♪ 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 all painting a strong and stable picture. and wall street applauded. we bring you the highlights. and facebook cause its developers conference. the biggest headlines from facebook's f8. including becoming a matchmaker for billions of users. and tesla gets testy. ceo elon musk shocks analysts and investors after he refuses

to answer questions about model three production 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. and that there are half a billion feature phones out there that will be traded up for smartphones like the iphone. 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 continue to 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 on the numbers is that it is really good. estimates are what they are. they are estimates. 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 buying the cheaper priced phones? i just got off of the phone with tim cook, and about concerns around the iphone x, he said it was the most popular iphone in every week in the quarter. 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 one, markets is plateauing, and these devices are very expensive. it is more and more like buying a pc so the upgrade cycles are , slowing. it will be harder to convince consumers to upgrade their phones every two years.

so i think it is in line with my expectations. the reasons to upgrade my phone are 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 talked about from last quarter to this quarter, they always take out the inventory. that is often the higher-priced inventory. tom 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 in fact held up and in some cases they have beaten analyst estimates. tom there was a lot of : pessimism coming into the quarter and it is hard to find a lot of fault with what they said. we have not talked about this a lot yet, but they have this buyback of $100 billion. they have this cash. 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 , a lot of 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 talked 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 pan 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. another thing to bear in mind 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 have 40 million paid subscribers and 8 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 off of a small base. we will also see the peak in the apps 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 bloomberg tech's tom giles. twitter and walt disney have signed an agreement to create live content and ad opportunities from across the disney portfolio. tw according to an emailed statement, twitter and espn will announce specific live shows. twitter shot up 6% in monday's session. bloomberg produces tic-toc, 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 -- "numerous unfounded accusations about its role in the facebook fallout" as a major reason for ceasing operations. it says it is being vilified for activities that are not only legal, but 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 corporate 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 of wireless companies in the u.s. to three major competitors. t-mobile and sprint are hoping the combination would let them get a jump on at&t and verizon when it comes to building a next-generation network. bloomberg's vonnie quinn sat down with t-mobile ceo 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. this deal is actually a $145 billion enterprise company combined. 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.

billionill start at $22 to $23 billion and up to margins of 55%, 57%. the fun part is the synergies of $43 billion with a $6 billion run rate and the cash flow by 2025 will be $16 billion to $18 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. there are three buckets, why washington, and i will be there right after we finish, i will be there quite a bit. what we have is this 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 second, uncarrier. what we have said is that customers can look forward to a

broader range of service, where -- more rural competition and broadband competition 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. you said 1000 jobs in 18 months alone. benefits to the consumer, particularly the rural consumer. we know the administration has signed an eo on broadband, so that is squarely in the administration's court, and fending off china and korea with 5g. will that be enough to sway a regulator that has only given the go-ahead to one media deal? the others 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 will take the spectrum from sprint and 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. because what is happening right now, we talked about this last time 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? so it is a scam. emily: that was john legere. now, to the milken global conference where we caught up ellie clippers owner -- caught up with ellie clippers owner and former microsoft ceo 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. they still have 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 looked pretty good. emily: we also caught up with drive -- thrive ceo ariana 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.

ariana: they have made tremendous progress because finally companies are recognizing that it is not about culture trumping 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 immune system is compromised, it will be much harder to deal with problems, to which are always inevitable 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 former google and facebook employees have

created the center for humane technology, to warn about technology addiction and pressure 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 we want to focus on, what are the people doing? we are not powerless. we have agency. we have created for example, a thrive box so that people will put their phone in thrive mode while they are having dinner with her family. it gives us a mirror of our consumption of social media, games, apps. we know how much time we spend aimlessly scrolling. and then there are things companies can do, to make it less easy to be addicted to our phones, less easy 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 also 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 optimistic about the new ceo's 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. -- i love his prioritizing safety. 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. and 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

-- inclusion and diversity. these three have been the biggest priorities for the year ahead. emily: fourteen women who allege they were sexually assaulted by uber drivers have signed a letter asking the board to allow their lawsuit to proceed in open court. what is the response to that going to be? arianna: there is a board meeting next week where this will be discussed and 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. and if you like bloomberg news, check us out on the radio, the bloomberg radio app and on sirius xm. this is bloomberg. ♪

♪ emily: tesla ceo elon musk got testy with analysts after the

company reported earnings on wednesday. it turns out musk's responses to analyst 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. next. >> of the reservations that have actually opened, can you let us know what percentage have actually taken steps to configure -- >> 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. but is the tide of public opinion turning? we were joined by dana hull, who covers tesla, and an analyst who

currently has a buy rating on the stock. >> you know, it is a shame that the call went the way that it did. i thought the results were actually quite positive. 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. so 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 more the shares kept dropping.

and then they dropped further today. emily: and some analysts pushed back. here is an extended version of that quote we brought you earlier on volatility. take a listen. >> 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. and volatility has a way of shaking people up. even those that are strong and want to be there. 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. do not buy it if volatility is 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 that goes to capital markets for fundraising you do , not treat analysts in this way. especially publicly. he was berating them in a way that i don't think there has been an earnings call quite this combative in a long time. people compare it to jeffrey skilling on enron. emily: bloomberg'ss dana hull and romit shah from instinet. coming up we continue our , coverage from the milken institute global conference. speaking with microsoft chair john thompson about joining lightspeed as a venture partner. that is next. a reminder all episodes of

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♪ emily: welcome back to the "the best of bloomberg technology." i am emily chang. back to our coverage from the milken institute global conference in beverly hills this week. we spoke to john thompson. since taking over as chairman when built that -- bill gates stepped down in 2014, thompson has played an important role to modernize the tech giant. thompson also just announced he is joining lightspeed as a venture partner. an early adventure -- early venture partner in snap and honest company. we started there. john: lightspeed because they were investors in my last company virtual instruments, and so i have known a number of the

partners for the last eight 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 technologies, so security, infrastructure 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. so this is an opportunity for me to keep learning and help them along the way. emily: are you concerned about the potential for increased regulation and how it will impact tech companies large and small, but really as big as 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 all about executing against a plan you have in place. i think there is an issue that looms on the horizon for us, and that is all around privacy. how are we going to manage privacy in a different way in a world where everyone is connected, and the amount of

digital content being parsed from that world 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 today? john: i think tech companies should respect to the information about me and you. emily: what does that mean? john: that means they don't sell it, they don't 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 therefore they have to use that as a leverage point, but at microsoft, we don't do that. we don't believe in that. and i think more tech companies should think about what their policy should be around that issue. emily: facebook has said over and over again that they do not sell your data. they essentially rent it though. there is something fundamentally broken about that model. john: i will let zuckerberg explain that to you. emily: so let's talk about the cloud because two years ago you said you wanted microsoft to move faster in the cloud.

where have you seen progress and where would you like them to still move more quickly? john: i think part of the role of being the chairman of the board is to be impatient. and so my comment a few years ago was about that statement of impatience, if you will. the company has made phenomenal progress phenomenal progress. , our commercial business is doing very well. they have got a very strong iot presence, and they are doing a lot more in that space. emily: you're still behind amazon in a big way. john: look amazon was the first , mover. and so it takes the second mover a little while to catch up. but i think we are making the kind of progress because our growth rate is stronger than amazon's at this point in time. 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. and so they have the capacity to go out and acquire a lot of things. emily: right, and that is your

overseas cash as well. john: most of that cash is back. so the real question for microsoft is not about the availability of cash to do quick acquisitions. it is more 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. therefore that was an important thing to do. if you look at the linkedin deal, soft jim felt very strong about being in the social media business, and they have had a wildly successful transaction. 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. sometimes it has. where would you like to see them? john: i think anything that strengthens the relationship between our cloud and a broad network of users. so iot, commercial things for financial services or industries that generally have not moved to the cloud. those are the places that represent big opportunities. emily: what were -- what should

microsoft be doing to advance more quickly in the emerging world of ai? john: well 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. i think what you are going to see is ai machine learning becoming an important part of if you will every single platform that microsoft and every company in the industry has. ai will be the future. emily: and do you see the 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 data and privacy? john: i don't think any of us anticipated 25 to 30 years ago that pc's would turn into what they have turned into. we cannot anticipate that just

as we cannot anticipate what ai might do. what we do know is that the digitization of the world is accelerating. have aai is going to more powerful effect than we imagined even a few years ago. we won't know until a few years just how impactful it will be. emily: that was microsoft chair john thompson. well 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 it gets on credit card fees to other retailers if they use its online payment service. this according to people familiar with the matter. typically, merchants using amazon's 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. but longtime incumbent dating site match.com says it is ready for a fight. that story ahead. plus 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. the company fell short of forecasts after rolling out a redesign of its main photo sharing utility that turned off new users and held back growth. the company missed on two crucial metrics. we were joined by debra williamson, a marketer for full analysis. debra joined from facebook's f8 conference in california which we will get to that momentarily. debra: it was definitely a challenging quarter for snap. no question. i think the big revelation or the big takeaway 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. because 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: well you know 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. and i think keeping those users engaged is something that snapchat is going to 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 towards a more self served, a more programmatic advertising infrastructure. that is making it easier to purchase ads on snapchat which i think is also helping them in the long run. i think those advertisers need to be reassured that this is a company that is dedicated to making improvements, to keeping its users on board, and keeping them happy so it has some work to do. emily: of course the irony is

not lost that you are at the f8 facebook developers conference, and facebook in many cases has copied some of snapchat's features and ported them over to facebook, ported them over to instagram. mark zuckerberg announcing a new dating service. i want to take a listen to what he had to say about it. >> it will be in the facebook app, but it is totally optional. yen. if you want you can make a , dating profile. i know a lot of you are going to have questions about this. we have designed this with privacy in mind from the beginning. your friends are not going to see your profile. you are only going to be suggested people who are not your friends. who have opted into dating for your preferences. emily: what do you make of this new service in the context of all the very, very big and important and critical issues facebook is dealing with right now including data privacy, election meddling, fake news, harassment, and now a dating

service? waya: you know what, the you phrased that was exactly my response. i think they did a great job of turning people's attention away from some of these big issues at least for temporarily. the dating app was definitely out of left field for a lot of people, myself included. it makes some sense i think because facebook's goal is to connect people and make them interact more, and certainly 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 that could materially add to the bottom line? i mean in a way it is surprising they did not do something like this sooner, but again, they did not do something like this sooner. debra: you know, people have said that yes facebook should've , launched a dating app before. i do think it will probably help the bottom line. dating apps and dating companies have been very successful, match.com being one of them.

as well as others. this is a business that facebook will get into and will take seriously. i think 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 be the one that people pay a lot of attention to and try to make sense of whether facebook is actually able to maintain people's privacy as they get involved in dating. emily: thanks to debra williamson from f8 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 streaming service said it reached 75 million premium users last quarter.

and while the number matched spotify's projections, it was not the breakout growth shareholders hoped for after is -- after its strong debut on the new york stock exchange last month. we spoke with bloombergs caroline hyde from london and alex barinka for more. >> i don't think it is necessarily disappointment, but i think it is how it got published. spotify went public in a direct listing. they basically said all of our existing shareholders can sell their shares now on the open about a month ago. holders sold in the early trading. now the stock is up 12% from its open price. i have a bit of suspicion that the good old-fashioned profit-taking is going on. people are seeing this stock of at $175 at the close. they are taking this opportunity to sell off. when i dig deep into the numbers, everything is in line . everything is in line with company guidance and estimates. i am less scratching my head a little bit as to what folks are really disappointed with unless

they are expecting really astronomical growth in users. emily: that is the question, will spotify have breakout growth of some kind in the future, caroline, or if it is the norm now they have gotten to this side, will growth only plateau? caroline: growth wasn't really plateauing. if you look at premium subscribers, up 45%. they promised growth of about a third. monthly active users continuing to grow about 30%. this is a company that will continue to deliver as it promised. and my mind boggled slightly. we got these numbers that they said were expectations for q1 two weeks or less than that before q1 was over. what did they expect? they were suddenly going to ramp up user base phenomenally in the last couple days and be able to punch the lights out into these particular expectations? you think that would potentially be market manipulation in some

ways. so they really have to live up to expectations. analysts really either have decided they wanted to see a little more, they wanted and underpromise and overdeliver, or many shareholders are indeed taking profit as alex said. i think there are heady expectations from analysts going forward. we have got plenty of buy ratings on this stock. if you look into the bloomberg analyst index, my favorite one, you can see hardly any sells, 12 buys, an awful lot of holds. the price target is getting close on where the price currently is, but many of these banks are saying look buy into , this stock because of its subscriber growth. it is just the beginning. that is what morgan stanley says. 1.3 billion smart phone users. well, they have got 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 for the right levels. emily: shares were down more than 6.5%.

i did speak to tim cook before the earnings call yesterday about spotify as the other competitor now in the streaming music race. it certainly has turned into somewhat of a two horse race globally. i asked him how worried he was now that spotify was a public company and seeing this growth. he said, i see it differently than perhaps everyone else sees it. if you take all of the streaming services in the world and add up the subscribers, you get a very small number relative to the global population. convincingllenge is people that don't subscribe to a screaming music -- a streaming music service to join. i think we are in a great position to do that. certainly a great way to spin. but do you buy it? alex: potentially. spotify is the market winner. it is a nice thing for tim cook to say as the horse that is perhaps behind in the race. where i see a bit of traction with what spotify has been doing, if you look back at the past month, they minted a deal

with hulu. they are packaging their subscription with hulu subscription video, and they are selling that as a combined premium offering. when you think about the generation that it makes sense for them to be targeting, smart phone users, folks who are used to perhaps cutting the cord and having a slew of different subscription services, that take from tim cook makes sense. whether or not apple is winning, it seems they might need a bit more content, which again is where you have seen spotify push in outside of just music and into podcasts, and now they are with hulu pushing video right , now. you can watch hulu shows right now. emily: tim cook also talked up apple's exclusive content. exclusive video content, excuse of interviews they do with artists. caroline, are there particular global territories or regions that spotify expects to grow more in particular? caroline: china i think 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. i was interested in the breakdown of premium users at the moment. the bulk, about 40% in europe. about a third is over 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 up in march as well as south africa. we are going to see an expansion territorially. as you say more innovative ways , 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 world's 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 is expected to raise at least $10 billion. the ipo could be the largest since alibaba and may bring in

thelue of $100 billion on eighth euro company. -- eight-year-old company. the chinese smartphone maker is growing at a blistering pace that will help it take on apple and samsung. we went live to hong kong on thursday where we were joined by bloomberg's stephen engle. stephen: xiaomi was an incredible success story when it was founded in 2010. i remember interviewing the first 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 really were kind of a victim of their own success. one of the cofounders became kind of a rockstar compared to steve jobs in china. actually he said he did not like to be compared to steve jobs but he was more like jeff bezos. anyway, they had an overaggressive expansion plan. of course as you know they hired , hugo barra away from google. they really expanded very fast. but in some other 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. but late -- they have now really turned things around ahead of the ipo, which could be listed in hong kong by june. he spread out to india. -- indiao handy a handset vendor. 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. well, hong kong has changed those laws to capture what has been of course a hugely successful run of chinese technology companies coming to market. but like alibaba as you mentioned 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, but in hong kong they did not allow that. , they did not want to have those violations or they saw the violations of corporate governance and transparency. they have changed the laws. a bit controversial here because of aging's -- 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 go ipo possibly this year in hong kong. emily: big question looming whether this company can convince u.s. carriers to sell their phones in the united states, and not only challenge companies like apple and samsung globally but in this market. what is the read on that? stephen: yeah, i mean 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 whether any of the chinese 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 obviously be a stated goal, but it will be a tough nut to crack, obviously. emily: that was bloomberg's stephen engle from hong kong. now 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 institute global conference in beverly hills, california. >> this will actually fill a lot of jobs in america if there is a trade war because the tit-for-tat trade tactics will really cause a retaliation. and in fact, in china, they have just put on tariffs on soybeans

. it is going to hurt american farmers. i think we are in the context where we are seeing a huge market in china. and it is kind of 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. president xi jinping last year in davos said that china would import $8 trillion worth of goods over the next five years. -- war of the trade door they put the gates down because of retaliation, this will hurt everybody, and it will 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 that may not happen now if a trade war moves ahead. are you pulling back on that --will those jobs not be created if the president stays the course? >> well jack has said that we , are not going to create a

million jobs. we could possibly create 10 million jobs if the trade flows are open. but if there are trade wars, if there are opportunities for small businesses that are being shut off because of trade wars, than the consequences could be quite severe. emily: so the jobs would not be created is what you are saying. >> i am not an economist to work through those ramifications, but certainly it would be creating fewer jobs than if there were no trade wars. emily: that was the alibaba feiss chair -- vice chair. that does it for this edition of "best of bloomberg technology." we are going to bring you all of the latest in tech through the week. be sure to sit down and tuesday to cover everything from diversity in tech to facebook and more. and remember all episodes of bloomberg technology are livestreaming on twitter. check us out at technology weekdays. that is all for now. this is bloomberg. ♪ mom, dad, can we talk?

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♪ haidi: returns from beijing with little to show except an agreement to keep talking. iran warns the u.s. of historic regret if it pulls out of the deal. haidi: i had scratcher for the fed as u.s. wage growth slows despite unemployment falling to 50 year lows. betty: warren buffett taking questions about policy at the first -- after the first lost since 2009. i