Foxconn to Fund Wearables: Bloomberg West (12/10)

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Dec. 10 (Bloomberg) -- Full episode of "Bloomberg West." Guests include Microsoft's Satya Nadella, WebMD founder Jeff Arnold, NimbleTV's Anand Subramanian and Singtrix's John Devecka and Eric Berkowitz. (Source: Bloomberg)

? live from pier 3 in san francisco, welcome to the late edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world.

I am emily chang.

Our focus is on technology and the future of business.

Let's get straight to the rundown.

Move over google glass.

Getting into wearable tech, making all kinds of wearable gadgets.

And amazon drones may still be away, but sparking a revolution?

And twitter is trying to get in on snapchat's turf.

Sending messages on the mobile app.

Well, congress has been racing to come up with a budget deal by their deadline this friday.

We have some breaking news that tonight they have apparently reached a deal, and we are expected to hear any moment.

Yang, what are we expecting to hear?

A few details about what this framework might look like.

Leading up to today, we have heard a lot about a trillion dollar spending almost for the next two years, but we are getting more details about how they plan to make up or those sequester cuts that they will be curbing.

According to the deal, according to my colleague, heidi, they would ease sequester cuts in the first year by $40 billion and even by $20 billion in the second year, and that is a $60 billion total, the cost of which would be made up with the auctioning of government airwaves and increased premium for government worker pension funds, and there would be no changes to entitlement programs, as we expected, so right now, that is what the deal is shaping to look like.

The two chairman of the house and senate budget committees, they should be coming out any moment -- the two chairmen -- chairmen.

It should thought some of the tension we have been seeing these last few years in the budget fights -- it should thas ww some.

It is certainly low hanging fruit.

They have not talked about some of the issues, but we will see that the government should be running past january 15. emily?

Is this expected, or is this surprising?

It is not surprising, so leading up to today, we did hear a lot about this potential framework, about them setting spending limits to the billions, so we have heard a lot of details leading to today, so it is certainly no surprise in that sense.

No surprise, again, that they are not touching any of the big issues of tax increases or entitlement reforms, but it is good to see they are making a good-faith effort to come together, even though we have the two sides, republicans and democrats have come together to reach a broader outline for a deal, it is still going to take some convincing.

Some are not happy about having to pay higher premiums for their pensions, so it is something that both sides are still going to have to do a lot of convincing, that we are not done and are not closed yet.

Thank you.

We will continue to follow this story from washington.

I went to get to some breaking news, and this from the -- i want to get to some breaking news.

Developing wearable technology, according to two people familiar with this.

Foxdconn will provide office space and services to at least 20 companies.

They are trying to diversify their revenue stream as some things threaten to do rail their traditional business.

For more, i went to go to -- i want to go to someone who helped to break this story.

First of all, tell us what you know about the actual fund.

Good morning from taipei.

Well, the key is really for foxconn to look into the future.

They do make the apple devices.

Apple is their largest investor.

Apple has only been a lien for about one decade.

What they need to do, -- apple has only been a client for about one decade.

They are investing in this incubator.

That is going to be one of the major points, that it is going to be an incubator, so they want to bring in new ideas and grow those ideas, and they want to bring it to taiwan, and they want to be able to offer the technologies.

Air is a lot of technologies involved in things such as wearable devices -- there is a lot of technologies.

We know they are involved in the google glass project.

We want to make sure they have the technologies available to offer them to companies like google or apple or microsoft, and those companies that will be developing in the future, so that will be key, offering extra things to their clients going forward in the future to keep up the prophet margins, because in pure manufacturing, -- to keep up their profit margins, because in pure manufacturing, the margins are not that high.

Some sort of wearable device, what does this mean for apple?

Is this a conflict of interest?

Yes, at first, people would think so, and the chairman of foxconn in june this year at the annual shareholders meeting showed off.

It was a smartwatch that he had, and he was very proud of it because it could measure somebody's heartbeat and transfer it, and iphone, of course, and so he was proud to show off this technology, but it is not exactly a conflict.

Until now, foxconn has not gone out to compete with any of their clients.

They have been very clear about that.

They are not going out and doing branded work.

What they are trying to do is anticipate what their clients need, so when a company like apple or google or microsoft comes to them and says, we want to develop this, they do have their offices in cupertino, but apple does develop a lot of their own technologies, but they work very closely with their manufacturing partners, such as foxconn, to figure out how to bring it to market and mass market, and that is one of the key things, mass production, so it foxconn is trying to anticipate the needs, and they can actually fulfill them.

What do you think foxconn will be looking at other than wearable technology?

Well, one of the things that we can assume, and we certainly have not seen necessarily any evidence is things that go further, such as medical devices, and that is similar to wearables and connected devices, but the thing with medical devices, we have aging populations in the u.s. and japan and even in china.

Inc.

That can measure vital signs is certainly an area that foxconn would be interested in -- things that can measure vital signs is certainly an area that foxconn would be interested in.

In southern taiwan, to build software, to build the cold negativity -- the conductivity, they are looking on that -- the connectivity.

There is not a lot of growth or new ideas left, is certainly the believe in taiwan.

They will be looking at areas that will do new, innovative software that can connect into that.

R bloomberg news reporter in taipei who broke this story, -- our bloomberg news reporter in taipei who broke this story, tim, thanks so much.

A name being floated at microsoft, the cloud services chief.

We caught up with them at the internet conference in paris and pressed him on whether he would want the job.

Take a listen.

Steve ballmer is the ceo, and i am actively engaged in running our enterprise engineering.

But do you want the chief executive role?

I have said everything i am going to say about that topic.

Our editor at large, cory johnson, with us now.

We have been talking about the microsoft ceo search for a long time now, and they want to name a successor before the end of the year, and that is almost here.

We have heard they have reached a stalemate, they are close -- where are we?

Sources have said they have not made a decision quite yet, there are some other possibilities out there, but sa tya nadella is the leading internal candidate, from what we understand.

This is a guy who has been at microsoft for many years and was principal to the cloud and the division that the cloud is underneath, and he is highly respected in that part of the company.

The technology world is moving into the direction that he runs.

Take a listen to what he had to say about the cloud.

If you look at what happened even in the last quarter in terms of our cloud, it grew over 100%. we have over 50% of the fortune 500 using windows.

Office 365 is already on a run of 1.5 billion.

That is the kind of growth we are seeing as this two dollars trillion of -- this $2 trillion is shifting.

There are executives at microsoft that i assume would like to be promoted as well.

Greg external candidates are probably in mix -- in the mix, but if you look at what satya nadella has done, sales are rising significantly, and we also see profitability in that sector.

He is not only doing $20 billion in revenue each year in that sector, but he is showing operating income that continues to grow, over a billion dollars in profit, and that is the kind of leadership that is impressive and kind of rare in microsoft.

If they do not get this job, executives that have been there a long time, will they leave?

That is an interesting question.

There was a reorganization of the structures in microsoft, and some people did leave, including the man who ran the xbox division, who left for zynga, but one of the advantages of having only one name out there as an internal candidate, it keeps other people from getting their hopes up to a much, but like i said, there are other possibilities -- it keeps other people from getting their hopes up to all much -- too much.

I want to say for the record that i am personally very happy and bloomberg and have no immediate plans to leave.

Although bloomberg's plans may be different.

That is good to hear.

I am glad you will be with us.

You've yes will deliver millions of packages, and they are betting on an algorithm to get the job done -- you be yes will deliver millions of packages.

-- ups will deliver millions of packages.

? welcome back to "bloomberg west," and a senate budget chairman is speaking now.

Let's take a listen.

Before the next one got started, that uncertainty was devastating to our fragile economic recovery.

It cost us billions of dollars in lost growth and jobs and the continued across-the-board cuts from sequestration are forcing our families and communities to pay the price, so i am very proud to stand here today with chairman ryan to announce we have broken through the partisanship and the gridlock and reached a bipartisan budget compromise that will prevent a government shutdown in january.

Our deal puts jobs and economic growth first by rolling back sequestration's harmful cuts to education and infrastructure investments and defense jobs for the next two years.

I know there were some people who thought these cuts should continue, but i am glad we increased these key to mystic investments and that we averted the next round of military cuts to programs, bases, and defense jobs in the country.

-- i am glad we increased these key domestic investments.

It continues the president we set in the fiscal cliff deal that sequestration should not be replaced with spending cuts alone.

This bipartisan deal will help millions of americans.

From the workers at our military bases and construction projects who were furloughed or laid off to the kids who lost their slots in head start programs to the seniors wondering if they were going to have meals on wheels and to the families who were praying for halted medical research programs to get back to work on a cure and so much more.

Because of this deal, the budget process can stop lurching from crisis to crisis.

The senate chairman speaking about the just reached budget deal on the sequester cuts that we have been talking about now for many months now.

Well, all day today, bloomberg television is taking you inside ups, the world's biggest shipping company.

They have a system that crunches data to save a fraction of a mile on a driver's daily routes, but all of those fractions add up to big savings.

We have an inside look with how it works.

This is or ryan --orion -- o rion, the algorithm that makes ups tick.

Orion is changing the world of package delivery.

The truth is, today we are a technology company that has trucks.

Orion is a program 10 years in the making.

The objective, to find the fastest, most fuel efficient way to get packages to you.

There are more ways to service those customers.

Orion is looking at trillions of things in seconds.

It is going to say, here is the best way to deliver.

Each truck is -- has over 200 sensors that monitor everything they drivers do, to -- from starting the vehicle to unloading boxes.

They prioritize distance, time, traffic, and cost.

Our goal here was not that we would dramatically grow efficiency by doubling and tripling, it was trying to take a look at some small gains, but on our scale, small turns out to be rather significant.

Its culture of efficiency is a story passed, starting with the company's first delivery car, a model t ford in 1913. 11 years later, they built the first conveyor system for handling packages.

Good morning, everyone.

Good morning, everyone.

This year, it is orion.

How is this a game changer?

We will have a portion of our fleet, and he will already save us millions in fuel.

It will adjust on the fly, so if the lead time changes, we run orion, and this is your new plan.

We do not think ups when we think technology.

Google maps are not accurate enough for a ups driver.

You are better than google maps?

Absolutely.

We have a world-class group that many people do not know about that create magic year.

Carol massar, bloomberg.

Well, twitter updates the way users can share and view photos, so is the company trying to give services like instagram and sanp -- snapchat a run for their money?

You can also watch on bloomberg.com.

? this is "bloomberg west." i am emily chang.

These days, launching a video to show how things work, including the recent one for the coin app have gone viral up to 7 million views.

Jon erlichman went to venice, california, to talk to the filmmaker behind those videos, calling him the spike jones of tech.

Take a look via are you running a startup?

Do you want to have a video that will get everybody's attention?

This is the man to call.

About five years ago, adam made a video to -- so we started doing them for all sorts of tech companies.

Square.

I did the job own.

My videos are nothing without a successful product.

Technologies that are going to be interesting and grow.

Compared to a tv commercial, how much does one of these cost?

$50,000 to 100,000 dollars.

And like most companies, his company also accepts traditional forms of payment.

Stock options, which can be interesting, because they are going to be growing.

Interested and lucrative.

Lucrative, too.

That means interesting.

Jon erlichman, bloomberg.

Well, it is music to your years, the technology behind the karaoke machine that perfects your voice -- music to your ears.

? you can harmonize with one person.

It is so cool.

? . . you are watching "bloomberg west" where we focus on technology and the future of business.

New details on just how important the microsoft search partnership is to yahoo!

-- after inquiries from the sec, yahoo!

Disclosed it generated 31% of the company's revenue last quarter.

Yahoo!

Had previously said it accounted for more than 10% of sales.

Verizon wireless is open to swapping some of the airwaves it is trying to sell, picking up the ubs -- speaking at the ubs conference, the ceo said the company may consider trading a certain block of airwaves to gain capacity and other areas.

T-mobile, flush with three billion dollars in financing, is considered a possible bidder.

Disney's new shanghai resort isn't scheduled to open until 2015, but the company is already talking expansion.

The cfo says both disney and the shanghai government are ready to expand rapidly should the parks be a hit.

Disney says shanghai could overtake tokyo disney as the second most visited disney park in the world trailing florida's magic kingdom.

Twitter has updated its mobile app for apple and android users to let users send and view voter -- photos inside of such as.

They can also swipe back and forth between timelines.

Who might twitter be targeting?

For more, i'm joined by our tech editor, ari leavy.

Who might twitter be targeting?

Are they going after snap chat?

Think about it as any service trying to get people to communicate by a message or photos.

Snap chat is obvious, but also facebook, instagram, and we have been saying all along, for twitter to work as a big business, it has to increase engagement and key people in service for longer and coming back more frequently.

This is basically a way of saying if you are using another service to snap photos and send them to a friend, you don't need to do it anymore.

We have all had direct message fails and they are truly horrible.

I'm imagining a fail with a photo.

That's something you would not want.

This is why snap chat is appealing to a lot of people because the photos disappear.

How does this compare to what snap chat and facebook already offer?

The big thing for snap chat, the novel technology behind it is the disappearing message.

What sort of i.t. they have behind it, i don't know.

It's a small company, only 30 people.

It does not appear twitter is going after that user.

What you want is the message to disappear after 10 seconds, snap chat is your service.

Snap chat is saying that's a very niche roddick.

The ability to shoot -- a very niche product.

Since you are already using twitter, it's a great way to do that.

There is also one-stop and message me.

It seems like mobile messaging is the hot battlefield right now.

Where is this going?

The really interesting story is what does it mean for all the carriers who have huge businesses from charging people for text messages for years?

You don't need that anymore.

There are so many over-the-top ways.

The competition is over the top.

Using the internet, using wi-fi, how are you able to send messages to people?

You have 10 different ways available to you right now.

How do you make money is a question for those 10. for the carriers, it is what do we do over the fact that we just lost the of dollars in revenue?

We will keep following this story of twitter adding the photos to its messages.

Millions of health-conscious consumers have turned to web m.d. to diagnose symptoms and improve their health since 1998. but now the site's founder is launching another health app that he says offers more.

It's related by ask -- it is called ask m.d. and it's now available on mobile devices.

Users can share their health information, reported symptoms and received customize recommendations on how to prepare for doctors visits.

The web m.d. founder joins us now in the studio.

I have used web m.d. many times over the years.

Why do we need something more?

I was out of health care for a few years and i met dr.

Oz.

he said if you could start web m.d. over, how would you do it?

I looked back and i didn't feel like it had been involved -- it had evolved with all of the new enabling technologies.

What more does it need?

I think health care needs to be more social, more mobile, more local.

There needs to be platforms that bring these other brands into one place.

There needs to be a platform that inspires digital caregiving.

Instead of being one web m.d., your doctor, your dentist, your trainer, yourself could be your own web m.d.. working with dr.

Oz, that is what we are trying to achieve.

How does it work?

It's a mobile app, you launch it and tell it your symptom.

You can talk or type it in.

It presents you a smart western air.

It gives you question she wouldn't even think to ask yourself.

-- it presents you a smart questionnaire.

It is back with serious science, with the idea of how do you put a doctor's examining room into your smart phone?

What about the risks of self- diagnosis and misdiagnosis?

Now that all of this information is available online, people read stuff and think that's what i have.

And maybe they don't. that's a great point.

There is over a billion searches every month for health information.

But even because it's broad- based, i might type in the term heart and get the band before i get the anatomy.

There's a lot of information on the web and content is not up dated.

One of the goals is to use a questionnaire, and take the medical literature that has been written, put it into a database and do pattern recognition so you can create guided search.

Let me ask you questions you would not think to ask yourself.

Based on the medical literature, here is probably what you have.

That diagnosis hopefully better prepares you for your time with the doctor.

You are not a shareholder in web m.d. anymore.

Why would you want to create something that competes with the company you created?

That's a good question and it's a hard one.

I did a company that i sold to discovery channel and went to work for discovery channel.

While i was there, i met dr.

Oz.

he was just launching his television show and he was really interested in how he could extend the conversation after 60 minutes into people's homes.

Realizing once he started the conversation, it wasn't going to and when the show ended.

We look back out on the web and i felt there was a big unmet need out there.

We are in an interesting time when we are going from sick care to well care and going from a health care system to a system of health and wellness.

I think it's a great time to be in health care information technology to help make that a reality.

We are seeing a lot of traditional consumer tech investors he come interested in health care technology.

Where do you see this field going?

If you look at our investors, which we have raised $100 million, its media investors.

Hospital systems for lead community health or trinity or people in san francisco ike eric schmidt or the gentleman who just bought the sacramento kings.

The big scene and why i think everybody is so interested is patient engagement.

Consumers are really starting to take an interest in their health care.

Jeff arnold, thank you for stopping by.

We will have more on the show after this quick break.

? i'm emily chang and this is "bloomberg west." we frequently cover every oh on the show and talk about the future of television.

But today, new disruptive tv service called nimble tv launched in new york and it may be the anti-area.

Our senior west coast correspondent, jon erlichman is an l.a.. what can you tell us about this?

This might be something the pay-tv providers are ok with.

Nimble tv, if you have a cable's script and, you can take it with you.

You can access your cable on different devices wherever you are.

We have the ceo and he's going to give us a little more on the business behind this.

I've heard you describe this as tivo and the sling box without the box.

The easiest way to explain our service is it's something people have been used to using for the last 10 years, where people have place shifted and time shifted.

It is a sling box and tivo put together without a box.

It is completely cloud-based.

And you have tested this yourself flying around on the other side of the world.

Can i get my cable back in new york?

Absolutely.

No technical hookups?

One of the reasons we have taken a long time to test this out is to make sure it's actually a global service.

The vision of the company is to be a global platform.

It is absolutely something that works no matter where you are as long as you have a good internet connection.

You are not doing this for charity.

It doesn't come free and you have the cable companies rolling out their own tv everywhere service.

I'm trying to do some math here.

Some people would choose to go with tv everywhere.

Some would go with nimble tv.

How many people do you need to be using nimble tv to make money and be profitable?

The beauty of our approach and model is the underlying cable subscription is between the consumer and the tv provider.

We don't have any cost associations with it.

We simply have our cost associated with making the actual content available to you over the cloud.

We have to build our own cloud from the ground up to bring down the price is immensely.

4s to break even, less than 100 thousand subscribers, we would be a fairly profitable business area -- profitable business.

Some would make the case of this being the anti-area know -- anti- aereo.

I can't comment on that.

I think the court will decide.

We simply tried to laser focus ourselves into making a problem that consumers have go away, which is consumers to actually pay for their television do have a fair use right to be able to use it on their own terms.

Our approach is to let consumers watch it anywhere, any time without worrying about rights and legal issues.

They have paid for it and they are legally paid subscribers.

Despite the legal headaches, they have been able to roll out a service and a bunch of different markets.

Given that you may position yourself to avoid his legal headaches, you are starting in the new york area, but what is the rollout plan?

Our intention with this current rollout in new york is to give the product a chance to understand that the market once a product like this and we are going to let our consumers and communities tell us where to go next.

Our intention is to let the consumers tell us if they want nimble tv in chicago or other places.

In the next year, we intend to expand not only nationally but internationally.

We intend to have germany and russia as well, available worldwide for people to access area -- for people to access.

Are you alerting them the same way you might be doing some quick explainers like the ones in the u.s.? every country is different and the rules are different.

We have to take it on a case-by- case basis and execute to it depending on the country.

Take you for your time.

The founder and ceo of nimble tv joining us from new york.

Cracks thank you.

Karaoke lovers, listen up.

We have the karaoke machine that supposed to make anyone's voice perfect.

It could also make a good gift, next on "bloomberg west." ? this is "bloomberg west." i'm emily chang.

It has been almost a decade since guitar hero exploded onto the game scene.

Now the creators are using some of the most advanced analogy available.

The new karaoke machine can turn your single voice into three- part harmony and even strip away the vocals.

Cory johnson is in new york.

We are all hoping we are going to hear using today.

That's sweet to hope that.

I know you like to sing.

The karaoke machine has studio quality vocal effects to sing along.

I saw it happen on the early edition of "bloomberg west yurko i asked the cofounders if they -- why they wanted to created new karaoke machine.

Rex karaoke was like the last frontier in music gaming that hasn't changed much since it first came out in the 70s. both of us can't sing very well, so we discovered this technology trying to do vocal harmonies and effects live.

This analogy presented itself and we just knew it was the future.

How does it work?

It is basically live vocal processing technology that we adapted for consumer use.

We made the interface simple but the technology is very complex and makes everybody even if you cannot sing well sound good.

In terms of inventing this thing, what is the real innovation here?

The thing that is new is that we have never seen something of such high quality come into play.

There is over 350 sounds you can use and different effects.

It's a very high quality -- how does it work?

We were talking about the vocals before.

One person saying is the root node and it harmonizes up an octave come of fifth and a third and the fifth?

It has almost every combination of harmony.

How does that work with the voice?

It listens to the song, knows what key it is in and tune your voice and harmony voice by pitch shifting your voice up and down into different intervals.

But it studio quality, so when you sing by yourself, it sounds like you are singing with a choir.

With the success of guitar hero, did you size the market and try to figure out how big the karaoke machine world is?

Wordage used the -- or did you just think you are going to make something cool and sell it?

We wanted to bring music to the masses.

The main concern was bringing something cool out there where people could grab a hold of music in their home.

I want to see this thing work.

So you're adjusting the thing here.

This is a very white voice.

Just turn the dial here and you can sell like a very famous baritone singer.

This is perfect for barry white.

That shows how powerful the technology is.

This one is very powerful, it's called choir singers.

That is crazy.

So it is this and the app?

You get a home theater speaker, 40 watts, studio processor, two microphones and a mic stand for $299. it's a tremendous value.

It's an odd technological innovation.

When you look at this, is there a channel?

Is there a big world to sell it into?

There's a huge world out there.

Right now, we are selling it online.

Do you know how any people have e-mailed me expressing extreme disappointment that you did not sing in that segment?

I was told i was the biggest tease on bloomberg tv, which has always been my single achievement i've wanted to achieve in my career.

You sang a cappella and college, didn't you?

May be.

You actually sung without music more than most people ever will.

Lex you know what question mark it's time for the bwest byte.

Jon erlichman is an l.a.. what have you got?

He tried to deflect, but you pushed back again.

We decided to pick the zero byte -- cory claims to have never gone to a karaoke bar.

We're going to give him one last chance.

I didn't say i've never been to a karaoke bar.

I've been to every kind of our it's ever been invented and a few that haven't. but i have never sang in a karaoke bar.

You sing in the church choir.

I do sing in the church choir.

We have a big christmas concert coming up.

I couldn't hear you.

A plane went by.

Yesterday, when you are off the show, cory was having fun with you've lost that loving feeling.

Is that your killer go to?

I see a late-night bwest outing in our future.

I think so.

That will have to be our christmas party.

Thank you all for watching.

We will see you back here tomorrow.

?

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

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