in need. live healthier, live happier - by resting deeper. get 15% off, and 2 free pillows. go to leesa.com today. ♪ hyde in: i'm caroline new york, in for emily chang. this is "bloomberg technology." coming up, loosening the leash on huawei. the trump announcing plans. the power ofell -- google and amazon. fangipos list the two giants as a competitor or risk

to their business. bitcoin's rally starting to waver again. the price of the currency down double digits since friday. first to our top story. any victory for beijing, president trump said he would hold off on any further tariffs for now and would relax constraints on huawei. manyonstraints remain and say optimism is overdone as many try to figure out what form the relief will take. huawei is still on the list usually reserved for rogue regimes and affiliated companies. on sunday, white house national economic council director larry kudlow commented on the move. >> this is not a general amnesty. they will remain on the so-called entity list and national security concerns will remain paramount. caroline: for more, we are

joined by sarah mcgregor and sophie elstrom. sarah, talk to us about the orails surrounding huawei the lack of details. was it expected? sarah: there were a lot of questions on whether huawei would even come up in the discussions. did note, trump and xi come up with a trade deal. they just agreed to keep talking. the big issues that caused trade talk to break down in may have not been resolved. they said, you have got some leverage. you said you would go easier now on this huge company. if it is a national security concern, should we be giving it up? we don't have a lot of details. we do know that the trump administration plans to remove china from the blacklist.

the murkiness,te we stop chip stocks soar on monday's trading. we saw euphoria across the board. why? easedo you expect to be with huawei? >> it is a good question. trump could have said the exact opposite and the facts on the ground could have remained the same. he said, we will not loosen up continue to offer some of these licenses. he came out and talked about going easy on huawei. kudlow's comments are the closest we have gotten so far to understanding. it looks like the commerce department is looking to keep them on the list but they will allow some companies to resume sales. at this point, the criteria are

not very clear. they alluded to the fact that companies without a national security risk will be able to sell components to huawei. question's marks -- question marks aplenty. could everything be undone with a tweet? sarah: absolutely. the markets and observers got what they wanted out of this meeting with a promise from trump at least for the moment not to escalate tariffs on china. a huge gulf-- remains. they didn't get past things like state subsidies. there has been no real change, no real timetable to get the parties past these breaking

points. i think it is a temporary sigh of relief. like you said, is trump going to tweet in a couple of days and say something has angered him? there is no certainty of what the markers are along the way yet --the way. caroline: a piece writing that it ends one war and starts another. these big tech companies becoming political ponds embroiled in trade negotiations, what does it mean to technology ways and means building up in the u.s. and china ever coalescing? peter: i think, from the china side, even if there is this temporary relief for while way,

they are dependent on components in key areas, and they know that, over the long-term, the only way they will be able to escape that is to develop those themselves. china has talked about this in the 2025 plan where they have developed industries in areas like ai, robotics, semiconductors. there's no doubt that this episode coming after zte will only encourage the chinese government and industry to continue their push to develop key technologies they need to have independence from the u.s.. caroline: sarah, remind us of the lobbying probably going on on behalf of the key u.s. companies affected. news that apple is making more of its products, the mac pro in particular, in china.

they are exposed to china in terms of the supply chain. sarah: i think it was very telling last week. a company like micron found some loopholes so they were able to still send a subset of products to china. companies are looking for ways to get around the tariffs and export restrictions. they will find anyway into the market that they can because they want to remain competitive. i definitely think that such is getting through to the trump administration -- that message is getting through to the trump administration. it is not great for the manufacturing revival. it was very high-stakes. caroline: do you think that the

integration with the u.s. companies you are meeting on this business trip and the asian companies, do you think these interlink's will be crumbling in the -- crumbling? peter: i think what companies want is reliability. if they think a supply chain that is run through china and has served them well over so many years will become unreliable because they need to pay tariffs or there will be some sort of blacklisting, they will look for alternatives. companies from apple to other technology companies figure out alternative ways to supply these products. it is interesting to see the --panies they are in because they are cop between the -- they are caught between the chinese

government and the u.s. government. it is a signal from the chinese government that they will continue to produce products in that market, signaling a dependence on the market. caroline: thank you very much. in regard to the trade truce between the u.s. and china, a so-called trade truce, apple jumped the most in three weeks. dan ives projects the shares could rise $25 or more in the coming month. removesthat the truce the albatross around ceo tim cook's neck. president trump said he will hold off on additional tariffs while talks resume on a trade deal. it is july 1 which means half of the deal is in the bag and we have seen tech companies hit the market. will the momentum continue? if you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg.com, and in the u.s., on sirius xm.

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caroline: 2019 has been quite the year for tech ipos. left, cooper, pinterest -- lyft, uber, pinterest going public. a significant shadow or two over these companies. google and amazon have a hold over these companies that have hit the public market. vanke, whogarrett do wrote the story. for many, i am sure they are aware of the power that these

companies have and the dominant force they have, but spell it out for us, just how much they depend and are controlled by these companies. spent $90 million on google ads last year. those people went to an apple app store, downloaded the lyft app, google maps was powering it. all of this was posted on amazon servers which has a $300 million contract with them. on top of it, google owns 5% of lyft and has a board seat. it is obvious that google and amazon are deep within the digital economy but when you look at these filings, you see how concretely they are the infrastructure behind how many of these companies work. caroline: mark, you focus on both amazon and google.

from the blessing side, do you see it as a good element that these companies have so much riding on them, whether revenue or from their future revenue stream? mark: there is good and bad. the benefits of cloud computing is that it allows startup companies to of -- two avoid a lot of infrastructure costs. you can treat those as variable costs rather than large fixed costs. been the magic behind aws, amazon web services, also behind microsoft azure and google cloud. they are offering a real benefit to these companies. there's no doubt that in order to scale up on the internet, you need to pay one of those three cloud providers. if you want consumers to use

your service, get to know you, you will probably be spending money with google, facebook. probably just those two. i don't know if they are toll -keepers, that might be too big companies that investors like to look at, like uber and lyft long-term, companies that are strong enough that they can and void those channels -- they can avoid those channels. caroline: some way mentioning google and amazon and statements, is this something regulators are looking at? are they worried that if they clampdown too hard or pushed breakups and the like that -- push for breakups in the like that elizabeth warren is looking at? necessarily are not

interested in disrupting these smaller companies because they are their customers. they want them to keep growing. you can look at it from both directions. i don't necessarily think that by breaking up these companies you would necessarily disrupt that web in a deep way. you can still buy google maps from google maps limited and buy google cloud services from google cloud service limited. caroline: before we go to the antitrust equation for the behemoths, i want to talk about the fact that you cover lyft and pinterest as well. in their filings, they do show competitive exposure and general exposure in terms of supply-side needs. do you see that as much of a risk factor? answer is no.the i didn't see it as a risk

factor. if they didn't -- if they were going to have a cloud services provider, it was either going to cloud. azure, or google chances are, it would be aws. they have almost 50% market share. if they didn't do that, then the p&l they would have gone public with would have looked a lot different. you would have a lot more capex spending. a would probably be frankly less attractive business model and he would raise the question, why are you trying to vertically integrate, manage all those data centers, server stacks, when there are three companies doing a phenomenal job of allowing you to outsource it? adon't see that as competitive issue -- i don't think that is a dependence risk. way, is an option, by the

of switching. snapchat migrating from google to amazon. as long as you can migrate, i don't think there is risk. caroline: what about the risk from a regulatory viewpoint that we are starting to see coming from capitol hill upon amazon and google? do you think there is a risk that they are seemingly so intertwined with the rest of the tech ecosystem? mark: regulatory risk has clearly become a major investor issue across technology. we hosted a call earlier today with a major tech investor to talk about the risks these face. i think the chances of these companies having to be forced to divest assets is extremely unlikely. i generally think if a company says they pulled assets for multiply -- they hold assets for

multiple years, i think the government would be loath to unwind that and would be unlikely to do that. we just listened to a weekend of presidential democratic debates. big tech didn't really come up at all. one time it did was over concerns of whether amazon is paying its fair share of taxes. the issue of google or facebook's strong market positions didn't come up. that is probably the best barometer. if it didn't come up in a presidential debate, it probably didn't matter. caroline: they saw the share prices rally after the wednesday night debate with cory booker and elizabeth warren. a great story and we urge you to go read it. coming up, how snapchat is trying to lure in more users. this is bloomberg. ♪

caroline: shares of snap gained slightly on monday britt on the year, it has risen more than 150%, sharply out rising its peers. it is called a "cinderella story." to tell us more about that turnaround, mark mahaney, who currently has an outperform rating. it is interesting how shareholders have got find the company. -- have gotten behind the company. do you think 15 million is realistic? mark: 15 million and one quarter doesn't sound realistic to me. we think this is an asset at an inflection point. they have done a lot of innovation around ringing in

games, improvement the user interface. they have fixed their app. it wasn't working well on android phones. the dominant phone system worldwide. they have finally fixed that. we had users decline year-over-year but we think we can start seeing inflection up. if gross margin continue to expand, operating losses continue to decline, we think the stock can go higher. we know it is up 150% on the year but that is important because it was at an all-time low last year, so that created an easier set up for full balance. caroline: your perspective with the competitive landscape out there because everyone had put squarely some of the concerns about snap coming from instagram, the fact that stories were doing so well, perhaps the

fact that people don't need to go to snapchat in the same way. is facebook still the competitive force to that effect? instagram,ook, tiktok out of asia. from a user perspective, and investors don't see this because out ofy be age demoed the core audience. the core functionality of snapchat for most of its users is a communications tool. it is not text, it is visual messaging back and forth in a very user-intuitive way, at least for the younger demographics, the 13-34 -year-olds. antok is much more of entertainment channel. its core mission for snapchat is

probably competitively integrated. the question is whether it can expand into being a lot more than it is. i don't know about that and i don't think the company knows either. what it is like in three to five years, i don't know. caroline: i like the new ones. another outperform or, facebook. $250 price target. this is a company beset by regulatory scrutiny, also having to rein in some of the hateful content. we had another headline with how that will be ensuring they are on top of the census data due in 2020. mark: this is a case where public sentiment got dramatically to negative on this stock. the advertiser sentiment didn't

really change at all. year-over-year growth in ad revenue, it has been decelerating but it went from 38%, 35%, 31%. that is very modest deceleration given the size of the company. now we find out there's more inventory that can be monetized with the explore tab on instagram. now we have this potential cryptocurrency. i think it is more of like a super-app play. it has gone through this massive amount of controversy over the past 12 months than it did in impact the growth rate -- it did not impact the growth rate. it tells you the value proposition is superhigh and this is one of the cheapest stocks you can find relative to its growth. caroline: 22 buy recommendations, seven holds, not a single cell.

coming up, can tesla bounce back from a lackluster first quarter. the chipmaking industry is consolidating rapidly. we will be discussing m&a. this is bloomberg. ♪

caroline: this is bloomberg technology. i'm caroline hyde. now, it was two quarters ago that tesla hit an all-time high. in the fourth quarter of last year, they delivered more than 900,000 vehicles. the next quarter, not so sweet as the number fell around 63,000. now we are waiting the numbers that tesla hopes will be three months. about 88,000 vehicles in the second quarter. so, will tesla be able to make good on its expectations delivering 400,000 cars in 2019? indiscuss, let's bring

tesla in san francisco. 88,000 is not much to reach the so-called record quarter elon musk has been bragging about. wast: the all-time record 90,700 and the fourth quarter. an elon musk urge them to go out and break the record. i think it comes down to how they did over the weekend. a lot of analysts put out their note before the weekend and there was a lot of deliveries. they could have made it. we are waiting to find out if they made it and if they beat the record by how much. caroline: you have a great story showing how tesla's double-edged sword in terms of deliveries. but even if they sell the number of model 3's they are pushing out, some of the buyers, maybe not as lucrative as they had hoped. dana: the number of deliveries

is super important. if tesla can show they rebounded from a dismal first quarter and broke a record, that would do a lot. the big question is margin and mix. if they sold a lot of lower end model 3's, that will impact growth margins. there is concerned model 3 is cannibalizing the model s, which has been the more expensive car. i spoke to one owner that is waiting for the model s refresh and decided to get a model 3 instead. it will be interesting to see what percentage of the cars were 3's versus the x and the s. that will impact quarterly earnings. caroline: it will impact the share price, which even despite the 21% rally we have seen since june, is still down about one third on the year. is it really cannibalizing and the lack of demand that has hurt shareholders and analysts's views? dana: i think people want to

know is tesla still a growth story? this is a company that has largely grown quarter over quarter. although, the first quarter was really bad. is it going to be unparalleled growth or is there a ceiling? that is what people want to know. this is the first time tesla is delivering cars not just in the united states and north america but china into europe, so they have this enormous logistics issue they have been trying to unravel. we are trying to figure out, you know -- on the one hand, is there ceiling to demand. on the other hand, if more people get cars, will they tell their friends? any predictability. another key metric is if tesla reaffirms its guidance for the year. caroline: all eyes on whether it is the 400,000. on theoned how it is inside. siteow elon musk sleeps on

sometimes when really he needs to get the pedal to the metal. we have heard of more executives leaving potentially this time ahead of production. stability like internally? of production did leave tesla last week. today, it was announced he went to lucid, which is the electric vehicle startup. we know where he has landed. there has not been any huge executive departures of late, but at the same time, there have not been any big high-level hires. you are seeing a lot of promotions within. not a lot of big names joining. the departures are kind of old hat. i don't think the market reacts to them that much. caroline: we will see how numb how they are in terms of the numbers in terms of the actual production. thank you. now, the boston pops spectacular

will be the largest and oldest public fourth of july event and this is a taste of what to expect. ♪ ♪ ♪

♪ do not miss the boston

pops fireworks spectacular. live july 4 at 8 p.m. eastern right here on bloomberg. coming up, right here, right now, bitcoin tumbling again, i'm doing some of this year's epic rally. we will discuss all things crypto next. this is bloomberg. ♪

materials hasied for $2.2 buy a company billion. it produces semiconductor

manufacturing equipment for major customers including samsung and intel. the japanese company will operate as a separate semiconductor group and will be based in tokyo. joining us to discuss is ian king. the consolidation wave continues. why is applied materials going after this asian competitor, to a certain extent? ian: there is a technical reason. they do something called batch inocessing, chips batches rather than individually. it openes up a new area that will help them better penetrate chipmakers, companies like samsung. basically, it is a get bigger exercise. as you pointed out, their customers are getting bigger, the costs are getting bigger for you need to scale in order to keep up with that trend. caroline: what about the

regulatory implications of this? there will be scrutiny, a lot of regulators looking at it. ian: that is an excellent question. we have already seen applied materials get knocked back. it tried to buy tokyo electron a few years ago. they have said, look, we don't see this as being something that u.s. regulators would necessarily look at because there is not really an overlap. but as we know, if you are doing business in the world of chips, going to china, you need approval. that, i think is giving some people some pause. initially, they said there is nothing to worry about. caroline: you bring up china and it is interesting given we have gotten out of that g20 and a stay of execution when it comes to trade tariffs. playis sort of global m&a going to be in any way within the trade tariffs headwind? ian: yeah, it was assumed up

until about six month ago that with this increasing rising of tensions, it will be another tool that regulators in the u.s., china, wherever would used to basically cause problems. what we have relatively seen is the reemergence of deals of one or two relatively small talk-in uck-in deals. the market does not appear to be totally frozen. it would take one more refusal of one more deal to get drawn out or killed to re-freeze things. caroline: maybe re-freezing after what has been a pretty active sphere within chipmaking and dealmaking. remind us the general headwinds that play. why everyone is scaling to such an extent. ian: there are a couple of things that play. if you are in the business of actually making chips, it is

getting more and more expensive and more and more difficult. basically, the amount of revenue you have to have to justify putting one of these $6 billion or $7 billion plant on the ground. billion, $7sting $6 billion in five years time, it is out of date. it is on its way to be in useless. you really need to get a rapid return on your investment. providing equipment for one of those plants, literally hundreds of millions of dollars it takes to develop equipment that is then made obsolete. really, you have to be selling at scale and there are fewer companies that are doing that. the ones that are capable of doing it are getting bigger. caroline: putting it into a global perspective for us. ian king, thank you. after last week's roller coaster for crypto ride, bitcoin fell at one point more than 18% on monday from friday's close to

almost $10,000. this after a week of extreme price swings where it almost reached $14,000. bitcoin is still up over 14% in the year but how much more volatility will we see? joining us to discuss is mike know it our bitcoin not all. amazing swings that we have seen over the course of the weekend. mike: it has been moving up a lot and finally people were overweight and it went down last week. to me, the key thing about bitcoin, it was looking up at $10,000 as a significant level two month ago and now we are looking down at $10,000. the trend is higher. as its migration towards digital gold, you wanted to decline a little bit. some range trading should be expected but the trend is up. caroline: trend's up. fueledout what has

buying up to 14,000? cyclicals like the rather than fundamentals, but many talk up facebook, institutional lose. news. mike: all of the above. to me, i really like to watch fundamentals too, but technicals really drive a lot. they are really highly speculative. lever was a key statement that favored bitcoin. if you look forward into payments, it is going digital. bitcoin is a you new case and it is like gold. only one gold in the world. there is only one bitcoin in the world, almost 3000 cryptos. we have record shorts a few month ago. the key thing is the increasing number of countries with negative interest rates easing. think it is significant. the worst day of the year for bitcoin and gold, which shows they are getting closer together.

the buy is still higher. caroline: do you really think the people buying bitcoin is doing as diversification? money managers are coming in and buy into it as some sort of haven rather than it being a fund for people dabbling on the side? mike: that is the key migration we are seeing. look at futures open interest. all-time record high. it has been around for only two years, but the institutions are not just going for all these other cryptos. they are going for digital gold. 1% of your portfolio, be willing to use it but it is a really good diversifier and for people interested in gold. gold etf's are still very positive. caroline: gold bugs versus crypto bugs. huge animosity on twitter, something to behold.

whatare you expecting -- should we expect for the second half? it's impossible with the volatility at judge levels, but how will evolution continue? mike: the key thing is a wide range. and very good support, 20,000 very good resistance. i think we will get towards $20,000 but do not be fearful if we get down to 6500. the evolution should continue. i'm worried about the continued focus on modern monetary theory and fed easing and negative interest rates. that is only good for bitcoin and gold. it is a question of how much they migrate and how they do it. for me, it is only a matter of time for both of these assets to go higher unless we have something different that switches the trend, which i think is unlikely. caroline: globally speaking, there is always a lot of demand, there has been from china, regulatory effects -- where do you see a lot of the buyers

stemming from? mike: for me, since i was in hong kong this time last year, i get a sense for a designer to do something about capital control. the minute i saw a protest on the streets, that is a bid for bitcoin, bid for people in interest in people diversifying their capital or their currency. where that is going, in remittances and global currency, it is only a positive. it is a question on how it is done. for bitcoin to run is lower volatility. right now, it is very speculative but it is part of the migration towards digital gold. caroline: when do you think a low volatility will kick in? mike: hopefully, sooner this year. when it was fast, it was way too high. last time, it was a new low. at the moment, i hope it migrates. time corrections in technicals for a long time. the more time, the better the base for higher prices. caroline: great having your

analysis. thank you. still ahead, apple has multiple design teams and now one key designer helping with apartments. how it's bringing ai to interior design, next. this is bloomberg. ♪

key applelast week, a designer johnny i've said he's leaving the company to join his own but he is not the only designer jumping ship. an apple industrial design joinmember left apple to home furnishings. it has developed beds and robotic systems that allows the

furnishings to be raised to the ceiling, increasing floorspace. numerous apple devices including the apple device. boss.g us now is his new thank you very much for joining us. and, talk to us first of all what rico will be adding to your portfolio in terms of design. guest: definitely. sike my new boss, i am hi new intern. we are here to learn from him and get his wealth of knowledge that he brings from decades, close to 20 years being in design and 15 plus years apple, shipping some of the best products in the world. just the attention to detail and every aspect of design. lookn does not mean just and feel, it will be how the product works. we are really excited to have

rico join bumblebee. this will be a new frontier for us. we say it will be leveled out. we basically got a chance to give will be the best shot in the world. caroline: talk to me about putting your clothing in the ceiling. can you paint the picture of how this actually all works, how you fit within certain spaces? because slowly coming into the market, you are working with some real estate developers and the like, but what is becoming a reality? sankarshan: yeah, just to give you an overview, traditionally, houses have been made into dimensions. every time you need a function to your home, you added to your floor. basically, everything is optimized on floor plan. think about anytime you think about the home, it is measured in square feet. 600 square-foot home and you get

a living room, a bedroom, a closet, a kitchen and a dining table -- everything spreading out into dimensions. we're never using all of the functions all the time. in fact, we waste a lot of space. and, as the population is growing, as more housing needs 're growing on the planet, we constrained first base. space is the finite resource we cannot get without the cost of, basically getting it at the cost of the planet. essentially,at is can we open up a third dimension? can we only bring the function to you 100% when you need it and zero present when you don't? if you meet a bedroom, it is a great bedroom, but you don't need it all the time and you were up and about when you are working out. you don't need the bedroom.

same with the closet. you go there to pick up your t-shirt, rest of the time, you are paying for it. heating, cooling, taxes. somata resources to build out into dimensions. we take over the ceiling plan and all the modules, furniture stays in the ceiling. we bring it down when you need it and make it disappear when you don't. caroline: how does the artificial intelligence fit and? i was reading perhaps you could find out where the tennis racket is in the back of your covered, but how does that work? sankarshan: you should think -- piles of stuff you have arranged in different places. your bookshelf, closet, cabinets. a lot of storage. the more space you have, the more storage you end up having. like, we were realizing that people don't -- when you own

things, there is a lot of stuff you don't even use. -- you your home suddenly become aware of what you own, what you use, what you don't use. that is a very powerful thing that drives bumblebee. how bumblebee's products work is basically we have a software staff that remembers and retrieves things. inventories all the stuff that is in bumblebee. only when you need it, you can contextually bring it down and group them together. it becomes a home organizer. kind of like managing all of your stuff. caroline: we thank you for your time. bloombergt you know, is a capital arm of bloomberg lp is an investor. that does it for this edition of bloomberg technology. we are livestreaming on twitter,

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paul: welcome to daybreak australia. i am paul allen. shery: i'm shery ahn. we are counting down to asia's major market open. ♪ paul: here are the top stories. wall street rises to another record from the tray truce with china but stops amid signs the economy is swelling. oil on the rise as the opec and allies extend the curves into next year. there is concerned of weakening demand around the world.