An interview with the impossible foods cfo on plans to enter china despite the spread of the coronavirus. The Global Smartphone market has been slowing down for some time. The coronavirus will only make it worse. According to ibc, smartphone shipments will drop 2. 3 to around 1. 3 billion units. Bloombergs paul allen and emily chang spoke with the privacy ibc president on wednesday. We have a number of analysts looking at this. We would say that the tightest component the ingredient in this is the people. People are not fully back to work. With think the manufacturers in china are mainly 30, 35 of capacity. They are slowly starting to ramp back up. That is good news. China also has been a place where many components are manufactured. From that standpoint, what we have now is we believe the tightest components will be pc Circuit Boards and screens. That would fit with the story we saw today, that if you are having trouble with replacement parts, what is one of the biggest parts . It is not your processor, it is that you drop your phone and you break your screen and you need a new panel. The idea that displays and screens are already starting to show up in short supply, absolutely fits that story. Thats what we are going to see. Everything is generally tightening as we get deeper into this. Emily we have heard tech conferences are being canceled. You guys just canceled yes. It was supposed to happen today down in santa clara. Emily there is all this loss of productivity. Employees working from home. Employees may be not working at all. How do you begin to assess the impact on the technology on the Technology Industry . Crawford we are living in this time where we have seen gdp and tech. Tech has been the rate of tech growth has been over 2x that of gdp. For perspective, back in 1999 we were shipping dog food bags. That was 1. 6 x. Was growing at twice the rate of gdp. The first thing we look at is the gdp growth rate going forward. We have put together a number of scenarios. We have got a optimistic scenario probable scenario and a , a pessimistic scenario. We think in the optimistic scenario, gdp goes to two and a half percent. In the probable scenario, it goes to about 2 . In the pessimistic scenario, it goes to about 1. 4 . That is global gdp. And then, of course, we would look at all of the different components that are tied to gdp as well as overall demand, as well as what verticals will be impacted. We believe, from a probable standpoint and from a probable standpoint, we are talking about if china starts to come back online in the springtime, but faces headwinds into the middle of the year going into the second half of the year. And the probable scenario says the virus spreads around the world, which is what has happened. We are out of the optimistic scenario. We are now into the probable scenario. We think it comes down to how much it spreads into other regions of the world. Which is taking us somewhere between the probable scenario and the pessimistic scenario. That takes i. T. Demand from where we thought it would be to somewhere between 3 and 1 growth. We could, in a negative scenario, get 0 growth. We do not think that will be the case. We expect we will be between those. Lets call it 2. 5 , maybe 3 growth. Paul i am wondering, to what degree are Cloud Services insulated . Crawford great question. When you look at the Overall Services market, those tend to feel the impact a lot later. It is sort of that, as a Service Business we think the direct answer to your question is, not nearly as much as the people making the tangible goods. It is a lot easier to say, i will put off my mobile phone buying. The actual people who are at the top of the stack in service or cloud applications, in this marvelous time where technology is eating the world, companies, if they are going to be in business, they are using a Cloud Service provider. That means they are likely not to back away from those Cloud Service providers. Kurt that was ibc president crawford del pratt. Despite president trumps claims that his administration is ready coronavirus, senator says they will not be able to meet his goals of one million test kits by the end of the week. We spoke to a professor of epidemiology at the Johns Hopkins school of Public Health. Things are ramping up. Im pleased that diagnostic capacity has expanded this week and will continue to expand in the coming days. More cases might feel alarming , but it is us just getting a better understanding of the situation. Paul are enough kits available . Yes. They are coming online and about half of state and local Health Testing laboratories now have capacity to test. I understand the rest of them will be coming online this week. That will bring us to about 10,000 tests per day if things run smoothly. Emily tests have not been available. We are looking at cases going back two, three weeks in the united states. Whats your best guess . How Many Americans do you think are actually infected by this virus that we dont know about . Dr. Rivers it is impossible to say and that is why it is so important we have testing capacity. I think we will see more cases in the coming days and weeks, because there has been transmission likely happening that we have not observed. We are going to go out and find those cases and get a better handle on the situation. But theres no way to really estimate what the current status is. Emily what is your longterm outlook for just how serious this is and how many lives it could claim . Dr. Rivers i think the current risk to the average individual is low. For communities that are seeing transmission, i think the state and local Public Health departments for those jurisdictions are communicating about what risks will be. I do think there is reason right now for the general public to take steps to reduce their own personal risk, regardless of what they are seeing in the community. The best ways to do that are hand hygiene and respiratory etiquette, which is covering your cough and staying home if you are sick. Paul i ask this question to a number of guests, because you see a lot of people Walking Around with facemasks. Are they actually effective . Dr. Rivers they are effective if sick people wear them to contain their coughs and sneezes and so on. They are not particularly effective for well people to stay well. We are also concerned about supply chains and making sure Health Care Workers have access to those masks, because they are at high risk, being in contact with people who may be sick. We want to make sure they have access to the supplies they need to be healthy. Kurt that was dr. Rivers of Johns HopkinsBloomberg School of Public Health. Coming up, why some activists want changes at the top of twitter, including pushing out jack dorsey. And if you like bloomberg news, check us out on the radio, on the app, and in the u. S. On sirius xm. This is bloomberg. Kurt shares of twitter surged on monday after bloomberg reported that Elliott Management is pushing for changes after stake in theillion company. This includes moves to replace jack dorsey. Jeffrey smith spoke to ed hammond wednesday. Its hard to talk about somebody elses position. Twitter is a position we have looked at for quite some time. We have a lot of respect for elliott. The governance structure, having a ceo who is the ceo of two Different Companies is highly , highly unusual. Is jack dorsey unusual enough to be that special . He might be. He might not be. I dont know the answer to that. I think it is going to be a discussion among jack and the board, as well as elliott in the even theybe shareholders to determine whether there is a better construct to manage that company. And if it is important to keep jack is a visionary involved in the business. I have potential predictions, but i dont think it is appropriate to share those. Is it a Better Company with jack dorsey or without . Im not sure i can answer that, and it depends on in what capacity. I dont think it is fair for me to answer that. I do believe jack is a visionary, a unique leader. But i dont actually know how involved he is and what he is doing daytoday at the company. And cant say with the right outcome is. Is one thing you have been active on is ebay. Last month, you wrote a letter berating them for not having done their Strategic Review fast enough. What do you need to see their to be satisfied . Ebay is one of those terrific businesses that should be able to handle the situation well. It is a true and adept business and a marketplace. They did sell off stubhub, one of the things we were asking them to do, but we would like them go further. We would like them to sell off classifieds. On the operational side, we need them to perform better. Theres more that needs to be done and it needs to be done faster, with more focus, and we care. There is a ceo search process going on and we care. We expect them to hire a best of breed ceo. The talent level and skill level of the ceo is important and we believe ebay can attract one. It is something you are working on currently . We have conversations with the company frequently and it would be around this time of year when it makes sense to talk about board representation. That is not always the answer. It may be the answer in this case, but it is not always the answer. In every company we look at, its not about the board to start with. The board is a tool of governance for us to oversee a company. But the board is overseeing management. At the end of the day, the most important thing is the ceo and strategy. The board has to oversee that. When you hear us talk about how companies can improve themselves and how they can perform better, and how they can create value for the benefit of all stakeholders, the ceo is incredibly important. We are going to talk about that or the plan when it relates to what can be done differently. When it comes to ebay, we can have a conversation about the board, but the most important decision they have to make is are they going to bring in a ceo who is a superstar ceo. Kurt that was jeffrey smith. Lets hearaction, from partner and chairman of the Shareholder Activism practice at austin. He also spoke with ed hammond. This is a forward lead company. Founder led company. Is very important to understand that founderled companies are just different. And jack dorsey is one of the most iconic pioneers. He has founded one of the most influential Media Companies of all time. He has actually started to do really good at twitter. When he rejoined in the 2017, he started to right the ship. Numbers were good relating to Audience Growth and retention. He has a very strong board. He look at the board and you have the former president of the world bank, the former cfo of google. The ceo of salesforce. Ands a list of executives this is really strange that elliott would choose this time and this company to go after. And not huge tenure on the board either, right . A lot of them have turned over recently. Do you think they have bitten more than they can chew . I think so. Elliott is not that experienced in running proxy fights. That is something people forget. The last proxy fight they ran was several years ago and i think they have misjudged the situation here. Kurt that was a partner and chairman of a Shareholder Activism practice at sidley austin. Mws big bet. We will hear from the german automakers ceo. And later, the ceo of impossible isds and how the ceo disrupting Global Supply chain. This is bloomberg. Kurt once the go to brand for luxury buyers, bmw is facing pressure from tesla. The german brands answer to the electric threat is a sleek, batterypowered car. The cfo spoke with matt miller in munich, germany on the launch of the new electric concept vehicle. I think a real bmw does not compare to any other band brand. That is where it comes to the heart of our brand. That is the first real dynamic car from mw. Bmw. It has an acceleration of only four seconds to 100 kilometers per hour. It has a range of and it looks like a real bmw. The range has been the hardest to nail, but it has also got 500 horsepower. How do you achieve that . Other german carmakers have not been able to achieve that. In 2013. Rted the i3 that is when we started to ponder, what is the future going to look like . We thought our architecture has to be able to be flexible enough to cater for mobility and combustion engines. That is the result of our thinking. You dont think Pure Electric cars are the future . You know, the World Mobility market is highly fragmented. There will be specific niche is where you can have only electric cars, but for bmw, we need all of the driving dynamics. Its much more than just the engine of the car. I think this is the right answer for us, but there will be other segments with only Pure Electric architectures. I am a motorcycle rider. R18. He are 18 to have aing motorcycle on the market . Differentycles is a Market Segment than cars. Full mobility has arrived in the car market. Almost everybody is working on it now and we have already sold 140,000 electrified vehicles in 2019. We will accelerate that expansion. Initial investment is obviously huge when you are starting a new model. You have done a lot of investment in production. Will the costs after that start to sink . You need fewer parts in an electric motor. Im not sure the complexity of the car is really diminished. There are so many other components, and of course, to have flexible architectures we can produce it like the same plant is a huge advantage over the competition. What about the headcount . A lot of your competitors have already started reducing headcount substantially and you have yet to do that. Do you need to catch up with them . Bmw is a growing brand so we need our people, our workforce. Of course, we have started to invest more heavily into electro mobility, so there is no need for us to reduce our headcount. I have to ask about the coronavirus. There was reportedly a case here at the center in munich. Is it likely you will have to shut down any facilities . I can confirm that, as of today, we had one case in our center. Hope we did was, that worker who was a temporary worker, put into the hospital. The hundreds of people who met him have been asked to stay at home and be placed under quarantine. That is our immediate measure. But currently it is not necessary and upper be overdone if we shut down facilities. I think we have the right strategy. What is the biggest impact beyond the people . As far as the business of selling cars. When we hear things like Fiat Chrysler having to shut down a plant, i think about the supply chain. When we hear about empty showrooms after the lunar new year, is it a supply problem or a demand problem . You refer to china. We had the new years celebrations, and afterwards, customers did not return to the normal routine. That also influenced our market in china. Specifically, in now, the world february. Is normalizing and we dont see any serious effects on our supply chains. But that is something we have to watch every day. It is quickly evolving, obviously. Still expects 5 to 10 sales growth in china. Can you confirm that is your target . We expect growth in china and we also expect growth for the rest of the year over the whole world. Whether that is true for the coming weeks, i would not be able to confirm. But it is far too early to make a prognosis for the full year. Bmw is a growing brand. Its only the beginning of its also the beginning of your march. Tenure here as ceo. Congratulations on that. What do you bring to the table that is different, or what, in terms of strategy, do you want to do different . I think we have a set strategy. I have been for five years on the board. What we have pondered about will not change rapidly. Hope we try to do is be faster than our competition. We want to expand more quickly. And i think we have created a. Specific strategy which fits perfectly for bmw and rollsroyce and we are rolling that out now. You will see that will be quite successful. We are quite confident about this. You didnt make a plan to build minis in oxford. What do you expect for the future of the brand . Cracks in the oxford . In oxford . For three years, we have been pondering what the effects would be but there has been nonwhatsoever on the production, supply chain, or brand in the united kingdom. We will also see what happens until the end of the year. I would be a little bit more optimistic than the public. At end, everyone the will make sensible decisions that industries, markets can develop further. I am slightly confident. Could envision being built somewhere else. I cant imagine building a rollsroyce coach anywhere other than england. Does it stay there . Absolutely. Rollsroyce is an english brand with english origins. That will stay. How was the luxury business . It is arguably a peerless product. How is that market . Echelon. K in the upper we are the market leader. We own 50 of market share and that is evolving independently of the rest of the world. With our new products, i think we have set the ground for further growth. That was bmw ceo oliver. Coming up, why hp rejected a xeroxs takeover offer. And Bloomberg Technology is livestreaming on twitter. Global to follow our breaking news network at court take onat quick twitter. This is bloomberg. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] kurt welcome back to the best of Bloomberg Technology. Im kurt wagner in for emily chang. On thursday, hp rejected an unsolicited takeover approach from