♪ emily: i'm emily chang and this is "the best of bloomberg technology," where we bring you all of our best interviews this week in tech. coming up, mark zuckerberg speaks to the press. the company now says 87 million users could have been impacted in the most recent data scandal and that they are learning from mistakes. our extended interview with facebook coo sheryl sandberg. tesla tumbles on monday. elon takes to twitter multiple times. why investors seem to be shrugging them off.

plus, spotify's trading debut. we will hear from an early investor after its highly anticipated direct listing. but to our lead. first, facebook revealed that 37 million more users may have had their data improperly accessed by cambridge analytica. that would bring the total affected to 87 million people. the news became before mark zuckerberg spoke to reporters on a conference call wednesday. zuckerberg said it is clear facebook didn't focus enough on preventing data from being abused, but that he is confident they are making progress in security. he added he is still the right person to be running facebook, despite this breach of trust. mark: and the first to admit we didn't take a broad enough view of what our responsibilities were, but i think it's important to keep in mind there are billions of people who love the services we are building, because they're getting value in being able to connect and build relationships on a day-to-day basis. that is something i'm proud of our company for doing, and i know we will keep on doing that.

emily: facebook revealed that all of its 2 billion users could have had their public profile scraped from the platform. on thursday, we sat down for an extended interview with facebook coo sheryl sandberg. sheryl: we had a feature or you could look up people by name or email. that was important for finding people. someone made a directory they shouldn't have with that information. to be clear, all of that was public information. that was information that was already publicly available on facebook. now to your broader question, we know that we did not do a good enough job of protecting people's data. i'm really sorry for that and mark is sorry for that. we are taking strong action. monday we will be starting the process of rolling out to people all around the world at the top of their news feed all of the apps they are connected to and

a very easy way to delete them. as part of that we will tell , anyone who might have had their data affected or accessed by cambridge analytica who they are. we are taking strong steps to restrict more data that apps historically have had access to, and we are looking beyond apps. we announced we are taking steps to shut down certain use cases and groups, pages, searches, and events. these are just the latest steps. this is going to be a long process. we are systematically looking at all of the ways facebook data is used. we are going to find more things. we will tell you about them, and shut them down. this is a forever process. security is always an arms race. you build, someone tries to misuse. you build, someone tries to misuse a different way. we are committed to this for the long run. julie: mark has personally taken responsibility. he said we didn't take a broad , in a few of our responsibility. that was a huge mistake.

that was my mistake. how much do you feel personally responsible? sheryl: i feel deeply personally responsible. there are mistakes we made and i made. i think when you take a step back and think about what has happened here, for a long time we were focused on building social experiences and a lot of good happened because of those. when we found problems, we would shut down the problem. the cambridge analytica case was shut down in 2015. what we didn't do until recently and what we are doing now is just take a broader view, looking to be more restrictive in ways data could be misused. we didn't build our operations fast enough, and that is on me. we had 10,000 people working in security at the beginning of the year. at the end of this year, we will more than double to 20,000. we are massively investing in smart technology, and we are doing all of this to make sure we get to a place where we can proactively protect people's data.

emily: facebook has constructed a business model that leverages personal data that users share with facebook. you are the chief architect of that. assuming the business model will evolve as a result of these changes, how will that impact the bottom line and profitability? sheryl: we have never run this company for short-term gains and we have never run this company to maximize profits. we have run this company for the long-term health of our community and business. we announced two quarters ago in earnings that these investments are big and they will impact profitability, and that's ok with us because it's the right thing to do. we will update at the next quarter. emily: you mentioned a few advertisers have paused their spending of the result of this. pause? is that sheryl: what matters is the

question they're asking. advertisers are people, people who use facebook, so are investors. everyone wants to tell are you protecting people's data? i think the advertisers and people who use facebook also want to know the good things will continue, and those are really important as well. earlier this week i was in houston. i met this incredible man and went to his local taco store. when hurricane harvey happened, he had lost his power. he used facebook and found a competitor who had a taco truck and teamed up with him and than they used facebook to drive around and find people who needed food. those people were publicly sharing their location on facebook. what people want to know from us is, are we going to take steps to be more protective and more proactive? the answer to that is a firm yes. we are also going to take steps to make sure that the good that happens on facebook can still happen. emily: with all we know now, do you believe facebook played a decisive role in electing donald trump? sheryl: there is a lot of concern about what happened in this election.

we are certainly concerned about the foreign interference on our platform. the overall picture here, i don't think anyone knows yet, but it's an important question. i think it's one that is going to be studied for years to come. now ise are focused taking the lessons of past elections and making sure they are applied going forward. foreign interference you may , have seen we took strong steps earlier this week to take russian ira content off of our site. that was content that was in the u.s. election that we did not find quickly enough. now we are analyzing ahead, and we found 270 pages and accounts linked to them that were deceptive, in russian, targeted mostly at russians. our message is very clear. there is no place for this theseive content, for troll farm's anywhere in the world. we took this down in russia. we're looking for others and we will take them down. julie: mark has been asked if he

is the right person to lead facebook. do you believe he is? he says he is. do you agree? eric: i believe deeply in mark. he has a vision for what social services and sharing could be a -- could be, and that vision remains very important. mark remains with me and all of us, takes full responsibility for what is happening and were making an important shift. we're going to keep building social products, because sharing is so important to people all over the world. we are going to be much more proactive. emily, i'm not going to sit here and say we won't find more problems. we will. we are going to continue to find problems. we are going to continue to shut down situations when we find them. this is a forever thing. security is an arms race. this is something we are signed up for, not just now, but on an ongoing basis. emily: be sure to tune in as "bloomberg technology" has to washington next week for full coverage as mark zuckerberg

testifies before the senate judiciary and commerce committee's. meantime, the fda is calling on twitter and facebook to be more proactive in stopping all my opioid sales. the fda says social media companies need to root out ads for the addictive painkillers, which contribute to hundreds of thousands of fatal overdoses in the united states. the fda is also planning a summit with internet ceos to identify technology gaps. coming up, spotify's nyse debut. how did its approach to going public fair? -- fare? we will talk to a key investor, next. check us out on the radio. this is bloomberg. ♪

julie: -- emily alibaba is : stepping up efforts to expand into china's food and delivery market. move signals the desire to compete with tencent in that market.

sony stands to reap almost $1 billion from its stake in spotify. the amount reflects the stock sale on tuesday and a higher value of sony's stake after spotify's listing. sony operates the world's second-largest record label and largest music publisher. this of course after the sweetest -- swedish music streaming service kicking up trading as a publicly listed company with a share price under $166. spotify has more than 70 million subscribers valued at $28.7 billion. bloomberg's caroline hyde spoke with an early investor a day after it started trading.

>> the company has a few competitive advantages that is very hard for the others to replicate. one is that it actually reaches the entire device ecosystem, not just apple products or within the u.s., which is the case with amazon. i think also, the business model is largely a function that the entire music industry is now moving towards a very well orchestrated idea of a trading marketplace. largely the brainchild of daniel and his team. ermediatethereby disint a significant part of the industry and significantly improve the margins. caroline: you mentioned we have seen a bit of a selloff in the share price. it closed down about 2%. i'm looking at my bloomberg and will explain to you what i see. you can look at how spotify is trailing its peers.

it rallied a little bit at the end of trade. underperforming the market, pandora, sirius today. what about the direct listing and the volatility we see in the share? do you feel a direct listing was the best way to go rather than a public offering? toi think it is really early draw any firm conclusions about that. it's clear that the company may be decision to do a direct listing because there was little point in having the cost of an underwriter to rate capital or sell secondary shares where there was no interest in either raising capital or selling secondaries in a more conventional manner. i think the downside is that you don't have the kind of investment banking methodology of propping up the share price a few days after the listing, and

i think that was a part of the expectations with them, including us, that there would be and will probably be some volatility going forward until the market has fully understood the qualities on the company and maybe see another quarterly report or so, but they have their business in great order. caroline: what about you going forward? this is, i understand to be the single biggest ever return for for european vc fund. you have got money to put to work, one billion euros. what will you invest in next? >> we see a lot of interesting things going on in europe and also here in the united states. i think the difference with the , 20ure industry right now years from when i started, we are addressing huge markets, fundamental market shifts, like

entire multitrillion dollar financial institutions industry. it is ripe for creative destruction, and you see there is a lot of venture capital money going into that space, so we are quite excited about that. also, obviously the ideas of disrupting the traditional way of selling stuff, typically through stores, and this is the direct consumers trend is here to stay and will build over time. parson,that was pj speaking with caroline hyde. coming up, keeping the internet safe from extremist content. the man helping to stop that content from ever being uploaded. that is next. later this amazon under hour, presidential fire. the president ramps up his war of words against america's biggest online retailer. -- retailer with a potential cloud contract with the pentagon

hanging in the balance. this is bloomberg. ♪

emily: we were live on air tuesday as reports came in about the shooting at google's youtube headquarters. police later identified the shooter as a video creator who was upset with policies that she claimed limited her content. the suspect, 39 years old of san diego killed herself after wounding three people at the san bruno, california campus. the victim remains in serious condition all to others were released from the hospital tuesday night. since the shooting, we have heard from google. the ceo tweeted -- there are no words to describe the tragedy that occurred today. we are focused on supporting our employees and a youtube community through this difficult time together. thank you to the police and first responders for their efforts, and to offer messages of support. fromook tweeting --

everyone at apple, we send our sympathy and support for everyone at google, especially the victims and their families. jack dorsey tweeted -- i cannot imagine what our friends at youtube are feeling right now. we are here for you and your families and friends. we are working diligently on product solutions to help. i spoke with mark bergen the day after the shooting to talk about the larger implications. mark: police say the most likely motive was she was upset at youtube's policies and we have , seen from some of her videos that were taken down yesterday, her website, she was a strong vegan rights activist. she posted a lot of videos about animal rights, some of them looked like protest images of animals being tortured. her claim is something that is similar that we have been hearing from you to creators for the last year, that they have been seeing less and less ad inventory.

some claim youtube is earning their livelihood. that is the claim she has made. it is an extreme example and it seems like this response was probably driven by mental health issues. emily: what do we know about how google and youtube are responding to this, given that this woman got into a private patio at youtube headquarters which presumably somebody with a , gun shouldn't have been able to get inside? mark: youtube has been really quiet today. we don't know if they're changing their policy. it's likely they will. companies like youtube, google, facebook, in silicon valley are , structured like college campuses. they were meant to have this open and free environment. this may change that. emily: what about the bigger story about the big policy changes that youtube has been making and we talk about the obvious creators like logan paul

and the ones people recognize, but there are so many craters that use youtube and they are making decisions that are dramatically impacting how creators are paid, how creators are -- the rules about what content can be uploaded. mark: one of the issues, youtube has made a series of policies but they have all been rather reactive and not proactive. there is a tug-of-war between advertisers and lawmakers and the general public who say you're not doing enough to moderate the content and some of the offensive comments on the website. in response, they have limited the number of ads. you have creators saying you're , doing too much. i think both parties are saying to youtube you're not , communicating well with us what the changes are. emily: these are the kinds of videos that perhaps shouldn't have been uploaded in the first place, right? or never should have been allowed in the first place?

then they are changing the policy. mark: that is the basis youtube has had for years. the company, even before they were bought by google was , broadcast yourself. they are dedicated to this revolutionary idea that anybody can upload any video at any time. the metaphor that susan wojcicki and the leadership has been using, we started out as a small town and now we are a big city, clearly a big, unwieldy city where they have not put enough rules and bumpers in place to prevent these kinds of issues. emily: a massive city. mark bergen, thanks so much. i know you will continue to report on this story and we will hear more from you. reports that the youtube shooter posted online rants about the company has some people asking if that should've raised a red flag. my next guest has made a career of tracking illicit content online, developing technology to identify things like child pornography and extremist videos.

it can help create truly socially responsible networks online. it is the focus of our latest installment in the socially responsible network theme. i want to bring in a senior advisor to the contrary extremism technology project. he has worked with companies like microsoft. his work has led to the detection and prevention of child pornography and extremist videos. i want to hear your reaction to this shooting at youtube. for so many minutes at the being , of the situation, we didn't know what happened. now we have a fuller picture on the story. what is your take on this? >> there is no doubt there are complex issues when you deal with platforms of the size of facebook and youtube. youtube has hundreds of hours uploaded every minute. there are going to be complex issues. we have always known that and tried to contend with that. our point has been that while

there are gray areas in terms of videos you were just talking about there are areas that are , unambiguous. when we have videos of child pornography, videos of beheading, calls to violence glorification of violence, those , are clearly ranging from legal to clear violations of the terms of service. guestw, and your previous mentioned this, the platforms have been more reactive than proactive. if you will have policy in place, which we all agree you have to have, i argue let's argue about the policy, what we want on our social media platforms, but then we have to be transparent. we have to have due process, and we have to be consistent in the application of those rules. that is something technology companies have not been good at. i think they can do better to avoid exactly the types of

confusion and misunderstandings and frankly being tugged in both directions. emily: you suggested the establishment of a cyber ethics commission to counter the lies of technology. can you explain this as it relates to this discussion? dr. farid: sure. for the last two decades or so we have seen somewhat of a wild west in silicon valley. it has led to an amazing growth of internet companies and social media, and lots of wonderful things in our lives, but i think we all agree over the last year and a half or so we have seen the dark side of that from the data privacy issues to the election tampering to the child pornography to online extremism. on and on and on. i think we have entered and continue to enter a complex and -- complex digital age. i don't think we are thinking about these things as thoroughly and carefully as we have.

i think often we are being reactive versus proactive. in the same way we had a committee established 20 or 30 years ago to deal with the complexities of modern medicine and modern biology i think we , should bring some of the best minds together and start thinking about how we live in this very connected, complex, digital world. everything from the social media issues we are talking about to the self driving cars, we have seen complex and troubling things over the last few weeks. i don't think we are prepared to think about them at a technological, legal, philosophical, moral, and economic level. i think we have to give more thought to that before we run headfirst and create enormous platforms we don't know how to control, and then trying to back our way out of that. i don't think that's the right way to do business. emily: that was dr. farid. senior for the counter extremism project. coming up, president trump is ramping up his critiques of amazon, but will the

administration take action against the tech giant and will it have an impact? all episodes of "bloomberg technology" are livestreaming on twitter. you can check us out weekdays. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ emily: welcome back to the "best of bloomberg technology." i'm emily chang. president trump's criticism of amazon has come into focus is weak. speaking -- this week. speaking of the white house on tuesday, the president said the post office needs to renegotiate its deal with amazon. on wednesday, we learned oracle has criticized the bidding process for a pentagon cloud computing contract where oracle and amazon are competing. the ceo complained to president trump in a private dinner on tuesday that it seemed designed for amazon to win, according to people familiar with the matter. president trump was receptive. we went to washington to get the details. >> it's interesting that it was an invitation from trump.

petersfield brought along -- peter steele brought along a guest, and she apparently returned to the subject several times over dinner, the competition to win this pentagon cloud computing contract. it is a 10 year contract worth billions of dollars, big business, and oracle is afraid that amazon is in the pole position topull win the contract. the with the pentagon wants to do it is to award the entire business to a single company. amazon is the leading company in the world and cloud computing. their competitors are trying to get the pentagon to split the business up among multiple companies, and they have got some members of congress on their side. that is about the only way they can hope to defeat amazon in this competition. emily: so the president was receptive, as we understand it, but could he really interfere, or are there any actual plans to interfere? question,nteresting

given the fire amazon has taken from the president over twitter over the past two days. alex: we asked sarah huckabee sanders about this. president didthe not intend to interfere in the contract, but he did hear out catz during the dinner and he told her that he wants the competition to be fair. one thing he could do to put his thumb on the scale slightly without looking like he is tipping the contract against or away from amazon is to tell jim mattis, the defense secretary, that he really thinks the business should be split up among multiple companies. emily: meantime, shares of amazon have been under pressure ever shows the president began tweeting about the company. but the selling slowed down wednesday after bloomberg -- bloomberg reported there are no active discussions to turn against the company, and several analysts reiterated their bullish calls on amazon. we spoke with tom forte. tom: when you look at president

trump and his intent here, i think he has a strong feeling against jeff bezos to the extent that jeff bezos, the ceo and founder of amazon, also owns the washington post. so i feel like a lot of these tweets are directed at amazon, but the real target is the washington post. but for amazon the company, given that he is the president, i think you have to take these tweets seriously. in the case of the postal service, i do think that amazon is getting a bit of a sweetheart deal. in that regard, the president is actually accurate. emily: one of the president's weets -- i am right about amazon costing post office a lot of money by being their personal delivery boy. post office leaders do not have a clue -- or do they? we have done the math at bloomberg and we have learned the post office does make money on their relationship with amazon. perhaps they should be making more money on that.

that is up for debate. but how do you think this will actually affect amazon in the near-term? tom: sure. so first and foremost, all of the tweets from the president basically convinced me that the second headquarters from amazon will be in his backyard. if you look at the 20 finalists for the second headquarters, three are in either washington dc.r a suburb of washington basically the process of picking a second headquarters is about influence, and where else could amazon have more influence than being next door to washington, d.c.? why is that important? having influence with the policymakers in washington, including the president, i think, is very important. as far as implications for the postal service, it's possible pay a higher rate. why i say sweetheart deal is that amazon could not probably get the same economics with fedex, ups, or any of the regional players. but the good news for amazon is

they are increasing their first party logistics assets. they have air freights, trucking. 460 wholegly, with foods locations and 10 bookstores, they now have a physical presence that they can also leverage to work on their majestic efforts. i will give a quick example -- when i go to my local whole foods, i'm greeted with an amazon locker. why is that important? it's another place i can pick up products i order on amazon or return them. while there is potential that disruption to amazon from losing the postal service in the most dramatic scenario, i think the impact would not be as significant as some may fear. emily: what about the bigger picture regulatory issues? you know, we were just speaking earlier about a huge pentagon cloud computing contract that amazon seemed destined to win. oracle's ceo complained about

this directly to the president. he was receptive, but there is no evidence the white house would interfere here. on a broader regulatory level, there's concern about how big amazon is becoming and how many industries they are getting their hands into. is that something that president -- the president could stand in the way of? tom: on antitrust, i would argue that most of what amazon does increases competition, lowers the price to the consumer, therefore at this point, i don't think antitrust is a significant risk to amazon. on cloud computing, to that end, amazon strategy has been the early leader in the space in -- and passing on lower costs to its customers. netflix is a great example of that. let's be frank, when with less -- when was the last time we ever talked about oracle in lowering prices? never. i think it is opportune for competitors of aws to have the president's ear. in this instance, when it comes

to this potentially large federal contract. if he wants what is in the best interest of the country, the lowest cost provider to the federal government, it is likely aws and amazon. emily: thanks to tom forte. well, espn is debuting a new streaming service that will cost $4.99 a month. espn plus will offer live sports , including hundreds of mlb, nhl, and mls games. this also includes boxing, pga golf, and tennis. espn plus will debut on april 12. the company says subscription video-on-demand of disney, pixar, marvel, and lucasfilm movies will launch in late 2019. still ahead, tesla's production goals get more elusive after it mrs. first quarter targets for the model three, but investors missing first quarter targets for the model three. investors shrug it off. that'll story, and had. this is bloomberg. ♪

♪ emily: the stock we are watching, shares of fitbit tumbling in monday's session after the stock was downgraded to underweight. the company continues to struggle with bringing in revenue and is burning cash. tesla also took a tumble this week, plunging monday after reports that see io -- ceo elon musk told employees in an email the carmaker may exceed a weekly production rate of model three sedans. we spoke with credit trudeau -- langdon.deau and colin this conversation took place monday, before tesla stocks came back from its low. >> is definitely -- i have been sleeping at the terminal moving all of these headlines.

elon is sleeping at the assembly line. you mentioned the jalopy report pnickhis idea that -- jalo report and the idea that tesla maybe was approaching 2000 model threes a week as of today. perversely, that spurred a little bit of a relief rally. the shares were down as much as 8% earlier today. as you mentioned, a ton of negative headlines. the most important from a being theperspective ongoing problems with model three and getting that car ramped up. that is supposed to be there mass-market sedan -- their mass-market sedan. they have not been able to get manufacturing going from the beginning, so tesla needs to figure that out and help explain these issues with elon sending angry tweets to reporters. i think one of his most recent ones was "ugh, i need to build more cars." i think that really sums up the predicament the company is in.

emily: let's talk about some of the tweets that have rolled in over the last 24 hours. one to the wall street journal about the model s recall. tesla policy is to issue a recall before there are injuries , and this is absolutely the right thing to do. there were dozens of recalled by other car companies last month, including with injuries and death. you only wrote an article about tesla. a response -- here is a new reason to be nervous about tesla. musk wrote back not criticizing, just asking question. colin, should he stopped tweeting and start focusing on the cars? fair point ia -- i think we are in a twitter point. era. obviously the importance for tesla is ramping the model three. it has everything to do with what investors are focusing on

in the near-term and everything to do with the cash burn story. if they can't get as ramped by q2, i think it will have to go to the market and raise capital in q3. that is a challenge for them, because they usually come to the market with good news. story tolly have a sell, a new product to sell, and if they are going to the market because they are in a cash bind, i am sure they will be able to raise capital but it will be the first time that they go in that challenged position. emily: you have a sell rating. why? colin: we are very concerned about the production ramp. as i said, they are in a tight cast position, and that is not a desirable position for any company to be in. when they get on the other side of this ramp, i estimate it will get a nice working capital benefit. you still have to worry about the underlying profitability of the model three. at the low price point we think it might eventually sell at, it will have -- it's going to be

challenging to have a white -- wide profit margin on that vehicle. lastly, to think about competition coming down the pipeline. audi, jaguar, porsche, a lot of competition coming that will cut into tesla's ev opportunity. on top of that, we have seen reports of quality issues with the model three. it is not only does ramping, but making sure those products are at the quality level the customers expect for what is going to be, even for the lower model, a luxury price point for that vehicle. emily: craig, we cannot forget about the tweet about the ntsb. spokesperson reportedly saying they were concerned about the investigative information they are getting from tesla. musk tweeted a response. look, safety is the ultimate priority here.

should we be concerned about the safety, given the rush that appears to be happening behind-the-scenes? craig: i think it may be unfair to link the rush behind-the-scenes to this accident that the ntsb is investigating, but it is definitely a fair question to ask whether tesla was acting inappropriately and putting up several blog posts, the most recent of which was critical of the driver involved in the seattle crash. -- in this fatal crash. the company did try to walk this line, saying it is tragic what happened and that it is sorry that this occurred, but the company came out and, during and asked -- inactive ntsb investigation, talked about the driver not having his hands for a period of time leading up to the crash. this is sort of a no-no, and the ntsb, when it looks into accidents like this, it requires that the companies that are the subject of the investigation to

operate, but also to sort of keep quiet as the investigation is going on. ubs analystwas colin langan and craig trudell. in the midst of the tweeting about tesla on monday, elon musk also fired a tweet celebrating spacex. monday afternoon, spacex had another successful launch from florida. the falcon nine rocket carried 5800 pounds of supplies for the international space station. spacex is starting roughly 30 total missions this year. monday's launch brings the tally to seven. coming up, why your next iphone may look radically different. we will get the products group on future -- product scoop on future smartphones. this is bloomberg. ♪

♪ emily: in the latest tech revolving door, apple has hired google's top ai executive to help the iphone maker catch rivals in one of the most important fields of modern technology. john d'andrea will report to ceo tim cook and has a lot of work to do. and apple wants to make sure future iphones will stand out in a crowded market. we haveomberg scoop, learned that the company is working on touchless gesture control and curved screens for nextgen devices. the control feature would let iphone users perform some tasks without touching the screen. and yet another bloomberg scoop on apple, apple is delving further in the chips business. plans to use its own ship in mac computers as early as 2020. the move would replace intel chips currently in the hardware. the news was a blow to the chipmaker with shares plunging.

we spoke to the reporters who broke this story. mark: what ian and i reported for the first time, apple is now designing and planning to use its own processors in its computers. this would replace intel, which gets over 5% of its annual revenues from the mac maker. why is this such a big blow to intel? not the end ofs but if itintel, spreads, if it becomes a point where it shows intel's chips are no longer the leading technology that nobody can live without, then it becomes a major issue. emily: what is the likelihood of that? ian: there have been lots and lots of attempts over the years to try and not intel off its spot. qualcomm has time and time again tried to get into the pc industry, again with help from microsoft. no one has made any impact, but if apple can do it, then people are going to look.

emily: mark, what does this fit into what we know about apple's plans? mark: apple's strategy over the past six or seven years is to increasingly bring more features from the mac to the ipad and iphone. as well as vice versa, bringing features from the iphone and ipod to the mac. and over that time, the mac has languished. it has taken a step back from prominence from ios, given how much money that generates for the company. the iphone offered two thirds of revenues. but what apple will start this year and will announce in june is a big push to bring the software platforms of the mac and iphone and ipad together. they will start allowing users to run iphone and ipad apps on your mac. so the next logical step is to move to the hardware space in terms of merging, and that is what we are seeing for the chip sense. device runs the same processor, lower-level functionality, then they can run

more of the same features and new enhancements at the same time. emily: intel is weathering this. and an already bad year after the chip flaws that you reported on earlier this year, ian. how does this fit into the bigger intel story? ian: there is no small risk here for apple. if you are saying we don't need intel anymore, then you are saying we trust samsung and others to make these chips. we trust them to catch up with intel if not surpass intel. and in the past, those bets have hasn't pannedit this could be a major test. we are two months ahead of everyone else, now we are not so sure about that gap. this could be a major test. emily: what about the hits apple is taking here, a company that certainly doesn't want to make any mistakes? mark: this decision is 10 years

in the making. in 2008, apple bought a company that was a u.k.-based manufacturer and developer of very low-power chip sets. a few years later, they turned that into the main processor, which was the chip behind the first ipad and iphone 4. now we have chips for wirelessg, networking, managing security, issues on mac computers. they have chips for everything on an iphone. so they have been working on this for a while. hug in israelg for chipmakers and other tech endeavors. so they have been working towards this for a while. now you can read the tea leaves and see everything come together. we have the hardware portion, what we reported on today, we have the software portion i reported on in december, merging the ios and mac app stores, and all we are waiting for is to get to the final point, the plateau where they bring everything together and do a complete merger of the hardware and

software. while still maintaining what is good about the mac versus what is good about the iphone. i do not think they will do touchscreen macs. i think those will be separate. i think in terms of risk, it is very risky, right? they have always had to walk a fine line. there is really no chance that if apple messes up, they will not do something that will alienate the customer base. emily: that was ian king and mark gurman. that does it for this edition of the "best of bloomberg technology." a reminder, we will be heading to washington next week for full coverage of mark zuckerberg as he testifies before the senate judiciary and house commerce committees. tune in every day and remember, all episodes of bloomberg technology are livestreaming on twitter. check us out. that is all for now. this is bloomberg. ♪

♪ erik: coming up on "bloomberg best," the stories that shaped the week in business around the world. trade tensions escalate. the u.s. and china go tit for tat on tariffs. >> they are in this for the long haul and they are playing hardball. >> i don't believe we will have an all-out trade war. >> this is not a trade war, there is no war here. erik: the new york fed names a will new leader. his counterpart in atlanta offers exclusive clues on the path for monetary policy. >> i think we're getting closer to the lower bound. at that point i think we need to wait and see and see how the market responds.