angie: the global equity rally has stumbled as asian benchmarks fell back. indices in japan, china, australia, and south korea have all trended lower as it rains from the market. japanese shares had been down by a rising currency; oil also turned negative after hitting a two week high. shares of bhp are rising in sydney after a first-half net billion.5.7 underlying profit came at $412 million, down 92% from a year earlier. bhp cut its dividend payout for

the first time in 15 years. is warning itp will post a net loss in the fourth quarter and its first full-year loss of almost two decades. in coals the tumble prices for additional $1.2 billion in impairments and charges. it is also morning that cold may be priced lower for longer. those are the headlines, powered by over 2400 journalists in 150 bureaus around the world. let's take a look at the markets right now -- hong kong and china closed for lunch, but that global rally has snapped in the morning session. this is a picture of tokyo and mumbai. emily: i am emily chang and this is bloomberg west. google is back in the hot seat with the eu. how the search giant plans to respond to mark zuckerberg -- plans to respond. mark zuckerberg is going all in

with vr. do americans agree with tim cook or the fbi? we find out. now to our lead, a new chapter in the ongoing battle between the european union and google. they are adding on to existing antitrust investigations into their mobile operating system and shopping services. the eu has been quizzing people involved about google's behavior. for more insight into this story, i spent the day at the google plex with hiroshi lockheimer.

i started by asking if he would have to alter googles business relationship with hardware makers or app developers to navigate heightened antitrust in europe. >> we want to work with the relevant authorities and educate them how android and the industry works. in terms of what is to come, it is hard to predict. we think there is a lot of confusion and how the ecosystem works. it has that existed before. it's never been done before. it is a new thing and we are learning together and learning with the relevant authorities.

i don't want to predict what will happen in the future. emily: are regulators confused? >> i don't know if they are confused, but it is a new thing. there is the template. it requires a lot of discussion and dialogue so that everyone can understand how it works. emily girl is that -- emily: is that something that you plan to fight? >> i don't know about fight. we are in discussions and that will continue. emily: the eu is taking a hard look at google because of its dominance. >> manufacturers choose to use android. some manufacturers have chosen to use android in other ways. we talked to regulators, which i

do not want to get into now. we think it is an open ecosystem and makes it a choice for everyone. emily: what is your answer for regulators? doesn't the goal of natural dominance put you at odds? >> there are certain markets were other devices do really well. i think it is case-by-case and we understand their opinions on this and we work with them to get them our viewpoint. people have reviewed what we do and we have said it is fine. emily: google now, your version of siri, seemed a big initiative but we have not seen that much development. is that less of a priority?

>> i think it is a really important area. we launched google now with jellybean. it has been a while and one of the ideas hind google now is that typically when people think of google, there is a search box and they enter a query and get an answer back. but what if we flipped that around and started providing answers before they asked? that was the original premise. for instance, based on the customer providing access and granting permission, google now can learn -- it seems like every date you drive from this place to that place. maybe that is your home and your workplace. it learns these things without the customer entering information.

emily: amazon echo is getting rave reviews but they say why did apple or google not come up with this? >> i don't know if it is better than these other products. it is a very different use case. echo is usually in your home. google now was born on cell phones and tablets that you carry with you. they seem to be doing great. i think that it is an exciting space. it makes us want to sharpen our pencils a little bit more. emily: do you want to see android in the home like that? >> there are already a lot of android devices in people's homes. there is now a refrigerator that runs android and other devices like your tv that run android. that is only happening and our goal is to interconnect these devices much better together so

that the new experiences that can be invented. one of the realizations, if you look through your home, forgetting operating systems for a second, there are many different screens. your microwave has a screen, your oven, your thermostat. they don't know how to talk to each other. if they could interconnect, there are a lot of interesting things that can be done. emily: what do you see as the future of android? a lot of these other products whether it is nest or self driving cars or cars in general, what is the future of android in our world? >> if you look at the future of

it so far, we've also announced initiative around internet of things. that is where really interesting things can happen. if your car approaches your home, you can change her thermostat to your desired temperature. you can start imagining new things that could happen. emily: you can stay tuned for more of the exclusive conversation where we discussed google vr ambitions. mark zuckerberg is sharing his excitement for the potential of virtual reality. >> even just in gear vr, there

have been more than one million hours of 360 video. on facebook there are people who watch 360 videos every day. that is happening. that is one part of the content ecosystem. i am pretty excited about that. emily: it wasn't all excitement. he expressed disappointment on india's recent decision to block facebook.org as well as his relationship with telecom carriers. sarah, give us the highlights of what he had to say. what are the main points? >> he said the infrastructure of the connected world can handle facebook's plan. that means people coming on the internet for the first time --

they are deploying this year around the world. on the flipside, he wants to lead the effort for 5g network. emily: white is facebook taking -- why is facebook taking the lead? that is interesting. >> they are not experts and don't claim to be but think about what they have done in the data centers. they decide they were not cutting it. now they are building acts that are incorporating virtual reality and live streaming video. he talks about 3-d video and that will need these networks. >> a what did he say about india?

>> he said that he is disappointed. it will not stop them from using free basics in other countries. emily: disappointed, but not deterred. sara, thank you for that update. we will leave you with this one photo from the conference that people have noticed. it could be a vision of our future if the oculus rift team has its way. ♪

emily: one stock on the way down. that is fitbit after the latest guidance disappoints.

sales will be between $420 million and $440 million. the miss? slower than anticipated global rollout of the blaze and to be alter -- the blaze and the alta. movers and shakers are gathering at mobile world congress to discuss the future of tech devices. encoding a revamp of the smartphone as the market saturates. i sat down with hiroshi lockheimer for an exclusive interview. i asked him about google's approach to virtual reality and if there are any plans to expand on the low-cost cardboard. >> cardboard we launched over a year ago and i think there are 5 million out there. it's the biggest vr platform in the world from that perspective. one of the important things

about the art there is the are the technology and the content that is available. what we've enabled with this massive reach is developers of started to pay attention. in the end, that is what a customer will experience. they will experience climbing a mountain in their vr headset. emily: how would you rate the pace? is it fast enough? >> i think it is fast. it is hypercompetitive. we try our best to keep up and bring new innovations and delightful moments to our customers's life. innovation is high and i think it will continue to behind. there is so much going on which makes it hard to predict what is going on aside from new change in newer things that we cannot

even imagine today. emily: what is it like working for a boss? what is his leadership style? >> he is an interesting guy. he has a lot more grace now -- i guess i do, too compared to 10 years ago. he is thoughtful and an organized thinker will stop i think he is exactly what the company needs. he is adept at all of that. emily: he can get in the weeds on what you are working on. how does that impact you? >> he doesn't micromanage of that's where you're headed with that but he does know a lot about platforms. he's been doing that for a long time which really helps me. in many ways google is a platform company but also a product company.

with platforms we work with partners and he understands both the sides of that really well and i find that helpful. emily: apple is the most profitable company in the world with a closed ecosystem. why not make android closed instead of open? >> we think that the open approach is the right one in the sense that it fosters innovation, competition, differentiation, customization, and choice. emily: have you ever considered putting walls around android? >> i have never considered that. i see it as almost constitutional. we made the source code completely available.

we provide our services on top, just like other companies build their services on top. we really think that the open approach is the right way to go. emily: the promise has always been mass ubiquity, cheaper phones and including india where you have hundreds of people that are not online. how is that going? >> really well. we are seeing a lot of growth in all markets like the u.s. and newer markets like india. that is definitely one of the strengths of android. every region has its own unique needs and desires. that is ok. the open model of android enables that. emily: where is it growing the fastest? >> android is growing worldwide, but we do see a lot of growth in emerging markets such as india.

worldwide, depending on whose metrics you are looking at something like 70% to 80% of smartphones are android. emily: you know it is dominant it is criticized for being fragmented. >> it's interesting. we hear about that word a lot, fragmentation. there are a number of ways of looking at it. at the base layer of the operating system we have created the compatibility test. if a manufacturer wants to participate in the android ecosystem they have to go through a number of tests to prove that their device is compatible and not fragmenting from a developer and user perspective. >> it is an interesting point.

the upgrade is something that is really important. there's also a security element as well. in the summer of 2015, we started multiple security patches. devices we were able to push these updates to. also working with the industry's they have all publicly committed to doing these security patches on a monthly basis or some sort of regular cadence. we think that is really important. security is important to anything and that is something we are providing now. >> what are the plans to merge android with chrome os? >> it is interesting because they started from different design centers and goals. they are successful in different ways.

emily: google has been criticized for not making much money on android and it has been said that you will never make as much on mobile ads as desktop ants, is that fair? >> as an operating system, it is freely available. it certainly enables customers to do things on their devices that may result in revenue for google and other companies. that is how we look at it. when not going to charge for android itself. for third parties as well. businesses thrive on mobile on top of android.

emily: my exclusive conversation with hiroshi lockheimer of android. after the tragedy in michigan, we look at what you have to prove to become an uber driver. ♪

emily: to a story we have been following closely. uber driver jason dalton has been charged with six counts of murder after a deadly rampage that left six people dead. uber has said they are how broken but will not be changing screening processes. he had no criminal record and the uber chief security officers had no back rent check would have flagged or anticipated this situation. it had us asking, what does go into a background check? the must provide their social security number, copy of a drivers license, insurance, and proof of a vehicle inspection. an outside company, checker, conducts a background check. that check goes back seven

years. they do not meet with them face-to-face. uber does not screen fingerprints which can lead to false positives and discriminatory results. the do have a panic button in their app and india but do not have one in the united states. they say they do not want to add an extra layer to reach law enforcement and do not think they can do better than 911. the uber of private air travel just raised new funding. the family had invested previously along with rapper jay-z. the ceo likens the company to uber black offering private jet rides you can book from a smartphone. the latest funding he says will be used to expand in the middle east, asia, and europe. when we return, how much does travis see really matter to smartphone users. ♪

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so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. bhp has cut its dividend for the first time in 16 years as they seek to protect their balance sheet and credit rating. underlying profit came in at $412 million, which dropped 92%. it will cut its dividend payouts from $.62 to just $.16 per share. will bepharmaceuticals correcting what it believes had been an error. the company says that $68 ouldion of net revenue sh not have been recognized.

valeant increased its eps by nine cents. taken a dives have despite a pretax profit that more than doubled to $666 million in the first half of the fiscal year. it did better than analysts expected, in the higher range of the forecast. cheap oil and the cost-cutting campaign spearheaded by alan joyce helps the results. the profits will be used in a stock buyback. >> we also benefit from trade congress initiatives. and american- airlines, which we have a joint venture in. both transformations are an investment in utilization of product and services and have really shown a dramatic turnaround more rapid than most americans expected. it is probably one of the

biggest stories of these results. aniggie: those are the headlines from bloomberg news. let's check in on how the markets have been trading in the asia-pacific. >> that global rally really stumbled. we are seeing the regional benchmark erasing all the gains from the start of the session. most indices have been slipping. the nikkei 225 down after the down,break, and the asx extending losses. 4.7%, concerns that fuel costs could dent profits. 1%, ang seng down half of lot of this because the pboc, after lowering that reference rate by the most in six weeks, we we saw some weakness there,

and that has sparked some investors to head to the haven. the gold is back in fashion as well. where counting down to hong kong and china at the top of the hour. emily: i am emily chang and this is "bloomberg west." we are the high-stakes standoff between apple and the u.s. government continues to evolve with apple saying monday that officials should withdraw the order. instead apple is calling on congress. members of the business tech community have been supportive of apple. here is what mark zuckerberg had to say about encryption. >> we are sympathetic. we believe in encryption and think that is an important tool but honestly people will find a way to get it anyway. i think it is not the right

thing to block that from the mainstream products that people want to use that will not be the right regulatory or economic policy to put in place. emily: at the same conference, the consumer devices ceo says privacy is a major issue for smartphone makers and he personally supports tim cook. while the industry is backing apple, the american public is split with a new poll from pew research say a small majority sided with the government. we are joined with ryan reese and tim higgins who has been covering this story out of washington, d.c.. i will start with you, what do you make of what way -- of wahwey coming out and supporting -- >> it does not surprise me >> it does not surprise me at all. i think that their points are right.

you have to can -- protect consumer security or it is more detrimental to these technology companies. emily: yet, the majority of consumers do not care. what do you make of this pew research poll? they want apple to help. >> 51% in that pew research survey found they would support the fbi. another survey they cannot late friday found 51% as well supported the fbi. but 41% supported apple. if you dig into their numbers you found there was an even split between people who look at the u.s. terror policies being concerned they would go too far or not far enough. there is really uncertainty in the american public over where they are on this issue. emily: tim cook has been speaking on this for a number of months. he made this his thing. speaking to charlie rose a

couple months ago, listen to what he had to say. >> there happened people that suggest we should have a backdoor. the reality is, if you put a backdoor in, that is for everybody. charlie: does the government have a point that if we have good reason to believe that information is evidence of criminal conduct or national security. >> if the government lays a proper warrant on us today, we will give the specific information requested. we have to by law. in the case of encrypted communication, we do not have it to give. emily: how high are the stakes for apple if they lose this confrontation? >> the stakes are going to be big regardless. given all the publicity that this entire story has received and continues to pick up

momentum. they held the right stance from the beginning and ultimately that should reflect well on the company. i look at this as a situation where technology is quicker than security or laws. i don't think that this is a yes or no type of thing. i think something will be worked out but i think tim is right. right now the backdoor opens it to the good and bad. emily: apple has said that they did everything they could, they sent engineers to san bernardino. the county changed the password on his phone making it more difficult to help retrieve what was on the phone locally without having to provide this master key. is there a middle ground? or is the middle ground moot? >> that goes into the question about the policy. that is part of the reason why apple is trying to move it from the courthouse to the court of public opinion.

when we start to have conversations about what we want as policy, it changes the dynamics and the details that are getting into the mud and can couple kate the issue -- complicate the issue. emily: when we do get into the mud, how does this play out? >> one of the things that you will see is that the uncertainty of what the public once will make it harder for any legislation in congress. congress that is already gridlocked at a time when we are in a heightened circus atmosphere. we saw donald trump coming out strong last week in an interview with us, he said tim cook's head would be spinning, he would come down so hard on him. the stakes are so high and the conversation is so heated that it is hard to imagine much a current in d.c. which is part of the reason why you see the fbi pushing in the courts to get

resolution. emily: apple does have until february 26 to respond to this court order. tim higgins and ryan reese, thank you, both. apple is said to be encouraging store employees to sell iphones with new rewards programs. apple is facing an estimated decline in year-over-year iphone sales for the first time. i want to get back to mobile world congress underway in barcelona. big carmakers are on hand to show off their technology behind the wheel. aryl and hide, up with mark fields and asked when will customers not need to drive at all? >> we will probably see by the end of the decade that somebody

will introduce a fully autonomous the a call -- vehicle. what we have said when we come out with an autonomous the? -- vehicle, it's a vehicle where the driver does not have to take control in a defined area. when we come out with one we want to make sure it's true to our brand which is always about accessibility. is it you or google or apple? >> our view is we want to make sure that we continue to be a leader. were not only a leader in our core business, but at the same time we are a leader in semiautonomous features, features that will keep you in your lane or adapt your speed on

the highway. one of the announcements we are making here is that we are tripling our engineering investment. at the same time we are also investing in autonomous vehicles and as we do that we will work with a lot of different partners so our clear goal is to make sure we are a leader in this space. where it makes sense to work with others we will. mark fields with caroline hyde in barcelona. coming up, ibm steps up competition in the cloud with a handful of new partnerships. but is it enough to make a dent? up next, do not miss bill and melinda gates on the go. ♪

emily: free shipping is getting more expensive at amazon. now you will need to spend $49 to qualify. previously they had to pay $35 to waive shipping fees. it comes as amazon aims to curb shipping costs which have been growing faster than revenue. the giants were to push customers to the $99 prime membership designed to keep customers loyal to amazon's shopping feature. trying to the cloud, ibm is hosting its biggest event ever devoted to that part of their business. as part of it and announced a series of cloud related partners. i caught up with ibm's senior vice president of cloud and asked how they will add to the bottom line.

>> we will market sell the vmware portfolio. we will enable the ibm team to sell that capability. when they start to move workloads to the ibm cloud, obviously that is revenue for ibm. that helps us open up the market and what clients can do on the cloud. that helps both vmware and ibm as it gives them choice and the ability to consistently and seamlessly move workloads. we think this will help our clients accelerate their notion of the hybrid cloud. >> it is still early innings, but some also say that you are a distant force when it comes to amazon, microsoft and google in the race for the cloud. how do you change that?

>> we don't look at it as a race for size but a race for value. we're focused on the enterprise to help on the clients taking advantage of a heightened cloud. they can take advantage of the cost advantages and the capability advantages but also connected back to their own private clouds and connected back to the data centers. most of the data and applications are running. we say to clients, take advantage and build a hybrid application. our differentiation is different. you think about our wanton cognitive services on the ibm cloud, the ability to take the data and analyze all the bad data that they had, it is very important. i don't view it as a destination but a platform. what the cloud is enabling is

people to do things in new and unique ways with data and information that they may not have had access to in the past. emily: how many developers are currently using ibm services? >> we have well over one million developers on one platform today. when you add the number of get help and swift -- github and swift programmers -- they all have access to new services. they can get access to all of our wanton cognitive services. we are starting to see new applications being built by traditional clients and new startups. as we kicked off our conference, i started it with the clients. there is one client who is a startup using the startup cognitive services to provide new unique insight and analytics into the way that traders trade.

we are starting to see a lot of people come from different areas. when you look at the number of developers, you have to think about them coming from all of these various sides and all utilizing the cloud. it's become a platform for innovation rather than just the destination. emily: in this edition of our tech revolving door, twitter says that it former apple executive natalie charis. in a tweet, jack dorsey announced the higher and confirmed her position as vice president of global communications. this comes one month after significant reshuffling at twitter and seven months since the former can indication's lead left the company. coming up, yahoo! has a big week ahead beginning its search for any potential buyers.

and, i have got a feeling. will.i.am is having the best day ever. we will tell you why. ♪

emily: we have a busy week coming up and i want to break down what you should be watching for. cory johnson and mark milian are with me now. i want to start with yahoo! we are hearing they could start approaching bidders as soon as today. this could be significant. >> presumably the m&a activity has been going on for a while. emily: they were getting the cold shoulder. >> now we know that they have been talking to people and have a number of interesting potential acquires. it will be curious to see what they try to take out of it and what kind of cash they think these things could generate and why they want to own these assets that are big and

important. >> verizon keeps coming up as the most likely buyer. tim armstrong is supposedly looking into this. you ask them about this very thing. >> we believe that our strategy in commendation with what everybody else is doing -- we are also partners. if you go to silicon valley and companies like apple or google, microsoft, facebook and twitter, we are partners with all of those countries. with a long-term strategy of our own a long-term partnership strategy. from a competitive standpoint we are not so much in direct competition but coopertition with those companies. >> they have figured out how to monetize users and taken from desktop to mobile. i think they have done a very good job of monetizing and transforming content from an old desktop world to a mobile world.

verizon would like that content there are certainly capabilities to see what they want because they have shown what they can make of those assets. >> the big question with at&t is whether they see verizon's model is one they want to copy. do they remain as a telecom or do they take the verizon route and see their big brother and say that i want to be more like them? fitbit results on the outlook continue to be disappointing. when you see a couple quarters in a row with lower estimates in the lower them again, it's very

disappointing for investors. salesforce -- that's the company that's going to be really interesting for these guys to report. you seen a slowdown in expected growth, of all weeks the apple shareholder meeting is this friday. >> apple is already in the news for other topics which will probably dominate part of the conversation there. shareholders will want to know how these privacy issues affect things how it will affect the company over the next year, but the other big thing they were waiting for is this vote on diversity where they are getting pressured by shareholders to increase diversity in their top ranks. the percentage of african-american and hispanic leaders that the company has

been declining in the last year. they are under pressure -- there is this proposal for what they are calling an accelerated recruitment policy to help them wrap up on senior leaders which the company has pushed back on. >> that coming from one shareholder who owns a small part of the company. >> the shareholder votes at annual meetings do not tend to be a big deal. now that it is so big maybe the shareholder meeting has less impact. emily: thank you both. it is time to find out who is having the best day ever. i already give you a hint. it's will.i.am. he's teaming up with deutsche telekom to create his own smart

watch that combines fashion and technology. caroline hyde cut up with him at mobile world congress. >> when it comes to searching the world's information it is a conversation away. you can have a conversation about the things happening in the world or music and she is knowledgeable about the ins and outs of music like what the artist is up to and being able to make playlists and have conversations about the things you are interested in. emily: the smart watch market is extremely crowded. he may have a lot of competition would let him enjoy this best day ever for today. that does it for this edition of "bloomberg west." do not missed our executive lineup from aol to viacom to armed holdings.

that is all today from san francisco. ♪ . ♪

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