It is geared towards business users. Hear about it when i talk with john chen. Talking abouts the inner workings of the search giant. Find out why the androidapple battle is more brutal than it has ever been. The new iphones are bigger and thinner, but that design is making it easier to bend. After numerous users said the fund had a slight bend to it after being carried around in their pocket. Challenged Ceo John Chen people to try to bend the new passport. Apple has already sold more than 10 million new iphones. Lewis, your video has more than. Million views how easy was this to do . It wasnt easy at all, to be honest. It was very painful to attempt to bend it because i am a big fan of the device and i have been using it for a couple of days. I had received a couple of tweets from individuals saying that their devices were bending. I received a message from a man wasrom a Family Member who expensing the same thing. So lets check to see if this is a real thing. The rest is history. Did you try it with the iphone 6 . The next video is in production. I will be releasing the later today. I have the iphone 6 as well as another highly requested found that people want to see compared, which is the htc 1m8 which also has an aluminum construction. I am having some interesting findings. I had no idea that this would get so much traction as it has. People appeared to be very interested in the bend test. What happened with the iphone 6 . Did it bend as badly . I will be attempting it in the enough coming video but the construction is very similar. They are both incredibly thin, aluminum construction. The only benefit to the smaller sizes that those materials are spanningding not wide as large of a device so they might hold up a little bit better. They might be a little more rigid. This is a very thin phone made of a malleable serial. Malleable material. The outcome is something ive projected it doing i predicted it doing. Does it still work . Yeah. It was still functioning completely fine. Completed, after i filming the video, i attempted to bend it back. That is when the screen actually cracked. But the components are still operating. For the average user who wears dontthere from pocket, i recommend putting it in the back pocket. For those who see a slight curvature, i do not see a problem using it at all. So did actually cracked . Yes. Thehe weak point in aluminum on the initial band, when i tried to bend it back, it snapped in that location. Similar to when you are working with a pliable material. On the band back it snapped and shattered the corner of the glass as well. It sent some hairline breaks across the screen. You have covered apple. We are waiting for a statement from apple. How big a problem is this . Reputationally, it is a problem. You dont want to be launching a new product where social media bendgateng bandga at this point. How big a problem do you think this is. If you are carrying it around in your pocket, is this really going to happen . No. What happened to me will not happen to you. I applied as much force as i possibly could. That they said, i find it to believe that these individuals who are interested in this trending hash tag our expensing something similar and then receiving a message from a Family Member who is not connected to the video i do believe it is for it is real. When you spend 500 on a device, it even a slight bend is enough for them to go back to the apple store for a replacement. You have an apple phone. Its fine. Here, lets try. This fine and i dont wear it in my pocket with tight pants. I dont know if this phone will be changing mens fashion. [laughter] let me just try to bend it . Mine is fine. If i dropped it on the floor or dropped it in the toilet, it wouldnt work. It is not software they can fix. A manufacturing issue, like the antenna that could not be fixed. We talked to some folks who fixed these phones in shops around the country and they say this could be a Good Opportunity to buy a different case for your phone. There have not been inundated yet with calls of actual problems. They got calls from people asking about it but no one with the actual problem. There is a team within apple that handles these issues, a new response to a response to new iphone steam. They try to deflate issues early so it does not become a Snowball Effect down the road. It is a starting point. Can you bend or attempt to bend to the blackberry passport . You are in toronto. John chen just said the passport is an bendable. Is unbendable. I will have to get in touch with him. You looked like you were really pressing hard. Somebody there should do the bend test right now. All right, here you go. Cory is going to try. It is bending back. I am going to break it, not bend it. It didnt break. It didnt band. It didnt bend. [laughter] thanks so much. On box therapy. Therapy, watch his video. [laughter] Building Blocks of blackberrys turnaround plan is the new passport smartphone. My interview with Ceo John Chen coming up next. Itslackberry is pinning turnaround hopes on another new phone called the passport. It has a squareshaped screen geared toward professionals. It is all about blackberrys turnaround plan. Will the passport be enough to satisfy investors and you and me . Chen righth ceo john after he unveiled the new passport and asked why he chose this square shape. We talked to the customers and we looked at how they use and productivity and looking at the new style apps, the vertical apps, and we figured that the wider and more onetoone ratio is how everybody will need to achieve a more. What is your goal for this phone . How many do you think you will sell . I am just coasting it right now. We expected to be successful but the market will tell me that. We have various different ideas that we use as a motherdaughter type approach. We will have two gauge how the ark it responds. The market response. You and i talked about market share. Global shipments are already lower than 1 . 2018, market share will be. 3 . Where do you think it will be . My job is to make sure that doesnt happen, right . I think we have a good plan, a good set of portfolios. Despite everything we have gone through, this is the third phone that we released this year. There was also one coming out in a couple of months called the classic. 3ay started out with the set in may and it is now in 13 companies 13 countries. It has been received well. Now theres a porsche designed phone. I think we can pick up the pace and we should be gaining market share as we move forward. Your job is also to make sure the phone doesnt bend. You to gauge at apple. Apple. Took a jab at what do you think of these reports . I have no idea. I just read it before i came here this morning. I thought it was a little amusing. In a main. Dad you know me. Cracked at it in humor. It is somewhat of a challenge, but you have to do it the same way. You put it in your pocket and see if it would end or not. I doubt it would happen. Did you actually test this for bending . We do a lot of mechanical testing. I dont know whether we do particularly do the bending itself. The fivelayer of the phone, including the antenna layer, which is a come rate a complete steel frame inside the phone. So bending that needs a little effort. What do you think of the new iphone and the apple watch . What do i think . I really dont know enough. I have been so busy i dont know enough to comment on that. Obviously, they have their audience and i am hoping to go after my audience, which is people with strong needs for productivity. One thing you do know is that the president is also addicted to his blackberry. Did you send him a passport to test out . I dont think we gave it to the white house yet. I dont know. I could be wrong. But i would love to have president obama using it. State use its of with extra security and this will continue on. Blackberry shares are up almost 70 . Investors are counting on you. They seem to be leaving you. You said that but barry will be profitable by march 2016 you said that blackberry will be profitable by march 2016. Ive told people he would be possible in fiscal year 16, so sometime in the 2015 calendar. I am Still Standing by at. Depending on the receptive and he of the sounds and the classic coming out in two months. Our Software Release is next month. I expect to see some growth next year. If i could get some growth on the top line, i will be able to make it profitable sooner. Blackberry Ceo John Chen. Udacity just made a big run. Welcome back. Apple isnt the only company benefiting from the enormous demand for the new life down. Broadcom ships are being used in the new iphone and will be in the new apple watch. Power connectivity to run down the iphones. We have seen broadcom chips inside. They will be leaving the cellular modem market. We have the ceo. Getting out of the baseband, how is that different from the other businesses you are staying in . That is a business that required incredible investment. We were not able to get as much revenue as we wanted. So we are going to wear our core strengths come to bear. Which also require a lot of investment but there is more upside as far as margin . We also have a market leadership in those businesses and it has allowed us to work on them market leadership and driving to new areas. Is a better volume which you get better yields as a result . It is mind share with customers. We are the goto partner somebody wants to do bluetooth or wifi. To havebles us conversations on how to take those things forward. One of the neat things going on, if you have companies doing specific development for their company, not just buying routers from cisco, but deciding they can make a router assuming theres is better off the shelf, chips like yours. The Network Businesses going so fast these days. You seeing the traditional box makers get incremental business. The Large Data Center guys like google or facebook or Something Like that, do custom devices so they can really work on their specific workload. I have such a Large Data Center need. I do more . Productspecific stuff. There are huge buildings full of servers and they only run a couple of applications. Or just se lurch they just do search or just do social networking. Are those decisions being driven by issues of cost efficiency and power or is it about performance . It is both plug power power is an increasing factor in data centers. The these tissue and causes the article cost. They consume a whole hydroelectric howard m to run of the sings power down just to run one of these things. Our big focus is how do you reduce the power and increase the capabilities at the same time. Refer to myself as the carrot top of tv. But you brought something today. This is a really big chip. Larges is an unusually ship and our industry. It has more than a transistor per human on the planet. This is a switch chip. It takes all the data that comes in, reroutes it to you or your home or whatever. It is capable of a million simultaneous netflix or amazon prime of is the internet, switching all that data simultaneously. This kind of chip will go in all the large mega center guys, all the guys who stream movies, who implement search. That, forproject out five years from now, we will have more singlefocused data centers or more of this Amazon Web Services for any kind of purpose or any kind of company . Both. Kind of thing the that is a mixed enterprise load and they provide outsourcing. We will also see things i facebook or alibaba where they run their own applications. So is not just one application but a really totally but a relatively small set. Thank you very much, scott mcgregor. Dont break it. [laughter] it is just that i am weak. Int is all we have proven bloomberg west today. Thank you. While eric schmidt is out with a new book. Aboutpped by to talk everything from the underapple battle and whether mercer myers can turn things around. Will come back. Welcome back. Ever wonder about the inner workings of google . Now you can get an inside glimpse courtesy of eric schmidt. He just wrote a book called how google works. Sthe book is out now. As schmidt talks about the android versus apple battle in smartphones. If you look at the innovation on the apple side and on the google side, that competition, which i think is the defining fight of the computer industry today, it benefits global, billions of people level. Is a more brutal than it ever was . Yes. Brutally and that the margins are very tough for the operators , for the handset manufacturers and the benefits to the consumer is having profits dropping. In china, there are retail phones unsubsidized. Retaila, there are phones unsubsidized. Those phones are entertainment, education, safety, window on the world. Would it be better if it was more than a duopoly . It is always better to have more competitors, but between apple and google, you see enormous racing. Ask when you talk about brutal competition, how does it work . Amazon is a competitor and a partner. How does that work . As a competitor, they keep us on our toes. But as a partner, they advertise on google for a variety of their products and we were collectively to grow the pie and build the industry as opposed fighting for smaller portions. Amazon is an android user. Apple is a large Google Search mapser and a very tough and some competitor. What about alibaba . Friend or foe . Beenibaba has largely separated from everybody else because they are primarily focused on china. They have done a fantastic job in anticipating the needs of the emerging new class of china. As alibaba extends beyond , what opportunity is there for you . Jack ma is incredibly clever and deserves all the credit he is getting for building one of the great Internet Companies in the world. It remains to be seen how the chinese model moves outside of china. Most of the Chinese Companies have had trouble exiting into other entrants and this is the next great challenge for them. Obviously, we partner them if we can. But are you concerned about his ability to acquire . He has a chinese model but he has an awful lot of money to buy big businesses here. So does google. [laughter] there you go. Do you think you are going to anytime soon . Not going to comment on that. Google is wellpositioned like other companies, like apple and facebook. How do you enter this market, by acquisition or an internal organic expansion . You dont enter new markets. You build fantastic products and that defines the market strategy. We talk about this in the book and jonathan wrote this very clearly. You dont define the market. Beautiful and the products. Think about building an incredible product and changing markets. How Many Companies around the world do it that way . Certainly plenty of new ones that are appearing. Look at what mover did what uber did. They understood every driver and every consumer had a phone and connectedect it their needs, a buyer and a seller, three smartphone oh and fundamentally changing the industry. Or tesla reinventing the automobile. Isevery market, there someone challenging the incumbents and incumbents react by doing their own innovation and leading as well. What product has changed the most, google, facebook, uber . How about the internet . 10 years ago, nobody in our audience was sitting with a mobile phone next to their bed. Accesss ago, internet was largely peoples offices and occasionally at home. This conductivity and mobile revolution has changed everything. Text, text, picture, picture, what does the app say . It only happened in five years. We talked about alibaba, amazon, apple weight. Do you asked weight wait. Do you think that hurts humanity . I have a strong opinion on this. Empowering individuals is the best way to deal with the Strategic Issues we face as a society, as a country, as a globe. Are smart. People human nature is good. Give them the tools and let them run. Does your mom think that . Yes. [laughter] its a fair question. Some people think that a level of humanity has been lost. When you look at technology, some products when people say they dont make them like they used to. What products are they talking about . 10 years ago, there was this huge thing about bowling alone. Everybodys good to be by themselves and would be isolated. Now everybody is with everybody all the time. [laughter] i double with anybody i dont bowl with anybody. Mercer mayer, can she save yahoo . She is the quintessential smart creative. If anybody can save yahoo , she can. She is the best ceo they have had in over a decade. She has clear product vision and understands the kind of product rationality they need to build. Alibaba has been the jewel inside yahoo . Leadership is around products, not around cash ver. Buchanan invest and make money. But what matters is does the hot you can invest in make money. But what matters is does a product make the world better . Google was the chief designer of the single page you mentioned. She is a very talented product is einar. Product designer. And donath and johnson rosenberg, coauthors of a new book. We will have more of that interview next. Chairman whocutive will smith and Jonathan Rosenberg talked about googles culture and its mission to change the world. People actually believe this stuff and we know because we test for it. When we interview, we asked them if they understand what we are trying to do . Do they care about changing the world . It is a lot easier managing a company that is framed that way where you tell people you have to work harder to do this to get this extra set of earnings or whatever. A few set an imaginative model and new get people to push themselves higher, you get it. If culture is that critical to googles success, is it something that you can put a value on . If so, do investors have a clue how . Investors are at the tail end of this process. You set your vision, hire the people, build the product, the product does really well and investors see growth rates and revenue and earnings. They dont care how the formula works as long as it works for the very long term. The model we describe is a generational model. This will work pretty much everywhere. They care about it in as much as some companies have and other companies dont. Dont have what . A successful productive culture. Remainle has managed to. Pretty Innovative Company a lot other Big Companies are having trouble innovating and i wonder how much of that is the product of culture. Google is not first and foremost about revenues and earnings during it is a out innovation. To make innovation occur over and over again. You will notice it has not just been in search. It has been in other internet five form things as well as applications and youtube and now many things through google apps. The reason i bring up the google the revenue figure is, for other companies, it seems to be a size problem. Once you become a certain size, it becomes to becomes difficult to innovate in a transformative way. Internet business and then they run out of good ideas. I dont know how much of that is a function of culture or leadership or management or what. I think you try to slip to ares on small teams that chartered to attack big problems. One of the beings we say in the book one of the things we say in the book is take about 10 asked, not 10 . 10 x, not 10 . Just yesterday, we set down with dennis and brian who says i am going to share what he said. Problem with all of those guys, google, facebook, they are having a party at our house. What do you mean . They are not giving us any revenue share for us to connect up to customers. We pay all the network. The telco operators worldwide. And they are having a fantastic already without bringing any drinks or food to the party. Worldis saying, sure, the you want the world to be connected, but you were not doing anything to help that. On the contrary. We are building balloons that will allow people all over the world who currently dont have Internet Access to be able to get online and they will be doing it on smartphones they never had before. Both the roads and mcdonalds and the franchises to make that happen. These are partners that we need. The mobile revolution is driving because of applications like google and facebook and others that drive the revenue. All of the telcos are now seeing fantastic wireless data growth. And jonathandt rosenberg earlier today. Lets get a check of your top headlines. Mark, what have you got for us today . President obama says the world must reject the cancer of violent extremism. The president said terrorist groups like Islamic State must be eliminated. The president also challenged u. N. Member states stand up to russias aggression in ukraine. Saba is accused of doctoring timesheets and has agreed to pay 7. 5 million in fraud allegations. Final game is in question because of rain forecasted in the area. Paidcould mean fans who big money for tickets will be out of luck. Over 2600. A game since seat geek started tracking this. What else . International aid agencies say massive amounts of supplies and Additional Health workers are needed in south africa, what in west africa, excuse me. To one of the coauthors, brendan greeley. I will see you at the top of the hour. Thanks. We will be right back when bloomberg west returns. The massive online course starter has announced 35 million in new funding around drive capital. With google self driving car. One of the interesting things i read, with all the education you have, you dont think you could get a job at google today. I could not get a job at google today. Is this what impart what inspired udacity, the fact that you could not get a job at google . Yes. I always believed you learn by doing. I want to learn how to start a company so i started one. I wanted to learn how to build a self driving car, so i built one. I dont go to school to hear a professor talk about it. You have done so many cool things in your career and at google. Why leave a great job at google to focus on one of the hardest problems in the world. Education . The mission of being able to educate people is the biggest thing i can imagine. If i ask myself how do we change we had to admit the number one thing that matters in the world is us, the evil. And it the people. And empowering people is a basic human right. We have to have a constitutional amendment that says we have a right to education. Dont miss my interview coming this fall on studio 1. 0. 1992, richard case told his staff to find a job and did it with three characteristics, smarts, expletive, and who does not piss off other people. The cricket pitches. It is a great story and one well told this week. The road from india to Silicon Valley and has been an interesting story. Ed has to be an amazing moment to return to india as the ceo. What do you think is going through satyas mind right now . I think he is thinking about inspiring people in india. Role models have from hollywood and from the cricket team and now they are ceos and entrepreneurs. I think they are aware that he is a role model for the entire country. I am sure he is thinking about that. Something in particular that indian executives are bringing into the world of technology that is unique or cultural to growing up in india . I think it is the underdog kelly. It is not often that you see people at the top of the world. But is becoming more and more common. Being humble, being the underdog serves us well. Seet is interesting to across technology a lot of tech people started in india and grew up there. I just wonder if theres something about, that is unique with that background that they are bringing to those positions. It is very competitive. The population makes it extremely competitive to get into engineering or medicine. We are used to competing with lots and lots of people. I think the hard work that is required to compete, i think we bring it to jobs and technology. You were at microsoft for a long time. It is a Much Bigger Company than it was 15 or 20 years ago. Are the particular characteristics that satya has them rings about the brings about the infamously despair parts of the culture . Yes. Hes fanned the business side as well as the cap ologies side. He has amazing emotional qualities. But those things together and i think he is the right person for microsoft right now. How is his cricket game . You know [laughter] that does not sound good. [laughter] i think he is a little out of practice. Presumably, he has other things to work on. Thank you very much. They famously played some tricky games where satya has not shown the very best skills. We will be following his trip every step of the way. It is time now for the b west byte. 17 months was a duration that ron johnson had at daisy payne. To he is reportedly trying make a comeback with a high and Delivery Service for gadgets. He has recruited a couple of apple executives for realtime delivery of hedges. He is an intriguing guy. He got a lot of credit for what he did at target to make it the dominant retailer that it is and then the apple stores were under his wing and he got a lot of credit for that as well. Miggy decks are on the board of apple also gets credit. Famous cap executive. Ok. Anything i can bend or break . I am going to hide everything right now. Thank you. Watching you all for this edition of bloomberg west. We will see you later. From bloomberg World Headquarters in new york, this is bottom line the intersection of business and economics with a main street perspective. Today, president obama lays out a tougher strategy against extremism. Then we look after the u. S. Governments response to the ebola outbreak. An official discusses the outlook for a climate deal. To our viewers here in the u. S. And those of you joining us from around the world, welcome. We have full coverage of the stocks and stories making ad