take for granted. emily: as you point out, alibaba
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is so huge and spans industries. there's really no other player that can take it on directly as a competitor. is it truly unhitched from the economy, unhitched from the future of the global economy and the chinese economy, or is it even more hitched because it is so large? >> it's certainly hitched to the economy. but this is a secular change, right? in our world, we see this whether it's netflix versus traditional television, google versus the newspaper, we have seen how these things have changed our world, but in the developing world, the emerging markets, china, that traditional consumption infrastructure doesn't really exist. you take this giant consumer wave 9% retail sales growth for the country, but it's going on to the smartphone because most of the retail structures we have
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at the malls don't really exist there anymore. i think joe is right that the entire chinese consumption economy online, off-line, in fact, they even said they are dropping the word e- from commerce. because it is all the same thing to the chinese consumer. emily: thank you for joining us today. plenty more coming up on "bloomberg technology." we are live, and follow our global news network tictoc on twitter. this is bloomberg. ♪ emily: tesla ceo elon musk says
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he probably would not accept an investment from saudi arabia now. in an interview, he criticized the kingdom's government over the death of journalist jamal khashoggi. he is attempting to secure funding to buyout investors and take tesla private.
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that post led to tesla being sued by the sec. musk also said he uses twitter without much of a filter. an investment firm has announced it is pouring more then $1 billion into a silicon valley window maker called view. the investor pulled out of saudi arabia last month in response to jamal khashoggi's murder, but he did meet with the crown prince privately. the fund has a $45 billion commitment from saudi arabia. still ahead, control at google under pressure with a mass walkout. we will discuss the state of leadership next. plus, gopro falling the most in
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10 months. gopro's third quarter earnings report. will it be enough to bring a backup this holiday season? this is bloomberg. ♪ emily: this is "bloomberg
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technology." i am emily chang in san francisco. our silicon valley leaders under siege? silicon valley leaders under siege? thursday, thousands of google employees locked out of offices around the world and purchased of the company's handling of sexual misconduct allegations against its top executives. it prompted responsive from leadership that google is serious about drawing a hardline and will look at demands for change. >> obviously, it has been a difficult time, this anger and frustration within a company, we all feel it. i feel it, too. ighgoogle we set a very h
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bar, and clearly do not live up to our expectations and that is where it was important to express our support for the employees today. emily: he also signaled that he remains in charge and will not wayed by staffs uprisings. we are joined by bloomberg tech senior executive editor, founder of the web investment network and also, author of "dear founder: letters to anyone who wants to start a business." you have a long history in silicon valley. you were the chair of yahoo!, worked with marissa mayer and meg whitman for a very long time. what has been your reaction as you have seen all of this unfold at google? >> first, bad behavior should never be rewarded. emily: let alone tolerated. >> no, and so we need to continue to do a better and better job, obviously, to make sure we don't have this happen
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in our companies. i was super blessed to work with meg whitman at ebay, and she made it perfectly clear to everybody, do not do a thing that you would not want your mother to hear you do or say, or show up on the cover of the new york times. emily: google's problem has been that they did not have the women. there are a few, but they did not have women in the top ranks for a very long time, and you saw executives getting away with bad behavior. >> i cannot comment because i haven't been at google, what people were doing to whom, but in general, we need to do a far better job, as you know, from the book you wrote, of treating people well, and not having these things go on and on companies. when they do go on, they have to get addressed immediately and quickly, and with transparency. emily: brad, it is good to see sinday out front.
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he went to the conference and spoke to andrew ross sorkin as the lockout was happening, and he talked about the anger that he himself feels, and also said that he does not run the company by referendum, that even though employees feel empowered, this is not going to necessarily determine how they lead the company. how do we square that? brad: he is in a tough position. the way all of this unfolded, andy rubin, who was really his rival to succeed larry page, he left the company in 2014 and sundar was elevated to ceo the following year. a lot of the allegedly inappropriate behavior did not happen after his watch. he is able to share the outrage of the employees and endorsed the walkout. he has gotten on the side of the internal protest. the difficult decisions will come when he has to address some of these five demands the employees have, like ending forced arbitration.
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in principle it is good, but it could open up the company to liability, so the top decision for him still remains. emily: and it did happen to larry page's watch, who is still ceo of alphabet and sanders -- sundar's boss. brad: that is definitely some awkwardness there. emily: in general, may not come -- have you ever seen this kind of employee outrage in silicon valley, this kind of employee organization? it is not just happen at google, we saw amazon protesting their shareholder diversity. we saw microsoft employees purchasing their work with the u.s. government. maynard: i think this is new ground for silicon valley and i think employees want a voice. they have always wanted a voice, but more than ever, they want to share that voice and they want us all to make sure we are using our technology for good and that we are treating people the way people should be treated, with
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dignity and respect, more than ever. i have been around a long time, and hopefully i have treated people with respect all the way through that journey, but it feels more visceral now to our employees when we are not doing that. emily: it feels like a strange kind of contradiction. you and i as journalists, we hear this. so much of this was an open secret and employees knew this, and yet now we are seeing this outrage. >> and was a change of the times. the me too movement, your book, what was sort of known and perhaps quietly accepted now becomes outrageous. a lot of these founders set up their corporate environments to look like academic environments and schools are now seeing the other part of that, which is that students want to have an impact in how universities spend and invest and now, employees are doing the same -- finding their voice.
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emily: the founders have set themselves up to be untouchable. they cannot be voted out. mark zuckerberg is the same way and maynard, we are now seeing calls for mark to be more transparent, even questions about whether or not he should still be leading facebook amid its challenges. maynard: i see him becoming more and more transparent, as he did on the earnings call this week. emily: right, he is doing pretty good with what he never did. maynard: right, that is all good. he may have more control of the company than a lot of public shareholders would like him to have, but he still has a board and over time boards are accountable to hire and fire ceos. emily: but you think he has the whole board in his pocket? they are all mark-loyalists. maynard: i don't know the board
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and i do not know exactly how they operate, but i know that mark needs to continue to move the company to better places and if he is not, the board will have to figure out what to do there. i am not speaking on behalf of the board. emily: there are open-ended questions thrown out there, should mark zuckerberg still run facebook? in any world, do you think that would be the case? brad: let's step back and look at how funders amass power. it is to insulate companies from all the short-term demands of the market. and look, with less control and protection, mark has built on enormous franchise and enormously successful. there are plenty of bumps on the road but he has learned the -- earned the leeway to continue to guide facebook. maynard: i could not agree with you more. if you look at where it is today versus where it started, it is is an amazing run, and it was
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not without bumps. we need to figure out, and i am sure he will, and the board will help, maybe, how to traverse this next set of challenges and bumps. if he doesn't, revenue will be impacted, the noise will grow. these things have a way to, you know, work themselves out. emily: facebook had an earnings call, that was a bit awkward, to some people. we heard tim cook come out and challenge facebook and google directly about their business model. what do you make of the tech smack down happening? i guess it is happened before, larry ellison and bill gates had their issues. maynard: i was there when cisco used to come and recruit our employees. we were not always friendly. but i think it is way more open today. frankly, i would rather see companies focus on making their
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business better than smoking -- smacking down a lot of other companies. emily: it seems like facebook, investors don't seem to consider it the more vulnerable of the tech giants. and now, mark said that they will make another big transition. mark has said that they will make another big transition. first it was to mobile, now it is exploiting the messaging systems that they bought. is that a transition facebook can successfully navigate? brad: i think there was an effort on mark's part to be more transparent in the earnings call. i liked how he referenced youtube and i-message, he talked about getting a hold of the fake news problem. can they be successful? i think with the track record, they have successfully navigated a couple of very hard pivots. this is an existential test. i don't know. one thing i will say, and the reason people are skeptical --
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social networking tends to be governed by fads, and people seem to be getting tired of facebook classics, and maybe moving to instagram and elsewhere. that is a risk for them. emily: maynard, when it comes to relationships, some things change, and maybe the expectation of leaders, maybe that you are has changed. how? maynard: number one, there are no quiet moments. you used to be able to go home on the weekend and be with your family and be alone. everything you do every day, somebody is listening or taping. emily: because of facebook. maynard: or twitter. there is no quiet time. work is blended between work and home so much, you are always on and always expected to be representing your company. so i think the pressures are much more intense today and
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always on, and your expectations of not just running your business, but doing things in a humane manner and making sure you have a voice that is representative of more than just a company, that is all different. emily: maynard webb, of webb investments, and brad stone. thank you. google's top lobbyist in washington is stepping down. former u.s. republican house member, susan molinari, will transition to an advisory role in january. during her tenure, google became one of the biggest spenders on influence in the capital during her tenure as it fought for net neutrality and government contracts. her departure comes as the company battles claims of bias against president trump and the republican party. coming up, gopro tanking, following its third-quarter report. how the ceo expects to restore
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profitability with its core camera business. plus, kohl's is outperforming the s&p 500, how the store chain has learned how not to fight the amazon era, but embrace it. this is bloomberg. ♪ emily: gopro shares are taking
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a hit after posting a weaker than expected outlook for the holiday season. it gave a revenue forecast of just $380 million for the current quarter, compared to the $393 million analysts predicted. gopro shares fell the most in 10 months, after also reporting margins that missed estimates. the ceo told bloomberg's selina wang that he is confident about the holiday season. >> in the first 30 days
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post-launch, our new flagship camera has gone on to become the best-selling gopro ever. our other products, hero 7 whte -- white and hero 7 silver are selling better than expectations and we are confident that will have a great orders. selina: are you looking at entering potentially other adjacent markets such as wearables, virtual reality glasses? >> for the time being, we are focused on our core business of helping people capture and share their active lifestyles. we are seeing growth in our core business and we are predicting 5 million total units of self through this year, up 60% 16% year-over-year. in the first quarter alone, we are seeing 50% higher sales in
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last year, so our core business is growing. we are making investments in a new types of cameras, like our fusion 360 degree camera which has 47% of the 360 camera market. so we think we have enough growth opportunity and potential to restore profitability to gopro, just by focusing on our core business. selina: trade tensions with china are ongoing and it was mentioned in the call that you might actually move production out of china next year. if that were the scenario, where would you move it, and how would it impact costs? nick: we are prepared to move production of our u.s.-bound goods out of china and the first half of next year if we are forced to do so. but we are not making that decision yet. to date, we have not been included in tariffs, but several consumer product companies have made the case to be excluded from tariff lists, so if we are included on that, we will focus on seeing if we are excluded? nick: but in preparation, what
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countries are you looking at? -- selina: but in preparation, what countries are you looking at? nick: we are not sharing that. selina: i would like to talk about margin expectations, a bit lower than expected. you have already reduced headcount dramatically. are you looking at revenue per employee number, will we see more restructuring? nick: no. we are looking at very successful holiday quarter for gopro. we are now one month into the holiday season and as i mentioned, hero 7 black is the most successful ever in the first few months post-launch. our 199 and 299 are selling very well. that sets us up with low channel inventory exiting the year, a great set up for a profitable q1. selina: when we look at camera sales, how much of that is from refreshes from existing users is
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versus reaching a new base? nick: roughly half of our users of the app are using four to six-year-old gopro's. hero 4s, 3+'s and hero 3s. we have a lot we can do to excite our customers to upgrade. the majority of our business is attracting new customers, so we are doing a good job of attracting new customers globally. but with hero 7 black, we're seeing a lot of social commentary about customers being excited to upgrade and those have upgraded our socially sharing it they are really happy with their purchase. so, gopro is a virally driven business and so far, the social commentary is doing a good job of driving business this holiday. selina: you talked about partnering with other organizations and has signed agreements with adobe and others. what about partnerships with consumer facing companies that can really expand the brand?
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nick: there may be opportunities, but this year, we have never in our focus to serving our core customers and we have seen growth. we are looking at growing total unit volume, up 16% this year, to 5 million units. gopro will be profitable in the fourth quarter, and we believe will be profitable for the second half of the year. we believe we can be profitable in q1 of 2019. we are right where we want to be. selina: this new products, how else are you going to add value to your program to make users want to pay a monthly fee on top of the quite expensive camera? nick: we have been quite successful with our subscription service so far. last quarter we grew 16% last quarter up to 500,000 subscribing customers. and we will be testing more, pricing tiers and benefits to
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enhance the value proposition for customers and find a program that really clicks, to drive that subscription rate further. emily: that was ceo of gopro, nick woodman. coming up, with the holiday season around the corner, kohl's is on track to outperform macy's and nordstrom. we hear from the ceo next. this is bloomberg. ♪ emily: u.s. department store,
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kohl's, has been on a tear this year. the stock is up over 40%, far outperforming the s&p 500. as they launch their holiday shopping campaign, emma chandra set down with the ceo and the y kick things off with an update on kohl's partnership with amazon where customers can return amazon products in kohl's'stores. >> we have expanded in l.a. and chicago and recently we went to
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wisconsin. about 100 stores, where it relates to customers bringing in their returns to kohl's. it is a great benefit because they do not have to package it up, it is free, they don't have to ship it out. all they do is bring in their goods and it is a very seamless process. when we started, one of the first things we wanted to see is whether the operation would work and would customers would use it. i feel like we checked that bought pretty well -- checked that box pretty well. now, we need to make sure that the entire profit -- opposition from both us and amazon is a sustainable idea for us in the long-term. emma: is it driving traffic? are you having more people coming into kohl's stores? michelle: we are up now against a very important season for holiday where there will be a lot of packages. that will be a true test for us.
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emma: do you think he will make a definitive decision after the holiday? michelle: i do want to get the holiday behind us and i know amazon wants to as well. to your question, we do have customers using it. i think the opportunity is, is it enough, and does that economic model work for both amazon and as. emma: do you think if you continue it, it will help diversify your customer base? you have spoken before about encouraging millennials to shop at kohl's? michelle: we are deep in the throes of studying that, and i am hopeful that he will do that and broaden our customer base. emma: your capex for 2018 has been devoted to i.t., half of it. how much of that is about driving the online customer and when it comes to mobile? michelle: technology is really fueling everything we are doing. certainly, a big portion of it is fueling the digital experience, and that is mobile for stores.
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but we are also investing a lot in our stores. we have a lot of innovation happening in the back of the house to help our associates be smarter about the store, and we also just started testing self checkout, which makes it really convenient. it is just in two stores but if that works, we could expand. a big strategy for us in marketing is personalization. segments like the core customer, millennial customer, they might want different things. so you need to have data, and you need to have a machine-based learning to serve of the content that will be relevant to those unique customers. emma: so is the store customer more important to you perhaps, than the digital customer at the moment? do you see the digital share of sales increasing to a greater number, i think it is at the team percent at the moment, how far can it go? michelle: they are both critically important. a majority of our sales happen
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in our stores, but we see digital as a growth engine, not only in its own right, but also a great avenue to attract new customers. emma: are you doing anything when it comes to the holiday to attract and compete for the customer online as a lot of people who are trying to drive people to their stores? michelle: yes. for us, i believe kohl's wins, when we have customers engaging. a lot of things we are doing around that, like buy online, pick up in-store, and we now have by online and ship to store. but in terms of reaching the customer digitally, one of the things i will tell you, from a marketing standpoint, we are leaning in more into digital channels. this year at holiday time, 50% of our spend will be digital, the highest we have been. emma: are you talking about advertising more on social media? michelle: all forms of digital. it is search, social media, partnerships with pinterest, across multiple channels. i think is a really thoughtful plan. emily: the ceo of kohl's,
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michelle gass. that does it for this edition of bloomberg technology. i am emily chang from san francisco. have a wonderful weekend. this is bloomberg. ♪
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