Global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. Im alisa parenti. This is bloomberg. Bloomberg technology is net. Next. Emily im emily chang and mrs. Bloomberg technology. Blackberry back under pressure as shares dive less than a year after it went all in on software. We will break down the first order miss that ended the canadian companys 2017 winning streak. Suddenly change in china. We have highlights from the biggest stories this week in tech. More portfolios in africa start to diversify from oil, we take a closer look at the emerging. Our deep dive into the bc climate on the continent and how it stacks up against the competition. First, to our lead. Blackberry shares plummeting more than 11 in friday trading. The Company Getting a speedbump in its Quarterly Earnings report grea. The company missed analysts estimates for total revenue. Before today, blackberry shares had risen this year. Most of its revenue now comes from software. Joining us in the studio, cory johnson. And from toronto, garrett did think. Why is the stock down so sharply after what has been an ok year . They had a great year, 60 . Good year from blackberry, of more than 50 . The reason they had such a great year is because people started finally treating them like the Software Company theyve become. They have gotten rid of phones completely. They no longer have to handle that manufacturing risk. People arent worried about that anymore. Investors said, its a Software Company. Lets value it like a Software Company great when you are a Software Company you have to get your growth targets and meet expectations for quickly growing software, which is what they werent able to do this order. Emily gerrit, i did speak to john chen, the ceo, several months ago. Take a listen to what he had to say. So we are recommitting more towards the licensing of software, i. T. Knowhow, two other people. On then we are depending relying on technology streams. We have one keeper, i promise people. We didnt get any numbers specifically from them. It is designed inhouse, but its not manufactured by them. You know, Major Chinese manufacturer of phones. Even if that phone does really well and everyone says, finally the keyboard Android Phone weve been waiting for, its not going to make a big difference for blackberrys bottom line. Emily we always knew this would be a difficult transition for blackberry. John chen said as much as well. What is your take on whether they can pull it off . Cory they are pulling it off. You have to ignore the prophets this quarter. There was a onetime gain of nearly 1 billion. Qualcomm actually won 980 million. That all went into earnings this order. Theres no affiliated cost with that. The result is that this quarter looked a lot better than it really was. If you look at the Software Growth on a yearoveryear basis, percentage gains, you can see that the growth has been really bumpy. N you look sequentially bigger sales in the fourth quarter. On a sequential basis, you can see the decline down 1 on order over order gain on software sales. That is concerning for this business. They need a business to grow. They spend billions of dollars in acquisitions. They planned to do even more. But they need to have growth, not just a survivable business. The concern among investors is, is this all were going to get from this business as the hardware revenue goes away. Emily what kind of acquisitions could he make . Cory gerrit it was highly hinting to them and told us when we went to talk to him that he will be doing acquisitions and he will be doing it to grow revenue. Going back to the strategy cory was referring to when they were buying revenue, they will try that again probably over the next 12 months. And he did say its not on the product side, its more on expanding their market opportunities. One potential for that could be going out and buying other companies to compete with qnx, Small Companies that make operator auto systems for cars, just sort of expand their market share in an industry they are already quite deep into. Emily all of this as we are about to mark the 10th anniversary of the iphone, showing no signs of slowing down. Cory its amazing to see the changing of the guard here. Its worth it for Technology Investors to think how much can change. How dominant nokia was 15 years ago in the cell phone business and now its completely gone. And how dominant black or he was straight when the iphone came out, no one imagined this phone without a keyboard could be a competitive. Blackberry was. When the iphone came out, no one imagined this phone without a keyboard could be competitive. Theres this great chart on my ofomberg terminal that one our colleagues put together, g btv. 3872. You can see the number of blackberries being sold in the blue and revenues in the white line coming down and down and down. The businesses collapsed. Similarly, and i was surprised, looking through my model today, their Service Revenues also collapsed. Revenue directly attached to every blackberry device sold. Those are gone as well. The business that was there is gone, and it didnt really get replaced with anything. The cell phone business is a new business but infinitely smaller than the blackberry of yore. Emily gerrit, thanks so much for joining us today. Cory, i want to ask you one more thing, and that pertains to google, giving up one of its most debated ad formats, popups inside gmail messages thats ken messages for content. The decision comes from the top scanss cloud unit can messages for content. The decision comes from the top of its loud unit. Cloud unit. I think whats really interesting is this google cloud effort. Everyone in the cloud business, amazon web services, oracle, rackspace and others, are worried about what google will do in this space and how big google could become because of where they sit in the tech infrastructure. Whats very interesting is what type of client they might get. Theres a theory out there that says eventually you will have a fortune 500 companies go to microsoft big fortune 500 companies go to microsoft azure. Microsoft has the lead there as the second largest cofounder. Will buildd airbnbs amazon with amazon web services. Suggests is google is going after the microsoft customer. Emily all right. Cory johnson, our editor at large. Thanks for joining us. Coming up, he will take you to the conference in berlin. We will take you to the conference in berlin. This is bloomberg. Emily one of europes biggest tech gatherings, the annual noah conference, just wrapped up in berlin. Lumber ask Caroline Hyde was there bloomberg west Caroline Hyde was there. You cant avoid it, edited dominate discussions at the conference. I got his to some of the keys uighurs there in berlin key speakers there in berlin. We think this is a temporary. We are already starting to see this event. In france you have a liberal government elected comprehensively in power. Reading what is happening in the u. K. And the u. S. Is not representative of the longterm orientation for civilization. Caroline do you think brexit will affect the u. K. . Everything that has to do with regulation. Whichan Investment Funds invest in all the venture funds in europe, just that investments in the u. K. Are not in the eu quarter anymore, so the percentage these funds can invest in the u. K. Dramatically will shift. I would say so far, no real difference. But in one year, two years, three years from now its tough to say. Brexit and trump were very helpful for European Development because a lot of europeans said, ok. Lets take a break great lets go into a different direction. There is a new and alternative form of political leadership, and it can be new and fresh without being, lets say, populist or libertarian. Caroline an optimistic note being played. You cant go to a Bloomberg Technology conference without a car being presented. I spoke to the ceo of porsches digital about the presence of the company not only in germany, but also in Silicon Valley, and got to discussing perhaps the future of the digital push for the luxury carmaker. It seems as though tech giants or where he sees the competition, not rival automakers trad. Specifically you aspire to the ownership of a porsche. It is something we want to preserve. There isnt another product that young kids hang a poster on the wall. Fascinating, if you think about it. [inaudible] thats something we want to preserve. Itself, andcar theres ownership and mobility around it. Then there are other things that are more lifestyle oriented. To me that is the lifestyle we want to focus on. Youre actually standing, blurring the line of the core industry you are in. You go into different areas, new segments, we are doing this by combining physical assets. It might represent the lifestyle. So, that means, we want to help you organize your weekend. You want to do this before you think about having a need. And doing this in a premium, inspirational way because we know what you want as a customer. I get an a car and it tells me where i can go, what i can buy. Even before. If its a nice weekend the car can tell you, it looks like nic weekend. This we can actually look at other ways of how we can enhance your life, even meeting people who are likeminded and Exchange Information on a professional level. Caroline who do you work with when it comes to the Technology Giants . With all the big guys currently, we talked to a lot of them. We are looking for innovators. We want to be on the road of orchestrating all these aspects. We want to porscheify your experience. It is a really cool and wild idea. Im a Firm Believer that information we consume it today will not be the way we consume information in the future. Create an experience around it rather than how we do it today. Want to change that completely. In terms of the data, at the end of the day its the customer. We only get permission on behalf, to unify some of this, orchestrate it, practice it in a meaningful way. Thats very important to us. Caroline plenty more great interviews from the noah conference straight you can check them out online, go to coming up on. Bloomberg. Com. Emily bloombergs Caroline Hyde from berlin. Coming up, we take a look at the working relationships it rain vcs between vcs and entrepreneurs. This is bloomberg. Emily on the heels of ubers ceo taking a leave of absence and resigning, another Silicon Valley figure is set to be taking a leave of absence after allegations of ms. Conduct misconduct. He announced his indefinite , in afrom Binary Capital statement provided to an online news publication. This follows a report of allegations of Sexual Harassment which report 6 women had uncomfortable encounters with him. Three of those women spoke to information on the record. Great to have you today. I should start by saying that he has several statements, the latest of which was to say im sorry about my behavior is a categorical it meant. Understatement. I am so sorry. I personally spoken to all the womens named in the information report. They can from their account to me. One of the entrepreneurs told me it is just behavior that is so appalling and for us it was as if we dont Say Something and this happens to other women, it is something we could have prevented. We are not going to speculate on the facts here. What is your reaction to this. Tory i would love to believe we are sitting at a moment where there is a sea change happening and the things that up until this point where the positives about Venture Capital or the way Tech Companies have been run and startups have been run, theres a pause and a moment to say, actually, we need to get more people involved for these for this industry and these companies, and new companies and innovation to happen, and it cant happen if there is Sexual Misconduct in Sexual Harassment at the core of a dynamic with women, women of color and i believe this is the first step and it is certainly not the last. Emily you are a woman who has money in the industry. Have you ever had an experience that has made you uncomfortable . What has been your experience . Absolutely. I know very few women who dont have an experience that either or thatm uncomfortable was a friend of theirs. But i think there is something really important to flag in this conversation, which is every woman, myself included, wants to talk about their company. I would love to sit here and talk to you about the amazing work we are doing as a staff platform for people creating their own social networks. The fact of the matter is that as a female entrepreneur, there is a tax that i am paying because of this bad behavior that i didnt do it, and i think the opportunity here is to say enough. Thats what has been wonderful to see today and yesterday, the men in this industry saying that this is on acceptable. Its unacceptable that the ceo of a 70 billion company, and its unacceptable as a general partner in a 300 million fund. Emily the tweets to that effect started rolling out a few hours after the article dropped. Reid hoffman, cofounder of linkedin at greylock posted extensively about this today. He said he was outraged, and he actually talked to you about what can be done. And you suggested some sort of or code of conduct governing the relationship between Venture Capitalists and entrepreneurs. Currently there is no framework for that. You and i have talked about this. Gina one of the things that has always sort of shocked people as an entrepreneur when i have said, yeah, because theres no hr department. If i am propositioned in a fundraising dynamic, or after i have taken money from someone, who do i go to . Am i going to go to the other partners . Maybe. But now im in a he said, she said at a moment and a time when my competition is actually recruiting and raising more money, and building and innovating. So now i have to go and deal with that . No. Im not going to go deal with that. So i actually believe that this is only step one. And as we start to say that there is a code of conduct and a set of behavior that would happen in a big company, we are only going to get better from here. Something like that get reinforced or enforced at all . Gina the good news is that there are experts at this. Im not one of them. Im building software. But what i do think is really is that up until this moment, it hasnt even been clear what is acceptable and unacceptable. In the first up is saying, this is unacceptable. The second step are people like reed or mike naples or thin barnes, all of these people stepping up and saying, this is not acceptable to us and if you let us know that something is going on, we will take action. Emily the very same week Travis Kalanick after taking a leave of this after resigned, a long investigation by the former u. S. Attorney general into allegations of Sexual Harassment. A woman named susan fowler came forward several months ago. Words. No but, do you think these kinds of consequences will actually lead to a better Silicon Valley . Gina i think addressing Sexual Harassment and unconscious bias and conscious bias, for that matter, will lead to a better Silicon Valley. The counterpoint is that for many years, some people say Travis Kalanick behaved unacceptably or created a culture that wasnt acceptable. Follow the money. I think the real story of uber today is the fact that travis didnt just resign. Hes on the board, and what he extracted in return for to removeas ceo is bill gurley from the board, if reports are correct. He is still actively involved in finding that new ceo. Hes the shareholder, i believe, that has the most control. I dont think the uber story is over. The founder and ceo, he will have you back to talk about your company, i promise. Thank you for joining us. Coming up, just in the last hour, spacex successfully fired a falcon 9 rocket for the eighth time this year. We dig into the state of elon musks space ambitions, next. This is bloomberg. You are watching Bloomberg Technology. Here are your first word news. 800 households will be evacuated from a Council Estate in north london in the wake of the tower fire appeared Officials Say it is to allow a urgent fire safety work to take a spirit take place. Firefighters said they could not guarantee resident safety. Meantime, theresa may says her thoughts are with residents being evacuated. She tweeted her support to Emergency Services to continue to safeguard the public. Earlier, the british feynman minister british Prime Minister called her proposal on the postbrexit rights of ease citizens fair and serious. We had a discussion about the offer the u. K. Had made to use citizens and other leaders have reacted positively to the offers we have made. But European Commission president donald tusk says the proposal is about reducing citizen rights. May says almost 3 million eu citizens in the u. K. Will be able to keep living there after the breakup. You and secretarygeneral will thus cutrez the uns funding. He will meet with members of congress and the Foreign Affairs committees and possibly seen her cabinet members. The proposed budget would cut budget cut funding for you and peacekeeping. U. N. Peacekeeping. The u. S. Led military Coalition Says someone was taken out near the iraqi mortar. He reportedly owned a currency exchange. He put millions of dollars into and out of Islamic State controlled territory. Turkey has rejected a key demand by aerostat arab states. The demand that turkey pull out its worse is was an ultimatum from saudi arabia and others which have cut ties over alleged ties to terrorism. Qatar has confirmed receiving the list of demands from kuwait, who is mediating the dispute. Landmarks will promote the bid for the 2024 olympics. Showing offlight is high divers and the arc de triomphe. Paris is competing against los angeles to host the games. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Emily this is Bloomberg Technology. There were a lot of tech related headlines this week. The ceonths of scandal, of uber is out. Have traveled to the white house to meet with donald trump youd donald trump y. Take a listen. The beginning of what will be a long process, but the initial indication is it was a pretty collegial atmosphere. Donald trump talked about how he is working hard with congress to make some concessions on it would be pieces or immigration ore hib visas immigration more generally. That is a positive move. Tim cook made some comments we will hear in a second. It is beginning of a big process, there is a lot of work to be done. About sixner talked months to approve changes on government websites. A lot of work to be done. I think they have started to do it. What lets take a look at tim cook had to say to president trump. The u. S. Should have the most modern government in the world, and it doesnt. It is great to see the effort that jared is putting in working on things that will pay back in 5, 10, 20 years. Join them cook did not president ial council by choice. He does not think they are terribly productive. He said he thinks it is important to work with the administration whatever your politics are. What did you make of what he had to say . He is showing there are areas where we will make concessions. We disagree on immigration, we disagree on the environment. But he cares about veterans issues, and that is one of the things Jared Kushner wants to modernize. Tim cook and the rest of tech will work with trump where it matters most and benefits them. Emily we have to talk about uber. Big week. Every week. Emily this ceo resigned. That is the biggest. It is kind of crazy. The ceo has resigned. Steward on is the the board, instrument on recruiting, and in the process to get rid of travis has also stepped off. A mind blowing week. Emily you wrote a great piece on the game of thrones clinical maneuvering. Bill gurley was the one who got investors on board to deliver him this letter asking for the resignation. Tell us more about what happened. What he could not do on the board, get the board to oust dravis, he got a coalition of fidelity, including five investors altogether. Handdeliverrtners sayingter to travis, your investors have turned against you, you need to resign, there are legal issues. You have put the company at risk, you need to step aside. Emily we know they had another Board Meeting yesterday. What is the latest . Where are they now . Of bloombergeme dramatic Board Meetings, not the top of the list. Some new people are on the board, and they are beginning the search process to find the ceo to replace travis. Emily it seems like there is not any one specific waiting in the wings to take the job, whether it is the ceo or coo job. It looks like they are starting from scratch. There is not a clear favorite. No strong internal candidate. It is a matter of finding some wellliked, highprofile executive who has run a Big Organization already who can step in and help recover the brand and organizational prowess. Emily the search for the new ceo will dominate the headlines. Story, tesla making an agreement with the Chinese Government to produce vehicles and shanghai. What can you tell us . Big change from the way they make their vehicles now. It would be a big break from tradition. But this is a big market for tesla, and they face the 25 tariff when they bring cars that are manufactured here. That puts them at a disaffected. They are more expensive in china than here. That gets the cars closer to the public, and there is a lot of demand. Emily tom giles and Eric Newcomer there. Now to out of this world. Spacex today successfully firing a falcon nine rocket for the eighth time this year. The next one is scheduled in two days. The company is on track to achieve the 24 total missions it targeted for the year. Spacex has positioned itself as a driving force in the new age space race. Hull. G us with more, dana what is the significance . Eighth launch of the year, and last year they only did eight total. This is a ramp up. It is significant because of spacex has a lot of missions on its manifest. A want a pattern of launching rockets once every two weeks. Elon musk of said launching rockets is getting kind of boring. It kind of is. Remember last year, they landed on a ship for the first time. That was a milestone. Today, they landed for the seventh time. All of the efforts they put into rocket reusability have become hard for the course. Emily it was not always so boring. They have had failed launches. Are they behind them . Always are is potential for failure, the launch community understands that. The last was in september, and they were able to return to flight pretty quickly. It feels like they have their mojo back. They have more launches scheduled this year than any competitor. Emily what does this mean for customers . Dana cost. We dont have a lot of visibility into what they are charging, that they are reusing boosters that have been flown before and offering probably a discount to customers. Will satellite customers show confident flying on a reused rocket . Launch missions will really come down in cost. They are doing a slightly different things, but where does this put spacex in the private space race with Virgin Galactic and blue origin . Dana spacex has more customers and launches. Everyone is working on reusability but spacex is proving they can do reusability with paying customers. Emily what is next . Dana a launch on sunday in california. 10 satellites. Another in early july and later this summer, we are supposed to have the first test flight of their heavy lift rocket. Emily we will be watching this weekend. Always great to have you. More problems for toshiba. Its shares have been demoted to the second section of the Tokyo Stock Exchange after Shareholder Equity slipped into negative territory for the latest fiscal year on friday. Toshiba ask for an extension for its earnings report. It has been rocked by multibilliondollar losses in its nuclear unit. It is selling off its chip business to raise cash. Coming up, how funding for startups on the continent compared to around the globe. This is bloomberg. Emily ireland is said to be seeking ways to protect itself against losses stemming from holding back 14. 5 billion of apple back taxes. This according to two people familiar with the matter. They want to make sure they are not left on the hook for the drop in the value of funds during the appeals in the eu court. Last year, the European Commission slapped apple with a multibillion dollar bill. The Commission Said ireland granted unfair deals that reduced the Companies Corporate tax rate. Meantime, a lot has been said about africas emerging tech scene youd with all of its promise, actual investment is still lacking. In 2016, only 129 million was invested in all of african tech silicon, less than valley raises in a single round. The Financial Services love aims to come in lab aims to come in to this. It supports tech businesses in developing countries. It recently announced a 250,000 investment in four separate startups that service all of africa. Joining us is the lab director. Talk about the initial investment. Jake thanks for having me on. The initial investment, we have four new companies we are adding to our portfolio. They are based in kenya, two of them, one doing microinsurance with satellite data, and one that is online lending. We have one in ghana, doing interesting things with identifying people for Financial Services, and finally there is one in the United States serving africa and south asia, and they are creating natural language chatbots to help people use Financial Services more naturally. Emily it is still a drop in the bucket compared to the kind of numbers we see in Silicon Valley. Why is that . Jake some of it is history. Africa is one billion people, a largely young population, rising incomes. A lot of interest in new services and technologies. A lot of new infrastructure is in place, new mobile networks and the adoption of mobile phones has going gangbusters the past few years. But the longer history, there have been challenges in the past and governments and exits investments. I think investors are still thinking of africa the way it used to be, where is we see it as an emerging opportunity with a lot of new consumers hungry for products. Emily tell us about the start of landscape, what sort of trends youre seeing and how develops trends are. Jake a lot of the investment that is happening is kind of clustered around a few specific markets. Nigeria, kenya and south africa. The trends are ones where they are often applying technologies to bring down the cost. If you want to serve low income people with Financial Services in small packet sizes, small insurance contracts, micropayment transactions, small loans, the cost have to be. Uper efficient a lot of the companies that are successful are finding ways to drive down cost per user. Emily what is the most promising trend in african tech right now . Jake wow. Emergencely think the and adoption of smartphones. The population in africa, roughly speaking of, there is maybe 50 or 60 of the population have a mobile phone. Not a lot of them are smart phones, but smartphone usage has doubled in the past couple of years. There is a really strong basis of four connecting people with dish all services. Among the challenges, energy and power, things that are very important to operating a business. There are days long blackouts at a time. How do you handle that . Jake people get creative. There are generators all over the place. Half the households in nigeria have their own generator. People create failsafes and backups. One of our advisors has created an off grid solar Power Solution that uses mobile technology to finance it. That is popping up all over kenya in giving people off grid solutions. We see a huge opportunity were a lot of people see a risk. A lot of entrepreneurs are stepping in to fill the gap in creating businesses to sell them for Structure Services and creative solutions. Emily what is the involvement of the bill and Melinda Gates foundation . Lab was started as a foundation, and the was part of that. They are interested in supporting the application and development of cuttingedge technologies to the problem of how do you bank the last 2 billion people on the planet who dont have Financial Services . They are finding things like satellite imagery, language services, to help with that. Emily thank you so much for joining us. We will keep our eye on you. Aiing up, interest in technology has exploded in the last year. Investors are taking notice. Cohen gives his perspective. This is bloomberg. Emily facebook is looking at raising Additional Office fees space in dublin. The company is considering 75,000 square feet in a Business Park where google and cisco have offices. They already agreed to rent space earlier this year. Venture capitalists are pushing a lot of cash into artificial intelligence. More than doubling the investment into fertile reality in 2016 according to data. More than 2 billion have been invested in Machine Learning technology this year. New yorkpartner at Venture Partners spoke with scarlet fu at the bloomberg paddle about the panel about the interest in ai. I guess everybody wants to get back on the ai track. It has always been part of the conversation for a long time. T has become vogue you can get a job as a Data Scientist immediately at a quarter Million Dollars a year. Of ai, there is no question. Machine learning is everywhere. It will continue to be everywhere for a long time. Is it real . That is the question. I think ai is when youre doing a lot of number crunching, and many people right algorithms and they are doing ai, but they are not. Ai is huge and continues to grow. It is the next, shiny thing. To pickit is so hard and choose, people invest in it because they can youd there are all of these new funds. I dont believe in funds. I think angel investing is a contact sport. I want to get close to the entrepreneurs. Were is a rise of funds people dont think they have the time, and i get it. That they lose out on so much by putting money into a fund, and funds generally have to invest. Some of theook at other areas that have been hot, wearable devices, augmented reality, internet of things. It is over . Brian i dont hear about it anymore. It is just like, bye. Scarlet what is next . Brian we try to use our crystal ball. Is it cars . Mobility . We seem to have that sort of kind of salt. Solved. Biomechanics. Extensions of our own bodies. Not robots, which is a possibility, a possibility for a long time. But maybe manmade becoming robots. What was it on star trek . The boarrg. We will start adding pieces to our bodies. I really think that. I want to take a closer look at that. We want life extension. People like larry ellison, they are getting older and are not happy about it. Ray kurzweil and the singularity. We are not happy growing older. We want to be happy and replace body parts. I think that will become a big opportunity. Scarlet fu in conversation with brian komen, cohen,n of brian chairman of new york angels. That does it for this edition of blooper technology Bloomberg Technology. Have ankend, we will eyewitness account of the meeting at the white house. Have a wonderful weekend. From our studios in new york city, this is charlie rose. Jeff charlie is away. We begin with health care. Senate Republican Leaders released 142 page bill this morning detailing plans to repeal and replace the Affordable Care act, or obamacare. The legislation was crafted in secret and make significant cuts to mirror medicaid and wer removes the mandate that all americans need to have health care