>> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover the global and media companies that are reshaping our world. apple will be starting mass production on a new line of iphones next month. this is a brand-new design for the iphone. bigger and a five 55 inch screen. consumers are buying more larger devices. and taking a hard look at the takeover of direct tv. executives urged approval of the big deal say it will lead to

lower prices for consumers and a higher quality viewing experience. they aree members say worried about the pernicious effects of consolidation. devices are expected to be a major theme this year. so is further expansion of android in the car and the home os a new version of android may also be announced. apple suppliers and china are monthng production next according to people familiar. one model has a 4.7 inch display of from the current for its screen and one will have a 5.5 inch screen bigger than the samsung galaxy.

and brian blair are here. let me start with you, brian. you have been talking about this and expecting it for quite a long time. is pretty known. in the next couple of weeks they have been tooling and preparing for this. but now is when they start production. if you're going to make $50 million -- 50 million units you have to have a couple of units of lead time. story, yourof your sources are not named. i wonder in terms of the timeframe does this suggest a release in october or earlier? >> september timeframe. sort of the typical release schedule. this is not just a speed bump. it is not just fingerprint reader. it is a new screen size and that

is one of the key things that people want. >> we have seen a lot of success with that. you did mention a four inch screen. >> we have not been able to confirm that but the assumption is they will. they are selling a lot of those. it would be nice to walk away from that market entirely. -- we believe they are keep the screen and do a 5.5 inch screen. fivere going to keep the -- 5s. the 4s product goes away. >> the four inch screen as well, gone? >> the four inch screen is what you see at the five and five. ae older is in that three and

half inch screen. that goes away completely. >> what will this mean for the cost of the phone for the developer? a lot of the components tend to and thethe glass battery costs do not drop as much. >> especially the screen. the good thing for apple is a lot of the key components will still be the same. those will have declined in price over the last year. that can change was volume. there's are going down for the cost of the glass definitely more expensive. especially on the five 55 inch. one of the bigger questions is will apple charge more for that? one of the things i am wondering is do they raise that price of the entry level five point five inch product. there's a great possibility of that because of the higher price point. >> what do you know about the

market for these phones, where people are in terms of the contract. is waiting tocle come next. >> there is clearly a lot of demand for these larger phones. i think this is a big enough change in the product line that a lot of people will move up. in asia 40% of android phones are of this 4.7 or larger screen size. i think the numbers or something five engine higher is expected to grow. whereas a slight decline in overall smartphone growth. points is a critical here. samsung has been the numeral -- number one global player in smartphone volume. part of that reason is samsung decided to take a direction in dealing with these larger screens which seems silly.

this is what consumers have wanted. you mentioned this number in china. i see people using the larger screens so apple has been kind of behind. this is a critical piece of the strategy and it will be important to their fight -- firearms. apple is going to see a big internationally because of these screen sizes and they will topple samsung in some of these markets because they are competing with the comparable screen sizes. >> why does it take apple so long to make these? it is a marvel in every way. but so is the galaxy. why does it take apple so much longer to come up with a new changes thate the the market is saying it wants? rex apple has some secret cows from the steve jobs era.

about always vociferous the smaller screen sizes the right size and portability was more important than the ability to have a big screen. it is kind of like the music subscription thing. it took them a long time to get past the notion that people wanted to own their music. to some degree it is a cultural thing. >> we saw the same thing with the ipad is well. they said for while we do not believe in the seven inch screen. we think it is too big to compete with the smartphone and the tenants ipad. we saw it in the market because they saw there was consumer demand. i agree. we might see some sam some -- samsung adds making fun of them. is there crew to be eaten here? >> i think there is a little bit. being reactive.

a lot of people have expected including myself would have expected apple to address this segment of the market for while. the three which is large. they sold on -- 10 million units. apple has ignored that. there is a little crow to be eaten because this is reactive. apple has to do it eventually and address consumer demand in they will be successful. >> you can tell the pioneers because you -- they have the arrows in their backs. thank you. release expected to more stuff. anti-trust complaints from german booksellers. you can watch a streaming on your tablet or phone and amazons fire tv.

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x i am cory johnson. this is "bloomberg west." apple is turning its focus to its appeal of a july 2013 ruling in its big dispute with the justice department. e-booking said it fixed rices. apple appealed that ruling calling the government's argument absurd him a fundamentally flawed -- absurd

and fundamentally flawed. amazon facing a big pushback from antitrust regulators. what does that mean for digital publishing? good to see you. how do you describe the business? >> we represent about 100,000 authors around the world bookse publishing 300,000 with us. we distribute them to e-book retailers. very few to amazon. >> amazon loves to boast about outsides they publish the traditional publishing circle. .hey have this huge dispute what is the effect of this havete with this company

on the rest of the industry? >> the biggest effect will come down the line once the suit is settled if it is settled. these companies are fighting for the future of publishing. there is a lot at stake here. amazon is looking to squeeze them and get it or margins and get payments for co-op dollars and pre-order buttons. they're trying to hold the lines and preserve their margins. me thes interesting to thinkent ways, you just amazon takes a cut. but they get -- they sell little pieces and little things such as? to extracte trying fees for placement of the store. these are called co-op fees. fees for pre-order buttons.

>> there would be a lot of priorities. >> amazon is trying to get a bigger cut of e-book sales. for e-books model selling at retail called agency where publishers -- the retailer takes 32%. the publisher sets the price. amazon does not like the agency model and is trying to dismantle it. they succeed in being able to take a larger margin. larges the future of publishers in jeopardy. >> one of the fascinating things met inway the publishers restaurants in secret meetings in manhattan and would come up with a plan to conspire against amazon and work with steve jobs.

is this company any different? >> we should say that the so-called conspiracies only alleged so the publishers were forced to settle at gunpoint. if they did not settle they've faced damages and annihilation of their business. not afford the risk of going to trial. and so they settled. >> apple could afford it. >> apple can afford it. i believe that they did not conspire. what happened here is apple came to market with a superior business model that appealed to publishers and allowed publishers to set the price of their own books. publishers got control over their destiny. amazon did not like it. the justice department took that as conspiracy and came down on all of them. so now apple is fighting it. they're going to appeal it and hopefully take it all the way to the supreme court and i hope they prevail. >> he talks about this, this was

the publishers struggling to respond to amazon and their strong him -- his strong-arm tactics. they are asking for payments to appear on the shelf. amazon's model is all about taking margins and putting the pressure on the suppliers to cut costs. that works in a lot of businesses but it does not work as well in publishing. created amazon and created the amazon problem. what amazon is doing is commoditizing book publishing. and saying that all of these books are interchangeable objects and it does not matter what the consumer buys. there are some any great books worth reading it does not matter . they are putting publisher -- pressures on the publishers to

give them what they want. the publishers make a big decision. are they going to give in or are they willing to pull their books from the stores? the publishers need to do a few things to produce their businesses -- preserve their businesses. they need to diversify so they are not dependent upon amazon. amazon has shown that they are not just predatory toward the publishers but a lot of publishers are seeing amazon as a rabid dog. someone they cannot do business with. if they continue to do business with them amazon will destroy their business. amazon is out to vertically di sintermediate publishing. tv at&t and direct executives are in the hot seat. we will tell you how they say the deal will benefit consumers in the push to get this mega merger approved. you can also watch a streaming on your tablet or at bloomberg.com. ♪

>> welcome back. i am cory johnson. google is getting into the domain registration is this launching an invite only test site that has the shares of web.com tanking. other companies charge for that privacy. the ceo's of at&t and direct tv testified in back to back hearings before congress today that their $48 billion -- about their $48 billion merger. i have never been to a hearing

like this and i am dying to know what this was like. >> it was probably a lot calmer than what we saw in the comcast merger. at&t's ceo randall stephenson very clearly on a mission today. all pit.m a bully he is making a case that it is good for the consumer. he said the company's complement each other rather than compete. take a listen. >> there is no significant competitive overlap between at&t and direct tv and the product that consumers are demanding is a broad band video bundle. consumer benefits of this transaction are significant. being able to offer drug tv asian wide is a game changer in terms of the economics for determining broadband. >> we did hear from some components -- opponents and

consumer groups. the mps do compete they said especially when it comes to pay for tv. there is some overlap. the groups are predicting prices will go up, not down. we heard from the tv writers g uild. -- fewer outlets to sell their programming. >> the lawmakers are buying this or are they for or against this? of what we're hearing, we are not hearing a lot of dreck the tax on this deal. -- closest that we got direct attacks on this deal. >> bundles are good for consumers if they offer actual cost savings. not if they are structured to hide the true costs of each service or force people to buy products they do not want. this would increase the bundling

power. i am not sure that is what consumers want. they feel they are getting a raw deal. more of aly we heard bemoaning of the merger landscape in general. certified broad brush. minnesota's other senators saying what will be the tipping point when it comes to consolidation saying we cannot consider this in a vacuum. those of the sorts of things we heard from lawmakers today. >> so much consolidation happening so quickly. i can see why this is the realm of the fcc. maybe the ftc. does congress have any real say here? >> not really. they do oversee the regulators but this is really going to be a decision that is left up to the fcc. also the department of justice. they will review any antitrust laws that will be violated.

the fcc and the doj are the players to watch. these congressional hearings are an opportunity for a bully pulpit. it does not seem like there are many major changes at least at this point. >> an interesting focus. you. kicks off io tomorrow. we will get a preview the next on "bloomberg west." ♪

>> you are watching "bloomberg west." google kicking off its annual two-day developers conference tomorrow. developers, designers, and marketers of the android operating system. kitupdated version of the kat operating system is expected. by jon erlichman. >> the key thing for google is

you want to hone your developers effort and focus in certain areas. i think these are all the areas where google has had steaks and hardware or software. the key thing for me is what are the messages i want to take away in the areas of focus. wearables is an area that i want to see. some advancements and i would like to see something in the auto area. i also want to see advancements in all of their current product platforms. that, do you want to see why do you want to see them active and wearable? >> it is an area that has attracted a lot of buzz and you want to see something that competes with apple.

i want to see what they can do in this industry if they put their minds to it. >> i know that one of the highlights is i get quality time with you. think anan is right. smart watch.ng the google in a lot of ways is ready to go. they have their android wear software. they have their smart watch partners. they have got a real opportunity to get in front of those developers and say get to work. and they will need those developers on their team to make or make google part of this conversation of where the smart watches going. they can talk about the power of android and they will.

it is not like a quick wrapup kind of event. they have defined the smartphone market. in the first quarter android was used in some way, shape or form on more than 80% of the phones that were shipped. >> we saw samsung announce a fitness band demo. the fitnessoff device or something. will we see a lot of partner products or partner attentional products? >> that is a great question. positionapproach and the product will be key. ,s this going to be a wearable and android wearable or will it be a samsung wearable which happens to have android on it? there is a subtle difference between the two and how they market it will be a big piece of the product disposition.

one of the things i got away there is a fact that significant amount of integration going on between the operating systems that apple has. integrationle facets. the ecosystem is coming together. wearableid and the disposition in that ecosystem on a competitive side will be very important. >> in terms of tomorrow's big show do you expect a lot of buzz from developers as well developing a platform? >> it out. everyone hasup, been so excited about google glass. that was definitely the real excitement factor a couple of years ago when sir j brennan -- brin came last year.

-- so now that you know >> that is an executive function, getting someone else to jump out of a plane. >> there you go. google glass is controlled by google right now. and you have android which is sort of this world that is shared. if they are pushing ahead with software for smart watches under the android label, how does google glass connect? a lot of people because you will see a lot of people wearing google glass will have those questions. i do not think google is ready to talk specifically about how those different wearable categories could come together. people are excited to talk about that. jon erlichman will be here in san francisco.

looking forward to that. inc. you both very much -- thank you both very much. sprint has raised the stakes in its battle with t-mobile. a response to a new t-mobile promotion. t-mobile is really shaking things up. >> what is interesting about this is the long rumored merger coming theoretically between sprint and t-mobile. you look at what is going on here. t-mobile starts the ball moving with this seven night stand that john leger called it basically allowing you to try out the t-mobile phone and service for seven days and deciding whether or not you want to buy it. sprint comes forward and extends that to 30 days and you wonder if regulators are looking at a deal down the road and they are seeing the number three in the

number for company competing like this and pushing the ball forward toward consumer friendly plants. why would they accept a merger? it seems that companies are doing a good job of moving forward in a way that at&t and verizon are not. you put those companies together, you could make an argument that those companies will not have the same competitive back and forth and maybe things will start to stagnate from a consumer friendly point of view. that is a hurdle that these companies will have to address if they come together. -- it is a- going great endorsement of commitment of sorts. we saw comcast time warner insist that there will be more competition if their deal was announced and we are seeing these mergers back-to-back. you wonder if any of these deals see thingse if we like this move today. >> this is the biggest longshot

of the three. there is a strong case to be made that if you are going to strengthen at&t by adding direct tv to it and this is the case that sprint and erect tv will put forward, they will say we are little companies compared to this at&t that is already giant and you're making it bigger by adding a 15 -- a $50 billion deal. you should let our small deal go. if we cannot compete you will not be able to impede if you allow us to buy directv. regulators will have multiple things going on. should we block all three or should we let two of them go and block one of them. it will be a complicated picture either this year and early next year. >> i was in seattle last week and a to spend some quality time with john leger. it was a lot of fun. i was really struck by and i met

a lot of people that had worked with leger for many years going all the way back to global crossing. one of the big takeaways is this was a plan and they had a plan on how to shake up the telecom industry and drug customers to t-mobile. nedonder if they had a plan response. >> you have to imagine they do. this back-and-forth might make things more difficult. if the merger is going forward -- and by alls accounts it is, you put us together, i am sure they do have some sort of thinking here. thee is no question that two of them are pulling the strings and we hear that john leger is going to be the ceo of this company. no doubt he is involved in the

discussion. you could make a case that john leger's entire persona has been a plan. from the people i spoke to, used to be a buttoned up guy and he used to wear a suit and be the normal executive. now he dropped after bombs and swears all the time. -- theysona could be uncarrier. the with alec in the air sherman today. thank you very much. following the bread crumbs left by private companies is a daunting task. we will tell you about a new company next on "bloomberg west ." ♪

are lot of public companies filing but private companies are an enigma. datafoxart up called unraveling the mysteries. good to see you. idea of this. it is hard to find out details there.ost businesses out >> it is very difficult. there is not a lot of information out there. are fromh is out there disparate sources. your job was doing what? >> to invest in private

companies. >> what was the process to find those companies and figure out what was what and who was which? rex any given morning my manager director says we're are getting into the sector or this company. data centers. which one should we be contemplating. >> it was not just about finding all the dry cleaners in san francisco. this was big businesses create >> usually high growth. >> what are the sources? is collected in some databases that we pay for access to. then bradstreet for example. there are a lot of great public filings that are very hairy to mine information out of. a lot of great information in press releases. >> you cook this up while you

were at the sanford business school. two of them were from the language processing group. they focused on eating information out. my other cofounder, we worked in finance. we knew what we wanted out of the product. >> i think the idea is interesting. i asked you for an example. we had this merger. find out from your database? >> this is a company that no one had ever heard of. unless you are a customer. interesting, we are pulling up their one-page year. this is information we are pulling up from hundreds of different sources. it was generated from what?

>> it grabbed information from and job content wetings. that is one way were able to find out who their competitors were. instead of having an analyst we already had this list here. we know the words that they are using to describe itself online. we just look at the other businesses that describe themselves in a similar way. conspiracy you this theory artist that taught how to invest and how things are connected. here.had this list this instead of having a dry list, you can see who -- >> apparently there is a big relationship with ibm. >> it is weighted by how similarly they are described and

how similarly they describe themselves. this was acquired by ibm. you can open some of these notes. rather than having a sense of what the landscape looks like you can see that is virus protection and those types of solutions. of where thisense company resides in its own universe. future our nurse, who are the future threats, who might acquire this company? >> your business is quite young. the reason i like talking about young companies is the ideas can be so rich. what is the business model and how do you see profit? >> this goes against how dated

as this is have been built up. especially when it comes to rye but company information because it has been such a manual process. dun & bradstreet has thousands of people sitting in the far east doing this manually. are doing it automatically. we have a team of seven people full-time and we have profiles just like this on 400 thousand companies that allows us to sell this as subscription bet at a much lower price point than we're dun & bradstreet and other and come -- income comes in. there are my former colleagues and people advising businesses but what we found was a lot of large fortune 500 and other big companies, the try and keep tabs on the landscape. enabledhe technology businesses -- [inaudible]

know whatwant to services there are. >> people want to know the next big thing. >> interesting stuff. more to come. much.you very decision ascourt early as this week could change the way we watch tv. we will find out next on "bloomberg west." be sure to tune in tomorrow. we will have special coverage from denver including an interview with former president bill clinton talking about ways to improve the nation's economy. -- all tomorrow on bloo day tomorrow on bloomberg tv. ♪

>> welcome back. byte.est what do you got? is 2 billion. as in $2 billion. i'd 2020 it will be generating upwards of $2 billion in annual retransmission fees. nomura estimates this year that number will be in the $600 million range. those numbers are climbing because the pay tv providers like comcast, direct tv are paying more and more to cvs to carry the network. the reason we went to focus on this number is we are waiting for a decision at the supreme court level in the battle theel versus

broadcasters. is victorious we wonder what that will meet for the retransmission fees going to the webcasters. >> there was a story about the by and the nfl could be hurt aereo.g for not get the nfl rights. they might not see those revenues. this is more than just a broadcasters against a ereo. let's go through that hypothetical if aereo is

victorious. in the case of cbs, we will move from being a broadcast network to being a cable channel. you already have the power of espn where a lot of the world cup action is taking place. asuppose you could be moving lot of the sports content that is currently on the broadcast networks to the cable channels. just one of the many moving parts will have to keep an eye on. >> broadcasters have tried wolf enough times that you wonder what their math is like. >> absolutely. b. aereo has no plan broadcasters do not have a plan b b. we will see what happens. wait to see you tomorrow. you can get the latest headlines all the time on your phone,

tablet, bloomberg.com, and radio. we will see you tomorrow. ♪

>> welcome to "money clip" where we tie together business news. i am adam johnson. it is alan mulally's final day as the ceo of ford. he talks about his future. what happens when a massive infrastructure fund runs out of money to repair america's roads? we are about to find out. hank paulson has a new call to action. and harley davidson is doing its part in this call to action. the maker of rumbling hogs is going electric. finally, celebrity chef marcus