Transcripts For BLOOMBERG Bloomberg Technology 20240714 : vi

BLOOMBERG Bloomberg Technology July 14, 2024

High, with tmobile, netflix all adding fuel to the rally. Alphabet posting its oneday percentage gains since july for death july 2015. Joining us to discuss, senior markets editor mike regan. Alphabet, facebook, twitter, all reporting results. Where do we see the biggest move . It was a major week for companies. Very tech centric. Alphabet is the star of the show, rising 10 . They seem to be firing on all cylinders. Announcing that major 25 billion share buyback, that is taking the edge of edge off of the concern of the probe of alphabet. Also twitter doing well, showing an 18 gain for sales. Amazon was an interesting story. They had a big earnings miss, but it was in an amazon typical way. They developed a more robust oneday delivery operation, and thats the type of thing amazon investors in the past sort of embraced, even though it caused a hit in the shortterm. I think the Semiconductor Stocks are a major story this week. We saw texas instruments, semiconductors are a weak spot. Texas instruments coming out and saying this is just a typical chip cycle that lasts about five quarters of weakness. They see about three quarters of that. The Semiconductor Index rising to a record. This is just another boom and bust cycle in the chip industry. Next week weve got apple, more chips. What are you watching . Next week is a major week for semiconductor earnings. Qualcomm, there are 10 members of the Semiconductor Index, about one third of the index next week. While the results are better than expected, they are down a lot. Beating estimates by 14 . There doesnt seem to be a huge concern about the trade war yet. There are still semisocks semi stocks to report next week. What could the impact of that be . Its kind of surprising not to see a little bit more of a selloff in the crypto space because of this. The irs announcing they are basically sending out notifications to 10,000 cryptocurrency holders and saying you have to go back and amend your past tax returns to report any gains and losses from your crypto transaction. The irs has warned there are criminal prosecutions coming from people who have dodged tax bills on a cryptocurrency transaction. One interesting point a tax attorney told bloomberg is these people will not be eligible this program the irs has where people can voluntarily go back and amend the irs of some accounts they did not know about. There could be some crypto busters who could hit who could be hit with some big tax bills. Senior markets editor mike regan. Turning to the big story of the day, the Justice Department has approved tmobiles acquisition of sprint, a deal it rejected under the previous administration. Tmobile and sprint agreed to sell multiple assets to dish network. That paving the way to creating a new wireless company. A 5g network would cover 97 of the u. S. Population within three years, and 99 within six years. Bloombergs ed hammond spoke to the chair about the deal from tokyo. Today is a different day. I think the department of justice approval or transaction is just a good day for american consumers, a good day for the country. It gets us closer. Things are different today than they were five years ago. The first thing we have to get clearance 5g. The new company is going to be committed to building the most advanced 5g network to continue to lead the 5g race. In order to foster innovation so it is quite different. He said you need to be an a largest player and enlarged player. Now you need dish as a fourth player. Hows that going to work . Youre going to have three large players racing for 5g. This will anticipate the investment that wouldnt have done otherwise. This will be a strong race to see who can provide the best 5g. Sprint a 5g spectrum we have, which is called a mid band, gives us the ability to build an advanced network. There is going to be great competition. We are going to bring competition. This will be off to a good start. Charlie has done an amazing job of buying a good amount of spectrum, allowing to build a network. It will allowed to have boosts and a few million customers. What is it going to mean for us as users of these services . Lets start with truly nationwide coverage all over america. You are going to have speeds low latency. This is whats going to enable autonomous vehicles. But for the average consumer, you are going to be able to download movies in less than five seconds. You are going to be able to play gaming against other persons with no latency. Do you think they are going to get on board . I have a lot of faith on the American Government and american justice. More importantly this is great for our country, this is great for consumers. I think its going to be great for each of the states. That was ed hammond. He was formerly a yahoo board member. I will start with you. Lets talk about this dish question. How can dish be a viable competitor when there are going to be so much smaller they are going to be somewhat smaller. This really sets up dish to be a disruptive player in the wireless industry. It will take time. Not only is dish paying 5 billion, this is three p pay three prepaid brands. Not executing on what they said they would do. Theyve got some specific targets that they said they would hit that includes covering 20 of the u. S. Population of their service by 2022 and 70 of the population with the new 5g network by 2023. These are serious undertakings they have agreed to. Ceo john leger tweeted, we cant wait to get to work is it really all that of all that positive for the consumer for 5g . I think it is definitely positive for the consumer. A lot of the concerns about competition are really misplaced. Having three strong players will make it much more of a competitive environment. Its going to be a race to be able to rollout 5g. And make it much easier for people you no longer need a physical some card to put inside your phone. Sim card to put inside your phone. People will get more choice out of it. Ultimately, i think that whats going to make a huge difference here is the rollout of 5g and what they have agreed to rollout. Its gong to l going to light up so many other services. Its going to be cloud gaming, sports betting. This is what 5g is going to enable. You have attorneys general in 13 states and washington, d. C. Suing to block the merger. Trials set for october 7. Do they have a case. They came out today, and even after these were announced, they have to not be happy with them. These are buddies dont cover up the ugly truth of this deal and reduce competition. He also had teacher james come out. How can these companies genuinely help a competitor emerge as a true competitor . Shes asking questions about will tmobile and sprint helped it become a fourth player . At the moment they are still going ahead with the lawsuit. We know sprint and tmobile are going to be working really hard to settle this before we get to that october early october court date. Promising to have 90 of the u. S. Population covered in six years, its ambitious. I think it is extremely ambitious and it might not be realistic. There are so many rural areas, where those areas are not necessarily covered to date. This is a big promise. I hope they can fulfill this, because it will change the nature of so much of the country. When we talk about this reducing competition, it definitely increases it and makes it much more likely that each of these major carriers are going to try to go into those areas that are way underserved. The Trump Administration has been consistent in approach to telecom mergers. Do we expect more deals to pass . Are there tales deals waiting in the wings . That inconsistency is the key word. Those are two things that are the fastest way to kill m a deals. The way this administration has handled the time warner decision this deal has been five years in the making. It has been difficult to get over the line. People are taking stock and saying may be people are reading too much into this decision, because we still dont know if they are going have a cohesive policy Going Forward. We have a couple of big deals away from the telecom sector. That would need approval. They are not the kinds of market shifting deals like the at t time warner was or even sprint tmobile. I remember the day the news broke they were going to try to do this deal five years ago. It has been in some time. Spend some time. The u. S. To permit justice has approved the tmobile takeover of sprint. Its not in the clear yet. However we are going to talk about next steps with a commissioner from the fcc. This is bloomberg. As we have been discussing the tmobilesprint deal expected to shape the country the carrier still have to contend with a lawsuit by the state attorneys general because they will harm consumers. The combination has come under fire in a market that is already concentrated. Lets bring in fcc commissioner carr. What do you have to say to the critics here . The lawmakers who say this will leave the u. S. Worse off than before . I think today is a good win for u. S. Leadership and 5g. It has been one of my Top Priorities for the Trump Administration. This transaction has been able to accelerate the buildout of 5g to 99 of americans, which is a good win. You mentioned that state ag lawsuit. I think the decision takes a lot of steam out of that. The complaint focuses on services in new york and san francisco. Those cities by approving this transaction we get 5g not only their but builds out again in 99 of the country. Which closes that digital divide. I think this undermines a lot of their actions in this case. I leave it to the department of justice to work out where that comes from. The lens that i look through this from is how do we make sure that consumers see the benefits of competition. A lot of americans today feel like they have one or no choice for inhome highspeed internet. By combining the assets of sprint and tmobile together you get some disruption of home in the broadband market. Speaking of the department of justice, there was diversions between the fcc and the doj. The doj took longer. Why was there a split . Each of the agencies have separate statutes and lenses and lenses. I respect the process they run over there. What does it take to compete in this new 5g world . The next three years in wireless may be different than the last five. You have a third provider that will be the same scope and scale. The amount of investment in spectrum assets you need to deploy this new technology is something that the two separate companies werent going to be able to do. And what consumers are going to now get can now experience of this transaction goes through. There has been some sort of inconsistency on how this administration has approached media and telecom deals. What sort of signal should we take about the future of these kinds of mega deals over the next couple of years . I think President Trump has been clear about u. S. Leadership being a top priority for the administration. Right now the u. S. For the last two years have engaged in a number of regulatory forms. Most of them below the full of the newspaper. We have been able to leapfrog our global competitors and we now have the Worlds Largest 5g build. 40 cities are planning on going live this year. That is something we werent seeing two years ago. The administration, congress, the ftc is working to make sure the u. S. Wins this right wins this race. Thank you so much for stopping by. Still ahead, twitter, while wall streets report in the fastest growth since 2017, we are going to hear from the cfo next. You can check us out at technology and follow our global breaking news network on twitter. This is bloomberg. Shares of twitter soared friday. The company reporting sales that beat wall street expectations, adding 5 million new users. Ringing the total to 139 million. I cant up with the twitter ceo cfo and atom what drove growth. We have been working for years to drive better relevance, to make sure that people can find the topics and events they care about most. We can continue to make improvements and deliver 14 yearoveryear growth. Thats quite a boost. Is there anything specific that turned on or turned off in the last quarter that work especially well . We wouldnt point to any one thing as we would point to years of work, which starts with the clarity of why they come to twitter. When you have that clarity you start doing work that is designed around those things. And the work that we did a year ago and two years ago, that benefits the people that are new to twitter today. Its really an accumulation of our work around those areas that is driven. There is a notable blip in the forecast, which is lighter than what analysts had projected. Does that change the ad format . We got it for seven to 15 growth. That was lower than the grub that is lower than the revenue growth. Our broad Global Business began really firing on all cylinders. Where we grew in the 20s and the united states. Second is we actually retired some older ad formats that we felt. If we prioritize our work and we focus our team on the most important priority, they wouldnt be working on those added formats. You lose some nearterm revenue, but there are better longterm decisions for the company. Along with longterm projects that will pay off over time that affect the guidance. Twitter cfo there. Coming up, apple urging the u. S. To keep its mac pro out of the trade war, but President Trump says the iphone maker plus francis coming up with its new digital tags and trump is going to strike back, discussing what it could mean for tech giants like facebook and amazon. Were the slowskys. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Emily this is bloomberg technology. Im emily chang in san francisco. Apple and Goldman Sachs new credit card is weeks away from launch, possibly as early as the first half of august. The apple card was announced on stage at an event in march, enticing consumers with no fees, iphone integration, and a privacycentric approach. Meantime, speaking of apple, the Trump Administration has rejected the smartphone giants bid to avoid tariffs on computer parts it manufactures in china. Apple will not be given a tariff waiver for mac pro parts made in china. Make them in the usa. No tariffs. Apple had requested key components to its new mac pro be exempt to 25 import tariffs after shipping production of the computer to china. Larry kudlow echoed the president s remarks. Mr. Kudlow they have operations in china and he has encouraged the ceo we are very friendly with mr. Cook. I meet with him a lot. Hed like to see the Apple Operations moved. I know there was some talk they would be moving production facilities to texas. I think that would be a good thing. That is our preference. Emily joining us now is mark gurman in l. A. , josh gallu in d. C. , and activate ceo, michael wolf, still with us in new york. Mark, what does this mean . Mark for apple, it does not mean anything. They dont expect to get tariff relief on the mac pro. The price is 6,000 for the base model so it is already expensive. I found it odd that apple would request a tariff waiver on a computer. I understand if it was always made in china, but up until this model for the past six or seven years, this line was actually produced in texas. Basically, they are trying to move it from the u. S. To china while maintaining benefits of being in the u. S. , so one can see why that would be a controversial topic for this administration. Emily i found it surprising they would do it so publicly, especially after moving production to china from the u. S. Was this a lastditch effort . Mark i guess. It is their responsibility to do what is best for the bottom line and their margins. We can be sitting up here and criticizing apple for not doing that. They are doing what they have to do. It is an odd circumstance, odd series of events. Emily josh, talk to us about the implications of this for all u. S. Companies that might be hoping for some sort of exception . Josh i think the takeaway is that the administration has said this is in a political process to try to get some kind of relief from the 250 billion worth of goods that are being tariffed from china. This is a clear signal that is not necessarily the case. They are supposed to give 14 days of consideration for comment after a request is made for relief. Apples request was made last week and the president came out today and said no. The administration has a pretty dim view of companies that are moving their operations overseas or that have their manufacturing abroad. Look at harley davidson. Look at apple. They are all getting pretty negative treatment from the administration. I would think that the sign is others looking for similar relief better have a pretty good argument or at least not be in the situation of apple where they have recently moved operations from a state like texas to china. Emily tim cook has made great efforts to maintain contact and engagement with this administration. Michael, what is your take . Michael two broader issues. The first one is that it can really harm apples ability to be competitive. There are certain processes, certain technologies and a cost structure basis, a lot of things are going to be easier to manufacture in china, also in terms of skills. The other issue is and why this policy may be misguided or likely is misguided is because it will end up causing some sort of china technonationalism, where Chinese Companies are going to start really penalizing their population, their citizens from buying American Goods or goods that are manufactured outside the country. We really dont want to be in that position. The Technology World is one giant ecosystem more broadly. And these policies are going to end up hurting ultimately the big American Technology companies, and it may add a lot of cost for consumers. Emily now, last question, some apple products have been spared thus far. Does this mean the mac pro gets a lot more expensive in the fall and could other apple products get more expensive . Mark on the mac pro, they have already announced the 6,000 starting price point beforehand so this is already incredibly expensive. I dont see them changing the baseline price. It is possible some of the upgraded versions, it will range between 6,000 and 40,000. You might see those upgrade pr

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