>> from pier 3 in san francisco, welcome to the best of "bloomberg west," where we focus on innovation, technology, 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, it was quite a day in cupertino, california, as c.e.o. tim cook unveiled the long-awaited apple smartwatch. >> apple watch is the most personal device we have ever created.

we set out to make the best watch in the world. one that is precise. it's synchronized with the universal time standard, and it is accurate within plus or minus 50 milliseconds. it is incredibly customizable you can find one that reflects your personal style and taste. >> besides the watch, apple showed off two bigger-screen iphones. not just bigger, but also thinner. it also unveiled a new payment system, apple pay. for more on all of the product announcement from our editor at large cory johnson and i spoke with the senior research analyst at piper jaffray gene munster and also om malik of true ventures. i started by asking him if he would wear this new watch. >> no. this is the first apple product where i'm not rushing out to buy it.

>> why not? >> it doesn't feel like a company product to me. i don't think it has the emotional connection with me in terms of as a watch. i am an avid watch wearer. i have a lot of watches. i have a lot of analog watches. i spend a lot of time thinking about watches and how they relate to me as a human being. this watch was not speaking to me. it felt a little bit too early and too premature. >> you and i have talked a lot about the challenge of wearables because what we wear is an expression of who we are and what we like. gene, how do you respond to that? om malik saying flat out, i'm not going to wear this thing? >> this is a critical starting point for wearables and apple. over time, i think opportunity will present itself. there could be a billion watches sold every year.

this is a huge market. my response would be that i think this is somewhere in 2015 will be the year it starts to take shape. as developers build compelling apps -- answer like the no will turn to yes. >> om, is this a market that can get bigger? if you're not going to wear it now, will you wear it later? >> i think what i am saying as a watch and what they showed off today, it doesn't have anything of which i want to wear right now. a year from now or 18 months from now, it might be entirely different. i might change my mind at that point. this is a much more personal expression purchase. with a watch or a bracelet, you kind of have to, you know, it has to appeal to your inner self. right now, it doesn't. that is what i'm trying to say. what it is in 2016, 2017, we don't know. >> cory, how about you? you are as gizmo and gadgeted

out as much as anybody can be. i think you tried every single smartband that you can possibly try. are you going to buy one? >> well, i think om is a very stylistic guy. that is a real challenge for the company. it is making things and deciding i want to do this thing with this device of which most people won't like. there is an elite sort of cost a lot of apple products that has given them a certain demographic certainly because of what it cost to get into this device. that has never been the approach of apple. the sort of said they want to be for everyone as long as everyone has a lot of bread. with the watch, they are facing a different business. that is interesting aspect. yes, it is early days. it is not available yet and we are debating whether we want to buy the thing. i was tweeting out some pictures

and on instagram sending out videos of the watch. i have gotten a lot of interesting reactions from people. it is very personal. it talks to us on how difficult this market will be for these guys. it is a pretty cool device. it is new in so many ways come at the least of which have got this watch os that will take developers time to get their head under. maybe the next phase seems to be. it seems developers can do very new things with this, especially with all of the sensors. the connectivity to the phone -- the possibilities are remarkable. >> as a fashion statement, om, is this going to be cool? i know you won't wear it, but google glass is if you wear it, you're like a social pariah. there is a name for it. you're a glasshole. is it going to be cool or uncool to wear this watch? >> you would not be uncool if you wear that. >> you're saying it has got something. >> look. it is an apple product.

it has all the hallmarks of a classic apple product. it is well made and beautiful. the os is very smooth. the technology inside it is pretty well thought out and very carefully crafted. again, it is not -- 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. >> gene, how optimistic are you about the watch being a game changer? how much will it add to apple's bottom line? >> i think in 2015, it will be modest. a couple percent to the street revenue. i think in 2016 it is the wildcard in terms of what developers do and how the watch evolves. i think it is good for investors to realize that wearables is a category for the future. it is a critical starting point and it will take time for the value of this to evolve.

i think it will happen. >> true ventures' om malik and piper jaffray's gene munster. still ahead, apple may have created apple pay for the new iphone but stripe is one of the payment systems helping to power these transactions. we'll speak to their c.e.o. about their partnership with apple next on the best of "bloomberg west." ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. perhaps the most important product apple introduced was not a smart watch or an iphone but apple pay, which c.e.o. tim cook says will forever change the way we buy. it will store credit card information and allow users to pay for items holding the phone or the watch next to a reader.

apple pay has teamed up with tens of thousands of retailers in the united states to accept the mobile wallet and because over the partnership with the payment start-up stripe, apple pay can help small app developers to enable one-touch payment. i spoke with stripe ceo patrick collison, and i asked what stripe's role in apple pay is. >> with apple pay, you need to work with a payment platform. something that ables you to darcy credit card. stripe is doing this with a ton of these successful apps being developed. apple approached with us this new product they were developing. we have worked together over the past few months to figure out how to make it really easy for developers to take advantage of that. we will be working with these developers over the coming weeks, the product will launch

in october, ensuring their apps are ready to take advantage of it as soon as it launches. >> are you handling all of the transaction or part of the transaction? is this bypassing some of the deals with credit cards and banks? >> for the apps that are built on stripe, like lyft -- it is a really long list, and we will be handling all of their apple paid transactions. >> what do you think the chances are apple can replace the physical wallet? >> in some ways, the stripe opportunity is so obvious. it took so long for it to happen. i think it is because it requires assembling so many different components. each have the technology, the relationship with banks and financial partners. it's the same dynamic at play in mobile payments. it is obviously an enormous opportunity that is assembled in so many different pieces, right, the pos and retail stuff, whatever it will be, the devices, authentication -- the

app developers and everything else, right? i think that even though there's a battlefield of corpses present with apple's antecedents, apple pay is a really good chance. i think this is the first product that has checked all of the boxes and has an excellent chance of success. >> are point-of-sale terminals holding out how fast this can be adopted and how fast our habits change? i know credit card is not the best way to do it, but it is what we all know. >> there are two interesting trends. a lot of active sales are doing this -- this is quietly happening. not just in the u.s. but around the world. >> the technology that makes apple pay possible, you can just wave your phone and wrist and pay. >> exactly. the other interesting trend that will have some bearing is a lot of these transactions you think of as being off-line or retail

are shifting into apps or off-line. you think about order ahead or lyft, whatever the case might be, these are not supplanting e-commerce transactions. these are replacing instances like in a restaurant or in a taxi. the combination of these are moving into apps and in the fact that so many of the pos systems are already enabled. i think it's a fairly ready ecosystem. >> it seems like this is bad news for ebay which owns paypal. paypal owns braintree, which is your competitor. braintree says they will support apple pay. how is that different from what you guys set up with apple?

>> apple is working with a small list of partners. the list is available on their website. not such a large list owner by banks, and then stripe, because we work with so many of the best or fastest growing apps or whatever, i don't know what ebay or braintree's plans might be, but there's an interesting strategic misalignment at a macro level between paypal and apple. paypal's strategy is fundamentally predicated on owning the consumer relationship. paypal is a wallet system designed in the 1990's. apple pay -- the fundamental idea behind the product is you should not need a wallet or need to go somewhere else. you should be able to authenticate with your fingerprint and the transaction is done. i think it's going to be interesting to watch that play out. it is going to require that ebay and paypal reconsider the value proposition for the end-users. >> could they take braintree and stripe out of the equation in any way?

>> the design of apple pay today is carefully crafted so it enables apple to provide the user experience they want or their users while still maintaining all of the other properties required any other parts of the ecosystem. these companies are selling in multiple countries, on different kinds of devices, in different channels. not all just through phones, right? these companies need to have a commerce infrastructure they build on top of. it would be an enormous undertaking for apple to build all of that themselves. it's a more obvious strategy to work with the most successful commerce platforms, right? it would be an entirely different business model -- it would be akin to apple deciding we should build aws just because apps want to have a backend for the things that run the phone. they are quite different

businesses. >> visa earlier said apple is not getting any cuts or what they take in the transaction. is apple getting anything from what you get in the transaction? >> we cannot comment on the economics, but there will be no charge for our developers for businesses going on stripe. apple pay will be a free product. >> and the apps that you power, they will still have our credit cards, right? is that correct? >> the way it works is interesting. neither the phone nor apple itself story the credit card number. it's a little arcane behind-the-scenes, but what happens is the credit card number is tokenized and a token is sent to the business. >> the token is a unique number. >> exactly, specific to that device. it also requires a cryptogram, which is a single use token obtained on a per transaction basis. but for the user that doesn't change.

you can store your payment details and request the ride is normal and the billing happens to your credit card as normal. the billing happens to your credit card as normal. all that is changing is substantially more secure. >> you seem to be on a roll, how does that work for you from a strategy perspective? there's a lot of different kinds of partnerships. >> it's all oriented around the same pieces. we have talked about building economic infrastructure for the internet. about how there should be more transactions taking place than are. a major contributor to the limitations today or the fact that there are not more is that the infrastructure hasn't been there to enable them. obviously, if it was easy to buy something in a tweet -- billions of dollars of this would be

happening. it's an obvious business model. similarly, there are more internet users in china than there are in the u.s. the fact they cannot buy from non-chinese sites is ludicrous. it's a collective failing on our part that we are not enabling these. our strategy is to look at all the places were transactions should be happening and figuring out how we can facilitate it. people love portraying all of this stuff in a horse race mentality where there is stripe and this company and that company. if you look, two thirds of consumer spending happens on the internet. so it's not 2% or how it is proportioned on the pie chart, the interesting question is how we go from 2% to 10% to 20%. that's where our strategy is. >> stripe ceo patrick collison. you just heard patrick. will apple pay really swipe business away from the service? we'll hear from bill ready, the c.e.o. of paypal's braintree unit 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 dan 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. ♪

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