For advocating for justice, gender equality, and womens empowerment, also at personal risk. Global news, 24 hours a day, powered by more than 2600 journalists. Im alisa parenti. This is bloomberg. Selina im selina wang, in for caroline hyde. This is Bloomberg Technology. Coming up, nine months after the historic vote, the process of brexit is underway. We will discuss what it means for the u. K. s 25 billion industry. Plus, samsung hopes to put a pr crisis in the past. Would hear from the u. K. We will hear what brexit means for a music app. First, its now official. The United Kingdom triggers article 50. Prime minister theresa may vows to get the best deal for this vow tohile eu leaders seek an orderly withdrawal. It could have a huge impact on the u. K. Economy and cause a Ripple Effect across the globe. Is sure to industry be affected. With me is joe cross. Investors in his firm include paypal and richard branson. Joe, your company has been very public and outspoken about its thoughts on brexit. They do not want the u. K. To leave the eu. What have things been like so far. Whats the outlook on the company . Been a very difficult time for people involved in brexit and fintech. First, let me explain why this is especially relevant transfer wise. We are a platform for moving money between countries. A huge amount of our customers are people who Live International lives across ders the brexit vote across borders. The brexit vote was averse to one of the things our customers feel deeply about, which is to live the lives they live across borders. A lot of our staff are people who have come to london or to our other offices around the world. They identify with the problem that we solved, which is expensive International Break bank transfers. Our definition a lot of our staff are people who are internationals. Selina i want to kick it off to aaron klein, a senior fellow at the Brookings Institute in washington, d. C. You have written quite extensively on brexit and the adverse impacts. I want to get your thoughts on how much of simtech fintech will be left behind after brexit. Aaron theres no question that london had positioned itself to be a Global Fintech leader. It was a rare city that included finance and technology, but brexit has thrown that all into mix. Its going to be hard to do business now and Going Forward with the uncertainty about whats going to happen in terms of londons position as a Global Financial leader and your basic ability to do business within the continent of europe. To use a more british terminology, its an own goal. They just scored on themselves. Selina the u. K. Government had invested significant amounts in this. It will be interesting to see how much that puts them behind. A big thing that Tech Companies have been worried about is the ng policies. Just how damaging is this particular potential policy change going to be to finTech Companies . Aaron it will be tremendously damaging if you dont have the ability to go into europe and needed to have a totally different in to the continent regulatory regime. Furthermore, the uncertainty about whats going to end up in being passporting will drive Investment Choices today. If you were a new fintech, why wouldnt you go to berlin or amsterdam or Silicon Valley or even new york . Its a double whammy about whats going to happen and the uncertainty between now and then. Selina aaron said it. How are you guys preparing for this potential loss of passporting rights . Joe london is one of the few cities in the world that has a meeting of finance and tech. I think thats a really important context to look at. Those conditions dont exist with brexit in many of the other cities, where you do have either finance or tech. It takes a lot to build a fintech hub. Passporting, to passporting, we have to see how it works out. The timeline is going to be very long. Its important to think about how quick startups and Tech Companies move and how slow policy moves. You are looking at something that happened today. Its a twoyear process before anything would even start. Then there is whatever timeline those actions take. It is a different timeframe. Obviously we are thinking about different scenarios. In terms of what it means daytoday, it are business as usual it is pure business as usual. Selina in terms of passporting, are you looking to get regulated to hedger eu city against the potential outcome . Joe its something we might look at. Along with expansion comes being regulated in a new country. We are building our own network in as many countries as we can. Today, thats about 60 countries we have customs in. Its very much part of our nomura normal modus operandi. Its not something we would worry about. No one is losing any sleep about that. Aaron come to america. Our remittance system is way too low and costly. We could use information to make peoples lives better. Fintech offers that. I would like to welcome you with open arms to try and solve these problems in the u. S. , because we have real problems in the areas you are trying to solve. Joe great to hear. We are transactional here. We are very much here. Its great to hear you validate that the country needs us. Aaron it absolutely does. The president goes and says these crazy things, that we are going to use remittances to pay for the wall, and it also has a chilling effect. Language from political leaders matters in terms of where business is located, particularly in high tech and innovation. Joe people who live across borders or in other countries have a pretty raw deal. Anything we can do to make their lives a little bit easier is good. Selina transfer wise, its very transferwise, its very crosscultural. How are you thinking about this visa problem . Is it a big concern . Joe its business as usual. The timelines will determine when we need to start thinking about it. What of the talk around theresa may and what britain will push for in whatever their negotiations and whatever their negotiations deliver are t he rights of the u. K. And brits in europe. Selina its no longer clear for u. K. Fin tech finTech Startups if thats the place to be to access the eu single market. Do you think investor should put their money outside of london . Fintech europe hub is up for grabs. London had clear advantagea had a clear advantage. Then poof, that all went to the wayside. You do have a series of other cities. Some are finance hubs, like paris or frankfurt. Some are more technology hubs, like berlin. Amsterdam is an interesting city that is in play. I would not knock out the United States from this conversation, both new york and Silicon Valley, where theres been a tremendous inflow of capital into fintech in the u. S. Global,ry strong, integrated economy that can hopefully allow for indication innovation to come and improve the system. Selina joe cross, u. S. General manager at transferwise, and aaron klein, Brookings Institute, thank you. A major blow was dealt to Consumer Protection advocates tuesday when the u. S. House of representatives voted to overturn fcc broadband privacy rules. In a vote largely along party lines, House Republicans moved to dismantle rules that required Broadband Companies to get explicit customer permission for using or sharing their personal data. The data in question includes health information, website usage, andstory, app the Geographic Information from mobile devices. The rules intend to tighten they said tighten Data Security requirements. President trump is expected to sign the bill into law. Still to come, samsung unveiled a brandnew flagship phone with half a year head start on apple. This theevice is device that was the company back on top of the Global Smartphone market . We will discuss next. This is bloomberg. Selina samsung is trying to move on from the pr nightmare of its last major product rollout. Flashy unveiling earlier today, the company showed off a brandnew smart chip flag phone brandnew smartphone. Bloombergs Kaitlin Meehan reports. Tlin samsung has unveiled its new Flagship Smartphone called the galaxy s8. The Company Knows its got to get this one right. Thats because samsung the last samsungs last major launch ended in disaster. Users posted in send year he videos, showing the phone incendiary videos, showing the phone catching fire. After she got browns of global recalls, the entire note after two rounds of global recalls, the entire debacle is said to have crossed the company billions of dollars. Apples share of sales apples share of sales edged past samsung ever so slightly, by a margin of just 256,000 phones. Before that, samsung had beaten apple every quarter since the end of 2014. Sizes,s s8 comes in two both larger than the latest iphone. The s8 comes with encrypted facial recognition and a virtual usersant to give samsung an equivalent apples siri or amazons alexa. Is it safe . The company has been touting a new eight point battery safety check in commercials released earlier this year. Investors appear confident with samsung shares trading at a record high, but samsung faces another test later this year when apple is expected to roll out the 10th Anniversary Version of the iphone. Selina that was bloombergs caitlin meehan. Kaitlin meehan. Is this the product that turns around samsungs fortunes . Joining us is Ronald Lummis llamas. Also with us, David Kirkpatrick. Ramon, its been a rough few months for samsung. Been one negative headline after another, exploding the heir apparent caught up in a corruption scandal. Can one phone turn this around . Mon one phone is a very important first step to getting this turned around, that we shouldnt just look at the phone itself. Its a beautiful phone, an elegant device. Take a look at what samsung has done. A very thorough investigation, extremely transparent with the process. An eight point process they are comfortable with, to the point where they are trying to champion it and advise some of its competitors to adopt. When you put all that together, i have to think samsung is feeling very confident that they solved the problem. Even today, at todays presentation, they referenced what happened and underscored their commitment to quality and safety numerous times, without having to rehash the whole thing again. As far as this device is coming out as the first device after the medical battery debacle, its a strong step for samsung. Selina ramon called this phone beautiful and elegant. What has consumer reaction been like so far . David it is beautiful. Samsung made a good move delaying its initial it underscores how seriously they take the process of getting it. Ight before they release will it turn around the companys fortunes . I think this company had not uberscaler not problems, but a lot of challenges facing it. You mentioned alexa earlier in kaitlins report. The smartphone era is kind of ending. We dont know exactly whats coming next. In the shortterm term, this phone will probably sell very well. Selina i want to take a look at samsungs market share. Fell below 20 in the Fourth Quarter for the first time in four years. They obviously have competition coming from apple on the high end, but they also have lots of up and comers. Ramon, what do you think is the main source of pressure there . Whats causing this drop in market share . Ramon if you take a look at where samson is competing, it clearly had its position staked competing, it is clearly had its position staked out in the highend. As you go further down to the midrange down into the midrange, the lowlevel, the entrylevel range, thats a dangerous part of the market to play for samsung, even if they can get scale, because it ends up being a contest for how low can you price your smartphone. If you look at some of the vendors, a number of smaller and Regional Companies that compete , that aren asia willing to lose money in favor of gaining market share its a very dangerous market to play in, when the market itself is growing at about singledigit territory. As far as the s8 is concerned, this is going to help samsung cemented its position in the highend and hopefully generate money. Selina these are going to be quite pricey. It seems like the iphone 7, 7plus will be the main competition until apple comes up with its latest phone. Whats your reaction on how this may stack up to whats coming from apple . David one of the things that really matters is china, and its not just because china has several competitors, but also because the market is so vast there. Its also a country which is increasingly, in many industries, but in this one, putting special preference on local champions. I think thats a challenge for both apple and samsung. Probably,i think, this is going to kind of keep the competition with apple relatively stable for the short term. The real open question is how great is the next iphone, and we dont really know yet. But if its great, that could be apple still has a better brand by a long shot. It still commands the sort of halo of the top of the market, and i dont see that changing. Selina before we move on, i want to get your thoughts on this big corruption scandal. Heir apparent jy lee in jail. Do consumers even care . Ramon absolutely not. If anything, this may be a concern for investors and perhaps competitors, in terms of analyzing samsungs strategy Going Forward. If you ask the next, oh, 20yearold male camping out in line at your favorite carrier, is it really going to matter to you what the leadership is doing, chances are he is going to say probably not. He wants to play with the device from dawn till dusk. Selina great analysis. As wellamas, thank you, as our guest host for the hour, David Kirkpatrick. In the latest tech revolving door, intel is moving up the head of its mobile device chip unit to a broader role as chief strategy officer. Has been the Company Began to make headway in that effort last year when apple chose intel over qualcomm for the chips in some of its smartphones. Evans will now report to intel cfo bob swan. Still ahead, toshibas westinghouse unit filed for chapter 11 bankruptcy protection, citing as much as 10 billion in debt. The tech giant is still facing challenges on several fronts. This is bloomberg. Selina toshibas westinghouse has filed for chapter 11 bankruptcy protection. Toshiba warns it might have to take a 6. 2 billion writedown. Westinghouse has been struggling with project delays. Toshiba may sell a majority stake in the unit. Another huge ipo may be just around the corner. Buzzfeed is wrapping to go public next year. Pasteo has turned down buyout offers because of its longheld plan for an ipo. It has been rapidly expanding a broader platform. Among its business biggest investors is nbc universal. Amazon stock hit a new record barclaysfter initiated an overweight rating. Shutting down a division which it acquired for about 545 million in 2011. Amazon says it has been unable to make the owner profitable. Stock to wednesdays gains, jeff bezos has become the second richest man in the world. According to the index, bezos has a net worth of 75. 6 billion. Coming up, brexit is officially underway. The man at the helm of u. K. Tech is the heavyweight. He joins us next with his outlook for Tech Startups in the country. This friday on bloomberg television, we will hear from two Federal Reserve president s. They will sit down with mike mckee. Catch both exclusive conversations. This is bloomberg. Im alisa parenti, and you are watching Bloomberg Technology. British Prime Minister theresa marked the end of britains 44 Year Membership in the eu. Candidatesidential Marine Le Pen was told by the French National treasure three years ago that her party would have to plu its deficitg with eu money. She was informed that her spending was spiraling out of control. The party is being investigated for potential misuse of parliament funds. The u. S. Ambassador to the u. N. Says the organization is partnering with a, quote, corrupt government in congo. She supports a massive cut in the Worlds Largest peacekeeping mission there. Her comments came a day after the bodies of an american and swedish investigator were found in a shallow grave. It offers israel the declaration was issued at the end of the annual arab summit in jordan. The palestinians want East Jerusalem as their capital city. Japans ruling party wants the country to arm itself with its first offensive weapon since world war ii. It will also recommend improving the Missile Defense system. Testskoreas missile raising concerns. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im alisa parenti. This is bloomberg. It is just after 5 30 p. M. , wednesday, here in new york, sydney. In paul allen has a look at the markets. A prettys looking like quiet day around the asiapacific. The index is looking pretty flat. Nsx futures are pointing that by just five points asx futures are pointing up by just five points. A billionaire was behind the purchase that sent the stock storing soaring. Over in japan, the nikkei futures are looking a little weaker. Keep an eye on toshiba today. That company has been having a pretty bad year. There will be an Extraordinary Shareholder Meeting today, where shareholders will get to question management for the first time about the u. S. Nuclear unit bankruptcy and the sale of the possible chip unit as well. Im paul allen in sydney. More from Bloomberg Technology next. This is Bloomberg Technology. As we mentioned at the top of the hour, u. K. Prime minister theresa may has officially triggered article 50, kicking off the formal process of brexit negotiations with the european union. Technology was flagged as one of the British Industries that would suffer the most in the wake of the brexit vote. Access to funding and top tech headlines are both major areas of concern. When one tech company that knows a thing or two about the u. K. Tech landscape is londonbased shazam. Joining us now, shazams ceo rich riley. And still with us, David Kirkpatrick in san francisco. Rich, you guys are keeping the headquarters in london, but you are opening a new office in berlin. Did any of this fear of talent fleeing the u. K. Go into this analysis . London. Grew up in its been a great home for shazam. Our team in london is from over 30 nations. We certainly hope it does not cause any anxiety or issues for them. I have discussed with the mayor of london and others that londons ability to track attract talent from around the world is one of the things that makes it truly special. I certainly hope they navigate through the socalled brexit and are able to maintain that. Selina there is still much navigation to be done. In the meantime, how are you gearing up for potential changes . Rich we are keeping a close eye on it, but we havent changed the way we are doing business. Selina shazam has had some pretty big milestones lately. You have reached off at ability, reached the 1 billion download mark. Whats in the works . How are you going to keep users spending more time on the app . Rich we have some interesting things we have done recently. We have been integrated directly into snapchat. Users can now hold down the screen on snapchat and it will shazam and return an experience that, so far, users are really loving. We have an idea how to expand that. App has been downloaded over one billion times. We have a tv show coming. It is on may 25 and every sunday thursday this summer. It will be the game show beat foxx. , hosted by jamie we hope that people enjoy it. I think its the first time an app has had a show. We are doing it with mark burnett, who has done apprentice and survivor. Selina i will definitely take a look at it when it comes out. Over to david. David shazam is one of the few companies that has become a verb. You have done, frankly, from my point of view, even a better job than i would have guessed, not just surviving, but thriving. Im curious if you could talk about, what do you think a single one or two things are that you have done that really explain the survival and more than survival, getting to this new position where your partnering with snap and doing a lot of really cool stuff where you are partnering with snap and doing a lot of really cool stuff . Eyes weve never taken our off the ball in terms of being the best in the world at giving the user what they want when it comes to music. We try to make it faster, better, more accurate. We are very proud that our user ratings right alltime highs on both ios and android. That is something we watch very closely. We are constantly trying to earn our users love. The associate our brand with magic. Internally, we talk about delivering magic together. I think that focus and effort has proven, in terms of the sustained popularity of the service. Selina shazam seems to have taken the lead in terms of augmented reality marketing. You have already started some partnerships. Hows that been going so far . Do you think consumers are ready to interact in this way . Our Business Model is primarily advertising, which has been a transition for us. We launched the ability to visibly shaza m things just over a year ago. We recently launched what we believe is the first scaled augmented reality offering. Add augmentedn reality to any printed thing, and its accessible through shazam. There are a lot of augmented reality startups and capabilities, but there are very few that are on hundreds of millions of phones. We bring in scaled augmented reality and make it easy for brands to create the experience. We are excited about that. We have a view few big campaigns coming up. Theres a lot of excitement as advertisers try to figure out how to bring packaging and other things to life. David this augmented reality thing does seem to make an awful lot of sense. Weve gotten used to sort of pulling out shazam to find things out about the world around us. There really arent many other apps like that. Maybe google maps at a larger scale. Do you think of it that way that because people have the habit of shazaming things with audio that they might naturally segue over to a more visual experience . Rich we do. We think that shazam and our brand and our verb its a one cap connection to the world around you. We have a camera now on the home screen. We use that to connect people to brands. When we partner with a brand, they will put an action on the packaging so that the user knows what to shazam and what they get for shazaming something. All kinds of things that are different value propositions. We were on hundreds of millions of coke bottles this summer, for example. We think its a natural extension of our use case, but still a lot of user education required. Selina i know you get this question all the time. The company has been around since 1999, has raised over 100 million. Whats the exit plan . Rich the plan is to build the best shazam we can. We were very proud to achieve cash flow profitability at the end of last year, which is a milestone that, as you know, many startups never achieve. One of the great things about that milestone is you really put yourself in control of your own destiny. Cash flow positive with plenty of cash gives you a lot of choices in terms of which way you go. Keepe meantime, we will building the company, doing big partnerships, doing great things with brands and tv shows. Selina you are on the show not too long ago. You said you guys were sprinting towards an ipo. Has that changed . Be a strongt to Standalone Company that has predictable Revenue Streams and growing Revenue Streams and is able to control its burn rate and be profitable. We are always tried to be a great Standalone Company. Then we will decide whether that ends up in the Public Markets or as part of a bigger platform. Selina what do you think your investors would want . Toh our investors want us build the best company we can. They appreciate how rare it is to have a brand like shazam that is truly known and loved by hundreds of millions of people around the world. The costs of replicating a brand like that would be well north of 100 million. Figuring out what we can do with the brand and build on this platform they are all very excited about the future. Selina rich riley, ceo of shazam. We are going to have to stop there. David kirkpatrick, you are sticking with me. Analysts remain bullish on the stock, despite samsung unveiling its latest smartphone. Where does wall street expect apples next big source of revenue to come from . We will give you a hint. Its not iphones. This is bloomberg. Selina pinterest has set its sights on a new company. The goal is to attract small and iumsized is is is is mediumsized businesses to the platform. This is ahead of a potential ipo with a target of more than 500 million of revenue this year. We will speak with the president of pinterest in an exclusive interview thursday about this new initiative. Slightlyres edged up in wednesday trading, closing at a record price, just over 104 144. One analyst raised his price target to 185 per share, calling it one of the most underappreciated stocks in the world. A longtime apple watcher also released a bullish note focusing on revenue from Apples Services segment. Still with us is David Kirkpatrick. In new york, alex webb, who covers apple for Bloomberg Technology. We had the big samsung unveiling. Does that put a damper on all the hype around apples impending iphone later this year . Alex apple did capitalized significantly capitalize significantly. It gives them a head start. The crucial quarter for any smart phone sales is christmas. The three months leading up to christmas, thats where the big sales are done. Apple usually releases the product just ahead of that quarter. Its hard to make any particular judgment until we have that out on the market. Selina i want to get your thoughts on this chart as a take a look into the bloomberg terminal. Apple has had some slowing iphone sales growth, as we see in that most recent quarter. There has been a bit of an uptick. What do you attribute that to . Alex it was interesting, the last quarter of apple sales. The growth which they experienced they attributed to new customers, not customers upgrading or swapping their old one for new iphones iphones for new iphones. If apple releases iphone which is an significantly better than the previous one and people still decide to switch to it, the strength of the brand is holding up. If you extrapolate that Going Forward, the expectation is that is that the iphone proves to be the phone that everyone is expecting, then selina something thats become more apparent is that apple needs to build up this service is part of its business as hardware continues to slow. Can apple do that fast enough before facebook and google can expand and hardware . David thats a really interesting question, selina. I think its pretty funny that somebody should call apple one of the most underappreciated stocks, considering its the highest valued company in history. Its at an alltime peak. On the other hand, there is a certain logic to that. Both those analysts you mentioned are very smart guys who have been around a long time. Isles he eat apples p e lower than Facebook Google or amazon. You cant just make more with nocost. Itspple could build software and Services Business and actually get revenue from it, then they could really get into a new category and, believe it or not, even with their astonishing current valuation, build on that. I do think thats a possibility. Do i see evidence of that happening yet . No, i dont. I think apple has done a relatively poor job Building Services and software business. Just one example, look at the apple maps compared to google maps. How many people on the iphone routinely use apples maps . Only people who arent aware of how good googles maps are. They have a high bar to reach. Selina you read about how they are beefing up this app ecosystem. What do they do to make it even better, the software and Services Part . Traits that close to 16 times apple trades at close to 16 times. , the appes growth store. Gene munster estimated it grew 40 last year to 8. 6 billion a tinyllion, so its slice of the pie, but its very high margin. They have to give developers what they want if they are going to convince them to build apps which not only are compelling, but drive returning revenue. Thats why they give more subscription revenue to developers. Previously, you might pay 4 for it once or twice, then you are not given any reason to keep on using it. They want developers to build apps that have a lifespan that drive returning revenue. You are pumping data into it, which makes you dependent upon it. Selina which part of the Software Services do you think has the most potential . They have the cloud, music, apps. David in a way, its the cloud. The real holy grail is annuity businesses. If you can get people to pay you a subscription for something, music is essentially a cloud service, those are the kinds of things you want to go to work. Anybody who can get that right has basically ability to print money. Apple has not proven it can do it. I dont rule it out. Selina david, thanks for joining us. Alex, thanks for coming by the studios. They have a dirty reputation, but china is attempting to clean that up. We will bring you the latest from the worlds biggest coal producers next. This is bloomberg. Selina dominoes will start using robots to deliver pizza in europe. Vehicles areing made by starship technologies and will deliver pizza to customers in germany and the netherlands. Whats the catch . Customers must live a mile within certain dominos outlets. This is not the pizza chains first rodeo with innovative technology. They delivered a pizza by drone in new zealand. While the Trump Administration is vowing to invest more in coal, china is trying to take a global lead in cleaner technologies. China is the worlds biggest co2 emitter and coproducer. Bloomberg got an inside look at how the largest state own power producer is trying to scrub not only the skies, but also the dirty image of coal. China feels this is one answer to its towering pollution problem, a new power plant that the industry likes to call a clean coal burner, spewing far less toxins than the older generators. This was opened in november by , which invited bloomberg for an exclusive tour. Coal is cheap and abundant, but its the worlds biggest source of carbon emissions. China is moving towards more renewable forms of power tran smission. The move to renewables takes time. Should retain its dominance in chinas energy supply. First off, china is rich in coal and has less gas and oil. Its a fact that there are many poor people in china. Coal is the energy for poor people. We are building new coalfired power plants that are cleaner than gas plants, cleaner than the average coalfired power plant that operate in many of the developed economies of the world today. It does not measure co2 emissions on site, but we could nox,hat they call sox and the emissions of sulfur oxide and nitrogen oxide. The government gets this data realtime and can punish the plant if emissions get too high. [inaudible] burning cleaner coal does have its costs. It is spending a little more than 1 billion over the next two years installing the clean coal tech at a time when chinas coal and Power Industries are in forms of crisis. They have overbuilt. Theres more capacity in electric Power Generation than any other sector in china. Is in then neighborhood of 50 . This is a neighborhood with extraordinary high utilization costs. When utilization falls that low, there are huge losses. It argues that president plan for reviving the u. S. Coal industry can lead to cleaner solutions. We believe that President Trump will be looking at this sort of technology for deployment in the u. S. Does not hurt your sales pitch when the weather does its part on one of the clearest, blue sky days so far this year. Selina that does it for this edition of Bloomberg Technology. On thursdays program, we will be speaking with pinterests president in an exclusive interview. Remember, all episodes of Bloomberg Technology are now Live Streaming on twitter. Out weekdays at 5 00 p. M. In new york, 2 00 p. M. In san francisco. Thats all for now. From new york, this is bloomberg. From our studios in new york city, this is charlie rose. We begin this evening with more questions about the russian hacking of the political process, and also about accusations against the Obama Administration from President Trump. Calls are mounting for the republican chair of the House Intelligence Committee to recuse himself in the investigation into russian meddling. The chairman admitted he met with a source on white house grounds last week to view secret reports. He suggested that had potential surveillance of president