China despite the spread of the coronavirus. The Global Smartphone market has been slowing down for some time. The coronavirus will only make it worse. Shipments will drop 2. 3 to around 1. 3 billion units. Paul allen and emily chang spoke with the privacy the ibc president on wednesday. We have a number of analysts looking at this. We would say the tightest ingredient in this is the people. People are not fully back to work. With think the manufacturers in china are mainly 30, 30 5 35 of capacity. They are slowly starting to ramp back up. China also has been a place where many components are manufactured. From that standpoint, what we have now is we believe the tightest components will be pc base and screens. That would fit with the story we have today, that if you are having trouble with replacement parts, what is one of the biggest parts . You drop your phone and you break your screen and you need a new panel. The idea that displays and screens are already starting to show up in short supply fits that story. Thats what we are going to see. Everything is generally tightening as we get deeper into this. Emily we have heard tech conferences are being canceled. You canceled a conference that was supposed to happen today. Down in santa clara. Emily there is all this loss of productivity. Employees working from home. Employees may be not working at all. How do you begin to assess the impact on the technology on the industry . Crawford we are living in this time where we have seen gdp and tech. The rate of tech growth has been over 2x that of gdp. In 2009, we were shipping dog food banks. That was 1. 6 x. Tech was growing at twice the rate of gdp. The first thing we look at is the gdp growth rate going forward. We have put together a number of scenarios. We have an optimistic scenario, a probable scenario and a pessimistic scenario. We think in the optimistic scenario, gdp goes to two and a half percent. In the probable scenario, it goes to about 2 . In the pessimistic scenario, it goes to 1. 4 . And then, of course, we would look at all of the different components that are tied to gdp as well as overall demand and what verticals will be impacted. We believe from a probable standpoint and from a probable standpoint, we are talking about if china starts to come back online in the springtime, but faces headwinds into the middle of the year going into the second half of the year. The probable scenario says the virus spreads around the world, which is what has happened. We are out of the optimistic scenario. We think it comes down to how much it spreads into other regions of the world. It is taking us somewhere between the probable scenario and the pessimistic scenario. That takes i. T. Demand from where we thought it would be to somewhere between 3 and 1 growth. We could, in a negative scenario, get 0 growth. We do not think that will be the case. We think it will be between those, lets call it two and a half, maybe 3 growth. Paul i am wondering, to what degree are Cloud Services insulated . Crawford great question. When you look at the Overall Services market, those tend to feel the impact a lot later. As a service business, we think to answer your question, not nearly as much as the people making the tangible goods. It is a lot easier to say, i will put off my mobile phone buying. The actual people who are at the top of the stack in service or cloud applications, in this marvelous time where technology is eating the world, if companies are going to be in business, they are using a Cloud Service provider. That means they are likely not to back away from those Cloud Service providers. Kurt that was ibc president crawford del pratt. Despite trumps claims that his administration is ready for the coronavirus, the cd says that cdc says they will not be able to meet his goals of one million test kits by the end of the week. We spoke to a professor of epidemiology at the Johns Hopkins school of Public Health. Things are ramping up. Im pleased that diagnostic capacity has increased and will continue to expand in the coming days. More cases might feel alarming but it is us just getting a better understanding of the situation. Paul are enough kits available . Yes. They are coming online and about half are already online this week. Well be up to about 1000 a day if things run smoothly. Emily tests have not been available. We are looking at cases going back two, three weeks in the united states. Whats your best guess . How Many Americans actually are infected by this virus that we dont know about . Dr. Rivers it is impossible to say and that is what it is so that is why it is so important we have testing capacity. That is why i think we will see more cases in the coming days and weeks, because there has been transmission likely happening that we have not observed. We are going to go out and find those cases and get a better handle. Theres no way to really estimate what the current status is. Emily what is your longterm outlook for just how serious this is and how many lives it could claim . Dr. Rivers i think the current risk to the average individual is low. For communities that are seeing transmission, i think the state and local Public Health departments for those jurisdictions are communicating about what risks will be. I do think there is reason right now for the general public to take steps to reduce their own personal risk, regardless of what they are seeing in the community. The best ways to do that are hand hygiene and respiratory etiquette which is covering your cough and staying home if you are sick. Paul i ask this question to a number of guests, because you see a number of people Walking Around with facemasks. Are they actually effective . Dr. Rivers they are effective if sick people wear them to contain their coughs and sneezes and so on. They are not particularly effective for well people to stay well. We are concerned about supply chain and making sure healthcare workers have access to those masks, because they are at high risk, being in contact with people who may be sick. We want to make sure they have access to the supplies they need to be healthy. Kurt that was dr. Rivers of john Hopkins School of Public Health. Why some activists want changes at the top of twitter, including pushing out jack dorsey. And if you like bloomberg news, check us out on the radio, on the app, and in the u. S. On sirius xm. This is bloomberg. Kurt shares of twitter surged after reports that Elliott Management is pushing for changes after taking a stake in the company. This includes moves to replace jack dorsey. Its hard to talk about somebody elses position. Twitter is a position we have looked at for quite some time. We have a lot of respect for elliott. Having a ceo who is the ceo of two Different Companies is highly unusual. Is jack dorsey unusual enough to be that special . He might be. He might not be, i dont know the answer to that. I think it might be a discussion among jack and the board, as well as elliott in the sheriffs to determine whether there is a better construct to manage that company. I have predictions, but i dont think it is appropriate to share those. Is it a Better Company with or without jack dorsey . Im not sure i can answer that, and it depends on in what capacity. I do believe jack is a visionary, a unique leader. But i dont actually know how involved he is and how he is doing at the company. One you have been active on his ebay. Last month, you wrote a letter berating them for not having done their Strategic Review fast enough. What do you need to see happen to be satisfied. Ebay is one of those terrific businesses that should be able to handle the situation well. They did sell off stubhub, one of the things we were asking them to do, we would like them go further. On the operational side, we need them to perform better. Theres more that needs to be done and it needs to be done faster, with more focus, and we care. There is a ceo search process and we care. We expect them to hire a bestofread see. Bestofbreed ceo. The talent of the ceo is important and we believe ebay can attract one. It is something you are working on currently . We have conversations with them frequently and its around this time of year when it makes sense to talk about board representation. That is not always the answer. It may be, in this case, but not always. In every company we look at, its not about the board to start with. A company has a board, but the board is overseeing management. At the end of the day, the important thing is the ceo and strategy. When you hear us talk about how companies can improve themselves and create value for the benefit of all, the ceo is incredibly important. We will talk about that or the plan when it relates to what can be done differently. With ebay, we can have a conversation about the board, but the most important decision is a superstar ceo. Kurt that was jeffrey smith. For more reaction on the surprise push for change, lets hear from the partner and chair of an activist shareholder who spoke with ed hammond. Is very important to understand that founderled companies are just different. And jack dorsey is one of the most iconic pioneers. He has founded one of the most influential Media Companies of all time and has started to do really good. When he joined, he started to right the ship. Numbers were good relating to Audience Growth and retention. You look at the board you have the former president of the world bank, of google. Senior bankers, the ceo of salesforce. It is a great list of executives and so it is strange elliott would choose this time and this company to go after. And not huge tenure on the board either. Do you think they have bitten more than they can chew . I think so. Elliott does not have much experience in running proxy fights the last proxy fight they ran was several years ago and i think they have misjudged the situation. Kurt that was a partner and chairman of a Shareholder Activism process. Up next, we hear from this german automakers ceo. At later, and its lucid interview with the ceo of impossible foods an exclusive interview with the ceo of impossible foods on disrupting Global Supply chain. Kurt once the go to brand for luxury buyers, bmw is facing pressure from tesla. The answer to the electric threat is a sleek, batterypowered car. The cfo spoke with matt miller in germany on the launch of the new electric concept vehicle. A real bmw does not compare to any other brand. That is where it comes to the heart of our brand. That is the first real dynamic car from bmw. It has an acceleration of only four seconds to 100 kilometers an hour and it looks like a real bmw. The range has been the hardest to nail, but it has also got 500 horsepower. How do you achieve that . We started in 2013. That is when we started to ponder the future. We thought our architecture has to be able to be flexible enough to cater for mobility and combustion engines. That is the result of our thinking. You dont think electric cars are the future . You know, the World Mobility market is highly fragmented. There will be situations where you can have only electric cars, but for bmw, we need all of the dynamics. Its much more than just the engine of the car. But there will be other segments with only Pure Electric architecture. I am a motorcycle rider. Will you have an electric motorcycle on the market . There are no decisions on that yet, but we have time. But motorcycles are a different Market Segment then cars. Full mobility has arrived in the car market. Everybody is working on it and we have sold thousands of vehicles last year and we will accelerate that expansion. Initial investment is obviously huge and you have done a lot of investment in production. Will the costs after that start to sink . You need fewer parts in an electric motor. Im not sure the complexity is diminished. There are sony components, and to have flexible components gives us a huge advantage over the competition. What about the headcount . A lot of your competitors have already started reducing headcount and you have yet to do that. Do you need to . Bmw is a growing brand so we need our workforce. We have started to invest more heavily into electro mobility, so there is no need for us to reduce our headcount. I have to ask about the coronavirus. There was a case here in munich. Is it likely you will have to shut down any facilities . I can confirm that, as of today, we had one case in our center. What we immediately did was put the temporary worker into the hospital. The hundreds of people who met him have been asked to stay at home and be placed under quarantine. But currently, the measures are not necessary. With our measures, we have the right strategy. What is the biggest impact beyond the people . As far as the business of selling cars, when we hear things like fiat chrysler, when we hear about empty showrooms around lunar new year, is it a demand or supply problem . You refer to china. We had the new years celebrations, and afterwards, customers did not return to the normal routine. It does not impact our markets in china. Now, the world is normalizing and we dont see any serious effects on our supply chains, but that is something we have to watch. It is quickly evolving, obviously. Youre cfo said bmw still expects sales growth in china. Can you confirm that is your target . We expect growth in china and over the whole world. Whether that is true over the coming weeks, i would not be able to confirm. But it is far too early to make prognosis for the full year. Its only the beginning of march. Its also the beginning of your tenure here as ceo. Congratulations on that. What strategy do you want to do differently . We have a set strategy. What we have pondered about will not change rapidly. We want to be faster than the competition, expand more quickly. I think we have created a very specific strategy which fits perfectly and we are rolling that out now. We are quite confident about this. You didnt make a plan to build minis in oxford. What do you expect for the future of the brand . For three years, we have been pondering what the effects would be but there has been nonwhatsoever on the production, supply chain, or brand in the united kingdom. We will also see what happens until the end of the year. I would be a little more optimistic than the public. At the end, everybody will make sensible decisions and industries and markets can develop further. Many i could envision being built somewhere else. I cant imagine building a rollsroyce coach anywhere other than england. Absolutely. Rollsroyce is an english brand with english origins. That will stay. Is arguably a peerless product. We are by far the market leader. We own 50 of market share and that is evolving rather independently of the rest of the world. I think we have set the ground for further growth. That was the bmw ceo. Coming up, why hp rejected a takeover offer. We are livestreaming on twitter. Check us out and follow our global breaking news network on twitter. This is bloomberg. Kurt welcome back to the best of Bloomberg Technology. Im kurt wagner in for emily chang. On thursday, hp rejected an unsolicited takeover approach from xerox. Saying it quote meaningfully undervalues hp and disproportionately benefits xerox shareholders. They said they have many routes to value we are not dependent on a combination with xerox. We spoke to hps ceo on thursday. We have rejected the offer for two reasons. First, it undervalues the company, second, it creates a risky balance sheet, and third, it is unrealistic. Because of those reasons, have rejected the offer because we do not think creates value. One of your complaints about xeroxs you have said they are a company in terminal decline. How can you be confident of that . We can see the devaluation of the company and we can steer clear. The best way to estimate that is the total contract value. It is easy to predict where the business will go and this will be Key Information to understand the performance going forward. One would assume that information is to put an offer on the table and get due diligence. When i do that . We need to make sure the value exchanges right, whatever the combination from the capital structure needs to make sense. And third, he needs to be realistic. This is the conversation we need to have before any discussion can happen. In terms of the pure logic of a combination, the printing business is a part of hp. To think it would make sense to combine an extended platform . We see logic and consolidation in the market area there is an opportunity there. We have been the first Market Driving consolidation. We took a market that was losing company and it will help us to grow into spaces where we are not operating. We have seen consolidation make sense and we are open to exploring that opportunity. You came into this role in november. Immediately, you find yourself in a hostile situation. On the others, what have you learned from it . This has been the key thing we are driving in the company. We need to continue driving the business forward. We need to make progress with our partners. The results really show the ability to not only stay focused but continue to make progress in our businesses. We are so focused on the potential deal, that we lose sight of the fact you are running a significant company. Lets switch on to whats going on there. How is the coronavirus affecting hp . It is a big company and we have many parts unrelated to the recent actions. We said the virus is impacting our business. Even on the manufacturing side, after chinese new year, manufacturing ramp in china was slower. We expect to recover in q3 and q4. Kurt that was hps ceo. Turning to gender equality in the workplace. Women have been told to change themselves and be more assertive to succeed at their jobs. But the director of inclusion at netflix thinks thats not going to close the gender gap. In her book the fix, she argues its time to stop the womenfixing epidemic in time to start fixing workplace. She was head of the u. N. Coalition for change, she spoke with emily chang and paul allen on monday. Its insuring you know what the barriers are that women and minorities face at work. You remove those and create a Workplace Culture where people are valued for their individual identities. There is a big focus on creating belonging, an environment where employees feel they can contribute in a unique way. Currently, we dont have that. Most have to conform to a 1950s ideal that does not really serve anybody. This is about crating the right organizations where women can thrive. Paul i was intrigued by that 1950s ideal that you mentioned. Men are expected to fit some certain gender stereotypes in the workplace as well, arent they . Michelle it was part of my research that i was surprised by as well. I assumed the outdated, what i call the don draper ideal work for men, but it simply doesnt. There are many barriers to their ability to thrive in the workplace. There are many as a result of this, things like mail silencing, male bullying, the inability to talk about difficulties in workplaces. I always say, gender inequality is one of the best things to happen to men. They just dont know it yet. Some of the takeaways from your book, diversity programs are largely not working despite the increased parental leave. Workplaces are failing parents. What are some things the rank and file can do if so much of what they arent are doing is not working out . Michelle the main thing we are asking leaders to do is lead. We need leaders to manage the daytoday inequality moments when they happen. In order to do that and to be aware of how inequality is showing up in your work, you have to know what the barriers are. When the inequality moments happen, so you can recognize them and intervene. Speak up. Advocate on behalf of women. Use those moments as learning or teaching moments. In order to do that, we need leaders to disrupt the denial. We found most leaders are in denial about inequality that men and women experience in workplaces. They believe that workplace is a meritocracy. That it functions for everybody in the same way and that is simply not the case. Living up to this outdated ideal is what creates challenges and barriers. Kurt that was michelle king, netflix director of inclusion and author of the fix. Coming up, how plantbased impossible foods has placed itself amid the virus outbreak. We hear from david lee next. This is bloomberg. Kurt apples top iphone maker says it expects normal operations by the end of the month. The unit assembles the majority of iphones and others have seen a swift recovery from the disruption. They say factories are currently running at 50 of capacity because of the outbreak. Chinas number two online retailer sees Revenue Growth above 10 while saying its preliminary estimates. They reported income topping the highest estimates on robust user growth. However, 10 growth is less than half of what analysts expect. Demand for more quality controlled food and shipment safety is also rising. Impossible foods, famous for its impossible burger, is sticking with its plan to enter china at a time when animals are more scrutinized. Emily chang and paul allen spoke to david lee in an exclusive interview. Theres no question that since asia comprises nearly 40 of the entire industry, our mission at impossible foods remains the same, which is to offer every meet eater whether they be in asia, china, or here in the u. S. , more and more of our great impossible burger and impossible pork made out of plants. We are excited to announce we are passing on cost savings by reducing cost to wholesalers by an average of 15 , a move consistent with our Global Mission to be available everywhere. Emily china is the Worlds Largest consumer of pork. That makes sense. But lets talk about food safety. This is a question on everybodys minds. What are you doing to ensure the safety of your shipments, and should the public be concerned about broader food issues . Impossible foods was founded by a phd, md pediatrician pat brown. From the very beginning eight years ago, our fundamental culture, our dna, is rooted in ensuring we have the highest quality options that hardcore meat eaters can crave. For us, that means being radically transparent about how we make our products, ensuring we pick the right plantbased ingredients to ensure that the public is certainly safe, but beyond that, has a better option than the incumbent industry for their health and the environment. Paul do you anticipate any sort of marketing difficulties in china for plantbased meat . I think the verdict is out that meat eaters, not just here in the u. S. , but as we have seen in singapore, hong kong, and macau, meat eaters globally crave meat that doesnt make them feel as guilty. The impossible burger is that. Craveable burger, a slider for less than two dollars at white castle or in the hands of a michelin star chef, and it can transform in the hands of a chinese chef as it has here in the united states. I dont anticipate that changing regardless of the headlines of the day. Paul the headlines of the day of course, mostly circulate around coronavirus at the moment. Has that had impact on your supply chains . We have had no material impact, and frankly, it has allowed us to focus on distributing more of our product. We have seen such Unprecedented Demand that even as we are fully in stock today, you can get a quarter pounder made by impossible at any mom and pop restaurant that wants to serve it through our distributors today. We know demand will increase. We have been undeterred and frankly not distracted by the news of the day in serving our mission. Emily disney resorts have been closed in china and shanghai and hong kong. What about your partnerships with disney world and the cruise line . Any impact . We were really privileged to see disney chose impossible foods. It was years in the making. They have an extremely high bar on quality. For it to be the choice they made for the plantbased products they are happy to serve is something that i think will pay off for the longterm. We have not seen any impact today, but our focus really is on a longterm business that goes beyond what we see day by day. Kurt that was impossible foods cfo david lee. This studio responsible for creating iconic products. I spoke to the founder and partner about the design process and how the Retail Experience can be improved with better product design. If you reinvent something, you will probably not get the acceptance that you want. So you start with what people know and draw them into what is new and beneficial in their lives. Can you give us an example . This uses at a technology. It weighs your food, but ultimately, it has to look at behave like an oven. This could be anything, needs to just be a good oven. If it was a spherical ball floating on a cushion in your counter people would not have bought it. When i think about design, this whole idea of real simplicity is certainly appreciated. I am wondering, as a nondesigner, how much of that is a trend . How much is just built into the way things should be designed. For me, it is builtin. Simple is timeless, beautiful, the way things should be. Whats challenging is things are very complex. The art and process of making it simple is very challenging and takes a lot to do. We spend an enormous amount of time making technology understandable and easy. What is a product in need of a redesign right now . There are a lot of things in the see them constantly. I have six kids, and you see lot. In childrens products, there is an enormous amount of nonfunctional design and waste. Its time to start putting as much attention on products for children as we do phones and watches. Kurt that was my conversation with ammunition Founder Robert brunner. Coming up, why one of teslas largest outside shareholders does not spooked by the rotavirus coronavirus. We hear about opportunities in the chinese stock market. This is bloomberg. Kurt facebook and its partners are weighing a revamp for the libra project in an effort to appease global regulators. They are considering a Payment Network that accepts multiple coins. Sources say the Libra Association lands to reintroduce of the project soon. This hotel group is cutting its global workforce. Most losses will be in china, where businesses crumbled in the wake of the coronavirus. The indian startup is also cutting jobs in the u. S. And japan. The company was once valued at 10 billion, but investors have soured on moneylosing businesses after wework. One investor still sees considerable opportunity in the chinese stock market. Christopher hammond spoke to James Anderson about the Chinese Companies he is eyeing. The current pattern of capitalization is wrong. It is not just to the extreme profitability, dominance of the retail business, the whole area of enterprise and Corporate Software in the cloud in china is underdeveloped. Alibaba is positioned and a strong premise of the Growth Drivers for the future are profound. The finance side is pretty powerful. What are some of the challenges . A lot of your bets are based in china. It is not the same as investing in the u. S. Or europe. What are the challenges . The first thing is that people that run these companies are very much of the longterm owners and deployers of capital. So there is that similarity with the west coast american model on that front. We have found that innovative companies, those the government feel are driving things forward are allowed to have dominance, but they occasionally have their wings clipped and regulation in china is probably more effective than europe or america. That is a marked difference between between china and europe. You have much heavier state involvement in these companies, particular the ones viewed as driving the economy. Yes and no. I am quite interested in the degree to which these Chinese Companies, the environment is still profoundly dynamic. When you think about the big American Technology companies. They are the same ones. We havent really seen anything like the emergence of bytedance or tiktok from america in recent years, so this environment is probably more dynamic in china than elsewhere. Looking beyond the fluctuations in the market, how much of your bet on china depends on political stability . I think any serious level of political unease in china would interrupt it for some time. I think to an extent, we have always felt we would get prior indication. Ultimately, legitimacy of the party depends on delivering these societal goals. And hence, you see that breaking down first. I we spoke about the damage conflict. Softbank is the heart of that. They are at the peak of that model. Do you think they are to blame for breaking the model . I i think they have a share of responsibility. The model is broken from the process itself. In a deeper way, i dont think Companies Need to go public until later, and that is structural. I have to say, i have quite a lot of sympathy. I think you can pursue longerterm goals. If i may be complementary to many venture capitalists, i think being owned by benchmark and sequoia is good for a company, where it is not always clear the market is supportive. If you have this shift where a lot of gains our are being contained in a private market, it concentrates those gains in the hands of the few, the rich. I am very sympathetic to that. We are trying. We are trying to give people access at a much lower cost. I know we are not directly involved, but our Investment Trust charges less than 0. 5 . We have often spoke about tesla, usually when it is a lower price. Today, its at 7. 25 at the close. Are you selling at that level today . No. I want to be completely honest. We have some clients with holding restrictions. As we have already explained in the course of the last month or two, we have had to do something about that. But structurally, no, we think the company is stronger and more competitively advantage advantaged. We are buyers of weakness more than anything else. The pattern these days is much more that increases in share price are tending to show the companiess winning a very large area. The opportunity for tesla has gotten greater, not just in the extent of its leadership in the industry. So i dont think i can give you a figure. We will tell you when we get there. I promise that if it hits 5000, we will have you back on. Kurt that was James Anderson. That does it for this edition of best of Bloomberg Technology. We will bring you all the latest in tech throughout the week. Tune in each day at 5 p. M. New york. Of course, Bloomberg Technology is livestreaming on twitter. Check us out and follow our global breaking news network on twitter as well. This is bloomberg. Hi were glad you came in, whats on your mind . Can you help keep these guys protected online . Easy, connect to the xfi gateway. What about internet speeds that keep up with my gaming . Lets hook you up with the Fastest Internet from xfinity. What about wireless data options for the family . Of course, you can customize and save. Can you save me from this conversation . That we cant do, but come in and see what we can do. Were here to make life simple. Easy. Awesome. Ask. Shop. Discover. At your local xfinity store today. Carol welcome to bloomberg businessweek. Im carol massar. Jason and im jason kelley. Were here inside bloomberg headquarters in new york city. Carol this week, the coronavirus continues to spread and investors try to size up government efforts to contain the outbreak and its economic impact. Jason Barnes Nobles next chapter. The new hero all of the rags to riches tale is a hedge fund. C