>> live from pier three in san francisco, welcome to "bloomberg west." i'm cory johnson. here's a check of your bloomberg top headlines. >> apple electric vehicle might look at the minivan, should

toyota worry about is prius? tim used to cover the auto industry, now he is an m.i.t. industry professor. >> you see the technology doing very sites mapping, it was involving google car, it is a different set of techniques and skills from detroit's automaking industry. cory: i saw your byline, tim higgins came from detroit -- any similarities between the companies? >> auto industry churns through cash. >> cost a billion dollars credit new car? >> it is expensive

time-consuming process. apple has a lot of money in the bank, they have global operations -- they are use to retail networks all over the world. now, that said, designing and building cars is very complicated -- something that trips up even experienced automakers with marketing hitting up what the consumer wants. it is a long lead time for developing a car. >> they spend boatloads of money in r&d which is container ships full of money. the history, the knowledge they have built up -- is it abn accumulation? >> when you talk to engineers

out in silicon valley, they feel like they do not move enough. guys in detroit say there's a reason why we are so slow -- we have regulations and challenges for putting a product on the road. >> is it about the way the cars are made? they are wrestling with union contracts, existing factors, wrestling with dealers. they have to figure out what to put in the pipeline, as opposed to the road. >> they have a lot of legacy issues, look at tesla -- they have created and interests in new players. they are able to do what they can do in a short amount of time what the other folks do with a lot of money? >> john, when you look technologically, what is it that

you feel can be improved the most? is it battery, the duration of the battery? is it the self driving aspect or road awareness? >> i think the number of lives -- it is safety. it is a tragedy we've lost so much. with the artificial intelligence algorithms, we should have a better way for accidents not happen now. >> is a really great thing to talk about, apple and google -- also looking at what the user is doing at the time when they're driving. these are companies that want to create a business where your digital life is at the center. when you're driving a car you are not able to fully engage in a digital lifestyle. they are pushing a product that allows folks in the car to use

the digital space. it opens up a whole new marketplace for commerce. >> the horrible irony that the country -- that the company is responsible for texting, is giving them cars now. >> there is a different sort of case of innovation, aside from both, you have witnessed them in both detroit and silicon valley. is your different pace? >> i have been told the typical silicon valley wants a return in 24 months, as a rapid turnaround. google, and building its small protect cars, they said they want to work with -- there is an announcement that could be win win. they could all come together. >> meanwhile, apple is being

sued by lithium battery maker for poaching. >> i spoke on how critical battery technology is with steve levine. >> a la son drove volta, the architecture of the battery -- it has not changed much. for the last two years, we have been -- the question today is which way is apple going? the geo group, with the super battery? or the tesla root off-the-shelf? >> is a business that has typically relied on outsourced component metrics. taking the best that other

companies are making by panasonic or someone else, and assembling them in another way. they change it with their own chip design. are they going to go with her own design? >> the latter part we do not know, yes the signs are that they are trying to in-house create and design the battery. the car around it is very exciting. already, i have been looking at that race between tesla and general motors. at the inflection point, the proving ground -- that brings on the electric age. with apple coming in, this is critical mass -- gm and tesla

apple can match them. >> i do not trade stocks now, but when i did -- i had to find another short bet. i did a search on the bloomberg terminal, is that the nature of the battery business? that it is going to limit. when you look at car sales, you can see the limitations of the market. it is not a big number, it is in a lot of markets -- i wonder, is it ever going to work out? like perpetual motion or something. >> batteries have been a special province of exaggerator's and hucksters thomas edison said this back in 1920.

100 years later, it is the same. in the book, there is an inflection point we are pursuing --at one point we find out someone has been deceiving someone all-time. i think there are real players in the race that tesla ngm and now apple have put their chips down on the electric car. it shows that it is authentic and real. >> steve levine is author of "the powerhouse." connecting the world through internet data works. ♪

♪ i am cory johnson this is the best of bloomberg west. facebook ceo mark zuckerberg has revolutionized how we communicate. now he wants to launch internet.org to support areas all around the world. in several african countries along with colombia and indeed, we have an exclusive interview. >> it is one of the most populous nations in the world, start up one the world's most precious resources. >> the internet is how we connect to the modern world. today, worldwide, only one third of the people have any internet at all. >> in india, the world numbers are even dire. and so we find mark zuckerberg

visiting students on the outskirts of new delhi. he hopes to revolutionize how people communicate, even more ambitious goals now. >> connecting everyone in the world is one of the great challenges, we are happy to play whatever part we can. >> he calls the plan to wire the world internet dartboard. he is spreading it from india to indonesia. >> of other technology companies to bring affordable basic service to everyone. >> from the lips of the guys who graded facebook, it seems possible. but it has been far from easy. >> there are market dynamics that are different, it has been challenging. do you want internet? people are like why would i want the internet, i want facebook. >> zuckerberg handpicked these 22 lead the efforts.

they have been crisscrossing the globe ever since. their mission is to convince mobile carriers to offer a limited version for free. here is how it works, facebook custom belts and internet.org site for them -- news, jobs, health resources, and facebook. all at zero cost to the user. the idea is they get hooked and by a data plan when free access ends. creating a more for the carriers and facebook. >> why call it a .org, is in a charity? >> there be easiest thing to do would be to focus on that. >> why not focus on giving access to the complete internet,

why a few specific apps? >> we see it similar to 911 in the u.s.. you can always dial 911. >> a professor at columbia university and a policy advocate -- why would someone want to give something away for free? they think they can build the world's most powerful tool for accessing hearts and minds and sell it. >> facebook is just one of many internet giants in a global battle. >> river gets the biggest share of that is likely to dominate the future. >> 1, 2, 3 -- not to be dominated. >> google has launched loon. a new company called one web and space x has launched a

satellite to carry the internet everywhere. facebook has a shop of its own, led by a mad scientist of sorts. >> it is a new frontier where you can get much higher data rates. >> in a southern california lab still being built, he is working with a team of nasa engineers to send the internet the beams of light. >> you're trying to improve access, we want to use lasers everywhere. >> to put lasers inside unmanned areaial vehicles. >> the world record for solar powered flight we need to make these planes last for months at a time. >> using drones in satellites they do not rely on cell towers.

connectivity from the sky is still a few years out, they expected test the first facebook drone later. >> once you have the power to reach them, how to use that power? >> for them, is about enabling. >> whatever that means in indonesia and india, zuckerberg's plan seems to be working. carriers recently announced partnerships with internet.org. giving millions access to the internet and facebook. >> how will you judge this is been a success? >> that that wwe can get a huge win for all these people who have new access to information on jobs and health care. >> do you think you will have more than a billion by 2020? >> we will see. >> whether it is the internet or the internet according to

facebook, it is the grand plan you can only expect from mark zuckerberg. gauging the world not once, but twice? emily chang, bloomberg in menlo park, california. >> in china, facebook has been officially block since 2009. >> your manager and has gotten pretty good. what is the likelihood that internet done or can help you get back into china? give facebook back into china? >> i don't know, that is not something we're focused on right now with internet.org. right now, there are countries where they reach up to us and say connectivity is a national priority. a lot of people in our country' loseies use facebook. i was meeting with the government there, making sure everyone is connected is a top priority.

india, as well. making sure that everyone can get connected. it makes sense for us to prioritize countries that are reaching out to us proactively. >> can get more of emily's interview with mark zuckerberg online. is the nsa secretly installing spyware on your desktop computer? a shocking new report, we would tell you about the next. ♪

♪ researches abacus bursty say top software

is using eavesdropping devices. i spoke about it with stewart. >> the matter what you do, it is made to be stealthy and avoid detection. you could try and wipe it, it will come right back. it is in the firmware, that is usually planted on the manufacturer. this is not the industry -- not the first time the industry has seen this. it is the sophistication of the attack that gives us merit to talk about it. >> it is also widely spread. it is not like they snuck it in. we spoke to western digital, it is wide across the industry. according to this report, every

manufacturer is infected. >> we do not know the. yet, but the implications are that there are real problems. whether or not it was pre-or post production is a little bit up in the air, we do not know that quite yet. that needs to be fleshed out and investigated. what we do know is that the ability to get on the systems is quite trivial. to stay there is quite trivial. it is easy for any adversary, a nation or a cyber criminal bad guy to do whatever they want to. >> what kinds of things do you think the nsa can pick up? the data hacks in the past? >> a could be israeli defense, as well. they have similar targets, of course in the middle east and

asia -- you know, in terms of attribution, it is difficult to give up smoking gun proof back to people on the keyboard. it is certainly possible and probable that the nsa is a part of this. we do not know the extent yet. in terms of what they can do darn near anything. they could pretend to be the user of the computer. they could infected in such a way to get screenshots or video. they could go through all your passwords and on the internet. they could infect your access to the bank accounts. you name it. is up to the creativity of the adversary. >> the adversary, i'd say the nsa because reuters published a report, an expert on reporting cybercrime -- the report listed

the most affected countries. syria, china yemen, of jerryalgeria. those seem to be targets of the u.s. because this is a hard drive attack, they are not adversaries we are keeping -- not amazon web surveys. >> they want to survey old the target. it wasn't like the sony attack to humiliate and destroy. they wanted to observe and understand what they were doing, to create an intelligence channel. most likely, to allow them to stay two steps ahead of the adversary. it is the victim in these cases. these countries are right. they have long been held a target as well as neighboring

countries, it could easily be those two instances for sure. >> is talk about what this means for business. when it comes to distributors, it is different in microsoft saying to a customer in germany, hey, store your stuff with us. >> you know, that is a good question. i do not think we have really ever seen this example in our industry before. we've certainly seen adversaries hacking into companies, like lenovo and others -- back during the computer. not to be coming from the manufacturers themselves. if that is truly what is happening, we have a big problem. >> ceo of the cyber security

firm silence. socially conscious startups are all the rage here in tech land. we would talk about the efforts to highlight the feel-good companies next. ♪

♪ you are watching bloomberg west where thewe focus on technology and innovation. the final price is to have billion dollars, is a smaller company. try to integrate operations. carnegie mellon, the top ranked information college in the nation has an information technology problem. they mistakenly sent out

acceptance e-mails to 800 applicants. the problem is the program only exception hundred applicants each year. the e-mails were a mistake, carnegie mellon says it is reviewing the process. we now know who plunked down $300,000 for dinner in las vegas. that person is a vice ceo shane smith, he said he has been on a lucky gambling run. at the bellagio's prime steakhouse for the consumer electronic show. it might not be the bastion of social responsibility but here is the rage. making money isn't enough tech companies have to do good, as well. it starts with the social media impact statements -- before the

business plan. is it good business, or pr? is it something more. mission driven companies, we spoke to the ceo. >> a group of people getting together to say it might be cool if ... if this sort of positive change occurred. >> wouldn't it be cool if my database work better? >> i think it's better if we create positive change in the world. it is significant trend occurring not only in the valley , but across the world. people can use a thing called the company to create good in the world. large companies like facebook, google, and others are leading the way. a lot of the founders are getting in the way -- getting in the game.

>> i think right after i left your garage -- i see this clip on silicon valley. the opening show. take a look at this, from hbo. >> just a few days ago, we were sitting down with barack obama. we were constructing elegant hierarchies. >> elegant hierarchies for making the world a better place. [laughter] >> when is it a serious company? >> we need a brand like newco. we have to celebrate and connect to them, there is no continuity. where you can call people on their bs. there is an opportunity to go beyond into promises and mission statements, and start to tell

the story of the companies that are creating that change in the world. >> we see venture capital funds talking about this along those lines. i would have expected this to develop as such, a pension plan would say, hey, we need you to death best from companies doing climate change. -- to divest from companies doing climate change. >> it has a nomenclature problem. they are afraid that if we say too much social impact we are going to get laughed on profit. they are going to beat the companies that do but, they have a better bottom line. over time, and the information economy, the total value of the company will be not just

profits. it will include the good it does no world. >> yelp is doing some things very quietly. those companies are giving a portion of its cost to charity. to volunteer organizations, is that enough? >> is part of it, but look at the organizations that started with mission statements for positive change. they wanted the end of software there was a better way of doing it. and yelp had a mission around finding local information in real-time. twitter is the same way. building social good and impact into its building. >> how so? >> twitter for good is their approach to corporate philanthropy. to where they have built the program to partner with san

francisco, a well-known place in the tenderloin, to partner with the district and integrate employees into the program. as opposed to just giving money, they are integrating the workplace. >> that was john. can technology face these age-old problems like potholes and garbage? we tell you about a place in philly next. ♪

♪ >> this is the best of bloomberg west. i'm cory johnson. the best or last innovation out of philadelphia maven tenderize meat.

it is salesforce now. to make it easier for residents to get the removal or other services. what does selfsalesforce actually do? >> was excited about the philadelphia city, and the mayor, is that companies like huber and airbnb have determined what they want government to look like. there is a third wave of computing, with mobile social, cloud, and analytics that is disrupting everything. the most profound is the fact that political leaders are recognizing they need to create a more open since and

participatory government. what they have been able to do with salesforce is shift power to be able to create communities in the cloud. where they are organizing some of the toughest problems the city has in crime and health care and education. >> what is the pushback like? there is a company out here in silicon valley that is trying to go around these issues of permitting. it is a ground war to get these deals done. the results, the success stories, are fairly amazing -- how much faster things are delivered. i do not understand the pushback is. >> when you have is the old guard, essentially,. . literally, a set of vendors born

in the 60's that continue to dominate government i.t. you have to wait in a long line or on the phone, we talk about how there is a form for the government. when you're dealing with the consumer web, there is an app for that. it shifts from cloud, social, and analytics -- the city of philadelphia is a shining example of where america can make technology priority and crack down on wasteful spending. >> where you short ofort of show how fastness improved delivery. >> the challenges in the eastern seaboard now are with this snow. let them know where the plows are in real-time to make sure

they are collecting trash, or potholes in real-time. more importantly, what if city governments could forecast and predict problems -- getting ahead of those issues. welcoming those citizens to a better future. in the past, the responding has been to crises instead of getting ahead. that is exciting. another big areas entrepreneurship. why not demystify the permit and lyicense, instead of having to apply at your local and state level, we are beginning to see this happen not his an united states but in japan, australia it europe. that is why you are seeing the exhilaration as far as the

technology being adopted across the world. >> salesforce executive vice president. how can companies cash in on ? who will talk to an astronaut who just got back from space station next. ♪

♪ >> this is the best of bloomberg west, i am cory johnson. nasa in silicon valley astronauts are here for a conference they are promoting research opportunities in space. the campaign is called destination station yes, it rhymes. they are meeting with google and facebook, i spoke with an astronaut who just returned from

the international space station. take a listen. >> for twitter, the outreach portion is amazing. it allows us to bring the science and life aboard the space station onto the phone. that brings us closer. i do not know what they could test but the outreach is great. we had successful house up there. for google, they are doing all sorts of projects -- you never know what they're going to do. when you take gravity out of the equation, where things happen. >> is it all about gravity? or are there other unique environments presented?\ >> definitely, you have a different radiation -- but also microgravity. >> not zero gravity. >> it is almost there.

you are still in orbit. you've a slight reduction, slight acceleration. >> i wish i had the video, i did a flight out of cape canaveral. there was a launch that was scrubbed. we wanted to show a launch there were some delays. what happens, what is going on -- when that happens? >> it could be anything. we had to delay a launch because the ship was in the ocean. there are all sorts of technical things that could be going on the rocket -- the valves on opening. once you finally have the rocket assembled, and fueled up anything that goes along -- safety is paramount.

>> elon musk and spacex, he was really struck by the launching of rockets. it hasn't changed since the days of duct tape. what of those are most important right now in the private sphere? >> i work in nasa. if i worked at spacex maybe a can speak more, but reducing complexity. >> the rock is the 60's were really that complex. >> i just launched on a russian rocket, it is simple. but with 3-d printing, you can simplify the tough product. you can resist debris in the fuel line. it was simple in the 60's, but we are simplifying the

technological complexities. >> simplifying the path that fuel must transfer. >> finding fuel inconsistencies, making it more robust. >> making the design. >> different ways to do the welding, when you can take a complex bar and put it in a 3-d printer and make it simple, and improves a liability all over. >> then, there is mars. >> let's go. >> was that process like? is there a plan? >> once we have o'brien built we are have a test flight -- we will start of training the crew and the rockets. it is going to be expensive, but it will be worth it. >> why will it be worth it?

>> it is not just the people sitting on the rocket, it will be the research we are doing there. we discover all have avenues we do not know. >> there is criticism of mars as a mission. scientifically, it is not -- politicians go out on limbs. they need experiments and closer orbit. >> there is going to be criticism of any major program like this. but, just sending a human to mars, sending them on the 500 day journey -- one planet to another. once we get there, what we can learn with a shovel -- report back to houston. it will change our entire understanding of the solar system. >> that was after not reid wiseman. getting hit hard by chinese

companies, we are going to look at how samsung has fallen so far so fast next. ♪

♪ >> this is the best of bloomberg west, i'm cory johnson. samsung's dominance in china is over. xiaomi sales have taken over. samsung was in fifth place in the fourth quarter behind apple. xiaomi, louenovo -- here is my chat.

>> it reflects an amazing fall more than anything else. go back to 2012, every single quarter, samsung was the leading supplier in china. basically, it has fallen apart. what we seeing now, you have this upstart in xiaomi -- you have market dynamics in carrier bundles, that would be zte. those folks are now selling direct. they're getting more sophisticated in product design. as you pointed out, apple has absolutely moved in and moved in fast. >> when i look at the rise of xiaomi, they slashed any notion

of process and profit in market share. >> xiaomi is fascinating, right? they load up, historically, top tier processors and memory. it is a beautiful industrial design, if you've ever been over there and sing. they really want to make money on their version of android. it is their version on jeff bezos'and kindle fire. make money on apps and other services they can offer. i want to say a bit about the authenticity of the brand. you do not see that with the samsung brand. it is a big monolith moving forward. it doesn't have a voice people can launch on. >> substantially, samsung most

of make tons of phones. they have over 100 varieties of phones over a year ago. is that part of this? >> absolutely, we saw this in the pc world, too. i was talking to hp at the time, they need to get rid of the number of skews. they need one iconic product. that is true to some degree but there is also an idea of the product you create has to be something that people are absolutely craving. that is something that samsung cannot tap into, something that xiaomi has cap into. there are features that get in the way, people want to strip them away. as opposed to show me who has expanded to the chinese audience. >> should we be talking about market share or should we be talking about profit share?

you have these competitors going down market in down margin less than single digits, apple isn't doing that. apple is making boatloads of money. >> here's the thing. we should be talking about profit share, that is the thing we spend time analyzing. the profit share battle is going to be really intense, there is only so many high-end customers. there are underserved consumers in china to spend a $600 in a phone is a tremendous amount of money. xiaomi is swapping out and putting in maine processors. that is because they want to address the tier below that. >> that was chief research officer.

that does it for the best of bloomberg west. we will see you later. ♪

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