>> you are watching bloomberg technology. start with the first or news. congress approved another step towards dismantling obama's health care love. victory.but crucial ignorance democrats from using a senate filibuster from annulling the law which is critical because it takes 60 votes while the republicans have a 58-48 senate geordie. james manus will join the pentagon and run it for donald trump. of and granted one-time for less than seven years from holding the top

pentagon jobs. president obama will sign their latest addition before he leaves office. the u.s. justice department said takata will plead for exploding airbag diligently to at least 17 it wasdwide and misleading regulators about the safety of its airbag and be subject to a compliance monitor while on probation for three get ran for 15 years. get ran for 15 years. more than 120 countries, this is bloomberg. ♪ caroline: this is "bloomberg

technology." coming up, donald inauguration is one week away. we will get perspectives from someone who is held the highest positions in washington. and we will give you a first look at a highly anticipated gaming console and speak with nintendo's president. and $9 million strike. we sit down with the president and cofounder. concerns and repercussions remain in the spotlight as we count down to the inauguration of the president-elect. president elected donald trump said that they will have a report on hacking with his first 90 days as president. this comes after intelligence that says the russian government may have gathered intelligence against him. donald trump vigorously denied the allegations and tweeted that

it was totally made up. we now turn to david westin in new york, who has a very special guest for a deeper discussion on this complex issue. david: joining us from california is leon panetta, chairman for the institute of public policy. he has held just about every important post in the legislative branch of the u.s. government. he has been chief of staff to president bill clinton and was director of the central intelligence agency. thank you very much for joining us. let us start with the cyber security issue. i don't remember tight time when

we have had this many cyber security issues in an election. we have reports that russians may have tried to interfere with the election. we also have the hillary clinton incident with the private server. the question is, is this prevalent because it is that big of a problem? mr. panetta: i think it is the battlefield of the future, if you want to know the truth. i think cyber attacks will continue to increase the capabilities, and countries are continuing to develop some a countries like russian, iran, china, north korea, will all continue to use cyber attacks incoming at united states.

what we are seeing happen, particularly with the russians, but we have also seen china be able to get intellectual capital by virtue of using cyber capabilities. north korea has gone after industries in this country using cyber, and iran has crippled computers, aramco, computers were crippled by use of a sophisticated virus. what we are seeing with the russians and what we are seeing with other countries, i think is going to continue to escalate in the future. it is something we have to be aware of and defend against. david: how confident can we be -- you have been in the room when intelligence agencies and have said, we know this is happen. how confident are we, particularly because the president-elect has said we are not sure? mr. panetta: when you get 17 intelligence agencies that unanimously agree that russia was involved that the orders

came from the highest levels in moscow, including putin, i think that has a tremendous amount of credibility. i was pleased that the president elect recognized that russia was involved in the hacking. i would hope that we could begin to see a more trusting relationship between the new president and the intelligence agencies. he will be the next president of the united states, his first duty is to protect this country, and frankly he cannot protect this country and less he is able to rely on good intelligence and has a trusting relationship with those agencies. david: let's go there. i don't think there has been a time in history when a president

has this public disagreement. repudiation i don't think is too strong a word to use, of the intelligence agencies. has there been this kind of thing behind the scenes in the past? mr. panetta: in the past, there have always been questions raised about intelligence, that is nothing new. presidents that i have worked for have questioned intelligence. but those questions are usually raised in the confines of the oval office, where they should be. if the president raises questions, the intelligence people have the responsibility to respond to the questions and be able to determine whether or not the information is credible or not. we've never had a situation where a president-elect tweets out questions about the integrity of this kind of intelligence information. that is unheard of and friendly, i think it is damaging to the credibility of that information.

it is damaging to the morality people who do that work in the intelligence agencies, and i think it invites our enemies to take advantage. i hope he can move away from that and try to deal with whatever concerns he has been the confines of the oval office. david: to be specific, he tweeted out, saying that he was politically influenced. he compared it to tactics used by nazi germany. at the same time, those in the past have suggested perhaps the intelligence agencies were susceptible to political influence. tweeted out, saying that he was how far-fetched is his claim that there might be some political influence? mr. panetta: as i said, when you have 17 agencies, all of whom have responsible directors as far as i know, when they come

together and agree on an issue like russian hacking and trying to influence and interfere in our election process, it is pretty clear that evidence is real and something we need to take seriously. i don't think little influence was involved in their determination. it's politics sometimes involved in the way intelligence is gathered? of course that has happened in the past, and it is something you have to be careful of. the point of intelligence agencies is to present the objective information to the president, not to present what that president wants to hear, not present what is politically something that would be an advantage for one party or another, but present the truth. there is a statement on the wall at the cia that says the truth shall set you free, and that is what the intelligence agencies are supposed to be about. david: someone who hopes to be

the next rector of the cia, mike pompeo, a congressman, he is going to a confirmation. he has to build bridges to his new boss, donald trump, but at the same time he has men and women who are sometimes putting their lives on the line. how can he reach out to president-elect trump and also convince his people, his men and women, that he has their back? mr. panetta: that will be the challenge. i faced the same challenge. you have got to gain the trust of the people who work there. they are not republicans, they are not democrats, they are good american. they are patriots and

professionals who look at their jobs as something that is extremely important to protecting our national security. the key is for the director to be able to build a relationship of trust with the team he has at the cia, tell them he is going to protect their back, and that he will be honest with them and he expects them to be honest with him. if he can build a cut of relationship, a product of that in terms of intelligence will be the truth, intelligence that will be important to the president. then i think the director has to build a relationship of trust and with the new president. a president cannot just walk away from the intelligence community. we live in a dangerous world with isis, with russia, with china, north korea, cyber attacks. if the president is going to deal with this kind of challenges, he has have good intelligence. otherwise, he will not be able to do the job of protecting the

country. david: you also have the job of chief of staff to president clinton. what advice would you give to reince priebus? how is he going to herd these cats? mr. panetta: he is going to have a challenge. as chief of staff, i am a believer in what i call the jim baker role. there is only one chief of staff and everybody should be responsive to that chief of staff. i also believe in a strong chain of command, where people have specific duties and a report to keep people. they are not wondering on their own. the danger i see is that the president is appointing a number of advisors, he is appointing a number of consuls, these people

have broad titles. i'm not sure what their responsibilities are. if these people are just wondering around the white house, going to meetings but having no responsibility, it is going to become quite a challenge to be able to discipline the staff to work specifically for the president. responsibilities are. david: leon panetta, thank you so much for joining us today. now we go back to caroline hyde in san francisco. caroline: a fascinating conversation. so timely. thank you. deutsche bank is telling its employs to put down their phones. the bank is battling text messages. a person with knowledge on the matter says it is an effort to improve compliance. up next, first impressions of the nintendo switch. we get our hands on the gaming console and hear from nintendo

america president about how it fits into the company's strategy. and a reminder that all of our and a reminder that all of our episodes are live streaming on twitter. check us out at 5:00 p.m. in new york. this is bloomberg. ♪ ♪

caroline: to the gaming world. nintendo launched its new console, the switch. $300. the price came as a surprise to some analysts, who had expected to be less. we caught up with the nintendo america president and asked him how the company justifies the higher price tag. >> we believe the price point is justified. me give you a few data points.

we have presales, and the feedback we are from retailers is very positive. a number of the presales have come up and had to come down based on the extremely high demand. our consumer base is saying, not only the price point but the proposition, the software him at the support from third-party publishers, it is turning on consumers and that is our key focus. to make sure the consumers understand what is the switch, and they're very excited. >> many are feeling that perhaps have not been as many games as have been expected. is the really support coming from the game makers? >> there absolutely is. for example, we are here in new york and holding events where consumers tomorrow, media today, are able to get hands on to our continent. we have nine pieces of content

from third-party developers, they are playable here today. we have announced there are over 80 games in development. it is not just the sheer number, but the quality of the games and the key third-party companies that are participating. it is activision, ea, take two. all of the big players in the industry are supportive of the switch, and that tells us that from their perspective, the developers see something that excites them and the games will flow in. caroline: this is a hybrid product. you can play on your television and then moved outside. there is a concern that the handheld might be cannibalized? >> we have been very clear, the nintendo switch is a console you can take on the go.

we see consumers will spend a lot of time in front of their extreme tv playing on the switch, and then when they have to go to work or school, a can take the system with them on the go. the nintendo three ds is a very vibrant platform, we've had year on year growth. we have sold more software in a three-month time period than ever before. we have new games coming out for the 3ds, shortly we will be announcing new games. it is a vibrant today and will be vibrant moving forward. nintendo has a rich history of being able to manage multiple platforms at the same time. we are very well positioned, not only to launch the switch, that maintain momentum on the 3ds. caroline: give us an impression of how the switch will be different.

>> our biggest challenge was clearly committed getting to consumers what the proposition for wii u was. we saw it was misinterpreted as a tablet. we made sure that with the switch, people understood it was a console. that message is resonating. we believe we have achieved job one. job to is driving the games and make sure the game lineup is as strong as it can be, and that is what we are focusing on right now. we think we have applied what we have learned from the wii u, to make sure the launch and sustaining. or the switch is as strong as possible.

caroline: the online gaming service is something new, because you will start charging for it. do you think people will want the price point? can you give us an idea of the price point? >> we have not announced the price point. what i can tell you is that nintendo is focused on making our products affordable, so our pricing for the substitution service will fall in that realm. online is very important for us. we believe the neck and for consumers, the ability to provide full, rich games downloadable to the system, the ability to provide additional downloadable content is important to our publishers. all of that will be available. but we will also continue to innovate. we will be launching as part of the service a mobile application that allows you to create the matchmaking and voice chat that consumers want.

we think that will be consistent with our gaming on the go philosophy. we are going to provide an overall online experience that really is going to be heavily compelling to the consumer. caroline: speaking of aiming on the go, the mobile game you launched, super mario run, is excitement fizzling out? was the price point too high? >> when we launched super mario run, within a week's time, apple had announced we had broken all of their records in terms of downloads, and over 50 million downloads had been publicly announced. that was within the first week. later on this month, we have financial meetings where we will share more information about super mario run. what i can to you is that the engagement continues to be quite high. caroline: that was nintendo

america's president. this is bloomberg. ♪

caroline: nintendo's shares have lost about two thirds of their value since the peak sales of the wii console a decade ago. now as you heard, nintendo is taking another crack at the console market with the switch. we took it for a spin. >> this is the nintendo switch. it is the company's long-awaited console. a cost 299 dollars and the launch date is march 3. nintendo is trying to create a new way to play. they want to mix handhold controllers with the device you can play on the couch or on the go. we're going to try a little bit of mario kart. let's go for it. there is also the much loved zelda game coming out.

a new version. they are also working with over 80 developers, but they will not be ready at launch. what is the difference between this and the wii u? >> we are never seen this in a console. you've always been tethered to the tv. >> you hop off the couch, and if you want to keep playing, you can start where you left off. you can continue to play alone or i can play with my friends. it will be important to see what sales will be like in the first two weeks, that is very critical to show consumer demand for the device. caroline: some get all the fun. coming up, amazon goes on a hiring spree while yahoo! announces more changes.

we have the biggest stories in technology. this is bloomberg. ♪

>> you are watching bloomberg technology. the u.s. justice department has issued a scathing report on civil rights abuses by two cars police department. department. police violations,l rights including the tendency to use excessive force. loretta lynch spoke earlier. >> the department of justice has concluded there is reasonable cause to believe that chicago inice department engages excessive force in violation of the fourth apartment. >> the investigation was

launched in 2015 after the release of videos away in opposite shooting a black , laquan, look on mcdonald. houston told reporters there were looking to fill more jobs and talk about the joint strike fighter jet. >> i sure his view that we need and at thepability lowest possible price so i am glad to tell him we were close to a deal. mattis saidames president-elect trump is not said president-elect trump is not opposed to buying the jet fighter and said he wants the

best bang for the buck. a send the hearing date for president-elect trump's secretary general. for next thursday but finance committee roles say it is unlikely before february. congress needs to dig into his 42 page financial disclosure and ethics to experiment. evil goal over the lasta send tr president-elect three tax returns and the standard questionnaire. the white house has released -- he will hold his final presidential news conference next wednesday and the president and first lady will hold it before the morning. and the obama's will the part to a destination yet to be announced. global news 24 hours a day, and more than 120 countries.

this is bloomberg. ♪ caroline: this is "bloomberg technology." this week, it was announced amazon is creating 77,000 jobs in the u.s. is this part of a bigger strategy to get on the good side of the incoming trump administration? donald trump has made it loud and clear that job creation will be a big platform. i spoke with our analysts about that and other tech stories that grabbed our attention this week. >> one of my colleagues did an

analysis of 2015 and ahead about 77,000 people in that one year. it is probably already in the pipeline. caroline: this could be showing us more about amazon's strategy. >> it was coming anyway. if you look at the growth, it has been strong. the demand has been strong. this is where third-party services can use their services. that is their flywheel they keep talking about. obviously there are other initiatives like amazon go, and there continued expansion of the cloud. maybe they accelerated, which is a good strategy. >> what about the automation? >> it is a little longer term,

the automation aspect of things. if you look at the window in the next 18 months, two years, this is a good thing. caroline: hiring big and spending big on real estate for jeff bezos this week. let's talk about how the growth in one company and the demise of one, as yahoo! has been on our mind. marissa mayer is leaving the board. maybe not a surprise. >> i think this is the first part of her exit plan. we don't really know what she is going to do, but i imagine she will spend a year or two rebuilding her reputation come at which has been fairly tarnished. she might be an entrepreneur or something like that. i imagine in 2-3 years, she

might turn up as ceo of a new company or start her own. caroline: once the web aspect of the company goes to verizon, we basically have the investments. what is inherently left of the business? >> you look at the value of what altaba has, take the tax out of the equation, there is still engineering the number is big. we'll have to see what tax implication, what workarounds come about for their shareholders larger term come up but potentially it is a reengineering play. caroline: there have been some jokes around silicon valley about altaba as a name.

it sounds like a joke. >> it sounds like a drug, can you take it with alcohol? caroline: maybe some hives if you drink with it. lastly, it was an interesting week in terms of celebrations or worries about the future of the iphone. this is still such a big product for apple. >> yes, 6 billion per quarter, i think it is. i think the best, i had this week was from peter thiel, where he was asked about the ceo of apple, and he said yes, i know what an iphone looks like. caroline: i actually cannot tell. >> this is the google phone.

it took them 10 years but it is just as good. we know what they look like, and that there is not much innovation left. caroline: when you look at the revenue that is still so dominated i this once powerful iphone, we're expecting things from the iphone eight, there is still a lot of anticipation. what about other products that might come in? >> this will probably be the last spurt of growth the iphone sees. given the expectations. longer-term, it is about services and accessories and other devices surrounding the iphone. so we have an opportunity with ar and vr. to be honest, the innovation execution has not been seen with

apple, so there is a lot for them to prove. it is a week and see with respect to their other opportunities. they are there and real, but as for execution, we need more proof. >> tim cook is the operations guy and steve jobs is no longer with us. i think in the next couple of years, the ar product, the glasses we reported on, those things have to start hitting it, otherwise i don't think the value will hold up. caroline: that was our analysts. two years after leaving google, andrew rubin is prepared to take on the smartphone industry. he is prepared to announce a new company called essentials. the company will marry his back out and software with artificial intelligence and consumer hardware. joining us is mark berman, who broke the story. how do we know this will work? mark: we don't know if it will

work but we know he is getting a lot of money for his incubator program. they have the best people in the business working on this, they have former apple and google recruits. there are about 40 people on the program right now. caroline: it could be a new system, not just the software. mark: it is being described to us as an entire hardware platform. he wants to get in different places of your life, sorting out the smartphone, and he is also looking at the smart home. caroline: as if competition was not stiff enough. great scoop for us today. thank you. coming up, almost double a

company's valuation. we will talk with their cofounder and president. this is bloomberg. ♪

caroline: uber is asking russian drivers to temporarily bear the load of a new tax, causing some of them to quit to avoid tax filings. the law is an 18% levy and went into effect on january 1. uber says it will reimburse drivers later. shifting to another unicorn, drivers later. shifting to another unicorn,

last year was a banner year for stripe. how is the company using their new funds and how is it evolving? joining us is their cofounder and president. welcome. when you're talking to your investor base, what vision are you painting of stripe? john: for us, there are two major axes of expansion. we launched, and it was just available to businesses in the u.s. now it is available in 25 countries and we are working very hard to bring it to businesses in more countries. last year we launched in singapore, france, spain and japan. entrepreneurs around the world can incorporate this business. it has also been helpful to our u.s. customers. caroline: i love that element, that you are able to see where in the world you're wanting to

register countries. what sort of geographical heat areas are you seeing? john: for people who might be familiar, atlas allows entrepreneurs to incorporate a u.s. entity, get access to u.s. bank accounts and get u.s. advice. it is everything they need to get a business off the ground. our intent was that entrepreneurial potential is distributed broadly, but you needed to be part of the in crowd. we see countries like israel represented strongly. the hypothesis we had, people are still too focused on the

particulars of the geography. in practice when you want to something online, you're launching it to the internet. that is your audience and we wanted to create more of a digital market. caroline: in this age of populism and fight back against globalization, to think that will happen? john: i think it is happening. i think you tend to get these, the headlines show the latest swings in popular sentiment, but the long-running trend is very clear. we think that cross-border commerce will continue to accelerate. we think the ability for entrepreneurs globally to purchase up eight in the economy will accelerate. and we think mobility will continue to accelerate. in silicon valley, we see the value of that, the late stage private technology companies, i

think over half of them have immigrant cofounders. we see this trend on and on. caroline: you being one of them, coming from ireland. we had the alibaba chairman in united states. china is an area you have been working with. how are you making it work? john: one of the partnerships we have is with alipay, which has penetration in the chinese market. again, is the cross-border aspect of was talking about. we have a shared technological layer, but there are restrictions on who internationally you can trade with. if you are a silicon valley startup, you cannot sell into china because they don't have the payment mechanisms to trade with you. what we launched a little while back with alipay is that now stripe customers can have alipay credentials. the markets we are looking about our latin america and southeast asia as significant opportunities for growth.

we launched in singapore recently. caroline: what about the verticals? you work with the likes of food delivery, and transportation. which parts are you seeing an appetite for growth? john: i think the trends tend to come and go, and one thing we see in the data is that you often have these very significant businesses that are built over many years.

the joke is that it is an overnight success 10 years in the joke is that it is an the making. these are businesses that really threw sustained execution and a huge amount of discipline are built over a many year period. that includes our product roadmap. one area of expansion is globalization. credit card processing is the easiest part of building an online business. turning stripe into a technology platform that provides the ingredients people need to run their online business, if you look at what we of been launching, it is a platform for substitution billing, running a marketplace. our most recent one back in november was radar, which is solving fraud for internet businesses. i think we all see how fraud has been happening him it is crazily antiquated. you're traveling

internationally, and your card gets blocked. somehow we don't match your gps up. we held our businesses prevent fraud. caroline: it is almost a stack of startup tools. i want to know about your growth and how you have developed. how have you scaled? how have you kept your culture how you want to be when you're adding in so many different people and different countries? john: a lot of investors are interested in, i think in general late stage companies are based on future cash flows. in the early stages, you can be based on potential, but later stages, it is about cash flows. i think one of the things investors tend to like about us is one, there is not some hypothetical modernization needs to take place. it is an existing business and

we have companies that start on on stripe and grow there. and it is not these companies scrambling for shares of the pie. today, 5% of consumer spending happens online on a global basis. it is a very large and growing market. despite the fact that we would like to think we are a significant player, we're still a small fraction of the overall pie. and in terms of product innovation, when you talk to these businesses, it is the startup stack, it is the tools, and we think there is a huge amount of growth in terms of what we can build. if we are successful in that, it is not just capturing a fraction of those companies, it is helping more companies get started and scale internationally. caroline: great to have you in the studio.

we hope to do it again. thank you so much for your time. coming up, dyson is known for vacuums, but could they be expanding their ambitions? this is bloomberg. ♪

caroline: there could be a major competitor coming into tesla's rearview mirror. dyson, known for making breakthrough consumer products, possibly getting into the electric car business. alex webb joins me with more. they hired tesla's ex-communications chief. alex: this adds fuel to the fire that they have been looking at car stuff. we had documents that showed that the government was subsidizing efforts to build an electric car. this guy is one of the key communications people at tesla that helped launch them into the automotive industry.

why hire a guy like that unlee they wanted to do something similar? caroline: it also speaks to the fact that they want more dominance in silicon valley and the united states. we know dyson very well. we know the entrepreneur stands for vision. alex: in the u.k., it is in a lot of households. they have the vacuum, the air purifier. you will find the products in most households in u.k. caroline: very big in asia, as well. where could they be looking in terms of the cars? do we know how far along they are? alex: not really. we know they are an electric car but we don't know about the autonomous element. the winds have shifted slightly, and now it is more about autonomous driving and the electric car is often done by

suppliers and put together by the carmaker. whether dyson is doing something autonomous is the interesting question. caroline: think we will get any more talent pinches? alex: dyson is a big deal in the u.k., but it is not a huge company. compare them to the hundreds of billions of dollars that apple makes, it pales in comparison. however, because it is privately held, it doesn't have to answer to shareholders. they can think slightly differently in terms of innovation. caroline: alex webb with

"bloomberg technology." that does it for this edition of "bloomberg technology." next week, we will be with the world economic forum in davos. this is bloomberg. ♪

>> the following is a paid program. >> the following is a paid advertisement for time life's video collection. >> hi, dean. >> hi there. [laughter] >> bob. [laughter] announcer: from the battlefield to the white house, from hollywood to the heartlands, america's entertainer was bob hope. >> oh, this room is so dull and depressing tonight. if only there was some way to brighten it.