caroline: this is "best of bloomberg technology." we bring you our top interviews from this week in tech. coming up apple and ireland wage , war on the european union. over 13 billion euro tax bill. plus, blackberry doubles down on software, and the move is paying off. we dig into the struggling comedy's latest report with the ceo. online lender sofi taking it slow after a rough year and

pushing back plans for an ipo. this ceo joins us ahead. first, to our lead, europe is -- -- apple is challenging apple with its $13 billion tax bill. the fight between apple, ireland, and the commission has been building. margrethe vestager, the european competition commissioner explains why this fight will be a long one. >> we will continue to disagree on this decision. also because we have different legal traditions. i have learned that in the u.s. that it is the order of the day , for a business negotiate tax rates with the state where it is situated. and we have had the prohibition to do that since 1958, so you have a clash of understanding. caroline: we discussed the

latest developments with the david rosenblum. he spent years at the treasury department covering international tax law. also, david kirkpatrick and bloomberg editor at large cory johnson. >> it was interesting because it explained the history of this tax regime and the different pieces of apple, and which pieces of apple should be considered irish, were considered irish, and which are not. there are two ways to look at the news of the day. one is whether this backwards looking thing might bode differently for the future of apple and many other companies as it relates to tax in the eu and ireland. is a fascinating read. it is a long tease, but gets into how apple is to claim certain parts of their business were not in ireland even though

money might have passed through ireland. and that is what is at stake here. what business was irish and deserves to be taxed in ireland. >> let's go to david rosenblum. give us the sense of apple claiming they were selectively targeted by the eu here. do you think they have a case? >> yes, they have something of a case. it is true the investigations have focused to some extent on u.s. companies. on the other hand, it is probably true that u.s. companies have led the world in aggressive tax planning, so i don't find it particularly surprising that the commission would begin by focusing on u.s. companies. >> david kirkpatrick, weigh in and give us a sense of your reading of the tea leaves. bayview there is potential tax warfare between the u.s. and europe?

>> i don't think it is quite to that it is a confusing situation point. of where i think apple has been extremely aggressive in how they structure themselves when they face these tax jurisdictions is an interesting question, and whether it is appropriate they should be so fine tuning of their own structure when they are simply trying to do business around the world. you know, it is legal in the united states at least. it's turning out that may not legal in europe. in a world where these companies have to have a positive carrying of the flag around the world, we may even question whether it is to our benefit. >> give us the shareholder's. surely, for many the shareholder , would say it is the company's obligation to prioritize profits. >> what is interesting in the , context of a donald trump presidency and we might have a

big tax repatriation holiday you , have companies like intel, apple and others who have set , this up to make the best of a that situation. you wonder if they're so entrenched in the new corporate structure such to minimize global taxes that the repatriation holiday might not be such a big deal for them and they might not be willg to bring cash back because they found another way to get around these laws. >> that is a key question for the next administration. i want to take it back to david rosenblum. there is much under discussion from a global perspective, the oecd was lining up to get all countries singing from the same hymn sheet. is that the way we can move forward, is that there is some sort of agreement worldwide between the tax practices? >> what is missing in the apple

partly -- a large into to your question, the oecd necessarily reaches consensus at high level of generality. and the issues come up at a factual level, so that applying these general concepts to the particular facts at hand is a real challenge. i don't think it is possible to reach international agreement on the kinds of issues we are talking about. and i might add that not withstanding the commission's decision, which was released today on apple -- at least i saw today -- was 130 pages. it is pretty slim on the actual facts of what happened. it has a great deal of history about the dispute, about the oecd, state aid, a lot of legalese and background that makes for gd is rating for most people. but i was looking at it to find out what happened here, and boy, you look in vain to find out how

it was that one of these companies, asi, booked about half of apple's profits in 2015. the commission says apple had about $54 billion in profits in 2015, and asi booked somewhere just south of $25 billion. >> i thought it was fascinating reading for that same reason. i agree, they did not lay it out chapter and verse, but there was so much great detail and it was interesting to see they could assign so much profit to that particular region when obviously they have a global business and it was not all happening on ireland. >> what is the broader expectation? david rosenblum, just sticking with you, who wins out in this particular argument and what does it mean for amazon, starbucks, ikea, other companies currently perhaps being analyzed by the european commission?

>> in a rational world, and unfortunately we don't live in a rational world, but in a rational world, apple wins in the dispute with the commission because the commission is advocating assigning all of this excess profit to the branches that apple had in ireland. and frankly the branches that , apple had in ireland had nothing to do with most of this money. so -- the commission is looking at the world from two very different perspectives. the commission sees these individual companies, asi booking $25 billion, and we see a branch in ireland and there is no real head office here, so therefore, all the profits should go to ireland. that is sort of what the commission is saying. the united states sees it differently. we see asi as a branch, not a separate corporation. it is part of a bigger company

calledaoi, top-tier company which has branches all over the world. so from a u.s. tax analysis of this, it is a much more complicated situation than the commission sees, and that is because of profound differences in the way we look at tax laws. i think you're going to find similar but not identical structures of other high-tech companies in other countries, and maybe some in ireland as well. there are going to be a little bit different from each other, but they are all going to pose a similar questions. >> coming up we will hear from , the blackberry ceo john chen as they boost forecasts with a new focus on software growth. that is next. facebook takes on fake news, but will it work? we head to italy later this hour. this is bloomberg. ♪

caroline: a couple of headlines in the auto sector that caught our attention highlights how

this industry is seeing massive changes thanks to new technology. fiat chrysler announced the first, production of 100 pacific a minivans that will join the waymo vehicle fleet. meantime, a new study reveals a large amount of motorists shut down self driving technology in their car. according to hyundai, half turn off emergency brakes and lane departure warnings. drivers don't fully trust the technology. nevertheless, blackberry is opening a research center for self driving cars. speaking of blackberry, the company boosted 2017 earnings outlook and posted an adjusted profit margin for the third quarter of 70%, its highest ever. we caught up with john chen in ontario and asked him whether

these margins are sustainable. >> a normal growing software company could definitely do better than 70%, yes. it will take us a while to get there, but it could do it. >> how about the software revenue growth? you said that will be 30% this fiscal year. 30% growth for next fiscal year as well? >> oh, no, now the numbers are getting pretty good. i think the market is growing like 10% or 15% this year. faster thanrowing the market. we feel comfortable about that. caroline: it is renowned that angela merkel has used the blackberry, the belief in the security the blackberry offers. how in this time of cyber security threats and concerns -- actually, i guess in a certain way, the answer is yes. the answer has to be yes. i see a lot of discussion, people try to get their arms

, especially in a crisis, try to get their arms around security and cyber security. mobility is one of the biggest vulnerability points. this is where we excel. we are number one player in that space where mobile meet security. feel very comfortable where we are and where we sit with the customers. you were announcing just yesterday a new research center in canada, the focus on automation and driverless vehicles. this is a really crowded space. apple in theinst tech giants not to mention the , automakers. how do fight within this competitive space? >> i don't fight with them at all. first of all, we announced a transaction or an agreement with ford motor company, providing

software to help them build the next-generation car. i will let them tell you what the next-generation car is, but we are helping them to do that. we have an generic people helping them. they are using our software. -- we have engineering people helping them. they are using our software. this is just an example of what the autonomous driving innovation center will focus on. the automakers will be our customers, our partners. all the tier ones like lg, panasonic, samsung, they will be our partners. they have already been our partners. we are very proud of the relationship with them. we are not setting this up to compete with the automakers, to compete with tier ones. in fact, we are embracing an open standard. we want to build the foundation so cars can be put safely on the road. caroline: automation is something that we have been discussing, but not long ago, we saw another announcement from

blackberry, a licensing deal. you are getting out of the hardware. you are letting the chinese partner build the hardware. how much of the relationships under threat with president-elect donald trump? are you cautiously optimistic or concerned about the direction of u.s.-china relations? >> that is a very complex question. let's art with technology. i provide all the software technology, where the majority of all of the security -- so in that sense, there is no truth that if i build my phone in china or by a chinese partner that my phone will not be more secure or less secure, whatever the right english is. our security is paramount. we don't have any issue with that. we control all the software and the security software associated with it. we also have an office that manages all of these devices in canada.

we don't have any interest in outsourcing those things. so anyway, the net of all that is i would not be concerned about security. as related to what the government -- the united states government policy is and where the trade issue is going to go, nobody really knows the answer to it. i heard an earlier guest talk about putting a tariff on developing countries. i assume the guest is referring to china and the currency manipulation situation. or at least being accused of that, all that discussion going on with the president-elect. i assume that cooler heads is going to prevail and we won't get into a trade war. caroline: would you work with the trump administration like you did with bush?

>> absolutely. like everybody said, he is the president now, he will be. anything to help the country, we definitely will. caroline: that was blackberry ceo john chen. coming up, facebook rolling out its third-party fact checking system to combat fake news. now it is getting some help from pointer. we will speak with the director of international fact checking. and coming to a pub near you, the world's first beer brewed with the help of artificial intelligence. can machines really brew a better beer? this is bloomberg. ♪

>> since president-elect to donald trump that with tech leaders, we have not heard from many of the attendees, and the silence perhaps speaks bullion since trump has not had a strong relationship with silicon valley. yet this week, apple ceo tim

cook finally spoke out this week about the meeting. an internal memo explained why he attended the meeting saying, "we engage when we agree, and we engage when we disagree. i think it is important to do that because you don't change things just by yelling." now since the u.s. election facebook's outlook on fake news , has evolved dramatically. the company pulled a 180, turning to third-party fact checkers to flag false stories, but is it enough? we discussed facebook's new strategy. >> the poynter institute has through its network develop a code of principles for nonpartisan independent fact checkers. when facebook decided in order to be a third-party fact checker on the social network, as a minimum condition, you will have had to sign on to our code of principles.

>> facebook is the arbiter of who is a third-party fact checker. >> correct. signing on to this code of principles which request transparency. >> many people signed up to the international fact checking network have been pushing for mark zuckerberg and facebook to take these steps. are the steps announced enough? >> we are in the early days. i hope you don't think i am dodging the question, but the reality is we have will have to wait a few weeks to see how this works out. i think, obviously, there has been a lot of pressure for facebook to do something. now it has acted. we need to see how this works out in practice. in theory, we think it is a welcome choice, but it may not be effective. >> in terms of where it could initially be tackling stories

that are obviously false, but the more misleading articles potentially that come across social media and catch wildfire, do you think that will he able to be blunted to some extent? will we see those misleading stories pushed down? >> i think it is important in the first to stages, and facebook and a third-party fact checkers are aware of this, that concentration be on the 100%, totally fabricated stories. you know, the pope endorsing donald trump. those stories are the ones that did really well by the social network this year, and those are the start of where the fact checking can have an effect. i think when we start going into the grayscale and the half truths, it will be more complicated and there are other platforms to do that. i am convinced this experiment could have a beneficial impact

already if it weeds out the totally fake stories. >> how important is this as we enter 2017, the u.s. election, we have germany france, the , netherlands, a wide range of political events happening next year, how is the institute preparing itself? >> i would add in the election this year as well as the brexit campaign and the italian election, in these campaigns we have seen totally fake stories do really well on social media. in the anti-in k's, it was ella boxes allegedly stuffed and there was votes found, this is a problem of international scope and it is believed that facebook is looking to roll this out internationally. of course, the poynter international fact checking network has members from across the world, and they are all

eager and keen to see this rolled out cautiously and carefully, but in other markets beyond the united states. >> that was the director of the poynter institute national fact checking network. the world's first beer root with -- brewed with the help of artificial intelligence is on sale in the u.k. beers, each recipe based on four customer feedback through a mobile app. we went to find out if machines can really brew a great beer. >> how do you like your beer? hoppy, bitter, dark? brewers for hundreds of years have been trying to find the perfect recipe. could it be that computers can find the perfect recipe? courts were talking about how can you stated more constructively, and we thought they are right in front of us.

>> his epiphany led him and his friend to develop an algorithm that turns customer feedback into better beer. the process goes something like this. a website printed on the back of the bottles directs drinkers to a survey that asks them questions about their taste preferences. the ai bit comes next. >> that data goes into our reinforcement learning algorithm, automated brewing intelligence, then the algorithm essentially takes all this information and then comes up with a recipe and gives the brewer a recipe. >> enter the very human brewer who acts as a last line of defense if the ai goes rogue. >> most of the time it is bang on. some of it is just not possible, and that is where you still have that human aspect to it. >> humans brew the beer and

drink it, too. >> kind of like seawater with cranberry. >> if you use an algorithm, when it come out tasting middle of the road? >> i like it the more i drink it. >> customer feedback. it can be fickle. but the technology points to a future of tailoring products to the people who use them. >> in the future, the same technique could be used for other products. i think chocolate, coffee. perfume. >> in the not-too-distant future, you will be able to give your feedback on just about anything -- for what that is worth. >> still ahead, unicorn valuations. will we keep seeing valuation skyrocket in 2017?

we will hear from one investor who is not so sure next. if you like bloomberg news check , us out on the radio, the bloomberg radio app, and in the u.s. on sirius xm. this is bloomberg. ♪

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♪ caroline: welcome back to the "best of bloomberg technology". i am caroline hyde. as 2016 winds down, some believe uber and snap's value is fair, and others warn of a bubble. my colleague emily chang spoke with a guest about just that. take a listen. >> i do believe and agree that we are at the highest level of fund formation and company formation. at the same level, i believe we feel we are at the highest level of innovation and disruption, and that will continue going

forward. a lot of these companies will not be able to be funded going forward, but there will be a subsection of them that will create interesting things that change the way we work and operate. emily: lot of companies have delayed going public. valuations have soared. a rise in so-called unicorns out there. how do you feel about that? >> our belief is there should be fewer instances of unicorns out there, because the majority of the m&a happens under $1 billion and few companies are going public. if a company expects to be a unicorn, there better be a high probability they can go public given the business model. otherwise, if their growth moderates which happens to every business eventually and they are not profitable, they won't be able to go public and their valuations will get crushed. as we look at the past few years, there has been more of a focus on optimizing valuation, versus exits so we hope that

, changes going forward. emily: that said, you guys are in a number of venture capital funds, and they have a lot of unicorns in their portfolio. does that concern you? >> if you look at the top 10 vc firms, they have had the opportunity to invest in these iconic elite companies. whether that is facebook, pinterest, airbnb, bloomberg, or lyft. so for those managers and for those companies, and there is a market for those companies to go public, but for the broader venture community, we believe that m&a is the most likely outcome for those portfolio companies. emily: andreessen horowitz is one fund that made a big splash, although there has been some controversy about how their returns have been so far. do you have any concerns there about the performance of andreessen horowitz? >> we don't have any specific concerns. we see the number. they have delivered very good returns over the course of the firm's life partly beuse they

have been able to invest in some of the elite companies i just mentioned. so, we are bullish on them. when they entered the venture capital game, they changed the dynamic by offering recruiting, pr, and the sales pipeline by introducing strategics to companies. on a daily basis, they will bring fortune 500 companies to meet their portfolio companies. for a number of them, those introductions have become a significant portion of their sales pipeline. that is a game changer. we hear that over and over again. overall, we have been very pleased. they have had great returns and invested in some iconic companies, and they are changing the way venture capitalists operate. you're seeing other firms mimic these services. emily: i am curious how you decide which venture funds to invest in and how they compare. >> we invest in venture capital and growth equity, particularly technology and some health care.

when we look at venture capital firms, we are modeling five x plus funds. that is because on the growth equity and buyout side, a number of our managers have delivered three x net funds to us with shorter timeline to liquidity and lower risk. for venture capital, we are looking for five x plus funds due to the longer timeline to liquidity and an increased risk. caroline: wells fargo is charging into the biggest asset management battleground, exchange traded funds. the san francisco based bank is considering launching its first etf next year, but is it too little too late as competitors already have a leg up in the $4.1 trillion etf market? we caught up with bloomberg news reporter dani burger and david kirkpatrick from new york. >> listen, this is a struggling time for active managers. they are seeing outflows and inflows are going into passive

investing and etf's. specifically, this new breed of etf's that wells fargo is looking at that is taking off. this is the hot, new product. if wells fargo wants to be part of the next generation of investing, this is something they will have to be in. frankly, many are surprised that it has taken until this year, or the next three to six months, to launch one of these products. >> they try to differentiate themselves. talk to us about the way in which they are trying to have a service here. >> these are quantitative-based etf's built around computer algorithms. you have smart beta that takes the idea of etf, but does not use market cap weighting. instead, it selects the cheapest stocks. from there, you go to multi factor which takes those things and puts them together. instead of using just one factor, they use a couple of

these factors, so this is an idea whose time has come and this is where wells fargo is entering in. if you look at this chart, assets are growing, but not as much as smart beta market as a whole. goldman sachs has the lead here, and that will be their biggest competition. they are hoping by getting into this front which is definitely the newest of etf's -- they are hoping they can differentiate themselves from what is already out there. >> maybe a bit of a me-too coming from wells fargo. david, you like the fact that etf's are catching on, right? >> what i like is that to apply algorithmic approaches to tools ordinary investors can get access to, because these are the techniques confined historically to the highest net worth individuals and institutions. this is a great way for ordinary people to invest in a much more sophisticated fashion. basically, allowing the software to assemble packages of stocks that would not historically be

assembled because with the software selecting from all these different variables, it can do things in real time that are much more sophisticated. so, it's not just an etf of grocery store companies, but companies that have gone up and down in certain conditions and other relations. i think that is a great thing. >> to david's points, i think that is compelling for these companies. they took some of the best investors, warren buffett, they found you could break it down using algorithms, so people who would never have dreamed of having an investor like warren buffett working for them, they can buy these products and essentially get the same returns. >> so active and passive, the war continues. does it surprise you, david, this being the last tech for right into etf's? where do you stand on the whole process? >> talking about wells fargo is

sensitive, because they seem to have made a bunch of mistakes in recent years in their larger business. it is interesting that they would not have been in the advance of this kind of movement given that they are in the thick of the tech community out there. there are a lot of startups that certainly are pressuring companies like wells fargo, and i am glad they are finally responding. i think we will see a ton of innovation coming from tech when it comes to investing. caroline: coming up, twitch is taking on the heavyweights of video streaming. facebook and youtube. as the company looks beyond gaming, we will catch up with the ceo next. plus, sofi lays out the ipo timeline, and what is in store for global expansion. this is bloomberg. ♪

caroline: softbank ceo masayoshi son is making good on his $50 billion promise to the u.s. softbank will invest $1 billion in a broadband access company as part of a pledge to

president-elect donald trump. the investment is expected to create 3000 jobs in the u.s. over the next four years. the satellite start up says it raised $1.2 billion from softbank and existing investors. another softbank investment was with marketplace lender social finance -- better known as sofi. the company is now on the hunt for additional funds and needs to raise $500 million. founded back in 2011, the company was one of the fastest-growing online lenders. we spoke to sofi cofounder and ceo mike cagney. take a listen. >> it was wonderful getting softbank support. essentially, what we are doing with the money is using it for the balance sheet. one of the things we learned is the need to have a balance sheet. the need to have generation from periods of market dislocation. we benefited from having that capital in 2016.

>> is that why you're raising more money? >> we are raising more money in part because we are looking for additional partners to help in a long buying standpoint. one of the biggest challenges we have is the balance sheet in terms of where we price -- place production. in 2017, $16 million to $20 million in loans, and that's a lot of paper we have to place. so, having deep relationships is a catalyst for the round. >> we're talking about how you started off with student loans, but have moved into new products such as mortgages and life insurance. what other products will you bring online? >> today, we are heavy on the credit side -- mortgages, student loan refinancing. we started looking at the wealth management, but, in 2017, one of the biggest solutions will be brought to market is the deposit account and the credit card, allowing us to deliver a full service of solutions to our member base.

so they don't need to go anywhere else for what they need from a financial standpoint. >> interestingly, i come from your where i was spanking. in germany, the united kingdom, we have seen plenty of other startups. is this where the competition is? or is it coming from the banks? >> we see more competition from the banks. we are going after a rich target in terms of that 25-year-old to 45-year-old customer target. that is important to the banks in terms of building those relationships. whether it is student loan financing, personal loans, mortgages, we are seeing more bank competition today, and it is very important that we differentiate through our value proposition. in differentiating with your value proposition, you have all these products. how long until you take it to the fintech? talk to us about expansion. and broader asia, so it is

important to us to deliver into that market. it is the same value proposition. it is delivering speed, convenience, alignment, transparency. something that is missing in a lot of these markets for millennial customers. >> what you have done setting yourself apart is help to foster the careers of some of these students. you have entrepreneurs meet and greet, people come to your house to be given advice. how do you scale that and how much is it hurt by when you have things like lending club not doing so well in the press? does that hurt you from an investor and consumer point of view? >> we have 200,000 members. if they all came to my house, i would have a lot of trouble. we don't do that. but we do do a lot of off-line events. we have 10% of our member base go to off-line events whether that is career services, navigating salary negotiations, getting employed. the entrepreneur program where we help people start companies. our dating events that are

massively oversubscribed for our users. hopefully, they can sell more household units. it is part of our differentiation, and we are finding that the community is beginning to support itself. people are setting up these events with our support. it's not a situation where everybody is coming to my house. >> talk to me about the regulatory perspective. i'm looking at the united kingdom. they are suddenly looking at what is happening in peer-to-peer and crowdfunding, and we are talking about the u.k. that is a forward thinking , open regulatory environment. where do you see regulation changing here? >> we are optimistic about the regulatory environment. i think the occ is a step in the right direction. we can move away from the state regulation we have today to a unified, national regulator. we hope that comes as the regulators become more familiar with the industry and the people involved.

>> ipo in 2017? >> i always get in trouble when i say when the ipo is coming. we definitely want to go public. it is important to the business. today, we have the luxury of being profitable and to determine when we do that. we will do it when it makes the most sense. caroline: sofi cofounder mike cagney there. twitch stepping into the video streaming goldmine rush. the amazon-owned video platform, is branching out its streaming offerings, taking on some heavy competition from facebook and youtube. we caught up with the twitch ceo and asked him about his expansion beyond video gaming. >> we are always going to be a video game centric culture at twitch. we are always going to love video games, but we are super excited to expand the platform and welcome a broader array of creators to use the technology we built to become part of our community. >> you have about 2 million per month creators. how will this expand?

will you use the creators out there and expand their knowledge base? or it is attracting new people to the platform? >> we have been experimenting with the creative category on twitch for more than a year now. but we have discovered there is --t while there is a time of a ton of crossover, you do see lots of gaming creators also wanted to do art, comedy, wanting to be artistically creative. you also see new people coming in who have never created before and who now feel like this is a place for me. so it is a mix of both. there are slightly more people crossing over from the existing community than coming in. on the other hand, we have a lot of people in the existing community. i think in the long run we will see a lot of new people creating, and that is our goal. we would like to get a lot of new people creating on the platform. >> how do you go about doing that? is it marketing?

the amazon platform? >> we mostly focus on the product. we like to think the product should speak for itself, and that we want to have a great product for creators that makes sharing the video, sharing your passions, really fun. but the other thing we do is invest heavily in a team called partnerships twitch. their job is to find streamers, help them grow to the point where they can become a twitch partner which would mean they have the opportunity to monetize their channel and get access to special events at twitch, so i think that we try to have a great product and then make sure we are out in the community evangelizing it. >> how does amazon react to this? >> we work closely with amazon when we can find something awesome to do with them. the most prominent thing we have done with amazon is twitch prime. twitch prime is a twitch-oriented part of amazon prime, comes with all the amazon

prime benefits of free shipping and video, but it also comes with twitch benefits. that is awesome for creators and helped to drive a lot of money into their pockets. it is good for our customers , because amazon prime is a great product. the twitch add-ons have been really great. outside of gaming so far, we are in the learning phase. i am absolutely positive that we will find amazing things to do with amazon, but we are still focused on growing that nascent community. >> the community you have already that has loved you for the gaming side of things, are they worried about the expansion? are you possibly worried about losing some of them? >> we really did worry when we started to expanding beyond gaming whether our community would embrace that or not, and the awesome thing is that they have. we recently ran a survey to ask people what you think about twitch adding non-gaming content? should we? will it be good for the platform? more than 70% of our creators either agreed or strongly agreed

with the statement, "i think twitch adding more content than gaming will be good for me and good for the whole platform." >> still ahead, we take a look at which tech gadgets are sent -- set to be the holiday winners this season. all episodes of bloomberg technology are now live streaming on twitter. check us out weekdays at 5:00 p.m. in new york. this is bloomberg. ♪

caroline: this holiday season as the all encompassing smartphone has become the dominant gadget for consumers, we look at the other gadgets that could be the biggest winners and losers of the season. with smartphones becoming a

one-stop shop for all of our needs, other tech gadgets are having a hard time gaining traction. gopro and fitbit have cautioned investors by lowering their holiday sales forecast. back in september, fitbit rolled out two new devices. yet, soon after, the company issued weak holiday sales guidance, and the stock lost a third of its market value as a result. about 30% of people in the u.s., u.k., and australia no longer use the device. this is followed by gopro in november telling investors that it expects a lousy holiday season. they then recalled 2500 of its new drones. the ceo defended the product. >> there is a misconception that demand for gopro has been waiting with consumers. i say misconception, because sales through at retail has never been better. caroline: once darlings of wall street, both fitbit and gopro are young hardware companies

that have fallen short of their promise. now, virtual assistants like and google home are jumping in to compete against smartphone personal assistants this holiday season. oppenheimer estimates 10 million to 12 million amazon echo and google home virtual assistants could sell during the holidays. it paints a rosy picture for the devices than what gopro or fitbit are offering. let's talk tech gadgets a little bit more for the holiday season. first of all, which gadget should i get to solve all of my ills when i am at home? >> there are two options, the google home which just came out a few weeks ago. then there is the amazon echo and the array of dot devices. it comes down to which you go -- ecosystem you are in. if you are on an iphone ecosystem, you can tap into both. you can use eyes are -- you can

use either with an iphone system. if you have an android phone, you probably want to get the home device from google because that can take advantage of some of the android functionality and the google ecosystem. >> if i was a bit of a gamer or even an artist, i was at the facebook party playing away with the vr. should i be getting into virtual reality? what is already out there that i can purchase this holiday season? >> i think we are very early. the oculus rift has to be hooked up to a pc, and if you're not a big fan and just a consumer like you and i, i would not have one. i would not want a big pc. over time, they will shrink and you will be able to wear them and buy them off the shelf, but olens isconsumer the hol a smaller fit than the oculus rift. google has their own. that is smaller than the oculus rift.

it is this fabric headset that is less than $100. you can connect it to the new pixel phone. that is where consumers will get a vr-ar experience. i think over the next two or three years we will see more advanced equipment appear. apple is already working on their own. so there is a lot to come. >> talking of apple, they are looking more at vr, the inside of cars, looking at the iphone, and one key product you are writing about they have taken their eyes off the ball. >> the mac, we have a big story today. i'm sure you read it. there is a lot of detail in there that the mac is taking a backseat to iphones and ipods and other products. given that it is only 10% of apple revenue while the iphone and ipad combined for over 75% in this 2016 fiscal year, it makes some sense, but don't that -- don't forget that mac users are a key group of people, professionals, creatives that

rebounded apple out of bankruptcy in the 1990's. so, it is an important market. people should expect a company as rich as apple should be able to walk and chew gum at the same time. they should be able to get a new iphone out the door every year and new macs out the door, and people are taking notice. >> so don't hold your breath for an update to the macbook anytime soon. >> definitely not now. they just came out with the new macbook pros in november, but they are planning upgrades, some new imacs, and faster versions of the macbook pro that just came out. that also includes the 12 inch macbook. caroline: that was mark berman of bloomberg technology. that does it for this edition of the "best of bloomberg technology." we will bring you the latest in tech throughout the week. tune in each day. tuesday, we will weigh in on

thin tech companies moving from london to germany post-brexit. remember, all episodes are live streaming on twitter. check us out. that is all for now. this is bloomberg. ♪

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