>> live from pier three in san francisco, welcome to "bloomberg west." i'm emily chang. here is a check of your bloomberg top headlines. the snp has just downgraded ukraine's credit rating to triple c minus with a negative outlook. francois hollande suggested it may be time to ease sanctions on russia. his comments come as russia's economy teeters on the brink of recession. is shrugging off russia's economic problems and looking to the country to boost revenue appeared twitter started

telling ads in russia through a third-party party. first question clients include twitter company -- worked with russian regulators who recently passed a law cracking down on bloggers. .ore battles for uber the company has just been declared illegal in taiwan. >> i think it is really sad when invested money tries to stop innovation in their best interest because capitalism -- >> will grow unfettered ? >> regulation is very different than people being affected by innovation. are we going to talk real here? we know exactly what's going on. >> back in the u.s., number is in portland.ices

t-mobile has agreed to pay $90 million to resolve claims a charged users for bogus services by core scopes. -- like horoscopes. at&t agreed to pay $100 million fine for similar allegations in october. to our lead, the fbi has concluded that north korea was behind that massive cyber attack at sony pictures entertainment. the fbi says malicious software used in the attack has links to malware previously used by north , including a 2013 attack against south korean banks. which prompted sony to cancel the release of the film "the interview" which to fix additional -- a fictional assassination of the north korean leader. barden.ok and jeff

fbi isatement from the pretty significant in itself. the fbi is making a statement on this. e the federal government officially accusing north korea of engaging in a cyber attack. it is a very significant deal. something we happen reporting the last couple of days. we get this statement from the fbi in which they say categorically the fbi now as an information -- enough information. three areas in which they have built that case against north korea. calling this out of bounds activity from a foreign government saying they will be -- there will be costs and consequences. it does not say what those will be. >> exactly how do they know for

sure that north korea, the north korean government is behind this attack? >> if you look at the statement, they are not the specific. they say they recognize malware here being consistent with malware used by other north korean actors in the past. infrastructure that was used, ip addresses, malicious cyber of aity, other aspects technical nature they say lead them to conclude that north korea was involved. it is pretty clear that there may be other sources of information they have out there that point to north korea. more intelligence allowing them to make this definitive statement that north korea is to blame. we have a statement from the department of, security. jeh johnson saying the cyber attacks against sony pictures was not just an attack against the company and its employees it was an attack on our freedom of expression and way of life.

what do you make of the fact that the u.s. fbi is making a statement on this and they are officially linking this back to north korea? >> north korea left enough breadcrumbs to trackback to their proxy. it was not very smart of them if they intended to be anonymous. the fact that the fbi came out and said they have enough evidence that points directly back to north korea, the key part is what they're going to do with it. what the u.s. government will do with respect to criminal response. >> what is the u.s. government going to do? what can they do? >> we have heard up to this point from the white house that there would be an appropriate response to the actions by whoever perpetrated this. there are real questions about what the u.s. can do. we have sanctions on north korea, limited contact. his naming and shaming enough

here? enough to change the situation? there will be a lot of pressure thate administration to do to impose tougher financial sanctions on north korea. the options are limited. if there was a cyber response from the u.s. government, highly unlikely to know about it. >> what exactly is sony to do now? how close are we to the end of this? the damaging and devastating information that has been released. now they're threatening attacks on people if they attended this movie. with the sony do now? when can they breathe easy? >> this is not the first time sony has been breached. they need to take a look at their cyber security environment. the fact that terabytes of data

were treated out of the environment undetected over time is concerning from a business perspective that this is allowed. there are some things that need to be done internally at sony. they have to address their i.t. environment. can they breathe easy right now? not necessarily. their continued gridlock in washington over cyber security -- will this accelerate things? >> this could be a turning point in that conversation. the fbi goes out of its way to praise and sony for cooperating with the fbi, making them aware of this hack. there are real questions about whether or not all those players in the private sector can communicate, can cooperate with the government and vice versa right out. there are legal liability questions. there have been obstacles to that. they have not succeeded. i see this being at least

lighting a fire under lawmakers to try to reach some bipartisan cooperation on that front. it is pretty clear right now that one is on the books right now, this administrative guidance may not be enough at this point. >> do you think the hackers will continue? fbi's coming out and speaking out on this, with the hackers continue to release more information? >> absolutely. is their intent to do that. they continue to embarrass sony. it is no doubt that they will continue to release information. we cannot mirror image our own thoughts upon an irrational group like north korea. we have to think in their viewpoint and that can be difficult for u.s. lawmakers. they willertain continue releases. they probably already have. this will continue to impact sony. the difference i see here is not the hack as the threat of

physical terror that is a change for this particular event. the creative community is very upset about sony canceling this film. do you think sony made the right decision? >> we don't know all the details underneath. i'd like to see that this continues to go forward. maybe underneath the covers there has been a deal struck between sony and the hackers to say we won't release it if you don't release more data. where does this go from here when it comes to the u.s. government, our relationship with north korea and our response? >> and rests in the hands of president obama at this point. limited options for the federal government at this point to respond to north korea. there are options and there will be pressure from capitol hill to come to bear on the white house to be aggressive and be forceful here. we will have to wait and see what they do. has changed the debate here

.n washington zynga curlyhair the idea of going to theaters to watch this film changes the debate significantly. this can be a major talking point on capitol hill. cook, thank you so much and jeff barden, chief intelligence officer. this story is far from over. we will continue to stay on top of it. a sales shortfall overshadows a major milestone in blackberries turnaround. luke 10 blackberry due to restart revenue growth? -- what can blackberry do to restart revenue growth? ♪

>> this is "bloomberg west." i'm emily chang. should have been a day of celebration for blackberry. the company generated positive cash flow. revenue continues to be a prophe problem. i spoke to the blackberry ceo in nd started by asking when we will see revenue growth again. >> we are going to turn ourselves positive before we get to revenue growth and we would launch a line of products and revenue growth will come sometime next year. showinghones are promise. you have the classic just announced. tell us more about who is buying these devices. how many of these people are new blackberry customers and how many are upgrading from their old blackberries? you see a lot of people using

two devices. i have a new product coming out next year, probably around june, that will convince people to go to one device. see in the case of the cloud thing, more uptake from the store base and the people who had used the 9900. those people will resonate with that. the passport is a little mixed. there's some new users coming from other devices. there are some win back people who left us and came back. passport.on the the classic is more for current users upgrading. >> we saw hardware sales down but software sales up.

how will that play out over the next several quarters? >> i'm hoping both of them go up. the one reason people need to , i understand the impatience of the revenue thing. it was the quarter that was important for us to clear our own inventory. year-over-year, 93% of our inventory was cleared out. pleased with where we are positioned. i can't produce the old phones anymore. let's clear the way to get to the new phones. i'm not concerned about it but i'm sure that as you pointed out , the investors have a different view about it at this point. >> apple and ibm just showed off their enterprise apps. what do you think? how much of a threat are they?

>> it's always something we have to take seriously. we're in the same space, the enterprise space. those are workflow products. not really deep. the one thing about their collaborations are very much on a proprietary system, the iphone and ipad. nothing to ignore. i'm not the first one to tell you that. solutions come out business solutions are more open oriented. we can be run on any device and we can manage those devices in the partnership we strike is broader like salesforce.com and others. will continue to stay open. --you just closed the deal what are the chances we see another acquisition in the next six months or so? in what areas of the company?

acquisition is something of interest to us. now that we have the ability to generate cash flow, we had $3.1 billion in cash. i should not comment on acquisition by itself. if there's one to be done in the future, i'm interested in the internet of things world. we have a lot of partnerships like the case with the medical world and many others. you will see us more progressive in those internet of things worlds. bewe know you are going to speaking at ces and will unveil the internet of things strategy. what are the chances we see a connected hub for the home

device or something like that? hub, butconnected something we are strongly interested in. safe to say we are working on it. we are very strong and connected cars. you come to ces, you will see one of those models. i believe it will be the maserati. >> you gave yourself a better than 80-20 chance of turning the company rod. what are the chances today? -- turning the company around. we will be here to stay. headline 100%o because anytime you say 100%, you might exit. -- jinx it. i will give a 99%. know ifid not blackberry would be iconic again. i was a question you still had to chew on.

what is your answer to that question now? can it be iconic again? >> chances are better. i'm working on it and i feel good about our product. security, the iot, the big space waiting for us, the big white space. i feel good about the opportunity. we will never know what to we execute. there is a path i can see to execute. sites struggles to keep up with what's hit in in highool -- hip school. you can watch us streaming on your phone, tablet and bloomberg.com and apple tv and amazon party be. -- amazon fire tv. ♪

>> i'm emily chang and this is "bloomberg west." is facebook losing it's cool? a study found teen usage slipping. 13-17-year-old

trop 288% this year from 94% in to 88% this year from 94% in 2013. facebook messenger is facing more competition from snapchat. 86% of snapchat users are under 37 years old. messenger'sfacebook are that young. teens don't see facebook as safe or trustworthy in comparison to other social media. -- instagramay be is hotter than ever. the app which facebook bought $1 $1 million in 2012 -- billion in 2012 is now valued at $35 billion. valued at roughly the same

amount as kraft foods and american airlines. instagram surpassed 300 million active users, more than twitter. coming up, the bbc releases a scathing report of poor working conditions for apple factory workers in china. how is the company handling the response? we will discuss, next on "bloomberg west." ♪ >> it is 26 minutes after the hour. let's look at where stocks are trading right now. in an upanged today week. the dow and s&p getting this the face athe company will mass consumer lawsuit relating to last year's data breach after a federal judge denied the company's bid to dismiss the suit.

target is accused of failing to protect customers. not seeing much change in the stock at this point. that is a big moment in that story. ♪

>> you are watching the best of "bloomberg west." i'm emily chang. over is under fire again claims that factories run by its suppliers in asia exploit workers. a bbc documentary released last night chronicles poor working conditions and apples factories in china with workers falling asleep on an assembly line. dangerous working conditions in a mine on the indonesian island of paying -- while apple declined to respond to our request for comment, memo from the senior vice president of operations said "tim and i

were deeply offended by the suggestion that apple would break a promise to the workers nor supply chain or mislead our customers in any way." minneapolisow from is gene munster and from new york, kevin slate. you haven't visited apple's supplier factories in china. these are apple suppliers, not apple itself that owns these factories. describe the scene. does any of this information revealed in this documentary ring true to you? >> the pure scale of what's going on rings true. the concept that this is 700 million workers building apple products, the conditions are clean but cramped. that is just the reality of some of the manufacturing that goes on.

the parts i have not seen in some of the sleeping -- i don't speak mandarin, so some of the comments from the the supervisors that were demeaning , i cannotloyees pick up on that. i saw what i expected. don't understand how these things come together, it may be a surprise. apple has arguably been more transparent than any other technology company about its labor practices and what it is trying to do. that being said, what is your reaction to this report? >> apple is one of the most profitable companies in the world. the most profitable electronics company. , we havethat for years been focusing on apple since 2006 along with other companies like samsung and we have seen these continue. the fact that these violations

have continued without proper reforming on the ground shows that whatever apple says is not important. it's not doing enough. >> what more can apple do? >> there are the most profitable company in the world. if they want to put more resources into the supply chain and ensure that things like excessive overtime and child workers -- if they want to which were these things don't continue to occur, they can do so when apple. -- at apple. >> what do you think? do you doubt apple is doing everything possible to make conditions better? >> i think they are doing a lot. the question is -- this is a slippery slope part of this complex topic. how much is enough? apple does more than any other

manufacturer when it comes to policing some of this. it is under tighter scrutiny, too. the reality that this is a topic and it gets ceo level attention is something that is unique. they are doing something. are they doing enough? that is the debate. it is not apple's place to provide -- i don't know what the standard is. it is a slippery slope and this is something that is complex and we are kind to figure out what the right pieces. they're going to continue to do more. they have checked those boxes and have satisfied what they need to do. >> kevin, what do you think about that? is it up to apple to establish the standard? >> he mentioned apple -- what can they be expected to do? we can expect them to live up to

the promises they make. they have a long list of labor standards they advertise on their website, showing that apple is socially responsible. we have shown over and over again that they don't live up to these promises. laws.ing chinese labor if apple can't live up to these promises, why are they allowed to continue to promote them and advertise them? >> one of the reasons why that is not the case -- there is corruption in the supply chain. there is corruption with manufacturing. some of these things that apple can do more, but some of them out of their control. >> one of the interesting parts about the story was there are suppliers in indonesia, the documentary details that some of the suppliers in indonesia are minds tin from a legal

-- illegal mines using children. >> this is a different topic now. much less on apple's watch because we are getting into a very broad long chain of suppliers. it was disturbing, some of the things they were showing. i don't think this is an apple issue. this is an industry issue come in indonesia issue -- an industry issue, an indonesia issue. you use a soldering to solder small manufacturing parts at home, you could be participating in this as well. it is a much bigger issue. thank you both for important context on this story. we will continue to do some digging. you'd asked me

welcomes its first batch of nano degree graduates. one of the godfathers, sebastian thrun, next. ♪

>> i'm emily chang and this is "bloomberg west." six months ago come at&t teamed up with udacity to offer a new kind of degree program focused on entry-level software skills. 3 million students have enrolled in the program and this week, udacity is welcoming the first batch of graduates. joining me in studio is sebastian thrun, cofounder and ceo of udacity. creating the idea of a nano degree. also the founder of google x. so great to have you here, as always.

the nano degree program, you and i have been speaking about this over the last year. now you are seeing the results. how many graduates and where are they all do? -- where are they off to? peoples amazing how many care about education. they are typically young professionals aged 24-38. they live all around the world. >> what jobs do they go on to? >> we have our first batch of graduates, it is too early to tell. is in data analysis. we have many super active students. >> you have been very vocal about how udacity and education can help bridge the skills gap. who should be responsible for that gap? >> it is all of us. ld create new

pathways. we don't reach people past college. we don't reach people internationally. we need to be creative about it. >> how about president obama's executive action on immigration reform? how will that impact the tech community? i'm a big fan of immigration reform and i believe everybody with a degree should get free access. skilled workers from around the world is what makes silicon ick.ey t people are fearful of other types of immigrants. we have a huge shortage of highly qualified people. >> i want to ask you about your ahead trends. what is to come.

carcar, the self driving which you invented with a team. what is in store for the self driving car next year? >> it is making great progress. the team is taking a different direction now. the team is making fantastic progress in the ability to safely operate. rhe california legislato passed a law that we can have cars without people inside. >> i know you don't technically work at google anymore. you are seeing carmakers like audi and mercedes -- how much of a challenge will that be? >> it will be a challenge to see the industry change. most cars are are not used most of the time. the vision is to utilize cars much better.

fewer cars on the street. >> i'm glad you mentioned uber. it has been also make people's minds. lots of pr issues. -- on a lot of people's minds. >> i use them regularly. wouldeve some of these not have happened if cars were self driving. >> what about the possibility of uber using self driving cars? >> as the technology matures, i resume everybody -- assume everybody would pay attention to this elegy. it is safer and cheaper. look at the cost of a self driving car, it can be a quarter of a taxicab. >> sony under attack.

the fbi has come out to north korea is behind this attack. more devastation every day for this company. curious what your reaction is. >> i don't know much more than what is in the public. it is the tip of the iceberg. we will see much more of it. much more systematic espionage and cyberattacks. it is something my company is involved in. --love to indicate workers educate workers to be more ready. moving so fast that many companies get caught underprepared. what we see today is different from two years ago. in five years time, it will be much more massive. >> is there a way to create and a reasonable -- erasable internet? the opposite -- our

communications are more and more stored. security risks we don't know about. , theyuse digital devices will be less safe. he said he wants to live to 120. he is trying to find ways to extend his own life span. pursuing ways to make our health better. what do you think? >> he's a great guy. it's one of the interesting things in research, cancer research and other things. there's almost no research on life extension. the lifespan is about 120 years

max. this is an opportunity to look into it and see what we can do. if telik a finds a solution, i -- calicoa customer finds a solution, i will line up as a customer. , they sayg of uber they are developing biometric technology. will fingerprinting and voice recognition software help? fbi biometrics expert, next. ♪

>> this is "bloomberg west." i'm emily chang. uber is promising safer rides

for passengers and more rigorous screenings for drivers. bringing biometric technology to the driver screening process. uber is teaming up with safety experts following allegations that over drivers uber -- uber drivers and passengers in india -- first of all, what do you think will be -- are these new measures realistic and will they increase the safety of the entire operation? >> good question. the boulder question of how they intended to use them. -- broader question of how they intend to use them. if you think about how the government uses this technology, you have the well-known leaders -- failures of people like snowden. 99% of them work just fine.

there are federal and state laws whathave to do with biometric fingerprint can be similar to the fbi -- >> this is a special report from bloomberg world headquarters in new york. will end barack obama his you are in washington with a news conference where he will face questions on cuba, the sony hacking and how he will work with the republican congress. after taking questions from reporters, the president and his family will depart this evening for their annual holiday in hawaii. joining me here in new york, and at the white house, peter cook. the sony hacking story front and center today. >> that is where the news will be made. a fierce debate

inside the washington about what the fbi said publicly but what the president comes out and says. his words have a lot of meaning and may dictate what the response from the u.s. will be in the days ahead. >> will the president be expanding on what the fbi has already made public? >> he certainly will be referencing what the fbi made public. the formal declaration that the united states is accusing north korea of engaging in this hack on sony pictures. -- a lot of is pressure on this president to respond. he will get questioned. what is the appropriate response to this? what more can the u.s. do? the list of options may be limited. >> the president of the united states live from the white house. say a bit about this year. in last year's final press

2014rence, i said that would be a year of action and would be a breakthrough year for america. it has been. things we had to tackle around the world. many of them on to submit it. -- unanticipated. there is no doubt that we can enter into the new year with renewed confidence that america is making significant strides where it counts. the steps we took early on to rescue our economy and rebuild it on a new foundation helped make 2014 the strongest year for job growth since the 1990's. straight, ourh businesses have crated nearly 11 million new jobs. nearly all have been in full-time positions.

most of the recent pickup has been in higher-paying industries. a hopeful sign for middle-class families, wages are on the rise again. our investments in american manufacturing has helped fuel the stretch of job growth. america is now the number one producer of oil, the number one producer of natural gas. we are saving drivers $.70 a at the pump over last christmas. i rescue of the auto industry is officially over. we have repaid taxpayers every dime and more of what my administration committed and the american auto industry is on track for its strongest year since 2005. we have crated half a million new jobs in the auto industry alone. thanks to the affordable care act, 10 million americans gained health insurance just this past year. enrollment is picking up again.

the uninsured rate is at a near record low. since the law passed, the price of health care has risen at its slowest rate in 50 years. he cut our deficits by two thirds since i took office. meanwhile come around world, america's leading. we are leading the coalition to degrade and destroy isis. a coalition that includes arab partners. we're leading the international community to check russian grecian -- russian aggression in ukraine. we're leading the global fight against ebola. we are preventing an outbreak from taking place here at home. leading efforts to address climate change, including last months joint announcement with china. writing a new chapter in our leadership by turning a new page

on a relationship with the cuban people. in less than two weeks, after more than 13 years, our combat mission in afghanistan will be over. today, more of our troops are home for the holidays than any time in over a decade. , many of our men and women in uniform will spend christmas in harm's way and they should know the country is united in supporting you and grateful not only to you but you are families. the six years since the crisis have demanded hard work and sacrifice on everybody's part. as a country, we have every right to be proud of what we have accomplished. s e jobs, more people in sured, a growing to become a bustling industry, booming energy. pick any metric you want,

america's resurgence israel. recovering from the crisis was our first order of business. on that business, america outperforms all of our competitors. over the past four years, we put more people that -- back to work than all other advanced economies combined. come to a point where we have the chance to reverse an even deeper problem. to make sure the middle class is the engine that powers prosperity for decades to come. , we will have to make some smart choices, right choices. we will have to invest in the things that secure even faster growth in higher-paying jobs for more americans. i am being sincere when i say i want to work with this new congress to get things done. to make those investments.

to make sure government is working better and smarter. we are going to disagree on some things, but there will be areas of agreement. we have to be able to make that happen and that will involve compromise every once in a while. perhaps that spirit of compromise may be coming to the floor. , i'mrms of my own job about the i'm excited prospects for the next couple of years. i will not be stopping for a minute in the effort to make life better for ordinary americans. thanks to their efforts, we really do have a new foundation that has been laid. we are better positioned than we have been in a long time. the future is ready to be written. we have set the stage for this american moment.

i will spend every minute of my last two years making sure we seize it. my presidency is entering the fourth quarter. interesting stuff happens in the fourth quarter. i'm looking forward to it. and i'm looking forward to it. the fourthinto quarter, you usually get a timeout and i am looking forward to a quiet timeout, christmas with my family, so i want to wish everybody merry christmas, happy hanukkah, happy new year. i hope you get time to spend with your family. one thing we share is we are a way to much from them. now josh has given me these who has been naughty and who has been nice list -- [laughter] and i'm going to use it to take some questions. we are going to start with greg from politico. >>