>> i am emily chang in san francisco. up, apple plans to cut back on hiring. we have details of an all hands tim cook.th tick -- plus, a high-profile executive leaves snap. starting door is to

the year with a new push into global expansion. first, our top story. bloomberg has learned weaker than expected demand or the latest crop of iphones has apple planning to cut back on hiring. aboutok told employees the plan the day after he wrote a letter to investors. now, you have the details of this meeting. what exactly did tim cook tell employees? >> he penned the letter and sent a memo. apple would if conduct a hiring freeze by an employee, meaning will they stop hiring people for a short or long time? does not believe hiring freezes or a solution to their current situation. look at theire a divisions and they would reduce the amount of hiring in certain

divisions that at the time or yet to be determined. he said some of the key groups like artificial intelligence would not be impacted. >> well this affect expansion plans in austin, and l.a.? >> they said they would be expanding in culver city, l.a., and san diego as well as a new secondary campus in austin, texas. cook said those plans will be affected by the reductions. showingave a chart employee growth over the past 10 years. 2018, they grew by 10%. how significant is this in the --text

they have so many people. it is unclear whether they needed to keep hiring at the pace. make sense for them to pause and see where they need people. they might not need as many people in iphone software. there wererted smaller meetings with different executives to walk them through the plan. way apple isthe organizing it, there is a group of lieutenants, senior vice all of them, they have their own lieutenants. those senior vice president totings discussed the need up innovation. this is the opportunity to evaluate going forward how apple could be more innovative as a

company. >> why ai? it is important for apple today as well as the future. it is going to become the heart of the iphone. inre are a lot indicating -- as to getting -- investigating. executive fromp google several months ago. that is a new team, a new thing being built. difficult to reduce hiring on a new team. >> we are continuing to look for clues about what is going on with apple in china. do we have more information about why iphone sales in china are slow? >> i don't know if the tariff is really having an impact. the bigger impact are the local

chinese phone makers. particularly huawei. giving apple a run for their money. some devices are just as good or superior to the iphone, that they could cost a third or half the price. we did math on what the average white-collar salaries are. the differences are massive. you can see why you read if someone feels it is better, why they are going to go for the wally device. -- huawei. pursuing asecutors criminal investigation against one way -- huawei. for aludes technology robotic device t-mobile uses. quoted saying the inquiry is advanced and they could see an indictment soon.

the justice department has declined to comment. shares of snap tumbled after news of a high-profile executive leaving the company. tim stone has resigned after just eight months on the job. he is the latest in a series of executives to have left in the last couple of years. around 20 since departures since the company went public. here is sarah frier. what will we know about why he is leaving? >> this is the latest in a series of departures. it is becoming difficult to find an executive who can last. they said there was no dispute with management but i'm hearing differently from my own sources. they are goingng to have to fix longer-term. they are going to have to show

they can have a less volatile future and a more predictable executive team. >> he said it is not related to any disagreement. management, etc.. what are your sources saying? saying there have been some dispute over what rules should be. sp and cheddar have said that was over some dispute, how he wanted a promotion. it has been an interesting time for snap. i reported earlier last year in some cases he has not handled this well. there was one executive, he offered the chief business officer role. that person has worked out well but the way it was handled is indicative of some of the immaturity at the top that is going to be a problem.

>> i have a chart comparing the market cap to twitter. when snap went public, they wanted to differentiate themselves. deceased so see it themselves. if you look at the blue line, it has gone up whereas snap has gone down come on now twitter is a billion dollar company. itis hard to believe, given went public at $30 billion. >> at first we were worried maybe snap would be the next twitter. now they have figured out how to grow. they are looking like they would are consideredy like twitter is today. maybe they will recover. if they cannot understand a way to grow with their management

being consistent, it is going to be a big challenge. >> revealing this news, they said earnings for the current quarter would be slightly favorable to the top and. >> they are going to be looking at users. that drives the advertising revenue. you need the advertising revenue to go up. otherwise, you do not grow. >> thank you so much. netflix, amazon, and apple duke it out. could short form video be the next thing? how they plan to disrupt the market. this is bloomberg.

>> as netflix, amazon, hulu battle for streaming dominance. an upstart wants to up into the -- upend the business. it is building a short form video library designed for mobile phones. it comes from jeffrey katzenberg and meg whitman. it is expected to roll out next year. it has raised $1 billion from alibaba and major movie studios. i sat down with them both to discuss. >> first of all, we don't think we are competitive with netflix. this is a different use case. netflix is fantastic. that is when you invest an hour.

this is a different use case. every morning you leave your house with the smart phone in your pocket and have these in between moments where you have 10 minutes and want to see something great. we are making high quality short form video designed for mobile. it is a different use case that we think has a real opening and has established customer behavior as people watch over one hour of mobile video. we will give them an alternative. >> short form content has not been a huge success. what makes you think this will be? >> you are correct. there is almost no short form episodic, and virtually none of it that is the caliber of production and talent that meg whitman is talking to in terms of the best of hollywood, network, subscription tv.

the amount of content being watched on those platforms today is by a factor greater than all of the networks and subscription services added together. people love watching video on the go. right now it is mostly cat videos. it is good cat videos and they are fun and funny, but the opportunity to do great quality storytelling is the white space. >> you have raised $1 billion, including major studios like disney. what is to stop that from seeing what you are doing, what works, and doing it themselves? >> we have money from the studios and financial investors. it is the first time that all eight major studios and independents have come together to do something. they realize this format could be the next big thing.

they don't want to miss it. they recognize that no one studio could produce enough content to launch the service. there is no library to buy. it all has to be made. they decide to get in the boat together to help create a new format that will be great creators, economics. they view it as a growth opportunity. it is not cannibalistic. they are all in. they have given access to the best ip and talent, which is important in this town. >> there is some skepticism you will be able to produce enough content. >> there is? where is that skepticism? >> there was an article about how some creators are creating 30-minute and 60-minute shows. they are not sending you the best projects.

>> it is fine. honestly, that has nothing to do with the facts of what is going on. >> tell us the facts. >> every single studio is making content for us and giving us access to the best ip and talent. you look at the roster of people who have rushed in here to collaborate and make work and make shows for us, steven spielberg, mark burnett -- i could go on for 10 minutes. the talent is coming to this because they are excited by the opportunity, and financially, it is an extremely rewarding form, which is why the studios are making content. the agent community will tell you there is not a room in which people are not discussing how do we get in the door and make stuff for quibi today.

i don't know the article written, but it is literally 180 degrees the opposite. >> names like james corden, tom cruise? >> all of them. they are on board. it is inappropriate to share their business before they are ready, but there are no names mentioned here that have not expressed extreme interest working with us and making content for quibi. emily: jeffrey katzenberg there and meg whitman. coming up, more of that conversation and what they had to say about netflix hiking as prices, and whether customers will stick around. that is next. we are live streaming on twitter. follow tictoc on twitter. this is bloomberg. ♪

emily: back to our conversation with the quibi ceo and founder. while the content wars heat up, quibi has pledged to have 5000 bites of short-form content. are they on track? take a listen. >> we have things in production. it is early, but we don't see a challenge of developing this content. we are not a studio. we are not creating anything. we are working with investors and partners. honestly, we could not do this if it was one studio. we need everybody in the boat and producing for us.

>> it is not just the content. for sure the content is as unique and differentiated in every respect from what people are seeing today or what exists on these platforms, but equally important is the way in which they will get it. no one has built a platform that is a mobile first, which is as exciting and engaging experience of watching video on a phone on the go. everything today has been imported from television onto the phone, as opposed to build it from the ground up. it is why this partnership is so essential. that is where the power of one plus one can actually make quibi happen. i could not do it without meg whitman. it would not be possible to build this company without her

knowledge, expertise, leadership, management, all of the things. >> and likewise, i could not do it without jeffrey katzenberg. his relationships and creativity are essential. emily: it will make this successful, ai, metadata, the technology that can change video from landscape to portrait on the fly. >> it is a better experience watching video on mobile than six years ago, but not as good as it can be, so optimizing for this device and how to make the work incredible on a mobile, there is a lot of running room and chance for innovation. you are right. machine learning. instant discovery. how do we know what you want to watch before you know. emily: you think people will pay five dollars or eight dollars a month. netflix just raise prices. do you think consumers will stick around? >> i think they are.

there is an unbelievable amount of competition in the traditional form of one-hour television. this is what comcast is, apple, hulu, amazon, hbo show time. we could list another batch of them. here are companies doing short form that you can watch on the go, quibi. our competition are ourselves. we must deliver something that is an outstanding experience on the platform and the device, quality of video and storytelling. emily: you think about netflix raising prices. is that the right call? i have heard binary views. >> i don't know. they have done an incredible

job, built an incredible, quality platform. people love what they are doing. they seem to be continuing to grow. i don't know how to cut up that high. the thing that is so fantastic about it is that it is not our problem. emily: all of these companies pulling content from netflix and doing their own streaming services -- >> they are not to us. everybody is moving over here to the left-hand side, right-hand side, ok, and we are off on our own path. it is a pioneering path. no one has been down it before. it is a whitespace, and that is what is exciting to the two of us. in the words of captain kirk, we

are going where no one has gone before, and we could not be more excited, and so is the talent, hollywood, the studios. they don't see us as competitive. disney does not look at quibi as competing with what they are doing. they are a supplier. >> they view us as incremental for their business. it is not cannibalistic. >> franchises -- as meg whitman said, this is the next big growth opportunity for hollywood. we have had two chapters of this. the first were the movies, the first half of the 20th century. next came television in the 1950's and continues to be a blockbuster business today, but is starting to peak. emily: are we in a tv bubble? >> it is starting to get to a peak. 550 shows is more than anybody

and everybody can watch. by the way, the next two or three years will see 10% a year growth, so the answer is, no, we have not hit peak, but we are getting there. the next big opportunity is quibi. to be able to create a new form of media, which is in quick bites, it could be that opportunity, and the studios agree. it is why they have invested and have become our best suppliers. emily: quibi founder jeffrey katzenberg and ceo meg whitman. we will be waiting. coming up, more on apple's plans to cut back on hiring. how misjudging chinese demand for the iphone is rippling throughout the company. how one health care startup is bringing healing to you. this is bloomberg. ♪

>> this is "bloomberg technology." i'm emily chang in san francisco. haidi: another sign of volatility at snap. shares continue to slide after the company ceo tim stone resigned. the executive had been on the job for only eight months. stone's departure follows several years of executive turnover. wework is defending a process for reviewing party transactions. the owner has made millions of

dollars by leasing millions of properties in which he had an ownership stake. several investors said they were concerned with a potential conflict of interest. bloomberg has learned that apple will cut back on hiring for some divisions. this after tim cook sent a letter to investors about recent problems in china. he said he is not decided which divisions would cut back on hiring. he said the key group would continue to add employees at a strong pace. emily: speaking of apple, i want to bring back bloomberg tech's mark gurman, who wrote that story about apple planning the

cutback. i want to dig in on what is happening in china. we see the market share pie chart shifting, but then we hear from bank of america that there is an an informal boycott of iphones in china. chinese consumers may be not wanting to buy american products. mark: it is a big problem for apple. they reduced their revenue estimates by about 9% for the holiday quarter. is it a boycott or something else? i leaned toward it being something else. i don't think people are buying phones built by chinese manufacturers instead of apple because apple is a u.s.-based company. i think they are buying chinese smartphones because, for their opinion, they are getting more bang for their buck. shery ahn: how much do we know is a direct result of the trade tensions when we are talking

about tariffs impacting apple products? mark: to this point, none of the tariffs have had a pricing impact on the iphones directly. remember, the iphone pricing up to $1000 happened well before the tariff conversation began to pick up. i don't understand the narrative that tariffs are driving down iphone sales in china. i think perhaps there is a point to be made about the tensions causing the informal boycott, but i don't think the informal boycott is a real thing either. emily: there has been a rumor circulating on twitter that apple is united's biggest customer and they are buying the equivalent of 50 business class tickets between the u.s. and shanghai every day. clearly, apple is making big efforts to continue in china.

mark: my first big take on that, how long is united going to be apple's airline of choice after that? apparently, at some conference, they held up charts indicating the stats you mentioned. that is how big apple is. we like to think of tim cook, johnny i've, steve jobs when he was around. imagine 50 business class seats per day between the u.s. and china, that's a lot of people making this happen. that is what is required to have this empire of gadgets. you need people flying from their headquarters to wear these things are built. shery ahn: with the slowdown in iphone sales, we are seeing apple shift their strategy toward services. i wonder, where does that leave a lot of those asian suppliers for apple? mark: these services have to operate on something.

even though apple is expanding apple music to the amazon echo, we see them on sonos now, still, the preferences for them to operate the services on apple devices. still, they go one and one together and it will not have an impact short-term on these suppliers. emily: we know that the market share is shifting and the broader smartphone market is contracting, but is anyone winning? it sounds like huawei is doing better than many of its competitors. mark: huawei actually topped apple to become the second biggest global phone maker after samsung. emily: why is that? mark: some of their devices are pretty innovative, and they are touting things that apple has chosen not to tout for a long time. apple doesn't tout

specifications because they believe in the overall user experience. huawei will talk about their phones folding, talk about how many megapixels they have on the back. it is 40 megapixels, eight very large number in the camera community. they tout their screen resolutions. they are doing it while charging about half the price. they also have such a strong range of devices from cheap to mid tier and expensive. they are really going after what consumers are asking for, especially in china, the largest smartphone market in the world. haidi: we are hearing from media and china that we have seen prices for iphones start to fall in the wholesale market in shenzhen. could we see an official price cut from apple to gain more market share? mark: it is possible. right now, what apple is doing as they are touting their training program in china. they will expand this further

globally as well. what this is going to do is basically show a price that is about 300 u.s. dollars equivalent lower than it is. the question is, what about people coming from other devices? they should be pushing android device trade-ins in china, not upgrade from iphone to iphone, but third-party phone to iphone. emily: it is quite unusual to get these things from an all hands meeting. what do you know about morale? mark: there are certainly a portion of employees who are not too happy about this. you have seen the stock price and decline. they have lost $200 billion since they became a $1 trillion company last year. other employees don't pay attention to this stuff and sort of ignore it or it i don't think it is having a big impact on the company overall, but it is certainly something people are

talking about in the cafeteria there. shery ahn: senior managers are talking about how the slowdown in iphone sales could be an opportunity for innovation. what sectors could they be looking at? mark: there are at least three moon shots right now they are working really hard on. they have their satellite project for mapping, their autonomous vehicles project, and they have their artificial intelligence project. in addition to artificial intelligence and machine learning which is sprinkled throughout the company in numerous other products like siri. shery ahn: thank you so much. this is bloomberg. ♪

emily: since its founding in 2015, heal has been looking to change the health care industry, primarily by harnessing technology for doctors to make house calls. it has made more than 100,000 such housecalls. wednesday, the company announced two high-profile additions to its ranks. dr. paul jacobs is joining heal as its chairman and former florida governor jeb bush is joining the board. i have used it a couple of times. you are announcing that you are launching in atlanta a partnership with aetna. you are also in partnership with several service providers.

what is the next step? nick: over the past few years, we have worked hard to get a regulatory change to deliver housecalls, to the audience that needs heal most. emily: the app is synchronized into the apple watch. paul, what attracted you to this company? paul: we had the idea of doing something like this a long time ago, but the technology wasn't there. we tried to build that at qualcomm. now is the time. the regulatory environment is right, the technology is there. emily: you make a good point, it sounds obvious, doctors on demand. give us an idea of the scale at which you are growing. nick: on one hand, 100,000 housecalls is a lot. on the other hand, it is less than an average kaiser facility

will see in a week. housecalls aren't just more convenient. they are fundamentally better health care because the doctor can see them in their environment. we are on a pretty exciting growth curve and that is why we are glad to add paul and governor bush to the board of directors. emily: how many housecalls will be done? the traditional visiting a doctor experience will hopefully get better, right? nick: i like to think, and on the optimistic ceo, but i like to think that this is the future of medicine. in 1990, 50 percent of patient care was delivered in patient homes. there's no reason we can't go

back there with better care that lowers costs by improving outcomes. emily: tim cook recently said that he thinks apple's greatest contribution to mankind will be in health care. do you agree with that? >> there's no question that with wearable devices and more measurement you can put on people, you can prevent diseases before they become more complicated. that is an area that heal is working on as well. we have a device that will go into people's houses, monitor chronic conditions, let a doctor know when something goes wrong, and the doctor can come and take care of you. people mostly think of technology and medicine as dehumanizing the person. we see this kind of technology as re-humanizing, putting the doctor back in contact with patients for greater periods of time. emily: is the goal growth, is the goal improving the

experience? nick: the goal at this point is to maintain the really high medical quality. i wife is the chief medical officer. she manages that team. the goal is to grow rapidly so we can serve millions more people while maintaining very stringent clinical standards she has set. also, using technology to give the doctor more data to deliver more precise, proactive care. ideally, your doctor knows what is wrong with you before you know something is wrong. emily: we've been talking about apple, the big revenue cut, what is happening in china. are you all concerned that trump's hardline on huawei, hardline on trade could lead to the u.s. losing its dominance in cellular technology?

paul: i think a lot of the innovation and technology is still happening here. have a new company that is focused on driving the next generation of technology and actually building technologies. the game has changed. we know what that game is, we are trying to lead it. will we work with chinese partners? absolutely. if a trade war turns out to split the world into two pieces, i don't think that will be positive. ? so you think it could backfire? paul: you never know how these things go. we will look for a solution and work together as we were in terms of looking to grow the overall pie. getting technology out there, it has changed lives. heal is a great example of a place where we take the fundamental wireless technology

and make people's lives better in a completely new industry. emily: a big open job, the ceo of intel. any chance you are up for that job? paul: i have a great start up i'm working on right now and a great chairmanship at heal. emily: you testified at an sec trial recently. how do you think the trial is going? >> i testified by video so i didn't actually go there. my father testified yesterday. it's a tough position to be in. there's a lot of pressure on both sides. hopefully this turns out the way it turned out when i went through something similar in nokia. emily: are you still bidding for qualcomm? paul: the opportunity is not there right now but we are prepared. if it turns out that it becomes possible and interesting, we would look at it again. emily: either way, qualcomm has been touting the arrival of 5g technology.

how would the arrival of 5g impact the heal experience or supercharge what you are trying to do here? nick: from our perspective, the more universal wireless signals, the faster it is, the more conversations the doctor can have with the patients. a quick video call with a specialist that might not be in the area that day. the more pervasive and universally effective that technology is, the better it makes data-driven precision care. data can enable doctors to give precise care to patients. we love the fact that technology is getting more ubiquitous, signals are getting faster. plus, it helps my kids watch videos better on their mobile devices. paul: i tried to motivate the engineers at one point by saying, we want to build a wireless system that is so

reliable that if your pacemaker was being controlled on the others of the wireless link, you wouldn't have to worry about dropped calls. how reliable can you make things and how ubiquitous can they be, how much data can you get, how can you do things where you can control things at the edge of the network and still impacts the device on you. the device that is on you is battery-constrained, doesn't have all the sensors you would want. it is a little bit of what we are heading towards with the product that is a sensor hub in your house where you will be wearing various devices talking to it and then off to the doctor. nick: the other part of that but i think is really important is that the whole goal of lowering cost in health care is to diss intermediate patients from the hospital experience. that's where all the costs are. there is a quote of hospital-grade reliability.

if they can deliver that in the home, the technology exists but you can have batteries run out, signal disruptions, things like that. emily: really fascinating stuff. good to have you on the show. nick desai, ceo of heal, and paul jacobs, heal chair. coming up, evaluation of pokémon go at $4 billion. this is bloomberg. ♪

emily: the company behind the popular game pokémon go has raised funding, raising the valuation to $4 billion, just

three years after spinning out from google. niantic's pokémon go has been downloaded 8 million times and they are preparing for their next launch. why do you think it is worth that much? >> the company has strong financial metrics. it has generated more than $2 billion in revenue. the finances are just kind of a first step. this is a company that is a leader in defining a whole new category. right now, it is thought of as a gain company but it is way, way beyond that. we love game companies, but this one is really special because you think about your child gaming, you worry about them being inside, always on the console, whatever.

this gets people out on the street, socializing with others. emily: pokémon go made a huge splash, then the buzz kind of died down. what is happening? sandy: it was an amazing splash. you could never keep up that kind of momentum on something. in fact, pokémon go is bigger than ever. the company has found many ways of enhancing the product, the user experience. they run big festivals, there are all kinds of competitions, new features. pokémon go is bigger than ever. emily: what is the harry potter game going to be like? sandy: we have seen a sneak preview and i think it will be exciting. it is unbelievable material for this kind of purpose. my great grandchildren will be reading harry potter, seeing the movies, and of course playing the harry potter wizard unite version 26 or something.

it is great material, perfect for augmented reality, people out on the streets exploring. emily: the chinese government has been cracking down about gaming over concerns about gaming addiction. does that concern you for the company or the industry in general? sandy: i think there is a concern that some people are spending too much time in games and so on. this is actually an antidote for that. this isn't the isolated screen activity. this is a social activity out in the streets, out in the fields. you would love your children to be out hiking in nature. the first step is getting out of the house and socializing with other people, and these games do that. emily: what other trends do you have your eyes on for 2019?

sandy: we focus on the enterprise as well as consumer-related things. i think the gaming sector is an exciting one. in the enterprise, it is still all about cybersecurity, more efficient data, data infrastructure, a lot of investments in that area. emily: so what is not hot? sandy: i think the classic -- fintech, i think, is down. i think that got overplayed. a lot of companies started. you need scale in fin tech and i think a lot of startups will struggle there. emily: sandy miller, general partner at ivp, thanks for coming to see us. emily: that does it for this edition of "bloomberg technology." we are livestreaming on twitter. check us out @technology. this is bloomberg. >> following is a paid program.

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