killed five dallas officers amassed a personal armory at his home. old micahr --nson was killed by the lawsuit was filed. in may, a love in other states sued the obama administration over the same directive. -- the manepartment was attacked by a russian policeman outside the u.s. embassy. a cia claimed the man was agent and refused to provide identification. ofa says the deployment

troops is an open-ended deployment. nato has tripled the size of its the climate force -- deployment force. this is "bloomberg west." >> i am cory johnson. this is bloomberg west. five police officer's dead, seven wounded, and a robot-delivered bomb used to kill a suspect. is there a place for apple in a world of four dollar phones?

eranos.low to sarah protest in dallas on thursday contorted into a night of violence. five police officers are dead and seven wounded. police officers using a robot-delivered explosive to kill the suspected gunman. questions about how and when police should be able to use new technology, technology only previously used in more zones. zones.wain war on the perfect -- on the fun we have professor seth stotten. lela, let me start with you. you have a terrific story on bloomberg.com saying this is the very first time that law enforcement has ever used something like this domestically, with the exception

of the bombing in 1985. >> this does set an uncomfortable precedent. this is the first time we know of that a robe -- police department has used a robot to kill someone. these robots have been used before usually to defuse bombs. does this set a precedent? this does not mean this might not be a sign for something to come in the future. there are a lot of concerns about what if defense manufacturers start to see a market for a cop -- for weaponize robots. if this does become a common use case, what does that mean? cory: what is the state of law enforcement agencies buying this military-grade equipment? guest: it is a sad day. change sois going to

much more dramatically in the next five years than the last 50 years combined. let's bear in mind, that particular robot was human-contr olled and was not autonomous. that is a very important distinction in giving law enforcement authority to do what they need to do, but the math is the math. there are 300 million people in the u.s., about 750,000 law enforcement professionals. campus, everyery school will have to rethink their physical security presence and strategy. the world is unfortunately going to get more volatile. we need new technologies and new tools. we cannot continue with the same path. cory: the conversation about the use of technology, military-grade equipment for law

enforcement came under a lot of scrutiny after what happened in ferguson, missouri. i wonder how that conversation has changed over the last year in the legality of using these things. it is a conversation that goes back a long way, back to the 1850's when people were debating if officers should carry the pistols of the day. in some ways, the use of the robot, and the use of explosives raise new issues and new conte xts, but the greater conversation about how police adapt to changing technology, and how they use force is a series of questions that goes back that just a couple years, but much further. whether this is primarily a

militarized piece of equipment -- there is no debate. mraps oring about armored personnel carriers, they may have a role in domestic policing, but they are certainly militarized. police have used bomb disposal robots for a long time and explosives in different ways for an equally longtime. this is a new horizon, domestically. cory: selena, you write in your piece -- there have been prior uses of using these robusta drop chemicals to disable a suspect or examine -- these robots to drop chemicals or to disable a suspect or examine a situation. in a: there was one used chemical situation in 2014.

in another one, police were actually dropping a bomb. but in this case, using the robot as the weapon itself, this is unprecedented. these are not just killing robots, it is someone controlling it. this raises questions about the security of the systems. what controls are there to make sure nobody could hack into these systems ? we have to make sure that when there is a robot with a bomb strapped to it that nobody can hack into it. cory: it seems to me that the increased militarization of police force -- the day started with the debate about police killing an unarmed black man, then began with a peaceful

protest, which led to more weaponry and ends with this robot. wonder if the desire is just a purchase stuff to fix problems rather than fix policing, which might be the more appropriate focus. >> that is a tough one. fixing policing is difficult. usually when you are trying to fix something, follow the money. the budget is 600 million dollars and we give our troops every level of advantage and i am ok with that. but the department of justice has no federal jurisdiction over the 19,000 law enforcement agencies, 18,000 private security firms. when you want a new submarine or jet fighter, you go to the secretary of defense and there is a whole massive -- to build a new product. in the homeland security space, there isn't. other than a taser, a

bullet-proof vest, and a camera, in the last 100 years, name me massive improvements to our neighborhood safety? there isn't. because there is nobody "in charge." that is where the private sector needs to begin to help innovate and provide new tools and technology. cory: hillary clinton just made some comments that i will?. -- that i will echo. we must not vilify police officers. certainly not. long legal history that will ultimately guide us and the legal use when officers decide situation to use lethal force. the legal ways, framework has been eclipsed. we seen that in legal policing, in the first modern use of

deadly force case. the supreme court pointed out that the common-law rules about using deadly force against fleeing felons no longer applies because technology has changed. firearms had fundamentally changed the landscape. as we get further and further , io technological innovation think that our legal framework will need to catch up. we have solid legal principles now. they are relatively clear. ohey are not well equipped t some of the changes that i will see coming. thank you, i really appreciate you coming. thank you very much. coming up, in times of protest

and times of crisis. people are increasingly turning to live streaming social media. we will talk about the importance next. ♪

aftertwo years widespread calls for police to -- isody camersas, facebook live a personal body camera? interesting.s hey,r ago we talked about, maybe this is a solution. they start selling these body camera's. s. of thethis total failure

thing where these cops wearing body camera's in louisiana suddenly didn't work. the police cases have the videos and can decide not to release them fast enough. cory: that in minnesota we have somebody using facebook live, of all things. facebook live is taking an increased role in providing eyes to the world. >> hours after she used that to broadcast the death of her facebook, it was used again in the dallas shootings. there were several facebook users streaming what was happening on the ground as shots were firing. fors becoming this use case facebook that is much more serious than we have seen in the past. exploding watermelons and the chewbacca mask video. this is more like the equivalent of calling reporter: cory: 911.

cory: and making a public record of it. what strikes you about the technology, the body camera case and the notion of live streaming? >> what is interesting about both cases is that you really see black and brown folks who historically might not have had an easy time of calling 911 when they need assistance. he really said the reliance on emerging technologies to get the word out and get help. obviously the woman did not feel safe. she thought that facebook live ogy was thee technol only reasonable way she had to get help and get word to her family. what is so heartbreaking is that it was reported that the mother wasn's watching the facebook live stream.

i can imagine how heartbreaking that must be, but it makes sense that if people don't feel safe, they will use technology to reach communities where they do feel safe. cory: mark zuckerberg took to facebook and posted about this. in a section he said, i hope we never have to see another video like this, like diamond reynolds. it reminds us of why coming together to build a more open and connected world is so important and how far we have to go. block thatn the last there was a notion that the technology would save us. if we put body cameras on the cops, it would govern their behavior in different ways, so the few cops that are bad actors would not be that way. we are seeing that is not the case. >> exactly. i think that body camera and legislation that makes it possible to wear body cameras at

all times is a great first step. i want to push back on the idea that investing in body cameras will make us safer and fix our broken criminal justice system. you cannot just throw money at a new, fancy technology and fix the problem. if it does, it will be abandoning. if law enforcement agents don't where the cameras,, or the conveniently fall off -- cameras, or they conveniently fall off, or they do not wear the cameras -- it's not going to work. i think it is a great first step, but in no way doesn't fix fixed the problem of the broken system. that temptation to throw new technology at the problem is a bad one. cory: to the point, the other technology that is working seems to be facebook live, snapchat, and periscope. >> and another way it is

protection. having this moment livestream with an officer who acted out of turn, she is protecting herself from future abuses. the guy is being filmed and he knows it. cory: it is interesting that the technology that is really working, that may he struggling right now is the technology that is closed. thank you very much. we appreciate your time. with asia's mobile market intensifying, we will dive into it. next. ♪

may start selling its own streaming package direct to consumers. andould have niche leagues some less popular sports but not things like the nba.

dip saw subscriber numbers at the end of 2015. the tournament cable network looking to buy more sports streaming rights. twitter already has the rights to stream thursday night rights. its a race to the bottom in asia's smartphone wears. we got news that india is introducing a four dollar smartphone. apple is falling to fifth place in china. julie ask and john butler join us from new york. julie, we start with you. a four dollar smartphone? >> as you said, it is a race to the bottom. apple doesn't have to win that race to the bottom. there are a number of ways to sell money -- to make money on smartphones. you can sell hardware. if you own the mobile os, you

can monetize that data. apple is not going to go there. apple is nearly unwilling to use the data even to improve their own products without consumer permission. what we haves that seen in technology is the ultimate bifurcation of the market, and the bottom end continues to go to the bottom. prices fall and the margins are garbage. >> the margins may be garbage, but the phones in general aren't. they have got much better over the years. in a way, that is apple's biggest problem. i don't think they need to worry about a four dollar smartphone. about --eed to worry in india.

and other goodax vendors that offer phones at low price points. call it $250 or less. cory: do they really have to worry about a company selling things at negative margin? how long will that go on and threaten their business? , they are one example that made a dent in china. they are moving way up that curve in terms of features and processing power. they are riding on apple's coattails. as they move higher and higher volumes, the component costs are coming down and enabling the smaller vendors to take this in margin, but move some volume by coming out with these phones.rigch

china is not the same premium market as it is in the u.s. with a low and is not as developed. i would say that the u.s. is less price sensitive because of higher average income. company is a bigger problem in china than it would be in the u.s.. cory: what do you think about these low-cost providers? >> i do not think they are an apple target market. someone who can afford an iphone is typically someone in the middle class. apple wins not only when somebody buys an iphone but they are able to perform other products within the ecosystem. and the iphone looms much larger than important devices in those markets. >> the other thing that you

think about is that the smartphone is a platform. if apple is not able to sell content and stream video it limits their upside. and one of the other wildcards is the smartphone as a payment platform. that is a place where apple has a device, that have apple pay, but they don't generate much revenue if any. >> not yet. but apple pay is magical and is just a matter of time before consumers say, why am i carrying around my wallet? cory: magical. i can go for a run and don't have my credit card and stop for purchases on the way. >> i make 80% of purchases with my watch. cory: do you really? john, apple pay? >> i think it has great potential. there is rumor that the next generation of the watch is going to be free of the smartphone.

when you talk to retailers, a lot of them say, when they look at who is using apple pay, it tends to be people who have the apple watch. i don't have the watch but i do use apple pay. i think it is just a matter of time before we see that service start to ramp up much more strongly than there is now. cory: for the record, i do not actually stop for beers when i am out for a run. [laughter] i appreciate it. lyft is getting luxurious. they are announcing a new upscale option. the latest words in the right sharing words are next.

>> let's begin with a check of your bloomberg first word news. denouncing the

shooting of police officers in violence. sterling -- an attorneyrling's family -- -- says the dallas killings were not caused by castile's de ath alone and that she wants justice for everyone. the justice department, including agents with the if the and atf are in texas working with local investigators. a weekays this has been of profound grief and heartbreaking loss. >> to all americans, i ask you, i implore you, do not let this precipitate a new normal. i ask you to turn to each other not against each other as we move forward. let's support one another,

lettuce help heal one another. -- let us help heal one another. we are one nation, we are one people, and we stand together. >> lynch says her department will help investigators in any way necessary. president obama has ordered flags to be phone at half staff to honor the fallen officers. mississippi's governor is ordering -- the repeal of a state law that would allow some workers to cite religious beliefs to deny -- to deny service to same-sex couples. the move comes after a lower federal court blocked the state law from taking effect july 1. u.k. applications for irish passports surged almost 20% this year. last month's vote to leave raises concerns that u.k. citizens could lose the right to live and work in europe without restriction. an irish passport is seen as a

way to retain access to those rights. calling for a declaration of war. for the first time, the u.s. has imposed sanctions on kim jong-un. it makes harder for banks to move or hold his assets. in columbia, the output of raw material for making cocaine has surged to its highest level since 2011. there guerrillas are said to be telling farmers they will eventually be paid in subsidies. this is bloomberg. you are watching bloomberg west. the right sharing wars are on and lyft is raising the

stakes. especial new service for the ballers out there. escalade. it is a rival service called select. why do this? lyft is the right for the people, you get in the frustrate -- front seat, and you get the fist bump. we reached out >> to passengers -- fist bump. >> we reached out to passengers and said what i not getting that they want, and 60% said they desired a higher and ride option. cory: this is existing customers. not the people that won't ride them, but the ones who already use them. >> it is both. whether they are going out for a nice dinner or have a business trip, they want a higher end

service. and for people who have not yet tried lyft, this is a great entryway. cory: talk about recruiting drivers who have such vehicles. i have a friend who has a maserati once in a while, but she is not using lyft. >> there are people driving great vehicles, whether it is the bmw x five or the cadillac escalade. lesson i got a ride in -- last night i got a ride in an x5. the have the opportunity to earn a higher fare. cory: do your relationships with automakers have a role to play in terms of providing the cars? >> currently, all the cars are independently owned. cory: surely, you have a plan to leverage those relationships. >> it is an option in the future. cory: what is an option in the future? >> if the driver wanted to rent

a vehicle and use that on the lyft platform, whether it is hig r for lyft classic, they could do that. have two programs. you can rent a car and drive on lift classic -- lyft classic. cory: maybe at some point there will be a natural connection of the dots. talk about what this means in terms of your new expansion into geographies. where would this work well? >> it is a huge market growth opportunity. corporate travel is a $28 billion market. 21% of that is spent on ground transportation. we have seen over the past two years, life has had 700% year on year growth without -- we can tap into many more business travelers.

we already have business profiles. we have expense integration. this is an additional option. are: as you look at this, the demographics substantially different? out, butust starting it sounds like you have done a lot of work to understand. hugest case is airport rides are getting to a business meeting. cory: first dates but not their dates -- but not third dates? [laughter] >> every date. i went on a premier ride with my girlfriend to a date less that. cory: in-n-out burger? >> i will not divulge where i was eating but it was a great experience. cory: in terms of cadillac, this and like a great one. the cadillac brand within gm.

>> it is a possibility in the future and makes a lot of sense, but as of today these are all driver-owned cars. cory: in terms of deciding when to lunch this in different markets, -- launch this in different markets, what is the timing? >> i mentioned that we have a business profile, so you can have that and a personal profile. you can add expense integration to get reimbursed of paid for by your company. those are launches that have been recent. as we push into that, having a high end right service was critical. cory: i mentioned catalyst. that's the name of an investment bank. you have taken on them. to do what? >> i don't personally focus on that. i can speak to premiere. i don't know too much about catalyst. cory: i will let you dodge that one. [laughter] is this a way to reach for a different kind of driver or take

drivers away from google -- uber? >> we heard from a lot of drivers who said i am interested in driving for lyft but i would not do it until you have a higher right option. youou're driving a bmw x5, want to earn higher and fares for that. now we are seeing lots of driver sign up. cory: already? give me a sense of how many? "?at do you mean by "lots >> the service launched in the bay area. so silicon valley and san francisco. it is also available in new york. and all of those markets, you will see all of -- lots of drivers just minutes from you available on premier. cory: what do you do to market to those drivers from a not consider this as an important opportunity? >> there are a lot of drivers already on the platform with high-end cars, but you just happen to get them in the classic service.

they are now available in premier and you can specifically request them. in addition to that, word-of-mouth is an incredible way that this spreads. somebody hears about it. we have a landing page were someone can learn what it is like to be a premiere driver. once they sign up, quickly starts spreading. cory: interesting stuff. the network effect in effect. much, david.y coming up, the cyber security war. the net was developed to disrupt iran's nuclear war efforts and now it will be part of a documentary. we will talk to the man behind a really interesting film. this is bloomberg. ♪

cory: theranos, another body blow. regulators take on theranos. they tell the ceo she cannot operate any lab for two years. i read this news and thought, this is it. there is no way that they come back from this. >> pretty much. cory: i cannot ask you to predict the future. they can appeal the sanctions. that have 60 days to put in an appeal and it would go through a complicated process. -- we that walgreens know that walgreens has ended the relationship with theranos. they don't have other partnerships. that is where the revenue was coming. now they cannot operate a lab. cory: they are facing lawsuits

from users giving incorrect data, knowing it was incorrect when they gave it out. the fact that this would personally to the ceo, and they said you cannot operate any lab for two years. >> that is tied to them losing their clia certificate. cory: clia? >> it is the certificate that means you can run a lab. that is tied to the owners. if you get your certificate taken out, you cannot run a lab for two years. cory: almost like a liquor license? >> exactly. theranos has put out a statement saying we have other parts of the business. cory: they have a really great parking lot if someone would like to rent it. >> they could try to sell other parts of the company. but nobody trusts that this

technology really works. it feels like options are running out for theranos at this point. cory: there is a search for the next theranos. everybody says, i think my company will be the next theranos. it's interesting that this story has planted suspicion back in the minds of investors and journalists. people who should always be suspicious. >> the other thing is that health is not the same as software. if you are a software's company, you can put out an app and if it is buggy, you can keep making updates. you cannot do that in health. that is a warning for a lot of tech companies in silicon valley who have wanted to go into health. cory: you cannot fake it until you make it. thank you very much. we will look at what is going on with the stuxnet virus.

the documentary made about the stuxnet virus. fascinating stuff. this is bloomberg. let's get to the interview right now. really interesting stuff. the story behind it. we talked to the makers of "zero days." >> it seems to me that there was a detective story element. this was something that set a new precedent. a new kind of weapon that could take over machines. there is a science-fiction vibe that i thought would be worth investigating. cory: it took you to figure out who was behind it and how it grew? >> that's right. when we first got this thing we did not know what it was. it is obvious that it was not like anything we had seen before. when we got to the end, we discovered it was trying to attack iran's nuclear centrifuges. cory: talk about how this looked

differently than other things you had seen. >> every time we look at it, we found things that were not just evolutionary, but revolutionary. with most code, when you get infected, you click on an e-mail or a website. this stuff spreads of thomas ly.d -- autonomous all by itself. we discovered in the end that stuxnet was conducting cyber sabotage, affecting the real world. that is the stuff that movies were made out of. typically the stuff we would see is people doing espionage or stealing your credit card number and now we had things that could literally blow things up. cory: is there a computer narrative cliche that you try to avoid? >> one of the things we tried to avoid, we got a lot of help from eric and his partner at

symantec, was slap up shots of computer code. we wanted the code to be a living, breathing character. we have the code at our office, but we wanted to make sure when we showed various aspects of the control mechanisms that we were in the right part of the code and that it moved and operated much the same as the code did. we wanted it to be real, not some phony backdrop. cory: how ubiquitous was this? where did it spread to? it was targeted on iran, but where did it spread to? >> it spread around the world. most of the sections we saw were in a run but ultimately it began to spread anywhere and everywhere. if you had a windows machine connected to the internet, you could be affected by stuxnet. cory: is there further functionality? is there unknown functionality? >> we believe that we have analyzed it quite in depth. what we do know is, there have

been multiple versions of stuxnet. believe there are other versions out there that we have never recovered. cory: what surprised you about this story as you started to unpack it? >> there is a computer story on the one hand, but the other thing that surprised he was how big an operation it was. the other thing that surprised he was how quickly the technology moved. we were exploring an origin story from the first time that a piece of malware jumped from the cyber world to the physical world and started blowing things up in real time. we discovered, in the process of doing this story, another operation launched by the nsa and cyber command called nitro zeus, previously classified. it had a much bigger attack lector. it was targeting the ability to shut down the entire iranian grid. to shut down the country. cory: was stuxnet a good thing?

tool was a smart and savvy for a particular operation which is to say to slow down the development of the iranian centrifuge program. it was a bad thing in a sense that it launched a new arms race for cyber weapons. cyber weapons about which we still know very little because the government is keeping them secret. we, is a bad thing because the united states, arm all -- more vulnerable than any other country because of the way we're connected. cory: coming up, the all you can fly subscription service coming to an airport near you. european ambitions, next. ♪

an all youair has

can fly subscription service that is now expanding to europe. the european membership is $3000 per month and lets them jet to air's sir fair's -- surf destinations. talk to me about europe and how it changes your business model. >> europe is a great opportunity for us because our model is flying.ng-haul it represents a great opportunity for business travelers. cory: the destinations themselves. for $3000 per month if i want to fly from san francisco to paris, you are cool with that at $3000 per month? >> what we are doing is launching operations within europe so within european cities. the price is going to between -- pounds per month at lunch

the price is going to be 2500 pounds per month. cory: it is an interesting time to start expand in london. imagining those locations in a pre-brexit world is different. and the fact that you're charging in pounds means that your big plans went on sale by about 15%. >> i would say with the brexit issue, we do not believe that travel will slow down. if anything, commercial air travel could get more difficult as this happens with more immigration rules. we also see the potential of more commuters commuting in and out of the u.k.. cory: how is that market different for jets than the u.s. market? >> there are differences in the infrastructure. what we do is to gear toward the customer that takes commercial flights. when we peg the market we look

at the frequency of business traffic and commercial destinations. the number of destinations in europe have higher penetration than some of the destinations we fly here. cory: higher? i don't understand why that would be the case. >> him out of traffic between london and -- in the amount of traffic between london and geneva. they are extremely high business markets. percentagewise more people fly business class than from l.a. to san francisco in business class. cory: that's a fundamental point about your business model. a lot of private jet travel is to go to out of the way places that are more difficult to get by commercial, not so much san francisco or l.a.. or new york-boston, or new york-l.a., for that matter. with your model. i suspect that is a bit different.

it's more about the luxury aspect because it is all that you can eat. >> that is exactly right. we do notfference is go after the private jet customer. our customer is a frequent business traveler. utilitarian, time-saving service. it is a premium service, but not a high-end luxury. people who would -- they do it because they have an office in two cities. the real reason they use it is to save time at the airport. cory: it is an interesting model. i expect in europe that it will have a different -- decent shot. are you profitable yet? >> we are close to profitable. we are about a quarter away here in california. we actually have founding memberships that come in early

which gives us a sense of how many people will fly and the routes to adjust. we have a lot of unique models. cory: it sounds like you have done a lot of learning along the way. >> certainly. we learn everyday. cory: thank you very much. virgin galactic is set to resume test flights next month. richard branson said the company has a new spaceship called unity. it will be the first to ferry private adventurers to the en reusabled of space in a spacecraft -- to the end of space in a reusable spacecraft. this is bloomberg. ♪

>> bernie sanders, the socialist turned democrat, senator from the month, stunned -- from vermont, stunned the political world by running a very close race for the democratic nomination. he received more than 12 million votes. she got 3.7 million more and will be officially nominated in less than three weeks. big questions remain for the challenger. will he endorse clinton, how