An electric fever. Tesla is set to unveil its electric pickup truck. We will have the latest. First to our top story. Apple is overhauling how it tests software. Bloomberg has learned the system is changing after a swarm of bugs marred the latest iphone and ipad. The goal is to make it easier to spot problems earlier. This comes one day after President Trumps visit to apples austin, texas factory where ceo tim cook met the president to discuss keeping iphones free from tariffs. Lets bring in tom forte and Bloomberg Technologys mark. What do we know about the software change . Software has ios been bugging the past few years. What apple is doing is they are going to make it so engineers earlier in the process will determine what is buggy, what is working and what is not working in order to hopefully come up with a much more stable operating system when they ship each september. Taylor tom, i know that you cover the fundamentals of the business. In your opinion when you analyze the company, at what point do you have to start to take a look at these Software Glitches and incorporate them into your analysis . Tom to the point it has a dampening impact on unit sales for the company, when you think about apple, they have had some snafus over time with their technology. It is not unusual for them to have issues with their software. But the challenge here is if you think about both new iphone users and then old iphone users who upgrade to the latest software, it is really part of that feel for the consumer of having the latest and greatest apple technology. So it is definitely something they need to improve. But when it has an impact on unit sales that is when i get real concerned about it. Taylor mark, i am curious, in your opinion, you have seen apple come out with these glitches and have to quickly issue new updates. Is it better to do that, to get out to the customer first, or would you prefer to see them roll it out right the first time . Mark they really dont have an option. It every to introduce june and release it every september. To toms point, selling new devices is the most support and thing. The way these new devices are developed is they are built concurrently with software updates. It would be impossible to ship the iphone 11 without ios 13. So they really have no choice. It is not a matter if they should or should not, there is really no option here besides adding fewer features, which of course they are not going to do because the features are what drives sales. Taylor tom, i want to switch gears and talk about tim cooks visit with trump yesterday at apples new factory in austin, texas. If you look at apple and tim cooks relationship with trump, are tim cook and apple doing the right thing by getting in front of the president , getting the president s ear, showing off these factories, even if it is small in apples terms. Tom the answer is on svitolinas. I would argue is absolutely nest. Absolutelyue is yes. You see that in the recent tariffs to the extent they adjust to the timing of it, which essentially gave apple an opportunity to sell its new iphones one more time without the full impact of tariffs. I think tim cook has done an amazing job. Do a interesting to compare and contrast with jeff bezos of amazon. When you look at the contract amazon lost, tim cook is doing a much better job. Apple is doing a great job managing with the president and tim cook is leading that charge. Taylor mark, react to that. These tim cook doing the best of all the big tex ceos . Mark i would agree that he is doing what he needs to do from a bottomline perspective, from a financials perspective. He did get tariffs on the iphone delayed and we will see if this dog and pony show yesterday gets apple a further delay on smartphone products. At the end of the day what they showed yesterday was not new in any way. They framed it as some sort of big lausch. It is important to note, everything that we saw yesterday, everything you see on the screen right now has been in place since 2013. So this is not new by any means. This is a sevenyearold existing infrastructure basically portrayed as a new thing. And they are going ahead and thanking the Trump Administration for this. On top of that, this is not the iphone, the ipad, the apple watch. This is apples lowest volume product they sell. The impact this would have had on apples bottom line if this was a tariff product they produced in china would have been so slim anyway. So it is unclear what apple is winning by doing this other than getting in this pr situation with the Trump Administration to prevent tariffs on other products like iphones moving forward, which of course is a smart is this decision but a bad pr move in the interim. Taylor tom, within the pr machine that is apple, is the political savviness of tim cook an undervalued asset . Is that not being reflected in the share price . Tom with the rebound and shares it is hard to indicate what is not in the share price. So i do think the company, again, tim cook at the charge, has done an amazing charge as the Smartphone Market has matured, and starting to diversify his revenue base. You think about what they are doing with all their other hardware devices, including wearables, the watches. When we look at in particular is proprietary content or things they are doing in Financial Services like apple pay and apple card, and also health care. So i do think it is reflected in shares, and it is warranted. They have done an amazing job managing the current administration, and it should be positively reflected in price. Taylor what is your best Case Scenario when it comes to tariffs . Tom great question. I will give a quick example of sonos, another company i covered. They indicated they are moving all of their production into malaysia and out of china. I think the base case is you are going to see more companies that will move their manufacturing operations out of china. In the case of apple, apple may never be able to move its smartphone manufacturing out of china, but it may be able to have more Parts Manufacturers move their own supply chains out of china, which could help it avoid some of the tariffs in addition to tim cooks efforts to manage the administration there. Taylor mark, i want to switch gears a little bit as well. We saw some technical glitches withdisney had to keep up passport thieves and hackers. We have had apple people eat apple tv plus have some glitches when it comes to the rollout of their films. Is apple tv plus prepared to be a Media Company . Mark yes. I think apples infrastructure for video streaming, the Application Development it has had for a number of years has been there. Cloudthink apple, their infrastructure on the consumer side is not normally great, but there have really been no glitches. It has been problemfree in terms of rollouts of new shows. I have seen it myself on apple products, every time a new episode hits on friday at midnight, you get a buzz on your phone it is available and ready to stream. Their experience in the app store and itunes movie rentals has really prepared them for this. Password management has been a big focus for apple for the last two years. Apple tv plus is tied directly into family sharing. You can use tv plus on that subscription either free or for five dollars a month with four other family members. From a technology perspective, tv plus has been problemfree. Taylor that was mark gurman and tom forte. Lung anticipated job cuts have begun and we work. They say the cuts will affect 2400 employees, almost 20 of its workforce. Is seeking to show a path to profitability. They scrapped an ipo and needed a bailout from softbank stay afloat. Coming up, switching gears. Google has been on the clinical at debate. We will break down how they are prepping for the 2020 election, next. And if you like bloomberg news, check us out on the radio. Listen on the bloomberg app, bloomberg. Com and on the u. S. On sirius xm. Is bloomberg. Hnologthis taylor twitter is taking steps to improve the health of discussions and interactions on the service. The social media platform will start letting all users revise the tweets they sent. It provides a degree of control which could keep spammers away. It could also hide hateful or inappropriate replies. However, the hidden replies can be revealed by clicking a button. Sticking with social media, google is jumping into the online political ad debate. Google is limiting how political advertisers can target people online. It will no longer allow election ads to be targeted based on political affiliation on google search, youtube, and across the web. Google is also restricting misinformation and blocking deepfakes. This comes as facebook hold strong to its existing clinical part policies, that one executive indicated that the company may still limit political ads in the same matter. To discuss is eric newcomer, and kurt wagoner. Break down for me what we know about googles policy and how they differ from facebook and twitter. Kurt you mentioned a few of the restrictions on ad targeting. You can target just democrats or republicans. I think the real important part here is google and facebook both have a product, they are named differently but it allows a politician to upload a bunch of female addresses or phone numbers and target those people on the surface. Will calls a customer match, facebook calls a customer audiences. Google is getting rid of that for political ads. A lot of politicians build these rosters of potential voters and supporters they want to reach continuously. Facebook still offers that right now and that is, in my opinion, the most important targeting element of this whole thing. Taylor eric, if it comes down to google, what will be the impact on some of the campaigns . Eric i think a lot of that is still to be seen. Sort of work do to within the rules. But facebook has been sort of in the headlines when you think of political advertising. Obviously it got super tied up in the 2016 election. But google is really important here. They have youtube, and there has been this power to target people out which is what gives Online Advertising its oomph. We will have to see how the campaigns react. As long as facebook is holding out there is a question of whether spending shifts over to where people can still target their audiences. But it is a pretty significant decision. Taylor kurt, eric stole my question. Doesnt it make sense where we just all advertise on facebook because we are not combined or confounded to what we say . Kurt i think that is the approach around uploading these custom audiences. Of course, you are going to the place which still offers that feature, which in this case is facebook and not google. Right now on paper facebook stands to benefit a little bit by googles decision, if a lot of this money that would have gone reveling mortar youtube than google search, because that is a little bit i think more targeted in terms of emails and phone numbers. But if you take that money and say we cannot reach voters in the way we were planning to, facebook is now probably the best option. Taylor kurt, yesterday when you were discussing and analyzing the story, he said on one hand the Trump Administration in 16 had been very good at this, had used it and was effective at it. Does that continue . Kurt that was part of the big story after 2016, president Trumps Campaign on facebook. Our colleague wrote a really good story last year. She got her hands on internal documents that facebook had reviewed, basically, his performance during the campaign from an ad standpoint. He was testing millions of different ad formats to different people. Really trying to figure out what message works with which group of people and then hammering home those messages to those individuals. That is the whole point of this targeted advertising, is that you can really get very granular and specific. The more they take that away, the harder it will be to really get in on a granular level. Taylor i know it is very early days, we are coming off the democratic debate last night. Any sense and big tech where the majority of ad spending is going and what campaigns democrats and republicans have been utilizing that tool as we ramp up to 2020 . Eric we have seen plenty of examples of Elizabeth Warren spending on facebook to antagonize facebook. There has been concern on the democratic side that trump has gotten out ahead, since he can spend for the whole Republican Party any president torres. He is spending more aggressively than any individual democratic candidate. So i think that is a concern. And you have seen efforts from , trying to find ways to counterbalance that. But like you said, it is still early. Part of the problem of the democrats having while trump has this time to position himself with potential voters. Taylor kurt, we came off a previous segment where we were talking about tim cooks relationship with President Trump. And of all of big tech, he has the becks the best relationship. Where does Mark Zuckerberg stand with a relationship with President Trump . Kurt it is not something they talk about, they being facebook. We just found out today he had dinner with President Trump in d. C. , they had previously had a closeddoor meeting in the oval office. I believe that was about a month before the dinner. So just twice in the last couple months they have met facetoface. But facebook does not talk about this. He is certainly not on tv and the way tim cook was. He is also not being antagonized in the way that jeff bezos of amazon might be. Trump is not attacking Mark Zuckerberg in the same way. So, i imagine he must be somewhere sort of in the middle, but it is telling that facebook does not necessarily want people to know when he is meeting with the president and what they are discussing. Taylor the intersection of technology and politics continues thanks to our bloombergs kurt wagner and eric newcomer. Coming up, earlier this week, at t was downgraded to a cell with a 30 price target. We speak to analyst Craig Moffett on concerns about the company, next. And Bloomberg Technology is livestreaming on twitter. Check us out at technology and follow us on tictoc on twitter. This is bloomberg. Other if facebook or any tech giant wants to start a bank, it should be ready for an army of government minders. The head of the fdic jokes she has a thousand employees and says quote, we could hire 6000 more to regulate the heck out of you. Tech firms have yet to make an incursion into oldschool banking. More common is what Goldman Sachs has done, backing and applebranded credit card and regulators are investigating whether the computer models goldman uses to determine credit limits our bias. At t. A rare sell rating this week as analyst Craig Moffett projects weakness for the company, particularly with falling subscribers and video revenue at the companys Entertainment Group. On top of that, falling ratings at warner media. And there is the upcoming launch of the hbo max streaming service. And is that enough to help the company fight its way back into the streaming wars . Craig moffett of moffitt nathanson joins us over the phone. Greg, i love your 42 page report. I admit id read it cover to cover. What struck me is turner media is about 20 of revenue, and that does include that hbo service. Where does hbo fit in for you in the middle of the streaming wars . Craig hi, taylor. Look, it looks like a really good product if you are a consumer. That is not the issue. And i give them some credit, they have done a very nice job making it a compelling offering. The problem for at t is you are taking three businesses within warner media, that is, you are taking the Turner Networks, you are taking hbo, and you are taking the warner bros. Studio, and you are collapsing them into one business, hbo max. That is a bit of an overstatement, but they are working in that direction. And so, there is a very real risk here that one plus one plus one is going to equal one. And you will have a good hbo business but you will have burned down turner and the tv studio in the process. Taylor an analyst at keybank security says he has been analyzing some of the early data out of hbo, and they were looking at some subscriber losses because of the end of game of thrones. Are you forecasting subscriber losses given the increased competitive environment . Craig the idea that they might have lost some subscribers in their traditional model in advance of this because of the because games of thrones rolled off is probably not a surprise. It is certainly not the main theme of what we are talking about here. What we are talking about here is broader. Lets zoom out for a second. As much trouble as they are having in the warner media business, part of that is a function of just, look, the Turner Networks are in the midst of a Court Cutting cord cutting cycle where distribution of Cable Networks is falling 3. 5 a year. And the Entertainment Networks are worse. Down iners ratings are the high teens to the low 20s. Yearoveryear. So you are seeing pressure not only on affiliate sees, but also in advertising. Because they are getting so many fewer eyeballs. So, you are seeing all cons of pressure on these media businesses. Separately, you are seeing a tremendous amount of pressure in the directv business, where they spent 2019 doing everything that they could to keep the wheels on the business by raising prices to offset subscriber declines. Well, what happens when you raise prices in a business that is suffering subscriber declines . Subscriber declines just get worse. So the following year is even harder. So you have all of these building pressures for 2020 and beyond that are, i think in the beginning of next year, going to be too difficult for investors to ignore like they did through most of 2019. Taylor craig, you called the Entertainment Group a cancer. What do they have to do to reverse that . Craig it is awfully hard to see. It would be nice if you just said they ar