a reward of $100,000 for the the suspect. he should be considered armed and dangerous and he has used various aliases. germany says it rejected an asylum request for him in july. the president-elect declared a aadly truck assault was attack on humanity. peter navarro has been chosen to lead the national trade council for the incoming administration. navarro was an economic adviser to mr. trump during the campaign . carl icahn will be special advisor to trump on issues related to regulatory reform. and will play a role in the selection of the next head of the sec. aleppo, evacuations have resumed. a dispute had delayed the final round of evacuations for 20,000

civilians and fighters to be bust out of the war-torn series -- city. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. caroline: this is bloomberg technology. coming up apple turns the corner on 2016 on a tumultuous year. be any smoother? after a year of executives abandoning ship, we will see who is left in the c suite. escalatee continues to

worldwide. first, to the lead. the year that was for apple. tested in aaith was way not seen since steve jobs held office. the wild swings on this chart tell another story. it reported its first annual sales decline in 2001 after smartphone saturation threatened the golden goose, the iphone. year likebig us this ditching the phone jack and office yelling it secretive plans. will this the another year where apple tests investors' resolve? or will we see the enthusiasm that defined years prior? discuss this -- joining us to discuss this, wonderful to have you here. the cash ofnse of

what apple lost. -- there ise seeing no bigger change in the iphone. there was no iphone and then there was. maybe they get better or simpler. you can say the same thing about the mac. the ipad has struggled. the watch has been a very big success but compared to other products it is hardly a blip on the map. the year of contraction set the difference. you have seen a 14% contraction in operating profits. it is a differing feel for the company they have not seen in a decade. carolyn: there are some of the negatives and concerns. is some things that

have changed. we are moving to a replacement cycle market. we went through this with the pc and we had to understand how long people would keep their devices and when they will upgrade. you're looking at them saying what year might is a big portion of their base upgrades and people have those signs pointing into 2017 particularly because of china. sales have been slow in china. holding ontomers their phones for a long time because they are waiting for the right time. they are not spending out-of-pocket money upward of $1000. they will not do that every year. i think a lot of signs are pointing to this next year. the challenge has been versus a growth cycle and the analysis of that market is different. caroline: there is that analysis you dig into many a company. we have a great chart and i know

you are a man who loves a good chart from the bloomberg. this is about the apple share price has been on a seller rally since the middle of the year. the number of institutional investors, the big institutional investors have been getting out of the stock. see a change,to is there a new product or new iteration? corey coleman investors like growth in the stock pricing. it is a full's aaron to chase after stocks. caroline: is this a growth stock, should we stop looking at that that way? corey coleman the expectations [indiscernible] the change in the business, we have gone from it the no one product company to a two product company to a three product

company with the mac, iphone, and the tablet. investors are much slower to update their stuff. the users need a new thing every 12 months over 18 months. they're pushing up their cycles where they might get one device every year but it might be three years until the upgrade their phone or their pc or tablet. maybe they sell some expensive add-ons. this seems to be a bit of a disaster in the making. cordlessise these new air phones and they did not get to the sales i quickly enough. you promised [inaudible] ben: it is interesting trying these things out where you have something that does not have accord in it. when you have a cord it comes out pretty easy but if you do called --ot get talked on or hold on by her neck. i do not think they are selling

these to a hard-core runner or jogger. i played tennis and they stayed in. is the typical use case but the fact that they do stay in. we are double tasking. the big part with this is when we talk with investors we are starting to move some of the conversation from pure hardware shipment and look at overall revenue growth. the apple watch, this adds to other categories of revenue and you will see other areas. apple is diversifying their product line and giving consumers something that is either $300 or $49 that are different options to buy every types of gear. bitline: they looked a lackluster which was connected homes. we are talking ai and mark zuckerberg's later -- latest

video. he has got selling out of android echo -- amazon echo. has apple been making any? corey: the success amazon has had with it axis -- with its echo devices and platform apple should look at this as a threat. they are known to be hiring the best people and you have amazon with this product that is a runaway success. multibillion-dollar business, sales going back a few months. it was only one of the top for selling electronics devices on amazon. there is an apple-like approach, there is an iphone-like approach. an open that form way they could get developers to develop, there are thousands who have created skill sets for this but all that

computing happens at amazon. amazon knows about customer decisions about -- and about purchasing and amazon is driving marginal sales and top of this platform. because of what amazon has got in the background they can drive a lot with these devices things that google does not have and that apple does not have. apple has missed the boat. then: they're taking a little bit of a different approach. theire trying to let assistant drive the home. it is a different strategy and we will see. caroline: thank you. . story we are watching falling as much as 13%. software company reported disappointing third-quarter

earnings. coming up, we dive into the european stocks ahead of a leading firm. that is next. this is bloomberg. ♪

caroline: u.k. has seen a number of their startups have impressive exits. bot magic pony for $150 million. head andith the firm's got his take on exit strategies for u.k. startups.

>> this remains the big challenge for europe which was -- we areo see starting to see develop and it is about taking those businesses from a few hundred million to being billion dollar businesses. the ecosystem and silicon valley is well-established. our ecosystem is being established. nate -- you need entrepreneurs and investors to take the businesses the entire way. when you have exceptional returns there are going to be exits. we have seen that more recently with sky scanners. the decision as to whether you take the business to the next stage or exit at this point. the challenge for europe is to ensure the latest stage funds are in place to provide the entrepreneurs and those companies the opportunity to create big businesses. valuations got

too toppy. european valuations have always remained more conservative because of the nature of the funding and once we have a more vibrant early-stage in start up ecosystems as the businesses grew, they need to be real businesses and generate those get themselves options. that may be with regards to exit be significant, large businesses. u.k. valuations will remain relatively lower. certainly by comparison to the well, i shoulds add. that opportunity and the opportunity for entrepreneurs to build those businesses exist in for funders to continue to be part of.

a risk weis there could see valuations getting too high, if we could see more risky appetite coming from the u.s. and asia piling into europe. guest: europe has had that almost fortunate situation where some of those wells started to ring in the u.s. so people were being a little bit more conservative or starting to. what i would describe as the frost being blown off the top. the reality is is these businesses are game changers and the opportunity for them to grow and build into significant enterprises. caroline: even the brexit vote that happened in 2016, does that put that it risked? guest: the brexit vote is still working its way through. what is interesting is when we talked to our portfolio companies. the act partners there have

looked at brexit and said this is just another challenge that we have to overcome. they have significant challenges in european markets by comparison to the u.s. with the numbers and languages they have to do with an different cultures. exit is not a challenge and codes provide them with competitive advantage over larger businesses that are not quite as nimble and quick to respond those challenges. caroline: what does 2017 mean for you, does it mean european startups expanding in the u.s., does it mean more ipos, does it mean more m&a, consolidation within the startup community my we are starting to see it within heredelivery with delivery with food panda. what does 2017 mean to you? guest: that is the really encouraging aspect of european ecosystem is you're seeing now those technology businesses looking within at some of the

m&a that is going on and that is about creating the ecosystem. a large part of this is the further development of the ecosystem that exists within europe. for us still, that focused toward artificial intelligence manyse it spans is so residual sectors. when you have great talent there into the ecosystem, is opportunity funding and we have started to see other entrepreneurs coming out around that area of excellence that are looking to drive great growth into those businesses. caroline: coming up, microsoft came back with a bang in 2016 putting together its biggest deal other -- ever with the acquisition of linkedin. our conversation next. this is bloomberg. ♪

caroline: overall it has been a strong year for microsoft. hardware launches impressed and they announced its biggest acquisition ever with its purchase of linkedin. emily chang spoke with the ceo and the linkedin ceo back in june. guess: it is about bringing together the professional cloud which is at the core of microsoft and the professional network. the green we have always had -- dream that we have had is how can we connect these two worlds so that our mutual users or the professions of the world can get their work more seamlessly. bringing the network with the cloud is transformative and i've been thinking about this for a while. and starting in february we started having some serious conversations and once we started talking about the possibilities of the product and the coming together of that mission that is when we said the common nation

can allow us to accelerate what we want to get down to drive this next phase of growth. that is what let us here. emily: it was about the same time that we had a in-depth conversation about how big you think the future potential of linkedin is. why would you sell linkedin for a price less than it was trading at six months ago? future got bigger and it has always been about the realization of our long-term mission and vision. you think about the global footprint that microsoft has, one billion customers plus and you think about the ability to seamlessly integrate our network. social fabric throughout microsoft's ecosystem. the possibilities are almost endless. emily: you're saying this will create the social draft for cloud and jeff has been saying that lincoln will operate independently like a whatsapp or

youtube. is it integrated or independent? guest: it is independent and integrated for customers. think about what we're are really talking about. there is a microsoft graph which is about a full, the relationships of other people so it is all the artifacts. even the dynamics are part of that. you connect that with the professional graph and then you start completing the scenarios. you do not need to change the need for social networks but you need to bring these things together seamlessly. grow: linkedin could not as fast as the market expected it to grow. you guys are saying this deal increases microsoft dos market by 58%. what is the change in strategy, how does microsoft help lincoln grow much faster than it was growing before? deal, the value

to individuals and customers within the enterprise, it is strong but this is very much about sticking with the path in terms of the mission and vision. just massively amplifying it across this ecosystem. that process be like and how do you make sure that this does not turn out like nokia or even skype? guest: what i think about acquisitions, i think is this something that is going to be expanding our market opportunities, is this writing the wave of the future and this is at the core of microsoft, is this something we can differentiate? this checks all these boxes. we want to try a different approach, that is something that jeff and i have talked a lot about is we want to be integrated when it comes to the customer scenarios. we want to be able to preserve the operating entity of

linkedin, the culture, the brand thisow they have built fantastic professional network. that is what i think will be very different about this. past, look at our own minecraft being a tremendous success and down the road here there is the powerpoint team which is one of the most successful acquisitions. we do have a history of getting it right as well. emily: you're getting a huge enterprise sales force with office. how much do think microsoft can membership,in's well this grow by leaps and bounds, will it skyrocket by multiples? >> we certainly have enormous potential here. we have 430 million members have signed up. and we have the opportunity to oneg that same value over billion customers.

that is definitely the plan. emily: anymore big acquisitions to come, will this spark more m&a? excited about the linkedin acquisition and i looking forward to completing that vision and scenarios. rest will see the way the of the industry response. >> we will see how industry and customers respond. it is about us realizing our mission and adding value to our customers. caroline: now some global tech stories we are following for you. you a toy filings from the netherlands show that google saves money and taxes by moving more than 15 billion to a bermuda shell company. dutch subsidiary has zero employees. after that uses -- it is part of a tax structure by moving most

of its international profit to bermuda they were able to reduce in tax rate to just 6.4% 2015. out of finland, nokia is suing claiming the iphone maker infringed several patents. nokia says apple has refused to license patented inventions since they agreed to a license in 2011 which is expiring. coming up, twitter's executive brain drain. shares closing down 6% over the last two trading days. how can they turn around the company in the new year? we will discuss next. this is bloomberg. ♪

>> i'm courtney collins and you're watching "bloomberg technology." president-elect donald trump has wrapped his security briefing with pentagon officials. he also met with the ceos of boeing and lockheed martin, two

major u.s. defense contractors he criticized for project costs. we are trying to get the cost down. it has turned into a program that is very expensive. >> mr. trump has been very vocal about criticism out the fighter jet and billing's plan for a new air force one. boeing's ceo said the company can build a new version of air force one for less than $4 billion. authorities in mexico have not reveal the cause of an explosion at a fireworks market that killed at least 31 people and sent another 50 to the hospital. 12 people are still missing their. of one of its few remaining diplomatic partners highlights the nation's growing risk of isolation.

and the u.s. military will return a 10,000 acres of land it has held since world war ii back to the japanese. the area is part of a territory officially referred to as the northern training area. it's the largest tract of land returned to the u.s. -- the u.s. returned to japan since 1972. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. courtney collins. this is bloomberg trade it's just after five: 30 p.m. wednesday in new york, 9:30 a.m. in sydney. james, good morning. hi, courtney. we looking at a slightly firmer start in wellington this morning, despite that soggy lead from wall street. that is partly due to a strong gdp number.

the new zealand dollar got an initial blip up on that. it has come back a bit and is trading flat. coming up today, a couple rate decisions to look out for, philippines and taiwan will both release their decisions, no change expected there. yes trillion markets, looks like it might open slightly lower. two two stocks to watch, seven west media and caltech made announcements this morning. more from "bloomberg technology" next. ♪ ♪ >> this is "bloomberg technology ." i'm caroline hyde. 2016 has been a year filled with executive departures for twitter , which recently the companies

chief technology officer announced his departure just weeks after the coo resigned. more than half of twitter's leadership team departed this year. to bempany is seen increasingly in limbo. seo jack dorsey faces mounting challenges to turn around the network. joining us from new york is an analyst. thank you for joining us in san francisco. sarah frier, who covers twitter, broke the story yesterday. why all the brain drain? sarah: this is a company that has had executive turnover for years. this year alone it lost not only the two you mentioned, but their head of products, and several other product executives, their head of news. this is a company that has lost maybe 25 executives since its ipo. caroline: 25 since its ipo. james, what does this mean for

an analyst such as yourself? how does this impact the product? a good thing.t just look at the ceo level. we needed a full-time ceo since the day after dick costolo left. unfortunately we have still seen no sugars as abilities between the square and twitter. at the most critical time in the have this kind of turnover does raise some questions about the long-term potential and ability to turn around. anecdotally, i just met with wpp today, the world's largest advertiser, and they are telling us that the growth there in twitter is rather not there for twitter in terms of dollars and they are primarily using it for pr and to gauge advertising effectiveness for their campaign. 're at a crossroads right now, twitter, and jack dorsey

needs to make some decision. our analystsah, and investors saying jack dorsey needs to go? sarah: i don't think they really have an option besides jack dorsey. they did this six-month ceo search, landed with dorothy. they thought bringing him in, he would have sort of the founder, moral authority to make big changes that needed to be made. andsearch, landed with finally'e loss of many of his executive leaderships, he seems to be taking on more at twitter in addition to his responsibilities. the numbers haven't changed since he took over. growth startvenue to decline, and user growth is still a little stagnant. this company, like james the same, advertisers are starting to say, why should we increase our budgets on twitter if the audience has been growing the way it's a growing on. they want to go where people are. caroline: it sounds like this meeting with wpp is quite

effective. i read your last note and you sounded a bit more buoyant about people starting to rejoin, reactivate, come to twitter as a product. have you lost your optimism there? james: i haven't lost my optimism on the user side. i do think there is an opportunity here. they are getting 2 million new uersers per day and the on boarding process has been good. unfortunately the revenue will significantly lag this. we are in a quarter right now where they are going through a sales force restructuring. actually see a revenue decline in the fourth quarter of this year, which could come as a negative surprise. if you do look into 2017, there is some room for optimism on the user side as far as the wpp's comments. you would have to see the user growth actually coming to fruition for the conversation to change. stocks,l neutral on the

hopeful on potentially higher conversion rates on users. caroline: neutral on a stock that is down more than 20% on the year. give us whether this is still an m&a target. 2017 will be a year of reckoning for twitter. this is the company that went through an informal failed process, did not get any bids, but forced the company to recognize that they need to take some steps towards profitability. they cut 9% of their workforce right after the sales talks year, like next james is saying, if they start going to revenue decline, they can get a lot cheaper and those suitors who turned away could get a little more interested. caroline: it feels like there were some really big missed opportunities here. we look at how vine did not quite look out. we see periscope being adopted by jack dorsey. game and ahead of the they lost entirely.

could they make that back in terms of video live streaming? james: i hope so. it's really disappointing to see these very strategic, very powerful potential assets like vine and periscope, not carry out the way you would expect them to. i think a lot of that has to do with how they are managing the integration of these acquisitions and how they are putting in front of the users. really, twitter needs to stay relevant. i've been making the case that they are the most important social platform in the world right now. twitter can provide checks and balances on media coverage by allowing a megaphone, four people around the world to kind of negate some points that are made. i think twitter needs to figure something out and hopefully it comes in the form of an acquisition, because they need to tap into the resources of a bigger company in order to propel themselves to the next stage of growth. caroline: james, immediate step

that needs to be taken ahead of that m&a for 2017, does jack dorsey become just ceo at twitter or does he hand over the reins to someone else? james: i wish i could say i think he will become the full-time ceo. i don't think it's going to happen. i think we're going to continue in this limbo. even with the more optimism on the user side, it's tough to get behind it when you don't -- this is an asset that requires more than 100% attention, and then it's just not there. great to haves, you on the show. sarah friar, i think you will be all over this story for 2017 as well. the deal would put the self driving technology into japanese automakers cars. the two sides reach an agreement, honda would be the most second automated -- the second most automated partner after fiat.

the self driving car unit is trying to work with more car markers. planspreviously announced to start selling self driving cars capable of operating on highways sometime around 2020. talk ofk to the executives, on thursday bloomberg television will dream -- bringing highlights from an interview with one of our biggest names in finance, the jpmorgan ceo jamie dimon sits down with washington's bureau chief. outlook for the industry will be discussed, along with the president-elect donald trump. coming up, high-profile hacking and cyber security threats come to the forefront of the public's mind this year. the biggest threats from verizon, one of the fastest-growing cyber security startups in the u.k., next. ♪

caroline: the office will focus on spectacles, the camera equipped sunglasses. the move is unusual because snapchat itself is banned in china. snap's new office has 20 employees so far but the company is said to be recruiting from the likes of baidu and tencent to build its team. leaks a personal user data showed on social media will be one of the major service security threats. it's not just individuals that have to deal with rising threats online, it's also huge issues for corporations and government around the globe. our next guest faces this every day. trace,if the ceo of dark a rapidly growing cyber security

firm headquartered in the united kingdom and here in san francisco. combined with intelligence experience and the latest software. zappos and crate and barrel. thank you very much indeed, nicole. dark trace, what does it do? >> we are one of the fastest-growing cyber defense companies, and we use machine learning and a way that very much emulates the human immune system. it learns a sense of self for network and it basically knows what is not self. just like a human body depends against viruses -- defense and -- defense against viruses and bacteria, that is how dark trace defends corporations. day,ine: in the news every discussions between u.s. and russia. what did 2016 mean for you in terms of cyber security? nicole: 2015 was the year of the credit card attack. 2016 i would summarize as the year of the trust attack. if you look at the dnc attack or

the general election rumors, it was really about trying to get society to lose their trust in democracy. i think trust attacks really followed throughout the year. caroline: what about 2017? what is dark trace getting the most calls about? 2017, there's a few trends we are starting to see. one of them is that we saw a lot of ransomware in 2017. though not complex, it moved fast. it's hard for humans to keep up with. setting up 2017 you will see more around machine against machine, artificial intelligence files attacked and artificial intelligence files defend. that's one trend. the second trend we will see is cyber bleeding over more and more to the physical world could we already started to see quite a bit of interest from energy and utility companies in 2016, with cyber defense. also water supply systems.

infrastructure, and critical systems. the other area we have started to see heat up in 2016 and continuing to 2017 is travel, transportation, and hospitality. -- one of the things we will see on everyone's christmas list is going to be iot devices. we think of those as consumer, a ash but they have a major impact in corporations as well. whether it be the amazon echo or us walking into the company with the a pile to gps locate our phone. caroline: there are companies not quite getting this, the fact that you and i are so connected with our devices, i have a key ring, but people are going to be getting new, connected smart watches, they are going to be getting connected coffee machines, all of this will in some way expose the company?

nicole: everything is getting more and more connected. when it comes to these devices, the traditional cyber security industry doesn't protect them. when you think about traditional cyber world, it is desktop, laptop, but not the iot devices because manufacturers have not gotten to the point where there is an accepted antivirus on all of them. dark trace sees these in our corporate network. we automatically detect them bus because manufacturers have not gotten to the point where there is an accepted antivirus on all of. we20% to 30% of the devices are seeing and the most vulnerable ones are iot inside a corporate environment. caroline: i'm fascinated. you are talking about the new areas of business that are coming to you, the utilities, for instance. what about countries? you are the attacking countries? -- who are the attacking countries and who are the countries who want to help? nicole: we are working on a

global basis. we have customers deployed in over 90 countries already. in terms of the attack sectors and vectors, it's pretty consistent. i think we are all fighting the battle. what we have come to realize is the problem of cyber security is still unsolved. i think until we have ceo's companies on a global basis saying, i have holes in my network, and maybe the attacker is already inside, and i need a different approach in trying to build a wall around the outside, or thinking we are smart enough to guess what the next attack is, as attacks get more targeted. until we wake up to the fact on a global basis that we need to start looking inside our network, we need self learning technology to tell us what's normal and what's not, we will not get ahead of it. that's the biggest thing i hope for in 2017. caroline: i'm pleased to say that i was part of a team that

helped choose dark trace as innovators. we were looking at the 50 most innovative companies in the u.k. and dark trace came up amongst them. i want to ask you as a brit myself, when investors have you got? are you looking at the ipo market? nicole: we have grown 600% year-over-year in terms of revenue. we have 350 employees on a global basis. we have raised $90 million to date. we have investors like kkr's global growth fund, summit, and strategic investors like samsung. caroline: of course, the japanese investor coming big into the u.s. as well. softbank has really helped us expand into asia. at this point, there's no ipo on the agenda.

many companiesso get ahead of the cyber crisis, the cyber threats they are facing your heads down growing the business. caroline: thank you so much. trace,eagan, ceo of dark based here in san francisco. tomorrow we will continue this conversation in the founder and ceo of white ops will join us. coming up, the next big thing in silicon valley may be an older player. -- we'lltake a look nvidia isk at thhow surging. ♪

hasline: 23-year-old nvidia

had an impressive 2016, the company is the best performer on the nasdaq 100 stock index this year. much of the success is down to the chief executive, who's won over many investors with claims that his products will become key components of developing technologies, from voice recognition to self driving cars. our reporter covers the company and joins us now. a great story on the success story that is nvidia this year. not just gaming graphics. it's becoming a reality now? >> the most recent earnings showed this 54% rising revenue, where that came from, automotive, a lot of that came from data center and that was delivering on the promise they talked about. caroline: they are still such tiny players when you are comparing them to intel, who owns the data centers. are they going to gain some traction here? ian: it's really all still

process at this point. they have shown some results. marginsking huge gross out of a $4 billion quarter business. caroline: how do they compete? you go to intel, and their r&d spending makes nvidia the tiny. . qualcomm cash rich. what is nvidia doing differently to woo over major investors? ian: it depends on the problem you're trying to solve. the argument is that artificial intelligence is the future. i'm sure you've heard lots of people talking about it. that's great when you talk about the software, how these data problems need to get solved. something underneath that has to be driving that. parallel problems, processing is the answer, doing lots of things at the same time. makersument is the best are going to profit the most from that type of process. caroline: tesla, right? ian: not using them already, but

announced they are switching to them. caroline: 54% increase in revenue this year. going to remain a darling if we can see this growth become a reality. ian: that's the thing. ilke,-- managers are like, they think they have years of growth ahead of them. their head. this is going to be a huge market, so they will get their fair share. caroline: a pretty focused ceo, according to your story. i urge people to read the story. theed, all over nvidia and six story of 2016. that does it for today. all episodes of "bloomberg technology" are now their head. live streaming on twitter. check us out we gaze at 5:00 p.m. in new york, 2:00 p.m. if you are watching late in london. that's all for now. this is bloomberg. ♪

>> from our studios in new york city, this is "charlie rose." charlie: what is artificial intelligence? so, it is what we are all doing when we make machines do things which we usually ascribed to human intelligence. it's all about taking the things which we thought were brilliant things that only went along inside our brains, we make computers do them instead. we often break up artificial intelligence into two subsets of work. many of the researchers are working on what we call au