Bronx in about three minutes, but by that time, the fire had spread throughout. They were able to rescue a dozen people. Several more were critically injured and are said to be fighting for their lives. Police promising a bigger security detail than ever before in times square for the upcoming new years eve celebration. It caps a year that saw a number of deadly attacks including a vehicle assault at the same spot where revelers will bring in 2018. An army of snipers and back in spending officers will be deployed along with metal the textures and bombs trained to find explosives. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Bloomberg technology is up next. Cory im cory johnson in for emily chang, and this is Bloomberg Technology. After massive gains, can big tech continue its run . And President Trump resizes and President Trump once again criticizes amazon on twitter. Should the tech giant be worried. And more from our best conversations of the year with candid discussions with c palmer and meg whitman. The sector outperforming the broader market, breaking records, up nearly 30 for the year i did not see the final numbers, but pretty damn close to that. It was a really amazing year. Just across the markets, i think. You have been investing in tech for as long as i have known you. Just what a run. , david it was a good run, but it was a nasty close today. But in the scheme of things, i , think what really distinguished tech was that growth was scarce and secular growth stories, as characterized by the fang names cory you mean topline growth in technology . David i mean topline and Earnings Growth and the stalwart and the largest cap name in the s p was apple. Cory it also seems there were not at least i did not notice there were years when software and service was the thing. There were years when hardware or even consumer facing stuff was the thing. This year seemed to have been driven by m a. David subsectors in semi. Artificial intelligence names nvidia were very strong. You had broadcom. Adding very strong broad performances as well. As you noted, you had m a activity, broadcom going after qualcomm. That really popped that stock at the end of the year. Cory where do you see growth coming from on the topline . Salesforce a lot of people were short, just continue to blow through estimates, the stock continued to rise. I did not see the big candidates. Where do you see the best opportunities for growth Going Forward . David first, you have to look global. Tech is a Global Growth the phenomenon. Is a Global Growth phenomenon. Some of the most successful large caps have much higher growth rates internationally than they do in the u. S. I think you have a global digitization towards tech. Tech as an infrastructure, the secular shift to cloud, the use of mobile, if you will your smartphone is the storefront for online shopping. And then, the internet as the infrastructure of choice for all both enterprise and consumer , activity. Cory give me some names you like that you have done some work on, or names you do not know anything about. Do you remember when we ran into each other in the hallway . I was doing a story from when i worked with another network, and you were there meeting with management trying to learn a little bit more about the company to make the investment. You have been doing this so many years, i wonder what research you have dug up. David thanks. I will probably run into you at one of those hallways at ces. Cory explain how you work that conference. David its a madhouse, but what is really important is the opportunity to engage with management, to see the actual products in practice. I think one of the most compelling secular Growth Trends continued movement into the cloud. The cloud is a place called the data center and the rehosting of data Enterprise Applications into that environment is a compelling spend. Capex spend. Lling cory what kinds of companies . David in the bay area, names like equinex, hosting many of the same names we talked about but also the conversion of enterprise compute. Within that data center ai chips, server chips, com boxes. With blinking lights. A lot of software hosted and distributed globally and in the network. Cory Interesting Data center play. Do you like the structure for that business . David the reit has some unique attributes, and that is the requirement that some 80 gets that some 80 of the earnings gets distributed out as earnings. Those are real cash earnings. The challenge in a raising rates environment is that they tend to be very ratesensitive. If we see a reflate coming off the tax bill that was approved in december, those could be challenged in terms of valuation. Cory we see higher rates and suddenly Data Center Stocks throwing off what is essentially a dividend. 80 of the profits coming out. Training along with other reits like real estate trading along with other reits like real estate reits. David exactly. That actually works to the advantage of some of the Fast Software names because those tend to be a distant payback opportunity set. Cory i dont understand. What do you mean . David a lot of Tech Companies run two sets of numbers. All generally accepted both gap earnings and pro forma numbers. Within the press release are, if you will, that channel of both gap earnings and pro forma numbers. In a raising rates environment, investors want more nearterm cash flow as opposed to distant cash flow. Again, if we get this reflate from the stimulus package out of the tax package, i would contend that Companies Planning to land and expand and maybe give profits five years out could be challenged names. Cory so revenue recognition makes it harder in a rising rate environment for companies not doing a lot with profits as opposed to Companies Like sap and oracle that the david you are going to shift some of that to the nearterm period, but again, the real swing factor on many of these companies is can you get leverage out of your Business Model on the sales and marketing side and, quite frankly, in the case of salesforce, as the market and company pointed out in recent meeting news, how do you prove the monetization of your existing workforce . Cory a lot of private companies on the side does it matter if we see those Companies Come out . David i think it is terribly important we get a new next generation of public companies. Just as a historical factoid, if you took the nasdaq peak and we were there, march of 2000 the top 15 companies, and you ask where are those companies are now, there is only one name in that list that has a higher valuation today than it did in march 2000. Cory that would be . Google . It was not even on the list, was it . David that is the point. On the list today are the facebooks and googles, which were not even around at that point. The importance is that new Company Formation and coming public into the capital markets. Cory i really appreciated. I really appreciate it. We have been doing this every year on new years eve for many years. Maybe we will go back to the tuxes next year. We are watching netflix, scrapping cash bonuses for top executives. A new tax benefit eliminate deductions for performancebased bonuses for managers who make 1 million or more, so it is no longer a writeoff. Coming up, one of the biggest battles in 2018 could be the president versus amazon. We discuss why President Trump is taking aim at the tech giant. And Bloomberg Technology live on twitter right now and every weekday at 5 00 on the east coast, 2 00 on the west. This is bloomberg. Cory President Trump has once again criticized amazon. On friday, the president tweeted officethe u. S. Post which is losing should be charging much more. I did not do a donald trump imitation. That was a missed opportunity. We are joined by alex wayne in washington and you are welcome to do in imitation of the president. Since you are imitating business analysts tell me about the business of the post office. Can the post office just decide to pick one customer and charge more money . Yeah, no, of course. The problem with the post office has nothing to do with amazon. It is a Government Agency forced to act like a forprofit business, and it does not do that very well, of course. Its rates are decided by an independent board. They are generally too low for most of what it does. It is required by law to deliver to every address in the united states. The post office would like to see is genuine reform of how they operate so they can set rates more competitively and maybe not delivered to some places that are really expensive to get to. Cory we talked this morning, and i pointed out that amazon they do not tell us how their business works, but they do tell us about their shipping costs, which are massive, far exceeding their shipping revenues. The losses they have an shipping were as high as 7. 2 billion last year. They are expected to be 30 higher this year. Alex sure. The reason they get such a good price from the post office it has been reported about two bucks per package is because they are such a highvolume shipper. They are almost certainly the post offices highest volume client. Although the details of that relationship are secret. Cory there is a lot of competition out there. The post office competing with fedex, ups, dhl, and many others outside of the country, but again, those companies do not have the requirement to show up at everyones house every single weekday and on saturday. Alex right, and potentially amazon could be a competitor to the post office itself. Amazon is working on several different methods of delivering packages itself, including the last mile but the post office handles right now. I dont think the post office has a lot of room to raise prices, and regardless, donald trump certainly cannot order them to. Cory when i was at time we had a lot of magazines delivered to a lot of post offices, and they did their own delivery, bypassing the post office, and they made sure there were stories in the local press the post office could see that they were building this capability. There was no intention to actually roll this business out. We just wanted the post office to see this when we entered into negotiation about the cost of delivering sports illustrated. People, fortune, and the like. Alex would not surprise me if amazon is playing the same game. Cory exactly. What do you think amazon is trying to do in terms of competition and putting drones on 60 minutes . Alex i would be surprised if amazon can beat two bucks a package, even with a drone. It is not my job to analyze their business, but putting people out on the streets, in trucks is expensive. , the post office has been doing it a long time and is pretty good at it. It seems like a reasonable cost for amazon to have the post office do that for them. Cory he is not a business political analyst, but he plays one on tv. Alex wayne. Thank you for joining us. Coming up, apple apologizes for slowing down older iphones. Meanwhile, we take a look at the top stocks of 2017. This is bloomberg. Cory i know you are wondering what the Top Performing ipo was over the last year. It was roku. Roku had a big run. Three months into the deal, they set a pace more than doubling since hitting in september. On the other end of the spectrum, blue apron has seen shares fall by more than 50 since its debut in june. Kind of sick to the stomach on kind of sickens the stomach on that one. Apple issued a formal apology for creating a Software Upgrade that hurt the performance of iphone 6s and 6 ss. While the news is drawing ire the company is on track to close out a banner year. Our Bloomberg Technology reporter who covers all things apple for us is here to talk about it. If you have a slightly older battery, last year, apple noticed or some customers started complaining that their phones were crashing, and apple looked at it and realized it was because some of the faster processes being performed by the new operating system were placing greater demand on the power they pulled out of the older batteries, and they were crashing. Cory highperformance apps were crashing because they were written with the expectation of a more powerful processor. Alex exactly. And it is built on a better processing system. Frankly, this is why they are issuing the new fix, which is that a new battery can cope with this performance. I think lots of the things you can do with, say, multiple lenses on the camera, image stabilization and things like that. Cory i love criticizing apple. It is fairly amazing, i wish they would be criticized more, but i think it is amazing, the backwards compatibility they tried to build into this as they are really racing ahead. This phone is really very different than the one before it and the one after it will have even more capabilities and better power consumption characteristics, much more powerful chip. It is a very big technological challenge. Alex i think it is actually interesting to look at it slightly upside down. It is a tacit admission that the hardware in terms of the process and actualrocessor Computing Power within the phone can still run the new software, so in some ways, it is not this kind of thing theyre trying to go for, and that might create a problem for apple because one of the reasons the stock is so high this year is because investors are looking forward to this super cycle. 1 3 of phone owners decide to replace the battery so their phone can still perform well with the new operating system, that begs the question will they not go for the new iphone x or iphone 8 . Cory we have seen the time in which people replace devices stretching out over time, not just in phones but computers as well. Iphone 6 was the sweet spot. Being targetedre by the new phones, iphone x. Cory there was a belief in their being a big cycle with the iphone x. You are in the target area. Cory its not too late for you to shop for my birthday. You dont have to wait. You can go out right now. I will do the rest of the segment by myself if you run to the apple store you are not going to do that. Fine. Alex two years was the classic upgrade cycle. Now it is extended to three years. The iphone 6 came out in 2014, so it is very much in that sweet spot. Cory also interesting what a big product refresh they had with the phone, the watch, and airplay. Alex we did see growth across all their product sectors. We will probably see more refreshes we did not see new ipads this year we did see the ipad pro, which is the crazy expensive ipad coming out. Cory a guy sitting across from me on the plane the other day had one. Alex his elbow extending out into your area as well. You should get the Business Class seats. Cory theres still the expectation of 10 yearoveryear Revenue Growth for apple in q4, which concludes this week. Alex it is interesting the kind of relativism we have when we talk about apple. Apple is still growing ahead of pace, but that pace is slightly slower than it was to do for then it was two or three years ago. People are looking for a repeat of what they saw and 2015, or 2014. It is still growing, just perhaps not as fast as a few years ago. Cory great time. Great time with you this year on tv, radio, Walking Around this newsroom and this great city. Really appreciate it. You have done such a good job for us. Alex thank you very much. Cheers. Cory coming up, believing in bitcoin. The winklevi talk about it coming up. You can check us out on the bloomberg app, sirius xm, and download our podcast, coast to coast. This is bloomberg. You are watching Bloomberg Technology. Lets check first word news. New york citys fire commissioner says the fire in the bronx last night was started by a threeyearold boy and a mother who fled the apartment, leaving the door open. He provided more details today. Last nights tragic fire, other than 9 11 was the worst loss of life in almost 20 years 28 years for our city. That fire occurred in 1990. We are in the midst of the worst month of the loss of life in our city from fire in the past 10 years. 12 people including four children died when the fire raced through their building. Meanwhile in another deadly fire, this one at an upscale restaurant in mumbai, india. 14 killed and dozens injured. An artificial bamboo ceiling burned quickly and collapsed as people tried to escape. Turkey has finalized its purchase of an antimissile system from russia. The deal closed despite concerns voiced by some of turkeys nato allies. Turkey is now the first member of the military alliance to own russias most advanced air Defense System as turkey strengthens ties with russia and relations with other western nations deteriorates. The Prime Minister of russia blames antirussian hysteria. For meddling for alleged meddling in the u. S. Election. The kremlin hopes the relationship improves, but concludes it takes two to tango. For the second time since september 11, a defense secretary does not visit troops in a war zone. General mattis broke a longstanding tradition of thanking combat veterans. The only time a holiday visit was skipped since americans began fighting in afghanistan in 2002. By then secretary donald rumsfeld. And bundle up, record cold grips , much of the northwest. Temperatures are below zero from new england to the northern plains. Dozens of cities are setting daily cold records because of the arctic blast. The deep freeze is expected to hang around through next week. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Cory this is the Bloomberg Technology. I am cory johnson. Bitcoin trading after a selloff yesterday, nevermind. Bitcoin bouncing off lower levels, well above 14,000 at the close. This is after south korea curbed speculation and suggested retail customers might not he able to trade it everywhere they want. Th