♪ >> it's noon here in hong kong and over in singapore. i'mry schad salamat. another horrid day. trading with them with only $640 billion wiped away in 1:15. they may not sell more than 1% of the holdings for the next three months in the hopes of restoring some calm. and the unease is spreading. the futures sinking has been taking place in china. down 1% for the s&p 500. shares were tumbling making the biggest cut since august 13.

"star wars" becoming the high yeast grossing film of the box office. "the force awaken" broke the $16 billion. it made an additional $18 million overseas and it opens in china. hong kong is closed for lunch. china now for the day because it exceeded the certain per september handle. there's no more trading this thursday. hang congress by 2.39%. there we go. on the way down as well. any nikkei. time now for bloomberg west.

emily: i'm emily chang. this is "boomberg west." potato chips and mitro chips. you can buy just about anything on amazon and that includes semiconductors. colleague as, my orey johnson at the consumer electronics show. >> we're going to talk to self-driving cars and the future of navigation as well. emily: an executive shuffle at morgan stanley. hat could mean changes the c.e.o.'s gorman's succession. eric, give us the rundown.

>> the bottom line is this, james gorman is going to be the c.e.o. of morgan stanley for longer than he initially planned. he will be though there for the next seven years and all the way through his retirement at age 65. gorman is 57. greg phlegming who has led the retail brokerage, really the crown jewel of the franchise is on his way out the door. , greg flemmingon has been seen as a potential successor. and as long as they're down 15% twites as down as gold man satisfaction you -- goldman sachs you know that takes the issue off the table.

emily: is gorman trying to shore-up his future leadership as c.e.o. here? >> in short, yes. gorman is cementing his hold on power. flemming's departure removes the potential successor trip. he's older and now perceived as a threat to his hold on power. what now needs to be seen the who steps into the shoe's of those deputy ranks, morgan stanley doesn't have many people in their 50's who are eligible. and so we will see the next generation of leadership begin to emerge. , ly, there's one last thing . that he had departing words emily: how existential.

marissa myers company under fire yet again from investors angry with yahoo!'s performance. a letter. comes from it pears that investors have lost all confidence in management and the board. starburt raising the threat of a proxy fight. in response yahoo! says it's in the mix of of a multi-year transformation. we will share additional plans for a more focused yahoo!. joining me now is eric couple an early investor. also joining us tom giles who overseas tech coverage for bloomberg news. tom, you guys have been choicing this all days. what do you make this? is a proxy fight inevitable? >> that's the word we're getting

right now. they are really fed up. nothing that marissa meyer and her management team are doing at yahoo! is just really up to snuff as far as starboard is concerned. and i think what -- what you saw marissa meyer and the management team take a few steps. but it really wasn't enough. i mean, starboard has been making demands for months and months and months, first they wanted the alley babba and they said no, we have concerns about the tax implications. don't do that, spinoff your core instead. yahoo! came part of the way to exceed those demands. they said we'll look at whether it makes since to spinoff like that. but as far as starboard is concerned still not enough. emily: the way that yahoo!'s positioning it, i could take the better part of a year which starboard said it's far too

long. they did specifically said if the board is unwilling to accept the need in an election contest may very well be needed so they can share a majority of the board. so eric, what should yahoo! do? eric: yahoo! really has no choice at this stage but to sit down with starboard and maybe some other shareholders and negotiate a change in the board of directors whereby some of the time. ts will get some they had to exceed to carl icon a few years ago and dan lobe. to take such a fight to the end to an election is just not done in two day's time. they have to sit down immediately. negotiate a settlement so that new directors come on the board, a new plan is put in place and the faster, the better.

this idea that they can wait another year or two years to turn this company around is just not going to fly. emily: what about marissa meyer? we recently spoke with mark benioff and he expressed extreme confidence in her qualifications. let's take a listen to what benioft has to say. >> i have a lot of confident in her ability to create a great yahoo!. -- ve a great confidence to in her. she's amazing. she's completely magical. ily: given starboard, what does that mean for marissa meyer? >> it seems like there's a group of people in silicon valley that are closing ranks. i do not know marissa. i'm sure she's a great leader

for her company. but you look at the result for the past three year, -- years. and starboard gave a very good try in a letter that shows there's a steep decline in the core business if you let that go on for a few more quarters there , ll be no more ebidad therefore no more core value thsm happened under marissa's watch and that's got to stop. emily: a potential sale of this core business is another. verizon is a name that has come up. we spoke to tim armstrong and we said what about yahoo!? verizon bought aol and is very interested in add technology. take a listen to what armstrong had to say. >> i told you we had our long-term goals. i'm not commenting specifically on any companies but we want to increase the scale of what we're doing. so we're doing things that make things organically to make sure we become one of the most

important mobile media companies on the planet. >> what do you make of ar strong's response there and you know, this open question, who could, should buy yahoo!? >> well, armstrong was not giving you a sense that, hey, no, don't look at us. he said he wants scale. jahoo would give give them -- yahoo! would give them scale. that's a billion people. there's still people who use e-mail. there's still a lot of people who flock there and use it as a portal to the web. they've missed a lot of social. they've missed a lot of mobile. but it seems that armstrong and verizon based on some of the things that verizon said publicly that they would be interested in yahoo! would put themselves up for sale. so armstrong in no way is taking them ott of the running for potentially buying eye -- yahoo!? what do you do about those asian asset that are so much of what yahoo!'s valuation is? you have the stake in alley

babba. you have the stake in yahoo! japan all of which any buyer and yahoo! itself needs to unravel. needs to figure out how to do it in a self-efficient manner. and that's what prolonged this for so long. emily: do you see a sale? -- ou see it being ve roy verizon? >> definitely. f you created an asset and you will find that there are a number of buyers nasm's the best outcome. ou sell the -- it. and you figure out the tax implications and the share holders end up with cash or shares in alley babba and yahoo! japan. that's the best cleanest way to get out of this.

emily: early yahoo! investor tom giles who understand our tech coverage. coming up i will be sitting down -- c.e.o.election cre max just resigned from the company. and where he sees the company heading. microchip technology will be reconsidering fellow chipmaker atmel. respective for atmel and microchip has declined to comment. coming up, we head to ces and speak with the navigation partner that uber parrer ined with. why uber wants a piece of tom-tom. nd remember the high speed support system? one company begins work on a prototype in the las vegas desert.

emily: shares of apple down 4%. after reports surfaced that the company's trimming orders for the iphone. apple announcing that its own ap store set a sales record last week. stocks have been sinking ever since. it's currently at its lowest point in over a year. to the consumer electronics show where automotive technology is the theme of the moment. especially the push towards making self-driving cars a real. tomtom unveiled its latest technology. our editor at large, cory johnson is standing by with tomtom u.s. president. -- joshua degrove.

cory: thank you. tom-tom is an interesting company. i first heard of them 10 years ago when you were making personal business devices. you are making personal navigation devices. it puts you in a position to serve up maps to uber and apple. talk to me about what happened there and how the business pivoted. >> well, i think for the business, one of the best decisions that was made is to actually -- as we real wanted to take our destiny into our own hands and control the business, one piece was missing. at the time, our ceo made a bold move to acquire the map companies -- acquisition.

cory: it seems crazy at the time, so expensive. >> exactly. this is exactly what we are seeing now. content and the ability to control the content and invest in the content is giving tomtom, what we're seeing with the development of highly automated driving technology, it is increasingly more important around the world. so having that able to build on that asset is a great opportunity for us. cory: what are you doing now? >> it is about investing in the technology. recently, we just unveiled a real-time map.

the ability to update maps little by little as the reality is changing. the grapped reality is changing. cory: that is coming from the evice or the user? >> that would be coming from us. if the map needs to be updated, it can be updated immediately, on-the-fly. which as you can imagine can be very important for that technology. cory: do you imagine there will be a day when tom-tom is not making physical devices? well, there's suddenly -- tomtom is a product company. this is one of the things that defines us. we make products that makes people's lives easier. this is why we went into

navigation and this is why we were recognized for providing the very first navigation device hat only had one button. we push the barrier with wearable, comfort, bringing heart rate to the wrist. bringing music on this wearable device. we are a product company and i think we will continue to be a product company. at the same time we face some very large bets. what we are doing in the automotive world, you have seen us partnering with apple and with uber. it gives us a unique opportunity to really invest in our technology, to be part of what is, i believe tonight,

undeniable, the next revolution in driving. cory: he needs a map because he is french and he lives in massachusetts and the company is based in holland. that alone requires g.p.s. to keep that straight. emily: cory johnson on the ground. we will be back there tomorrow. -- with the u.s. president of tomtom. coming up, want to get from san francisco to l.a. in 30 minutes? yes, please. we're going to talk to rob loyd about whether or not that sci-fi dream could become a reality.

emily: in the market for a vr headset? preorders just began. it will cost you $599. the head sets are expected to ship in april.

the majority declined to estimate. saying the device suspect a big deal for the social network. now, i want to get to the main event, the consumer electronic show underway in las vegas. earlier or editor at large, cory johnson caught up with qualcomm ceo. after the company announced its w processors will be used in 2017 audi 17. he started by discussing the importance of the deal. >> we have had a long relationship with the car industry, over 10 years. asicipped over 340 million s. the speed at which people -- it started off by getting the car connected. it has accelerated through more technology and the audi partnership is not just taking

the modem, but also the part of the car that processes information. cory: this is an additional socket? >> more technology in the car. the car is becoming a smart phone on wheels. audi is an innovator and we are happy to be working with hem. the automobile is going to be a growth sector. our blend of technologies that we can provide in a smart phone type factor is going to be important to the car manufacturers. the car manufacturers are becoming much like the cloud providers. they generate so much data. if i had information on your intermittent window wipers, so much data i can get off that

information. that is why you see the cloud providers and car companies onnecting. we invent that technology to allow that to occur. that trend is good for our business. cory: they want to keep the data hemselves. >> anytime you have innovation occurring at a fast rate, you ave a lot of different parties. that has always been a good trend for us and we try to make that easy for these companies to take advantage of that technology. cory: what percentage of the business might be cars five or 10 years from now? >> if you look at our business, the smartphone business will continue to be a big business. but it's slowing down. we can take that same technology

and apply that into new markets. when we look at those businesses, it doubles the available market over the next five years. when you look at all of the hings on the show floor, not just cars, but if you take cars, the home, what is happening in smart cities, automotive, health care. those are new sockets for us. it doubles are available market. cory: i think i will come to hate the phrase internet of things, so thank you for not using it. i imagine how you see that working? >> well, today we're already a big player. we ship over 100 mill chips into that area. what people forget, it is very diverse. you have to enable a number of different partners. not just one like you might do in the smartphone case. but what's happening is they're absorbing many different

technologies, drones, even your thermostat has a number of technologies. -- that 10 years ago or five years ago would only be in the beginning stages. that accelerates the rate of innovation that occurs in the home and all of these different markets.

♪ >> half past 12:00 here in hong kong as a look at our top stories. chinese regulators looking to restore the market. and just after 15 minutes the -- wiped t breakers out $640 million. the security council has promised to take new measures r north korean korea's claim hydrogen bomb. the blast was a clear violation of the u.n. resolutions. he said that the blast was to

protect itself from the u.s. an other enemies. they summoned the north korea envoy in protest. netflix has gone live in 130 new countries on its way to becoming the first global online service. india, singapore and hong kong mong the asian market. netflix jumping more than 9%. they expect to add more than 11 million subscribers outside of the united states. the asia pacific trading day today is one that many would like to forget. >> given how short it was on the chinese menu. we do have some breaking news right now from china that the securities regular, that the csrc has scheduled -- well, scheduled an unscheduled meeting. i said an unscheduled meeting to

discuss what they can do about these circuit breakers in china. two of them kicked in. when they fell 5%. trading was halted for 15 minutes. when things resumed it took less than 90 seconds for us to hit the second threshold of minus 7% in effect shutting down the market for the day. of course, we don't know details of what they will be discussing. perhaps should they revisit the gap from 5% and 7%. once they reach 5, everybody fears they may get stuck in. they also discuss the rules or the limits on how much these big hare holders can sell. perhaps alleviate some of the panic that we're seeing across the choi knees market which is shifting into hong kong. we're counge to 2.4% morning session, 200% of the 30-day

average in terms of volume and we'll see how this plays out in session. not in shanghai. hong kong reopens 27 minutes from now. emily: now we're headed to hyperloop. it's an idea outsourced by ilan musk for. the system capable of speeds of more than 700 miles an hour. rob, thank you so much for oining us. what is the path for bringing this idea to reality? rob: emily, it is a pleasure to be here. what is really exciting for all of us at hyperloop is one year

ago, we were operating out of a garage with six employees. one year later, we have 88 people, $37 million of capital, on our way to closing are $80 million b round. we're sitting here right now, 45 first s away from our important test that we will be completing this year as we move quickly towards what we call our kitty hawk moment. the moment we demonstrate the full system, achieving those 700 mile-per-hour speeds, and demonstrating the innovation this company has brought. we'll have 300 people by the end of this year. and not only is hyperloop a fast technology. hyperloop is a really fast company. >> so when do you move to actual mplementation? >> you know, as we see incoming

interest from around the world, we are putting some folks around the world to start to work with projects that we are already identifying. along with the technology evolutions, we will be demonstrating this year, we are seeing interest from around the world and we are beginning to work on the process of identifying those projects that will demonstrate the transformational nature of hyperloop. it could be passenger movement, opportunities between cities, it could be moving freight. we are focused on identifying the three top opportunities by the end of this year that between 2017 and 2020, we will begin constructing the three first production hyperloop systems around the world. emily: how involved is elon musk at this point? have you talked to him about how you move forward technically and financially? rob: he has been pretty pleased with the progress our company has made. he is not directly involved. the hyperloop competition being sponsored by spacex is something we love.

that is coming up as students and contestants begin to demonstrate their ideas. the test that spacex will be sponsoring the summer -- we are a sponsor of that activity, but most importantly, we love the fact that some of the brightest minds around the world are putting their thoughts toward solving this problem and we think some of those will be the next 100 people that we hire. emily: what kind of people are you looking for? you said 300 but how much hire having you done already? and who are you targeting? rob: we have 88 people today. we are looking at engineering talent from across multiple disciplines. it's actually a fascinating process to watch as we build a company of builders. the only people that we have us join our company have credentials of building stuff.

they could be mechanical engineers, aeronautic engineers, but they are coming from all sorts of disciplines as we bring this unique idea together. about the pod in a pressure reduced environment, the levitation technologies that reduce friction, the propulsion system, and the pod design. -- that will carry both people and freight. emily: when will i be able to get from san francisco to l.a. in 30 minutes? is that five years out? 10 years out? 20 years out? rob: well, emily, that's a great question. san francisco to l.a., i am not sure that is the first route we will be constructing. we will give you one of the first tickets to a hyperloop ride somewhere in the world. you will be able to cash that to get in the year 2021 and if we get lucky with a country, government, regulators, and with financial backers, we will let you punch that ticket in

2020. that's our go. three projects underway and the first production system in 2020. emily: we have a date. i will hold you to it. rob: look forward to it. emily: rob lloyd in las vegas. to another stock we are watching. netflix shares soared after reed hastings took the stage at the consumer electronic show. it would announce the company's near global expansion. >> while we have been on stage at ces, we switched netflix on in vietnam, india, nigeria, poland, russia, saudi arabia, ingapore, south korea, turkey, indonesia, and in 130 new countries.

[applause] emily: he went on to say that viewers watch 12 billion hours of netflix programming, 70 million people around the world stream netflix every day. absent from that list, the world's most populace country, china. they hope to launch their in 2016. former yahoo! board member joins us as activists wrap up pressure on marissa mayer. he is announcing the first annual election prize.

emily: pinterest is the latest tech company to hire a head of diversity task of hiring more women and minorities. this comes after a week that more diversified people. along with a higher, pinterest is starting an apprentice program for minority engineers and an internship program for minority college freshmen. pinterest said it was setting quotas. 0% female and 8% from minority as their back grouped. max levchin, a former board member of yahoo!. rns out he's also a huge cryptography, fascinated by the security challenges facing governments around the world and privacy challenges for people everywhere, the real world

cryptography conference is going on in silicon valley. he is here with us now. hy cryptography? and why a prize? max: a huge part of my life since as long as i can remember. certainly paypal, my first act, was established to build a company with security at its heart. and ever since then, everything that i've done had deep debt to cryptography. it seems very appropriate, given that current political conversation, it is important to highlight the science behind security. emily: you named two winners today. i know you said that technology can improve, electronic freedom policy. what are the big innovations and cryptography that you are chasing? what needs to be done? max: this conference is important as an embodiment of

what needs to be done. it is something that helps people live private lives if they choose to do so, protect us from bad guys. -- and dishonest government. it's the sort of think that you would find useful today when you go to your browser. one of the winners was my team which had created a former proof of the -- what used to be known as sfl, the lock in your browser. and the ore winner is silverado way which is a legend in crypto and most of his work protects your e-mail browser. the other winner is a legend and most of his work is useful in your day to day life. emily: the cyber security information sharing act was passed right before

christmas. big brother or not a big deal? max: somewhere in between. i have yet to see a thoughtful solution from our government in the world of security. there is a lot of misunderstanding. par of the reason for the prize is to highlight how this stuff actually works. you cannot tell people to stop thinking about the math. the bad guys whatever is available to them so we might as well protect ourselves as well as we can. most of the law that has been written suffers from what looks like washington's speak without a real understanding of what's really underneath the math. emily: i have to ask you about yahoo!. you left the board recently. today, new action from starboard. saying they have no confidence in management, no confidence in the board asking for significant changes before a sale or a spinoff can happen. what's your reaction? max: despite being off the board, which i was quite sad to

leave because i learned a lot, i still cannot talk about it. i am afraid that is the latest in the volley. mily: why did you leave? max: the firm took over my life n the best way possible. early last year, i realized this would be the one i would spend the rest of my life on. emily: i know there is not a lot you can say, but what is your level of confidence in marissa mayer right now? max: she could be the hardest working ceo in silicon valley. bar none. there's a gap between the next c.e.o. and marissa. she is a smart product person. if you look at the successes that yahoo! has full credit to take which the press rarely gives her credit for, the

product development, the shift to mobile, the efforts to create new revenue streams have been tremendous. there are an enormous amount of legacy problems. they're very real and they will take a while. but i doubt there's anybody out there better qualified to do it. emily: interesting. so when you look broadly at the tech landscape in 2016, you have been doing this for two decades, what is the biggest theme that will emerge this year? what is 2016 going to be the year of? max: there are several answers i can immediately give. one of the things that's really exciting, in the last couple of years, people taking on extremely serious challenges. five, six years ago and i'm certainly as guilty as anyone, there a lot of effort in what may be considered fun or frivolous. today, the companies i see as an

angel investor are about food shortages and water cleanliness 13s and energy supply and renewables, things that are impactful and consumer finance, health care. we are entering the age where the brightest minds are applying themselves towards the hardest problems humanity faces. i'm super bullish on this and excited to be a part of it. a wrinkle on it, making sensors, the one thing that seems to be emerging rapidly is people attempting to create platforms for disparate sources of data combined for dis proportionate impact. so that's really exciting. emily: max levchin awarding the first levchin prize today. thank you so much for joining us. >> thank you. emily: amazon is continuing its quest to really sell everything, from batteries to baby wipes and now o its own semi conductors.

the subsidy announcing it has developed a chip. the move is a challenge to intel's dominance of the data center. of which intel has a 99% market share. coming up, blackberry wants in on the driverless car race.

emily: toyota tapped a google employee. to help build self-driving cars for the giant. james kuzner had been a google employee and was named head of the company in 2014. he be part of the team leading the company's artificial intelligence lab. toyota promised $1 billion in funding over the next five years.

speaking of driverless cars, apple, google are all in the race. and now blackberry is making it official, too. qnx will be equip frd autonomous driving. blackberry's advantage could be that it is already in more than 60 million cars. joining us is blackberry ceo. john, always great to have you here on the show. o what major car manufacture has signed up to use qnx so far? >> we have about 250 who have signed up. we have been in business for a very long time. we have 60 million cars out there. they're on our system, navigation. today, at the show, we announced two new products. advanced driver assist and coustic.

and so those are the two major ones. emily: how about for the autonomous car software specifically? have major car manufacturers igned up for that yet? >> what we provide, the resource management and application eneath all the interfaces, apple or google or ford or fdl technology or car manufacturers or engineers, they then add on to it and use my technology. these are required technology for autonomous cars and for the connected car. these are required technology. but not only for an awe tom mouse car but for the connected car. so those two -- so we are very basic technology in cars. emily: you told me for that you would like to work with google, apple, tesla.

have you had actual conversations about partnering with them? >> my people have a lot of conversations with them. i think probably more so with google today, since we also joined forces in the android world. i think google is probably the best of our partners right now. emily: are you concerned that google and apple would want to own the entire software stack? to n, why would they want work with qnx? >> we provide a secure layer with how these applications talk to each other. and those security are very important. so what we're known for, obviously, we're qnx is the security part of it and the connectivity part of it. we happened to create more

module so people can plug in. we have an open system interface. i am not concerned about how they want to own the entire stack. you know, that will just give us licensing opportunities. i would love for them to be on the stack. emily: i want to turn to the share care deal. you do not need to use a blackberry. are we going to see more deals like that? more of this sort of outsourcing of v.b.m.? >> we are providing our technology, the security and interface, into sharecare. it is big into next generation ealth. absolutely to answer your question. we are hoping -- i personally am hoping we would see more applications like this.

and other areas as well. emily: how big could that business be? >> messaging business, recurring, it could be substantial over time. like everything else, i tell people, you have to be patient. having the design win -- you always try to trap me with numbers. i want to make sure that even knows that this is the right direction on the long-term for us to deploy our technology. and then we will reap the rewards as sharecare becomes more prevalent. we need more of this. then we could embed a lot of our technology everywhere. emily: not a trap, just a question. you always do a very good job answering. john chen, c.e.o. of blackberry, live from las vegas. that does it for this edition of "bloomberg west." tomorrow, plenty more from the consumer electronics show. we'll be focused on the future of media with tom rogers, boss

ttman and vevo c.e.o. eric huggers. that is all for today from san francisco. ♪ the only way to get better is to challenge yourself,

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