Ceiling. They say the company pays men more than women, for the same work and want their lawsuit to be granted classaction status. But first, to our top story, billionaire terry may no longer be the chair of apples largest supplier but that isnt stopping him from trying to keep the relationship going for years to come. Hes stepped down from that role to focus on his campaign to become president of taiwan and he wants to make sure tensions between the u. S. And china dont force apple to leave the country. Speaking from the perspective of the republic of china ill plead with apple to come to taiwan. This comes after its said they were asked to shift from china to southeast asia. To discuss, we have venture partner munster and in l. A. , bloomberg text resident apple watcher. So there is some confusion about what terry gou said. He made some remarks and then later clarify them. What did he say and mean . The context here is very important. I think this might be getting a little blown out of proportion because this is the guy who is in charge of foxconn. Helped to create foxconn for many years. Of course, foxconn is where apple produces pretty much all of its iphones outside of india right now, out of china and now hes stepped down to run for president of taiwan. Wouldnt it benefit him greatly if apple moved some of his production from china to taiwan . Wouldnt he look really good as president and a Great Campaign slogan to say hes trying to get the iphone moved to taiwan . People have to understand whats going on. There is the political side for him and the political side for apple, so he has a lot to gain by making this happen. Bigger picture, all of this is based on a report nikkei, asked the chinabased suppliers to consider moving production outside of china to perhaps southeast asia. Do you think that would ever happen and what are your broader thoughts on the implications of apple even considering this, at this point . I think that will happen in time. I point back to four years ago, when apple started to consider doing production with foxconn outside, actually in brazil, because of some of the tax laws, the import laws in brazil. So i think this motivation for apple to essentially derisk themselves with china is nothing new. The timing on it is suspicious and probably the truth is several layers beneath the surface why apple is talking about that now but do i believe outside of all things going on with trade apple has a longstanding interest in diversifying outside of china for the manufacturing. Now, mark, without getting too deep into taiwanese politics, gou has pitched himself as a china first candidate. This doesnt sound very china first, but, you know, what are the broader political implications here of apple moving considering moving its factories outside of china anywhere and perhaps even to taiwan . Yeah, you know, this could be seen as a loselose situation for apple. Youve seen the struggles that apples competitors such as google and others have had in china. Apple is the nonchinese tech company to actually be mostly free to function in china. Most of their Services Work there. They have dozens of Retail Stores across the region. They have had a lot of success there revenuewise in the last five to seven years as well. That cant be said for google and others so if apple starts stripping out parts of production from china that will cost a lot of jobs. Apple is responsible for about 3 1 2 million supply chain jobs in china alone. If those jobs go away it will hurt the chinese economy and china will have less of a will to want to work with apple to keep them in their region right now. In the meantime, gene, youve got a new note just out on apples reputation in china. What have you found . Emily, weve been monitoring this closely since really may 5 when the trade dispute with china started to flare up and what we wanted to get a sense of, what the typical Chinese Consumer would do, boycotting apple products as weve gone back over the past month and looked at the broader chinese news media outlets, all of those have a surprising supportive tone relative to apple and the reason why i think that this is important is, that the tone in the media is directed from the top. It comes from the government. There is no question about that. And i think there is an insight in terms of how china wants to operate and work with apple. If you take in this very clear view, in fact, government is putting a positive narrative out to apple, i think thats a sign that the government wants to continue to work. Exactly like mark said. 3. 5 million supply we dont want to disrupt that. A positive for apple. I just want to briefly mention, even on social media, they are speaking relatively positive or overwhelmingly positive about apple, that doesnt mean that the typical consumer feels that way. There could still be an impact of a negative iphone number in china based on some of the things that are going on in the geopolitical world. In the meantime, mark, i want to get your thoughts on other story. Google announcing that its getting out of the tablet business, this after it just released a new pixel tablet. What do you make of this announcement . Not entirely surprising. What youve seen since google really entered the business in a big way in 2016 is that from a market standpoint, from a revenue standpoint, their hardware has been a flop across the board. The pixel phones are some of the best android phones in the market. Some of the best high end phones in the market but they do not sell anywhere near the quantity of samsung or apple, to a point where its hard to believe that they are even close to profitable on this hardware business. So what youre seeing is one sign now of them sort of wining down their hardware business. Were not saying thats going to happen completely, but tablets, if you look at the categories of major consumer electronic devices, you have smart watches, tv devices, tablets, smartphones, you know, taking one of those products off of the shelf is a considerable deal, and i think its a sign of more things to come if they dont turn that business up a notch pretty soon. Interesting. I know youll continue to follow that one for us. Bloomberg mark gurman, thank you so much. Gene is sticking with us to talk more about slack later. Five for Chinese Companies are joining another company from being banned. They raised National Security concerns over the companys role in chinas efforts to develop computers, among those added, to this blacklist, the Chinese Joint Venture product of the chipmaker, amd. They are suing. Huakei is looking to recover equipment and is suing the bureau of industry and security and the office of export enforcement. They dont seek damages and is looking to recover equipment seized by the united states. Coming up is the Party Still Going for slack . Well look at the second day in the public eye for stewart butterfield. Thats next. This is bloomberg. Slack has been a Public Company for two whole days and since its direct listing on thursday shares jumped above their Reference Price but closed slightly below their opening price. It wasnt the slashiest debut but thats what butterfield said he wanted to minimize volatility s. The idea of foregoing an ipo in favor of a direct listing going to catch on . Colin stewart of Morgan Stanley thinks next year there could be as many as five direct offerings and for them that could be a good thing since only Morgan Stanley, gsa have had direct listings like slack and spotify. We have with us in the studios, a guest. To be clear there wasnt a pop on the first day. The opening price was the opening price. Thats totally right. Everyone is looking at the 26 Reference Price and calculating the closing day and looking at a 48 pop. Thats not right. It opened at 38. 50. Thats the price we should look at comparing performance. No one was buying or selling at that price. No one was agreeing to buy at that price. That was something the New York Stock Exchange put out as a guide. Jet folks are still looking at this as a positive moment for slack. Gene, how optimistic are you about slacks future growth . Im most optimistic. And partly because this concept of future of work, they have been zeroing in on this communication piece. Really, thats the substance of why they have gone public but they have an opportunity to extend that beyond communication into work flow, in terms of kind of using a. I. To give recommendations to people about how to use their day, nudges, humans instinctively become distracted and get off task, and they can really evolve their platform to help with some of the firsts of work. The point is simple. There is growth opportunities, new markets that slack can pursue and i think that will be good for the stock longer term. Now, in a way, there is an irony about slack where its called the email killer, but in a way, youre also more connected to work if you use slack and you use slack religiously. Who wants more nudges as gene said . And if the goal is to sort of minimize nudges, minimize your you know, sort of improve or change your connectedness to work but youre only working more, is slack doing its job . That might end up being a central question that we ask ourselves about slack for the next few years. I asked a question on twitter the other day about how people relate to slack and how it compares to email and i got a lot of interesting responses where people are just sharing how, you know, its tough, its like the more people use slack the more it becomes the place where everyone is just asking you to do stuff and people were saying its like email and in some ways its better but in some ways its worse because the barrier to entry to writing a slack message is lower than it would be to writing an email and it is this expectation of being something you need to respond to instantly. People are having, i think, an evolving relationship with whether slack is actually helping them to be more productive or less. My sense, people who use slack in a smart way are probably getting more done. People who are just using it to chat or maybe not, and so i feel like it falls on slack to make sure its easy for users to understand how to use it in an effective way and that would probably require more education or a smart design so that someone who just starts using slack isnt going to get caught up in instant messages and several different channels and feel overwhelmed. Interesting. Jean, do you think direct listings are going to become more of the norm . To be fair they didnt have a pop, but they did get to take home any difference between 26 and 38. 50 because they didnt open at 26. They opened at 38. 50. Yeah. Undoubtedly, i think this is the future. I come from a background in Investment Banking and can think of that as an area thats right for disruption. There has been a decade of talk around direct listings that have really never played out. The last big one was spotify almost two years ago. So whats the message here . This is a better instrument, a better vehicle for becoming public because it achieves two things. One is better price transparency, which investors want, and separately, as lower fees, which companies want. Because of that i think this is an undeniable trend. There are such large forces in place around ipo process that it will take, in my opinion, a decade before we see half of the companies doing direct listings, but this is only going to increase. Right. You know, its hard to say this is a trend. We saw one last year. One so far this year. We spoke with the partner at Venture Partners who like you thinks it should become more of a trend. Very few companies have attempted this and its a small class of companies that can pull it off in the current construct but it suggests very good things for trying to do more of a market match for these ipos as opposed for the pops that happened with the other companies that went public this quarter. They are preparing. They are looking at this idea and the way its camping on and the way were all talking about it, thinking, okay, if were not going to be getting the same underwriting fees how can we set ourselves in good position to be advising these hot companies before, during and after a direct listing. Youre seeing them be more involved ahead of time and after maybe trying to advise these companies on other Credit Facilities but most importantly, during the direct listing they are coming up with new ways to get fees. Morgan stanley, for example, is now the adviser to the direct market maker at citadel security. Thats not a role that morgan was planning on playing in the past but they are looking that as an Important Role for the bank to play if direct listings become more common. Gene, how do you manage this changing, changing the dynamic between the banks, changing potentially the balance of power between banks and the companies they work with . Gene unfortunately for the banks, they will slowly, again, it will take a decade but they will slowly lose some of the economic interest in this. They can come up with new vehicles, and they are, to help to continue to get some fees from this, if you look at it as a whole, that 7 , which was the golden number as the percentage of an ipo that would go to the investment banks, that pool is going to be declining over time. I suspect that it will be a slow decline, but undoubtedly, it will decline. So how i see this playing out probably doesnt have as much of an impact, but definitely on the listing side, this is going to cause a lot for investment banks to think about. This is not new to investment banks, of course, because they have already gone through this exercise when it comes to their trading platforms, having decimalization, and also automated trading which has impacted some of those fees. Always good to have you here on the show. Ellen hewitt, thank you for your tireless and continuing coverage of slack. Just a reminder, the capital arm of bloomberg lp is an investor in slack. Coming up, oracle is being accused of underpaying thousands of women. Well give you the latest in a gender pay suit seeking classaction status. And Bloomberg Technology is Live Streaming on twitter. Check us out at technology and follow our global breaking news network tictoc on twitter. Women at oracle are trying to break another kind of ceiling. The glass ceiling. Three are trying to obtain classaction statute in their lawsuit against oracle over pay discrimination. The women represent more than 4,000 employees on the basis that the database giant pays men more than women to do the same jobs which would violate the california equal pay act. The winning classaction status wont be easy. In the last two years two similar genders fade to advance as classactions. Joining us to discuss is jim finberg, who is representing the women in this case. You were in court this morning. What happened . This morning, the court continued our hearing on our motion for class certification until september 9. The motion is fully briefed but a lot of evidence has been submitted. The court wants more time to read the expert reports and did declarations. What makes you think that this suit has potentially more merit than the microsoft or the twitter lawsuits or has a better chance of getting classaction status than those . This is a particularly strong case, both on the facts and the law. Our expert from the university of california has done a report saying that looking at the women in the Product DevelopmentInformation Technology and support functions, and controlling for the same job code and even controlling for education and experience, on average, those women received 13,000 less in compensation per year. The Microsoft Case and the twitter case are distinguished both factually and legally, those cases both involve individual manager discretion. In this case, oracle had a policy and practice of using prior pay to set initial pay at oracle and the Statistical Analysis shows that jerndz gap from prior pay led to a gender gap in starting pay at oracle that continued throughout their careers at oracle. If thats how pay is determined thats nowadays a big nono. That said, oracle, we did reach out to them for a statement. They say this meritless lawsuit is based on false allegations and a seriously flawed process within the ofccp that relies on cherry picked statistics rather than reality. We fiercely disagree with the spurious claims and will continue in the process to prove them false. Were in compliance with our regulatory obligations, admit to equality and proud of our employees. Whats your response to that . Im glad that they are proud of their employees but they should pay their female employees equally to their men employees for the same work. They highlight the fact that the u. S. Government, has also brought a suit against them that. Case will be going to trial in december of this year. Our case is completely independent of the ofccp case. We received oracles payroll data. We had an independent expert review that data. Our expert and the governments expert have reached very similar conclusions, having reviewed the data. These are not fake facts. Well find out more in september. As you mentioned, the department of labor has a similar case. That was brought during the Obama Administration against oracle about pay discrimination. They filed a similar case against google for gender pay discrimination. They have since dropped that case. Historically, these cases are very hard to win, in part, because of a ruling that the Supreme Court made in 2011, involving 1 1 2 million walmart female workers. That ruling, that the Supreme Court made in 2011, influenced the microsoft and twitter decisions. Can you get around that ruling or could that ruling also stand in the way of your case . The duke versus walmart case that youre referring to was not brought under the equal pay act. It was brought under title 7, understand that case, which involve thousands of walmart stores, Supreme Court said that the decisions were made by individual managers at an individual level, and that because it was individual discretion, you couldnt have a classaction. Here, in contrast, we have the equal pay act and the standard under california equa