simple. easy. awesome. click or visit a retail store today. emily: i'm emily chang in san francisco. technology."mberg coming up, china's number two smartphone maker losing billions of dollars in market value. has the global smartphone slowdown come for them? and bitcoin has taken a turn for the worse. the cryptocurrency dropped the indicative for the rest of the year. ?nd the bridge builder

elon musk is no stranger to brash talks so why does beijing think he has a shot bringing washington and beijing back together? another day, another smartphone maker feeling the heat. it is not apple or samsung. -- that means stock has fallen 17% over that span. analysts including ones that goldman sachs have cut their price targets as the slowdown market continues. we sat down with the xiaomi co-founder. apple recently cut sales forecast for the year, blaming much of that on the slowdown in china. what do you see in terms of smartphones inmi

the chinese market? are you seeing any evidence at all that consumers in china are ditching u.s. brands and moving more toward domestic brands? >> 5g is coming very soon. at this point, the demand for smartphones is declining. when 5g comes, we will see a peak in demand. four of the world's top six phone makers are from china. it is understandable that foreign brands are facing pressure in china as local brands are more competitive. just wanted to push you on what your priorities were for overseas expansion. you talked about india, europe, countries like spain. what are your priorities? have those priorities changed at all given the current environment? the new priority will

be european markets. we hope to choose two or three countries to break into to prove xiaomi is capable of putting a footprint in those countries. tom: there is skepticism about is anaim that xiaomi internet services company, more than just a hardware company. are you doinglly to address those concerns? and when do you think the steps you are putting in place will start to have an impact? lei jun: xiaomi is an innovative company that includes hardware, e-commerce, and internet. xiaomi is a new creature. xiaomi had revenues of 9.9 in 2017.uan in third quarter 2018, that increased with than 80% year on year. it is growing very fast. our active internet users number as many as 220 million people. emily: tom mackenzie with xiaomi

co-founder lei jun. i want to continue the discussion. josh will the cover story for this week's bloomberg businessweek, looking at how u.s.-china tensions are impacting the global smartphone market. give us a bigger picture here. it we heard about the revenue forecast cut for apple. also cutting revenue. but not mentioning china specifically. and now xiaomi. what is happening? see awith apple, you reminder that the u.s. and chinese economies are really interconnected. and any action that policymakers take that have a negative impact on the chinese economy will eventually end up impacting american companies. there is more going on in the

smartphone market than just the trade war. there are other reasons the market is slowing down, but that is one of the factors we are seeing here. i mean, this revenue cut from apple is unprecedented. i pointed out that apple is essentially a luxury product. especially in the chinese market. all luxury brands have suffered pretty aggressively in their market. if you add to that the overall isand for smartphones, it softening. it has been a growth industry for 12 years. it is growing at such a tremendous rate that people have a hard time understanding how growth actually tapers off. in pcs and other devices. why would smartphones be any

different? emily: are smartphones the next pc? om: they already are. the demand will be tempered going forward. it will be a battle within the ecosystem. i think in china, the market will be more interesting because it will be dependent on all the services in china, not just the hardware. you would want to give an advantage to companies ei that have massive influence in their domestic market. how much does this actually have to with trade tensions? tim cook would like to see apple do better in emerging markets this past quarter as well. what we are seeing has to do with time specific trade tensions and trade talks? how much does it have to do with a broader global smartphone issue? josh: i definitely think the

latter is a significant factor given the amount of tension we are seeing to the trade issues. everything is understood through the lens of that. that said, the sock -- smartphone market has been softening for a while. smartphones are not buying them with the same frequency as they used to. there's is not as big of a difference between these generations. there will be a softening. you will look for companies trying to make their mark in --vices because the mark hardware will not be the factor. emily: will services be enough? absolutely. apple has apple pay, apple music. i think they have an opportunity in the video aspect of their

business. i wish they would get their act together on the cloud business and make a lot of money there. there is a lot of opportunity for the company. most people forget why apple gets a premium. they have made a primacy their primary unique selling point. you do not get that with an android phone, no matter who is making that android phone. is some semblance of privacy challenges. you aret standpoint, if in the apple ecosystem, you're opting for a privacy oriented ecosystem. i think people realize that any year from now -- in a year from now. pc's, theaspect of similarities are so much between the pc business and the phone business. with veryall-out war

low margins except for microsoft and intel. everyone else was living on scraps except apple. emily: do you see the same for a company like xiaomi? the e-commerce business, the services business. lei jun talks about it like a new creature. people don't understand these new lines of business. om: new creatures live in the same space we live in. don't have an insatiable capacity to consume. we keep buying things and getting rid of them all the time. a lot of the electronics companies are going to face that challenge. apple included. emily: josh, is it correct that if and when 5g comes, there would be a new smartphone peak?

will that drive new sales? josh: i don't know. it iseople talk about 5g, often the next level application. that it will power things like autonomous vehicles. the short-term phone makers are not going to see that as the main reason to upgrade. maybe further down the road, though. love for him to define what 5g is before we start talking about its potential. current 4g can do a lot and we haven't even scratched the surface. will be the panacea for everything, i don't buy that. emily: it's not just a u.s. company, apple, that is suffering. , bute talking about xiaomi do we think what is happening with apple could put pressure on the u.s. administration and what is happening with -- u.s.

administration? and what is happening with xiaomi, could that put pressure on china? josh: we know the president watches the stock market. that is a bad story to take credit for. i am presiding over tough times for wall street and this iconic american company. as is not addressed it have seen yet. but it will be political pressure that is inevitable for that. emily: tim cook has made efforts to engage with the white house. joshua burstein, thank you for sticking with us. poised to reign as the darling of facebook apps, offering a lifeboat to the core platform during privacy concerns. share of budgets for ad buyers will double from 2018 to 2020. instagram is the go to choice brands toing new

reach ages 18 to 34. billion ints for $14 assets. coming up, wear a tie every day. run 365 miles. those are some of mark zuckerberg's past goals. moreyear, the goals are serious. it's about fixing facebook. and you can listen to bloomberg on the internet, on the app, and on sirius xm. this is bloomberg. ♪

ceo markcebook zuckerberg is notorious for

setting new year's resolutions. in 2009, he set a goal to wear a tie every day to work. only eat meatuld he killed himself. in 2017, he promised to meet every -- someone from every state in the u.s.. this year, his personal challenges to host regular public discussions about the future of technology and society. it will focus on the hopes of how and technology will shape human behavior. that is it too late for zuckerberg to rebuild trust? k and sarah mali fryer. he probably couldn't get away with a resolution like eating only meets that he killed this year. trying tokerberg is present some of the problems that facebook faces as not unique to facebook. he is saying these are issues with technology and society.

let's talk about it broadly and talk about the issues that we all face with ai, content, and these things that are becoming huge problems for him. but also, other companies. emily: will something like this help him lead better? he could be a talk show host going forward. see -- i think they are shifting attention away from what is essentially their problem. they haven't addressed the core problems as a company at home. is, ig about resolutions think, just getting us excited about nothing. emily: is there any chance that zuckerberg leaves facebook? om: hell no. emily: what about cheryl? om: why would she? emily: sarah, you are continuing

to talk to sources internally. what do employees think about leadership? sarah: there is a little bit of concern that there is a focus on how to get people to trust us again through messaging and not through the actual action. business as usual is what is going on cap many parts of facebook. zuckerberg has tried to make the case. about still excited artificial intelligence, vr, and all of these exciting things. we are investing in content, policing, stuff like that. i think facebook is struggling where their line is. how much they are responsible for and what should be on government or independent entities? and think that is what zuckerberg is trying to get at, which are mostly content

marketing, let's be honest. emily: we know this is anecdotal. we see little evidence that engagement is changing. but talking to people young and old, there is a significant distressed and facebook. facebook.t in can that trust be rebuilt? said this last time. it took 25 years before yahoo! became irrelevant. it will be a while before facebook loses its place in society. i think we have to use this platform going forward. but the company needs to be clean and clear about what it is doing and what it plans to do with our information. and be very careful about who it partners with. i don't think they address those

issues clearly. in the end, they have to grow. and basically they are making us waste our time on facebook and instagram. emily: sarah put out a story this week that on certain phones, facebook is preloaded. and you can't delete it. you can't delete it if you want to. facebook won't tell us how many of these partnerships it has. om: it used to be like that with phones all the time. app companies paid a lot of money and that is part of the deal. why would they not pay money? know: why can't consumers if i'm going to go buy a phone, why can't i know if facebook is preinstalled on it?

why don't you have some transparency around these deals so that you can say, if i'm buying a samsung phone on t-mobile, this generation will have facebook preinstalled. but if i buy this one, it doesn't. should there be more transparency around that? om: absolutely. and there should be more transparency about phone company selling our location data without telling us. pitt, i looked like brad but i don't. i think facebook is a company that is going to find very hard to change itself. be brought instagram down with it? sarah just put out a story about instagram's ad revenue doubling in the next couple of years? instagram fans and writing books about instagram. we know a little bit about this market.

say instagram is becoming untenable to use already. .very fourth story is an ad i don't know how they are going to double that. inically, read a story, then -- an ad. for every two photos, an ad. this is what they did with facebook and we will see the same thing happen with instagram. emily: that if emerald bar on top of instagram -- that a bar, it isephemoral a barrier to produce that content. if you are an advertiser, you have to create a unique ad. it is a really big creative

barrier for advertisers. growth really drive at a . you see a social network filling the void. om: you have microsoft making another search engine and google tried to make a social network. it will be something else. look like what the social network of today is. we don't know yet.

it is a shame that snapchat invented that whole idea and they are not able to cash in on that. strange that they copied and ran with the idea to make money off of it. emily: we will continue to talk about this all year. always good to have you both here. coming up, twitter is expanding its streaming presents, reaching a new deal with the nba to stream only the second half of each game. and bloomberg tech live streaming on twitter. check us out every day. this is bloomberg. ♪

emily: twitter has reached a deal with the nba but not the type of deal you will imagine. they will not be streaming games, but part of games.

starting february, twitter will stream the second half of nba games focusing on a single player. half, usersirst will vote on who they want to focus on. whoever wins will be this all focus of the nba live streaming that the nba is calling iso cam. is buying naming rights to san francisco giants stadium for more than $200 million. this is a second deal done to boost image in the bay area. will beent at&t park named oracle park and will own the rights for the name for 20 years. they have oracle arena in san francisco east bay. positive, after a start to 2019, bitcoin has fallen dramatically. will 2018 18 cryptocurrency volatility continue into the new year.

and what can the smartphone market teach the world as the slowdown hits? we will discuss. this is bloomberg. ♪

emily: this is bloomberg technology. back to our top story, the global smartphone slow down hitting xiaomi. suffering three straight days of losses on the hong kong smart .arket -- stock market that totals 6.2 billion dollars. if you look at the numbers worldwide, you can see how growth is at a 6% loss in the third quarter of 2018. meaning there were four straight such quarters in the red. i want to bring in tom giles. the let's dig deeper into

xiaomi numbers. how dismal is the slow down for xiaomi given that it is a chinese set maker for the biggest smartphone market in the world? tom: they should have it laid out there for them. right now, smartphone buying in china is slowed down. of this whence apple issued the warning. they talked about less demand. we saw with samsung earlier this week. on track for the second year of declines. this is the market that has been booming for a decade. we see the slow down one after another. all falling victim. in particular -- actually, all three of them, when you look at who is winning in all of this is a name that

has been in the news recently. that is huawei. whether it is pricing or the ability to connect with the awei has been doing a better job than any of these folks. it is competition and the separation of winners and losers. the more you hear about it, the more you hear huawei's name. emily: they are gaining share and it is fascinating. you wonder if the trade issue will have a greater impact despite what we are seeing with xiaomi. anka of america said there may be some sort of informal boycott going on of the u.s. goods and possibly the iphone. how big an impact is that happening -- is that having? reports that companies in china are encouraging their employees to

wei and shine some of these brands, particularly apple. huawei'sto do with arrested onouver, allegedly violating u.s. trade embargo against iran. that had big, global implications. here is the symbol that you can rally your employees around and the chinese public can rally around. it is a national champion. it could be playing a role. we won't know until we get fourth-quarter numbers. we will continue to plot

the smartphone slow down. bitcoin volatility continues into the new year. it suddenly start, and declined -- and sharply declined on thursday. the dramatic drop brings bitcoins when your losses to more than 70%. here to discuss, chief commercial officer said he came -- sonny king. are there reasons that this week in particular we see another sharp decline? a other than it just has been terrible week for bitcoin. stocks are doing better so maybe people are moving. in 2018g that was huge -- is this concept concept that it is a port in the storm and a safer asset.

we see stocks fell, bitcoin fell. it is all connected. emily: i know what you are going to say. how bullish are you? .> i am still long-term bullish new employees, new tech people. it businesses are still moving along. it businesses that built around having a price at $10,000. emily: you're talking about a billion dollar market that lost -- sonny: right. bitcoin is still hiring a lot of people. they are still launching products. it we just don't know when it will happen. the regulators are making this an asset class that is traded

around the world. when i originally said was about investing, but what about the usage of bitcoin? that was down 80% on average last year. think, as some did, that you are wrong. look at the growth of usage. worth 20,000. going down 80%, it should be worth $40,000 or less. maybe it is worth 2000. sonny: it was a total of -- a

total anomaly, actually. it turns out that not a lot was happening and it is still far down the road, actually. stephen: the usage and the regulatory picture are not going in the direction of bitcoin. the image of it as a safe asset not going in the direction of bitcoin. i don't get it. i think the heart of bitcoin has long been done a lot of the ande was for illegal goods

make transactions that people thought could not be tracked. it turns out it can be tracked. are seeing the crackdown, that usage is going away. and it hasn't transitioned into a useful currency for legitimate transactions. that illegal usage went away a couple years ago. people were unsure about regulations -- regulatorywhat action are you expecting this year? sonny: three or four years ago, surere sure -- we were not if the government would make bitcoin illegal. the big progress that we made, actually. is where institutions is

a big win. see anotherll anomaly. stephen, thank you so much for stopping by today. coming up, construction is one of the largest untapped industries in terms of technology. this software company wants to make it a priority. we will speak to the ceo next. and later in the show, elon musk broke ground on a new tesla plant in china. now he might be breaking into an ultra-exclusive chinese club. this is bloomberg. ♪

the global construction industry is valued at over $10 trillion and has been notoriously slow to catch up with technology. construction in efficiency cost the global economy $1.6 trillion a year and construction projects regularly lose up to one third of their value because of it. to close the gap. in the last month, autodesk has invested $1.5 billion to acquire startups. they have over 700,000 whileuction of national's the grid allows workers to collaborate on digital blueprints. joining us now to discuss the autodesk ceo, good to have you

on the show. why construction? >> it is ready. it is one of those classic convolutions. they know if they don't digitize, they will get outbid. but construction can be cyclical and if there is a broader economic slowdown, construction can be hit. andrew: downturn in construction, this is what happened in the last downturn. investction companies more in i.t. and technology. they are competing more aggressively in the most digital -- and the most digital bidder wins. emily: but what about general in efficiency?

-- inefficiency? one third of projects lose their value. worked onve you ever your house? you have experienced exactly what the construction industry is like. there is a pile of waste, eight or 10 redo's. it always ends up being more expensive. translate that to a bridge. it happens exactly the same way as it does in your home. all they have to do is some simple things. keep sending the contract to the list of things you want fixed. what if that is digitally managed? people have direct feedback that goes on and on. this is the kind of basic efficiency problem that we are tackling right now. emily: how is this contributing to topline growth for autodesk? nextw: autodesk is the billion dollar business. no doubt about it.

we are the leader in building information modeling. we want to move that through the entire construction process and turn it into a manufacturing process. anld a building like you do airplane. that is a huge market for us. we think construction is probably the fastest growth manufacturing sector in our business moving forward. all of this equity market volatility impacting your views on i.t. spending? people continue to invest in digitization even when things slow down. if there is a big macro impact, you will see some deceleration of spending. it usually happens at the low end of the market. at the high end of the market, that investment continues. they need it to be competitive. emily: will we see more m&a from you or others? andrew: i think the twin construction and assembling a plan to grade, we have a pretty

broad solution when you combine it with our existing 360 portfolio. you will probably see a slowdown but we are continued to be interested in manufacturing. we are growing robustly and we will do what it takes to win in the market. emily: what are the other white spaces you see? andrew: more and more, manufacturing is designing decisions to become more connected. automating decisions that used to be passed downstream. that automation will drive new ofes of growth and new types design systems. and frankly, a renaissance in how people build things. we are looking at the next five to 10 year macro trend. we have seen a lot of consolidation and software with ibm, red hot, salesforce. would you be interested in a merger? andrew: things come our way all

the time. everything we will consider. we are not looking for a merger and considering a merger. we think we have a long path ahead of us. we are more interested in doing what we do well. but who knows what happens over time? emily: in five years, what does autodesk look like? andrew: it is the design and manufacturing software. we automate between those two processes. emily: we will talk to you again in five years, if not before. makepeace?, can musk why beijing thinks the ceo can become a bridge builder. that is next. this is bloomberg. ♪

broke ground on a new $5 billion factory in shanghai on monday. and he also met with chinese or near -- with the chinese premier that expressed hope that tesla could become more than an electric car maker. we hope your company can become an in-depth participant in china's opening and a promoter of china u.s. relations. he floated the idea of giving musk something quite rare. chinese residency. let's go to new york where max is standing by with ramy inocencio. how rare is it for china to offer someone a green card? it is pretty rare. only about 10,000 foreigners have gone into this ultimate

exclusive chinese club. folks who have this chinese theanent residency, so-called chinese green card gives equal treatment as chinese citizens if that is something that you want. another question. but you can buy a home, get social insurance, get a drivers license and financial services. to the question of eligibility, it goes to folks that are smart and powerful, if they have some contribution to the chinese economy, to society, to technology. especially if you are contributing a lot of money. shanghaiopening of the tesla factory. elon musk definitely hits a lot of those boxes. emily: should we call him ambassador musk? or is that too soon. when you think about diplomacy,

elon musk is not the first person that comes to mind, as our producer puts it. of two things. the tesla perspective. elon musk needs china. china is the most important growth market for electric vehicles. perhaps the most important growth market for everything. it is a place where tesla has not played very much. getting this factory and making nice with the chinese government is very important to elon musk. what does china want with elon musk? it wants is basically a public relations opportunity. subtly take a dig at president trump and maybe drive a wedge between elon musk and president trump at a time when there are trade negotiations and lots of tension. . think it is telling this is not an offer made in the back room. it was made for the purposes of tv cameras. and there's a reason we have not

seen a comment from elon musk on it. we seeand how often do china use something like this as a political tool? good question. it is more about the brain gain that -- brain game china is trying to do. these folks are superhigh level. the question is if they needed or not. this started from 2004 when the first person who was a nuclear physicist was given this, may be awarded might be the correct term there. nobel laureates in chemistry. and the first nba player, stephon marbury in 2016. the question is if they need it or not. i do have a little bit of skepticism here. there is no free lunch. if you are given something free, what does this mean? he basically wants to pave the way for elon musk to contribute further to china's+++

to contribute further to intellectual property and technology processes there as tesla ramps up even more. emily: and i wonder if some of the big tech ceos might have tried to break into china. mark zuckerberg has been trying to get back into china for years. max: i think it puts elon musk into a difficult position. what he wants to do is, as quietly as possible, he doesn't want to wade into the political back and forth between president trump and the chinese. a sickly, we are one tweet away from some kind of embarrassing thing that can spiral out of control. i don't think tim cook and mark zuckerberg are jealous here. what is kind of interesting is it speaks to just the power of the elon musk brand. we talk about his hijinks and the craziness all the time. he is someone the chinese would be happy to claim as one of their own. ramy: as max alluded, this is more for the cameras here. it using elon musk for some kind of political purpose. elon musk is breaking ground here. let's do something together. levelther point, a second here. if anything, this will help china and the beijing authorities push forward. their own goals in terms of made in china 2025 and the ev they want to get out. by 2025, the country wants to have 7 million ev back on the

roads. that is 20% of the sales they are expecting. that is supporting tesla and the bottom line. oppo over to the bloomberg terminal. i want to show you the forecast for new energy -- hop over to the bloomberg terminal. i want to show you the forecast for new energy. china's share of the shales -- sales of ev will be more than through 2029 and 2030. this is playing into the hands, playing into the roles of china for its own purposes. tesla all right, well declined to comment on the offer. so who knows if it will be accepted. ramy and max, thank you very much. that does it for this edition of bloomberg technology. we are live streaming on twitter. follow the local breaking news

on tictoc. i'm emily chang in san francisco. this is bloomberg. ♪ amazon prime video is now on xfinity x1.

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anchor: good morning from bloomberg's global headquarters in new york. anchor: welcome to daybreak asia. ♪ our top stories this friday, asia-pacific markets look set for gains, on course for the strongest week since early november. anchor: the fed reinforces the feeling that a rate hike causes coming. jay powell says he can be flexible. anchor: president