tv Bloomberg Technology Bloomberg January 7, 2019 11:00pm-12:00am EST
emily: i'm emily chang from los angeles and this is "bloomberg technology." in the next hour, tesla finally begins building its $5 billion factory in china, which will shield it against import tariffs, but will it protect it from the ongoing trade war? why the start-up overhauled its business model in europe and changed its hiring strategy as a potential i.p.o. nears and the consumer electronics show gets into full swing. we'll look at what trends to ook out for.
first, tesla breaking ground on its first plant outside the united states. c.e.o. elon musk was in shanghai for the ceremony to get construction started on its $5 billion factually. they didn't break ground in the traditional sense but he can was kicking off a new timeline. what is the timeline for this factory to come to fruition in china? >> it's very aggressive. they want to build this factory in 2019 and have model 3 production by the end of the year. the tremont plant was a plant they bought from toyota and g.m. this one they're starting from zero in terms of construction. emily: what will a china plant mean for tesla's business? will this really protect the company from political machinations? dana: that's the hope. it's significant because china is the world's largest auto arket.
having sort of cooperation with the chinese government in the local provinces and the national government is a big boon for tesla. they obviously want to inflate themselves from import tariffs and it's cheaper for them to produce locally for that market than make them in the united states and pay the cost of shipping them overseas. emily: meantime, the company is hitting milestones. made its 500 millionth car at he end of last year? dana: cumulative, yes. emily: this is a car generating -- the model 3, at least, generating more revenue than any other sedan? dana: in the u.s. yes. it's a very popular car. consumers seem to like it. tesla is going to crank up its
supercharger network. there's a lot of rumors about tesla unveiling the model y, its next crossover vehicle. 2018 was a pivotal year for the company. you'll see more of that in 019. emily: elon musk did tweet a few tidbits about what cars it would be producing in china vs. the united states. he said affordable cars at certain models need to be made on the same continent as customers. what is the strategy here? dana: to save money by hipping. the idea is to produce cars at the local market at the factory in that market. first up is china. they've also talked about building a factory in europe. it doesn't make sense to make cars in california and ship them there when you could have
local market do the same. emily: dana, thanks so uch. this week's u.s.-china trade talks were supposed to be low level. but chinese vice premier lui has made a surprise visit, bloomberg has learned. sarah, vice premier lui is one of the president's top economic dvisors. what does this signal? >> china isn't putting emphasis n these talks, it's taking the deadline seriously and him showing up, even if to give a wave and friendly greeting is a good little gesture but doesn't negate there's a lot of hard work on a deal to be done and right now it's lower level officials from both the u.s. and china in beijing.
they'll meet again tuesday and they're trying to make some progress. we heard from ross today he thinks they might be able to make some deals but it's greater access for american companies and the chinese market are really going to be the tough ones to achieve. emily: we got big news from apple last week about cutting their revenue forecasts. we don't know how many of it has to do with the trade war specifically. any indication how big bombshell news like that for a u.s. company that has a big business in china, whether that impacts these talks or puts any additional pressure on either side? >> this is a complicated piece for the u.s. apple lowered its revenue figures for the first quarter, seeing slower iphone sales in
china. first of all, the impact of these trade tensions. they're sending a bit of a chill in the business communities amongst consumers and secondly, there are u.s. companies organizing in china so if there's a slowdown it's going to affect them. i think there's a lot for the trump administration to consider going forward and as it decides how robust a deal does it need to have. on march 1, does it needs to have fewer practices on i.p. in china or can it move forward with deals to reduce the trade deficit, for instance, and work owards the larger goals?
emily: we're marching towards a march sideline. what tangible progress are we expecting from the talks this week? >> the talks, they're lower-level officials. i think they'll set the stage for a meeting we're expecting in washington potentially as early as next week. that's not been officially announced but that's what we're hearing from sources is the goal. we're about halfway through this period towards the march 1, the 90-day deadline for the trip escalation, so we're going to have to see some progress going forward so that there's a deal put on trump's desk that he can say yes or no to. >> the white house has expressed a lot of confidence about the u.s.'s position. is there any indication about whose favor the talks are swinging in? i know it could be a matter of perception but have you seen any cracks in the confidence on the american side? >> i think right now both sides are playing down either of their economic situations. both countries are seeing a
little bit of weakness from their economies. china probably a bit more than the u.s. right now and also stock market fluctuations. we see in the u.s. the stock market rise and fall on the rade production. even on december 1 or when in trade war started in july -- i think that puts them both in a bit more of a precarious position. both sides are saying we'll get the best deals for our countries, we will not ave. our economies are doing great. but as more and more data comes out, manufacturing or whatnot, the reality is there looks to be some weakness that will play into their laps. emily: meaning, the u.s. government is still shutdown. will that impact progress at all? >> really the one way we've seen it impact things is that trade data isn't coming out so
we can't assess the impact of the tariffs so far from every corner we normally get it from. so far the departments that deal with this haven't been affected or the collection of tariffs. of course, the longer this goes on, the more variables will be thrown into that but right now that's the one area, the collection data, that's been the most notable for the u.s. >> in the meantime, 900,000 u.s. government workers still not getting paid. thank you so much. investors continue to see the silver lining florida in biotech. we go to the conference in san rancisco next. listen on bloomberg.com and on sirius xm. this is bloomberg.
emily: the biggest names in biotech and health care are gathering at the j.p. morgan conference in san francisco to set the agenda for the year. taylor riggs is at the conference and joins us now. give us the lay of the land. taylor: i'm here with the c.e.o. of 10x genomics, serge saxonov. thanks for joining us. lay out what 10x is and what you're hoping to achieve here at the j.p. morgan health care conference. >> yes, our premise, the reason we founded the company is many of us believe that the coming decades are going to bring transformational challenges,
address infectious diseases, bring help to old age but the biggest obstacle is how little nderlying biology we know. our goal is to become really good at building tools, applications to allow the world things the world could not see before. we combine hardware, software, chemistry, biology to build the products we bring to customers. aylor: so far the numbers look good. you're up about double year over year. what's driving that top-line revenue growth? > it's both. our existing applications are getting more and for adoptions with our customers. they're making discoveries they weren't conceivable a few years ago and we're adding more so that our customers and scientists can see biology they
could not see before. last year was tremendous on every front. taylor: you've gotten an additional inflow of about $30 million. where do you see the future rowth opportunities? >> last year because tremendous year. we launched six new products and expanded into multiple geographies and increased the size of the team. the goal is to keep accelerating that growth, to keep investing in r&d and in commercial organizations. there's much more growth ahead. big investments we're making across asia and just about every other geography around the world.
>> r&d is expensive. i think you're currently valued at a $1.3 billion valuation. how many more fundraising do you see in the next three years? >> we're not in the needs of capital. the business is scaling really ell. our goal is to keep investing in r. and d and keep scaling the distance. >> what are your prospects this year for new products in terms of scaling, like snubs >> we've significantly expanded the range of our products, both in terms of the number. six new products covering epigenetics. immune system. we want to expand and also introduced new areas we made earlier last year.
aerial spatial analysis. >> what are some of these new areas? >> the fascinating one is biology. we have delivered an ability to do analysis at the single-cell level. the next thing we see the world is asking for is being able to tell where the biology is. whether cells are inside the tumor or outside the tumor. that will enable all kinds of new discovers, new treatments, new diagnostics. >> so much of what we think about venture capital or fundraising, there has to be an eventual exit strategy. i know it's early days. what would be your ideal exit strategy in whether?
>> we actually don't think in terms of exit strategies. our goal is to build a very large company here. our goal is to build the tools and capabilities to accelerate the understanding of biology and that entails building something very significant and that's our goal. we can imagine going public as a step along that process but if focus is on building the business and keep scaling. >> do you have a timeline for hat? >> the goal is to keep building the company and depending on how the markets perform and our internal needs, we'll keep assessing it throughout the year. >> we talk about expanding geographically. where do you see geographically now areas or for growth? >> we're going to be across the world, partially a function of
where the needs are and the talent is also. here's a lot of potential in asia so we've already started making significant investments 2018 and that's going to accelerate into next year. > one last question. what's been your key takeaway here at the conference? what have been some of the biggest conversations you've had and what are people most interested in? >> i'm learning what will happen over the next several days. it's always exciting to get be here because you do get an idea of what's happening. i'm looking forward to the rest of the conference. >> thank you. c.e.o. serge saxonov here at the conference. mily: thank you so much.
emily: the data mining company palantir has been a bit of a mystery in 15 years it has never hired a sales team and focused mainly on big-budget government work. in recent months, the company has brought on dozens of sales staff, hiring top salespeople from oracle and i.b.m., a big departure for a chairman who once said the only way he would hire a sales team is if it was it by a bus.
bloomberg was at chatman. thankfully, they haven't been hit by a bus so why is palantir hiring salespeople? >> number one, they're finally positioned to because they have something they can sell to the commercial market and the second reason is motivation. the pressuring has been increasing for them to i.p.o., which happened as early as this year. emily: what do we know about the potential for a public offering? >> it could happen as early as this year and it could also happen in 2020. it's something of a par already game here in silicon valley and i'm sure also from wall street where many are looking to get in listing. we've reported morgan stanley is fortifying its connections with palantir, as is credit suisse but we don't know an exact timeline. there is increasing pressuring from customers. this is a tightly held company, formed by peter thiel 15 years ago, the traditional pressures from a large cam table with a lot of heavy muscle investors with different timelines and agendas isn't coming to bear because it is so tightly held by a very small group of eople.
since then there's been no public filing showing anything other than that a huge discrepancy even within one morgan stanley group. as recently as late last year. ean, morgan stanley's i.p.o. investment banking group said they could see an i.p.o. valuing them as much as 41 billion. this is a huge gap so it's not exactly clear how much they're worth. emily: right. morgan stanley, you mentioned, trying to build their bridges with palantir as a banker but they're also one of palantir's biggest corporate clients. what are these companies using palantir for? >> to pull disparate chunks of ata.
either silos or real-time data, pulling it together to take business decisions about how to best run flair businesses. for example, chrysler-fiat, they're using it to do things like identify tiny fixes early in the manufacturing proceedings that could save them later by doing basics. like repairing one wing aetna costs maybe a couple of cents as opposed to something that if you wait six, seven months, it could cost a couple thousand dollars so going in and finding hat information. emily: is having a sales teem work income terms of gentle remaining revenue? > right. it's too soon to say
globally. they pull their finances tight to them with you in europe, we reviewed some documents that showed it is paying off in europe and it's up significantly, up to $135 million for 2007, which is the last filing that we were able to access so it is paying off but the larger question about culture is still undetermined. it might have been tricky to have the c.e.o. and leader of your company saying they're an engineering first, engineering-only culture and bring in a sales team after 15 years. that's tricky. emily: i know you'll be charting the road to a potential i.p.o. for us. coming up, the latest on bold new technology at the prison i said consumer show and we'll hear about 5g and the potential impact of the u.s.-china trade war. this is bloomberg. ♪
emily: this is "bloomberg technology," i'm emily chang in los angeles. just ahead of the electronics exhibition, apple announced a deal that seemed unlikely. they'll be offering tv, news, and television programs on its rival samsung. i want to get to las vegas where c.e.o. michael kasson is standing by. michael, thank you so much for
joining us. unlikely is one word. unthinkable is another. what do you make of this deal between apple and samsung? >> well, strange bedfellows. you know, i think we're all in agreement about one thing. while for so many years we said it's about the content and i still agree it's about the ontent, there seems to be an abundance of that. i think today it's about the distribution so finding strange bedfellows or arguably frenemies that can work together i don't think is surprising. i think it's spot on. emily: do you think apple has a chance in original content, and if so what are the chances? >> it's hard to belt against apple in anything they do. that being said, the two areas where i think they've been slower than people would have expected is in that home device. i know siri has exist fards long time but the idea of amazon and google and facebook
having come to markets sooner than anybody would have expected, certainly well in advance of apple with their advice, that's number one. and number two, while contents is an object for everybody, it seems apple has plenty of that. i'm surprised it's taken them this long to make those movers, as they have. that being said, they certainly an catch up. we've seen networks on the linear and cable side transform themselves on the back of one snowfall. look at amc and "mad men" and breaking balds to plook at what one particular show can do and mazon with "the match allows mrs. maisle." those kind of one-time wonders, if you will can make that differential so you tonight -- don't resume apple out of everything.
emily: programs it's a sign that apple is changing its hardware first approach. since you mentioned "the marvelous mrs. maisle," one of he wingers at the golden globes, we saw two awards for "roma" a big deal for netflix as i thought first original ovie winning an award. hat do you make of that? >> look, i think content from wherever it comes today is the answer. netflix is certainly spending normous sums of money, as is amazon so the likelihood of them having more winners in the awards season i think is to be xpected.
them throwing more against the wall, and a half more of an it has a chance to stick. i think you'll see more of that as opposed to less of that as the marketplace really doesn't care who the producer is but how good the content is. emily: that said does that mean netflix lose its edge in the future as more companies develop their own i.t.t. service sns >> look with disney being as serious as they are in their scompligs with the fox deal ready to close momentarily, reason -- within the next few weeks is what the expectation is what disney is doing under the leadership of kevin mayer, i think you can't understate that and certainly warner media with kevin taking on desirable sfornlt relative to the over
the top creative misks and let's not forget our friends in fades and "30 rock" with comcast nbc uniform. i think the field is crowd but as in all crowded fileds, the creature is going to rise and those whoing create the best content and catch the attention of the viewers and we'll talk about that for a meal. , in terms of catching the attention, i think that's who's going to win and they're all capable of spending enormous sums of money to cream content. not that money enshurems good contents but the more of it you produce, district, the higher likelihood of catching the ttention of the audiences. i think it's important to note the amount of money that is being spent on program promotion. we don't any longer and haven't
for quite some time relied on lead-inas network television used to refer to it. you just have to drive up and down any of the mainly thorough fares? in certainly los angeles, new york and police stations all around if country and see the money being spent in one sector, particularly out of home promoting the content of hulu and netflix and so on. the money is being spent and the eyeballs seem to be responding when the content is ood. emily: back to apple. am did put up a big ad on the side of the marriott hotel referencing its privacy. you know, what happens on an iphone, stays on an iphone. pointing to apple's privacy policies. despite this deal with samsung, t's sort of that slap at
android competitors, facebook, at even google. what do you make of apple really doubling down on this idea that they're on the right sides of hit when it comes to your data? >> well, i think apple certainly is. i think evan spiegles made it clear that snap commat shares a similar view of the utilization of users' data. inning this is an important conversation and one that's going to play out very, very importantly over the next several months and i think we're going to fifpblgede a delicate balance that talks about government regulation but as well, good business practices. it's a conversation that's going to be has. consumers are paying more and more attention to it. i know it is generational. there are those who think certain generations couldn't care less about their information. others do but i think at the end of the day, it's knowledge
and how we advise the consumer and how these varies platforms advise the consumer of what's actually happening with flair dat i-. t's incumbent upon the consumer to do that. i'm going to a hotel shortly. when i get online i'm going to say i agree. i'm not sure what i'm paying attention to. maybe it's the zwrock of the platform to make that fine print a little larger so we do understand where ow data is being participated and monetized for somebody lse. emily: you're going to be sitting down with john donovan, the c.e.o. of at&t communications later there week. wharkeds the role of the
telecoms be there this privacy you? >> again, anybody who is in control or in rewall street -- receipt of data around consumers, owes the consumer that right to privacy that we all cherish and i think the telecoms are as important in this conversation as the platforms but again, i'm actually using terms that i don't generally let others get away with whether we say platforms. these are all media companies in some way, shape, or form and no different than the same scrutiny that the traditional media companies, the broadcast companies were subject to, i hink these "platforms" need to be subject to the same scrutiny that traditional media companies were subjected, to umber one.
number two, in my conversation on wednesday at 2:00 with john donovan, i'm very keen to hear the 5g plans. this is seemingly the year of 5g. i hearken back to something that will make a few smiles, i hope. y 2 k, now 19 years ago. i had a guy who worked with us in the media business who used to say gee, i don't know what all the noise about y 2 k is y 1 k was easy. what i will say the 5g is not just the next g. it's going to be a quantum legal in terms of the delivery of contents and the speeds at which you can access it, where you can access is and was behind po -- pointed out by randall stephenson, when you bring together a couple of things happening in our environment, one being awe anonymous driving and the other being 5g and look at all the time that people are now going to have for consumption of content so i think the three
play very well together. autonomous driving on the one hand, content creation and con such on the other and content distribution as the thirds leg of that stool. i think as all of throes things come together, it should make for a very interesting opportunity for the consumer. mily: media link c.e.o., michael kassan. we'll have to leave it there. as hex, 5g this year is expected to be a big one so what is qualcomm's game plan to stay ahead of the competition? we spoke exclusively with qualcomm's president crillings chris about their strategy for he year. >> i would say it's the important -- most important year for 5g.
we just announcinged we have over 30 devices loung launching oo sfwoo 357b8g. the majority are smart fonse and you have to launch that to get the technology, perform in the feefleds, make sure the devices are very competitive and we also said fiscal 2020 it becomes a very significant financial events. but in the early part of 2019, we can predict that in the second half of this calendar year you're starting to see all of the major care earliest changing their incentive mechanism and their exanl and starting to implement their business plans. emily: how worried are you about the impact of the u.s.-china trade war on the chinese consumer and the
pullback in general of the chinese consumer with the decrease in consumer confidence? >> look, you can look at this in multiple ways. ne way to look into there, such a big transition to 5g and if you're a customer in china, and companies like vivo. opo, one-plus, they're looking into there as a growth opportunity not only within their domestic market to upgrade but outside china. if you're concerned about growth in domestic china, that's where you accelerate your tompletse go outside and inning we've seen this trends within the china market dynamics and as we look at the china scale in itself. china mobile has more subscribers than probably the united states has in population. emily: right, it's the biggest smart phone market in the world. >> all they needs is to yum grades, change their mechanism off and big change in the maveragets we're betting on 357b8g balls every signal
question -- 5g because every signal we get from china, they're just as excitement is about it as the united states s. emily: you don't see a pullback in the chinese consumer? >> since we're not impact business, not part of the new pple phones. as far as our business, we're not in a position right now to be providing financial guidance but i'll say we're happy with china. china has been a very good tory for qualcomm and we expect that to continue to be. emily: so qualcomm dominates in smart phone components but you've talked about internet, cars, multiple things. in which are you seeing meanleful progress?
>> all the motive is a big piece of qualcomm expansion and that's one of the areas we have the most announcements that is show and when we were in january 2018, exactly one year ago, we had an automotive pipeline about $3 billion. now january 2019, that's actually to 5. 5. we grew 2.5 billion of our pipeline in the past 12 months and the announcement we have at c.e.s. we now have the same approach to mobile utomotive. emily: qualcomm hasn't focus is only the self-driving space, why is that? >> we've been focused on the areas we could bring the biggest impact to our mobile eritage. we focused on connected car and virtually every connected car now is using qualcomm technology. people are driving, they look in their smart phone. they shouldn't be doing that.
why not bring all the technology to the cockpit and you see that expandsing into other areas into the future. we're not making any product announcements but i think we're in the automotive industry to stay. emily: so you are in the midst of a global patent showdown with apple. am has very deep pockets, can pay the legal bills of their suppliers, which are also in a dispute with qualcomm as well. you have had big wins in china. what makes you think that ualcomm can prevail? >> we said in 2007 we expected this to be resolved one way or the other. we're beginning to seal the legal milestones that were started. it's a long process but we're confident in 2019 we'll get some form of resolution. at the end of the day we stand behind our intellectual profit
many of it has been fundamental to enable companies to expand into the cell phone market. it's a big portion of the market and we feel very confident in our ability to be able to prevail with this. we look at the excitement in our other markets. he excitement about 5g and we'll continues down that ath. we're optimistic about it. emily: qualcomm president cristiano amon. coming up, officials in seattle are giving a warning to new york city, beware of amazon. why? the tech giant is once again under scrutiny as it expands in the united states. this is bloomberg. ♪
emily: amazon is facing more puckback on its expansion. two seattle city council members are urging officials in new york to hold the tech giant accountable as it moves forward with its hq 2 plans. spencer joins us from seattle. these two seattle lawmakers traveling to new york to express these concerns? spencer: yeah, that's what jumped out at us too. it's not something you see every day. so what you have here are two seattle city council members warning about things like -- essentially people getting squeezed out. they're warning new york lawmakers to prepare for the ffordable housing crunch, to prepare for transit problems, prepare for homelessness and make sure amazon is paying its fair share to address those ssues.
emily: as i understand it the deal is done. could the terms of the deal change as a result of these protests and pushback? spencer: that's where it gets murky. let's think about how this was structured. amazon negotiated directly with the governor of new york and new york city mayor so a lot of these others making noise were left out so now they're looking for any means necessary that they can slow it down, influence it. i don't think anyone seems to think they're going to completely stop this thing. they might limit some of the funding amazon gets from the state or basically get some assurance from amazon put on the table. they can file lawsuits to slow it down, go to some of these appointed political bodies that still have a approve part of this process. there are some things they can do. emily: new york senator jill
emily: amazon, beware. microsoft and kroger are joining forces. the tech giant and america's biggest supermarket chain have remodeled two stores to test a series of new digital fires. bloomberg's dina bass visited one of the locations. what was it like? >> you basically walk in and you have your shopping list you leded to their a.m. and you -- uploaded to area a.m. it will start to tell you which aisle or part of the aisle the items you're looking for are in if you look at the smart shelf below the item, there's an icon hat picks the one you picked nd tells you here's your tem.
it has sensors for meat temps e, cameras and you can use the microsoft software to guess hat your age might be. emily: is this all about taking on amazon and whole snoods > microsoft wants to take them "on the markets" the tech sides and sell more software. kroger is worried about whole foods and amazon also has these cash leer -- cashier-less go convenience stores. they want to make shopping for convenient and want to be able to sell for advertising and more promotions personalized to articular users.
emily: this kind of technology being integrated into real orld physical locations always sounds great but sit going to be work, first quarter, bug aor seamless? what's your sense? >> i tried it out there a pretty controlled environment. t worked fine but that's why they're trying this first no these two pilot stores. they're going to see what works and what doesn't and the plan for kroger is to expand the forms that work best to all stores. apartments from working well, it has to be integrated into a regular shopper's experience or it's not really worth anything for them. emily: dina in seattle. thank you so much. that does it for this edition of "bloomberg technology." tuesday, much more from c.e.s.
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middle east." top stories this morning -- >> hopes for a trade deal given a boost after the chinese vice premier unexpectedly attended talks with the u.s. in beijing. >> atlanta's fed president raphael bostic thinks there will be a single hike this year. the latest fomc meetings tomorrow. >> 50 days after his arrest, carlos ghosn appears in court, saying he is wrongly accused. nissan's saudi business partners has payments under scrutiny were legitimate. >> the israeli prime minister benjamin netanyahu demands