been asked to join the disney board. can his perspective bring tech magic to the magic kingdom? and iac had to fire an employee over a racially insensitive tweet over a twitter account that is barely followed. how is social media created the potential risk for modern businesses? we will explore new corporate management over social media. apple's iphone is finally coming. after six years of negotiation, apple and china mobile have announced a deal that will bring the two newest versions of the iphone to china starting next month. china mobile is the country's dominant carrier and apple will gain a subscriber base more than twice the size of the entire u.s. population. but how will this help apple in china as they battle lenovo and samsung? my guest helps google set up chinese operations. good to see both of you. how big a deal is this? >> good to see you. it is a great deal for apple. finally, they will be able to get access to china mobile's 759 million subscribers. the problem is, a lot of analyst of the to realize it, only about 20% of their subscribers actually use three g. the vast majority still use the outdated two g service, so it's going to be very difficult for apple and china mobile to convince hundreds of millions of consumers to leapfrog and skip over using three g and go straight to the 4g system. it must work on a 4g. it hasn't really been released yet. they are hoping the technology will come out by the end of the month in the inner ring area. that would be like saying you can have four g services in downtown manhattan. in greenwich village. a lot of consumers will take a wait and see attitude about whether the system is stable because china mobile has been criticized and whether prices on the data packages are reasonable or not. it is good for apple but it's not going to be that 20 million handsets a lot of analysts are estimating. >> he says only 20% -- that's 150 million people already in three g. forget all of those migrating to it. what do you see as the likely benefit? >> china is so massive that any small fraction is nothing to scoff at. some of the early estimates we are seeing anticipate 17 million new subscribers from this deal alone. 17 million is almost as big as the entire smartphone user base in spain. that gives you a sense of how a tiny drop in the market share is a big thing for any hardware or software manufacturer. >> at a certain level, there is the migration -- i don't imagine you'll have fewer people or a smaller percentage of that user base on mobile, but how big can that migration be given the economics of china and the level of income of the vast majority of people? >> this is a great question. the number 100 million has been floated around as the potential new handsets for people as a result of this deal. it's a much larger than the numbers we have seen. i think it depends on the pricing of the handsets himself how much china mobile can subsidize depends on the data plan and how well the 4g rolls out in china. to give you a sense, china mobile has 40 million iphone users on its network and a network does not even support iphone functionality. even if a fraction of those users migrate to the five -- >> or upgrade from their illegal phone. what do you make of that? >> the reason why the numbers sound big but are not, most of the users are not signed up for long term data package like a three year long contract. most chinese workers prefer a pay-as-you-go card. they are actually buying a lot of the expensive iphones because it is a prestige item. all of these people might move to shanghai for six months or beijing for six months i network. these people will never sign up for a multiyear contract for data plan or voice because they are based off of one city. it's not like the united states where you can take a phone from new york and moved to california and be able to keep the same phone number. that is going to be a problem. you brought up a good point rate a lot of people are only making about $5,000 a year. these people are extremely price sensitive when it comes to a data plan. they would like to have a handset to show prestige and status to outsiders, but they are price sensitive when it comes to the data plan. you will see an 8 million to 10 million increase in sales. people who want the iphone 5 in china pretty much already have it. you will see a bump up when the newest iphone comes out. >> i remember years ago, the star, had its own illegal approach and one was the inability of workers to take those cheap phones from one city to the next. do you think china mobile could change that policy? >> let me add to that point that might be of interest. one is the rising of the upper middle class in china which is certainly expected to grow tremendously in the future. i have not heard the press talk about but it's important to talk about it. we have done insights about mobile user behavior and what we found in our proprietary study is the china mobile user is much more active on mobile than the average first western world mobile user. 80% of china mobile users would have said yes that they made a mobile purchase versus 50% or 60% for the u.s. and germany. >> restate that. a china mobile phone user is more likely, 60% more likely to do mobile app purchases? >> also more likely to download apps. in addition to the new users, they are gaining more active users. >> that is really interesting stuff. there are more legs to this story than i even thought. thank you very much. jack dorsey, twitter is no mickey mouse operation but disney is definitely not a mickey mouse operation. we going to look at why disney has tapped jack dorsey, coming up. you can watch us screen -- you can watch is streaming on your tablet or phone or at bloomberg.com. ♪ >> this is "bloomberg west." i'm cory johnson. a consortium created by several companies to acquire patents from nortel networks is 2011 is now trying to unload some of them. they recently held conversations to sell a portion of the portfolio that includes 4000 patents ranging from internet technology chips. according to people with knowledge of the plans -- why is rockstar getting out of the patents? why did they overpay for them or did they overpay at all? i'm joined by david martin, the founder and ceo of a company that -- you have been predicting something like this since the day i met you. why? >> it's always funny because you will recall after some of our early conversations, a number of people said we grossly misrepresented how much overpaying had happened on the rockstar portfolio, just like we talked about the overpaying that google paid on the motorola portfolio. the reason why there's a dispute between our view and the consensus view is we looked look at the actual patents themselves. the problem rockstar has is that there are some very good patents in the portfolio but of the 4000, close to three quarters of them would have a hard time standing up to a true, unmitigated and unadulterated view of a re-examination process. one of the terrible pieces of news for the rockstar consortium is michele lee -- >> i want to talk to you about the new head of the patent office has a job that wasn't working for apple or microsoft. she worked -- >> for google. that is not good news. >> the funny thing is, a lot of people don't realize there are two mechanisms the patent office has for the re-imagination of the patents. one is outside parties. in addition, a director of the patent office can institute director re-examination and who knows? maybe there would be a special interest on the part of a director who has made very public statements about wanting to deal with patent quality issues and, by the way, she will do a fine job because she's one of the first directors to call attention to the patent quality issues. a lot of the portfolio could be subject to re-examination by third parties as well as the director reexam. it represents value to the nortel portfolio because there's no chance there patents in their entirety would be upheld. the risks are going up for consortium members. >> are the patents nortel had, would they have been more valuable for small companies or big companies like this consortium? >> they probably would have done more defensive cover for the smaller companies. added to the already tens of thousands of patents held by microsoft and apple, they did very little incremental improvement. with blackberry on the potential sale block, finding out its patent did not have the value it wanted her tensile -- its potential sale, all of these stakeholders are realizing they probably bought a whole bunch of paper and they did not necessarily get the value for the sale. >> interesting stuff, as always. his prediction came true once again. we will have more of "bloomberg west" just after the break. ♪ >> i'm cory johnson. this is "bloomberg west" streaming on your tablet or phone or at bloomberg.com. jack dorsey has been elected to disney's board of directors. he along with other board members will face an election at the annual meeting. joining us with a perspective on dorsey's newest job is david kirkpatrick, he has -- he is the ceo and tech editor in new york. you know jack really well. what does bob eiger see in jack? >> i think it says a lot about what a blue chip company disney is that it could get jack dorsey after already having sheryl sandberg on its board. i think he sees somebody in jack is a clear sense of where not just social media but internet innovation is heading. if you were running a $45 billion media company, which you and i would love to do and would both do a good job of it, you would want to know what is coming next. everybody knows everything is getting changed by the internet and disney has been a well-run company but it's going to continue to face a lot of difficult choices about how it spends its money and promote that stuff. having such a smart guy as jack on the board will be hugely valuable and will give him a lot of value to be on the order as well. >> i have to wonder -- the largest shareholder at disney was in steve jobs' family. jack dorsey is no steve jobs and sheryl sandberg is no steve jobs. what do you think eiger thinks he needs? >> he would like to clone steve jobs and have a new one. if anyone could play a role like steve jobs, i think jack can do it. he's going to have an amazing resource to have them both on his board. i wouldn't be surprised if cheryl had mixed feelings about jack joining the board because facebook wants to have the insights that might be available when they hear the discussions and now there is the nemesis and i think jack brings a unique set of capabilities and taste. this is one thing he shares with steve jobs is taste, which is in relatively short supply in silicon valley, sorry to say to a san francisco denizen like you. we new yorkers are very aware of that. >> how does jack dorsey manage his time? >> at one point, he claims he was working at both square and twitter. >> it's not someone who manages his time very well. >> it's not an executive full- time position at twitter anymore. if i were an investor in either company, i might have some reservations about this move. except discussions there happen at such a high level that what he learns on this board would benefit both companies. that the good thing. >> do you think he steps back a little more from twitter? he has enough on his plate with square? >> square is his primary obsession, but he is unbelievably devoted to twitter. i think he does have enormous energy. he's not married and he has no kids and works 26 hours a day and spends a lot of time on twitter even though square is his obsession. i don't see him stepping back. he's made a big commitment when donating the stock back. he's not changing, he's just adding. >> thank you very much. how can two big wave surfing legends use technology to make what they do look even cooler? tom carroll using 3-d cameras for the biggest waves ever. i caught up with these guys to get a look at how the technology is changing what they surf and how they show it. >> there are surfing waves, and then there are big waves, three stories or four stories tall that terrify the world's greatest surfers. >> you get thrown around, it almost feels too much sometimes. >> it's a feeling few will ever experience, but think us to technological innovations, this experience has been captured in a cutting-edge surf movie called "storm surfers 3-d." it follows ross clark jones and tom carroll trying to catch the biggest waves in the southern seas and this couldn't happen without the latest in tech. a star with imagery from satellites following the changing directions of vegas storms. then google earth pictures looking for unknown big wave spots and wired buoys measuring the latest motion of the ocean. >> so many different resources we can tap into and understand the weather. >> then they race to the expected wave spots with them loads of specialized equipment. new 3-d cameras mounted on helmets. tricked out powerful jet skis with more 3-d cameras that toes into the wave. 3-d cameras on helicopters, experimental beam splitters on the foreground and background. and when the lens got wet, an air knife to blast the lens. >> i have a handheld camera and cameras on the board. there's a jet ski shooting me and a helicopter shooting me and the boat shooting me. it was overkill. >> there were some tech casualties. >> we lost like eight cameras. >> you lost them. >> you did more damage than me. >> to be sure, 3-d television is struggling for air. 3-d television sales have fallen but in the surfing arena, 3-d technology may have found its niche. how else could a viewer see this freakish tasmanian wave? >> basically get a wave over these steps and into a big tubing barrel and that's when we realize this is different and we are onto something really special here. >> forget the storm surfers. all of this tech proves mother ocean is the real star. >> the ocean is constantly moving and that's the big challenge, to understand the best angle than what sort of wave is going to hit the right spot. >> the film opened to international critical acclaim. they won the most outstanding 3- d documentary. the sound is incredible. you have to check it out. we will be right back with more "bloomberg west." ♪ >> you are watching "bloomberg west" where we focus on technology and the future of business. i'm cory johnson in for emily chang. let's get straight to the headlines. the apple store in berlin was robbed -- police say the thieves crashed the car through the window and stole laptops and ipads. they believe it is the same criminals who robbed another store in a similar fashion. sony sold its music offshoot, grace note and now they are trying to get rid of some nonessential businesses. grace note provides software using itunes and other music programs. italy's parliament has passed the google tax for web advertising. it requires italian companies to purchase internet ads from locally registered companies instead of companies registered in tax havens like bermuda. you may have heard this story -- pr director at irs -- at a company -- she tweeted, going to africa, i hope i don't get aids. just kidding, i'm white. she will landed in south africa and was immediately terminated which released the following statement. the offensive -- we take this very seriously. my next guest look at this thing. he's the founder of a company called maine and is a recruiter here in silicon valley. you have worked at foursquare, twitter and google. obviously, the potentially offensive comment, whatever humor was attempted here was lost on some people, maybe everyone. what i'm interested in this from a corporate perspective. companies hire social media editors to look out for this? >> yes. a lot of the companies i work for have a social media policy. your first day of orientation, they say if you don't want this on the front page of the new york times with your name and photo next to it, don't write on the internet and don't say it to a blogger or reporter. and you don't see a lot of those issues coming from google or facebook or twitter employees. this is a gray area because iac owns a company like college humor, and that type of sardonic morbid comedy is consistent with their brand. >> college humor is a site that pushes up against the limits -- maybe in a sophomoric way, about what is decent, what is funny. you can watch videos of a kid getting knocked over by a door and say that's not right or it kids should get knocked over by doors. i'm not saying what she said was funny, but they are offended at another attempt at humor. >> tweeting in a vacuum -- she had fewer than 200 and followers. one was picked up by buzz feed. she surely just thought she was talking to her friends and for buzz feed tube take it up and say it was the worst tweet of all time. we know it's not the worst tweet, but because she's it the public relations field, it was really damaging. >> back to my original question -- i feel like a lot of companies when they start to approach those in the media say we need to have a social media person, you probably get those phone calls saying do you have someone in their mid-20s who can tell us how to use twitter? >> there are a lot of companies that have a dedicated person handling the company's tweets read even there we see a lot of issues. gogo in-flight wireless had to apologize for piggybacking on it was saying this would not have happened if she could access the internet on her flight. even there, we see these falls from every angle. but that does not prevent having a social media policy or social media manager doesn't prevent employees from making the same mistakes. >> i read a piece online today where the ceo of gawker was rephrased -- i don't want to contribute this to him, but an era where anything you say in private or semi private becomes public, maybe society will get a thicker skin and not take everything seriously and look at bad jokes that fall on their face like bad jokes that followed their face. is there any evidence of that or are things even more sensitive than before because we're not used to seeing private commented public? >> we used to really worry about having college drunk photos outcome back to haunt you. we did see those little bit when facebook first became big and was released. >> i had them burned of me. it was really bad. i had a cleaner come in that came and took care of these people. >> we are not seeing these photos come back to destroy people's reputations grade but we are seeing the tweets, which is something that was not expected. i think it can only go in the direction of everyone is flawed, everyone is going to make terrible jokes or say things in a vacuum that looked really terrible without a context. but i agree. >> i want to talk about something different but on the hiring perspective -- we saw the chief financial officer at microsoft was named in what seems like a surprising job at this new iac, william morris combined talent agency. but the common thread is the investor silver lake. silver lake work with microsoft. silver lake, big investors in silicon valley worked with microsoft to sell skype and worked on a dell deal and now brought him and to do this combined talent agency. is a lot of the hiring that takes place in silicon valley really controlled by these groups of venture capitalists who work with executive? >> yes. i like this story because it was passed at a later stage and a private equity firm is involved. the work he will be doing is still in the wheelhouse. but it is a counterintuitive move that he would go to a talent agency after microsoft. >> william morris is looking at technology to be the new way they build their company like so many companies. that's the purpose of the show we're doing right now -- lots of companies care about that -- care about tech. >> the same for venture capitalists. if you get an e-mail from a company wanting them to run their finances. it is kleiner perkins or andreessen horowitz, you're more interested even if it's for the same start up to work for. it's interesting to see what a role silver lake played. >> the founder and ceo of maine, thank you very much. there is no escaping the self he. they are everywhere. -- there is no escaping the selfie. >> i don't have a problem with the selfie. it's a natural and human instinct to capture yourself in a way that history will not for you. the walls of the met are hung with selfies. norman rockwell -- it's possible having a camera in your pocket all the time has perverted this human instinct and turned it into unbearable narcissism. but if we are going to indict yourself for that, we have to remember the role of the selfie industry. twitter makes you post one when you sign-up. you don't on facebook, it will remind you until you have one on the page. instagram is the house that selfies built. these are not individuals, they are companies. the one that is my twitter icon was taken from a wedding and i obscured my face. one is me walking away with a child on my shoulders. this is a way to imply i'm too cool for selfies. but nobody gets out of here alive. you can be a part of it without making some kind of decision about what you want the world to think you would like to be seen as. is that even grammatical? silicon valley is run on selfies. if they can keep us doing it all the time every day, they have no reason to exist. when i'm done with this video, i'm going to put it on facebook to see what my friend from high school think. rather, alex -- brad, alex. i don't think the rise of the selfie has anything to do with a decline in humility. it's a business strategy, and it's working. >> sorry. i was busy there for a moment shooting a selfie. crowd funding for clean energy is happening inside. find out how to go green with a new investing scheme, next. ♪ >> welcome back. turning now alternative energy, can you save the planet and get a financial reward of the same time? a solar energy platform is letting everyone take a financial stake in going green. i spoke with the cofounder earlier today and asked him to describe the business model for mosaic. >> mosaic is the first clean energy investment platform. people go to join mosaic.com and can browse lots of different projects they want to invest in. those projects make money by selling electricity and investors are paid back with interest. >> you are working on different ways to bring solar since you dropped out of a college back east. which one was that? >> yale. >> you dropped out of college to do what? >> build the clean energy movement. i think it is generation we can shift from fossil fuels to clean energy and i want always to be a part of it. >> this is an interesting financial model. what is the problem? why do we need this model? >> one thing we are hearing from investors as they like the transparency of our investment even more than the yields. we offer about 4.5% -- >> let's back up. that's nothing in a zero interest rate environment. >> these are good investments. people like the yield and environmental performance. more than anything, they know what they are investing in. >> i just want to understand the basics of the financing. let's call it a five percent yield. does that pay in perpetuity or pay for the installation? >> we make loans typically in the five to 10 year space. people get principal and interest monthly. >> at the end of that, who's the owner of the panel? >> whoever you are sitting on basically. >> the capacity for making a solar panels is so much greater today and one of the effects is been a collapse in rises that happened twice. it looks like maybe it is about to. a lot of the solar panels out there that opportunities -- that investors have the opportunity to back, the company that sold them has gone out of business. is that true and is it a risk? >> it is true for one of the projects. the panel manufacturer has gone into bankruptcy. most of our projects, the manufacturers are still around. the warrantees you can count on for something but it's the technology you are financing. if we have zero defaults -- all of our systems are operating well. >> you have zero default and how much transaction has been done? what is the size of an average loan? >> typically in the $200,000 to $500,000 range. >> that was the cofounder and president of mosaic. you can watch the full interview on bloomberg.com. speaking of solar, something unusual was anchored in a manhattan's north so, the world's largest solar powered boat. the company spent more than $19.5 million to build this giant catamaran. it's powered solely by the sun. bloomberg news asked the ships captain how he is changing the future of nautical exploration. check it out. >> basically i'm a sailor. this extraordinary machine [indiscernible] the boat was built four years ago in germany. we were seduced by the idea of doing a first world tour with solar energy. it is the biggest solar boat in the world. it is huge. those solar power -- solar panels make electricity that we store in batteries. we don't go from a to b, we have to adjust with the forecast of the sun. it's quite a challenge. i found my personal energy was not sustainable. so it's good to have a company that relies on the sun. >> that was the captain of the solar powered boat. retailers have been using twitter and facebook to promote sales for a while. target is turning to pinterest to sell popular items in their store. more on how that's going to work when we come back on "numbered west." ♪ >> welcome back. retailers big and small grapple with how to use social media sites like facebook and twitter to draw shoppers to their brick- and-mortar physical stores. one store try a new approach as target, setting up displays, flagging shoppers to particular items of popular on pinterest. emily chang went to a store in san francisco with the pinterest head of partner marketing to see the displays in action. >> pinterest is featured in target stores, which is great for you guys. show me how that works. >> they are calling out items that have been popular on pinterest. some people are visiting target.com and say i love this rug. i'm going to save this in a special collection. it's happening over and over again, so they created this and did it on their own to call out the items users have decided are the most popular. >> one of the most popular items this season is elf on the shelf. i don't know a lot about this because my son is 15 months old, but apparently this is the big thing. >> the elf will sit in your house and observe and make sure everyone is on the nice list. he will fly back to the north pole every night and give a report to santa and then observe the kids again. when it comes back, it sits in some really fun places in the house and target has managed to catch pictures of where the elf sits. it's a beautiful board they have created. >> what are other retailers doing with their products? do you have any other stories where they have used pinterest in a creative way and the result has surprised you? >> a number of partners are using it for their black friday and cyber monday strategies. the hardware company lows created some boards and saw some silhouettes of some items about to go on sale. >> pinterest is just starting to experiment with ads. easy in opportunity down the line to make money through e- commerce? to take some sort of commission on the things people are buying? >> we are doing some right now on promoted pins to test the system. we are in the very early stages today to see how users react and what kind of results drive the partners. >> facebook has been experimenting with commerce for a long time and twitter hired a head of commerce. how do you think it sounds -- how you think it stands out for other potential partners? >> we think of it almost is a combo meant -- complement to google. when someone knows they want something, they can search for it and find it. the other side is i don't really know what i want and don't have a really well formed idea area but when i see it, i know i like it. you don't really come in the store, but when you see it, you want it. that's the experience we are trying to provide area we are hearing it fills a gap that doesn't exist online. >> that was emily chang's interview. the bwest byte is where we focus on one number that tells a whole lot. today, we have a special guest to give the byte, tom giles back in san francisco. what is the bite? >> are you ready for this? it is seven digits. i don't know what that is. >> or might it be 4, 12, 1960. >> is this the day candlestick was open? >> it is. it is the last night of the 49ers games to be played at candlestick. >> monday night football. they are playing the atlanta falcons tonight. i'm thinking braves because the first game was the giants back in 1960. guess who threw out the first pitch? >> it probably wasn't willie then vice president richard nixon. >> a california native. beloved by san franciso nonetheless. >> and now we are losing it great. >> i don't mind losing the stick and switching it with a better stadium. get the latest headlines at the top of the hour on bloomberg radio among and all the time at bloomberg.com/technology. we will see you tomorrow for "bloomberg west." >> live from pier three in san francisco. welcome to the late edition of bloomberg west. in for emilyson chang. our focus, innovation, technology and the future business. let's get straight to the rundown. deal in chinais a with the biggest mobile carrier.

Related Keywords

New York , United States , Shanghai , China , Germany , Beijing , California , Manhattan , San Francisco , Maine , Greenwich Village , Spain , Italy , Berlin , South Africa , Bermuda , Italian , Chinese , Ross Clark Jones , Jack Dorsey , David Kirkpatrick , Emily Chang , Michele Lee , Tom Carroll , David Martin , Cory Johnson , Sheryl Sandberg , Alex Brad , Tom Giles , Richard Nixon , Andreessen Horowitz , William Morris ,