bypass congress will focus on that project. during an emotional address, he consisteded up, it is not a block to take everyone's guns away. bernie sanders is ramping up his attack on wall street. elected, theif candidate sat down on bloomberg television with all due respect. mr. sanders: wall street has not changed its business model. instead of investing in making affordable loans available to small to medium-sized businesses, they continue to come up with complicated financial instruments which, i think, as the potential to have serious harm in the future. emily: federal authorities are aeping their distance as national wildlife refuge in oregon. the property was turned over to

the local government so they can use the land without federal oversight. the fbi is working to bring about a peaceful resolution. powered by our journalists around the world. ♪ emily: i'm emily chang and this is bloomberg west. coming up, we will look at the big news coming out of this year's consumer electronic show. plus, the world's most valuable company, a little less valuable today. a bite out of apple's stock price and the company is cutting back iphone production. virtual-reality about to become a real reality for consumers. we will preview the developments for 2016.

first, the lead. cars that can drive themselves and speak to your home devices. a vehicle that can rival a new a.i. that can make it safer. these are some of the things you can see at the consumer electronic show this year. the big theme is silicon valley working with detroit to make technology to make your cars smarter, more connected. organizers have dedicated 25% more floor space to 115 auto -related exhibitions like ford and bmw. .oining us now is david walsh we have car news. david, i want to start with you. who are the big auto industry players making news? let's start with ford. david: mark field's of floor in

talked about the new investments they had coming. the big news was they are tripling the number of a taunus cars via testing on the road -- cars they areus testing on the road. they are tripling the fleet so they can test the more and see how they actually work in real-world situations. emily: talk to me about the microsoft announcement today. of course, microsoft getting into the connected card game. game. >> it is a pleasure to be here. microsoft is happy to be here. the number of our customers and partners, highlighting capabilities that are critical. starting off with the

productivity, think of this as the office. the work we are doing is a great example of how we can enable new productive experiences, almost reinventing the car. meetings. as cars become more and more connected, these are capabilities that people need. microsoft is playing the role of being the technology partner for auto companies for these innovative experiences for the consumer. emily: on one hand, we are seeing the race for connected cars -- apple, google. and then there is due, apple, tesla, uber. how do you see these races playing out? david: the holy grail seems to be if you have a car that is

autonomous, it drives itself, then you can really bring connectivity to life because people can send e-mail. they can watch video into all kinds of things with data while driving. googlee companies like that love to get those two hours a day you were commuting in your car -- they want to get your eyeballs on their content and marketing and the things they do to make them so much money. if they can get the vehicles going and carmakers can have the driver out of the picture, then you can be back on the web and consuming content and paying for all kinds of services. even mark fields talked about this. he would want to make revenue off the driver when they are in the car, and they are not seeing them again for another five to eight years. it really enables connectivity

from a business standpoint that everybody is trying to get to. sanjay, one of the things we have been talking about, automakers had great sales last year. they are preparing for slower growth. are they getting creative with technology to balance out a potential slower year? sanjay: one of the exciting things that consumers needs and having a connected experience. that has been a big driver for demand for vehicles. what you are seeing automotive companies investing more in this space to ensure they can make the brand more compelling for the consumer. make the driving a fun experience and have a capability that consumers will look forward to. absolutely, you will start seeing the new productive experiences, connected experiences. the fun work balancing with the

home and on the commute. making the commute a productive experience. all of these will play into making the cars more attractive and drive more demand. emily: david, you attended the unveiling of the future car. this is coming out as a competitor to tesla. how does it compare? we will dig into it in a moment. last: the car they showed night is not a real car in the stricter sense. withes back 10 to 15 years what cars used to do with really advance, futuristic, but not realistic cars. fantasy stuff. it has one seat. it almost looks like a modern version of the batmobile. the batmobile from the original series, the original cartoonish one. it was fun, neat.

1000 horsepower. it is not the kind of car kids pick up their kids from school. they want to show they can design things that are really neat. it is like a skateboard with the motor on each wheel. you can put any body style and easily manufactured it. they want to say we have aggressive styling. smartphone put your in the steering wheel, it can drive and you can have unlimited connectivity through the partner. you can get content from that provider whether it is movies, entertainment, videos, business work -- whatever you need, you can get it through the smartphone embedded. that is a big part of it. driving, connecticut driver, all different kinds -- connected driver, all different kinds of styles.

it is not a car that will go up against tesla, per se. sanjay,k, david, you are both in las vegas. we will have a lot of great interviews from you guys all week long, including the ceo of ford and a number of different folks in the auto space. do not miss it on bloomberg television. as we mentioned, the electric car start up finally gave us a glimpse of the potential. engineers from tesla and spacex, worthy of an apple event. tom tells us what his batmobile that this is not the world is waiting for. tom: welcome to the future. whatever that is. it is this supersecret, that

wants to compete with the likes of tesla. the first concept car which looks worthy of a batman car. they also have a factory in nevada and want you to know they are for real. -01 constant car has a motor for each wheel and go from zero to 60 in under three seconds, putting in the same club of the world's fastest supercars. we are talking 1000 worst power and a top speed -- horsepower and it will be equipped with sensors. it is built and will later be the chassis for other cars and suvs, whatever this company wants to dream of. unfortunately, this is still just a concept car built for a racetrack. no concept cars never get built. another problem -- there is

already an electric car that goes from zero to 60 in under three seconds. it is called a tesla and it has been putting foerraris to shame for years. it wants to be a tesla today. best of luck. there will be a lot of other electric that mobiles to compete .ith -- tha emily: not so much a rival to tesla yet. later this hour, we will go back featureor more futuristic technology. e-sports kicking off the new year with a new deal. i will have the details next. ♪

emily: the french telecom be gettinguld beget sma smaller. control the mobile markets, sparking concern from antitrust regulators. the companies are evaluating a bonanza of after sales according to people familiar with the matter. be other two major providers monitoring the situation closely. does nothe tech m&a by chinagroup wid resources can have a better deal. it is a move that brings the gaming company closer to its

ofe of being the easespn game sports. tell us about the deal and the potential. alex: this has been a bit of a back-and-forth. reaching a deal with fairchild. this was about a month ago at this point, for $20 a share. then, this company, china resources -- a big company out of china -- the semi conductor theywhich is much smaller, made an unsolicited offer which was deemed to be not bac. t a superior offer. the addressed some of the concerns that fairchild had, including paying a breakup fee to the semiconductor because of a did not happen, there was a

breakup to be associated with the deal. they said they would pay it. now, what we broke last night and confirmed today that fairchild is saying, ok, we think this is reasonably likely to lead to a superior offer -- saying that allows fairchild to have a dialogue. thisa have not said is say is a superior offer. the current deal will exist as is, but it allows them to dialogue which could lead to a new offer. be in aes, semi would position where they have to raise their bid. emily: it sounds a little bit complicated. china is emerging as a tough player in this space. alex: they want to have their own access to technology that is dominated by

u.s. companies. in order to do that, you need access to the technology. this is step one. that is why we are seeing chinese entities attempting to buy u.s. companies . the big question is will regulators allow it? to people i speak with say they are probably will not be a regulatory issue that would bar a deal because fairchild is $2.5 billion company. some of the bigger companies that have elicited some interest, it is a harder deal. -- why do theyon want to become the espn of e-sports? alex: espn is the dominant chemica cable companies of any trouble is that cable bills are getting too big so people are

starting to not have cable and espn subscribers have gone from 100 million tonight 3 million. to 93 million. it still cost a lot of money because people want to watch live sports. the next wave of this is people will watch live gaming sports, in other words, watching other people playing games. it has been a big hit on youtube and other channels. activision figures why not throw $50 million at this? they said they plan on launching aming around their current games like call of duty. this seems to be a small bet which could be a big option value. long-term, i think the big question is will the legacy media companies like disney actually decide they want to buy an activision or ea?

that is something as i will be watching for the next year or two. emily: we will be watching it too. activision come a potential takeover for disney. thank you for joining us. coming up, we will stay on the gaming beat with an investor that has backed the most successful games. see what he has to say about this year. ♪

emily: i want to pick back up on gaming because 2015 was mark marked by consuls the mobile. activision dropped $6 million. nintendo made plans beyond the wii-u. if you look at the top grossing games in today, classic lands is plans is onash of

top. thank you for being here. what is the investors take on what is happening on the gaming industry this year, given that we have seen a number of mobile gaming to struggle? >> we have to keep in mind gaming is a massive category. anybody with teenage kids knows this. emily: or some adult children. >> or even some seven-year-olds. it is the biggest thing people do with smartphones, figur bettr .han phone calls hal you talked earlier about kingision, which bought and getting into e-sports. it is that. super cell.

microsoft with minecraft. you have to concentrate with people on the big marketing budgets and the abilities. emily: who will get bought by whom? i see more consolidation because there is more power in the platform. there are the big asian companies which i don't see of acquiring in the u.s. that they are the model to some extent. that wasally something a learned experience from the big asian game makers. there are a number of small innovative companies that i will be acquisition targets rather than ceo candidates because they don't have the marketing clout, but they have the innovation. emily: the struggles have been well documented. is zynga going to be taken over? sandy: the company has a strong

position. i think back to zynga, they were developing games in san francisco at the chip factory. small teams developing what became farmville and other big hits. i think all the game companies need to get back to that -- the basics of a small team that can really develop great games as super cell did. small people doing amazing super things. emily: the environment for deals is potentially on the environment. what do you see when you see for the tech exit for 2016? sandy: absolutely, yes. 2015 was a very weak year. only 21 tech ipos which is nothing compared to 150 in 1996.

today, there is way more interesting private companies than earlier. it is a tiny fraction of companies going public. i see that opening up quite a bit more in 2016. a lot of great companies. i have been around technology companies for about 40 years and there are more companies to scale, growth, interesting products today then there is ever been in that time and by a wide measure. -- my dropbox, snapchat guess is dropbox would go public. do you see a company like dropbox or another bigger name taking advantage? sandy: i think all the bill whether companies like that -- because the private companies have been so favorable -- have been so well-financed. event andeat branding it kicks off the liquidity process.

i don't have any comments about those particular companies and i don't think anybody is rushing into the market with the feeling is good because the deal that happen are towards the end of last year which work. they were priced conservatively and they traded well. i think investors are interested in ipo's again and i'm optimistic they will see some flow. we don't get the visibility we had, so we don't know who is coming. i'm hopefully will be a great year. emily: we will be watching. sandy miller, thank you for joining us. we will be back with more of bloomberg west. reports of apple cutting iphone sales, next. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. emily: this is "bloomberg west." it is 3:30 p.m. tuesday here in san francisco. 7:30 wednesday morning in hong kong. we are joined for a look at the stories making headlines in

asia. good morning! >> china is said to have intervened to calm things in the face of new year market volatility. a source told bloomberg the central bank stepped in to prop up the yuan on tuesday the currency rebounding from a five-year low. the move was meant to take the edge off the yuan's volatility rather than to guide it higher or lower. analysts warned china will have to put an increasing bill to keep the exchange rate stable as investors head for the exits. u.s. auto sales enjoyed a record last year driven by cheap fuel, a strengthening economy, and continued pickups in s.u.v.'s. nissan led the pack in december with a 19% rise the only auto maker to beat estimates. toyota and fiat chrysler each posted a jump to at least 11%. only v.w. saw declines for the month on the back of the emissions cheating scandal. china's property developer is said to be close to buying a majority stake in jurrasaic

legendary entertainment. people familiar with the matter say the talks involve the purchase of outside investors' interests in the company. the deal would mark the biggest step yet into u.s. movie making by the owner of wanda the 13th richest person in the world. malaysia airlines has told passengers on some long haul routes they can't check bags. the carrier is struggling to reach parts of western europe as a result of longer flight paths and what it says are unreasonably strong head winds. checked luggage on flights to paris and amsterdam will arrive after the owners until further notice. malaysia airlines is acutely conscious of safety after the mh-317.s of mh-17 and emily: it seems to be against the rules that passengers must travel with their bags. are there restrictions on carry on luggage? >> well, emily, certainly this is an unprecedented step malaysia airlines is taking and, yes, there are further

restrictions. it says heavy bags are jeopardizing the ability of some aircraft to reach long haul destinations even with a full tank of gas. now, passengers affected will be allowed to carry on a bag weighing no more than seven kilos or 16 pounds in coach and two pieces with a combined weight total of 14 kill grams in first and business. for now the restrictions are limited to flights to paris and amsterdam and are operated by the boeing triple seven aircraft. servicetors london on the a-380 jet is unaffected for now, emily. >> all right. thanks so much. that's your asia first word news. ♪ emily: investors took a bite out of apple in trading today reacting to reports the company reduced the output of its

test iphones by 30% in the first quarter of this year. according to the nikkei asian review apple told them to keep production at the same level as for the predecessors but inventories of the iphone 6 and 6 s plus have piled up at retailers and developed markets like china and europe. apple didn't respond to our request for comment. joining us now from minneapolis the senior analyst for piper our y covers apple and other guests. gene, i'll start with you. how significant is this report? >> it is really not significant. every cycle, every year when apple releases a new phone, they cut production quickly after they launch the phone. the reason is what they want to do is make sure their supplier is able to handle any capacity. the concept of cutting production is nothing new to the story and historically has not been correlated to the iphone units.

emily: that said it does fall in line with the trend we've seen from jpmorgan, credit suisse, about iphone declines. 30% sounds like a lot. tim, what are you hearing from suppliers? tim: well, we saw a couple splares have already announced december sales this week, taiwanese companies have to report every month by the 10th of the following month. one of the big names reported yesterday and we saw their december sales fall quite a lot from november. other names have seen rather large decreases including the company which makes the back light for a lot of apple products and the batteries and the metal casings for phones have all posted pretty strong double digit sales declines for december. but as gene says, we often see that. what we're seeing this time is a lot larger scale than maybe in the past but the normal cut going into the first quarter,

the calendar first quarter is very, very common. so, really, the concern would be the scale, is it out of the ordinary or not, and that is what people are looking at in taiwan. emily: if it is all just part of a cycle, adam, how much greater does the iphone 7 need to be for sales to pick back up? adam: i think every time they come out with a redesign there is a lot of anticipation and hype around it and apple needs to always live up to that. the broader context of what this is is a lot of the skittishness around apple right now about what the next big thing is going to be. the company is incredibly reliant on the iphone for business and so any hiccup that investors see in how the iphone is doing causes these sorts of blips in the stock. emily: gene, how dramatic do you expect the redesign of the iphone to be? will an iphone 7 be that much different than an iphone 6s given that the screen has already gotten bigger? gene: probably modestly

different. one of the things they could do is potentially remove the home button and use things like ultra sound to do some of the biometrics so there is some technology that could allow a slightly bigger screen inside he same form factor. the substance will probably look a lot like the iphone 6 plus and 6s plus. the big trend investors should take some safety in is the pace at which people are buying iphones is speeding up. they're buying iphones more on subscription at least in the u.s. and apple says they'll export that program to outside the u.s. if that happens, that should speed up the pace and create a several-year tail wind to the iphone starting december 16. emily: now, gene, you and i have talked about this over the years, but this is still an iphone company. 66% of revenue comes from the iphone. at what point do you see a

significant diversification in revenue where the revenue, a significant portion of revenue is coming from another product? how many more years is apple an iphone company? gene: well, as far as iphone, it's going to be probably four or five more years. you'll see other categories becoming bigger like the watch. it's a few percent. that could ultimately be around 10% but it is still an iphone story until other categories like the car or this augmented mixed reality kind of this next generation google, apple will eventually be involved in. those are the type of things. so a long-term investor shouldn't have anything to worry about. it is the investors quarter to quarter that impacts the stock on days like today. emily: all right. gene munster, piper jaffray. thanks so much. tim culpan, our reporter in japan. thank you. staying with apple now, fit bit taking a page from the cupertino company's playbook. the wearable company releasing the blaze, a fitness tracker

with some apple watch like features including a color touch screen and changeable bands. investors, however, weren't enthused in the face of increased competition shares falling to their lowest price since fit bit's ipo. fossil and underarmor also debuting fitness devices. staying with the latest, imagine waking up to the smell of fresh coffee or croissants every morning. a google back start up is making an alarm clock that will give you just that. >> over the last couple years we've seen a lot of innovations with alarm clocks that wake you up with different lights and sounds and vibrations but this is an alarm clock that wakes you up with smell. this is the olefactory alarm clock. it is an alarm clock that wakes you up with smell using the little pods. these little pods contain scents developed by a french perform house specifically meant to stimulate your senses and wake you up within two

minutes. if that doesn't happen you will get a backup beep so you don't miss the morning meeting. there are scents like buttered toast. the perfume tods cost $10 for a two pack and it is sort of a razor blade business model. you buy them and each pod lasts to 30 days. you are effectively paying $5 a month to wake up to the smell of fresh toast. it first appeared on kick-starter last summer and will start hitting kick-starter backers this may with units available for retail by the end of the summer. emily: bloomberg there and tomorrow we have full coverage of everything out of c.e.s. we'll hear from the tom-tom founder and the blackberry robert lloyd.

emily: the nation's leading economists are in san francisco for the american economic association annual conference. bloomberg's senior economic correspondent started by asking if productivity is measured correctly. >> i think the question is we're certainly not measuring productivity right but then we didn't measure it right before either, so are we doing a worse job in measuring productivity now than we used to? and i think there are some arguments that suggest we are. mainly services for the most part where we've seen growth, seeming productivity growth, and we've seen situations that are quality changes and that makes it hard to measure productivity when you have services plus quality. >> the argument and this is one advanced by a panel here as well, has been that as amazing as networks computing has been, the real productivity enhancer was indoor plumbing, was

internal combustion. so will networks computing actually provide the productivity boost that the model t did? >> i agree with robert gordon the 20th century was a hard act to follow. my grandfather said he was born when people got around by horses and buggies and he lived -- that was 70 years, really remarkable. so it's difficult to get boons like indoor plumbing twice. you only get it once. but the kind of technological innovations we are seeing in i.t. are pretty incredible. >> they are incredible but are they creating economic growth? many of the things they create then become free. >> yeah. well, let me give you an example. look at the gps systems. gps systems had a big, measurable productivity impact on the shipping, trucking, logistics industry for obvious reasons in the late 1900's early 2000's. now the price has fallen so much that everybody has a gps. you don't get lost anymore. the kids aren't crying in the back seat. you don't have to sit fumbling with the maps around. that is a big productivity

increase in reality, but you're right. it doesn't show up in g.d.p. because it is home production. >> the kids are always crying. but the question is always then how do we turn this into policy? policy makers are scratching their heads trying to figure out how we then create growth. is productivity even the culprit, right? if what you're saying is we're seeing -- i'm sorry. productivity we aren't seeing in the data, so do we need to look somewhere else for the lack of growth? because we're definitely measuring growth and it is definitely not growing as much as it used to. >> right. we've seen similar phenomenon around the turn of the century, the last century, the 1900's where you had big technological advances in president barack obama production, washing machines, driers, dish washers, vacuum cleaners, lawn mower iss all of this stuff that made home production much faster and easier. people were much more productive but it didn't show up in g.d.p. we have a lot of that going on now where many of the productivity advances we're

seeing are not easily measurable. >> how do you capture that in policy? >> i think we should not be so obsessed with some of these measures of productivity and we should continue as economists. we should continue trying to measure this unmeasurable phenomenon. we've done some stuff in that area. other people are doing things. it is not a completely bleak picture. >> one of the things that's really changed in the profession is this ready availability of so much data. if your a he a young economist right now, you might be going to google or some other firm that's sitting on all of this data where you can actually learn something about human behavior. is there a way to generalize what it is we're learning when we have all of these micro transactions that can help us do macro economic predictions? the holy grail. >> right. well, there are two things. one is having more data and the other is having more time. look at the statistics which come out once a month. g.d.p. comes out once a quarter. you can look at a lot of these economic, online data

measurements that come out. google is on an hourly basis. >> so on this friday i'm going to the bureau of labor and statistics for the jobs day lockup. is there a time when i will also be going to the google jobs lockup? >> oh, yeah. absolutely. look for queries. go to google trends. look at queries like looking for a job, is anybody hiring, where is the unemployment office. these are taking the polls of the labor market these kinds of queries. emily: goog's chief economist hal varian. is a tweet longer than 140 characters still a tweet? that is the question. twitter may be preparing to raise its character limit according to a person with knowledge of the matter. the maximum number of characters could be raised to as high as 10,000. depending on how users respond to the trial. joining me now, you cover twitter for us. 10,000 characters is the

equivalent of a 20-minute speech. >> no one is going to write 10,000 characters. >> okay. twitter is he experimenting but why 10,000? >> it is like having no limit at all. it is really just a way to say people can write whatever they want. there has to be some limit of the code you have to probably have an end, right, no one wants to put a whole book into a tweet. but i think what they're really saying here is they don't want to restrict people anymore. emily: of course the twitter sphere has been very active over this news and jack dorsey just tweeted before we came on the show, a lengthy tweet that did not confirm that they are raising the limit but suggested that they are experimenting with raising the limit. he said, what if that text -- and he is talking about tweeting a photo of text, what if that text was actually text that could be searched, highlighted? we're not going to be shy about building more utility and power into twitter for people as long as it's consistent with what people want to do we are going to explore it. my favorite tweet from the

opposition as i'm calling it, jack, please, twitter is all i have. don't do this to me. sarah: there will always be people who are really worried about change and who think that the 140 character limit is the defining feature of twitter. how is it twitter without that? but if you search for reported characters on twitter you see a lot of complaints from your every day users, not the journalists or celebrities or politicians who use it but people just trying to use twitter to talk to their friends who get really annoyed. emily: so does twitter lose what makes twitter twitter if this happens? sarah: i think they'll try to make it more like what you see on facebook where you have a little preview and then you click to expand it. so people are thinking it is going to change everything and it might not change as much as you think it will. emily: interesting. we'll be watching. sarah frier who covers twitter for us. bloomberg news. thank you. coming up virtual reality is finally getting real. the technology expected to grab the spotlight at the consumer

electronics show. we'll have a preview.

emily: the consumer electronics show gets under way tomorrow in las vegas. over the years the technology that debuts there has had a profound impact on the lives of american consumers. consumers around the world really. in 1970 the v.c.r. changed the way people watched tv and movies. in 1981 the c.d. player changed the way we look into music. now, in 2016 it's virtual reality's turn. sales of v.r. headsets are reportedly expected to increase 500% this year. joining me now from las vegas with a preview of virtual reality developments at c.e.s. tim stevens editor at large at c.e.s. tim, thank you so much for joining us. of course the long awaited oculus rift will be unveiled and of course also a big headset from h.t.c. is it really just a race for consumers at this point? tim: it is definitely a bit

after race and a long race. v.r. first came into prominence in the mid 1990's. it's taken a long time to get here but is ultimately finally here. we've been waiting for this debut of this consumer device and it will be available for view tomorrow morning so the long wait is about to end. but there is a competitive product as well with the vibe. it is going to be an interesting race to see which of of these two is the strongest. emily: what about past $300 to spend on a headset? tim: there are super options. it may actually be quite a bit more. we're still waiting to find that out. probably the best low cost option comes from samsung. if you happen to have one of the latest generation samsung phones, the galaxy note or galaxy s5 or 6 you can get a gear v.r. which is a virtual reality headset minus the display. you plug your phone in and your phone becomes the display. it is only $99 which is quite a bit cheaper than any of these headsets are going to be and is a surprisingly compelling

experience. samsung put a lot of time and investment in these and partnered with oculus on the technology. it actually works really well. emily: i want to talk about augmented reality. we've been waiting a long time to see something more from magic leap that is working on this very secretive augmented reality technology. it works with your smartphone. i could potentially shoot aliens on my desk for example. what are you watching for when it comes to augmented reality and magic leap in particular? tim: magic leap is a very exciting company to watch. they have been very secretive about exactly what they're up to. i have seen a demonstration and the technology is quite compelling. basically a camera in your phone detects what is going on behind you and basically projects these 3d images on top of it as if there was a tiny elephant walking in your hand for example. things like that. kind of magical experiences delivered within your phone. since it is in your phone there is really no cost other than the potential cost of the app. but what exactly they'll do with that technology we are still waiting to find out. that's pretty exciting.

one of the other interesting augmented reality applications comes from microsoft, hollow lens, like a big v.r. headset but transparent. instead of just going to a virtual world it can actually bring characters to you so you can imagine playing a game like halo and having the enemies running around in your living room and shooting them. that is pretty exciting but that is going to be pretty expensive and not in the hands of consumers for a while yet unfortunately. emily: and it is of course based on the p.c. which you have to have as well. let's talk about some of the practical applications of this technology. i've been watching some of these amazing demos and v.r. and a.r. videos, h.t.c. for example has this incredible demo with the animator of the little mermaid. what sort of practical applications do you see for this in the real world? tim: well, on the consumer tech side of things gaming is definitely the thing to get this into a lot of homes quickly but a lot of productivity applications ultimately. they're actually using v.r. to help designers come up with better interiors for cars. they can quickly and easily

make changes to the interiors and the designer can put the v.r. headset on and act as if they're sitting inside the car. you see a lot of potential for designers and doctors to look at things on a scale as if they were inside of the cells. there's a lot of potential applications for v.r. and it is pretty exciting to think about what people can do with these things once they're on the arket and affordable, too. emily: when it comes to gaming what are the top titles right now? tim: mine craft is probably the most exciting. we've seen demonstrations on oculus rift and also seen that running on microsoft's hollow lens so you get augmented reality experience to have your creations on the table in front of you which is pretty exciting and is one of the most popular games in the world. that will be a huge seller i think for v.r. one of the most compelling experiences is alien isolation as if you're basically in one of those creepy alien movies. you can imagine walking down the corridors and hearing the alien kind of hunting you. that is a pretty compelling,

freaky experience to say the least. emily: okay. so if you can pick one company that you are most optimistic about, which one would it be quickly? tim: right now it has to be oculus rift. the backing of facebook and aiming high with their technology. i think they'll do very well. htc has a great product but oculus has better backing. emily: we'll be all over it this week. from the heart of the action in las vegas, tim, thank you so much for joining us. tomorrow of course we have full coverage from the consumer electronics show. we'll hear from tomtom cofounder, rob lloyd, and blackberry c.e.o. john chen. that's all today from san francisco. ♪ we live in a pick and choose world.

choose, choose, choose. but at bedtime? ...why settle for this? enter sleep number, and the lowest prices of the season. sleepiq technology tells you how well you slept and what adjustments you can make. you like the bed soft. he's more hardcore. so your sleep goes from good to great to wow! only at a sleep number store... find the lowest prices of the season, going on now. save $600 on the #1 rated i8 bed. know better sleep with sleep number.

♪ >> from our studios in new york city, this is "charlie rose." ian bremmer is here, the president and founder of a political risk consulting firm. the company published its annual risk report today, outlining the main geopolitical developments to watch in the coming year. this year includes the transatlantic alliance, an increasingly closed euro, china's global footprint, as well as isis. arabia is another country on the list. the country's prime minister announced that