live from pier three in san francisco, welcome to "bloomberg west." i am emily chang. bendgate.g dubbed apple is dealing with iphones bend, along with software issues. what does it mean for johnny isakson who is in charge of hardware and software -- jonny ives, was in charge of hardware and software? the threat of rain is not cooling fever for derek jeter's

final game at yankee stadium. some of the highest ticket prices ever for a regular-season baseball game. and forget the skies -- the next frontier is drawn. from surveillance to some warfare, we're looking at how technology might be used. we are keeping a close eye on underway.f all three major indexes down 1.5%, with the tech heavy nasdaq getting the hardest hit. story, the newad phones are to be a gold mine for apple. apple is pulling its ios software update. crashing muchpps more often and it is starting to show up in the company's stock

is, losing $22 billion in market value since the new iphone has been released. how serious is so-called #bendgate? how much will all of this cost to fix? joining us is editor-at-large cory johnson, bloomberg news therter tim higgins, and ifixit ceo and cofounder who did a showdown on the new iphone earlier. tell me about your teardown. what did you find, anything that would make these iphones more: morerevious generations -- vulnerable that previous generations? >> they decided to make it easier to repair. >> i understand that you have a phone with you. what do you have? you are going to tear it down for us.

handy suction cup tool and to get inside, or you --thatre you dio possibility. >> what does it look like on the inside? plus,s is the iphone six and it is mostly the battery inside. along the edge this is the main board. you have the circuit board and the new chip that apple work on to make. pretty sophisticated internals. the reason people are having ding is itith it ben is incredibly thin and there is not a whole lot of metal supporting the phone. i think it is an appropriate amount of metal, but there is

additional for that can be applied because the phone is so large. >> can you put it back together? this is still usable? >> absolutely. people were parodies phones theseday -- people repair phones everyday, thousands of workers shops across the country and they will not have a problem repairing the iphone 6. >> what is the difference between the iphone 6 and the 6 plus? >> they did a number of things to make it easier inside -- make it easier to get inside. the difference between the 5s and 6 plus is that they used to be a ribbon cable and they got rid of that. aside from that, it is an incremental revolution. it is not dramatically different phone design. devices arele's well engineered and very, very durable. i am not particularly concerned

about the bendgate concerns. it is a durable phone. >> it seems dramatically different. i've taken apart the older and oncend ipads you've cracked it open that was not much you can do to get it back together again. they might want to swap out to provide a longer lifestyle for this phone? >> i think they are really optimizing for the apple geniuses in the stores where they are having to repair millions of these funds. 20 to 30% of smartphones have broken screens. it is a complete 180-degree shift from the ipad from which is designed to be very hard to repair. >> apple has not responded to the bending issues. dareel issa statement about the software updates -- they have released a statement about the

software updates. >> they last night they issued an apology for the operating system issues and will try to get a fix the next few days. if users are having a problem with the most recent update, they can reinstall the old ios 8 software and that will allow them to use their phone as a phone. >> i have not updated the update yet. i've regular old i was 8 -- i have regular ios 8. >> regular to be gold -- two-week-old -- >> is ives handling too much? with is a massive company everyone around the world paying attention so any slip up with a greater s -- will get greater scrutiny. >> the israelis of the technology product in the history -- biggest release of a

technology product in the history of -- >> quite a statement. >> 20 million units of this device sold over a two-week period. what does that come close to, the launch of a game console? apple notes about being as dependable as it once was are a serious concern for the government. >> how would you compare the issues we are seeing with this iphone 6 and 6 plus two previous generations of the iphone? >> it is awkward to reverse. that is a major software development quality insurance problem. -- it was the software development team that made that mistake. in terms of the bending issues, i think that is a far less severe issue than the intended issues we saw with the iphone 4 a few years ago. i think the bending issues are a little overblown.

it is only if you put it in your pocket and applied huge amounts of torque to it. >> give us the numbers you found in terms of the cost for parts. as i understand it, $220 to make the iphone 6, just $50 more for us even though it is far more expensive in terms of the sticker price? >> i don't put a lot of weight in the building material estimates we see because they just don't have access to the information within the manufacturers. nobody but apple knows what they are paying to get these processors. the estimates out there. i don't know how much bearing they have on reality. >> in general, is that that these phones are easier to repair than previous generations? >> absolutely, for that we are

really appreciative. i think it is a sign of a new direction for the design team and apple, going away from the ipad style, the disposable design, when the battery were out we pitched it and bought a new one. these are designed to be serviced. if you have an apple watch with 18 carat gold on it, you don't want to throw it away after a year. >> that is my call deathwatch. -- that is my kind of watch. thank you for opening up the iphone for us on camera. largest be europe's tech ipo in years, but the berlin-based rocket internet doesn't mimic existing tech ideas. ♪

i am emily chang here with cory johnson. this is "bloomberg west" on bloomberg television, streaming on your phone, tablet, bloomberg.com, apple tv, and amazon fire tv. rocket internet is going public should the german startup is set to start trading in frankfurt on october 9 and it could be europe's largest tech ipo in years. tenant right the coattails of alibaba can it write a good ride of alibaba --can it the coattails of alibaba's debut ? >> you know the old saying, there is no such thing as a new idea. models seenccessful elsewhere -- a lot like alibaba has -- and try to replicate those. i first stumbled on these guys to go public,iled

which we covered with great fervor on "bloomberg west." modelontinue to take that -- they were exclusively locked up by her bomb for a while but they took the model and -- locked up by groupon for a while but they took the model and replicated it. a bunch of different companies around the world except the united states and from germany mbas and descendents these places and try to grow it to something big. taking this idea of stealing and logic of business is to -- launching of businesses to running this company. running and operating the business is an entirely different matter. of -- ahead ofer

development and rocket internet joins us from hamburg. this is a company that gets talked about so much in silicon valley and gets criticized for stealing ideas. is that a fair criticism? >> emily", first of all, thanks for having me. fair -- it is [indiscernible] looking for an ipo. we have a good ecosystem but a story like google, facebook, just recently alibaba, is missing from germany. we may make it possible as well. rocketer executive at internet, one of the big restaurants -- big questions is can this ipo ride the coattails of alibaba? > when the ducks are

quacking, feed them. with interest rates so low, investors are chasing growth and turning to anywhere they can find it. this is a company we will continue to follow as they walked down the road drive you could we believe -- rock down the road to ipo could we believe they're going public in a couple weeks. online ticket sites are seeing huge demand for yankee tickets today as derek jeter gets set to play his final home game. will the rain put a damper on things? i want to get a quick check of the selloff happening right now. everything in the red. ♪

>> welcome back to "bloomberg west." i am emily chang. derek jeter will go down in history as one of the best shortstops to play the game.

is final game is tonight at yankee stadium although it is looking like it will literally rain on his parade. shelby, how is the weather looking there? , it is not a downpour but it has been raining steadily throughout the day and the national weather service says we could get about an inch of rain in the bronx. people are legitimately worried that his last game could get canceled. even though the yankees won't be in the playoffs, this is his last game at yankee stadium and people are spending crazy amounts of money to go to it. if the game happens, it could be the most expensive regular season mlb game we have ever seen. regardless of whether or not they get canceled, it has already set records in terms of ticket exchanges. this is the most demand ticket type have ever seen for a regular-season game and people are willing to pay world series ter waved see je

goodbye in new york. >> something like 30,000 tickets exchange, half the capacity of yankee stadium. what happens if the game rained out? >> yeah, that is the big question. refunds ticket holders for purchases. if the game is canceled, these online ticket exchanges will have to refund $12.5 million worth of tickets. obviously, that is going to eat into their profit. they are worried about the weather. and the original ticket holders, from theo bought them yankees, will get the ticket back but not necessarily the money they would make onto next game. so everybody loses. .s a huge deal for new york we don't know what is happening tonight but they are spending a lot of money and everyone wants the game to go on. if it does get canceled, people will lose a lot of money, but the weather is looking a little better tonight so hopefully the

game happens. >> shelby, what is the scene like there? i have seen stories of people coming literally from all over .he world for this event our people congregating because they have made the trip. is going to -- made the trip whether it is going to rain or not? >> yeah, but they are wearing hats, wearing jerseys. je jersey is the highest jerseyter's -- jeter's is the highest selling in the world. sales within the stadium itself are up 700% this year. a lot of interest in this game and it is not just new yorkers. people all over the world are tweeting about it and will be watching it tonight if it happens. >> are you a fan, shelby? i know you have been living in new york a long time. >> i have been in new york a few years. i am not a jeter hater.

the more i read about him, the more i am kind of hopping on the jeter bandwagon. he has been here for 20 years. if you look at the statistics, it is hard to hate him. >> better for the giants if he is out of this game, way better. > >> bad day to talk -- >> next year, cory, next year. shelby holliday outside yankee stadium, thank you. next big thing in maritime defense could be drones. ng is teaming up with that would robotics, coming up. ♪ >> it is 26 minutes past the

hour, which means bloomberg television is "on the markets." i am olivia sterns. the dow is down by 233 points right now, the s&p falling by the most in eight weeks, 27 points. the nasdaq is down by 74%, leading the benchmark indexes lower today. particularly heavy selling of tech stocks, in particular apple. also way on the nasdaq, shares of biogen, along with lumina. sliding more than 3%. both of those stocks, biotech giants, gained at least 90% in 2013. another stock waiting on the allegheny technologies. the metals miner let losses along -- among materials for your sister we will be "on the markets" again in 30 minutes.

>> you are watching "bloomberg west," where we focus on innovation, technology, and the future of business. im emily chang. the social media management has spent an undisclosed amount of money to buy his eagle -- zeetl. response to complaints unsocial on social media with a phone number. future?o in hootsuite's cory johnson is with us as well. is an ipo in your future?

>> right now we are a great private company and we are putting together a management team and a great organization in general. we are building toward what looks like an ipo, public company. but we are not in any hurry to do this. we're being cautious in terms of how we grow in the next year and beyond and the timing and market is right, no question. >> let's talk about hootsuite it i used hootsuite to schedule my tweets but you can do other things with it. like what? about a tweet -- actual of microsoft office for , we are the parallel for the social world. engagement,or

listening at what is going on in social media, the analytics behind what happens. campaigning products, which help you understand and engage with customers more, then we are looking at other products that fulln pull in to do the advantage of the management tool. >> who are the power users of hootsuite today and will they be five years from now? >> we are the pioneer in this space, really. 10 million users across the ,000 using our products. many customers to pick. achieved a broad penetration of the market. >> how do you guys make money? um model so itremi

is free to a large percent of our users. products andy our use it for years, power user, small business level. as they need additional functionality, we have a pro product that is tailored to small to medium businesses and we have the enterprise product that roles in the .nterprise-like functionality conditioning, security, and other things that large organizations need. >> let's talk about zeetl. what business opportunities do you see here? >> is an interesting product and feature. we are putting it into -- what , asllows the company to do we think of how social is expanding, is that it is not just a marketing team. your sales and support team all need to be involved in social and it allows sales teams to

directly reach out to customers that are having issues, or potential customers, and give them a call number that only they can access, and start a conversation. for people who understand social or sales, the velocity of responses is hugely important and this allows them to quickly connect with customers and potential customers. >> what is the one thing that social media networks could be doing to make your life easier? >> we have a really great relationship with our partners linkedin,, facebook, and about 100 other social networks in our system. i think the thing we are most excited about is getting new social networks into our system and there is always a problem when the social network is oring on -- like snapchat

instagram or others that are on the leading edge, where they are busy just fortifying handling of businesses and the customers want products in our product. we work with them to explain how we can help their business, and how to prioritize them to get included. that is the big thing for us, always being on the edge. we love our partners at twitter and facebook and linkedin but also the new and up-and-coming networks. , ceo of greece we , thanks so much -- ceo of hootsuite, thank you so much. our countries like apple and google missing the opportunity to get customers who still prefer to pay with cash? ♪

>> i am emily chang and this is "bloomberg west." the landscape of money is rapidly changing but of services like google wallet and the upcoming apple pay ignore the millions of people who just want to pay with cash. >> we spent all this time talking about technological innovations but one in four americans are underbanked or u nbanked completely.

they make a transactions with cash. paynearme founder and ceo joins me now. let's talk about this whole notion -- those of us who have money and bank accounts, it is different from the way the good chunk of the world works without it. >> let's talk about the united states alone. people used to talk about the digital divide being a lack of connectivity, but now with smartphones those people are connected. how do they pay? of the statistics you shared with us that is sort of amazing is people who don't have bank accounts are more likely to have a smartphone that people who do. you have people who are really technologically connected with a smartphone and you don't have -- and yet don't have bank accounts at all and primarily use cash. >> and makes sense. the smartphone is the least

expensive form of connectivity you can get and you have to have a phone to live an increasingly have to be on the net to live. >> more than you need a bank account. you guys are helping people do what? >> make any kind of payment transaction where they cannot handle the cash strictly to the payee. loans, paying your water bill is good things that were traditionally done with walk-up bill payment, we can get it done 62 seconds -- 60 seconds or less . -- real-time point connection between that point of sale terminal and the agency or business you are trying to pay. >> these are people who would normally get in line at the get in lineany or somewhere. i imagine there is a big movement towards more of these businesses work government services even though they don't

have bank accounts to do so. >> you have all these people with cash in a world where there is a massive shift from direct come in person to remote. commerce is now e-commerce. even bank deposits is now deposits with your phone. and yet you have these people with cash you can do any of those things -- you cannot do any of those things because you cannot shove cash into your screen -- >> i have tried that. >> they are wired into our system and are wired into all of these government agencies that want to get paid. >> what is the credit profile of these people typically? >> i have no idea. >> good work on customer research. >> we make cash into them like they're taking an electronic check transactions or credit card transaction could we make

it look electronic to the remote system while letting the consumer live with cash. >> there is a wonderful book madness," where he talks about the cash economy. >> talk to connect desktop to connect --talk to connect reefer madness with cash, but ok. >> what is your sales process to get these companies to work with you? >> generally speaking, when you call somebody, they are like "what are you talking about?" but there is somebody in any industry who cares about the user experience and when they see how incredibly simple it is to pay this way, the competitors look at it and they want to fall in and we see classic penetration. >> what is the last one that works for you? >> rent crazy.

20% of rent payments in the united states are made with cash or money order. to take an hour or so to go get a money order and get on the bus and get your property managers office and give your money order to the property manager -- who is going to get charged by the bank to deposit it, and maybe is going to miskey it. all those problems go away if you can pay your rent electronically at 7-eleven or family dollar. >> good to see you. thank you very much. >> now for a check of other stories making headlines right now, mark crumpton in new york. >> the prime minister of iraq says that islamic say militants have been planning attacks on subways in the united states and paris. he says the information was given by captured islamic state militants. the u.s. has not confirmed the plot. president obama says the world is not moving fast enough in fighting the outbreak of the ebola virus.

speaking at the united nations meeting on ebola, the president urged countries, foundations, and businesses to increase contributions to fighting evil in. the virus has killed 2900 people in west africa and we are keeping an eye on the markets with a selloff underway. the dow and s&p are all down about 1.5%. the tech-heavy nasdaq was the hardest hit. the markets are off the lows of the day. >> you're watching that, too, mark. what is coming up on "bottom line"? the topon one of stories, u.s. attorney general eric holder plans to resign. you will reportedly stay in a successor is confirmed. he has been a recent target of criticism by congressional republicans and in 2012 the house cited him for contempt. we will look at his residence -- his legacy and possible replacement. back to you in san francisco. could be bringing new drones to the high seas.

world's why one of the biggest defense contractors is teaming up with the notion robot maker. ♪

>> welcome back to "bloomberg west." i am emily chang. amazon togoogle and the punch when it comes to protrude very. it is authorized to start testing thrown delivery -- drone delivery, the first time they have been approved for real delivery.

copters,alled parcel will deliver things like medications when fairies are not available. tech giants like google and amazon are drinking -- bringing the oceanthe skies of could be another frontier of unmanned vehicles. boeing is teaming up with liquid robotics to deploy anti-summary were clear and marine surveillance. autonomous ocean drones have been at seasons 2000 and. it's waived lighter vehicles collect data about conditions in the water. joins med robotics ceo now in the studio along with cory, still here as well. how is the partnership actually going to work? >> we have been working in the defense space for quite a while. it is wave power and solar

powered vehicle platform and you can put any type of sensor on it. you can listen for things and detect surface ships and submarines. the partnership with boeing is a natural extension of the number one defense contractor globally on a global basis. partnering with the top player in the defense industries a huge company-making event. >> are you sharing technology? >> absolutely. we make a drone that runs on the surface. boeing makes undersea drones and aerial drones, and aircraft, of that have been modified to work in a military context for submarines, marine surveillance, that sort of thing. >> connections with tenet on procurement officials -- is that -- pentagon curcumin officials, is that a principal driver to work with boeing? >> we are a startup company in

the silicon valley and they have region we would never have, but the vision they have is to connect all of these assets in an unmanned away from the seafloor to space. they have aircraft, aerial drones, underwater drones. ofron -- what kind of drones are more advanced, air drones or underwater drones? >> the connotation with aerial drones is sometimes negative because they're dropping bombs car,d you have the google what amazon is doing. we make an ocean drone. it listens. we are not armed and weaponize for gathering information we can supply to other people. >> what kind of surveillance are you talking about? >> service special protection.

especially in asia, there is a lot of illegal fishing and human trafficking and drug running and that had thing and we can detect what kind of ship it is. we can also detect things underwater. summarys -- submarines is a big thing but with referee arming their fleet and -- with russia chinang their fleet and and iran, and is the topic. >> how much of a focus is it for the pentagon right now? >> is a huge focus. there was acoustic sensing of submarines and it is inoperable these days. it was vanquished, they didn't invest any more. after the cold war, there was not a need to invest in that technology. but now submarine hunting is a big deal. >> how do other countries' technology compared to ours, or yours? >> we are way ahead.

a $19 billion spent on a global basis and the u.s. spends $12 billion, just to put it in perspective. the dominant share of building submarines and the technology to track them. we are far ahead in the market. inhow is the interest drones help your business? >> it helps. ed things are being created for a reason. the ocean is a very dangerous waste. it is expensive to put a ship out midocean. we can listen for things in a very cost-effective way. it is similar to delivery or companies like amazon, google car, eventually. drones are here and are being developed in different markets and it will be a big part of our lives in the future. us forare sticking with

one another. when we got? >> 55. 55 pounds is the limit of drones that have been approved by the faa. allowing movie studios to use drugs that can reach a weight of 55 pounds to shoot stuff and do stuff for movies. the faa is finding ways to let these things get used for business. >> apparently drones were used "skyfall,"quences of a james bond movie. memore than that coming at in the sky -- >> you don't want one flying and your head. but in a controlled environment is a fantastic thing. we are getting the faa to release restrictions and allow things to be filmed. i have to offer -- i have got a friend who is a drone obvious to

as imagery -- and the imagery that he takes with his drones is fantastic at >. are real, the drone enthusiasts. you take a selfie with your drone. it is a real thing. >> a couple weeks ago in the lake tahoe we had a drone following the vote. >> should we be worried about the safety of these things? with kids playing in the playground -- >> sure, ultimately mechanical things and fail so you have got to make sure that it is in a safe and controlled environment. the ocean is a good place because if it falls in the ocean the odds are you are not going to hit anything but it crowds, you definitely want to be in a controlled environment. >> we will see how this plays out. johnson,-large cory and thank you all for watching this edition of "bloomberg west ." you can get all the latest headlines at the top of the hour

on bloomberg radio and all the time at bloomberg.com. ♪ . .

>> i'm mark crumpton and this is bottom line. today, eric holder announces his plan to resign. then, u.s. stocks fall the most in eight weeks. rain threatens to dampen derek jeter's farewell home game.