tv Bloomberg Technology Bloomberg September 12, 2017 5:00pm-6:00pm EDT
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recorded in the atlantic, continues to grow. at least five were killed in florida, including a correctional institute sergeant who died in a head-on collision. two people are dead in georgia, including a retired court reporter. are dead in south carolina, including a public works employee on his way to help. president trump is expected to visit florida thursday. russia and china supported a scaled down version of sanctions but councilrea, members came with a warning. no regime change in pyongyang. arizona senator john mccain will continue radiation and chemotherapy for brain cancer while maintaining a regular work schedule in the senate. anain's office said he had mri done yesterday. he disclosed his diagnosis in july. the white house is naming help eggs as communications director -- hope hicks as communications
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director. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. "bloomberg technology," is next. ♪ emily: i'm emily chang, and this is "bloomberg technology," from cupertino, california. here, featuring and an alleged screen, no home button, and facial recognition technology and the price tag -- $1000. new capabilities allowing runners and sources to leave phones at home and still make calls. the whole event took place at the sprawling apple campus. we are here in front of the
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steve jobs theater, where it all went down. the phone still the show. editor at by our large, cory johnson from l.a. sitting next to me as our bloomberg tech reporter who covers apple and brought us the details before they were told to us today. however, you got to hold the phone and touch it. i'm curious about your first impressions. reporter: it is really hot. it's a nice phone. really cool. adds to edge. i'm sad it does not go on sale until november. for an investor perspective, it misses a quarter sales. it is nice. emily: in terms of the product itself, it is light, it is small, especially if you have
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been carrying and iphone 7 plus. the other thing that struck me was the height of the screen. you don't have to scroll so much to see what you want.and the facial recognition technology is key. reporter: i was able to set up face. you twist your head around like this twice. it is quicker than putting in fingerprints. i was the first person outside of apple to enroll my face. tip credit -- it is a quick set well. works really if you have a touch id app on your phone, it will convert. the integrated it really well. like you said, the screen is taller, the integrated more video. emily: cory, i know you are getting your hands on one student. from your perspective, looking at the big picture, how big of an upgrade cycle will this he that 80% ofgiven, the people buying this phone already have an iphone? change inbiggest iphones ever it was not having a phone, 10 years ago.
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it is a big upgrade cycle they are facing an opportunity for. one of the things apple has found over the years is that when people upgrade from an iphone, they upgrade to another iphone. it's a system in which they tend to stay in, so they don't lose. whereas people who leave an android device quite often switch to an iphone. they grow like dan miser. the time between phones has been growing longer and longer, which suggests the upgrade cycle should be big for apple, but the unanswerable question, we could sit here and speculate, will the computer -- consumers feel the need to get this new device? are anls and whistles obvious way something you experience looking at your neighbor using a phone. will it help them sell the phone? stuff,ial recognition
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they might be a more pleasurable but itnce for the user, is something the person who is yet to upgrade has seen. emily: it is a significantly different new form, new design, and interesting. several analysts suggested to me it my discourage people from buying the iphone 8. why would you buy it if you could spend a little more and get the most expensive phone? i was speaking to jean musser from bluerun ventures, who says it will be a home run nevertheless. the 10 will be a home run, i think so. the eighth, i don't know why anyone would buy that. i was surprised, they raised the price. $700.now now you are about $300 between the iphone 8 and the 10. that is dollars per month. a lot of people are doing this
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installment plan. why people would not get the 10 if you are on an installment plan. that takes us back to come up either delay? y november? i think it could have come out next week. but how many will be available store?apple may be four or five of them. but if they wait, they can bring in more phones. they are saving up for a big third launch. emily: it will be available in reporter: onntries november 3. that's right. a lot of waves happening with three new phones. it's a big expansion. emily: i want to talk a little bit about the apple watch. they emphasized the health features, the sports features. they introduced the watch with a surfer wearing a watch while riding a wave, and getting a call on the watch. corey, i know you are obsessed with fitness trackers. apple scented a this is now the
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most popular watch in the world. just howour take on much bigger a products category the watch can be for apple? i need the emily chang back-check. -- you are from hawaii, so you know -- was it a surfer or a paddle boarder? emily: it could have been a paddle boarder. [laughter] i'm from the midwest originally, what do i know? thatnk it's interesting fitbit figured out what apple couldn't, which is that -- the iphone watch was launched, without knowing what the business plan would be, they just threw it out without knowing what would stick. hadoz was there when they the lunch. we always thought health was going to be a part of it. what fitbit figured out was it
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was finished that is behind the sales. they have had a lot of success with that product, focused on fitness. it seems like apple figured out as much as they thought fashion would be a part of the watch, that fitness is the thing. certainly showing off the water proofing capabilities that other devices don't have, be it , also surfing and swimming and everything else. emily: right. hawaii, idaho -- tahoe, anything else. they demoed the apple tv set box, before -- the four k capacity. reporter: you ask me if there were any surprises earlier. this was a big shock. if you have 1080 p videos in
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your life -- itunes library, they can convert those for free to the 4k video content. that is not something i expected apple to do. they typically would charge more for the higher end. they are upgrading them. when you buy it new, they are charging the same price for a 1080p. it's great and it probably makes people happy. emily: could apple feed off of the adoption of 4k technology? reporter: initially, because 4k costs more. however, the box itself is $180. so it is $30 more than the original apple tv from 2015 with the new software. emily: corey, final thoughts? bey: the four k tv will table stakes. every new tv will start to offer it. they have to offer it. it's not like a fantastic venture.
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they don't have all the partnerships they would like to have, but they have to have it as an option going forward. i don't know that it is such a huge deal for apple. are really competing against is stuff already built into the tv. they have to have a more compelling offer. emily: and we know apple is talking with studios about k original content. cory johnson, our editor at large, sticking with me. mark gurman, great work, making sure we did not have any surprises. we will be back from cupertino, california at the brand-new apple contest -- campus. >> iphone 10, the most advanced iphone we have ever made, incredible new design, face id, more powerful technology than we've ever put in an iphone before. it really is the future of the smartphone. ♪
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>> the first iphone revolutionized a decade of technology and changed the world in the process. now, 10 years later, it is only here in thiswe are place, on this day, to reveal a product that will set the path for technology for the next decade. emily: welcome back to "bloomberg technology.". i'm emily chang from apple's brand-new campus, in front of the steve jobs theater, where the new iphones were just unveiled. cory johnson, our editor at large joining us from, and sitting next to me is alex len -- webb. i want to talk about the price
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point, $999. how do you think it will sell in the u.s. and abroad? reporter: that's a good point. two different issues. there is a big fan base in the u.s. for apple devices, and carriers where you can spread the cost over some years. two or three years, it looks like some of the cycles are turning towards. in the u.s., they will probably still do very well. if you turn to china in particular, where apple is very much a status symbol, if you want to buy the iphone, you may not be buying an apple device at all. you might turn to devices from weibo or wildly -- while way -- huawei. emily: they recently surpassed opal -- apple globally. kari, when you look at the market share, what is your take on how well this will sell? never reallyas
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tried to win the market share game. profitsal is to win the game, which is to say they identified a section of the market where there is an opportunity to make a lot of money, and there is a bigger market where no one makes money. they want to be where the money is made. they have less than half of the market share of the smartphone, but they have more than half of the profits and the smartphone business. they recognize that across all their products, at all price points, they want to be there making money. it's not just emerging markets for the cheaper phones. you know my children. they are not getting the expensive phone. there is a place in the developed market as well. i will be curious to see what this does for the average , not only in the
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first quarter of next year, when we are away from the bond you might the end of verse -- bump you might see from sales in november and december. they historically have not told us which of the phones are selling, and we have to get out of the asp information. emily: let's talk about cheaper phones. they have had fairly mixed results. maybe your children love them. it is hard to tell. the key market they are trying to grow in is india. they are in a strange dichotomy right now. get to the top of the s curve in terms of smartphone innovation, what else can come? apple has been trying for two years to announce it is pivoting, moving towards services. you can get more people buying apps from the app store.
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but if you will really suck people into this universe of paying for things, using apple music, icloud, all those things, you need to cell phones they can afford. that is the effort in india and other developing economies where they have to either the. in a meeting -- have to aggregate. are they making money the hard way? emily: some people were hoping there would be more .nnouncements around ar today apple has been trying to pitch itself as a gaming platform, but has not been successful. reporter: they are building blocks. the first building blocks. we thought ar talk -- tim cook talk about it in june. it seems as though the hardware is pretty impressive. a lot of stuff they can do an iphone enables impressive ar applications. this is the first step in a market which they think could be huge. we reported they are working on some kind of smart glasses.
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emily: coming more about that, and when. reporter: the earliest we think is probably 2019. willis when the prototypes be outcome at the least. we don't know how advanced the capabilities will be. it is an opportunity to place more wearables on you, add to pods, tethered to your iphone, making sure you still by the air -- iphone. emily: this point about whether there's more in a -- innovation left in smartphones, it's interesting. peter thiel says he doesn't think there will be anything left. cook, he saidim that is wrong. it is hard not to be impressed looking at the new features. even if they are incremental, they are so much better. i'm curious where you see innovation in smartphones going.
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i think the innovations for smart phones are limitless. the innovations that came from the iphone were not better called. they were worse calls. the innovation, we still call them phones, but the things people do on their phones -- the businesses that have come out of over hones are instagram, -- uber, things that were not imaginable 10 years ago. global businesses have grown at cases only possible in the technology industry. what is that was ar, now best expressed through pokemon go, could be anything and so muchd, easier to develop because of the development tools apple has created. now the hardware in this launch announced today, i think the possibilities are limitless. i think peter thiel is wrong again. it is as entertaining that he is
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that he is as entertaining as ever, but wrong again. emily: by the way, there was a surfer and a paddle boarder, that's why we were confused. we were both right. johnson, editor at large in l.a., sticking with me. alex, how are reporter, -- our reporter, thank you. we will be back with more of this special from apple's brand-new headquarters in cupertino. >> we are at the next major inflection point. one that has the most stunning visuals ever, that are ideal for the large tv screens that are coming into our living rooms. this will bring cinematic quality to virtually everything that you watch. that's why i am so excited to 4k.oduce apple tv [applause] ♪
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>> now with iphone 8, with its glass back, we are enabling the freedom of wireless charging. [laughter] [applause] >> this is a simple thing. we do this every day. we use our phones during the day and charge it every night, often charging by our bed stand. itds can't describe how nice is to just put it down and pick it up without having to plug in a cable. emily: welcome back to "bloomberg technology," live from apple's brand-new campus in the steve jobs theatre, where three new iphones were just unveiled, as long as -- as well as an apple tv set-top box and a new apple watch. let's get to abigail doolittle, who has been following the market. why don't we start with what we saw? reporter: pretty exciting day. quiet at first, but we finished with record highs.
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the dow, the nasdaq, all putting in record highs. the s&p 500, an all-time high. despite the fact that the gains for major averages were somewhat muted, we do have records. even though apple finished down 4/10 of 1%, very volatile on the day. the highs up one and a half percent, the lows are down 1.7%. investors are trying to figure out what the new iphone x means for the stock.is this a buy or sell ? the stock is up in a huge way over the last year, up more than 50%. consolidation, investors trying to figure out what it means. justcould come down to not the phone, but also supply. will there be enough of these phones out there, the ones that launched in november? emily: you have been digging into the reaction among various suppliers.
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what did you see? reporter: not much of the reaction. it is pretty funny. if you look at radcom, syria's youx -- serious logic, would think there would be a bit more of a reaction. but that just wasn't the case considering these stocks could in fact be a tell to some degree for apple. these are the parts that go into the phone. to some degree, priced in. however, there is a great chart i would like to sell -- show, cycle. a boom and less this is a longer-term chart. we see between 2008 and 2012, shares reacting well to the iphone. 5,you remember the iphone stocks fell 45%, it was disappointing. then the iphone 5 s and six,
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those were showing a nice rally. the question is whether or not the new iphone x will be enough to keep the boom going. time will tell. i did speak to an analyst at longbow research. he's bullish on the long term, but he says there could be near-term choppiness. our bloomberg stocks reporter abigail doolittle in new york, thank you for the roundup. we will dig into why the shares didn't move so much, what investors are thinking, coming up from apple's headquarters in cupertino, california. ♪
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the virgin islands governor says the trip will take place in about a week. the u.s. most senior official on disarmament issues says nuclear testing by north korea is a violation of global norms, and the security council's united stance in taking measures to curb their behavior is crucial to international peace and security. >> as far as i could hear, no one is really asking for any collapse of dprk, quite the contrary. no one is asking or talking about. regime change. mark: in geneva, the international center for migration says the number of rohingya muslims are for exceeding the predictions. >> with 313,000 so far in this period, the system is clearly at full stretch and needs all the
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, if all ofcan get these vulnerable refugees are to be looked after. groupsr: human rights accused the you and of ignoring the ethnic cleansing taking place on a large scale against rohingya muslims. in paris, there was a rally against the proposed changes to france's labor laws. president macron says this will make it easier to hire and fire workers. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. it is just after 5:30 p.m. here in new york, 730 wednesday morning in sydney. paul allen has a look at the markets. that another bright day on the asx, with futures up half of 1%, following another strong finish in the u.s. iron ore ore prices climbed about $76 per ton, as local moderate -- markets wait on
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consumer numbers. in japan, a bright future as well. nikkei futures higher. keep your eye on toshiba today. the board will meet to make a decision on the sale of its chip unit. the leading contenders are bain capital and foxconn. that sales should go ahead, expected to be $19.2 billion. a few other things from japan. ppi for august. south korea unemployment for august is out. expected to see a slight tick up to 3.7%. i'm paul allen in sydney. more from "bloomberg technology," next. ♪ emily: we do have one more thing. [applause]
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>> we are here at the steve jobs theater, at the new apple campus. this is the new iphone x. ss has an almost bezel-le screen, face recognition center, it has a glass back, stainless steel edges. it looks really nice. oled screen, which really makes colors pop out. you can see the time in the corner. the status bar. a bottom charger. wireless charging on the back as well. overall, the screen is 5.8 inches. it is a little bigger than the iphone 7 plus and eight plus. overall, feels about the size of an iphone seven, smaller, because of the slim bezels. i know people are asking about the sideline. it's a little longer.you can
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hold it down to activate siri. also double-click for apple pay. you can swipe on the bottom and invoke multitasking as well. the cool part about it is with a larger screen, you can enter more text messages and see them at once. the iphone x goes on sale november 3 after preorders at the end of october starting at, $999 for 65 gigabytes. there is a 200 and 50 gigabyte version as well. -- 250 gigabytes version as well. emily: that was mark gurman trying out the new iphone x at the steve jobs theatre on apple's brand-new campus in cupertino, california. apple just unveiled three new phones, a new apple watch, a new apple set tv box. cory johnson is joining us from l.a. with me is a principal analyst at creative strategies.
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i want to talk about ai. ai is powering a lot of upgrades we saw today. one in particular's -- what in particular stands out to you? aihow apple can make>> relevant to the normal person on the street, and also appeal from a wall street perspective to investors to show where apple is going forward. siri wasn't much talk of today, and i will tell you why. there's a lot of machine learning going on with the new cpu and machine learning, as well as ai. having the device to be smarter but also creating a smarter union between you as a user and the device is where apple is going. if you are thinking about face id, often they mention how face id is learning. machine learning and ai coming into not just unlocking your
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phone, but using your face to detect, if you are looking at your screen and opening up identification for you, or if you are not looking at the screen randomly and it opening the device. ,nd then for the more mundane ji looking at your facial expression. emily: that definitely got the most laughs. [laughter] i do want to talk about the point about siri. there are numbers to talk about that syria's less popular this year. this is supposed to be -- that siri is lesst popular this year than last year. reporter: a lot of us are typists. our thumbs are so used to typing what we need and get, and
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answering. changing behavior is really hard. pod think with the home being lunch later in the year, i will have her moment. the union of siri and the home environment with home pod will have the next version of siri speaking to consumers more. today we heard about it when he came to the watches. now with a cellular connected watch, siri will talk back to me. that is useful, because i don't want to be watching a very small screen. emily: we didn't hear much about the home high today. we do know that the home pod will start shipping at the end of the year. but this is a very competitive market, of course with amazon echo and google home. what is apple locking into here? -- walking into here? cory: they are trying to come up with a product of higher
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quality, sound wise. we will see if they can master that. the buzz seems like it would be great. i will wait for the audio geek magazines to get involved and see what they think of the quality of the speaker. is a world that is well, if not over covered, but people who are audiophiles. we will see if it forms leadership with much better in the music industry. this notion of what ai is and how it works is really going to evolve. we are just not going to know right away. but the idea that apple could use those emoji's and see when you're smiling and when you are not, but also get the data about how many people, when they are presented with a smiley emoji, after they have had a facial moment or expression, it will improve over time because it can measure. you make a face, your phone
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thinks it is a smile, and the third thing that happens is you choose whether or not it was a emoji.y selecting the apple will internalize all the information using ai, start to fix facial recognition aced on how many people use that emoji, and improve the facial recognition with every hour, as more and more people are not or are selecting the emoji. think about that in 100 different ways, when people are ordering food, or using instant messenger, or chatting in asia in ways they don't in the u.s. that is a lot of potential. i did get to try out the new emoji feature. i was a cat, a dog, a robot. it was pretty cool. cory, our editor at large, sticking with me. we will be right back after this break back here at apple
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the shipping is a little later than we expected, but how many iphones do you think apple will sell in the holiday quarter? reporter: i think it will be a record breaker. it was last year, not by much, but it will be record-breaking. 90 million units is possible. emily: really? said 70 someone million. reporter: we will see. the delay may impact that. the super cycle dream is impacting this. we are also looking at asp rising. emily: the average selling price. reporter: and it has been rising recently, against the grain for phone makers. for 10 years now, we have seen pretty steady iphone pricing, around 630 overall, one .2 billion units. we might see breaking 650. emily: there is a $300
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difference between the iphone 8 but how many people will be contemplating, maybe i should just go for the more expensive model, and how many people will say i will not buy one at all and just wait? reporter: that's a good question. pragmatic issue. i think overall if we step back and ask, look at the way they bracketed this, they went from -- 22 56, huge increase in to 256, a huge increase in memory, and also, what do you do with the middle price and memory?a lot of people will go out to the 256, and more people will stretch, which is good for the price. 256 gigabytes. apple has some of the best margins of any company in the sellingith the average price rising considerably, what does that mean for margins? cory: we fundamentally don't know about cost.
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in prior phone launches, the higher and following -- higher and phone had lower growth margins. in the hardware world, they have maintained margins upwards of 35%. we just really don't know. a lot of -- another reason this will be hard to figure out is that a lot of the components will be different. with all of these new advances in the software, we don't know how they will advertise those , so thato the costs could be affected by the notion of the duration of the value of artificial intelligence software. say.ll be hard to once we get our hands on phones, we can crack them open and count components, and
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understand if it's a better idea of what the components actually cost. we won't know until we hit a clean quarter of sales at the end of the first calendar quarter, especially because the phones will ship late. -- it'simagine is about about 10% fewer units then at the beginning of the quarter. emily: i want to talk a little bit about the watch. there's a lot of skepticism about how big the market can be apple announced. today it is the best-selling watch in the world. some estimates put 41 million apple watches will be sold over the next year. that's about as many iphones as they sold in the last quarter. that's a lot. i would go a little lower than that. i think they have sold overall 30 million, and that may be a little on the high side. i think it will do very well. we are seeing -- emily: you think it is a sleeper
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hit. reporter: i think it is a sleeper hit because, tens of millions are using it every day and there is huge engagement. apple is moving into health care. it is a multibillion dollar business. and also on tethering, you don't have to have a phone with your watch, how much will that drives ales -- sales? reporter: i don't know how many people would want to pay the extra $10 a month to have that feature. it's all about making incremental improvements in this category. the focus on health, the focus prevention,cs and it is really tremendous. no one has really gone into that sector before. i have been bullish on the iphone watch since they won. i always thought it was a disruptive product. we are seeing it take on more with the phone. the phone has never completely
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taken over the pc. emily: go ahead. cory: i think it's a great point you mentioned. imagine a world where we don't have phones. today is the day we start moving in that direction. so much of the computing we are doing already actually happens online. the brilliant ai suggests, weather and a emoji or address, whatever, it's happening on the cloud your now, we have a device where you listen to something in your ear, you have something on your wrist, it doesn't interact with a phone.this could be the beginning of a post smartphone world, where you have a lot of things happening in the computing world both happening in the cloud and being signaled by devices on your ear and in your wrist, but not on the phone. that could be where we are 10 years from now. emily: do you agree? reporter: absolutely. air pots plus the watch, this is decentralizing the hub, which
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used to be the phone. ambient computing, if you will. emily: always great to have you here on the show. cory johnson, you said it, i'm holding it to you that this could be the beginning of a post smartphone world. you will be back with me after this quick break. >> these are a new generation of iphones. we improve on everything we have loved about iphones. the design is all new. there is glass in both the front and the back. the aluminum band beautifully matches the finish of each iphone 8. gray,es in silver, space and a beautiful new gold finish. [applause] ♪
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and from our studio in san francisco, brian white, the global head of tech hardware and software. slightly down today, apple shares. why? >> a lot of news is always anticipated in these events. what i liked out of this event is the fact that the iphone x is delayed, yet apple gave pretty phenomenal guidance for the september quarter. i can tell you looking at the supply chain, and we look at june,or apple monitor, july, and august were strong. september quarter for apple monitor looks like it is at a record. to me, that is very encouraging. here is the iphone x delayed, yet the supply chain in apple's outlook were very strong.i'm coming out of this event more bullish than ever . emily: you can start preaddressed at the end of. october .
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. in a few dozen countries. / start preorder at the end of october. it will be on sale november 3 and a few dozen countries. you can charge multiple things at the same time with wireless charging. what do you make of this step forward when it comes to charging technology and battery life? >> i think it will make everyone's life a lot easier. and all theis event charters i had to bring with me, myi'm able to air power, and air pods and iphone can get charged at once, that is significant. that is the thing about apple. talk about new innovations, wireless charging, 3-d sensors, it is very tough as we go forward for competitors to keep up. i don't see how they will be able to do it. emily: interesting, given that
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samsung is currently in the lead when it comes to global smartphone market share. vevo, xiaomi, they all have much cheaper alternatives. you don't think that is stiff competition? >> i always felt samsung is a great competitor, no doubt. has done a decent job. we know the reason why it market share has gone up so significantly. china's 4g network has expanded. that has brought consumers into 40 smartphonesuy that can't yet afford an iphone. as soon as they can afford it, they will buy the iphone. that will be trouble, just like it was for xiaomi the last couple years. company like apple that can do the hardware or the software services, which is exactly what we saw today, how all those are intertwined, that will be very difficult. awei will always be
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around. other than that, i don't see the competition. emily: tim cook says this will be the new generation of technology. i want to take a moment to talk about the man who brought us here, steve jobs, who cofounded named the theater is after him. they opened with an audio recording of steve jobs talking about what it means to produce wonderful products and get things back to humanity. at the same time, the end of an era is also the start of something new, a fresh yard for apple moving to the new campus. as we seek tim cook's apple starting to emerge, he is speaking vocally about political and moral issues. how do you see tim cook's legacy shaping up? cory? brian? are you there?
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>> yes. i think apple has always had a northstar, whether that is making great products or on social issues. i think tim cook has been more vocal, but to be honest, i think it has always been part of the apple culture. i think tim cook is talking more about it, but carrying the baton the company always had. emily: we will be talking about -- that for the neck several years. thank you for watching this special edition of "bloomberg live from apple headquarters on the day that the iphone x was unveiled. this is bloomberg. ♪
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♪ from our studios in new york city, this is "charlie rose." charlie: steve bannon is executive chairman of breitbart news. until recently, he was chief strategist at the white house trump.sident during the campaign, he became the ceo of the trump campaign. he grew up in richmond, virginia, went to virginia tech, and georgetown and, harvard business school. he went to work for goldman filmmaker.ecame a last week, i spoke to steve bannon about pol
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