♪ >> i am emily chang and it is the best of bloomberg technology where we bring you the best interviews. tech earnings in. lincoln amazon reported sales of more than $43 billion in the third quarter and we will break down the results. on for thentdown is release of the iphone and 10. it can rise and fall on the key features and well the new facial recognition technology be the gold standard in amazon gets a

spare key. emil -- amazon topping estimates, showing they can invest in new markets while selling more products online and managing expenses. for the first time, amazon is incorporating whole foods into their mix. the grocery chain generated $21 billion. james and our bloomberg tech reporter elizabeth join me to discuss the results. >> hats off to jeff bezos. what you are seeing is acceleration. seven points acceleration in the total business. even when you strip out whole foods, it is a three-point acceleration. everything is growing and growing faster than it was before.

there is a lot of scrutiny over what the margins were going to look like, and north america did dip a little bit, but international is holding flat, at the same time, you saw an uptick in the aws market where there was some concern about pricing pressure. all in all, goldstar. emily: let's look at whole foods. they had about a month of sales included. what are we seeing there? >> we saw about 21 million in operating sales. investors are curious about how whole foods is doing within the amazon brand. is it a sustainable interest within the brand? is it really just rubbernecking as there is a huge amount of publicity around whole foods. emily: let's switch to talking about the cloud business. i recently spoke with aws ceo. this is on track to multiply as well over the next decade. take a look at what had to be said over growth in aws.

>> it is certainly growing very fast. i do not think any of us had the audacity to predict that it would grow as fast as it has, but we always believed it had a chance to be a significant business. emily: what do you expect to see when it comes to cloud business? >> amazon had originally built aws for themselves for turning -- and then turned it into a product. you are seeing the success of that translate into other parts of their business as well. when you look at the cloud, there are a couple of horsemen there leading the pack, but, at the end of the day, when it comes to which company is putting out the number of features at the iterative rate that amazon is putting out, there is only one company.

they are putting out 700, 800 new features every year and listening to exactly what the customers want. aws will continue to be a source of funds for the company to subsidize other assets of their business, which is what makes them so dangerous. emily: whole foods generates $21 million dollars in operating income in that month. i believe i said $27 million at the start. tell me what else they discussed in this report. they really focused on consumer electronics. >> and that was really fascinating. it focused on devices like alexa that you have in your home. you usually have it in your kitchen. you can order groceries. i think they have showed that is a key strategy going forward. all of these products and services are really integrated. it reminds me of apple when apple was really hot appear years ago with their various devices which all spoke with each other to create an ecosystem where you did not want to go outside of the apple

experience. i think we are starting to see that now with amazon. emily: amazon's hardware efforts have not always been massive successes. you look at the amazon phone for example. the kindle got off to a rocky start, too. how much faith do you have in these new hardware efforts whether it is the echo for this new service, amazon key? >> it is not so much about the hardware device as it is on alexa. what amazon is doing is taking a page out of google's playbook with android and making alexa completely ubiquitous across their devices and third-party devices as well, forging massive partnerships with the likes of bmw. i think that ubiquity will open up new opportunities to gather and collect data, and to also open up commerce opportunities not just related to the offerings they have on the site, but also getting you hooked on what the next iteration will be to create a daily habit of ordering from amazon.

i think there is a lot of opportunities to create up to a trillion dollars of value that the company has yet to unlock. this company is very, very dangerous. sleep with one eye open. emily: obviously, the amazon prime subscription service is key. >> yes, we saw that grow at 59%. you getting people to sign up for prime. we will see that continue to grow as well. emily: shares of twitter gained the most in more than a year after adding 4 million monthly users and reporting better-than-expected revenue for the third quarter. industry watchers caution that more consistent performance is needed to prove that twitter's growth is sustainable.

>> managing expectations is an art, and twitter seems to have mastered that as well. cautious optimism on this side. emily: twitter has been miscounting its users for the last three years. even though there has been an increase in 4 million users, there really only was a growth of 2 million users. 2 million of those users were not using the platform. >> they miscalculated for several years, and only now are they realizing that they had this mistake. it was only a couple million per year. over a broad base of users, it is not a huge impact. it does show a bigger gain over some years, and it shows that actually between two quarters. when it looked like they were stagnant, they actually fell. it is not a good time to be testing trust with investors and analysts about the quality of their numbers. emily: does this miscount concern you? >> i think that is the fair assessment. i am less concerned about the actual numbers themselves.

they were not huge errors in calculation. that is not concerning, but it does raise questions of trust in the validity of numbers. i should point out however, that their large name competitors have also had to come back to the market and say that they mismeasured or miscounted. depending on the company you are talking about, these things tend to matter more. twitter needing to turn around growth, i think this could have a bigger impact on them than some of their competitors. emily: twitter has been piloting a number of new, different products. are any having more traction than others? >> interesting enough is that

the businesses that showed the most was the new advertising as well as their data licensing business is growing at a double-digit rate. they have been increasing about 14% which is acceleration, but they have not reported the base of daily active users, so it is hard for investors to wrap their minds around what does this mean. the biggest risk factor in these are names is that u.s. revenue their largest sector fell 10%. emily: in the meantime, twitter has been making some changes in how they talk about the online harassment policy. we know that twitter along with facebook and google will testify before congress regarding fake news and russian infiltration of their platform. how concerning are all of these issues combined?

>> for twitter, these issues are quite concerning. it is a question of trust, not just investor trust and confidence, but marketer trust and confidence, user trust and confidence. they have to show that they are creating a safe, comfortable environment in which to engage. all of the press around questionable advertising and testifying before congress is not going to do anything to increase user confidence. i think we also need to see some more concrete answers about what exactly the steps being taken are to protect consumers from things like bullying and harassment. emily: that was melissa and selina. bloomberg is developing a global breaking news network for the twitter service. cisco is acquiring a new software company. the move allows cisco to expand their presence in software and the cloud which has been a huge priority for the company. it also caps off a year of big deal making.

this is the ninth acquisition for cisco this year. coming up, a member of congress has strong words for silicon valley. representative ro khanna of california joins us on the show. later, amazon is proposing a new service which could change the game for delivery and expand their offerings for users. we will explain. this is bloomberg. ♪

emily: on november 1, three of the top tech companies will testify before congress about russian use of their platforms during the election. representative ro khanna of california has penned a stirring op-ed in the washington post entitled, "trump beat silicon valley at their own game." now, they must prove themselves. >> he used passionate messaging

to get his message out. a lot of the platforms were abused. they fake amplified voices, extreme voices that pretended to be 10,000 voices when they were just one person. so tech needs to help figure out how to solve some of these issues. we know how it can empower individuals in extraordinary ways, but we need to fix the excess we saw in the 2016 election cycle. emily: you say technology tools should strengthen not weaken and democracy. some would argue that social and media has dramatically increased the number of voices being heard. can tech companies really be responsible for all of this?

>> i think technology has been playing a positive role over all. it helped give rise to the voices of president obama and bernie sanders. sometimes, people can accomplish more with a single twitter post than i can accomplish with an speech before an empty congress. however, they need to have some basic differentiation between fact and opinion. newspapers, tv stations like yours have third-party verification that independently check facts. there should be third-party verification on some of the posts. they showed look at providing some sort of alternative perspective for viewers who want it. they need to look at what their journalistic responsibility is

without suppressing the freedom of expression. i am encouraged that a number of tech companies are doing that, and that dialogue has begun. emily: you want to know how far these companies can go in distinguishing between fact and opinion when our own president might have a different opinion of the facts than the facts. >> i agree it is a very difficult issue, but the are some independent organizations which can rate the information. if someone is saying the sky is green or barack obama is not an american citizen, they can at least have a rating and verification just like newspapers and television him stations do. they can provide a link to some alternative perspectives if you so choose. i think tech companies and social media is different from television. television is not as interactive. people are not responding to me. tech is a person to person communication, so tech cannot be responsible for every single

post and the content of every single post, but they do need to adopt some sort of journalistic standards of third-party verification so that they give users an informed perspective. emily: how much can we rely on companies to do the right thing? or whatever is in the best interests of society rather than the best interests for their business? how much should the government be involved in determining if there was russian interference on these platforms? should there be government regulation? >> i think there are two different questions. in terms of the best interests of society, that was a silken valley tradition where some of the early founders talked about building technology which would help empower society and people. if you talk to tech leaders, that is what they hope. that it would create a more connected world and create more jobs. tim cook recently said business leaders have a moral

responsibility to care about education and jobs. the google ceo announced a billion-dollar initiative to prepare folks for tech jobs of the future. i think there is an ongoing interest with tech giants and the responsibility to help people prepare for the future. given that they are some of the largest companies in the nation, and some of them have great many responsibilities to their viewers. on the russian issue, i think we need better intelligence sharing between tech companies in the -- and the government so that they can get advanced notice of suspicious activity. and tech companies need to help adopt exceptional processing to look at also counts -- look at false accounts or bad accounts. even if they hire thousands of new people, they probably need investments in machine learning

and artificial intelligence to do a lot of that work. there will probably be a role for congress and lawmakers as well to have constructive rules that tech can follow. emily: you spoke about the importance of increasing diversity at these companies. is this something that companies can do on their own? we know that the representation of women and minorities in tech companies is low. is this something the government should regulate? >> i think it is in the tech company's own advantage to increase their imagination when it comes to recruiting. 45% of african-americans with stem degrees go to a historically black college or university. 45%. if tech companies want to expand where there is talent, they should form partnerships with some of the best historically black or african american universities in the country and recruit from there. the oakland raiders did that. they started recruiting at these

universities, and it gave them a huge competitive advantage over the rest of the teams in the nfl. at times when we have such scarcity of quality talent, expanding the pool will make a difference. emily: the question is whether or not they should. it is whether the government should force them to do so. legislate requirements for women or minorities in their ranks. >> i am not for government regulating that, but i do think the government can make investments in women's schools that focus on stem, in hbcus that provide opportunities and pathways and corporate mentorship. i think the government can incentivize the creation of the pipeline, but i do not think they should regulate a number of

seats that tech companies have to fill. i think that would be going too far. in emily: congressman ro khanna there. coming up, bayer is looking to break into the next phase of farming technology. plus, allegations of gender discrimination in silicon valley is nothing new, but the latest case could have a plaintiff represent over hundred 25 female engineers. this is bloomberg. ♪

emily: with its proposed $66 billion acquisition of monsanto, will bayer has focused on a shift to life science you technology.

we visited a new unit of the you will company in massachusetts focused on agricultural technology. growing in the check it out. >> something is growing at bayer. the company is making a big bet that it can make plants fertilize themselves. >> we believe we have the responsibility to solve the big issues. >> according to the head of the by life center, one of those issues, how crops grow, is to help farmers respond to a growing population. >> undiminished land, you have to -- on diminished land, you have to feed more people, and that is why we believe the demand for self fertilizing plants is the demand for the future. >> bayer's life science center is teaming up on a $100 million venture with a boston based startup which aims to take genomes found in peanuts which automatically supply nitrogen to crops that do not have that

is capability like corn, wheat, and rice. their ceo explains. >> we are taking that genetic and a you design from those and you will peanut microbes, will and we are migrating them you and over. the idea that we can use less nitrogen fertilizer to save farmers money and give consumers a more environmentally friendly food. >> fertilizer has raised pollution concerns, and it is one of the most costly inputs for farmers. >> there is an enormous expense in the actual fertilizer buying and getting it out onto the and field. >> self fertilizing plants are one way to increase production and after years of falling crop prices. the bloomberg agriculture index as has lost half of its value you over the last five years. that and declines in land have boosted investment in

agricultural technology companies. him bear has said these could be worth $250 billion in 2050. >> they need an entirely different approach. him they need 10 times the money and 10 times the time, the patient's, -- patience, and 10 times the guts. that is why these big ideas only work in partnerships. >> the effort to reduce fertilizer waste comes as bayer awaits approval for its takeover of monsanto, the world's largest seed company. >> i don't see a conflict there. we would benefit from having these together because the microbes we have tried to develop would perfectly fit into the chemicals and seeds we would

potentially have. >> bayer is giving it five years to see if their technology will make it to the crops in sacramento, california for further testing. ♪ emily: uber is expanding its operations in europe. the ride hailing giant will open a new center in lisbon to provide rides to users in france, spain, and portugal. the company expects to create 250 new jobs from this venture. in the meantime, in london, uber is still seeking an appeal for its license ban. coming up, tech earnings are in full swing. we will break down alphabet's results. all episodes of "bloomberg technology" are streaming on twitter. check us out. this is bloomberg. ♪

♪ emily: welcome back to "the best of bloomberg technology." i'm emily chang. tech earnings were in full swing. alphabet reported revenue of you over $22 billion in its third quarter report, encouraging investors and we will sending shares to an all-time high. google's ad business continued to be the company's juggernaut with revenue rising over 24%. we had the opportunity to speak with their c.f.o. after the numbers were released and discussed their relationship with the e.u., m&a and political pressure. will and she also called out the

other bets segment which helped to strengthen the quarter. will and will to strengthen the quarter. i spoke with the c.o.o. of google europe about the numbers. >> a lot of mobile companies, their products are increasingly commoditized. they are looking for the maximum they can squeeze out of those revenue shares from google. i think it will go up. there are probably others where there is a lot of upward pressure for google in areas like display, revenue shares, as well. i think it is something that to a large extent we have to get used to. there will be a trend upwards. clearly google is doing what they can to slow that growth. you i do not think it will reverse any time soon. emily: when you look at the numbers, it seems like most things are otherwise going in the right direction. what are the main highlights to you? ben: so obviously, there is the

overall growth rate expectations. they have not broken out where that has come from, but my bet is a lot of that will be coming from youtube. youtube is doing very well. there have been lot of questions about youtube recovering from a whole brand safety scare earlier in the year. all the evidence suggests they are. we have seen meaningful price increases. we have seen almost every single advertiser back on youtube, so that is certainly a highlight. beyond that, i think it is overall health in the ad business. clearly, there are a lot of other bets out there. the revenue is growing, but the losses are continuing. at least what i have seen so far, there is no real standout success. but clearly revenue growth is a good sign. but to start being meaningfully prosperous, we will need a lot more growth yet. emily: alphabet revenue is now totaling $3.4 billion, and capex spending has dropped dramatically over the year. they spent $324 million last year, this year $77 million. ruth porat told me mainly that

is because they are spending less on google fiber right now. they are focused on developing the technology before expanding it. she also spoke specifically about how they decide where to continue to invest in other bets. she said, "we are looking to create valuable businesses over the longer term. what we do is a multi-year financial model. establish business, technology and financial milestones. it is really a multi-year look at creating what we believe are multi-year opportunities," and she singled out waymo, the self driving car unit. she said they are pleased with the progress they have made when it comes to safety and ways that self-driving cars can help cities. but there is the sense that they are thinning out their investments in other bets. ben, what do you make of that? ben: i think they have to. they have to be disciplined. the reality is for google or for alphabet to build something that will meaningfully change their results or change the world,

they need to only focus on bets that can generate $10 billion in revenue and meaningful profit. very few bets any company can make have a reasonable chance of building a $10 billion, $20 billion, $30 billion business. they really do need to think through the things i can really change the world, generate a lot of revenue. and that alphabet has a meaningful -- a good chance of being one of the winners. clearly driverless cars is a massive opportunity. the auto industry is massive and it seems like alphabet is one of the frontrunners in that area. i think they are right to focus there. i there are a lot of other bets with an alphabet whether say this is going to be too small or we are too far behind or there is too much competition. emily: that was ben legg, c.e.o. of ad parlor. the recent groundswell of women speaking out and alleging gender discrimination at tech and venture capital firms is shedding light on the rocky terrain women face culturally and professionally in silicon valley. google, microsoft, oracle, uber and twitter are all facing similar lawsuits on this matter. tina wong, a former engineer at

twitter filed the suit two years ago alleging the company thwarts the advancement of female engineers. since then, she has been gathering data on gender and pay for her peers and she believes she can prove that twitter stacked the deck. by early next year, she plans to ask a state judge for permission to represent 133 female engineers at twitter. this would be the first group case of its kind in silicon valley if certified. twitter has rejected these claims in court filings. our bloomberg news legal reporter joe rosenblatt, and an and employment attorney join me to discuss the case. >> what makes this case different is the plaintiff is miss huang herself. she feels very strongly that she was denied a promotion due to her gender. she feels that her him andshe feels that her contemporaries at twitter, other females at twitter also have been denied advancement. she is willing to take this case to trial. emily: how do we know she was

denied these things based on her gender and not her performance? jason: so in this case, this is a class action case. in many of these cases, discrimination cases are individual cases. in this case, she is seeking to represent all of the women engineers at twitter. the case is based on a theory called disparate impact. what that means is the promotion process, while maybe it wasn't devised to discriminate against women, the impact of the process adversely affects women. to put it simply, it took women longer to get promotions and fewer women had promotions that we might expect. emily: ellen powell felt passionately about her case too. joel, what do you think makes this case different? joel: well, so ellen pow's case was really about ellen pow. there was discrimination claims

in her suit but there was a lot of harassment. more focused on harassment and it was focused on ellen pow. as jason was explaining, this is about a systematic bias against women at twitter. it differs a lot from ellen pow's case in that way in particular. emily: twitter did give you a you statement saying twitter is deeply committed to a diverse workplace and we believe the facts will show miss huang was treated fairly. joel, what do you think is the likelihood this gets certified as a class action? there is no precedent for this. joel: there is no precedent i am aware of. what this is going to turn on is the data that tina is able to

turn up, extract from twitter and marshall in her favor. if she is able to extract numbers and data that make -- that support her case, i think it seems like there is a good chance, i think it all depends on that. i've seen some of those numbers and they initially filed in the lawsuit. they have changed. there is disputes between tina and twitter about those numbers that are going to be resolved, or taken up in court this week on thursday. emily: jason, what can you tell us about these numbers and what they show? jason: of course i'm hesitant to talk about getting into the nitty-gritty of the evidence in this case. what i can tell you is the data is going to be really important for us. what we're going to have to show is that fewer women were promoted than statistically we would think should happen. that's to say more men are being promoted than women and we're still working with twitter to get that data. there are some bumps in the road but i'm confident that is what the data will show. emily: how do you think the climate right now -- we have seen many, many sexual harassment allegations, especially in the last year.

we have seen men get fired. we have seen the c.e.o. of uber resign. some people said if ellen pow filed her suit today maybe she would have won. do you think the environment matters or will have an impact here? joel: i think the environment matters in terms of decisions. i think it matters for judges, what cases came before. i don't think that the climate matters more for juries, you know, maybe jason is probably the better person to ask about that but i think the way the climate really shapes these kind of suits are in terms of encouraging and motivating other women to come forward. i think you begin to see more of these cases. but how they -- the outcomes kind of depend on precedent and the legal issues i think. emily: jason, have you been talking to other engineers at twitter, female engineers at twitter and what do they say? jason: i think the folks we have spoken with say clearly there is

a problem. if you look at the statistics from when we filed the case in 2015, 35% of the employees were women. if you look at the technical positions, engineers, less than 10% of those folks were women. everyone we have spoken to seems to agree that is impacting the work environment. just the fact that the population there is skewed so heavily towards males. emily: next step, when will we know for sure? jason: so the next step in our case is class certification. we are hoping that the class will be certified or at least have a decision as early as march of next year. once that is done, assuming we are able to proceed as a class action, then we need to get a little more data to see if we can really prove what we are saying is happening over there. emily: a quick disclosure. bloomberg l.p. is developing a network for the twitter service. coming up, apple has struggled to solve technical issues around the iphone 10. from the screen, facial recognition and 3-d sensors. we'll break down what is going

on behind the scenes at the company. this is bloomberg. ♪

interest in the iphone x is mounting as the countdown to the november 3 release begins. the technology posed several challenges for apple from facial recognition to 3-d sensors. covering what is going on in the supplying chain. willhether the tech china be ready to get the iphone x in the hand of consumers next week. >> the technology was previously only in the microsoft connect.

a few centimeters across and a few millimeters deep. possible forake it their suppliers and component ,akers which will then ship they have to redo some of the specifications in order to make it possible to ship in the quantities they need it. >> is the technology going to be any different? >> the difference they were ,alking about for the touch id face id they are saying it's one in a million. sure whether they cut the specs after the release. the likelihood is it is going to be infinitely better. >> we expect face id to be the

new gold standard for facial authentication. one in aues to be million probability with someone unlocking your phone with face id. >> speaks to what i said before. that perhaps suggests that might have happened before they released that number. but we stand by our reporting. we have good confidence in the people we spoke to. they are very close to what is going on. emily: crawford, what do you make of this? crawford: i think this is about the tolerance of where apple potentially started versus what they will live up to when they shift. the fact is, if they live up to that one in a million, then they have not reduced it and the consumer will never know. if there is a reliability problem, if people experience situations in low light, in ways that do not necessarily recognize it, that would be an issue.

we don't believe that will be the case. apple is clearly coming out and saying they are standing behind this technology. we have said we think there will be somewhere between 3 million and 4 million devices at launch. we are standing behind that number. we have no reason to believe it will not be a successful launch. emily: walk us through how apple's facial technology is expected to work. alex: there are three components that matter. what they call the flood illuminator, which is like a torch which sees a face. it then passes on the action to what they call the dot projector, which is computationally intense. they do not want it to be on the whole time. this flashes 30,000 dots at your face. the infrared camera then detects that, puts that through the algorithms and recognizes this is the person that i should allow or not allow to unlock the phone. emily: crawford, how difficult would you say is it to manufacture this kind of technology at scale? crawford: it is very difficult to manufacture at scale. these are precision products. we have heard a lot of rumor and innuendo that yield has been a problem. there have been manufacturing yields of 60%, 50%. those are really unacceptable when you think about a high-volume manufacture product. those yields have to come up to

90%, 80%, even 70% over time. i think they will get better. this is a very expensive product. this product has a premium price point. there is going to be fallout around some of those components. we have definitely seen that in the supply chain. emily: are there other components causing issues? alex: we have reported going back a year that there were constraints. it seems they have broken the back of that. the flood projector as well, this other inferred laser, they had some issues with that. we heard from our sources, the yield on the dot projector was about 20% at one stage, 40% for the flood illuminator. now it is above 50% for both of those but it is still a long way from the 90%. crawford: i would just say we believe that apple will ship optimistically somewhere around 37 million. we are now feeling that is at the very high end. not only based on the components we are talking about today but also based on the oled availability.

don't forget, samsung has the absolute lion's share of the screens locked up. they take a significant amount themselves. oled, we are not going to say it is not going to be a constraint going forward and certainly into next year. emily: that is shipping. what about demand? are you expecting demand to be higher than ever despite this $1000 price tag? crawford: our expectation is there will be unsatisfied demand. this is going to be a very hot product. when people are lining up for it, trying to get it, they will not be able to meet initial demand in q4 we don't believe. alex: one thing to take away, we go into great depth. this is one detail of the story which apple has not been happy with. we go into great depth with the supply chain. i think the big takeaway is they have broken the back of a lot of the problems they have had with the 3-d sensors. there are other ways as well. please read our story. emily: crawford, what do you expect? preorders start on friday. you can go to the store and buy it the following friday, if you

stand in line, presumably. but how do you expect the demand and supply curve to unfold? crawford: i think they are going to be fairly supply constrained. as we said, our expectation is somewhere around 4 million at launch. they probably ship optimistically 37 million, probably more realistically 30 million range for q4. and then our expectation is, as you get out into next year, we are looking at 50% of phones high-end. looking at about 240 million units next year. not all iphone x. that is all iphones in general. half of those will be the larger size, which the x will be included. emily: what do you see with the iphone 8? crawford: our expectation is pretty strong. our expectation for this quarter, about 15 million. alex: one interesting idea, it will be important to have the iphone x in stores. i think there are probably a lot of iphone 8 buyers waiting to

hold the two side-by-side and say, do i really want to spend $300 more on this? if they don't, they will buy the iphone 8. emily: meantime android creator andy ruben is feeling the heat of a crowded smart phone market. his newest creation, the essential phone is getting a price cut of $200. the price is now $499. it originally cost $699. this comes after reports of disappointing sales for the new smart phone. the launch of other new devices from the likes of apple and google also could have hurt the company. customers who already bought the device are being offered a $200 credit. coming up, amazon has a new service that will let them into your home. the latest on the online retail giant's steps to make sure you never miss a package, next. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com and in the u.s. on sirius xm. this is bloomberg. ♪

♪ emily: as we have been reporting, more than 200 cities are bidding to secure the location of amazon's second headquarters. real estate investor barry sternlicht spoke to erik schatzker and said he is betting on one city in particular. barry: create so much demand. erik: so far they are not building their own buildings. barry: no, they own their own distribution center. not clear why. can't do everything although it looks like they are trying to do everything. i think boston has a good shot at that, given the technology, the infrastructure and the educational base.

it is the zeitgeist of the city. we'll see how that turns out. the other places they might go are the southeast, atlanta, raleigh, durham. atlanta is affordable. erik: transportation. emily: and other amazon news, the retail giant would like to make missed deliveries a thing of the past. the new service dubbed amazon key will let amazon deliver packages directly into your home and it will let selected services like house cleaners and dog walkers in while you are away. the service works with an electronic lock and the security camera that will film the person entering your home. mark gurman joined us to explain. mark: now it is security cameras. it is a hot now. everyone is coming out with a security system now. this is amazon's approach. they are tying it to how they make money, packages. people buy stuff online. now this is another tool amazon

is selling to help people get their stuff. emily: this would literally be a package delivery person entering your home? right? mark: right. emily: what about security concerns? mark: it is interesting. we have not heard back from them yet if amazon has an insurance program, liability, or the terms of service. are you waiving your right to sue amazon or file a complaint if something goes wrong? i'm sure that the people are vetted. they hope there won't be a circumstance like that, but the reality is that letting a person into your home is not an easy thing. emily: how do they convince people this is worth it? mark: there is two things. in terms of buying the hardware, i think it is a no-brainer purchase. if you look at the specs, the video quality, the app integration, it is $120. which is a really good price. that is about half the price of some of the closest competitors from nest and other smart home camera makers. from that perspective i think it is a cool product. in terms of the amazon key, it is a tougher sell.

emily: how does it fit in with the echo and other home-based devices? mark: right. all of amazon's devices are designed to sell you more stuff, whether that is buying stuff with your voice. this is another conduit of that system. people buying things and having a security camera. they will also be selling cloud storage. that is another way to make money from this. emily: how does this fit into the broader delivery efforts? obviously amazon is trying to take on more of the delivery logistics problems. taking it away from u.p.s. and away from fedex. mark: there is another element to it. amazon is getting more competition lately. there was a time when you could not think of anyone other than

amazon to buy your stuff. now there is walmart. walmart is the date competitor and they have announced a similar service. now amazon is fighting back with a more integrated approach. the integration with smart locks and integration with her new cloud camera tech as well. emily: what will you be watching as you head into the holidays and all of this stuff converges at once? mark: it will be interesting to see how the different companies create their platforms as a way to lock people into their ecosystem. it will be interesting to see if there will be people who buy apple devices, google, nest, some amazon. i think that the competition is going to heat up and you're going to see everyone trying to get a piece of every different device. emily: what is the hottest speaker on the market? what is mark gurman's recommendation? mark: stay tuned to gadgets with gurman, my blog. we will be comparing everything down the road. i have been listening to the sonos 1 at home. it is the sonos speaker with alexa. it actually sounds really good. stay tuned for more on that. emily: that was bloomberg's mark gurman. that does it for this edition of "the best of bloomberg technology." we will bring you all the latest in tech throughout the week. tune in each day 5:00 p.m. in

new york. 2:00 p.m. in san francisco. remember, all episodes of "bloomberg technology" are live streaming on twitter. you can check us out at bloombergtechtv weekdays. that is all for now. this is bloomberg. ♪ who knew that phones would start doing everything?

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carol: welcome to "bloomberg businessweek." we're inside magazine headquarters. and this week's issue, how -- a deadly side -- how snapchat resists propaganda. and rolls-royce shows us how the superrich and royalty like to drive. all that ahead on "bloomberg businessweek." ♪ carol: we are here with the