♪ ♪ ♪ emily: i and emily chang -- am emily chang in san francisco, and this is "bloomberg technology." a global battle that dragged on for years is over. apple and qualcomm have settled differences, at least for the next six years. and netflix gives an underwhelming forecast in earnings, saying price increases in some countries will slow subscriber growth. this as disney, apple and warnermedia fire up their

competition. and, behind the scenes of facebook. interviews with more than 60 current and former employees paint a picture of what one journalist calls a "fresh hell." apple and qualcomm agree to end a two year legal battle over billions of dollars of technology licensing fees that threatened to jeopardize qualcomm's most profitable line of business. shares of qualcomm surged over to any percent on the news on tuesday. here to discuss the details, i want to go to ian king and mark gurman, who is outside the courthouse in san diego where a trial was just getting underway between these two companies, mark, and opening statements were happening as the news came in. set the stage for us. mark: so we were in round three of opening statements. this morning kicked off with apple's lawyers giving their perspectives, and then the contract manufacturers, a consortium of foxconn and others, and after that you had

qualcomm take the stand. we were about 10 minutes from qualcomm finishing their prepared opening remarks, and the news came in from apple about the settlement. it was interesting, because the lawyers kept going. they did not seem aware of what was happening outside the courtroom. emily: ian, you were just on the show yesterday previewing what would happen. jerry selection was under -- jury selection was underway. are you surprised they came to terms after all the bitterness? ian: remember what we said yesterday, the interview where they said this is business, it will work itself out, and we have seen this bitterness transform in a second to a collaborative relationship. that appears to be what we have here. emily: apple and qualcomm released a joint statement saying that apple will be paying qualcomm a one time payment, and they reached a six-year licensing agreement, and a

multiyear chipset supply agreement. can you tell us more? what is the amount of the payment? ian: the only clue we have so far is that qualcomm said it will be worth two dollars of eps for them on an annual basis. investors i spoke to say that t if you back that out, apple has agreed to pay roughly the same licensing everyone else has to pay. if that's the case, this is big for qualcomm. emily: can you put that into billions for me? i'm asking you to do math on the spot. ian: on an annual basis, qualcomm learning roughly four eps, soper share in this is adding 50% of that. a lot of money. emily: mark, does this seem to be apple waving the white flag, apple giving in? not really apple waving the white flag and giving in. more so apple putting the consumer and its flagship

products ahead of litigation. this is an extremely important fight for tim cook personally, apple as a whole going after qualcomm for what they believed to be overcharging or double-dipping as they have been calling it all morning. but now they are saying, we realize we need to be in 5g. more of an admission of apple saying they don't think intel is capable of giving them the 5g modems as early as the end of next year, as intel and apple anticipated for months. it also means that apple's own in-house chip efforts are a ways off. the agreement will be a moot point in three or four years when apple inevitably has their own modems ready. emily: apple ceo tim and qualcomm's ceo were expected to testify in this trial, which really upped the ante. but does this agreement mean the core issues go away? apple complains qualcomm charges too much, abusing market dominance. qualcomm says that these are the

rules, we own the patents and you have to pay. that's not going to change. ian: a couple factors are at play. accusing an sec trial qualcomm of the practices you mentioned. we still don't have a result there, and we have to see how that plays out. fundamentally, you have technology and licensing. qualcomm has throughout its history faced a series of legal challenges, trying to get license fees reduced. it managed by and large to fend them off. of course, we are likely to see more. as companies come and go in the power of their customer base, they will try to challenge this, because it helps their profits. emily: mark, you reported apple postponed 5g this year and would perhaps consider it next year. does this mean that apple could bring 5g even sooner? could it be unveiled in any phones in the fall? apple,t is too late for

barring some miracle of engineering. i don't see there being a chance apple has a 5g device on the market this year, but this does give them a much cleaner, clear a path getting it to the market in 2020 around their next september, october, november iphone cycle, the iphone 12 or whatever they choose to call it. there was concern over them being able to get the right amount of chips from intel or proper processing power for 5g for the modems, and now that goes out the window. you have the best in qualcomm, the market leader in 5g components, now under agreement for six years. emily: ian, you are nodding. ian: it is a technology decision. these things take about 18 months. the chip alone to mak takese three weeks, never mind the integration, the software. it will not happen this year. it can't, basically. there's not enough time. emily: ian king, mark gurman, we

will continue to cover the story and bring you more headlines as they unfold. ibm reported a decline in revenue from cloud computing, ai and cognitive software units the company is hanging their future on. revenue from that business totaled $5 billion, down 2% from the same period a year earlier. total revenue missed forecasts at 18.2 billion dollars, down 5% from the first quarter. coming up, netflix slides after hours after forecasts for new user growth trail estimates. what it means for competitors like disney, next. and if you like bloomberg news, check us out on bloomberg radio, in the bloomberg app, and in the u.s. on serious -- sirius xm. this is bloomberg. ♪

emily: netflix shares dropped in after hours trading instantly, after reporting first-quarter results. shares are now paring their losses. the streaming platform added the most customers ever, 9.6 million, but that didn't stop the stock from dropping. the forecast for the second quarter was underwhelming. netflix said it would 85 million customers, short of the 6 million forecast by analysts. with price increases in the u.s., brazil, parts of europe, they say they will slow growth for a brief period, but not in the long run. what about competition from apple, or disney? netflix in their portfolio, and also true optic ao andre swanson, who runs

metric system over the over-the-top ecosystem. what is your take? ? here beating for the for an quarter -- for the current quarter, but not what is to come. andre: i might come off as contrarian, but i almost didn't care about what netlist reported for q1, -- netflix reported for q1, and the guidance for q2. i think netflix is facing huge headwinds when apple plus, disney plus, and the massive growth across, three over-the-top ad supported solutions. i think q4 of this year is when they will for the first time have real, direct, head-to-head competition, and i think it will be a challenge for them. emily: you are an investor in netflix. do you care? >> i care. the way i see it, you're going to have some competition from apple, but we really don't know what it is.

what they told us was very, very slim. and when it comes to disney, i think they can coexist with netflix. i don't think the parents are going to be watching disney after 8:30 at night. that's just not the history of computers in general and cable tv in particular. so those two together would still be under $20 a month, and i think that is something they can very much coexist with. emily: i sat down with bob iger, the ceo of disney, when they unveiled disney plus, and he talked about why he thinks the details of this service will be competition for netflix and the rest. take a listen. on aking them available new technology platform, a technology platform that is simply more modern and i think growing in popularity, at a price that makes sense with a user interface that is beautiful -- that's why we feel confident. emily: he's talking about the entire disney vault, animated classics going back decades as

well as new original content. andre, do you think customers will pay for that and netflix? andre: i think people like me who don't even look at their bill can when it comes to that, but there's a lot of americans who can't afford that and will prioritize. if we look at this as just common sense, what business industry, could you lose your best-selling product or most voluble products to the business right next to you and they undercut your price and it doesn't impact you? the other thing a lot of people are not realizing, the real growth of connected tv over the last when he for months has been in ad supported solutions like pluto tv and others. what netflix benefited from for years was kind of being the de facto standard across over-the-top and connected tv's. if you bought a new smart tv or you had toe stick, get netflix, or what was the purpose of that device?

but now across 30, 40 million homes, you buy the new devices and turn on summing free with ads, and you can be very selective about how you add on top of that. for any home that has a child, if you're prioritizing budget, do you prioritize disney's content library or the content netflix has? it is not really just children. it is the avengers library, all the other things, as well as competition from warner, apple. netflix has never had to face so much direct competition. prices,ple are lowering they will be increasing them. i can't find a metric by which there is not a concern. emily: disney has the star wars library as well. that said, netflix has first mover advantage. mariann, are you concerned about the forecast? the price increase, slowing subscriber growth, and for the first time ever there could be real direct competition? mariann: actually, i would say

that now is a great time to be raising prices, because the unemployment rate is so low, workforce but it's high. if you will increase price, now is the time. a dollar or two a month, i don't think that will crush anybody's budget. looking at netflix, they are growing very strongly overseas. they leverage the heck out of content by dubbing or subtitles back and forth, so things made in india will be shown here, subtitled or dubbed. there's a ton of leverage to be had. we are positive. emily: how do you explain what happened with the stock today? shares plunged 9% right after the result, and now they have stabilized. ?hat happened there mariann: u.s. -- you are asking

me? people did not read through. one of the things, they beat subscribers both in the u.s. and overseas. when you look at that guidance for the coming quarter of 5 million, that is right in line with the consensus numbers that we have seen. it didn't knock the cover off the ball, but it was in line. people have to think back to the management guidance in recent years, which has been conservative. they now have that more common attitude of, we are going to guide down and beat, and this has been more frequent in their situation. we expect them to beat next quarter as well. emily: andre, netflix is competing with companies with big budgets. cash,has $260 billion in and they are investing multiple billion dollars in original

content over the next few years. can they spend their way ahead of the competition? andre: i mean, netflix has had a huge head start in terms of investing heavily in content. i think more so, they are going to spend their way out of this, because you cannot spend more than these other companies if they decide they really want to dig in as well. there are opportunities and applicant take advantage of, because they have spent billions and billions of dollars in several years now. some older content they could make ad-supported. the -- people talked about that. that's more of a reality in 2020, if i were them. i do think that's a way that they may go, but i think people are underestimating, or overestimating the loyalty people have to netflix, or any content in particular. much higherte is across households that don't have a child, across any since coaching service, then those that -- than those that don't. there are a lot of things that would be concerning, regardless

of what numbers are for q1 and q2. emily: interesting. do you go with the content, or stick with what you have? optik ceo.ston, tru thank you. coming up, what has gone on behind the scenes at facebook as controversies and scandals piled up? can the company find a strategy to fight its way back? we will discuss. this is bloomberg. ♪

emily: it is one of the biggest, most powerful companies on the planet, with over 2 billion users. years, thelast two mission of facebook together and share information is also turning into its biggest challenge. from cambridge analytica on, facebook has seen a tidal wave of scandals and controversies, causing rising distrust outside the country and rifts inside it. editor-in-chief nicholas

thompson interviewed 65 current and former employees for the new cover story of the magazine, joining us from new york. always great to have you with us. what was the overarching narrative of these many, many employee interviews that you did? and ias: fred vogelstein wrote the story together, interviewing the employees. the overall touching -- overarching narrative is paying the price for mistakes in the past. this company prioritize growth over every thing else, and that came back to bite them. the bills came due. that's problem number one. problem number two, they lose the trust of the media, of the general public, of government. this is a problem for silicon valley in general and for facebook in particular. part three, they are facing all these really, kid problems. how do you improve privacy -- really complicated problems. how do you improve privacy while also improving safety? the story is the company

grappling with all these problems, losing trust, struggling with contradictory problems and kind of flubbing it all, in a nutshell. emily: you talk about how facebook made some mistakes handling the press. days of silence after the "new york times" investigation. do you think that facebook has figured the press out at this point, or are they still making mistakes? nicholas: i don't know if they can figure the press out. they certainly recognized their past mistakes. when the "new york times" and others came to them with the cambridge analytica story, the front ran that. you don't put up stories before the press runs, or you alienate journalists forever. and then they were complete the assignment when the press broke. they did opposite errors, doing too much and then too little. they recognize that. but they are also in a kind of impossible position. because of their algorithm, they

helped create a news media ecosystem that prioritizes outrage, and now all the outrage is directed at facebook, so they are in a storm of their own creation. emily: you talk about the wealth of antipathy that has built up. at this point, do you think the tide has turned against facebook for good, or can public opinion be reversed? nicholas: public opinion can reverse. i do think there is a lag. i think facebook is genuinely trying to solve their problems. they genuinely are trying to look as deeply as they can to figure out how to do things better in the future, cleanup mistakes from the past. but at the same time, there's nothing they can say right now that anyone will believe. they won't be trusted. they have problems left and right. i do think they are trying to move in the right direction. i do think it is possible they can go in the right direction. i also think it will take a wh ile. emily: i wonder. in my own conversations with

facebook employees, they are very defensive. they defend the company, they believe facebook is doing the right thing, that most of the , ittiny, the dislike doesn't happen on the inside. i wonder if there is a fundamental disconnect between the people inside facebook who need to fix these problems and the people outside facebook who are really upset by these problems? nicholas: well, the people who are really upset by the problems and are the most strident and articulate in their critiques of the company were current employees. i couldn't put their names in the story, but most of the people we talked to work there now and have very thoughtful critiques of what they are doing. i do think there are a lot of people inside the company who are, as you say, to believers, and many for good reasons. there's also a large number of critics who think there needs to be a different direction, on the inside and the outside. emily: there's so many juicy details in your story. we don't have time for them all,

but you dive into the falling out between zuckerberg and the instagram founders. you hint at suspicion, or perhaps even jealousy of instagram's success, to the extent that zuckerberg made a rule that none of the executives could sit for profiles or news interviews without the approval of mark zuckerberg or sheryl sandberg. tell us a little more about the new information that you are bringing to light here. nicholas: that specific thing is, facebook says there is a rule that no one else can sit for profiles, but just so other companies wouldn't find employees to poach. other people involved said no, it was aimed at keeping kevin in his place. the real information we have that is new is about the clash between them. they were overheard telling people that he felt zuckerberg was treating him the way trump was treating jeff sessions, in a way that was drive him out without having to be fired.

it is absolutely true, and this new, that facebook looked at all the ways they were propping up instagram, driving traffic to instagram, all the things they were doing to help instagram. zuckerberg said, we are taking all these away, all the things we have done to help you grow, we aren't going to do them anymore. you have to give a little back. he then posted it internally at instagram, which caused a ted for and then depar paternity leave, came back and said he would make the leave permanent, and that was that. we can't get to everything, so emily: emily: i highly recommend you read the piece. facebook continuing to grapple with issues, especially in light of what happened in christchurch, new zealand and the video of a mass shooting that went up on facebook live. nick thompson, thank you so much for sharing your story with us. you can check it out in "wired." coming up, a new report says the t-mobile-sprint deal faces yet

another big regulatory hurdle. we will discuss the merger's most recent pushback from the u.s. department of justice. this is bloomberg. ♪

emily: this is bloomberg technology. i'm emily chang. back to netflix. the company's second quarter forecast fell short of analysts expectations saying the company it will add 5 million customers with estimates calling for 6 million. investors reacted quickly and shares fell as much as 9.3% before regaining much of background. you can see it now barely changed. reed hastings say price increases has led to some customers canceling their subscriptions in the u.s. for more, bob o'donnell, president of technology research. also, lucas shaw. lucas, what are the highlights

you might not have expected? lucas: i think the rate of growth picking up every quarter is one highlight. adding 9.6 million, biggest quarter is a big deal just because when you look at the companies scale, almost 50 million customers. more than a 20-year-old company and yet it hits new records every year. at is building a huge mot around itself before the entrance of new competitors. the reason why the forecast for q2 is a little concerning is because netflix seems to have been able to add an increased prices with impunity. it says that delivers enough high-quality shows it can get away with raising prices. but it is actually saying, well, we cannot raise prices and it has some effect, that may limit its ability going forward especially with new competitors at lower market.

disney's new service will be significantly cheaper. emily: netflix has always been a polarizing service among investors and analysts. i have heard folks say winter is coming for them. there is no way they can keep up the spending. they cannot keep up with disney's giant existing library. you do not want to rule out apple. which side do you follow on? bob: i think they still have opportunity. there is a very interesting data point in the shareholder letter. they said 10% of tv viewing is over the top right now. that means there is a lot of opportunity. we get caught up in the fact we think everybody is doing this. they are not. there are still a lot of people not streaming anything yet. netflix for a lot of people is the entree to over-the-top. i think there is an opportunity for them to continue. it is like the music business in that you got to have hits. that is a hard thing to do. i think disney is competition, but not in the negative way. i think ironically, it is in a

positive way because together they become more compelling for people to get into over-the-top. i think they are complementary. emily: we talked a lot about disney because we know what is in the library, we know what they are working on, we know the cost. we don't know any of those things for apple. in theen the legends entertainment industry are not counting apple out. i sat down with jeffrey katzenberg, founder of dreamworks animation, on his take on what apple is rolling out. take a listen. jeffrey: i don't think what ever bets against apple. i don't think one bets against $250 billion of capital sitting in the bank somewhere, just racking up a lot of interest. i don't think you bet against the talent of that company. emily: tim cook? jeffrey: tim is an extraordinary

leader. yes, it has been like this, so they have some headwind here. he will be challenged in new ways. but, it is a brilliant company. widely talented people there. emily: lucas, what has been the word on the street about apple and disney since the announcement? lucas: the reaction to disney especially in hollywood has been very positive. impressed with how many shows and movies they have clawed back from other services and the breadth they will release. the reaction from apple was mixed. people were pretty disappointed by how little they had to say. we did not learn about the pricing, the different packagings. you talk to people making lots of shows and they are still in the dark. they are flying blind. given we are talking about netflix, they compare it to netflix in 2010, 2011 when netflix was making his first deals for original shows.

we're going to try this. we don't know how they are going to release it. we don't know if anybody will be able to watch it, but it is worth taking a bet because people like apple. that continues to be the philosophy of people in the entertainment business. disney, people know what they are getting into and they expect it to be pretty successful. emily: we don't know how much apple is going to cost. you watch apple very closely. are you concerned given all of these unanswered questions? bob: absolutely. there is a big question mark hanging over the services theyesses, because have to build up a library of content. we are not even sure what type of content they will be willing to do because a lot of the more popular content has been a little racy which does not really match with the apple brand. then there is how much will they be able to get away with charging people? there is the support or lack thereof of other platforms they

have not been strong about. not everybody who owns apple devices are only going to be able to watch apple services. emily: do you wonder if you see a game of thrones in all of its nude glory on apple? bob: i don't think you would. disney has done a fantastic job with doing family-friendly content, but they have decades and decades there. netflix is starting to build up that library. that is the other interesting thing. the final point i will make is people are going to be willing to subscribe to a few services, but not all of them. that is going to be -- we are going to be back to the cable days where you have to pick a couple of things and go with that. apple could be on the short end. emily: lots to watch. bob o'donnell, good to have you. as well as lucas shaw covers netflix for us. you will be jumping on the earnings call momentarily. turning now to with long-awaited merger in the u.s. wireless business. the wall street journal reporting t-mobile and sprint's plan is unlikely to be approved.

the doj antitrust division is considering whether the deal would present an unacceptable threat to competition, posing the immediate hurdle to the deal. let's bring in our reporter who has the latest. this is not necessarily surprising since the approval has been taking a very long time, but what is your assessment? previouslystaff have voiced their opposition to this tie up. in 2014, softbank controlled sprint and tried to buy t-mobile at the time. doj came out and voiced their opposition to this deal. it is not a surprise that doj staff has voiced some concern about this deal and a distinction can be made between the doj staff and leadership. the staff is very concerned. we understand there was a meeting earlier this month where sprint and t-mobile representatives presented to the doj staff and they had some

questions. they wanted to know more about the cost cuts they talked about. they wanted to know more about competition and what would happen to competition post this deal getting done. the company's came away with that understanding the concerns, but also realizing they could probably do something else. they have always been open to partially restructuring this deal. there has been talk of asset sales, potential asset sales that they could sort of do to get the deal through the leadership of the doj. it is not a big surprise. it is a matter of time now. i will say the companies have said they will look to close this deal by the end of the first half, june or july of this year, and they are still sticking to that timeline. emily: we just spoke with the former ceo of sprint last week who is very optimistic. that said, the doj having some concerns about the deal is different from saying it is unlikely to be approved. it sounds like you believe there

is still a chance here, but it would involve restructuring. nabila: the companies want to do whatever it takes within reason to get this deal done because the cost of not getting the deal done, particularly for sprint, is really high. this is an industry where scale really matters. the companies are getting together because they believe achieving this kind of scale will allow them to compete better with the giants like at&t and verizon who are miles ahead of these two companies. particularly for sprint, which is very much debt-laden, and a lot of conversations about what would happen to sprint if this deal did not go through. they would need to look for another partner because we don't think sprint could probably survive on its own in the current environment. the company's together have talked about this deal they think could allow them to cut costs by about $43 billion. a lot of that would come from not having to compete on price with each other.

so, the companies are very determined to get this deal done. the prepaid business is one that has been targeted as perhaps a domestic or candidate. this is the prepay as you go wi-fi and called business which is a big business for these companies. it is run under the boost brand and virgin mobile brand. industryne area where experts have said perhaps that is a business naked try to get the deal done. emily: all right, we will continue to watch how this develops. thank you for that update. coming up, the electric carmaker that is outselling tesla at a massive pace. the big plans next. this is bloomberg. ♪

emily: in this week's bloomberg businessweek, americans may think of tesla when it comes to electric cars, but china's byd is the world's number one maker of ev's. the warren buffett backed company has even bigger ambitions. max campbell joins us from washington with more on this story. bydmericans might best no as the electric car company that warren buffett back, but what else do we need to know about byd and how it came pairs -- compares to tesla? >> byd is an enormous company, something like a quarter million employees based in southern china. fews really a month mong a

really driving forces behind this electric revolution underway in china. that is the revolution that is happening far faster than just about anywhere else in the world. north of half of the eb sales worldwide happen in china. cities like shanghai have more ev's sold every year than are sold and entire countries like france and germany. byd is at the heart of what is happening in the world's second-largest economy and potentially right at the heart of the broader electorate transition which is coming to all of us eventually. emily: talk to us about scale. how much bigger is byd than tesla? matt: in terms of sales of passenger vehicles, the companies are pretty much in the and neck. sometimes tesla a little bit ahead, sometimes byd a little bit ahead. we will have to see how this plays out this year. that has a lot to do with how tesla's production goes. where it gets interesting with

byd is this mix of other vehicles they manufacture. trucks,orklifts, dump rubbish collection vans. anything you can imagine on wheels byd pretty much makes it and they make it electric. they are offering what they call a full market electric solution. if you want it, they can give it to you as an ev. emily: it is no secret that tesla wants to break into china. they have broken ground on a shanghai factory. yet, they have run into problems with some vehicles being held up, for example, at customs. how much of an advantage does byd have given that it is a chinese company and probably much friendlier with the chinese government? matt: that is a very good question. the chinese government, as you know, has made a lot of noise in the last few months about being more open to foreign investment. wanting to get rid of some of the conditions that foreign

business has complained about over the years. that certainly extends to the automotive industry. that is why you see not only tesla, but the other global automakers putting so much money into china. that said, the chinese auto companies have a lot of brand identification in the market. they have enormous distribution and marketing networks. in particularly at the higher end, tesla is an aspirational car in china just as it is in new york or san francisco. that brent has enormous cachet and that is not something that byd or any other chinese manufacturer can compete with at this point. emily: you profiled the ceo in your piece. tell less more about him. 1995 byd was founded in a chemist by training. a real nerdy scientist who worked on rare earth metals and gradually got into the battery business. it actually has its origins as a battery supplier, sintering

batteries around the world for cell phones, cordless drills. and then it branched into cars in 2003. that is something that he was almost ridiculed for. it seemed crazy the idea of building electric vehicles almost 20 years ago. after hanging on for a while and putting up with weak early results, byd has turned into an enormous ev business. emily: matt campbell for bloomberg businessweek. you can check out his story in this week's coming addition. you can also hear from the magazine's reporters and editors every saturday and sunday on bloomberg television and radio. this is bloomberg. expedia group is moving to simple type its ownership model and boost its value. the company agreed to buy liberty holdings. the structure has been divided between two billionaires. diller will become the largest

shareholder with a 29% stake. still ahead, digital health company wants to push health tes ts into the hands of consumers. how it is competing with consumer health startups, next. this is bloomberg. ♪

emily: alphabet is making its app available on the google play store starting with the phoenix area. the company has effectively had an app for some time, it was only available for those accepted in the early rider program be a private link. now anyone can download the app. once accepted, new users will be accepted into waymo's early rider program before moving to the public service. in the last year, americans borrowed an estimated $88 billion prepaid for health care, with one in force giving

treatment due to cost. that is according to a study by gallup. everlywell wants to democratize the system. everlywell offers a suite of that home lab kits, including tests for fertility, food sensitivity and sexually transmitted diseases. 275,000 it shipped over kits. the company has secured $50 million in new financing to expand its digital platform. joining us to discuss, the upper everlywell founder and ceo. thank you for joining us. tell us exactly how the platform works. you develop these kits and also sell them direct to consumer and in retail stores. >> thank you so much for having me. so, everlywell is transforming the $25 billion lab testing industry and htthe kits themselves are a way to make the process more accessible and

convenient for consumers. we actually work with fully certified, regulated labs that have been around for a long time working with physicians and hospitals and using existing technology to be able to make a service that is suitable for home kit collection by a consumer and mailed off and resulted in a certified lab. emily: tell us about the technology and how proven it is. anytime you say at-home testing kit, that can raise some alarm bells when you are doing something outside the doctor's office. how proven is the technology you are using? julia: what is important is that everlywell is the connector. we are not inventing any new lab testing technology. all of the labs we work with preexist our company and have been in business for years or even decades. what we are making easier is the home collection process of a sample. using materials that have been validated and cleared for use via various regulatory bodies.

the testing itself is just as accurate as the same tests your doctors and physicians use. we work both with an independent physician network to review the orders and results, as well as work with physicians around the country. emily: as i understand it, your tests are not fda approved. some of the critics say this is a way to get around fda approval. how do you respond to that? julia: laboratory testing in the united states is regulated by two federal bodies -- the fda and the center for medicaid and medicare services. cms is the regulatory body that currently regulates the tests we offer through our network of labs. that is generally through a body of legislation. all of the labs we work with meet and exceed federal regulations for lab testing, as well as meet or exceed the state-by-state regulations.

should the fda choose to regulate our type of lab testing, we would be exciting to engage on them with that. emily: tell me how people understand what the test results show, whether they really have a food sensitivity or a sign of something more severe like cancer, or maybe it is an eating disorder. can attest really tell you that at home? julia: what is really important is we are making it very accessible for consumers to get accurate, insightful, and clear lab results. these results are not only reviewed by independent board certified physicians, but also unavailable and encourage to be shared with consumer's primary care physicians. 80% of our customers have a primary care physician and 60% reported directly to their physicians. the goal is to provide a service that closes the care cap of consumer compliance around lab testing, something like 48% of americans do not get testing done due to fear of cost.

our goal is to increase that rate of getting testing done. it is a useful experience for people. then they can work in conjunction with their health care provider and own lifestyle plans. emily: i am sure you are compared to -- they were creating technology and you are not creating lab testing technology. however, this spectacular failure of theirs is very fresh in the health tech industry. what can you say to assure consumers and your customers that everything you are providing them is sound? julia: the most important point to know about the everlywell brand is the network of labs we partner with work already with physicians and hospitals. they existed before we had this model to allow consumers to initiate test orders.

they are relied upon by many of the top physician network and hospitals in the country. we work with some of the larger labs in the country as well. obviously, there have been parallels made, but i think the most important point is we are really connecting people to proven technology. similar to what a model did, connecting people to more affordable eyeglasses and physicians have driven service, and not creating anything new. emily: everlywell ceo and founder julia cheek, thank you for joining us. there is a lot of friction in the lab testing process. there is certainly room for improvement. an update on the wall street journal's t-mobile-sprint story. the ceo of t-mobile just weeded "the premise is untrue. out of respect to the process, we have no further comment. this continues to be our policy as we announced our merger and we will continue to follow this." we will have an update as they

come. that does it for this edition of bloomberg technology. we are live streaming on twitter. be sure to follow are global breaking news network, tictoc, on twitter. this is bloomberg. ♪

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haidi: welcome to daybreak australia. i'm haidi stroud-watts. shery: i'm shery ahn. sophie: i'm sophie kamaruddin. we are counting down to asia's major market open. ♪ haidi: here are the top stories we are coming in the next hours. u.s. stocks rise despite the emergence of the u.s. economy. the nasdaq climbing to a 10th of its all-time high. qualcomm and apple strike a deal, bringing their chip licensing battle to an end.