♪ from pier three in san francisco >> welcome to "bloomberg west." for emily johnson in chang. first, let's check your bloomberg top headlines. duncan, the first ebola patient to die in the united states will be cremated. ,duncan died in a dallas hospital, and the bodies of the deceased remain extremely infectious.

shares of the company that makes the ebola drug down sharply. before recovering later in the day. ebola fears are hitting airlines docs particularly hard. said minutes release to today show that policymakers say that the stronger dollar poses risks. to the u.s. economy. those factors are a key reason for the fed to maintain a pledge to keep interest rates low for a considerable time still. markets are up sharply today. three major indexes posting nearly 2% gains today. and a change of leadership at chipmaker amd. the company has named lisa sue as ceo. effective immediately. under their former ceo they were , trying to get more sales in game consoles as well as industrial and medical equipment companies. elevation partners, that counts bono as a partner is not going

, to raise new funds. and a letter to shareholders they say they will focus on investing their own money through a private fund, instead. and at the cupertino headquarters, apple is expected to reveal two new ipads. trying to reverse falling ipad sales, and this comes a month after the release of the new iphone. the 5.5 inch screen. affects sales even further? our guests, including a piper jefferies research analyst from indianapolis joins me. you have been studying consumers and particularly young consumers. what are they saying about tablets? >> they are saying they are not as interested in ipads. we interviewed teenagers, and 66% said they were interested in getting in ipad in the next

year. when we did it last month, it declined to 60%, so we measured a decline in that number, and i think the event is timely, that apple needs to get a little bit of a spark. surprisingly, the microsoft service, i cannot even believe i am saying that, they sought interest go from 10% to 15%. microsoft guys put something in my hands, and it is an intriguing device. in terms ofou, covering apple, any terms that microsoft is even on the radar for apple? >> they are the leaders at this point, and they need some pizzazz. they are doing this for the holiday season. they got a bomb last month with the new iphones, and they hope they are going to keep that momentum going, that is for sure. >> there is concern update iphone takes demand from a smaller iphone mini.

what do you know about that? >> we know that is happening. as we have surveyed people, we have noticed less interest in the ipad and surprisingly high interest in the iphone 6+. currently about 60% of the units and we the iphone 6+, were checking today, and almost no stores had been today. >> in case you are worried about that. i am getting one, and i continue to wait. there is a data point for you. i ordered it through the at&t store the morning they were first available, and they are still saying november for me. i didn't go to the company to use my considerable pull to try to get a faster phone, but you say it is happening across the board? >> it is happening across the board. bloomberg reported this back in august, that there is a 13 inch tablet, the 13 inch ipad, and

that that could change the dynamic. the ipad mini is going to get cannibalized by the iphone 6+. and so it is kind of up to them to have something to add some excitement to the high end of the line. that could be a larger screen ipad. >> the 25% chance of the giant 12 inch ipad. the maxi. what do you think is the likelihood we will see a bigger ipad? and what does that mean to the market here? >> our sources are saying they think this is going to hit a issue. meantime, we are going to see these ipads next week. >> the growth rate comes off this. the revenues have declined quite a bit, as have the unit sales. >> yes, the last two quarters are down. going into the holiday season, they need some pizzazz. they need potentially a gold

version of the ipad. like with the iphone. they are trying to be faster and even better than before. does this wonderful sort of trend report every year, and one of the sort of amazing trends that jumped out when she started doing this was the growth rate, and with every sort of new major technology, going back to the television, we have seen this growth curve, lot faster and grow a lot higher. kind of a new thing with the tablet, right, where there was rapid growth, rapid adoption, but it also really rapidly slowed down. >> yes, i think that the innovation around it has slowed. at the end of the day, what kept smartphones continuing to grow is it just radically changed people's lives. whereas tablets have had a modest impact on people's lives. and so, i think that plays into it, and that gets back to the innovation question.

we always keep circling back. there could the modest new features. touch id and apple pay, metrics that could open up further enterprise applications. be some new uses for tablets that we are not thinking about that could we accelerate the growth rates. force, the ibm sales about the apps being written for this, and he gives that not only something else to sell but a way to put their apps in a new place. tim, let me ask you also, there is some speculation about the apple tv product, they could be announcing this thing, as well. any indication this is coming closer? >> there is also some us and changes with a mac lined up, so we are looking at not just ipad news but other new products that the company has. >> so we will circle the date in our calendar.

so many companies coming up with new products for this fourth quarter. our bloomberg news reporter, tim, thank you very much, and our piper jeffrey analyst joining us all of the way from indianapolis, thank you. how do you stop cyber crime? hitting a lot of banks and stores, with millions of victims? the former director of the nsa shares his thoughts with us about the rash of cyber crimes. ♪

>> i am cory johnson. justice agrees on fulfillment. whether they should be paid as they wait in line at security check out. -- suggestingng it is helping amazon, but chief justice john roberts questioned

whether it was a work activity due compensation, and this goes -- t.j.apple to tg max maxx and others. and the former nsa director keith alexander joined emily chang, and the conversation was dominated by the recent hacking of jpmorgan affecting millions of households. asking theed by general how secure the nation's financial sector really is. >> the financial sector does the most to protect cyber than anything else. they're cyber security is the very best. having said that, what you have hit on is a key problem we have seen in technology. look at the rate at which technology is advancing. the iphone 6, the internet of things, the amount of data that is being created, and how difficult this sector is. advancing at a

rate that is doubling every two years, and what that means where all of our wealth is stored, all of our intellectual property is stored, all of our government secrets are stored, protecting them is becoming increasingly more difficult. i think what you raised in this question is two key points. one, the tech community, and you are right in the heart of the tech community here in san francisco, has to come together as a group to provide better options, and integrated cyber defense. >> individuals or industry? >> both. across the board. we need a integrated solution, so if you think about that, what we are trying to do is we are computerch of these security officers, cyber security officers, all of these different types of capabilities, and they have to integrate it together, and then they have to then find the attack. what we need is an integrated

defense. so that is the first and i think the most important. >> i don't think anyone would disagree with you, but show us how that would happen? sitting at home, having a jpmorgan account, a citi account, and we wake up tomorrow, and they have our names and addresses. >> the way i would address it, because you're asking for a plan that does not exist that goes across industry, the hacks exist. it is easier to exploit than it is to defend in this space. what you need to do? think about this. the firewalls, the servers, all of the different components of the network are individual components and not integrated together, so the first thing i think we need is an integrated defense. some companies provide that way of integrating defense, like blue cat. here in the companies the valley understand is you have got to go away from hard

signatures and go to behavioral modification. that is the second thing. you have to bring that together. >> what does that mean? behavioral models will detect malicious software without a signature, so imagine if you did everything right, and they still get in, we have got a problem, right, and that problem is the way we are doing it is based on signatures that we know, and so the adversary says if you know all of these, i will use 31 if you know one through 30. that ability to detect it has to go away from signatures, which knows what it looks like, to anonymous activity or behaviors, and i think behavior models is the next step for doing this, so that is two parts, and then the third is you start to bring this together. you have to have a way for messaging within a network and among a network at network speed. what does that mean? something, and

imagine these buildings as networks. you have doors, windows, rooftops, all different types of access, just like a network. you would want all of those to be brought to the same security center in real time if you're going to monitor the building. you need to do the same with the network, but if somebody is rattling the door on that building, this building would want to know also, so the ability to share information is something that is very important. cyber legislation. >> now, you founded a company, cyber security. why would yours work when jpmorgan cannot do it with 1000 people? >> the key that everybody is going to go to is just the model i talked about. i would like to say it was unique, but you have heard symantec say they're going to go to behavior models. there are info blocks and more. everybody is talking about it. we are bringing some special talent to it, and we will be one of the players, but it will take

more than one company to do this. you're going to have to have firewalls working with network servers, working with antivirus companies, working as a team. if we try to do it individually, what you are getting is the problem back to the guys who can least afford to do it. you have got to come up with an integrated defense, and so if i were going to put one thing on the table, take me out of it, if i were going to but one thing on the table, we have to get the cyber security companies and people working together. >> and what do you say for those who believe the type of technology your company is building is unethical? >> how do you mean unethical? >> when you talk about behavior, people are concerned about their privacy being violated. >> so it has nothing to do with your personal communications, so take all of that off of the table. we can prove that what you're looking at is not indications of yours. what you do, we do not care about that. what we care is what is the

packet of information trying to do, so a hacker is going to jump on your packet of information and put in some piece of malware, and that information, instead of going directly to emily, it then drops a payload into a server or something like that, or it goes through the firewall, and it does something in its behavior that is different than what you would normally do. >> general keith alexander, former director of the nsa, there with emily chang and stephanie ruhle. we will be right back with more "bloomberg west." ♪

>> welcome back. i am cory johnson. into theently jumped world of wearable devices, saying they would have a watch in 2015. job own has introduced a new

russian up its act that will work with the apple health kit. earlier today, emily chang and stephanie ruhle sat down with their ceo at a summit here in san francisco. why jobarted by asking own is on board with its competitor apple. it has been good for years. we launched in many categories with them. we like what they are doing in health care. we have taken an open approach. we have an app that works on the iphone without any of the hardware. wear one ofaving to these. you worry about that cutting into the devices. >> people starting out if they do not know they want a device. you really cannot track sleep that well with your phone in bed. sort of it is all additive, right? it is a way for people to get whatthe solution and find is right for them, and then they

keep graduating through. >> so what do you think of the apple watch? we do not know what it looks like. we have not seen it yet. is that going to catch on? >> it is a totally different case of what we do. life.eks of battery you put it on and forget about it. at least the way we see it. i like it. i think from a design perspective, doing things at that price point, materials and integration and quality that people have not seen before. we're going to support it. >> i do not wear this on my wrist, right? do you want to? >> i do not want to wear it, but, guess what? i do not think i was going to have a device that would track me or having a smart phone. things change. completely different. >> millions of dollars. what are you doing with that? >> we are growing our business.

>> how? >> investing in more products, more technology. >> you have been doing this at job own for a decade. beakers and headphones and now wearable. is this where the focus is now? spending a lot of our time, for sure, but there is a way where this all comes together. you will see. i think that when you have , wet, connected devices were there before people started talking about this, before it , andool being in wearable we were a different application, right, but a lot of the sensors, things like that, and for us, when you understand what is happening with the user, which is ultimately what we think about the role of a wearable in , 24/7.fe, it knows me it knows what is happening with

me. whether it be your thermostat or your car or any of these other things, right? my car should know that i am falling asleep or that i am tired. my thermostat should know if i am hot or cold, so this is where it goes, it should know that i am in a bad mood and play me the right song and all of those types of things, so i do see it ultimately coming together. >> and you do see everyone connected. do you see yourself being more powerful if you were part of a bigger company? ofs job and need to be part a bigger organization that is part of this? >> i mean, look. we are doing great. we are having fun. we are building. you should ask tony. he is going to be here. >> i am pretty sure snapchat and others were moving along. >> we are trying to build a great company, and we can add value, and we are looking at the

best way to do this. >> in the future, how many things are we going to be wearing? are chips going to be embedded in our clothing, our bodies, around us? werethink different things different times. there is going to be fashion. a different dress during the daytime when it was hot or cold, and at night, and those things get integrated into our lifestyle in a deeper and deeper way, so absolutely. >> that with bloomberg's own stephanie ruhle and emily chang with the job own ceo. vice media has attracted investment from heavyweights, like rupert murdoch, but will that take them into the mainstream? we will examine it. ♪

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>> welcome back to "bloomberg west" where we focus on technology and the future of business. vice media has attracted business from rupert murdoch. the media company has propelled themselves to a lot more. stephanie said down with the vice ceo. they started asking about the evolution of vice. >> buzz feed has done a tremendous job online. we are going towards being cnn of global news.

>> are you? cnn is true news. do you not learned the line? -- blur the lines? >> not on vice. it is straight news. it is growing asked eventually. -- exponentially. >> as a former ceo of mtv networks, what did you see? >> hope. i liked their style. they had a good vision to get into media when no one else was doing that. they have got websites about food and music and all types of other things. >> do the lines get blurred? >> what it is for us is the most popular thing we have online is

our news platform. we just won the emmy for news. we actually don't put advertising next to it for that reason. however, on the other things we make a lot of money. >> you said you are going to launch a 24-hour news network. how does this dan. from cnn -- stand out from cnn? >> we already have a global plan. we already put the infrastructure in. we are pretty excited. >> were you drawn together because you have a love for the age?

you travel to the underdeveloped parts of the world. is it really a merger of your taste? >> that is what attracted me, this in of adventure. -- sense of adventure. >> the first thing we did was a guide to travel. we were like, that was amazing. tom said, we should be doing more of this. as things develop we said we should be doing more of this around the world. >> when gopro says they should the in the content business, it kind of sounds like what they want to do.

>> the more, the merrier. we produced things. everything we do, but i think there is a place for gopro. i think there is a place for them. >> what other game changers do you see? >> i see these digital things like netflix. the move from analog television to video. >> audio and tv and online. >> netflix has been like a gateway drug for a lot of people. i think it is going to be easier to see what a want.

a lot of companies are going to come up with a new platform space. >> that makes me think of word association. when you think of network tv, what do you think? >> movie. i like to watch. >> at work tv, what does that mean for you? >> we started online. it is the third green for us. there is a lot of money and a lot of audience. >> what about apple and the potential to do something innovative in tv. can they? >> they are really able to integrate online, broadcast, and cable into one place. apple would be an obvious company to want to do that. >> they have a lot of money. they are a natural to buy one of the major networks.

to integrate it. >> why? >> they have done a shot across the music industry with u2 and showing there is going to be a different model. he also have direct consumer, which is a big thing going forward. all that stuff is going to be big. apple is the only company set up to do that. >> the vice cofounder shane smith. how are tech companies affect and education in their own backyard? you can watch us streaming on your tablet.

bloomberg.com. ♪

>> i am cory johnson, and this is "bloomberg west." the biggest names are based in the bay area. what role our economic giant playing in the cities they call home? we sat down with the san francisco mayor at the vanity fair new establishment summit.

we started by asking about the growth of new technology in the city of san francisco. >> we have over 2000 tech companies employing 56,000 people. innovation is about solving problems in a collaborative way, getting creative in the way we approach everything from climate change to business to the challenges of success and working very hard on managing success. we were able to cut unemployment literally in half. what i have learned the hard way is not to settle on success so quickly.

we are able to create a lot of new jobs in the city. we cut unemployment in half. that means there are a lot of other challenges. people want to live here. they want to work here. i have got to make sure it is affordable to people. their talent is saying, do you want us to stay? you have to work on the neighborhood being strong. you have to work on public safety. how about that homeless challenge? they work on all of that. >> housing prices are going up. people are getting evicted. many people cannot afford to live here but want to. >> we need to have answers for people.

i don't want restaurant to have fear. i want them to take a look at how they can connect to success and advise me on what i can do to link them to success. everybody sees the ceos making a huge amount of money. how do i keep restaurants, teachers, working-class families in the city? you have to make sure building more houses have to be aggressive. we have got shipyards. we have visitation valley, treasure island. these represent 15,000 new units of housing we are investing in building. >> what is the timing? people are protesting today.

>> 30,000 new units of housing between now and 2020. we already have 15,000 figured out. we are moving aggressively. we are making sure one word is permanently affordable to low income people. >> you have the teamsters union complaining they are treated like service. how do you balance the people who want to live here but cannot? are other companies doing the same thing? >> that is what mark has started. we have 1000 of the 2185 tech companies have ended together to circle all of our public

schools. they are never going to have a situation where a teacher or a says, i don't have enough money. these tech companies realized their future talent is graduating from public schools. they are investing in our public schools. i have got him investing in housing. >> i hear these names all the time when it comes to philanthropy. are you getting phone calls from a lot of the ball we don't hear about who want to give back? mark just made that a lot of people we don't hear about who want to give back.

>> they may not have the level. they are having their employees serve meals across the street. they are opening up the office space, utilizing the great spaces. this is being created over and over again. each of the new ceos are really exhibiting their passion by creating these allegations. they are asking what is the latest issue we can feel comfortable with. education -- housing -- homelessness. these are things we believe in. i want to help create that link. i can reduce that fear.

if i can get them to meet the ceos that want to do good work. >> airbnb is finally legal here in san francisco but with a catch. you can always stream on your tablet, on your phone, or at bloomberg.com. ♪

>> welcome back. the san francisco board of supervisors passed the airbnb law that legalizes in this city.

the new law comes with several restrictions, including who can rent out their home and how often they can do it. san francisco figured out what? >> they figured out they cannot stop it. they are somewhat legal. >> the current law says you cannot rent out your place for short-term? >> not allowed. now you can. airbnb somehow communicated it as, we are helping people make extra money off of extra space in their homes. they can make money on their home while they are away. ok. this makes it only possible for permanent resident to do it. you cannot own several properties and rent them out and make a ton of money, which a lot of people

do. you have to register with the government and have insurance. >> i heard some of the board of supervisors were really incensed by this. >> the burden is not on them at all. it is on the burden of the users to make sure they follow the law. and on the sentences go government to make sure they make sure people are registered and to catch when people are not

following it. >> there is no way to say, give us a list? >> the burden is on airbnb. >> i have a friend who takes off. from a city planning standpoint, a lot of hard cities made choices. they want to have the workers, the artist and have mixed economic interest. everything is going to the top dollar. you don't get the benefits affordable housing allows. it is what type of city do you end up with. >> i have had the ball driving

around the city, and that is not attainable. airbnb has any more battles across the world. >> don't go anywhere because you are going to give us one number that means a lot. what have you got? >> the number is one. it signifies the reach for how close facebook can get to have local targeting. they track people, and they can say business a target people within a mile. >> this is a permanent fear. they will show up.

>> i think one mile is pretty broad, as ashley in an urban -- especially in an urban environment. they have restrictions. >> is it about gps? it will tell you where you are. >> that is what faith that is using. -- what facebook is using. they can only target the location. it will still take a while to get more specific. if you feel really creep out you can turn it on your phone. >> this is the holy grail of local advertisement. now facebook is there in a more local way.

>> they are trying to make this work for small businesses. now they are trying to make it relative to them. >> now my dry cleaner is going to know when i am in the neighborhood. we will have more "bloomberg west" tomorrow. ♪

>> welcome to your medicare, your decision. you program that guide through the medicare options available from humana. the you -- are you sure you have the right medicare plan, are you with the right company question mark do you wonder if you could