it was quite a day in cupertino ceo tim cook reveal the long-awaited apple smart watch. the mostwatch is

personal device we have ever created. we set out to create the best watch in the world. precise.is it's synchronized with the universal time standard and it is accurate within plus or -50 milliseconds. it is incredibly customizable. can find one that reflects your personal style and taste. watch they showed up to new iphones, not just bigger but also thinner. our editor at large and i spoke who has beenster covering apple since 1995. >> no.

>> this is the first apple product i am not rushing to buy. completet feel like a rodda to me. it doesn't have the emotional connection to me. i am an avid watch wearer. i have a lot of watches. i spend a lot of time thinking about watches and how they relate to me as a human being, and do this watch was not speaking to me. too early and too premature. you and i spent a lot of time talking about watches and about who we are and what we like. how do you respond to that question mark how do you respond to that? >> i think this is a critical time for apple and as the

utility and fashion evolves the opportunity will prevent itself -- present itself. my response to that would be 2050 is the where year where it will take shape. is the year where it will take shape. and as developers get a hold of it this is the year that it will turn to yes. >> what i am saying is that as a watch it doesn't have anything that i want to wear right now. now or 18 months from now it might be different. this is a much more personal expression. whether it is a watch or a bracelet and has to appeal to your inner self. right now, it doesn't. that is what i am trying to say. in 2016 or 2017

we don't know. you are as informed as anybody can be. are you going to buy one? think omar is a stylistic guide. that is a challenge for the for theis making things company. that most people won't like. there is an elite cross to a lot just becauseucts of what it costs to get into the device. that has not been the approach for apple, as long as everybody has a lot of bread. stayed in as different kind of business here. the thing isn't available yet and we are debating whether or not we want to buy the thing. i was tweeting out victors on

twitter and instagram and sending out video of the watch and i got a lot of interesting reactions from people. they were going to talk to us about how difficult it would be for these guys. it's new in so many ways, not the least of which is that it has this watch os that will take developers time. developers can do new things especially with all of these sensors, the conductivity to the phone. , is thision statement going to be cool. you won't wear it, but it is a social pariah for the google glass. >> you would not be uncool if you were that.

>> it is an apple product. it has all the hallmarks of a classic apple product. it is well made, it is beautiful. the os is very smooth. the technology is well thought out and very carefully crafted, but again it is not a slamdunk for them. the iphone and ipad were game changers. i don't feel this is a game changer just yet. youteve how optimistic are for the watch being a potential game changer how much will it add to apple's bottom line? >> i think in 2015 it will be modest. in 2016 it is the wildcard in terms of what developers do and how the watch evolves. it's important to recognize that wearables are a category for the

future. it will take time for the value of this to evolve. still ahead, apple may have created apple pay but what about the payment system hoping to power these transactions. ♪ >> you need to work with a

payment platform. you need something on the other end that enables you to charge the credit card. obviously strike is already doing this today. us and wepproached worked together over the past couple of months how to make it easy for developers to take advantage of that. we will be working with these developers over the coming weeks and ensuring that their apps are ready.

no do you do all of the transaction or part of the transaction? >> for the apps that are built on stripe, there is a really long list, we will be handling all of their apple pay transactions. >> what do you think the chances are that apple can replace the wallet. the physical wallet. >> i think it is interesting with stripe. it took so long for it to happen. stripe didn't launch until the end of september. i think that is because it requires the assembling of so many different components. developersartups and and financial partners. you see the same dynamic at play in mobile payments. they have assembled so many

different pieces. stuff, thee retail devices. the user front end app that even, i think though there is a half old field of corpses that are present with apples antecedents, i think that apple pay as a really good chance. it is one of the first that has checked all of the boxes. about how fast this can really be adopted? and how fast i can change? >> i think there are two distinct trends here. pos's have been quietly happening, not just in the u.s. but around the world. >> nfc is a technology that makes apple pay possible. trend other interesting

that has a significant bearing is that a lot of these transactions that we think of as off-line or retail are shifting into off-line or online. any of these apps, these are supplanting e-commerce transactions they are replacing things at a restaurant or a taxi we would previously have swiped the card. so it has become a nation of these four transactions in general that are moving into apps and the pos systems from large retailers that are already in effect them a i think there is a ready ecosystem. >> it seems like this is bad news for ebay which owns paypal. supporte says they will apple how is that different. >> apple has worked with a small list of partners. large payment

processors that are owned by banks. because we work with the fastest-growing apps, i didn't know what ebay or braintree's plans might be but there is an interesting strategic misalignment at a level between paypal and apple. paypal's strategy is to on the consumer relationship. e wallet system designed in the 90's. apple's fundamental idea is that you should need another wallet. you shouldn't be bounced to another website, you should be able to authenticate with your fingerprint and the transaction is done. watchl be interesting to that play out and it will require that ebay and paypal will reconsider the value proposition. >> in any way is what apple is

doing could it take braintree and ebay out of the equation? >> the design today is quite carefully crafted so that it enables apple to provide the user experience that they want for the user while still maintaining all the other properties that are required for the other parts of the ecosystem. in multipleing countries, on different devices, -- are selling do these companies need to have a kind of infrastructure and it would be an enormous undertaking. i think it is a more obvious strategy to go and work with the most successful e-commerce platforms. it would be an entirely different business model to aws, justbuild because apple wants to have a

backend for things that run on the phone. >> visa was on earlier and they say apple isn't getting any cut from what they take in the transaction. is apple getting anything from what you get. >> we can't comment on the economics, but there will be no charge for our developers. >> and the apps that you power like lift, they will still have our credit cards? interestingly very but neither apple itself nor the phone stores the number. behind-the-scenes, what happens tokenizede number is and then -- >> token is a unique number? >> exactly, to that device. isn a single use token obtained on a per transaction basis.

for the user experience, that doesn't change. paymentstore your details and request the right as normal and the billing happens to your credit card as normal. all that is changing is that it is substantially more secure. to be on a seem roll, you powering the twitter by button, how does that work for you from a strategy perspective? it is all very much oriented on the same pieces. we have for a long time talked about this idea of building an economic infrastructure for the internet and how there should be more ways to pay them there are, and a major contributor to the limitations is that the infrastructure hasn't been there to enable them. if it was easy to buy something with a tweet, aliens of dollars would be happening. it is an obvious is this model.

there are more internet users in china than the u.s.. the fact that these internet users cannot buy is ludicrous. it is a collective failure on our part that we are not enabling. it should be happening and we have to figure out how to get it. people love to portray the stuff and they -- in a horserace basis,ty, but on a macro 2% of consumer spending happens on the internet. the question is not how it happens, but is how it goes from 2% to 10% to 20%. patrick ct heard ollison, but will apple pay swipe at from the service? we'll hear from bill redding,

next. ♪ >> welcome back to the best of

"bloomberg west." i'm emily chang. apple pay will launch in just a few weeks. paypal will be supporting the device, however, it is not on apple's list of official partners. does this spell problems for paypal's future? cory and i spoke with bill ready, the c.e.o. of braintree, also a paypal executive and asked why it was not an apple's list of partners. >> you look at the list of partners that are not there. i think, you know, it is an interesting product. if you look at n.f.c., though, it has been around for a decade

and it hasn't really gotten traction. there are a lot of unanswered questions on security, who'll be responsible for fraudulent transactions? is the merchant responsible for those? until those questions get answered, i think a lot of the merchants will be looking at it. for merchants that want to use us, we will support those transactions. we said we'll support these transactions because they are an open platform but until the questions about security, who holds the responsibility for fraud, i think you'll see the players in the ecosystem -- waiting on wal-mart and best buy and others. >> does the biometric identification, does the security inherent in that change the reluctance of some retailers that might be willing to accept

the fraud risk because they know it is great, it is lesser because of -- >> i think that is a question that is still left to be answered. i think that the product is not out there yet so it is hard to speak to it. how hard the biometric security is going to work. the fingerprint scanners are better than that they have been, but they are not foolproof. there are a lot of those questions that are there. i think it is still open for the merchant who is going to be responsible for that fraud. it is not just about the finger print scanning. what happens when an account gets hijacked? these things do happen. when that happens, a lot of this rides on tokenization, a virtual credit card number. >> when a transaction happened, rather than having the credit card number pass, the one-time token number passes. >> that's exactly right. however that makes it so if one account gets hacked you don't have to reissue plastic cards. at the same time that often gets picked up after many

transactions have happened. who covers the fraud? that is a big unanswered question. >> there are a lot of questions about where apple pay really succeeds. we spoke yesterday with stripe ceo patrick collison. take a listen to what he had to say. >> it is an interesting sort of strategic misalignment at the macro level between paypal and apple. paypal is a wallet system designed in the 1990's. apple pay -- kind of the fundamental idea behind the product is that you shouldn't need another wallet. you shouldn't need to go somewhere else or be bounced to another website or something like that. you use your fingerprint and the transaction is done. >> how do you respond to that? >> paypal is big in itunes. google has google wallet but recently added paypal as a payment.

one of the things people don't really appreciate is while paypal functions across the ecosystem, it functions from consumer to merchant and everything in between along with being the most trusted digital wallet, it is a payment method and platform. the button you push may be itune or google play but paypal is a payment within that. it supports a number of transactions when we are we're not necessarily the wallet. we can say we accept other payments like bitcoin. we said we're going to make it seamless for merchants to accept a number of wallets and payments. the world will have more of this. >> including apple pay. you are compatible with apple pay, however, apple is encouraging people to use the official partners.

right? does that mean it is risky to develop for apple pay using braintree? >> absolutely not. apple said here are some providers we recommend. but we work with any player that is out there. we strongly recommend you use somebody that has an s.d.k. for these things. we certainly do. you're requesting the tokenized card number. there is not a lot more there than that. that tokenized card number we support those today. we support that standard. we have been a pioneer in tokenization for years. we more than anybody else has driven these kinds of things. from that perspective we're better positioned to handle it than perhaps anybody else in the industry. >> braintree c.e.o. bill ready. t-mobile is doubling down on wi-fi. i'll speak with john legere about the latest move on the

best of "bloomberg west." ♪

>> you're watching the best of "bloomberg west" where we focus on innovation, technology, and the future of business. i'm emily chang. on the heels of apple's new product announcements, t-mobile made some headlines of its own. the uncarrier announced several updates to use wi-fi calling, a personal cell spot, and free wi-fi. i went to their event in downtown san francisco and sat down with john legere himself. i started by asking how many uncarriers can we expect? this is the seventh one. >> as many as we have aim points in the industry that need to be solved. one of the things we talked

about in the session here was a trivia test to ask people when do you think was the biggest growth month in the history of t-mobile. everybody had a lot of guesses and the answer was august. the momentum of the company is great, and we unleashed wi-fi, which means every single device we sell from now on will be fully wi-fi enabled out of the box. every wi-fi place will be a t-mobile tower. then we have the personal cell spot, which is our own capability in the home to give five bars of coverage wherever you want it and a relationship with gogo that will give you texting and visual voicemail capabilities on planes. >> you're basically giving everyone their own personal cell tower. >> personal cell spot. hard to reach places -- you are probably one of those wealthy people with a gigantic home and down three stories you have this office. you get five bars worth of coverage. >> i wish. is this an admission your network isn't that good and you need help? >> i love this.

the first couple of questions i got generated by one of the three c.e.o.'s of at&t. >> they didn't talk to me. i came up with that all by myself. >> they said what are we going to do when t-mobile announces this wi-fi stuff. say they had to. my first answer to that is who cares? who cares if i can give a customer a full five bars capability, who cares the reason i did it? 57% of wireless customers say they've got some dead spots in their home or have a drop call capability. not 57% of mine. 57% of all. >> historically, that is why t-mobile fell to number four. until you came along -- it's because of the coverage. i know you have been working on it but how much has improved? >> we were here, we have zero bars of lte. we have 234 million pops. we've got nationwide volte, which nobody else does.

yesterday there were discussions about their cave billet these and it was clear they are moving to next generation wi-fi calling and the only ones that have that is t-mobile. 17 markets of wideband lte and moving. it's not so much where we were and where we are but where we are going. it is proven. we are the nation's fastest 4g lte. everyone uses us but you and cory. i don't know what your problem is. >> i need a little convincing. apple announced you are the first carrier they are working with on wi-fi calling and texting. just last year, t-mobile did not have the iphone. how did this deal come about? how did you make it happen? >> listen. we are not a utility. we are a mobile internet company. we think about things differently. our network is brand-new. we went from no lte to nationwide volte. we are the only ones who got it.

we think differently and we are providing our -- we are all about providing our customers what they want. they've got utility company assets and mindsets and try to depreciate technology before they move on. it's not about customers, it's about them, what they have what happened they think. trickery, old assets, i like it. >> how did this conversation start? did apple come to you or did you go to them? >> are not authorized to talk about it. apple -- not speaking about yesterday in particular, they are a game changer. only apple can change entire industries. what they talked about with mobile payment yesterday with the watch, it's taking things mainstream. frankly, i will tell you when apple mentioned us on the call, we were surprised. that they spoke about us. >> obviously new iphones coming out mean a massive opportunity for carriers to potentially gain or lose commerce. you said you'll beat everybody and give them an extra $50.

>> a new device is a switching opportunity. when a new iphone comes out, the biggest group that risk is the group with the biggest base of iphones, which is really at&t. that is the biggest switching pool. we announced something this week -- what i'm trying to take the uncertainty out. so much of the industry is trickery. the way people do trading is trickery. it is like old used car deals. i used to go with my father and they would try to screw you with trade-in values. so we say we know trade-in values. we put out a guarantee you will get the best trade-in, and if you don't and see within a week that you didn't, we'll match that and add $50 to it. >> you have really shaken up the industry and everyone gives you credit for that. >> everyone -- even cory. >> prices are going down but this is coming at cost.

these new customers that you are getting is coming at a cost. i wonder how long can the carriers keep doing these kinds of things to each other? you're not really hurting the business or damaging the business. >> what things are we talking about? think about today. we have the same pricing plan. the simple choice pricing plans. we've been very consistent about it. we have enabled the capability that customers have resident in wi-fi and utilization of technology in devices. we already have unlimited talk and text. we're simply going to give something additional to customers. >> once you get all the customers you want, can you sustain the sweet deals, or is the hammer going to come down? >> the guidance we laid out on our three-to-five year growth -- we are smack on. as i introduced here in august, we gained 2.75 million gross adds. that's not the quarter, that's

the month of august. 10% greater than the second guest month in the history of t-mobile. this is clearly having a positive impact on the company. we can't talk about earnings, but i'm very comfortable with where we are. >> ok. speaking about the long-term, the last time i spoke with you, you said if i want to bring long-term competition and leave this entire industry, capital is important. one could be a transaction. they exist internationally and domestically and i think it's clear there is interest in t-mobile. this is before softbank pulled out. they were trying to tie you up with sprint. this was before the iliad bid was turned down. what options are there now? >> what options aren't there? first of all, we are at the height of our growth. we are doing extremely well. this brand is cool. this company is on fire.

we got a great stand alone capability of multiple auctions coming up that will give us great depth. and capability. we have a great standalone future, however, there are so many different ways to think about the future of the company. i don't need to list them for you. what would make sense? we are playing from a position of strength. remember, all the discussion about sprint were rumors. but we were sprint's answer to fixing themselves. we were going to be t-mobile, and we are. >> i think bloomberg has some pretty good sources that reported you would be in charge of this sprint-t-mobile tie up. how did you feel about it when you found out it wasn't going to happen? >> i've already said. i'm very clear of my opinion on john legere. it is very high. i have a very high opinion of him. i think there is no company that he shouldn't run. that is just my own personal opinion. of course you wouldn't be in charge of that. i would be in charge of bloomberg, except he is coming back.

>> what about iliad? they are talking to pe firms to up their bid. how would your strategy work with theirs? they would seem to have an even more radical strategy than yours. >> i don't know the company. i have heard the same rumors about them having an interest. i take it in a very flattering way. they think the u.s. market is ready for a maverick. that is who we are. if they make approaches to the company, we will listen and see what happens. i'm not sitting around waiting for a phone call. >> t-mobile c.e.o. john legere there. coming up, how has technology changed the war on terror 13 years after the september 11 attacks? how have terror groups changed in the age of social media and cyber hacking? we take a look at all of these questions with former homeland security secretary michael chertoff next on the best of "bloomberg west." ♪ >> welcome back to the best of

"bloomberg west." i'm emily chang. 13 years after the september 11 attacks, the united states is back on the offensive confronting terror groups like islamic state. president obama announced a broad based coalition to confront them. >> i have made it clear we will hunt down terrorists who threaten our country wherever they are. that means i will not hesitate to take action against isil in syria as well as iraq. this is a core principle of my presidency. if you threaten america, you will find no safe haven. >> while the fight against terror continues, technology is changing everything from the way we gather intelligence to the way terror groups broadcast their messages with them embracing social media. cory and i spoke with michael chertoff, executive chairman of the chertoff group and the former secretary of the u.s.

department of homeland security. i started by asking him what he thought of the president's speech. >> i think it laid out at least the general framework of his strategy which has to include not only air attacks in iraq and syria directed at isis but also helping to put ground forces in with our allies. i think we will need to have some capability on the ground in terms of gathering intelligence and helping direct some of these operations. a key part is also going to be dealing with terrorist financing and travel. all of those elements are good. i would be careful in promising that there will not be any boots on the ground. it's a little hard to see how this will develop, and we may need at some point to put special forces or special operations personnel into the actual theater of combat. >> what role is technology playing in this fight?

how has our technological capability improved since we started fighting al qaeda 13 years ago? >> 13 years has been almost a revolution in war fighting because of the use of technology. our ability to use precision weapons, to target people who are dangerous, our ability to coordinate intelligence collection and real-time operations like we saw in the operation that eliminated bin laden -- those have been giant steps forward. back several years ago when we were actively engaged in combat in iraq, we were remarkable in the precision and speed of our targeting against critical terrorist leaders because of the ability to marry the technology of intelligence and the technology of our operations. the bad news is the bad guys have also developed technology and they have gotten better at bomb making and better at use of social media and have gotten

better at communicating. there was a news story that they have schooled themselves on what edward snowden released to better defend themselves against us, which would be yet another negative consequence of what snowden did. there is no question technology has transformed the battle. >> it's amazing what has gone on in terms of social media. i think of terrorism 1.0 with bin laden handing off a videotape to al jazeera and that is sort of they got the message out. we understand that isis has this program they use that people sign up for to spread the twitter message to get around the spam filter. they broadcast so much information about themselves in social media. is there a suggestion that there is an offensive capability there as well? >> absolutely. this is a war of ideas, not just a war that occurs in the physical realm. part of what isis is trying to do and terrorists try to do is

to enlist others in their cause and frighten those they oppose. they have been quite effective in using social media as a recruiting tool. we can do some of the same things to push back. i remember some years back, there was a live chat with zawahiri from al qaeda where he talk to muslims around the region and actually in that discussion, there was real pushback and people criticized him for the fact that innocent muslims are being killed. so there are ways, if we are smart about it and we work with our allies in the region, there are ways to use social media effectively, but it cannot be just the united states imposing its view on everybody else. it has to be working with those who are part of a community in the region to come up with an alternative vision of what the future may be. >> is using social media and technology risky for them? does it leave behind digital evidence that would make it

easier for the people behind us to track them down? >> of course, when they leave digital fingerprints, that creates the possibility of following those fingerprints. i don't want to get into specifics, but obviously there is a certain risk to them. there is also the risk that what they put out will actually offend people. there have been some muslim religious leaders in the region who have now spoken out against what isis does pointing to the fact that they are killing other muslims. that really undercuts a lot of their appeal. as with most technology, it's a two-edged sword. properly deployed, it can be helpful, but it can also be dangerous in the wrong hands. >> i was struck early this week when isis after twitter shut down a bunch of accounts that were tweeting isis propaganda, that isis threatened twitter executives. is that a real threat? >> i'm sure the intent was to make it a real threat. whether they have the capability of carrying that out is a different question.

it shows their mentality. they only have one mode and that is to threaten and kill. i don't think it's particularly effective in this case. it underscores the importance they place on social media. >> executive chairman of the chertoff group and former homeland security secretary michael chertoff. coming up, how can improving data centers change the internet? we sat down with intel's data group next on the best of "bloomberg west." ♪ >> welcome back to the best of

"bloomberg west." i'm emily chang. intel held its 14th intel developers forum bringing together developers and makers and creators to showcase their products and stay on top of the latest tech trends. one of those trends is the evolution of the data center. our editor at large cory johnson spoke with the diane bryant, general manager for intel's data center group.

he asked her how intel is improving their infrastructure. >> all of these devices, they create tremendous demand back on the data center. all of that content is getting served. all of those applications, it is coming from somewhere. it is coming from the data center. there is an incredible growth in the data center infrastructure that is driving innovation. if you look inside the data center, it is all rigged up with copper cable. electrons moving across copper cable it is very big and heavy. >> i'm fairly strong so i can lift this. >> i am proud of you. if you're going to get to higher bandwidth because of the higher entity and demand of those devices, you need something new. we have silicon photonics which

is taking optics into silicon. we're a big silicon company. we can do silicon very well. it allows you to go to a very thin. >> different kind of connectors. >> this module plugs into the cable and is going to completely change the way data centers are built. >> the speed of light is faster than the speed of an electron moving. >> that is correct. >> the backbone of the internet is famously all of these things traveling at the speed of light, but then they drop out to get reenergized into electrons and get slowed down and sped up again and pushed out again and optical. you are actually changing signals optically and they never get dropped down to the electron level. >> at some point when it gets to the microprocessor, it gets to that microprocessor a guest to that system, needs to convert into electrons. as soon as you can convert it back from electrons into protons and run it across and optical cable, you get much higher bandwidth and much lower power a

much longer distance. data center to data center, you can go country to country and that's why fiber is such a big deal because he can go long distances. this thing is limited to three meters. you're not going to get over three meters. this will run 300 meters or two kilometers. >> the manager of data center's intel group diane bryant with cory johnson. with the new iphones just announced, we'll take a look back at the iphone's history next on the best of "bloomberg west." ♪ >> welcome back to the best of

"bloomberg west." i'm emily chang. the excitement over the announcement of two new iphones underscores the global significance of what is probably the best selling consumer electronic device ever. cory johnson had a look at the size and scope of the business that is the iphone. >> the origins of the iphone can be traced back to the ipod.

in 2001 the ipod was so popular even the earbuds became icons. by 2006, ipod sales were so big, they were even bigger than macintosh. apple is a transformed country. when asked if their next product might be a phone, steve jobs said anything sent through a carrier is too difficult. he said we're not very good at going through orifices to get to the end user. it was a ruse. they announced the apple iphone in 2007. >> and we are calling it iphone. >> $2.5 billion in revenue in the first year. by 2008 apple became seventh in mobile global phone sales but after watching them get up to $10 billion in iphone revenues,

samsung stepped into the fray with galaxy. a fierce rivalry ensued. by 2013 samsung's market share even outstripped apple's. still 551.3 million iphones have been sold. total revenues are huge. $343 billion. it is a global phenomenal. it was initially just sold in the u.s. but now it is sold in 143 countries and it is single most popular consumer electronic device ever. in china alone, sales have doubled in two years. year one -- $12.7 billion. two years later, $25.4 billion. the industry created around the iphone is enormous. apple will likely sell more of the new iphone in the first weekend than the first iphone sold in its first year. it is a global phenomenon and an enormously popular device. >> my partner, cory johnson. and that does it for this edition of the best of

"bloomberg west." you can catch us monday through friday 10:00 a.m. and 3:00 p.m. pacific, 1:00 p.m. and 6:00 p.m. eastern. we'll see you next week. ♪ >> with the right ingredients

>> > -- >> we have sugar and butter. >> celebrity chefs have turned their kitchen chops into sizzling businesses. >> anybody can do this. >> luring us in with their tips of the trade -- >> it's a very easy recipe. >> and the high-stakes drama of the kitchen. >> i'm dying up here and you're killing me. >> tv shows, restaurants, and cookbooks. >> i feel like a burger or something. >> these larger-than-life personalities have made eating into a multi-billion dollar industry. we all know some of the best conversations happen over a meal, so we gathered at a classic new york city restaurant. let's meet the titans. first up, mario batali.