♪ mark: calling for an investigation into what he says a war crime is being committed the eastern aleppo. airstrikes by the assad government or blame for most of the civilian casualties. security issues prompted the u.n. to cancel plans to begin medical evacuations. the philippine president says his remarks about separating from the u.s. don't mean severing ties. they are fighting comment made in beijing the president said separation from the u.s. refers

to foreign policy that doesn't dovetail with america's. hillary clinton had a slim lead over donald trump in the battleground state of florida. fortinet percent of likely voters support clinton compared to 45% for trump according to a poll. gary johnson gets about 3% to green party's jill stein nearly 2%. swingof eight collection state ohio, and a colonic and michigan saw the unemployment rates rise in september. nevada and new hampshire saw declined the jobless numbers were unchanged in florida, ohio, and pennsylvania. hiring has slowed from last year. global news 24 hours a day from around the world. bloomberg technology is next. ♪

cory: i'm cory johnson, in for emily chang. at&t pushes to clinch a deal for time warner by monday, trying to front run other bidders. why the telecom giant is in such a rush. another blockbuster $40 billion takeover. nxp could also come next week. and markets for consumer drones aiming for the skies. we will hear from china's consumer drone giant. first, possible deals on the radar this friday, qualcomm and nxp. the chipmakers wrapping up what could be the largest transaction in the history of the semiconductor industry grade we are also watching to go were with at&t and time warner. the carriers pushing to seal this deal by monday.

in enterprise software company said to be belt -- valued over $10 billion. first, let's kick this off with qualcomm-nxp. this is an amazing deal here, a big change for at&t. when you think they see in this book? >> the industry in general has been moving towards this combination of distribution and content rate we saw comcast is a first mover with the steal or -- deal for nbc universal and later for dreamworks. at&t following in its footsteps there and that is where the industry in general is moving right now. cory: the verizon results this week and verizon with aol and there may be acquisition of yahoo!. is this about a slowdown in growth in wireless looking for other venues, or looking for something that will integrate? brooke: i think it's a little bit of both. what we have seen his people are

willing to pay for content even if there not willing to pay cable. hbo go has gotten good traction. people pay for netflix. content is key. especially for that wire cutting generation. cory: these mergers happening in the media telecom space, but then the semiconductor business is really amazing. we have seen so much activity in this sector. nxp, qualcomm very different businesses to me. brooke: qualcomm wants to move away from the smartphone market. shipments are stalling, they are facing a lot more competition is handset makers are bringing a lot of this production in-house. nxp is a really big player in the automotive market, which is seen as a growth area going forward for semiconductor makers. the idea is to diversify. the question is whether it's too much diversification and if qualcomm will get in over his -- its head here.

you will be a mess of a company already in the process of a deal. we have not even past the one-year anniversary of nxp's freecale acquisition, $17 billion deal. this will be a very big undertaking for qualcomm. cory: that is what got them substantially into the automotive business. finally, what is in four? brooke: a software company. the most interesting thing about this deal is the size of it, over $10 billion. we haven't seen many private equity deals of this size since the financial crisis. they have been very difficult to get done. companies have moved away from the club deals that were the hallmark of 2008 and something that big is difficult to do just for one private equity firm. i thought it was interesting to see that companies are actually talking about maybe doing a club deal again which will be a very interesting phenomenon.

cory: there's a lot of deep pockets looking to do deals. i would imagine it's possible. brooke sutherland, thank you very much. cory: hackers shut down access to a lot of websites around the world on friday, primarily in the u.s. the issue appears to be with domain name service hosts. the first attack was reported at 7:00 a.m. new york time, denying millions of people access to twitter. access to no twitter. two other waves of attacks followed later in the day. joining us now, brian, what happened here? >> there was a massive distributed denial of service attack. it targeted against the dns. what is happening, to put this into layman's terms, if somebody went after the post office and the post office didn't know

where to send packages and that is what essentially happened here, and why this is concerning, it went at the fundamental infrastructure that connects people to sites like twitter and spotify. cory: why would somebody want to do this? what is the motivation? phishing attacks and all that stuff, i get it. shutting down websites, is this a crazy kid in a smithsonian basement that happened? >> they took many computers together and what they are taking advantage of increasingly are all the internet connected devices. these are webcams and connected devices. they have unprecedented scale to start to launch these types of attacks. the second in terms of why they may do it, that's unknown. there are a couple different ideas. one is weird. one first is that there is some research that was done and released yesterday and they thought maybe this may be retaliation. the problem, it's hard to launch

this sophisticated of an effort that quickly. it was about the proliferation of these types of attacks, what else needs to be done, and being aware of the issue. brian, a well known cyber journalist was impacted by these. the second idea, which is probably more concerning, are people now probing the fundamental layer of the infrastructure, and they're thinking about what is really interconnected, and what else can i do. are they probing our systems to really understand just how interconnected we are. cory: that could be a state backed attack. they want to see how the internet works to know how to attack it. >> we did not know until today that spotify and twitter gave all their business to dyne this only a few of them that do

that type of service. but now they know that. i don't know if that's really real, but if you want a conspiracy theory, that's as far as i will go with you. cory: there is some history of a couple of countries, russia, north korea, china, the u.s., israel, all countries that have used cyber attacks to achieve certain goals. >> exactly. what we are seeing now, who would have imagined we would have this much coverage about what russia is doing, and their potential relationship with wikileaks and the disclosure of the emails. there's quite a bit of capability out there and we don't know exactly what everybody is doing. the reality also is that we need more redundancy in the capability. inevitably you're going to ask what else needs to be done to avoid these problems going forward. it's a combination of many things. it's more redundancy, more

testing, better technology, and more communication to ensure we know when something like this happens, we can get back up and running. that was the concern this morning. cory: it's also interesting to see the businesses affected. i talked to one entrepreneur who told me that her business was completely knocked out. because they are such a young business, they don't have the redundancy of the larger businesses. apparently spotify and twitter did not have it either. could this lead to businesses having duel publishing methodology? >> i think they may go to more and more providers to help them with redundancy. many of them do already. we are so reliant on this. gidhub was also impacted.

a lot of people were impacted by this the would not normally think about. it's not going to change the way we develop software, the way we interact, the way people shop. they are reliant on this system. cory: brian white, ceo of red owl analytics. nintendo launching a gaming console what we can look forward to. the world's largest maker of consumer drones, new competition for go pro and others. this is bloomberg. ♪

cory: microsoft, a record high the software giant reasonably strong in the first quarter of sales, particularly in the cloud

business. shares surging 5.6%, breezing past the price hit, dot-com bubble. nintendo trying to regain a foothold in the gaming console market. the company unveils the nintendo switch, the lets gamers play at home and on the go. the giant reaching out to 30 -- third-party developers. one of those developers, a san francisco-based game development platform. some of the top games, including the blockbuster hit pokemon go. let's talk about unity with unity's ceo. describe what unity does. >> unity does a couple of things . at its core we built up technologies that make it super easy to build games, whether those games before playstation's or xbox or ios, android, apple, and google.

if you're going to try to build a game for all those different platforms, it might take you 50 people to build one. cory: they've got all these different teams. >> that's what they have been doing historically. in unity, first off, there's so much there in their code base. you can do it cheaper, better, faster. the second thing is essentially hit a button, hit return and you capture all the platforms. we are a content enabler. you think of ourselves as super advanced paintbrushes for content. you make better stuff faster and cheaper with unity. cory: there was once hoped for an object oriented programming, where you have a bunch of complete blocks of programs and stacked them together. is that part of the notion here? >> that's a metaphor, but i'm not sure it's the perfect metaphor for what we are doing.

if you're looking for a metaphor, if you're trying to write a game, you will pick a programming language appropriate for the platform. you will start with a lot of letters and text and syntax. unity, you draw the car, the race track, and then use scripting to connect the card on the racetrack. because you've built the game, we can compile the code on any of these platforms. you deploy on all the platforms. saves time, money, energy for developers, which is why in the month of september, nine of the top 20 games on mobile were built in unity. why over half the games in the world today are built on third-party engines, and why about 1/3 of the games built in the world are built in unity, or why 70% of vr are built in the

community. cory: i want to run through what's going on in the world. i mentioned nintendo briefly. they have this new gaming device brought back to their original roots. your take? >> if you look at nintendo -- we live to enable content creators like nintendo. nintendo has created some of the most incredible intellectual property in history. we are proud to have helped the pokemon go franchise was built on unity, super successful. at the recent apple event they announced mario. i think the world has been waiting for this. it's going to be a gigantic hit. of course i've seen it, i've seen the releases. i'm sort of in a nda situation to say more than i actually know about it. this is one of the things i tell you. nintendo surprises you every time. they are innovative and different and at times when they

nail something they hit the ball out of the park. cory: sony vr is out, oculus -- it looks to me like sony vr is in better condition. what do you see happening on the content side in terms of development? is anyone starting to do really big games, immersive games that take hours to play? buthat is a long question, it is such a early innings in the industry. i think of where we are in vr, the prelaunch era. oculus and what sony has done is so incredibly innovative. if you've seen those things out there, it's a transformative experience. the notion that we will be living in vr, in ar, i believe in that. i've seen some of the best experiences. your readers are your watchers of new york, go into the void, and try the ghostbusters experience here, not tethered to

a chair, its mobile and you are running around. you are blasting ghosts it's incredibly fun. it is location-based entertainment. right now try to handicap sony versus oculus versus the many others that have come. it seems like wasted energy. it was nokia versus erickson versus motorola for the smartphone stakes in 2002. cory: palm, they were the ultimate winner. >> those things were all there. i believe that sony is going to be one of the winners. and the guys are incredibly innovative. trying to handicap this now is sort of like -- we're talking about carburetors and cubic inches of cars. remember 5, 7 years ago we were talking about the power of the cpu in your phone. now it's talking about what you get out of it, the experience you get with the new iphone 7.

my point of it is this, it's going to be gigantic. we are in such early stages. we are measuring the winner of a marathon on the basis of the first 50 feet of the race. we know it's going to be glorious. cory: you see development happening all the time in terms of new games. development, of i've never seen anything like this. i remember when sony launched the playstation. when that came out, it was a spectacular transformation of the industry. the number of people that are still in the industry, it changed everything. i believe it's believable. vr and ar are going to be bigger than the gaming industry in total by a wide margin. it will encompass gaming and lots of other things. whether it is travel, or technologies that allow me to

talk to u.s. if you're in the room with me when you're not. cory: like watching tv? >> better than that. cory: we will be right back on "bloomberg technology." ♪

♪ cory: "bloomberg studio 1.0" returns. with season five, it kicks off this sunday with the instagram ceo. four years ago facebook offered $1 billion for the service. ceo mark zuckerberg pledged to let the instagram teamwork independently. we started by asking whether zuckerberg has lived up to that promise. >> mark has been true to his word and then some. still to this day mark's interaction with the company is through meetings with me. i learned a tremendous amount through him, about our transition to a more global community, about strategy. he's one of the most interesting

long-term strategic thinkers i've ever met. think of it like having the best board member in the world. do you know how many companies would love to have mark zuckerberg on their board? you get amazing guidance and amazing counselor for someone who's been able to build a tremendous company. >> how open has he been to your ideas? do you think he's learned anything from you? >> i would love to ask him that. instagram is focused on community and craft, which is fairly different from a lot of tech companies at the time. facebook has this ship love mantra on the inside and that came from instagram's focus on the consumer and focus on making our community great. i'd like to think we influenced facebook but it's hard to say that for sure. emily: what have you learned from him? >> some of the things i talked about before, strategy and understanding your place in the ecosystem.

our transition to advertising was an interesting one. i was of the believe that if we had fewer advertisers, they would be of higher quality. that turned out to be the opposite. if you have more advertisers and you are able to bring in an ecosystem where they're able to compete against each other, you get higher-quality advertisements. i remember him saying i felt the exact same way when we introduce advertising and it turns out there's this other thing. i was able to learn a lot there. emily: you mentioned you meet with not just market, but jan and brandon. how do you see instagram taking advantage of the more futuristic things like virtual reality? >> if our vision is to make you feel like you can travel anywhere in the world and it a fraction of a second and ask friends whatever's happening in the world, imagine a day where you can put on a headset and be at a coldplay concert, seeing something happen like a big protest or big riot anywhere in the world, or something as simple as a friend's wedding. that's the kind of experience we love to create, and we think

virtual reality in the coming years will play a critical role in seeing that vision come true. emily: what about artificial intelligence? >> we use it today. it is what powers advertising. making sure we have the right amount of targeting. the more personalization you have, if we can have an experience that caters to you, if we know when you engage with, we can use machine learning and artificial intelligence to make it a much better experience for you on instagram. cory: that was emily chang with the instagram ceo. pacific, 12:00 back east. coming up, a chinese tech giant coming up, a chinese tech giant aggressive enough to push apple and amazon out of the way? if you like bloomberg news, check us out on the radio.

in the u.s. on sirius xm on 119. this is bloomberg. ♪

mark: you are watching bloomberg technology. let's begin with a check of your first word news. iraqi forces have raised the national flag on a church near mosul. iraqi special forces went to the predomninately christian town. u.s. defense secretary as carter told reporters that as a member of a counter-isil operations, turkey will play a role. >> turkey and its neighbors the region has an interest in the ultimate outcome. many other parties as well. it is a complicated city. we all understand that.

the iraqi government understands that and the turkish government understands it and we understand it. >> turkish military operations have led to increases tensions between the two countries. donald trump says he will be packing his schedule with events until election day. at a campaign stop in north carolina he said he does not want to have any regrets. >> our campaign is powered by a love for this country and our love for our fellow citizens. we are in a divided country now. there is going to be love. it is a campaign about rejecting this cynicism and elitism of our failed political establishment. mark: trump said that win, lose, or draw, he will be "happy with himself." hillary clinton has a new ad featuring the father of a u.s. army captain killed in iraq. mr. khan spoke about the proposal to bar muslims.

he says, would my son have a place in your america? the divisions between the u.k. and the rest of the eu have begun to take shape in germany, warning that britain faces a difficult path following june brexit vote. the u.k. prime minister theresa may address the subject following her first eu summits after she assumed power. >> we still want to trade freely in goods and services with europe, and the u.k. will continue to face them are challenges to our unit -- european neighbors. we will share the same values. i want a mature, cooperative relationship with our european partners. mark: may said that while the u.k. is leaving the eu, it is not leaving europe and there should be an "give-and-take with europe." the defense department said the

u.s. navy warship has conducted a operation in the south china sea where china and five other countries have competing territorial claims area the spokesman said transit operation near the island. in new york, i am mark crumpton. ♪ corey: the chinese textile hopes to push into the you -- u.s. market with a number of devices. tech hopes to push into the you -- u.s. market with a number of devices. we set down with him and asked him why they had not been heard of. >> i heard of it when it was lei tv. i knew a little bit about it.

a lot of my work over the previous years has been building technology i hoped would get out to the edge of consumer devices. i can influence a global market around consumer products and that was exciting. >> this week they unveiled the slew of devices, vr goggles, smart phones, tvs, smart bikes, electric maybe autonomous driving cars. we have never seen another chinese tech company a so aggressive or achieve such a broad scale in the u.s. what makes you think it can pull off this? >> one of the things that is different is we are not starting from the hardware. there are not little silos building each of these pieces of hardware. we're trying to build the content and these devices are part of that ecosystem. when we make a great tv it is because we want to drive quality in the video and entertainment experience that our users are getting.

when we do it with a car, we want to make sure how we use cars changes. we change how we can consume media in that setting. the content first approach will drive a different way of thinking about the market which i think will benefit consumers. >> i understand that, they are a content business and to be able to better access all that. we are seeing tech giants also trying to build these -- this ecosystem between content and devices. how is the strategy somewhat different than that? >> i am not sure you can say it is completely different. we are content first, we're focused on this iterative user experience. the up to you policy of soliciting this live feedback to the point where on a monthly basis we might be adding features to the devices like

phones and the tv is in order to make sure that our customers understand they can influence how the products work. it is why we stack our devices so high end so he can keep updating software. as long as you have that tv it starts to daylight you more. >> is there room for another ecosystem player in the u.s. market? it is a very mature, saturated one. >> absolutely. if we were just coming in and doing one of these verticals, if we were just trying to do phones, i have been a long -- around that for a long time and that would be tough but the fact is we are not going to only build a ecosystem with their own devices but we are open about plugging in other people's devices. we recognize that the world is a place of many brands and we think we can be a platform that other brands can come and be part of the ecosystem. >> the strategy is interesting, it contrasts to apple which has told the consumer we know what you want, it is going to be so great that you will want it. how would you compare why the up to you approach will work

better? >> there is a lot of tech that we have a foundational understanding of what we have to do. we know what the basics of smartphones are. we know how app store should work and we know how the ecosystems work but beyond that there are ways that people use their devices in different segments differently. the up to you allows you to listen to that and drive that customization overtime. up to me approaches can be good when things are starting and there is no substitute for a great designer. we also think some of our users can give us good insight into what the markets might be delighted with. >> you unveiled your devices and you do not profit from those devices, it is the content and services where that is where the money is going to come from. do you think that is a sustainable business model for a new company coming to the u.s. that is just getting started on the content side?

>> there are a lot of businesses that are investing in that growth in that way. we see that half of the consumer with the devices, that is our way of acquiring subscribers. we do think it will work as a business model. we have proven that in the chinese market and we will bring that to the rest of the world. corey: i want to bring in serena. i am confused. what do these guys do? serena: they have this netflix style content streaming business and a bunch of hardware from virtual reality headsets, smart phones, tvs, and electric self driving cars. >> their netflix and their schwinn and they are samsung. >> this is not a great time to be comparing yourself to send -- to a young samsung. it is a content streaming business, they were the first to

have this -- one of the first to have this paid subscription model. the ceo said we want to be able to get this content to easily stream across devices. that is why they pushed into this hardware. it is important to remember that the business is enormous. they have more than 730 million users. corey what? that is nearly 10 times the size of netflix. >> more than the u.s. population. they have a huge in a team and production unit so they produce some of their own original content for their web streaming side like how in the -- netflix has "house of cards." they have a show with an insane amount of views one program is about a guy that gets transplanted back to ancient asia and is trapped in the body of a princess. corey: how does it translate into making quality electronics? >> they're going to have a lot

of struggles in the u.s. they have very high spec products. it is impressive phones and tvs. they make no profit on that. they are losing money on every smartphone that they sell. they feel that -- they are hoping to make it up with their content since service. that works ok in china because they are a content -- and their business has reached scale but in the u.s. they do not have a lot of edge over a lot of that. corey: you get the hardware, not unlike the cable industry that has cost the cable company but they know that is going to keep you using the cable system. >> exactly. they're working with a lot of different streaming sites and say you join our hardware we will give this sufficient service for free. they will assess how they are going to monetize that an charge consumers. they have set up a huge entertainment unit in l.a. and

hired an old paramount president and he is working on making original content. corey: you have hbo, netflix, amazon, hulu and leeco. >> you know that great wall movie with matt damon? they are behind that. they want to produce these blockbuster english-speaking movies, they want to make tv shows. corey: everyone is selling content in hollywood. >> you are seeing more chinese money in hollywood. look at alibaba pictures, they are behind a lot of blockbuster pictures and leeco will be there. corey: how big is the company revenue wise? >> let me break it down. they have three big entities all tied together by the ceo who has a big stake in all of them. there is a publicly traded streaming part and global group which is the massive slew of the

leetv, all those different companies. they want to take that company public in the u.s., that is another entity. they own one of the larger ride hailing companies and the ceo is a cofounder of an electric driving initiative in l.a. and they have a big plan. corey: not light on ambition, thank you. coming up, a story we have been following. one of the toughest restrictions on airbnb in the country. it was already illegal to read out of artman's were less than 30 days but this new measure adds a $700,500 fine. it takes residential areas off the market.

airbnb said they still make money. they filed a lawsuit. the chinese company dominating the drawn market sets its sights on silicon valley. we look at dji's expansion plans next. ♪ and we bring you the best interviews of the week. conversations with several others. this saturday. this is bloomberg. ♪

corey: walmart is investing $50 million.

it is their extention in china. it just a have more than 25 million registered customers delivering to more than 300 cities. the world's largest drugmaker is -- drone maker is sitting up shop in silicon valley. it comes at a critical time, gopro is trying to crack their dominance. joining us right now is their vice president. this is an interesting device. is it pedantic to compare it to the nascent gopro device? >> possibly. we think the karmapro or the maverickpro is something that is small enough and portable enough to take anywhere. corey: what do people want when they want a drone? >> they want something that is

accessible, easy to use, something that can take with you on a day hike and still have room for everything else you would normally take with you and not fill up an entire backpack. >> a backpack? >> you want to see one? corey: break it out. >> this is my day hike hack. i have got my jacket in here. got my water bottle and look. corey: i tweeted a picture of this when it first came out. this is a drone? >> that is the whole thing. corey: it has a camera built into it. >> it has five cameras. corey: what about the controller? >> you can control it from your phone. we also have a really cool controller so there is the whole thing. you can control it from your phone. you have a limited range just because of wi-fi.

if you want to go further, it kind ofan, it feels new game controller. where it gives you the control. corey: compare this to the competition. we have staff compare you to gopro. is the gopro the one thing we should be comparing it to? >> not really. this is everything but in a smaller package and more capability. corey: it is lighter and small -- smaller and flies faster and for longer. >> we have five cameras. so we do collision avoidance going forward and looking down. it helps you prevent you from hitting stuff and makes it super easy to use a much you focus on the creative aspect of collecting the photos and video you want to take. corey: who buys these things?

>> it is a consumer, smaller and lighter is better for the consumer. one of the things we're hearing is exploring industrial and commercial applications. we are getting a ton of interest on this platform but on our larger vehicles. we build a set of payload lifting vehicles. corey: what kind of payload? >> weekend to six kilograms, it can take a broadcast quality camera and put any of the hardware you want, specialized sensor hardware, if you want to do inspection mapping, attentive -- a ton of interesting applications where normally they have been addressed with very expensive manned aviation applications, or havent been possible. corey: what about cost?

>> we have a few different packages under $1000 , you can get mavicpro and get an extra battery for 1100, 1200 bucks. there is the range of demand, even lower-priced. if you do not want the controller and you're happy flying with your phone, you can get the drone itself or $799. corey: the professional market is the x factor but how big is the market for the novices, people who want to full around with these things and take pictures? >> that is the market that exploded this year. exploded, we do not talk about specific numbers but massive. a massive market that exploded. corey: across all companies? >> i am sure at least across all products. corey: we think about the samsung note 7, we don't want you to go that way. [laughter]

corey: we are talking about 5 million people but the professional in terms of size or maybe not in size but how much they're willing to spend. >> that is right. there is a ton of interesting value on top of the vehicle. the drone is a platform so there's a lot more money to be had per vehicle in terms of addressing applications. corey: does -- are their ambitions in terms of data collection and analytics? >> absolutely. we build a software development kit that allows you to treat this as a platform. we want to enable all these third-party applications and these professional applications by allowing people to take her -- our vehicle and tell their stack on top of it. corey: if you get thing -- one thing regulatory wise, one thing would be changed for drones, what would it be? >> we are working hard on that.

we have 107 rules which allow you to do commercial operations line of sight we are looking for beyond line of sight operation. once you get there, you allow complete mission autonomy and that as we get the labor -- laborsaving. corey: this thing is cool. the johnson girls might have something in their christmas stockings. appreciate it. monday, we will catch up with the always colorful t-mobile ceo. the so called uncarrier, we will ring in the details and we will be between those. the air national space station is getting three new tenants, we will bring you up to speed on the latest crew and a possible explosion on mars. that is next. this is bloomberg. ♪

corey: this edition of out of this world, the european space agency meant for mars had the right spot but at the wrong speed. and likely exploded after a crash landing. photos show a black spot in the area where the lander was meant to touchdown on wednesday. it is supposed to test technology for more ambitious mars landing. orbiting will

analyze the martian atmosphere in the search for evidence of life. the latest team of restaurants -- astronauts from russia and the u.s. have arrived at the international space station after a two-day voyage. the docking process went smoothly on friday morning after a lengthy process of opening up patches and existing three-person crew. this brings the total crew to six. about a week, three of the astronauts head home and shane kimbro takes over as the commander. don't miss our conversation with the instagram ceo on "studio 1.0" at noon new york time this sunday. for all episodes live streaming on twitter. 6 p.m. new york, 3:00 p.m. san francisco. that is all for now.

this is bloomberg. ♪

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