Life and Death of Smarthphones: Lunch Money (08/13)

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Aug. 13 (Bloomberg) -- On today's "Lunch Money," super-charge the day, and devour all that's driving the markets: stocks, bonds, currencies, commodities, options. (Source: Bloomberg)

? . the biggest act of trauma from advertisements, let's put the big boys aside for a moment.

Blackberry was once the only name in smart phones.

The glory days are over, market value has plummeted to about $5.5 billion.

The shares are now about 10. the company's launch of the revamped blackberry is not enough, even with all the sickies on stage.

Yesterday they said that they would consider takeover offers, joint ventures, partnerships to try to keep it alive.

The question is, who is going to bite?

That is a small list.

Microsoft has what they need, nokia.

Samsung and the others already have the android operating system, which as you noted is doing quite well.

Is possible that canada's billionaires might try to save this gem of the country.

That is what it was.

One of the chinese players.

That's why i was thinking.

They might say that they are going to try to compete at the high end or the low end of the market.

Do they not make laptops?

Lenovo purchased a business in 2005. so far, yes, there is a specific opportunity in that time.

As we said, obviously.

Lenovo is taking the smartphone game seriously.

They are planning five more in the next three years.

This smartphone is in your pocket.

Popular movie product placement, lenovo is aiming for younger, cooler customer.

They are now at least publicly deemphasizing.

We are very much focused on the pc product.

We are really entering a new era.

We sell a huge amount of smartphone tablets.

The apple dna is quite evident here, where things are minimal and inviting for things to come in and put their hands on the touchscreen.

We are learning from apple, opening up self-branded stores, increasing grants for consumers, making led novell a more recognized brand.

Mostly, dare i said, they are in the computer models for china, the plan is to take it to upscale.

Fundamentally, we want people to appraise and experience the product.

Samsung and apple dominate the market globally, leno vote is no.

2 behind samsung in the -- lenovo is no.

2 behind samsung in the chinese market.

Chinese consumers see it as the world of chinese, compared to apple.

Their brand position is not as high.

Consumers in china have a perception that both brands have quality service, while chinese brands have to work harder.

At least they are talking about their own brand, here in beijing.

Lenovo is posing a challenge to another company, htc.

Htc has been struggling with declining shares and profits.

Is there anyone out there that can help this company?

Focus.

Subversive thinking.

Let's catamaran?

With a minute, robert downey jr., the new htc super hero?

He has signed on as spokesman for the company.

His first 15 second spot will rollout on august 15 on youtube.

The two biggest reasons all of these smartphone makers are struggling?

You guessed it.

Apple and samsung, getting ready to release their next project update, a high resolution ipad and possibly two new iphones and it could happen as soon as september 10, but that is not it.

The main thing to be will see from them is the iphone5s with a new operating system.

I think it will have a fingerprint center.

They purchased the company last year that makes biometric fingerprint sensors.

We are going to see something similar but i think it will be hidden under the home screen button.

There is.

You just put your thumb on it.

I think bill be a combination of security as well as some commerce opportunities.

You cannot use your phone as a wallet yet unless you can identify the user.

That is the first thing we will look for.

The second thing is a mid-tier price iphone.

Cheap?

Color.

I think there will be multiple versions.

These innovations can literally not happen soon enough.

They lost about one-third of their value since last september.

According to one of the biggest leaders, shareholders should get used to it.

What happens?

Right now.

What?

We conducted the experiment.

It has been done.

We saw apple with steve jobs, we stop apple without steve jobs, we saw apple without steve jobs -- with steve jobs, and now we see apple without steve jobs.

That was larry ellison on charlie rose.

It is not just the fact that steve jobs is no blogger at the helm, a check this out, samsung is fighting apple everywhere, the store, advertisements, the court room.

Take your pick.

Samsung is playing hardball, expected to stage a major event one week before apple to release a smart watch, a product that apple itself has been rumored to be working on.

You ever notice that samsung makes refrigerators?

This is the newest refrigerator from samsung.

It has a computer -- a portable part of -- a portable compartment here.

Also, loaded with apps.

Fantastic stuff.

Who comes out on top in this no-holds-barred smartphone russell?

In this case the stakes are incredibly high.

I mean, the future of the smartphone and whenever technologies that emanate from that, whoever is the top dog in that battle is going to govern that.

There are a whole bunch of marginal players hovering around market share.

These guys, it really is sort of crunch time.

We are getting to that point where in a few years the world is going to see it very different unless one of these players can pull something out of the bag.

Someone who may know how to trick j.c. penney, bill ackman, coming up next.

Plus, elon musk finally reveals his plans for the hyperloop.

Check this out.

? investor bill ackman has been all over the headlines these days.

He is known for taking action on company boards, putting his own people in, trying to create value and raised the stock price.

Today it seems that he made a move that would seem anti- activist, resigning from the board of j.c. penney.

He fought hard there, bringing in ron johnson, apple's retail guru.

Last week he brought himself -- brought in a replacement for ceo the for and that did not work out either.

Today in a statement he says that the addition of the two new directors and the stepping down from the board was the most constructive way forward for the parties involved.

His departure was overdue according to one corporate board veteran.

The former ceo of medtronic, he serves on the board of the mayo clinic, and he spoke with erik schatzker this morning.

It shows the pitfalls of having an activist like him, with short-term goals on a company board that has been in a state of decline for two decades.

You cannot turn retailers around in that time and he put a lot of pressure on the boards to try to get it turnaround, it does not work.

They abandoned their customers, losing 30% of their customer base.

Now they are in deep trouble.

Ron johnson is not a bad person, but he is not going to turn the place around and make it into apple.

This is a big mistake.

Where do they go from here?

They have a tough road ahead of them, for sure.

No ceo worth their salt is going to come on the board if they're having a risk -- a dispute like this.

Disputes like this lead to no good things.

This is the same bill ackman that try to take over the border target in 2009, thank goodness he did not.

In the last year j.c. penney is down 40%. millennials and super minis, marriage made in heaven?

So far, so good.

Be glad that you were not on this electric train.

? ? tiny with a tiny price tag, we are talking about super minis, they cost about $15,000, millennial love them and it turns out it is not just about the price.

Matt miller explains.

Baby boomers apparently out spend every other generation by $400 billion per year.

Why is general motors making a car for the kids?

The world's biggest car maker is trying to sell its sonic to the money else.

Flipping it over a jump.

The top-selling supermini beat its crosstown rival in this very competitive space.

Kids can get this car in 11 different colors, including inferno and the dragon.

Spotify, that is in the infotainment system.

If you do not know what that is, you are too old for the car.

Right.

Right.

You can get it in blue candy.

Can you imagine your dad buying a car in blue candy?

No.

this former skater has 15 million hits on youtube, one- fifth of the entire country.

By the way, these cars only sell for 15 grand apiece, but the real value is the relationship with the kids because some day these millennial may be buying like baby boomers.

Are you kidding me?

Another tight fit, the hyperloop, the new travel system unveiled by elon musk.

He claims it would carry people from los angeles the san francisco in half an hour.

What would it be like traveling in sides of in that fast?

It would feel like being in an airplane.

The initial accelerations, once you are at traveling speed you would not even notice at all.

It would just feel extremely smooth, like riding on a cushion of air, really.

You would not feel lateral acceleration.

It would bang against the side.

It will always point down.

Unlike an airplane, it is not going to fall out of the sky.

Nor can it be derailed.

You can have similar things in buildings in california.

Vertically mounted in the post , initially there be some earthquake protection but over time -- we have the same problems with buildings.

Relative to, say, a train , where you cannot really do that on the tracks.

I think that it might help if i did a demonstration article.

He is trying to figure out how we will get around in the cities of the future.

Here is franc from planet forward on the next big thing.

American cities are filled with cars, 250 million of them.

The hunt for parking only adds to pollution and congestion, urban planners say that you need 3 spot for every car.

Add it all up and it is a bat -- black, the size of connecticut.

Their friends up loaded the idea to plan forward.

A big part of cities, how can we make the cars better citizens to the city?

They call it the city car.

We have developed a vehicle that meets most needs.

It is electric.

It can get the equivalent of 200 miles per gallon.

It leaves about 1,000 gallons and a smaller footprint and folds up to one-third the size of an average car when you park it.

The folks at mit took out the drivetrain and replaced it with the wheels that are self- contained units.

We have the steering, the drive motor, the suspension.

The whole car is controlled by a solid state computer systems.

It is just tires and wires.

Can it survive on the street?

Just what these folks in spain.

It has no reverse gear but can rotate on its wheelbase princeton parallel parking.

If you want to buy one it will run you about $1,600. one car with a big mission, moving cities and the planet forward.

That was seriously cool.

You can see their latest ideas every monday on bloomberg west.

You can also go to plant forward.org.

New changes are ahead in the war on drugs.

Taking a new turn?

Luxury, the hot spot for the rich, some of the most expensive properties in the world, why do billionaires' love to flock to monaco?

26 mets past the hour, meaning that bloomberg television is on the hour.

Let's give you caught up on where the markets are trading right now.

Pretty much flat right now, but there you see it.

It is industrial, these materials, leading shares higher in leading the laggards.

U.s. airways merging with american airlines, blocked according to the justice department, a deal that would create the largest airlines.

More after the break.

? ? this is "lunch money" on bloomberg television.

We are streaming live on bloomberg.com.

Today's moving pictures, there you go, rio de janeiro, police using tear gas to push back the crowds were protesting the disappearance of a brazilian bit -- bricklayer.

More than 300 people participated in the protest.

Check this out, a man from beijing spent six years building his own private mountain with a luxury villa on top of a high- rise apartment building.

Nabors have been saying for years that the structure is damaging the building's structural system.

Authorities have given the owner 15 days to tear down or they claim they will do it themselves.

Kraft wants to remind you to have fun with your food, they began a new ad campaign shifting the focus back to families and fun in the hopes of trying to reverse a recent slide according to ad age, they have already launched new campaigns for iconic brands like planters, of bellevue, and kool-aid.

Eric holder broke some new ground yesterday, his speech to the national bar association, he used it to call for prison reform, one possibility being reduced sentences for non- violent drug offenders.

His proposal was met with applause.

We will be be calibrating the fare -- federal criminal justice system.

We will start by fundamentally rethinking the notion of mandatory minimum sentences for drug-related crimes.

What did i hear that right?

Rethinking the mandatory sentences for drug-related crimes?

Sounds pretty bold.

Here is the director of the drug policy alliance.

Too little, too late, but incredibly significant, the first time a u.s. attorney general has spoken out this boldly about it, about putting forward specific proposals that could make a difference.

It reflects the shifting politics and his feeling that the time is right.

Let's go back to what the secretary had to say.

The so-called war on drugs enters its fifth decade and we need to asked whether it and the approaches but that comprise it are effective.

We have an outsized prison population.

We need to make sure that prison is used to punish, deter, and rehabilitate, but not to warehouse and forget.

It is clear today that too many americans go to too many prisons for too long and for no truly good law enforcement reasons.

This is why i have mandated a modification of the justice department charging policy for low-level, nonviolent drug offenders with no tiles to -- no ties to drug cartels or gangs.

There will no longer be draconian mandatory minimum sentences.

[applause] so, minimizing minor offenses is certainly part of the debate on whether to legalize or legitimized marijuana.

Eric holder did not say anything about legalization, but obviously it got everyone thinking.

Half the people in the federal prison are there for non-violent drug charges, said this will make a big difference.

There are a lot of marijuana by later is behind bars in federal prison.

I am disappointed but not surprised that he could not use this speech as an opportunity to said they wanted to give washington and colorado a chance to implement their new initiatives.

So far the fact that he has not said anything is more good news than bad.

Certainly a pulverizing subjects.

Dr.

sons a group of recently changed his mind on the issue after working on a documentary in which he said the following -- i tried it, i did not care for it, but from a medicinal standpoint it can provide something that is not already provided.

California is one of 20 states that have legalized medicinal marijuana and silicon valley is a place with the business is booming.

What's on the very streets that these big technology companies call home, another big business industry is blooming down the block.

Medical marijuana.

San jose has 106 dispensaries and they can thank the silicon valley work force for their growth.

Pain and suffering does not have a prejudice and does not discriminate against the type of job or walk of life you are from.

Because of that, because of our location, i think that is why we have such a higher base.

No one knows exactly be do exactly how popular it is, but some dispensaries say that 15 percent that their clients are engineers and i.t. professionals, others claim the number is as high as 40%, users saying that technology work is needed -- technology work is a need for pot.

Particularly those in the technology industry who need to be discreet but may have cramping hands from a long and arduous hours of typing and topical sprays that our external, the kind that will be sprayed on or absorbed transdermal late.

$14 billion in sales annually.

There are four times as many clubs per square mile.

The booming industry is creating a new technology business, like, and communities to find and review them curious the company said they had more than 350,000 users across their websites and mobile apps.

I think they are more tech savvy because they are more innovative.

There are a lot of questions associated with that.

Do not affect to find stoned programmers working on the next big thing.

One of the big stereotypes of the industry is that these are big pot dealer is selling dime bags of cannabis.

That is not what this industry represents.

So far only two states have legalized canvas for recreational use.

Next, we take you to monaco.

Plus, john oliver , talking about what it was like to step into this use of john stuart.

Step -- get your water guns.

A big music festival in the netherlands.

? ? today in luxury we are taking you to the hub for millionaires, the country of monaco.

[indiscernible] ? [loud guitar music] ? [indiscernible] four fashion properties [indiscernible] 35 million.

? [indiscernible] services at 1.5 million.

? it sounds like my kind of place.

I could imagine hanging out at the hotel de paris, home to the world's oldest wine cellar.

Hello, i am the manager.

Welcome to our amazing hotel.

Follow me.

This is the biggest hotel wine cellar in the world.

Welcome to our special reserve.

During world war ii, the germans occupied the hotel and the manager hid all of the precious bottles.

The germans arrived and began to take one out, two out.

To not forget, if you are a gambler, you have to go [indiscernible] for more on all things luxury, visit bloomberg's "the good life." i wonder what it was like to host a comedy show?

We will hear from john oliver, the man standing in for jon stewart, coming up next.

This little canine is putting tony talked to shame.

? ? in pop, being funny is big business.

Comedy tv is no different.

John oliver has been a senior correspondent for "the daily show closed but since 2006 and is standing in as host since jon stewart has been off.

He spoke with charlie rose.

I knew it would be terrifying, it did not disappoint.

I was not sure how much fun it would be, and it has been an incredible amount of fun.

I have worked on the show for years.

Like being a pit crew member, i knew how it worked, but did not get to drive it.

It is a finely tuned machine.

It is a machine, one that john has very strategically and intricately built himself.

He has taught almost everyone in that building have to do their particular version of their job.

I am even more impressed with the whole machine now that i was before.

But which raises the question, it was finely tune for him, dropping you into a machine that was finely tuned for him?

He finally to end it for him.

He built this thing over a decade and have.

It has been that long?

I know, while.

My main responsibility was not to destroy the machine in three months.

You know, i guess it shows how well the machine works that he built, if you then have someone without your skill sets running it and not crashing it.

You can watch the whole interview between charlie rose and john oliver's tonight on bloomberg television at 8:00 p.m. at 10:00 p.m.. in the world of humor, there is only one dan aykroyd.

The comedian turned businessman stock by a few days ago, celebrating the anniversary of his movie, "trading places." you know the scene that happens at the end of the movie?

He explained it and now we know what really happened.

But one minute you are soybeans, the next minute your kid is in college.

Everyone knows that "trading places" is a classic american comedy, but i would posit that it may be the best movie ever made about american business.

It is definitely the only movie made about the commodities trade.

Certainly one-of-a-kind.

When you first got the script, did you understand what was happening on the financial level?

I lived downtown near the world trade center, i understood enough about it.

This is the other guy's problem.

I did not understand the in the pits mechanism of trading.

I did not understand the call and response system.

When i got in there and learned about it, eddie and i became infatuated but their enthusiasm and adrenaline.

In the and you can see as in the movie shouting.

We were just trying to replicate that fury and that frenzy that happens.

What's entirely replaced by computers.

Bloomberg terminal.

Exactly.

It is very complex.

Could you give us a small favor?

Described in plain english why you win and the dupes lose?

There was a short taking place in orange juice futures and we were able to get information about what the dukes were doing.

We want you to get as much o.j. as you can.

Do not worry if the price keeps going up.

We worked the other side of the trade.

What they were operating under false information.

You have to know what you're doing to play that game.

Looking good, billy ray.

All right, there is.

The mystery meat.

Cory johnson and elon musk, a joy riding in the model s. pretty cool.

? ? 56 minutes past the hour, let's get to cap -- caught up on the markets past the hour.

Up nearly 54 points, the s&p is also up by 3/10 of 1%. it means that stocks have pared earlier losses, a pattern that we have seen happening for the past nine consecutive days of trade.

Two stocks to highlight, the first one is eli lilly, claiming that their submitted application is for a lung cancer treatment after a study found that the drug increase the overall survival.

The second is yum brands, posting a drop in china.

Why?

Diners remain reluctant to eat chicken given the outbreak of the avian flu earlier this year.

For more on how to play the actions market, i am joined by the senior analyst at the cbot in chicago.

How are you position yourself in financials?

We are at the end of the earnings cycle where there is a bit of a lull, , but they kick it off again in october.

They usually start the way with wells fargo, goldman sachs, and in the past has been a catalyst.

Why are you still bullish on financials right now?

Look at how banks have performed over the last 12 months, clearly outpacing the s&p overall.

Why so bullish?

What happens if the fed pulls back faster than you expect?

I do not think that is the case here.

Yes, they are up over the last year cut back, but to put it in perspective they are not even in the halfway point.

The low of 2096, said 22 at halfway point, we are not even to the halfway point and some bank stocks are still trading below book value.

There is more upside appreciation and they have not recovered by the rest of the market.

So, banks are creeping back up to pre-crisis levels.

Looking at the general and not the broad market in banks, the broad market right now, the historical average since 1989 has been 19.

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

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