♪ >> i am emily chang in san francisco and this is "bloomberg technology." apple moves manufacturing of its new macbook pro computer from the u.s. to china. the timing raising eyebrows in the midst of the u.s.-china trade war. what signal is apple sending? plus bitcoin breaks through $12,000. optimism over facebook helping to push the cryptocurrency higher, despite regulatory pushback. should investors be worried or jump in with both feet?

after two fairly uneventful presidential debates, is twitter out with a new label that flags tweets to break the rules the move may make president trump walk a fine line. in light of the growing u.s.-china trade war, many companies are considering shifting production out of china. apple has other ideas. bloomberg learned the tech giant will manufacture its new macbook pro computer in china, moving production of what has been it's only major device assembled in the united states. the company will use quantum computer to make this $6,000 desktop, and it is set to be -- said to be ramping up production in shanghai. the trump administration imposed billions of dollars on tariffs in chinese made goods. joining us to discuss, we have a creative strategy analyst.

and with us, technologist research president bob o'donnell. >> remember that quanta is one of the biggest original device manufacturers of pc's in the world. this is not an unusual move for apple. the timing is clearly a bit odd that they are doing something just as all these tensions are going on for you this is a very low volume product. it doesn't have a big impact psychologically. clearly it does not look very good. >> talk about the potential message this is sending to the u.s. administration and the world. >> i think when you remember -- if you remember when they made the announcement -- not manufactured in the u.s..

right at the epicenter of usa is a good thing. we are at the tensions between the u.s. and china. the reality is from a pop -- from a volume perspective moving the assembly cart to china doesn't impact work opportunities in the u.s. but from a supply chain perspective, china makes a lot more sense and it always has. it's a recent signal and a message right now, apple still wants to keep the relationship with china. i doubt that's the driving decision-making part of this move and it is just a logistical reason and best opportunity for them. >> we have a statement like at -- a statement from apple. this is the sort of familiar

refrain we hear from apple when these manufacturing stories popped up. "we are proud to support 30 manufacturing cities in the united states with 9000 suppliers across the united states. final assembly is only one part of the manufacturing process. they reportedly had trouble finding workers who would work for minimum wage where the pro was being assembled. you wonder is moving jobs back to the u.s. ever a possibility, or given that apple is exploring alternatives to china, what with those alternatives be? would they be southeast asia, vietnam, et cetera. >> the bigger story is what you brought up. it's about moving iphone high-volume products into southeast asia.

we have to remember that the reason why a lot of manufacturing doesn't happen in the u.s. is because most all of the components, especially the ones that actually have weight and are expensive to ship are made in china. you have intel chips and a few other components from the u.s.. it's significantly easier with those pieces there. some of those chips and components are now being made in southeast asia. there is a whole supply chain built around that. this process takes years, if not decades. even a transition is going to be slow. manufacturing of the mac pro is like a decimal of a decimal of a decimal. i think that's not the big question. the big question is what does apple do longer-term with these other supply chain issues. the other big question is robotics and the notion of these

things being assembled automatically. if they bring it back to the u.s., they have to do it in such a way that may be final assembly is there. even as apple has said, that is a small piece of the overall puzzle. >> i know you are about to take off for a trip to china. so far this has been reported out of asian newspapers. do you think in any scenario apple will realistically move production of its big ticket items out of china to southeast asia or elsewhere over the next several years, given the political tension? >> i think there is always opportunity to look at other markets from a job perspective and cost opportunity.

southeast asia has become extremely popular with the vendors. it takes years to shift, it doesn't happen overnight. keeping your options open, given what's happened this year, there is something that's going to be on most manufacturers mind going forward. >> i think the reason he got such a big reaction is it is the last emotional tie to steve jobs. tim cook was there. there was that sense that jobs had this combination that drove the apple magic. his formal departure is like, it's finally over. i know carolyn has talked about this, his impact has been greatly reduced over the last

several years. not everything he did was fantastic. he's kind of been moving away, i think this is part of a transition apple is doing with their overall leadership, a sensitive bring fresh blood in. last few apple products are ok. i don't think it's a problem that they didn't have a big chief design officer. who also is going to replace issues? >> the apple watch was the big last hardware product he really had his hands on. he was also very involved in the air pods, which have been as successful. does this make you worry about their future magic? >> it doesn't. when you look at the future, for me design goes beyond products, beyond the actual things you touch.

that is where maybe, from a perspective from iphone, he is not seen as successful. his focus has always been simplicity and elegance. there was some criticism that in the effort to make it beautiful, it wasn't as intuitive as it could be. when you are thinking about design for the future, you need different skills, not just from a hardware point of view. it seems to change every day. say there is a pair of glasses. there are different things coming to play compared to mac or a phone. having different skills and people is important.

i said that straightaway yesterday on twitter. not having the new discussion is great for the team. it's going to give them more freedom to do their job and get the job done. i think it fits more that apple has become a company more about teams and less about individuals. >> 18 will lead to design reporting through to jeff williams. i know apple is planning for this, we know we should have been expecting this for a long time, but it does feel like a changing of the guard. thank you both. coming up, the string of hot ipo's continues. could it get hotter?

if you like bloomberg news, check us out on the radio, this is bloomberg. ♪

♪ >> two companies friday surged by double digits in their public debuts. a luxury reseller went public friday after the ipo price above its range. and a biotech firm joins the ranks of new hot public companies in that sector. third day, to other biotech firms. adaptive biotech technology

started nearly double its ipo price. to talk more about the market, we have jackie kelly, and in new york eric newcomer. it was a rocky start to the year for ipo's, uber and lift case in point. >> i think we have seen some exciting results. the ipo's are this first starts out with pricing in the right market. the growth stories, the results they are providing are excellent. >> is in pricing thing? how this company seen the struggles of companies that come before that come before? we can say this is a good result but they are leading a lot of -- leaving a lot of money on the table. >> are they leaving money on the table or are investors or and retail investors excited? >> shouldn't that be factored

into the pricing? shouldn't the bankers realize that and get these companies a better deal? >> i know they are working on it. it's a fine art in pricing and we should be excited these companies are trading up. >> for all the criticism huber ipo has received is only now to start of trading above its ipo price over the last couple of days. perhaps there's were priced perfectly right. >> remember that they kept bringing that price down there have been expectations of 100 billion dollar ipo. it is far from what the perspective bankers at the time thought. if the concern is not making

enough money in the ipo, uber seems to have priced it really well right around where we end up trading. there's plenty of time for the stock to continue to rise and for the company to look better. >> slack went public in a direct listing, which seemed to go relatively fine. what does it mean for all the business is tied into ipo's, including your business and your work? >> direct listening -- direct listings are similar. all the effort that goes in behind the scenes, it is the same. there is still significant involvement from investment bankers, the lawyers, the auditors, the accountants, the ipo advisors. all the folks around that transaction are the same group making sure those companies are

successful. >> what is the trend you are expecting to see in the second half of this year? >> this momentum has kept everybody on track. i think there were little concerns and volatility in the markets in general. all those things have settled. performance is high, that sets up a really strong runway for companies that are still in the pipeline. there are a lot of companies in the pipeline. >> we are going to be watching how these companies that have gone public perform. uber had a couple of interesting announcements, mentioning a potential boat service in nigeria. working with regulators in western africa, what can you tell us about these global developments? >> i think the financial analysis of a is going to depend on the performance of ridesharing, food delivery, where they are growing against

the competition, and getting more quarterly results and seeing the trendlines there. our subsidies going down, how is the price war with lift? that's going to be the core of these other ideas, whether it is to continue expansion of bikes. i think our investors want to know there is a story ahead. i think a lot of the value is around these core to businesses in understanding how much room left there is for them to grow. >> in san francisco there have been a ton of discounts from uber and lift. i checked my emailed to make sure i got 50% discounts on the next 10 or so rides from both of these companies in the last week. is there something going on between the two companies in the u.s.? >> there is still fierce competition. it's always hard to get a perfect window.

i'm sure more metrics will emerge from independent players. these companies are tactical, competing in different cities in the u.s. and around the world. i think we will just have to see how that plays out in terms of losses. lift has said this will be a peak spending year. clearly there has been this focus on revenue, which means spending on subsidies, to continue to gain market share against uber. >> will the outcome of the trade war, assuming there is some resolution, some decision, could that throw the next half of the year off? >> ipo markets like certainty. what decision ultimately is made, the markets will adopt it, absorb it. i think what we are going to see is that increased certainty will

only propel the ipo markets further. we want a decision made. >> jackie kelly, ipo leader thank you for stopping by. bitcoin has jumped the most this week since its peak in 2017. will the bubble burst again? check us out and be sure to follow our global breaking news network on twitter, this is bloomberg. ♪

♪ >> it has been a roller coaster week for that coin. capping the best quarterly rally since the height of the 2017

bubble. this after a week of extreme price swings. bitcoin has almost tripled since march. how much more volatility will we be seeing? joining us is spencer bogart. we do this every time there is a big swing. what is happening? >> this is natural for any type of asset that has fixed supply but fluctuating demand, particularly one like bitcoin. what other types of assets have that kind of nature? store value assets. it's helpful to think about some of the others. people talk about gold as a store value asset. high-end art collectibles is a trillion dollar market, where people assume you're buying this art because it's beautiful. these things don't adorn people's walls, they are not

driven on the street, they are sit in the warehouses. there will be no new picasso paintings, no vintage ferraris. maybe not all of the real estate market but a portion of it. we can see that and local metropolitan real estate markets like vancouver, where a significant driver of home prices has been overseas purchasers that do not live in the homes and do not collect rental income from them. that struck me purchase an scarce asset that is used as a stored value to preserve capital over time. >> do you buy, sell or hold? >> with trading there are lots of emotions. i recommend people take a small percentage of their portfolio, 1% or less. they planned to hold it for at least three years at a bare minimum.

>> how much does this have to do with facebook's libra? >> i think facebook has been the biggest driver in the past few weeks. i think we have to look at global monetary policy. when we look at government bonds yielding negative, you get paid -1% for three year german boones , o's going to flow into other assets. we have seen this across the spectrum from tech ipo's and particularly in the scarce assets. >> are you optimistic about libra? >> i think it's a hugely ambitious plan. you are drinking the kool-aid too much. there is definitely a risk in this launch.

>> goldman sachs reportedly one of the partners that turned them down. >> what are they going to do with the technology? want to have the most success of the ones that use public permission less at -- permission less networks. >> i'm sure there will be more to come. blockchain capital partner. thank you so much. twitter announces a rule that may hide tweets from president trump himself. coming up, also a bloomberg scoop.

why the chinese military may be closer than we thought. ♪

♪ emily: a new label on twitter will flag tweets from president trump and other politicians to break the rules. the u.s. president routinely posts comments that might get a lesser-known person suspended for breaking twitter guidelines. now twitter will hide will breaking content behind a warning label which will say the tweet was left up because of legitimate public interest. users will need to click past the label in order to see it. to discuss, we are joined by david kirkpatrick. in d.c., we have naomi nix.

kurt wagner in san francisco. i want to start with how this debate plays out in social media because it was fairly uneventful. no flareups or controversies. kurt: there was not a moment where everyone said look at this fake news going viral. that is what facebook and twitter want. they want to have an uneventful debate. they have teams in place that were ready to pounce in case there was that moment but as far as i can tell, there does not seem to be. emily: maybe they were doing their job. let's talk about this tweet flag. it does not just apply to politicians, it applies to anyone with 100,000 followers or more. what is your take? kurt: it is just politicians. emily: politicians with 100,000 followers or more. kurt: that is why it is more specific to donald trump. he tweeted to kim jong-un and said rocket man, you are not going to be around for longer. a threat like that. a lot of people asked wouldn't that get a user suspended? at the time, twitter's response was sometimes politicians have tweets that are so newsworthy

that we will not take them down. now we may know which of those tweets violate the rules but the company labels it as newsworthy. emily: david, you have been talking for years now about how difficult it is for these companies to flag any kind of content that breaks the rules or crosses a line. do you think this will work? david: well, it's definitely a step in the right direction. we need to acknowledge that some very famous and powerful people are misbehaving, but i also think twitter has rightly in many ways acknowledged up to now certain people on twitter are of a different nature than others. i think it is a lot of judgment calls. even the tweet you cited about kim jong-un i think could be debated whether that actually is a violation of the rules. a country threatening another country or an individual

threatening another individual? nonetheless, this is the right kind of step to take and i am glad to see it happen. emily: now, the president is always quick to talk about conservative bias on social media. there was an expectation he could get angry or tweet about this new rule, but as far as i can see, he has not mentioned it. naomi, is there any pushback or reaction from washington? naomi: it has been pretty quiet but it was a bit of a bold move for twitter given the repeated activations by washington that tech companies are biased against them. they have held multiple hearings on this topic. polls shows public trust in some of the tech platforms is waning. republicans have not shown any signs they are planning to slow those criticisms down. this looks like an issue that just gave them more ammunition to continue making those claims.

emily: meantime, one of the biggest flareups also for media recently was the nancy pelosi video where she was slurred to make her appear drunk and facebook decided to leave that video up with a flag. mark zuckerberg did say a couple of days ago there was an execution mistake there, that the process was not necessarily perfect so they stood by the decision. take a listen to what he had to say. mark: it took a while for our systems to flag that and for fact checkers to rate it as false. once the fact checkers saw it, they were able to rate it in an hour but it took more than a day for our systems to flag it and it got more situation that are policy should have allowed. that was an execution mistake. what we want to be doing is improving execution but i don't think we want to go towards so far as saying a private company prevents you from saying

something it thinks is factually incorrect what to another person. emily: david, i would love to hear your reaction. is it yet another facebook sorry, not sorry moment? david: i think facebook probably did -- their rules are good on that. i don't think the pelosi video should have been removed. as he said in that same interview, which i happened to be at, there are so many gray areas. if facebook is being asked to make the universal determination of what is and is not legitimate or false, it is going to be extreme the controversial in itself. giving it less situation strikes me as right. i think nancy pelosi's reaction to that whole thing was very extreme and inappropriate when she acted as if that proved they really sort of tolerated russian interference in the presidential election.

it really was not that. they are trying hard to do the right thing and these are tough decisions. emily: that said, you know, naomi, pelosi's reaction is an example of how angry politicians are right now that facebook on both sides of the aisle or at least they think it is politically expedient to act as if they are angry. naomi: yes, both republicans and democrats have bones to pick with facebook and other tech companies. what you are seeing on the house side in particular is house democrats announced they were investigating the technology industry as a whole and looking at antitrust issues that might be going on in the industry. that could reveal, that committee, the antitrust committee might end up holding multiple hearings with facebook executives, google executives, twitter executives, and give

them an opportunity to continue raising their criticism about this information about russian interference, about discrimination on their platform. emily: we do have a tweet from jim jordan talking about twitter -- representative jim jordan talking about twitter's policy change, kurt. "last summer, they shadow band meadows, nunes and jordan. what's next? why can't twitter just respect free speech?" kurt: it is a common theme here to feel that anybody who voices a conservative viewpoint is therefore the enemy of either twitter or facebook. the companies have come out and said this is not the intent. we try to uphold these rules. these are private businesses and they have rules, they have community guidelines. they are not held to the same free-speech laws that the united states is. so, i think that is a really

tough distinction for some people to make. i don't know what specific tweets he is talking about, but this has been a continuous conversation that has dominated now for almost three years since the last election. emily: facebook has said they are planning to create a content oversight board. zuckerberg has described it as an almost supreme court. could that work? david: well, i'm not certain, but i think it is a step in the right direction. what we are seeing at twitter and facebook is that, partly because of the election of donald trump and the connection that had to the abuse of social media, so much scrutiny has been placed on these platforms that they recognized they have to come up with some more judicious approaches to content management. i think an outside review board is a very good idea. the execution is going to be excruciatingly difficult. i absolutely applaud facebook for attempting it. emily: more for you to cover.

kurt: it is nonstop. i will be back. emily: kurt wagner, naomi nix for bloomberg. david kirkpatrick, thank you for joining me. coming up, a revelation from bloomberg news that huawei employees worked with the chinese military on various research projects, adding more fuel to the fire as the u.s. stands off with one of china's top tech companies. this is bloomberg. ♪

♪

emily: now to a big bloomberg scoop. over the last decade, huawei workers have teamed up with various members of the visions of china's people liberation army on at least 10 research projects, spanning from a.i. to radio communications. this includes a joint effort to classify emotions in online video conferences. this discovery as the trump administration imposed strict sanctions and urged allies to follow suit. to discuss, peter elstrom. how did we get this information? peter: our reporters dug into these research reports online. these are publicly available research projects, but they are usually limited to academics and very niche audiences so our reporters dug into this after the controversy around huawei really exploded, where the u.s. government was accusing them of resenting a national security threat of helping beijing with

espionage. the reason this is interesting is the company pushed back and said they did not have any cooperation with the military on research. our reporters found these 10 examples of publicly available documents where authors listed who are both from huawei in the people's liberation army also. this delves into a whole range of technologies, artificial intelligence, communications online, geolocation technologies as well. emily: huawei said huawei is not aware of its employees publishing research papers in their individual capacity. huawei does not have any r&d collaborations or partnerships with affiliated pla institutions. peter: their response is this is not huawei-sanctioned work. these are employees doing these research projects and did not know about it at the time. on the documents, it is listed very clearly these are huawei employees and they are listed along military people. what their argument is

essentially these are individuals acting separate from the company. emily: does it prove there is a tie between huawei and the military? peter: it shows there is cooperation between employees of the company at people within the people's liberation army. the reason this is significant beyond the controversy and beyond the statements the company has made before is that the founders say they have been in the pla before. there are questions about how closely they are tied to the government and military. the company has worked hard to say they don't have government involvement within the company and keep their distance from the military. emily: i have spoke to a number of prominent executives in the tech and business community in the u.s. and many of them think the u.s. is overreacting to huawei. there is no evidence of espionage at huawei. certainly something like this casts some doubt over that, but there is a contingent in the -- various people in the united

states who think huawei has not done anything wrong. peter: clearly, we are seeing a range of opinions within the tech community and even within the trump administration. they blacklisted the company last month to essentially cut off the company from buying american components of any sort. there is a debate within the administration about exactly how they should treat huawei at this point. the g20 meeting between trump and xi is coming up. huawei is going to be one of those agenda items for the two of them to discuss and china wants to get them off this blacklist. it is hard to imagine that the trump administration would back all the way down, but they may try to figure out some modest steps they could make to help china come closer to an agreement on these broader trade talks. emily: stories like this won't help though. peter: probably not. emily: peter elstrom, thank you. good reporting. still ahead, the popular dating app tinder is reinventing itself to grow in asia.

can it break through and become the region's top new matchmaker? we will discuss. this is bloomberg. ♪

♪ emily: users swipe right and left to find the next hookup in the popular dating app tinder. while it was feared the transactional reputation would make it impossible to find success in asia where dating rituals like arranged marriage are still common, but that has changed as tinder reinvents itself to win over the region. here to tell us more, olivia carvelle who has been covering this story. what is tinder so focused on asia? olivia: tinder is huge in the u.s. it has totally dominated the

north american dating market. it is now owned by another u.s. company that actually owns all of the big dating products in the u.s. it owns okcupid and tinder. we saw on the last quarter that while tinder subscribers are still growing in america, they actually have got five million subscribers based here and they are looking for other areas where they could potentially grow. looking around the world, there is no bigger opportunity than the asia-pacific region right now. we heard from the company there are more than 250 million single people in the asia-pacific region, most of whom have never tried a dating product. tinder is looking at the asia-pacific is a huge area of growth. emily: how is the product and the marketing of tinder different in asia than it is in the united states? olivia: great question. in america, we all know tinder as a hookup app.

it's known for casual dating, casual sex among young college graduates and college campuses across the country where people connect and get to know one another. that really was not going to fly in korea which has more of a conservative dating culture. the dating culture largely in korea, as i found out while researching the story, they would have blind dating where friends connect different people who have not met one another before. tinder kind of new the hookup reputation, the casual dating scene was not really going to work in korea. so, it decided to attempt to totally reinvent itself into more of a friendship app. it claims it is a social discovery network. when you look at the marketing around the country, it is on billboards outside university towns. the advertisement all read new year, new friendships, new you.

it is really around building friendships rather than dating. emily: is this going to fly in china where there is tough regulation on the u.s. tech companies or is tinder focusing on asian regions outside of china? olivia: we heard from the ceo that they are not really looking at china right now, but they are looking at different countries across the asia-pacific. huge focus on korea. another big focus on japan and india where they have local managers on the ground trying to connect and learn the cultural customs. we heard from the ceo who said they are spending more money on marketing in india, japan and korea than any other area in the world right now. they are looking to potentially expand into taiwan, indonesia, singapore, but china is still on the back burner due to regulations. emily: what is the outlook for match or broadly now owning all of these properties?

of course, the original match app has been criticized for being sort of old and stale. olivia: yeah. one of the strategies in these countries is getting these local managers on the ground to look for potential acquisitions. in japan, for example, they have acquired the app called tiers, it is a model where only the men pay. that is the biggest online dating app. they are trying to build up tinder as well. match is being pretty strategic. trying to encourage the local management on the ground to look at potential acquisition opportunities, because some of these countries have completely different cultural customs than what match is familiar with. in korea, there are a lot of dating apps that do things pretty different to tinder or match's other products. one app called amanda, in order to apply, you actually have to

get rated by the users out of 10. there is another app called sky people where men can only get on the app if they hold down a job as a doctor, lawyer or work for a major conglomerate company, or went to a prestigious opportunity. there are a lot of different acquisition opportunities in this space. emily: fascinating. so fascinating all the dating nuances around the world. thank you, olivia. with disney buying out fox media assets for $71 billion, james murdoch has a need for a new gig and it looks like the son of rupert murdoch has found one. he's investing in drones, specifically norwegian drones. he is backing the seed round for a firm that claims it will transform unmanned aircraft operations in cold climate. to tell us more about the new venture, i want to get to l.a. with anousha sakoui.

how do james murdoch and drones mix together? anousha: i kind of had a very similar -- very dry, drones. when i delved deeper into what this company is all about, it is about de-icing drones. it is a big bet on the fact flying taxis and drone package delivery is going to be a big market. this norwegian company has been developing the technology for that to help unmanned aircraft travel into very cold climates and help that whole industry. that is a product they were expected to launch last year. james murdoch has this new office and has done a couple of investments. this is his third one he has done. emily: so, how did the deal come about? anousha: he's got on his team an

analyst who was at the defense department, the pentagon, who was in this field. this is an area of research that has been going on. it was his idea to approach this company and give funding. that is one of the investments they have done. james' fund has also invested in comic, a comic book publisher. he's invested in human ventures. emily: so, tell us about how he is diversifying his portfolio and what is the sort of driving strategy besides for making money? anousha: i am sure making money is going to be one of his focuses. he is a billionaire. $2 billion is what he is estimated to have just from this deal. they are looking at tech obviously. ways to make the world better. focusing on solving problems of

the future. we know he has also in his interest in social issues. he's been investing in those kind of things. we expect he will do more of that, more technology focused. emily: anousha, interesting stuff. thank you so much for joining us on that one. that does it for this friday edition of "bloomberg technology." we are livestreaming on twitter. you can check us out @technology. follow our global breaking news network, tictoc, on twitter. have a wonderful weekend, everybody. aloha. this is bloomberg. ♪

>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates or its employees. >> this program is a paid presentation for omega xl. it is brought to you by gray health works. ♪ larry: welcome. i'm larry king, and i'm here today to report on a significant