taylor: i'm taylor riggs in san francisco in for emily chang and this is "bloomberg technology." coming up in the next hour, tensions mount after president trump orders an airstrike that killed one of iran's top generals. has tehran promise retaliation, we look at the technology realm. plus, tesla delivers. the electric carmaker with a record amount of deliveries, but

will the tesla turnaround continue? and price targets for apple raised to $300 per share. rbc and bank of america. we will discuss the optimism of iphone sales in the holiday quarter. but first, to our top stories. a u.s. air strike that killed one of iran's top military officials. in the wake of the attack, the director of the u.s. cybersecurity and infrastructure security agency, heeded warning urging the public to brush up on iranian tactics in order to pay attention to critical systems. to discuss, we are joined from boulder colorado by tom telemann and in studio bloomberg reporter. want to start with you. thank you for joining us. i often read that iran will

respond to our sanctions and sometimes it has been the in and increasingly, it looks like it is cybersecurity. do you see increasing cyber security threats as you have been covering them? >> i think there has been persistent threats. i think most organizations are constantly being bombarded by iranian actors, russian actors, chinese actors, anyone who has the capability. the question now after the attack in what way does that change? in what way might new tactics me -- to those attacks exacerbate? what new tactics might be in play and how exactly the major companies and organizations that manage the control system respond or bolster their defenses? taylor: tom, do you agree that iran will be responding to cyber warfare?

>> very much so. it will be met by a cyber strike. they will take their gloves off as they have the technical acumen and the weaponry to leverage attacks against the energy, technology and cyber -- transportation sector. taylor: you said they were looking at any new tactic. what in the space you cover could some of those new tactics be? >> i think there is a major question about what they have had up their sleeve for some time. se've seen them drop ddo attacks, send malware or ransomware, but if they have be beatg that can't back immediately, there is no quick solution for. this might be one of those cases where they actually use it. the problem with anticipating that attack is you don't know exactly what you are in for. the best solution is knowing what your network looks like and in those industrial control systems, what we are hearing is a lot of companies that have machines talking to machines

don't always know exactly what that network looks like. tom, you mentioned energy, transportation, some financial institutions. walk me through each of those arguments, if you will, about how those sectors present the most vulnerability. >> let's back it up a bit and pay a little respect to the coding in iran. they have constructed numerous destructive malware throughout the year. oil took down the largest and gas company in saudi arabia through destructive attacks. destroye the ability to systems and we should be very concerned about that kind of attack against the energy sector and financial sector to read -- sector. even though the financial sector is much more secure than the energy sector as a whole. it has interconnectedness and dependency is so vast that they can hop through the trusted ecosystems whether it is the

isps, service providers, security vendors themselves. destructive attacks, according to research, are up 11% last year and i can only imagine that they will explode in the coming months. taylor: as you look, how much more vulnerable are the energy, are the transportation sectors relative to the financial sector where mainly in the past, that has been the most targeted and that is an area where they have really tried to get a good defense up. how much more vulnerable does it make the other sectors? kartikuy: i don't know that it makes the many more vulnerable than they already were, but the concern is there is very little visibility in their networks to start with. if for instance, an iranian group was already in that network, now might be the time ence turn their pres into a kinetic attack, where they take cyber weapons and use them to derail a hydro plant through a that is an excellent

-- that actually causeosts live. taylor: walk me through that. tom: that's an excellent point. that is why i highlighted insurgency. they already have footprints on system that they can now relies an attack against that infrastructure. we should be very concerned with lateral movement within systems. the lack of visibility is quite profound because many organizations have not asked the tough questions. ceos should be convening meetings as we speak and ask do we have visibility across all our devices? are our systems integrated? and most important, do we have a cyber threat team that is conducting exercises to root out that type of insurgency? taylor: tom, you also mentioned that coding in iran had become advanced, but we too have some very strong coders in the u.s. are we able to, are we as

prepared as we should be to heed off iran's coders? tom: i think we are, but the challenges are the constitution, so much that the nsa cannot actively protect american businesses unless they are invited in to do so. number two is the iranian cyber army is larger than what you would think of a division of a military, because they are a collective of cyber hackers who pay omar's to the regime for activities around the world. all they have to do is be right once. all they have to do is deploy one destructive payload to destroy the integrity of that data which could cause a energy systemwide failure, cause transportation systems to fail resulting in physical deaths, and more importantly, they could leverage attacks against emergency management services during times of crisis. taylor: what are you hearing as the potential biggest threat?

as to whether we are prepared or not? what would you advise to make sure they are prepared? kartikuy: we started looking at banks and the financial sector to understand where things are -- things stand and most businesses that got back to us said we are constantly paying attention. nothing really changes because we have the infrastructure, we have the groups that communicate with each other to prepare for this. we are looking at this everyday. i think it is in these industrial control systems in power plants, in the transmission of electricity systems where the greatest vulnerability lies. i think what has to happen first is iran needs to understand how they got beat this week, where those vulnerabilities came from before they start planning a new attack. taylor: tom, final thoughts as we shift to conducting cyber warfare instead of military physical warfare, does the u.s. star shifting to doing that as well to take on iran?

do we do cyber attacks to take on iran? tom: i can't speak to the doctrine of the military or strategies being implemented, but i will tell you there are certain red lines that if there are cyberattacks that result in physical harm or significant attacks against the health care or energy sector. cyber command will respond. that being said, what type of proportional response will be leverage or pre-strike we will leverage is unbeknownst to me. the number one thing that every ceo who is watching this needs to do, ask them have we deployed our cyber threat hunting team? vmware tom kellerman of and kartikuy, thank you. wall street is increasingly pessimistic that t-mobile will complete its 20th -- $26.5 billion takeover of sprint. the spread between the offer price and trading price is the highest since the deal was announced in 2018. the fcc and justice department

has okayed the transaction, but 13 states have come out against -- gone to court over it, saying it will lead to higher prices and weaker service. tesla is on a roll, topping wall street records in the fourth quarter. can ceo elon musk keep up the momentum? and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

taylor: the tesla turnaround continues. the electric carmaker delivered a record 112,000 cars in the fourth quarter. buyers rushed to take advantage

of subsidies being dialed back or eliminated in three key markets. the biggest seller was the tesla model three. we are joined by dan ives and bloomberg's david welsh in detroit. i have to start with you, 112 deliveries in the fourth quarter, 367,000 deliveries in 2019. are you surprised elon musk did it again? ultimately, if you look at what musk has done and tesla over the past six months, he proved many of the skeptics including ourselves wrong in terms of demand, especially in europe. i think if they are able to continue that, especially with china, we talked about 600 and that is where it becomes reachable. taylor: the one caveat is you had a lot of buyers rushed to -- rush to the market to take it

vantage of subsidies that were lowered or expired at the end of the year. without those, is there enough demand here? that's a big question in the u.s. because as of january 1, there are no longer incentives available to buy a tesla and we have seen model three demand in the u.s. down. that's the argument here. did sales go down because people don't want them or as elon musk told us, he is diverting production into europe and china? my guess is it is the latter. there is any of demand in the u.s. for the model three. the biggest question is will you sell all the cars? as you get past the early adopters who wanted the bigger cars with the bigger batteries and you start selling less expensive model threes, can they make money doing that? can they bring enough cost out of the system? can they lower the cost of the batteries to consistently make good profits on the cars and high enough margins to justify this huge valuation. taylor: reacts a little to that.

as we look at the fourth quarter numbers of 112,000, about 93000 and of those were the model three. are you comfortable with the composition mix, given 93 of 112,000 our model three and those are low on profits? >> they are really betting the company on model three. coming later this year and eventually cyber truck, but no doubt i do like the mix, especially what you are seeing in europe. china is $75 to $100 per share and that is why giga three is the linchpin of tesla's china strategy. taylor: i want to show you a chart that i am showing inside my terminal and i showed us every time we talk about tesla

because this continues to be the big surprise, which was the banner earnings-per-share in the last quarter that we saw. can they continue to cut down to -- cut their way down to a profit? where can they continue to cut? >> it is a big issue, because even though they did make a nice profit, surprising to the upside, there were a lot of one-timers. that is why there is still a bull case on this company for some analysts and investors who are not convinced the profitability will be there. remember, they just can't -- can't just make money. you have to have the margins to -- and cash flow consistently to do that. i think they will get the growth, particularly in china. they have got to really lower their costs, operationally, not just by trimming operations. , they haveles staff

to bring cost out of the vehicle and get the scale to make real money. --lor: dan, talk to more talk more about how they could cut costs operationally to boost the bottom line. i was speaking to an analyst earlier this week and he was saying on the same assembly line , tesla is working on producing model threes and some of the other higher profit models on the same line. but they hadn't really been able to do that before. have you noticed that in your analysis as another way to cut costs? dan: they are doing factory stores and what you have seen, there are two areas. one could be in terms of taking over some of those lines and giga, andiency in just operating efficiencies, especially as they start to scale. you will start to see profits increase, especially model three

with software and self driving and some of these other pieces. that is all margin. that all flows to the bottom line. i think the combo is what elon musk is betting on. to continue to see profitability. taylor: while i have you, i wanted to show another chart that i'm looking at in my terminal and it is a runaway stock price that we have seen. now 8443. the median price is that 303. -- at 443. the median price is that 303. are you comfortable given the size and scope? dan: it is a parabolic run-up. you could say half of that is short covering, but i think what is starting to happen here is that the vision, the ev vision in terms of europe and especially china, it is now starting to happen and no doubt, dark days the past nine months and we criticize them as well as others, but now this thing starts to really take off and you can get 500k units and you

look at the stock and it could be $580 or $600 and i think that is what the bulls are starting to see and many of the bears will have to going to hibernation mode. taylor: we will have to get you back to keep you posted. thank you for joining us and dan will be sticking around with us because up next, we will talk about another stock and that is apple. they start to the year and why analysts are so optimistic about this holiday season. bloomberg technology is live streaming on twitter. check us out on @technology. be sure to follow us on quick take on twitter. this is bloomberg. ♪

taylor: apple's price target was raised by at least two analysts on friday.

both citing optimism over iphone sales in the quarter. rbc capital markets and bank of america boosted their targets to $330 per share. for more on apple, i will get back to dan ives of wedbush. look at the chart i am showing in my terminal quickly. you see apple at $300 per share, today, pulling back at 297. share, overvalued, overextended, or breaking out to a new trading range? dan: breaking out to a new trading range. it has been a two-part thesis for us over the past few years. in the first part, you saw stocks had a massive move and it is a 5g super cycle we are going through. you look at where penetration is, i think a third of those the next few years, that remains for play and it is

continuing to happen on apple and many are starting to come around. taylor: if you look at another chart inside of my terminal, i know my producers kill me every time i do this, your price target now, you are leading the way at $350. we've got two of those price target raises to $330, but after an 86% run-up in 2019, how much food of the good news is already baked into the share price in your opinion? >> i think only half of it. i can tell you, we talked to institutional investors on a daily basis, many not believing in the 5g super cycle and i -- the upgrade cycle in terms of what is happening and think for i a company that is 12 to 16 times now breaking out in terms of where it is trading. there's still a lot of haters out there. i think that is what i like to see. you do not like to see everyone loving this, and they will continue over the coming

quarters, not just iphones rock of gibraltar, but what they are doing on services. you get to 350 or north of that as we go into next year. taylor: what if 5g does not pan out? what is your estimate for that left side, downside, tail risk event? it is, what happens if 5g is a dud? that point, if you look at what is baked into numbers, it was 200 million units that lie in the sand. i think what is being baked in here is not overly bullish numbers in terms of the stream and that is what i love about the setup. and if it is a dud and you see some disappointment, you see some sort of speed bumps, which i see as creating opportunities in the stock, it is a two-part 5g cycle, so i don't view this

as a 6-9-month cycle, i view it as 12 to 18 months. taylor: you said a one-two punch is not only 5g, but services. so much of the frustrations over this company is the cyclicality. because they get over half of their revenue still from the iphone. what percent of revenue do you want to see from services to reduce that cyclicality and become a more stable stock? for now and the foreseeable future, iphone will continue to be the core part of apple. we know it will change, but i would say on the services piece, north of $50 billion. next year, north of $60 billion. aboutluation, what i love it, services valuation, $600 billion. you are starting to see more occurring revenue and i think rerated byis being the street and that is what i

love about the system playing out. taylor: we are waiting to get a rare apple appearance over at ces. anything you are looking out for for the company at ces? dan: we will be there at person and that is obviously more about privacy. i think you saw last year at ces, that is apple's line in the sand, being like we are here and these others are over here. that is really them trying to continue to delineate themselves in terms of where they view themselves from a data privacy perspective. a totally different business model in terms of facebook and google, but this is where cupertino try to draw the line in the sand where they stand on data privacy, especially with the beltway and the 202 area code knocking this year. taylor: dan ives of wedbush, thank you as always for joining us. coming up, tensions mount. we continue to look at the standoff between the u.s. and iran following that deadly american attack.

all of that next. this is bloomberg. ♪

taylor: this is "bloomberg technology." i'm taylor riggs in her emily -- in for emily chang. our top story, escalating tensions between the u.s. and iran. speaking in florida, the president defended u.s. airstrikes that killed a top iranian leader. >> if americans anywhere are threatened, we have all of those targets already fully identified, and i am ready and prepared to take whatever action is necessary. and that in particular refers to iran. taylor: to discuss, we are joined from washington by jamil

jaffer from ironnet, security firm started by former director of the nsa, retired general keith alexander and before that, he served on the house select committee on intelligence. great to have you. kick us off, give me your broad thoughts on iran, most certainly responding via cyber warfare. jamil: look, iran is going to feel the need to respond. we have taken strong action, the president has, in response to a long series of aggressive activities by the iranians. they are likely to respond in one of two ways. terrorist attacks, likely abroad, it would be dangerous to provoke a terrorist attack in the united states. that would certainly provoke a strong response, but more than likely they are likely to conduct cyber attacks in the united states against industry or the american government. taylor: talk to me why a cyberattack seems the better

of the two options versus a fallout -- full out physical military attack from them? jamil: depending on what level of cyberattack, they could ratchet it down to a level where they are seen to respond, it has an effect, but not the kind of effect that would form a very aggressive response from the president, who clearly is willing to take action directly to the iranians in a way he hasn't yet to date in his presidency and the prior president, president obama hadn't in the bulk of his presidency also. i think the iranians are looking at this and thinking, president trump might be willing to go toe to toe with us, that is something they may be weighing in that is why a cyberattack may be the way they come at us and ratchet down what they do with respect to an attack tear the -- to the united states they are likely to conduct in response. taylor: a concern is iran coming out and saying, we could do this at any moment. when, if that is the route they take, would you expect a

cyberattack to be coming? jamil: the idea is that iran would do it in the fairly near future. the reason why i say that is because iran feels the need to respond. they are under pressure publicly, their own population, there is a huge iranian diaspora the regime certainly, the , iranian people are going to be on theyou have taken it chin, how are you going to respond? remember, qassem suleimani has american blood on his hands. with 600 americans being killed in iraq by penetrators that they gave. taylor: we have an earlier soundbite from an admiral. i want to get your reaction. listen to what he had to say. >> they are quite capable in this realm to launch a significant cyber attack against

financial institutions, our infrastructure, our educational system. they are highly capable in cyber. so look for horizontal escalation hereby iran. taylor: the admiral talking about financial, education, other infrastructure areas being most at risk. where do you see the most risk as well? jamil: admiral stavridis is right. historically they have been looking at things like financial services, energy, oil and gas, health care, the government itself, so institutions that have a significant impact publicly and are seen as having an impact publicly. part of this is perception of -- for the iranians to be responding to something here. those industries are likely to be looked at. they are some of the best defended industries, so the key

to a defense is about individual companies working together, and ultimately industry and government working together. chris said on twitter something that is very important, the dhs needs to step up and share actual information with the private sector to defend the private sector. taylor: how advanced has the iran coding and hackers gotten, and are we prepared for it? jamil: i think we are prepared. that being said, the iranians have gotten a lot better a lot faster. the chinese, the russians, and bus have always been the best at this game. the iranians and north koreans are newer at this game but have dramatically upped their game in the last two or three years and are able to undertake very serious activities. the big question is not do they have the capability, the question is are they willing to take the risk, with president trump willing to punch back, and he may punch back very hard.

taylor: do you see big differences in china, north korea, iran? jamil: i think -- look, obviously china is a political, military, and economic threat and a long-term strategic threat. russia being a longer challenger to us has longer-term interests. iran and north korea are important regional players with global ambitions, but certainly a capability in the cyber arena to act aggressively and conduct what you might call asymmetric attacks, bat above their pay grade, as it were. that is that concern with iran, that they can do more damage than their military strength or regional capabilities might otherwise indicate, and that is why they are a threat in this space. taylor: that is exactly what we keep hearing. that is jamil jaffer of ironnet cybersecurity, thank you. expected toacebook,

face regulatory headwinds in the year ahead, but one analyst is staying loyal to the social network and predicts a blowout fourth-quarter. we will see with victor anthony of aegis capital is next. this is bloomberg. ♪

taylor: fears of facebook hitting a 52-week high friday, the stock up over 2% since the start of the new year. our next guest raised his price target on facebook to $300 from $235, saying in a note monday the company will power through the regulatory and antitrust risks it faces in 2020. that is victor anthony, managing director of internet at aegis capital. he joins us from new york.

victor, share price closing just short of $209. give me your path from $209 to $300? victor: number one, as you stated, it had a very strong fourth-quarter. i base it on three reasons. the user numbers i am looking out for core facebook, instagram, messenger and whatsapp are certainly strong, certainly high engagement in the fourth quarter, user engagement in the fourth quarter. second, advertiser comeback is extremely positive. that is a strong indication revenue growth is solid. third, really just a readthrough from online retail numbers that we saw, up 18% in the fourth quarter. i think the market ascribed most of that to amazon, but they are missing the fact that there were ads that actually drove online retail sales, and those ads were

on digital platforms, primarily facebook, instagram, google, twitter and snapchat. but facebook is one of the imary beneficiaries. so those three put together i think suggest facebook had a very solid fourth quarter. taylor: i wanted to get your thoughts on instagram, because you've mentioned that a few times. we were getting other reports that instagram stories alone make up 10% of all ad revenue for facebook. i wonder, though, what is that -- downsideail side tail risk if growth in instagram starts to slow? victor: stories really took off instantly on instagram, not so much on the core facebook platform, but i think that changes in 2020. the core newsfeed is still driving the bulk of the growth. it is a combination of stories on instagram, the combination of the newsfeed, advertisers have really gravitated to stories,

that is the feedback i getting. am but it is a long runway for stories on instagram, so i am not too concerned about the fact that it is a large percentage of the mix today. taylor: i want to get your thoughts on a pure valuation standpoint. if you look at the chart i am showing inside my terminal, you know the story, it hasn't rebounded off of its lows and is trading below other companies like a google, like an apple. is facebook just undervalued to you? victor: facebook stock hasn't really been a story this year, unlike other stocks and other sectors, but i think that story could likely change. number one, i do think there is continued user growth in 2020 across all four platforms. number two, advertising, facebook accounts for roughly

about 12% of global advertising budgets today, growing by 18% by 2022, i think. a significant share shift on facebook. you also have the fact that 2019 was a peak investment year for them, so you have marginal extension in 2020, 2021. you have epf's in 2020, appreciating 25%, normalized growth, and you had 35 percent etf growth in 2019. 2019. you also have a strong balance sheets, strong free cash flow, which they don't often get credit for, whatsapp has a billion plus users and they haven't even scratched the surface in terms of monetizing those assets. so you are going to get there -- facebook stock is worth mainly because of estimates coming in significantly above what analysts like me have been projecting, but ultimately, i think you will get that multiple extension in conjunction with upside to and revenues this year.

i'm convinced it is a stock you want to own over the next five years because of the factors i talked about. cheap multiple relative to group, large cap peer usn china, and it trades just a few points above the s&p 500 index. if you look at 2021 multiples versus s&p, it is even more compelling from a valuation perspective. taylor: you also cover alphabet. is facebook poised to benefit more from olympics, political ad spending, all in 2020, more so than alphabet? victor: i like both companies. i think alphabet will benefit as well as facebook. facebook is a little more scrappier and may take more share than google or alphabet. but the story for alphabet is you have a business that is benefiting from several tailwinds. search is resilient.

you have the fact that youtube continues to grow users and advertising dollars, the cloud business is becoming a formidable competitor in the space, i think it will report 12 million runway by the middle of this year. you have good corporate governance. i was at google headquarters and met the employees, extremely enthusiastic despite headlines you are hearing about the work at google. -- working at google. i spent a few minutes with the cfo, excellent cfo, good management team, good corporate governance which they don't get credit for, and multiple stock as well, similar to facebook. taylor: quickly, come and look at a chart i am showing inside my terminal. it is all the things. you know the story better than anyone. apple and facebook taking off, the loser in all of this is netflix. is netflix prepared for upcoming streaming competition? victor: i have a hold on netflix. as far as the fourth quarter, though, disney plus, the data i

suggests that user growth is pretty strong in the fourth quarter, but ultimately i think all the streaming options, and ones that have yet to be released so far, when they all coalesce in 2020, that will put significant downward pressure on netflix user growth in the u.s. and ultimate as these platforms get rolled out internationally, downward pressure on growth outside the u.s. as well. but not only that, you have the cash burn issue, which is an issue for me. i don't see them in flecked think for seven more years. you have the fact that they are losing premium, second-run content which would ultimately lead to churn, and you have an intrinsically high multiple stocks. after that, i think they have lost pricing power in the u.s. and they are well on the way to losing pricing power outside the u.s. it is not a stock i am recommending right now, even though i love the product.

taylor: victor anthony of aegis capital, thank you for joining us. i want to stick with streaming, because apple is making another investment in its streaming service. former hbo ceo richard butler and his production company will develop original movies and tv shows exclusively for apple tv plus. landing him is another sign of apple's growing investment in hollywood and its ability to attract top talent as it competes for viewers with the likes of netflix, amazon, and disney. here to help break it down is bloomberg's lucas shaw joining us from los angeles. lucas, how big a win is this for apple? lucas: it is a big one. there are few executives in the entertainment business and media that have a better reputation than richard. he worked for hbo for close to 30 years during the heyday of what you would consider hbo, starting with the sopranos and recently with game of thrones and the watchmen. he was ceo for the past six years and really only left after at&t the phone company came in

and bought time warner, hbo parent, and had plans to change hbo and make it less independent. plepler had really run his own company and had his own team for -- fiefdom for a very long time and wanted no part of at&t's vision. he left and decided to start a production company and lean into the relationships that he had. he probably could have had his choice of any company with whom to work, and he chose apple. taylor: what unique ideas, creations do you think can plepler and apple release, and i will give you that it is a crowded space? lucas: it will be all about talent relationships. one of plepler's strength was developing relationships with documentarians, filmmakers, writers, producers, he always put talent first and will lean into that network, whether it is with publishers of hot new books, and come up with projects that really appeal to apple and

to viewers. one thing hbo was good at under plepler, even better than companies like disney, as you would take a show that is not -- is tapping into the zeitgeist. you would take a show that is not one of the most watched shows, and it would seem like everybody was watching about it. if you think about "girls" or "west world," these had small audience releases but had huge impact culturally and were shared constantly online. taylor: your great reporting highlights how these companies differentiate themselves to compete for viewers. you noted earlier that netflix might be trying to go the route of winning an oscar for some of their movies to really stand out. where do you think apple continues to focus in 2020? is it these shows? what do you think? lucas: i think it will be shows and to a lesser extent movies, with big-name talent that helps them, they think, break through.

it will be something like the morning show with reese witherspoon and jennifer aniston and steve carell and is up for three golden globes, i believe, this weekend. and that is in apple's first year of original productions. next year, you will see them try more of that, but whereas netflix has taken a volume approach, making hundreds or this year maybe 1000 pieces of product, apple will make fewer but every one they make, they will try to make big. taylor: thank you bloomberg's lucas shaw, all things streaming wars. still ahead, the biggest tech companies are heading to las vegas for the cef trade show with digital assistant technology set to take the spotlight. we will discuss what else is in store. this is bloomberg. ♪

taylor: the world's biggest tech companies are headed to las

vegas for the annual ces tradeshow next week, with a rare -- even apple making a rare official experience. let's find out more with bloomberg technology's mark gurman, who joins us from l.a. mark, what are you looking for? mark: ces this year i think is going to be kind of boring, to be honest, for lack of a better term. i'm not expecting any bombshell or breakthrough developments from any of the big companies, even the apple you mentioned. i think there will be a lot of talk about smart speakers, a lot of talk about integration with cars, so you will hear all the buzzwords. last year, i saw a shower that had alexa integrated into it, so maybe this year it will get google assistant or work with apple's home kit. i think it will be a lot more of the same and tech companies will continue holding their fire until they are ready to make big splashes on their own timelines. taylor: mark, you are never

allowed to say boring on live tv with me again. talk to me about apple making that rare official appearance. why now? mark: i mean, this is all about privacy, right? apple is not going to be making any hardware or software announcements or anything. they are going to have their senior director of privacy initiatives on stage on a roundtable with chief privacy officer's from other companies, including u.s. government officials as well as facebook. what apple is going to be doing is giving its stance on privacy. their stance is, when it comes to las vegas where ces is, what happens on your iphone stays on your iphone. there is an argument to be made that that is not entirely true, but you see their perspective, they are trying to hold themselves up as a privacy pioneer in technology industry, and they are going to do this with the speaking engagement. of course, apple makes many speaking engagements related to this topic as well, so this is not unique. taylor: well, mark.

you are spot on. i just spoke to dan ives over at wedbush who said he is going to ces and this is apple's way of differentiating themselves from other big tech companies, the likes of facebook, for example, given their stance on data privacy. you have been covering apple, how is their stance on data privacy? are people buying the fact that it is safe and they are keeping our data private? mark: and i will see dan there, so i look forward to that. in terms of apple's stance on privacy, people believe it. people understand there has been a trade-off made in terms of the functionality of some apple ai initiatives, with privacy, that they are not as good as perhaps google or amazon. apple strongly pushes back on that, says it is not true. a lot of people think it is true. i think there is truth to that. but apple has the technology to beat that out and make it true that apple is able to have the best technology on ai but also

be the most private. people understand there is a lot of encryption and security that goes into effect with the iphone. what you haven't seen as a major privacy breach or anything like that on apple's part, compared to what you may have seen from some of the other internet service giants. all in all, apple is talking a lot about privacy but also backing it up in practice. taylor: mark, 20 seconds here. should we continue to see further integration between all these companies, so that my experience as a consumer is seamless, i could have an ios on an amazon, alexa, etc.? mark: they say you will but i don't necessarily buy it. i think all of these companies are trying to beat out each other. this is going to be a lot of talk and i will believe it when i see it, but i don't think it is going to be at 2020 ces. taylor: bloomberg's mark gurman. thank you for joining us. that does it for this edition of "bloomberg technology."

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