open market operations in the run-up to the lunar new year holiday. those operations will now happen every business day. korea has expressed concern over the currency. those comments were made in a joint statement by the country's finance ministry and the central bank. action will be taken against so-called current behavior in the markets. that it deems necessary. those the headlines from bloomberg news. let's take a look at the stock markets. they are currently closed for lunch. everything is down paring back to gains. i will be back in half an hour. now bloomberg west. ♪

plus, what if the san bernardino shooter had been using an android instead of apple? and can set top boxes handle even more competition? we will ask the experts. emily: apple is still in the spotlight two days after opposing court orders to unlock the iphone of the san bernardino shooter. reaction from the tech industry has been polluted, with calls for more debate and states of broad agreement that companies shouldn't be forced to create so-called back doors in their products. google tweeted that it could set a troubling precedent. the facebook company, amazon, microsoft and twitter declined to comment. is apple's stand putting other tech companies in an uncomfortable situation? many companies while publicly allying themselves with apple do in fact comply with requests for

official requests for information. i put this to hiroshi lockheimer. asking what he would have done if the gunman's phone had been an android instead of iphone. >> honestly we focus on building really secure products but if requested by law enforcement agencies, with proper documents we will make those available to them. i think in this case apple is being asked to, it sounds like, help in hacking their product. i think that's a very different scenario from sort of the way things work today and i think that requires a lot of discussion and debate. an important decision. i have a lot of respect for law enforcement and of course, you know, don't have any respect for criminals. that's not what this is about. more a completely new way of thinking about things and we need to debate that more.

emily: you have opponents out there, including president obama, saying this is restricted to one criminal and if it's going to save lifers, isn't that more important? why would you protect criminals or put innocent people's lives at risk? >> like i said, it's a new area and i think it warrants more discussion to make sure how is this actually going to work, what kind of precedent is being set and so forth?

so i any more thoughtful debate is warranted here. emily: if that phone was an android phone, what would you tell the f.b.i.? >> hard to get into the hypothetical since that's not the case we're talking about now but i think we would feel the exact same way. look, this is a different scenario now and let's think this through a little bit more and have that debate. emily: edward snowden has said this will be the most important tech case in a decade. these are important issues you have the power to control as the head of android. >> i think it's about privacy, which i think everyone agrees is important. you know, it's easy to talk about these cases in general terms, but the specifics do matter. i'm not familiar with the specifics of, you know, the san bernardino apple situation so it's hard for me to comment on that, but it does feel like an important area that requires more discussion. emily: us tune in to "bloomberg west" for my full interview with hiroshi lockheimer. google's senior vice president of android, over the next couple days. with us now, wicker co-founder here with me in the studio. tim, i want to start with you.

lay it out for us. who is supporting apple and who is staying conspicuously silent? >> you have the trade group here in d.c., and facebook and twitter, all coming out in support of apple, saying they don't think the government should be able to force them to hack it and then donald trump is quickly saying who does apple think they are, adding to the mix of this toxic situation that the debate is just going to get much hotter as we get further towards the general election in november. emily: what do you guys think? >> well, you know, the thing to think about from my perspective is we have to separate this case from some of the larger

questions. i think of? the details of this case air little bit different. clearly breaking encryption is a wig problem and that's something we absolutely have to avoid. the reason i think some people have been not quite as strong on this is the specific details of this case aren't really about encryption. hacking into the system but not involving encryption. that's important. it's a very complicated case. the concern is by focusing on this one that really isn't about the bigger encryption question, is it unfortunately bringing into a conversation this maybe we weren't quite ready to have yet? that remains to be seen. emily: now, nikko, you run a messenger service. you have actually had requests by the f.b.i. to build a back door. explain. >> i was lucky enough to be educated by the best hackers in the world. thomas croft taught me and many others how to break into a back door and as soon as you have learned that lesson it's very clear that if you put a hole or

circumvent security encryption, it will be used by the bad guys. we've seen this with juniper recently. this is really frightening because of a couple of things. one, the government is acting more like a dictatorship, trying to force apple to build something it does not want to build and what it's asking them to build is actually a weapon that would be way more destructive to the united states and the entire world economy if it got out. i think tim cook is standing up more for national security than anyone right now. emily: so the same question with android, if this is saving lives, targeting one criminal, what is wrong with that? >> i believe tim cook is saving more lives by making this decision and it's the right way to go. what you are hearing from public technology companies, maybe they're not supporting this. i've spent the last day with cyber encryption experts and everyone agrees that tim cook is making the right decision here. the government is asking us to

build a unicorn, something that doesn't exist and if it's made for one, it will be made for others and the code will spread. so this is a very landmark case here and we need to make sure we hold our ground. emily: bob, what do you make of how as businesses these companies have responded or not? hiroshi lockheimer stopped short of saying we would do exactly the same thing. >> couple things to think about. number one, the details of this case aren't necessarily for release of a, an encryption key. that clearly would never pass muster.

emily: does apple end up standing alone here at least publicly? >> i think you are already seeing some voices of support. really in the d.c. world you are going to see the trade groups and coalitions stand up in support. they get their funding from silicon valley companies and will push money to those groups to help support apple publicly. they will be there behind the scenes. emily: and nikko, the f.b.i. asked you for a back door in still no back door. >> it's not that we don't work with law enforcement. same with apple. they complied with over 70 requests last year alone. it's just that if you have information you can help law enforcement but asking them to circumvent security and build something brand now is not something the government should do. emily: and another statement, we stand with tim cook and apple and thank him for his leadership. >> we do, too. emily: thank you so much. tim higgins in d.c. covering this story for us, thank you as well.

a story we are watching, starboard value is taking initial steps toward a proxy fight with yahoo. sources say a proxy solicitation advisor has been calling yahoo shareholders. last month c.e.o. marissa meyers outlined those. >> we are really very confident in the strategic plan 2016 and beyond in terms of a few key products. we're focusing on news, sports, sports and lifestyle, that's more focused than we've been in the past.

coming up, why federal regulators are pushing for more disruption in the pay for tv marketplace. plus free wi-fi for all of new york city. too good to be true? we will dig into the ambitious plan later this hour. ♪

emily: espn is trying to win back cord cutters. the goal is to lure subscribers who are canceling higher priced cable contracts or not signing on at all. it pays the highest per subscriber of any network. the s.e.c. just voted to begin writing new rules that would expose set top box users to bigger competition. there is big money at stake here. the plan was backed by google and opposed by the national group that represents providers. craig moffett, thank you for joining us. why are the cable companies so upset about this? >> it's about more than set top boxes. that piece alone wouldn't cause the kind of controversy you are

seeing. what i think people are reacting to is the mechanism for the proposal, which is to unbundle the video stream itself and effectively make the cable operators video stream generically available to third party providers who can then repackage it however they see fit. emily: so, craig, what's really at stake here? how much of it is about the fees? and by the way, looking at this chart, the set top box marketplace generates $20 billion a year. average household, including mine, pays over $200 a year just to rent the box. are there other benefits to cable companies? >> you know, that's what makes this so complicated because there are so many pieces of this proposal you have to run unpack. the boxes themselves, as you say, it's about a $6 fee on average for a box. there's two and a half boxes fer -- per household, so about $20 per month per household.

>> no, what mr. dodge was saying today on the dish call, and i think it's what almost everyone in the industry would say right now, is that things are happening quite quickly. you can get a roku box, an app from time warner cable that operates on your box and you don't have a -- to rent a box from the cable operator. the mechanism to the s.e.c. from the people opposing it would seem to be overreach. they say no, you have to separate information about the video stream from the video stream and what the customer has bought and we've allowed them to watch. it is trouble some to the distributors, to the content makers and to lots of people in the creative community as well. emily: craig, you said a 50/50 chance of actually changing regulation?

>> yeah, look, from here the process is, this is just say notice of proposed rule making. from here you go through a process of comments and reply comments to eventually get to a report and i give that a 50% chance of happening. then it probably goes to the courts and you have a 50% chance of it surviving a court challenge. emily: ok. we will of course continue to follow this. thank you so much for coming on "bloomberg west." coming up, the japanese game maker ask building and army of big-name partners to develop products outside its core asian market. we'll speak to the c.e.o. next. ♪

emily: another stock we are watching, i.b.s. it's stock rose after news broke that it is buying truven. true sven provides cloud-based management and analytics to more than 80 health care clients. the purchase is seen as another move by i.b.m. to amass huge data on how to work its software better. turning now to gaming, nexon, right now its core market is asia. japan happens to be the world's largest mobile gaming market. but nexon has its sights set on the west and making key partnerships abroad. owen, great to have you here. you are actually from san francisco but the first american c.e.o. of nexon, which is sort of a testament to the priority now. you are doing sort of the

reverse what other game companies are doing. they're trying to expand in asia. >> the north american markets for games are huge. we think there is a huge opportunity in north america. what they have had less experience where the last 20 years is rm online games. that's where we learned what we do 20 years ago the and we think they have a lot to offer by tying up the best of asia and the best of the american. we just finished up the fiscal year about $1 billion, and our u.s. and european business about 10% but growing. emily: this is a very hit-driven business. do you have to make regional changes for different markets? >> in some cases they do and some they don't. we have a game in the west called domination. it's been very successful in the west -- emily: shocker. >> then it did even better in

asia. we brought it to the u.s. and we've had a fantastic quarter with dominations and it's continued to grow. emily: zenga and king have struggled to come up with their next hits. how do you overcome that? >> we come from a very different perspective. we build the games we really want to play as gamers and we think there is a huge opportunity and plenty of space for games that are truly fun and immersive. if we build those sorts of games, the kind that game players warrant to make, then we will have a very robust retention of our game players and that creates a nice business overtime. emily: i was speaking to andrew wilson and he said in order to survive today as a gaming

company you have to do a little bit of everything, consoles, subscriptions, premiums. what do you make of that? >> we think that the issue is not so much being on a lot of different platforms. we think it's about making games that are really fun and really different or unique and if you do that, as long as you are on a big enough platform like mobile, p.c., console, any one of those address a very broad market. having said that, e.a. has done a fantastic job on being on all those different places. emily: all right. owen mahoney, thank for joining us today. great to have you. coming up, bloomberg's cover story features the most important apple executive you have never heard of. and check us out on the radio, the bloomberg app, and more of "bloomberg west" next. ♪

the oecd has cut its forecast for global growth. that risks in emerging markets. the world economy will expand 3% the same pace as last year. it also urged g 20 nations to consider more fiscal stimulus. much still needs to be done on the uk's demands over a possible exit of britain from the eu.

deep divisions over britain's demand. vital that the eu remain united. says the dutch prime minister. apple has had an immediate boost for its payout system in china. other big names will accept apple paid. let's check in on how the markets have been trading in the asia-pacific region.

not a great day to end with. they're giving back some of the gains from the rally earlier this week. the risk aversion has spread throughout the region.

commodities trading currencies in particular. down with energy prices. off by 7/10 of 1%. we are counting down to the markets reopening in hong kong and china. at the top of the hour. ♪ emily: the latest edition of business week is out. the most important apple executive you have never heard of. developed the first apple designed chips. his latest success was dax nine processor.

here are the authors of that story. >> he just joined tim cook's management team earlier this year. he has been an apple since 2008. he is basically running the semi conductor division at apple. a company that likes to make everything from the software for the hardware all the way down to the processor. that is what enables them to make differentiated products. he is an israeli born engineer. he joined apple right after the

first iphone had come out. it was a revolutionary device but it was limited. steve jobs made the determination that apple needed to design its own silicon. they thought that they can have new features they would not have otherwise. increasingly apple is making its own chips. they have been doing more silicon work starting with the iphone three. to convince the world to pay more for iphone and ipad. that there is something special about apple.

they are trying to play up silicon. the encryption debate that we are having this week. why the fbi finds it so difficult to get into apple products. very tight encryption makes it very difficult for law enforcement to come in and hackett. it. to createasked apple a kind of skeleton key into the products. the blending of the hardware and the software. there are elements of the chip that are essential. also the incorporation of the software and the algorithms.

why ago go it scrambles that is going out of the phone. it decodes it. what is happening in the middle is what law enforcement wants to step in. apple doesn't usually provide this kind of access. why now? this is something strategic that the company is doing. the stock has been battered. for some people say the smart phone market has been saturated. what makes apple unique? maybe the time was right for them. it is simply too good of a story not to tell. the skepticism around apple and

the challenges of apple stock. having to continually reiterate why their products are different from other ones. thank you. free wi-fi service for all of new york city. a public-private partnership is putting up digital wi-fi kiosks. where old payphones used to stand. the good old phone booth but rarely used. in new york city this is taking their place. link nyc. the 21st to bring century.

free wi-fi. usb ports for charging devices. browsing the internet. a consortium called city bridge.

as for security concerns, the linkedin network is encrypted and the information will not be sold to third parties. the ultimate goal is to blanket new york with uninterrupted free wi-fi. huge opportunity for future development and entrepreneurs. emily: is convertible debt becoming the new standard in silicon valley? ♪

emily: nearly one in five of those deals included convertible debt. is the trend proof of a greater strategy or are the companies still addicted to quick and cheap money? ellen: convertible debt is a loan structure where they will give a company money with the understanding that in the future it will convert into equity. it becomes more attractive in times when valuations are fluctuating either up or down.

to raise money without having to have everybody agree on evaluation. that can be hard if the investor thinks the company is worth less than the entrepreneur does. it is easier and faster to move forward with new funds. there's a big difference between convertible debt that is used for early-stage companies and early-stage companies. this is a pretty common instruments for all companies that are raising capital. there are a couple of reasons for that. it is a quicker instrument for a lot of reasons. it doesn't cost as much. you don't have to synchronize all the investors. it is an easier document to use that is a little shorter.

dave: it definitely has experienced some changes. the potential bear market that might happen. i think it has happened. what you saw was a lot of interest in money getting into private companies because they were not necessarily going public quite as quickly. publicage private equity companies and international companies were all trying to get into the tech market. they gave a very generous multiple for their money. perhaps more generous than the public markets. i used to work with keys. that crystal ball is pretty wide.

25 to 75%. keith: things are going to change radically for the next one to three years. when that mental bottle shifts all hell is going to break loose. dave: in the late stage portion multiples are coming down or have already come down. a lot of people giving very with someultiples significant proof and traction. we have done public yet. we are that multiple come back down pretty dramatically. ellen: where you going to see

differences in that kind of funding? dave: we still think there are a lot of interesting companies out there internationally. we really see a lot of interest from other countries. as dark and gloomy as people say the u.s. tech market is, it is still a very attractive market compared to everything else out there. china is really a tough story. russia is a tough story. any country with oil and gas making a big a part of their gdp that has already been cut by more than half. technology may be quite as fantastic as used to be but is still a pretty dam good story. we have always focused on those

fundamentals. that just in silicon valley but also in other markets. we have to look at whether downstream capital is available. a lot has been made of the on-demand economy. areas you think are in danger? dave: drones and virtual reality and augmented reality. those are all really interesting sectors. very sexy and interesting. they are also very capital intensive and they're not completely here yet. things that are transactional and solve problems. you don't think the internet of

things is going to be as big as everyone says? dave: a virtual reality game that my kids play constantly. it is not really over the horizon but it is out there. 3-d technology will be very immersive. emily: thank you for being here. and already sell sneakers running shorts and yoga pants. they are adding another must-have item to their list of products. workout apps. the autonomous car races heating up.

one of theing about biggest players in the game next. tomorrow on bloomberg to the polish finance minister. more bloomberg west next. ♪

top officials at twitter are scooping up shares of twitter stock. they bought nearly $2 million worth of shares this week. stock purchases by executives are considered a way to show how much management believes in the company. it may not be enough. dorsey august ceo jack purchased many shares of twitter and the share price has fallen

35% since then. is self driving car industry still in the nascent stages. blackberry surprised investors when they said they would be getting into the driverless car space as well. competing with tesla, google and apple. what is he going to take for driverless cars to be on the road? are so these industries often talked about yet still so nascent. : the driverless car is a reality today. the technology is out there.

enables cars to recognize pedestrians and other cars and objects. of theore of a question legislation. what are we going to do any collision happens? we will see autonomous cars on the road within the next five years. emily: you have any deals with carmakers to get the software to market? dimitri: absolutely. every carmaker has its own strategy and its own technology. quite a few initiatives. contributed to the user experience of the future car. this, the models that

will haveo the roads most of the autonomous driving features in them. emily: why blackberry if google and tesla are so much farther along? dimitri: we work with many companies. the operating system is currently on board 60 million cars. it provides a lot of safety features. into manyto integrate systems on the car. ready to go. they see a lot of opportunities going forward. emily: do you see space for

other companies to compete in this market? there is a promise from tesla will am sure play. i don't think google is in a position to enter the space. thank you very much. it is time to find out who is having the best day ever. over isnews by saying losing a billion dollars a year in china. some good news follows. uber is finally profitable in the united states. that thesuggests company might be a little ahead of schedule. that does it for bloomberg west.

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