>> apple connects with china mobile. they finally strike a deal to give wireless consumers in china access to the iphone. >> amnesty continues. putin releases one of pussy rio t's members after khodorkovsky says he will work to get other prisoners out of jail. >> our exclusive interview with sheldon adelson. whyalks about the future of he is not placing bets online. good morning to our viewers in

europe. good evening to those in asia. a warm welcome to those just waking up in the united states. >> this is "the pulse" live from bloomberg's european headquarters in london. >> we begin with what could be a win-win deal for apple and china mobile. after six long years of negotiations, the companies have struck a deal. it will give china's 1.2 billion wireless subscribers access to iphones. caroline hyde joins us with the details. this is a long time coming. >> six years. that is long they have been haggling it out. that last piece in the puzzle has been attained by apple. they were already with the second and third biggest wireless companies, china unicom in fact introduced the iphone back in 2009. china telecom had them in 2012. china mobile, the biggest player has got just above two thirds of the market. they have now been able to sell s.one 5c and 5

this basically gives apple access to more than double the population in the united states. the bakeware he is whether all of them will be spending that amount to go and get their iphones. the stumble that have been there, the fact that china telecom's home growth networks weren't really wanted by apple. china mobile really pushing for more benefits sharing coming from apple. they managed to iron out their difficulties and agreed a deal. sort of sales growth are we likely to see? access toss -- new two thirds of the market they didn't have before. will they get all that three quarters of a billion people that china mobile has on their network? probably not. morgan stanley says they are likely to add about 12 million iphone sales for apple next year. that is nothing to be laughed at. thanis really percent more

the 150 million units that were sold in 2012. they are upping the amount of market share that they have. certainly with $700 the average price of your iphone, not everyone is going to be able to afford it in china. there are far fewer discounts in china compared to u.s. and u.k. when you go for iphones. everyone won't be able to get access for it at it is increasing apple's market share. ofy will be fifth in terms handset providers in china. back to you. >> thank you so much. caroline hyde. >> ok, the u.s. luxury jeweler tiffany will have to pay swatch almost half a billion dollars after losing a breach of contract case against the swiss watchmaker. david tweed is in berlin with more. tell us the details of the case. a jointes back to venture that was set up between swatch and tiffany in 2007. the idea was that swatch which

is the biggest major -- maker of watches in switzerland, it was going to join up with tiffany to produce and develop and manufacture watches under the brand name of tiffany. in 2011, swatch brought this allegation that tiffany wasn't expanding and developing the business. that is the root of this entire battle that has been going on. we have heard that the netherlands arbitrator has decided that in favor of swatch. be $449ges going to million. it is quite a lot of money. >> it is quite a lot of money. half a billion. it is a significant blow for tiffany. >> it is more than tiffany earned in its last financial year. tiffany says it is going to have to take charge of about $305 million. it is what happens to tiffany's

earnings per share that is going to worry the shareholders. tiffany says it is going to dilute earnings by as much as $2.35. in november, they were forecasting their earnings three dollars 75. that is a massive chunk out of those earnings. that explains why we are seeing those shares falling. the surprising thing is that we are not seeing big gains by swatch in switzerland. that could be because the tiffany ceo says, we are shocked and extremely disappointed and we are going to talk to our legal counsel. the story might not be over yet. >> david, thank you so much. >> with that much money involved, i am not surprised. it is time for him bloomberg exclusive. sheldon adelson says he will to blocktever it takes online gambling in the united states. he spoke to elliott gotkine. he says this isn't about money. it is about something else.

>> he says it is a moral argument about preventing what in his words is a casino in the hands of anybody with an electronic device. specifically young people who wouldn't necessarily have the money. that ultimately is why he is so opposed to it. >> i will spend what it takes to get the point across. it is not going to take a significant amount of money. in my position, whatever it takes is ok. just am very much against it. i am morally against it. i think it is going to kill the entire industry. it has the potential to kill the entire industry. it is already doing that in europe. allowing internet gaming in europe without any consideration. >> so is about preservation. categoryot in that

where my customers would play on the internet. we take that's that are -- bets that are quite significant. to $1 million a hand in singapore. >> online gambling in the united states has already been rolled out in three states. there are half a dozen more that may soon follow. istainly, sheldon adelson putting his money where his mouth is. he is going to spend as he says whatever it takes. when you are worth as much as he is, that could be quite a considerable amount of money. he doesn't really want to put a number on it. >> what is adelson doing in israel? >> he was here to -- for the inauguration of the adelson school of entrepreneurship at the interdisciplinary center. he is a self-made man himself. i asked if he stopped by to give a lecture here. he said, sure. he may even take a lecture or two because he said even at his

advanced age, you never stop learning. >> elliott, thank you so much. that exclusive interview with the 12th richest man in the world. >> the amnesty continues in russia. vladimir putin has released one riote numbers of pussy after mikael khodorkovsky said he will work to get other political prisoners out of jail. we now know chancellor angela merkel helped broker the deal for his freedom. ryan chilcote joins us from berlin with the details. some of our pictures today have flash photography. was mikael khodorkovsky's first opportunity to speak with the press in more than 10 years as a free man. absolutely rock star reception. i have never seen the kind of atmosphere that we had going into the press conference.

not just one packed press conference room but they had several backup rooms where people were also watching on screens. they even had to delay the press conference by about an hour because there were skirmishes between cameramen fighting for position. he got an extraordinary reception. people applauded him as he came into the room. the other thing that struck me was where this took place. it was at a museum. really, given the venue and the reception, he had the perfect opportunity to be the freedom fighter and really strike out at his arch rival or at least the man you would perceive as his arch rival, president putin. he didn't. he said he had no hope -- interest in overthrowing putin. he wasn't going to go back into business in russia. in fact, maybe not go back back into russia. people asked him if they should boycott the olympics. he said no to that. i asked him if investors should stay away from russia. he said, i would be the last

person to give advice about that. his first opportunity to speak clearly, trying to figure out what is he trying to do now. putin'swhat does pardoning of khodorkovsky and the amnesty for pussy riot say about him right now? a lot of people say this is a political game, him saying to the world, i am not as bad as you think. >> it definitely is a concession to the west. the west was pushing for the release of both the pussy riot activists and khodorkovsky. it is not a sign of weakness. khodorkovsky himself said president putin wouldn't do this if he didn't feel like he was in a position of strength. it does show him in a more compassionate like. -- ahead of the olympics, perhaps this is a really good pr move for president putin. >> ryan, thank you so much.

is on ourat else radar this monday morning. a british airways plane has collided with a building at johannesburg international airport. the wrong taxiway as it prepared for takeoff. it wing hit an office building adjacent to the runway. the plane carried 182 passengers. to debut an aluminum f series at next month's detroit auto so. for militaryed grade metal for the display. the company makes aluminum glass shields -- blast shields for battle cars. more than 24 hours of freezing rain led to an icy buildup on trees and power lines. in some cases, trees came crashing down on cars and homes. the president of toronto's electricity provider has called it one of the worst ice storms that ontario has ever seen. >> still ahead, the future of

flight. we take a look at the year that was for the airline sector. and what lies ahead for the industry. first, charles dumas joins us after the break to share his economic outlook for the year. find out why he says we will party like it is 1999. ♪

maxwell comeback.

as you wrap up the year, let's take a look at some of the performers or nonperformance out there. this is the trade that nobody wants to trade. euro/dollar. this year, up 3.7% year to date. the problem is that it continues to confound. it has been a difficult story. people have given up trading it. if there is one person next year above all that is praying for better data out of the united states, it has got to be mario draghi. the trades have captured everybody's an advantage in -- imagination this year has been the short yen trade. this is dollar/yen. year-to-date today, 20% have been the gains. are we going to continue to see more of it next year? what impact will a cheaper currency have versus the other arrows, particularly reform of the structure of the japanese economy? francine, over to you. >> thank you so much.

with just a few trading days left in 2013, let's look ahead to the trends we are likely to see in 2014. the imf raised its outlook for the u.s. economy citing the budget deal and said tapering announcement. our next guest says the u.s. economy looks like the only game in town. during us to discuss his charles dumas. on theo have you program. thank you so much. there is so much buoyancy in the markets, so much expectation, so much hope. is there a danger that it will all crash down? >> there are risks. there are always risks. i suppose politics is the main risk. have got a kind of competitive day valuation potential in china and japan. the germans have a permanent evaluation structure in the euro whereby other people's expectations keep them competitive. china and japan are up against one another. if that flares up in any military sense, then that would

be a risk. problem, u.s.e looks to grow by three percent to four percent this coming year. the stock market is likely to carry on rising. presumablyoks weak, not back into depression but week. with debt problems and the deficit emerging markets are weak. >> said taper talk and all of that. >> the measures they have already taken more than anything else are slowing them down. the exporters depend on u.s. imports. the dollar is bury cheap. >> that is going to be -- is 2014 going to be the year of problem currencies? the euro? >> we are dollar bulls. probably against the euro too.

there is not much to go for in europe in terms of investment. the markets are stretched. there is a little money to be gained in bonds. there is not much to make their. surfacee a substantial which is likely to persist which has to go somewhere and the natural place to go is the dollar. a lot of it is coming here and to britain. >> that is certainly true. the biggest risk geopolitically you say is what happens between china and japan in 2014. >> yeah. the japanese are not at the current exchange rate going to make the inflation target they set on a permanent basis. they may get their short-term just because of the inflation hump asking through the economy owing to the devaluation itself. they are not going to stay at 2%.

towardsdrift back down zero. they want to get to 2% inflation and there has to be more devaluation. it is already china which will be sitting there heavily overvalued that is to some extent the kind of victim if you like of this. >> charles, thank you so much for all of that. have a great holiday season. dumlesd umas -- charles as. >> what will 2014 bring? let's talk to our aviation reporter. 2013, quite a good year for the airline sector. a continuation of trends we saw the golf carriers doing very well. what are the key trends to come out of 2013 that will carry on in 2014? >> the trend of the golf carriers and their positioning is still going to be integral going into 2014. you saw qatar join oneworld. you saw emirates making enormous

orders in to buy. had considering a stake in alitalia. the consolidation in the u.s. is a very positive story in terms of the income for all of the airlines. 20 billion in net income is forecast for next year. three passengers is what they are expecting. in europe, you continue to see some of this restructuring. it is going to be interesting what the low-cost carriers do. they have a lot of orders coming the following year but they have -- they have to solidify their position. they have got a few things to do to get all their ducks in a row to take advantage of this. >> my biggest question for 2014 is, will michael o'leary continue to sort of demonstrate that he can change and continue to be nice? >> it is going to be very interesting to see how they

manage this rebranding of themselves. i think it is incredibly important for them. one of the things they want to do is get repeat customers. easyjet is really focused on this. they have been successful. ryanair is a bit more of a one- hit wonder. they don't want that to be the case. they want customers to come back. this whole rebranding, getting people to not feel like if i don't print my boarding pass i'm going to get charged, convincing people that they are honest about all that is going to be a big part of what 2014 is for ryanair. >> thank you very much indeed. ok, what have we got coming up for you? chicago's skyline. one man's work in progress. the even bigger dream that he has in mind. that is what we are talking about next right here on "the pulse." ♪

goals.coo has two to save people money and to rebuild the chicago skyline in his apartment. he is going brick by brick using his favorite building material. of forever car.com. i build large architectural buildings with legos. andve chicago architecture i think the skyscrapers are fantastic. if you take a look at the lego

building from far away without any context of space and size, you will probably think that is the real building. lego is about building something from nothing. it is easy to build a set because the directions are there. what is more creative is to do something from your own imagination. it is an unusual hobby that i feel combines art and science and mathematics. when i approach work, you have to build a framework of what your strategy is. what are the tactics you have to get done? just like that, lego is all about banning. all of these buildings take more than two or three months is to figure out what the structure is going to look like. buildings takes me away from the frenzy of the corporate world. it really relaxes me where i can and mye my hands creative process, take my time and build things. people look at this and immediately, i want to show my

kids this. they get so excited. they almost get giddy looking at it. my dream is to build a lego city, not just with skyscrapers but with trains and train stations where they can move with trees and houses. i think i am going to get there. really really hope my children are not watching this. i would just spend two days building huge amount of legos. that is probably a step too far. coming up, we are just two days until christmas and shoppers to be checking their lists. we are going to look at some of the hottest tech gadgets to fly off the shelves and what the trends are for the year ahead. you may be surprised. as we head into break, thousands of lottery winners in spain are celebrating christmas a little early. the world's richest lottery paid out 2.5 billion euros. giveaway 400,000

tickets. the annual drawing is a welcome reprieve. spain suffering a little bit of an economic crisis at the moment. this may make a few people feel better about christmas. follow us on twitter. we will see you in a moment. ♪

pulse,"me back to "the live from london. i am francine lacqua. >> i am guy johnson. these are our top headlines. >> the imf raising its outlook for the u.s. economy. christine lagarde says there is more certainty there -- and then there was for 2014. she credited the budget deal in washington and the fed's plan to taper. ruling outdorkovsky a political challenge to

vladimir putin. he said he will focus on freeing political visitors. he is in germany after being released from 10 years and russian prison. vladimir putin has released one of pussy riot's members. he is expected to release a second member today. they were imprisoned after a performance critical of london. >> caroline hyde has more on the markets. >> more people are dreaming of christmas rather than what is going on in the stock market. periphery is lower, spain is off by .1%. u.k. and france and germany holding onto gains. imf saying yes, the u.s. is growing. as if we needed more evidence, friday we got the third-quarter gdp revised upwards to an excess

of 4% growth. many convince the u.s. will grow. credit agricole saying this sets a positive tone. stoxx 600 higher. big winners today, technology. it is all about apple. all dependent on apple for parts of revenue. up 2.5% as apple signs a deal with china mobile to get access to more people in china for the iphone 5c. by 0.25%, getting more than 400 million swiss francs from tiffany's after a legal battle. premier foods coming off of lows but still down by 6%. this company might be having to sell shares come the new year. let's have a look at what credit agricole is recommending.

very key issue with tapering and the u.s. looking more buoyant is seeing the dollar continued to rise. the effect on the dollar should not be underestimated. down a little against the yen. it has been trading higher of the past week, up almost 1% against the yen on the back of stimulus coming on board. credit agricole saying their favorite trade is short yen. >> thank you very much. caroline hyde on the markets. let's talk about tech. a big year for tech unveiling from the likes of apple. microsoft and nokia as well. with two shopping days left until christmas, we brought in senior european editor to share products that define it is here in tech -- defined this year in tech. they are interesting. >> these might be overlooked. >> these are not the singing and

dancing incarnation of apple radix. -- apple products. they are more interesting. >> also possibly what to look out for in 2014. i am keeping it mobile. no 5s or moto g. what i do have is the surface pro 2 from microsoft. this is a tablet that breaks apart. it comes with a keyboard. 700 pounds. >> junkie. -- chunky. >> it represents a trend -- ngtel and microsoft collidi with mobile computing. about a year ago, november 2012, i was very skeptical. in 2013 with gadgets like this, 2, they are well on their way. this is still an ipad.

but this one is for windows. this will run business apps. >> our corporate buyers going to pick this up? >> i think so. my wife uses a thinkpad, 1.4 kil os. everything the thinkpad can do. this functions like a laptop. it has the alternative interface that windows has. >> hold that up. touch-basedot a interface like a tablet. when you slam it into the keyboard, press this. it goes to the desktop. you can do your work and you can plug it into a computer. you will save a lot of back strain. it has a has will processor. people look for i5 and i7. the 2013 intel processor is good

for battery life. also have a processor that can bring windows down to the size. this is a toshiba tablet. it proves windows can work at eight inches. >> if you are traveling a lot, that is a big difference. air,u can afford an great. >> maybe just travel with this and reduce the weight. >> one of the biggest evolutions we saw in tech was that ia phonet bought the nok business. you wonder whether 2014 will throw some surprises. >> it has to, they both depend on that happening. ss was the linear 1020 -- thi was the lumia 1020. ast camera that has been in smartphone so far. it was announced before we knew microsoft was by nokia.

i hope that decision will lead to a lot of new gadgets with a productivity focus in 2014. this is the most left field smartphone of 2013, the lumia. >> is it going to become mainstream? the two major ecosystems -- apple ios and android. you felt that they had it to themselves. >> the duopoly is still there. to beed an extra thing able to compete for attention. sewnid and ios have it up. by the end of 2014, there will be a shakeup in tech. i hope that will be wearables and give other companies a chance. microsoft might be one of them. yellow phone.ght it catches the attention.

>> this was before the iphone 5c. -- hasia has been understood the importance of wanting to stand out in tech. windows phone and nokia sales are growing. cannibalizing the point and shoot camera, cheap cameras that has been the mainstay of christmas presents for many years. >> we will make an evolution from the lumia phone two great cameras. from engadget, staying with us. "surveillance"s, with scarlet fu. tom keene is out. looking very christmas-y. >> it is going to be mike mckee, myself, and matt miller. we have to talk about bitcoin. plunging over the weekend. bitcoin versus gold.

we are going to look into the security features of bitcoin. as a giftve bitcoin certificate over the holidays. i don't know if you are watching any movies, we checked out "the hobbit." the special effects supervisor of the hobbit will be joining us to talk about the special effects industry. we are going to ask him about the terrifying scene in "the hobbit" where bilbo faces spiders. i was squirming in my seat. >> i am looking forward to seeing "anchorman 2." >> i am waiting for tom keene to come back so we can see it as a team. >> we will all come over. lookingu so much, forward to the show. after the break, we are back with engadget for tech trends in

the new year. ♪

>> welcome back to "the pulse," live from london. let's get some company news. blackberry had its biggest one-day gain in four years after announcing plans to outsource its handset production to foxconn. will investors see the move as a transformation? blackberry 10 a $4.5 billion write-down last quarter because

of inventory gluts. tole will offer iphones china mobile customers, giving apple axis two 763 million subscribers and china mobile a chance to offer 4g. phones go on sale next month. tiffany's has been ordered to pay 450 million dollars to swatch after a joint venture failed. the panel ruled tiffany's was in breach of contract. complete --ture to to market swatch watches with tiffany branding. >> let's bring in pussy riot' -- seniorring in engadget's european aeditor. let's talk about the luxury end

of the market. we were talking about premium pricing apple enjoys and stepping into china. are people prepared to pay a places like china or in the u.s. for tech luxury? >> we are. thought thewe iphone might be cheaper. apple has clung to the premium end because it still exists. we were talking about the lumia having a great camera and making irrelevant point and shoot cameras. there is very little reason to spend a couple hundred pounds on a small camera unless you need the zoom lens. it does not mean an end to the camera. it means a boost to the lecture a -- a boost to the luxury end.

camera that kny ills the lumia in terms of image quality. it is 500 pounds for this, a very good sensor and good lens. there will still be a market, sony knows that. sony has pioneered 4k. we watch a lot of movies on tablets, does that mean we do not want television at home? it just means we want more from our television at home, more can than what our tablet can do. you have 4k tv's. you have got cameras. if you ask what is my favorite gadget of 2013, i could not bring it, it is kind of expensive. ound00 pound mike on -- p

nikon ds. it has professional grade sensor inside. 3000 pounds, it is expensive. there will always be a market. >> what is interesting is that order to get decent quality, you had to have a digital equivalent of a slr. thatuality you get off of is amazing considering the size. >> this is almost pocketable. you can see the real size of it. you could easily put that in a pocket or a bag. high-end quality. category ishis under threat, they have thrown in things like wi-fi sharing, beam your photos to your phone to e-mail them. it represents the high end of things having to work harder.

having to deliver much more. >> in terms of the cost of these things, are they going to continue to go up. will there always be a price point premium we are prepared to pay? is there something that is going to happen here that even the upper and stuff -- >> this is looking further afield. i think we will be prepared to pay certain prices for specific things. we will want to pay for a watch with our sim in it. 500 pounds for a camera that takes photos we want to keep for a long time. tablets, a big screen at home. we will not want to pay for all of those things logged into one -- lumped into one. >> talk about beginning story next year. we have the consoles and we were talking about the evolution of chips.

is difference between chips a significant. >> a lot of hype over consuls understandably. $90fastest growing area, billion, mobile gaming on smart phones and tablets. that will double between my 13 and 2015. that is the most convenient way to access games. chips are growing. chip.s 64-bit there is a strategy game that came out this year for the ipad. that is a real game, a deep, strategy game that can keep you going. i am waiting for the perfect mobile game, i think we will see that in 2014. mobile gaming will be taken seriously. you.ank you, great to have see you next year. joining us from engadget. we will talk tech, more on that

deal that gives apple axis to a phone market twice the size of the u.s. population. theyears in the making, news on that story is coming up next. ♪

morning, everybody. you are watching "the pulse," we are live on bloomberg tv and streaming on bloomberg.com. let's talk about the financial markets. currently markets in particular. has been tothe year avoid this one. the euro/dollar is what everybody loves to hate. it is hard to trade. everybody ignores it now. 1.3680 at the moment. this is one of the better performers out there this year. it has been hard to make money on. the other end, abenomics. what has it done? depreciated the yen by nearly 20% against the u.s. dollar. will that be enough to get the japanese economy out of its deflationary funk it has been in for two decades now? probably next year, whether or

not the structural reform process is going to continue to deliver. this has been the trade so many people have jumped on. short yen trade. will that continue next year? it will be interesting to see u.s. data. wants decent it out of the u.s., not mr. abbée, mr. draghi. pretty much everyone in europe. let's go to our top corporate stories. the deal between apple and china mobile will give the iphone a presence in the world's biggest market and a sparkle to what is already an enormous operation. our biggest china mobile? -- how big is china mobile? here are some of the numbers.

>> the numbers are quite impressive. >> incredibly impressive. someone was telling me they will pay a premium, they will want to buy these despite the fact they are unsubsidized. >> $700 is a lot.

a person they had interviewed was saying -- a lady who was earning -- >> she had given up a lunch to buy one. caroline hyde is back with a look at what you need to know for the rest of the trading day. apple stock, we do not expect it to gain a lot because this was priced in. >> we have been talking about it for a long time, but supplies rose on the back. maybe a little bit of a euphoric pop. in premarket, trading a little higher. these subscribers at china mobile will pay for the more expensive phones? morgan stanley says about 12 million. >> a lot of phones. >> samsung still wins in matter what, it is a subscriber -- it to apple.ier >> put one in your lvmh case.

>> kanye west saying they are extremely expensive. prettyest is a interesting character at the best of times. he had the bottom row with his teeth replaced with diamonds. he supposed to kim kardashian at a baseball diamond. he is a bit bling. he says that the price of louis vuitton handbags is too extreme. >> he was burned by the ceo. meet him ind to paris. perhaps because kanye west stormed off stage when he was performing in paris with jay-z. maybe he did not like that. >> more serious things? >> obamacare, by the midnight you need to sign up if you want to be covered by obamacare by january 1. just over .5 million are signed up, 7 million by march.

is itnk you so much, that for "the pulse," "surveillance" is up next with scarlet fu and the team. >> have a great afternoon, we will see you tomorrow. ♪

>> this is "bloomberg surveillance." are beggingelpers shoppers to wander into stores. holiday discounts, will it be enough to keep the grinch away?

a double whammy for target customers. stolen, jpmorgan chase is limiting how much they can spend. matt miller has visions of bitcoin. are here, theards careful where you show them off. >> good morning, this is "bloomberg surveillance," live from new york. monday, december 23. i am scarlet fu. tom keene is all. we have matt miller. did you bring any bitcoin gift certificates? >> that was going to be a surprise. >> we anticipated it. christmasbitcoin cards. china's benchmark money market rate climbed overnight for a seven day as banks struggle to meet cash demand. japan unveiled a record budget for next fiscal year. that will go along with some serious debt that that country is being stifled under.