How Apple Tracks Customers: Bloomberg West (12/09)

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Dec. 9 (Bloomberg) -- Full episode of "Bloomberg West." Guests include Michelle Richardson, legislative counsel at American Civil Liberties Union, Venky Ganesan, managing director at Menlo Ventures and Knightscope CEO Bill Santana Li. (Source: Bloomberg)

Live from peer three in san francisco.

Welcome to the early edition of "bloomberg west./" i am emily chang.

The focus is on business and investment in the future.

Companies from apple to facebook are demanding u.s. surveillance reform in thewake of edwards noted's -- wake of edwards d snowden's leaks.

We look at how ibeacon could change the shopping experience.

How hard is it to buy the bitcoin and how hard is it to spend it?

We put the digital currency to the test in the series we're calling the 12 days of the point.

Calling on the white house and congress to reform practices.

The open letter from apple, google, facebook and linkedin comes after documents leaked from edward snowden showing the government had gained access to tech company servers.

In a letter we write -- they write -- cory johnson in new york in -- joins us with more.

What exactly does this mean.

There are geo the lyrical issues, issues regarding other countries and leaders.

There is what we do not know yet, the notion that he has so much more to release about this, that the government has not told us yet.

I think fundamentally this is about a business issue come a u.s. companies trying to compete in the global i.t. market.

There have been estimates about what the cost could be.

They are only guesses.

Some companies have tried to look at this and figure this out.

The company actually looked at this.

They found 71% of the people polled said u.s. is a top cloud services provider but found evidence that european companies are targeting u.s. companies trying to gain market share.

Going forward, they have a multibillion-dollar cost on this that is an enormous number that they think as the business grows , and this is indeed a growing business, as it grows, more and more local businesses will to stew host cloud they'd -- caused they'd -- cloud-based offering.

How believable is that estimate?

It is just a guess.

They suggested people are suggesting -- changing to the clouds.

All the sudden you will look at $180 billion cost.

The notion that u.s. companies are being hurt i this nsa by an program is a great concern to the u.s. economy when you have politicians talking about how they want more of the economy to look at the big tech company.

The tech companies think this is hurting our ability to grow businesses internationally.

How do you think the white house will respond to this?

It is an open question.

This white house has really been dragging their heels on concerns that people have raised about national security.

Trying to build out the infrastructure.

Whether businesses have more sway in the white house, traditionally has always been the case.

We will see if these companies forget the industry.

Some of the biggest companies in the world are signing these.

Those companies, one would imagine, would have a lot of swipe.

L cory johnson, editor-at- large, thank you.

I want to bring in michelle richardson where she focuses on cyber and government transparency issues like the foreign surveillance act.

She joins us from washington, d.c. isn't it a little ironic given that many of the technology companies have been cooperating?

Is this just political posturing?

We have been debating privacy since 9/11 nine years ago.

This is really the first time they are weighing in and saying the government has gone too far.

Except for the fact that they have a lot braided if the government in certain cases, right?


I think what prompted the new movement is the recent revelation that they are not just serving the companies with court orders that hacking into the system overseas where the laws do not apply.

It might have been what pushed them over the edge to get involved.

The people who run the companies are powerful.

Together they account for a large part of the united states economy.

How is the government likely to respond?

This as a whole new voice to the privacy debate.

By this he advocates and members of congress have been taken -- taking a principled stake.

This is really a game changer.

The president is expecting a report from the pointed review rupe just this week.

President obama said he is trying to get the nsa to impose self-restraint.

I will be proposing some self-restraint on the nsa.

And to initiate reforms that can get people more confidence.

I want everyone to be clear, people of the nsa generally are looking out for the safety of the american people.

They are not interested in reading your e-mails or text messages.

President obama speaking on hardball.

What kind of reforms eu imagine the president is talking about here it?

The way he phrases it as self-restraint will not be enough.

The nsa artie has privacy rules that it violates on a regular basis.

It cannot be trusted to police itself.

The most important thing that we hope will be endorsed is fundamentally changing the statute, the rules so they can no longer collect information on everyday americans and innocent people are not -- who are not suspected of doing anything wrong.

How can the government and nsa truly protect us is everything it's -- is transparent?

No one is calling for them to name terrorist targets or explain who they are spying on.

We're just asking they explain the very different parameters.

Release the underpinnings.

It is crazy in the united states we have a secret court making secret law and interpretations about the constitution.

There is a lot of information we can make public that will not tip off the bad guys but allow us to have an informed bait for the first time since 9/11. ==-- debate since 9/11. we would like to see the companies fight back against the court orders and challenge them.

We would also like to see them get involved in the legislative debate.

I think that is what is so important about today's release.

They are finally in -- endorsing the idea that the government should not be scooping up the information.

We very much look forward to working with them to take them to the next step.

Thank you so much.

Legislative counsel at the american liberties union.

Thank you for joining us.

Apple has just rolled out an in- store location to track shoppers and physical stores.

We will tell you more about this next.

You can also watch us on your tablet, your phone, and streaming at

? this is bloomberg "west." i'm emily chang.

Apple has launched a new transmitting service called ibeacon.

It helps to track customers.

Now we are going to be looking at our phones even more, right?

The new reality.

We know apple stores are one of the big reasons for success.

Relatively simple in the look of powered by technology.

So the idea is to make it more efficient for the consumer and make it more efficient for apple.

An elaborate video display in the store to tell you about a new product can be costly.

Not always as effective as the retailer would like.

A lot of times a looping video not speaking directly to you.

That is the reasoning behind the reasoning.

Lex will other retailers that sell apple products feel pressured that they have to offer something similar?

I think retailers, if they can generate more revenue are always interested in these kinds of things.

Think about the potential to boost same-store sales in a way that is different than sending out circulars that can be quite costly for them.

You would expect that this is something that other retailers will watch very closely.

I think one question is which device maker, software maker are you most aligned with?

Players like dust i -- best buy are selling all kinds of gear in their stores.

Do they have two -- have to offer something more here towards andrew -- android?

I think that is the question for retailers more broadly speaking.

Jon erlichman, thank you.

Square has launched a new credit card reader.

Additional payment company has unveiled a thinner and more accurate device.

The former head of the apple accessory division is behind the new design, 45% thinner than the previous reader.

For more, i want to bring in the technology editor, are really be.

Obviously the goal is to make it center, lighter, faster and better.

They now have a lot of the parts in this particular reader.

Is this a step toward something even bigger.

As far as design goes, it is signifying it will need to stay on the cutting edge and it will.

At the end of the day, it is a software company.

It is all about transactions.

They have to make them as seamless as possible.

The hardware help you to get there.

He want it to be nice.

So that is crucial.

-- you want it to be nice.

That has happened to me in taxis a few times.

Anything square can do to reduce the friction between merchant and consumer will be a benefit.

What about the road ahead going public?

Obviously dorsei just told to take twitter public.

Is it coming soon?

They're not talking about it public -- publicly yet.

If you look at the valuation, whether it is 3.5 billion or 5 billion depending on what report you believe, you cannot get to the valuation and expect investors to put in money at that price.

There are not real other ways to get return on the capital.

Square is in a hyper competitive environment where they need to continue to get there.

Holiday shopping season.

A busy time.

What kind of growth can we expect?

It will be interesting to see the numbers.

You have seen a lot of competitors come into the space coming in to help merchants.

Paypal has its own reader.

Bloomberg news editor, thank you for weighing in.

Could today be an even bigger day than last week cyber monday.

That is just ahead.

? this is the early edition of bloomberg "west." it may not be as well-known as black friday or cyber monday, but today is green monday.

Traditionally the biggest online shopping day of the year.

The second monday in december, the day shoppers rush to finish online gift orders i the holidays.

Cory johnson is back to explain.

Only you would be talking about finishing up holiday shopping.

I am somewhere about zero percent like a lot of people.

75% done.

Are you tracking this on a spreadsheet?

I want to get my free shipping.

That is why this they have historically been the biggest day for online shopping.

Green monday, the second monday after december shows the strength and change in nature of commerce every year.

This year the managing director vocus is -- focuses on the consumer.

I thought it would be great to have you look at what we have learned at this year in particular.

This year is a year of mobile.

25% of online sales right now and growing.

When i say mobile, i mean tablets and phones.

Every year there is a headline.

This is the biggest e-commerce cyber monday ever.

Of course it is bigger, but the growth rates have been slowing, particularly for the monday after thanksgiving am an quite a bit for the green monday.

What do you make of the slow in growth rate?

Online has slowed a little bit, but mobile has not slowed.

If you look at tablets, especially tablet usage has shot up.

Mobile allows you to shop better.

How so?

Mobile has a choice.

Mobile, because of a constrained screen size and better data, you are a -- able to get people exactly the choice and conversion rates are much better.

You say the e-commerce companies are doing a better job of differentiating the signal to give the consumer a clear choice of what they are about to buy?


Mobile you can use location data, and timing to make sure you offer the person the right choice at the right time.

The call this the right now a economy.

-- we call this the right now economy.

Customers usually screw this up.

They do not get the local behavior quite right.

Let's break.

-- right.

People are quickly figuring out how to take full advantage of it.

Look at companies in the portfolio.

They figure out how to make the mobile experience so good that you will find what you want to buy in by it.

That is the conversion rates on mobile.

I noticed on the amazon site, the mobile experience is quite different.

Amazon has talked about the years they have done things to encourage more like bruce.

Use a simple is better than offering more choices?


Look at the most successful things on the mobile commerce.

Very simple.

They give you the right choices.

Because of that, you convert touch better.

True of the amazon mobile app, too.

I am not into on -- in depth about fab.

But i see rollout stories.

Could you lay out how this is successful, because it is different from what i have been reading.

Every company goes through evolutions and changes.

What they have done really well is focused on design and all sorts of best quality design on the internet.

People are by yang.

-- buying.

People like to focus on the bad news.

It is growing and has done a great job.

I am one of those people who like to focus on the bad news.

Kind of my job.

The hollow -- the holiday season, focus on the good news.

My soul is just start.

Look at what is going on in the markets.

-- just dark.

Getting you caught up on where stocks are trading.

Second day in a row of the rally.

The s&p 500 is up nearly .4%. taking a look at celgene.

Shares are rising along with other bio surgical companies are news they may have found a treatment for leukemia that does not include chemotherapy.

They presented the research at a medical conference in new orleans this weekend.

More on this in just 30 minutes.

? this is the early edition of bloomberg "west." i'm emily chang.

Now for your bloomberg top headlines.

Riot police out in full force in ukraine's capital.

Police also raided the headquarters of an opposition party and toward down barricades put up i.e. anti-government protesters.

They want the president to resign after he rejected a trade he'll.

Us airways and american airlines have officially completed their merger, creating the world's largest airline out called american airlines route.

Over the coming months, the companies will work on integrating networks, frequent flyer programs, reservation systems and more.

If gold medal -- a gold medal won by jesse erwin has sold for more than $1.4 million at auction.

That is a record highs for a piece of memorabilia.

Ron burkle plans and educational tour and other items he owns.

The virtual currency bitcoin has had a wild ride lately.

All the bitcoin headlines led us to ask what can you do?

Cory johnson is in new york with more.

All of the excitement surrounding bitcoin.

12 days of bitcoin being celebrated by matt miller.

12 days of christmas and 12 days of bitcoin.

Matt miller is sitting next to me.

You purchased a bitcoin this morning after some difficulty.

My experience, the difficulty arises from my unwillingness to give details to the internet site.

Some of them that i dealt with are very reputable and big internet sites.

Very reputable.

You have heard of fred wilson.

So he backs it.

So i have not heard of it either.

Did i want to give them my social security number?

Bank details?


they wanted social security, bank routing information.

They wanted my credit card, and they only wanted a visa.

This is in order to get an account running instantly.

I did not want to do that either.

There are other routes to go.

Local bitcoin is another one.

So i kept running up against little problems.

You meet another guy or gal and agree to it strange.

Every time that happened, they wanted more money than the actual advertised price.

This morning i got the reporter from bloomberg who is an expert.

He sold me one of his bitcoins at a price that he agreed upon last night.

$800. i called him up last night.

I said i really need a bitcoin.

I will give you $800 in cash if you give me one.

$800 in cash.

He gave me a bitcoin.

Fortunately, by the time we made the transaction this morning, with $876. it is a fluctuating currency.

I have breaking news about the $800. i sold 20 of them.

A little while longer a check my pocket.

He messaged me shortly after.

What i found throughout the day, i was tweeting about it for a while.

I am not internet savvy.

This kid does not know what he is talking about.

The point is i got on there and started talking to a lot of people in reading more about it.

These guys really know what they are talking about.

I think there are two different kinds of communities.

There are people like you and me that are worried about the volatility and investment value and if it is a stable currency.

Then there are people that are there for the community of it.

It is like a dead show.

Every time i talk to these people and they explained what they are doing.

An outer edge.

I am on the inner circle right now.

They got involved at a dollar or $10 or $20. what is the reward?

What will you use the bitcoin for?

What i will do first off is i am buying tons of stuff.

I bought pizza for the office.

I bought it with a tiny piece.

It worked out to about $30. i bought the repeats us from pizza for coins.

There are other ways you can buy stuff.

Three pizzas for this whole place?

You did not get one?

It was delicious.

After i bought the pizzas i had one bitcoin.

People have been all day long sending me, and i shared my code , which i will walk close to the camera and show everyone.

I shared the code.

They will not show it?

I can stay seated.

They consume in.

After i bought the pizzas, so many all sent in tips, which was disliked to dollars or five dollars that my bitcoin was replenished.

I have bought three pieces -- pizzas and i have replenished my bitcoin.

What i am trying to say is this is the kind of thing people in my community do.

They pass this around.

They pay it forward, if you will.

The notion that one we sit here and look at the degree of safety and return is being used more of a community of people that are sharing tom and perhaps participating because of the success of the community but not just investment.

One person described it to me as occupy wall street for people that do not hate money.

It is kind of a counterculture that is pretty cool.

I will do a number of things.

The guys have given me a number of ideas.

They are all in two different stuff.

Some of them are into precious metals.

We have had the big story about china and how you cannot use it.

At least chinese food.

Interesting stuff.

Thank you.

More on bitcoin as the countdown -- we count on the mary 12 days of bitcoin.

Please tell mapped we would like some pizza.

Thank you.

We will be right back.

This is the early edition of bloomberg '"west." i'm emily chang.

Autonomous data machine is a security robot designed to predict and prevent crime.

It can see, hear, feel and smell by using a combination of her big bed analytics while using sensors to gather on-site data.

It was founded following the newtown connecticut shooting that left 28 dead with the goal to utilize technology to cut crime and half.

Joining me to talk more about it, the night scope cofounder and ceo.

Preventing crime with robots.

How do they work?

These are data machines.

They roam around 24/7. they can see, feel, hear, and smell.

Thermal recognition, gesture academician.

It can run license plates and look at doing a real-time map of an area.

You can have more eyes and ears for private security guards and law enforcement to do the job that much more effectively.

You started the company in april and you are ready have one available and not one tear?

We have about a dozen customers were next year.

We will start doing data testing.

We are running as fast as we can.

What kind of crimes can this prevent?

I can part of mark law enforcement vehicle in front of your home in criminal behavior changes.

These robots are five foot tall, three foot wide.

Physically being there at a school or big shopping area or shop -- special event or local community, that will detour a lot of crime.

Having the capability to be able to gather information ahead of an event to see their are two stolen cars here.

We do not know why but for people doing this rapid giant -- rapid hand gesture.

That is an idea to push the event to local community and law-enforcement that much earlier.

You are doing interesting things with the information.

Tell me about that.

Lex you can look at that day that not only for counterterrorism and forensics but something as simple as setting insurance rates.

What if you can combine it with mapping technology to find you the safest way home, not just the quickest way?

How much does one of these cost?

The equivalent of 6000 $.25 per hour.

We can triple shift them.

This is to deploy technology that is 80% cost reduction for our customers and give them an order magnitude capability.

365 thousand dollars per year?

30s x thousand dollars -- $36,000. what about false positives?

Obviously we are analyzing a ton of data.

The real on-site data we spoke of earlier we are analyzing.

For us to analyze and humans to decide what to do, and added capability, added situational awareness to do your job that much more effectively.

And trusting stuff.

I will be looking out for these robots.

Thank you for sharing this interesting story.

All day tomorrow bloomberg television is going inside ups.

The busiest time of year for the world's biggest package delivery company.

Carol massar will be at the $1 billion held in louisville, kentucky.

Or than 4 million packages per day are sold during the holiday season.

We will have a live interview with scott davis.

Plus, the algorithm that is expected to save ups 50 million per year.

All day tomorrow on bloomberg elevation, streaming on your tablet, ipad, and at

? this is bloomberg "west" on bloomberg television, streaming on your mobile, tablet and that

Verizon announced it is buying edge cast.

The deal will accelerate the ability to provide online digital media content to customers.

Jon erlichman has more.

Why are they interested in this particular company?

Phone companies are going through a transition right now.

What do you do?

In this case they buy a company like edge cast.

Say they have business customers that are making verizon to host an e-commerce site.

They can now go and say we have edge cast.

Maybe they call it something different.

I can say we can provide you with higher quality ways to deliver videos through that site.

By doing that, they can charge customers more money.

You think about some of the ways others are nothing away at the customer business.

People using an app to text instead of dealing with the high bill through the phone company.

Looking for ways to protect the business, protected dollars longer-term.

This business, they offer something similar, right?


We have seen that company stock is lower today on the news.

I mentioned better, faster, cheaper.

Part of what they have positioned when talking to investors to say the world has come a long way, we can do things more efficiently.

Obviously they have the early- morning advantage but there were younger companies including edge cast.

I think it shows up in the number of customers that they have, whether it is linked indin or yahoo!. they say that these customers want a cheaper, more efficient way to do this.

It has helped to get this deal done.

More after this quick right.

? -- quick break.

Welcome back.

Coming up on the late addition of bloomberg 'we"west." what do president obama and the basketball star and mark zuckerberg together?

The latest initiative in the classroom.

We will sit down with the co- founder at 6:00 eastern.

56 minutes past the hour, which means we are on the markets.

Julie hyman is in new york.

Getting you caught up on where stocks are trading.

The second day of a rally, albeit fairly small after the one percent increase for the s&p 500 friday.

In terms of individual movers, highlighting a couple for you.

First, noble energy.

The analysts a commodity prices remain a concern going into next year.

Shares rising by the most since the ipo.

Products are giving investors reason to believe it could grow into its valuation.

Also watching an american airlines group.

The new giant created by the merger of us airways and amr croorp.

Adam johnson had a chance to speak to the ceo of the new giant in the airline industry.

Circling the wagons in using all the resources of the company.

We are keeping all the airplanes because that is away this merger works.

We need all of that.

The networks are highly complementary.

So we put the networks together.

So supply will be unchanged.

If supply is unchanged and demand remains constant, there should not be any change in the prices.

Prices move a lot based on any sort of factors, but this merger will not be one of those.

No change in airfares.

That is a big deal.

Randa started at american airlines.

Went to us airways and now

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


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