Chevy, its volt . Lets go to apple. M. I. T. s john leonard. You see technology for doing very precise localization in mapping. Some of the sort of parts of this whats involved in the google car. So its a different sort of set of techniques and skills than sort of the traditional detroit auto making industry. Tim higgins, i love i didnt think about this but then i saw it. Oh, yeah. Tim higgins came from detroit. You come here to cover apple. What are the similarities between these companies . For one thing apple is a Global Company with a lot of cash. Costs, about 1 billion for a new car to be created. It costs 1 billion to build a new car . Generally speaking. Its an expensive timeconsuming process. So apple has a lot of money, 178 billion. So not short of cash. Theyve got Global Operations used to doing supply Chain Management around the world, used to doing industrial design. Used to dealing with retail network. So they have a lot of things in place. That said, designing and building cars is very complicated. Something that trips up even long experienced automakers with regulations and safety and marketing. Its a very long lead time for developing a car. Lets talk about the r d spending those companies do. They spend boat loads of money on top of containerships full of money. The history of knowledge that theyve built up. I guess its the question is there an accumulated bit of knowledge, or is it a calcified bureaucracy that thinks about the way they do things as opposed to a blank sheet of paper . Silicon valley feels frustration when they deal with automakers. Guys in detroit say theres a reason why were so slow. Some has to do with safety and regulations and the challenges of putting a product on the road where peoples lives are going to be in jeopardy. Is it about the way the cars are made, though . Theyre wrestling with Union Contracts and existing factories and relationships with dealers . Because theyve got to figure out what to put in their pipeline as to what to put on the road. Exactly. They have a lot of legacy issues. Teslas emergence, you can say what you will about their Business Model, but they have created an interest in the auto space from new players who have said, look at the challenges in the past, but look as these new entrants. I think thats where some of the excitement is coming from. John, when you look at the excitement what is it that you feel like is right there ready to be improved upon the most . Is it battery, the duration of the battery . Is it selfdriving aspects or road awareness . I think its safety. I think that the number of lives lost to traffic accidents over 30,000 per year in the u. S. Alone and 1 Million Worldwide is just a tragedy. I think that with the better sensors and Artificial Intelligence coming online, we should have the capability to radically reduce accidents. So i think that is the thing thats really exciting about what can happen now. Safety is a really great thing to talk about, but apple google is probably also looking at what the user is doing with that time when theyre driving. These are companies who want to create a business where your digital life is at the center of their devices. Right now when youre driving a car, to his point, the safety is important. So if youre pushing a product that allows folks while theyre in the car to be in digital safety, that opens up a whole new marketplace for commerce. Well, the horrible irony is the Company Responsible for more techdriving accidents, giving people devices in their hands while they are driving, are now looking at cars. I also wonder if there is a different sort of pace of innovation, when youre safely aside from both you witness what goes on in detroit, you see the Engineering Centers here. Is there a different pace of innovation in Silicon Valley . I think so. Ive been told that the typical Silicon Valley investor wants a return in 18 months or 24 months. Thats a rapid turn around. Interesting, google and building their prototype cars, theyve said they want to work with the sort of detroit ecosystem. So theres an acknowledgment that it could be winwin. Theres parts Silicon Valley could be good at and eastern u. S. Industries would be good at, and they could come together. Bloombergs tim higgins and m. I. T. s john leonard. Meanwhile, apple is being sued by a123 systems for poaching employees. I spoke about how critical Battery Technology is with author of the powerhouse, steve levine, one of the foremost voices of batteries. The battery was invented in 1799. The architecture has not changed much since then. So much of that time we werent really trying to create the super battery for the last few years we have been. The question today is which way is apple going . Is it going the gm route . Will it try to create the super battery . Or is it going to go the tesla route, go off the shelf . Among the interesting things about apple going into the business, is apple the business that its typically relied on outsource component manufacturer taking the best that other companies are making, the best chips made by qualcomm or taking the best batteries made by a panasonic and assembling them together in a way the software performs the magic. Theyve changed it a bit. Do you get a sense that they are going to go for their own design and even maybe manufacture the battery . The latter part we dont know whether they will manufacture. But yes the signs are that they are trying to inhouse create design the battery. And the car around it is very exciting because already i have been looking at that race between tesla and gm, the 200mile car as the Inflection Point. Thats the proving ground. That brings on the electric age. Now you have apple coming in and this is critical mass. Was gm going to be able to match tesla . Apple can. I dont trade stocks now, but when i did that for living, i one time decided ive got to find some other crazy bet against something thats not going to work. Theres got to be a publicly traded Battery Company that my firm is not already short. I did a search and found were already short every single one and every single one worked out to be a pie in the sky promise or a stock fraud outright. Is that the nature of this battery business . That it is a pie in the sky dream and its going to limit we look at teslas car sales you can see the limitations of the market. Theyre selling more cars than they ever have before but its not a big number. And in a lot of markets its already slowing down. Im wondering if the better Battery Technology is never going to work out. Like perpetual motion or something. Batteries have been a special province of exaggerators and hucksters. This is the Thomas Edison said this back in the 1920s. 100 years later its the same. In the book there is an Inflection Point where pursuing everyone is pursuing the race and at one point everyone including me finds out that someone has been deceiving everyone the whole time. But i think that there are real players in the race that tesla and gm and now apple have put well, two of them. And it seems apple, too, have put their chips down on the battery, on the electric car, i think shows that its authentic, that it is real. That was steve levine the author of the powerhouse. Check it out. Now, Mark Zuckerberg. Up next. The topic connecting the world through internet. Org. Im cory johnson and this is the best of bloomberg west. Facebook Ceo Mark Zuckerberg has revolutionized the way the world communicates, and now he wants to connect the next billion people. To provide free basic mobile Internet Service to poor areas all around the world. The app has been rolled out in certain african countries as well as india and colombia. Emily chang sat down with mark for an exclusive interview. It is one of the most populous countries in the world. The internet is how we connect to the modern world. But today, unfortunately worldwide only a little more than a third of people have any access to the internet at all. In india, the numbers are even more dire. Of 1. 1 billion people, only 15 are online. And so we find Mark Zuckerberg visiting students in a village on the outskirts of new delhi. The founder of facebook revolutionized how people communicate. Now he has an even more ambitious goal. We believe that connecting everyone in the world is one of the great challenges of our generation. And thats why were happy to play whatever small part in that that we can. Zuckerberg calls his plan to wire the world internet. Org. And he has been spreading the word from india to indonesia. We launched internet. Org. Its our effort with a handful of other technologies to bring affordable basic services to everyone in the world. From the lips of the guy who created facebook, it sounds possible. But his team admits its been far from easy. Its challenging because there are Market Dynamics in every market that are different. You go to these villages and you ask them do you want the internet . And people are like, why would i want the internet . You ask them if they want facebook, and they are like, absolutely. Theyve been crisscrossing the globe. How do you think having the internet has changed peoples lives . Their mission to convince mobile carriers to offer a limited version of the internet for free. Heres how it works. Facebook Custom Building a website for each partner country. The site links weather, health jobs, resources, and finally to facebook, all at zero cost. The idea is that users get hooked and buy it when the period ends. Creating new carriers and new users for facebook. Why call it dot org . Is this a nonprofit . Is this charity . If we were primarily focused on profits, the reasonable thing to do would focus on the first billion people. You said connectivity is a human right. You want to do good things. Why not give access to the complete access . The model that we consider this to be most similar to is 911 in the u. S. So even if you havent paid for a phone plan, you can always dial 911. Tim wu is a professor at Columbia University and a Public Policy advocate. Why would the company want to give a product away for free . They think they can build the worlds most powerful device for accessing hearts and minds of the human race and sell that to somebody else. And facebook is just one of many internet giants in an epic global battle to win heart and mind share. We have about 7 billion people on the planet. Whoever gets the biggest share of that might be expected to dominate the future of media period. One, two, three. Not to be dominated, google has project loon, a fleet of High Altitude balloons, beaming the internet down to earth. A new Company Called oneweb and spacexs elon musk both recently announced plans to launch low orbit satellites that will carry the internet everywhere. And facebook has some moon shots of its own led by a Mad Scientist of sorts, yael maguire. Laser communications is a new frontier where you can get much higher data rates than typically done. In a Southern California lab still being built, mcguire and a team of former nasa engineers are developing lasers that will send the internet to earth in a beam of light. For all of the developed markets that were looking at trying to improve access, we want to use Laser Communications everywhere. Maguire plans to put lasers inside unmanned aerial vehicles, solarpowered planes that continuously circle above the earth. The world record is around two weeks. We need to figure out how to make these planes last for months to years at a time. They dont rely on cell towers or any earthbased infrastructure. Mcguire says connectivity from the sky is still three to five years out for internet. Org but expects to test the first facebook drone later this year. Once you get people connected, once you have the power to reach them, how do you use that power . For us its really all about enabling people. Whatever that means, in india and indonesia, zuckerbergs plan seems to be working. Carriers in both countries recently announced partnerships giving millions of new people access to the internet and to facebook. How will you judge that this has been a success . If we can make it to that Free Basic Services are available in 100 or more countries, then that is going to be a huge win for all of these people who will now have access to new information on jobs and health care and education. You said you hoped for more than 1 billion people by 2020. Do you think you can get there . Well see. Whether its the internet or the internet according to facebook, its the kind of grand plan you can only expect from Mark Zuckerberg. The real question is can he change the world not once but twice . Emily chang, bloomberg, menlo park, california. Heres more of emilys interview, this time focusing on china where facebook has been officially blocked since 2009. Take a listen. Your mandarin has gotten pretty good. Whats the likelihood internet. Org could help you get back into china, get facebook back into china . I dont know. Thats not something that were focused on right now with internet. Org. Its right now there are countries where they reach out to us and say, connectivity is a national priority. And a lot of people in our country use facebook. And if theres a way to Work Together to do that. For example, in malaysia, i was meeting with one of the leaders in the government there, and making it so that everyone in their country is connected is one of their top national priorities. Similar to indonesia. India i think as well. Theres a lot of priority around making sure everyone can get connected. So it makes sense for us to try to connect countries who are reaching out to us. You can catch more of the interview online. Check out studio 1. 0 airing thursday night on bloomberg tv. Is the nsa secretly installing spyware on your desktop computer . A shocking new report about hard drive hacking is out. Well tell you about that next. Im cory johnson. This is the best of bloomberg west. Nsa spyware may be hidden in hard drives around the world. Researchers in moscow base kasperski found spyware made by Western Digital, toshiba, and ibm, would give the nsa the ability to eavesdrop on the majority of the worlds computers. I spoke with stuart mcclure, the ceo of the cyber firm cylance. No matter what you do, even if you can find it and its made to avoid detection, you can try to wipe it but it will come right back. Thats usually planted at the manufacturers. This is not the first time the industry has seen this kind of a type of attack inside firmware. Its simply the complication and sophistication of this type of attack that gives it some merit to talk about. And its also widely spread. Now, getting the leading manufacturers at Western Digital or somewhere else its right across the industry. Every major manufacturer disk drive, according to this report, is infected by this software. We dont know the full scope quite yet, but the indications are that there are real opportunities with these hard drive manufacturers to implant this kind of stuff in the firmware. Whether or not it was preproduction or postproduction is a little bit up in the air, and i dont know if we will know that quite yet. That needs to be fleshed out quite a bit and investigated. What we do know is the ability to get on to these systems is really quite trivial. And then to stay there with persistence is quite trivial. So it becomes really easy for any adversary, whether a nationstate or a simple bad guy cyber criminal to do whatever they want to on the box. So what kinds of things do you think the nsa can pick up with a hack such as this as opposed to the data hacks that we know about in the past . Well, and it could be nsa, it could be even Israeli Defense as well. They have similar targets in of course middle east and asia that nsa or other organizations are. And in terms of attribution its very, very difficult to give smoking gun proof back to the people that are on the keyboard. But certainly possible highly possible and probable that someone like nsa is a part of this. We just dont know definitively yet. In terms of what they can do geez, darn near anything. They could pretend to be the user of the computer. They could infect it in such a way where they could capture screen shots, follow your video. They could capture all your passwords and become you on your internet, take your persona. They could infect your access to your bank account. You name it. It really is just up to the creativity of the adversary. So the adversary, again, they dont say who it was. And i say the nsa because reuters reported that and lets go to the gets when it comes to reporting on cyber crime. At least my strong opinion. But the report out of russia listed the countries most affected. And yes it listed russia. But it went on to list syria china, mali, yemen, algeria, and afghanistan. Those seem to be in particular targets of the u. S. Is there a notion about what kinds of things they may be after because this is a hard drive attack that tells you maybe these arent adversaries who are keeping data stored at Amazon Web Services or something . They definitely wanted to surveil the targets. So it wasnt a destructive attack like sony where they wanted to humiliate and terrorize and destroy. They simply wanted to observe, surveil, understand what theyre doing. And allow them to stay one or two steps ahead of what they perceive as the adversary, which is the victim in these cases. And the countries youre absolutely right. Theyve long been held target countries for the u. S. As well as israel and neighboring countries that are friendly. So it could easily be those two entities for sure. Lets talk about what this means for business. When it comes to manufacturers its a little bit different than selling Safe Software or microsoft saying to a customer in germany, hey, host your data with us. So what is the business effect on the company that sells these devices which we now know to be infected . Well, thats a really good question because i dont think weve really ever seen this example in our industry before. Weve certainly seen adversaries hacking into Companies Like lenovo and others and backdooring the actual buys the bootable part of the computer to put their own stuff in here but not to be coming from the manufacturers themselves. If that is truly whats happening i think weve got a really big problem on our hand. That was stuart mcclure, ceo of cylance. Up next making money and doing good. Socially responsible startups are all the rage here in techland. Well talk with John Battelle about his efforts to highlight those feelgood companies next. You are watching bloomberg west, where we focus on innovation, technology, and the future of business. I am cory johnson. Here are some stories that made headlines. Realty web site zillow, 2. 5 billion in stocks. The new combined Company Called zillow group. 350 billion jobs are being cut in an attempt to integrate operations. Carnegie mellon, the topranked Technology Company in the nation apparently has a Technology Problem on its hands. It mistakenly sent out 800 letters, the problem is the program only accepts 100 a year. Carnegie mellon now says its reviewing its notification process. We now know who plunked down 300,000 for dinner in las vegas. Vice ceo shane smith. Smith has been on a lucky gambling run. At least he was then, so he chose to treat a dozen friends for a meal at bellagios prime steakhouse during the electronics show. Maybe spending 25 grand a head on dinner may not be the bastion of social responsibility, but here in Silicon Valley, its all the rage from googles do no evil pledge to facebooks pledge. Making money isnt enough any more. Tech companies have to do good as well. Start with a social Impact Mission statement often before a business plan. But is this dogoodiness just p. R. Or is it something more . I talked to John Battelle, ceo of newco. A lot of Companies Start with a group of people getting together and saying wouldnt it be cool if dot dot dot and then they fill in the blanks with what would be great if this sort of positive change occurred. Wouldnt it be cool if my database works better . Well, that could create some kind of positive change in the world. I think framing it as positive change is something that is a significant trend occurring not only in the valley but across the world. People are saying we can organize ourselves in this thing called a company to create some kind of good in the world. And i think the Large Companies look facebook, google, and others are leading the way and a lot of the founders are getting in on the game. Silicon valley is the subject of a show it pokes amazing fun. The next day we had this long conversation. Then i see this clip, the opening scene of the opening show. Take a look at this. A few days ago when we were sitting down with barack obama i said, ok, were making the world a better place. Constructing elegant hierarchies for maximum code reusing sensibility. Elegant hierarchies of making the world a better place. Whats a Serious Company thats focused on this and when is it just i think thats one of the reason that we need a brand like newco. Because if you dont have a brand thats all about identifying, celebrating these companies and connecting them theres no continuity where you can call people on their b. S. If theyre not living up to what they say theyre doing. I think theres an opportunity to go beyond empty promises of Mission Statements and start to tell the stories of companies that are actually creating that change in the world and own it. We see Venture Capital funds also talking about this and investing along those lines. And i would have expected this to develop as such. Pension plans would sort of say, hey, we need you in the same they that theyve suggested the divesting of companies contributing to Climate Change saying you need to invest in companies that lead to social impact or something. But it doesnt seem to be led by that. The social Impact Investing community has something of a nomenclature problem in that theyre afraid if too many about social impact, then were going to get lapped on the profits. Companies who dont have a social impact agenda are going to beat the companies that do because they have better profits, better earnings, you know, a better bottom line. I think over time and with the information economy were getting to the point where we understand the total value of a company not just its profit. And that includes the good it does in the world. Marc benioff made a very important point of this. Yelp is doing things more quietly but both Companies Giving a portion of their operating profits to charity also insisting that their employees work in volunteer organizations. Is that enough, or are you talking about Something Different . Thats part of it. If you look at organizations they started with a Mission Statement about creating positive change. Salesforce wanted to the end of software because they thought that was inefficient and there was a better way of doing it. And yelp had a mission about finding information in real time. And twitter is the same way. Building social good and impact into its actual building and they talked about that last year. How so . So the twitter for good is their approach to corporate philanthropy. Theyve really changed the traditional approach to where they built the program where they partner with mid market in san francisco. Its a wellknown sort of tenderloin depressed area of san francisco. Theyre partnering with a that actual City District in the actual headquarters of twitter and integrating employees into that program, as opposed to just giving money theyre integrating it into the workplace. That was newco ceo John Battelle. Well, can technology fix some of these ageold problems, like getting pot holes filled or garbage picked up . Well tell you about an experiment in philly next. This is the best of bloomberg west. I am cory johnson. The last big tech no innovation to come out of philadelphia may have been tenderized meat. Until now the city of brotherly love is now teaming up with sales force to revamp its 311 system to make it easier for residents to get easier services. Can this spread to other cities . What does this really do on the ground level . Salesforces Vice President vivek kundra, former chief information officer, and i talked about this. Whats so exciting about the city of philadelphia is that the mayor and his leadership have recognized that three big things are going on. The first one is that Companies Like uber and air bnb have fundamentally reset citizen expectations in terms of what they want their government to look like as far as interactions are concerned. Second, theres this third wave of computing with mobile social, cloud, and now analytics thats disrupting every Business Model including the government. And third, and the most profound, is the fact that political leaders are recognizing that they need to create a more open, transparent, and participatory government. What theyve been able to do with salesforce is engage citizens, shift power to be able to create communities, so the community cloud, where citizens are selforganizing, and addressing some of the toughest problems the city has around crime and health care and education. Whats the pushback like from the cities that are not jumping to do this . I also look at a Company Called accela, based out here in the bay area, that is also similarly trying to go around these issues of permitting, county level, city level. Its a ground war to fight to get these deals done. But the results from their Success Stories are fairly amazing about how much faster things are delivered. I dont understand what the pushback is from the cities. What you have is essentially the old guard and literally a set of vendors that were born in the 1960s that continue to dominate government i. T. That is one of the reasons when youre dealing with the government you have to wait in a long line, hold on the phone, or submit a threepart paper form. We talk a lot about how when youre dealing with the government, theres a form for that. When youre dealing with the consumer web, theres an app for that. So it is the shift to cloud social mobile analytics that is beginning to happen. And the city of philadelphia represents the shining example of where a mirror comes in makes it a priorities and cracks down on wasteful i. T. Spending. Whats the one service that a city offers where you sort of show the best benefit of doing something on the cloud, doing something online fastest improves the delivery of that service . Lets look at some of the challenges in the eastern seaboard right now around the snowstorm. So the ability to be able to connect with your citizens in a whole new way to let them know where the snow plows are on a realtime basis to make sure that theyre collecting whether its trash or filling pot holes on a realtime basis. But more importantly, what if city governments could forecast and predict some of these problems theyre getting ahead of those issues and theyre welcoming their citizens into a Better Future . In the past the government has been very much around responding to crises instead of getting ahead of the problems that these cities have. And thats so exciting. And another big area is around entrepreneurship. Why not demystify the whole process of permitting and licensing to be able to abstract the levels of government whether federal, state, or local, instead of having to apply at the local level and then the state level and then at the federal level . And were beginning to see this happen not just in the United States but in japan, in australia, and in europe. And that is why youre seeing this oneway street in terms of acceleration as far as the technology being adopted across the world. That was salesforce executive Vice President vivek kundra. How can Tech Companies cash in on space . Nasas is in town giving tips. Well talk to an astronaut who just got back to the space station next. This is the best of bloomberg west. I am cory johnson. Nasa brings space to Silicon Valley. Astronauts and executives are meeting with a handful of companies here on earth. More specifically here in the bay area. And theyre promoting Research Opportunities in space. The campaign is called destination station. Yes, it rhymes. The companies are meeting with twitter, google, and facebook. For more i spoke with reid wiseman, an astronaut who just returned from a sixmonth stay where he was tweeting. He even posted the very first vine video from space. Take a look. For twitter, the outreach portion is amazing. It allows us to bring the science and also the view of the space station into everyones living room on to their phones and tablets, so that brings them closer. I dont know what they can necessarily test but how they can explore this social outreach from space is great. We had a lot of success when i was up there. For google, theyre doing all sorts of projects. When you take gravity out of the equation weird things happen. Is it all about gravity or are there other sorts of unique environments presented in the International Space station besides weightlessness . Definitely. You have a different radiation environment than you do on the earth. But really the big thing is the microgravity environment and what is going on. Not only in like microgravity. Not zero gravity. Not necessarily but its about 0. 000 because its almost there. Youre still in orbit. And you have a slight deceleration. So youre never exactly at zero gravity. I should have had the video. Zero gflight out of cape canaveral. And while i was there, there was supposed to be a launch. And ive yet to see a rocket launch and it was scrubbed. We do this quite off. Theres so many delays. What happens during those kinds of delays . Whats going on that sort of put every delay into one basket. Whats the process . It could be anything. It could be like just a few months ago, we had a ship come into the safety zone, so we had to delay a launch and it got moved to the next day. Then theres technical things that could be going on. Valves not opening. Everything is tested. But once you finally have the rocket assembled on the pad and fueled up, anything that goes wrong, safety is paramount. So any little glitch and theyre going to wait and see. I visited with the spacex factory in hawthorne, california and was struck with this notion that really technology launching rockets hasnt changed since duct tape in the 1960s. What is most important right now to the new sort of private space race . I work at nasa. To me it seems like any way we can reduce complexity, just reducing the complexity and building a more robust rocket i thought that was the opposite. I thought they werent really that complex. One of the reasons theyre still using the old i Just Launched on a russian rocket, and it is simple. But with 3d printing and modern manufacturing processing, you can simplify the tough parts and make them more robust, much more resistant to debris in the fuel lines. With all of that, yes, they were simple in the 1960s but were even simplifying the complex parts now. So simplifying the path that fuel must the high speed turbo punches, making their engines more robust. Is that about advances in material science as well . Not just 3d design but also the stuff its made out of . Definitely. Different ways to do the friction welding now. When you can take a complex part and put it in a 3d printer and make it simple it improves reliability all the way around. Then theres mars. Lets go. Whats that process like . Picking people . Coming up with a plan . For us, its basically business as usual. Once we really have orion built, we just did a test flight in november. Well do another one in two years. Once we get through that process well start picking the crew and training them on the rocket. How expensive is that going to be . Pretty expensive but well worth it. Why is it worth it . Any time you can take humans and put them farther than theyve been before its going to be difficult. What kind of research were going to do there, you start to discover all sorts of different avenues. There is criticism of mars as a mission that scientifically its not the place where the most information will be gathered. It might be exciting. Politicians put a lot of attention to it, but there may be experiments that just can be done in a much closer orbit. There is criticism of mars as a mission. There may be experiments and things that could have done so much more than what we will learn. Theres going to be criticism of any Major Program like this. But just sending a human to mars, on that 500day journey where were going from one planet to another in our solar system, and once we get there the amount that we can learn if you give me a shovel and my mind and a bunch of Mission Controllers back in houston, it will change our entire understanding of the solar system, i guarantee it. That was astronaut reid wiseman. It wasnt long ago that samsung was the dominant company in china but not now. We are going to look at how samsung has fallen so far so fast in china next. This is the best of bloomberg west. I am cory johnson. Samsungs dominance in china is over. Idc says xiaomi took over the spot. Their sales tripled and samsung fell by 22 . Second place . In their dreams. They are in fifth place behind apple and others. What happened . Heres my chat with idc chief crawford del prete. It reflects an amazing fall. If you go back to 2012 every single quarter from the Fourth Quarter to the first of 2014 samsung was the leading supplier in china. And basically its fallen apart. What theyre seeing is now is that youve got this upstart in xiaome, Market Dynamics where some of the other indiginous suppliers used to sell what we in the u. S. Call carrier bundles. So chinalabeled mobile phone. Those folks are now selling direct and theyre getting a lot more sophisticated with their product designs. And then of course as you pointed out, apple is absolutely moved in and moved in fast. When i look at the rise of xiaomi in particular, i look at a company that decided to have a fairly full featured phone but also just slash any notion of profit and that allows them to get market share. So xiaomi is fascinating because they load up historicically will load up toptier processors, with memory. And its also a pretty beautiful industrial design. If youve been there and seen the product. They really want to try to make money on their version of androids. A little bit like the jeff bezos model but hasnt shown up on the kindle fire. Make money on accessories and apps and other kinds of services that they can offer. I will also say theres an authenticity about the brand where you dont see that with samsung. Samsung is sort of the big monolith moving forward with lots of products but not a lot of authenticity and authentic voice people can latch on to there. Yet samsung have talked about lowering the number of phones they offer and substantially theyll still make a ton of different kinds of phones, but they were up over 100 varieties of phones just over a year ago. We saw this in the pc world too. I can remember talking to michael dell about how they have to get rid of the number of skews because people just want one iconic product. That is true to some degree, but theres also this idea that the product you create have to be something that people are craving. And thats what samsung is having trouble tapping into and xiaomi has tapped into. Samsung has trouble with features getting in the way. People are really excited about it. Talking to michael dell. I got the name drop. There you go. Should we be talking about market share profit share . Apple you say that youve got all these competitors going down market, down the margin scales down maybe sometimes less than single digit margins. Apple isnt doing that. Apple is making boat loads of money with their very best products over there. Heres the thing. We should be talking about profit share, and thats the thing were spending more and more time analyzing. But the profit share battle is going to be really intense because theres only so many of these highend customers. And apple is now that aspirational brand. And theres a lot of underserved consumers in china that to spend 600 on a phone is a tremendous amount of money. And xiaomi is now starting to do some interesting things. Theyre swapping out qualcomm and putting in media tech for the main processor because they wanted to start to address the needs of the next tier and the tier below that. That was idcs crawford del prete. That does it for this edition of the best of bloomberg west. You can watch us monday through friday, see you later. Hi. Good morning. Tonight on titans at the table this place is gorgeous. I will be chatting with businessman turned environmental activist, tom steyer. He was born and raised in the Financial Capital of the u. S. , new york city, but chose to open his company in san francisco. He founded the company with 8 million, and by the time he stepped down, he turned the initial investment into 30 billion, making it the fourthlargest hedge fund in the world