>> live from pier three in san francisco, welcome to "bloomberg west," where we cover the future of innovation, technology, and business. good but not good enough, a slower pace is forecast after business investment cooled and the trade gap widened. mitt romney will not seek the republican nomination for president in 2016. the former massachusetts governor and 2012 nominee and

2008 candidate announced his decision today, ending speculation that he will attempt a third campaign. >> i will be asked and have been asked if there are any circumstances that could change my mind. that seems unlikely. >> the decision comes just three weeks after romney told a small group of donors in new york that he was considering another run. alibaba financiers are considering another public offering next year. they have an estimated value of $50 billion. details of the fundraising are not yet finalized. police say the founder of death row records, should night, has been arrested in connection with a fatal hit and run.

he was booked overnight and is being held on $2 million bail. the incident under investigation was in connection with the promotion of straight out of compton. now to the lead. apple has conquered the chinese smart phone market. what is next? global domination? why not? for the first time since 2011, according to a report, both companies ship 75 million smart phones globally each order. apple has applied several strategies to finding success opening more stores, partnering with china mobile, and holding the line on pricing, but it was the release of the iphone 6 that

pushed apple over the top. how did apple push past chinese makers at a higher price? joining me now is an executive director for wireless device strategies. let's start in england. how do you define these results and how surprising is this turnaround? >> these results for apple in particular are very good. a very strong quarter. blew past pretty much everyone's expectations. the sampson -- samsung results are pretty much in line with expectations. it's pretty well-known they are going through a tough time at the moment. apple and samsung are facing challenges. >> your results were a little different than idc's numbers earlier in the week. samsung was a little ahead in

china, barely ahead worldwide. i have a hard time figuring out these numbers every quarter because they are quarterly and the year probably matters more than the quarter. is this just about a new phone release, or is it more than that? >> good question. i think what it boils down to is essentially what we call the tablet wars. the phones that are a cross between a phone and a tablet, those wars between apple and samsung are clearly heating up. samsung was the clear leader for the last few years. but the new iphone 6 plus has taken the fight out of samsung and their -- a bite out of samsung and there is a real battle there now. >> i give samsung credit for

coming out with the category. it took apple three years. >> and they made fun of it saying your hand is only so big. >> apple delayed, partly because of you jobs. samsung has benefited from being part of the android platform which is a very popular platform in china. >> tell us what that is. >> it is the os platform the google popularized. >> android. sorry, sorry. >> but that advantage is going away. in the end, apple has now come out ahead. >> great of these companies to sell the same number of units, but when you look at profits, it is not even close. apple regrouping so much profit from this sector that the

comparisons aren't even close. >> what we have tended to see in the last couple of years is that samsung has led on the volume while apple has led on value. but now we are starting to close the gap on samsung on volume as well. it is an impressive performance. apple can really thank the mobile operators for the ability to deliver high revenues and high profits. operators like china mobile at&t companies in japan have saturated the market very heavily with the iphone and gets preferential treatment on store shelves. that is the underlying factor that drives apple's success and profits. >> i have seen people try to guess at it and say apple might

have 30% market share across markets, but they have -- 80% market share in the market. -- 80% of profits. >> it is a huge chunk of the bottom line for the mobile industry. >> it looks as if samsung was having annexes dental crisis in the smart phone business. they were drastic -- having an axis dental crisis in the smartphone business. -- xexistential crisis in the smartphone business.

>> from what i can tell they need to be careful. the chinese guys are very aggressive. >> really quickly, will we get to a point where there is not a lot of innovation left to have in the smart phone? >> that is historically what happens with pcs and other products in the past. >> thank you. we appreciate your time. amazon web services has become such a behemoth the company is going to be breaking off numbers, maybe because the fcc is making them. we will look at this across the world of technology. that's next. ♪

>> welcome back to "bloomberg west." i'm cory johnson. time for a check of world news headlines. the pilots of the airasia flight had been dealing with alerts. all 162 people were killed in the crash. new-media rules in russia may be hurting discovery communications bottom line. russia passed a lot the beginning of the year is that band advertising on pay tv channels with less than 75% local content. these new rules could cut the revenue in the country by up to one third, according to the company.

jay-z has launched a nordic music streaming company. late last year, pimm fox spoke to andy chen about this service. >> what we are offering is a higher-quality service across all devices. it has integrated video and we are the only streaming music service provider that provides audio and video. >> so of all the earnings releases and quarterly updates in the last week perhaps amazon's business results are the most important to the world of technology. amazon posted a fourth-quarter profit following a time of losses, and shares are on fire this morning, up 14% the last i looked. perhaps the biggest acceleration is the rapid growth of aws. for the first time, amazon says it will break out revenue from

amazon web services. the seo talked about this on the conference call, saying -- ceo talked about this on the conference call. amazon has never done anything like this before. it is the very thing that is pressuring companies like ibm hewlett-packard and microsoft. kim, great to see you. you have been working on this for a couple of years now. aws is a beast. >> it is, and it was nice to hear them talk about the potential to see that broken out more clearly on the call last night. i think before the next quarter's report, we probably can it specs some historical financials. in addition, they have -- expect some historical finance else.

in addition, they have given a little bit more clarity. >> every ceo when they talk about amazon web services say if they are not hosting their business on it, they are being threatened by it. ibm says they would march into a company with consultants, software, servers, and now the company will say yeah, we are just going to rent from amazon. >> there is a lot of talk about the pressure on aws from a pricing standpoint. it's a fairly commoditized business. amazon understands that as cto's leverage that structure that audience seems to be capped in terms of consumers.

amazon is trying to create more of an infrastructure. >> investors always look at the tea leaves in the conference call hoping they will say something about leverage, hoping they will say something about taking profits, and they never say it. i think it's because they don't think that way. wall street is excited hoping something will change in the future. there was some suggestion that amazon services might have a better profit profile than the rest of the business. >> i don't know that that suggestion really came through to me. folks are making that extrapolation just on the fact that they are willing to break it out. i think that amazon aws specifically, still requires a considerable amount of investment. i think some of the disclosures they were willing to highlight suggested that the level of spending on aws is still quite

high. i think it is a big opportunity and we welcome or disclosure here, certainly. -- more disclosure here certainly. >> may have gotten notes from the sec in the past asking for more detail. with the detail be enough for you if it's just revenue or would you want to know operating profit at the least? >> there will be operating profit. i am not sure you will see gross margin but you will see operating profit. i don't know if there will be thresholds where they are forced to disclose. there would be time, i believe, and the company was clear to say that it is not something they have to do, but it was voluntary. i think it would highlight what they think is better for 2015. >> i only read a few notes this

morning, and of course i made sure to read yours. you have a situation where ever note is also on amazon web services. in your report it was really funny, because it suggested that investors are going to look at the separate revenue line and say hey, someday they could spin this off. it would be another thing to add value to the stock. >> i think so. more disclosure and separation between the entities hurriedly makes discussion around the more feasible. the company was clear to say that is not their plan at this point, but i think they would evaluate it at a future date and it gives investors more information so that they can evaluate it as well. >> when you look at the business -- and i know you don't cover hardware companies and i

wouldn't even ask for your opinion on them, but does that start to let you understand what is going on in the world of technology and why other companies are struggling so much with the top line? >> amazon sees the marketplace in terms of buyers and sellers and what really gives sellers the value they are looking for. a lot of times, it is understanding they are getting a new customer. amazon is willing to give away the infrastructure side of the business that is fairly commoditized if you think about shipping and delivery. what they are really trying to do is put together a buyer with the seller. their understanding of the long-term or has given them the -- long-term potential has given him the tailwind in this space. >> head of internet equity research at ever corp. thanks, ken. broadband just got faster, sort

of. the sec is changing the definition -- fcc is changing the definition of broadband. we will talk about how the rules change could change the rules of the road in the merger between comcast and time warner. ♪

>> welcome back to "bloomberg west." i'm cory johnson. broadband internet across the world just got faster, just like that. on paper the definition of broadband has changed.

why would the fcc do this? this gets really interesting. joining us from new york to help explain this and why this might matter for the time warner-comcast merger that has been proposed tom with bloomberg news. >> the fcc changes the definition of what it means to deliver high-speed internet access broadband. on its face, it sounds like something that would be good for customers. tom wheeler is concerned about the 20% of the population that has little or no access to high-speed internet. this is access to news broadcast like this one, over the internet. they are concerned about consumers, and they don't want the cable or telecom industries passing off something subpar for high-speed internet access.

the fcc, ostensibly, is trying to look out for the consumer. here is where it starts to become an issue for comcast. it makes me think of the famous bill clinton interview. it depends on what your definition of is is. it depends on your definition of broadband. this definition says it is the faster speeds. that has a dramatic impact on the size of the market for this new high-speed internet access. you went from a situation where comcast went from 35% to this new definition, then they have a whopping percentage of the market. i their definition, once they combine with time warner, they will have 63%-60 4% of that market. if you are worried about concentration or competition,

going from having 35 to almost double that that means that the regulators are going to look very differently at that merger. >> in other words, there are some super fast internet connections out there that were not considered high-speed by the old rule definitions of the fcc, and the fcc said, wait a minute. in the new definition it acknowledges that comcast already controls a lot of the high-speed stuff that is out there. >> they don't want the communications industry, whether it is cable or telecom, to be telling people look, you are getting slow speed. you are getting fast internet access at a slow speed. it's really about holding the industry accountable. for the fcc, they are looking out for consumers for the big swath of the population that

doesn't have access to the internet or is still getting it up very slow speeds. >> tom giles, u.s. technology leader at bloomberg news, helping us unpack that complicated issue. super bowl ad spots are selling at an all-time high. how much is a 30 second commercial worth and what does it mean on social media? ♪

>> you are watching "bloomberg west," where we focus on innovation technology in the future of business. $40 million is what it costs to have a commercial during the super bowl. nbc is calling that a steal. of course, they are the seller. joining us is the ceo of the parent company of parties and carl's junior. he is probably on his way to the game, i would assume?

>> i will be watching it from home this year. >> four point $5 million, while we have seen a number increased dramatically, i suspect is just a drop in the bo bucket compared to what you will spend to highlight the ad itself. >> carl's junior is regional on the west coast. the sister brand is hard thesees. our big exposure on this has actually been digitally, on the internet. we have already had 2 billion earned medium impressions. when somebody sees the ad for free, that is in earned media impression. we have had 2 billion to date. that is an incredible number and

we have an even run the ad yet. >> it hasn't even run in this segment yet, but it well. 2 billion, seriously. how many of those are repeat views or new people? surely there aren't 2 billion people looking at carl's junior. >> how many times did you look at it today? i am sure people are watching it over and over, but they do try to eliminate when people watch it twice. i don't think they can do that very effectively. a really good at, you might get 200,000-three hundred thousand medium impressions. with the kate upton add, kate got a little over 200 billion. that was a very popular ad. this ad has almost caught up and it hasn't even run yet. it is exceptionally compelling and it has gotten a lot of use

from our target demographic. we have got 6 million from youtube alone. that's a huge number. >> it makes you wonder about what this means to the world about rich eisen. i will work with the premise the brand advertising works. -- to the world of advertising. i will work with the premise that brand advertising works. the super bowl draws one big audience with the disparate demographic. do these kinds of ads work when you are really targeting a customer instead of blasting the ad out to anyone that might be interested? >> what you said is right. when you watch the super bowl it's a little like tv used to be. it's a little like when everybody would watch "leave it to beaver" because there were

only three channels and you had to get up to change the channel. >> these ads would not be on "leave it to beaver." >> these days you can fast-forward through ads. my younger kids don't even watch tv. they watch everything on their laptops. unique content that appeals to people in polls them in -- you need content that appeals to people and pulls them in. our target demographic is 18-30 four-year-old males. we want to appeal to them in an aspirational way. we don't want just 18-34 euro males. -- 34-year-old males. 12-year-old guys don't want to eat where the clown or the pigtails are. they want to eat where there are

big brother eats. and women want to date the young, hungry guys. it's not a laser beam target. it's more like a shotgun target. >> so it's like an aspirational message, trying to get people to want to be next to that target. do you see a direct result from these ads? >> absolutely. ads like we did with kate upton, this year we did one with paris hilton. these ads are very compelling and they have a direct relationship to sales increases. we introduce the product a couple of weeks before the ads run. the reason we do that is so that people in restaurants know how to make them. you definitely see an upswing. the ads are very compelling and very successful or we would stop doing them. >> with the big change a

donald's -- at mcdonald's your competitor has a lot of problems. you have done a change in your menu as has mcdonald's, without a lot of success. do you look at the possibility of a battleship as big as mcdonald's to ever turn around? >> they can turn around. they are a great company with a lot of ad dollars and a lot of penetration. but it's important to be something to people. you can't be something to people if you try to be everything to people. you can't appeal to everybody. mcdonald's has a strong appeal to women, kids and families which is one of the reasons we went for young, hungry guys. but you need to focus on who you want to be and what you want to be. you can't be mcdonald's, starbucks, and kentucky fried chicken. you have to choose your

identity. they are smart guys. they will figure this out. >> who do you have in a game this weekend and why? >> it's tough, but i think i like the seahawks. they have the better team. they won it last year. the patriots have a good team two. -- too. >> thank you very much. some investors write off bitcoin after a year-long price plunge. investors are pouring in new capital. we are going to look at this with one of the most important investors in the sector, next. ♪

>> bitcoin price declines have not deterred the drapers. the apple does not fall far from

the tree. apple's son is a fourth-generation venture capitalist. -- his son is a fourth-generation venture capitalist. thanks for being here. you know as much about bitcoins as anyone in silicon valley, probably. when i talk about bitcoins with new yorkers, they don't get it. the commodity price has fallen for the last couple of years. they are like this thing has had its moment. it was stupid to start with. nobody liked it to begin with. >> i think bitcoin is the single most important emerging technology in the world today. really, what we did was we made then tech sexy. suddenly, the best engineers in

the world are working on this global technology. in the united states we are 92% digital. it's not as useful -- i don't know how much cash you have but 93% of our wealth in the u.s. is just it it's on a screen in a bank account like the payments that happen every day. >> as opposed to storing gold in your basement. >> but a lot of countries aren't as lucky as us to be able to trust the bank system. we are almost 100% banks come in general. -- banks in general. >> so in africa, people have money, but they don't put it in a bank, but they are using phones at a high adoption rate. so when they start trusting the banking system and bitcoin

could help them trusted, there is a massive mobile move to digital. >> it is a leapfrog for the rest of the world. argentina is a place a lot of venture capitalists are talking about as an emerging market for startups. you can purchase bitcoin in argentina. the pitch to everyone was in my lifetime, three times the money in my bank account has gone to zero. that is a scary thing that happens to people and the rest of the world. in the united states, we don't represent that. i feel we are going through a trend where bitcoin has been speculative. wall street and all these places we're are very excited about the price going up. but it's going through a repair mode were now it's becoming useful. volume has doubled in the last year. there is a lot of very exciting

things happening, and i think most of the transactions are going to be more useful for day to day. >> let's talk investment focus. your big focus is what? >> we have one bucket that is repair mode. one bucket that is like what does bitcoin do better than dollars, which is stored value. we touched on micro-transactions. we have a company called zap chain that is allowing you to tap a network of bitcoin people. people love being able to tip online. before, people were not capable of sending five cents or $.10 over the internet because you have mastercard and banks taking a fee. bitcoin is a frictionless system. >> last question. do you feel like this price adjustment has sort of separated

the people who have actually been working in this arena around the technologies that are so interesting from the speculators? >> yes. i'm really excited because if you have been in bitcoin for the last three years, you have gone through big rises and big falls. right now it is the true believers that are building great technology in this space. >> the more you dig into this stuff, the more interesting it is. thank you very much. time for a check on your world news headlines. a kenyan marathon champion has been suspended for two years for doping. the runner tested positive for a blood boosting hormone. she won the last two consecutive boston and chicago marathons. russian executives close to vladimir putin say the company -- country is starting a science

incubator run by putin's daughter. she has never done a media interview in the kremlin has ever released photos of either of his daughters as adults. the national basketball association is hoping to score more popularity in china in a post jan meeting air out. -- post yeah lome andyow ming era. "bottom line" with mark crumpton is coming up at the bottom of the hour. what is your real basketball team? >> don't start. you want me to talk about the nexen i am not going there. let's talk about -- the knicks and i'm not going there.

let's talk about the economy. gains in household consumption were the biggest since 2006. what does that tell us about this year's growth expectations and will the u.s. economy gain enough momentum to offset possible headwinds from europe? the chief economist from kp and he will join me. who do you have on sunday? >> i have the warriors over utah. >> super bowl cory. >> oh, that one. the seahawks are a challenge. we hate them as 49ers fans. but i am going with the seahawks. >> i have to go with seattle because they are the defending champ's and until somebody beats you, you are still the champs. >> we are to talk about super bowl xlix and some high-tech sensors.

tracking your every move up next on bloomberg west. ♪

click>> this week, the super bowl will look different than any other things to wearable technology. joining us to discuss what the partnership with the nfl means is the company's general manager. good to see you. haven't seen you in about a year -- probably exactly a year. you guys have sensors on whom during the game? >> we have to sensors in the shoulder pad of every player on the field for the super bowl. >> that's amazing. what sit going to show us? >> we have been doing this project with the nfl all season. every football player in the league has warned sensors in every game, and then in 17's davy adams -- worn sensors in

every game and then in 17 stadiums, they had sensors going. it shows us the distance between the wide receiver and the quarterback and how the game is unfolding with new statistics. >> we talked on this program a year ago when i was in new york a week before the super bowl. i wonder, what have you learned over the course of the year. >> we have learned a lot. this is the first year of data collection with our partnership with the nfl. what is interesting about year one and it takes time to build an amount of data that can give you some insights. in week 17, there was a game with the detroit lions at green bay. calvin was recorded for 39 forward yards, when in actuality

he ran 1600 yards and all the other wide receivers in the game, whether they were the green bay's or the lions only ran 1100. so calvin johnson's effort was so big during the game. those are the fun kind of fan insights that we can see. >> that's really interesting. we had jerry rice on the show once and i asked him what makes a trick receiver great. he said run every time like you can get the ball even if it is not coming to you. you can see that with calvin johnson. >> exactly. another statistic, same game green bay, the way they covered calvin johnson to stop him to getting -- from getting more than his official yards more than 39, was they had two guys on him instead of just one. those guys got rest, where

calvin ran the whole time, 1600 yards. it's a lot of effort that you can see from just one player. >> you should see all the running i do at "bloomberg west ." it's crazy. who uses this information? >> the teams are not using it in this season, but the goal is to have the music going forward. -- have them use it going forward. the other thing we have added for the pro bowl and the super bowl is the ability to see this information in the stadiums. on the jumbotron during pro bowl, you saw player participation. that's nice because it's hard to know who everybody is. in this, you will see that kind of fun stuff as well, speed of running an player participation inside the stadium. >> the market be on the nfl of

course, the great football team from the university of phoenix aside, where is the market for this? >> was interesting about this technology is that we are in the intelligence business, and we have been using this technology in industrial manufacturing for it does in years. the fortune 500 uses this technology to get insights on their business. outside of sports, huge. inside sports, interestingly enough every team is looking for a lead to bring advantage to their fans. i don't think fantasy gaming is going away at all. we think the market is big. >> good stuff. we really appreciate it. enjoy the game this weekend. the bwest byte is one number

that tells us all a lot. joining us now is peter cook from d.c. what have you got? >> the amount of money the federal government, the fcc took him from its latest spectrum auction. big money for taxpayers coming in from this multi-week auction. at&t is the big winner, but it shows you how much money companies are willing to spend to get some of the high-priced real estate in the air. >> and that bodes well for the next auction. >> absolutely. this is the specter auction still to come. he gives you a sense of how valuable that real estate is. >> interesting number. get the latest headlines all the time on your phone, your tablet bloomberg.com and on bloomberg radio. we will see you next week. ♪

>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." to our viewers here in the united states into those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this friday. tracking a measles outbreak that is way too close to the home of super bowl xlix. we begin with our washington correspondent, peter cook, and the fallout from mitt romney's decision not t