tencent's blowout earnings. sales jumped more than 60% in the last quarter. we will discuss the secret to the companies continued success in asia, and its u.s. ambitions. uber has set the stage for one of the biggest private startup deals ever. the service has approved softbank's offer to buy a $1 billion stake. softbank and other firms will be allowed to invest up to $1 billion in uber, and can buy out -- up to $9 million in shares. i caught up with cory johnson and bloomberg technology's eric newcomer. >> we have basically everything except the price, which is key. and who the sellers are, we don't know that for sure. therefore, we don't know the total amount that is up to be bought. but we have sort of a slate of governance reforms, and we have softbank, dragon year and a , number of other potential buyers. but the thing we have been negotiating over for the last many weeks now if those governance reforms and also sort of the process by which softbank would buy the shares. emily: so, talk to us about some of the governance reforms. there were some contentions over travis kalanick's role. he made some compromises and benchmark made some compromises. tell us about those. that travistest is wanted benchmark to put their fraud lawsuit against him on hold, and agree to end it at the end of all of this once governance reforms goes through. benchmark has been unwilling to put it on hold, and really commit publicly that there was going to be any sort of ending of a lawsuit. they came around, and travis agreed to give the board sort of the approval. the board has majority approval if he replaces his own board seats that he failed sort of going for -- filled sort of going forward, so that was the major compromise. emily: cory, what is your take on the hurdles that remain? cory: the way to think about this is in terms of the ipo for the long-term shareholders. this will allow a lot of the long-term shareholders to get out of $8 billion worth of stock. so, but it also really clears up the corporate governance questions of who owns what in the company, and what classes of shares of stock may be offered in an actual ipo, in an actual public offer of those shares? not only would softbank be buying $8 billion worth of shares, but by clearing up the governance structure, which is something that a lot of companies do getting closer to ipo. by doing that it sets the stage for these guys to go to the public markets. i think interestingly, in this sort of marginality, between the lines and eric newcomer's wonderful story on bloomberg.com and the bloomberg terminal, is what we really see happening is with valuation. softbank has agreed to pay a higher valuation for its first bunch of shares, and then the subsequent shares from existing shareholders. which is to say, the existing shareholders could say they are paying what everyone else is paying, but they can dribble down to a lower cost to acquire more shares. so softbank is getting the best of both worlds, and the valuation of uber doesn't officially decline, but the overall valuation will decline if existing shareholders sell that top $70 billion market cap valuation. eric: we will know it is less. the blended valuation will probably be lower. we are already seeing the positioning. we had an investor reach out to say, you know, this cannot be too low. and softbank put out a statement sort of saying, this is not done yet. the price positioning is really beginning and that is what cory said. you know, this isn't the last round price. and how low it goes will be a major point of contention now. cory: but here is why that matters -- because the reason that matters is because what matters is what the valuation is officially set at. if there are ratchet deals, if some of the investors have deals as we have seen in so many ipos where a lower valuation issues more shares automatically, a cascade of shares to anyone that invests before the last round, they would have to do that. they can sort of say, hey, the official valuation has not gone down. so we don't have to issue more shares. there is no ratchet trigger, no devaluation of earlier shares. they won't have to flood the market with new shares as existing investors because they lowered they valuation. the blended valuation will be the official valuation. we will see that in the paperwork. emily: obviously, eric, a lot of unfinished business here, but once softbank is officially on board, what can they contribute to uber as a strategic partner? how can they help them you know, , moderate some of these issues they are facing abroad? eric: hopefully for they can one, stop investing in uber's competitors. i think they would appreciate that. and i think the dream is that softbank can help broker peace in india or southeast asia where it has investments and grab. so, that is the hope. i mean, that is not an explicit part of this deal, but i mean, softbank has invested everywhere, and it is in everyone's interest, except probably lyft, to see a global alliance and the cash burn goes down in india and southeast asia. and companies can find a way to profitability. emily: bloomberg technology's eric newcomer, and our editor at large, cory johnson. well, another ridesharing startup making news -- lyft is rolling north. the ride hailing company will launch in toronto as well as hamilton ontario starting next , month. lyft is pushing into a territory long occupied by rival uber. about 50,000 toronto residents have downloaded the lyft app this year, even without service available yet. coming up, qualcomm rejects broadcom's history making $105 billion offer. what is next for the potential mega-chip deal. and how apple plans to ramp up its efforts. this is bloomberg. ♪ ♪ emily: this week, qualcomm broadcom's 105 billion dollar offer kicking off what , would be the largest takeover battle in history. what is next? i posed a question to bloomberg tech reporters, and bloomberg deals reporter ed hammond. ed: what is really interesting is we know that broadcom was going to get pushback and they knew that as well. the fact that qualcomm rejected, and on the price, saying no way this deal would ever get done. that was actually seen as relatively positive by the market. you saw that reflected in qualcomm's shares, which has initially gone down and went up when the bell opened. what happens next will be really broadcom's call. they have shown already a willingness to go directly to the shareholders and go hostile. i think we see a continuation of that strategy. they are probably going to launch a slate for the qualcomm board. i think they have to do that sometime by december. then it remains a question of how much money can they really put on the table? almost certainly they will go above the initial salvo of $70 a share. some talk around whether they could go in the mid-80's, maybe even $90 a share, but a lot of that depends on the feedback they are going to get now and when they next make a move from qualcomm shareholders. emily: if you want to keep negotiations friendly what , happens now? >> that is a very good point. the assumption by the market is this is just about price. if you look lower down at that statement, there is a fundamental difference in how you run a chip company. they say the good times are over and no more growth to be had. we need to batten down the hatches. qualcomm still believes it can grow and move into new areas and that is absolutely not what he does. emily: he has gotten a lot of what he wants lately. could this be the one thing he cannot make happen? ed: it is the biggest thing he has tried. look, everything he has done, emily, has been friendly. this guy is a deal machine and built this company up through acquisitions, most notably the deal with broadcom. this is a hostile, a different order of magnitude from anything he has tried. i think even if he does get the shareholders of qualcomm on board, which is entirely possible, i think one of the real issues will be whether or not this passes muster with the regulators. you are seeing qualcomm's existing deals they are trying to put through in europe is being held up by the e.u., who is taking a very careful look at this. even if this deal gets over the line in terms of the companies deciding to dance, whether it gets through the regulation hurdle is another story. and one that will play out over years. emily: ian, how much is qualcomm really worth at this point given the headwinds it is facing, given the potential of losing apple's business? ian: it depends on who you believe. if you believe qualcomm's management, it might get a bit of time. we go back to this lucrative licensing model. get that extra $2 billion of revenue a year. it is worth much more than this, especially if you bring in xp. if you believe the detractors, they are worth what qualcomm would want to pay. emily: now to a bloomberg scoop. apple is planning to take another step towards turning the smartphone into an augmented reality device. according to people familiar with the matter, apple is working on a 3-d small rear facing system for the iphone by 2019. i spoke to the man behind this -- the scoop, alex webb, and our editor at large cory johnson. >> at the moment, what you have at the back of the phone, is two cameras if you have got the iphone x. it is not terribly accurate. what apple is looking at doing is the 2019 iphone, adding the depth perception on the back, which allows them to do a lot more complicated, augmented reality things with the rear facing camera. emily: would this impact any of the current technology, the face id, or is this something completely separate? alex: it is something separate. if you are a laser maker, it is probably good news because there are two lasers on the side of the screen, which allows face id to work. there would be another one on the back. the example i think of is if you take a monopoly board, a virtual monopoly board, you can play virtual monopoly on this table with the ar kit. if you put your hand in the field of view, it does not know there is a hand there, and ruins the illusion. adding a 3-d sensor can allow you to pick up a virtual top hat and move it to the next space. it would appear like that on your screen. [laughter] cory: i want to hear him talking about english monopoly. emily: it is not surprising apple would already be pushing forward on technology one, two, three generations out, but what do you make of this knowing what we know now about apple's broader ar strategy? cory: well, i think apple looks at what has happened in the pc industry. we have seen people just decide that we have gotten to a point in pc's where there is no compelling reason to get a new model every year or every other year. and the replacement cycle has slowed down for pcs and tablets. we see people replacing their tablets, but at a much slower pace. and they are worried about that in the phone business. people want to get a new phone after the 18 month or 12 month period, but they don't want to slow down and they need to find something compelling enough to get people to want to upgrade their phones. and this is that kind of thing that is a big leap in one direction. alex: i think the thing is interesting in that particular context is there are two production from out at the moment that have this kind of technology already. kind of shows apple is taking the advantage because it wants to milk this cycle and the next cycle, rather than bumping all the technology into the phone as soon as they can because it leaves them little to room to advance the next generation. emily: apple working on ar headsets. how does this tie into that? alex: it can be seen as a foundation stone in some ways. we have seen their ar kit and there are increased numbers of augmented reality-based apps. the problem with augmented reality glasses at the moment is there is not a huge amount of content out there, which makes it worth people buying. now if apple is building a whole ground foundation of ar content, hopefully they would parlay that into smart glasses in three or four years time. cory: they have the ability to do a lot of things with ar using air pods as well. this augmented reality stuff with the air pods with some kind of glasses as well could be somewhere they go. i think the fundamental of this is one of the development tools. if you think about what they do with pokemon go, it was really ground-breaking stuff, but they had to build that from the first ones and zeros to the top. now, developers can get a head start and we might see real advances quickly. emily: new technology can be hard to imagine how you would use this. as with pokemon go, if somebody explained that to me, i do not think i would have understood it until i played it myself. cory: now you cannot quit playing. emily: alex, give us some ideas about how i as a regular user might benefit from this kind of technology. alex: ikea, which has an augmented reality app, it allows you to place a virtual sofa in the image of your living room, i -- and walk around and see how it might look. what it cannot do is hang a mirror on the wall, or a picture on the wall. it is very good dealing with horizontal planes. it is not as good dealing with vertical planes. it adds that some of perception to it. you have seen the walking dead cap where you see zombies walking around your living room. the moment a person approaches a zombie does not know the person , is there anything place an interactive thing with your friends saying hit them in the face or god knows what. emily: bloomberg tech's alex webb and editor at large, cory johnson. coming up, our interview with will hearst about his decision to launch a brand-new print magazine in the era of digital complications. and later, amazon takes ai to a whole new level. the tech titan prepares to launch the first cashier-less convenience store. this is bloomberg. ♪ ♪ emily: "vanity fair" has named its next editor-in-chief. -- rudica jones comes from "the new york times," where she served as the editor of their book department. she is well known in the literary community, but lesser-known in hollywood. she will be the first fema editor of "vanity fair" since tina brown's tenure in the 1980's. staying with media, william hearst, iii has unveiled a new magazine called " ulta." it focuses on culture, politics, and the big issues impacting california. but traditional print publications have been facing headwinds, to say the least. just last week, conde nast announced it was closing "teen vogue" and limiting other monthly issues, like "glamour." the publisher, whose family has had a legendary place in journalism from more than 130 years, sat down with us to discuss the current state of media. william: i think, when you are starting a new business venture, particularly something in the area of culture and the arts, you don't want to be in a super crowded field. so i think announcing a new blog or new website, we would have been lost, whereas a publication has a certain permanence, it is quarterly, so we don't have to keep up with news. we kind of reflect on things that are happening. i was modeling what we did with a little bit of "vanity fair," and a little bit of "the new yorker." they come out more often so they have to stay closer to the news. whereas, we are interested in things that last a longer time -- culture, politics, technology, trends, larger scale movements. and we just thought print would be an easy way to do it. nowadays, a print publication is mostly electronic anyway. all of the editors work in different places. the copy comes in electronically. the printing is just the last step in a process. so, we are very ready to do anything we are doing in the magazine online almost simultaneously. emily: so what do you think is , the state of the magazine business business as budgets are -- business as budgets are getting cut, people are being laid off, magazines are being canceled? william: well, it depends on what you are doing, you know? if you want to do a mass pop magazine, i think it is very difficult because that group has moved largely to the web. but if you have a very focused audience and delivering something of value to them, like "the economist," i don't see that as a failing business. "the new york times" has had a giant search in attention because of the interest in politics. "the washington post," i remember when jeff bezos bought it, most publishers were thinking he had a secret technological idea. something to do with molecules and transistors. and jeff bezos had an unusual idea -- run it like a newspaper. report the news, get it straight. underneath the nose of "the washington post" is washington and politics. "the washington post" newspaper in the old days sort of wanted to be "the new york times." they were opening bureaus in singapore, trying to cover the world. and they were a little bit disdainful of something as greasy as politics. and under bezos, they are covering what is under their nose. washington to cover politics, san francisco should cover technology. if you're not covering what is under your nose and trying to be someone else, you're entering a crowded field. emily: what you think of radhika jones as the new head of "vanity fair?" william: it is an interesting choice. it is kind of a literary choice, i think a book choice rather than a pop-culture choice. i will be interested to see what happens there, but i suspect they will continue to have very good writing, very good photography, and maybe a little more culture, and a little less politics, but that is just a guess. emily: great in carter obviously -- grayden carter took a very tough stance against president trump. you wonder what voice she will bring to the political part? william: she knows how to mine old criminal cases and modern stories and meld them into a unique conversation -- conversation. i think graydon himself thought that things were changing. emily: right, budgets are getting cut. maybe the big, glossy pages, maybe they won't survive, we don't know? what was your advice? william: they were also lifestyle issues in the conde nast organization. big black cars for everybody, fancy restaurants. the hearst company is in the magazine business, too, and we run a little bit more of a businesslike operation. i think that is where conde nast will trend, because they have to. it is a business reality. emily: so, will it be your advice to radhika jones be? william: i hate to give it away because it is advice i want to give to myself, but i think arts and culture are a very enduring interest area. there are more people going to museums and ballets and symphonies than go to sporting events in san francisco and new york. there is a very deep vein of interest. why do people who work in silicon valley want to live in san francisco? it is not because stanford is here or because hewlett-packard was founded here. it is because of restaurants, arts, cultures, hospitals, the whole texture of the city. and i think that is a part of life, and that is the part that our magazine is addressed to. emily: we have been talking a lot about digital platforms and the responsibility in the age of "fake news." what do you think is the responsibility of facebook and twitter? william: i hate the term "fake news." i think news is news. fake news is made up stuff. emily: fake stories. william: what bothers -- i think the terminology is wrong. i think -- i don't believe in the trump terminology. i believe that there is opinion and commentary, which is very much what modern news has become. emily: right. william: people sitting in the studio discussing things as opposed to reporters covering the news. emily: but some of the "news" is actually inaccurate. when it comes down to how many people were killed in a shooting and who did it? william: those things have to be right. if it is not accurate, it is opinion, not news. opinion can be wrong, interesting, or boring, but it is a completely different genre. if you let everyone's opinion be the same, you are in the commentary business. you have to get the names right and the fact right or you get fired. that is the news business. emily: what is the responsibility of, let's say facebook? william: i think you have to pick. every business has an opinion. you can say we are a commentary business and we are good at it. or you can say you are a news business like bezos did with the post. emily: they say they are a tech business. not a media business. is that absolving themselves? william: that is another kind of dodge of vocabulary. they are a tech business and a much better tech business than most media companies are, but media companies are better at gathering news than facebook is. and you know, there are national business boundaries between tech. but the thing that i think that has gotten facebook in trouble is that they are selling advertising. once you sell advertising you , are playing by a different set of rules. but fox is mostly commentary and sells advertising. but they have to account for where these ads come from, and they have to report it in certain ways because they are taking political ads. so i think if you added transparency, then facebook could decide to be a news organization or a commentary organization it does not matter, , but in the zone of advertising, you have to play by those rules. emily: that was william hearst, chairman of the hearst board and publisher of "the journal." coming up, an exclusive interview with the blackberry ceo. he will tell us why europe and the middle east are in the -- are key to the company's future. and a reminder, all episodes of "bloomberg technology" are live streaming on twitter. you can check us out at bloomberg tech tv, weekdays 5:00 p.m. new york. 2:00 p.m. in san francisco. this is bloomberg. ♪ ♪emily: welcome back to the best of" bloomberg technology." i'm emily chang. canadian technology company blackberry is trying to become a software powerhouse. the company says it is trying to grow suffer revenue by 10% to 15% over the next year is on track. much of that growth is coming from the middle east and europe. 's ceo john chen explained the plan to julie hyman. -- blackberry's ceo john chen explained the plan to julie hyman. john: we're seeing growth in the middle east and in europe. mostly from security businesses. security software, mobile security, threat analysis -- we have some big contracts. julie: and is the growth of the software business going to remain quick enough to make up for the declines you have been seeing and service access fees paid by the legacy blackberry users? john: eventually it will. we do about $100 million a year on the access fee. ur growth rates -- we have roughly a high $600 million and mid $700 million software business. so, if that grows 10% to 15%, ou can do the calculation. julie: now that you look at the proportion of your revenue that is coming from the software business, and enterprise mobility management specifically, one of the more important parts if not the most important part, you got big competitors in that market. you've got vmware, microsoft. ibm. coming at it from a blackberry angle, what is your sales pitch when you're speaking to companies, potential clients, going up against those large competitors? john: nobody can beat us in security. every analyst firm agrees with that. that is number one. and we are the number one company for mobility first. we have maintained that dna. if that is important to you, we are the only choice. but if that is not, -- john: and you can take one of those other people. julie: when you look at the and -- and when you look at the business over the next three to five years, directionally where you want to take a business, where you see it going? john: that is a good question. i don't think everybody can ignore iot. we focus on enterprise and management. directionally, where the industry is going, not just where blackberry is going, but with the industry is going, that will be in better software technology to make everything you touch safer, more secure, like your car, your home, medical equipment. that is where i see the big potential being. julie: do you see any product gaps in the business at this point? john: where we are today, no. but the market evolves fairly quickly. so, we are putting a lot of attention on how artificial intelligence, how that applies to security, threat analysis, mediation, remediation. so, we are working on those things right now. i am sure the market will continue to evolve, and sometimes in the future, we will see some gaps. julie: you have been acquisitive in the past to fill gaps. you expect to continue to be, and will be more along the lines up of by a company that has a revenue stream, or buying something more intellectual property? john: that is very, very interesting. i'm interested in both. i think one of the things library needs is a new strategy, which is taking shape, i should point out. it needs more channels, more reach into the market. so yes, in that sense, i have been focusing on the company that is a mature business face. mature does not mean old, it means growing to get our channel broader. the gap, as i pointed out, we don't have a lot of this point. interesting ip technology, we are interested in looking at it. julie: let's talk about cars. speaking of futuristic stuff. you are now in the fleet management market. your product is called radar. can you tell us how that is doing so far, and how you might be expanding there? john: it is early on. the product has been through a lot of proof of concept. lots of great accolades. we definitely are the leaders, technological point of view. building a sales team to reach the market, investing in marketing. early signs are very encouraging. i expect that to be a growth next year. we have two versions. one is for the containers, which is kind of the heavy-duty one. the other one is more for the chassis, managing other assets. there are so much opportunity there, it is unbelievable. asset management is in offering -- everything. including hospitals, transportation, logistics, of course. and even government, you know question mark who was managing all of these trucks and we are early on in the game right now. julie: how about driverless echnology? john: um so, we are perhaps, we have about 50 million cars out there today running around the world using our technology embedded. mostly in the infotainment system, in the last two or three years we added a lot of investment. we built up things like lane hanging and signaling. we are differing one of the major players in the market. and i think connected cars is a bigger market today for the next five years. they may turn into a more autonomous technology. emily: that was blackberry's john chen speaking to bloomberg's julie hyman. softbank is deepening its ties in the middle east. the tech giant plans to invest as much as $25 billion in saudi arabia over the next three or four years. $50 billion is expected to go to a new city that the crown prince plans to build. this project is also backed by more than $500 billion from the saudi wealth fund. robin lee has been outlining his strategic shift towards artificial intelligence and autonomous cars. he gave the keynote at the world conference in beijing. tom mackenzie reports. tom: baidu ceo and cofounder robin lee detailing squarely on artificial intelligence. ai not just the power the search engines side, but his video content and increasingly pushing the autonomous vehicles space. it is partnered with a number of carmakers in china. also a bus maker. it expects of the company to run on a fully automated bus in july of 2018. robin lee also announcing his desire to push into smart ities. and launching a hardware product, an ai-powered smart speaker system that you can deploy in your home and connect to other devices, and it will be voice-activated and controlled. baidu is making the shift because it is facing increased pressure when it comes to revenue, particularly on spending for the likes of tencent and alibaba. baidu says they have an advantage, which is a treasure trove of data in the search engine business. were they have about a 70% market share. they said that will help them deploy the kind of ai products that we can use in our homes and in our day-to-day lives. tom mackenzie, bloomberg, beijing. emily: coming up, tencent post a blowout quarter with its fastest growth in seven years as wechat plans a newly one billion smartphones in china. we will discuss the company's growth story. and yixin, an online car loan provider backed by tencent made its debut in hong kong. we will catch up with the ceo next. this is bloomberg. emily: in china, tencent posted it strongest growth in seven years. they posted a 61% rise in quarterly revenue. tencent writing the success of video games and expanding internet ad business. the earnings comes after the vital percent stake in snap. peter alstom joined us from tokyo. peter: tencent had surprising growth. the fastest revenue growth since 2010. also on profits, they blew past the estimates on profits by about 14% on a gap basis, which is substantially greater. there is a company that seems like analysts -- it is a company that analysts are having a hard time understanding exactly what is going on. a lot of this is driven by their instant messaging services. they have we chat, which is now up to almost one billion users in the country. so that allows them not just to advertise on that platform, but also to promote different products, including the games business, which has proven very strong for them. they have a whole category of games. that has allowed them to cash in on the services. emily: taking a look on the loomberg chart, we see the revenue growth of tencent compared to the world's biggest companies. tencent is that white line. alibaba is the purple, facebook is the yellow, and alphabet is he blue-green. do you seems any sign -- do you see any signs of weakness, peter? peter: it is very much a chinese-focused company. they have talked about wanting to reach out beyond china and expand international, like alibaba has. they have probably struggled a bit more and is not as well known outside of china as alibaba is. you mentioned the snap stake. they have taken a stake in tesla. they want to expand not just instant messaging services, for -- services, but some of these games that have been quite popular. so far, it has been great and helping them tremendously, but they want to move to expand internationally in the future. emily: yeah. what do you make of this 12% stake in snap? is that the first of other similar moves? peter: well, tencent has been very active in investing in startups in the u.s. some more established companies. snape is an interesting case because tencent's business model has been so successful with promoting products with the and advertising. it seems like the kind of skills snap could probably benefit from. but it is a quite small stake, even at 12%, it is not clear exactly what kind of collaboration there will be between the two companies, but it sounds promising that tencent can bring some of those skills in advertising and marketing a particular to snap. emily: so peter, these are the the other chinese -- peter, vis-à-vis the other chinese tech giants, alibaba or baidu, do numbers like what we see only further cement tencent's dominance going forward? peter: it is interesting. ever since alibaba went public alibaba and tencent have traded places as the most valuable tech company in china. now, tencent is ahead just before the trading yesterday, it was ahead by a very, very small margin. this will widen the gap a little bit. but yeah, tencent has been doing very well. i think it's business is not that well understood. it is kind of a hybrid of facebook and twitter, and games companies wrapped up into one. that has been very popular for them. emily: that was peter alstom in tokyo. well, yixin, an online car loan provider, jumped on his first day of trading in a market group by tech fever. we caught up with stephen engle in hong kong to discuss the ipo scene. stephen: trading started for yixin's ipo. congratulations on the successful listing this morning. can you tell me, what a company has an ipo in hong kong, if your tencent-linked or alibaba-linked to gives you a pop. can you quantify how much of a pop you get because you are backed by tencent? andy: we are backed by tencent in many different facets. right? accounts, you know, user traffic, risk management. they are very different facets of my business. i think the pop are getting from the fundamentals of my business, rather than just on the stock market side of thing. stephen: it helps to have one billion plus users on we chat. andy: we are currently integrating on our account systems. we are overlapping accounts. we are creating higher payment in a virtual circle. we are allowing customers to purchase loans on cars and leasing on cars, all using their capabilities. and simultaneously, as we provide services to them, we are allowing or enabling customers to use it as a means for payment on the service side of it. it is many, many different facets for the individual who owns a vehicle in china. so, it is all about car life altogether. stephen: ipo's, timing is everything. you are hitting the market at a good time. are we in a tech bubble now? andy: no, i think we are right in the middle. hong kong is a great place to be. east resources meet the west resources. investors locally are living currently in the market where we operate. -- i think hong kong is one of the best places to be right now. stephen: we are above the previous tech bubble already. we are about that already. andy: we are operating on the fundamental basis. in terms of myself, looking at the market as to how the market overall in china is driven, and now the stock market, and the capital markets are reacting to that. and what we can deliver in the ext few years. stephen: tell me how the auto market has evolved. 10 years ago i lived in beijing, and i try to get auto financing. they said, do you have a house or collateral? [laughter]stephen: i know you work with a third-party. have you reduce your risk? andy: when i started yixin. half years ago, leasing penetration in china was in the single digits. not necessarily people are rich but they are likely to use cash to pay for cars. now we are faced with a new generation of car buyers. a lot of them like to get used to the credit life and pay in installments, submitting cash. yixin happens in the at the right time in the right place in china at this moment. stephen: how much growth easy -- how much growth do you see an auto financing and auto insurance? andy: tremendous. the auto industry in terms of selling wise was about 3 trillion renminbi for year. you are looking at a 4 trillion market, 1.5, 70%-80% will be in the retail end. about 3 trillion or so market to penetrate. right now, we are only half that. so it is tremendous growth for the next two years. stephen: i saw some pretty big numbers for your parent company. andy: they have been participating in the last two years. we had a record day. we had almost 120,000 submitted applications that day. and we are looking to deliver thousands and thousands of vehicles after that. stephen: well, what would you say is your biggest risk right now? there are a lot of cities that have restrictions, traffic restrictions. what is your biggest risk? andy: we actually get to have thousands of different license plates because we release -- because we lease vehicles to consumers. we are not only the leaseholder, but also, we are the vehicle owner as well as the license plate owner. we are stacking up thousands of different license plates in different provinces. the biggest risk for yixin, because we are operating in such a big ecosystem, there are multiple parts in the system. i want to make sure every part is working together cohesively. we are enabling our growth in the next two years. emily: that was bloomberg's stephen engle. coming up, amazon takes ai to a whole new level. the tech titans are pairs to launch their first cashier-less convenience store. and if you like bloomberg news, you can listen on the bloomberg radio app, bloomberg.com, and on sirius xm. this is bloomberg. ♪ emily: square has been allowed its purchasers to except bitcoin ince 2014. it's amazon's most ambitious effort yet. amazon is a limiting checkout lines. the company has been working out the technical bugs in its cashier-less convenience store known as "amazon go," and it's almost ready for prime time. olivia and spencer gives us all the details. olivia: in typical amazon fashion, we don't know every detail of how it works. we know you walk in, scan your phone, pick something off the shelf, and thing when you walk out, charged you automatically. we understand through patents, it uses facial recognition. we think it recognizes your face and then pairs that with your amazon account. emily: so spencer, they have been working on this for a while now. why have not least in this at work? spencer: yes, they definitely had some unexpected bugs when they launched. at that time, they expected to open early calendar year, which did not happen. what we have understood is that they are working through situations beyond the individual shopper, which is a simpler transaction. they have to think through groups of people coming in, say a couple or a family. there might be a situation where mom, dad, a couple of kids go in, and the person who checked in with their phone come in and the parent remains with the children. there are a lot of group shopping scenarios they had to consider and work through. emily: you guys, olivia, you uncovered a little pikachu challenge for the employees dressed up and try to fool the system? olivia: amazon has been encouraging its employees to use the store often so they can find any bugs. and three very brave amazon employees say they will try to trick this up, and they put on three matching, bright yellow pikachu onesies. they went into the store and bought snacks and sandwiches, and apparently there bill was accurate. it even past the pikachu test, which is really great. olivia: but i think it is pretty interesting. it is amazing that the store has been delayed so long mainly because of kids. if you are going in and shopping -- if you have ever shopped with a small child, it is difficult. emily: i have. olivia: when a touch everything that was tripping up the sensors. emily: spencer, do you think this technology is something we will see in whole foods? that would be obvious, right? spencer: i think that will be the long-term plan. amazon has very much said that is not the plan, but that may not be the near-term plan and they don't to say that because they don't be seen as a jobs killer. but if a perfect this and this becomes a consumer expectation, how can they possibly leave cashiers and the checkout logjam in other stores that they operate? granted, that would be a much more difficult proposition, bigger store, bigger inventory. but you have to think that ultimately if they perfect this, they will get more and more ambitious with this and apply it to a bigger setting, and that is what amazon is trying to do here -- we defined a shopping experience and take away the inconvenient piece. if they can do that in a small store, you figure they would try to apply it to a larger store. emily: we saw big price test today, olivia, on thanksgiving merchandise inside whole foods. is there more to come? olivia: yes, just in time for the holidays. you can get your turkeys to $3.49. prime members can get it for $2.99, a $.50 drop. they are trying to get people to sign up for prime. that is really the strategy behind these price drops, and we will expect to see the more, but we will see them with that added "you must be a prime member" to get after discounts. emily: can we see more of the same, spencer, with the christmas holiday coming up? spencer: this is going to be an interesting holiday. the first holiday shopping season with amazon owning whole foods. we are already seeing them capitalize on the physical presence by introducing their gadgets. they're not going to put in random, nonfood items, but they will put the amazon-branded gadgets that makes the most sense to them, and and they see more loyal amazon shopper. things like echo devices and their fire tv sticks, those sorts of things. they are definitely capitalizing on the physical, much bigger physical presence they have with the whole foods acquisition. emily: that was number technology's spencer silver and olivia zelesky. nd that does it for this this edition of "best of bloomberg technology." we will review the latest in tech throughout the week. tune in each day at 5:00 p.m. in new york. 2:00 p.m. in san francisco. and remember, all episodes are live streaming on twitter. check us out. that is all for now. this is bloomberg. ♪ is this a phone? or a little internet machine? 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[laughter] >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it ay