Transcripts For BLOOMBERG Bloomberg Technology 20170926

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senators lisa murkowski and susan collins. the supreme court has canceled arguments set for october 10 in the dispute over president trump's travel ban. the justices requested both sides weigh in by october 5 on how to proceed. the ban expired sunday. it's been replaced by a new policy that impacts eight countries. and the florida keys, officials say the island chain reopens to tourists october 1 after some 25% of homes across the region were destroyed two weeks ago by the hurricanes. global news 24 hours a day powered by more than 2700 journalists and analysts and more than 120 countries. i'm alyssa parenti. this is bloomberg and " bloomberg technology" is next. >> coming up the iphone 8 has been on the market the last few days but suppliers aren't feeling the love. shares have dived for vendors on the supply chain side. we look into what is driving the slump. plus, the food fight is brewing in the product deliveries market. we'll hear from one of the british start-ups and now a board member who will join us to discuss the latest funding. and she became the face of the fight against gender discrimination in sill convalley. ellen powell discusses her new book on the high profile lawsuit and moving the needle under adversity. first to our lead consumer excitement surrounding the release of the iphone 8 and latest versions of the apple watch and apple tv hasn't quite translated to apple suppliers. if you take a look at the bloomberg terminal, you can see how foxconn which assembles the iphone and other apple devices has fallen 10% since apple's new product unveiling earlier his month. other companies have plunged more than 12%. what could be causing the slump? reportedly they tell buyers to delay part of the shipment for iphone 10 devices. joining me in san francisco to discuss, our tech reporter who covers all things apple. analysts are saying iphone 8 orders are substantially lower. we have this report about the iphone 10. what do we make of this? >> comparing apples to apples, very hard to know. haft year they staggered the release of the two items. on one hand they're saying iphone 8 orders are slow and buying is slow and then new report seems to suggest apple is not expecting to ship as many iphone 10's on launch day. it could be that is not reflecting demand. it could be apple trying to constrain supply a little bit to say we have sold out. they may say it is a hot device and build up expectation. they could still also be short of the organic light technology and just can't make enough. >> if indeed the iphone 8 sales aren't going so well so far it could be a good sign. could be a bad sign right for the iphone 10? we don't know. it could mean people are holding out for the iphone 10 or just don't want an iphone at all. >> it is really tea leaves. there is also the idea perhaps some people want to buy an iphone 8 and are going to wait and see the iphone 10. then if they decide it is not the worth $300 they'll buy an iphone 8. the first indication is when we start to see the earnings numbers in this quarter and the subsequent one and see the mix inferred or implied by the average sales price. emily: what do you make of what we're seeing with the suppliers in particular? >> it seems to be this might be some sort of profit taking in the market. people+++ is going to get. an indication of a little bit of weakness --. emily: the apple tv, the watch, do we know yet? >> no. the moment, the only moment we will know if the apple watch has really become significant is when they start breaking out the sales. there is no indication they'll do that yet. these products are far smaller in terms of revenue drivers than apple's iphone. emily: absolutely. what are analysts saying about whether the iphone 10 is going to cannibalize sales of the iphone 8? >> or the other way around. everybody wants them to be selling the higher model, iphone 10. it's the big problem. right? often when you go into these events or these new product launches there's always a slight skepticism in the market or as the apple bubble bursts are people still going to keep buying these products? and history tends to show they do. so maybe this $999 price point will change it but that is what people are risking right now. hamilton right now saying they would buy right now because of the declines in recent weeks. emily: interesting. we'll talk about this a little more. alex west, our bloomberg tech reporter. thank you so much. after paying $800 for an iphone 8 the last thing you might want to do is take it apart. that is exactly what my next guest did to get a look at the hardware inside. joining me now to tell us what he found, principal analyst for ihs market. wayne, you have looked inside every iphone since the beginning of the iphone. what struck you about the iphone 8? what is different from the predecessors? >> hi, emily. yes. we have had about 10 years of experience looking into the design of the iphone. i think what the iphone 8 shows us is that there has been sort of an inflection shun point in the design evolution of the iphone. we've seen it with iphone 7 and now 8. we're seeing a lot more, newer innovations, a lot more costs put into place to justify some of the new features. so, for example, the iphone 8 plus which we will release the tear down analysis for has most likely the highest cost we've seen yet. you can see a lot of the contents, the monetary content and the components going into things such as memory, computing, camera, which yields a very good camera experience on the iphone 8 plus. so we're seeing this sort of evolution toward more and more features. nd i think it's a -- they're setting up for the next big jump in innovation with the iphone 10 coming out in about a month. emily: in your findings you talk about the incremental memory upgrades but said that this phone is different. how so? wayne: yeah. so if you look at the history of the iphone, and there is a period where iphone memory, base memory really hasn't changed. it stayed about 16 gigabytes for seven years. and the reason for that is really how you look inside apple's monday tiesation strategy -- monetization strategy. they sell it so the next incremental increase would be 32, 64, but incurs a hundred dollar premium. variable costs to apple are probably less than 22% of that. that has been their profit engine so to speak. what happened over the past -- go ahead. emily: there's been talk about apple having handicapped the iphone with respect to future connectivityy. can you expand on that? >> oh, ok. yeah. that is my word coming back to bite me. i was mentioning how apple is using dual sourcing the lte modem one from intel and the other from qualcomm. the qualcomm chip set in the iphone 8 is actually a cap 16 or gigabyte lte. the intel version is only about cap 12. in order to compensate for the two and kind of match the is such e the design that it doesn't take full advantage of the qualcomm chip. an analogy would be qualcomm based iphones give you 10 lanes of highway traffic but the rf only allows 8 of that to be operational. that is the sort of handicap we're seeing. emily: so the iphone 10 is coming. what are you going to be looking at most closely under the hood of the iphone 10 as compared to the 8? wayne: the iphone 10, there is a big emphasis on the display because that is something that is in very tight demand. these displays are something of a new, a novelty to apple. they've used it in the apple watch but never implemented it in a smartphone. for a display that large and that custom they only have one supplier today which is samsung. so we'll be looking very closely as to how they control that cost and manage to implement it on the iphone 10. and also the other componentary is quite interesting. that essentially is a -- the fruits of the purchase of the technology behind the microsoft x box connects and what they've done is basically shrunk the connects down to something so small it fits on top of the phone that will enable facial recognition and so forth. there is a lot of great technology to take a look at. emily: we'll be watching for your report on that wayne lam principal analyst of ihs market thank you so much for joining us. coming up food delivery, disclosed a new funding route pushing them to become one of the most valuable start-ups in the uk. we'll hear from an early investor that increased their stake next. and check us out at bloomberg tech tv week days 5:00 p.m. in new york, 2:00 in san francisco. this is bloomberg. ♪ emily: the new c.e.o. is already demonstrating a more diplomatic approach than his predecessor with the first big challenge the revoking of uber's license in london. in an open letter he said you have my commitment we will work things with london to make things work right and keep the great city working safely. they now have more than 750,000 on a petition. in the meantime uber rival lyft is looking to expand in london according to "the financial times." well, meal delivery service is now one of the most valuable start-ups in the u.k. after raising $385 million in the latest funding round and plans to use the infusion to improve logistics and spread to new cities. can deliveroo keep growing as it gets more competitive by the day? joining me now partner at index ventures who first invested in deliveroo in 2013. martin sits on the board. you are very confident in the future of the company. $385 is a lot of money. what is it going to be used for? >> first of all i want to say, great day for europe. great day, great home grown european tech company. we first invested in the .ompany that he years ago very humbling -- we are very proud and humbled by what they've achieved in europe. in terms of what the money is going to be used for today, three main things. the irst is the rollout of addition -- the physical kitchen they are using to enable restaurants to open to the new area in a very quick way with zero cap x. it is quite revolutionary in the restaurant business. the second thing is tech and product improvements. getting quite a technical business with a lot of routing algorithms improvements. the third one potentially more expansion. the business today is about 160 cities. we think there are many more to cover. emily: as you say deliveroo has grown substantially but there is skepticism about the food delivery business and the margins. when you have giants like amazon getting into the business how do you see smaller start-ups fairing in this very competitive -- faring in this very competitive world? >> having large companies come into your space kind of validates the size of the market. that is what we're thinking. one of the reasons we're so excited about delivery is really because one, the opportunity. the food takeaway market alone today is about $25 billion. we see them as going well after market which is the restaurant markets about a $400 billion market and more important growth markets about 1.2 trillion. take away market, 25 billion, the grocery market 1.2 trillion in 12 countries -- not even mentioning the u.s. or china or other large markets. it is a very, very large market and we are at the very, very beginning of that. just scratching the surface. that's what is amazing. it's only been four years for the company and this is still the beginning. people are shiftingth behavior and what you are seeing in the product very clearly is that the longer people have been in -- because they are shifting their behavior from going to the supermarket, loading up with groceries and cooking once r twice a week to just using deliveroo to deliver food much more frequently. that is a shift and we believe that is the beginning and why is --.pany emily: one bank did back out of an investment in deliveroo in part because of competition from uber and general skepticism about the space. what is your reaction? >> i can't comment on any specific investor. every investor has their own analysis. investing at this stage, preipo, puts you in a really strong position for the future growth of the business and potentially if you want to go public they are a great anchor investor to have, two of the best in the world. i don't think any investors could have been much better. you know, we are very happy as it happened. emily: as i mentioned earlier, london authorities have revoked uber's license to operate. do you think uber will work its way out of this? what is your reaction? >> it is a bit of a shame and quite disappointing. obviously uber had its challenges but at the same time it is a fantastic product. i think it is offering a lot of economic opportunity to those who didn't have it before. it is a great product for the users. london and ultimately the world are better off having uber in their cities. the one thing i would say is that the transport for london organization have put themselves in a tricky place by monopoly and ng a by not getting new entrants to the market to grow outside. london is one of uber's most rofitable markets. work with uber on solving their issues and also opening the market to more entrants. this is the best for the consumers and the drivers. emily: it will be interesting to see if lyft can make a dent in that market. martin, thank you so much for joining us this evening from london. coming up, a new report says president obama tried to give facebook c.e.o. mark zuckerberg a wakeup call about fake news after the election. details. this is bloomberg. ♪ emily: just last week facebook c.e.o. mark zuckerberg outlined a plan to combat potential interference with elections. it is a far cry from his initial outlook on facebook's role in the 2016 u.s. presidential election after the november results. here is what he said at the time. >> personally, i think the idea that, you know, fake news on facebook of which it is a very the content of influenced the election in any way. i think it's a pretty crazy idea. emily: now "the washington post" is reporting president obama personally reached out to zuckerberg after that interview around that time to make an appeal about the threat of fake news. for more we're joined by our bloomberg tech reporter who covers facebook for us. very in depth "the washington post" story about what was going on behind the scenes at acebook. had some evidence of russian espionage as early as june 2016 but couldn't quite make sense of it. reported it to the f.b.i. what is your reaction to this story? >> well, it is interesting. in august i actually had a conversation with the head of products for newsfeed and he was telling me kind of casually that they were seeing there was some issue with fake news on the platform. but at that time, everyone thought hillary clinton was going to be elected. it wasn't ringing alarm bells at the level it did after the election when people said oh, wait. this may have been a really bigger effect on everyone's way of thinking about these candidates. we realize -- than we realized and the obama conversation, the in depth reporting we saw from "the post" a really great story shows a little bit deeper about how they could have impacted something. emily: do you think president obama has an influence on facebook's response since? sarah: i think a lot of criticism across the board from people saying facebook, you need to recognize you can't be on one han tell advertisers, hey, if you use our ads you can change people's minds and get more latino voters in this state, more women voters in that state. you can't tell advertisers that on one hand and on the other hand say, oh, all the information spread on our platform, there is no way it could have been affecting the election. i think that statement will haunt him over and over until this is solved. we did see a very different zuckerberg last week coming out and taking this much more seriously, saying he doesn't want facebook to be used to subvert democracy. very strong. emily: steve bannon -- there is a report steve bannon tried to infiltrate facebook's hiring process. to what end? sarah: he wanted to figure out according to busby's whether the hiring practices favor people with a liberal persuasion over conservative persuasion. it just goes to show how skeptical people are of facebook as it becomes so much more powerful over all of our lives. they have more than 2 billion users right now, more than half the world's internet connected population is on facebook. they have such a profound impact on the way people share information that people have to be asking questions about it and coming up with their own theories about it like bannon is. >> right. the heat is on. we'll be watching to see how this russian investigation proceeds. sarah frier our bloomberg tech reporter who covers facebook, thank you so much. coming up ellen powell opens up about her very public fight against sexism in silicon valley. we'll hear about the case and the progress or lack thereof for women in texas. 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. that's how you outmaneuver. in hong 11:29 a.m. kong. the latest minutes from the bank of japan show several board members losing confidence about inflation. one said it makes it difficult to normalize monetary policy while another one said 2% should be regarded as a long-term goal not necessarily achievable by 2019. however, almost all the members agreed reaching 2% is vital for japan. the bank of greece plans to start stress tests for the country's four lenders in late february to determine if they'll need fresh capital before the end of the greek bail out program. we're told banks have been asked to send information and results of the tests may be ready by early may. cutting bad loans has become a pressing issue as greece prepares for the post bail out era next august. the latest republican bills that repeal and replace much of obama care is dead. susan collins became the third gop senator to say she would vote against it despite tweets to a so-called graham-cassidy bill funneling money to states with holdout senators including maine. it's the latest failure by republicans to deliver on a promise they campaigned on for seven years. global news 24 hours a day powered by more than 2700 journalists and analysts to more than 120 countries. this is "bloomberg." >> and with a check on the markets, the yen is below 112. we have weakness for japanese stock. nikkei lower by 0.2%. gold is barely budging. perhaps not so drastic a move to safe havens here. stocks in manila falling over 1% even as a.d.b. raised its forecast for the philippines as well as developing asia. the business confidence takes a hit amid political uncertainty and the aussie is now higher by 0.1% perhaps gaining some ground given the rise we're seeing in prices in china which is climbing along with other base metals here after morgan stanley raised price forecasts for some metals for the fourth quarter and in 2018. taking a look at hong kong some interesting swings there. energy stocks leading the pack given that oil is holding on to gains. most car makers have erased earlier losses but real estate stocks look mixed. the benchmark is set for a fourth day of losses. a last check now, consumer staples, gained over 1% though the kospi is fighting for a sixth straight day. you have coal mart leading a rally of cosmetic firms. yune lever agreed to pay $2.7 billion for one of the biggest players in the space. that is the market snap shot as we head to midday here in hong kong. this is bloomberg. emily: ellen pao continues to make headlines. it is five years since her trial became one the most prominent of its kind in silicon valley. whale she may have lost the suit she helped kick-start the conversation about gender equality. now pao has written a book about her experience called "recess, my fight for inclusion and lasting change." i spoke with pao earlier and asked what her goal is in rehashing all the details now. take a listen. ellen: a big part of it was having so many women and men come up to me and tell me how much my story had inspired them and how much it gave them comfort in the experiences they had. how they connected with it. i wanted to give them all of the facts and give them the whole story and see if i could help other people through the writing of this book. over time also to kind of give this kind of inspiring ending to what was a pretty terrible experience but you can get through all of this and continue and have a career and move forward and, also, try to change tech and the business world. >> you wrote in an op-ed in the "new york times" that although a lot hasn't changed the one thing that has is now people acknowledge the problems in industry. do you think if you filed your suit today the outcome would be different? ellen: i don't know that we would be here if i hadn't filed suit. it's hard to say. we've changed the conversation. no longer are women forced to defend themselves. it is a much easier experience for people to say i've been harassed or i've been discriminated against. people believe it. but i don't know if it hadn't been for all these women who come after me to share their stories if we would be where we are today. but i think somebody suing now has a much better shot. emily: we've seen so many allegations, a rash of sassments stories in venture capital, at uber, has any of this surprised you or are you just not surprised at all? >> i think most people who are familiar with the highest levels of tech and venture capital have heard the stories. what's been surprising is so many people have now come orward to talk about them. susan fowler coming out with such a specific blog post and being accepted and not taken down has opened the door for more people to come forward in open conversation. emily: what do you think went so wrong at uber? how did it get to that point? ellen: good question. early on, i don't know the details but what happens in companies is that you get this culture and you want to be hard driving and push and break all the rules. that ends up going into your personal side, the interactions with employees and peers and people who report to you and you don't think the rules apply so you just do whatever you want and that ends up breaking down into illegal areas. emily: what responsibility do those who invested in uber for i don't know what it is letting the bro's or bro culture run wild? ellen: i think a huge responsibility. i think investors have responsibility for letting venture capitalists run wild. the problem is you've got the fox guarding the hen house. you have people who don't have clean hands who are trying to manage people and tell them, hey, you're not supposed to do these things when they are doing them themselves. you're, as the board member you have a huge responsibility to the employees of a company, to the other share holders, to make sure the company is, you know, a company that is operating within the bounds of the law and is building a culture to help it be successful. that is diverse and inclusive because we know that generates better financial results. emily: you go into incredibly fine detail about the boys club environment that you experienced at kleiner perkins, not just sexist jokes but racist jokes as well. if the culture is that broken can it be fixed? ellen: i don't know if the bigger companies and the older funds can actually be fixed but i know in working through project include and through the capital teams that there are a lot of c.e.o.'s, a lot of founders who are really committed to diversity inclusion and want to build companies that include everyone that are, you know, tied to the community, that are tied to their customers, and that are going to build the best products. i have a lot of hope because i think the next generation of companies that are successful will have this commitment to diversity and inclusion and be inclusive across all of their activities. i don't know about the funds that have been around for a while and talk about lowering the bar as you've heard and finding that next white male nerd. it's just, how do you change that attitude? emily: that said you're referencing a comment that mike morris made to me a couple years ago. you know, venture capital firms like joya, like bench -- sequoyah have one woman partner now, do you think the male dominated firms, are they going to be surpassed if they still have "the best returns and the best reputations?" >> i know a lot of women and people of color who will not go meet with them because they don't think they'll be treated fairly. if you look at the rang wauge, i'm lowering the bar to bring in people from different groups, they don't think women or other groups are actually equal to men they typically invest in. how do you go and join -- how do you let somebody like that invest in you and expect to get the same outcome as other people they're investing in or you would get with a different investor who believes you are capable and likely to succeed as other people? emily: ellen pao this author of "reset" and partner. coming up more of my keerings with pao. what she had to say about her time as interim c.e.o. next. and a reminder of our interactive tv function. find it at tv go on the bloomberg. watch us live. if you missed an opportunity you can go back with it. you can send our producers a message and play along with the chart we provide on air. for bloomberg subscribers only. check it out. this is bloomberg. ♪ emily: indian retailer shopper stock feeling amazon bump. shopper stock will raise $28 million by selling a 5% stake to amazon. the alliance is amazon's first investment in a publicly traded retailer in india and is pected to help the company add visitors to amazon online stores. back to my conversation with ellen pao author of "reset" and capital partner. after she lost her historic gender discrimination case she ecame interim c.e.o. of reddit where she made bold but controversial moves to crack down on hate at the site. eight months later she was effectively forced to resign. i asked her what happened. here is what she had to say. ellen: we had a lot of change that had to happen. they it was a small startup with mostly white men, started by two white men, and that culture was very strong of exclusion and as he came in he brought in different people, all of of the women kept getting pushed out. in i think oining 2013 and worked with him to push a lot of change together. you know, this was a group that didn't want mobile. it was very conservative. very locked into the product as it was. and we were trying to bring it into -- in to reach more people and have more conversations. i think the change was really hard on the community. it was really hard on the employees. it just took a lot of effort to get to where we thought at the end of that. emily: you made an effort to cut down on hate. you banned several of the most hateful and there is some evidence to show it actually worked. there is a study that came out and showed they have significantly cut down on hate. do you think that online harassment would be such a problem if more women had been involved in designing these systems in the first place? ellen: i think if more women of color and especially under represented women of color were involved at higher levels it would be completely different because, you know, people who get harassed the most who really understand how the systems work and really see all the ways it gets distorted into ultimately presenting a certain view and having that dominate the conversation and if you can't come at it from that kind of minority, small group perspective, it is really hard to see everything that's going on. emily: how would it be different? how would twitter be different? how would reddit be different? ellen: i think people would have invested more in tools, community management, had different rules, taken down more of a content faster and banned more people in a more consistent way. but it's hard when you don't put enough resources because with, the problem skills with the user brace if you're not putting in the framework and the tools it gets out of hand very quickly. emily: how much hope do you have for twitter? can twitter at this point 10 years in get the harassment problem under control? ellen: i don't know. i know they are trying and have made some incremental improvements but i really believe it is going to take a lot of work to get rid of all of the harassment and make sure everybody feels uncomfortable participating in the platform. i think they should ban donald trump. that is a huge problem that he has behavior that is very counter to the terms of service and yet he continues to be given this huge platform to dominate and to encourage more of the same bad behavior. emily: you think twitter should ban donald trump. ellen: one of many people. it is not just me and i think with good reasons. emily: what is the reason? ellen: he is harassing of people, threatens people on the platform and uses his influence to get people to harass other people. emily: what about people who ould come back and say "free speech?" ellen: it is such a red herring. there are many reasons why people say "free speech." then you can say whatever you want on the platform. we saw on reddit when you allow free speech it is the people who are dominant on the platform who can bully everybody else off. and there's also an issue of everybody limits some speech on the platform. you ban spam. you ban certain types of harassment. so people are not having complete free speech on the platform already. this is just driving the rules to protect people from getting harassed off a platform. you can have as many voices as possible. the purpose of free speech is to allow everybody to be able to have a voice, to have these conversations. and if one group is pushing everybody else off you can have the free speech platform but there are not many voices or opinions being represented. emily: hannah jackson is planning to introduce a bill that would explicitly prohibit harassment in the venture capital industry. what is your take on the bill? our optimistic are you that legislation could solve this problem? ellen: i'm hopeful. i think everything else hasn't helped it so far. shaming has started to help a little bit. people coming out and saying this is not acceptable. you can't go on an airplane and experience what i did, people talking about porn stars, sex acts, prostitutes. that is not acceptable anymore and you know that so you should change your behavior. it's not changing quite yet. we need something else to help. everything i think will help but i don't think that is going to be the one thing that prevents it. these people do think they are above the law. they don't think the law applies to them. you need to keep pushing that public perception and pushing and telling the stories. the most impactful thing is all of these women telling their stories. emily: on the last note you mentioned, we saw that also in the excerpts of your book. you don't mention his name. his name did come up in the trial. why did you leave his name out and what else did you leave out? i'm sure there is a lot you didn't put in there for various reasons? ellen: i wanted the book to be as fair as possible. with the c.e.o., i don't know, maybe he had an off day and was goaded into doing something by tedd. i just don't know. i didn't want this one incident kind of, you know, one experience where five hours is the way i portrayed him to the whole public. i think i tried to be fair. i tried to keep people's families out of it. i tried to, you know, i had a friend and our view was no collateral damage. you have people who are protaganists and who are the main people who helped me back and are holding -- held me back and are holding a lot of other people back and they are the people i wrote the story and the book on. emily: ellen pao author of "reset." fs networks is joining the pay tv boom and the paid service will offer hits such as american horror story and atlanta without advertisement. move netflix shares fell monday losing nearly 5% posting their worst day since june. coming up, the latest in china's online crackdown next. this tuesday the federal reserve chair will deliver keynote remarks on monetary policy in cleveland, ohio. bloomberg tv will have full coverage starting at 12:45 p.m. eastern time. this is bloomberg. >> china has handed out fines for content violations. according to a statement, the highest fine for failing to per vise chat as required by law and there were similar fines after users posted ethnic hatred and other content. the statement didn't give the amount of the fines. however, the troubles for chat services in china do not end there. facebook's messaging service has been largely blocked in china following a censorship crackdown by the government according to the "new york times." this block is a huge setback for facebook which has been trying to re-enter the chinese market for sometime and was the last remaining facebook service that worked in china until now. chinese centers began blocking video chats and photo messages using the service back in july. straight to hong kong now for bloomberg's chief asian correspondent is standing by. what do you make of this? >> well, it just was almost inevitable i would have to say having lived in china for so many years. including the entire time that facebook is blocked there. you kind of got to realize that the chinese government is very serious about blocking these types of messaging services and what is htfully said the last of the facebook apps or services avail natalee holloway china. now it seems it is no long -- it was the last of the facebook apps or services available in china. i tried testing it uploading photos and videos and it didn't work. i tested it late yesterday when we started getting word that it actually had been blocked. the actual messaging part of the service of whatsapp. i sent numerous messages to my wife who is in beijing right now. she always replies right away and she didn't. i even tested i'm going to spend lots of money. she did not get it. it is not necessarily working between the two of us. yes it is another step. instagram of course. google, various services blocked. facebook. a number of them no longer working in china. emily: so, that's when you know for sure when you threaten to spend money. what do you think is really behind this ban if indeed it is a ban. is it the same reason that facebook was blocked back in 2008 and hasn't been unblocked since? >> well, as you and i both know since you lived in china as well we are coming up to a very politically sensitive time in china with the 19th communist party coming up if you will next month. they often times show these kinds of services down to a crawl if not an outright ban. virtual private networks which a lot of people use to get around the great fire wahl of china, they are being blocked as well. then you again have this new cyber security law which takes effect the beginning part of next year but is already starting to be implemented where they'll be outright banned and apple has already taken steps to remove apps from the apple stores. so a number of steps have been taking place as well earlier this month in the first week of september new bans came down, we chat message group. if you're the administrator of a group you're responsible for the members and what those members post. so there is a lot of self-censorship going on. this is what the authorities want to do in china. get people to self-censor and also they can still monitor. keep in mind whatsapp had end-to-end encryption. it looks as though authorities have found a way to break that. wechat is not encrypted and is highly censored. emily: speaking of that, if -- who gained from whatsapp loss here? was it services that might see a bump as a result of this? >> yeah, well we tchst chat obviously is the predominant messaging service of choice by the chinese simply because it is available and it has not slowed down. emily: we have to leave it there. thank you so much for joining us from hong kong. really appreciate you stopping by. that does it for this edition of "bloomberg technology." we'll see you tomorrow. 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