emily: software at the heart of the scandal. what it means for apple, tesla, and a future of smarter cars. i am emily chang and this is bloomberg, coming up, the new iphone six goes on sale this friday. the verdict is you should buy one, but not for the reason that you might think. plus, speaking of new software, microsoft gets its first upgrade in three years. how the company is hoping to change the way that we work.

plus the chinese president lands in seattle. top u.s.ave other business leaders live. all of that is next on bloomberg west. first to our lead, volkswagen is at the center of an omission rigging scandal that is developing by the hour. regulators from germany, france, south korea and italy all are now vowing to join united states in scrutinizing the w diesel fuel cars. the result could be billions of dollars worth of signs. at the heart of the issue is mal program software. is this a cautionary tale about smarter cars, tech savvy cars in which reports that apple is making advances in its own card about it how is the role of tech and auto industry changing. we have someone with us from new york. and bob o'donnell of another place. david, this volkswagen story is just my line.

what is your take away from this. is this a cautionary tale about more and more technology in our cars? abouta cautionary tale corporate dangers at one of the highest levels that we have ever seen. i think it is a scandal of the greatest proportions. i think the consequences are going to be far greater than a few billion dollars in fines. i'm certain the ceo is going to lose his job. it will not surprise me if the company goes under as a result. this is her ethically inappropriate behavior. i do not think that the company has acknowledged how bad it is. in terms of the software piece. it is fascinating that we are now moving into a world that is called the internet of things where software is going to be in every thing. now we have an example of the world largest automaker using the software that they install in their thing, their car to deliberately break the law. i think that is a terrible president as we are moving into a new world of software to define everything. i find it just plain terrifying.

emily: david think that volkswagen can go out of business at the result of this. it is such a big brand, bob, what do you think the real applications are here? the notion that they are using software to intentionally go around the rules and break the law, that is a problem. >> it was unintentional problem. this is fundamentally a concern that we have as a move into the internet of things. we are moving into this world there is so much connectedness coming. when you have problems with one system and then there are other problems with another system, then you try to marry those two together. i think we're going to see a lot of this over eagerness in irt start to pull back. i think connected cars, smart cars are exciting and interesting. there will be big challenges, especially if apple wants to try to do something like 2019. >> apple is getting dragged into this right now. there are reports that apple is making advances in its own card

development. david, should we be worried about not just apple, but other carmakers and more problems like this in the future? to make as have decision on who do we trust. the trust toward volkswagen has been, again, rhythmically broken. if you talk to anyone who owns one of the cars involved, everyone i've talked to and i talked to quite a few people because i have a lot of environmentally responsible friends, they are all want to have volkswagen by their car back. they do not want to take it and have it repaired. they have been driving it for years. now we are told, no, you have been a bidding 40 times more of this polluting gas than you thought. that is awful. apple, i don't get really have anything to say about apple anymore than it has anything to say about any other automaker i think apple actually has tremendous trust from its users. shocking amount sometimes. -- speed at which people

are assessed with the company. i think if they were to build a car people would presume. people hold them to a higher standard, but historically, apple has enabled to live up to that higher standard, and i think they would with a car as well. what you make of this report that apple is tripling the number of people that are working on this car project, why don't they just by tesla? >> they want to provide a way to provide apple innovation. look at the car industry. there are a lot of players and a lot of opportunity. apple believes they can bring a unique set of values to this. my question is, yes, there's a lot of tech, but there's a lot of mechanics in cars, and apple has no history of doing the mechanical piece, the engine, drive train, all those other elements. to me, that is the fundamental question. apple has a tremendous brand and they will work hard to achieve the kind of trust with the car

that they want, but they see this as part of that ever-involving -- evolving world of devices. emily: really, it's hard not to be excited about this. >> it's hard not to be excited. i think apple has fundamental advantages. if you look at the reviews of the iphone success -- one of the problems that people complain about is that they have is to sucked into the echo system and we can't get out. maybe apple can integrate the technology because they control so much of our technology. that is something that tesla does not have access to. if apple did build a car, it would be as tied into all of our other apple devices as the iphone, and that would be a fundamental advantage.

emily: speaking of iphone, we will give you our review of the iphone 6. thank you so much. great to have you. staying with apple, the official reviews are out today. while it does not look much different, a lot has changed on the inside. bloomberg's sam grobart gives us his take. >> should you buy one? yeah, probably. i still think the iphone is the best smartphone you can buy. android phones have made tremendous improvements, and apple has had missteps, but the way apple can develop the hardware and software together makes for the best user experience. these new models are typical of the two-your product cycle.

a lot has changed inside. -- two-year product cycle. basically, if you press harder than normal, you can pull up shortcuts for different mobile apps, like right click on your mouse. first, 3-d touch does take getting used to. push the wrong way, and you get all your mobile apps to move around the screen. right now, things are limited about what you can do with 3-d touch. i can preview a mail message or jump to a new note, but other uses are more questionable. who exactly needs a shortcut to call up a private browsing page? we may see more clever applications in the future. the other big change has to do with the camera.

the rear-facing camera is 12 pixels. it also has a function called "live photo." they do take up more room on your phone. walk past that 16-gigabyte model and get one with more storage. the flash matches the ambient color of the room,'s you don't look like a zombie. what makes them the best smartphones are the fundamentals. the new a-nine processor is fast, as is the touch id. there is a raft of improvements banks to ios nine, activate battery-saving car mode, maps, and find things faster thanks to

improved search and siri. it is the behind-scenes upgrades that matter. these new iphones sort of fade away and let you focus on what you are doing. the best thing about the new iphones aren't all the new things that grab your attention, it is all the stuff in the background that you never notice. emily: coming up, microsoft just released a new version of office, the first update in three years. we will show you the latest features. plus, the winner of google's science fair, nasa enthusiasts, and budding inventor. that is next. ♪

emily: to a story we are watching, groupon announced it will cut 1100 jobs in a massive restructuring. the company will be shutting down operations in seven countries worldwide. groupon was once the leader in the market, but has since struggled to boost sales. the the ceo says they need to focus energy and dollars on fewer countries. you may remember my failed attempt to get an interview with

them the ceo after the company went public. concerns were already mounting around their business model. simpson, the stock has fallen 79%. -- since then, the stock is fallen 79%. microsoft office, more than 1.2 billion people use office, and it is microsoft's biggest product. how important is this upgrade? how does it fit into the vision for microsoft's future. joining me is microsoft's executive vice president. so great to have you here. what exactly is new? >> we focus on collaboration and teamwork. we have made it easier for

people to work inside a document together, one-click sharing, within word, excel, powerpoint. we've also made it easier for people to work together, have shared conversations, shared challenges, outside of a document. emily: google docs has been around for a wild. the user interface in microsoft office has not changed much. i wonder how much you balance in catering to your loyal users and getting new people on board. >> it is a great point. for us, the familiarity of office is a great strength, and to bring new ways of collaborating into the office inside of outlook and excel -- they don't have to learn a different way of working.

from that perspective, and can become familiar right away, and yet, they are working in new, interesting ways. 150 million people have downloaded the applications for ios and android, giving us new customers to introduce to office. emily: there are 20 different office products. there are a lot of products out there. office 365, cloud-based subscription, the mobile app. what should i buy? >> we think office 365 is what most people will buy. emily: it's what you want people to buy? >> absolutely. it gives you the applications for your entire family and across all devices. if you have office 365, you can put it on all your devices, and

we introduce new features every month, so no longer will it be three years before you get something new. if you have the subscription, you get those features automatically. you don't have to install it. you don't have to manage it. we think the subscription is what they want. emily: there is a big skype integration as well. there was a big skype outage recently. how do you prevent network issues? >> we have to have the world's most sophisticated data center operations. all of these tech countries will have an outage from time to time, but you have to do everything you can to communicate to your customers when you have a problem, and fix it as soon as possible. skype happened to be up and running after a small number of hours, so getting better and better. >> you have been buying iowa has an android mobile apps, or we

going to be seeing more of this -- buying ios and android apps, are we going to be seeing more of this? >> we think that is the fastest route to market, but if there is one that we think will complement office, then we will continue with those acquisitions. what ever is the fastest to market. emily: thank you for joining us. google posted its fifth annual science fair yesterday, and bloomberg was there to speak to the winner. oliva hallisey, a 17-year-old from connecticut designed a diagnostic test to detect ebola. we asked her why she picked this project. >> i found it devastating how ebola destroys the fabric of the

area. emily: the biggest star of the night was surprise guest ahmed mohamed, the 14-year-old freshman who made headlines when his homemade clock got him suspended from school. he also got to meet with sergei brin. he posted a picture on his twitter account. coming up, president xi jinping is in seattle with top tech leaders. why are they eager to speak with him? we will have that after the break. the iphone will help to measure the gender pay gap in the united states. our findings are next. ♪

emily: it is time for the daily byte, one number that tells a whole lot. today's number is eight. according to bloomberg research, a woman must work in more hours than a man in the same profession to afford an iphone six s and the united states. data tog used u.s. compare men and women's earnings across professions from bartenders to ceos and found the disparity to be on average, a full day's earnings. they gender gap is greatest among restaurant and coffee shop post where women must work 70% longer than the male colleagues to afford the same iphone. while this data is troubling. bloomberg did find some professions where men are

disadvantaged for pay. the amount of their technicians can apparently afford the iphone six after. now, to china and seattle. the chinese president is in seattle as part of his first state visit to the united states. this stopover provides a were opportunity for china to meet with u.s. tech executives like apple's tim cook. the tensions between countries remain high after an alleged cyber attack. what will this trip to seattle accomplished? someone on theis ground for us there. dana picture for us, what is the atmosphere like? who is there so far. >> good to speak with you. right now i'm in front of the weston in seattle. this is where the president checked in earlier today. he is out and about four meetings with governors from china as well as local executives.

he will come back today and he will give a policy speech and potentially has only policies each of his whole entire week. in terms of the atmosphere, earlier this morning there were a few hundred supporters as well as a few critics of the president being here. people were waving united states and china flags. looking ahead, there is an error of skepticism, anticipation about what is going to happen here in the tech industry. additionally, when he goes to washington, d.c., to meet with president obama. emily: on that note, the chinese president gave a very rare interview to the wall street journal on this issue of cyberattacks. he said that the chinese government does not engage in fact of commercial secrets in any form, nor does it encourage or support chinese companies to engage in such act is is in any way. we are ready to strengthen cooperation with the united

what reaction are you getting from people on the ground? wends like they are saying, don't hack, but everyone agrees, yes they do. >> you said it. anyone who has heard that quote would raise an eyebrow and say, really? looking back at the past year, at least three major hacks have happened over the past year by china-backed hackers. the most recent we are talking about was this past summer, with the office of personnel management. hackers got the information of 20 million former federal workers that included united airlines as well as health care. lots of people are concerned that this is really happening. what the house press secretary had to say. >> our concerns center around what we have described as government-sponsored cyber-enabled theft of

confidential business information and proprietary technology from u.s. companies for financial gain. we have been something long been concerned about and it the president's administration. >> regardless of what is happening with cyber espionage between the u.s. as well as china, companies here in the u.s. still want greater access over in china, and the same is true for chinese companies trying to get into the united states. that will be addressed tomorrow at the paulson institute, when techos of text -- companies will meet with u.s. executives. emily: president xi jinping is about to speak. we will be covering this tomorrow. that doesn't for "bloomberg west." -- that does it for "bloomberg

west."

announcer: from our studios in new york city, this is "charlie rose." charlie: at just 40 years old, bjarke ingels has established himself as one of the world's most inventive and sought-after architects. his current projects include a pyramid-shaped tower on the west side, a danish power plant, and working with another architect on the google headquarters. earlier this week, it was announced he would design the tower at the world's -- the world trade center. 2 world trade center will be seven separate boxes stacked together, and i am pleased to have him at the table for this first time. welcome. bjarke: thanu.