Intel discloses this week that most of the processes running the World Computers and smartphones have a feature that makes them vulnerable to attacks. As the largest chip acre in the world, the impact is farreaching. The next coming over few weeks and it sees no Material Impact to its business. Google says the issue affects other Semi Conductor firms. Microsoft, apple, and google says what we need to know. Outoogle researchers found that this might be a problem going back to the middle of last year. The idea was we get together, find a fix for this, then we put that fix in place, then we go and say, look, this is what happened. We sorted it out. Dont worry. Unfortunately, news intervened. People found up. They are now in a scramble mode. Found out. They are now in scramble mode. We dont know the impact they will have on computers. Are there any legal issues . Regulators might look at this and say, hold on, you have one or two companies where everything depends upon. Why are we giving them so much power, so much influence and the potential to damage . Emily we are talking about almost every computer and smartphone and server out there. E the potential impacts what are the potential impacts . First, no reports that anyone has exploited this vulnerability it. This vulnerability yet. So far is the important thing. If you have a computer at home, you have areas on your computers stored,sswords are where Encryption Keys are stored. Programs dont have access to that data. This future feature this feature of chips allows access to that data for highlevel programs. Emily intel says they wont have a significant financial impact. How can that be . In the past, they have had to recall chips or fix patches. They say, look, this is the future of chips. This makes chips that chips faster. Emily another thing that doesnt look good is that intel found out about this six months ago. Sold a chunk of stock later in the year. What happened . This has created a water of attention. If you look at the filings, this was a regularly announced plan. They usually set out a plan where they say i am going to sell this amount of shares. Timing of this, whether intel really knew this was going , that ish a big deal all up in the air and we cant say with any concrete bases he knew. Basis he knew. Coverage continue our from the fallout of the news, speaking with brian white. Take a listen. Iswhat we are talking about a feature that has been in processors for over 10 years, but he has discovered it, and it is used in intel and other designs. Designs tos their others. Everybody is impacted. What i find interesting as i was brought in a couple weeks ago by these companies to give an offense because they knew what was a big deal. In 20 years i have never seen three Companies Come together in a briefing to talk about the issues and how they are addressing it as an industry. That is an important side of the story that hasnt been told. There are a lot of problems. There are interesting ways the issue will be mitigated. I think we will see more discussions from apple and others. Emily do think they should have told consumers . I think they were going to. The transparency of the industry together, working and with responsible disclosure, which is important. They found a vulnerability, find a manufacturer, working on a patch, and were planning to announce it. Somebody leaked information, and now it is public. It shows the community is taking security more seriously and more responsible. What is gearing us is this is ubiquitous. What is scaring us is this is ubiquitous. Emily how serious is this issue in terms of impacts . We dont know that anybody exporting this, but we dont know a lot of things about attacks happening. It is a fair point. It remains to be seen. The one that allows people access to private data is the one being talked about. This has been out there forever, and we are seeing this being addressed now. In theory, there are bad things that can happen, but it took 10 years to discover it. An idea of give you how hard it is to exploit these. Emily who could exploit this folder ability and what would they do with the information this vulnerability and what would they do with this information . Those with significant resources. Google would spend the time to find this vulnerability. Those actors may have the ability to know how to actually access and take advantage of this flaw. What is important is there are no known attacks ongoing right now. We are still unsure if you can execute this remotely or you need to be on the user machine. There is a lot we dont know. It just reinforces two things, one, the software we are operating is quite secure. The second is that we know that if i determined adversary was to gain access to a machine, they are going to gain access. May be another way they potentially able to exploit. Emily what can consumers do . They need to update. There will be too. There will be software and hardware updates. It is easy to take down a software update. Update may be difficult, depending on how they push that out. To begoing straightforward, given the attention this is receiving. I think the manufacturers are a liver this and we will be protected. Our all over this and we will be protected. You need to protect her data and understand who was you need to protect your data and understand who is accessing it. Do extra precautionary measures. Make sure only certain people have access. This what do you think foreshadows for the year ahead in fiber in cyber . Is, it isas this going to lead to better things. What you do when you find these weaknesses is you redesigned you redesigned things. To address a point you raised, it is common in the security world for people to tell people about an issue and give them time to fix it. Is they what project give people three months. Because this was deep level, they needed more than three months. They were scheduled to do it january 9. Theys six months past when got it, because they knew they needed the extra time. Bottom line, we will see more awareness of how this process occurs in more sensitivity to what is going on, people having to figure out how they do this. It is going to be hard. The firmware stuff can be hard to update. Apple will probably do it as a confined as a combined update. It gets messy. Emily we know companies are cooperating more clearly. The vulnerabilities being discovered are more specific, yet hackers are also getting better. Is anything changing . Are we under a less or more of a threat . Understand you are adequately equip. Emember to protect the data that is were security needs to live. It is not about just protecting the software. It is understanding your data and who interacts with it. It is a layered approach. It is basic training. It is all those elements together that are going to increase our cyber hygiene and make us better. Andy those brian white bob. Analyst says apples offer to replace iphone batteries cheaply could mean a big drop in future sales. He writes that apple may sell up to 16 million fewer iphones this year. The analyst expects some customers to take it manage the discarded batteries and skip potential upgrades to newer models in 2018. Coming up, tesla pushes back a key Production Target again, raising questions about whether they need to raise more cash. Later, we hear from the blackberry ceo. This is bloomberg. A group has advantage its plans to merge with moneygram international. The company failed to win approval from the committee on Foreign Investment in the United States. The panel has become more active in blocking chinese investments in american companies. Last year, the Company Offered cash for money gram. The deal was valued at 1. 2 billion. Tesla pushed back a Production Target yet again after shipping fewer cars than expected last quarter. The Company Expects to hit producing 5000 cars a week, delaying the goal by another three months. We broke down the numbers with max taft in. Bad . Re these numbers so max they are bad because this is now another delay. Elon musk last year said he this 5000 ahitting week go by the end of the year, then it was three months, now six months. As bad as these numbers are, tesla has done a good job of managing expectations. If you look at what analysts were saying at the beginning of the week, a lot of people were expecting some disappointment. Basically, elon musk has been fade to investors and the public has conveyed to investors and the public that he wants to get this right. That gives ammunition to skeptics. Emily we have a chart showing production on the bloomberg here. Carsows the number of produced every quarter. Overall, they are holding about steady, but what do the numbers helpll indicate about how how hellish production is . Max it is below what we were expecting. I wouldnt read too much into the production numbers of the more expensive luxury cars, because a lot of Consumers Want this model three. Tesla already has claimed a big chunk of the luxury car market. The real question is, after you 35,000 the mass market , 40,000 current, whether the company can do things the Car Companies have been able to do. Musk has done a fantastic job of getting analysts, everybody to see this as a bet on the future. The future gets closer each quarter, and each quarter that tesla isnt able to get this massmarket electric car we have been promised, the sales pitches going to get harder, and it is going to continue to cause people to ask questions about the companys future. Emily why is wall street focused on this when the numbers are still small . Justify thisla to enormous valuation, it needs to be a mainstream car company. It needs to produce these massmarket numbers. To meet the Ambitious Goals that elon musk has set for himself and humanity, as he would put it. Us off oft to get fossil fuels, you need to get the cost of electric cars down. Sell luxury suvs, but if you really want to make a dent in the universe, so to speak, then you need to sell these massmarket cars. Analysts are saying tesla is way ahead of the competition still. Put this in broader context. Any problem that elon musk and tesla are going through at the moment, his competitors are going to have to go through it. What tesla has said is one of is atg problems happening the factory where they are making these battery packs. Any other country any other company that wants to make these electric cars is going to have to deal with battery production issues. The other side of that is these are companies that are experienced in dealing with supply chains, manufacturing big pieces of machinery. Tesla less experience. Maybe they will be will to deal with a faster. Said, tesla has done well as far as getting people to buy electric cars. The model as has outpaced expectations. Has outpaceds expectations. Emily we will hear from the blackberry ceo, next. Later, we will speak with microsoft. This is bloomberg. Emily google saved billions of dollars in taxes in 2017 with is with its structure. It involves shifting revenue to a Dutch Company with no employees, and then on to a view to mailbox owned by in ireland registered company. Google is under pressure from regulators around the world for not paying enough in taxes. Blackberry has signed a deal with baidu to Work Together on driverless car software. Companys vehicle operating system and in car Entertainment Software will be bundled into baidus self driving car platform, apollo. We spoke with john chen about the deal. Been working with most everybody in the ecosystems, and this is one of the latest announcement of a number of partners we have signed up. Others. Qualcomm and this just happened to be the next major partners we signed on. Emily how does this help blackberry push into the self driving car industry . , in all are providing pieces, we are providing the safety operating systems, safety and security operating systems for a taunus vehicle and platform. For Autonomous Vehicle and platform. When we first talked about me picking up taking this job, was to create a category for us to dominate in. We certainly are doing extremely well. How will blackberry help baidu become a dominant player in the car industry, which is their goal . It is quite ambitious, creating the baton and is platform, the Autonomous Vehicle platform. They are putting together some code and a lot of partnership. They pulled a thin as their operating system platform. They pulled us in as their operating system platform. With that, they should be rather complete in going after the Auto Industry. I assume the Auto Industry will go beyond just the auto that you and i know of today. They are going to provide maps and Digital Information also. Goodnk this is a pretty partnership, and we are bringing some good things together. Emily talk to us about the thist you see of partnership on blackberries business. Give us any hard numbers, if you can. John i cant give you any hard numbers. I know you have to ask. Be our growth platform. My growth is on the Enterprise Software, especially with security and cybersecurity. The next leg of our growth is with the auto. Autoe going to go beyond into the iot world. It is a huge market, and it is growing. We are very fortunate. Emily are there any other partnerships with other automakers in the works, and how do you plan to pursue more partnerships . You should expect us to continue to expand our ecosystems. Our attention the last two or newe years has been winning design, joining new partnerships, creating new platforms, like the one we just announced. Humanmachine interface. , someally good, new stuff of them a little scifiisf. Scifiish. Fit intow does this the context of blackberries broader turnaround strategy . Working . Is it has evolved considerably since you have taken it over. John that is a great question. Not call us in a turnaround mode anymore. We make money. We generate growth in the right area. We have a very good footprint in the cybersecurity enterprise. Growing. Quarter, the billings in the Enterprise Software grew 20 . We are announcing really big design wins. More, and you see should expect to see more. When we married the two together in the future, we are going to have a platform of security for iot management. As i said, i am excited about the future of the company. We are executing to it. We are showing results. Oris not just the strategy piece of paper like the first time you when i spoke. Now, we are really delivering. I am very pleased we are doing that. Emily that was john chen. Up, the iranian government is cracking down on social media, as ways of protests gripped the country. A reminder, all episodes are now Live Streaming on twitter. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Emily welcome back to the best of bloomberg technology. Imm lite. Antigovernment protests have swept across iran this week. I am emily chang. Antigovernment protests have swept across iran this week. This with aout former analyst. This is not really surprising. Iran has already had a number of social media sites and applications blocked prior to this. They have done this in the past, restricted access putt restricted access. There has been additional blocks put on. Telegram channels have been blocked. There haveng that been potential internet shutdowns in various parts of the country as well. None of it is surprising. The iranian government taking on a higher form of censorship now, as they are trying to crush any form of dissent. Ofly i am recalling the use twitter back in the day years ago which precipitated the blocking of twitter. About how protesters are using technology in iran today, how it has evolved from those years. , technology has been critical obviously now compared to 2009 you have had a rise in not just the number of individuals using iphones in mobile devices, but you have had growth in terms of individuals all over the globe using social media and different applications to communicate. Cases, encrypted applications. This helps them organize, communicate, coordinate, and spread ideas and opposition ideas in opposition to the government. I think is the technology being critical. It is worth noting that, even though the government in iran is taking steps to quell protesters by blocking their axes, the iranians have gotten savvy about workarounds. A lot of them have ways to access these platforms even though the government has prohibited them. That the should note use of technology has a dark side, including telegram. Telegram has been reportedly used by terrorists to communicate. Is that correct still . Absolutely. One of the other areas the applications have been used for have not been for peaceful protests, but also by terrorist organizations. This is Something Technology companies have been grappling with. Terrorist organizations using telegram on public and private channels. It is something my organization has actually been pressuring Tech Companies on in terms of cracking down on content which violates terms of service in the case of terrorism. In the case of iran, much of the protests that have gone on our peaceful protests and demonstrations, things that the United Government is in full that the United States government is in full support of. What has telegram in particular done to combat the use of its platform for terrorists . You are seeing the Tech Companies become a bit more responsive. You saw youtube, part of google, takedown videos recently. Telegram still has a ways to go. A lot of these channels are closed. In some cases, there is encrypted communication. We think telegram should be enforcing its terms of service. Any content that violates it should be taken down, not be permitted, and users that are affiliated with terr