emily: apple shares tumble, dropping $30 billion in market value. why some are concerned about the company's pace of innovation and what tim cook can do about it. ♪ i am emily chang, this is a special "bloomberg west" from new york. qualcomm is cutting jobs since its worst jobs outlook since 2009. plus, a debate in new york over trying to limit you burp. -- to limit uber/.

e-commerce entrepreneur mark lori talks about taking on amazon with his new jet.com. we start with breaking news -- texas instruments releasing its second-quarter results from nevada. let's go to the breaking news desk and bring in our senior market correspondent. julia: matching estimates at $.65 a share. $3.23 billion. not much little where estimates stood. revenue was down 2% year after year. the company says it was inclusive of notably weak demand in communications and continued strong demand in automotive. i'm also seeing the forecast for the third quarter from the company. we could definitely see some stock movement on that. the company is projecting earnings per share of 62-72 cents. i'm seeing $.75 on that basis for the company. also looking for revenue for the third quarter, $3.15 billion.

it looks like the forecast is short of the estimate. if you look at the sales forecast for the third quarter it looks to be potentially short of what analysts had been anticipating. we could see movement on the stock. you see the stock up behind me. we are seeing a drop off as these numbers start to come out. emily, we see a lot of weakness across linear technology today. numbers for phone shipments not necessarily spelling good news for the chipmakers. emily: i know investors are going to be looking at china. we will get back to you. i know you will be jumping on the qualcomm call in a few minutes. thanks so much, julie hyman. now to our lead. a strategy overhaul at qualcomm. the chipmaker that powers most

of the world smartphones. qualcomm saying it's cutting 15% of its workforce and slashing costs by $1.4 billion. it's all part of bowing to requests by investors. it doesn't mean qualcomm is considering their request for a split. what sort of clues are we getting about big, strategic changes and a potential breakup? >> we are seeing a couple things, emily. we were expecting a restructuring around $500 million. what they've announced this afternoon was a cut of almost $1.5 billion. almost three times as big as what we were expecting. that is going to come in early from the headcount as well as the reduction of the number of offices.

it sounds like they will be moving resources into lower-cost regions. the other thing they said is that they are looking at potentially breaking up the company, which is pretty significant. when most investors do parts analysis on qualcomm, looking at the licensing business as well as the chipset business, you come up with a value that is significantly higher than what the stock is trading at today. emily: let's talk about the pros for a breakup. who might be interested in what parts of the business? romit: we are not talking about a sale. we are talking about spinning off the licensing. qualcomm has a licensing business, which is about 1/3 of revenues but 2/3 of profits. they have a chip business which is 2/3 of revenue but only 1/3 of profits. the idea is that you split those two into two separate entities the market would more fairly value each of the entities. what we have estimated that the

licensing business is worth $45-50 per share. the chipset is worth $15-20 per share. plus they have got cash. that is $10-15. when you put it all together you have on a combined basis, a couple entities that are worth maybe $75-80 per share. emily: our bloomberg intelligence guys are saying the goal is not a sale, but different parts of the company would attract different kinds of suitors. i know you have been looking at the qualcomm numbers over the last 30 minutes without. what is your take? julie: you have to remember that in the background, the numbers are not very strong. yes, earnings-per-share beat estimates, but the company is cutting its forecast again. revenue year over year falling by 14% at $4.8 billion. it has not been as strong.

again, the forecast is not as strong. it will potentially continue. emily: our senior markets correspondent. i know you guys are both about to jump on the call. we will get back to you as that progresses. now to apple shares, still falling after reporting disappointing iphone sales. wiping out more than $33 billion. some of apple's suppliers, including qualcomm, have also been hit. more than 20 companies worldwide rely on apple for 1/4 of the revenue. you are seeing many companies in the red today. i want to bring in our apple reporter, looking more deeply at the numbers. also a ceo of a research firm focused on the chinese consumer.

man, they sold a lot of iphones, yet they are selling far more than every phonemaker out there. why are investors and analysts so down? >> their best third order ever in the history of the company. it just wasn't good enough. a lot because they are setting expectations for this quarter to the holiday season. analysts are looking for a lot of extra growth to help their thesis that the company can continue to seek record growth going into next year with the iphone 6, or 6s plus as we expect it to be named. emily: tim cook was so effusive about how the watch was doing. tim c.: the watch did exceed our expectations. they did so despite supply trailing demand in the end of the quarter. to give you additional insight

through the end of the quarter the apple watch sale was higher than the comparable watch period of the original iphone or ipad. emily: if the watch is doing so well, it brings us back to why won't they tell us how many they sold? according to bloomberg data, it's looking like 1.9 million watches shipped? >> at least 1.9. the cfo talked to me about increased revenue, that the watch was being included in more than 100% because of the watch. analysts are saying maybe $2.5 million. the issue is that apple does not want to tip their competitors into how the watch is doing in various ways. this is a new product and they want to see how it does in the market place. emily: let's talk about your interview with the cfo, who told you about china.

there has been volatility in the equities market. we think that is a relatively small portion of the chinese economy. when we look at the macro conditions in china, we couldn't be more positive. the revenue from china doubled year-over-year, and yet it fell as a percentage of total revenue. how significant is that? brian: it's a good question. people love thematics. they want to tie this into china, but we don't see that at all. this is aligned with the chinese lunar new year. we are seeing growth because of that. we've seen nice over year growth in q2. it did not match q1, but it is still phenomenal growth. emily: should they be worried

about volatilities? brian: i would say they should not be at this point. china is still a greenfield opportunity for apple for a number of reasons, especially with the iphone. it's a mostly entry-level luxury product for this entire aspirational middle class coming online in china, looking for ways to show their new status. nothing says it like the iphone. emily: brian buchwald. thank you so much. we will continue to watch those apple shares as they move. coming up, new york city mayor bill de blasio may be dropping his plans to cap uber's growth. what this move could mean for uber's future on the streets of new york. a new retailer promises to be cheaper than amazon. we talk to the ceo of jet.com. ♪

emily: new york city mayor bill de blasio is dropping his plans to cap growth of ridesharing companies, according to the new york times. he was backing a bill that limits cars 21% before officials could study traffic conditions. uber struck back with anti-de blasio ads. even a feature that shows no cars available, or wait times of up to 25 minutes. new york governor andrew cuomo

weighed in on the debate today saying the plan wasto push the new york city council to delay the vote, which was expected tomorrow. how could this debate shape the future of ridesharing in new york city? david has been following the story. he is here on the set. we also have john from san francisco. this is a political advocacy group that represents lyft and uber. that went fast. david: many folks were wondering if this vote was going to happen. as the week went on, people were taken aback. there were rumors that this would be postponed until the future. there have been talks about deals. it sounds like what has been reported is that there won't be a cap, at least not for the time being. there will be a study. it was interesting talking to the industry and those who represent taxi workers. it has grown like crazy. it is interesting finding out

what those have been. emily: as a visitor, the traffic here is pretty horrible. i do understand the need for a study like this. i want to bring you in to talk about this, john. from technet and the perspective of uber of lyft, why would this be so horrible, this cap? looks like we are having trouble hearing john. they say this is going to take away 10,000 potential jobs. david: it has grown crazily. what you hear from taxi drivers is that of the great month for part-time jobs. that is what the distinction is being made. emily: revenues between the city of new york and uber are still different.

what are the other issues they are still fighting? david: if you talk to uber and lyft, they say they follow the letter of the law. when cars were dispatched by radio, uber has played by those rules, so has lyft. what the city council is saying in this proposed legislation. three years ago, you saw unprecedented growth in the number of for hire cars. you get the sense that the city council and the taxi limousine commission were taken aback by this. they are playing catch-up. the reason we are moving so quickly towards this vote is because of this catch-up. why would we want to keep doing that going forward? emily: matt, as i understand it, you can confirm that this vote is officially off? the cap is officially off? matt: it looks like uber has reached some kind of tentative

deal with the administration that will avert a bill going forward. the study is going to proceed as i understand it. there are some concessions which you should be hearing from city hall shortly on providing breadcrumb data, meaning specific data to the tlc that uber has been resisting. as well as other details that will come up in the next day or so. david: how big a deal is it that uber might release that data? this has been mostly servicing people in the outer boroughs. what you hear is that the taxi industry does that as well. matt: it's not proprietary. the courts have sued me and lost when i was commissioner. there is no right of try to see in the back -- right of privacy

in the back of a cab. all the tlc wants to do is get the same data the yellow cabs have been providing for years since we put credit cards in the cabs. pickups and drop-offs and where the cars are going so that they can understand traffic patterns, so they can understand where the cars are, what they are doing. blips on the screen, nothing of a private nature. we reached a deal with the new york civil liberties union years ago, which will certainly be consistent in protecting uber's customers. emily: i want to bring in john doherty from san francisco who represents uber and lyft. what can you tell us about the latest from uber's side and the latest developments? john: i want to start off by applauding the mayor for the decision to hold off on pushing a vote on caps. we think that sort of approach is backwards. these services are growing, and they are growing quickly in places like new york city. they are providing consumers

options to better transportation that are safe, reliable, on time. actually we believe it will do things like reduce congestion, improve environmental impacts, and get more cars off the road in the long-term. emily: we just got a statement in from city hall. david: a council speaker saying the council not voting on the legislation tomorrow. the bill will be tabled. uber provided this trip data. what we will have is another piece of legislation requiring a study. tabling this cap that is discussed, but going forward with the study. emily: we will continue to follow this. thank you so much all for joining us. now, to ready set fight. a new website called jet.com is

taking on amazon with the promise of lower prices. we spoke with ceo mark lori about all the brands that are signed up to sell on jet.com. take a listen. mark: we do stock items in our own warehouses. the vast majority of the millions of products we sell online come from third-party merchants. merchants like barnes & noble, toys 'r' us, babies 'r' us, newegg, lenovo, those are some of our partners. those partners sold on the market through us. emily: i also asked him how and when he plans to turn a profit. mark: we make our profit from the $50 annual membership fee. the second way is we built this proprietary technology. it changes place in real time certain items that are smarter to buy than others based on the marginal cost of getting those products to you.

emily: mark lori, ceo of jet.com. he also told me he expect the company to be profitable in five years. coming up, we sit down with the brains behind professor stephen hawking's computer. this story is so cool, you don't want to miss it. ♪

emily: it is time for the daily byte, one number that tells a whole lot. the number is 3. three astronauts are bound to the international space station today. the crew represents u.s. russia, and japan and will embark on a five month mission in space. the russian soyuz spacecraft is on the launch pad in kazakhstan. if all goes according to plan, it will dock at the iss six hours later.

they join three astronauts already up there, one of whom is american captain scott kelly, who is in the middle of a one-year mission to learn about the effects of space on the human body. professor stephen hawking, renowned for his breakthrough work on how the universe works but also famous for continuing to fight motor neuron disease. hawking relies on this technology, and intel upgraded the system, doubling his communication speed. intel has made that technology open-source. i'm joined now by intel labs senior principal engineer. this story is so fascinating. talk about the challenges you had to overcome to make this work. lama: it was an interesting problem from the beginning. we were trying to design a system, and it's hard to get input into that system. we are trying to influence communications in the first place.

being able to talk to everyone not just stephen, but everyone in the works with stephen to understand the complexities. thinking how we can make it better through things like improved sensing, adaptability interfaces, things like that. the whole process was very challenging. emily: there is only one muscle in his cheek that actually interacts with the computer, how does that work? lama: one part is an infrared sensor that is on his glasses. every time he moves his cheek, it triggers a signal. that signal then goes into the software platform that allows them to do things like virtual keyboard interfaces, or moving a mouse, or selecting options. once he actually types stuff that he wants to speak out, the software platform will send that information to hardware box that

will translate text to speech. that is his iconic voice. emily: why make this open-source, and how adaptable is this technology? who can use this? lana: great question. a lot of problems with the solution in the space today is that they are virtually integrated and proprietary. there are times of innovation happening in the state in sensing. the problem is to bring something like this to market is very hard. people have to develop key systems from scratch. with open sourcing, people can build on top of the platform. if someone wants a new interface, they can plug that in to the system and take it back to market. emily: fascinating stuff. thanks so much for joining us. that does it for this edition of "bloomberg west" from new york. i will be back in san francisco

tomorrow. we will be all over amazon comcast, and pandora. ♪

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