Apple-Samsung Smackdown: Lunch Money (07/23)

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July 23 (Bloomberg) -- On today's "Lunch Money," super-charge the day, and devour all that's driving the markets: stocks, bonds, currencies, commodities, options. (Source: Bloomberg)

? welcome them to " lunch money" on bloomberg television.

I am adam johnson.

Inside the apple-samsung smack down.

Earnings come out after the bell.

In cyber, companies are eating pushed to dig deep for protection.

The profits of ups fall, but that won't ship down its overnight shipping hub.

And in our pop dish, our tribute to the newest member of the royal family, the world's most valuable baby.

Is there any earnings report people like to talk more about van apple?

The maker of ipod, ipad, everything.

The stock price fell from $700, and the lack of new products is what investors and analysts are focused on.

Apple is a great company, but trees don't grow to the sky.

The market is treating apple like they will never invent again.

I think we are going to pass for now.

The products speak for themselves.

I remain optimistic.

I don't think apple is done.

There is samsung.

The two have been locked in a rivalry over smartphone customers.

If you ask the experts on bloomberg, apple has some work to do.

Apple has got to think about a very different price point for smart phones in china if it wants to grow at the rate of samsung and other players.

They make devices that people love.

They build all kind of android devices.

They lose all this litigation and still come out on top while apple starts to flag.

Ok, so how about another apple expert?

He is the man who put the i in i-products and launched the think different campaign.

Personally, i think they are behind.

I think this is a year when something is due.

All indications are we will see a major revamp of the product line in september.

I personally am holding out for the i-watch.

I think there will be a game changer out there.

I think apple will do it in typical apple style and there will be a whole new world of apps.

We cannot sit down with apple's ad guru without talking about the ongoing samsung at war.

Samsung has really hit the ball out of the part, in many ways making fun of apple.

If you have a lot of money, it really helps.

Samsung is spending three times what apple is spending.

I go around the world and there are samsung posters everywhere.

You get the feeling things are happening because they are on big shows on tv.

They are all over the place.

But do you see traction?

I see bigger phones.

Really quickly, are they gaining traction?

I think they are.

They have the bigger screen, which people like.

I think apple has to respond with a bigger iphone, for one thing.

That jay-z collaboration caused samsung $5 million.

But here is why they did it.

It enables them to further push their strategy in north america.

They are trying to position themselves as for the younger consumer, versus apple.

For jay-z, it is a great opportunity to kickstart his out them -- his album.

It is of benefit to both of them.

One of the things they're going to be offering will be early access to music.

This is one of samsung's ways of making sure they are seen in parity.

How much is samsung dishing on ads compared to apple?

We have the numbers for you.

The iphone 4s has an all- new camera with eight megapixels and advanced optics.

So it lets you capture stunning photos.

So maybe the only camera you need is the one on the most amazing iphone yet.

Message, i will be there in 10 minutes.

Text jason.

Unexpectedly easy.

The samsung two.

Play "shake, rattle and roll ." the next big thing is already here.

This is what matters.

The experience of a product.

This is our signature.

And it means everything.

Yes, please.

Do you want it?

Wow.

Can i share?

Know, yours doesn't do that.

So, while apple and samsung duke it out, nokia is making a big push for smartphone users on a budget.

It unveiled the leumi --lumia today.

It will go on sale in asian countries.

Here is the video that nokia posted right after the release.

? all right, cool stuff.

So we will have full coverage of apple's release.

That is going to happen at 4:30 p.m. right here on bloomberg.

We will break down those numbers for you.

The cloud, going underground.

We are going way deep beneath the earth's surface to find the new frontier of data protection.

Fascinating stuff.

We will be right back.

? this is "lunch money" on bloomberg television, streaming live on your tablet or phone.

I am adam johnson.

Source wire makes software to protect networks from hacking attacks.

Cisco is going to pay $76 per share in cash.

Cisco has been on a buying spree recently.

It bought a uk networking company for more than $300 million in april, and a company called toolx -- jewelx in may.

Richard shows us how deep they are going.

This is not the first place you would expect to find the cloud.

How far underground are we?

About 125 feet.

This 3 million square-foot cave is called home.

With natural disasters such as hurricane sandy and the recent tornadoes in oklahoma threatening to wipe out above ground data centers, an increasing number of data services companies are moving their operations underground.

Data has been stored in a mine in western pennsylvania since 1998. some is in an air force bunker in iowa.

Cavern says the benefits of moving the cloud underground are many.

We have the lowest operating costs.

You have about a 20 point spread on the market.

One of the many advantages.

Ambient temperature makes cooling servers much more cost efficient.

Operating costs are 30 % lower than above ground.

Cave walls are five times stronger than traditional concrete, to protect against earthquakes and storms.

While burying a server farm deep underground will protect from mother nature, there is one threat they cannot do anything about, a hacker with an ax to grind.

Ironically, technology taking us back to the caves.

Protection has been pushed to the front of the national agenda since edwards noted and opened his mouth.

Drones are being pulled from the frontlines of the war on terror to go to other hotspots.

All drones are not meant to blow things up.

Here now, the top 10 non- military uses for drones.

? ? in a moment, the hedge fund legend and his tiger cub.

? it was a provocative cover of "bloomberg businessweek." you remember.

Julie -- he is a hedge fund legend that turned millions into billions back in the 1990s. what does he think about all of these struggling hedge funds?

Cage funds do better in bad markets because they are -- hedge funds do better in bad markets because they are hedge funds.

The ideal for a hedge fund is a big, active market that does not move a whole lot.

They can make it in both the long and short.

These days, cyber management is growing its so-called tiger cubs.

Mr.

robertson came to bloomberg this morning with one of his proteges.

The fund is absolutely crushing it this year, up 29%. she explained to the "surveillance" team how they are doing it.

We focus on three things, finding a great ceo, spending a lot of time understanding him, his background, his track record , focus on finding a good business that is very cheap, and all of it is focused around change.

If those are listed securities, why are they not being found by other people?

Change creates confusion.

Both inside and outside an organization.

There are investors -- i will give you an example.

Please.

We own a company called walter asset management.

It is a legacy mortgage business.

The stock went from $25- $15, but earnings power doubled from one dollar-six dollars.

We bought it at $19 and sold it in the $ 30's. this is a lovely example of what we do that is away from the headlines.

Julian robertson, you are trying to find managers that can do something others cannot do.

What is the key attribute at tiger for people like her?

She has not mentioned one of the aspects of her view which sort of got us there he interested, and this was almost as important -- which sort of got us interested, and this was almost as important.

She was on the indian national tennis group, davis cup caliber.

She is a vicious competitor.

She is a winner.

I find that people they compete well in one thing compete well in others.

With the millennial hedge fund business, if you are a competitor, how do you work with a distressed company that does not work out?

If you cannot compete, you are out.

It is quite simply that.

We are constantly making sure that why we own the stock continues to be a reason to be in it, but if we have a mistake, we will make the loss.

A slight correction.

I said they are up 29% this year.

That was for 2012. coming up, ceos give us glimpses on how they are going to grow.

We have the scoop on at&t and ups coming up next.

Plus, an underwater treasure in the atlantic.

Amazing stuff, and we have the details.

We will be right back.

Time for bloomberg on the markets.

Major u.s. indices pretty much mixed.

The s&p down about .1%. the dow jones down about 17 basis points, and the nasdaq down about .33%. remember, apple's big earnings report is coming out this afternoon.

On the commodity side, take a look at what is happening with oil.

The energy index, materials, healthcare, all showing signs of being standouts.

Healthcare is the biggest loser loser in that sector.

We will be back in another half- hour.

This is "lunch money" on bloomberg television, streaming live on your tablet, your phone, and at bloomberg.com.

Here are some of the moving pictures grabbing headlines right now.

Mort he tells on southwest -- more details on southwest flight 345. southwest says one of the passengers remains in a new york area hospital.

The runway where the accident occurred reopened this morning.

That helped to ease flight delays that resulted from the accident.

Also, southwest has returned to full operations at laguardia airport.

The first instagram video from north korea giving us a glimpse of life inside the country.

It gives a panoramic view of the capital city.

Another clip shows north korean state television broadcasting korean war footage.

These are the first known videos from inside north korea.

Are you ready for this?

Bentley plans to introduce the most expensive suv in the world in 2014. it will have a price tag of 200 $37,000. it is part of the effort -- $237,000. it will be a boost for the uk, where it is predicted the production of the suv will create about 1000 jobs.

Let's talk earnings and guidance.

Ups reporting in line with their previously lowered guidance.

Profits fell two percent in the second quarter as shippers opted for it cheaper service.

We traveled to the sorting hub in louisville, kentucky, where they turn around 1.6 billion packages in four hours.

-- 1.6 million packages in four hours.

Ups just announced a deal to buy more than 1800 fire resistant shipping containers.

A fire in 2010 for stay crash landing in dubai.

Both pilots were killed.

The plane was carrying lithium batteries, which have been linked to other airline fires.

At&t recently agreed to buy link wireless and the spectrum that comes with it.

Spectrum is basically a collection of wireless airwaves, the frequency that lets your mobile phone connect with a network.

Are you still confused?

We explain.

Spectrum is part of your digital life that you probably know nothing about.

Spectrum is invisible waves that allow us to translate video, audio, data.

Your cell phone, radio, and tablet streaming a movie from netflix are all using spectrum.

The federal government regulates spectrum and auction spectrum off to large companies like at&t and verizon or several smaller companies.

Like real estate, spectrum is all about location, location, location.

That is because not all spectrum is created equal.

Some is better for things like cell phone service and wi-fi.

Companies do two things.

One, they try to order spectrum they already have.

Two, they try to get more spectrum through government auction or by buying other companies.

This is causing some people to worry that we're rapidly approaching peak spectrum.

If the government is not auction off more spectrum, get ready for a lot more dropped calls.

Hello?

Hello hello?

Can you hear me?

Can you hear me hear it?

Can you hear me here?

Some companies may stockpile spectrum to keep it out of the hands of competitors.

Furthermore, newer wireless networks can use spectrum more efficiently.

We can drill for more oil.

We can also build more fuel- efficient cars.

If the government allocates spectrum efficiently, there should be plenty of milkshake to go around.

Interesting stuff.

A sunken treasure finally found.

We have the details on a find in the atlantic ocean.

A wild story coming up.

? this is "lunch money" on bloomberg television, streaming live on your tablet, your phone, and bloomberg.com.

Earlier, we took you underground.

Now we are going underwater.

This is amazing stuff.

A salvage company has recovered silver bullion on from a world war roman to ship wreck.

-- from a world war ii shipwreck.

Here are some of the numbers from the big guys.

Here is the man who made it all happen, the president and coo of odyssey marine exploration.

He was speaking on "market makers" just a short time ago.

This is quite the treasure, and we know you brought along a piece of it as well.

We are hoping the table is actually going to hold up.

So, this is actually from the bottom of the sea.

Correct.

We have about 100 tons of silver recovered.

What is it worth?

This bar is worth about 22,000 dollars.

The total discovery?

About 75 million dollars.

You get 80% of what you find.

This is after you refund yourselves the expenses of the dive.

In this case, the british government gets the remaining 20%? this is a great thing as well.

The government has deficit.

We are helping by returning cash to them.

How did you get that deal?

It is risk and return.

80-20 is a good share for the government.

I know that in the history of your company, negotiations have not always gone as easily.

You had some tense moments with the spanish government.

You had to mention that.

We lost what was widely reported to be a few hundred million dollars worth of treasure through legal maneuvering by our government and the spanish government.

We learned from that in future negotiations and that is why we were able to take the deal with the british government.

Are there any governments that will not work with you?

Spain may not.

What about environmental groups, history buffs, or just people with strong opinions who say that either this material should not be touched or they are upset about you disrupting a coral reef or the like.

Environmentalist are not much of an issue because the wreck itself is probably more of an empire mental disruption, leaking oil and such.

-- environmental disruption, leaking oil and such.

It is more archaeologists, and we do the best archaeology in the world.

We use unmanned vehicles, remotely operated vehicles, which are essentially robot submarines.

What has been the biggest surprise to you, as you said , you started doing this yourself in a small way and now you are the ceo of a big firm.

What has surprised you the most along the way?

We have a team of deep ocean rock stars.

The ingenue at him perseverance the team has to pull off an accomplishment -- ingenuity and perseverance the team has to pull off an accomplishment like this.

Coming up, ryan braun and the newest royal.

We will be right back.

? this is "lunch money" on bloomberg television.

I am adam johnson.

From royal babies to sports scandals, we have it all.

Let's start with scandal.

Ryan braun, slugger for the milwaukee brewers, suspended for the remainder of the season for possible performance enhancement drug use.

He was the national league m.v.p. in 2012. here is a little peek at his handiwork.

So, was it him or drugs?

Just last year, ryan braun dodged a 50-game penalty and has been vocal about his innocence.

This has been the biggest challenge i have ever had to deal with in my life.

I view this challenge as an opportunity.

As players, we are held to a standard of 100% perfection in regards to the program.

Everybody should be held to that standard.

We are part of a process where you are 100% guilty until proven innocent.

It is the opposite of the american judicial system.

And lance armstrong is making a return to the bicycle seat in his first major public event since his interview with oprah winfrey back in january.

Armstrong participated in the des moines register's annual bicycle ride.

He sat down to talk about reaction to his participation in that race.

I did not expect the wave of hostility.

So far, there have not been any middle fingers, but it may happen and that is just the nature of the story.

I understand that.

Even if these support for me has been overwhelming and positive, i am sure there are people that have the control and character to keep it to themselves.

That reality that the world is seeing now is uncomfortable for many people.

It is uncomfortable for me.

The reaction in the fallout was more than i expected.

But i am a big boy.

Now for some good news.

The uk celebrating the birth of the royal baby.

Rinse william and kate's son, the prince of cambridge.

As you certainly know by now, the future monarch displaces his uncle harry to become the third in line for the throne.

He is expected to pose for his first photo opportunity when he leaves the hospital today with his parents.

We will bring that to you.

Being born into a world of privilege is not just for royals.

We have a look at some of the world's most valuable babies.

Quick cisco bets big on cybersecurity.

Members of -- marissa mayer coming up next.

? it is time for "on the markets." here is what we are watching right now.

Take a look at stocks, an interesting picture, a whole lot of action but not much happening at all.

The s&p down about two points.

The dow jones up .15% and the nasdaq down about 12 points.

On the yields, we have seen a little bit of movement overall.

Again, if you take a look at the treasury market, we have to talk about the fed and everything else.

With the euro, we are seeing , again, is a move for the most part to the upside versus the u.s. dollar.

One of the sectors very much in focus -- time to light it up on today's options update.

One of the sectors we are following closely is the utility sector.

Let's head to chicago where allen says he is using and options play to play longer- term on utilities.

Allen, talk about why utilities are in focus for year.

I like it because the overall trend is still intact.

Looking at slu, which tracks the utilities sector, there is still some upside.

What you are saying is that with utilities, you are saying hey, the markets are valuing it so high.

What is the sector that has not participated?

We know utilities have been one of the under-performers.

Exactly.

Artie for was the extreme low at the end of 2012. -- 34 was the extreme low at the end of 2012. the $34 calls -- and you know me, i like to buy as much time as possible -- buying the 34 calls for january, 2015, which have 540 days until expiration.

That is $5.40 in the money.

It is breakeven.

It is only $.30 higher.

We are showing viewers the profit and loss on this.

The breakeven is only $.30 above where we are now.

Why do you use the option?

Why not just i the stock out right?

The maximum risk is 500 $70. obviously, i am putting up less money.

What you are taking advantage of is the low volatility.

This text has been automatically generated. It may not be 100% accurate.

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