>> you are watching "bloomberg technology." let's start with a check of your first word news. president trump and chuck schumer one-on-one talk this afternoon at the white house. the meeting came in the run-up to the midnight deadline to keep the federal government operating. we will bring you the latest from capitol hill with a live report, straightahead. a panel of federal judges has approved re-drawn north carolina legislative districts. the court hired a stanford law professor to address concerns about continued racial bias with certain boundaries. the changes to two dozen house and senate districts would be used in this fall's elections. the u.s. supreme court will review the legality of president

trump's travel ban, which restricts entry into the country by people from six predominantly muslim countries. the high court will hear arguments in april, and the case could produce a definitive ruling by late june. president will meet with british prime minister theresa may at next week's world economic forum in davos, switzerland. the president said last week that he canceled a planned visit to the u.k. because he was unhappy with the location of the new u.s. embassy there, and because the old site an had been sold to cheaply. global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. i'm alisa parenti. this is bloomberg, "bloomberg technology" is next. ♪ emily: i'm emily chang, and this

is "bloomberg technology." coming up, president trump is closing in on his first year in office. we look back at how the administration has impacted silicon valley. plus, the iphone x was one of the most anticipated devices ever, but one key analysts current projections, citing weak demand in china. and netflix stock has been on a tear this year,'s skyhigh expectations for fourth-quarter earnings results next week. you will discuss what to expect. but first, to the lead. u.s. lawmakers trying to avoid a government shutdown. the senate minority leader told reporters he had a long and detailed meeting with the president but that a good number of disagreements still exist between the two sides. for more let's get to see okafor on capitol hill -- what's the latest? >> everything is still up in the air. we are about seven hours away

from the government shutdown and it would come around the ---year anniversary of before his state of the union. the last government shutdown lasted 16 days so there is a where they could continue. he recentlyirmed spoke to paul ryan about a path forward. francine: the senate has not yet announced a vote on the continuing resolution -- they don't seem to have the votes to get it done. many things up in the air right now and the clock is ticking. emily: what are the chances this happens in seven hours, or can buy a few more days? >> it is hard to know, but there are many senators who are nervous about a shutdown and are proposing alternatives suggest a can to make resolution over several days.

somewhat to work through the weekend and soft issues on spending caps and on the pentagon side, which has been a major holdup. the major dividing point is the issue of the dreamers, the undocumented people by here illegally as children. democrats are demanding that the deadline be used as leverage to force republicans to come to the table to force a solution. democrats don't believe republicans are going to get serious on that issue unless they are forced to. there are facing a lot of pressure from their base. emily: one more question, if this happens, how does it impact midterm elections? >> the 2013 shutdown hurt republicans because they were the instigators. this is the first time if a shutdown happens that a single party would oversee a government

shutdown on their watch, so it would be a historic first and republicans will take the blame. the last time republicans took the blame, the odds of that, i don't know. emily: thank you so much for that update. we are taking a first look at president trump's first year in office and how it has impacted technology. joining me now on this retrospective is bloomberg tech executive -- and david fitzpatrick. my guest post for the hour. david, i will start with you. we had meetings with president trump with tax reform -- what is

the big takeaway? david: he hasn't intersected with text nearly enough. if you look at a leader like macron or theresa may, so many leaders -- china, russia, these countries recognized technology is a competitive differentiator that is going to allow their economies to do better than different countries. trump has barely mentioned it. for me, while there have been some good things, far more neutral or negative things about the trump administration approach to tech, i am disappointed that it has a disappeared from the white house rhetoric. emily: some tech executives met with trump multiple times and

expressed concern that many of these councils and meetings don't amount to much, if anything. take a listen to what tim cook told me back in june. >> i don't find these councils and committees to be terribly productive. it wasn't about not wanting to advise on something where i thought we could help, or we had a point of view that should be heard. i am doing the latter -- i think it is in the best interest of america to do it, and i am first and foremost an american. emily: have these councils not been able to do much silicon valley? >> no. there has been a variety of councils, and you have seen a number disband after the way the

president responded to charlottesville. there's one aimed at reforming the government -- some have disbanded, uber's debt -- uber's then ceo quit. is no longer happening, and one is focused on reforming government and upgrading the technology, vucevic everyone would agree needs to happen. we haven't heard anything more about it. the technology industry and trump -- i would say it is a lot of love and hate. mostly the hate on where the government stands on net neutrality. and love when it comes to tax reform -- the one big thing that the trump administration has accomplished this year. whether he wanted to or not, it is going to have a big benefit for the technology industry, in so far as many reducing the tax rate on all of those billions of

dollars that are overseas right now. emily: there was a brief mention of peter thiel and his relationship with president trump -- suggesting that the president didn't much prioritize his relationship with peter. you see that relationship has amounted for anything for silicon valley? david: not really. it's in like peter thiel was trying to bring that one key tech executives -- but nothing came out of that. while tech companies have tremendously benefited from the tax bill, it wasn't directed at helping them at all. it was peripheral. it is funny that you have that clip from tim cook, and apple has done this announcement that they're bringing money back. they give absolutely no credit

in all of their discussion to the administration or the tax bill, as far as i saw. that has two great on the president. emily: we do have a tweet from the president saying that he promises companies will bring money back to the u.s. a huge win for american workers and the usa. tax reform is the only significant think this administration has accomplished so far, at all. >> he is quick to take credit for anything these companies do, any lip service they pay competing jobs home and manufacturing here. to his credit, apple made a commitment to the number of jobs they want to create and the ways they want to invest in r&d, and ways they want to bring that money back.

i think r&d centers is creating jobs in america, and a lot of top companies we talked to -- a lot of that is going to go towards dividends, buybacks, maybe towards compensation. these are not going to result in money trickling down to the average worker. to the middle class -- it is going to line up the pockets of wealthy investors. i'm interested to hear what these companies plan to do when they bring the money back. emily: silicon valley will be balloting with net neutrality and immigration. based on u.s. census data, nearly 70% of people in silicon valley are from outside of the united states, but they are increasing scrutiny of tech workers -- what is happening here? >> this is the administration that ran on a platform that is

less than friendly and hostile to immigrants. this is a constituency to has become the backbone of silicon valley -- of the technology industry. senior leadership are oftentimes foreign-born. a lot of engineers want leniency -- they don't want to see daca go away. this is the industry that has opposed that immigration stance that this administration has taken, and you will continue to see them oppose any crackdowns on immigration. emily: tom, thank you. david fitzpatrick, you are sticking with me. coming up, we will catch up with the new ceo of coca-cola and how they are technology to usher in a new era.

chec out on twitter on weekdays. check out on twitter on weekdays. this is bloomberg. ♪

emily: we saw square jump on fridays trading session. it is at a street high of $64, reiterating its by on the stock and expecting more growth in payment volumes, and compared the company to amazon and its early days. although coca-cola was founded well over 100 years ago, technology plays a crucial role in the business giant. they are using technology to hold its place on top of the beverage market. we talked about the evolution of technology at the company. >> i actually think that places

like shanghai and some parts of western europe are all cutting edge, along with some bits of the u.s. the u.s. in many respects -- it is advanced in places like shanghai and western europe as well. the penetration of e-commerce is even higher in some of those places that even the u.s. when you want to learn what is going on, i would be just as tempted to tell you to go to shanghai than to stay in new york. >> how do you market? you don't have that when you are on your app. >> no, but you have to get it. if you go to china for example, a lot of the apps in the mobile payment systems came in, we weren't on the menu. even worse, were trying to return a glass bottle to the restaurant, and there wasn't a

delivery system. that advance very quickly to be present on the apps, so what is the virtual representation of what you normally see in the store -- and how do we change the packaging portfolio so we could be part of the delivery system. yet places in shanghai where all food orders is 50% of restaurant sales. >> that his relationship with the consumer. talk about coca-cola, how does technology change how you're doing business? >> it is changing and a lot of profound ways. in simple terms, you go back 20 years, we are one of the few to invest in expensive i.t. systems and do our own stuff, our own programs. we have to move to the cloud, we have to move to standard programs that the whole industry uses, and refuse mobile. the one thing i tell the i.t.

department is to put it on the phone, let's move everything to the mobile phone. everyone knows how to use apps on phones, so it is profoundly changing the way we work, and it is going to continue to flow through the organization. we have a program of digitizing the company. >> does that translate to a fewer employees? >> people are having to adapt to doing things in a different way. we have actually make a lot of changes in our i.t. departments to move to different skill sets, so it is changing the nature of employment and the source of profiles you want. whether we buy the services ourselves towards do it ourselves, it makes a difference as to where the employees are. but more employment is being generated in the economy. >> when you are trying to recruit young computer

scientists? >> the state of georgia has been ranked top one or two places to do business in the u.s. for many years in a row. the local political system has been a great job. it is a competitive economy there, and we do great in atlanta. they have done a lot to invest in tech startups and the media industry, and it has been successful. emily: that was the ceo of coca-cola speaking with david westin. coming up, amazon is making a price change for prime members. this is bloomberg. ♪

emily: facebook will not bid for the national football league's package next season. this according to a person familiar with the matter. hammond said if they will make future bids on and of all content -- they haven't said still make future bids. sticking with amazon, they will remain in the spotlight over prime prices, saying they will raise the prices by 18% starting on friday. new members will pay $12.99. $99 sounds like a bargain compared to $13 a month. what do you think is the motivation for this change?

david: i have opinions whether this is the right thing to do or not, but i think the motivation is that they were making money the way they were doing it before. what has been happening is that people who pay month-to-month were signing up when they had a bunch of things to order, and a turning it off again later. or else, just not ordering enough stuff to justify what is generally expected by all analyst to be the loss leading shipping subsidy that prime represents. if you are not ordering enough stuff for order to much stuff and not paying on an ongoing basis, i could see white crime would be a good transaction for customers of amazon. emily: so what is europe union on whether or not it is a good call? david: it reminds me of payday loans. not have to spend $156 a year for the same thing -- that seems fundamentally wrong.

it certainly is within amazon's prerogative to make a change like this, but in effect are saying that people have less money should pay more, and i do like the feeling of that at all. emily: they have also started stiff competition for amazon hq2. i can't help but laugh because this is the most amazing pr in history. in my humble opinion. they have 20 cities doing everything they can to make their cities as attractive for a company like amazon. david: i have a feeling that amazon didn't even think when they initially announced that they were going to build a second headquarters that it would turn into such an incredible boon for them, that every city in the country would be competing to be there subsidizer. there are getting a bonanza of

free publicity in every one of these cities. it is a new story as well as a national story. biking they get a new story and 20 cities, the guaranty and the 20 largest cities in the country, gary going to get all kinds of think. whoever is managing it should get a big metal all reward from jeff bezos. emily: the company is leading in any which way, and it really is up to jeff bezos himself -- it reminds me of the race to host the olympics, which often has not turned out so well with the cities where the olympics and up. it is a huge expense, and i wonder how good it will be for the city that wins hq2. david: cities that significantly subsidized sports stadiums

almost never get a financial return and economic growth to justify the investment they have made. the winner of this derby will be the city that throws the must -- most money at amazon. the likelihood that city is going to benefit economically at a macro level is very questionable. on the other hand, the publicity benefits will be huge, because the publicity of this has gone out of control as we have discussed. if i were chicago, or new york, i would throw tons of money on this. emily: it makes a great story for us journalists. coming up, the apple iphone x brought into question. production of the $1000 device could and sooner than you think. check us out on the radio and

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>> i'm alisa parenti, and you are watching "bloomberg technology." here's a check of your first word news. federal reserve vice chair rental car wants to ease regulation on u.s. banks. in a speech in washington, he signaled he is embracing a mission to review and revise any of the rules in response to the 2008 financial crisis. >> confusion that results from overly complex regulation does not advance the goals. i'm advocating a simplification of large bank requirements. i'm not advocating an intervention of the regulatory capital regime. >> in what may be the most urgent item on his agenda, he says the fed is finishing its

near-term efforts to rewrite big bank leverage limits. people familiar with the matter say the central bank is working to reduce capital demand on some wall street firms. a supreme court spokeswoman says they will try robert menendez on bribery charges. the first trial failed to produce any of the 18 counts against him or his codefendant, accusedy florida i dr., of biting his influence with luxury campaign contributions. a supreme court spokeswoman says justice sotomayor your is doing fine after being treated at her washington home today for low blood sugar. the spokeswoman added that the 63-year-old, who has type 1 diabetes, was able to go to work. defense secretary james mattis says terrorism is no longer the primary threat to u.s. national security. speaking today in washington, he said the military must be strengthened as competition from will powers grows.

he described the power as eroding. >> we face growing threats from revisionist powers as different as china and russia are from each other. create ahat do seek to world consistent with their authoritarian models pursuing veto authorities over other nations' economic, diplomatic, insecurity decisions. >> a defense department strategy report echoed the remarks from calling forttis, "increased and sustained investment in the military." in australia, a drone was sent out to see to drop a flotation device for two teenagers caught in a riptide. officials describe it as the world's first rescue of its kind. they were about a mile and a half from lifeguards who were about to start training for these situations with the new drones, which were equipped with a camera and rescue gear. the drone reach the swimmers in just 70 seconds.

global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. i'm alisa parenti, and this is bloomberg. ♪ emily: this is bloomberg technology. a closely watched apple analyst/20% of iphone 10 shipments. at the will move six two 2 million of its most expensive smartphones there gets lifetime. that is down from 80 million. with demands in china -- but the alarming call is that he expects production to stop at sometime this year as apple rolls out newer versions. joining us now from new york is david fitzpatrick -- mark, how serious is this? mark: this is their q1 -- we're going to see higher average

selling prices for the iphone's, which would indicate that iphone x demands and supplies is strong for the quarter. emily: is 80 million a high number for a device of this nature? or is that standard? mark: if you look at a quarter by quarter basis, yes, it is a high number. for the fiscal year, that is a bit low. but apple is selling three different models, and what we're looking for is a total number of sales, revenues, profits. if apple sells one iphone x, which is not the case -- but if they sell a billion other iphones. we don't know the mix right now, there is also its of speculation and analytics on the web and reports. but we do know is that apple

projections for the revenues for the first quarter are at over $80 billion for the first time. apple's projections are lower than what is actually going to happen, so apple is usually dead on in beating the estimates. the iphone is about two thirds of the company sells, so i revenues means more iphone sold, so i think i would have a good quarter. emily: would you make of that china part of the story? apple has struggled there when it comes to growth. they have return to growth recently come up does that signified in demand on the chinese market? david: let me start by saying something, but mark knows more than me when it comes to things apple related. there is no question that chinese companies have been building better smartphones that are perceived in china that are

increasingly as good or as better -- and a lot cheaper. there is a huge push for all kinds of reasons from the government, and patriotism, to buy local, and the quality of the products as high. there is a long-term challenge in china -- and they'll elect to hear from mark, when i'm on the phone from our, i want to hear his opinion. you think apple has a long-term problem in china? mark: i do think it is a long-term problem per se, but it is one day have to examine. the way to chinese consumers are running towards the iphone truck -- start to die down a little bit because all those big chinese makers -- they are coming up with really interesting fonts that could appeal to the consumer. i saw a couple of weeks ago at ces this new phone that has two screens that you can fold over, and play cool tricks of the cameras. what we are seeing in china is a

futuristic look of what a phone can be, so apple has to catch up with bigger screens, new cameras in the coming years. emily: what you see coming in the fall of this year? will there be a significant model change, or a minimal upgrade? mark: i think it will be a mix of both. it will be a bigger version of the iphone x. they shrug. iphone x to the size of the iphone 7. emily: you think we get an iphone x plus? mark: i think it will call it that, but you will get a bigger screen diagonally. emily: think you so much. coming up, twitter had better than expected results. we will give you the latest on

twitter's turnaround, and. this weekend, will bring you the best interviews, including our conversation with arianna huffington. tune in saturday for the best of bloomberg technology. this is bloomberg. ♪

emily: a story where are watching. snap has laid off two dozen employees, this comes after snap announced a redesign that will rollout around the world. the group focused with publishing publishing partners to produce original content for

the discover section of the app. facebook will partners news that they believe users will find trustworthy. they will start testing it next week. facebook is trying to root out bogus news reports and attempts to interfere with italy's election in march. joining us is selina wang who covers twitter, as well as a guest post of the hour, and david fitzpatrick wrote the book the facebook effect. basically, facebook is going to ask users what it believes which publications they believe's most trustworthy and prioritize news from those publications, correct? >> right. they're algorithms based on users -- and it gives us things that are relevant, something we need to see more of. there is a set of users who are

going to figure out what use is trustworthy on facebook. the company doesn't want to be the arbiter of truth, is resourcing that. the crowd is not always the best thing when it comes to determining what is trustworthy, because the crowd has also created this viral, they can use phenomenon. crowds are eating tight pods -- tide pods on youtube. but it allows facebook to avoid perceptions. emily: this seems to fail to take into account that people are idiots. someone tweeted that a lot of people are basically idiots. what do you make of facebook putting this back into the hands of the people?

david: facebook will never act like it believes that ordinary people are idiots. and fact, it is the wisdom of the crowd that they think they are facilitating, and they are always going to default to trusting users in the aggregate, despite the fact that users watch fake news and do a lot of stupid things. and swallowing tide pods, i don't get that at all. [laughter] they want to go through a night the authentication of posts. they have authenticated people on facebook, now there starting to authenticate in the new ways. the pages, the advertisers, in places that are much needed. emily: how should we watch this unfold after they said they are prioritizing posts from families and friends, rather than publications? >> they said the percentage of

news on your newsfeed is going to decrease by 5%. publishers have been freaking out, and this gives them another thing to freak out about. how are they going to game the system? everyone from the outside is trying to decide how they can take advantage of this, and there's a few things to watch out for. facebook said that that ornate -- not only is a prioritizing -- go to try to make coverage more local. they're trying to determine traps the percentage that people are familiar with the publications that are trusted. this is an advantage for the big, well-known publications that are very polarizing that people have different opinions about. we have to see how that works and whether that causes issues with publisher pushback. emily: i want to turn to twitter now.

twitter is more optimistic about its future. what happened today? emily: analysts upgraded catalysts. >> breaking news just a few minutes ago -- twitter is coming out with a transparency report of what they found on the russian investigation, and what is noteworthy as they found an additional 1000 accounts linked to the russian account agency. they have already disclosed 3000 a few months ago, and there are saying they're going to be in alley notifications to 677,000 people who interacted with these accounts. they're going to be turning over those handles to congress. it is a small portion of twitter's overall users -- some

33 million. but there -- 1% of the population has interacted with these accounts. which is a significant number. emily: if only there were a few hundred -- more votes, then maybe the election results could be different. it is interesting to see both facebook and twitter grappling with these issues in real-time. what are the main things you will be watching for this year? david: i want to comment that is worth thinking of twitter in light of the changes that facebook made last week. facebook made a fundamental decision to downplay posts from pages and put a much higher priority on individuals, or things coming from individuals. it would almost inevitably seem to make twitter therefore more important. while twitter has other signs of

progress that the analysts are pointing to, the context it is operating in no position to facebook, people going back and forth between the two, it is beneficial for twitter right now. many pages will not be able to afford to advertise on facebook, but delicate substantial distribution on twitter. i think twitter will be sold in 2018. i think if this type of enthusiasm is building, it is natural product for a lot of companies to control, way bigger than twitter. jack dorsey, square is being upgraded. he is doing a good job. emily: two jobs. >> the facebook news change solidifies their position, and

have come a long way in determining they are the platform of what is happening now. publishers don't have much of a way of getting in front of their audience on facebook -- advertisers are saying they need to at least consider of going back to twitter, where is more transparent of who they can reach and how they can reach. didn't have to play mind games in trying to navigate the system. smaller advertisers can't afford the big bucks to pay debt increased at prices. emily: what are the chances that twitter will sell in 2018? >> i don't think they will sell to facebook. they wanted to crush this early rival, and they haven't been able to do it. twitter is researching, and that is very good news.

i think maybe google. emily: maybe google. we could speculate. thank you. david kirkpatrick, thank you all for joining. coming up, netflix reporting fourth-quarter results. an analyst calls the stock the best idea for 2018. this is bloomberg. ♪

emily: looking ahead to next week's earning session -- season. expectations are high for this trimming giant, as the stock is at an all-time high. here to discuss what is next -- we have david miller, analyst or capital markets who has a buy rating on the stock. what are we expecting? >> netflix will almost

undoubtedly report what is the biggest year in terms of subscribers in history. but read 3.5 million more to break that record in 2017, and are projecting more than five. they have added more than 20 million customers. i dissent time, you are seeing all traditional minis march, edges in some ways it response to the success of netflix. emily: how is that line up with your projections? >> where are expecting 6.2 one million subscribers for the fourth quarter, and that will correlate to 2.3 billion in revenues by at as your other guests said, that will result in roughly 23% subscriber growth for 2017 and 2016. that is just phenomenal growth

for a company of this size, and it is one of maybe reasons why we make netflix our top by just a couple of weeks ago. emily: are you concerned with how much money netflix is spending on original content and whether or not is paying off? >> it is somewhat of a concern, but not yet. it will have to be higher first to be more concerned about it than we already are. it is a lot of money to spend on content, but they have a tick range -- or i should say it allows a lot to play with, and their hit rate is much better than ever one else's right now. emily: lucas, with their top show, with kevin spacey out,

they are doing a new season with robin wright. you expect to see any impact from that this quarter? >> probably not because to david's point, the volume of what they release. the terms of this shows they released that has a big cultural impact. you have mine hunter, punisher, david chapelle specials, the will smith movie. they are not really at a point where anyone show flings their fate a whole lot. i think that sexual harassment -- i hope that it would come up because it is such a big coach earl issue at the moment. netflix is past and directions -- i think it would put on the individual actor and make clear it is not their production. emily: obviously -- they have a head start, but now you have amazon, hulu, and, youtube, disney -- does netflix maintain its lead when it comes to

original content? david: it doesn't have to be black and white. it doesn't have to be either/or situation. i do think consumers are saying, i am going to get netflix or the disney tv offering. or i'm going to get netflix or hbo now, or i'm going to get netflix or keep the cord. i don't think anyone things that way. there is plenty of gray areas here, and consumption of video is growing over 55% a year, so there's plenty of room of other players on the market, and that is what you are seeing right now. emily: the price hike recently, how that impact results? >> more than likely will improve the margin. they saw and negative impact on the price hike the last time they did it, but this time it seems like everybody accepted that netflix is giving them so

much, and they are ok with it. less time analysts projected a negative impact, but there wasn't as much this time. some of the services that consumers must have -- the owners of those services now have the ability to manipulate those prices, so long as they don't get too high. i don't agree with david if there is a good disney offering that people won't cancel netflix, i think it is possible, and are so many services people want to pay for, but the extra one dollar a month for people using netflix as their primary entertainment service is still a good deal. emily: lucas shaw and david miller, thank you both. they're going to have full coverage of netflix results this monday. that does it for bloomberg technology. a reminder that we are live streaming on twitter. that is all for now. this is bloomberg. ♪

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