mark: i'm mark crumpton, this is "bloomberg west." let's check the first word. russian president vladimir putin is ordering the bulk of his military to begin withdrawing from syria. president clinton said today that polar is expected begin tomorrow. the announcement comes as peace negotiations resumed today in geneva. russia's five-and-a-half month air campaign allowed bashar army to win back to the ground and strengthen his position ahead of the talks. syrian kurdish fighters battling the islamic state are noting an increase in the number of militants going awol. kurdish fighters are making claims that coalition forces continue to reclaim territory.

another islamic state recruiter a u.s. driver's license was surrendered to a military unit today. president obama says he is confident he can make significant progress on foreign policy in the next 10 months. he says the u.s. will keep fighting isil on all fronts and will work to close the u.s. military prison at one time of a, cuba -- after guantanamo bay, cuba. a university poll has donald trump ahead of marco rubio in florida a day before the winner take all republican presidential primary. global news, 24 hours a day, powered by 2400 journalists in 150 news bureaus around the world. i'm mark crumpton. "bloomberg west" is next.

emily: i'm emily chang and this is "bloomberg west." analysts bumping heads on conflicting outlooks with apple. we will bring you the details. tesla gets a vote of confidence from robert w baird. we will look at what this new dose of optimism is about. reading the tea leaf of presidential primaries. how do pollsters stay relevant in the age of real-time data? first to our lead -- a flat day for the markets but analysts are adjusting their notes on two major tech companies. with apple and a product of an next week, the new smaller iphone has experts divided with contradicting notes. next, upgrading tesla to outperform on evidence of production ramping up. to break it all down, cory johnson is in new york. let's talk about the smaller

iphone. if it happens, how big an impact could have on the bottom line? some are expecting modest sales and others are expecting it to be bigger. cory: i like what you did there with small phones and big sales. the real question isn't just about topline sales and how many they sell but what margins are going to be like. we won't know until they report the quarter but that's the kind of thing we will be looking for with this announcement. the fact they were going to have a smaller iphone was out there but the fact he's margins might be better for apple could be interesting. that's one of the entry sting parts about this announcement -- if this phone is more profitable, can it help give the bottom line boost that a bigger and more expensive phone with newer components doesn't often bring. apple sees better margins literally with everyday components are on the marketplace. this phone could have nice margins for apple.

emily: how does apple balance going more downmarket with maintaining the prestige of the brand? cory: what we have seen his they have tended to stay at market and while that my generate -- might generate less than 20% of the margin, it accounts for 80% of profit. they really are the pride of the industry in that regard but as they have grown into so many different geographies and the geographies of ship earlier and earlier, you seen the slowing growth of the company is of great concern this year. we are at a point where there are questions about can there be any growth? emily: i know you have your opinions about analysts but what is it about this event that has analysts so divided? cory: this is as closely covered

a company as there is. you have a company very much at an inflection point. the company not introducing -- of such size that new products like the watch that have been successful and big just cannot move the needle because of the size of this country -- size of this company. then you have forward growth companies that are actually quite low because the question is will there be growth for the future? emily: moving on to tesla -- tesla upgraded to outperform on evidence they say production is accelerating, which should drive deliveries and should drive margins. cory: the person who wrote the note lowered his rating a few months back and now is raising

his rating. in talking to him over the course of time, he still very bullish. he has remained bullish on tesla and among the more interesting things is there's concerns on the model x, a lot of concern about demand and their ability to produce it. he was comparing it to the model s which did in fact have a lot of issues in the early days but is now shipping a lot of cars out there. they still lose money on every car they make, but a disaster is not in the cards and he thinks they will meet expectations even though tesla missed its own estimates virtually every turn. emily: cory johnson, thank you. staying with apple -- the new iphone seven release is not

expect it until fall. over the weekend, images that to be the new iphone seven were leaked. the pictures were on screen renderings. it appears the new iphone is similar to the iphone success. the biggest change is that there are no horizontal antenna lines. the leaked photos not provide any insight into the lack of a headphone jack. coming up, take two looks for its next big hit. the ceo is here for a look at the future of the gaming company. later, exclusive conversation with shaun parker. his thoughts on who survives a music streaming wars later this hour. ♪

emily: neighbors of airbnb host will be able to give feedback on the behavior of their guests. the company will roll out the new feature in japan, its fastest growing market and then go global. the development comes amid complaints about so-called airbnb party houses that attract rowdy renters during major sporting events. a major gaming industry showcase called the game developers conference is taking place in san francisco. we are focused on one of the biggest publishers in the world, take two interactive, the company behind megahits like grand theft auto. joining me for an exclusive conversation is the take two

interactive ceo. good to have you on the show. you have been straight up that your holiday sales were not that great. what are you doing to make sure this year is better? guest: our holiday sales were phenomenal. our holiday release schedule was lighter than the prior year. but we have been crushing our numbers. we are doing much better than we expected and that's related to the ongoing success of grand theft auto, grand theft auto online in the entire release schedule. emily: how do you make sure take to does not become over dependent on grand theft auto and nba? strauss: what we have tried to do is diversify the company. when we took over, it only had one big franchise and today, we have 11 that have sold 5 million units as an individual release.

we have wwe, borderlands, civilization, which has sold 33 million units. emily: how do you balance giving shareholders what they want and not giving gamers brand fatigue? strauss: we start by trying to delight the consumers and everything else follows. we are one of the only leading companies that doesn't annualized our releases. it takes a long time to make the best stuff in the business and we are concerned about removing certain excitement when you want something to come your way but it wasn't just there. we don't ship a title until we think it is as perfect as it can be and we specifically, except for our sports titles, we don't

put our titles i schedule. emily: when do we see the next grand theft auto game? strauss: grand theft online still has its highest revenues ever two years after launch. this title is still continuing to delight consumers everyday. at some point, rockstar will talk about its future release schedule but it's continuing to delight consumers. our 2k label has some releases coming up as well. emily: i just tried oculus for the first time. what are you guys doing in virtual reality and how are you thinking about it? strauss: we are not made any specific announcements. we are intrigued. we are working on some things we have not announced yet but oath of our labels are intrigued. there are three leading contenders.

if there is a business, we will be there. no one else can produce our intellectual property. emily: why are you just intrigued? why are you doing more just yet? strauss: whether we are intrigued is not relevant. until there is a base to seller products to, there's nothing for us to do. when it becomes a software story, we will be there. emily: the number of developers working on vr has doubled. are you worried a bit -- worried about a talent brain drain? strauss: we have to see whether it turns into a future platform. we have 2200 developers in our company and hundreds of others we work with exclusively and we have a lot of interesting stuff for them to work with.

we've seen a lot of people who want to work with us. emily: have you tried vr yourself? strauss: i have. it is early and there are challenges as far as one's comfort level. emily: you mentioned you are not a gamer yourself. strauss: specifically not. emily: how do you run a gaming company being a guy who's not addicted to games? strauss: most of our senior executives are gamers but i'm an entertainment executive. i've worked in every entertainment medium there is and this is the fastest growing, most important, most probably consumed entertainment that exists today and the ones that -- the one that delight and excites consumers of all ages. the median age of our consumer is 37. we skew a bit more mail but it is almost 50-50. i have a healthy appreciation for what it takes to make an entertainment business successful, but i don't know how to play video games. emily: march madness is here and i'm wondering how much you benefit from people going online

to play your basketball games? strauss: it has changed our business. just a few years ago, we would sell our title and that was the end of our financial engagement. our virtual currency sales are up 72% year over year. emily: you announced a $250,000 tournament. are you taking e sports more seriously? strauss: it's hard not to take it seriously. all of our competitors are concentrating on it. one thing they are working on constantly is league of legends. it the only game in town. this is our first foray into the business and lot of tournaments are being played. emily: will we see more e sports committed? strauss: i hope so. we tend not to be people you make promises. we like to over deliver.

emily: looking at the broader gaming landscape, social gaming and companies like zynga were all the rage but we've seen zynga struggle and people are calling for the death of the console. what do you think the next five years in gaming will be defined by if it's not social or mobile gaming? where do you see things going? strauss: mobile gaming is a huge business. zynga and some others have struggled. companies that do well deliver the highest quality products to consumers. i think there's a big opportunity and free to play games. i think there continues to be an enormous opportunity in a kind of aaa titles we specialize in. there are massive multiplayer games as well and we have the leading sports title in china. we launched a massive

multiplayer online game in korea , so there's plenty of opportunity that is in our core business and we see that as a wonderful opportunity or growth. today, we put out a title and always give consumers an opportunity to stay engaged and we monetize that engagement. i think the business is more of the same and new opportunities, some of which we see, some of which we are not sure about like virtual reality. emily: in town for the gc. thank you for stopping by. coming up, and a bloomberg exclusive, we meet the woman hoping to bring the theater experience to a mobile device near you. ♪

emily: when you go to the movie theater, it's just as much about the sound as the sites. at that immersive experiences lost when you watch a movie on your tv or laptop. that is until now. angie lau introduces us to a young startup in asia that has just harnessed with skywalker sound that is bringing a galaxy far, far away right to your laptop. angie: this young woman from taiwan is meeting with the head of a hollywood giant. lucasfilm skywalker sound. >> one day i was watching "transformers" on my laptop. the picture was so huge like buildings falling down and robots running around and dinosaurs and the sound was so tiny.

i felt sad about that. angie: he says this will keep it relevant as more and more people experience movies outside the theater. >> it is a concern if more and more people are experiencing entertainment on this small device. angie: this hollywood sound veteran with seven oscars under his film couldn't believe his ears. >> what got me excited was the ability that gives people in all sorts of venues and all sorts of ways to hear in surround mix. that is exciting. the more people that can hear the mix the way it should be, the happier i am. angie: only a hand full of people have heard it and immediately invest in it. they just signed a deal with disney skywalker as well.

watch our soundman experience the work for the first time. a scene from gravity given the treatment. >> that's a trick. angie: we have encoded the audio for you so that you can, too. angie: as a sound guy, do you think it's going to change? >> definitely. it's like a theater experience on your laptop. emily: here to discuss this potentially groundbreaking technology is angie lau -- it almost looks like you got emotional there. angie: it's like a man who has

spent his entire career in the sound industry suddenly hearing sound for the first time. emily: it was really powerful. what make sure technology different from what is out there now? iris: right now, stereo is designed for the fact that we have two years -- to ears. this will address a little bit more on a connect and level. emily: how do you guys see this changing? gaming, virtual reality, film? angie: just being out at skywalker sound, the potential is movies and they are partnering with you to help with all their movie studio friends, but the virtual reality and gaming is exciting as well. iris: yes it will definitely create this helmet of sound.

it will help them jump into this world. and it will engage people in the context. emily: it is especially interesting -- i went to a movie for the first time in years and it's an inconvenient experience. i'm much more comfortable watching at home were watching on my laptop. so much of that experience is lost when you are doing that. iris: that is where we come from. when we watch films or movies on the laptop some of the sound cannot match that experience. lots of people watch their films on a mobile device or let top end we want to bring the experience to their mobile device. angie: you were in the movie

theater experience, but there are 20 speakers around you and these sound engineers have put sound all around you. now, it just blew me away and it will blow everybody away. you can get that stereo surround that real life experience just like the movie theater right from your laptop. we've got an exclusive demo we worked on here in your studio in the san francisco office. we have it on bloomberg.com. emily: we will check at out. thank you so much -- we will check it out. thank you so much for sharing that with us. coming up ahead of mega tuesday, we kick out the silence of polling and how it's changing the era of real-time data. ♪

mark: you are watching bloomberg west. let's begin with a check of your bloomberg first word news. with less than a year left in office, president obama is looking to put the finishing touches on his foreign-policy legacy. speaking at the state department's chief submission conference today, with president highlighted some of his administration's diplomatic successes. >> the historic democratic transition in afghanistan. chemical weapons are moved from syria. iran nuclear deal. americans coming home. climate agreement. the cessation of hostilities in the syrian civil war. that's strong, principled diplomacy. can: the president says he

build on those accomplishments over the next 10 months, and that the u.s. must move forward with this strategic rebalance in the asia-pacific region, and work with other nations to ensure stability in the south china sea. theimir putin today ordered russian military to withdraw most of its forces from syria. during a televised meeting with russians foreign and defense he said that the air campaign has allowed syrian president bashar al-assad's military to, in his words " radically turn the tide of the war and help create conditions for peace talks." president clinton coordinated -- president putin coordinated with president assad. the united nations security council is condemning the attacks in the ivory coast over the weekend that left 18 people dead, including 15 civilians.

the president of ivory coast, cabinet ministers, and the national security council held an emergency meeting today. militants linked to al qaeda say they carried out the attack on the resort town. turkey's prime minister says 11 people have been detained in connection with the suicide bombing in ankara that killed 37 people. no one has claimed responsibility, but turkey made it clear who it blames. turkish warplanes hit kurdish militant camps in northern turkey. it's a dog fight in ohio, where polls show john kasich pulling ahead of front runner donald trump a day before the republican presidential primary. kasich spoke earlier at a town hall. >> this country is about us coming together. this country is not about us carrying one another down or having fistfights at a campaign rally. that's not what america is. mark: mr. trump is stumping in

north carolina, florida, and ohio, among the states voting tomorrow. local news, 24 hours a day, powered by 2400 journalists and 150 news bureaus around the world. from bloomberg world headquarters, i'm mark crumpton. emily: we are counting down to mega tuesday. five states will go to the polls. florida, illinois, missouri, ohio, arizona. could we see some surprises? last week in michigan, bernie sanders pulled off an unexpected win. i spoke to mark halperin and john heilemann and asked, in today's smartphone era are some pollsters failing to reach young voters?

>> some pollsters are using cell phones, it is one of the things that separates good pollsters from bad pollsters. it was recognized a long time ago that you will miss one big demographic chunk. there is a lot of bad polling. there is also some good polling. there are some that are really good and some that are not so good and a brave new world of online polling where people are just trying to figure out how to do it. it is the thing of the future but eventually we will end up getting there. emily: how is polling different in this age? >> part of the challenge is there is this great appetite for polling now. every poll on television is treated equally even the other is a difference and there is an

effort to figure out how do you poll so that you can afford it because most news organizations don't want to spend more than they have to. if you take a poll of 500 people versus 400 people, your margin of error will be smaller. now you will have to do traditional telephone calls, calls to mobile phones but also online. emily: are some harder than others? >> yeah. there is a variety of things. is it marry or caucus. in the primary it's not always is accurate because you have a much smaller universe of people who come out. with a primary we all understand what that is. caucuses make it harder and because they make it harder to participate it makes it harder to see who is a likely voter. states that have had a long tradition of important primaries have a deeper tradition of good

pollsters who do good polls in this state, states that have not played as big a role for a long time tend not to be -- in michigan, the pollsters there are not very good and that state has not had a primary for a long time but its prominence is a little bit unusual so a lot of the polls were not to be believed because they do not have a great tradition of polling. emily: how much impact could a state like california have? >> california could have a huge role. it has been rare in our recent history, but if either bernie sanders is still alive, or anyone has stopped donald trump, california could be massive. one of every seven americans live here. the general election at the

presidential level and statewide offices is basically now a blue, democratic state. >> trump's presence on social media has been unrivaled and you guys have in covering politics for so many years. could things have played out differently? >> it is a hard hypothetical to answer. trump is a big personality and a big character who has a mastery of television as much as social media. in a the old media, donald trump looked pretty great. in any race that donald trump ran, he would always be competitive. he is rich, successful, and he understands tv. >> if it was morse code, he would do pretty well.

>> there is all this technology that shells out any candidate for raising millions of dollars on the internet. bernie sanders has a brand and marco rubio raised almost nothing on the internet. you think he was young and spent a fair amount of time out here and why would marco rubio's brand be as good to raise money on the web as bernie sanders? for some reason it is not. since 2008 -- it is so much cheaper and easier to raise money but everyone asks, how do we do that russian mark it is not a matter of technology. how do you get a brand that make people get that person to click? >> there is a deep mystery as to white bernie sanders is so appealing to young people but that is the key.

it is still the case that young people live their lives on the web more than older people. the republican party is still an older party. there has not been a great fundraiser on the web for the gop. the great ones have been democrats and that is because barack obama inspired young people. the mystery is why bernie sanders appeals to young people more than marco rubio. emily: thank you so much. >> they say that the web is the future. if that is true, republicans had better get with it. emily: our bloomberg politics comanaging editor mark halperin and john heilemann. the sequoia capital partner has left the firm. michael geoghan is his name. she says the venture investor

agreed to pay her $40 million to avoid going to court but paid her $10 million and stopped. he has filed a counter suit sang the woman threatened to shame him publicly if he did not shame her to keep quiet. i spoke to baptiste's attorney who says that they now plan to take the case to trial. coming up, a candid conversation with sean parker on the state of the music industry and spotify's spat with taylor swift. ♪

emily: a new way for cord cutters to catch their favorite channel.

sony announced a new streaming tv service going nationwide. playstation's view is expanding. the new offering is $10 cheaper and it does not include over the air channels but it could make it more attractive to users on a budget. a playstation or amazon fire tv device is needed to sign up. i sat down with entrepreneur and philanthropist sean parker to discuss the state of music streaming and his role on the board of spotify. i started with the early days of napster and how he became a hacker. >> everything was going fine until the age of 14 when i discovered this world, and think goodness i did because i would not have learned to code or about the early internet, i would not have built napster.

i only great debt to that small cabal of people who were essentially an underground community of cyber criminals. at the same time i drove my parents crazy. emily: at the same time, you met another hacker online and you moved to silicon valley and built napster. >> it was a great experience for us. we had nothing to lose. little did we know there was a criminal element of enabling copyright infringement. i blame myself only and that i was not a better negotiator and i cannot help them save themselves. but it is sad to watch the decline of this industry. it did not necessarily need to happen this way. emily: why not? >> consumers turn to piracy when they cannot get the product

through legitimate channels. they needed to have one coming from the record labels and they could not get their act together for years. it was frustrating to watch this long deleterious collapse of an industry producing something that i loved so much. that was never our intention. we never wanted to see that happen. emily: music sales peaked in 1999 and since then there have been years of decline. you are now on the board of spotify. do you think that streaming services can and bank that years of decline. >> i think we have turned the corner and are getting back to growth, based on what i have seen it spotify. that looks like it has bottomed out.

for a while, spotify could replace cd sales, a decline in cd sales and a decline in downloads. >> how do you convince people to pay for services when there is so much available online? >> the question of free versus paid is a question that has plagued the music industry going all the way back to radio. i would say that services like spotify that monetize at a really great rate, where we see users coming into a free channel. where we see at least one third of those users over time becoming paid customers, there is obviously added value and it is convenience, the ability to make a play list share playlist with the outside world. all the things we do to help service music. emily: how does spotify get over its taylor swift problem? it is not just taylor swift.

how does a company like spot a fight get over this issue that artists do not want to give away music for free? with a consider offering a paid tier? >> there is a big difference between artist to these this make money by touring and doing ancillary things. download services are not doing so well these days. they get a little trickle from youtube, which is nothing, but the branding opportunities to stage large scale tors because the touring industry is so healthy. that is the bread and butter. artist management is a different story. many of them are my friends so it is a necessary profession, artists would say a necessary evil. they're always trying to figure

out how do we extract every last drop of value? i find it hard to believe that the artists you are mentioning don't want their music to be heard as widely as possible by as many people as possible. i would say they have managers would like to extract every last penny from the product which they had no creative role in producing. but their job in the ecosystem is to extract every last dime. emily: you think this is taylor swift's manager speaking? >> that is an interesting theory. it is very hard to tell. we know that from social media. i do not know what she really thinks. i have talked to other artists whose managers are on a vendetta who love streaming and just want the music to be heard as widely as possible. emily: next, more of my exclusive conversation with sean parker where we discuss his hacker style of philanthropy and where he spends most of his time

and attention. more than 60% of adult smartphone owners use the device for health information but a study by the stanford university school of medicine finds that siri and other ai assistants trivializes some important increase on depression, mental health and domestic violence. for example, siri's response to the query for rape is, i do not know what that means. coming up, competition to find life on mars heating up the latest agency to blast off with the red planet in its site. ♪

emily: the xo mars mission blasted off from kazakhstan on monday. nasa was originally meant to

launch it but the agency backed out in 2012 due to a tight budget. this is the first of two launches that will see the european rover on the red planet by 2020. returning to studio 1.0 and mike conversation with sean parker. he may have disrupted the music industry as a cofounder of napster but these days he is focusing on charity. in part two of my exclusive interview i asked about the parker foundation and why he is giving away hundreds of millions of dollars to life sciences, global health, and public engagement. >> we are doing things that we feel extremely passionate about that we feel a need to get done in the world and the reason you are seeing so much of this

hacker style philanthropy is because of this group of people who made their money by being disruptive, by being unconventional. there is a desire to see the same type of impact that they have had in their business career which, if you look at mover, it has been massively disruptive. how does one find opportunities that are equally disruptive in the philanthropic world, but the type of disruption that has to happen if these entrenched social problems are going to be addressed? emily: you are giving money to advanced science focusing on allergies and cancer. what can you do differently than traditional venture capitalists? >> venture capital, when done correctly happens at a time when

a business is ready for commercialization. it is not there to fund basic science. for example, if you're going to fund immunotherapy and take money away from existing labs and researchers that have been built up over time there is a hesitation. the breakthroughs have happened quickly but they have been driven by private philanthropy because governments have been too slow to recognize that the technology is ready for investment. whether that is philanthropic investment or venture investment. emily: any crazy areas in biotech that you are thinking about that we do not know yet? >> pharma has done a really poor job of understanding where past drugs that have been

demonstrated safe in phase one and phase two clinical trials could have been approved in a much narrower indication. but it may mean that you need access to a drug that only 300 other people need access to. we do not have a regulatory framework today that is good at getting those drugs to market. emily: what is next for sean parker? >> i think life sciences is the single most interesting area of reflection. it is the ability to get to lab on ship in so many cases where it is easy for a grad student to do something that someone would have spent 30 years of their life doing previously. i think that cost reductions -- because of new technology

leading to faster and faster progress, the fundamental question of the 21st century is, how do we make sure that the technological novation's coming out of life sciences are available to everyone? emily: sean parker, facebook cofounding president, napster founding president, and founder of the parker foundation. it is time now to find out who is having the best day ever. the first place winner of the world drone contest in dubai. a 15-year-old from england named luke banister. more than two dozen people showed up to watch the pilots race against the striking backdrop of the dubai skyline. they were decked out in racing year and vr headsets. besides drone racing it will include robotic swimming,

running, and wrestling. tomorrow, a skyhigh interview with richard branson, literally. do not miss it. ♪

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