West"is on up next.
? live from pier 3 in san francisco, welcome to the early edition of bloomberg "west." i am corey johnson.
But this innovation, technology in the future of business.
Straight to the rundown.
What is lenovo doing right?
Selling more mobile devices than pcs last quarter while turning results showing the pc is far from dead.
Will the movie about steve jobs turn to be as popular as the devices?
We will sit down with the ceo behind the distribution to find out how big it could be.
One mcdonald's has gone from serving happy meals to some of the wrist footage shot on the moon.
Nasa is unusable research base.
For the first time ever the world's largest pc maker sold more mobile devices ever been pcs.
Sold nearly 13 million in the quarter, including 11.4 million smart phones and 1.5 million tablets.
Smartphone tablets nearly doubled from a year ago.
This comes as the ceo says he will be proactive and seeking acquisitions in computers and smart phones.
But to everyone who says the pc is dead, they should be looking at lenovo's pc sales.
It dropped less than 1%, the smallest decline among the top five pc vendors.
This will take the lead from pc.
For more, turning to bloomberg industry analyst who joins us from new york.
The numbers are really interesting because of the u.s. market share is not so big, i think we do not pay enough the attention to the turnaround.
They are doing everything they've -- doing everything right that they can.
You want to gain share and protect the business.
Look at the share reelected to h-p and del.
Doing really well in the pc business.
The pc business down 11% year on year.
There were down around a 1% range.
From that perspective, even though the pc business is not doing so well, they are doing relatively well.
On the diversification part of it, almost a quarter of the sales come from non-pc related devices from smartphone, tablets.
One thing going in their favor is tablets and smart phones are being driven by asia and prices are going down.
The non that samsung -- non- samsung's and apple's are gaining share.
Multiple fronts they are doing really well.
Talking about the pc business.
Why are they doing well?
It is all about china.
One of the interesting things in the early work is chinese sales is a big portion of pc demand.
Chinese employment is a big driver of pc consumption.
They have significant share in china.
They have significant distribution presence.
So they are tier one in china and everywhere else as well.
So china is doing well for them.
Here stateside in western europe, doing really well in the corporate business as well.
Is it because the margins are so slim?
They are willing to make almost no money in the business?
To go on a relative basis margins are lower.
That is a fair point of comparison.
The products are also better.
How many times have people been excited about a dell or h-p pc?
On a relative basis, cool, sweet products and in touch with what the customers oneswant.
A shrinking customer, but what the customer wants.
I would imagine they benefit from apple not being able to crack the china mobile business.
They are really killing it there in terms of mobile phones and china smart phones.
To a great degree it is a maturing business.
One of the things he is noticing is the high-and doing really well, driven by apple and samsung, but the low end is doing well driven by pricing and a good enough product at a great price.
They are strong brand presence in china and capitalizing on the brand presence.
To go on the pc business, i want to turn to dell.
-- on the pc business come i want to turn to del.
When you look at the press release, what is the one thing you may look at that will tell us about what is going on?
-- want to turn to dell.
Carl icahn says things are getting better and michael dell says things are getting worse.
The whole thing might hinge on today's results.
You want to see points that augment either person strategy.
Is the business really getting better?
In which case you want to see stability in server numbers and ec members instability in the services margin.
So you want to see that, if in fact the business is getting better.
On the other hand, they demonstrate continued share loss on the pc side and the commodity server business is hurting for them, then it weakens michael dell's pieces that you want to pick the business toward servers and storage and services.
It says that business is getting better after pc business that is already broken.
You want to see which strategy works.
Yes, and we will very soon.
Thank you very much.
It might serve as a model for the struggling u.s. computer maker.
Dell reported later this afternoon, a week earlier than expected.
This as the battle to pick of the company.
Earlier today sara eisen and scarlet fu spoke with robert mcnamee about the future of dell.
The way i look at dell today, i think they are a middling player in a dying industry and i think they his -- have historically been the exception -- exceptionable at distribution.
I think they have to rebuild what the company will do going forward.
The question is, to the public shareholders have an appetite for that?
Personally, i do not see what silver lake and michael c. and the company, but then again, i am a group investor.
Maybe this is a financial engineering play.
To me, the pc industry is done.
Unless an adult can reinvent himself as something else, i do not think the outlook is very bright.
Where is the value in dell?
I think michael dell is an exceptional human being.
I have known him for a long time.
I was a co-founder and silver lake and an exceptionally talented team as well.
To be honest with you, if the value is not an initial engineering, i do not see the value in the core business itself.
This is the business i would run away from, rather than running into.
What is the future?
Can this company adapt?
It beats me because dell has never been a net technology innovator.
The component comes from lots of suppliers.
You could shipley -- ship a new product by putting a faster processor and the exact same product you worshiping before and you have a new product.
The game does not work anymore.
They are not the factor in any one of those.
I do not see them a prospect for becoming one.
That is not to say they cannot be.
If microsoft were to focus on skype make hand-held on those operating systems, then they would have a really good shot.
Barring that, i just do not see it.
Lenovo growing sales.
It makes sense.
It is a highly fragmented industry.
The market is consolidating in the market of players.
They have stuck with an expensive brand and a cost structure that is not competitive.
So it is not surprising at all.
Someone has to win.
That is not dull or h-p. -- dell or hp.
You can get the full interview on your phone, a tablet or bloomberg.com.
Ashton kutcher will bring steve jobs to like starting friday.
We have the ceo of open roads film coming up onb bloomberg "west." ? welcome back to bloomberg "west." bloomberg news has just learned facebook is testing a system to make on-line checkout process easier and a program would allow users to place payment date on file with facebook.
They can use the information to check out on partner sites.
Jon erlichman is an l.a. following this story.
An interesting the relevant.
When you think about baseball, and we talk about all this -- this all the time, a company based almost entirely on mobile.
I think it is still fair to say when it comes to commerce some people would say pressing the button and the check out, buying something online could be a better experience.
From facebook perspective, this is a two-prong that thing.
Maybe they could generate more revenue tied to commerce, certainly a market people are going after.
It is just as much about the advertiser.
All the new advertisements that may come into you -- your news feed is great for revenue for the company, but you still do not want people to get annoyed by advertisements, and sometimes that does happen.
Facebook wants to make sure those advertisers spending money to get in front of you are not annoying you.
Making the process easier.
Those are the two important parts of what facebook is trying to accomplish.
It is interesting the possession of the credit card is such a big asset.
When we think about amazon or ebay, you'd think about purchase intent.
People are watching bloomberg west and watching on their phone and ac corey johnson wearing something cool and they want to go and buy it, chances are you can go to ebay or amazon and go buy something.
Facebook, you are tooling around for an hour-and-a-half every day.
That is an incredibly valuable thing.
It's something that amazon and ebay do not have.
People did not spend their whole day generally on amazon or ebit.
That is where the potential really lies.
Mark zuckerberg making the push for innovation reform on the road.
The group will hold a roundtable in utah.
There is no skiing this time of year.
What are they doing?
They are trying to get grassroots on the ground action.
This is part of a series of roundtable discussions.
Part of the effort in the districts to have a conversation about the economic need for economic reform.
Senator warren hatchets in the key senator -- key player in the immigration debate.
He will be with joe greene, mark zuckerberg former college roommate.
They will be with a group of tech guys.
And a new lease anderson, and this is part of a bigger push we have been seeing that kicked off with the big public speech by mark zuckerberg on that open of the documentary.
The idea is lawmakers are on recess, so they are at home in their district, this is the time they will feel pressure for reform.
Activists are specifically targeting 100 house districts.
This is not the first 1. congress and rigid congressman mike honda posted one in june.
One in late july in illinois with bill foster.
There was another one in san diego.
They are also taking this to the airwaves.
They have been buying advertisements in some of the district's targeting them on the specific issue.
We will have the congressman on friday.
With that targeting, i would imagine it is all about advertising in those districts.
There has been a lot of that.
Looking at what forward is doing, they have had a couple of different approaches.
One of the bigger guys, $500,000 tried to humanize the issue.
Telling the story of an undocumented worker in dreamer.
I want an opportunity and a chance to show everyone out there that i am american and i will honorably served this country wearing a marine corps uniform.
That is running on cable outlets, 13 major networks across the country including florida, texas, arizona and washington, d.c. interesting.
Thank you very much.
Open road films is bringing the movie about steve jobs life to the big screen.
The story next.
? this is the early edition of bloomberg "west." "jobs" will hit theaters this weekend.
It was produced independently but open roads film as the domestic distribution rights.
Jon erlichman spoke to the ceo today.
Take a listen.
The movie is getting a lot of attention.
It has been fascinating to watch.
I thought it was interesting you said in honor of steve jobs.
You have gone all digital with the release.
Can you tell us more about that?
We will be in 2400 theaters friday.
We thought in honor of steve, his memory, innovation, that it would be an appropriate time to do when all digital release.
You spoke about him being an unconventional man.
When it came to the marketing approach, you took unconventional approaches.
Tell us about the marketing behind the film.
Certainly steve jobs is one of if not the most unconventional man of our times.
I think the movie does a terrific job of honoring the legacy.
We felt it come from -- incumbent upon ourselves to do a similar job in the marketing.
We had the first instagram trailer.
Our marketing job did a terrific job doing that.
We did very successful google chat.
Things like that.
Our cast in particular very tech savvy.
And recently they talk about the future of hollywood.
He was even more preposterous -- big blockbusters.
What do you think about those comments?
There has been some buzz around them.
The reference for the potential for bigger blockbusters failing because the studios are relying more and more on the blockbuster soak there are more of them.
Logic dictates more of them will fail because they're doing more of them in their crowded on top of each other.
Overall the box office will potentially reach an epic record level.
There have been several big budget bill years.
In terms of variable pricing in things like that, i am not so sure.
We will wait and see.
We have about 10 seconds left.
Do you think steve jobs would have been a fan of this movie?
I really think he would have been a fan of the movie.
I know he would be a fan of ashtof ashton kutcher.
Time now for on the markets.
And look at what is moving on the hour.
We are seeing a sell-off across the board.
The dow down more than 220 points.
All the major benchmark indices are all down.
Every single industry group in the s&p 500 trading lower.
The biggest sell-off for the s&p since june.
Two stocks we're watching, cisco cutting 4000 jobs.
The turnaround effort appears to be sputtering out.
Also watching shares of wal-mart falling after the cut the forecast.
More of this coming up after the break.
? this is the early edition of bloomberg "west." i'm corey johnson in for emily chang.
You can also cut just at 6:00 eastern.
Bloomberg top headlines.
President obama says the u.s. will count -- cancel joint military exercises with egypt.
More than 500 people have been killed.
They have torched a government building.
Eyelids also erupting in the and on.
An explosion ripped through an area near beirut.
-- violence also erupting into a rou beirut.
Josh harris has agreed to by the last-place new jersey devils.
The co-founder of apollo global management owns this 76ers'. the devils have struggled financially under the current owner.
Facebook wants you to know it is taking security seriously.
The company has paid over $1 million and rewards for the bug bounty program.
This rewards those who support security problems of the social network.
So far facebook has issued a word in 59 countries, the youngest of " 13 years old.
Cough-- -- the dullness of which was 13-year special.
What we're trying to do is find any type of vulnerability in the service.
We start on the inside and do everything we can.
We hire outside testers, and then we engage the public.
The goal is to find every vulnerability on the site.
What we're asking the general public to do is if you understand security and want to find a vulnerability on the website, we would be happy to work with you.
We have set up guidelines on how to do it so when you do testing it does not break privacy or intrude, but allows you to test the site.
That way we can get the information you might have without harming privacy and increasing security.
Is the facebook bug bounty program different than any of the other big technology companies?
It is very similar.
We all start with the same premise.
We know there are many people around the world who have security talents that are not living and working where we have offices.
Our goal is to engage them come and buy them to work with us and paid them if they can help us do a better job.
So there are some differences between the different programs.
All of them are evolving over time.
For the most part what we're trying to do is reward good security behavior.
Be worried that people will find hole in trying to exploit it?
-- do you worry that people will find a whole and try to exploit it?
We worry about that whether we have the program or not.
So you are in mining incentives.
What is the biggest drawback to the bug bounty program?
I think that when you started this program there are a number of things you have to make sure you understand.
For example, you need to be responsive.
If you engage people around the world and tell them you will pay the money to do something, you better be there ready to respond when they send you a report.
We get many reports and have to work our way through all of them and find out which ones are relevant or helpful, and then engage with the security experts and then have to pay them.
But bounty of this book is about a two-year-old program.
In some ways, is this a more cost-effective way of managing security expenses, because you only pay out for people who find something as opposed to full- time employees who are always giving for problems?
It is 100 percent and incremental expense.
We will always do the security work we would do otherwise.
All of the security work than any other company does.
We hire the best engineers.
We hired consultants and at the rigid auditors.
We're constantly scrutinizing, to make ourselves better.
I think with the evolution has shown and the statistics you see about the program is no one is perfect when it comes to security, and you need to engage with smart people around the world and you will have a great benefit if you do.
By a crowd sourcing, we are not out sourcing.
We're increasing the quality inside the company and all the way around.
We have even hired to people that we got to know through the program.
In a way come a bit of a recruiting tool.
Security is definitely the biggest headache.
The biggest reward is $20,000. tell us what that person found and accomplished?
We have paid out $20,000 a couple of different times.
When we started the program we did not want to set a cap on the maximum we would pay out, but at the same time, we did not want to start a large debate of how to characterize one of versus another.
It is a bunch of different factors.
Also, sometimes above identified a very discreet problem and other times identifies a series of problems.
For us, a small bug may indicate there is a problem with the whole family of code would be more valuable.
So we add up those different factors in determining the amount to pay.
Take up that was the facebook chief security officer, joe sullivan.
Up next, only in silicon valley would old macdonald find itself in part of the massive effort to explore the moon.
The story bigger than the big mac coming up next.
? this is the early edition of bloomberg "west." i'm corey johnson.
What happens when captain jack spero meets pronto?
Soon you can find out.
A new gaming con sole will allow characters to pit against other characters.
They can slug it out.
It is called disney and kennedy.
-- disney infinity.
That was up but.
It is funny you mention the word slow the.
One of the first things people will think about is the success that activision has had with sky landers, which brings together the real world of toys with the digital world.
Basically the idea is you can go to the store.
You buy the game, it comes with some collectibles, a different characters, which you can build the game around.
You could go to the store and buy the other characters and attach them to the consul and you have totally changed the game.
A way to get people thinking about the disney characters when they are in stores and get them to think about when they are planning or thinking about playing video games.
It is a really important development, because just like with the box office strategy of having the big movies that then lead to spinoffs coming here is a way to have a lot of disney characters in one place and give the game along their shelf life at a time when we talk about people playing social media games and fickle whether they want to play one game or another game.
What about the money?
How much matters in terms of the business?
It has been a massive investment for them.
Of course of a couple hundred million dollars that it has generated from a product like this.
You talk about this in the past, the idea that a game can be just like a blockbuster movie.
It is a little bit delayed in its release.
It may take a little bit longer to be mature for the company, but it will be material.
More importantly, this has been the source bought for a long time.
They are looking for profitability in looking for this product in particular.
But like year and other characters have been in happy meals over the years but as close as mcdonald ever got to the space program, until now.
We are here at mcdonald's. we're here with dennis.
You have relabeled this.
What is the basic premise of what you are up to?
The lender or be it recovery project.
There were sent to the moon in 1966 and 1967 by nasa to be the first federal reconnaissance of the moon service.
This is in preparation for the landings of the apollo mission.
The premise of the project is to go back and give the complete historical record of the moon as it was in pristine condition.
Think about how much money it would cost today for an asset to fly a mission to 1960 -- for an asset to fly a mission?
You are back here in years prior.
They have come all the way back here.
More canisters and canisters.
And of more canisters.
It looks really strange.
To go -- i want to introduce you to austin.
The quality of the analog process used in the 1960 significantly degraded images that were taken on board the spacecraft.
They did not have the computer power necessary.
As right now you can basically do what was impossible to do in 1964 and 1965 on a 2012 computer.
To go i really love this picture because this is the north pole of the moon.
It is incredibly important because this is where man's kind -- permanent outpost will be.
Don't you get tired of thinking of this ever?
And a lunatic is what you do not know.
This is the heart and soul of our project.
A miracle of 1960's technology.
Every one of those bumps are craters.
This is only 200 meters across the surface right here.
Neil and buzz landed safely on the moon because of these images.
I really want this material to be conservative.
Part of science is to go back to their original sources.
If you cannot do that, you do not have scions.
That was cool.
Ashley vance in silicon valley.
More after the break.
Welcome back to bloomberg "west." managing global supply chain is tough works -- tough work.
Lots of goods moved through countries.
One company devoted to solving these logistical nightmares is nexus.
What do you do?
We operate a global logistics' platform.
Is a symbol technologies back in the cloud.
What is unique about it is a bar rose an information network qc in social networks.
Just as easy with social networks you have people updating personal updates on our platform.
Businesses' share business information across global networks.
The you take for granted how much you can get your hands on?
Everything from food to iphones to whatever is shipping all over the world.
I cannot imagine the complexity of logistics' has gone through the roots.
Supply chains are long.
Probably it is highly likely he were wearing something or drove here in something or talked on something that was procured and probably track.
We are showing your customers.
Toms, ann taylor, global supply chains.
I think the regulatory issues, i want to highlight one company in particular.
It made me think about your business when i found out about this.
A company called ubiquity.
A technology company that sells some stuff that you cannot sell in some countries.
They claimed to not know that.
They have talked about some prohibited encryption programs before 2010. they said the contributor until 2 -- continued to sell to iran.
Is that the kind of thing you guys help with?
We certainly do.
The example you cited is a good example of how complex it can get when you are dealing with suppliers or distributors.
You have to know who you are working with.
There are watch list.
We manage them and use them to screen for transactions.
That is just one example of what happens.
Shipments are late.
Ports shutdown because of labor strikes.
Anything could happen along the supply chain.
Because they are so distributed and everyone is so dependent on them come any blip can cause major disruptions.
We have gotten a lot more efficient and economical, but if you cannot manage and control the flow is coming you put your business at risk.
How was this done before you could do it on the cloud?
The business world has been buying business software for 30-40 years.
The problem with that is almost all of this software is designed for the single enterprise.
It is how you operate within the four walls of the company.
Companies are vast distributed networks of companies.
They need a platform to help them manage it supply chain like a network.
Uc companies like h-p and pfizer really transport companies -- you companies the h-p in pfizer really transform companies by moving.
Really appreciate that.
We will be right back after this.
-- thank you.
I'm corey johnson.
Coming up on the late addition bloomberg "west" dell announced earnings after the bell.
We have assembled a special roundtable to break down the results and figure out what they may mean for the takeover deal looming.
56 past the hour.
That means bloomberg television is on the markets.
Olivia stearns is on top of all of that.
Stocks are still selling off.
Looking a little bit better than they did half an hour ago.
A sea of red out there.
The dow down 200 points.
The snb off by more than 1%. all the major benchmarks feeling the pain.
-- the s&p off by more than 1%. we had an unexpected drop in u.s. jobless claims.
That is making some investors think the fed will pull back on stimulus sooner than later.
Two stocks weighing heavily on the benchmark.
Cisco and walmart.
The world's biggest maker of network equipment cutting the forecast.
Walmart shares also were up the world's biggest retailer turned their earnings forecast.
Walmart says higher taxes are curbing u.s. spending.
On wall street a different story.
Apatite appears to be growing the most -- for the most expensive type of stocks.
The stocks that cost more than $100 is amid a record high because of the record rally we've seen this year.
Alix steele has more on why.
Me that we talk about this today.
On the whole day up on by the wayside.
Is 54 companies that trade above $100. retail investors are becoming less important.
Professional guys have become more involved in the market, almost doubling the ownership over the past 30 years.
A lot of investors are opting
This text has been automatically generated. It may not be 100% accurate.