Second largest in california history. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im alisa parenti, this is bloomberg. Bloomberg technology with emily chang is next. Emily im emily chang and this is bloomberg technology. Coming up, well take a look at a big year in consumer tech. What worked, what did not and what is worth your money . Plus, we discussed facebooks role on the platform for clinical propaganda. Is the social network overstepping by helping controversy all World Leaders used the platform . Ham says the firm is a tech company at heart. Our exclusive interview. Advanceddeveloping an hard ponder. Is part of a broader push to turn what is a Luxury Fashion device into a serious medical device. 20 of the population will be using a wearable device by next year. That growth rate is slowing. Joining us from chicago, along with a bloomberg tech reporter who broke the story about apple. What exactly are they working on here . . Already modest your heart it already monitors your heart to a certain extent. Moment andin the historical. It shows your heart rate over a. Of time. But an ekg, the device they are , what that is able to do is anticipate future cardiac events. It can see if you are going to have a stroke, or have a blood caught and should see a doctor. It is that Preventive Medicine and health care which is a huge opportunity for apple, potentially. Emily how does this fit into apples overall plan . The preventive idea is crucial. They have talked a lot about prospects. They are set to grow by as much of a third over the next five to 10 years. They are trying to position the watch toward the health care industry. It senses a great opportunity been just luxury products. Waywatch was marketed that to begin with. We do have some breaking news. Ofly the executive alphabets just getting in the full release. Googlesidt, who was ceo then became executive chairman. Larry page returned as ceo. The then restructured company and became ceo of alphabets and schmidt became executive chairman of apple that. There is likely some more to the story, those schmidt has been at the company for a long time. We will have more on the story momentarily. About appleaking and its health efforts, what is this signify about where apple wants to take the watch, and how much will this help monitor help sales . Remains the moment, it something of a luxury. Do just asking . , do you have a watch . They are trying to make it a central part of your life. If you have any concerns about Health Issues owing forward, you really feel like you need to buy one. Emily nicole, i want you to tell us a little bit about how wearables are doing right now. There was a lot of optimism about the potential for wearable devices but they have not lived up to the hype in terms of adoption. Where do things stand right now . Nicole that is exactly the case. Back in late 2015, we were very foolish on wearables or it that was primarily because we expected the apple watch to perform very well. When that did not happen, we downgraded our forecast last year significantly. We just updated that again. We bumped it up slightly, but nowhere near where we were at the time. Now we estimate that this year, 45 Million People in the u. S. Use a wearable at least once a month. Next you, that will rise by about 12 to about 50 million u. S. Users. Emily just once a month . Isnt the goal to be wearing them every day . Nicole most people probably do, but that is how we estimate usage. Emily do you think a feature like a more advanced heart monitoring feature would actually significantly boost sales of Something Like the apple watch . Nicole like you were saying, they are trying to turn this from a luxury nice to have item into a need to have item. While i think that that kind of Health Information would be of a lot of interest to some people who have risk factors and there are other ways of people watches i apple do not know that is something that the mass market will feel like they need. Especially at the current price point. Emily so, alex. Are talking about how wearables are slowing down and it seems march speakers are the hot thing this year. They could surpass wearable sales. I wonder if there is a similar question there as to whether they will continue to dominate the market as they are right now . Alex you mean in terms of for the watch itself . I think is interesting with the speaker. When they were first developing the home part, they saw some of the lessons they learned from the watch. They gradually shifted and realized that is how they should market. This is a music device. It is interesting the relationship between the two devices. Emily it is coming out early next year. To a lot of competition from google home and amazon echo. Alex webb, thank you so much. Nicole, thank you as well. Sticking with gadgets, with 2017 coming to an end, big tex companies are still fighting to win your heart. And more notably, your wallet. The biggest offerings from apple, amazon, and google . It has been a jampacked year for new tech products. All the big players are buying for every part of your life. Google is no longer just a search company. Amazon is more than a retail channel. Apple more than ever is going for the high end aaron they are all trying to fight to be your number one. ,pple is going for the high end the smartphone but the iphone x. Without a doubt, this was the most anticipated gadget of the year. Perhaps the biggest iphone update in the companys history. So far it has been a hit with consumers. Apple is expecting and 80 billion holiday quarter. Google wants to sell you a 400, super loud, highend speaker that works well with it new pixel to phone. Amazon is trying to be everywhere in your room. They have released several speakers. Devicen alarm clock and of the future. It integrates services and is a solid holiday gift for the tech lover in your home. Apples home pod, will come out in early 2018 after being delayed. The iphone maker is already working on its next iphone as well as an ipad with a psyd for next year. Google is working on a new home speaker with a screen where it amazon is always working on new echoes. Happy holidays. Emily that was bloomberg technologys mark gurman. Returning to headlines, we prefer you just a few minutes ago out of that saying eric schmidt is stepping down from his executive chairman role to become a Technical Advisor to the company. This ending a 17 year Senior Leadership position at the internet giant. Joining us now on the transition, number Television Editor at large cory johnson. Cory i remember when he got the job. It was an amazing thing to see these entrepreneurs with a new ideas get one of the best people in Silicon Valley. He was well known for what he did. He came with a knowledge of how Enterprise Software works so much. He was known for his mind in Silicon Valley. Google became one of the Great Companies in the history of the world. As much as it was the founders, it was eric schmidt deeply involved. He was an executive chairman. He was very much involved. Nonexecutive chairman is a very different job. Essentially it is a board level advisory role. He will still have an active role in the business. , just simplyble remarkable what he has done in 17 years at google. Emily so this from larry page. Continuing his 17 years of service from the company he will be helping us as a Technical Advisor. I am incredibly excited about the product our company is making an about the strong leaders driving innovation. Presumably that is a reference to other alphabet companies. Corey think about how much bruce comes into google that she will pare down some of these things. Company witho the a goofy idea of letting smart people give highs salaries and explore things. One of the most interesting things about his long career in technology was recognizing how the very latest development in technology would be very pertinent in the near future in enterprise and consumer facing technology. From Silicon Valley and putting his company at the forefront of that. Emily the question remains is there anything more to this story . If he transitioning out because he is ready to transition out or is there more . Corey there have been discussions about him going to all kinds of places. We have to get rid of the kinds of places we read in the past and higher eric schmidt. This guy a so plugin and understands technology. It means there are a lot of opportunities available to him. He has been moving away from the executive role at google for a long time with the move from ceo to i remember when that happened. It was 2011. Page came in as ceo and in 2015 he restructured and turned the company into a bet. Corey he has had a remarkable career at Silicon Valley. He has also been very involved in philanthropy. I would not expect that to stop either. Emily thank you for giving us the more context. Sing has raised 50 billion. Cash reserves at 12 billion. Raised goesmoney toward Autonomous Cars and electric car charging networks. Coming up, facebook theres a lot about getting influential people on this platform. Now the companys practice of working with politicians, some use it to silence opponents is under scrutiny. Next. This is bloomberg. Emily facebooks influence in elections worldwide continues to be under scrutiny. It is a politically agnostic tool, but they actively work with hearties and leaders. A teamtiative is run by that is neutral and that it works with anyone seeking or securing power. Bloombergs sarah frier broke this story. Fascinating story. What exactly does the Facebook Policy Team do . They do withike celebrities or sports stars, this team trains politicians about live video, how to build a base of followers, and all of those tactics that then when they end up running for of office, they have a very close relationship with them and continues to help them. Sometimes they turn it into a Campaign Advertising relationship. Emily this is no matter what their politics. Sarah absolutely. Dutere was one of them. Withhave worked closely the far right party in germany. The Scottish National party. This is something that facebook just does that based across all kinds of political parties. They drew draw the line at some very strong extremists. They do not work with the far right for example. This is something that is looking very concerning today because we are seeing facebooks influence and power locally in shaping elections. The fact that politicians are anding special training, they are using it against their citizens, definitely is an uncomfortable position for the company to be in. Emily and you spoke with a formal a former member of the team because she was uncomfortable. Sarah right, my colleague spoke with her. She said the team was has started to help to create democratic relationships within societies and evolved into an election nearing strategy. She said she did not like how it was turning. Emily back to the question, if facebook is a neutral platform, why do they need to help politicians learn how to use it . Everyone else learns how to use it on their own. What are they saying about their role here . Sarah i think it goes back to their longstanding competition with twitter. We have seen twitter become the bullhorn for important people around the world. Our president included. Naturallyas never been that kind of place for politicians and leaders. So they have had to train and ease people into it. They have been very successful in getting these politicians to get massive followings on their network. From that perspective, it seems like a good idea. When you look at it from the context of now youre helping the people in our, but the citizens in some of these countries may be new to the internet and not as digitally savvy. It creates a power imbalance. Frier, thank you so much for sharing that with us. We will continue to follow. Coming up, facebook is not only dabbling in politics it is making a push into music. Signing a multiyear deal with universal music. How it ends up the competition with youtube, next. This is bloomberg. Emily facebook has signed a multiyear licensing deal that lets the network carry artists from the worlds biggest labels. Under the agreement, facebook users will be able to upload songs of the universal label and share using through facebook instagram, and the art technology. Joining us from l. A. , lucas shaw. Lucas four , they have great ambitions in video. In recent years, any video that is included a song, say you are at your wedding and you dance to that video gets taken down because you do not have the right to use that song and facebook does not have the right to host videos using that song. It has been a source of frustration for users and facebook. This solves that problem for them and in the long, give them the potential to improves their relationship with the music business so that it could get the right to professional video in the future. For the music business, it has been irritating for them to have videos violating copyright on facebook. It helps them establish facebook as a competitor to you to. Two youtube. Emily do you expect we will see a deal this with other record labels . Lucas yes. Facebook has been talking with sony and warner for several months. I do not know if they will announce them or how, i would be surprised that they did not have deals with all three of the majors in the next three months. This signify to the competition, whether it is youtube or spotify. Lucas what you have seen in the music business is there have been growth recently because of paid Services Like spotify, apple music. Free has been an untamed wilderness. Youtube is where everyone goes. The music business is trying to bring order to what people can and cannot listen to for free. Universal music, made a deal with spotify that gave them greater control over what music was available for free. With youtube, and a deal announced earlier this week, they got greater control over what music was available for free. If they get to a point with facebook where they spoke is hosting full songs, they will exert a lot of control over what is available for free. You canl want to say listen to any feature you want if you pay. If you are not going to pay come you can only listen to certain songs. They have made a lot of progress this year toward that end. Emily quick question, only 30 seconds left. Mark dribbles about a spotify ipo. What is the latest we know . Lucas a report in the wall street journal said the fcc was leaning toward approving their direct listing. It is not a huge surprise, but we had supported earlier the fcc was looking into it. Lay, lucas shaw, in a thank you. Still ahead, our exclusive interview with bank of america chair brian moynihan. His thoughts on bitcoin and why he is skeptical about bitcoin. This is bloomberg. Alisa parenti in washington. Lets start with a check of your first word news. The house of past federal funding to keep the government running for three more weeks. The bill still has to clear the senate before the shutdown deadline on friday. 188. Ure passed 231 it would maintain current spending levels through january 2019 and provides emergency funding for Missile Defense work as well as other pentagon expenses. Authorities say the driver of an suv who drove into a crowd is an Australian Citizen with a history of mental ole miss and no known link to terrorism. Vice president pence has outlined president trumps strategy in afghanistan. Pence says trump has put pakistan on notice that the country has much to lose if it continues to harbor terrorists. Says he says too often they provide safe haven to terrorists and says those days are over. The department of homeland securitys internal watchdog says his office will investigate how a small says aws was lanes of dollars in contracts after hurricane maria. He said he would look into why a bronze star llc never delivered the emergency tarps and plastic sheeting as promised. The supplies were needed to cover homes damaged by the storms wind. Im alisa parenti. This is bloomberg test after 5 30 p. M. Here in washington. It is already the weekend. 6 30 in hong kong. We are joined by sophie with a look at the markets. Sophie already the weekend we are gearing up for a happier friday as we close out the penultimate week of 2017. Investors react to the latest u. S. Gdp figures. Moving to the board to check on the yen, which is sticking bitcoin looking set to snap a three base slide and we are watching copper. Kong up next more with bloomberg technology. Our top story, stepping down. The transition and a 17 career eric schmidt is stepping down as Technical Advisor to alphabet. Investors large and small are determining how Much Technology will in florence the market. The company has made strides such as ai and Voice Recognition to improve the Banking Experience for its customers. Moynihan sat down with us in an exclusive interview and talked about the transformation. Since i have been ceo i have been trying to do something. We are about 25 billion in coding. That is a lot of feature functionality and improvements. Its about 2. 5 to 3 billion per year and a little higher when youd do mergers and stuff. Its a talented group of teammates and a bunch of huge Computer Technology systems and frameworks. That is what we do. Money is digital. Activity is digital. Together for our customers and teammates is huge. What will happen between improvements in Voice Recognition and artificial intelligent, ada storage and retrieval and wifi networks, being able to transmit on a wifi basis times of data without having a battery go down in 10 seconds, all of that is important. Having all of the data in the world unless the person is going to act on it, which requires storage, analytics, and distribution, the last part you hit a note. The question is you have to have it all come together. The advances are tremendous. When we think about a voice or text Artificial Intelligence for bank of america specifically question mark we think customers want to get