rnc chair and rnc headquarters today, and asked if this election could predict what could have been nationally in 2018. >> there are so many unique characteristics to each of these elections. you can't model turnout. it is hard to predict who is coming out to vote. you have to take each of these special elections on an individual basis. reporter: you don't think this is an indicator of 2018? >> i don't. i don't think you can predict 2018 based on an election not even 100 days into the president's administration. alisa: french police say they thwarted an imminent terrorist their election. two men have been arrested in the southern city of marseille. officials believed they are converts to radical islam. tax returns are due in the u.s. today. so is any money you only uncle sam.

there have been over 100 million close toiled comment 80% filed for refunds. global news 24 hours a day powered i more than 2600 journalists. i'm alisa parenti and this is bloomberg. ♪ caroline: i'm caroline hyde. this is "bloomberg technology." coming up, ibm revenue sinks for 20 straight quarters, dragging the stock lower. plus, the iphone is getting an overhaul just in time for its 10th birthday. the high-end features on the new model. and we bring you the latest from facebook's sh conference, including mark zuckerberg's big --nsfer augmented reality

plans for augmented reality. first, ibm reporting first-quarter refill -- results. they are down more than 2%. expectations.nder gross margins also trailed analyst predictions. as a result, shares trading lower after-hours. we are down 3.9% in after-hours trading, more than $5 billion in the market cap. let's get a little more analysis for you. we are joined with more reaction. is there any upside here? revenue falling, profit margin falling as well. light amidst the clouds? reporter: the few things i would point out is that pretax margin actually went up quite a bit, due to a severe cutting off as gna. caroline: sgna?

saves, and the othertive -- thing is they are maintaining guidance of non-got bps for the full year. the thing i would be listening to is to understand the difference why the gross margins declined by such a big amount between last year and this year, and whether difference would be going for it. caroline: it was quite a significant fall. down to 44.5%, down from 46.9%. there is still a ray of light also where the growth is eventually going to come from. they have been talking about their cloud part of the business. revenue is not enough to stabilize the overall ship, but they seem to be making the right

investment in new growth areas. reporter: absolutely. if you look at the crowd numbers as well as other areas, you are seeing revenue growth over there. as we talked about, several quarters in a row now, legacy business are declining. offset thenough to declines in the legacy businesses. it will take some time before the crowd businesses and analytics will take over the declining legacy businesses. caroline: can you talk about the ibm?perspectives of this is a company that set alongside donald trump and said they would be hiring, and it seems they have been making significant layoffs. in october, they laid off 600 people in germany. what are we seeing in terms of employment? reporter: cost-cutting has been one of the big reasons why pretax profit increased this time across most of their

divisions.we will be listening and trying to figure out if they are hiding in certain areas, whether it is in watson, artificial intelligence, cloud, are in areas where there is no growth. caroline: i want to talk about the core operating expenditures. suisse has been saying the only way ibm can make earnings per share forecast is by reducing core operating expenditures significantly. apart from layoffs, where else could they be reining in their expenditures? reporter: layoffs is a big expense item.rmb is still healthy. it is really cost-cutting through employee costs. a large portion of that is in the legacy businesses, where there isn't much growth. they are scaling back on that. do you see this

stock price girling and the company going --growing and the company going? reporter: i think we would want to understand a little bit what was behind the sharp decline in simply awhether it was function of newer products not having a high margin and going at a much faster rate compared ,o legacy software businesses which were high margin in nature. without aes along, scale up and improve margin structure. that is one of the core reasons revenue was just 1% more than was expected. i don't think the shortfall in revenue had that big of a deal, but i think it is the gross margin that we would want more about. caroline: we will see whether those questions are answered. thank you very much.

in funding round news, silver lake has announced the largest technology private equity firm. the initial target was $12.5 billion. silver lake manages $39 billion in total. after steve0 years jobs held at the original iphone, apple is ready for an iphone overhaul. we have the details next. this is bloomberg. ♪

>> do you have anything to say on the first phone call?

>> it's not too shabby, is it? [laughter] caroline: history was made. steve jobs making the first call on the iphone in 2007. yes, the iphone actually turned 10 years old. in a bloomberg school, we have learned apple is celebrating with its most extensive iphone lineup today. in addition to upgrading the current models, it has completely revamped the iphone within all screen flat -- front, curved glass, and stainless steel frame. show.e to the mark, talk to us about what we are expecting with these new products. >> it is going to be a big upgrade from the iphone. this will be the first time they are coming out with three new models. right now there is the iphone 7 and iphone 7 plus.they will upgrade those with faster

processors and bells and whistles. the main attraction is the overhauled iphone eight, with a skillet -- stainless steel frame, curved glass, and has a slim bezel. it will be able to pack in a slightly larger screen, but into an overall size found that's about the same size as the smaller iphone 7. about howtalk to us this affects of the supply chain. we are talking about how it looks like the galaxy s eight. it may be benefiting from the supply chain here. >> this is a really interesting moment in the friend and enemy relationship between apple and samsung. these two companies fiercely compete in the high-end smartphone market, with samsung's own line of phones versus the iphone. samsung is also a very important supplier to apple.

it makes things like computer chips and screens and memory, and over the years apple has tried to reduce its reliance on buying parts from samson, but it doesn't always work. case of the fancy new screen on the iphone, apple will need to rely on samsung to supply these displays. it is a little bit of an awkward dependence. caroline: the friend and he continues. renemy continues. this new phone will use the oled display, the colors will be a little better. while, has had it for a but they are under supply constraints. these displays are in high demand, and only samsung's component arm is able to produce

these. in the future, lg and sharp will get to it, but right now it is only samsung. it makes apple reliant on an arm of samsung's bigger business, but also keeps constraints high for the time being. caroline: it comes at an interesting time when we had seen pressure being put on suppliers, whether it be in the chips area or imagination technology in the united kingdom. this applies have a concern with apple? they can be made or broken by this juggernaut. that we a little ironic are used to these smaller companies falling victim to pressures from apple. in one case several years ago, there was a graphite supplier that went bankrupt after it was tying its entire business to getting business from the iphone. now we've seen the tables turn a little bit. you have apple relying on a company like samsung, which is just as powerful as apple. aboutne: just talk to us

how important his lunches. it is a decade-old, but there's also pressure coming from samsung. the samsung is a good, quality piece of equipment. >> people are looking for what goes beyond the smartphone. apple still has to show the smartphone is the cream of the caught -- crop, and the king of the consumer device industry. on the other hand, the samsung features, six months before apple will have this lunch in the fall. it comes at an important time, even though apple will retain the same form factor for three years in a row. we'll see. run, set up to hit a home so they better come through. i think they will. caroline: you think they will. we urge all of you to check out their stories.

bloomberg technology is mark gurman who broke the story, shining a light on the supply chain. thank you for joining us. whoking with apple, the man cofounded the world's most valuable company says he's confident apple will remain on top of the game for the next few decades. we sat down with steve wozniak and ask about the disruption technology causes and where he stands in the midst of it all. >> disruption doesn't necessarily mean on a big scale, all jobs. disruption to me means a company comes across with a new idea, a new approach, and everybody says, oh my gosh, that's the wave of the future. a lot of companies get disrupted. they get put out of business. that's what disruption means to me. you are talking about with human life the way we not getting distracted, every change in my life, it has changed how we live. it has been very dramatic in recent times from personal

commuters -- computers, to smartphones, how we get things done has changed. you can say it disrupted ways of the old. some people grew up with the old. we lament losing the things precious to us, but the way i've always looked at change and technology, from the time i decided to be an engineer, we created a new world that is different and we lose things in the past, but it's not bad. we lose another form of the. -- good. it's too early to come to a horrible overall assessment. i think we had pretty good employment level right now. caroline: what about apple's role in the future and what unveil? they will we are expecting the iphone age. what new features will need to come from these products to ensure it remains the dominant start phone -- smartphone? >> i'm not an expert on what apple's going to have. i don't speak for apple. i have read as much as you.

i've probably read less than you about the possibilities. obviously, huge company has to look to stay huge and stay alive going.p apple has done it by spotting new trends, making changes, being innovative, going in new directions. i'd like to see if apple is going to be in something huge, huge market like self driving cars or electric cars. what is apple going to offer that is so different from everyone else? it will be a leadership position. the iphone said that a phone doesn't need to have buttons. it took a while for the world to catch on, but now you see that in all the smartphones. maybe apple will be the first company to take a lead in self driving cars. maybe without a steering wheel and it will be the way for everyone. they got clearance for trials for autonomous technology. are you an optimist about where apple and the big tech players will remain?

you are talking about where years.y will be in 60 will you see facebook, google, and apple still the top most valuable companies in the world? >> know, there's always new things you don't expect to come on that become huge entities that take life in a new direction. apple, google, facebook, these companies will still be very huge and large. the trouble is, you get to a certain point of wealth that 60 fors is too soon to take apple to go out of business. the only way it would go out of business is if apple merged with google and changed the names lately. just kidding. caroline: alice apple cofounder steve wozniak. a story we are watching. planning toompany roll out affordable vehicles. batteryalso debuting a

crossover car to introduce in 2019. this is the chance for volkswagen to emerge from the cheating scandal and comply with tightening emissions regulations. president trump called vh1 h-1b visa system a -- the h-1bprograms visa system a cheap labor program that takes jobs from americans. and we want to bring attention to our interactive tv function. you can watch is live and also interviews, and dive into the securities or functions we talk about. become part of the conversation by sending us instant messages during the show. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

caroline: president trump is taking action on the h-1b visa

program, widely used by the tech industry. speaking in wisconsin, he railed against the program. president trump: right now h-1b visas are awarded in a random lottery. that's wrong. instead, they should be given to the most skilled and highest-paid applicants, and never be used to replace americans. no one can compete with american workers when they are given a fair and level playing field, which has not happened for decades. now he has signed an executive order to review h-1b visa programs to favor more skilled and highly paid applicants. 85,000 visas are issued out of the program, but the mind -- demand is white-hot. the biggest recipients are indian outsourcing firms. mike covers the white house for bloomberg news and joins us from

washington. this means that this seems to be aimed squarely at some of the outsourcing companies. >> indeed, one of the administration officials who specifically this named three outsourcing companies he thought would be hardest hit by this. the whole idea is to shift the h-1b visas away from the lower toll less well-paid jobs, jobs that really are high skill and that you couldn't find an american worker. caroline: it seems the white house is asking for the help from certain agencies for their ideas of how they can make this more targeted. reporter: yes. this executive order really doesn't order them to do anything. all it does is start a process that any large organization we have thisch is, goal, what are good ways to achieve this?

this will probably take months, probably not until next year before you see any impact on this. caroline: what about the h-1b in terms of how much the executive can drive forward changes, or how much still we are seeing the white house held to account by congress? they are going to weigh in at some point? reporter: there are bills before know, thats you would get rid of the lottery system and switch to a different system for allocating h-1b visas. some of the experts we talked to were not quite certain how much authority the executive branch might have to completely move away from the lottery system, which the trump administration would like to do. even if they can't do that, they can probably come up with ways to change the rules of the lottery so that it can favor more highly skilled, more highly paid physicians -- positions, and that is where they are asking for ideas.

caroline: agencies being asked for ideas. it would be interesting to see if silicon valley is asked. do you think there will be some discussion going on with the technology industry? reporter: i think they don't need to be asked. i think they will provide their ideas. caroline: we will see whether they do provide that. very willing and eager to give them an earful. mike adorning, thank you for the perspective. coming up, we go to facebook's estate -- s8 conference. what is planned for the social media giant? if you like bloomberg news, check us out on the bloomberg radio. this is bloomberg. ♪ hey you've gotta see this. c'mon.

no. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. alisa: i'm alisa parenti. you are watching "bloomberg technology." facebook says it will allow its employees to attend pro-immigrant protests on may 1 as part of its "inclusive workplace."

the rally's call for safe and fair employment conditions and protest, president trump's immigration agenda. facebook, along with microsoft and intel, signed a february court filing opposing mr. ban.'s travel attorney general jeff sessions says the justice department will crackdown on gang violence, saying he blames open borders and years of lax immigration enforcement for gangs such as ms 13. sessions says the gangs represent "one of the greatest and gravest threats to american safety." u.s. defense secretary jim mattis says north korea failed missile launch was a reckless act of provocation. matches 5 -- commented on the lunch while speaking with reporters traveling with him to saudi arabia. marine le pen has pointed to a "devastating" multiplication of attacks after the arrests of two suspected radicals planning

attacks. she says this is be a result of islamic fundamentalism and has expanded and the mentally in the last decade in france. global news powered by more than 2600 journalists and analysts in more than 120 countries. i'm alisa parenti, and this is bloomberg. it is after 5:30 p.m. in new york. we are joined by paul allen has a look at the markets. good morning. reporter: good morning. quite a bit of weakness on asx futures, 7/10 of 1% off. we are keeping an eye on the oil open. before the easter break, it was off more than 2%, the more -- most so far this year. on the gas front, we have prime minister margaret turnbull -- --colm turnbull meeting with

u.s. president mike pence is in japan where he will be talking trade and north korea. in south korea, the bribery ir is of the samsung he occurring. are in south korea, we waiting on ppi numbers. those will be due out later this morning.that is some of what we are watching around the region. i'm paul allen in sydney more bloomberg technology -- i'm paul allen in sydney. more from "bloomberg technology," next. ♪ caroline: this is "bloomberg technology." i'm caroline hyde. let's get back to the lead. ibm reported earnings, revenue fell short of projections, with

a 20th consecutive quarterly decline. businesses like artificial intelligence failed to make up for slumping sales. ibm has lofty goals for sales, aiming to hit $40 billion by next year. the call is underway with alice. -- analysts. quarter camethere to $170 million. the ceo will not join the call. facebook's annual developer conference has officially kicked off. in the keynote address, mark zuckerberg signaled a major focus going forward will be augmented reality. >> even if we were a little slow to add cameras to all of our apps, i'm confident that now we are going to push this augmented reality platform going forward. long-term, all the work we are doing will go into glasses we all want.

it is all the same technology. this is another step on the path. caroline: turning is within inside take fromm facebook f8 conference. what were your key takeaways? reporter: it was really interesting. snapchat this morning announced they started doing this 3-d world. on the real just in time, because facebook comes out with their big developer conference and says that this strategy that snapchat has brought to the floor, we are going to win and it. zuckerberg is very confident theydespite the slow start are going to be the ones that are going to get people used to augmented reality, first phones and then through some sort of device. caroline: of course, they made a big push into virtual reality with the purchase of oculus.

many are questioning the price point, but they are not giving up on the are. there seems to be a new focus. reporter: absolutely. vr has become this incredibly crowded market. thefor facebook, to look at market and look at what they can really own, it is the social software that helps people really build relationships. what they announced today was a thing called spaces where you can create a vr avatar and hang out with your friends and family in this avatar world. plenty of energy going on at f8 from speakers and developers, but there was also a personal awareness note made by mark zuckerberg. of course, noting that had been this tragic occurrence over the , iter weekend in cleveland

had been broadcast on facebook. a listen to what mark zuckerberg said. >> our hearts>> go out to the family and friends of robert godwin senior. we have a lot of work and we will keep doing all we can to prevent tragedies like this from happening. heoline: are you surprised took to the floor and mentioned this, or did he have to. ? reporter: i think his word choice is interesting. prevent tragedies like this from occurring. this is something that's going to be tricky for facebook to navigate in the future. they currently rely so heavily on humans to flagstaff when it is something that needs to be taken down. once it was flagged, they got it down in 23 minutes. that is not fast enough. the internet was even faster. what they need to do is use

artificial intelligence to determine if these videos are inappropriate for the platform much earlier on. caroline: plenty of challenges, but still opportunities. fantastic reporting throughout the day from f8. speaking with facebook, there was news on the company's messenger platform. facebook announced new features in an effort to use the primary messaging app. we caught up with facebook's vice president of messaging products, and i asked about his goal to make messenger a one-stop shop for users. >> it all depends on what you are trying to do, but there are lots of things that belong in the conversational context. think about the messaging app, it is the place you go to to coordinate plans, whether it is making reservations at a restaurant, building a playlist, are many things that require some form of conversation and coordination. ,ow instead of apps switching

and bringing that in context sharing photos, you can do it inside of messenger natively. it's easier to do things you are already doing. caroline: therefore, no app switching, keeping within messenger, and using box. you want to see companies and people interacting more. there was a lot of hype with this announcement. can it live up to the hype in 2017? >> every new technology has a hype cycle when it lives on a platform as large as ours. we've made a time of progress in the last 12 months. from had over 100,000 up 30,000 last december. 65 million visitors on facebook, of which 20 million respond to and a much facebook

better way than they could over the phone. things are happening because we opened the platform, because we have learned a lot, and because we built a successful ego developer system around a product that has over 1.2 billion people using it every month. give us the monetization strategy of messenger. are we going to see advertisements? how our business is going to be using this and paying you? >> the way we are thinking about monetization for messenger is that if we create more value inside of conversations for businesses, then they more -- create more of these.the way they do this right now is to buy ads in the newsfeed that opens conversations in messenger. that is the first step. it is creating a new demand for the new ad. gradually we will test ways for

companies to advertise and messenger in a taste away that doesn't get in the way of messaging. caroline: how big a part of facebook's overall revenue do you see messenger being? do you have a target? >> we don't break that out. it is very early, because buying ads in newsfeeds that point to something thatly any of the companies that have built the platform could start doing. it is very early still, so it is very small, but we think that with the user base and the that overcosystem, the long run we will be able to build a solid system. hasline: many feel that f8 been facebook showing how they can overtake snapchat. do you agree? are you taking aim at what snap has been doing?

>> if you look at the stories format that was built and invented, now it is standard and available in a number of apps, because it doesn't fit in a number of apps. when it comes to messaging, posting something on your day actually helps build contacts for better conversations or enables you to share plans. if you want to send a quick photo, who is up for coffee, and broadcast it to your friends, messenger will get it to you quickly and you will get private responses instead of public.we feel this is a product adding a lot of utility and we will keep investing in it. facebook vice was president of messaging, david marcus. another bloomberg school. verizon is open to a merger. the largest u.s. wireless carrier could consider a deal .ith comcast, cbs, or disney

verizon has struggled with a mentor and ultracompetitive consumer business, and has difficulty establishing itself in mobile media and advertising ventures. ceong up, former microsoft gives us details on his new venture, aiming to make government data more acceptable -- accessible. this is bloomberg. ♪

caroline: google has unveiled the upgrades to google earth. the redesign adds new features like 3-d maps and specific locations of interactive guided tours. these are led by scientists and documentarians helping users learn about the world.

this version of google earth is now available in chrome or on android, and will be coming to ios in the future. former microsoft ceo and current l.a. clippers owner steve ballmer believes in data. he believes in it so much he has launched a comprehensive data driven look at government spending. it is called usa facts. earlier, david gura met him and asked if measuring productivity impact has gotten any easier. >> measuring productivity is a weird concept to me. measuring how people live, how they eat, what their housing looks like, how much money they have to spend on those things, that looks clear to me. obviously, we all like having cell phones.it has changed lives. it has made things different . yet, it doesn't show up in a particular way in some of the gdp and productivity numbers. to me, that may not be the most

important point relative to what we are trying to do with usa facts. we had gdp and all the numbers out there, but i'm not sure it really captures the citizens experience, and never will capture the citizens experience. reporter: when you look at tech market exclusively or the sharing economy, it is hugely popular. more and more people are becoming part of it, yet it is not making a ton of money. as you look at the data on that segment, what do you make of that?is that something you have to take as it is for the time being? >> we don't have data that relates specifically to the topic. my own sense is that tech is enabling people to do new things in cheaper ways, and that is all positive for quality of life, -- we willwere other ever capture that precisely in our data, who knows > but i'm a big fan of tech. ? i was in the tech industry for a long time.

it can transform people's lives. president trump traveling to wisconsin today. what is your message to him about how immigration has fueled the tech sector over these decades, are you with him on that the system needs to be reformed? >> as ceo of microsoft, i appreciated the value of people who are not u.s. citizens and the impact they could make, particularly in these high skilled engineering jobs. i will stand by what i've said. when i look at the broader set of numbers, the total number of people who come to the u.s. under h-1b visas is about 165,000 a year. relative to all people coming under a visa, it is a relatively small number. i think it is more than 2 --lion overall, 165 million 165,000 come under here some of

it is going into tech jobs, but some going to outsourcing. i think it is a much broader and more complicated question, but on a relatively small piece of numbers. if you add up all the h-1b newbies is that -- new visas that go to people at facebook or google, it is not a dramatically high percentage of the workforce. reporter: i hear that you have it amazon echo. you look at amazon as a hugely successive company, what does a new startup do in the face of a behemoth like that one, or like microsoft a few years back? what is the best route to compete with a company like that? >> the key is to find a place where you have a unique concept and understand how it will fit the user, and try not to be in the place where the team and can logically and easily go -- that behemoth can logically and

easily go. if you take a look at how amazon got going or facebook got going, these companies got going in the moths, but they had a unique product concept, they got it going quickly, drove it to critical mass, and it was far enough away at that time that the other big companies were not responding fast enough, and the new ones can grow. reporter: i know you are a ford loyalist. you are driving a ford. we have a president now who is seemingly interested in more interface with executive. is that a good thing? what is the role of government encouraging entrepreneurship? day, the end of the

business has to take care of itself when it comes to innovation. like at i like or don't t'se for government, but i the creativity of people in business that will lead to innovations. at the end of the day, the number one drivers will actually be with the businesses do that are largely independent of government impact. caroline: that was former microsoft ceo and current l.a. clippers owner steve ballmer. coming up, a bevy of tech companies heading to the silver state. lead big into the tech land grab in nevada. that is next. this is bloomberg. ♪

caroline: tesla's factory is about to have a new neighbor, google. according to "the wall street journal," the silken jet --

silicon valley giant bought land in nevada. there is also speculation the land could also be used for testing self driving cars at high speeds. joining us to discuss is our bloomberg technology editor. who knew this is such a hot place to build out your technology companies?talk to us first about the data element of this .this would not be such a new area of growth for google. reporter: google opens a new data center every one or two months, and they are always buying land ahead of time. now the common practice. -- that is a common practice. area.ight be a good you might be able to cool the data center quite easily there, in the high desert. caroline: of course, google, the crowd part of the business, they

think it will be eventually bigger than the search part of the business. people are wondering white uber -- why uber is looking at nevada. nevada seems to be pushing ahead of the laws. reporter: california is sort of the place where self driving cars have been tested, but , they have the first self driving car law. one guy had votto write a self driving car law so he can test cars years ago. they have a reputation for pushing the envelope and being more lax than california. there's loads of space for google so they could easily test cars in the desert. caroline: we also have to look to tesla and get a factory, may

be pushing towards battery and clean energy. found -- larry page he's close to elon musk. he said basically he might give a lot of his fortune to elon musk, so he is highly supportive . if tesla needed anything, alphabet might invest. fascinating. we will see how the 1200 acres are put to work. i want to go down there and see how they are jostling for space. landgrab is on. thank you. bloomberg technology editor joining. that does it for this edition of "bloomberg technology." remember, all episodes are now live streaming on twitter. check us out at bloomberg tech tv weekdays, 5 p.m. in new york, 2 p.m. in san francisco.

that's all for now. this is bloomberg. ♪

♪ announcer: from our studios in new york city, this is "charlie rose." jeff: good evening, i'm jeff glor filling in for charlie rose, who is a way today. we begin with politics. on friday, the trump administration announced it would discontinue public access to logs of visitors to the white house. meanwhile, protesters demanded that the president release his tax returns. on the foreign policy front, tensions with north korea escalated.in the wake of pyongyang's failed missile test sunday. vice president pence normed