>> live from pier three in san francisco, welcome to bloomberg "west." i am emily chang. some of twitter's new features saying off? the company answers and about key features and company growth later today. should police be able to search a person's phone without getting a warrant? an issue before the supreme court today. first, a check of the top tech headlines.

apple becoming one of the biggest corporate borrowers in the united states. returning to the bond market today. the iphone maker expected to raise about 8,000,000,000-10,000,000,000 dollars come at less than the $17 billion bond sale last year. billion.ion to 10 samsung down four percent. facing competition from both sides with apple on the higher end and low cost chinese smartphone makers on the lower end. also becoming more dependent on mobile, which now accounts for 76% of operating income. netflix going to pay more money to verizon to guarantee faster access of fios broadband network. terms were not disclosed. even though the ceo has called the comcast dna or for -- unfair toll on internet companies.

nowur lead story of the day , all about the users for twitter as it reports earnings for the second time today. under rusher to get users to be more active. user engagement has declined and inactive accounts and accounts with little or no followers are becoming a bigger issue. joins me in studio. it engagement numbers last quarter were surprising. >> i think the user growth numbers, certain numbers have not been as bad as terms as revenue per user. fundamentally you want to see if there is a way to revolutionize the business. we saw an amazing trek after that facebook i feel. growth rates were slowing down. we also saw that with groupon. we saw that was social media companies that came out with user numbers that were called clicks.

what we saw with facebook as a reacceleration because they figured out mobile. out? ander to get that can they get it through better mobile numbers. hear markting to zuckerberg speaking on the call. when facebook reported its earnings and repeatedly said i expected it to decline in plateau but it keeps growing, is twitter at a stage in its life cycle where it can afford for user growth to be slowing down? of money ine a ton the ipo. a very young company. trying to figure out the levers that make the business work. what we have seen for them over time is with all of the shakeups that led up to pre-ipo coverage so well is that they are still figuring out what they want to be.

they are figuring out how to be. still a company and a very young stage. saide ceo of twitter has it is and wants to be the global town square. can they be that? he will be on the show tomorrow and we will speak to him. i want to take a look at the milestones since it has seen since it went public. >> november 7, twitter shares pot more than 70% on the first day of trading. december 26, hitting the peak stock price of $73.31 per share. twitter is making changes to reach more people than ever before. march second, ellen degeneres famous oscar selfie get 3.4 million retweets. new low aprile 11. april 20 second, twitter unveils the new facebook like profile pages. coming up on may 5, the first

lockup experienced -- expires the top insiders say they are not selling. it comes to the business of twitter advertising is the name is the -- the name of the game. what should the company be doing to grow you from joining us to talk about this is ceo of the ad tech company trickett. greatoes not sound that when you look at facebook 22%. those are much more mature companies. we give twitter the benefit of the doubt? >> i think it is very early. very quickly in terms of mobile numbers. i think facebook shows where they will build out. how much does the user

engagement question that are? most evil are completely passive. >> you have the storm going. >> a similar phenomenon. a few people tweeted a bit. twitter will go through a couple of bunch in terms of mass-market adoption. number is useric and user growth. what we have seen particularly after the first quarter, i would have expected the first quarter, the attention the ipo got for a lot of people to say i have to check this out. the twitter user number would have increased what a bit. even in the quarter in which they did the ipo, they added a paltry number of users. the user growth rates continue to fall off. any suggestion you have gotten that that has changed? >> hard for me to know.

i do know that twitter in my experience is top -- hard. takes time to learn how to do it. once you get it, it is very powerful. early adopters have already adopted. now it is my mom and grandma and everyone slower to the game. takes some more work to break through the thresholds. >> my mom is a power facebook user but not ready for twitter. >> what about the advertisement business? given what is happening with facebook, what grade would twitter get? >> i would break it out into two businesses. a brand business and platform business. they have done an amazing job branding. they have gotten super excited about twitter. very powerful.

moving very carefully. still too early to tell. still too early to tell. >> when we look at the value, i look at the number of users and revenue. revenue numbers have been pretty strong. the revenue per user number is great or at least improving. the value going substantially. are you seeing that in terms of the rates advertisers are willing to pay to get at them? >> i have always argued the revenue numbers are still a fraction of what they will be. the ability to show video, communicate, have motion and get people excited him at the value to an advertiser goes up. indications on facebook video advertisement ideas, off

the charts. twitterare thinking is will be in a similar place. the very early stage revenue per user. we will be all over twitter earnings after the bell. thanks so much. as a reminder, tomorrow i will interview the twitter ceo, dick costello. we will talk about the efforts to go may or mainstream -- to go more mainstream and more. -- dick costolo. is sam suns dominance in the smartphone -- samsung dominance coming to an end? what just on bloomberg.com, streaming on your smug -- smartphone and tablets and apple tv. ♪

>> welcome back. i am emily chang. samsung out with first-quarter earnings and sales overall gaming three percent. but profit fell three percent to

eight point $2 billion. and, they posted the lowest sales in its mobile phone business in five quarters. johnson joins me and also brian blair on the phone. the saturation or competition? >> i think it is a little bit of both. we have seen things slowing down at the high end of the smartphone market. there definitely is a competitive element because especially in places like greater china and asia you see players really coming in strong right now at the low end. i think they are getting hit on both sides. >> one number really surprised me, how much samsung counts on mobile for revenue, like 76% of sale? >> that is right. from a sales basis,

54,000,000,000,001 and 32 of that came from mobile. this is the engine driving samsung. the other areas have been week. samsung numbers did pretty well. the bulk of the business really does come from mobile. right now there are signs of weakness. >> you would have thought this company had a strong position in the business. were theou think weaknesses? >> a couple of things we have seen. one thing going on right now, in china. a lot of smart phones being made anticipating the buildout of the four g network in china. -- 4g network. there have been and balances and a lot of overall demand. samsung doesn't expect that to grow faster than the rest of the

market. it may be attributed to the sales. handset >> apple numbers on the other hand were surprisingly good. what is apple doing right or better than samsung at this time? price points are very similar. is attacking all tiers of the market. the highest and galaxy s5 line. they go all the way down to the 500 price point retail. they are mainly focused on the higher end. older iphone to attack the midsection. apple focused on the high end right now. -- samsung something and apple was taking very different approaches. critical isg to be when they come out with the iphone six. they do a larger screen. that is going to really attack samsung at the high end.

>> i was really struck the cash number here. 60 billion in cash is a very apple-like number. they have a big plan to return it to shareholders. what do you make of that? >> they spend a lot of money on marketing. this is where the bulk of the money is spent. and it is spent well. presence and advertising is where their money goes. they have said they will be returning the cash to shareholders. athink apple has set precedence with the last quarterly report where they are increasing the size of the buyback in giving more to investors. i think samsung will be forced to follow. i think global investors will have a similar expect patient use of cash, particularly

given the quarterly jump in cash. >> brian blair, managing director at rosenblatt securities. we will continue to follow both of them. up, disney just announced cash of the new star wars movie, episode seven. those details and five -- five gore next. -- bob igor next. ♪

>> welcome back to bloomberg "west." yahoo! pushing deeper into entertainment. they have announced a new video channel. they announced two new comedy originals. other space from the bridesmaid direct or and simcity from mike: of one tree hill.

big news from disney announcing cash for the next star wars movie just minutes ago. jon erlichman in l.a. who is it going to be? >> first of all, the old gang for the most part coming back. carrie fisher, harrison ford. set 35 yearsll be after the return of the jedi so that will satisfy some fans. the young stars mostly names you have not heard of. names like a z ripley. that is by design because the team behind the film more concerned about you focusing on star wars and less about the big names. this is one obviously important project or bob iger. the other is the big resorts and shanghai. we caught up and talk to him about that. here is more for what he had to say. >> i am very interested in not just disney today but disney long-term, well beyond my tenure

as ceo. one thing that any ceo needs to do is not just manage a business successfully in the moment or to manage year, but it for success long-term. collectively as a management team, we invested in china, and not just plant seeds but to plant big trees that will hopefully fuel in or miss growth for the company, long-term well beyond my tenure. it means a lot to me because when i think about carrying on my responsibilities, shanghai disney land looms large. china looms large. >> you have talked about things of that park and resorts that are unique to china. myt are examples of that? >> charge to the team of imaginaries designing and building this, make it

authentically disney but distinctly chinese. authentically disney because we are bringing a disneyland park to china. and our strong instinct and research is that people want a strong disney experience him up but we also know there are cultural interests and tastes and cultural pride and is reflect the taste and china -- case and culture of china. we have not been specific about them. other than a couple of attractions, we have said very little about what will be in the park. parks, af our significant amount of entertainment. most in the amount of shows typically in place indoors or in front of castles or in front of fireworks. the creators of the shows for

shanghai disneyland tom at not just those conceiving the shows but choreographing and direct inc. are largely chinese. the performers will mostly be chinese. there will be a very strong chinese element throughout the entertainment in the parks. another is use of language. it will be easy to say everything will be in mandarin. we are starting in mandarin. all of the storytelling and navigation and menus, many of the language and nomenclature will start in mandarin and be translated to english instead of starting in english and translated into mandarin. >> so you have been busy with shanghai. you recently acquired makers studio. tell us about the purchase. we are talking

international, 70% of the traffic comes from outside the united states. we have not only a great desire but a great need to grow outside the united states. ofhave been extremely aware and impressed with huge growth in media digitally, in particular short form media. eaker has done a great job. the number one supplier to youtube. not only identifying creators of short-term video but distributing it very effectively and usagealgorithms data to enhance distribution and consumption. into the company when the world is changing before our eyes we thought was very interesting and attractive. >> that was the disney chairman iger.o, bob

virgin america state farm and mercedes-benz just some of the sponsors who have joined the protest over the clippers owner alleged racist remarks. we will take a look at how big of a financial blow this is to the team next. ♪ >> it is 26 minutes past hour, which means bloomberg tv is on the markets. taking a look at where stocks are trading right now. we have a rally going on today with the nasdaq leading the way. the s&p and dow gaining half of one percent. mostly in the strength of the earnings reports we got out today. a two-day fed meeting in progress and will get results of that tomorrow. widely expected they will reduce the bond buying program by 10 million or month. take a look at coach. 21% last quarter as competition in the handbag market heats up.

trying to move away from the band market, repositioning itself as a lifestyle brand for the thing from shoes to trenchcoats. shares have hit a five-year high after announcing merger plans. ♪

>> you are watching bloomberg "west" where we cover innovation, technology and the future of business. adam silver said to speak in less than an hour on the controversy surrounding donald sterling. he is accused of making racial comments on the phone to his girlfriend, all of it cap -- captured on tape. take a listen to what he allegedly said. if you want to broadcast you are associating with black p all. >> i am not you and you are not be -- meet.

>> this is in response to a with formerposted star magic johnson. several sponsors have ended or suspended partnerships with the clippers. now is the former president of the golden state warriors. history as a sports executive. if you were president of the clippers right now, what would be going through your head? >> job. to get another this is radioactive, larger than the clippers. it is momentous we're looking at a press conference in a suit and tie instead of someone wearing a uniform. adam silver and nba ownership in the players association must make an extremely strong astement and extract as far they can and firewall donald sterling activity from the clippers.

>> it struck me when they had the protest moment when they shed their uniforms of the financial impact of the nba that is unique which is their inability to sell clippers stuff. good right really now. they have at least two of the biggest stars in the nba on the team. is the point of which the damage to the brand starts to cost money that the league it's involved. >> that league is already costing them money. we're seeing sponsors back away. icon talken lead about how negative this evening best -- this is. players association getting together to figure out how to stop the radioactivity the donald sterling has got.

>> he has a history of racist remarks. is it too little too late? >> that we are in a monday morning quarterbacking to say something should have been done sooner but he is a very litigious person. i am sure there is some concern if the league extracts him and there is legal pushback, what does he bring out? the two words ownership hates to hear his deposition and litigation. scary words. is this the last act of a dying franchise or the first act of moving and a positive direction after the stupidity of one person? always covering the new places where the media is finding out with. the nba looking at that as

the value is increasing? certainly the initial investment in the san diego clippers before he defied the leak was $3 million. now they are talking about a value of $1 billion. how much does that have to do with technology, social media? >> also has a lot to do with los angeles. they share a building. they do not even run their own building. i think the franchise value goes up because people with unlimited resources will now say i have an opportunity to buy into the nba. i never said larry ellison. will look at a purchase if it comes on the market. >> there are reports he could face a lifetime ban? >> that would be a good time. they have to firewall him as soon as possible.

we have seen the power of social media. just friday when this came out and now the rest of the world knows about it. >> the president talked about malaysia. we see how big of an issue this is. on a positive side, this is sports. everyone wants to be heard. the fans are the alternate arbiters. bob iger said he will still go to the games and support the players. what is the responsibility of fans? >> fans are to speak out. this is such a damaging blow to the players. sterling pulled the plug on a hand grenade and now it has

exploded. what do you do? even doc rivers said i do not know how to handle this. do the players have out? are there clauses where they say i will not play for this guy anymore and get out. there guys can believe, is a lot of conversation behind closed doors and law offices all across the country for players, owners, league officials, broadcast organizations and sponsors to answer the questions. this is unchartered territory. this is raised. it is basketball, but this is race in a heavily black sport. firestorm of debate.

hopefully it will move in a right direction. >> the sba -- nba will go on, but in terms of the clippers, how likely is it they will i do not work>> for them, and i'm speculating. they ultimately will be fine. a leak is a combination of all the franchises. small and big. ultimately fans come to see the greatest athletes do their thing in an unscripted setting. it is sad they have one of the best teams ever and might not get past the first round. i think this is a difficult time for doc rivers. has the a sport that unique place in african-american culture. it is a special sport because of the history for black athletes. and the black culture.

ethnicetball has been an sport forever. .rish, jewish a tremendous amount of international players. this is not just a black rights situation but an asian situation. adam silver said he wants the league to be bigger than the nfl. this is a defining moment for the nba, not just what adam says now but the days and weeks to come. of the grizzlies and warriors. thank you for joining us. you're standing by for the statement. 2:00ba commissioner at eastern time, 20 minutes from now. we will have it on outside even channel. -- on our lives even channel. should the police be able to search your cell phone without a

warrant? why the supreme court is debating that very question today.

>> welcome back. police officers can search a suspect's pocket or bag when they arrest someone, but what about a cellphone? the supreme court will hear two cases today to determine whether authorities will have to get search warrant before looking through phones. the chernoff group brian cunningham joins us from l.a.. he specializes in information security and privacy law. thank you for joining us. as it stands now some states you can in some you cannot right away. >> this is a classic case for the supreme court to take up. you have conflicting ruling all around the country. they are trying to deal with the fourthf amendment and doctrines that are

decades and half country -- half a century old. the federal court upheld the right of the police to search a cell phone upon making an arrest without a warrant and a federal circuit court of boston said you have to have a war and. the court almost had to take this up. >> a cell phone is probably a lot more revealing than anything else they could search, right? how do you ask them to weigh on the issue? >> -- how do you expect them to weigh on the issue? >> there is an interesting split on whether the prevailing theory or the right to property will govern the kinds of searches going forward.

the justices are really looking for a middle ground. there are only two or three votes in every case. they do not want to continue saying if the devices is on you, police can do whatever they want. they will try to find the middle ground. policesor not the actions are reasonable. you can have different outcomes in different situations depending on how likely it was the person could destroy the data on the cell phone, whether it is an urgent situation or something less time sensitive. they could come to a ruling that says police can take the phone, dump the data onto the old hard drive and go back to a court to get a warrant to search the data. if they do not arrest a

confederate tea they could destroy data. >> you could remotely wipe your phone. moguls -- mobile phone security companies making it is easy as possible. can you give us an indication of where it was abused? >> going back to my days as a cartel prosecutor, call means records wasalling crucial in the investigations that brought on the cartels. in these cases before the supreme court the data was crucial as well. in one case there was gang videos and gain retribution murder case. was data that identify the home of a person arrested that led the police to go there. in both of the cases the data was crucial.

was it time sensitive? did they have to have it at that moment or could they have gone and secured a warrant? in both of the cases they have the required standard to get a probable cause. by ortho my friends be conservative. want to put the fate of all police action in the hands of the course where they say bad facts make bad law. >> we will watch to see how this plays out in the supreme court. thank you for joining us. >> still ahead, the secrets you need to know before launching a startup and how to write a perfect vc pitch next. ♪

>> welcome back. i am emily chang. apple has refreshed its line of mac look laptops. also cutting prices on the mac

took air model by $100 each. -- bac mac book air. applext guest is an early insider who spent four years as the chief evangelist and wrote a book called " the macintosh way." today he launched his first class on skillshare. sanford.us now from art ofass is called the the start. what exactly are you teaching? >> we are teaching how to start a company. this is a very positive entrepreneur environment because the fact is you need -- starter companies are much cheaper. for -- marketing is free or cheap with social media. so we wanted to provide a 13

course explanation of how to start a company properly and based on the experiences of myself and my partner, bill reichert. we have been in silicon valley are decades. we have seen hundreds of not thousands of companies and wanted to pass on the knowledge about how to properly start a company. >> you think entrepreneurship is something you can properly teach or when it comes to visionaries like steve jobs there is something more to it? >> there is something more to it. still within the boundaries, they can still do things wrong. so there is no reason to incorporate a wrong corporate structure to recruit and incorrect ways to increase overhead too much. i am not saying you can necessarily inspire someone to be an entrepreneur am a but if you have an entrepreneur, you can certainly make them a better entrepreneur. just as you can coach anybody,

no matter how natural an athlete they are to be a better athlete. you can also take someone who is not a natural athlete and make them more athletic. wax you mentioned it is cheaper to start a company than ever before. do you think it is too easy these days? entrepreneurs tell us it is easy to get funding. >> as a point of correction, it is not easy to get funding, it is just that you need less funding. it is less important you receive funding. you could make the case it is so easy it is too easy, but i think that is a far better condition than it is too hard and you have to have the right pedigree come connections to start a company. i think the more people pounding

on keyboard -- keyboards and all of that the better it is. there is more variety. there is more to addressing a niche markets and experimentation. computers byon of apple. democratization of information by google. democratizeg to design. this whole thing, that horses out of the barn and will continue. there is nothing we can do to stop that. being achieved evangelist at apple, not a lot of places you can go. not easy to talk that. because itanva is in the business of democratizing design. do you do not have to buy expensive software to create

your own graphics. i had a wonderful time to try to democratize computing with apple. the second time i have been achieved evangelist in my career. we want to make it so that people who could not use graphics before can now do this. that is a huge opportunity and a huge challenge but a very enchanting challenge. >> any of the startups on your ?adar caps on >> it is a most too hard to keep track of. if you are in silicon valley they are popping like how corn all the time. basically everything you ever wanted to do, probably somebody else has wanted to do it, too. that is a very good development. andlook at these apps ,ocial media and you say wow

that is something i just wanted to try and someone has artie it.ed of it -- thought of diversity is a wonderful thing. >> what about strength? anything stand out to you? >> the megatrend is democratization. things are getting fast and ubiquitous. this course teaches you how to use the environmental conditions to create a great company that will grow into a healthy business. >> chief evangelist at canva, formerly at apple. we do have breaking news. to lehigh men in new york. looks like the s&p has downgraded several banks. >> specifically deutsche bank and 14 others are outlook for ribeyes negative bias they under downpours. s&p doing this to reflect the

view that extraordinary government support is likely to diminish as regulators implement resolution framework. that is the background for this. from network to stable. they raise the rating and maintain negative outlooks and maintained stable outlook. outlook being revised to negative by standard & poor's. things seem to be improving in the overall economy. not quite solid. thank you. tomorrow i will interview dick c ostolo. talking about twitter's results, effort to increase user engagement. do not miss my interview with the twitter ceo tomorrow. ♪

>> from bloomberg world headquarters, i am mark crumpton. this is "autumn wind" the intersection of economics and -- line" theottom intersection of economics and business. the statement comes after the clippers lost sponsors and a half dozen other suspended deals with the team. a leak marketg