♪ emma: i am emma chandra in new york and you are watching "bloomberg technology." irma has been downgraded to a tropical storm, but still caused significant damage. it crossed into georgia where it produced storm surges along the coast with south carolina. 800,000 people in georgia without electricity. in florida, more than 6 million were without power. officials in georgia say at least one person has been killed as a result of irma. irma has been blamed for two deaths in florida. the toll is expected to rise. the u.k. has defended its response to irma.

they have dispatched troops to islands in the caribbean. opposition politicians compared the british response to france, which sent troops and had two frigates in position ahead of the storm. today marks 16 years since the deadliest attack on u.s. soil. survivors gathered at the world trade center for a ceremony that began with a moment of silence and reading of the names of the more than 3000 people killed. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. i am emma chandra. "bloomberg technology" is next. ♪ ♪

emily: i am emily chang in this and this is bloomberg technology. cupertino hits reset. we will discuss the latest phones on tap and other products to be unveiled in just 24 hours. the fallout deepens after one of the biggest data breaches in u.s. history. we break down the ongoing disaster management effort at equifax and the new rules being drawn up for better corporate transparency. amazon has added thousands of items to its website, causing a surge in online sales. the countdown to apple's biggest event in years. the tech giant now worth $800 billion is expected to unveil three new iphones on tuesday, including a premium model called the iphone x that carries a price tag of $1000.

the publicity is a reminder of how much the company relies on the iconic gadget which still represents about 63% of sales. we will be at the big unveiling at the steve jobs auditorium. this is the first time they will be opening it to the public. will investors and customers buy in? you guys have been the drumbeat for us over the last weeks and months. any new details? anything you have not told us already that we will be seeing tomorrow? >> i think you can see it on bloomberg's website what we have been doing. alex has been doing a great job and i have been helping. there was a big leak over the weekend. the build of the final version of the new operating system

leaked on the web to a website which we know well. it had lots of details on the phone. the biggest revelation are the names. it might be iphone x, but i am reading it as iphone-10. emily: you have been crunching the numbers, trying to figure out how much more apple will be making at the higher price point. >> there have been great analyst reports on this. a report says a $1000 iphone could add about 6% to the bottom line at apple, which is a big chunk of change. the risk is people are not willing to pay that much for the phone. what will be interesting is seeing where the customer split lies. how many people think it is worthwhile spending $1000, whether they space out payments or are willing to pay for the iphone 8?

emily: this is an interesting point bob o'donnell raised on friday. the iphone x will be such a different design from the previous models or the iphone 8. could it cannibalize the sales of the lower end models? less expensive models. >> what is the possibility they lower the price of the 8? the 7-plus came in with a lower differentiator so they did not lose sales. >> if you have an iphone selling for $1000, the next price point seems cheaper even though it might be more expensive than the predecessor. we will see the widest ranging pricing on iphones we have seen. the iphone se is selling for $399. there is a chance they cut the price. we have iphones ranging from

$350 up to $1000. that will be in adjusting model. emily: what does that mean for apple globally? we know about competition in china. are we expecting a pullback in markets because of the pricing or not because they've such a wide continuum? >> apple has a good distribution network. they will try to push the lower models into india, in particular markets in china. they will place the high-priced model in the bigger cities. >> i think in some of the chinese and asian markets, the iphone x will be a hot seller. i saw an analyst report this morning saying the gold version of the iphone x is going to potentially launch later than the white and black. apple came out with their first gold phone in 2013 to appeal directly to the chinese market.

it will be interesting to see how that plays out. emily: what do we know about supply issues? we have been concerned about supply constraints. >> you will not find the iphone x. i know alex has been wanting one. you may have to wait in line for a while to find one. this is going to be hard to find. the 8 and 8-plus will ship in high quantities throughout the next month or so, starting in about a week and a half from tomorrow. they will probably put it on preorder a couple of days from now. emily: samsung is saying preorders of the note eight have broken presale records. is that good or bad news for apple? >> it shows demand at those prices. it will be interesting to see given that appetite. last year, we said the iphone lines died. the demand for the iphone x and

the expectation for supply constraints, perhaps we will see the iphone q arising again. que arising again. emily: there are other products unveiled tomorrow. apple tv, the watch. tell us what else we can expect. >> two other major product lines. apple tv in 4-k. the apple iphone watch, you will be able to make phone calls from it. you won't need to attach it to an iphone at all times, so three major products. it will be a significant launch for apple tomorrow. emily: see you both there tomorrow. very excited. mark gurman and alex webb, thank you so much. tune in tomorrow for our live coverage of the apple product launch starting at 1:00 eastern right here on bloomberg television and bloomberg radio. google took its fight over a record european union antitrust fine to the e.u. court, starting a legal challenge that could

take years to conclude. the e.u. slapped google with a $2.9 billion fine in july saying the company unfairly uses it search engine to direct customers to its own shopping platform. it was told last week the first case must be re-examined. this is only the start has regulators are expected to probe into the advertising and android mobilephone software. coming up equifax still reeling , from that massive data breach that may have impacted basically anyone in the u.s. with a credit card. can their insurance policy come close to covering the damage? what are they doing to stop the bleeding? that is next. and "bloomberg technology" is live streaming on twitter. check us out at @bloombergtechtv weekdays. this is bloomberg. ♪

♪ emily: china is dropping the hammer and cryptocurrencies. the government announced plans to ban trading on domestic exchanges. the ban will only apply to the trading of cryptocurrencies on exchanges. it is the second blow to the nearly $150 billion global cryptocurrency market. china also outlawed initial coin offerings. now to another story we are following, the massive equifax data breach. shares of the agency have dropped as much as 20% since the news broke late last week. a class-action lawsuit is demanding $70 billion in damaging. the company carries an insurance policy for situations like this,

reportedly covering up to $150 million in damages. join me to discuss the latest, phil quade. he spent three decades in the n.s.a. and served as the chief of the cyber task force. thanks for joining us. the hackers got a six-week head start on investigators. what does that mean for the people whose data was stolen and for the investigators themselves? >> thanks for having me today. i think it means the company is doing its due diligence to figure out what happened, the extent of the breach, and what they need to do to address the victims of that breach.

they will be cooperating with law enforcement to get to the bottom of it. emily: in europe, there are laws against not reporting things like this faster. i believe you are required to report data breaches within 72 hours. wouldn't that make more sense so the hackers do not get so much of a head start? >> we might be talking about apples and oranges. i think what you are talking about is the european regulation called gdpr which is designed to bake in privacy protection for clients of companies that handle personally identifiable information. the approach is a little different. in the united states, our model is more one of market forces with the end of the continuum being legislation. more specifically, here in the u.s., we go from market forces to public outcries, to executive orders, to regulation, to legislation. that is the continuum from minimum to harsh. in the european union, they start closer to the regulation part of the continuum.

there are hefty fines if you have breaches of private information, up 4% of global revenue. emily: dick durbin said we are duty-bound to step in on behalf of innocent citizens who will pay a price. he added, "this is an indictment of current regulation when it comes to this industry and others." how do you respond to that? >> i think there is a role for government, at a minimum trying to incentivize companies to avoid the false choices between convenience, privacy, and security. i want all three as a consumer. the best systems can provide all three. emily: what do you imagine investigators are doing now? explain what is happening behind the scenes. >> they are looking primarily at

forensics. hopefully, just as important, they are looking to the future. they're looking to see what strategies and technologies they are to be implementing. things like really good segmentation at the macro and micro level so future breaches are limited. they are looking for solutions that implement what i call defense in depth. rather than relying simply on point solutions, they might have a bunch of automated solutions working together. i am guessing they are looking closely at the best way to communicate with the private sector since so many people were affected by the breach. emily: there are reports this was possibly accomplished by exploiting certain networks other major companies are based on. what is the likelihood many other companies could be at risk of the same kind of attack? >> it is quite possible.

we collectively do not have that specific information yet about the point of the original breach. there is one company who stepped forward and said it might be us. this is software used in 65 of the top 100 fortune companies. we don't know if it is a zero day exploit of the software package or if a patch has been released. it is important to understand there is a point of entry they came through, but there are likely other points in the network where the defenses did not live up to what was necessary. emily: would you say the scale of this breach is as bad as it gets or it could be a lot worse? >> the scale of this is about as bad as it gets. there is probably not a viewer of this show that has not been affected.

this is unique in its scale and in the type of information it has breached. this is not me having to change my email password or email address. this has resulted in a breach of hard to secure information. my social security number, my date of birth. these are very personal things. it is different both in the scope of the compromise and the nature of it. emily: what do you imagine will happen to all of this information? >> quite honestly, this is most likely to be a criminal event. i like to categorize threats into four categories. number one, individual hackers looking to cause mischief. number two, persistent criminals looking to make a buck off the compromise of private information. three, it could be countries looking to destabilize democratic institutions.

the fourth type of threat is countries who look to impose their national will against other countries in times of crisis. this is probably in category two, where it looks like a criminal element. it is most likely they will try to commoditize this private and financial information and sell it on the dark web or other places. emily: thanks so much for your perspective, phil quade. coming up, amazon's purchase of whole foods is rattling brick-and-mortar grocers, but also making an impact online. details next. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app and on sirius xm in the u.s. this is bloomberg. ♪

emily: european union regulators may try to ban employers from issuing workers wearable fitness trackers even

with the employees' permission. there are concerns about how the companies will use the data. the panel's recommendations are nonbinding, leaving the final decision up to the individual nations. after amazon's purchase of whole foods went through, changes in the stores started to happen. while it was shaking up brick-and-mortar locations, it added thousands of items to its website. olivia zaleski joins us from new york with more on the story. they saw a 25% increase in foot traffic and an increase in the amount of groceries sold online , where analysts thought they would have trouble doing that. tell us what happened. >> analysts were concerned the two brands would cannibalize each other and sales might go down in both places.

it is quite the opposite. we saw that foot traffic went up about 25%. we also saw the 2000 new skus amazon added from whole foods almost sold out entirely. only 7% remain. emily: you and i have talked about how i prefer to do my grocery shopping in person. i want to get my ripe avocados. some people say there may be a fundamental shift in how people shop for groceries happening now. where will the chips fall? how much will happen in physical stores? how much will happen online? >> several experts today said we are on the precipice of a fundamental shift in consumer behavior, that consumers are going to start feeling more comfortable buying groceries online. i think a lot of that has to do with the fact that amazon previously had a wide range of groceries, but there was no

brand recognition, there was not that sense of trust. you did not know where the produce was coming from. one thing whole foods has done an incredible job of is building consumer trust. it has created an identity as a healthy, organic chain that vets every product. amazon by buying whole foods takes that trust under its umbrella and consumers will feel more comfortable. last year, less than 5% of people purchased groceries online. and already this year, we are seeing that number rise to 13%. emily: how much of this traffic surge has to do about price? does it all come down to have cheap you can get it? >> i think that is important. also what played a big role was all the press and marketing in the last couple of weeks. there is a lot of excitement

about the merger. i think that is what we can learn from what has happened in the past couple of weeks. this merger between amazon and whole foods in consumers' eyes is a good thing. emily: what do we know about how well amazon prime fresh, the online grocery service, is doing? >> amazon is very tightlipped about that. i will have to get back to you with those numbers. i don't know how that is doing. emily: obviously, there is a huge challenge dealing with fresh foods. how did amazon plan to manage all of those challenges as it makes this massive transition? >> one of the most remarkable things analysts pointed out today is how quickly amazon was able to get all of these whole foods skus online, how quickly it moved to put those 2000 on its website. i think that is something we should be keeping a close eye on, the way amazon can move quickly. it has an incredibly staffed backend and is able to upload products much faster than traditional grocery stores.

one analyst today said it would have taken about three months for a traditional brick-and-mortar store to get that many online. emily: olivia zaleski, thanks for keeping us updated on the numbers. coming up, anticipation for apple's latest iphone has hit fever pitch. we will look at the iphone and it's importance to the company's evolving ecosystem of products. you can find our interactive tv function at bloomberg tv . you can watch us live. if you miss an interview, you can go back to it. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

>> it is 1:29 p.m. in sydney. i am paul allen. the un security council has unanimously approved a new sanctions against north korea, punishing the regime. the u.s. had to drop key demands to win support from russia and china. nikki haley says the sanctions will cut 55% of shipments to the regime. the north korean regime appears to be stepping up efforts to secure that coin and cryptocurrencies to avoid trade restrictions. eye says hackers are

increasing their attacks on cryptocurrencies exchanges. the u.s. supreme court justice has issued a short-term order restoring president trump's ban on entry for thousands of refugees. justicer issued by kennedy puts a lower ruling on hold until the high court decides whether to grant the request for a longer-term order. it affects 24,000 refugees who have in a short basic services. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. mark: mixed, whiles bonds fall. tokyo leading gains. the hang seng being dragged lower by real estate shares. the currency markets driven by the resurgent dollar strength.

the aussie and kiwi drag the most among g10 pierce. .- peers oil on the back foot, base metals continue to climb after rebounding from the biggest drop in nine months following the uptick in prices. here is a look at some of the movers on the regional inch mark. asian auto players on the rise. check out the korean auto-parts

maker gaining 5%, rising on expectations it will benefit from the growth in the global electric vehicle market. that is a look at the market action midday in hong kong. ♪ emily: this is "bloomberg technology." i am emily chang. apple's next phone offering will almost certainly transform the way people use the high-end device. ahead of the big product launch, i took a look back at the most crucial product for the company -- the iphone. ♪ emily: apple has set a date for its most significant new product announcement in years. on september 12, it plans to introduce three new iphones with a variety of features including facial recognition and gesture controls, a move that will certainly transform the way people use it. apple's ability to change the way we interact with technology is not new.

ever since customers got the first iphone in 2007, the market has been revolutionized. the smartphone has proven to be the undisputed king of apple products and revolutionized an entire ecosystem, destroying heavyweights of the day and spurring on new rivals across the globe. the iphone opened the door to what has become a large portion of its revenue -- its revenue, apps. the launch of the iphone did not just change the way people work and socialize. it changed the company itself. it went from a staff of 18,000 to a workforce of 116,000 in 2016. apple sales went from $19 billion in 2006 to over $215 billion in 2015.

it does not stop there. since its launch, apple has sold about 1.3 billion iphones , generating $800 billion in revenue. that blows other iconic devices out of the water, including the game boy and the sony walkman. with the iphone's astronomical growth rate comes heavy dependence. the iphone makes up 63% of apple's revenue, making it the company's most crucial product by far. some tech heavyweights are sounding the alarm on the future of smartphones with peter thiel saying of the device it is not an area where there will be any more innovation. it is clear that apple ceo tim cook sees things differently. >> i think we are just getting started. i am incredibly excited. clearly, there is nothing that i think virtually anybody would

say is going to replace the smartphone anytime soon. emily: as apple looks toward the next decade and the competition continues to ramp up, a major question remains. how long can the iphone remain at apple's core? apple's product launch is not the only major event in the silicon valley area. mobile world congress america kicks off this week. it is an event that touts itself as one of the major industry events for the region and will have some of the most influential executives to share their view of the industry and future trends. meredith, thank you for joining us. what are the trends of the future? >> we are going to be talking a lot about the connected life and the next generation of networks called 5g.

this is going to transform the way we work, the way we live, and the way we play for the next generation even more than we have in the last 10. emily: it is 100 times faster than the speed now. what is possible? >> there is no lag time. if a car is going 60 miles an hour down the highway on a 4g network, it would stop in 460 feet. on 5g, it would stop in one inch. it does let you do remote cars and surgeries, all kinds of things with these new networks. emily: we are expecting three new iphones to be unveiled tomorrow. the samsung note 8 is breaking presale records. what does that mean for the industry? >> it is so exciting how the innovation is happening in the united states and how the companies are changing our lives

and the things they will be able to do and bring us in the next generation of 5g networks is incredible. emily: when it comes to 5g, are any of the service providers ahead of one another? i know they are all trying to mark their territory. is anyone farther ahead than the rest? >> this is a global race to 5g. we won the race for 4g. that is why all the innovation happens in the united states. we have trials here. 30 china has 100. japan and korea are racing to get it done for their olympic commitments. emily: leaders of the wireless companies met with the trump administration earlier this year. what can the government due to do to compel the shift to 5g? >> these new networks are more about antennas the size of a shoebox or pizza box as opposed to a 200-foot tower. we need new rules for the new networks. we will have to put up 300,000 new sites up over the next few years. that is twice as many as we have done in the entire industry

existing. emily: what does the u.s. have to do to be more competitive? >> we need to change our infrastructure rules so we can roll these sites out faster and at more affordable costs. and we need more spectrum. we will always need more spectrum as america is dying to have more mobile devices, we will need more spectrum. emily: you are a former sec commissioner. -- fcc commissioner. i'm curious what you think of the current commission's efforts to roll back net neutrality. >> we have five supersmart commissioners in place. i think we all agree more than we disagree. emily: really? >> it is time for congress to act. emily: what would you like to see? >> we all believe in a free internet. innovators need to be able to innovate, and i think we need to get the rules right so we can have proper investment to build these 5g networks. emily: the fine print does matter. getting the rules right has caused massive disagreement with strong feelings on both sides. >> i think it is more hype than actual.

we all want the next innovations to occur. we also want to have remote surgeries and autonomous car's. we want to make sure we do not close the door to innovations. we are still in the beginning stages of these networks. emily: what do you think the actual impact if net neutrality rules are rolled back? >> i don't think we will see any change. emily: really? why not? >> the companies are all committed to free and open internet. i think that commitment is real. i think we will have the same innovation after the net neutrality rules. emily: the same impact for consumers? >> the same impact. emily: interesting. all right. thank you so much for joining us. go-pro shares rose as much as 11% in monday trading to the highest level since february. the pop in stock coming after oppenheimer expressed optimism in the strategy that includes cost cuts and an updated product line.

recently gopro said third-quarter revenue and margins would he at the highest of the forecast. coming up, in may, the rest were wannacry crippled hundreds of thousands of computers across the world. is it still a threat? we will speak to the man whose company discovered the kill switch, next. this is bloomberg. ♪

emily: the equifax data breach is the latest in a series of cyberattacks. it ranks as the fifth largest hack on record having affected 143 million people. in the ransomware attack, the infected computers in 150 countries demanding payment in bitcoin or the data would be lost. joining me, the c.e.o. of the company credited with finding the kill switch against the wannacry ransomware. is wannacry still a threat as of this moment? >> the actual threat has been brought to a standstill and nullified. we have been the custodian of the so-called kill switch for a number of months now. that kill switch is what has been preventing further propagation of the actual attack.

it still is a threat, but kryptos logic has maintained the kill switch so the attacks have been nullified. emily: when it comes to attack like equifax, what do you make of this and how it compares to something like wannacry? >> i think it is interesting that we don't have any kind of scale to measure cyberattacks today. i spoke in a congressional hearing earlier this year that we need some sort of richter scale to determine what cyberattacks actually look like from the point of view of businesses and individuals. when we look at equifax, we see that was a huge and very high magnitude event because none of that data can ever come back. it is not recoverable. with an attack like wannacry, you may have business interruption and loose some systems, but eventually you could continue. i think equifax and wannacry were substantially high magnitude attacks that were crippling.

emily: would that be 8.0 on the richter scale or higher? >> i think wannacry was 7-8. i think equifax is 9.9 with a 2.0 response. emily: what kind of cyber crime will follow this equifax attack? what is happening now? >> we have to be really careful. you can always look back to previous breaches and use that as a threat model to see what could happen. if you recall the ashley madison breach, there were a lot of things that happened. one of those was the follow-up of fraudulent emails or extortion to get information out of people worried about their dating preference or infidelity or lack thereof. when we look at equifax, you will see a lot of interesting things. you will see potential phishing

emails, fake websites asking you to validate your social security number to tell you if you have been breached. in actuality, you are breaching yourself. you want to be really careful about the next few days and weeks and carefully assess phone calls, emails, and websites you visit in terms of validating any particular threat. another thing you want to think about as you are looking at this is all of your inventory a very sensitive emails, bank logins, or anything financial. really think about if you have reset your password, the type of questions you use. look at that in retrospect and think about if you use your birthday to reset your email or any of the questions that could potentially be in this breach. in terms of financial, do i use my social security number? does the company i call use the

social security number to authenticate me? the individuals and businesses dealing with this need to think about introducing authentication measures as a response to this particular breach of data we have had. emily: we had a guest earlier who said he believes this attack is as bad as it gets, as bad as it can get. you think about companies like facebook and google with huge troves of user data. could companies like that be hacked to a much more detrimental effect? >> i think that is a really good question. you have to look at it in terms of how you quantify the data. many advertisers have access to a lot of the websites we voluntarily share information with. equifax, some of that information aggregated may not have been voluntary. in addition to that, it is the most sensitive information that is irrecoverable.

it is not so easy to change my social security number and i cannot change my birthdate. if i lose my facebook posts, ok. you have to look at another thing when it comes to threat modeling. facebook is a vast amount of data. handling that is extremely large. even facebook has its own challenges handling that data. the equifax data may not be that big. it could fit on a usb drive. emily: fascinating stuff. salim neino, thank you. coming up, we take a look at the future of the industry that could make or break worldwide. this is bloomberg. ♪

emily: all this week, bloomberg is taking a special look at the future of the electric car industry. bloomberg will discuss the range of factors that could make or break the global adoption of the technology. today, we have multiple headlines in the industry. tesla paving the way for the arrival of the model 3 with the expansion of its supercharger network. the first of the urban stations opened for charging in chicago and boston. drivers will have to wait 45 to 50 minutes to replenish the batteries. in china, the government is working with regulators to set a deadline to end fossil fuel car sales. it would make china the first to ban gasoline and fossil fuel vehicles. >> this is a significant development in the world's largest car market.

companies have poured billions of dollars into electric vehicles developed in the last few years. sales have been bolstered by government subsidies. the decision to phase out fossil fuels is expected to accelerate those trends. beijing wants reduced pollution and to play an increasing role in the electric vehicle space. france has said they will phase out the vehicles by 2040. the carmakers plan to release ev models in 2018 and 2019 while tesla is looking to set up a factory in shanghai. bloomberg, beijing. emily: finally, one of the automakers looking to go electric is volkswagen. the company says it plans to build electric versions of all 300 models.

speaking on the eve of the frankfurt auto sales, the volkswagen c.e.o. vowed to spend $24 billion to develop and bring the models to market by 2030 and promising to plow billions of dollars into the batteries needed to power the cars. matt miller caught up with him and spoke about the finances of the announcement. >> volkswagen is very robust financially speaking. so you don't really have to worry. we will have the necessary wherewithal to implement our plans. of course, we are making investments every year. we are investing part of our profits. we have done it in the past and will do it in the future. we will make the money we need for the investments. >> do you still see the need to sell off some units? heavy truck units, maybe an ipo?

is that necessary to this plan? >> i have been reading about this in the newspaper. sometimes i don't really understand the ongoing discussion. one of my most important tasks is to think about our product portfolio on an ongoing basis and ask if we are properly positioned for the future. this is what we do. we are relaxed about this. if and when decisions need to be taken in terms of sale or acquisition of companies, then we will talk about it openly. >> you did say in the press release today you plan on an electrified version of each of the 300 or so models in your portfolio. does that mean we will see an electric ducati monster or even a superbike? >> you have to ask ducati.

to answer your question, volkswagen has learned from the past. over the past two years, we have understood what people understand by sustainable mobility. this roadmap that we have announced is a self-commitment. it will be so going forward. emily: the volkswagen c.e.o. with matt miller. that does it for this edition of "bloomberg technology." bloomberg tv and radio will air a special covering the apple product launch this tuesday in less than 24 hours. coverage starts at 1:00 eastern. we are live streaming on twitter. check us out at @bloombergtechtv . that is all for now. this is bloomberg. ♪

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♪ yousef: stocks extending their rally after a shakeup on wall street. receding fears about hurricane irma and north korea. >> the security council's less new sanctions on kim jong-un's regime but stops short on a total oil embargo. >> almost 100 days on and no let up in the gulf. qatar says it is willing to negotiate but the saudi doc says no. we will tell you why the united