cory: live from pier three in san francisco, welcome to "bloomberg west" where we cover technology, innovation, and the future of business. i'm cory johnson. we have the check of your bloomberg top headlines. the nasdaq extended its winning streak to seven days, the longest rally so far this year. one of the biggest reasons priceline rose 8% after reporting wrong growth in bookings. walmart was one of the big losers on the dow. they said -- set a pay hike for all u.s. employees. it might

help employees, but it hurts their profits. there is a goal to retake the iraqi city of mosul. 20,000-25,000 troops will be needed. u.s. advisers will be training the iraqi brigade. the cleveland browns general manager has apologized for texting at least one browns coach during the game. that's a violation of nfl rules about game communications. cleveland could even be docked a draft pick. intuit reports sales gains in the second quarter, but a wider loss of $66 million. meanwhile intuit says its sales of turbotax online is a 19% so far

this tax season. desktop sales fell 7% after a price hike. now to the lead. it is apple versus 8231 systems. they sued apple, claiming they illegally posted -- post -- coachedpoached information. the case has been moved to a federal court in boston this week. how serious are the allegations? him has all the details from the newsroom. this is really interesting area first, how serious are these

allegations? just the notion these guys cannot take services, like lebron james, they move their talents to cupertino. >> access one of the beauties of silicon valley, the lack of a noncompete clause. this is something you see quite a bit in the automotive industry. it's not that unusual. what is interesting is the window into what apple is doing and it is the first concrete example they are trying to move into the auto space. cory: you broke the story -- they've got over a hundred people working on this project in cupertino. it's sort of shocking they have all these resources going after this. but i guess a123 knew. what's so important about the battery technology? >> the way to manage that power is the key to the electric car race in the future. gm has been working on it and the creation of the battery isn't the key thing. you can get suppliers to do that, but getting the computing power is one of the key ingredients to making one going forward. cory: it seems like they are cobbling together these pieces

they would need to build a team to do what? i guess we have seen a van of some kind? >> it appears they are putting the pieces together to have a conversation about what the future of the automobile will look like in the u.s. we are looking at the emergence of a silicon valley auto industry. tesla has changed the dynamic. its success has shown silicon valley that the high barriers of entry may be not as high as people previously thought, so it opens up new doors. cory: thank you very much. for more context, we are really lucky. we've got one of the leading experts on the fight to build a better battery. steve levine has written this great book -- run out and buy it. i am so psyched to have you on today of all days. what does this mean? what is the advance from a123 -- it was backed by big federal government grants and president

obama spoke at an a123 factory -- the company nearly went bankrupt and now they are back and suing? >> a123 in 2009 was the largest ipo of the year. it was the darling of the battery industry and it and it -- ended up failing in 2012 but it still has the technology. --cory: it was the twitter of 2009. it was the hot ipo. >> there was a lot of buzz about it. it still has the stuff, it still has the battery it invented in the scientists who engineered it. at the key there. it's one thing happening -- it's another thing being able to optimize it and stick it into a battery and scale it up in a way that works. apple will be looking for that. cory: when we compare the different cases -- tesla -- in

your book, there's this tale and you would not think it's so fascinating -- but they end up fighting with each other. you explain gm's approach tesla's approach and apple's approach is all being quite different. >> gm sees itself as a market maker and it is seeking to make -- to buy and install a super battery that will be. and be able to take its car 200 miles. cory: and something really innovative, unlike say tesla. >> tesla sells between $70,000 and $100,000. gm wants to be in the space of $25,000 to $85,000. -- $35,000. it wants to hit the mass market.

irony has bet against the battery. elon musk thinks the battery scientists, the guys trying to create a super battery won't succeed, so they are using a battery straight off the shelf panasonic invented it. cory: i love this -- the idea i got from your book is that elon musk, greatly credited for being an innovator and forward anchor is adding against the -- betting against the advancement of technology and batteries. he says -- and i'm paraphrasing -- let's take some old pc batteries, strap them together in a new way and i'm not going to try to invent some type of innovative every. -- battery. gm is betting and failing in the bed of innovation. >> it failed in its first try out. so there's a twist in the book in which the company on which it was relying for the super battery turned out to have been wildly exaggerating its claims.

it had to pit it and make a -- it had to pit and make a left turn and got lg -- the chemistry gives it a 200 mile car in 2018. cory: that is the ultimate electric car -- to get a car that can go a great long-distance and have a great price. >> you have to be able to have the distance and while you are traveling that distance, your car cannot catch fire. cory: it can't catch fire? the bar keeps getting higher. you can't have a flaming car. it's interesting the technology is so difficult to come by. things get half the price and twice as powerful every year and we expect things like 3-d printers to do that and we expect batteries to do that. has battery technology changed much in the last 200 years? >> this is the thing.

alessandro volta invented the architecture of the battery in 1799 and it has not changed much since then. much of that time, we were not trying to create a super battery. for the last few years, the question today is which way is apple going? is it going the gm route? will it try to create a super battery, or is it going to go the tesla route and go off the shelf? cory: the interesting thing about apple going into this business -- the business it typically has relied on is outsourced component manufacturing. taking the best other companies are making, the best chips from qualcomm or once upon a time ibm or motorola and assembling them together in a way where the software performs the magic. they've changed it a little with their own chip design. do you get a sense they are

going to go for their own design and manufacture of a battery? >> the latter part, we don't know. the signs are that they are trying to in-house create and design the battery and the car around it is exciting because already i have been looking at the race between tesla and gm. the 200 mile car is the inflection point, the proving ground that brings the electric age. now you have apple coming in and this is critical mass. was gm really going to be able to match tesla? apple can. cory: i don't trade stocks now but when i did that for a living, i had to find some kind of crazy bet against them thing -- something that's not going to work.

there's got to be a publicly traded battery company and i did a search on the bloomberg from every single one and found out we are short every single one and everyone was a pie in the sky promise. is that the nature of this battery business question mark -- business? that it's a pie in the sky dream? when you look at tesla upon car sales, you can see the limitations of the market. they are selling more cars than they ever have before, but it's not a big market. i wonder if this pursuit of better battery technology is never going to workout and it's always going to be a pie in the sky, like your patch or -- like perpetual motion. >> batteries have been a special province of exaggerators and hucksters. thomas edison said this back in the 1920's. 100 years later, it's the same. in the book, there's an

inflection point where everyone is pursuing the race and at one point, everyone including me finds out someone has been deceiving everyone whole time. but i think there are real players in the race, tesla, gm and now apple -- it seems they have put their chips down on the battery, on the electric car and i think it shows that it is real. cory: a great, dramatic book. who would have thought? thank you for coming in. more "bloomberg west" right after this. ♪

cory: i'm cory johnson and this is "bloomberg west." germany leaving the door open for greece on a bailout option. they initially flat out rejected the greek proposal but now the

greek official says germany regards it as a basis for negotiation. finance ministers are talking about this in brussels tomorrow. 23 house democrats are urging speaker john boehner to postpone prime minister benjamin netanyahu's speech to congress. democrats say it appears john boehner is using a foreign leader as a political tool against president obama. the white house has criticized the speech since it was not notified in advance of the notification. nestle says profits of 45% last year mainly due to sales of its stake in l'oreal, but sales dipped slightly due to currency fluctuations. philadelphia, home of the liberty bell, but maybe the last big technical -- technological innovation to come out of philadelphia with meat tenderizing by hand, until now. salesforce is applying for

interesting technology, teaming up with salesforce in philadelphia, revamping what they call the 311 system. the goal is to make it easier for residents to get city services delivered, doing things like applying for building permits or requesting graffiti removal. all of this on the cloud could change the way city governments work. joining me now is the salesforce evp, joining me from new york. this is interesting because the way cities work fundamentally seems slow. the way they buy software is big, massive and slow. what's happening in philly? >> what's exciting about the city of philadelphia is they have recognized three big rings are going on. the first one is that companies like uber and airbnb have fundamentally reset expectations

for the citizens on what they want their government to look like a sars interactions are concerned. second, there's a third wave of computing with mobile, social, cloud and now analytics, that is disrupting every business model, including the government. third and the most profound is political leaders are recognizing they need to create a more open, trends errand and participatory government. what they have been able to do with salesforce is engage citizens and shift power to create communities in the community cloud where citizens are self organizing and addressing the toughest problems the city has around crime and health care and education. cory: what is the push back like from cities not jumping to do

it? i'm looking at a company in the bay area that is similarly trying to go around these issues of permitting at the county level and city level. it's a ground were to get these deals done, but the results from their success stories are fairly amazing about how much faster things are delivered. i don't understand what the pushback is from cities when you're trying to sell this thing. >> what you have is essentially the old guard, literally instead of vendors born in the 60's that continue to dominate government i.t.. that's one of the reasons when you're dealing with the government, you have to wait a long line, hold on the phone or submit a three-part paper form. when you are dealing with the government, there's a form for that. when you are dealing with the could -- when you're dealing with the consumer web, there's an app for that. the city of philadelphia represents a shining example of

where america comes in, makes technology a priority and cracks down on ways to keep spending. cory: what's the one service a city offers where you show the best benefit of doing something on the cloud, doing something online and fastest improve the delivery of that service? >> let's look at some of the challenges around the eastern seaboard on the snowstorm. being able to connect with your citizens and let them know where the snow plows are on a real-time basis, let you know if it's filling potholes on a real-time basis, whether they can forecast and predict these problems, getting ahead and welcoming the citizens and to a better future. the government has been going around responding to crisis instead of responding to the crisis these cities have. another big area is around entrepreneurship. why not demystify the process of permitting and licensing to be able to abstract the levels of government, whether it's federal, state or local? we are beginning to see this happen not just in the united states, but in japan, in australia, and in europe. that's why you are seeing this in terms of the acceleration and

the technologies being adopted across the world. cory: interesting stuff. potholes are about as local as you can get. thank you very much. more "bloomberg west" right after this. ♪

cory: this is "bloomberg west." i'm cory johnson. mark zuckerberg is weighing in

on vaccination. this comes after a measles outbreak started in disneyland. mark zuckerberg writes "my next book is "on immunity" -- vaccination is an important and timely product. -- topic. he writes, " the science is completely clear and vaccinations are working for the health of everyone in our community." zuckerberg also posted a video. listen to this. >> [speaking chinese] cory: why the strong interest in speaking in chinese? since 2009, facebook has been banned in the world's most populous country. it is a country that he has

visited four times. he met with officials last october. will facebook try to get legal again in china? >> your mandarin has gotten pretty good. what's the likelihood internet.org good help you get facebook back into china? >> i don't know. that's not something we are focused on right now. right now, there are countries where they reach out to us and say connectivity is a national priority and a lot of people in our country use facebook and if there's a way to do that -- for example, in malaysia, i was reading with -- i was meeting with one of the leaders in the government there and making everyone connected is one of their top national priorities, similar in indonesia. there are lots of priorities around making sure everyone can get connected. it makes sense to prioritize countries that are reaching out

proactively for this. cory: be sure to catch the entire conversation on "studio point -- studio 1.0" tonight. john leisure says they killed it in q4. listen to what he had to say in just a little bit. ♪

cory: welcome back to "bloomberg west." i'm cory johnson. t-mobile just reported an interesting quarter -- fantastic subscriber games even as at&t and verizon are hurting on the subscriber front. the company getting a record number of game -- gains, and led in their big turnaround by john leisure -- legere. john legere joined my colleagues in an interesting interview earlier today. listen to what they had to say.

>> we just finished a great quarter with 8.3 million net additional customers and post paid phone net. we took 100% of the net adds in the whole industry. what you are going to see is 2015 is a transformational year. we will have completed 300 million pots of lte and rapid deployment of the 700 band and we will be preparing for the low band spectrum in 2016 which you can envision the start up, t-mobile, will be on the asp of not only being the fastest-growing wireless company but duplicating and exceeding any kind of wireless footprint at&t or verizon has. and i don't think they are prepared to think that way. >> let's talk about the spectrum auction coming up. the last auction was about four times what anybody had thought.

how deep are your pockets? you need the low band spectrum that is coming up. >> that's a great point. we bid in the auctions. we spent $1.77 billion. we got 151 licenses in areas that we needed. we had the biggest mid-band portfolio of anyone going into the auction, so it was not extremely important for us. what's happening in the industry and in washington is what i would call auctions. what the country and the government wanted to accomplish is fundraising for public safety aspect and second, to ensure competition, which that is what this is. >> let's get a number on it. what are you willing to commit to the as yet unknown amount all of you are going to have to pay in the next round? >> we don't know what the numbers are. should it happen quickly or be delayed? i say quickly.

second, what you learned in the first auction is at&t and verizon will spend anything they have to to sweep the table and competitively stop the kind of competition that will come with us. we are pushing washington to look hard at these auctions and create rules that set aside the ability for players like us to come in and not be pushed aside because if you like this competition, you've got to keep it going. that's the most important issue. if you read the blog i put out yesterday, i'm asking american consumers to look in and don't let what happened in the mid-band auctions were people in the industry controlled 93% of the output. i don't care if it was 45 billion or 75 billion, they would have spent what they needed to sweep the table. and they will again if we don't stop it. >> how long can you be aggressive? how long can the price war

continue? your revenues were up 29% for the year, but your adjusted ebit off -- is growing. >> in q4, year-over-year, a group 41%. we did $4.65 billion and just gave guidance of 6.8 to 7.2. thus the fastest growth of anybody and the biggest news out of the earnings here is this model is working. it does lead to growth and profit ability and cash. but you cannot compare our situation to what is happening with rent. sprint is attempting to survive and frankly, we ported with the whole industry, 2.15. never was there a single week any year any carrier ported positively with us and with sprint, we are porting about

2.6-1. if they are gaining progress, it is not from us and i think the model does scale. spectrum is a scarce commodity and one we all need support on. >> but people are asking the same questions about t-mobile as they are about amazon. you are doing a great job of growing revenue and attracting customers, but your margins are not improving and they are not that big. at what point do you gain the pricing power you are going to need so you can deliver operating leverage and generate meaningful growth on the gap bottom line? >> i'm going to give you a pass just assuming you are a last-minute insertion here and celebrate the first thing you said, which is people are comparing us to amazon. let me help you. two years ago, when i strutted into this building, people were not comparing us to amazon. to your point, the ebitda margins of the company were 30%

up from 25%. we're the only carrier that expanded margins this year will stop from the standpoint of -- this year. from the standpoint of price pressure, it's only price pressure to use a war analogy, if you are making excessive profits and someone is bombing your factory. we are not competing on price, we are competing on the run carrier proposition. if you look at q4 and what we announced for 2015, margins are expanding and we have a value proposition that leads to growth and profitability. cory: that was john legere and erik schatzker -- really interesting proposition right now. "bloomberg west" will be back in just a minute. ♪

cory: i'm cory johnson. this is "bloomberg west." nasa is meeting with a handful

of companies here on earth, more specifically, here in the bay area, promoting research opportunities. campaign is called destination station. it even rhymes. so what are they talking to tech companies about? what can be done on space that you can't do on the ground and what could happen in the international space station? join now is a nasa astronaut who just returned from six months on the space station. welcome back. >> it's great to be in the bay area. cory: there's so much i want to talk about -- but i assume the space station is just schoolkids doing experiments. -- isn't all just like schoolkids doing experiments with all kinds of secret stuff going on up there. what kinds of things do you think companies like twitter or google could be doing to test things out in space in a zero gravity environment? >> just the social outreach portion, just to bring the science and the view of the space station into everyone's

living room, onto their phones and tablets, that brings them closer. i don't know what they can test, but how they can explore social outreach from space is great. we had a lot of success while i was up there. google is doing all sorts of projects and you never know what they are going to do. when you take gravity out of the equation, you never know it's -- what going to happen. >> are there other sources where unique environments are presented besides weightlessness? >> definitely. you have a different radiation environment, but the big thing is the microgravity environment and what's going on. not necessarily zero gravity but it is almost there will stop you have a slight deceleration so you are never exactly in zero gravity. cory: i did a zero g flight out of cape canaveral and there was supposed to be a launch.

i have yet to see a rocket launch. it was scrubbed and we run into this quite often where we want to show a launch in our sony delays and you think what happens during those kinds of delays? what's going on -- you can't put every delay into one basket, but what is going on? >> it could he anything. when a ship coming into the safety zone and it ended up getting scrubbed and moved to next day. there are all sorts of things that could be going on. everything is tested before we get to that stage, but once you have the rocket assembled and fueled up, anything could go wrong and safety is paramount. any little glitch in a are going to wait and see. -- and they are going to wait and see. cory: i was really struck by the notion that launching rockets technologically hasn't changed since the days of duct tape and the 60's. what's most important in this new private space race right now?

i work at nasa. if i worked at spacex, i could answer it better, but any way we can reduce complexity and build a more robust rocket -- cory: the rockets from the 60's were not really that complex and that's why they are still using the old russian -- >> i just launched in a russian rocket and it is simple. but with 3-d printing in the modern manufacturing process you can simplify the tough parts of a rocket. you can make the more resistance -- more resistant to things in the fuel line. they were simple in the 60's, but we are even simplifying the technologically complex parts now. cory: simplifying the high-speed turbo pumps -- is that an advancement for material science as well? is that also about the stuff is made out of? >> definitely.

different ways to do the welding. the way they do friction welding now and when you can take a complex part, put it in a 3-d printer, it improves reliability all the way around. cory: and then there's mars. >> let's go. cory: what is the process like? picking people and coming up with a plan? >> for us, it's a process. -- it's basically business as usual. once we have a ryan built and the other ship built -- we did a test flight in november and we are going to do another in two or three years. once we get to that process, we will start picking the crew and putting them on the rockets. cory: how expensive is it going to be? >> it's going to be expensive, but worth it. cory: how is it going to be worth it? >> it's the entire complex it builds the market, what kind of -- that builds the rocket, the scientist looking at mars and the research we are going to do, you start to discover all sorts

of different avenues. cory: there is criticism of mars and the mission that scientifically, stop the place with the most information will begat other. it might be exciting and politicians get attention by sending a man to mars, but there are things that can be done closer to orbit. >> there's going to be criticism of any major program like this but just sending a human to mars, we are going from one planet in our solar system to another. the amount i can learn, if you give me a shovel and a mine and -- and my mind and a bunch of mission control back to houston, it will change our understanding of the solar system, i guarantee. cory: you were six months in the space station. what was the most surprising? >> when you are a kid, you dream of floating -- i'm sure you had dreams of floating. it seems like a magical thing. cory: doing this show is the same thing. >> when you get to space you remove gravity from the situation, and everything you

thought would be easy becomes hard. trying to get a little screw out of a bag -- anything not captive just floats away. getting your mind to work in a three-dimensional, zero gravity environment is a whole new way of thinking. it takes time to do it. cory: i wonder if the business of private space stuff -- with going on with spacex and lockheed martin, i wonder if the business -- we have this general belief that people work in a problem-solving way -- are you seeing that innovation because you've got some buddies going after the big dollars? -- because you've got all these big companies going after the big dollars? >> i think we are seeing that innovation. we have parallel paths. if boeing or spacex has a problem, we have parallel paths to get humans do the space station. any time you bring in competition you are to get innovation. cory: i'm glad we were the matching blues stop welcome to -- we went with the matching blues. thank you for coming to

"bloomberg west." now for a check of world news headlines -- big innovation the packaging business. colorado-based ball will buy london-based rexam four $6 billion in cash and stock. it's a large -- largest maker of beverage cans. ball says it will keep its headquarters in the u.s. the european central bank released transcripts of its monetary policy meeting for the first time and documents show most ecb policymakers see buying government that as the only -- government debt as the only option large enough to fight against inflation. the ecb will launch a 1.3 trillion dollar asset buying plan next month. lenovo has disabled software known as super fish. it's preloaded onto notebooks. customers complained. the product scans web browsing data to tailor advertising to users. the software was intended to help find interesting products while shopping. sure. right.

more right after this.

cory: i'm cory johnson. this is "bloomberg west." some of the biggest issues for every company include cyber attacks. nobody takes it more seriously than jpmorgan and when they got hacked, it was a big deal. they listed some military great

-- and listed some military grade help, including building headquarters to fight these kinds of problems next-door to the nsa in fort meade, maryland. but is it working? jordan robinson wrote an interesting story about this interesting fight. what they have done is amazing. a thousand people fighting this, twice the number of google's cyber security team? >> i spent a significant amount of time looking into the story and basically what we have is a novel experiment unfolding within jpmorgan, the kind of militarization of private sector cyber security. not only is the experiment unfolding, but we had the first major test of it just a few months into the top two guys from a cyber security organization, their first few months on the job. the biggest bank in the u.s. gets hit by a devastating cyber

attack. reporting shows the response did not go as smoothly as many would have expected. cory: it is a really neat story and really gives you a sense -- when i talk to people in the cyber security world, they use jpmorgan as an example, using a presentation from jamie dimon, saying we are going to spend $200 million to fight cyber terrorism. is it proof that no one is safe and there's nothing you can do? >> jpmorgan has long been the gold standard of cyber security in terms of expensive -- a thousand people dedicated to the effort. twice the size of google. jamie dimon just increase the budget and they're very few organizations that spend that kind of money. on the other hand, it's a stark illustration of when you get breached, who you have responding to the breach matters a lot in terms of law enforcement and how the attack is attributed. the amount of engagement you get from the government and what happened in this case was

jpmorgan clashed with the fbi and secret service and tried to push the idea that it was the russian government behind the attack. ultimately, the law enforcement community decided to go the other direction and that's a difficult position for both sides to be an. >> one of the things your story brings out clearly is that companies don't feel like they are getting enough help from the government, particularly from the white house will stop i wonder if what happened last week with the president's pronouncements about cyber security might change that? do you think there will be a thawing in that relationship? >> i don't think so. the bank is staffing up on a x military and x intel there's a

lot of reason for that. they bring a lot of attack capabilities. few people know how to attack networks better than these guys. but when it comes to defending networks and dealing with all kinds of criminal actors and the smorgasbord of those guys, it's not always best to have one type of thinking because the mentality can cause problems. i see more and more companies testing this philosophy because large organizations are facing some serious threats both from nationstates as well as sophisticated criminals. cory: jordan robinson, thank you very much. bwest bite, one number that tells us a lot. mary childs has it for us. >> it is 23 -- it's the average number of hours per day a car is parked. jeffrey dunlop thinks this makes the industry right for disruption. with people increasingly using car sharing apps like uber people stopped needing cars as

much and that means trouble for ford, gm and other automakers. cory: he's not an equity guy but the era's notion of not wanting to belong any part of the auto industry is fascinating because of the threat of uber. >> there are still dividend yields on these stocks and they are good investments for the near term, but in the longer term, it's a fresh indicator as we all reduce our use of the car. cory: the sharing economy doesn't make winners for everyone. thank you for joining us. you can always get all the latest headlines all the time on your phone come a tablet, on bloomberg.com and bloomberg radio. we will see you with more "bloomberg west" tomorrow. ♪