Again in 30 minutes.
" bloomberg west" is next.
? . . live from pier three in san francisco, welcome to the early edition of "bloomberg west." i'm emily chang.
Our focus is on innovation, technology, and the future of business.
Apple is working on two phones with larger screens and current class and is developing future technology that can sense or react to how hard or lightly you press on your device.
Amazon is working with the u.s. postal service to offer delivery on sundays.
Starting this week in new york and los angeles, expanding to more cities next year.
A super typhoon slams the philippines, leaving 10,000 feared dead.
How social media is helping relief workers to send help first.
Get ready for phones with bigger screens and curved screens.
A person familiar with the plans says that apple is developing new designs that have bigger screens and curved glass.
One will be 4.7 inches and the other 5.5 inches.
Apple is said to be working on enhanced sensors that can detect different levels of pressure.
These designs are still a work in progress but the person says they can be released in the second half of next year.
Jon erlichman has more from l.a. a lot of people have one of these for a long time.
What can you tell us?
This is a great story and where the smartphone market might be going.
We already know there are rivals to apple that have been pushing ahead in this curved market.
Lg is a great example as well as samsung.
This becomes a story on the marketing side, who is leading the way with innovation.
It is still too early to know how beneficial these devices will be, but what we can say, there is a lot of interest for the possibility of phones that are bendable, maybe you can roll up like a magazine or newspaper.
These phones are certainly not that, but they are being positioned of going down that road.
Just as we have seen with samsung rolling out its first smart watch, there is an important story about who is leading on the innovation front.
Additionally, you think about what this kind of technology can do with wearable devices, and whether apple has any tricks up its sleeve on that front.
Who knows, but we all get interested when we hear these tidbits.
What kinds of challenges comes with a curved design?
If you are a smart phone looking to make each edition better, the goal is to maintain some premium pricing.
So far, it is not clear how many bells and whistles will really be appreciated by users of these devices.
There has been some suggestion that there is less reflection outside.
Think about the formfactor.
People like to slide their phone into their pocket.
It is curved, does that create a bulge.
You do not want the backlash of consumers who thought you were doing something innovative, but turned out to be the opposite.
Maybe that is why we have not heard anything officially from apple.
Long-time apple supplier foxconn may be opening up a factory in arizona.
Chairman terry go met with arizona governor brewer over the weekend and said that it could be a good location for a factory.
Apple says that it is opening up a factory in mesa, arizona which could bring 2000 jobs to the state.
Why arizona, all of a sudden?
It is a push that you see from these companies bringing back manufacturing into the u.s. why would foxconn want to do that?
Their customers want some of the devices made in the u.s., so they have a business opportunity.
Different states are trying to appeal to companies like apple, foxconn, and others to try to get that work.
What does that tell us about the apple plan.
What do they plan to do their?
It would be a facility in mesa, arizona.
They will have furnace equipment where they can make a mineral that is used for the touch sensor button on the 5s, also some coding that is made for the camera, to make it sturdier.
There are lots of components that go into making these things.
If some of that can be made in the u.s., they would love that.
And then they would ship it to china and then it would be assembled in china?
It depends on the product.
Or an iphone, it is hard to imagine millions of phones being assembled in the u.s.. that is primarily done by foxconn in china.
For example, apple is doing the mac pro in the u.s., but that is much more of a niche product.
There are a lot of robotics, a higher end product.
They will create 2000 jobs with this particular plant.
I wonder, what is the business behind us?
Does it cost more to do this, why have they decided to do this, other than to say made in the united dates?
I think that is part of that.
-- united states?
They have to operate a business as well, and that is why the macbook pro makes more sense.
It is a high-end product used by filmmakers and graphic designers.
They have a lot of robotics to make that.
It is very involved what goes into it.
Could you see apple darting other plants in the u.s., expanding the site?
They say there will be more in terms of this, but we do not know what that means.
It is an interesting trend, one that the government in washington and states have been pushing for.
I know you will be bringing us the details.
Now to amazon here the e- commerce giant will start offering sunday delivery in new york and los angeles this week with plans to expand sunday service to other cities this year.
Amazon is partnering with the u.s. postal service on these deliveries, and it comes at a time when their competitors like ebay and walmart, are offering faster delivery times as well.
Or he johnson has more.
How exactly would this work?
-- cory johnson has more.
When you see the expansion of commerce into everything, sunday is sort of a layup, and amazon is trying to get around the old days of the post office and the challenge they had.
You have seen the way they have used the stock to pay employees and grow their business.
Amazon will continue to find new ways to bring in revenues.
This sunday plan has already begun.
Effective immediately in los angeles, new york, amazon prime subscribers are able to get delivery on sunday from the u.s. postal service.
They will be expanding to dallas, houston, new orleans, and phoenix in 2014, among others.
This is amazon prime customers only.
What this underscores is amazon is so powerful and they spend so much on shipping, they have compelled the postal service to do something they have never done.
The numbers are astounding and growing.
In the most recent quarter, spending $1.5 billion in shipping.
That is a huge number.
Of course, the fourth quarter, which we are in now, is their biggest quarter of all.
What can you tell us about how amazon works with different shipping providers, like the postal service, ups?
I have been to the fulfillment center in phoenix.
What is really astounding to see are all of the different shippers, whether it is fedex, ups, the postal service.
All of those trucks lined up outside the fulfillment center.
You can imagine, their ability to move $100 million there, $1 00 million there, it really gives them control over what companies are doing.
Obviously, they charge for amazon prime, but they send you a lot of think weekly, and for free.
It is interesting how amazon discloses some things and not others.
They are compelled to disclose their shipping cost and revenues.
And this does not include third- party shippers.
Amazon itself recorded $721 million in shipping revenue the past quarter.
Despite that, they are losing money every quarter on shipping.
Nonetheless, they think this will drive revenues.
Their losses in a shipping business are astoundingly large, but nobody seems to care.
The stock market is driving their revenues higher and they continue to grow their business.
What about those cities, what does that tell you about where they are rolling it out first?
The company is growing faster in the u.s. man overseas.
International percentage of their revenue has been climbing over the last couple of years.
Now we see them pushing distribution centers closer to major cities, dealing with state sales taxes, which they have tried to avoid in the past.
This new delivery is pushing them closer to their customers -- fulfillment center is pushing them closer to their customers.
I think we can expect more business in the u.s. thanks to new faa guidelines, you can now use your gadget on takeoff to landing on some airlines, but could in-flight calls the next?
You can also watch us streaming on your tablet, phone, and on bloomberg.com.
? this is "bloomberg west." gogo sees blue skies ahead.
Revenue increased to over $85 million, up 47% from last year.
The company took a net loss of $18.5 million, down 43%. the news at the stock shoring.
Stocks are up 27% for the newly public company.
While that is good news, gogo may have even better use for users.
As the faa eases rules on in- flight rules, gogo users can now make text messages and talk midflight.
Michael, how is this going to work, is this going to be like using your phone to make phone calls and send text messages to the ground?
It is remarkably similar.
You need to download our app.
Once you do that, you can make calls and text, just as you would on the ground.
Tell me about the technology that goes into this.
You are using ground technology to make this happen.
First and foremost, it takes our groundbreaking air-to-ground network which we put in place a few years ago.
Then we have networking, a wi-fi hotspot which looked like just another cellular company on the ground.
You can communicate with any smartphone anywhere on the globe from the plane.
What is the speed?
Should we assume it will be about the same as if we were on the ground?
It is amazing.
Texting is as fast as on the ground, virtually instantaneous.
On the voice calls, of course, we will have to wait to see whether the commercial airlines in the u.s. want people talking on planes.
That will be a source of big debate, but it is certainly possible.
We know how to do it.
Are any airlines allowing this now?
Not to my knowledge in the u.s. overseas it is allowed in some places.
We have many of our business jet customers using this service both for the texting and talking.
Some critics say that your service is lower than your competitors because you rely on a ground network.
How would you respond to that?
We get the most of bandwidth to planes than anyone in the industry, we are the leader in doing that.
What we do today with air-to- ground is the most capable.
Just a few weeks ago we announced our ground to orbit, which combines a satellite solution with our ground system, and we think that will deliver 20 times the speed we see today, twice as fast as when anyone will have in the industry.
Let's talk about the satellite technology you are developing.
You are working on stuff to better serve overseas flights.
What can you tell us about that?
We have done two things.
We have developed a global solution that is going to be deployed on the two carriers weekend now about as partners, delta and you can airlines -- japan airlines.
Those will work virtually anywhere on the globe.
In addition, this other solution which we call gto, will augment the speed of our u.s. network which runs from three megabits to 10 megabits per second, and we will be going all the way up to three -- seven megabits per second.
You are on airtran's and virgin planes, what is the hold up with the other carriers?
We are on stage with delta domestic.
We are just about done installing american airlines.
All of u.s. airways domestic flights are done.
We are near the end of doing all the install.
All the airlines that have made the decision to partner with us, we have pretty much completed the installs.
And what about internationally?
Internationally it is just beginning.
There are 13,000 commercial aircraft outside of the u.s., compared to 4000 in.
Re-times as many outside the u.s. -- three times as many outside the u.s. air to ground was a good solution but satellite is just becoming a good solution for connectivity for aircraft outside of the united states.
Over the next few years, you will see rapid adoption from the various airlines.
Thank you for joining us today.
Netflix and youtube are leading the video streaming race according to a new report.
We take a look at what that means for amazon and hulu.
? welcome back to "bloomberg west." i'm emily chang.
A small number of people who pre-ordered the xbox one at target are getting them early.
The official release date is november 22. microsoft is blaming the retailer for the error.
Researchers are at with new numbers on internet traffic showing netflix and youtube account for half of north american network data.
Jon erlichman has more.
If you have been doing binge viewing on netflix, i blame you for these numbers.
If i had time, i would.
A lot of people are spending more time every day using services like netflix and youtube, but for different reasons.
Netflix has gone from sometimes being on to always being on in a lot of households as people stream various shows, original productions, and the kids are watching tv shows.
In the case of youtube, people are consistently checking in but it is more bits and bytes.
You put these two together and you end up with an absolute monster consumption of bandwidth going on.
There is constant debate over who should pay for all of this broadband, right?
Nobody wants to pay more.
The consumer does not want to pay more as they stream more.
Netflix does not want to change their pricing strategy, so there is this back-and-forth that you see between the services and the cable companies that provide the bandwidth.
It is even one of the reasons why you have people like john malone, the media mogul, talking about more consolidation in the media business to keep cox under control.
People are consuming a lot of these streaming services.
It is time for on the markets, a look at what is happening in the markets.
Julie hyman is in new york.
Let's take a look at the markets today.
I am not watching a lot of movement in the stock market.
There is not much.
The nasdaq has looked over into the green.
The bond market is closed today so we have a big drop in volume.
Analysts at barclays downgrading cirrus.
We are also watching rocket fuel, the digital advertising company.
They were upgraded.
Analysts judge it as a better bet now.
We will be on the markets once again in 30 minutes.
More "bloomberg west" after the break.
? welcome back to "bloomberg west." i'm emily chang.
Now for your bloomberg top headlines.
We are getting new numbers on enrollment in a new state-run health insurance exchanges.
49,000 have been enrolled through 12 state-run insurance exchanges since they opened last month, according to one consultant.
1.4 million people will enroll by the end of next year.
President obama and the nation are marking veterans day.
The president participated in a wreathlaying ceremony at the tomb of the unknown soldier at arlington national cemetery.
He said the nation has a responsibility to ensure returning troops cap the care they deserve.
The president of the philippines has declared a state of calamity to speed up the delivery of aid following the massive typhoon.
Supplies are having a tough time getting to the victim two to the destruction of many roads.
The death toll stands at more than 1700 but there are fears that more than 10,000 people may have been killed.
Technology is playing a role in helping rescuers get to the right areas.
Agencies are using social media to identify where the victims are and what problems they are facing, but how are they sifting through hundreds of posts to find what they need?
Cory johnson has more.
The technology they are using is called social mapping.
They are able to find a clear picture of what they need to get help.
Patrick meier is a developer of one of these tools.
He is with us from doha, qatar.
How is this working, given the storm?
Better than planned, to be honest.
This is very new technology.
We were only able to tested once before during the pakistan earthquake.
Considering, it is quite impressive.
We were able to get to a quarter million treat -- tweets over the weekend and provide some situational awareness for our partners.
Explain what that looks like on the ground.
A quarter million tweets related to the typhoon in one way or another.
Not all of that information will be relevant.
It is like looking for a needle in a haystack.
There are a few dozen tweets that will have life-saving, relevant information, letting us know where the most damage is, where the most needs are.
Where displaced populations have been displaced.
That is information we can get in real time.
We needed this platform to extract that meaningful information in as close to real time as possible.
How is this kind of data in the third world different from the first world, what are the advantages and weaknesses of this approach?
In the case of the philippines, you have a sophisticated population of social media users.
In the past decade, it has been remarkable.
The fact is, this is an ideal situation where we can find informative and rich content on social media.
92% of people online in the philippines are on facebook, for example.
Including a high number for twitter and other social media platforms.
In this case, it is ideal.
It's weeks ago, in pakistan, which does not have a large media footprint, it was not as useful as it is in this context.
Very similar to what we saw in hurricane sandy in new york.
I am thinking about what went on in the boston marathon bombing, when social media was sort of the first information source.
There was so much bad information going on during the course of the day.
How do you distinguish the signals to the noise?
Very good question.
Our colleagues at the bbc launched the user generated content hub a few years ago, whose whole purpose was to verify social content.
They were operational in one year before twitter was born.
Applying the standards is something we are looking to do.
My team and i have shown that you can predict the credibility of tweets automatically.
That is a platform that we are developing right now.
It is a combination of using investigative journalism skills, common sense, and ultimately, once we extract the information and we pass it on to our colleagues, it is up to them to vouch for the information and to get a better sense of whether they can use it.
It sounds like you are giving me the why, but how can you tell if the tweets are real or not?
Triangulation is key to investigative journalism.
When we find a dozen tweets that record on the same issue, that gives you more reassurance that maybe there is something going on there.
Importantly, a big part of this digital humanitarian operation is assisting through images.
When we start to see a collapsed building or bridge from five different angles, taken by five different individuals, then you can start triangulating in that way as well.
I do not want to say there is a silver bullet there, but there is a lot we can do to verify.
Patrick meyer, thank you very much.
Of course, our hearts go out to everyone in the philippines today.
We will be back with more after this quick break.
? welcome back to "bloomberg west." i'm emily chang.
A demo of an ipad has reportedly exploded inside a vodafone store in australia last week.
The charging port exploded in a burst of flames reportedly.
There is no confirmation on what model it was, and no injuries reported.
Bloomberg has reached out to apple for a, but have not heard back.
In china today, millions around the country celebrated singles date, a chinese twist on valentine's day.
The state owned newspaper in china says that the day was invented by students in the 1990s because today's date, 11/11 is similar to the chinese world of bachelor or bachelorette.
Alibaba sold $5.7 billion worth of merchandise today, 84% higher than last year.
For more on singles day and its impact on retail, i am joined by the founder of an online community focused on curating lifestyle and fashion items for chinese shoppers.
Explain to me the tradition here.
Basically, you buy yourself something really expensive on singles day?
That is not the tradition, but that is how it has worked over the decades.
Originally, it was a holiday to celebrate, and invert it valentine's day, where chinese man who should have been getting married were celebrating the fact that they were single.
That proliferated to women as well.
In the last decade, it has become a shopping decade -- holiday, has become china's answer to cyber monday.
You have retailers from clothing to automobiles offering discounts.
What did you do on your own site?
We focus more on trends for fall and last chance opportunities to get great looks from western retailers.
We focus more on trends like camouflage, fall and winter colors.
This is huge for ali baba.
What is your response to them selling $5.7 billion worth of goods?
Alibaba is one of the few great success stories of the internet right now.
We do not focus on it as much as their western counterparts, but think about amazon and ebay, rolling them into one, and then adding multiple functions on top of that.
It shows the pure mind of alibaba.
Tell us how the retail landscape is different in china than the u.s. it is very much consumer to consumer sales, but that is changing.
Could you explain that?
I lost my earpiece, can you say that one more time?
Talk about the retail landscape in china.
As i understand, it has been a consumer to consumer selling landscape, where you have more business to consumer directly.
Can you explain how that is changing?
It is really the maturity of the internet in china, maturity of the industry.
A business that was founded largely off of consumers buying products and reselling products, individuals setting up their own storefronts has become something much larger now.
You are seeing mature functions to the industry.
If you think about alibaba, it grew from b2b, c, and part of that ties into new payment functionalities and the rise of mobile.
It is much easier for businesses to deliver products to chinese consumers, and also for those consumers to buy from the businesses, in ways that we may take for granted here in the u.s. interestingly, they are starting to leapfrog our capabilities as we start to buy online.
What other holidays in china rival singles day?
From an online perspective, nothing.
When you think of the spring festival, the biggest holiday of the year -- basically their new year.
That is a shopping holiday to a large extent, but that is much more about traveling.
Consumers going to europe, the united states and other countries, but nothing that rivals national singles day, in terms of actual spending online.
A big part of that is, this is the holiday that has been building with discounts.
-- built-in with discounts.
Thank you for being here.
I wish i had a excuse to buy myself a car.
Anyways, the legal battles are showing no signs of slowing down.
We will speak to the home away ceo.
? welcome back to "bloomberg west." i'm emily chang.
Consumers use the web to buy everything on the digital marketplace.
More and more, people are also opening up their cabins and beach houses to those planning their vacations online.
With more than 570,000 listings, homeaway is one of the leading listers of vacation rentals.
I recently sat down with brian sharples, ceo of homeaway, asking him how trends have changed with peer to peer transactions.
What we see that is different today, people are starting to rent things like their own houses which they live in, which you see on sites like airbnb.
For us, it is an old business may be dubbed as a new economy business, but just a name.
Airbnb is one of your competitors.
They have run into some legal issues, especially in new york.
Some allege that what they are doing is not actually legal.
How have you been following this?
We follow it closely.
There is a big difference between them and homeaway.
Most of them are renting out the primary home that they live in.
For us, most of these are secondary homes.
Many of the homes are located in areas which are dependent on the tour is in business.
Airbnb has focused much of their attention in cities.
In new york maybe it is .2% of our listings worldwide, but for bnb it is a large percentage.
We work with them.
We have a group, an advocacy center we put together for owners which we do in partnership with them.
I do think it is an important issue to watch.
As new york goes, many other cities might go.
How likely is it that iarbnb can overcome these challenges and become a sustainable business?
The high tech, start up world has a precedent of people coming along and creating a service that nobody envisioned before, but as long as the economic base is supported by it and it is big enough, people will figure it out.
In new york, some of it is about taxes, which can be solved.
Some of it is also about neighbor issues.
There are people that do not want strangers coming into the apartment next door because it is a building where they expect everyone to be a primary home dweller.
Because of that, at the moment, it is anybody's call how that might turn out.
Earlier, you teamed up with expedia to showcase some of your vacation rentals.
How is this partnership going and how important will this be to the business?
We just announced a deal.
We have been thinking for years that it would be great to distribute some of our inventory . we have the largest collection of vacation rentals in the world, almost 800,000. expedia has a tremendous footprint in the travel industry in the u.s., so we will be testing.
Most have been reluctant to put vacation rentals on their site because the bread and butter of their business is hotels.
Many hotel ayers -- hoteliers are threatened by that.
Over the next quarters, we will be out trying to get the model right, seeing if there is a new distribution channel that we can create.
If it works with expedia, it may work with other ota's as well.
That was brian sharples, ceo of homeaway.
You can catch the full interview on bloomberg.com.
More after the break.
? welcome back.
I'm emily chang.
Coming up on a late addition, how have revelations of the nsa prism program hurt tech company trying to go global?
It is 56 past the hour, which means bloomberg tv is on the markets.
Olivia sterns has more.
Stocks were little changed this hour.
Close to an all-time record high still.
The nasdaq is up by two points.
Slightly lower volume because today is veterans day and the bond market is closed.
A couple of stocks i want to highlight, best buy.
Ubs is raising their price target on the retailer citing optimism about their 2014 earnings.
We are also watching deckers outdoors.
Shares of the outdoor retailer may hit $100 by year's end, calling it a leader in winter boots.
Speaking with the retailer -- speaking of retailer, teenage retailers have been hit especially hard.
Julie hyman has more.
What has happened?
Have they lost the cool factor, our teenagers spending less?
It is a combination of factors.
Part of it is changing taste.
They do not necessarily want a logo switcher from abercrombie as they used to.
If you look at the subsector, it is sort of the all-american teen retailers.
Abercrombie, american eagle, aeropostale.
These companies that went for a fresh, preppy look.
In addition to that, you also have the internet.
A teenager is not limited to the stores that they can go to the mall.
They can get on the internet and see what their friends are buying, from around the globe, and they have a much larger menu of art into shop from.
Teenagers is a $30 billion market, according to piper jaffray, so these various retailers are fighting it out.
They are shunning logos, they are socializing online instead of in the mall.
A big change from when we grew up.
But they also have less money.
They do not have the jobs they once had.
A lot of teenagers get their money from working a part-time job at the mall or wherever it may be.
Teenage unemployment has hovered around 10% back to 2009. the other problem is i'm a their parents do not have as much money.
When they are asking for a handout to get something new, they are not getting as much or anything at all.
Having a hard time adapting to contemporary trends.
Are any retailers bucking this trend and doing well?