live from pier three in san francisco, welcome to "bloomberg west." i'm emily chang. bloomberg topr headlines. passengers arriving in the u.s. from west african countries hardest hit by ebola will be required to enter through five airports. larry summers spoke about the economic impact. >> i do not see a likelihood at this is going to be an important event for the u.s. economy. ,or certain countries in africa this has the potential to be

defining >>. >>chicago, atlanta, newark, jfk and washington dulles. kleenex and huggies makers cutting up to 1300 jobs. forecast toull-year reflect costs associated with the spinoff of its health care business. in emerging markets has been a strong point. coca-cola shares are falling the most in six years today. it down more than 6% after the company reported sales that fell slightly in the quarter to just under $12 billion. they announced a cost-cutting aboutnd mounting concerns the health dangers of soft drinks in the united states. deutsche telekom's has teamed the company says it is

looking at options for t-mobile. a future where t-mobile remains independent. but sprint and iliad dropped plans in recent months. staggeringlling a number of iphones. the smartphone brought in 56% of revenue. the success of the device begging the question, is apple turning into just a phone company? our marketurn to makers anchor stephanie ruhle who has been at the robin hood conference. j cruz at ceo. withd exclusive sitdown the founder of formation. you just left the stage. you and eric schmitt, two leading minds in the tech world. what was your biggest take away? >> i have always tried to look

up to eric schmidt. similarto do something to what google did. it's extraordinary to see how he can take that culture and build what he has built. a lot of our friends right now compound from google. our building is an intersection of old industries . >> isn't there an argument to be made -- the idea of disruption is great. unless you truly knew the product, is there a bubble? is silicon valley trying to disrupt businesses they don't understand? >>'s people from the outside that come and change it. building government technology, but we had lessons from companies on how to apply -- you come in and you figure it out. you have said before that

what silicon valley can do is solve some of the problems businesses face. >> the way they are running these industries is not very smart. >> like what? >> health insurance, for example. there are tens of thousands of people using fax machines. 300,000 people still entering data manually. it's not how the industry should work. it is hard to build a technology culture. >> is the mobile payment business getting crowded? do you feel like there's too many? >> i agree with you on that. paypal and i was working for him, everyone knew the payment company -- i have seen thousands of payments companies. there are too many good >> is there a company right now you are most excited about? >> the second company we built.

doing a wealth management platform. a lot of interesting technologies applied to finance we have not seen yet. >> whether it's corporate america or the u.s. government, we are prepared for cyberattacks? >> we really are not. there's a lot of new technology coming out that's changing how we see security. a company named of the meals launched today. illumios. >> what is fund-raising like in silicon valley right now? is the money falling from the sky? >> there's a lot of lessons from the last 15 years. if you are going to one of the top funds, they are going to be skeptical of most things. have laterwhen you stage companies that people think are hot, people in new york a pretty eager to give the

money and that is dangerous. involved -- now that joe green is out without zuckerberg, what does the future hold? >> zuckerberg is still backing it. the immigration issue is so important. of our bestg one engineers because his wife lost her work visa. politicians on both sides want to fix this. this room isn panicked over market volatility. the screens go read last week -- did that matter to you and your community? >> you have to be aware of it whiche there is a truth is the call before the storm. >> absolutely great having you here. so many wondered why there is a silicon valley guy.

they should listen to joe. he surely knows what he is talking about. thank you so much. stephanie ruhle from the robin hood conference in manhattan. is apple to dependent on the iphone? the phone is making up more and more of the company's revenue. ♪

>> i'm emily chang and this is "bloomberg west." has the dominance of the iphone turned apple into simply a phone company? apple sold over 39 million iphones in the third quarter. that includes just one week of the new iphone sales. tim cook called the demand staggering as the company forecast record holiday sales

driven largely by the iphone 6. is apple getting too reliant on the iphone which made up 56% of revenue for the quarter? consider it is the second-largest product category in the quarter. the first was the mac, which made up just 16% of sales. cory johnson with me now here in the studio. the phone numbers are staggeringly great. is there a flipside? >> we could have done a whole show today on apple. a fascinating quarter. has long beenich the product apple sells the most of is now well over half of their business. you see how much the iphone dominated apple's overall business with 56% of the revenues in the last fiscal year. moment a donuh

, but it points out how important this singular product has become for this company. >> two important? we saw the iphone 6 beginning of the guidance for the fourth quarter. what is next? some people are saying are they ever going to grow from right now? >> there is talk about apple creating an ecosystem of products. if the phone is becoming so dominant and that is the only product i really need, does that theory makes sense? >> how close is that ecosystem? pay the services like apple draw people across the product category?

when you look at how this stacks up to the ipad which had been the second-best selling thing in their product line, the number thephones sold compared to number of ipads pales in comparison. >> apple has now rolled out apple pay. allowing users to make transactions at participating retailers with this type of iphone. the system is already place at 220,000 stores. olivia sterns when out on the streets of new york to find out. apple says my new iphone 6 is going to completely replace my wallet. i have decided to put apple pay to the test. let's see how much shopping i can get done. my first up, the disney store.

perfect. thank you. the disney store was easy. one touch and i got all of these. that doesn't mean i don't need a handbag. i think we have a winner. that took a bit longer than i expected. apple pay did not work. it did work when i read my card as a credit card. either way, i did not have t o sin. -- have to sign.

a $35 ostrich egg. here's the deal, apple pay worked very well. so smoothly it's a bit anti-clement kick. -- anti-climactic. some things like the ostrich egg and that went very smoothly. apple pay does save transaction time. for people like whole foods, anything you can do to move customers more quickly is going to mean a lot or business. after allore stop this shopping, my feet are killing me. i have to get some aspirin. that is everything. i'm out of money and out of time. i have to get home. for that, i'm going to uber. do you take apple pay?

>> i have no idea. >> no? at least uber already has my credit card. sterns, apple pay is out. i want to handbag. the reviews are in. how did apple pay go on day one for apple partners? -- you guys are a partner with apple pay. what are the numbers so far? >> it's too early to say. we are really excited. a good step for you was on the day. the newmes more people customers getting cards. >> is this a new business where

-- are trying to get people let's say i have a chase credit card and a wells fargo credit card. is this a chance for you to win share with customers? what it allows us to do is help them use it in a mobile way. can you move the card from the back of the wallet to the front of the wallet? >> i don't think it's a singular option. it's more of a holistic option. a consumer's my digital experience with chase is better and we can give them different offers and the experience is -- we recently

rolled out our chase mobile app. centric.digitally 40% of our customers log into their mobile app once a quarter. helping me work in a digital world. getting any aren't data out of this transaction because that's how apple has structured it. to use, it's simply one click and i can buy something with apple pay. i wonder if it could boost e-commerce and boost the number of transactions we are seeing because consumers don't risk the abandonment. >> that's an excellent point. one is the point of sale, which we just saw. it's almost anti-climactic. buyingpt transaction, stuff using an app on your iphone.

it is really simple. it pops up with your credit card of choice and shipping and billing information and you are done. -- bettert people to than any other experience. what are the friction points that might be different? i can't talk about what our creditors do -- st talk about the crummy iie one. >> when you put your card in, it's really simple. as opposed to having to go through multiple steps. getting verified and calling call centers. there is e-mail verification. >> some banks have more steps than jpmorgan. >> some have different steps. sure our digital

platform is simple. have you had any conversations with google? about what welk are talking about with different workers. there is interest in the market about tokenization. people are excited about the services we offer. and helps remove the credit card out of the consumer device. use the tokenization system that is being used by apple pay today. >> one of the problems i've had with my chase credit card -- i have had problem with security and i've had my credit card over stolen and used multiple times. do you think this will help with that? >> i'm sorry that happened to you.

chase is constantly looking at monitoring all the different fraud systems. if we see anything unusual, we let you know and you can call us anytime and we will be more than happy to take care of anything fraudulent. will tokenization help? we think it will. a single payment code is used for each transaction. somebody goes to intercepted, that number will become useless after one transaction. expect -- are you certain that fraud levels will go down? >> it is too early to say. we are really excited. it looks really good. it just happened today, so. >> thank you so much for joining us. executive director at chase. we'll test less sales be banned in the home of the u.s. auto industry -- tesla sales be

banned in the home of the u.s. auto industry? ♪

>> welcome back to "bloomberg west." michigan governor rick snyder has until today to either sign or veto a bill banning the direct sale of tesla vehicles in the state. tesla has reached out with michigan suppliers rallying them against the bill. >> we might even have dealerships. it's not something we need to do right now because we are selling a medium volume car. we don't need car lots. >> if michigan decides to ban

the tesla sales, it would follow the lead of other states like texas, new jersey, arizona. sales are being challenged north carolina and massachusetts. qualcomm, teaming up for a virtual reality startup. a streaming on your phone, tablet and bloomberg.com. ♪ it is 26 minutes past the hour. bloomberg tv is on the markets. we do have a rally going on. the s&p 500 still up about 1.4% on the strength of the earnings reports. about individual never spirit harley davidson reporting third-quarter earnings that beat analyst estimates.

shares rising by the most in almost two years. a chipotle better than estimated third-quarter results. the company says the growth is going slow and the shares are down. ♪

>> you're watching "bloomberg west." i'm emily chang. augmented reality can make wales fly and elephant fit into the palm of your hand. the secret of startups is working with google and qualcomm , raising $542 million. obviousvestors include centers. it will commercialize its mobile wearable system. what could it be working on and why are tech giants wanting to be a part of it?

the codirector of the augmented reality center at miami university. leap'su seen magic technology? >> i've seen their vision. i hope they can deliver what they are promising. it looks fantastic. has half a million dollars -- half $1 billion worth of stake in it. what do you make of the interest in this company? , usermented reality interfaces are going to be huge if someone can finally deliver a system that is usable. isgle believes magic leap going to succeed at that. i think qualcomm investing is a great sign. they have been one of the main benefactors and one of the main

suppliers of augmented reality technology for several years. magic leap's technology differ from something like oculus? >> magic leap clearly wants to give you a wearable that can go out into the world. meant to be cheap, everyone can have it in their home connected to their game machine. magic leap is about going out into the world. some lightweight wearable that will let you experience -- have experiences in your everyday life. glass, itgoogle projects the image directly onto your i. what are the applications of that? be able to going to make the device a lot smaller and a lot lighter. this has always been the direction the technology was going to involve. google glass was a nice first

step. you can look around and see people wearing them a year ago are not wearing them anymore. the packaging and the usefulness of it was not sufficient. magic leap is looking to make that step. >> they like to call it cinematic reality. what is the real difference? >> it's a bit of a cynical answer. when i say augmented reality to someone, no one knows what that means. cinematic reality gives a much better, intuitive feeling about the kind of experiences they are trying to design. i love their video with the submarine in the sky. communicates their vision better. >> what are the future possible applications of this?

is this purely for entertainment? it reminds me of something i'd see on game of thrones. it is definitely not going to be just for entertainment. a set ofrking on technologies, enhancements for people that have vision deficiencies. people are working on augmented reality applications for teaching people how to do tasks like repair a vehicle or repair a reactor core. those kinds of technology designs have been worked on for a while. what we lack is a nice platform to deploy them. >> magic leap has some interesting open positions for people with phd's in optics. abouto those jobs reveal

what they are working on or their approach to it? that theylls me really think they are going to need some custom hardware, custom optics. they are hiring someone who has experience making high-performance graphics cards, people makingd custom circuits. they are working on some kind of wearable that will have custom optics and some sort of laser technology. it will have custom integrated circuits. it sounds like they are in the process of building a whole bunch of high-performance specialized technology to make this work. they won't be able to take off the shelf parts. >> when facebook bought oculus for $2 billion, there were a lot

of skeptics out there. in terms of the future of cinematic reality, how ubiquitous the uc this kind of seeity coming -- do you this kind of reality coming into our lives? will it be something occasional? think it is quite possible that everyone will have one. whether we wear it every minute of every day, i would not expect that. i would expect it to be as or an as a game boy tablet. -- it'sng to give you going to open up possibilities you won't have any other way and it will open up possible applications in entertainment. it's a question of making the technology work and getting the price down. people are going to want this.

>> what kind of research are you working on? what work remains to be done from your perspective? >> i think the biggest part of the work is, once you have this technology platform, what are the great uses for it? we remember how terrible webpages where when the web first came out. we are going through that same period. a lot of what my research group focuses on is trying to develop that areons fo useful to people. anave a student presenting assistive device for people who are colorblind. we have a prototype we are working on that will allow first responders to see around corners in a building. we send in a fleet of camera heads and the person has a

mounted display that lets them look around and explore the environment without having to physically walk through it. we will see a ton of applications. your target figure out which ones make sense and which ones don't. >> fascinating stuff. thank you so much. we will continue to watch how this field develops. up next, what happens when you combine technology with wall street finance? product looking to disrupt the brokerage business. ♪

>> i'm emily chang and this is "bloomberg west." your investor strategy might be good. betterment could make it even better.

disrupting theis brokerage business. the company's straightforward investment approach driven by technology to deliver results. of newlooks in part two hack city. ed kitchen, old and seemed meeting spaces. >> people say it looks more like a second grade reading room. i'm ok with that. >> at the new york headquarters, silicon valley culture meets with wall street finance. >> cap the company has a tech background. -- half the company has a tech background. >> the startup is trying to rewrite the rules of investing with user-friendly technology. compared way 1% fee that some traditional money managers charge, betterment clients pay zer 0.15%.

>> we use a smart technology to automate a part of your life. >> the founder and ceo quit his job at financial services and launched betterment in 2010. >> i built this product for me and my peers. on client investment goals, betterment uses software and algorithms to manage their money. >> we do things like balancing, dividend management. all better than you could do on your own. you get a better return on your money and less time and more peace of mind. >> disrupting the brokerage business isn't easy. but betterment is expanding rapidly. company manages nearly a billion dollars in assets and it to grow four times per year. itno one else has reinvented from bottom to top. it allows us to provide a

better customer experience. your money moves faster because we are managing the process. >> betterment is also growing in size come expanding its new york office space. >> i think this is a great place to attract tech talent. the city where people want to be. it makes it easy to attract the great engineers. shelby joins us now from new york. you are out there on wall street. his betterment really disrupting the financial industry? do they have something to worry about? >> betterment is doing it in a smart way. they made an announcement this week that speaks volumes to this. they are partnering with fidelity to let "old-school investment advisors utilize betterment technology." they are bridging the gap

between these brokerage firms and technology instead of wiping them out completely. they are there to help make it more efficient. it's like with television and computers. they are utilizing technology to make it better. shelby holliday, thank you. new hack city all week long on bloomberg television. bottom line is coming up in a few minutes. mark is in new york with a preview. 20% z of pimco will join me. we will discuss how the bond market has reacted to the recent volatility on wall street. we will examine fed strategy and the nba season begins one week from today. i will talk to the boston celtics president about the team's prospects and the economics of running one of the most storied franchises in sports. mark crumpton in just a few

minutes. comcast's bid to take over time warner cable. we will discuss, next. ♪

>> welcome back to "bloomberg west. the senate judiciary committee chairman asking comcast to strengthen its commitment to net neutrality by pledging to never create internet fast lanes. provider like netflix pays an internet service provider like comcast to obtain preference for its data on the provider's network.

the cofounder of bondage and a pioneer of voice over internet protocol joins us now -- cofounder of vonage. they have no plans to do so. how do you see this actually playing out? netflix --ast and they decided to go to their consumers and getting them and saying go to the local providers and turn them we are dealing with a business issue which netflix is trying to leverage rules and regulations to look like the good guys. at the end of the day, the issue -- i don't think you will find anybody against neutrality. the solution netflix is pushing for, if they have their way, will happen overnight.

everybody becomes regulated. 11 years ago, i went to over in order that said it was communication on broadband is not to be regulated to telephone service. we have seen rateises in innovations. skype come all these types of services. this explains -- this is a fundamental issue about philosophy and whether or not you think these businesses should have to carry services at their cost for the benefit of society or not. you've created one of the great businesses and telecom history. on the backbone of this open internet.

you are suggesting maybe there should not be favorite players of that. there was business level come service, people have paid different amounts of money. -- iember growing up with did not do anything different. i just got older. technology evolved. people are positioning words to bully. we want an open and free internet and to be able to allow people to connect in a meaningful way. if we fail to do that, we are going to have a bad time in telecom markets and a bad time in america when we can use it to lead. in terms of whether or not people pay for the better 1996, i chose to have broadband in my home and i paid extra we have always had that choice.

that does not mean our other connectivity should be discriminated against. >> it's about getting certain things faster. that's a perspective of the people providing that service. with netflix come if their pipes are not big enough and they choose to increase the size of their pipes, they have to develop a relationship with the providers. the issue of business logistics in terms of how we achieved that -- as longy is happy as they are paying for it on both sides, there should be enough wiggle room to make the transaction happen. i am all for open standards and open internet and open communication. the more people who connect, the better as far as i'm concerned. when it comes to delivering commercial services, the businesses show the opportunity

to figure out the best way to use commercial technologies is to deliver the services. whether or not -- how you do that is open to the business is open to the businesses. it's not fair to try to leverage certain rules and regulations. if fast lanes don't happen, what are the options for the businesses? what path do they go down next? has happenedet because of what the fcc did not do. they were smart enough to get out of the way and allow the innovations to continue to happen. if the fcc were to do nothing, that would be the best thing possible. the fcc were to listen to what netflix is pushing for, which is to use turning your phone company and public utilities, that would be a disaster. -- nobody wants to

wake up tomorrow with a regulated business when it did not have to be tomorrow. it would be terrible. the needs of the many sometimes outweigh the needs of the few. trying to solve this netflix issue as a one apple have a dramatic negative affect -- as a one-off will have a negative dramatic effect. vonage cofounder. a couple kidded issue that will continue to unfold in washington. issue that will continue to washington. time for the bwest byte. >> 12%. werean francisco giants given a 12% chance to make it to the world series this year. tonight at 5:00, they will do just that. >> what team got the most? >> the dodgers.

a great bunch of players. >> too bad. >> want to guess what the royals were? 50%. that's 50% of 12%. it was 6%. you do couple kidded modeling. what odds do you give the giants? >> the royals are tough. they beat the giants in the series in the middle of the summer. the royals nearly blew their season because the team was addicted to clash of plants. clans.h of the video games nearly took them out. >> can't wait for game one. thank you for watching. we will see you later. ♪

>> from bloomberg world headquarters in new york, this line," the intersection of business and main street. to our viewers here in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this tuesday. shelby holliday outlines new orders from homeland security on ebola airport screenings. with a world series beginning tonight, matt miller looks at efforts et