tv Bloomberg Technology Bloomberg August 7, 2019 5:00pm-6:00pm EDT
but delivery giant will not review their ground delivery contract -- renew their ground delivery contract. we will talk to one of the founding members of fedex ground. and, new phones, new features. amsung's first look. we've got all the details. a rebound in tech shares helped fuel recovery in u.s. equity markets. starting wednesday with an ugly open. inafternoon turnaround broadcom couple apple, helps a race losses across major indices. -- the race broadcom, apple, helps erase losses among major indices. the nasdaq closed in the green while the dow was fractionally
lower. joining us to dissect the moves is our senior markets editor. talk about broadcom here. the report that they are nearing a deal to buy symantec's enterprise business. >> the deal after the close may happen as early as this week. it is valued at $10 billion. there was a tremendous rally after hours and symantec. -- in symantec. it was up by 8% or 9% right now. there you go, 13%. still a pretty big rally. this type of deal could be bullish.
not necessarily the type of thing where there is a lot of other businesses. stocksf publicly traded that will get a halo effect from this. still, a pretty bullish catalyst. emily: what about the tech rebound in particular? >> it is one of those days, they are not exactly a clear catalyst. the future markets before the cash exchanges open, was actually higher in the morning, then spiked down very abruptly. there doesn't seem to be any fundamental or news driven reason why. intrudes intoy the market like it was on monday, there tends to be this unexpected swing both up and down that is very hard to explain. it takes a few days for the market to sort itself out. tech was not the leader on the downside today. that is a bit of a change from what we have seen this entire
correction sect. -- correction stocks. today was not necessarily the trade war itself that was causing the weakness earlier today, but rather the effects. we saw this tremendous rally in treasury bonds and bonds across the world. that really reduced interest rates sharply. it was banks on the lead for the downside. the tech rebounded yesterday, so despite the fact that it is very hard to predict where the slings are going to shake out over the next few days, it is encouraging if you are a tech stock investor to see the follow-through today from the rebound yesterday as well. emily: what about cryptocurrency, bitcoin? fairly stable over the last couple of days. despite the volatility we have been seeing elsewhere, is it sort of a safe haven? >> the result a lot of debate
about that. people were talking -- there is a lot of debate about that. people were talking about gold getting high again, suggesting it is being viewed as a safe haven asset. i would also point out that bitcoin tends to be the type of thing that could rise because on monday, when china's currency was very weak, there was a lot of speculation about capital outflows leaving the country to avoid this weakening currency. clearly bitcoin can be a beneficiary of anyone trying to get money out of china and into other assets. they put out an interesting report saying the one thing standing in bitcoin's way is the short-term volatility being very high. bitcoin's a notoriously volatile asset. they get use to a center -- they get used to a certain amount of volatility.
it tends to put a lid on prices in bitcoin. as you look at the chart this a hardhey are having time staying about the 12,000 level. there's a bit of a safe haven as well as the china capital appeal. they will see if they can crack that's all thousand level and stay above it. emily: thanks so much, mike, for that update. to our other top story, lift earnings. -- lyft earnings. the company, reporting revenue million, up 72% from last year. the good news quickly overshadowed by the company's decision to sell earlier than anticipated. the lockup period will and august 19th -- end august 19th.
i want to get more from the oceana partner ceo. lockupw about the expiring earlier. >> yes. emily: why are they doing this? >> there is a restricted stock unit plan that is causing this lockup to be moved up from september 24 to august 19. it is coming off august 19th. we are not selling. we are in it for the long haul. emily: why? in thelieve strongly founders doing a great job on the day-to-day. numbers at lyft the -- business tha lyft, thess at numbers were phenomenal.
it is great for wall street. emily: they are not going to replace the coo living the company. from a management perspective, is that a concern? >> no. think john zimmer has been the de facto coo from the beginning. someone coming in and try to duplicate his effort didn't really make sense. it is the same thing going on at uber as well. they just lost their coo. that is what you are seeing at both companies. emily: the lockup ending concerns hitting the market, even as the share prices down. >> i think that is just the way things are these days. with unicorns going public and that many shares hitting the with the expiration, we
have seen over and over and companies we have invested in, the stock takes a hit with the market shares. when they have the opportunity, they take it. emily: let's talk about the future. versus uber lyft has been price wars, pretty much since they have existed. that means lower revenue, less incentive for drivers, as well. is there an end to that anytime soon? in earlyk we are still days with a long way to go, but i think we will see less drivers and those drivers making more money in the future. emily: wireless drivers? >> -- why less drivers? >> the business model is geared towards full-time drivers. you're going to see less of those in the future. emily: less drivers make more
money. does the company make more money? >> the company makes more money as well. emily: what does that mean for the competition between lyft and uber longer-term? is it more about the brand? >> have always that there was room for -- i have always thought that there was room for a coke and a pepsi and the richer business. it is a huge market. cash in th -- in the rideshare market. it is a huge market. toly: when do they ever get the two companies combined, losing $2 billion? >> that conversation is one that is top of mind for the cfo at lyft and probably that is the
most important thing for him on a daily basis. i think autonomous vehicles and electric the goals -- electric vehicles. think there is a way to achieve that path to profitability. emily: in the past profitability, a lot further out? >> is a bridge with electric vehicles. lyft can take advantage of things like charging stations, the >> in new york city -- the bikes in new york city. providing vehicles to drivers that are much lower cost and less maintenance. that incrementally adds to the bottom-line for drivers and to the company. shares are almost up 2%. to have you here. -- good to have you here.
fedex is offloading their ground delivery contract with amazon, the latest move to reduce dependence on amazon as the online retailer growth. , we have a guest from philadelphia, a founding member of the company that became fedex. who does this hurt more? fedex or amazon? >> amazon is so big and they have built their own capability to deliver their own packages so
rapidly in less than two years, that amazon is not going to feel any pain from this. in fact, i will tell you as of june and july, they have not been using fedex settle. -- fedex at all. terminating their contract because her was no business. headaches is the one who will have to replace the volume with other -- fedex is the one who will have to replace the volume with other e-commerce is -- with other e-commerce. it will offer their capacity to other guys like walmart and target and kohl's, were fairly large shippers of fedex, making their capacity available so they retailersome of those going from ups or the post
office to fedex. emily: would you agree? just a lot of work for fedex? >> amazon spends more than $31 billion in shipping every year. coming.a long time this is not something that was unexpected. the risk here is not revenue, the risk here is margins. now, amazon is moving to one day sipping going into the holiday season. there's a lot to cope with. back in 2015, their capacity, they had to pay more for shipping, so margin variability, that is something to think about, but from a long-term perspective, this was largely expected. emily: to be somebody who founded the company that became fedex ground, what do you make of the longer-term prospects for fedex given their relationship
with ups? may always had a relationship with the also service. and, fedex globally has had patchy issues, struggling particularly in europe. >> that is a great question. i think you will see for the next three or four quarters or more, the company is going to be challenged to produce results that are desirable from the shareholder perspective. they have lost volume and losing ground. it is not going to be easy, it takes time to have customers, replace fedex. it is going to be a lot of hard work and tough times ahead for fedex. long-term also, when you dominate -- when you terminate a customer, it leaves a bad taste in the minds of the shipper. amazon will be very reluctant even if they have fedex coming
that weing on the door would like to handle your peak season volume, amazon will think twice before they give them any business again. emily: what about the other mentioned?hat satish opportunity for them? >> walmart in particular has the biggest delivery network here in the u.s. private network, if you may. there's a lot of direct consumer demand. you have direct consumer demand of companies that do not want to sit on the platform, want to sell by themselves on other platforms or things like that, maybe that is an opportunity they can go after. it is a big market in the end, but losing access to 300 million plus customers because you are
on the platform, obviously it holds a big volume back. it is going to be a wait and see. as far as walmart is concerned, they are equipped. logistics continue. thank you. samsung has announced the new line of phones. how will they compete with huawei an apple? that is next. . -- and apple? that is next. this is bloomberg. ♪
>> from a services perspective, samsung will leverage the relationship and start creating their own services. consumers have already met their best as far as content, so leveraging those relationships and making sure that the experience you get on a samsung device is the best experience that you can get. i think is what they are trying -- it is what they are trying to achieve. channels with samsung tv's is an easier place with n not starting with their on content. reporter: do you think this upgrade with the bigger screens are enough to really pull people from other ecosystems? whether that is apple devices, google's's life on their own pixel phones -- slice on their
own pixel phones? would you see buying these new devices? >> the audiences is always the note owners, the current owners. from an enjoyed ecosystem -- android ecosystem perspective, there's a chance for samsung making it more mainstream. it is very smart to diversify the screen size as well. women tend to prefer smaller devices than larger devices, but they need productivity and being able to juggle everything they do as much as the men do. i think that opening up a broader opportunity for the note is very smart. reporter: what about the market? and has been going down the past few days. it has been going down the past few days. looking at the market, the dow jones, the s&p 500, what is samsung's involvement there?
main differences between samsung and apple and how they risk on -- how they respond. one, samsung is not american. to some extent, they are a little bit -- they are not as infected. -- as impacted. china is not a strong market for samsung. everything is an opportunity for being hit negatively. reporter: you have been testing iphone.ecar on the iphone.cart on the -- applecard on the iphone. do you think this'll become like a streaming services? >> as you get into financial services and health, those are key part on the apple side.
-- key parts on the apple side. they may actually shield consumers from looking at the iphone and thinking, maybe it is not the most -- device, because now it is my link to my doctor. i will keep the service. through services increases, for samsung looking at health and the active with watch they just announced a few days ago, it is probably the first step. financial services may be harder for them. reporter: and the galaxy, the nearly $2000 phone that if you rip the sticker off, this green protector would destroy the thing. how is that impacting the note 10? do you think it will be followed? -- fall outs? >> i don't think so. i think simpson has a strong, loyal base. samsung -- samsung has a strong, loyal
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emily: this is "bloomberg technology." a trail of u.s. senators continue their scrutiny of 's ties to huawei american companies. this time they are going after google. there's concern over a report google is developing a smart speaker with the company, one that would be sold outside of china. to discuss, in washington, we have a brodie who covers tech,
, our reporter who covers google. certainly, there have been national security concerns about byle way -- huawei expressed the president and white house. huawei device a getting into millions of americans home is pretty low. they cannot even sell their u.s. in the it's unlikely that if they came out with a speaker that it would sell. although it could be a google branded speaker. we don't know. i think the senators are getting to a point, which is huawei has been a consistent partner with google for years.
since the trade war and the , google has stayed silent on the partnership and how that will change and affect their business. emily: this coming in the mix of scrutiny from the president himself and at the same time, a new rule goes into effect involving the blacklist. intoat will be going effect. it was expected. it will basically be stopping the government from using huawei gear either. it started banning networks. now it will be banning it from executive agencies and things like that here in the u.s. it was expected, but it comes at a time when the trade war is really ramping up. china,have seen out of you have the trade war on one hand as well as national consider -- national security concerns about chinese espionage , so it is that sort of
escalation when those things come together that i think is really making this kind of interesting. comment on itople and say why they think it should be broader or narrower, but in this case, given that congress pulled the white house to do that, i think it will continue much the same way it looks now. isly: the u.s. ban on huawei having global consequences. the u.s. has been putting pressure on other countries to take similar actions. the chinese worry there could be reversed sanctions on some of those countries. for example, india. if india bowed to u.s. pressure to stop business with huawei, indiannese saying companies and products could be subject to reversed sanctions by china. >> right. the complexity of all these relations are things people are constantly worried about here in
washington. we know the white house has been pressuring a lot of our allies out.ep huawei gear it does seem other countries sometimes share concerns about chinese espionage, but this no doubt trade war and national security, those things are going together and increasingly become not just bilateral tensions but really multilateral tensions on the world stage and the white house will have to deal with that. emily: just yesterday, the president took aim at google over alleged anti-conservative bias. social media companies remain under scrutiny over what happens on their platforms. they have been invited by the white house to a meeting on friday to talk about online hate in the midst of these mass shootings. is google going to be part of that?
>> they'll like to talk with us very much. google is taking more heat now. there was a former engineer we talked about who claimed he was fired for being conservative. he and other former employees have been very vocal, certainly to right-wing websites like breitbart sharing what they claim is evidence that google and youtube are censoring conservative content. it will probably be a topic of conversation. emily: the leader of the house inquiry to big tech is calling on the fcc to make special qualifications for youtube, especially as it concerns children's content. he's urging them to put children's content and one place and not collect or store personal data on children under
13. isit sounds like fcc reportedly in talks with youtube about children's privacy. i read this as congress saying have some teeth with this. if you are going to enforce it and enforce it well and apply it to the world's biggest video platform, which we have talked about a lot, they have a strange issue where they say there's no one under 13 on the site unsupervised, and you go to youtube, there is this fountain of children's content. it has been wildly successful for them. emily: you'll have to keep us updated about how that develops. thank you both. switching gears to softbank, specifically third-quarter results. the company reported profit that beat the highest estimates due to the success of the vision fund -- the first vision fund, that is. investments in companies like dash managed to
losses. what are the biggest takeaways from these results? transformingally softbank away from this old line telecommunications company with a majority stake in sprint. it are that will get the approval it needs so they can offload spread off the balance sheet and position softbank as an investor in up and coming technology. as you point out, he has a 100 billion dollar vision fund. a lot of that has been deployed and he is starting to reap a return on it. now he is embarking on vision fund 2. that will be launched very soon. start to see new investments of $108 billion.
he really wants to position softbank as a cutting-edge company that is a savvy investor, even though sometimes those investments do not go quite as well as hoped, over -- uber being a case in point. emily: still many of those freshens have not come to fruition. the question remains can a second fund at that size be as successful? >> excellent question. now there is a shadow hanging over the entire tech industry, which is the regulatory one that you were just discussing with your guests. questions about the global economy. there's questions about growth. the trade war is hanging over the entire industry, so there's a lot of actors that will raise questions about if new investments will work out as well as the previous slate.
not to mention the fact that when softbank comes in, sometimes it comes in a little later when there is less upside for some of these investments. it has a tendency to inflate valuations beyond what they actually should be based on the soundness of the underlying fundess, so will vision numeral to be as successful as 1 -- there's a lot of reasons to be more skeptical and less optimistic about its prospects. emily: what are the biggest challenges going to be? they got to place the bets and find companies willing to take that money, and it is a lot of money. smart asnd finding mrs.. we are through the cycle where there was a lot of relatively easy money to be had and investing in consumer-facing, ridesharing, ride-hailing .usinesses like uber
finding smart investments where there is less willing this for risk. without but the global economy, the trade war, and the outlook for the technology industry, been for ahan it has wild. you've got to remember getting sprint off the balance sheet and enable people to value softbank investor. tech sprint-t-mobile has gotten , but you stilll got to clear that antitrust hurdle. chances are it will, but it is not an for a deal to his snacks this late in the game. emily: thank you so much for that update. coming up, crunched in the trade war. we will look at how a start up in hong kong is caught in the
emily: by now, you've heard plenty about how the trade war is hitting tech, especially in china. camera maker gopro, for example, has moved some production out of china. smaller companies face tougher choices but can be even more nimble. and ai startup that has operated in hong kong the last seat of front runnersng to connect them to brands, but the prospect of relocating outside of china looms large. to give us a first-person account of the impact of the trade war, i want to get to the ceo. evolvedtrade war has
and especially escalated over the last few days, how will your thinking change -- how has your thinking change over if remaining in hong kong is the best idea? >> it has been in the news as an aonomic item but also political item. i think we do feel more solid in that decision. there is a heck of a lot of uncertainty that has been added in the last couple of months because of the unrest in hong kong. emily: so you are moving your company to the united states? that's decided? correct. we feel confident in that decision. emily: talk to us about what is involved in that. it is a pretty huge undertaking. >> i'm an american, so i'm no stranger to the legal culture here. we're fortunate to have a great lawyer on staff as an advisor, and we have definitely saved a lot of the cost and the headache
. in addition to that, it is about tax minimization. hong kong is a very business friendly environment traditionally, but we already sentencing and many clients here in the west, so it was less of a struggle for us. we think it will be a struggle for hong kong startups that have a presence.blished nevertheless, it is always a difficult process. emily: what was your biggest concern about remaining in hong kong? did you see it already impacting your business? >> definitely. in the ai field, your clients trust you with your data. we put privacy first and have since the beginning of the company. that is very well aligned with the western approach to ai and data. byhelped us confirm restructuring our business with
current clients as well as prospective clients. in addition to that on the investment side, uncertainty, and hong kong certainly has a lot of it today -- uncertainty drives risk. if we don't remove the risk from the table from a prospective service, it will only us. emily: facial recognition, technology, ai, especially for identification purposes, has become much more controversial. >> that's correct. we built the system so it operates independent of i/o metrics or facial recognition. we use the whole body to identify an individual and do it complianthat is gdpr within also compliant with regulations in the united states. it has been a unique thing we have been able to offer clients. it has been a big part of our growth recently. deep learning is and we throw lots of data at
some very interesting problems, the biggest ones being in the brand space. shoe brand is our biggest play right now within the running space. emily: we will be watching to see how the business develops. thanks so much for joining us. still ahead, facebook takes its first big step to merge all its different apps. we will look at the changes coming to instagram's chat feature next. plus, samsung's galaxy note 10 comes with a bigger screen, more storage, and a microsoft integration. we will talk about everything that is new next. this is bloomberg. ♪
messenger. it does chip away at the independence of instagram's slate of products that has always enjoyed a bit of untimely -- a bit of autonomy from its parent company. apps has been incredibly controversial, but it seems facebook is not deterred. >> not at all. this seems the most logical step one, but it is step one, which is you take a service like instagram that uses a ton of , webook technology and say are going to make you this first step toward bringing our messaging services more together. whatsapp is going to be a totally different challenge. people were not happy because they like that instagram is instagram and facebook is facebook. they don't necessarily want the two blended, but that is what facebook wants. amalie: i still don't understand
why. >> i'm a little confused as well. i think their statement was something like we want to be clear about what products we build. i was speculating maybe some of it has to do with their new privacy deal with the sec. maybe they have to be more clear about the data they are collecting. it would have been easy for them to say and they did not say it. i do not really understand because facebook as a brand is not strong right now and they are basically saddling two stronger brands with the facebook logo. i'm not sure why they would want to do that. emily: in the midst of a lot of scrutiny about facebook power at the high levels of u.s. government. >> we're talking about an antitrust investigation that is currently ongoing. facebook has always been a little brash in the since they do not necessarily let these outside scandal's stop them, right? they launched portal a while back. they are trying to launch a cryptocurrency in the midst of all this stuff.
emily: kurt wagner will keep us posted on how these evolved. announced the latest additions to its galaxy note line. the galaxy note 10 smartphone comes as the company grapples with waning chip and smartphone amid global trade tensions. ouring us from the event, very own mark gurman. what are you most excited about that you have seen today? mark: i think the biggest thing is the screen size. that is the foremost most impressive change. only changes the visually. it really makes me want a bigger iphone. 10s max maxes out at
6.5 inches. the samsung screen is better for gaming. hopefully, apple does in this direction. it is definitely the host impressive thing. emily: how will this impact sales? obviously, there is competition from apple. lots of things going on with huawei. in general, the smartphone market generally is slowing down. >> my view is this will do nothing to turn that around. this will not give new growth to the smartphone market in general. people are not going to buy their first smartphone because of the note 10. people are not going to switch from the iphone. what will happen is people on or older other samsung phones will want to upgrade to this. but as we have talked about so many times, the combination of a lack of major new features with skyhigh prices north of $1300
for the high-end big models, that is a lethal combination for bad news, wright? you cannot charge those kinds of prices without adding revolutionary new things and expect people to upgrade on an annual basis or every two or three years. emily: you reported that for apple, when apple unveils its iphone in september, the update will also be incremental, but there is a big design upgrade, design overhaul coming next year. is that the same for samsung, that next year, there will be a ? gger difference are think apple and samsung on opposite schedules. it just happens that last year and this year were going to be small and a come until years for new iphones. -- small incremental years for
new iphones. samsung actually seems to view device launches this year as bigger, radical changes like the iphone x was in 2017. i do not anticipate big news from samsung this year, but we will see if they keep rolling out new folding devices. i think that is where a lot of their market demand will be coming from in the future. emily: let's talk about that. had a lot of problems, which you discovered when you tried it yourself. other phones samsung is unveiling now ready for prime time? did not hear on states today, galaxy fold. i do think the s10 will be different. it was easy to discover fundamental flaws minutes into playing with them. i had a little bit of time to play with the us 10 today. i had time to play with it the other day, not an extended
period, but these things seem as solid as last year's model. i don't anticipate any fundamental flaws. spoke one ceo just stage. tell us about the partnership between samsung and microsoft. >> they really did not announce too much. they have had some partnerships in the works for years now. they are expanding a little bit, opening up the phone app on microsoft windows tend to be able to support the new samsung phone. the note 10 will be sold in microsoft stores. there will be deeper integration . not very groundbreaking, but just another notch on microsoft's belt are working with more companies. emily: i will let you get that to the event. thanks so much for joining us. that does it for this edition of "bloomberg technology." we are live streaming on twitter at tictoc technology. this is bloomberg. ♪