emily: i'm emily chang in san francisco and this is bloomberg technology. in the next hour facebook under fire again. could the social network, itself, be the one now threatening democracy? we'll discuss a bombshell "new york times" report. plus, uber moves one step closer to release morg data on sexual assault. our extended sitdown with uber's chief legal officer, tony west, one year into the job. and apple rebounding after hitting its longest losing streak in more than six months.

why investors are questioning their faith in the iphone going into the crucial holiday season. first to our top story it is no secret faceback has been strug tolling keep up with fallout from its platform being used for election meddling spreading fake news and more. now a blockbuster "new york times" report alleges just how far the company has gone to protect itself under major scrutiny. specifically how c.e.o. mark zuckerberg and c.o.o. cheryl sandberg went on the offensive to fight back at facebook detractors including direct lobbying of lawmakers and going right after their opposition. even hiring a republican opposition firm to paint its accusers as antisemitic. specifically hole cust survivor and billionaire george soros a move his philanthropy chief is calling reprehensible. he wrote in an open letter to sandberg the notion that your company at your direction actively engaged in the same behavior to try to discredit people exercising first

amendment rights to protest facebook's role in dissemyonning -- disseminating propaganda is astonishing. it is disappointing to see how you failed to monitor hate and misinformation on the platform. to now learn that you're active in promoting these distortions is beyond the pale. mr. zuckerberg for his part defended the company against the times reporting on a call with reporters thursday. take a listen. >> to suggest we weren't nterested in knowing the truth or wanted to hide what we knew or prevent investigations is simply untrue. emily: he added that facebook will form a new independent body to review content desillingss. he added that facebook will form a new independent body to review content decisions. both of you were listening on this call. zuckerberg seemed to be on the back foot. reporters were firing questions at him. who is getting fired as a result of this. walk us through what zuckerberg

had to say. >> what i thought was very interesting about this call in relation to calls past is he was willing to say that they are -- there could be some people who could get fired because of this. in previous calls he said everything ends with him. he takes full responsibility. in this case he said, look. we did some things wrong and we're always making personnel decisions. that is as far as we've ever gone in the direction of him saying he has to fire someone. one of the first things, first pieces of fallout from this is made the irm that link with soros, four reporters, though it was true there was some relationship -- financial relationship ties, that has been cut with facebook. zuckerberg said on the call he did not know about the definer's relationship and was not informed about the way the company was using them. emily: this firm the definers as it is called it is interesting he admitted he didn't know anything about it.

the "new about it in york times" piece. i want you to listen to what he had to say about personnel. i think it is worth hearing exactly what he had to say. >> i generally don't talk about that, specific cases in public. it is not that we run the company and people make mistakes and there's no consequences. it's that as part of the normal ocess of running the company we're evaluating peoples performance and making changes either in role or finding different people to do different roles when we need to. that is an ongoing process and part of running the company and we'll certainly keep doing that. emily: this after being pushed by reporters. david, you've read the article. you listened to the call. what due think of these revelations is the most damning? >> well, it was amazing with which -- the defensiveness with which the call was conducted.

i think facebook is coming to a sense of responsibility so egregiously late on many issues of misuse and abuse and political manipulation that they're forced into an extremely uncomfortable position. the article most amazingly laid out, it is not shocking to those of us who follow the company closely but was laid out chapter and verse and was right there in the title. you know, delay, deflect, and distract. that has been the company's policy. the other thing was leaning out. in effect this article was very much about cheryl sandberg and progenitor of a distracting and delaying and deflecting tactic. it is very interesting to me she was not on the call today. emily: it is also interesting to see some of the internal workings of facebook. mark and cheryl have surrounded themselves with loyalists and obviously for this story to get

written people were talking. we heard about an exchange member with a board member grilling mark and cheryl about why they didn't respond to this sooner. very ind of detail is unusual. the board has come out with a statement saying they did push mark and cheryl to move faster on the russian interference issue but to say they were not interested in figuring it out or getting to the bottom of it is grossly unfair. >> david is exactly right. this story points directly at the part of facebook run by cheryl and the strategy she has, she has been praised for in the past, her ability to have more political savvy, to have contact in washington, to be able to go to them personally, the story talks about her writing personal thank you notes after meeting with people to try to change their opinion about facebook. but, you know, obviously those things have a very different tone to them when you think

about the broader narrative that facebook is trying to propagate which is that they're on top of this. they care. they're willing to change. then behind the scenes to have a top executive talking to members of washington and saying, un, you really shouldn't be as hard on us. this isn't something you should look at. that is very concerning because you have a behind the scenes different from the facebook eople are trying to portray. emily: david, some of these tactics are reprehensible but others seem to be tactics used by many different companies. all tech companies are lobbying on capitol hill. is it fair to criticize facebook for them when we can presume other companies are doing this as well? >> i don't think there is anything wrong with a company managing its image. that's what p.r. is all about. i think what is very unseemly and which the article i think laid out in some devastating

detail is that even as the company has essentially been inactive in addressing some of the disastrously harmful social effects, it has been extremely active in managing its image to try to undermine the impact of people thinking that it was bad at managing the social harms. to me the former is much more important and i think the article maybe didn't hit as hard as i would have but that is what they really knead to be focusing on. not image but substance. they did announce some things today that i thought were extremely positive, this board of oversight composed of outside people. that is a very positive move. i would say in general zuckerberg's tone on this call was the best i've ever heard in terms of taking seriously this set of problems they face. but why they didn't have that attitude years ago is the real question that is not yet answered and maybe can't be but has to be asked.

emily: let's listen to what he had to say about the independent content review. >> i believe we shouldn't be making so many decisions on free inspection and safety on our own. we've been talking to people about this for some time now. i have spoken to many experts myself starting in the summer. today we are announcing that we're creating a new independent body that people will be able to appeal to that will have the authority to determine whether content should come up or stay down. emily: david, do you think that there will be some high profile executives who leave as a result of this? i'm talking going all the way to the top. david: well, i will say, and i talked to a lot of facebook experts, critics, thinkers, analysts, there are quite a few i'd say a growing number of people who seriously question cheryl sandberg's role at the company. i don't think she is likely to be forced out because i think

wall street would freak out knowing that she is the architect of the business that has been the, you know, the goose that laid the golden egg so to speak. this is an incredibly profitable business and she architected that. however, i think the evidence is increasingly accumulating that she has not imposed sufficient governance into the system that she designed. so, you know, that's where the question is being asked. emily: we know that this company is being scrutinized in washington. that lawmakers are looking closely. has anybody suggested that this company, which also owns instagram, and has facebook messenger, should be broken up? >> well, what is really interesting about what we've seen happen in just the last year is facebook has taken those external properties and brought them in and created what is calling the family of apps which includes messenger and instagram and the data is being shared amongst them. a lot of resources are being

shared. and the leadership changes that happened this year with or without facebook's, you know, wanting them to happen, we had the founders of of the instagram leave, the founders of west app leave and that opened up an opportunity for facebook to really connect with these other apps more. they're making it harder to be broken up if somebody was going to come in and do that. that said, we did hear yesterday, the leading democrat on the anti-trust committee of the house, he said that starting next year they have to take a very close look at facebook's practices especially in light of what we heard in this "new york times" story yesterday that this is going to open up an opportunity for democrats to be hard on facebook. emily: all right. sarah, i know you'll continue to follow the story, as well as david, thank you as always for weighing in. all right. coming up uber is expected to

launch one of the biggest tech ipo's in recent history early next year but will the company's continuing losses stand in the way? we will discuss. if you like bloomberg gnaws check us out on the radio and listen on the bloomberg app, bloomberg.com and bloomberg sirius xm. this is bloomberg. ♪

emily: uber has been spending more to fuel global growth but it is the company's losses that seem to be growing. on wednesday the ride hailing company reported it lost more than a billion dollars in the third quarter, a 20% increase from the second quarter. while the company looks to diversify with scooters and

bikes, its growth appears to be slowing as well. uber reported revenue growth of 38% in the third quarter. almost half the rate it was six months earlier. meantime the company is preparing for what could be one of the biggest tech ipos in twintse. 2019. why is it losing a billion dollars in this quarter just months before a potential ipo? >> uber would say scooters, food delivery, investments in autonomous vehicles. part of the question is we don't actually know. uber doesn't break out wide sharing specific numbers and part of the uncertainty around uber financials is the fact there isn't a lot of visibility, how much losses are a war with lyft in the united states versus actual invest nments future growth. the c.e.o. sort of stopped talking about it. for a while he was saying targeting second half of 2019. internally we're hearing he is telling people the first half. it seems like next year judging market conditions and hopefully for them in the first half of

the year. emily: is the company going to be ready in a matter of months? >> you know, their chief financial officer sort of deflected several months ago when he started having to figure out what is going on with the company. so i think they haven't said, ok. we have all the pieces together. but it is a pretty professionally run company. i think they can get it together. emily: give us the bull and bears case here given that bankers are shopping $120 billion valuations. >> right. the bull case is the losses are mostly about growth. that when we see the ride sharing business it'll look pretty good. that they can make a profit when there is less competition or when they make certain tactical decisions. and that eats is becoming one of the biggest if not the biggest food delivery company in the world and there are a lot of pieces promising this future sort of amazon scale business. that is the bull case. the bear case is that they're hiding bad ride sharing numbers with sort of losing money, food

delivery business. and that, you know, you can make a lot of revenue by giving something, someone something for less money than it costs but at the end of the day you need to be able to make a profit on the service to have a profitable business and we haven't really seen evidence yet that uber can do that. emily: how big is uber eats relative to the rest of uber's business? do we know? >> they've said it is like 17% of their total gross bookings, which isn't a perfect number because --. emily: it counts the food. >> exactly. it is definitely the number to pick if you want to make the point that you think uber eats is really big. we don't know on a revenue basis the size of uber eats but, clearly, a priority for the company. emily: and the other businesses are really completely nays ent. scooters, bikes, bus driving. correct? >> right. self-driving, spending a lot of money on r&d but it is not a revenue generator. scooters and bikes are extremely early. the company just announced a

rewards program they hadn't even included scooters and bikes in it yet. it is so new they didn't have time. uber analysts announced a rewards program. uber seems a little more fleshed out but it sort of reit rates the idea ride sharing is a commodity just like a hotel or airline. a page of the hotel and airline handbook. how much is lyft eating away at uber market share if it is? >> you know, i think lyft got somewhere 30% market share. it's not just the gains in market share that are troubling but the fact that uber has to keep spending, discounting, under pricing what it would like to charge to keep riders and drivers on its service. i think also the fact that the economy is booming has made it hard for both companies to recruit drivers. so the competition, you know, makes it a low margin or no margin business in the u.s. dara said publicly at "the wall street journal" conference the company is not contribution

margin positive. already a generous sort of made up financial term in the united states. so that's problematic. the competition with lyft is really challenging for uber. emily: eric, thank you. coming up uber's new 53-page report on sexual harassment, misconduct, and assault. we'll speak with uber's chief legal officer and also ask him some of the other questions as well. plus, walmart is proving to be a force to be reckoned with in the battle for e-commerce. how it plans to take on amazon globally, next. and bloomberg tech. check us out at technology and check tictoc on twitter. this is bloomberg. bloomberg.

emily: amazon, beware. walmart is ready for battle. the world's largest retailer posted third quarter earnings and the message is clear it is coming after amazon hard.

the company saw strong sales though its rosie forecast ahead wasn't enough for some investors and the stock fell. walmart is expected to overtake apple as the third largest retailer in 2018 proving itself a fierce competitor to the behemoth amazon. i sat down with jeremy king at the conference in half moon bay in california monday before earnings to talk about the competition. >> their strategy and ours is different. we are trying to focus on hundreds of thousands of items you can pick up in the store. buying online, picking up in store, making the shopping experience easy. also online grocery is a place where we're excelling. emily: and you are to be fair beating amazon in that category. >> yes. how do i focus our efforts to make that shopping experience? just like you would expect at a walmart store. how do i make it so simple to make sure you have a time to get a good toy or sporting good

at the same time? focusing our efforts around the experience and fresh and frozen pickup and delivery is a big part of our strategy. emily: with amazon buying whole foods how will you stay ahead in groceries? >> well, we have a significant amount of locations. we have 2100 online grocery pickup locations so the biggest in the u.s. at this point. we are continuing to ramp that. i think we're opening like 30 or 40 stores a week that allow pickup. we've also done delivery to stores. you can imagine the technology and rolling that out to all of the u.s. essentially as fast as we have is one of the fun parts of a technology job is scaling as fast as the business can. really about focus. emily: across all the platforms what are you doing specifically to leverage customer data to make the shopping experience faster and easier online and off line? >> yeah. walmart has a lot of great data. really what we're focused on is

making a really customer sent rick interface. so, for example, i mentioned easy returns but things like easy reorder. often times when people are buying groceries from us they're buying 50 or a hundred items and if it only takes five or 10 seconds to add an item, to the shop, you're talking about a 20 to 30-minute shopping experience so how do i make that easy? you're buying the same cereal and baby food you did last week so how do i make that experience of adding a hundred items to the basket extremely easy and using customer data and trends and things that you did last year at this time of the year can really help that experience. emily: now, walmart has of course bought foot cart. there is a new battle ground in india. over the course of your career you've worked in india and china. how does the india battle ground play out with amazon and the local competitors? >> really the thing i'll say about this is our leadership team there, judith mckenna is our c.e.o. of the international and she has an incredible team.

we've done partnerships not only with j.d. and also as you know the foot card deal. so it is easy and typically when walmart does an acquisition we try and let that bloom a little bit before we help too much. we don't want to hug technology teams to death as we go out there. we're really spending time with them to talk about their data strategy and they are doing great work on the mobile side. but the international stage will be a very interesting one. emily: what do you think the potential is in india for walmart? >> well, obviously we have stores there. judith is working thoon strategy. how do i use the flipkart and walmart together, a similar experience as in the u.s. emily: you report to both the c.e.o. of walmart e-commerce and walmart u.s. how does that work? >> it makes the job really interesting. super fun. you have somebody like greg who ail say is probably going to go down in history as the best sort of operator of a retail

company in the world. miami that's a big compliment. >> he is amazing and the team is incredible. they're running a million person customer effectively. 1.1 million associates and their operational excellence and efficiency and focus on not only things like price and customer experience and the ability to execute that is fascinating. you have mark on the other side who as true innovator and he's got an idea every minute and we're experimenting all over the place so the combination of the two makes my job great. emily: that was walmart c.t.o. jeremy king at the conference in half moon bay, california. after that interview we learned the c.e.o. of flipkart ress island amid allegations of misconduct. uber is one step closer to releasing data on any serious incident that happens on its platform including sexual assault. we will speak exclusively with uber's chief legal officer tony

west, next. plus, apple shares hit the longest losing streak in more than six months on more bad news. will the holidays bring more losses or rebounds? we'll discuss. this is bloomberg. i am a family man.

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see the grinch in theaters by saying "get grinch tickets" into your xfinity x1 voice remote. a guy just dropped this off. he-he-he-he. emily: i'm emily chang in san francisco and this is bloomberg technology. 53 pages is the length of a new report that outlines how uber will label cases of sexual harassment, misconduct, and assault. the report written with the help of the national sexual violence resource center and the urban institute will be key to uber's commitment to release data on sexual assault, fatal car accidents and other serious incidents that happen on the platform. this as many tech companies like google, facebook, airbnb and more are changing policies on handling sexual harassment some more so than others. here to tell us more uber's chief legal officer tony west.

thank you for being here. tony: great to be with you. emily: you're a year into the job. >> a year next week. we talked about how this would be a hard job and you'd find skeletons. you've likened it to climbing every est. how far are you? well on your way or at base camp? tony: the thing about climbing every est is it is the journey not the destination so we are well on our way to getting to the top. the last year has been incredible for me just to be able to be at a company that has got this organizing principle of do the right thing, which really informs everything we do. and then being able to make progress on some and take leadership positions on some of the issues like sexual assault prevention that we are beginning to do with this. emily: you've not just pushed uber to do the right thing but do the right thing period. tony: right. emily: and this handling of sexual assault cases goes

beyond what other companies do. how optimistic are you that other companies will follow? tony: i'm quite optimistic. we are having conversations with other companies about adopting this. this has never been done before and it cat graces exactly what kinds of behaviors or make up ors that sexual harassment, sexual misconduct, not always illegal but things you don't want happening in a customer service environment. what is great about it even though it was developed with the uber platform in mind it an be used by any company that pulls two or more companies together in the real world in a customer service environment. emily: the question is i wonder how do you balance your instincts as a former d.o.j. attorney when there are trends in the legal profession to enable companies rather than resist them? sexual assault for example it is believed the incidents actually reported are highly

under estimated. that there are far more than actually reported. is this good for uber's business? >> it is very good for uber's business. much more important than that it is the right thing to do. it is good for all of us. we've always believed if you enhance the safety of women you make it safer for everyone. what this does is it takes us closer to the goal of having a safer platform. you know, i understand why some people may be reluctant. obviously the chief legal officer is usually the guy in the room saying take less risk not more. for eason this makes sense us is we have a paramount duty to our shareholders no question but also to our stakeholders. those are the millions of drivers, partners, riders who use the platform every day. we have to do right by them and this is a step toward making the platform sustainable and safer in the long term.

emily: months before google ended the sexual harassment cases uber did it and also for ride earns drivers. airbnb is taking that a step further and eliminateting for discrimination cases. microsoft allows class action around sexual harassment. why not go that far? if there is an argument to be made in getting this out into the open more quickly you address more systemic problems? tony: i am certainly proud of uber's leadership position on this issue and i have to applaud airbnb and google for following suit and we think the fact the bar is being raised for everybody is a good thing. it is a great thing when you have companies competing with one another to raise the bar on an issue like this. when we took the step to announce the end of mandatory arbitration for claims, sexual assault, sexual harassment we did so with safety primarily in mind and that is really what drove that decision. i did say at the time this is a first step. it doesn't mean it is the only

step and these are active conversations we continue to have. emily: so you are considering the discrimination provision? tony: definitely that is one of many things we are considering. i should say that there is nothing wrong with arbitration. it is an appropriate tool used by businesses every day in a very appropriate way. what we determined is that it is used when it came to sexual assault and sexual harassment was inappropriate because it stripped agency and control from the survivor even more, you know, even continuing to do, unfortunately, what the original act can do in terms of stripping away the control. and so it is not really an appropriate tool there. you want to give the survivor choice. and i think as we look at whether or not arbitration is an appropriate tool for other types of claims i think that is the kind of frame that we will approach it with. emily: now, you have an anonymous tip line for employees. and managing that has been challenging some of your top executives, former h.r. head, c.o.o. has been in the cross

hares. another executive resigned over some of the allegations that came across this line. how do you balance corrective punishment and outright termination when people want to see consequences? tony: certainly i can't speak obviously about any particular personnel decision but i can say this. it is important when you have a system of reporting and a system of consequences in any work place that there be a proge regulars of responses that you can bring to bear because -- a progression of responses you can bring to bear. what you are trying to do is make the workplace safe, inclusive, welcoming for people to be there so that they can bring their best talents to work every single day. you want to be able to support people in that environment. and if you can create that environment by giving someone coaching or by, you know, changing someone's assignment so they're not in the same environment or doing whatever you -- sometimes you may have to terminate someone. that is an appropriate response in some situations. i think the main thing is that

you have to telegraph that you are going to take those actions and hold people accountable for their behavior and that is going to be across the board. i have said many times, no one is indispensable to a company. you know, everybody has to be held accountable for their behavior. emily: you've reached a settlement on the hack with all 50 states and yet there are still multiple open questions om your former employer into the foreign corrupt practices violation, price discrimination, stealing trade secrets. due think that legal risks will factor significantly into uber's ipo? tony: certainly you always consider legal risks whenever you're looking at whether you're going to go public or not and i should say that i'm not really -- can't really talk much about whether or not we may go public but i can say that, you know, we just had a

bond offering and part of the risks you put in like that include the legal risks that you faced. i think one of the -- the good things is that our legal risks are well known. you've just recounted. so there is not a lot of secrecy there. investors know. i think investors also know that we've been methodical and successful in mitigating those legal risks. i think, you know, in less than 10 months we've been able to not only announce a data breach but then resolve it with all 50 states. i think it's got to abrecord time from the time that you've announce ad problem to the time you've actually resolved it with 50 different regulators. and we're continuing to be very methodical about that. emily: for some of the other legal concerns can you say you've gotten the all clear from the d.o.j.? >> i am not in a position to say that. i'm still continuing to work hard to make sure we're responsive to the requests that we received from all regulators. and we continue to work very

methodically and carefully to make sure we're mitigating risks across the company. i'm very confident, though, that there is nothing that certainly i'm aware of at this point that would be a hindrance. frankly to the company going forward. we need to deal with these issues, no question, and put a lot of these issues behind us. i don't see anything in terms of a threat to the company. emily: the d.o.j. are now looking into snap according to snap for potentially not disclosing enough tony: vestors about how much instagram was harming their growth. with your ipo, and your c.e.o. has said, could happen, you know, next year, and reports are that it could happen early next year. how do your priorities change as you prepare for public scrutiny whenever it happens? tony: again, i think the task for us is to recognize that even though we are a private company, we are a global brand, and that carries with it great

responsibilities. it carries with it accountability. begin to y, if we hold ourselves to the same standards public companies hold themselves to we're finding we're towing the line just fine. i think the most important thing, too, is if the company goes public when it goes public i don't know but what is most important is not the day it goes public. what is most important is the day after and the day after that and the months and the years after that. execution is what is going to make this company continue to abgreat company and a successful company regardless of what any potential ipo date may or may not be. emily: putting on your government hat experience, glad you're not facebook today after this "new york times" report, but experience in silicon valley, where do you think democrats in the house should focus their energy when it omes to tech regulation? tony: i don't know. i'm probably not in a good position to give the house

democratic leadership advice. i'll let others do that. hat i will say is that it is important to always balance the approach as a regulator between creating incentives for good behavior and inviting companies to do the right thing. and holding companies accountable. that is a very careful balance. sometimes, you know, you can go a little bit too far in one way or the other so the real balance is not to, i think, over correct, but to make sure you're holding people accountable, no question. but that you're also recognizing and incentivizing companies to do the right thing. emily: earlier this week your c.e.o. said you need more information to make a decision about how to proceed with your relationship with the saudi public investment fund. this morning the treasury department sanctioned 17 saudi officials. do you have enough information now to make that decision? tony: i think i'll stand on the

previous answer which is, look. let's be really clear. nd unequivocal the murder of mr. khashoggi was a human rights and civil liberties horrific tragedy that should never have happened. and i think we -- you can't mince words about that. that should just never happen. and i think that the fact we took it so seriously is manifest in the fact that dara was one of the first executives to pull out of the saudi conference when the initial reports we were getting was incomplete information and in some cases not credible information. i think there is a process in place to try to see if we can get more facts, more information, and i think once we get those facts, get that information, we'll do our best to respond appropriately as a company. emily: uber sales are dramatically slowing. revenue growth in the third quarter was half of what it was six months ago and also back to a billion dollars in losses in

a quarter. are you plateauing here or is this short term? tony: i actually saw the results yesterday and i said, you know, that is a healthy quarter for a company of our size and global scope. look, the reality is we are investing for future growth. when you look at what we're doing in freight, in food, with electric bikes and scooters. what we're doing in high potential markets like india and the middle east. we are investing for future growth. we want to solidify our leadership position both as a platform for mobility but also in key markets. and i think that is what the results demonstrate. emily: all right. uber's chief legal officer, thank you for coming in a week before your anniversary. tony: thank you. emily: appreciate having you here. tony: great to be here. thank you. emily: apple rebounding after the longest losing streak in more than six months. a recent raising of a hundred million dollars from apple's market value.

that conversation is next. this is bloomberg. ♪

emily: bit coin has fallen to a one-year low. the largest crypto currency plunged thursday to less than $5600. in 11 months bit coin has fallen bay more than two-thirds. meantime, the bad news just keeps piling on for apple. at least four of its key suppliers for iphone components have reduced are revenue estimates for the current quarter. the latest was swiss company a.m.s. which makes light sensors for smart phones. that's amped up concerns about weak demand for iphones. apple shares hit the longest losing streak in six months.

so, gene, how alarming is this to you? >> surprisingly, it is not. i want to put into some historical context that the supply chain when there is early feedback, this is still early in the quarter, these tend not to be good indicators and the reason is that apple already gave their guidance on november 1 so two weeks after we're hearing the supply chain cuts. it is not alarming because what we're hearing from the four suppliers you mentioned, those comments are already reflected in apple's guidance for the second quarter so this should not be anything new. my history trying to figure out the supply chain data points is this is clearly more of an art than a science and one thing that is important to know is every year going into a cycle apple tells their suppliers they need to produce more than they actually will have orders for and then every year they cut orders going into the period so this is nothing new,

emily. emily: shares have come back a bit but in general how confident are you that the has lineup of iphones been a hit or is that not the question to be asking anymore as they transition to a services company? >> i'm in the camp that that is the right question to ask is can they grow the base of iphones in the low single digits? i think they're still on track to do that. i suspect over the next 12 months they'll probably increase the base by about 3%. it is not about a big hit iphone but about maintaining the base and finding ways to grow from that. one way they can grow from that is by increasing a.s.p.'s which we've seen over the past year and it will continue over the next year. another way is by selling services. and i think that is the broader, bigger piece of question. i suspect the street is slowly, it will take a year plus, adopt this view that the overall apple business operates like a

service. the hardware included has some predictability that historically hardware companies did not have but apple's iphone business over the years will start to yield a more predictable trajectory. emily: so looking at the stock chart here, you can see the slides around when the new iphones were unveiled, you know, we know this is a company that has been fendent on iphone sales. going forward do you see a point when services revenue is equal to iphone revenue? >> probably a long time away. it is 15% of revenue right now. in four years we expect it to be 20%. that compares to the iphone going from 65% of revenue down to 60. there is still going to be a big gap and ultimately, this idea, the real emphasis is this, that just to conceptualize that the hardware business is operating like a software services type of a

business. and i think that's the real inflection opportunity around the stock. i think that can pay the way that we'll look back and this will be considered a buying indow for long-term investors. emily: they are well off the milestone they recently passed. do you think investors aren't etting it? >> i think the concern and anxiety about the iphone is misplaced and there are three factors that played into it. one is the overall market. second is apple giving less disclosures about iphone units or no longer giving disclosure on iphone units and i think the third is we're hearing in the supply chain. but i think this has caused the street to fundamentally miss the story. and again, i believe that the iphone franchise is intact. i think that the chatter from the channel is essentially already priced into apple's december expectations.

and the other piece i think investors don't get is that 13 story trading that call times trades below coca-cola which is closer to 22 times and at a minimum should be on par with those two type of consumer stable kms. in fact that is what apple has become is a consumer staples company. emily: what about globally? we know in india for example apple failed to break into that market in any significant way. in china there is concern about the trade tensions. the iphone is just so much more expensive than many other phones out there now. we're talking $50 phones. are are are you concerned that apple won't be able to keep up or the global competition is the iphone always going to be most desirable and aspirational phone out there? >> i think apple will continue

o be the leading edge. call it 20% of the population is going to want to pay up for a better experience. as you said a lot of people can't afford this. india and china are two different stories. on the china story i still say i'm confident that despite the availability as you talked about the $50 alternatives, a much different competitive environment than really any other market that apple competes in, despite that more difficult competitive environment i think just the sheer size of the opportunity in china still renders this incremental positive for the apple story in the years to come. there's just a lot of people who do make a lot of money in china who can afford the more expensive iphones. india is a different story. this has been needling at apple for a long time. i still don't see the path where apple is going to get meaningful traction in india. they just simply don't have the brand in india that they have in the rest of the world. emily: all right. gene munster, always great to

have your thoughts here on the program. thank you so much for stopping by. still ahead, elon musk wants to provide global internet coverage from space. and his company space x just crossed a major regulatory hurdle needed to do so. next.l discuss, this is bloomberg. next. this is bloomberg. this is bloomberg.

emily: elon musk spacex has won permission to deploy more than 7,000 satellites from u.s. regulators who also moved to reduce a growing risk from space debris as skies get more crowded. that is far more than all operating spacecraft currently alot of. the satellites are expected to provide broadband services to residential, commercial, and government customers in the united states next year. sticking with musk the tesla c.e.o. announced on twitter thursday the company has bought trucking companies to deliver model 3's in the u.s. by

december 31 if they're ordered by november 30. he wasn't specific about which companies were acquired. hedge funds dumped video game maker electronic arts in the third quarter. at least nine funds exiting their stakes in e.a. more than any other tech stock that wasn't an acquisition target. the launch of the company's battlefield 5 game was delayed until after new releases from ome of its key rivals. big backlash to amazon's decision to put one of its new headquarters in new york city. some members of the city council want to know how the deal got done and whether it will really benefit the city. amazon is promising to create 25,000 jobs in new york but critics warn the project will raise housing prices and display is -- displace local residents. that does it for this edition of bloomberg technology. bloomberg tech is live streaming on twitter. check us out at technology and follow our global breaking news network tictoc on twitter. this is bloomberg. ♪

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