>> live from pier three, welcome to bloomberg west where we cover innovation, technology, and the future of business. i want to get to our lead story today. there were no blockbuster announcements but apple has unveiled a wide range of software features and upgrades at this year's worldwide developers conference that kicked off in san francisco today. the highlights -- i was, new operating system for mobile. te, a new system for the desktop. a new programming language for the developers. and new health feature called

healthkit. they also took the opportunity to jam the competition saying more customers are coming to apple. over one 130 million 100 30 million customers who bought an ios device in the past 12 months was buying their first apple device [applause] many of these customers were switchers from android. an android phone soughtake and then had a better experience and a better life. [laughter] iphonesded to check out and ios.

threw a few punches at microsoft. new features aside, did apple hit a home run? our editor-at-large cory johnson is with us. we're also joined by one the leading authorities on apple, a senior research analyst and covering apple since 1995. also with us, brad stone. brad, i will start with you. how would you rate today's conference compared to prior years? >> there was no blockbuster hardware announcement so perhaps disappointing in that respect. it was a genuine developer of event. iosr advancements for 8. opening up aspects of the iphone, that touch id so any developer can come. the swift programming language.

not as much raw meat here for consumers but we will be using the services by the fall. it is the way we are going to live. >> how important are these new features they rolled out? >> it is critical for the hardware that comes out of that exciting features. the three areas that people really want to see is payment, health, and home automation. fore wasn't a lot of sizzle the average consumer but if you look at the substance of what they are trying to do, they're trying to make cool features in the products. i think there was a lot there today that i think a lot of investors do not fully understand. >> do you agree with that, cory? we were there today. there seem to be this feeling of wanting more as the hour passed on. >> the story abouof apple -- these events that steve jobs made so exciting by having a

band come on stage were doing a that isemonstration, the kind of level of expectation the most successful computing company in the history of the world. one might argue that is what they're looking at. they were saying, what we see is a company taking steps to embed themselves deep into the lies of their users in ways. which a lot of the conversation was, marrying the mac and the iphone and the ipad and a tighter synchronized way. also connecting you to this is how you are going to get into your house and this is how you are going to navigate your car. your body, you're going to monitor your body. iphone is wired into all that through the extensions of software we heard about today, the macintosh operating system,

the iowa ciphering system which is closer to one in the same is suddenly embedded into consumers. >> there were some criticisms about copying today. pulling features from dropbox, skype. i have a tweet from the ceo of whatsapp that says it is very flattering to borrow numerous features into ios 8. wax i think they were -- >> i think they were doing the right thing. they discredit apple from taking the cues from whatsapp. they did it for a lot cheaper. cory is hitting an important point. in the past, apple talked about themselves as the ecosystem and the hardware piece. the services are the latest feature of that fabric and those are the things we heard about today. getting entrenched is important. >> is a laying the groundwork

for iwatch? >> it is. for those that haven't following tim cook's comments, he talks of new product categories in 2014. >> new product categories. have not have those yet. >> some people could interpret some of the stuff as new product categories but on the services side, around the home and health, they did not check any of those boxes today. we continue to believe they will be doing more hardware updates. >> i wonder like some of these have been on the road map a long time like the touch id. surely they knew they had problems with the touch id. 15they rolled out to different banking apps and the were small problems, it would've made much bigger problems. i watch people at starbucks and they use a the starbucks at

all the time. when the longtime apple executive says he thinks the upcoming product line is the greatest line in 25 years, greater than the ipod, you said we should disregard that statement. did you agree? after what you have seen today, do you still believe that? stranger to is no apple executives and it is characteristic to the kinds of things they would say. they have been promising a lot over the last year. we still have yet to see that big new product category, the hardware, the smart watch. that is clearly coming. homekit, healthkit, these are placeholders. in the fall, think we will see those products. >> we will dig deeper into home quick -- homekit and healthkit. stick around. apple is the latest tech giant trying to help you stay healthy. also, the latest company getting

in on the growing smart home field. we will look into the new features next. ♪

>> welcome back. if you are just joining us, we're are talking but today's announcements from apple at the worldwide developers conference. cory johnson is the with a. -- still with me. little more about what this means for apple's bottom line. they ended it slightly down in their shares today. what do these initiatives, what they actually mean for apple's bottom line? >> this is laying the groundwork for the iband which will come out later this year. >> it will? >> i say the all but announced the all but announced today by coming out with this platform. i think the groundwork is there.

let's assume they come out with this watch and they sell about 10 million units. 5% toould add just under the street expectations right now for the next 12 months. it could be a little greater. probably won't be much less than that. wefar as the home, don't expect apple will be making lights and smart rocks but those will build a pla tform. is something that probably will take a year or so but that will be more of a service level type of a revenue which i think was something that is harder to model. of facebookr cto pointed out that apple has never been as good as getting other companies to make products as good as apple products. the this smart home, are other product to integrate with the iphone actually going to be good? >> that is a great question.

we have seen other platforms like smart things, a company based in virginia. it is made a lot of its own devices. innovative with a lot of hackers to build these devices. they haven't been all that clever in embracing the connected home. google strategy has been going to buy nest to do it themselves. >> nest gives a lot of information -- they gather so much information about how people use -- >> it is hard to use these devices. we have been talking about it for 15 years. >> about the health stuff was really fascinating. i am very geek out on the wearable stuff. i thought the jawbones opening up this developing environment so lots of other devices and lots of other trackers. appcan use the keep my run

and the information would come up. you saw tim cook showing all the stuff. the only app he showed was a nike one. it suggested there has to be an input device. there is no discussion of input devices. at the apple up stores and i think they know a lot about that business already. >> you are thinking iwatch later this year. when? >> before the holidays. >> iphone six with a larger screen? same timeframe? >> september. their expectations it would be too larger screen sizes. think of it about 4.7 inch screen. they had been on that annual release cycle.

i was recently traveling in europe and met with a couple of components of the iphone and they talked about the launch. >> back-to-school and holidays? go off at a certain time. >> think the reason why is back to that school and holiday angle. >> apple tv, is that still happening? an apple tv set? >> we think it will happen this year. dayink at the end of the some of the stuff we saw today actually would go well for apple television. they are trying to create a single interfaces to manage a complex environment. whether it be with health or beauty or around the home. they need to do that around the tv. thing about your netflix app. apple is in a great position to do that. even though we didn't see any

substance, i think that is clearly on their agenda. >> we had a discussion earlier about products they develop in the marketing plan -- and the marketing plan. do you think when we hear these stories, when we get these leaks and find out there is a watch being developed that they get the go time and decided it will never be seen? >> i think that does definitely happen. there are certain categories they're too big for them to deny and too big to shut down long-term. i think the tv is a perfect example that is taken them a lot longer. stone, gene, thank you. wwdc is apple's chance to dazzle developers. what are experts and ceos thinking about today's announcements? that is next. ♪

to hi>> welcome back. you can catch earlier edition. it keynotedtream tech enthusiasts worldwide. they're putting on a show for developers. cory johnson is here. we have a phil levens, both companies that rely heavily on developers to build the apps that fueled their businesses. and a lot of experience developing for apple and apple products. how important and impactful were the announcements today for you guys? >> it was huge for me. i think that was the most

developer centric note that i've ever been to. it may mean remember that i am a developer. >> which is why consumers alike what about me? >> all the excitement around the new developer abide -- environment, the language. it is very developer centric. more people can work on these apps. it is not something customers will necessarily see. >> i don't code and so i don't really know about it. i heard about new language. >> is based on a lot of javascript, a lot of similar things that people are familiar with. >> it happens faster and cheaper/ >> that is what i expect in our guys are excited about. we are starting to see the guys that are developing on android getting excited to do more on ios. >> you developed on android?

>> of course. >> we are a mobile only company. we operate on all the major platforms. >> does apple still have -- the magic? >> i think they got it back this morning. android has made some big strides in being developer friendly. ity went all out on making easy to do beta testing, to deploy different features to different people. and let's apps communicate with each other. up until recently, a lot of that was missing from apple. i think they caught up. >> it is hard to judge the success of something during a keynote because the apple faithful cheer at everything. the coffee cup -- yay. >> i would buy that. >> the mobile stuff.

the apps were interesting. the crowd was very excited about beta testing. to be tested by groups chosen by company and group selling apps. maybe zynga can bundle all the games together. collects the huge thing for us and really productivity in general is all the extensions. is the interactive notifications. it is the extensions that allow apps to look into each other and into the operating system. -- it isteroperability the interoperability. within two or three months, you will see far more. this is going to be huge for consumers. >> i can see that being huge for company like evernote. what about this whole idea of innovation and if apple is the limiting. do you feel it is still there?

>> it is where we started as a company. we started because we were so excited about the iphone and we wanted to build something for it. it was our inspiration spill and it is where we developed our first features. it is where we get the feedback on it. our top users are guys using iphones. that is something that has not changed in the past 3.5 years. it says a lot for the platform. also, it continues to deliver and continues to excite people. >> are your most valuable uses iphone users or android users? >> apple users are more valuable. measured by money. >> how wealthy they are much they spend? >> how much they spend. android users perform really well too. i think apple is very innovative.

i think people who say they are maybe think that innovation is when you have a completely new look and peace of hardware. that only happens a few years -- every few years. >> i think the last time it happened was in 2010. maybe that is a longtime. time. i amcts i am hoping -- >> hoping there is new hardware later in the year. some kind of fitness or band would be fantastic. i think the developer stuff announced today was greatly innovative. this it -- putting in functionality that would preserve the security, the feel about your products is hard. if they manage to do it right -- >> it is hard to do. the fact they kept this a secret is no small feat. the innovation that is involved,

to work a entirely new developing language is shocking. >> they introduce a new computer language and no one knew about it beforehand. you don't do that in secret. >> how long does it take to start implementing? >> i am going to learn it pretty soon. most people are not going to switch to it right away. that is a much longer-term thing. you will start seeing apps appeared o oni it. >> it can add a performance improvement to that part of the app, that will be the first thing you see. what was the one thing that really captured, was really exciting for you? >> the ability to do right with push notifications. to get people into using hotel tonight without getting into the app.

app with theparty ids. you for bringing us the developers perspective. we will be back with more next. ♪

>> you are watching bloomberg west would be cover innovation, technology and the future of business. samsung says its first smart phone running on the operating system will be available in russia. it is called the samsung z and will hit the market about a year later than planned. alternativensource to android. google is being flooded with requests to remove the links after that eu court decision. google got more than 12,000 requests a day after work -- putting up the removal form

online. users have a right to be forgotten and that search engines must remove certain links. more executive moves at microsoft. jeff tepper has been named the new head of poker strateg -- focus strategies. he was previously the vice president off -- of office software. they focus on mobile and cloud computing. we turn back today's top story -- apple's 25th of the clippers conference earlier today where 8 was unveiled. founder and author of the market intelligence site earlier todayc and is one of the widely followed analysts on apple. we have the genius behind apple's greatest product. he is the editor and publisher and covered apple for more than a decade.

we will start with you since you flew in from findlaland. how does this one rate? >> i think it was one of the best shows i have ever seen. i started out as a developer. >> you should get out more. [laughter] >> you a right. re right. eye started as a developer when i was in college. when they announced a new language, this was a watershed event. these things do not come out as often. i think apple has had three of these in its entire existence. what this means for developers is productivity, massive increase in certain types of applications they can build. this was all about releasing all of these building blocks which they flooded and. in. we are talking about 4000 apis.

this is mind-boggling from a developers point of view. as far as my heart is concerned being in the developer community, i think it was a wonderful event. there wasn't a lot to be excited about. the way i would put it is that this is like going through a cement conference and you are learning all about cement and you want to see the skyscrapers that can be built with it. they hinted with that with the new ios. it is going to be up to developers to build a city full of this new stuff. >> it is a worldwide developers conference, not the worldwide press conference. it is for developers. would you agree? he is not being as optimistic as he might be. i think they showed us they are looking at three massive areas. the home, health, and mobile payments with unlocking touch id. all of them have huge

invocations for the next few years. if what tim cook says is true, these may be an indication of the three things they looking at. device, and iwatch, some home innovation technology. a johnny isakson for -- johnny i've exper. i think of his work is being closed in removing option and fewer buttons on the device whether it is the ipod. right when he is in charge of the software. sorts of newll options that outside developers can label onto the ios experience. explained that. >> it is always been very sophisticated but much simplified to make it easy. if you put three buttons on it, people are going to hit the wrong button. the macintosh has always been really sophisticated.

ande is a lot of complexity they're hoping both apple and developers make it easy for people to use. the whole thing in computer design is that it's hard to make systems for proof -- foo lproof. it is hard to make things easy. behind the scenes, they introduced all these things that will make things easier but are complex at the level we are looking at. >> talk to us a little bit about johnny ive as a person and leader. see as his trajectory within apple? -- it wasas a lot kind of surprising because i thought they don't sell anywhere near as many computers as the ios devices. on surprise this pencil much time on maverick. -- you can see how much time they spent on maverick.

i think it looks beautiful. all the different features. work, playking it well with ios so that collaboration features, the handoff, the way you're able to start work on one device and move to another. i think it shows that both platforms are very important. there wais a unified design. you can move seamlessly from one platform to another. it is more integration. --their learning more from the design cues are coming from ios. what we saw last year is that they were starting to percolate into the mac. you can see from a designer's point of view, th devices create constraint. they are smaller and less power. they designing around those constraints. it is a good design the

direction -- direction. constraints make you work harder as a designer and that is what we are seeing the benefit of. the real risk is that think it is safe to play it safe. how does he think about innovation? crazy. innovate like it is funny. google was seeing a lot of praise last week for the driverless car. people are thinking what is apple coming up with? google is reinventing the future of driving and i think people misunderstand. what they have is a demonstration of the potential technology. that is not ready for prime time. what we're seeing today is the result of many years hard work. it is a sort of a glimpse. when you see the hardware later,

you see the innovation they have been up to behind closed doors. are going to continue this conversation after a quick break. talking more about apple and their latest announcement at wwdc. ♪

>> i am emily chang and mrs. bloomberg west -- and this is bloomberg west. we are back with a special roundtable of just talking about the importance of design at apple. back with us, cory johnson. i want to talk a little bit about the presentation today. who presented, who didn't present, and what it means. we heard from tim cook. nothing from johnny ive.

>> phil is heading up. the two folks that did design -- iose who did the innovation. he is represented by his team. what we're are seeing is a rotation of some rush faces each year -- fresh faces each year. we are seeing people that we don't see frequently. there was a concerted effort to show it is a team effort. >> there are no stars/ ? stars. are all --othy and any contributors there is a conscious effort. t likes johnny no the stage?

>> no. that is why he is on videos. you will make a short video talking about the design challenges and what it is. he tends to do a little bit of designer speak. >> today there was no video. >> they will save him for the industrial design. like a huge underused asset because he is very charismatic and very passionate as well. i think -- >> does he refuse sometimes? >> he is only gone once in recent memory. feels hek he probably comes across as more sincere if he speaks from the heart. this is scripted performance. he would feel uncomfortable having to read lines rather than speaking from the heart. that is a personal preference. >> i wondered about that watching tim cook.

i was wondering if you would be more comfortable or if reverse -- if you were her stick -- if he were her stick -- rehearsed it. to what degree was it done. >> he could still be fresh and spontaneous. when they did the ipad air, that was so over cursed -- over -rehearsed. >> can we evaluate the company post jobs and the answer has been let us wait. is it about time to start thinking how was the company doing now that steve jobs is gone? some saw evidence here in important ways. what we saw from the developers point of view, we saw a great deal of thinking about architecture, and great deal

about thinking about design on a software level. tove jobs apple was created design level and the user experience level. i think we are seeing progress. asked they probably not put the effort down below because it was taking a lot of time and it would've taken a lot of resources. under the current management, i think there is more bringing back some of the computer science to apple. i think maybe he would've gone along with it. this is definitely a departure. >> what do you think? >> i was hoping to hear more about beats. >> they call the dr. dre but that was it. told ive was in the audience. >> do you think the beats deal is a good deal for apple? >> i came around to it pretty quickly. >> why didn't you?

>> initially, thought it was only a brand that apple did not need to bone because it is not an engineering organization or an asset that you can acquire like intellectual property. i thought while that is a great brand but why would apple need a brand? they never had to go outside to get that brand value. , i thought -- at first, thought it didn't make sense but then i got to thinking about the future of music and the evolution of the job of music. when i convinced myself was the notion that itunes needed to have a new mission in life. itunes was about ownership and control of your music library and your own personal taste, but over time the job of music became more about discovery. discovery and filling that emptiness. >> finding new music. >> the idea of porting content when content is so abundant he

becomes attle -- little -- that is where we saw the evolution especially if you follow young people. at a certain point of your life, your behavior stops changing. --n you are at a certain age on withapple is going the notion that music is changing. if you go back 100 years, you see a different music used to be before recorded media. >> beats is the most successful wearable technology company in the world. i think that kind of -- i agree with psa. what he is saying. the wearable technology, it is an important brand in that area. if they are going to get into wearables, that is a brand they could do something under. >> i thought the brand sat nicely on top of itunes on either replacing it or

potentially being the ipod which is a brand that will go way. maybe they can do something there with music. >> beats potentially replacing itunes, i never heard that one yet. thank you so much for joining us. thank you both. we are going to talk a little more about beats now that it is official. the headphones and the streaming music business really means for apple is next. ♪

>> welcome back. this is bloomberg west. you can catch earlier edition. its $3 billiong acquisition of beats electronics last week, apple made no major announcement about a future plan for music for me ic. dr. dre made an appearance on the phone and now is a full-time

apple employee, he wanted to know what time to show up for work. what time should i show up for work? [laughter] a.m. would be about 4:30 a.m. soion starts at 9 you don't want to miss the free tou-shirt. >> sounds good. our editor at large cory johnson and i sat down with monster founder after the keynote today. he helped design the original be telephones -- and beats headphones. we asked him what he thought about the major push now that a deal has been sealed. >> i think it is a great opportunity for the whole industry. when you combine a technology company like apple and an audio company like beats which we are

proud to have helped start, i think this opens up a new whole aiera of collaboration. >> what does the iphone the due to the headphone business? >> it allows you to carry your sources around with you. it wasn't too long medicare your records in the case and cds in a cd. . now it is ubiquitous. people have their music collections along with it will have to play it on something. the headphones are like speakers. you carry your big speakers around with you that used to be in your living room. >> it is interesting to see dr. dre up here with tim cook -- up here with tim cook. about theu think cultural differences between the two companies having worked with beats? >> jimmy really has not worked with anybody. he never really worked underwear

-- under anybody's of that is going to be a very interesting dynamic. we will see how that goes. >> what is jimmy and dr. dre bring to the table that apple does not have? >> jimmy brings to the table and on cable -- an uncanny ability to find talent and develop them. he is one of a kind that way. dr. dre brings the relationships with all the artists. he has that insight. it is really all about the music business. i think jimmy and dr. dre can bring that to apple. >> the tech people look at this deal and the financial people look at this deal. i wonder about the headphones business and in fact if they are requiring -- acquiring a high-quality headphone company. >> i think whatever the marjorie -- is

>> you would know better than almost anyone. >> anything that consumer electronics -- >> under 10%? >> absolutely. >> under 5%? >> i cannot tell you everything. it takes so much marketing these days. if you look at what beats has spent just in the beginning of this year bringing their name out. maybe because of this acquisition to get into the public limelight, it is immense. it is hard to make a profit. >> you are wearing your monster headphones around her neck. where his innovation and the headphones business going? what is next? >> first of all, the quality of sound. that is where monster has expertise. there is so much more to get. the prime pair of audio

speakers. you hear more things and get closer to the music. it is an exciting thing to experience. when people hear this, they relisten to the whole entire collection. beyond that is wireless. bluetooth. beyond that is personal identification. with our dna headphones, you can tune the sound yourself. those are some personalizations. wearables -- >> what about putting sensors and headphones attract things about your body? >> first of all, i think that wheres a lot of areas you can sense all kinds of things for the body. since you are already wearing headphones on your head, that will be a good thing to be able to tie together with your watch or iwatch. >> the ceo of monster with myself and cory johnson. that does it for us today on

apple. ♪

>> welcome to "money clip" where we tie together the stories, nterviews and business news. the city of detroit son the rope bus it's fighting back with the help of a watch factory. and one of the hottest economic debates in recent history has more than two sides, it turns out. t-minus 10 dies until the world cup. will brazil be ready? and we go inside the studio that designed your first class