Existing visas will be honored, but new applicants must prove they have either a business relationship in the u. S. Or an immediate family member. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im Alisa Parenti. This is bloomberg. Emily im emily chang. This is Bloomberg Technology. Coming up, we will chart the wild swings and breakdowns in volatility. Plus, blue apron goes public to little fanfare. Why getting its valuation before the ipo may not have an a winning recipe for the Food Delivery Company and the growing challenges ahead. 10 years ago today, the world was introduced to the iphone. A trip down memory lane and the changing faces of the smartphone that made apple the worlds most valuable company. First, to our lead. For the second time this week, we saw a selloff in tech stocks. The nasdaq losing more than 1 , set to snap its winning streak. York tous now from new help us dissect the decline, our Bloomberg News the reporter, abigail doolittle. Tell us about the biggest winners and losers. Abigail today was really interesting from the standpoint there was tons of selling going on. Sellers were in control. It is important to break it down that way because it confirms that selloff that started on june 9 is on. Yesterday we had a bit of a rebound, but now, we are down in a bid way big way, telling us tech has been and still is the big sector in the year. What is interesting is nobody knows what is behind this. Wall street does not have a fear he or hypothesis, and that is pretty rare. R called ite mysterious. Good point,ade a some of it could be window dressers taking a profit, but even so, its pretty clear we have a pretty big change in sentiment, jitters and uncertainty on the part of investors. This has been the top trade all year, really a hot sector with facebook, apple, amazon, alphabet, netflix up on the year and now dipping down. Asked what was behind this fundamentally, and our Bloomberg Analyst said nothing fundamentally the only thing we could talk about was seeing this rotation out of tech into banks. Some of that money going into banks. Another point to be made, while we have these stocks selling off, if you look at the fang bonds, they are fine. Fundamentals for these Big Tech Companies are fine. Its just jitters. Emily there were a couple of bright spots. Tell us which ones. Abigail this is pretty funny. You would not guess it. Snap and fitbit. Ipos. Ely new both of these stocks were up on the day. That is sort of an interesting investors going for some of those premier names. Who knows. Those investors going from of those some of those investors going for those high names. Emily think you for the update, abigail. June 29 marks the iphone first birthday. It jumped far beyond the competition, starring rapid changes in industries of all kind and society as a hold. Here is a look back at the dictate of the iphone. Today, apple will reinvent the phone. [applause] on june 29, 20 07, consumers got their hands on their very first iphone. Now, i decade later, the smartphone is proven to be the undisputed king of apple products and revolutionized an entire ecosystem, destroying heavyweights of the day and spurring new arrivals across the globe, like the iphone open doors of what has become a large chunk of the companys revenue. The launch of the iphone did not change the way people work and socialize, it transformed the company itself. Apple grew i every dimension, going from a company with a staff of around 18,000 preiphone to a workforce of 116000 and 2016. 116,000 in 2016. It does not stop there. Since its launch, apple has sold 1. 3 billion iphones, generating more than 800 billion in revenue. That blows other iconic devices out of the water. Including nintendos game boy, which sold over 118 Million Units in its lifetime and sony walkman, which sold a little over 200 million and a 30 year. But with that astronomical growth rate comes heavy defendants, the iphone makes up 63 of revenue for apple, making its company most crucial product. Some tech heavyweights are sounding the alarm about the future of smartphones, but longtime Silicon Valley endorsed it silicone valley investors saying there will be no more innovation here. Apples ceo tim cook sees it differently. Tim were just getting started. I am incredibly excited. There is nothing that anybody could say is going to replace the smartphone anytime soon. Looks for thee next decade on the competition stays red hot, a major question remains how long can the iphone remain at apples core . Joining me to dig into the iphones first decade is my hour, david for the kirkpatrick in new york. Thank you for joining us. It is hard to sum up the iphone, but in your view, what is the biggest significance of this 10th birthday . David you cannot come up with enough superlatives for the iphone as a business success. You have to say it is the most successful product ever. Period. 800 million in sales. Just this year financial gravity of how the iphone has been a success combined with the way it has shifted the nature of our behavior, that is astonishing. Im emily i know you have been thinking about how has the iphone changed our lives. David we all walk around looking down like this. In new york, people just bump into each other on the sidewalk. You could often be in a public place, and look around, and literally every person in the space is looking down at a smart phone. They are not all iphones, but look, this has changed our behavior and wonderful ways, allowed us to do all kinds of but letsthe economy, admit that it is changing behavior into negative ways, taking us away from the interaction and the awareness of our surroundings. Lose essentialo part of being human. Emily we had gene munster recently who thinks that iphone sales will peak and 2019, and that the next big product from apple will be augmented reality glasses, and i wonder, is that true . What that change a particular behavior you are referring to. David it is one of the reasons why a lot of people are excited about augmented reality because if it could be implemented properly, which i dont think anyone has yet seen, it would potentially give us the ability to effectively be online and be in the real world at the same time. I think that is the reason why people like Mark Zuckerberg are so excited about it. I do think tim cook is among the few people in tech that would say, nobody can imagine anything replacing the smartphone anytime soon. A lot of people are imagining a lot of stuff, including those people in seattle at amazon where their echo devices have made impacts. Emily facebook announced hitting 2 billion users. You say that the future of facebook and the iphone go handinhand. David they have gone handinhand along. ,hen people use the iphone spending two hours a day, when people are looking down at their phones, the thing that they are looking down at the most is facebook. Come along,did not it is possible that the iphone did not that the iphone would not have become the phenomenon it did. It is interesting to go back to zuckerberg with his thoughts on augmented reality. He is already thinking about other physical devices, which might be a minor concern for apple. On the other hand, shortterm, apple is still is in the captains seat, no question. Emily so much to reflect on on the iphones 10th birthday. David kirk pocket David Kirkpatrick, youre sticking with me. A major setback for rupert murdoch, the u. K. Government is pushing back on the medias tycoon 20ntury fox 20 bill billion bid will undergo scrutiny. The government is concerned by the murdoch family. Coming up, blue apron makes its public debut we discussed the new start ups journey. And Bloomberg Technology is livestreaming on twitter. This is bloomberg. The apron madef their public debut thursday, but stock wase a the literally unchanged, after the company lord is after the company lowered its ipo price. Company gavevery it a market value of 2 billion. Eric joins us from new york and still with us, David Kirkpatrick. What happened . A good bit of this has to do with amazon whole foods. Looking at the trading today, the fact that it was acting unchanged, a closed at 10 a share with some aftermarket trade that nine dollars . 95 below the ipo price. There is a bit more convinced her a bit more investor concern. Right now, they are sitting at a 1. 9 billion market valuation. If i am an investor, i am looking at this company and saying where is the growth . And i am saying how are you going to afford it because when i look at this past position, it seems like they might need some money soon. Some of that could be playing into this downward or flat pressure. Emily david, should investors be concerned about blue apron because of amazon whole foods for because of these other things . David if i was in any kind of foodrelated delivery business, i would be watching amazon with incredible care. This goes to show the seriousness as how they view food as part of a copper the world strategy. I think they should worry, seriously. Be a alex, should there particular way they should handle this . I they did what they had to. I have been talking to folks around the deal, and if they launched the deal three days after the amazon announcement, or waited after labor day, this idea of amazonwhole foods will be there. Evaluation they went out at is very strong. Richlyvalued at more than some of the ecommerce companies. It made some folks scratch their heads. Open blue apron needs the cash. If you look at their first quarter, they had 61 million on hand, and they had a cash flow deficit of 74 main in that quarter and told investors, look, we have cash and borrowing to get us 10 months of runway. That is not a lot of time. This is a company that has to out market its competitors. And it is continuing to try to build out its the just ask network and fulfillment its Logistic Network and fulfillment centers. For go out now, it will be a question of valuation to get the deal done. What does this mean for tech dealmaking and ipo plans Going Forward . It seems like we have had the tech deal Pipeline Companies worked their way through. You have some locked evaluations because investors were chasing these returns, and now it seems like realism is sinking back in. Cast a niche, this deal shadow underneath a massive shadow of amazon on exits in particular. You have sun basket trying to go out. You have these smaller firms that Venture Capitalists have thrown money into the delivery space. If you are thinking of exit valuations and you are behind the scenes, you got to be saying, we have to get our books in order and our house in order to prove we are not blue apron, and we will not exit less than our last private round valuation. Emily all right. Alice, thanks so much. David kirkpatrick, youre sticking with me. Coming up, Management Issues ubersershadowed Management Issues have overshadowed everything else. This is bloomberg. Emily korean tech giant samsung announced investments worth 1. 9 billion into u. S. Plants. Samsung will spend 1. 5 billion in its Semiconductor Factory in texas and over in South Carolina for home appliances. Both investments will be carried out until 2020 according to statements from the company. The announcement came just ahead of korean president for summit with the u. S. Residentelect been vocal uber is back in the spotlight in the courtroom. In a new filing, the ridesharing ofpany says it was unaware data theft prior to the lawsuit. Bloomberg is looking to refute uber is looking to refute the claim. We are joined by bloombergs legal reporter. You think ubers assertion that they did not know these files were stolen was extremely important. Why . This was the first time they were able to say if these 14,000 files that are at the center of the lawsuit, we did not know anything about this until the complaint was filed. It is a big change in the direction of the lawsuit. A kind of reveals something of the strategy. Uber being to seeing kicked around in the courtroom. The judge believes that stole the files. They have already been on the receiving end. You can feel it in the courtroom. The change the tide little bit. Emily David Kirkpatrick is still with us. It is amazing that bloomberg is going through this. What do you make of this sideline courtroom battle . David it is hard to believe anything that bloomberg says these days. It could very well be that they did not now this guy they hired was a dishonest thief even though they paid him 250 million, and he turned out to be a thief. And they said, it was not us that stole it, it was them, throwing him to the walls. That is possible, but that is the culture of uber. Joel is the one who knows what is happening in the courtroom. But i am extremely skeptical. Uber may be able to salvage a little bit of their reputation. About thel, tell us courtroom and the weibo team. Joel uber is always on the receiving end. In the courtroom today, even though they distanced themselves , in the courtroom today, they are making this tricky argument, maybe their lawyers new or a ,irm was hired to investigate but there is an insinuation that maybe they told the lawyers of the firm they hired, whatever you find out about him, dont tell us. There itways seems like tricky lawyering. Emily what can you glean about ubers trial strategy Going Forward . They have laid it out, the theme that they will present to a jury, which is we are guilty of hiring anthony levandowski. You can see how that would play with the jurors. Med of as dirty as the guy seem, the lawsuit is not against anthony lindau ski, but it is against the uber. You. joel, thank David Kirkpatrick, you are staying with me. Coming up, we dig deeper into the nasdaqs selloff. Our markets will markets fullback . If you like bloomberg, you can listen on the radio. This is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. I am Alisa Parenti in washington. That will likely anger china, the state department has approved on sales to taiwan worth 1. 3 million. Deal with thet selfgoverning island since President Trump took office in congress was notified of this deal today. Lawmakers have 30 days to object. The chinese president continues his first trip to hong kong since being sworn in back in 2012. He is there to mark the 20 anniversary of the british colonys returned to chinese rule. The territorys the leader will be sworn in on saturday. The president is excited to leave after attending that ceremony. In moscow, a jury of five men a jury found tightening guilty of russian Opposition Leader ofis a tough opponent Vladimir Putin for walking or the kremlin. Advisornciss financial has in terms of multiple Sexual Assault offenses. Iraq says it has reclaimed the landmark mosque in the city of mosul that it last week by the Islamic State. Troops are pushing through the last neighborhood in that city still held by islamic extremists. In 2014, the Islamic State declared a caliphate on territories in a rock and syria iraq in syria. Global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. Parenti. It is just after 5 30 p. M. In washington. Bloombergsd by david with a look at the markets. David, good morning to you. David good morning. Futures are pointing down following the u. S. Markets, 1. 2 down from futures. And down 1. 1 in japan on the niikkei. We will be looking at pmi this has been some of the strongest levels in almost three years. Iron ore is up 14 so far this week. The main things we are going to be looking at today. Music emily welcome back. Our top story today, the selloff in tech stocks. For the second time this week, the nasdaq losing more than a percent and on track to break the sevenmonth winning streak. Here with me, dani burger, tech economy ceo danny kirkpatrick. The fundamentals have not changed at all. Why are investors suddenly down on tech . We have seen down rotations in the stock market, and tech is now the latest casualty. In thing we have to keep mind is how ubiquitous; ors and tech stocks semi conductors in tech stocks are. When we think about, are we ready to raise interest rates, will that affect the economy, i think tech is one area where you are seeing investors play the tech stocks. To point outo want is how popular tech stocks were. Bloomberg, each one of those dots is a stock in the nasdaq 100. One line shows its yearly return, the other shows the percent return. If you stick with me, you can see the most popular stock over the past year pulled off the most today. The most loved stocks are now the most hated. We are seeing momentum where people are selling off, thinking maybe its a bit overbought, maybe now is the time to take profit with perhaps no specific catalyst we can point you at this moment. Emily no specific catalyst, david. I think tech may be seen as so popular with investors that its movements are kind of a macroeconomic indicator. But longterm, tech has so much to go, it is crazy. Possiblen, with the exception of netflix, these companies have unbelievable headroom. They are going to go to the moon. You might say they are already at the moon. Look at it in five years. There is a theory based on the percentage of the economy that is digital, which he says is 6 today. All it has to do is go to 15 by 4 trillione says more will be created in Consumer Internet market caps. I think he is in the right direction. Emily dani, is tech overcrowded . Yes. I want to point to something which speaks to what david was talking about. A chart i have for you shows the market cap of tech as it relates to the s p 500. Averagelow line is the over the past decade. Keep in mind that if i expand this back to the tech level, which i am going to do quickly for you, you can see that we are still far below that. Weve got some ways to go before that looks sort of bubbly. But this is an increasingly important part of the market. It is dominating the s p. There are days when tech sells off, and it hurts the s p as a whole, but still we are seeing the market remain calm. A bit of a difference. Tech is not doing anything to complete because trading to go completely at this moment. Emily dani burger with the roundup, and tech economy ceo David Kirkpatrick. Thank you for joining us as always. Coming up, as the iphone celebrates its 10th birthday, we from hear we will hear who is often referred to as the godfather of the ipod. And at 8 00 a. M. Eastern, the boston fireworks spectacular live from bostons historic esplanade. This is bloomberg. Emily lets return to our coverage of the iphone. Took to the stage to unveil the latest product, combining email, web browsing, and phone calls in a single device. He detailed the product with johnny ides. Johnny, do you have anything to say . It is not too shabby, is it . [laughter] emily tony fidel, another key executive, spoke to bloomberg at the opening of station f,based startup camp a startup camp in paris. 10 years ago, we had all different brands of cell phones. This year, almost every brand of cell phone is different than it was 10 years ago. 10 years ago, we did not even have 3g networks. Now people are talking about 5g and 6g. We did not have rights Hearing Services like lyft. Ridesharing Services Like lyft. Everything about our world has changed in that 10 years. So what is the next 10 years going to be like . But station f is here because of the mobile revolution that started 10 years ago. All the companies and here are building on top of the platform we collectively built as a society on top of these smartphones that are in 2 billion peoples hands. Whateally excited about else is going to come in 10 years. Off 10 yearsd it ago, and it is wonderful to be here and see what that has created for companies around the world, including france. Some say apple am the iphone it have lost innovative touch. What is your take on this . Lets roll the clock back to laptops, or computers before that. When you look at laptops, you say they stagnated in the 1990s and the 2000s, but what did they get . They got internet, email, all these other applications. Look at the iphone and smartphones in general. They change every day with the apps that you download. If you were to say laptops stagnated, well, not really. They were just in enabling platform for all these things to be created. Same goes for mobile phones and smart phones. It is not just about the phone you carry, but it is about all the things you can do, and every day you get a new function. Do you think the company is too dependent on this single product . I think it is continuing to build other businesses and innovating. New platforms take a long time. The last platform before the iphone was the macintosh, in 1984, and that took 20 years. We are just in the first 10 years of this platform. To create another worldwide sensation like that takes time. We are trying to adapt to the one we just built in 10 years. I think we are all excited, but it takes a long time to do something really important and impactful. Do you do you actually believe the next iphone could come from a place like this, paris . And what would it look like . Would it be a smartphone . I dont know what it is going to look like. I am not a great predictor of the future by any means. I would not tell you 10 years ago that the world looks like it does today. Future, butect the what i can tell you is that when we look at these devices and the intrigued byreally what has happened over the last seven or eight years. If we look at the dna of devices preiphone or preandroid, almost all the software and hardware was locked up with a few companies. Create an operating system or applications was all locked in apple or microsoft or who have you. Today, with open source, all the different services, the Cloud Services and commoditization of the cell phone, now everyone can evolve, around the world, new phones, new products. They have the opportunities of the last 20 years. Aily that was tony fadell, former apple executive. Trump hasdonald pressured apple to build a production line in the United States. We take a look at what it would look like if the company could assemble a smartphone in the u. S. Reporter take a look at the back of any iphone. You will see a familiar phrase printed on almost a billion units of the iconic product. Designed by apple in california, assembled in china. Like everything, that wording is deliberate. Apple designs the software, researches new technologies, and develops the phone chips, in california, which allows them to sell the for 65 more than the cost. But apple iphones are assumed in china for a a simple in china for a reason. Wages are lower, but that does not tell the whole story. Assembly is only 2 of costs. Today, most iphones are made in two chinese cities. Favorable Government Policies helped one of the cities become a manufacturing giant of the world. As a result, thousands of companies and millions of workers have moved to this city to be closer to the action. Foxconn hires almost a million people, accounting its workforce to a few hundred thousand during low seasons. Such a clustered effect means that most of the components need to make a phone, a laptop, or a drone are within a 50 mile radius. Attempts to recreate this have so far failed. Brazil is a perfect example. Apple urged foxconn to make iphones there. Foxconn built a factory, but very little changed. Rather than doing lots of highlevel manufacturing and brazil, foxconn continued to do most of the work in china, where the supply chain was nearby and parts could be preassembled. This meant most of the iphone was made in china and rarely shipped to brazil for local workers to slop together, like legos. The brazil project failed on two levels. It hired a fraction of the workers the government expected and failed to attract apples hundreds of suppliers. The brazil model means far fewer jobs, and making an apple would be like picking apples. While one day there could be an iphone assembled in america, do they really wanted to be . Emily dont be failed by a 10 reportedtim cooks pay, putting016 them in the bottom third of ceos. Only ceo of a publicly traded u. S. Company to cross the 100 million threshold for takehome pay. Reed hastings of netflix reached 106 million last year. Coming up, we take a look at a group of activist hackers on the front in protecting elections from tampering. To putxavier neil wants paris on par with Silicon Valley for tech investing in innovation. The opera the entrepreneur opened station f. Including facebook, microsoft, and Venture Capital have appeared at the campus to advise entrepreneurs. We have programs that are completely different. We have a thing where we are looking for young people outside , and have them come in to create a company. Emily the french capital is trying to position itself as uncertainty looms around london postbrexit. Voting machines to fake news, Many Companies countries like the United States and france are beginning to wrestle with the ways democracy can be hacked. One country has taken on an unusual effort, and that is germany. The country uses the Chaos Computer Club, a tech focused watchdog is simply area caroline asked how exactly the Chaos Computer Club helped the german government. We were looking at the data of which countries had the worst levels of fake news. Oxford had done research that put high levels in the u. S. And u. K. , but a blip in the data was germany, where the levels of professionally produced news versus other political items looked really good, and one place we looked was hackers themselves. There is the Chaos Computer Club , an organization founded in the early 1980s that has helped instill a healthy dose of skepticism and tech savvy miss tech savviness among germans. Caroline what has the Chaos Computer Club actually done to shine a light on where some of the weaknesses are in germany . Withat they have done is, a bit of humor sometimes, taken on things like the Voting Machines themselves. A decade ago, when germany was starting to roll out voting computers, they said, i bet we can make one of these play chess. The manufacturer said, id like to see that. Within a month, not only had they shown that you could manipulate the vote, but you could actually make it play chess. They did that, although they say it did not play it well. The real result was the decision by the Constitutional Court in germany that cited the Chaos Computer Club in rolling back what was going to be a rollout of voting computers. Atoline when we are looking the role these hackers can play in the upcoming german election, is there concern in germany about the role of fake news, or is that not something they are concerned about considering the blip in the data . There is. There is heightened concern, probably because of germanys history. There are laws against hate speech that have been a part of germanys history, and addressing past problems. Also, the government now. More close government has threatened the social Media Companies with fines if they dont get the fake news phenomena under control. Role has been one of raising awareness. Their leadership has gone out there. One thing they did to me was show me how a twitterbot worked. I thought i could recognize what a real twitter account was, plus or minus a few percentage on being able to get fooled. But it is so easy, and this is what they are doing with a lot of journalists, showing the public that anybody can do it, and building a bos army of hundredt bot army of hundreds. That is the role with their hacker percent they have been playing. Caroline the Chaos Computer Club, talk about how much this could be replicated. Could we see it used as a device in other countries that have succumbed more to fake news . How formal is the arrangement that they have . Whats interesting is what has developed in germany is kind of unique. It has been around since the early 1980s. It has gotten a role as a human rights organization. And because of germanys history with naziism and communism, there is a real aversion to surveillance and the role the. Tate can play it is Fertile Ground in germany for having a hacker resistance. It is maybe not something that can be replicated in other places, although there is something to be said for it being emulated. Airbnb isl, finally, said to be planning a new tier of luxury vacation rentals. A rentalny will test program for mansions and penthouses at the end of the year, with a broad rollout plan of successful. Year, airbnb acquired canadas luxury retreat, which lists more than 4000 villas and vacation homes. Topicl be covering this on fridays show with airbnbs head of Global Policy and public affairs. That does it with this edition of Bloomberg Technology. You can check us out weekdays at 5 00 p. M. In new york, 2 00 p. M. In san francisco. That does it for now. Our studios in new york city, this is charlie rose. Harlie William Burns is here in 2015, he became president for the Carnegie Endowment for international peace. After 33alking in 2014 years in the state department, where he helped with russia and jordan. He was only the second career diplomat to become secretary of state, serving under Hillary Clinton and john kerry. John kerry described him as a diplomats diplomat, on a short list of american diplomat legends