shery:. update of the top stories. chinese stocks have fallen for six days with the shanghai composite with its longest losing streak since december 2013. tremors in the nation's financial markets, spurring selling. brokerage and real estate firms have led decline. theresa may says they will step out of the eu market. the british prime minister will say she has no interest in the approach.alf-out

sources say they want to boost their statke, cementing control over tata's listed companies which is said to be the main chairman'schairman's priorities. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. you are watching bloomberg. let's get a check of the market. afternoon trading gets underway in hong kong. highs losing ground, the regional benchmark with a day of losses. ♪

caroline: i am caroline hyde. this is the "best of bloomberg technology". we bring you all of our top interviews. coming up, the president elect meets the press. donald trump faces reports from hacking to the media itself. it is her job to makeglobal newh titans play by the rules, our exclusive interview with the eu competition commissioner. our interview with mary barra, ahead. president-elect donald trump tackled one of the most controversial issues plaguing his administration, russian hacking. he has previously cast doubts on the accuracy of u.s. intelligence. he did again wednesday. >> i think it was russia, but we also get hacked by other

countries and other people. >> if putin likes donald trump, i consider that an asset, not a liability. we have a horrible relationship with russia. russia can help us fight isis. caroline: trump vigorously denounced reports that the russian government has gathered compromising information about him. we want to take a closer look at the hacking itself. and the u.s. intelligence say it was backed ussian intelligence. fireeye was amongst the first firms to identify this group. they came out with additional information. take a listen to our conversation with laura galante. fireeye was amongst the first 2014, we were

profiling this group that attributed their operation to the russian government. what we have seen is a variety of targets, journalists in chechnya -- so a variety of different targets we have seen this group go after. i have done it in a couple of ways. they will breach networks using malware. they will take data, frequently emails. we are seeing another side to these operations that play out on wikileaks. the emails came out and changed the conversation. it is the combination of network intrusion and the ability to change the narrative through leaked data that has been so powerful.

particularly in the u.s. in 2016. caroline: and using social media as the means to do this. is there a risk of this still going on? how much could the u.s. government be compromised? >> it isn't just going on. this group is taking it to europe next. we will see this occur around policy issues in the u.s. the elections were one of a variety of targets this group has gone after. when we look at elections in the netherlands, france, germany, we are seeing the same mechanism, the ability to push documents to journalists, a focused ability to change how the conversation in the press plays out. they do this very flexibly. they don't need to change the malware. they just need to change the flavor of how they get their message out, and that is what is so powerful here, and also easy to deny. was it actually the narrative or

operations. there are clear operations with the forensics behind it that link this back to a russian government effort. caroline: can you illuminate how you managed to track them back? >> there are hallmarks in the malware that give us these indications. the compile times, the marks that show when malware was built, continue to go back to the time zone that moscow and major russian cities are in. over 90% of the samples we have tracked are in line with the working hours when this malware was compiled. was compiled. we also see the marks of a well-resourced effort. the malware shows a certain techniques to evade detection,

that people can't unpack it and understand it as well. these are the signs that the developers behind these tools are thinking about how to do it. they aren't just buying tools online and applying them. this is a state effort that takes years of planning, and the targets say so much about this, caucus agencies, agencies in georgia. that is what has led us to believe that the russian government is the likely sponsor of the group. caroline: i had no idea hackers kept a nine-to-five regime. give us an idea of the work you are doing. government institutions, is this a game of whack-a-mole? or can actually be something

done? >> the question is where is the line between acceptable state espionage and aggressive measures that interfere with the internal affairs of a state? so what is sovereignty in cyberspace? do we consider cyberspace or information space? that is the question at hand between russia and the u.s. right now. on the u.s. side and other nato countries, they thought about this in terms of networks and systems. do you take an expansive view or think of this in a more traditional technology approach? and what are the implications of choosing any fatality. caroline: so when we hear from president elect donald trump saying he does not think he will be attacked while he is president, should we believe him

or pour cold water over it? >> we have long said it is a matter of when, not if. we have long seen a variety of breaches. whether the department of defense, against companies, and what has changed is the type of actors and intrusions. what hasn't changed is to go after key government targets in the u.s. i would be surprised if that changes. what hasn't changed is to gocars claiming he is the victim of fake news, facebook is taking steps to curb it. they announced a stronger partnership with media companies and that her efforts to educate users on how to avoid hoaxes. it follows a year of debate over facebook's role in the media and whether the network is biased. members of the media will be

updated on a new facebook journalism project page. coming up, jack ma -- can the alibaba chairman deliver jobs? a reminder that all episodes of bloomberg technology are live streaming on twitter. check us out. this is bloomberg. ♪

caroline: jack ma met with president-elect trump monday. he says the two men discussed how alibaba is focused on creating one million u.s.-based jobs. >> very productive meeting, helping small businesses sell things through the alibaba platform to china and asia. we talked mainly about small business and young people and american agricultural products to china. we think the china-u.s. relationship should be american agricultural products strengthened, friendly, and better. caroline: the visit is the latest from a growing list of business leaders eager to work with the president-elect. we caught up with mary barra for an exclusive interview at the north american international auto show and spoke about the

upcoming administration. >> we have more in common with the administration and president elect than we have at odds. we are looking to strengthen the country, business performance, because we are a big provider of jobs and provide over 100,000 good paying jobs, and looking for reforms, regulatory streamlining, so those are all things that will improve our business and allow us to invest. >> there is an opportunity there for you? >> i believe there is. this is a complex business with long lead times. the volt and the traverse are built in lansing, michigan. those were decisions made a few years ago. we need to look for the opportunities. >> let's talk about autonomous vehicles. that is something you have been lot lot.a

where does that projects it right now at gm? everyone is announcing some sort of autonomous venture. >> we feel good about where we are at. we have vehicles getting real-world experience in san francisco, arizona, and detroit. it is about experiencing all the different situations. francisco, arizona, and detroit. downtown san francisco, there is t a better place to experience things that come into the roadways, so our vehicles are learning a lot and you will see movement early this year. >> there was talk of changing from a model of selling cars to providing a service for a fee, almost like a subscription service. is that realistic? >> as we get to autonomous vehicles, we believe it will start in a rideshare environment. we are also excited about what

we launched with cadillac. we have a subscription opportunity for people who want to drive that performance car on the weekends, but need the functionality of an escalade. those of the things we are experimenting with. >> a record deal for vehicle sales, 2016 beat it. what does 2017 hold in store? >> a record deal for vehicle can you beat that record again? >> we think we will have a strong year, much like 2016, and we are looking to continue to improve. that is our goal, build on the momentum of 2015 and 2016 and carried that into 2017, and we think we can deliver another strong year. >> you have a great product people want to buy. people also have to have money and the willing to buy it. as you look at the factors that

could drive 2017 to the upside or downside, what is most important to you? wages? disposable income? consumer confidence? >> consumer confidence is important, but we are seeing household wealth go up. if the indicators stay in the direction we think you're going, we think he will have another strong year. >> one of the topics much discussed is wages. we just had numbers on friday. you are a big employer. are you seeing wages go up materially? >> they are going up as expected. it is important we manage that. i am proud of the fact that of the 100,000 jobs, we have good paying jobs that allow people to live a good life. caroline: still ahead, our exclusive interview with margrethe vestager, her regulation battles with tech

giants from google to apple. plus, high-profile hacks are on the rise and security software has ballooned to a $40 billion industry. we will speak with the ceo of cloudflare next. this is bloomberg. ♪

caroline: as 2017 gets going, tech giants gear up for hurdles in europe. apple, facebook, and google head to court to settle cases regarding taxes and privacy. david gura spoke with margrethe vestager, who has targeted these tech titans. take a listen. >> i consider this an important issue. we cannot do our jobs if we do not get the right information from the businesses in question. the concern we have here is that facebook did not give us the right information during the merger procedures. that of course is a huge problem if that appears to be true, because if we are not told the full story, we will not be able to take right decisions and enable competition on the other side of each and every merger, and that is why it is important

as a concrete case and the take away from the business community that we will police are procedures to make sure we get the right information. we try to do that as best as possible within the short deadlines we work within. >> you have been looking at google as well. the european union has gotten a reply from google. how satisfied are you? >> we got the last part of the android answer, so we are analyzing it, and therefore it is too early to say what will be our final decision, but we are in the process of going through it. it is very substantial of and there is a lot of data to go through, but now we have the working material, the answer from google on the cases in question. >> you have seen the rise of

populism, the shifting political ferment, and i wonder what that means for you and looking at competition in general? >> it is important that people see that we do our best to do the job ahead of us, to make sure that citizens are not being cheated when they are in the marketplace, that businesses do not agree on prices in the back office, but that businesses do compete with products, prices, services that they can offer customers. because i think for every citizen it is important to see the authorities do their job, and they do their job to service the citizens and on behalf of the citizens where the individual might be too small, but where we can do good together, and in that respect, it is important what we do. >> how pivotal do you see the apple ireland case to your

office? perhapsyou better known silicon valley. how do you make the relationshis silicon valley. how do you make the relationship a better between your office and tech firms in silicon valley? >> we have tried to make it clear that we have no issue or grudge against any company. what we are aiming at is behavior. for instance, the thing that clear that we have no issue or happens if one company or a group of companies given aid that is not available to other companies, that seriously makes the playing field no longer level, and that is the issue. i don't think as a company when you are a competitive, when you have a competitive culture, you want to innovate, present the best products to your customers, well, how can you approve of your competitor having benefits that are not open to yourself?

in that respect, of course, the business community is served by enabling their competition. caroline: margrethe vestager there. cyber threats remain a major concern for business and government agencies. this week, we got reports that mario draghi and matteo renzi were among those hacked. this week, we got reports that our next guest says it is time to build a better internet. he is cloudflare ceo matthew prince. >> we have seen what 2017 will bring, large cyber attacks against firms, then attacks

against presidential campaigns. they were a big part of the story in 2016, and we don't see that decreasing in 2017, so we are busy at cloudflare. caroline: does it matter particularly where they are coming from, regions, groups? we always seem to be saying china, russia, but there are many different countries. >> cyber attacks are incredibly democratize. we see some of the largest attacks by what turns out to be 15 kids in the u.k., while at the same time nation state actors as well, so it is hard to attribute to the attack is being launched by. we often have circumstantial evidence based on who is reading atck, but regardless, we want to be able to stop it. caroline: the weak spots will

become more plentiful as the internet of things becomes a reality. what are the key threats when it comes to the building up? >> everyone thought why does it matter if my toaster gets hacked? but if you're toaster gets hacked and it can be commanded to launch attacks against critical infrastructure, that means if we don't have security around iot devices, that will make us more vulnerable to attacks that's one of the things we are thinking about at cloudflare, how to wrap the security around the devices and the big corporations that we help protect. caroline: talk to us about the

demand? who is wanting of your services? you are on the ipo trail as well. more cash to expand? >> we have not raised money since december 2014. we are on the path to being a public company, but they either go public because they have to and need more cash or because they want to. we are in the position to pick and choose the timing right for us, so we will pull the trigger when it is right for us. cloudflare has over 6 million customers, 15,000-20,000 a day. they are mom and pop companies to fortune 500 companies, 16 presidential candidates were a cloudflare customer, in fact, everybody but hillary clinton presidential candidates were a used cloudflare.

caroline: an interesting line you could use. why would you want to become a public company when you want to? because you have more people you would have to answer to? >> the ceo of a zendesk said it best, at some point you have to move out of your space. there is a right time and place for companies to be just a couple of people in a garage and take funding from venture capitalists, larger private equity institutions, and eventually you have a responsibility to investors, employees, in order to take the company public. we will do it when we think the time is right for us, but something we are working towards. caroline: in 2017? >> no, we won't do it in 2017. i think 2017 will be a distorted year for a lot of reasons,

especially the changes around tax policy, the repatriation of cash to tech firms. it will result in distortions in the market, and often times volatility is not good for entrance into the marketplace. caroline: the health care tech industry has grown dramatically since 2010, how the industry will fare if president-elect trump repeals the law. next. if you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

ahn with anhery update on the top stories. theresa may set to announce the you cable pull out of the eu market. the british prime minister will say she will have no interest in a half-in, half-out approach. the pound had already fallen since october's crash. moving to reassure beijing foxconn remains committed to china even as it expands the u.s. a high-ranking chinese official expressed concern to gou about the iphone maker's american

went. plan. donald trump things they should manufacture in the u.s. seesalaysia airlines ceo another opportunity to break even in the fourth quarter this year. he expects the post profit by next year. he also explained the key role in the business plans. >> i think for us the massive opportunity is china. literally, the government has targeted 150 million more people with passports over the next 10 years. urism.osest company is to chinese food in every street corner or malaysia. i think we have a massive opportunity to get another 4 million people. shery: global news 24 hours a

day powered by more than 2600 journalists in more than 120 countries. you are watching bloomberg. let's get a check of how markets are trading in the asia-pacific. here's juliette. juliette: we are seeing most asian markets weaker this afternoon. there is validation and nervousness ahead of theresa may's decision and as we away the inauguration of donald trump. you are asking about the weakness. in shanghai, chinese stocks fell quite heavily. the shanghai composite is up by half of 1%. its sixth session of losses, the longest streak we have seen since december 2013. a lot of worries of liquidity. looking better in hong kong. hang seng is up 4/10 of 1% as energy players with the index. reversing all of yesterday strong gaionns.

theyen stronger against dollar for the seventh consecutive session. the overall regional index is also lower. we are live from london at the top of the hour. this is bloomberg. ♪ caroline: welcome back to "the best of bloomberg technology." i am caroline hyde. speaking at a news conference wednesday, president-elect donald trump said he will repeal the affordable care act. then thursday, the senate took the first step in repealing the affordable care act in a razor thin vote. obamacare helped to connect the health care system to a new era in technology. we explored the changes under the groundbreaking law. caitlin: when the affordable care act was signed into law in 2010, one of its main goals was to bring u.s. health care into the digital age. since then, investment in digital health technology has exploded. venture funding rose from $1 billion in 2010 to $6 billion in 2015.

that money is going towards things like electronic health records and computer modeling to track spending. major companies want a piece of the action. ibm launched its watson health unit in 2015, and since then, spent $4 billion on related acquisition. last year, general electric said it expected its i.t. unit to grow more than 20% over the next two years. but now the industry is bracing for a serious shift in u.s. health care policy. president-elect donald trump promises those changes will come as soon as possible. mr. trump: as soon as our secretary is approved, almost simultaneously, shortly thereafter, a plan. it will be repeal and replace. caroline: that was bloomberg caitlin meehan reporting. so will there be a slowdown if

obama care is repealed and replaced? joining me now are our two guests. i'm going to start with you. will in fact the affordable care act be fully repealed? can it be fully repealed? sunny: it is unlikely to be fully repealed without an alternative. over 20 million people have been added to the system, many from states that trump won, like michigan and wisconsin. in those states before the affordable care act, more than 14% were uninsured in those states. i think it is highly unlikely. furthermore, i think there are many aspects of the affordable care act that will continue and flourish that health care investors have been investing in.

caroline: you heard the views. you are at the heart of helping modernize and making more efficient the infrastructure behind health care. is this something that if repealed would be moved away from the efficiency search, the drive for it in the u.s.? lisa: i completely agree with him. many of the market drivers for technical innovation are not going away if aca is repealed. the shift of cost to the consumer, the shift of value-based care that we are seeing that is led by cms, followed quickly by the private industry, private insurance market, that is not going away and that is driving a lot of innovation that we are seeing. caroline: the underlying factors are still there. does it change your opinion in the investability in health care in terms of certain verticals, because there is uncertainty at this time? >> there is a level of uncertainty that is causing a pause in the buying process, but in the long run i do not think this will be a big impact.

lower cost and higher quality has been the mantra within the affordable care act, and also within the trump approach. whether the payments or consumerization or shifting the fight of care, all of that will continue and maybe accelerate. even when you think about the digitization of the medical system, the stimulus had $30 billion allocated to move medical records from paper-based to electronic-based, and that has been a foundation for software and applications that have been developed to advance health care. innovation and disruption will continue within health care. technology investing, regardless of how this shakes out. caroline: has it slowed your decision-making process in any way, the electoral changes and administrative changes that will come? >> no, many of the bets to

digitize the medical industry were made prior to the aca and will continue. from our perspective, and the only point where i will differ is that even with economic stimulation and the adoption of electronic medical records, much of that is written on circa 1990 software. what we are expecting to see from this administration and their commitment to investing in infrastructure, is a commitment to modernizing health care in the u.s. for the first time. companies like pocket doc are creating open software development platforms to bring these products and solutions to market quickly, health care systems, right at insurers, even -- private insurers, even cms, they have made their bets. they are starting to deploy on platforms like ours. caroline: what does the spectrum look like out there at the moment when you are analyzing the environment? who is the most interesting to be investing in?

which parts of the system are more likely for disruption? >> the areas we primarily invest in our the intersection of health care and technology, where people are developing applications at a higher quality and lower cost. the foundation has been laid with the digitization of medical records, so we find that to be quite robust. we have companies like tiger tech, that are within these clinical communication workspace and their mission is to improve outcomes and lower costs, and they are benefiting from the trend we are seeing. even as you look shifting site of care from hospitals to home-based care where it is lower cost and where patients would rather be. we have companies where they are at the center of that, and so almost across the board, we are seeing a ton of innovation and disruption, but with any discussion of aca repeal, there is some uncertainty created, so

we could see some pause in buying. caroline: is that something pocket doc is dealing with? when you looking at your suppliers, those you are working with, how are those discussions? lisa: health care as the longest enterprise sales cycle known to man. we have not seen a slow down in that sales cycle. at the same time, we have 10% week over week growth, and week over week growth, and emerging companies coming to our platforms and signing up and building product and production today, so that has not slowed down. i do hear, and certainly hear in the industry from other companies that they are experiencing somewhat of a slow down. as we go in, i think most recognized that the aca, that is not going to impact what they are doing today. it will not impact the

out-of-pocket costs for the consumer driving these innovations or new access models, but it will have some affect for sure. caroline: where is the competition when you're looking at startups helping provide this sort of efficiency to health care? they must be coming out of asia and europe. is it only u.s. companies that will be adopted by u.s. health care providers or to you think they will go further afield? lisa: platforms like ours that provide an open software development platform allow companies from outside the u.s. to enter the u.s. market in ways they have not before. the other thing it allows is other industries to insert themselves into the health care workflow like financing, banks who want to offer financing to consumers who cannot afford a certain procedure, or supply chain companies like amazon that want to start providing different goods and services, durable goods and services to health care. we will see a lot more of that as we come into this year and as

there is a move to the cloud across the industry. caroline: still ahead, london, snatches snap. why this social media giant is banking on the u.k. ahead of its $25 billion ipo. this is bloomberg. ♪

♪ caroline: there were a few deal headlines that caught our eye this week. fitbit has purchased vector and is focusing on luxury watches following its acquisition of smart watchmaker pebble, a sign fitbit is stepping up wearables beyond fitness devices. airbnb is branching out, investing $30 million in an app for securing restaurant reservations. this is another move to expand

airbnb's offerings to travelers, making it a one-stop service when taking a trip. it will take a few months to integrate its app fully into airbnb services. square has integrated its system with wix, a cloud-based platform with 100 million users. the deal is a large online-based contract that is mainly focused on brick-and-mortar businesses. the parent of the popular snapchat messaging app has made london its international headquarters this week. they will pay british taxes on sales booked in overseas markets. the move is a win for the u.k. as it attempts to lure businesses in the wake of the brexit vote. caitlin meehan reports on the road ahead for snap's public offer. caitlin: snap is gearing up for hotly anticipated ipo. the parent company of snapchat could be valued as much as $25 billion once it hits the public market this year.

once famous for disappearing images, it is now rebranding itself as a camera company. its first hardware product, spectacles, have gone viral. thanks to an ultra-limited release in select cities. meanwhile, snap's user base grows at breakneck pace, and although the company's 150 million daily active users are based mostly in the u.s., it is gaining ground in europe. snap does not turn a profit but it is showing revenue growth. it is on pace to bring in under $2 billion by 2018. now investors want snap ceo evan spiegel to prove he can grow snapchat beyond its young demographic. caroline: for more on the choice of london as international headquarters, we checked in with london-based bloomberg technology reporter adam satariano, and asked him if this was a smart move by snap. adam: you are a kind of formalizing something that has been going on a while.

they have been staffing a lot in london, up to 75 people in the city come up from six. having this as their tax hub is unusual because companies have been taking better advantage of lower tax rate elsewhere. apple, amazon, starbucks, a lot of other companies have been touching on regulator's ire as a result of that. caroline: is this potentially a reaction to how we have seen in particular the european competition commission react to some of the tax arrangements that the likes of apple have? adam: a lot of companies have been spooked by what they have seen from the european commission and other regulators going after some of these tax havens. but at the same time, we should not put snap on a pedestal too much year. the tax rates in the u.k. have been coming down. there is some optimism among business leaders that tax rates will come down further because

of that vote. they could be trying to get in ahead of all of that. caroline: certainly an upside for the united kingdom. amid a lot of uncertainty surrounding the brexit vote. adam: certainly, but for snapchat, this is a logical hub because the global advertising industry is headquartered in new york and london, so it makes sense for them to have a big office here. they have opened up a shop in the soho neighborhood, they have one building open, and they're looking for another building. caroline: is this a race ahead of what is expected to be their ipo as soon as march this year? adam: snap's ceo evan spiegel, part of his pitch to investors for the ipo will be the company's global opportunities. it has clearly done well in the united states, especially with young people, but to justify the valuation which is said to be $25 billion or more, it will have to show it can resonate in

other countries. in europe, 50 million users, 10 million in the u.k., so that number will have to continue to grow quite rapidly to justify that high valuation. caroline: let's get an investor's take. as snap expands ahead of its heavily anticipated ipo, what do investors, what does wall street want to see from the burgeoning social media company? with me is sunny dylan. welcome to bloomberg technology. u.k. headquarters a smart move? sunny: i think so. having worked in soho, it is the hub of the creative industries in london, advertising, tech companies, startups, talent in that local market, so as a hub of creativity and advertising, i in london, advertising, tech think soho is a great place to be. caroline: notably, we are seeing expansion in europe and as far as asia as well.

this is a scaling up ahead of think soho is a great place to the ipo, isn't it? sunny: you have to understand your audience, local influences, content in each different territory. they are not a homogenous group. people are different in how they communicate and what kind of visual messaging they choose to express themselves with, so this means being close to your audience. caroline: what do they have to do a head of the ipo is drum up the excitement that they are worth $25 billion and they have growth potential perhaps outside of a social media app. how are they doing this at the moment? sunny: the ceo is 26 years old and has stayed authentic. i think evolving beyond messaging, it has been showing itself evolving over time, with

snapchat stories, filters, geo lenses, etc. augmented reality is an exciting area for snapchat. i think that has increased activity with brands and analytics will fuel the revenue machine. a whole host of other things on that similar trajectory, but augmented reality is probably the most exciting. caroline: the most interesting thing is you talk about working with businesses in the same way facebook leveraged an ecosystem, targeting you and i. how much is facebook copying them? sunny: the biggest and most egregious copycat move was from instagram, copying instagram stories. it is literally the same product as snapchat stories. there has been a whole host of efforts from facebook ripping

off various features that have performed well for snapchat. the difference here being that when you are going mass-market, shoving ads and monetization efforts down the throats of your audience, it is no longer native and natural. the one thing snapchat has for it is that it is empathetic and authentic, and people want to be associated with it. caroline: will that give the revenues the investor base was to see? sunny: that remains to be seen. when companies focus too much on monetization, the original originally you coast of what those companies were founded on the great overtime. we saw it with twitter post ipo. so the jury remains out. caroline: will they always tackle just the millennials? sunny: if they come up with new ways to express themselves, it

is a safe bet that if they keep refreshing themselves, i think snap spectacles have been a great example of a way to do that. they are a camera company now, genius piece of marketing. if you can open up your after the camera, they view the world the way you want them to see it, and what you choose to overlay on top of that is similar to the way the web portals used to be in the 1990's with original isps. caroline: so much has been hoped for by the ecosystem, silicon valley. do you think they will live up in the 1990's with original to the hype? the way they are pursuing the map to the ipo is the right one at the moment? sunny: so showing metrics growing quickly, that is what they have been able to do. there has been speculation that some of those metrics have an

slightly falsified, which has been vehemently denied by the company. if you look at where snapchat is compared to where facebook was when it went public, they paint a different picture in terms of real money, actually getting dollars and revenue. caroline: this week, hon hai posted its first annual revenue decline, down 2.5% from the year before. the taiwanese company is the main assembler of apple iphones. hon hai is the world's biggest contract manufacturer of electronics. up next, the iphone turned 10 this week. we will look at how it became apple's most important product and whether the company can ever re-create its success. this is bloomberg. ♪

♪ >> today apple is going to reinvent the phone.

caitlin: 10 years ago, steve jobs unveiled a new product called the iphone. at the time, it was seen as the heir to the ipod, albeit an expensive one. since then, it has revolutionized the smart phone market, destroying industry heavyweights like nokia and blackberry, and inspiring a handful of rivals around the world. apple has sold over 1 billion iphones to date. they helped to drive up apple's stock price more than 850% to its peak in 2015. in 2016, strategy analytics reported that operating profit hit $9.4 billion worldwide. apple alone made of 91% of that, but with these numbers come high expectations. the iphone is now apple's most crucial product, making up 63% of revenue in fiscal 2016. that is worrisome to investors, because annual iphone sales fell for the first time last year,

and apple's operating system held on to 12.5% of the market versus android 87%. still, analysts remain overwhelmingly bullish on apple stocks. nomura believes the iphone eight will shatter all previous sales records. stocks. nomura believes the iphone eight will shatter all previous sales records. caroline: that was bloomberg's caitlin meehan. now, since the iphone took off, apple has been under pressure to prove it can re-create that kind of sales success. we checked back with activate ceo michael wolff. stocks. nomura believes the iphone eight take a listen. michael: with over 1 billion iphones being used today around the world and 100 million of them in the united states, they are poised for a large percentage of that base to upgrade to a new iphone eight, and they have got a lot more coming.

it is likely they will have much more integrations of siri. imessage will have bots and other functionality built-in. there is going to be a new operating system next year, likely in the middle of the year. apple has everything they need to be successful, and they don't have to have all of the market. they can skim off the most profitable customers, not only the ones who will not only by their phones but participate in the itunes and app store. caroline: you are sounding pretty bullish. over the past decade since they launched the iphone, the market has been bullish. analysts recommendations on bloomberg, the majority all the way back to 2007 have always said buy. the green chart here shows how many analysts say to buy the stock. 80% at current levels. the lowest they ever got was 65% in 2008. generally analysts say buy apple and look through the gloom.

what about their movement into the emerging markets? does that spell to you that they could be going for lower margin profits or were they just going for the growing middle class in india and the likes of china? michael: where apple comes out with lower cost products, they with lower cost products, they do not seem to do as well. once again, they can go after the premium customer. they can go after the people who want to have the entire apple experience. all they have to do really is get a large percentage of the billion people today who are carrying around an iphone to continue that growth. they have a lot of other avenues into that growth including new products like apple tv products, a new operating system, that will allow them to get more revenue out of this, not just in terms of sales of the phone. caroline: 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 at 5:00 p.m. in new york. 2:00 p.m. in san francisco and 6:00 a.m. in hong kong. tune in on tuesday. we will be talking with a partner and cofounder with index ventures. that is all for now.

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