leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ emily: i am emily chang, and this is the "best of bloomberg technology." we bring you all of our top interviews from this week in tech. coming up, apple turning in a solid quarter. revenue, profit, and forecast painting a strong and stable picture. and wall street applauded. we bring you the highlights. the biggest headlines from facebook's f8. becoming a matchmaker for billions of users. and tesla gets testy. elon musk shocks analysts and

investors after he refuses to answer questions about margins and cash burn. but first, to our lead and apple's blockbuster second quarter numbers. some of the main takeaways, ceo tim cook says the smartphone market is not saturated. in the meantime, apple services business had a sensational quarter, and the business is on course to double revenue by 2020. for investors, apple will prioritize buybacks over dividend increases because the company thinks shares are cheap. apple stock shot up on the news, and we delved deeper into what it all means. tom giles and julie join us. julie: the big picture take but the numbers is that it is really good. the numbers are up dramatically. same quarter over last year. i think overall, the numbers are good.

emily: what about the afp, are you concerned that people are purchasing the cheaper priced phones? i just got off of the phone with tim cook and in general around the iphone x, he said it was the most popular iphone in the quarter every week. and the first time since then that the top iphone has been the best-selling. i think that is an incredible result. i do not have concerns about the price. i think it is priced for the value that it is. an incredible product. julie, do you have concerns about the afp dropping? julie: i would not be concerned for a number of reasons. smartphone adoption in mature markets is plateauing, and these devices are very expensive. it is more like purchasing a pc so the upgrade cycles are slowing. it will be harder to convince

consumers to upgrade their phones every two years. it is in line with my expectations. the reasons to upgrade my phone is becoming more and more subtle. it is less about the camera and the screen and the nifty features and more about the subtleties of artificial intelligence. emily: i did ask him about the afc dropping. he said from last quarter to this quarter, they often take out the inventory. that is often the higher-priced inventory. what is your topline takeaway given all of the fears that smartphone demand is slowing and these results would not be that great, but they have held up and in some cases they have beaten analyst estimates. >> there was a lot of pessimism coming into the quarter and it is hard to find a lot of fault with what they said. they have this buyback of $100 billion. people have been saying that it is basically the size of a

netflix. that is a lot of money to put in the hands of shareholders. the fundamental story at apple is that it has held up well despite a lot of pessimism and evidence in the market that the smartphone boom is ending. i do not think that the fundamental story changes, but apple is doing very well in spite of it. they talk about grabbing share, strength in china, the world's largest smartphone market. a market where competitors have been taking share from them. it remains to be seen how things panned out with a competitors. we will know more in the coming weeks but for now, they have been holding up well. if there is suffering to be done as the smartphone boom slows, it is not happening for apple. also, you have to bear in mind that if you look at the rest of the year, apple realizes that people do want lower-priced devices. and so, as mark gurman has reported, you will see later in the year the introduction of a

lower-priced device that has a lot of functionality that the currently high-priced devices have. they recognize that they cannot let go of that lower end of the market. they recognize that not everyone wants to spend $1000 on a smartphone. emily: apple's tim cook on the call right now. we are listening in. i want to talk about services which grew 30-some percent. obviously, powered in part by apple music. we talked a little bit about how he thinks the real competition is not spotify or any other music service, but it is convincing billions and billions of people to pay for a subscription service. they do have 40 million subscribers in trials. julie, what do you think when you look at the services numbers and break them down? julie: the services revenue is

up 30%. looking forward, and we look at the notion that smart phone sales will plateau, apple has to look to their other products for growth and to services. i think it is very solid growth of a small base. we will also see the peak in the near future, and apple will have to look more to its services and subscriptions as well as things like apple pay for future growth. i would expect that number to get much bigger over time if apple is to sustain its growth. emily: that was julie ask and tom giles. twitter and walt disney have signed an agreement to create live content and ad opportunities from across the disney portfolio. according to an emails statement, twitter and espn will announce specific live shows. twitter shot up 6% in monday's session. bloomberg produces tick-tock, a global news network for the twitter service. the political consulting firm at

the heart of the facebook data manipulation scandal is shutting down. in a statement released wednesday, cambridge analytica said it filed application to begin insolvency proceedings in the u.k. the company cites numerous unfounded accusations about its fallout as facebook a major reason for ceasing operations. it says it is being vilified for activities that are legal and generally accepted as a standard component of online advertising. still ahead, after several false starts, t-mobile is purchasing spread for $26.5 billion in stock to take on verizon and at&t. some still fear that the deal will be blocked. we will hear from t-mobile ceo jon leger. plus, this week we were live from the milken institute global conference. we speak to ariana huffington to talk about her mission to transform culture and her goals at uber. this is bloomberg. ♪

emily: shares of sprint tumbled more than 10% on concerns that antitrust regulators may reject

t-mobile's agreement to buy the company for $26.5 billion. the deal would reduce the number theireless companies in u.s. to three major competitors. t-mobile and sprint are hoping to work together when it comes to building a next-generation network. bloomberg's vonnie quinn sat down with jon leger on monday to talk about the deal. take a listen. jon: what we have got today is the start of doing two new things. one is talk about the deal and the value to shareholders and secondly, why now and how will that be approved? those things together will drive shareholder value. deal is actually a $145 billion enterprise company together. what we will have starting from day one is $75 billion of topline revenue, 55 billion dollars in service revenue that will grow 2% to 4% compounded

annually. it will be up to margins of 55%. the fun part is the synergies of $43 billion with a $6 billion run rate and the cash flow by 2025 will be $60 million-$80 billion. if you are a shareholder, this has huge value. people are asking why now and will it get approved? that is my job starting day one. i am so confident of the plan that we have got. i will be there right after we finish. i'm going down there, and i will be there quite a bit. three points. what is different now? 5g is an imperative. the nation's leadership in 5g is at stake. we have fallen behind china. t-mobile and sprint together is the only company that can change that. 5g is critical for the country, and we will change that. we will supercharge the

uncarrier. what we have said is that customers can look forward to a broader range of service, where rural competition and broadband competition is at lower prices. and last of the three, jobs will go up. that is why it is going to get approved. and when that happens, the shareholder benefits. vonnie: this is what you have pitched, a job positive merger. 18 months alone. benefits to the consumer, particularly the rural consumer. and sending off china and korea. i like how you threw korea in there on 5g. will that be enough to sway a regulator that has only given the go-ahead to one media deal? the other one had a lot of trouble. john: the statistics are our leadership as a country in 4g spurred so much innovation. in 2016, there was $3.3 trillion globally in the mobile economy

driven by what we did. uber, snapchat came out of 4g leadership. facebook and amazon, these companies grew because of it. in 5g, right now, what is going to be critically important is we are going to invest $40 billion in the first three years. we are going to create a mobile layer that will drive this leadership. we expect what we do will force at&t and verizon and others to invest significantly. what is happening right now, we talked about this last night, this millimeter wave deployment that at&t and verizon are doing right now, do you know that if they wanted to do that nationwide including rural america, it would cost $1.5 trillion? that was the scam. emily: that was john leger. now, to the milken global conference where we caught up with steve ballmer. we talked about his outlook on big tech.

balmer says he is optimistic about facebook earnings. >> if you look at last quarter's results, it would be hard to say that it is too late. there is still a lot of momentum in their business. i don't think it is too late. they are smart people. i spent a lot of time over the years, a good amount of time with both cheryl and mark and i think they will be very resilient. emily: ballmer explained why he sold his roughly 4% stake in twitter. steve: i sold my twitter stake. i am sure i own some in index funds, but i did. i decided that i am not excited as a profession to be an investor. a great thing to do but not for me. and the price was pretty good. emily: we also caught up with arriana huffington.

she has been touring the globe on a mission to transform culture. she talked about how much progress she has seen and where she thinks companies need to do more. arriana: they have made tremendous progress because finally companies are recognizing that it is not about culture jumping business imperatives but about culture accelerating business imperatives. culture is now seen more and more as absolutely essential for the success of a company. at thrive we call culture the company's immune system. if the culture is compromised, it will be much harder to deal with problems, to be able to see disruption, to see the icebergs before they hit the titanic. culture is no longer the exclusive province of hr. emily: a group of google and facebook employees have started a center to warn

companies to make changes. what would you like to see from apple, facebook, google? arianna: the first thing i would like to see is from the individual. i think there are three ways we can effect change that is absolutely needed in terms of our relationship with technology. the first one is what are the people doing? we are not powerless. we have agency. we created a thrive box so that people will put their phone in mode -- thrive mode while they are having dinner with her family. it would be a welcome removal of social media and games. we learn how much time we spent aimlessly scrolling. there are things companies can do to make it less easy to be addicted to our phones and to lose ourselves.

emily: facebook, for example, has been in a storm of controversy. you have former facebook employees saying it is addictive. they are worried about the impact on children. are you worried about that, and should facebook be doing something more to make itself less addictive which is potentially undermining it? arianna: we have the data. it is not a matter of opinion anymore. we have the data that shows that excessive use of social media is having an impact on people's mental health. teenagers especially. depression. anxiety. those are escalating. suicide. we see this as a global phenomenon. absolutely, companies have to do more to make their algorithms less addictive. but also individuals have to do more. that is why we stress what individuals can do because otherwise, if we hold our

breath, and wait for companies to do something, we will suffocate. emily: i have to ask you for an update on uber. i know you have been very ceo'sstic about the new tenure. when you look ahead to the year at uber, what are three goals that you would like to see him meet? arianna: i love his priorities. a great initiative to make safety of riders and of drivers a big priority for uber in the year ahead. the second priority that he has established is to make uber a true mobility company. buying jump, the bike company, getting more engaged with public transportation. and the third is culture, the

shift in cultural values. and the work that remains to be done around exclusion and diversity. these three have been the biggest priorities for the year ahead. emily: 14 women who allege they were assaulted by uber drivers have signed a letter. asking the board to allow their lawsuit to proceed in open court. arianna: next week, this will be discussed. our general counsel is going to give us all of the arguments that we need to consider. emily: still ahead, tesla's circus of a conference call shakes confidence in elon musk. where the company goes from here. if you like bloomberg news, check us out on the radio, the bloomberg radio app and on bloombergradio.com. this is bloomberg. ♪

♪ emily: tesla ceo elon musk got testy with analysts after the company reported earnings on wednesday. it turns out that his responses to questions overshadowed the company results which beat expectations. then came what one analyst called a truly bizarre earnings call. >> where specifically will you be -- >> next. those questions are not cool. >> of the reservations that have actually opened, can you let us know what percentage have actually been -- >> we are going to go to youtube. sorry. these questions are so dry, they are killing me. emily: investors' response was swift, and shares plunged on thursday. musk has built a reputation as a showman, ushering in new technology to the masses. is the tide of public opinion turning?

we talked to one analyst. >> you know, it is a shame that the call went the way that it did. i thought the results were quite positive. they showed -- tesla showed quite a bit of progress on model three production. they showed quite a bit of fiscal discipline. we see capex coming in for the year. they are very close to profitability. importantly, the company reiterated that they do not need to raise capital this year. unfortunate the way the call went. i think if it were not for that, the stock would've been up 5% instead of down 5%. emily: what do you think is going on here? barely promising results, and then he kind of train wrecked the opportunity to explain them. >> the shares were up after the earnings hit, but as soon as he cut off the analysts, the shares dropped. i think it was a level of dismissiveness of wall street that the street was taken aback

by. the more he kept talking, the shares kept dropping. emily: and some analysts pushed back. here is an extended version of that quote we brought you earlier on volatility. >> i understand your frustrations, and i am frustrated also about how myopic we are now. they also say that great years are made out of quarters, and great decades are made out of years. everyone's short-term focused in some ways. volatility has a way of shaking people up. anything you can do to help in the near term on that is helpful for the stock. that is it. >> i think if people are concerned about volatility, they should definitely not purchase our stock. i am not here to convince you to buy our stock. volatility isif

scary. there you go. emily: and yet, you still have a buy rating on the stock. why? >> i think this issue is temporary. and over the next couple of days, we probably won't even be talking about it. we are optimistic about tesla. they are growing. it is a multibillion dollar company growing at an unprecedented rate. we see a path to positive cash flow and a valuation that will put the stock north of $400 over the next 12 months. emily: i want to push back on that a little bit. over the last several weeks, we have been talking about elon musk's rogue tweets and his bad april fool's joke. minutes before this call, he was tweeting about his other company, spacex. do you have any concerns about his state of mind? >> i am not in a position to comment on his state of mind. what i believe is that the number one thing as relates to this company is the production of the model three vehicle.

if you look in the third quarter, they produced 200 vehicles. in the fourth quarter, they produced about 1500 vehicles. in the first quarter, they produced almost 10,000 vehicles. in this quarter, we believe they will produce over 30,000 vehicles. the progress is tremendous. once they get to around the summer months, we think they will be producing around 5000 cars per week, and they will be profitable. once they get over the hump on production, and they turn a profit, i think the conversation will completely shift from free cash flow and the balance sheet to market opportunity. look at this company -- they are competing in a market that is about 100 million units, and they are a very small fraction of it today with a tremendous amount of growth. we are optimistic about the

company's prospects. we are a big believer in the product. in the long run, i think elon musk will be very positive for shareholders. emily: dana, are investors worried about this kind of behavior despite the numbers? dana: yes. the shares started dropping once he started talking. that is phenomenal to me. the shares were down further today. i think people are concerned. he probably said things that every ceo would love to say on an earnings call, but he broke the norms of convention. when you are a publicly traded company, you do not treat analysts in this way. he was the rating them in a way that i don't think there has been an earnings call quite this combative in a long time. emily: bloomberg'ss dana hull and romit shah from instinet. we continue our coverage from the milken institute global conference. speaking to john thompson about joining lightspeed as a venture partner.

that is next. all episodes of bloomberg technology are livestreaming on bloomberg. check us out. this is bloomberg. ♪

♪ emily: welcome back to the "best -- "the best of bloomberg technology." i am emily chang. back to our coverage from the milken conference in beverly hills this week. we spoke to john thompson. regarding taking over microsoft. to modernize the tech giant. thompson just announced he is joining lightspeed as a venture partner. we started there. john: lightspeed because they were investors in my last company, and so i have known a number of the partners for the

last 8 or 10 years. i tend to invest in areas that are very much of interest to me and it is all around enterprise and infrastructure related technology like security, storage. all of those things are things i have invested in either personally or when i was running symantec, we acquired businesses in that space. i can keep learning and help them along the way. emily: are you concerned about the potential for increased regulation? it can affect companies large and small, as biggest facebook and microsoft. john: i think the recent incidents have raised the issue of regulatory oversight, and there may be some that will evolve, but i would not let that distract me if i were the ceo of a tech company. it is about executing a plan you have in place. there is an issue that looms on the horizon for us, and that is all around privacy. how will we manage privacy in a

different way in a world where everyone is connected and the amount of digital content is really significant? something is likely to happen. i just don't know what or when. emily: what would you like to see tech companies do about privacy differently than they are? shouldech companies respect to the information about me and you. emily: what does that mean? john: meaning they do not sell it or share it. they do it in a way that is relevant to the needs of their business. many of them make money off of ads. and they have to use that as a leverage point but at microsoft we do not do that nor do we believe in that. and i think more tech companies should think about what their policy should be around that issue. david: -- emily: facebook has said over and over again that they do not sell your data. they essentially rent your data. there is something fundamentally broken about that model. john: i will let zuckerberg explain that to you. emily: let's talk about the cloud. two years ago you said you

wanted microsoft to move faster in the cloud. where have you seen progress and where would you like to see them move more quickly? john: part of the role of being the chairman of the board is to be impatient. my comment a few years ago was about that statement of impatience. the company has made phenomenal progress. our commercial business is doing very well. they have a strong iot presence, and they are doing a lot more in that space. emily: you're still behind amazon in a big way. john: amazon was the first mover. it takes the second mover a little while to catch up. our growth rate is stronger than amazon. emily: how bold should microsoft be in acquisition? john: i am sorry? emily: how bold should microsoft be in acquisition? john: well, that is a tough question. i think the company has an enormous amount of capital. they have the capacity to go out and acquire a lot of things. emily: that is with your

overseas cash as well. john: most of that cash is back. the real question for microsoft is not about the availability of cash to do acquisitions, but rather how an acquisition fits into what you are trying to accomplish. if you look at the nokia deal, steve felt strongly about being in the mobile business. that was a big deal. if you look at the linkedin deal, that was wildly successful. if we can do another linkedin, i am all in. emily: other areas that you are interested in? obviously, nokia did not work out. linkedin, you say it is working, we will see. where would you like to move to? john: anything that strengthens the relationship between our cloud and a broad network of users. iot, commercial things for industries that generally have not moved to the cloud. those are the places that represent big opportunities.

emily: what should microsoft be doing to advance more quickly in the emerging world of ai? john: microsoft has a huge investment in ai and machine learning. if you look at the most recent restructuring of the company, we allowed harry shum to continue to run ai as a research operation, but we also integrated many of the functional components of ai into the operating teams driving the revenue day in and day out. what i think you will see is ai machine learning becoming an important part of every single platform that microsoft and every company in the industry has. ai will be the future. emily: do you see a negative side of ai? do you think it will be more positive? is it up to companies to be responsible in the same way that we need to be responsible about privacy and data? john: i don't think any of us anticipated 25 to 30 years ago

that pc's would turn into what they have. just like we cannot anticipate what ai will do. what we do know is that the digitization of the world is moving on. we won't know until a few years just how impactful it will be. emily: that was microsoft chair john thompson. amazon is said to be prepping a move that could be a new threat to payment services like paypal and card-issuing banks. the e-commerce retailer is offering to pass along the savings they get from credit card fees to other retailers if they use its online payment service. typically, merchants using amazon service pay about a 2.9% fee, but a long-term commitment could mean a lower negotiated price. still ahead, facebook says it is building its own matchmaking app. match.com says it is ready for a fight. just a month after its direct listing, spotify had its worst stock decline in its short life

as a public company. why investors were disappointed, next. this is bloomberg. ♪

emily: shares of snap tumbled after reported earnings on tuesday. it fell short of forecast. the redesign of its main photo sharing utility turned off new users and held back growth. the company missed on two crucial metrics. we were joined by debra williamson. she joined from facebook's f8 conference in california. we will get to that momentarily. debra: it was definitely a challenging quarter for snap. no question. the big revelation or take away for me has been that not only are users upset at snapchat because of the redesign but now advertisers are concerned. that is a big issue. snapchat cannot stand to have any concern among its

advertisers. those people need to be strong and solid on snap for sure. emily: what is the solution here? what can snapchat do? aside from revert. debra: there are a couple of positive things. one of the great things about snap has been and will continue to be is the fact that its active users are very engaged. keeping those users engaged is something that snapchat will have to make sure they continue to do in addition to adding new users. on the advertisers side, i feel they are doing smart things. they have transitioned to a more programmatic self-serve advertising infrastructure, which is making it easier to purchase ads on snapchat which is helping them in the long run. i think those advertisers need to be reassured that this is a company dedicated to making improvements, keeping its users on board, and keeping them happy so it has some work to do.

emily: the irony is not lost that you are at the facebook developers conference, and facebook in many cases has copied some of snapchat's features and ported them over to facebook and instagram. mark zuckerberg announcing a new dating service. let us take a listen to what he says about it. mark: it will be in the facebook app. totally optional. you can make a dating profile. i know many will have questions. we have designed this with privacy in mind. your friends will not see your profile. you will only be suggested people who are not your friends. emily: what do you make of this new service in the context of all of the very big and important and critical issues facebook is dealing with right now, including privacy, election meddling, fake news, and now a

dating service? debra: you know what -- the way you phrased that was exactly my response. i think they did a great job of turning people's attention away from some of these issues. at least temporarily. the dating app was definitely out of left field for a lot of people, myself included. it makes sense because facebook's goal is to connect people and make them interact more, and dating is part of that. but i really do not know that this is something that anybody expected out of facebook. it was quite surprising to me. emily: is it something they can -- that could materially add to the bottom line? in a way it is surprising they did not do something like this sooner, but again, they did not do something like this debra: sooner. people have said that facebook should've launched a dating app before. i think it will help the bottom line. dating apps and dating companies

have been very successful, match.com being one of them. this is a business that facebook will get into and take seriously. the proof will be whether they can put the privacy safeguards around the dating service that they claim to. things like being able to keep people's information private from their friends. keep them safe from people seeing or interacting with them that should not be able to do that. with all of the privacy concerns swirling around facebook right now, i think the dating app will will be the one that people will really pay attention to. facebook is able to maintain people's privacy as they get involved in dating. emily: thank you debra, joining us in san jose. staying on the earnings front, spotify suffered its worst decline since becoming a public company, slammed by investors who were not impressed with a 45% jump in subscriptions last quarter. shares tumbled after the music service said it reached 75

million premium users in the last quarter. while the number matched spotify's projections, it was not the breakout growth shareholders had hoped for after is strong debut on the new york stock exchange last month. we spoke to caroline hyde for more. caroline: i don't know if there is necessarily disappointment, but i think it had something to do with the way it went public. it went public in a direct listing. they basically said all of our existing shareholders can sell their shares now on the open. holders sold as was expected. the stock is up 12% from its open price. i have a bit of suspicion that good old fashion profit-taking is going on. people are taking this opportunity to sell off. when i dig deep into the numbers, everything is in line with company guidance and estimates. i am left scratching my head a little bit as to what folks are really disappointed with unless

they are expecting astronomical growth in users. emily: that is the question, will spotify have breakout growth of some kind in the future, or is this the norm? will growth only plateau? caroline: if you look at premium subscribers, up 45%. they promised growth of about a third. this is a company that will continue to deliver as it promised. my mind is boggled slightly. we got these numbers that were expectations for q1 two weeks before q1 was over. what did they expect? they would suddenly ramp up the user base phenomenally in the last couple days and be able to punch the lights out? you would think that potentially that would be market manipulation in some ways.

analysts have decided they wanted to see a little more, underpromise and overdeliver, or many shareholders may be taking profit. i think there are heady expectations from analysts going forward. we have got plenty of by ratings on this stock. if you take a look at the bloomberg analyst index, you sells, 12 buys, a lot of holds. many of these banks are saying buy into this stock because of its subscriber growth. it is just the beginning. that is what morgan stanley says. they have some 75 million premium users and in excess of 117 million users in general. you have plenty of room to grow, as of course tim cook was telling you.

emily: shares were down more than 6.5%. i spoke to tim cook before the earnings call yesterday about spotify as the other competitor. in the streaming race, it has turned into a two horse race globally. i asked him how worried he was. he said, i see it differently than perhaps everyone else sees it. if you take all of the streaming services and add up the subscribers, you get a relatively low number compared to the global population. opportunity is to convince people to join. i think we are in a great position to do that. a great way to spin. do you buy it? >> potentially. spotify is the market winner. it is a nice thing for tim cook to say as the horse that is behind in the race. where i see a bit of traction with what spotify has been doing -- if you look at the last month, they minted a deal with hulu. they are packaging their

subscription as a combined premium offering. when you think about the generation that it makes sense for them to be targeting, smart phone users, folks used to cutting the cord and having a slew of many subscription services, that comment from tim cook makes sense. whether or not apple is winning, it seems they might need a bit more content, which is where you have seen spotify push in outside of music and into podcasts, and now they are pushing video right now in the spotify app. you can watch hulu shows. emily: tim cook also talked up apple's exclusive content. artistve radio and interview content. caroline, are there particular global territories or regions that spotify expects to grow more in particular? caroline: china is where analysts are focusing. remember, one of the biggest

investors is tencent. they think a deal could be done with tencent music. they could really grow their focus over there. a breakdown of premium users, the bulk, about 40% in europe. one third is with you in the u.s., but then it is latin america and the rest of the world. i think you will see more emerging markets. we saw israel open in march as well as south africa. we will see an expansion territorially. of cashing in and making money. emily: that was bloomberg's caroline hyde and alex barinka. still ahead, how xiaomi went from has been to the biggest ipo in years. this is bloomberg. ♪

emily: this week, xiaomi filed for an initial public offering in hong kong, kicking off a process that could be valued at $10 billion.

it is the largest deal since alibaba and may bring in the value of $100 billion. the chinese smartphone maker is growing at a blistering pace that will help it take on apple and samsung. we went live in hong kong on thursday where we were joined by stephen engle. stephen: xiaomi was an incredible success story when it was founded in 2010. i remember interviewing the cofounder in 2012, one of the first foreign journalists to get an inside look at this booming company. we had no idea it was going to become this large. they were a victim of their own success. one became a rockstar compared to steve jobs in china. he said he did not like to be compared to steve jobs but rather jeff bezos, but anyway, they had an overaggressive expansion plan. they hired to go borrow away from google. they expanded very fast. some cheaper competitors came

along and stealing their business model of online distributing of handsets. and they lost their way a little bit. the growth went down into the single digits. they have really turned things around ahead of the ipo, which could be listed in hong kong by june. he spread into india. number two in india. they went upper end as well, recapturing some of the blistering growth they saw in the early days. emily: how does this set up the hong kong market to challenge new york as ipo king or queen? stephen: that is right. because, of course, hong kong did not allow dual class share structure which would allow the founders, despite having a minority shareholding, they would still maintain control. hong kong has changed those laws to capture what has been a hugely successful run of chinese technology companies coming to market. like alibaba in 2014 taking their $25 billion ipo to new

york because jack ma could keep control with a dual class shares allowed in new york, here in hong kong, they did not allow that. they do not want to have those violations or they saw those violations of corporate governance and transparency. they have changed the laws. bit controversial. the thought that beijing was exerting more control. but the founders saw this as an opportunity to come here and maintain control of the company and others are lining up as well, didi chuxing the ridesharing company as well as alibaba are looking to possibly go ipo in hong kong. emily: can this company convince u.s. carriers to sell their phones in the united states? not only challenge companies like apple and samsung globally but in this market. what is the read on that?

stephen: that is going to be a tough one as well because of course we have been reading all of the stories about the blocking of other network equipment makers in the united states. xiaomi is going to use the proceeds of this ipo to look at international expansion. they have gone successfully into india as the number two vendor there. the united states would be a stated goal, but it will be a tough nut to crack, obviously. emily: that was bloomberg 's stephen engle from hong kong. last year, alibaba's chairman promised that his chinese e-commerce giant would create one million u.s. jobs. we spoke to alibaba's vice chair to find out what a trade war would do to that pledge from the milken global conference institute in beverly hills, california. tit-for-tat trade tactics will cause a retaliation. and in fact, in china, they have just put tariffs on soybeans

that will hurt american farmers. we are in a context where we are seeing a huge market in china. it is ironic that the u.s. administration is putting on a trade war right now because there are a lot of consumers in china, 300 million. the chinese president in davos last year said that china would import $8 trillion worth of goods over the next 10 years. because of the trade war, they put down the gauge because of retaliation. this is going to hurt everybody. it is going to close off a lot of opportunities for producers in the united states. emily: jack ma said they plan to create a million jobs in the u.s., but warned that it may not happen if a trade war moves ahead. are you pulling back on that -- will those jobs not be created if the president stays the course? >> jack has said that we will

not create a million jobs, but we could possibly create 10 million jobs if the trade doors are open. but if there are trade wars, if there are opportunities for small businesses being shut off because of trade wars, the consequences could be quite severe. emily: so the jobs would not be created. >> i am not an economist to work through those ramifications, but you would be creating fewer jobs than if there were

♪ nejra: coming up on bloomberg best, the stories that shaped the week in business around the world. the fed holds rates steady as rate creep towards its target. is loudnk the statement and clear -- mission accomplished. reportwhile april's job provides more data to chew on for june. >> the big mystery out there is what is going on with wages. buta: mergers abound, hundreds still remain. and apple's results stand out in a crowd of earnings report. much maneuvering, but scant process on negotiations over tariffs and brexit. hi