>> from pier 3 in san francisco, welcome to the best of "bloomberg west," where we focus on technology, innovation and the future of business. i'm emily chang. every weekend we'll bring you the "best of west," the top interviews with the power players in global technology and media companies that are reshaping our world. well, amazon has fired up a challenge to apple, samssung and others by announcing its very first smartphone. c.e.o. jeff bezos himself unveiled the amazon fire phone in seattle. >> can we build a better phone for our most engaged customers?

can we build a better phone for amazon prime members? well, i'm excited to tell you the answer is yes. [applause] >> from 3-d viewing capability and image recognition technology called firefly, bezos was keen to point out how the phone was different from the wide selection of smartphones on the market. at&t is the exclusive carrier of the fire phone. it hits the market july 25 for $199 with a contract and includes a year of free prime membership. so how will the fire phone stack up against the competition? i spoke with our editor at large, cory johnson, who was in seattle for the event. also joining us is "wired" deputy editor joe brown, bloomberg "businessweek's" brad stone, author of "the everything store: jeff bezos and the age of amazon," and from san diego, paul kedrosky, the managing partner at venture firm s.k. ventures and bloomberg

contributing editor. i started by asking joe what he thought of the phone. >> i mean, this is a phone that is going to help you buy stuff. the coolest feature to me was firefly. this button you push on the side and you can look at anything. it will say oh, we sell that. here is how to buy it. it indexes what you look at because it maps it out with its camera and looks it up an amazon.com, which, as brad will tell you, is the everything store. >> i already buy a bunch of stuff on amazon. do i want phone that makes me spend more money on amazon? >> how will small retailers feel when they see you buying stuff online instead of in the physical retail space they have paid for. look, the phone is neat. kudos to amazon for one, getting it out the door after five years of development and two, coming out with something a little bit new with that screen that cory talked about with the firefly app. it is priced very conventionally, $200 for that two-year contract. they are going to have to do a

lot of work to get people to move away from apple or samsung. >> it is not super cheap. paul, what is your first impression of this phone? the 3-d features. the six cameras. is it more than a gimmick? >> i got motion sick just looking at the pictures of the pictures. no, i hated so much i feel i must be wrong. that i'm just plain missing something really important. it struck me as a couple of novelty features, solving a problem that amazon has, not solving any problems for consumers. it is not particularly aggressively priced. the key feature being largely irrelevant to most people. i can't get it at all. jeff is way smarter than i am. clearly i missing something important but i don't know what it is. >> joe, who is going to buy this phone? who is going to give up their iphone, their android phone, to buy a fire phone? is there a person you can imagine? >> i don't think anyone is going to give up their android or iphone. people who don't have a

smartphone yet maybe are interested in the guidance that mayday will give you. you look at the kindle fire, which has made a great name for itself as the cheap tablet, also the easy tablet. it is going to get the same kind of people who maybe are a little bit scared of getting a smartphone. i think it is going to be a disaster. >> to go back to the little clip of sound of jeff bezos, this is a phone for our most passionate customers, amazon fanatics. maybe they a little bit older, they don't necessarily have a smartphone already. if so, there might be a phone market there. >> cory, what do you think? you have been out there all day long talking to people. is anyone going to give up their phone for this phone, the fire phone? >> i don't have a cynical bone in my body. i'm not much of a doubter, but i actually think kedrosky could be very wrong on this. i think this fire fly feature could be really dramatic for amazon in the same way that amazon prime took people that

shopped on amazon a lot and made them power users, driving lots of revenue to amazon. this phone could do exactly that. this would allow you to listen music like shazam sort of style. recognize the music and go ahead and order it. similarly, they showed a clip of "game of thrones," these demos are all rigged but the notion is that you could watch a bit of tv and home the whole thing, read the whole thing, secure that for later watching, or something. i think this could be a devise of software that drives a lot of consumption on amazon as a shopping platform. that could be a very big deal for amazon. >> right. not so much about the phone, per se. but its connection to amazon and all of its computing power, the cloud store. paul, cory just said you might be wrong. how do you respond to that?

>> cory has more experience of being wrong than i do. \[laughter] i couldn't help it. it is possible. it is that feature he is describing, it is already on your amazon app. on your iphone. how often do you use it? maybe you don't even know it is there. i don't ever use that feature. it is there already for people who want to go and do an image i.d. on an object they see in the store, get a price ordered on amazon, and i don't see it changing the world. most people don't know the feature exists. it doesn't strike me as a compelling sale. >> in the same way that wal-mart was supposed to go -- wal-mart supposedly row and small town america by opening up superstores and driving up business out of every small town in america. amazon has done the same thing. now they have essentially a ray gun to take to every small business in america and beyond, point it at the stuff in the store, get it cheaper and get it sent to your stuff while they

are building a delivery network? this could have a dramatic effect on business because it destroys small business by lowering the prices that only amazon could get the stuff, have it waiting for you by the time they get home. that's direction this is going in. this is a divise, the laser gun that will be destroying businesses as we know them in retail locations all over the world. >> cory johnson with bloomberg "businessweek's," brad stone, "wired's" joe brown, bloomberg contributing editor, paul kedrosky. well, t-mobile's outspoken c.e.o. john legere is attracting attention for some curse word he had for rivals verizon and at&t as he launched t-mobiles latest uncarrier program. i speak with legere next. >> welcome back to the best of >> welcome back to the best of

"bloomberg west." i'm emily chang. t-mobile c.e.o. john legere is taking aim at rivals at&t and verizon with some new programs and some choice words.

>> every time we do something, people don't tell me, hey, that is a great idea. they say well, how were you able to do that? because the assumption is that these high and mighty duopolists that are raping you for every penny you have, if they could do something nice for you, they would. they \[beep] hate you! >> controversial comments aside. it was quite the event. in typical t-mobile style, hip-hop duo macklemore and ryan lewis headlined. they have been connected to t-mobile ever since legere was tossed out of at&t's macklemore concert earlier this year. they got to hear about t-mobile's free trial program where potential customers can get a free iphone 5-s for a week to try out the t-mobile network. t-mobile is also waiving data charges for music streaming services like pandora and spotify and it is setting up its own music streaming service partnering with rhapsody to offer unradiio. i spoke about it with t mobile

c.e.o. john legere himself. >> we announced the availability of wideband l.t. in 16 markets in the u.s. already, which gives you up to 150 megs worth of speed, that is a 90 minute h.d. video in three minutes, and in about 107 million people's locations in 15 markets. but what we found, emily, is that the $6 billion that media is spending, that the industry is spending on maps, and a cacophony of crazy messages, makes it hard to come through. what we found by listening to our customers is what they said to us is, hey, we love what you're doing, but we would love a chance to test drive. we have a program called test drive. we're offering something called the seven-night stand. it is the ability to get the iphone 5-s from apple fully loaded and have a data experience on t-mobile for week free of charge, no down payment, no cost.

i believe that will change the way the industry purchases wireless services. we're quite excited about it. >> what you're doing, john, is pretty unprecedented. why don't the other carriers do this? >> whether it is no contract or anytime upgrade or international data roaming, contract freedom, people have artificial barriers in their mind about why it was done the other way. we talked to apple. and by the way, this is great. apple, the awareness level by customers that t-mobile has the iphone is very low. by the way, this is a chance not only to test drive our network, but test drive the apple iphone 5-s if you have it. so the question is with the partnership with apple, it begs the question why was it not this way? tomorrow it will be to the other guy, why don't you do this? >> apple is not usually one to partner. how did the partnership with apple come about? >> i think one of the reasons

that we are partnering is it is a small update i provide to you. t-mobile is the fastest growing u.s. wireless company that exists. obviously, apple would like to find a way to be a higher percentage of our business and get the word out. we have a very good, strong, evolving partnership with them. >> amazon just released its new smartphones. at&t is the exclusive carrier. you have not been shy, as usual, about your thoughts, saying, "amazon does not know what they signed up for." exclusivity sucks for customers. exclusivity on at&t sucks for the industry. hashtag just saying. tell us what you really think. >> i will comment on this as long as we come back and talk about music freedom. along with everybody else, including cory, who i believe was covering for you. the observations for me are i was really excited. i was expecting something big. and i kind of saw an old

business model, two-year contract, exclusive with at&t, a phone that was priced as high as any device in the market. then i was a little confused because as a prime customer, i thought they would give me a phone, but they gave prime service to the other customers. i did see that the phone will allow you to point at things and tell you what you're seeing. for me, i usually know what i'm looking at except, you know, like late friday night. i'm not sure having that phone telling me what i'm looking at is going to help. i don't know. by the way, if it is a great success, then i believe you will be able to buy it unlocked and t-mobile customers can have it. i think the bigger event is uncarrier five and six. >> let's talk about uncarrier 6.0. you guys making a big bet on streaming music. how much do you think this is really going to entice customers to switch to t-mobile, or stay with t-mobile if they are

thinking about switching? >> here is what i know. about 113 million people stream music on their mobile devices. that is double in a year. the traffic on our network streaming has gone up sixfold in the last couple of years. so it is a big deal. second is that i know that the other carriers are just using this as an opportunity to gouge customers. they tell them what service to use, and then they charge for every single minute of listening to even the ads. the pain point is, music freedom needs to be solved. we are doing is providing our customers free streaming, unlimited music in the top six or seven services, and then more to follow. and we also work with rhapsody to create what is called unradio, to solve the pain point of internet radio. it is a gift to our unlimited

customers who already get free streaming. it will be a very big deal. >> unradio, un carrier, unamazon. you guys are on a roll with the uns. i have to ask you about what is the latest on a merger and you being in charge of it? >> well, the update, emily, is last time we talked, it took you seven minutes to get to that question. today, i think you are down to about five. you need a little improvement on this. >> i'm running out of time. >> we're not going to comment on rumors or speculation. i have been very consistent about the uncarriers point in industry and the importance of this to the wireless consumer. i think the momentum will continue and consolidation and/or other avenues will continue this momentum. >> t-mobile c.e.o. john legere. back in march, blackberry's c.e.o., john chen said chances of turning around the struggling smartphone maker have risen 80/20. next we will hear from john chen what he thinks about those chances today.

>> welcome back to the best of "bloomberg west." i'm emily chang. blackberry's turnaround might just be catching on. the first quarter net income rose 127% to $23 million as the company sold some assets. however blackberry still has major challenges on the sale side. revenue fell 69% in the quarter to $966 million. i sat down with blackberry's c.e.o. john chen and asked him what he thinks of his company's turnaround chances now. >> obviously, when i was talking about 80/20 i had the visibility of this quarter. i will stay with that. one interesting thing is that everybody wanted to hang on to these numbers. we are getting a refined state. i think 80/20 is a pretty good

number. i don't want to say anything is 100%, but we are fine. we are a viable company. we have strong balance sheets. lots of cash. we are starting focus on growth. >> ok. so where does 80/20 come from? what gives you any doubts at this point? >> we are all right. the world could change. the market could change. i have been in business long enough to say nothing is 100% because you will jinx yourself. again, i don't people just to focus on the 20. i want people to focus on the fact that we are comfortable about the viability of the company going forward. you saw all the numbers. we can talk about those, but we're in good shape right now. >> you are aiming to get to $100 million in revenue fiscal year 2016. walk us through where that is going to come from. paid 80/20 functions, advertizing, channel subscriptions? >> i believe that we have a good

handle on monetization plans. b.b.m. let's talk about b.b.m. the most secure messaging system. about 160 million registered users of it. about 85-plus million are monthly active users. the monetization plans are in three buckets. one is the enterprise b.b.m. function. we released one, called the b.b.m. protect, which are highly encrypted data messaging between two users in an enterprise. then there is a lot of new features and functionality that will come out in that vein, voice and data alike in the b.b.m. world. then there is the mobile payment. as you know -- you probably know that we have the system called b.b.m. money running in indonesia that is going well there.

we just entered an agreement with n stream, a canadian mobile payment system with three major banks, visa and mastercard in canada and we are using our infrastructure. that is another aspect of it. that is the second bucket. the third bucket has to do with the consumer space. we have a lot of channels. they are great for advertising. i won't do the advertising myself or sell the advertising myself, but i have an agency. you think about partners and distributors that will do so for us. we had a couple of early successes already in that part. the virtual groups included figures and other parts of the virtual goods. there are three buckets. depending on what part of the world we are in, what segment of the -- we have the ability to monetize everything together. we believe we can get to $100 million. >> you made it clear that blackberry is still going to continue selling smartphones for now.

you are going to turn into a software services company. how long will you keep selling phones? how long will you keep selling hardware? >> if i make money on phones, i will sell it forever. part of the reason is when you would like us do an end-to-end security provider in the mobile world, our phones are a gateway of security. we encrypted it differently. we have an i.p. that runs on it that makes us the most secure device. in the internet of things in the future, not everything needs to be like a phone you and i think of today. it might be a device emitting signals and data, collecting data and acting on it. on the device side of the equation i believe we are going to be there a long, long time. whether i want to sell hardware, per se, it depends on whether i can make money on it. we are able to get close to break even. we used to lose money on phones.

now we are getting there. we need a couple more quarters. once that happens, we will be in the phone business for a very long time. it is the first gateway of encryption. >> you did just partner with the amazon app store. i got a question on twitter. someone wanted me to ask you why partner with a "neutered" amazon app store rather than google play. the amazon app store has 240,000 apps. google play has more than one million. >> yeah. amazon and us have a lot of things in common. especially they like our b.b.m. base. and we work well together. i'm not going exclude everything or anything. amazon is a good partner today. it really, really helps us to address one of the major needs of mine. i need apps. some of them for consumer, some

are prosumer. some are professional users. some are the consumers apps. i need that. i don't have enough volume or money. i am spreading my resources very thin. this way it will help me to focus on building enterprise space apps. my resources should be plenty now. and then amazon will help me build the base of the consumer. and where the professional might also want to use the consumer app. we have alignment in thinking. they like the base that we're in. there is a whole bunch of reasons for that. we have been talking for a while. it is a great thing that we did it. >> last question, john. you said blackberry is not for sale. what could change that? >> i answer -- it is a very standard answer. i run a public company. i do this for the shareholders. what could change that is

somebody would have to put a number on the table where all my shareholders cheered and my employees feel proud of and my customers don't get negatively affected. i have a duty to take a look at such offers. but i am not seeking one. but should one come i have to look at it. >> you have to look at it but you don't want to sell. how strongly would you actually consider? >> at this point, no. it would depend on how strong the offer is. if you offered me $100 a share i would call you back. >> blackberry's c.e.o. john chen. still ahead, want to work at at&t? online education company udacity may be able to help. we'll tell you about a new type of degree program next on the best of "bloomberg west."

>> you are watching "bloomberg west" where we focus on business and technology. at&t has teamed up with udacity. the new nanodegree will be offered online. i spoke with the cofounder of udacity. he is also a founder of google x. i asked him to explain what a nanodegree is. >> a nanodegree is a very sure degree. it gives you the skills to find

a job. we are excited to work with at&t. they are our initial partner. they're helping us build these degrees. they are also putting in employment. they have the same type of content as a regular degree. they're offering internships for the top 100 people in this program. anybody who wants to do this can apply. you have to be good at math. there is some basic science. you get something in the world. it is more of an engineer. >> sales force and other businesses endorsed this. what other companies could we see partnering with? >> we have a bunch of announcements coming up with the

nanodegree. in this day and age, learning has to be lifelong. things move so fast people must engaged in the learning and increase their skills. we are creating more nanodegrees. >> you invented the google car. how do you apply that big thinking to education? >> education is a point of innovation. they need more points than they have in the past. people are getting engaged in many years and they don't finish the degree. they have no credentials that allow them to learn from home flexibly and in a focused way. we can create options for people of all walks of life. we have tremendous talent and they need to unleash their talent and a new career. a nanodegree and at&t can provide that. >> where else can you see the nanodegree apply?

>> every industry. we are starting with computer technology. they are most urgently looking for new talent. there are other fields that could benefit from a very focused job driven education. >> you have a harder with georgia tech. you can get their masters degree for just $6,600. the you foresee partnering with universities like that or companies as you have done today? >> we are proud of partnering with both. at&t has been our major sponsor. they have lowered tuition fees. i think we need creativity and rethinking education from core principles rooted what is required to get a job? for many people, you don't need a four-year degree or a two-year degree. you can do something very focused. if you do that in a fast way we want to get people ready for careers much faster. >> you are a professor that

stanford university, i recently interviewed john hennessy and we talked about online education. he does not think online education will replace a traditional college degree. an mba may be, but not a traditional degree. >> a nano degre is not a college degree. we might remember the days of the libraries. we would go to a place and read a book. the amount of knowledge acquisition and knowledge inquiry has gone up. there is the potential to have more people engage in higher education is you have to go to campus for the most part. tomorrow you might just do it on your cell phone. >> my interview with the cofounder of udacity. what will be the next big thing

in education? we are talking about what companies could change the classroom. ♪

>> welcome back to the best of "bloomberg west." >> the event brings together over 600 leaders in education from the public and private sectors. udacity and edx are already disrupting what is going on.

what is the most exciting thing in technology in education today? >> we are super excited to be hosting this conference of harvard. we have an extra ordinary group of people. it is a unique conference. it brings together both companies and investors and academics and administrators and policymakers. it is a unique group of people. the recurrent theme in the discussions today is the possibilities for technology in disruption in the space to increase the access and outcome of education throughout the world. it is a very exciting time.

>> education and technology companies have not been huge companies especially by market cap. how does goldman focus on education and payoff? >> there has been a sea change in the amount of venture dollars in this market. if you look from 2001 to 2011, there were $250 million a year invested. in the last two years there was $1 billion. we are at a $2 billion rate this year. there is capital being invested. much of it is very smart capital. it generates returns and creates new companies for us. this is already been active for

us. we have done 17 transactions in the last 18 months in this area. it is already been an active space for us. >> you have worked with some of the biggest tech companies in the world from apple to facebook. can an education company ever become as big as facebook? >> if you just look at the market opportunity statistic that i shared earlier, there seems like there would be every prospect for the ability to create a very large market cap company in this space. the size of the market opportunity is larger than many of the markets that the companies you were referencing address. i believe that is true. i think those companies will increase and become interested in this market. there is a place for large companies like that in education overtime. >> speaking of online courses and trying to replace traditional education with courses online, will online education replace traditional

degrees like a harvard degree? >> it is not a disruptor but an expander. most of the people that engage in courses that are made available online are not college students. they are people like you and i that want to explore an interest. they may be geographically unable to access quality education. these are much more expensive in terms of their influence on the market. the encouraging elements that you see is people like m.i.t. and harvard begin to dip their toe in the water in this area and be innovators in this market. >> given your history in the tech industry, i have to ask you about the atmosphere and it valuations. where do you see this going and where do you think of the word "bubble?" >> i have been in this market

for 20 years. i've seen lots of ups and downs. what i can say is i have never been more excited about the prospect for tech companies to bring change and create value in our society. to the extent that there are some phenomenal breakaway outcomes in this space, it is not surprising given the impact these companies can have on the world around us. there will always be ups and downs and big valuations in the market. the fundamentals are so compelling and technology that no wonder companies are creating this much value out there. >> how do you see some of the turmoil affecting private companies making the choice whether to go public or to sell? >> i think one of the things that characterizes companies we

take public is they are a journey and a process and less focused on the ipo as an event. it is about the right time to take the company public. what advantages can be gained by being public. there is less focus on the near-term market tone which can change dramatically. what i see in the companies that i deal with is a lot of focus on creating value and a lot less focus on what is going on in the market day today. >> george lee of goldman sachs. why tech giant like google and apple are expanding their health products? who is helping them collect your data? ♪

>> welcome back to the best of

"bloomberg west." fitness apps have become all the rage for health junkies. how can doctors and those with the data to use? cory johnson sat down with mike leigh. he asked him about the power the apps have in helping users lose weight. >> it is incredibly powerful. our users have lost 250 million pounds combined. >> they have not lost it, they have misplaced it. what do you know about your users? what is the typical use case? >> when you're as big as we are, over 65 million users, you start to resemble the population as a whole. we have a very broad set of users. a lot of people are bodybuilders or pro athletes. we have people with medical conditions.

we have people who have never exercised before trying to lose weight and have a healthier lifestyle. >> it seems from the outside the basic law of thermodynamics, it measures calories in and calories out. >> it is pretty simple really. that is what most i answer trying to do. if you burn more calories than you consume, you will lose weight. that is what we are trying to help people do. >> talk to me about how it changes. emily was teasing me. i am concerned about my fitness. i run and swim. i use the up tracker to monitor myself. that is helped quite a bit. it is geared toward the fitness geeks and not toward the average for some. >> i don't know if that is the

case with our population. we have a lot of people -- >> how does that change over the course of your business? >> the kinds of things that people want to do changes. they get more sophisticated about their exercise routine. they get more thoughtful about their diet. they worry about their nutritional balance and are they getting enough nutrients. are they getting enough carbs, protein, fat and keeping those in balance? this is what they do as they become users of our product. there is a ton of different ways that people can monetize our service. this product has a value to people. this is an incredible point for people when they are overweight and it affects their social life and their job prospects. they're willing to pay. that is very clear.

if we can create a premium product -- >> look at the gyms and jenny craig. there is a lot of money spent. the golden goose is going to be the insurance companies and the employers who want their employees to be healthier. >> there is a sea change happening in medicine. physicians are shifting from a sick care to well care. there is going to be interested in being preventative and helping people get ahead of things. i think there are early signs that that is happening. it is going to happen in the future. this idea of digital therapeutics and products that can have a positive impact on peoples lives that has value. this impacts health care costs and companies bottom lines. companies like ours should be able to capture some of those possibilities.

>> and ipo is up in the hong kong. we will find out why the company behind "the social network" is looking overseas. ♪

>> welcome back to the best of "bloomberg west ergo i am emily chang. relatively media is planned to go public. they are known for films like "the social network" and tv shows like "catfish." the goal is to complete an ipo within 12 to 18 months. kjon erlichman caught up with ryan kavanaugh. >> "the grant" is a contest. the contest is a group of top philanthropists and industry sector leaders. each episode will be around some

social entrepreneur philosopher. if there sector is being energy or clean water or hunger, the entire show will be around bringing in a social entrepreneur's third there will be 10 selected to come up with a solution to that problem. in "the grant," we will give each episode a million dollars to make their idea into a reality. >> you just got back from china. you made lots of deals. you are bringing more content to the chinese market. you are also helping to export chinese content to the rest of the world. >> china is a place i have been going since 2005.

i shot my first movie there. we partnered with the government. we partnered with their content and cultivated. we want to make it more worldwide, there is so much content being made in china. we announced a deal with the largest broadcaster in china, they own 15 stations, they made a large investment in our company. that is a good validation of the chinese government and chinese businesses supported this. we can grow into television, fashion, sports and all the things we do in the united states. we want to be able to release

our movies successfully in china. it is nice being the only one there. >> you made it clear that an ipo is something you are looking toward right now. what is the timeframe to think about in terms of accomplishing that goal? would you do it in six months? 12 months? >> i can't give an exact number on that. we've been very lucky to have an incredible institution to work with as our banker. we are on our pre-ipo roadshow. we are setting up the proper capital rates to go public. our goal is the next 12 to 18 months. >> as you raise money, what is the goal? what do you want to do with that money? >> we want to make sure the company is 100% well capitalized

to take advantage of the harkin opportunities that we have. as we have talked about on a few occasions, most people think of us is a film studio. that is about 50% of our business. we are heavily tech focused and content focused. we are the largest supplier of reality television. we are the largest sports agency. we want to be liquid and have the capability of growing at the same speed as other large public companies. we would like to make acquisitions in the tech sector. we want the liquid stock to do that. >> you could see yourself listing in new york and hong kong. >> we consider ourselves as much a chinese company as a u.s. company. we want to be listed where our business is. that focus is important.

we did a public ceremony yesterday. it speaks well to having the support from the chinese economy and the government to do a listing. >> let's talk film. "earth to echo" is a fun film. >> the movie is about a $13 million movie. as usual, we tried to make it feel and look and act like a $100 million movie. we are very proud of it. it is an "e.t." meets "goonies" meets "stand by me" film. >> jon erlichman with ryan kavanaugh. that doesn't for this edition of the best of "bloomberg west." you can catch us monday through friday. we will see you next week. ♪ ♪

[cheering] it is the only game the whole world cares about. >> it is the simplest of games, the most democratic. >> two companies care about it very much. adidas and nike. >> we are in the football business 365 days a year.