♪ >> i am brad stone in san francisco in four emily chang. this is "bloomberg technology." in the next hour, apple shares fall as president trump that of tariffs are made good including -- as president trump ponders further tariffs are made good including the iphone. plus, where is mark zuckerberg? u.k. lawmakers are angry that the facebook ceo did not turn up to answer questions tweeting out a photograph of his empty chair.

the chinese backed silicon valley designed car's makers will hope to speak past tesla in china. we talked to the ceo about the race to the chinese ev market. to the top story. apple shares were hit hard after trump implied he might include iphone in the tariffs. tim cook is spending the day with ivanka trump touring schools. this provides an extended conversation with the president's daughter and senior advisor before trump holds a key meeting with xi jinping in but with our rights -- in but authorities -- buenos ares. our next guest has a bayreuth redone apple on $220 and with us from -- -- our next guest has a buy apple.for

tom, let's start with you. you are watching china very carefully saying it is the biggest single threat to shares of apple. how seriously are you taking this threat for president trump? >> i think today, you have to assume everything out of china will be tariffs. i think on the assumption, you have to think about two has -- about who has pricing power. if you look at apple and take the least expensive new iphone, the xr, is more expensive than the apple a. -- apple 8. i think apple has the ability to better withstand tariffs than their competitors. brad: let's put the potential impact aside. do you think the president really means this? >> absolutely. to date, you have had multiple rounds of tariffs. you had one tariff in place today that escalates from a 10% tariff 25% tariff on january 1.

a 25% tariffff to on january 1. at this point in time, you have to make the assumption tariffs are real and there is more to come. as far as what more could be tariffed, you have to consider may be subject to a tariff. brad: tim cook is spending quality time with the ivanka trump. will that make a difference? does tim have the currency with the administration to make an impact here? >> i think they do. if you solid happened in -- if you saw what happened in early september, apple put out a statement saying two of their most valuable products would be impacted by the tariffs. a couple of days later, not long after that, the trump administration said we are not going to allow tariffs on apple watches or air pods anymore.

now trump has the day to spend with the president's daughter , a close advisor. surely discussing this will be one of the topics on the table. at the end of the day, despite exporting a lot of goods from china, apple is a u.s. based company. brad: let's say tim is not successful today and making his case to the president's daughter and we see a 10% tariff on iphones and ipads that have not been previously affected by this. you talked a little bit about how apple could potentially mitigate the impact with the xr. what about the xs? some analysts say it is not doing as well as apple hoped. >> generally speaking, investors are underestimating the ability of companies like apple to mitigate the risk of tariffs. for example, the chinese government is actively devaluing

its currency. that will take some of the sting out of tariffs. in some instances, the chinese government is subsidizing manufacturers who might be affected. additionally, apple suppliers are moving the supply chain out of china. and on a short-term basis, the big winner from the prolonged trade war is vietnam as you see manufacturers make products in vietnam rather than china. i do think apple and other companies relied on china for -- reliant on china for the supply chain have a lot of opportunity to mitigate risk from tariffs. as it pertains specifically to the xs, with a higher average selling prices, they don't have to sell as many units to bear the fruits of a financial -- from a financial standpoint. brad: do you agree with that? this is not been a great season for apple.

shares are down, suppliers are renting back production. -- ramping back production. a 10% tariff, perhaps apple can mitigate it somewhat but it cannot be good news for apple in the holiday season. >> absolutely not. i do not think this is good news for pretty much anyone. the consumer, apple, or the suppliers. the suppliers are already losing money on apple because they squeeze them so much. apple puts multiple suppliers -- apple plays multiple suppliers against each other to get the best prices. from that standpoint, they will mitigate the 10% tariffs if those come into effect so, but i do not think it matters. iphone is not selling as well as expected. we saw four apple suppliers making components for the company lower the revenue estimates for the current quarter, all during the same week, all citing a major consumer electronics company. that is pretty alarming. this is a bad new story for

apple and i do not see it getting better in the short term. brad: tom, is the market misinterpreting the news from the suppliers? >> two things, going into apple reporting the september quarter, they indicated weakness in emerging markets but not china. in brazil, russia, india and turkey. i think they were trying to adjust expectations to begin with when they reported that quarter. the other thing we are overlooking is one of the reasons for the tariffs is to not only improve our trade imbalance with china but to protect the intellectual property of u.s. manufacturers such as apple. while tim cook has done an amazing job of balancing the tightrope between managing the china suppliers, selling a large portion of products to chinese consumers, and managing sales and things like that, apple

stands to benefit from some of the things the tariffs are aimed to protect. the intellectual property rights of companies including apple. brad: what kind of argument you think tim cook is making with the president's daughter? >> i think it comes down to this is going to hurt the consumer more than anything. that has been their argument from the apple watch and air pod standpoint. that worked and the trump administration reversed course. why not try the same trick again? if apple has to increase the price of iphones, people will buy less of them and they might want to look to phones manufactured by the chinese like xiaomi. smartphones are too expensive, where our consumers going to go? that would defeat the entire -- where are consumers going to go? that would defeat the entire purpose of the tariffs in the first place.

brad: we have to leave it there. tom and mark gurman, thank you both for joining. elon musk says he can change the world, but not if you only works a 40 hour week. the man behind tesla, spacex, and other companies wrote a tweet that you need to work between 80 to 100 hours per week to make an impact. last month, musk told someone he was working up to 120 hours per week at times as tesla ramped up model three production. coming up, u.k. lawmakers are not happy with mark zuckerberg as the facebook ceo pulls a no-show. why the government is cracking down on the social network, next. if you like bloomberg news, check us out on the radio. listen on the bloomberg app, bloomberg.com, and, in the u.s., on sirius xm. this is bloomberg. ♪

brad: where is mark zuckerberg? that's the question asked today by the international grant committee on disinformation and fake news. a select committee of the u.k. parliament that invited lawmakers from nine other countries to participate. one department we did this image -- tweeted this image of an empty chair after facebook's founder failed to show up. in washington to discuss is the ceo of content next. they represent premium online publishers. also with us is jeremy who joins us from london. set the scene. this was an extraordinary hearing with nine countries. what was it like and how did he

-- how did it go for facebook? jeremy: as you said, the u.k. parliament invited lawmakers from other countries like singapore, argentina, brazil as well as small european countries to this hearing. with the idea that maybe they could draw mark zuckerberg out. the committee has asked zuckerberg to come several times. he has always refused. he did not show up again which may lawmakers angry. instead, facebook sent richard allen reaches their chief -- richard allen, who is their chief lobbyist in europe and is head of policy for them in this region. he tried to answer their questions but a lot of lawmakers were not happy. at times, the exchanges got heated. brad: i thought you started a tweet with the word woah. i think you were referring to revelations that facebook knew about interference back in 2014 from russia. why did the committee think that and why is that important? >> that served as documents that were famously seized over the

weekend and we will find out more about the documents in the next few weeks. i made the comment about the timeline in which facebook possibly found out about cambridge analytica. senior managers at facebook, and there is a list of who the employees were, were aware of cambridge analytica. she said, in 2014 or 2015, and this is the first time we have heard evidence facebook possibly knew about cambridge analytica. before we read about it in 2015 in the press. and that is important. brad: clearly, we will be hearing more about the documents. they are seized as part of a california case filed against facebook. the u.k. parliament has the documents. what do you suspect is in those and why have they come so central to the u.k. government's inquiry into facebook? >> this committee is owed a lot of credit by pretty much everyone along the growth --

-- everyone around the globe. everyone should be thrilled at how these lawmakers are try to hold facebook accountable. that set of documents may be further evidence to what was actually happening at facebook back in these critical years of 2012 to 2014. there were a lot of questions around facebook's decision-making and who had access to data, which apps were restricted from getting the data and cambridge analytica is a part of that discussion. brad: jeremy, in your story today on bloomberg.com, you got a comment from facebook about this potential revelation and that maybe the company knew about russian interference as early as 2014. what did facebook say about the

revelation and about the documents? jeremy: this is about a document referenced but not released by the committee. damien collins, the head of the committee, said there was a document from an engineer citing russia using these features that allow third-party app developers to harvest the state to back in 2014. facebook told us this was taken out of context and this claim had been investigated at the time and found to be groundless. that is what they told us. richard allen who was testifying, he refused to discuss the documents in front of the committee because they are under seal in california. others say they are only representing a partial view and selected by hostile litigants to make facebook look bad. i think we will find out quite more and the committee has promised to release the documents over the next week. brad: should mark zuckerberg have been there today?

jason: absolutely. they have been after -- asking very specific questions and theanswer has always been buck stops of mark zuckerberg. the people that testified previously did not have the answers to their questions. mark is in an empty chair and i think that looks poor on facebook. they refuse to answer the question regarding when mark zuckerberg personally knew about cambridge analytica. it is quite a sign of poor faith in facebook to nine different countries not to show up for this hearing. that is concerning. brad: jason, following this, have the prospects changed from regulatory action or actions like splitting up the country? -- or antitrust actions like

splitting up the company? jason: the ftc is the most important regulatory group at this point. they are investigating facebook and they told us that. we don't know when facebook knew about the issues and the timeline. there is a lot of questions that they need to be asking. there is a significant find behind that and they could possibly push to break up the company. we think that is unlikely, but it is worth pointing out also that there was a surprise appearance at the end of the hearing today by a former cto of the ftc. he just happened to be in london and they asked him to come over about something he tweeted. he specifically got in front of the committee on short notice and said what richard allen had told him hours earlier was either misleading, false, or a lie. there are a lot of questions the ftc should be asking now. brad: how does facebook feel at the end of this committee hearing?

jeremy: i'm sure they don't feel great. they took quite a battering. on the other hand, in a way by denying the committee -- zuckerberg, by not having them be there, in a way they kept it is contained. if zuckerberg had had testified, you would have every network on the planet broadcasting it alive. -- broadcasting it live. you had that kind of attention around his senate testimony earlier in the year. by sending richard allen which is this anonymous figure to testify, although they angered the lawmakers by not having zuckerberg there, they probably denied some of the options that -- some of the option that they might have gotten had he had appeared. brad: thank you both for joining us. amazon just passed its biggest shopping day on history topping its very own prime day on cyber

monday. that's next. "bloomberg technology" is livestreaming on twitter. check us out @technology, and be sure to follow our global news network, @tictoc, on twitter. this is bloomberg. ♪

brad: cyber monday sales hit a high this year and amazon was no exception to the record-breaking. the retail giant said it had its biggest shopping day in history on cyber monday. the holiday weekend set a record for amazon as customers purchased millions of more products this think giving through cyber monday compared to the same period last year. customers worldwide bought more than 18 million toys and 13 million fashion items on black friday and cyber monday combined.

joining us from new york is shira ovide. from reading your twitter feed this morning, i gather you were not impressed by the press release. is that true? >> i think you can comfortably ignore everything amazon says about holiday shopping trends this year and every year. the word record amazon used it seven times about holiday sales over the thanksgiving weekend. of course, as is their habit, there was no specificity around the numbers. is 18 million toys a lot for is 18 million toys a lot or a little?

brad: there was some stuff in here, 20% more sales for small and medium-size business. doesn't that cap for anything? shira: it is directionally useful to see what people are buying. that often reflects what amazon is promoting or discounting. it is useful to know they sold a lot of echoes and instant pots but it is not as revelatory as they suggest. brad: i moisten interested in how amazon uses these to promote the things it cares about. you have the four stars store, the ring devices for your home, the echo devices, these are the things amazon wants to highlight and was people to pay attention to for the holiday season. shira: and i was struck looking on amazon over the holiday on how much amazon was promoting its own products. you saw a lot of deep discounts on it could devices and the ring which is the home security -- on echo devices and the ring

which is the home security company that amazon now owns. as you said, there were promotions for things like prime video releases and amazon's digital music service in the -- and the four-star stores and bookstores. it is interesting to see how much amazon uses the holidays to promote itself. perhaps no big surprise there. brad: i will serve you up a softball. amazon appears to have coined the phrase in this press release. "the turkey five." i have not heard of this before. what is it and what you make of it? shira: i had not heard of it before either. turkey five refers to the five days between thanksgiving and cyber monday. i guess a frenzy of thanksgiving related deals. i've seen it somewhat catch on in the analyst community, much to my chagrin. if you can see my eyes rolling this morning when i read turkey five, it would have been quite a sight. brad: i think maybe we can agree never to utter it again on bloomberg technology.

shira: it is a vow. [laughter] brad: thank you for joining us. tank is revolutionizing the midwest. tech is revolutionizing the midwest. midwest. how columbus ohio is leading the transformation of tech, next. plus, the rates for china's ev markets. can a chinese backed silicon valley designed car beat tesla? this is bloomberg. ♪

>> this is bloomberg technology. i am brad stone. columbus, ohio is getting smarter. in 2016, they beat 77 other cities for the department of transportation's smart city challenge, winning $15 million in grant funding and designation as a smart city. it is committed to redefining public transportation and what it calls the new midwest. columbus has eclipsed the rest of the midwest in ev sales with a goal of introducing 300 electric cars to public fleets by 2020.

they also developed a system of self driving shuttles which will begin accepting passengers in december, and last month it was the number one city for unicorn startups, and here to discuss is the mayor, andrew ginther, and the ceo of a development organization, columbus 2020. mayor ginther, i need to start by congratulating you on the buckeyes win over the wolverines. i was very excited to see that. >> always a good day when we are living wolverine -- whooping wolverines in columbus. brad: tell me about columbus as a hope to unicorn startups. -- as a home to unicorn startups. it is a home to ohio university, the fast food chain wendy's, but

how did you foster the entrepreneurial environment? mayor ginther: it is rooted in the columbus way. we do public-private partnerships better than anywhere else in america. we are very proud of the success of insurance and coverage by meds, and we believe there is a bright future for entrepreneurs in the city. we are focused on affordability, mobility and talent, all things that are key ingredients to making sure that startups and entrepreneurs are successful. brad: i am sure a lot of developmental organization heads are looking at the success of columbus, trying to figure out what you did to stimulate an environment that was good for startups. what are the lessons for the other cities? >> we had a comprehensive strategy. we take care of markets that already operate. we try to attract the best from

around the globe, and we believe actually those two things lead to a great entrepreneurial environment. commercialization, institutions, other platforms we have from the private sector, it is increasing every day and it is a comprehensive long-term strategy to make it the best lace in the country to do business and scale. brad: i mentioned the fact about columbus defeating other cities in ev sales. talk about the visions for the public transportation network. how do you incorporate these vehicles and what would be the impact on congestion? mayor ginther: smart columbus has been critical to our success and progress we are making. we lagged behind midwestern cities. since the award, which is really communitywide, not just a city project, but with the award from

dot and the paul allen philanthropies, we have been able to build a movement in central ohio that has put us ahead of other midwestern cities and ahead of the nation with respect to electric vehicle adoption. it does take all of us raising awareness, working with dealers to make it easier to purchase and access and building infrastructure with charging stations and other amenities. corporate leadership has stepped up in big ways of ultrafine their fleets as well as investing in a smart grid of the future. brad: columbus was one of the finalists for amazon's hq two. are you happy with how amazon conducted it? mayor ginther: amazon already knows the great place central ohio is to do business with thousands of employees already working in the region. they know that columbus has a bright future. we believe through this process

we have a great roadmap for economic development for our region over the next 20 years. it focuses on making sure we continue to leverage and use affordability, enhanced mobility options but also really aggressive about recruiting and retaining talent in central ohio. we believe those three things will drive economic development in the future. we have to be aggressive and thoughtful and strategic about putting those in place. brad: let me ask you, the mayor is being politically astute with the answer vis a vis amazon. it didn't work out that well. alphabet also announced a process to help facilitate nonemergency transportation in the city.

how do you feel after these two relationships, working with big tech companies when they do show interest in columbus? kenny: we consider amazon and existing industry that we work with on a daily basis and didn't take the process would help us immediately to refine our value proposition to all kinds of companies, forced us to actually think about scale in ways we hadn't because of the size of the project, and we are in touch every week with the world's best technology companies, including some that are already operating within our region like aws, facebook, chase has a large operation in our city, nationwide insurance doing technology out of the columbus market. how do we become a great employer in a great city for those companies and continue to scale?

tech is clearly impacting every future business model. brad: are you happy with the time amazon devoted to ohio -- that alphabet labs has devoted to ohio after the announcement? mayor ginther: absolutely. we are excited for the start up with -- the future of startups, entrepreneur ships, existing technology. they have been great partners to us, and as we look out on the future, we think columbus and central ohio's future is very bright. brad: ok, mayor of columbus, ohio mayor ginther and kenny mcdonald's, thank you for joining. coming up, a chinese back to start up using the know-how of silicon valley to make the next generation of ev vehicles. we will talk about the potential of the chinese market with their ceo next. and google workers have another problem with management strategy.

the latest revolt from employees coming up. this is bloomberg. ♪

brad: this is the chinese backed and based electric carmaker, hot on the wheels of tesla in china. the company is looking to target the growing market for ev in china. they raise half $1 billion in june and are considering future funding and the option of going public.

joining us now from the floor of the l.a. auto show is the ceo and ofounder. thank you for joining us. i'm imagining a lot of our viewers have not heard of your company. they have heard of tesla and other electric cars. tell me what you are introducing this week and when we can expect to see it on the market. >> hi, everyone. thank you for talking to me and being interested in our company. it is very exciting to be at the l.a. autoshow because normally [indiscernible] they are not cars in the traditional sense. the product will be very different and the business model will be different. even selling electric cars -- different business model. you look at different companies now and can find [indiscernible] this is not a sustainable business model.

we see the car as a parking lot on wheels. this means our business will be selling from the business that beginning. it is based on what the smartphone and consumer electronic industry is doing today. [indiscernible] eventually become a provider of mobility and of shared mobility. this is what we are built around. brad: we cannot buy one of your cars today and most of your viewers are not at the l.a. autoshow. tell us what the car is, how much you will sell it for and how it differs from other ev on the markets. carsten: what we introduced at the beginning of this year, this is a very safe suv, on the affordable side or it will be around $145,000 u.s.

-- around $45,000 u.s. it will go on the market next year in china and come to the u.s. in 2020. the basic approach is it is affordable, it is multiuse. we are focusing on the user experience. what we are going to unveil in l.a. is our second product, built on the same [indiscernible] and this one is very exciting new interpretation of the sedan. china is still a very big market. a new interpretation, very exciting [indiscernible] the features of this car, we will unveil here and show in our press conference. brad: and you mentioned you will start selling these vehicles in the chinese market.

you have a lot of your engineering and manufacturing in china. why the bit on china as opposed to other countries? carsten: we were seen as a globally company from the -- global company from the beginning. if you want to be global, you have to be present globally. if you look from where the product you want to do, premium product, the debate is premium car. this means you have to be in china and germany where the premium cars are. and it is a smart car with connectivity, autonomous driving, very fancy style of using. [indiscernible] you -- that you can only do in silicon valley, state-of-the-art

technology you find in silicon valley. if you want to be successful in the chinese market, [indiscernible] then you have to be in china, produce in china and do your price change. this was a global company from the beginning. we have one global product, global brand and business model. brad: it sounds like you spend a lot of time on airplanes. we mentioned raising 500,000 dollars in june but one thing we learned from tesla is the capital requirements not only to bring a car to market but to scale manufacturing and get profitability are high. what do you plan to do to keep byten fully funded as you move towards releasing your first vehicle? carsten: we are going to production the end of 2019. our plan is under construction

with the phase done now. we are installing machinery, we have built prototypes. we will bring products out of the production process come bringing it to the [indiscernible] the end of the year. we went through different two funding rounds already, a round, b rounds, now we are preparing the c round funding which will be finished in the first month of next year. this will bring out -- brad: ok, thank you for joining us. coming up, google workers sign a public letter against the company's plan to return to china. we will discuss that next. this is bloomberg. ♪

brad: alibaba chairman jack ma has been announced as of communist party member. he was among the most recognized business leaders. he is one of 100 that the party will honor as a celebration, marking 40 years of the economic reform and opening up. google's plan to bend to the chinese governments desire to this government's desire for has notg search results gone well with employees. the right, it is oppressing the vulnerable wherever they may be.

dragonfly in china would establish a dangerous precedent, one that would make it harder for google to deny other countries similar concessions . to discuss the issues around this, we are joined by isaac stone fish, the senior fellow at the asia society and mark bergen who returned from a reporting trip in china. let's start with you. how many employees signed it, and how will google read this? mark: i think it is close to 140. what is rare, there have been public letters before. there was one earlier this year around the contract with the pentagon, and there was one about dragonfly. this is the first time employees have put their names out publicly. it will draw more attention and google management will put more attention on this because of how they go out on a limb. brad: what you make of the argument? they refuse to censor the vulnerable.

isaac: i don't know if that is exactly what is happening here. i would not call the chinese people who get to use google in this case the vulnerable. i think they are helping the powerful, helping beijing, the party. that is striking. it was also strange to read the letter and see the employees say this was not targeted against china, but any country that would do that whereas china is the case they are dealing with now and is by far and away the most important market where any issue can come up. brad: what do you think of the argument that google would have to be bending to the will of other governments isaac:? -- of other foreign governments? isaac: they are setting a bad precedent for alphabet and other businesses and other american tech companies. we see no other market that has

comparable levels of repression and anywhere near the size of china. russia is a smaller market for google and every other american tech company. the real problem for google to enter this way would be the message that it sends to facebook, microsoft and the way it in bold and stationing about, u.s. tech companies are not going to yield. brad: i had the opportunity to interview john hennessy recently on studio 1.0, and i asked about project dragonfly, and he sounded ambivalent himself. does give a listen to what he said. >> anyone who does business in china compromises some of their core values, every company because the loss in china are different.

the question i think comes to my mind and i struggle with is are we better off giving chinese citizens a decent search engine, capable, even if it is restricted and censored in some cases than a search engine that is not very good? does that improve the polity of their lives? that is the struggle we have to work our way through. brad: what do you make of that argument? that mark -- that google can do good even with a censored product? mark: that is what is happening. one of the employees that resigned over this project told me he was talking to a colleague and said a dirty window is better than no window. there was a strong belief and the management certainly would express this internally that google could do more good being there, and what with isaac was saying earlier, we have this balkanization of the internet. 10 years ago when google was in china, it looked different. indonesia, the country is asking google to ban certain apps and in europe they have the right to be forgotten.

there is no consistent internet, so they look at other companies in china and say why can't we do the same? brad: where does google go from here? they are waiting for some license to introduce public -- operation dragonfly. if they were to get a permission to operate in china, considering the blowback and the pr punishment, do they want to do that? isaac: i would guess somewhere there is a spreadsheet about projected revenues not only for china but a host of other projects they have versus the pr damage, employ url, the people who publicly quit to protest this. i would guess the potential games financial are much higher than losses. i think google is going to say unfortunately we will take a hit

of our reputation. we will feel with the trump administration criticizing this. if we can go in, we will do it. brad: do you think they are still going forward? mark: there was a letter to senators saying we feel like we will be behind. china is marketing ahead, and part of this project, even if we never launched it is a way to keep up with the insertion. google looks at tencent and alibaba, the companies in china, and how they are using ai, and i think they want to be a part of that, and even if they don't launch a search engine, they are looking at a cloud business which is less controversial in

congress and with their employees and other parts of alphabet. i think right now we are less likely to see a search engine then we would six months ago -- than we would six months ago. brad: thanks so much. that does it for this edition of bloomberg technology. bloomberg technology is live streaming on twitter. check us out @technology and follow tictoc on twitter. this is bloomberg. ♪

[ phone rings ] what?! ready for christmas? no, it's way too early to be annoyed by christmas. you just need some holiday spirit! that's it! this feud just went mobile. with xfinity xfi you get the best wifi experience at home. and with xfinity mobile, you get the best wireless coverage for your phone. ...you're about to find out! you don't even know where i live... hello! 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.

>> the following is a paid advertisement for credit secrets. the product endorsers who appear have been compensated for their travel and lodging costs. all of the endorsers are actual and enthusiastic and successful users of the "credit secrets," program. ♪