>> live from pier three in san francisco, welcome to "bloomberg west." i'm emily chang. ahead this hour, she has been 's self google driving car and delivery drugs. she is heading to washington as chieftion's new technology officer. it's been the premier battle in the smartphone world. apple versus samsung. this week, it got even more heated with samsung announcing the new galaxy note.

will ultimately win this fight. is the russian government behind the major hack attack on jpmorgan? investigators have found key clues pointing to a city in russia. we will have the latest as investigators search for the and motivesntity and were all that stolen data may have ended up. first, to our lead story. from google to the white house, president obama has named megan smith as the nation's new chief technology officer. most recently head of google's secretive google x lab where it's creating moonshot products like self driving car and delivery drug. twitter general counsel has been named deputy cto.

their mission, to help the united states and on top of technological innovation while dealing with tough questions. for the latest, we are joined by the nation's very first chief technology officer. rate to have you here. -- great to have you here. he made you the first. what do you make of megan smith thing appointed cto? >> great selections for the country. it affirms the opportunity we have to make sure that we have the best team in place to harness the full power of technology, data and innovation. and grow our economy and ensure the internet continues to be a source of innovation and problem solving. cofounder of google singh make an inspired sony people through her commitment to inclusion and innovation. we are excited to see what the future holds for her in washington. google would like a lot of

things from washington. they want self driving cars on the road. >> do you know where the origins of the technology behind the self driving cars came from? you have a long history in our country where research and development is now seen as a building block for innovation economy. as our nation invests in rmb and continues to do so, it will open up more opportunities for commercialization. i would say make and has a front row seat to how this commercialization model is working and can help support the next generation of breakthrough innovation. >>'s how does she represent google at silico and silicon valley's interest? look at the role of government as president obama has identified it, he wrote a

strategy for american innovation. it says the country invests in these building blocks, making sure we have the human capital to be successful in the global economy and make sure we have digital infrastructure and broadband. further affirming it as an important part of our infrastructure. she will continue to advocate her infrastructure investment that will facilitate innovation for the decades to come. it's also about rules of the road. the assignment to make sure the internet can still be a force for innovation while making sure we get privacy and security everettn of baseline in -- baseline internet privacy principles. that will help everybody in the internet ecosystem. it's ensuring we harness all of these technologies to fix the challenges of our day. health on energy, education and this more open and collaborative government -- megan has done a

phenomenal job ringing new ideas to the market. he also worked at google for six years before that. should google and twitter' rivals be worried? tide lifts all boats. you have two individuals with incredible capability. they understand technology in question and the opportunity to bring an idea out into big commercial opportunities. that talent is what matters. it's going to have an impact on the entire innovation economy. >> what is the biggest challenges they're going to face? we know the president has embraced technology, but there have been problems like the rollout of healthcare.gov. >> we will have plenty more challenges operationally in the years to come. you put the seeds and plant the

seeds to make sure they have a long-term success. we are in execution mode. thatwill take the playbook we started in the first term and execute, execute, execute. i don't imagine a lot of surprises. they will put their stamp on these late books and make sure we execute with great rigor. >> what did you find was the hardest part of the job? >> is all about culture and change. part of the idea was to say it's ok to try new ideas and fail. making sure agencies understood that part of innovation is capacity for failure. it's less of a technological challenge and more of a cultural change issue. how do you bring the mindset to people that this is possible? that we can have ubiquitous data flowing? >> there are so many technological issues on the play. recent nsa revelations, the

hacking of jpmorgan. what should be the first thing on megan smith's to do list? >> execute the plan that todd park and his team have set up for her. launching with rigor the playbook for the digital service for the government, ensuring we have r&d investments within the agencies that are rightly positioned to create long-term economic opportunity. to execute the internet policy principles so that when we make these tough decisions on cyber security and privacy, that we execute those. the policies have already been written. ideas theexecute the president has already been championing and see them to the finish line? >> what does it mean in practice -- how doesvalley the cto impact them? an opportunity i

for interface. that public-private interface that will solve problems. the principal role of the cto is to foster greater improvement in the interface between the public and private sector. as government opens up more data, it allows entrepreneurs to consume it and build new interfaces. scopey shape wide security policies, it allows us to engage in e-commerce with confidence. is that interface that is critical. what a statement for our country that our third cto was a woman in a profession in which we've seen a lot of room for improvement to bring more women into the science and technology field. has been a big champion for inclusion and has been at google.

thank you so much for giving us the lowdown. >> things for having me. -- thanks for having me. >> samsung versus apple. each unveiling their latest smartphone less than a week apart. the stakes are high. what should we expect for apple's upcoming iphone release? find out, next. ♪

>> welcome back to "bloomberg west." i'm emily chang. the google backed life science company which is turned to find ways to prevent aging is teaming up with a drugmaker. the two companies will invest about $1.5 billion to find a treatment for age-related diseases. it will also build a new research facility here in the bay area.

in-depth look an at the ongoing battle between samsung and apple. for every three years, the two companies have clashed on a scale almost unprecedented in business history. engaging in a series of lawsuits that have cost more than $1 billion. samsung just unveiled its latest galaxy note edge and other devices at an event in new york. next wednesday, apple is set to unveil a new iphone and details of the long-awaited smart watch. who will ultimately come out on top? engadgetr-in-chief of and director of mobile devices at ibc joins us now. we asked both of you, what are your biggest wishes for the next iphone? you came up with completely different lists. ryan, i will start with you.

number one, a larger display. >> this is all but confirmed at this point. this is the most important thing for the series. you have an iphone user base that has been using the same sized screen for the duration of iphone. this will be the game changer regardless of this play type they use. -- display type they use. big game changer if they are the last to market? >> they've been doing ok without it. the real opportunity there is, you've had a lot of people who for choosing android bigger screens. people like having more room to look at on their phone. you will be able to pull in more folks. >> what else is on your list? wirelesst expect

charging. it is a game changer in my opinion. nfc is one i do expect. this is their segue into making mobile payments easier. it helps with pairing devices. widgets or live app icons? >> it's not something i expect. i think this does change the landscape when you start to have -- you see android has had widgets from the beginning. nokia and microsoft with live titles. changes how you interact with the device. >> your turn, michael. with what itch up

want. i don't like having cases on my phone. the iphone hardware is beautiful. durable. more the sapphire display. you don't need any screen protectors. that's one that i think we're likely to see. they have been using sapphire glass on their touch button and camera lenses. that one is easy. the next is waterproof. japanese manufacturers have been making waterproof phones for a long time. samsung is doing it now, too. you hear about people dropping their phones into the toilet or out in the rain. it would be nice to have a waterproof iphone. those are the durability things.

the one usability thing i want is better integration with google services. calendaril and google and google maps. i want the same experience on android and iphone. know apple and google aren't the best of friends. >> you're asking for a two-day battery life. we are expecting a larger display, and it's the -- nfc, sapphire screen. any surprises on tuesday? >> i feel like we are bound to see a surprise. i don't know what it could be, though. >> the biggest surprise will be a lot of emphasis on battery. when you double the size of the screen or the device itself, it gives you more opportunity to put a bigger battery. if we do see to sized devices, i'm expecting a double in the

battery for the larger display. this will give people that longer lifetime on the device itself. you guys are sticking around. we will continue this conversation after a quick break. still ahead, lines have already started to form at the apple store on fifth avenue. we speak to a couple who claims to camp out there until the next iphone comes out. ♪

>> welcome back to "bloomberg west." i'm emily chang. we turned our in-depth look at the ongoing battle between apple and samsung. apple has yet to announce details of the next iphone, but

a line has already started to form outside the company's flagship fifth avenue store in new york city. " was therewest this morning could we spoke to a couple who has been there since monday. the phone isn't even announced yet and it may not even be released for weeks. when will the phone go on sale? >> it usually goes on sale a week or two after the announcement. they could be in for a bit of a haul theire. >> they have a tent. a whole set up. i'm wondering what's in it for them at this point. >> the have a startup to promote.

they have their own agenda. they got what they wanted. do you think these phones are going to be that impressive? are they going to be enough? >> i mentioned this before -- i've been saying for a long time now that the bigger screen is what people want. iphone users have not gravitated towards this. this will be the first opportunity for them to experience computing on a larger device. really does change how you interact with the device when you have that much real estate. >> 5.5 inches is just too big. 4.7 is going to be -- i'm going to love it? you just came out with a report that they will top tablet sales. --that's not so much in the

there's a lot of places around the world where people, the phone is in. they don't have laptops and tablets. that's why the tablet makes a lot of sense. you are seeing cheaper, large screen phones showing up in china. people want to have a bigger screen but it needs to be portable. that's where you see the trend going. a lot of that is cheaper android devices outside of apple's target audience. somethink this will drive premium android devices were apple now has an opportunity to get those customers back because of the larger screen. >> it's not just apple and samsung out there. i do want to touch a little bit more on the battery problem. you mentioned the phone is likely to have a bigger battery, but also a bigger screen. how long does the battery last? >> it's all about usage.

i do think we will hear them talk about this. there will be a bigger battery. >> why is battery life such a hard problem? samsung did the waterproof thing . >> the chemistry behind batteries has been maxed out for a while. does, it's because they happen able to make it bigger because the phone is bigger or more efficient processors and software usage. are's where the gains coming from. it's not a new type of battery. >> is wireless charging a realistic thing? >> for apple, now, no. >> down the line? >> i would think so. you sacrifice design and depth and all these different things. i don't think it's worth it for them at this point. same thing with waterproof .

they are still focused on the best design in the market. >> ryan and michael, thank you both. we will see if you get your wishes next week. tech savvy football fans -- lookingll fans are at a new connected device. the latest game changing innovation hitting the court, next on "bloomberg west ♪." it is 26 minutes past the hour. bloomberg tv is on the markets. we have had a bit of a rally in the u.s. market following the ecb unexpectedly raising rates. we are seeing the s&p gain .25% today. we have been seeing a bit of selling in the u.s. bond market. we are watching shares of dbh today.

climbing the most in nearly two years. sales of its tommy hilfiger unit up 9%. more on the markets later. ♪

>> you're watching "bloomberg west." i'm emily chang. from jumbotron footage captured by google last two virtual-reality stadium towards. sports franchises are stepping up their game to attract more fans. joining us now from the bloomberg sports business summit in new york with the president of the sacramento kings. cory? when he bought the sacramento kings, there was lots of speculation about what this tech genius might apply to his nba team.

there are lots of gimmicks. google class -- google glass. you're announcing a new initiative called prime sports that does what? of ourn sports was born partners and sponsors telling us we love what we are doing. we want more. we want to go year-round. we want additional opportunities to grow our brand with you. what we have decided to do is partner with other active lifestyle am other iconic brands throughout northern california -- what we are going to do is have a marketing and sales relationship with venues like alpine meadows or u.s. snowboarding to be able to say, would we go to market as the kings or crown sports, we offer you a potential partner, a range of assets.

not just the kings, but all of sacramento, lake tahoe and everything in between. manageg technology to the sales process and go out and call those customers that might be willing to buy ski tickets. >> we just think if we have more marketing tools in our will box, more places to most people and more television opportunities, we become a more interesting partner for the sponsors that exist. not just regionally, but nationally as well. whether it's the sacramento convention and business bureau or other ski resorts, the idea that we have an intact salesforce and activation force we can use to help grow not just er team -- not just our team brand, but the other brands as

well, they enjoy the breadth of opportunities. >> that is the what. tell me the how. >> everything we do is grounded in either technology or sustainability or community outreach. those are the precepts. to the extent that we can partner with other like-minded brands who have an interest in millenials and youth lifestyle and can do that with the the type ofthat is business we are looking to partner with. >> how are you managing this process? lot ofre trying a different things. we want to be disruptive. whether partnering or oculus -- with oculus or google glass or bitcoin, there are so many leading technologies right now that we are having fun trying different things and seeing what works. they enjoy that process where they are a part of it. >> you are taking business back

to the most basic thing. ran into two guys in front of the watercooler saying, is john trying to sell you something, dan? get on the phone and tell something. that's how ticket sales were handled in the nba. organizationales first and foremost. it's more than just banging out 100 phone calls a day. there is more of a science to it . a scienceore of behind it to make sure that we are successful, especially in a small market like sacramento. sales organization.

whether it's ticket sales or sponsorship, we want to do things that are cutting-edge and things that drive the business of our partners. >> thank you very much. go kings. apple and samsung dominate the smartphone world. competitors are trying to steal their market share. how real is the threat? that is next on "bloomberg west ." ♪

>> i'm emily chang and this is "bloomberg west" on bloomberg television. anything apple can do, samsung wants to do better. the two rivals are behind almost

of two smart phones being sold in the country. that is being threatened by companies like china's upstart, xiaomi. for more, i'm joined by bob o'donnell and the korea economic institutes troy. thank you for joining us. done a lot of research on what people actually use on their phone. what do people do on their phone these days? >> really, the name phone is a misnomer. they are not making phone calls. i did a survey of 2500 people around the world. what we find is that phone calls are the fourth most common activity. it's only about 11% of the time.

instead, what they're doing is browsing the web, doing texting. more and more about watching tv and things like that. all of those things really cry for a bigger screen. because of that, we will see a huge hit for iphone six and it will give further legitimacy to the other large fonts. you look at korea, in the korean market, it's already about 75-80% of all their smartphones are the large size smartphones. , that is what everybody is using there as well. would ask people, what is it you are thinking about buying over the next year? the number one thing people were interested in buying, a large smartphone. >> a large smartphone or tablet? it's like a pocket computer.

mentioned before, apple is the last to market with a large phone. steve jobs was famous for saying, we will give the people what they want. we tell them what they want. samsung is different. they do a lot of user research and then come up with a phone. >> samsung is very methodical with what they've done. firstmay have been on the smartphone market, but samsung went through and saw what types of applications people would be using and what times they were watching. in korea, virtually everybody on the subway sitting on their cell phone watching tv, watching video. video usage needs a slightly larger screen. samsung was the first ones into this tablet or large cell phone market. we can see that now with the announcement of the galaxy edge.

this is something that will be interesting to see how this goes because it will give you two screens on one phone. >> i don't know about the note edge. it looks really different, bob. >> it's an intriguing product. but samsung is good at doing is finding every possible niche out there. they will get a phone to fit into that niche. it's one of those devices that not everybody will be interested in but it's a cool, interesting twist. the note four is taking the tablet or pocket computer to that next level paired they have been doing it for a long time. people are starting to get it. it's about adjusting the size to fit your hand. you were talking about how it's going to fit in your hand. there are ways to make bigger screens still fit in your hand. you can get too big and not everybody will want it. i think we are going to see tablets outsell the combination

of pcs and tablets by 2016 and 2018, my production is they will be half of all smartphones because everybody will get used to having that figures -- that bigger screen. >> quite a production. it's not just samsung making larger screen fonts. tell me about the upstarts out there. some of them are established players in this business. lg, a koreanm is competitor. when i talk to my korean colleagues, they speak highly of the new lg models. you have xiaomi in china and others. this is the challenge samsung faces. they are facing competition on the high-end from apple and on the low end from chinese competitors as well. -- asidefrom xiaomi

from apple, what is the number one competitor? >> lg is going to be very important. motorola,o purchasing it will be a big deal. you have a bunch of other local players in different markets. it is true that we are going to see the price points really being hit hard. even though we are going to see smartphone growth on a unit perspective, we are going to see 2016evenue peak out maybe and then start to decline because those price points are going to be brought down by these less expensive chinese competitors. o'donnell and troy. thank you both. we are going to be beating the drum until thursday when these new iphones come out. we will see how they match up to

the competition. i want to check in with mark crumpton in new york who has headlines for us outside the world of technology. bank hasropean central cut interest rates will start buying assets as it tries to jumpstart europe's economy. ecb pushed the euro to its lowest level in more than a year. the world health organization gives an update on the ebola virus. there have been nearly 3700 confirmed cases in west africa as of august 30 forced. -- 31st. the death toll stands at more than 1800. been taking a closer look at whether free lunches should be taxable. >> what's coming up on your show in just a few and it's? -- in just a few minutes?

>> the latest from the nato summit in wales. 60 world leaders are there. among them, ukraine's president. he has been meeting with nato leaders. he made it to the traditional family photo. ryan chilcote we'll have details on the meetings and how nato leaders are showing their support for ukraine in the face of russia's recent moves. thanks so much. that funneled jpmorgan data from russia has made use of a global network of computers for higher. we discussed, next. ♪

>> welcome back to "bloomberg west." jpmorgan investigators have

unveiled new clues that could tell us more about who was behind the bank breach. a global network of computers used to send the data from jpmorgan to a major city in russia. this sophisticated ring used computers everywhere from asia to lead america. -- latin america. cyber criminals and eastern europe may have used the network in the past to target banks. can this information help authorities track down the individuals responsible for the attack? michael riley joins us from new york. we also have ken weston who has done extensive research on the cyber black markets. start with you. what new information do we have now about this jpmorgan hack attack and this network of computers for hire around the world? >> investigators are trained to

retrace the steps of the hackers. this is always a really can't get it processed because hackers make a lot of effort to hide their identity. they commandeered computers all over the world. in brazil and asia. these those computers to hide their steps. you use those computers to command and extract data and those computers bounce the data to other destinations. investigators are trying to trace those steps. they all lead back to a said city in russia. servers in russia, where does the trail lead after that? >> you used the word commandeer. does that mean the owners of these commuters that computers

do not know that these were being used in a hack attack? malware of times, will hijack systems. you can go into the underground and lease networks of computers where you can actually then use that to extract data. organizations or companies with robust defenses will monitor and y connection to russia. by taking advantage of these networks, it's easier to hide what you're infiltrating. it's harder for investigators to cover the trail. >> we are learning more about the home depot hack attack. could this be as big or bigger than the target attack? >> initial indications that it could be as big or bigger. home depot has more stores. it looks like the hackers may

have gotten into the entire putork, which means they pos malware on registers throughout the network of stores that home depot has. it looks like they have been on there for a long time. this could be a bigger hit than target. >> what is happening on the cyber black market right now? how much is this information being sold for? >> quite a bit. -- itn get credit cards depends on how valid the information is. everything from $10 to $100. there's tons of credit cards on the market right now. there's a bit more supply than there is demand. there is quite a bit of information available. an entire economy surrounding these breaches. the way credit cards gets old. get sold.a old --

there is a lot of different groups involved in this. we don't see it letting up anytime soon. >> what evidence do we have that the russian government is somehow involved in both of these attacks? >> it is tricky. we know jpmorgan thinks they are not just the target of sophisticated cyber criminals but that the russian government had a hand. there may be more specific information that leads jpmorgan to believe that. it has not been made public. in terms of something like him packs and a lot of retail -- retail hacks are high-level

cyber criminals. the idea that the russian government is directly involved is pretty minimal. it's possible that in russia and ukraine, the authorities are getting a cut of what the cyber criminals are taking as protection money. there's a lot of protection these guys receive. some of that money floats back to the authority. weston.el riley and ken thank you both. it is time for the bwest byte. one number that tells a whole lot. sarah is here with the bite. >> 65,000. women inhe number of stem majors that companies will be able to directly target using piaza.oftware made by

they are trying to solve the diverse the intech problem by saying, if you buy our software, you can directly contact a woman who just finished her computer science 101 class. you can contact her directly and it would be think really great if we had more computer science majors. why don't you come to our events a week and groom you -- so we can groom you? >> very topical. smith being named the u.s. cto. >> all the data showing that about 30% of women are at these companies. >> thank you so much. thank you all for watching this edition of "bloomberg west." we will see later.

-- we will see you later. ♪

>> from bloomberg headquarters in new york, this is "bottom line." i'm mark crumpton. today, nato leaders meeting in wales show their support for ukraine. u.s. fast food workers holding nationwide protest. the sports industry's biggest dealmakers gather to discuss the money behind the games. to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories