clinton campaign with former vice president, al gore, saying clinton would make climate change a top priority. mr. gore: the choice in this election is extremely clear. hillary clinton will make solving the climate crisis a top national priority. mark: he warns that donald trump would "take us toward a climate catastrophe or co- climate catastrophe." pence: when he takes residence in the white house, he will fight every day for the american people, his only special interest will be you. mark: north carolina officials say three more people have died in the aftermath of hurricane matthew. the death toll across five states is now 30. thousands of residents were ordered to evacuate as high water pushes downstream. a us-led coalition is preparing to take the iraqi city of

mozilla. islamic state militants have then observed digging trenches and placing ied's in roadways. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm mark crumpton. "bloomberg technology" is next. i'm emily chang and this is "bloomberg technology." welcome viewers on television and for the first time ever, viewers tuning in on twitter. you can watch on twitter every day. samsung ending production of the note 7 smartphone. we will ask if the company can take that hit and dive into why the batteries have been overheating.

partners raises a billion-dollar fund. we will look at what is shaping up to be the biggest year for vc fundraising since the.com bubble. and a reality check for the food delivery business. we will look at a business called caviar and why it has been hard to find a buyer. first to early -- samsung is ending production of it galaxy note 7 smartphone after reports that replacement phones have the same overheating battery problems as the same devices were cap -- same devices that were recalled. samsung shares closed down, wiping out $17 billion in market value, the company's worst session since 2008. analysts are trying to understand what this costs samsung financially. one report says halting the note 7 could translate into $17 billion in lost sales. can samsung absorb the hit and what does the crisis tell us about the limit of smartphone design? joining me now is the ihs mark

and greylockector partner john lilly is with me here for the hour. great to have you. you tear down many smartphones. tear down the note 7 smartphones and i'm curious, was there anything in there that you could even begin to speculate on why this happened, about the battery in particular? guest: high, emily. yes hi --, emily. the samsung note series is interesting because it's a new category samsung introduced many years ago that focuses on larger devices, larger screens, and more capability. what we have found in iterations notete three, note for, five, and a skip six, so this is the note 7, we've seen an

evolution toward higher and higher energy density in the battery pack. to the seven from the five is almost a 22% increase in density. that's just pure energy stuffed into a smaller, smaller area and volume. what samsung is doing here is actually quite astounding. they are competing against two diametrically opposed consumer needs -- and her phone but more art ability. so what happens? everything gets squeezed and you have this evolution of the note series. they've gotten to the point hitting some of these pain points in design. they can be overcome but we still don't know what the root cause of the battery failures are. it is very alarming and a safety concern, but you can't knock

samsung for not innovating in is spa. samsung said they originally believed it was because of a battery issue that only applied to the original phones. talk to us about how important samsung smartphones are to the overall business. this is a huge company and how devastating a potential hit from this particular issue could be. what is really hard on samsung is that this is their flagship phone. thenote is without a doubt phone you see more -- most often in their advertising. -- galaxy s seven and the edge come in a close second. that it has too hurt to recall the phone a second time and i think that's where the damage comes in in terms of the brand and the financial damage you alluded to before.

i would point out that the note itself is probably around 5% of sales in any given quarter, 10% of their mobile phone sales. i think they can contain the as we rollticularly into next year. my suspicion is they will move up the introduction in the next note. in countlessvest companies that invest in a smart phone market and android especially. how big a problem do you think this is? i think it's hard to say. smartphones are a huge part of revenue. have a near-term problem just getting through the next few weeks or months. i don't have any information about that but the midterm problem is one of trust. will people think about -- the but thee brutal --

longer-term problem is a more fundamental one. they have a hardware soul in an internet world right now. emily: they are working on the note eight which is a must be coming out in six months. i'm curious how do they solve tos problem is it is related everything being so tightly packed in there and these batteries being more dense than ever. is that a hardware problem that can be solved or have they reached the limit? guest: i don't think we have reached a limit. it's about solving these issues. it's a quality issue in a manufacturing issue. is theppened here hypercompetitive market has forced samsung to reiterate at a much faster rate. things like this get lost through the cracks and what they need to do is go back and work out all the quality issues. this is achievable. long-lastinga

phone and a large screen, just being the first to do this type of design. take the risk of spectacular failures like this. emily: let's talk about china specifically because the note seven was left out of the recall and now this applies to all note 7's round the world. this is a hypercompetitive market, and biggest smart phone market in the world. what does it mean for china specifically? john: china's tough because if didlook globally, what they for competitors to watch, you huwei. look out for want to goay i don't

down market in the brand itself, where do i go? if you are in china, you may go ei.walk away -- huaw -- these consider vivo are great brands. another one. china is particularly crowded with particularly good competitors. they: do you think circuitry could fix the problem -- could they take the pressure off the battery? guest: sure. as with any consumer electronic and semi conductor product, it follows moore's law of smaller and smaller circuitry. the next generation will require less power and generation of display will be next -- will be less power hungry.

but it is really about this fast pace of innovation. apple only releases one new generation, one new product the year. samsung is releasing multiple products through the course of the year. this pace of trying to get new designs out and differentiate and be in the forefront, those are the risks that happen when you are a market leader. emily: without some questions on twitter -- one of them is what kind of phone do you use? i carry around an iphone 7 plus. i like the bigger battery. despite what your guest has said, it's hard to believe a smaller degree, anything is going to reduce our desire for more and more energy. emily: do you give samsung credit for trying? john: i think it's a brutal market. if people start returning your phones and lose trust, it's

tough. samsung is an amazing company. they are huge. but they will have to come up with something new. google is shipping when that is just as big and apple is shipping one and a half to compete. emily: john lilly is my guest for the hour. think you both for weighing in. we are sharing our first show on twitter today. we look to twitter and asked would you still buy a samsung smartphone. over 500 people took the pole. 72% said no. the timing of these numbers couldn't be better for apple with a release of the iphone 7 or google, which just announced plans to launch its own high-end phone. who stands to benefit the most from the galaxy note 7 debacle? john lilly from greylock is still with me. peoplely numbers show

could be affected by this. what does it mean for apple and what does it mean for google? ink: this is not happening march, april or june. this is happening right ahead of the holiday season, the most important quarter for every technology product maker, especially apple and samsung. for googlenews because their phone is coming out two weeks from now. it's huge news for apple because their phone is out and they are ramping up production getting ready to go into the massive holiday season. for samsung, it's awful. they're going to miss the boat on one of the most important quarters yet. president global vice did not seem to think it would be a hugely long-term problem. guest: they will recover. they will get their brand back. it is perhaps a small mistake that will cost them dearly, but

i don't think this is a long-term problem. emily: there have been incidents of lithium-ion batteries overheating in the past. dell had them with laptops and owing had it with their airplanes. of course we are still talking about samsung today but do you agree this problem will blow over? as every year goes by, the spread of news to different social media platforms, our own station of being streamed through twitter, the news spreads at a faster pace and more people read about it. when the boeing issue happened, as many people did not hear about it. growingis a brand quarter over quarter against apple and this is a historical move and one of the worst consumer tech battery related issues. will it low over?

sure. the note 7 only represents a small percentage of overall sales, but from a marketing perspective, it is pretty damaging. emily: samsung's name is all over their product. should the ditch the note eight and rebrand? john: i think they will not call it that in china because of the numerology stuff. i think they like the big screen. maybe they will call it the big galaxy. we will see. are suppliers telling you? why it information about has taken some son to -- so long to figure out the root cause? mark: samsung has not said what the root causes. they have not gone into detail on what's causing the issues. it's been a repetitive process

and we are still talking about this two or three weeks later. i remember when the news first broke last month, is just getting worse and worse every day for samsung. this news where they are completely halting production is surprising just hours after they say they are wanting to halt sales. we are wanting to be nearing the end of it. eight is a lucky number in china. 88 times is the charge. a supreme court showdown between apple and some son has begun. at stake, whether apple should be allowed to keep the patent award that it won after accusing samsung of copying the design of the iphone. the amount is equal to samsung's entire profits from 11 phones found to have infringed on apple patents. we know some justices suggested

returning the case to a lower court while others said they were not sure how a jury or judge should decide how much money apple can collect. still to come, square may be trying to shed its food delivery business but a steep price tag is getting in the way. this is bloomberg. ♪

emily: square maybe trying to shed its food delivery business. so far without success. people familiar with the unit say they have talked about the 100caviar and million dollar price tag was shot down. r bloomberg reporter who wrote the story is with us as well as my guest host for the hour, john

lilly of greylock. what happened? guest: just after square had --e public, we got a little nothing came together. maybe 100ore, million. emily: i had a former coo of square. he does not hesitate to share opinions. why did square by caviar, he said i'm not going to answer that. guest: it never made a ton of sense to me but i'm sure it made sense to somebody. emily: as far as you know, they are still trying to sell it? the actual talks are behind them.

i imagine there's always a price. i can't speak for them, but that would make my -- the talk seems to be behind them if nothing came together. emily: you guys are in sprague, another food delivery company, and i'm curious -- there's a lot of companies trying to do this. is this a good business to be in? not all of these companies have the same model. it's very different from caviar. to get efficiencies, they vertically integrate. can the economics work? john: we think so, otherwise they would not have invested -- we would not have invested with them. every business is different and

the models matter. emily: what are the companies doing wrong? not survivemajority and a couple rise to the top? john: it's hard to tell. it depends how consumer demand moves over time. i not a food delivery expert, i'm a food consumption expert. emily: grubhub shares are up 60%. uber is going hard after this market. uber has the advantage of having a network of drivers already and drivers who are taking people and commute hours and in the interim, when people are eating, a little less busy. so they think they can smooth out the crazy demand for drivers toreas our competitors have build up their own fleets of drivers, so we had a huge advantage. all over the world, i have seen them.

i think that is the looming threat. grubhub is doing well and the stock price is way up. emily: i have had some positive experiences with no burrito and some negative experiences. is this something that they can crack along with everything else on their plate? john: i've had the same experience. some of them are good when they -- some of them not so good when they don't converge. can they get the right product and the right time at the right price? it's a hard mix. emily: thanks for bringing us that update. we will keep our eye on caviar. john lilly of greylock is sticking with me. bmw is taking on tesla. plans for aes his future electric fleet. this is bloomberg. ♪

emily: amazon may be pushing deeper into brick-and-mortar. the e-commerce giant plans to push into the grocery store business with convenience stores and curbside pickup locations. people for what the plan say they will tell gopro -- they will sell produce, milk and meat and order items with a longer same-daye for delivery. the plan is known internally as project, and is reserved exclusively for customers of its fresh subscription service. one stock we continue to watch his twitter. after news sale of the company may not be on the table at all. the stock was upgraded to hold from cell, citing a forecast that might be on the conservative side.

seagate -- shares of the hard after theymaker expect higher operating costs. despite this, analysts from j.p. morgan and needham upgraded the stock to a buy on improving demand. coming up, the road ahead for samsung. the recallmage could due to the branded china? if you like bloomberg news, check us out on the radio. , streaming on twitter, this is bloomberg. ♪

when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. great, that's what i said.

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. mark: i'm mark crumpton. you're watching "bloomberg technology." says house speaker

paul ryan is complicating his campaign, tweeting "it's hard to do well with zero support from the speaker." asking trumpd by to defeat democrats rather than fighting republicans. a lone gunman killed 14 people in an attack on ace shiite shrine in kabul. another 26 people were wounded. the suspect was shot and killed by police. german chancellor angela merkel met in ethiopia today with the african nation's new primus are. ethiopia is under a newly declared state of emergency. it is one of the world largest host of refugees with hundreds of thousands having fled from nearby somalia and south sudan. russian president flatter putin postponed a is it to france after the french president let him know that he would not take part in the opening of a new russian orthodox church and was only interested in discussing the syrian crisis. russia blocked a un security

council resolution proposed by france and spain on ending the hostilities in syria. i'm mark crumpton. this is bloomberg. it is just after 6:30 tuesday in .ew york my colleague, paul allen, has a look at the markets. paul: good morning. in new zealand which has been trading for 90 minutes now. of 1%lready off one third following a week lead from wall street. the new zealand in the trillion are weaker after following a greenback.ng when the asn begins trading in 30 minutes, we expect declines their of .8%. no surprise, we expect declines on the nikkei as well. futures are pointing down. store ownerenience out after family mart boosted for your sales guidance.

's operating profit is expected to decline 5% to 400 million u.s. dollars amid ongoing store renovations. it has not then a great year for lawson. data outof economic today -- south korea will release unemployment figures for august. it is expected to hold steady at 3.8%. machine orders are expected to contract by 4.7%. in the next hour, we will get consumer confidence figures for the month of september. more from "bloomberg technology" next. emily: this is "bloomberg technology." i'm emily chang.

samsung is ending production of its galaxy note 7 phone. they are recalling all of the devices, including the supposedly safe replacement units. one country left out of the global recall was china. the market was a huge hit for china. for more, i want to bring in a cory johnson and our asia tech managing editor joining us from tokyo. with me still is john lilly. it's been a unique situation in china. all notel applies to 7's around the world. what is unique about the way this has unfolded in china? guest: it is important to begin with the fact that china is them biggest smartphone market in the whirl and samsung has done well

there. they are facing competition recently but they shipped a small amount at the beginning of reduction. not do a full-blown recall. they only took back some of the phones from the early batch ends of the early phones were safe because they were from a different manufacturer. now that they have discovered another round of problems with this phone, they have done a full-blown recall, but the initial decision not to go into full-blown recall in china has cost them some goodwill. they were bothered by being left out of the recall and that has fostered some ill will and they have lots of choices among mystic manufacturers in china. emily: a potential rise of distrust around the brand. samsung is a huge business. are smartphones so important to the business, though they are a fraction of the whole? cory: most of samsung's rots derived from smartphones. they have lots of diversification, but when it

comes to the bottom line, natalie are most of the profits from smartphones, but as those phones grant, there's a tremendous addition to that. profits are going fantastically for samsung. samsung has a diminished market share but the note was the product that help them in china because of the way the chinese characters work and read better on a bigger phone, the iphone 7 plus and samsung note were very important in terms of product offerings. to screw up that country is a big screwup for samsung. how big is the phone business in china for samsung? cory: it is the menace but the opportunity is massive. bey thought it was going to the device that catapulted them into a prominent position in that country. they are working at the very high end. there's a ton of phones sold in china but the serious profits

are left only for the most expensive phones. for them to tick off those customers and backtrack on a recall, it could seriously damage the long-term effort to cap are the vast majority of the profits as opposed to the sales where you have companies like mi slugging it out for crummy profits. emily: what is the first order of business in china? how do you begin to tackle it? john: you have to make sure you take care of your customers. always give them the phone they want. if you have to eat short-term profits in a serious way, you have toy want, be more transparent than they are used to being. where up and down the stack is the problem? emily: secrecy is very much a part of apple culture. test for j lee, the

heir apparent at samsung. they've been suffering from some serious health issues. what does it mean for them mark -- for them? he has been stepping into a leadership role and samsung's brand has been on the rise up its ranked number seven in the world ahead of amazon and mercedes-benz, so they have a valuable brand to protect. they need to be more transparent and open up about what went wrong and assure customers the next generation of phones that come from the country will be stave to use and good quality phones. historically, they had a strong record and that makes it particularly difficult. this is a company that does not outsource its manufacturing and pride themselves on their manufacturing expertise.

one year from now, how do samsung's balance sheet look? cory: it depends how much money they spend. emily: it's estimated it could cost a billion dollars. cory: which is not big. there are two things that are interesting. there's the damage of the brands. bigger question for me is will other competitors come into the market on the high-end with lower margins and say we are willing to have a 5% margin on these smartphones with a lot of features and customers throughout the world say this phone is just about as good as the new samsung nine and at a much lower price, so there may be a permanent readjustment of the operating margins or even the gross margins for smart phones and that could change the phone industry. pulled about 500

people on twitter who said they would no longer buy a samsung phone -- 72% said they would no longer buy it. , thank you. coming up, greylock partners, the $1 billion fund -- a sure sign that fund raising is going well, but what about the average investor? we will talk more with john lilly. this is bloomberg. ♪

greylock partners $1 billion fund -- the latest in fundraising funds. investments in startups are

slowing. back with me is john lilly of greylock partners. what's of questions about what kind of investments you will be making, any changes in strategy. how will it be allocated? john: it will be the same. study she goes. around 50 years and we want to make a billion-dollar fund like the round we raised in 2015. we have the same people around plus some new partners. we tend to invest in companies like linkedin and facebook and instagram. we tend to invest in enterprise software and we will add some things to that mix. a couple of questions from twitter -- you've had some big exits you have discussed. can you talk about managing expectations? to be inare gratified some of the most important companies round -- dropbox and some up-and-coming companies like next door and medium.

gratified and work hard. he had to act like it is a new fund. we have proof we are valuable to entrepreneurs every single day. we don't do a lot of managing expectations. don't try to manage that, we just try to be ourselves. how difficult was this fundraiser for you? -- john: itifficult was not difficult. we have our twice annual meetings and we were going to do it about the same as last time and closed did the first week of october. there was not a lot of drama but we are grateful. vcs have been raising a lot of money, but there is a 29% drop in dollars invested in startups and the number of deals actually being done.

i'll talk to a lot of people who say they have not seen a good company in the last six or 12 months. as consistento be as we can. we do 12 or 18 companies a year. i think as far as dollars invested, technology is getting more consistent. productier to get the and it probably excludes the huge amount of seed funding. we see no slowdown at all. my guess is this is counting institutional seeds. what is your advice to companies trying to race but not getting any of it? tried car -- tried hard to keep our companies capitalize. the was some terminal and we got

ahead of that. but mostly we tell our companies build iraq's people want. build products with sustainable, durable value. people won't tolerate that now like they used to. emily: what is going to happen with valuations? >> we have seen the peak for in q3 or q4 of last year. we are in a new normal zone where it comes down just a little bit. the best companies that look like real breakouts, there are not a lot of them anymore. snapchat is doing well and some companies like that, medium and consumer side, there are not as many consumer breakups as there have been. we have reported snapchat

is lookingo go public as early as march of next year. what do you think is going to happen with the tech ipo market? it's hard to predict and is very sensitive to macro. the five or six companies that they have all tended to do well and i think i passed on truly over five times and jeff has been an amazing chief executive. unpredictable is the m&a market is incredible. it's the best m&a market since 2000 and maybe the second best ever. and for good reason. tech companies have a trillion dollars on their balance sheet and they want to spend it. of thewhat do you make twitter?lation on time onspend a lot of twitter for work and it is where

my friends hang out. salesforce as a buyer make sense? john: it doesn't make a lot of sense to me. trying to help him and all the customers make sense of what is happening in the world, he is a smart guy. i take it at face value. salesforce buying clip and then salesforce is obviously on the hunt. john: they are a special company. toy set out four years ago office and they realize microsoft did not have a distribution advantage like they had for the past 30 years and are suddenly a new opening. they built a beautiful product. i think they looked at who's got the channel and he's got the distribution power to take

advantage of that? i know you have some thoughts on how google may use this to their advantage. what do you think google can get out of it? john: number one, the phones look like phones. the magic is in the software. you can see what google is lou --to do is say google intelligence is going to be in everything. google home, i'm sure it will be in the car, it will be everywhere. is probably what led samsung to buy them last week. we have an investment coming out of oslo building a stack as well.

you can do things like asking where's a good place to watch the game which doesn't make a lot of sense. oslo knows about tvs and sports bars. emily: john lilly, partner at greylock. talking about your $1 billion fund raise. thank you for stopping by and keeping me company on the set today. of streaming on twitter. tomorrow on bloomberg, don't miss designer tory burch. she will be joining "daybreak america" to discuss the 2016 election. up next, bmw taking on tesla. we have an exclusive conversation coming up. ♪

emily: new data from market

pcearchemily: shows shipments continue to decline, but less so than earlier this year. shipped 60 8rs million machines in the third quarter, down from 71 million this time last year. the u.s. proved to be a bright spot. unit sales rose 2% for a second straight quarterly game. gartner at a more pessimistic snapshot, showing a slide globally and little change in dates.ted the ceo of the m.w.p. says he is looking to electrify the brand. bmw says he is looking to electrify the brand. says new or models will have a longer range of charge. he sat down with us for an exclusive interview with matt miller. it is a challenging goal and we will see what will be the outcome.

there are three drivers for electrified vehicles, the range, that the customer does not have a pain point, and the infrastructure, that's something where we need to be faster in invest more in the infrastructure. a city like los angeles come over we are today, they are nearly perfect in many areas but many parts of europe and other countries across the globe, it difficult to have the infrastructure. third pillar is a attractive pricing and financial support for the electric vehicles. but it is a marathon, not a sprint. with a marathon, this is being decided if you win or lose. columbia or 30, you need some time for this movement in development, but it is nothing that will go away. it's one important strategic of the bmw group to invest in electrification. you as a german and bmw

executive, you are a planner, what kind of numbers are you thinking about? 10 years, will you have 10 or 15 new models? do you want to make 20% of your sales electric? harold: if you think we are in with myo, we started three and i ate, now we will electrify the group for you. the bmw brand and many the brand. we also invest heavily in with afied motorcycles, urban concept and a positive future, it is difficult to guess how any products we will offer and how much we will see in the future, but it might happen that we see a range of 15% or 20% or 25% in the next 10 years in terms of the percentage of electrified vehicles. bmw ceo, harold

kruger with matt miller. president obama is reinvigorating his call for the u.s. to send humans to mars by the 20 30's and return them safely to earth. in an op-ed, obama says that long-term goal is to remain on the red planet for an extended amount time. the president called attention to cooperation between the government and private space companies like spacex without naming elon musk posco company by name. he set the goal to set foot on mars in 2010 but the initiative attracted little attention. that does it for this edition of "bloomberg technology." tomorrow, we are speaking to snapchat's first institutional investor. tweet us your questions. and a reminder we are streaming every episode live on twitter at

3 p.m. pacific, 6 p.m. eastern. thanks for watching. this is bloomberg. ♪

♪ from our studios in new york city, this is "charlie rose." charlie: we begin with an analysis of second presidential debate. hillary clinton and donald trump excuse -- exchanged character attacks for 90 minutes in st. louis. it was in a town hall format. donald trump entered the debate following criticism after a 2005 video surfaced wherein he made lewd comments about women. he expressed