Live from pier three in san francisco, welcome to the late addition 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 innovation and technology in the future of business.
Apple could reveal a new lineup of ipads in as little as two weeks.
The new report says the company is planning a launch event october 22 to show off new, full-size and mini apps -- ipads.
Some older samsung devices will be sensually be banned in the u.s. starting at midnight tonight after president obama chose not to overturn a key patent ruling, this after he did halt a similar ban on apple products.
Twitter's ceo dick costolo settled into a major controversy when he responded to critics on the lack of women on twitter's board.
Could his comments violate fcc rules?
We will have much more on apple's anticipated ipad announcement in a few minutes, but first i want to get to what is happening in washington.
President obama is standing firm in his refusal to negotiate with house republicans, and speaking today, he said he will not negotiate until congress passes clean bills to fund the government and raise the debt ceiling.
House speaker john boehner fired back, calling for negotiations to begin now.
We are in washington with the very latest.
Any sense that there is any movement happening anytime soon?
I wish i could say yes, but it looks like it is still no.
The date of the shutdown -- the eighth day of the shutdown is coming to a close.
Not a lot of action today.
We did hear plenty of rhetoric.
The most recent coming from house speaker john boehner.
This was his second time before the cameras today where he once again said he wants negotiations with the president right now.
He pointed to past debt limit negotiations and sounded confident at this time would be no different.
The long and short of it is, there is going to be a negotiation here.
We can't raise the debt ceiling without doing something about what is driving it -- driving us to borrow more money and live beyond our means.
The idea that we should continue to spend money we don't have and give the bill to our kids and grandkids would be wrong.
Earlier today, the president called the speaker just to say that he would not negotiate until after the threats of shutdown and default were taken off the table.
The president reiterated that message when he took to the white house briefing room this afternoon.
He spoke for a little over an hour and signaled that he could accept a short-term debt limit increase so long as americans are not held hostage.
No american president would deal with a foreign leader like this.
Most of you would not deal with either coworkers or business associates in this fashion.
We shouldn't be doing this way here in washington.
Emily, let's remember that all this talk about negotiations is just about getting the leaders together in the same room.
We haven't even touched on what they would actually be negotiating.
At the end of the day, the two sides are just as far apart as they were on day one of the shutdown.
I mean, we are just a few days away from default.
Hardly any progress.
What is happening on the fringes?
Is there any movement anywhere else?
Yes, so on the fringes we have seen a few plans emerge.
House and senate democrats have procedural maneuvers in the works.
Senate republicans are floating around this idea, a bill that would reopen the government, but it does include some asks on taxes.
A bill only works if it can pass both chambers, and that doesn't seem to be in the cards just yet.
All right, thanks so much for that update.
We will have more updates throughout the day.
Turning now to apple, the company is apparently gearing up for a second major product event this fall.
According to all things become apple will hold an event in two weeks where it will reveal a fifth-generation full-sized ipad and a second-generation ipad mini.
The mini is said to have an improved retina display, while the full-size version is said to have a better design and camera.
The event will feature updates to a line of mac computers and the operating system.
The ipad refresh comes just about a month after apple put its newest iphones on the market.
Will these new ipads satisfy apple's critics?
I'm joined now by wedge partners' brian blair in stamford, connecticut.
What do you make of the timing?
Is this in line with what everything you expected?
We knew they were going to come sometime in october.
This idea of october 22 is in line with what people are expecting.
I think you nailed all of the features that we are going to see from these new ipads.
A retina screen on the mini, and i think on the larger one, we will see a thinner design, but more importantly, a much smaller bezel.
They will keep the 10-inch screen, but do it in a much smaller device.
Tell us more about the features.
What is going to make these new ipads any better than the ones we already have?
The retina screen is actually going to be a big deal for the mini.
That was a big complaint when it was launched last year, why doesn't it have the retina screen yet given that all of apple's other products have that?
That is going to be a big deal.
Most of the ipads, i think more than half of them being sold, are the many, the smaller form factor.
It is going to be a big deal to see the consumer affection of the bigger 10-inch ipad, but with a much smaller bezel.
It will feel a lot more smaller and more portable.
That will be a focal point, which one of these devices is flying off the shelves as we get into the holiday season?
What about the macs and operating system?
The only thing i'm curious to see is if they will introduce any new hardware, which is unlikely.
The macbooks themselves have looked the same for a while.
They made a some innovations here and there, but we have already releasing the software, this new maverick software.
I don't think there are going to be any features they will introduce their.
I'm curious to see if we will see any new hardware.
The big variable, the potential for surprise is, do they do anything with the apple tv box?
That is one variable that is possible.
Are there any new ipad formfactor factors that nobody has picked up yet?
What might those be?
What other form factors are you thinking of?
You know, the last few years, the ipad line is not as important.
They do not sell as many units.
It has been declining year-over- year.
They have played around with the nano.
They have played around with the touch little bit.
Is it possible they do something very unique?
Do they introduce a new touch id fingerprint center -- sensor across the ipad it touches as well as the ipad?
That is a variable.
What is interesting is that we already know what they are going to release great i wonder if there is a chance of them doing something that we all don't know already.
That is going to be a challenge for them.
That was my last question.
Could there be one more thing having to do with televisions?
Maybe a smartwatch?
If there is going to be anything announced around that, i think we would have seen evidence of it in the supply chain.
I don't think there is going to be an announcement regarding the large television, which i think is more likely attitude -- 2014 event.
-- at a 2014 event.
We could see an update to the new -- to the hockey puck tv device.
What sort of update would you be looking for?
They could introduce an app store to apple tv where you have the ability to download some of the same apps that are available on the ipad or iphone onto your television.
People feel like that could be a precursor to them doing a large, 50-inch screen on your wall next year.
That is a kind of thing that would be a significant move, a major surprise.
It would be a great direction for them to go with the apple tv.
What could be?
The speculating brigands.
Ryan blair, thanks so much for giving us your thoughts on the upcoming event.
Speaking of apple, the company also has plans to expand itunes radio overseas, beating rival pandora to some foreign markets.
That is next on "bloomberg west ." ? welcome back.
I am emily chang.
Apple is planning to broaden its radio reach.
Bloomberg news has rick nash has learned the itunes radio soon be available in more english- speaking countries, and clipping the u.k., canada, and australia.
Our senior west coast correspondent jon erlichman has more in today's "digital remix." how is apple able to do it but not pandora?
There are a couple of factors in there.
Part of it has to do with licensing deals.
Before the break, you're talking about a hardware story.
Here is the software story.
When apple unveiled its new ios 7 operating system, they announced the introduction of itunes radio.
You were talking about a very aggressive rollout of that service in other countries.
Canada, australia, the u.k., new zealand, the nordic region.
Some great reporting by bloomberg news reporters.
This is similar to what we have seen from apple in the past, especially with itunes more than a decade ago, to really get into a lot of countries quickly, something they are potentially able to do because of their dealing specifically with the music labels.
Eddy cue, the executive at apple, was talking about getting service into upwards of 100 countries.
There really is this need for apple to continuously introduce new products, but also new offerings to go along with these products.
Maybe when apple holds its next event, they will give an update on how many people are using it within the first five days of itunes radio being watched.
They said 11 million listeners have given it a try.
Pandora has actually dropped almost 12% over the last couple of days.
How big a hit is this for pandora?
I'm sure you could factor some of this news to the stock price decline.
There were a number of tech stocks that were down today.
There are two views to look at the pandora story.
As we highlighted earlier, apple negotiates directly with the music labels on these international rights deals.
That allows them to fire into a bunch of countries really quickly, whereas pandora does not follow a similar path.
That has slowed its international expansion.
However, i think there is a bigger question of where pandora needs to be focusing its energy.
Right now, this company has been going around the country, building up an advertising sales team so that it can generate more advertising revenue and getting itself available anywhere and everywhere in the u.s., whether it is in your car or in your living room.
On the other side of it, maybe apple has an up hill battle here at home, hence the need for the international expansion.
Jon erlichman, our senior west coast correspondent, thank you.
Apple's biggest rival samsung is facing an import ban on some older devices starting at midnight tonight.
This after president obama did not overturn a ruling from the international trade commission which found these devices infringed on to apple patents.
You may recall the obama administration did overturn a similar ban on apple products a couple of months ago.
Our editor at large cory johnson is here with more in today's "drill down." these cases are really different.
I feel like this patent stuff is so confusing to people.
Everyone thinks a patent is the same thing.
There are so many different kinds of patents.
Some matter because they are a link in a chain.
Others matter because they are the chain themselves.
Samsung has done very well on the basis of some of its early phones, which sold like crazy, but were later found to steal some important patents from apple.
That is what the court said.
When you look at the growth in samsung stock and the growth in samsung's business, what you are really seeing is the success of those early phones that infringed on patents and how they grew a business out of these things that other companies who did not steal things did not get.
Samsung did a lot of things on their own.
President obama was faced with this difficult decision about what to do about giving apple a pass when they were found infringing on patents and what they should do with what sounds like a similar case coming against samsung.
So, the decision was due by midnight tonight.
The ban is supposed to take effect tonight.
The u.s. trade representative came out today and explained why they were going to let the band take place.
He said, after carefully weighing the policy considerations, advice from agencies and information from interested parties, i've decided to allow the import ban to proceed.
Again, think back to what happened on august 4. president obama said he was not going to let -- he was going to veto the ban against apple.
The following day, the korean ministry of trade warned that they were going to be carefully watching the upcoming ban on samsung products, and then of course, today, president obama decided they are not going to veto a similar samsung product ban.
Why would president obama give apple a break but not give the same brick to samsung?
It certainly looks like he is favoring a company.
Unless you pay attention to the details, which you and i are doing.
On one hand, you've got the samsung patents.
On the other hand, you've got the apple patents.
They are very different patents.
The samsung patents are on the left there and are nonessential patents.
They are not required to license -- let me rephrase -- the apple patents are nonessential patents.
They are not required to license those.
Those are unique things that apple invented.
When you pinch her fingers across the screen and you move things, or the headphone jack and it stops playing music.
The samsung patents, however, our standard antisocial patents.
There are thousands of links in the chain that are required for wireless to work.
The law standard is a fair, reasonable, standard licensing requirement.
The president says, apple's things, they don't need to license those out.
We will let those things go ahead.
Samsung did not fairly license these things.
That is why they said the product ban did not have to take place for apple.
How big is this business for samsung?
On one hand, the phone business is huge.
It has grown to over $28 billion in the last calendar year.
It is a troubling number.
That is in the most recent thing.
The phone business, while it is $20 billion, that is the newer phones.
These are older phones.
These are heart -- these are high-margin devices for samsung, but not as important as the cutting edge phones.
They would like the right to continue to sell those phones.
The newer phones, because they knew about the patent problems, they designed around them.
You'll never know how much market share, how many customers they have achieved because of these phones.
Cory johnson, thank you for that very detailed explanation.
Now that twitter has released its ipo filings to the public, what kind of legal questions might the company face?
We will bring you that story next.
? this is "bloomberg west." i am emily chang.
We are just 17 days away from the earliest possible date that twitter and begin its investor roadshow or start trading.
As we have been telling you, under the sec rules, twitter has to wait 21 days to do so once it makes its ipo filing public, and in this time, the spotlight is on all aspects of twitter's business.
One issue that has been controversial is the lack of women on twitter's board.
The "new york times" has identified 21 women who could be possible candidates.
They include intel president rene james, diane greene, susan lyne, disney media networks cochair and sweeney, pepsico's ceo indra new way, and many more.
Bloomberg west has reported that twitter is actively searching for a female board member.
My partner cory johnson is back with more on all things related to twitter.
What costello's -- the carrot top comment.
One of his critics we had on the show yesterday, dick costolo referred to as the carrot top of academic sources.
Interesting stuff indeed.
Can a company make these kinds of comments?
What are the legal ramifications of that.
I'm joined by charlie moore brock.
Good to see you.
I would surprise that dick costolo would say anything during this period, but have his comments or tweets run afoul of sec rules?
Only the sec is going to say that for sure, cory, but it is unusual for a ceo to make statements.
During the quiet period, the period between when you file your registration statement and it is considered filed by the sec, that is called a quiet period.
During that time, ceos and insiders are prohibited from making any statements that in ordinary investor is going to use to make their investment decision.
The thinking they're being that all of that information should be in the prospectus and roadshow.
Calling someone names probably not that big of a deal, whereas, another example, a phone call i took down one time, the company will be wildly profitable and the sec filing said the's -- said the opposite.
That is a comment that would affect the decision.
Anybody will look at the two situations and judge them quite differently.
The issue is an important issue.
I think we will probably see less comedy about that issue going forward, i would guess.
[laughter] i wonder, if we are in an era where media companies, it is a regular thing for dick costolo to be talking as part of the regular business, doing customer meetings and calls -- does regular business have to stop during ip registration?
The idea is that regular business does not have to stop.
You are still tweaking print i saw you tweeting this morning.
I still use twitter.
They have customers they have to continue to serve.
Regular business doesn't stop.
There are rules.
Now is the time when the company is supposed to be in a quiet period.
They are selling.
They are selling stock right now.
I want to move beyond this.
When you look at this filing, what was your biggest take away from a legal perspective?
I really thought this was quite a transparent ipo disclosure.
They had more risk factors than facebook.
Folks have done a word count -- with a smaller business.
Actually, it is probably appropriate.
Facebook's business was making money.
Twitter's business is still losing money.
I did find it to be a pretty refreshing ipo document.
20 -- twitter is a pretty darn democratic company.
That is some of the commenting i have been doing about it.
Twitter has one vote per share, which is kind of going against the grain in silicon valley.
We have had so many companies from groupon to zynga to facebook with all these multiple classes of shares.
I will throw in google as well.
You buy a share and you get a vote.
That doesn't mean -- i've been an advocate in favor, in many contexts, having strong founder control of companies -- when you look at it, facebook has rebounded from their ipo.
Charlie moore, thank you very much.
We will be right back with more of "bloomberg west" in just a moment.
? you are watching "bloomberg west" where we focus on technology and the future of business.
I am emily chang.
Will has unveiled its latest laptop.
The hp chrome book 11. the new chrome book is one of the lightest laptops on the market.
It features a micro usb jack for charging, letting the computer use almost any portable charger.
The price is $280. amazon is taking aim at paypal, launching a new program called login and pay with amazon.
It allows amazon's 250 million active customers to pay for items on the website with information already stored in the amazon accounts.
Electrical problems have been plaguing a data center being built in utah to house sensitive information collected by the national security agency.
An agency official says the problems are getting fixed and final testing is underway.
The 1.2 billion dollar building has been described as a state- of-the-art facility to protect the nation cybersecurity.
It is day eight of the government shutdown.
We appear no closer to reaching a deal to reopening the government or raising the debt ceiling.
Yang yang is in washington.
We talked about this earlier, the trifecta, if you will, president obama, speaker boehner, senate majority leader harry reid -- they are not giving into each other in any way, shape, or form.
What about movement within the parties?
Is there movement anywhere else in terms of some different options that we could be looking at?
We do have a few options.
House democrats have introduced a discharge petition.
If they can get enough signatures, they can bypass the speaker and bring a clean senate cr up to a vote.
In the senate, republicans are floating around another idea for opening up the government without delay major parts of the affordable care act, but it does require some concessions from democrats on spending cuts and some changes in the tax code.
Senate democrats, they have proposed a debt ceiling bill that would give president obama the authority to extend the debt limit by one year as long as fewer than two thirds of congress disapproves.
Because republicans would not have to vote for an increase directly, it's got a better shot of working, but it is still a longshot.
We have a few plans out there, but in order for any of them to work, they have to pass both houses.
As we saw today, both sides are digging in their heels even deeper.
It is looking unlikely at this point.
Despite the unlikelihood of all of this, all of these guys are saying they are optimistic.
What is with the optimism?
I don't think they really have any other choice to say anything else.
A markets certainly would not take any signs of failure well.
Neither side wants to believe at this point that the other would let this go beyond that october 17 deadline.
Today, we saw president obama said he would be willing to accept a shorter-term debt limit increase, and that looks to be a move in the right direction.
We could be getting somewhere, even if it doesn't look all that promising right now.
There is a faction of the republican party, right, that doesn't appear to be all too concerned about this october 17 deadline.
Are they going to be a problem?
We like to call them the default and i'll caucus, republicans who think that the october 17 deadline is a political ploy by jacob lew.
Lew and obama have said this is not the case.
The lucky thing is that at least speaker boehner seems to agree with them.
He doesn't want to see a default.
Those default deniers are really more on the fringe and should not be affecting the party as a whole, but you never know.
President obama would not speak any more on the possibility of going over that october 17 deadline, and he deferred to lew.
He will be speaking to the senate on thursday.
We should get more details then.
Yang yang in washington, thanks so much for that update.
These days, it seems like every tech company has its own conference or conferences.
Oracle just held open world, salesforce's dream forces coming up, and then they're all the conference is put out by media outlets as well.
How exactly does the conference business work?
Cory johnson is back to explain.
Cori, we've got a little bit of personal experience with this.
Yeah, and full disclosure, "bloomberg west" as a conference of its own print tech conferences have changed a lot.
Kicking off tomorrow and seven cisco is open code, a different kind of tech conference that is more like music festival then geek fest.
The attendees will roam the streets of san francisco, walking right into the offices of tech companies, from google to jawbone, yes, even "bloomberg west." the founder of open code is here, john patel.
Tech conferences have been around for a while.
I was sort of throwing up the names of all the old ones in the industry.
But there were pc forums back in the day.
There was a demo.
When you look at back at that business, who sort of made their first big names in this?
If you think about well-known leading bloggers today, those are the people that were putting on conferences 20 years ago.
Before they had blogs, there were newsletters.
These newsletters were subscription-based newsletters.
It came with a conference invite.
You got to go to these exclusive , invite-only conferences and mingle with the most important people.
You would pay $10,000 to pay for thoughts.
You would meet all of these other people who were running the industry.
I went to all of these as a reporter in the 1980s and 1990s. i started building the same model.
You reported in the 1980s? tell me about that.
[laughter] we used typewriters.
There would be a fancy hotel, scenic resorts.
The attendees would be whom?
They would be entrepreneur starting companies, the financiers who backed them, the press who wrote about them, all the different people in the ecosystem that created the innovation that was technology.
The idea of our conference was to turn it inside out.
Those conferences you would go to, it wouldn't be a startup guy on the corner.
It would be bill gates.
It was a great networking opportunity if you could get in.
What is the business model there?
We did some work.
You created out of the blue a really successful conference which you are trying to do again with openco.
What is the business model?
It is very simple.
You charge people to come, a lot of money.
He's tickets to conferences today are anywhere from $1500 to 500 -- $5,000. you have sponsors who give money to depart -- to be part of the conference material, have a logo, or have a moment on stage where they say a word or two.
It is the typical media model.
Ads and paid circulation.
It is a pretty straight forward business model.
What kind of revenues are at bigger conferences?
Forgetting oracle and other conferences, what kind of revenues are we talking about?
They really are in the single-digit millions of dollars.
The very successful ones can get up to $5 million, $6 million.
Then they get stuck.
You can only put so many people in a ballroom.
Not so when you have been roaming the streets of seven cisco at openco.
The web two summit we did for eight years.
On the ninth year when i was trying to get geared up to doing it again, and it was very profitable, a great business, i just could not do it anymore.
I said, why is it?
Putting people up on stage and having them talk at other people was a model that everybody seem to be doing.
It was harder and harder to compete.
I wanted to think about how to reinvent it.
My partner and i came up with this great idea of turning it inside out and letting people go to the places were the innovation was happening, go inside the actual company and hear from the founders in their native environment.
A very different experience.
Are you losing the sort of communal aspect where people get together?
One of the things that was so successful about the industry- standard conferences, you have a startup person who knew if they bought the ticket, even if it was the last dollars they had in their company, they would be sitting next to a vc.
They might get another round of funding.
That is the value of the networking opportunities.
We put them into openc as well -- open co as well.
We have a kickoff event we will do in the beginning.
Each of the difference defense have their own little networking opportunities.
There are 135 of them.
Someone who chooses a particular company probably chooses it does they have some reason to be there, and everyone getting there, it depends.
Bloomberg might be 60-70 people.
Google is taking 100 people.
They are almost like 130 five miniconference is going along the way.
People do meet ups at the end of the day.
I am stoked to have the people here on friday.
John patel -- battelle, thank you very much.
A fascinating model.
Some of silicon valley's biggest names have a love affair brewing with coffee.
Why the interest in your morning cupping -- cup of joe?
We will explain next on "bloomberg west." ? this is "bloomberg west." i am emily chang.
Tonight, bloomberg tv premieres "c-suite." host jeffrey hayzlett travels to massachusetts, home to dunkin' brands, to talk with cfo paul carbone about the doughnut maker's plans to expand west here in california.
Keep in mind, this is the market they fail than twice.
Jeffrey hayzlett joins me now from new york.
Jeff, what is brewing in the boardroom?
A lot of growth and a lot of questions.
We are taking people into the c suite where 99.9% of most business executives never get to go.
We asked some of the hard questions.
We take it right to dunkin' donuts, which is a company growing at 15%, 40% in terms of the earnings over last year, and they are moving back into california where they failed twice.
They want to put in 1000 new franchisees, new stores, by the year 2015. they have a brand-new management team that is 90% new.
We have a lot of questions about how they are going to do it.
They had to answer them.
I understand you also went to seattle to check out microsoft's cofounders paul allen's major league soccer team.
I believe they are using technology?
It is amazing to see what these teams are doing.
Here is a team that pulls more than most football teams.
They are using technology in their everyday workouts, where they strap these guys with all kind of different things and make them breathe and do tests, and they treat -- and they tailor make their workouts based on the various readouts.
It is absolutely fascinating.
You are seeing why they are winning.
Fascinating stuff, jeffrey.
Good luck tonight.
Everybody, make sure to watch the from your of "c suite." thank you.
Well, speaking of coffee, some of silicon valley's biggest names are using their expertise and investment dollars to make a better cup of joe.
I recently looked into why the likes of jack dorsey in mark zuckerberg have a new passion brewing -- and mark zuckerberg have a new passion brewing.
There is something brewing in silicon valley with some of the biggest names in tech bringing their obsession with fancy coffee right on campus.
Exhibit a -- mark zuckerberg.
They wanted to create something really special for their employees.
They are very mindful of creating an environment for a good culture.
It takes an average of five minutes to get a cup of joe.
It is big with the tech crowd.
Phils also sells it's been strictly to google, twitter.
A lot of people in the tech crowd like simple things that happen to be delicious and may be luxurious.
Jack dorsey is also getting in on the fresh-brewed action.
He has invested in sight glass, a small san francisco roaster known for hip paresis, steps from the company's twitter and square.
Then there is blue bottle, small chain of high-end coffee bars known for its tech clientele and long lines.
Mark pincus loves it so much he block -- he brought a blue bottle coffee bar to zynga.
Kevin rose has gone from holding meetings at blue bottle to investing in the country.
Google ventures recently took part in the nearly $20 million funding round for the chain.
He's got high praise for how bluebottle fly -- founder james freeman is changing the business.
James is one of the first people to discover that even though coffee has traditionally been this thing where you grab a cup, you are on your way to work or whatever it may be, he was the first one to kind of slowdown.
It creates a better cup of coffee than anyone else.
A better cup of coffee, driving the new passion for the tech elite.
Since the google ventures invested in bluebottle, the bay area roaster has expanded to new york city and just this month announced plans to open stores in l.a. could a smart devices become the next big market for intel?
We will talk to the intel vp about the company's newest trip in which electronics will be powering it.
? we have breaking news now out of washington.
President obama is said to be ready to nominate janet yellen as the next chairperson of the federal reserve.
Yellen, currently vice chair, has been considered the leading choice to replace ben bernanke.
Again, president obama ready to nominate janet yellen for head of the federal reserve.
We will have much more on this right here on bloomberg television.
It has obviously been a very long and controversial process, but now we know that president obama is said to be ready to nominate yellen for this post.
Intel is aiming to make your air conditioner, your power grid, and even your coffeemaker smarter.
It is part of the company's efforts to create what it calls the internet of things, a network of everyday devices connected to the web.
Intel announced today they are releasing new chips to better support connected devices in the energy interest rotation industry.
Cory johnson joins us now with this story.
Intel has been dependent on the pc market for some time, but the internet of things, maybe a good place for intel to build its business.
What do you do in your job?
What is your day-to-day?
We really try to enable the internet of things for many of our customers, and for them, it is really about, how do unleashed business transformation with these new devices they are connecting up?
What does it mean on a day- to-day basis?
How are you trying to jumpstart a market that is only beginning to exist?
The market has existed for a long time.
Think about farm street all of these farms -- think about wind farms.
You can monitor multiple wind farms across the state.
If you look at all the data, bring the data into the cloud, and big data analytics is what it is about.
It is not just about chips.
It is about lots of things monitoring lots of things and putting that data into a place where it can be used.
The power is really about how people distribute analytics.
Analytics in the cloud has really driven business transformations.
It is interesting.
Most of the companies and businesses that can use the internet of things, they spend about $36 trillion in operating expenses.
Yes, but on things like how to run a commissary.
Do you have to think about ideas they are not thinking of because they do not know it is possible, or do you walk into a customer's door and say, we have tried to make this thing happen?
We really make new things happen for them.
Very often, these companies do not know how to harvest big data and how to leverage that into business transformation.
If you think about the energy field, how can you get data out of substations and homes and use that to optimize energy flow?
These are huge transformations for those types of companies.
Are these more software questions then commoditized chip questions?
The software is incredibly important to make this happen.
As an example, 85% of the devices we are talking about actually sit in legacy infrastructure.
What does that mean?
It means these devices are all out there.
How do deliver the benefits -- for example, windmills.
Water supply, the existing grids.
It is really about, how do bring the benefits of that to those companies?
That is the business transformation.
We have designed and introduced this morning a number of different products that help these companies do that.
Really interesting stuff.
Thank you very much.
I appreciate it.
I want to get back to this breaking news coming out of washington that president obama is planning to nominate janet yellen for the fed chair.
I want to bring in yang yang who is there for us.
What are you hearing?
So, emily, what we are hearing is what you just said, the obama administration is getting ready to nominate janet yellen, the current vice chair of the fed, to fill in that spot that bernanke indicated he would be vacating.
This closes up a very long process that started back in june when obama first mentioned that bernanke would not be staying through his term in january of 2014. janet yellen is certainly the more favored candidate that we have seen.
You are member that she and larry summers, a former treasury secretary, were both top contenders.
Democrats were not behind larry summers, so he basically had to back out.
Now we have janet yellen, and many senators have spoken out in favor of her, especially in the banking committee.
This nomination does come at a particular tumultuous time in washington.
As we have been discussing in this show, we have the current shutdown showdown, issues with the debt ceiling.
It is going to be tough p to get herassed -- to get her passed through the senate.
The fact that the white house is considering nominating her as soon as tomorrow could be a signal that perhaps the white house is looking to provide a little more stability, a little more certainty in a time that is very uncertain, given the shutdown and that impending debt ceiling deadline.
Yang, if in fact she does get this post, are we expecting her to continue bernanke's policies?
From a policy perspective, if she is already vice chairman, would it be a thing?
-- more of the same?
That seems to be in what we are hearing.
Not only did obama say that whoever would follow bernanke's footsteps would continue to pursue bernanke's quote unquote -- or 90s "smart policies," at the fed, she and bernanke have held the same policy viewpoint.
One thing that we could see more of is more communication.
One thing that they have credited yellen for is that she has helped with a more transparent fed.
She currently leads communications.
We could see that go on with her at the helm.
Yang yang, thanks so much for that update.
We will be watching for janet yellen to potentially be nominated by president obama for the fed tomorrow.
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