With amosite in the Cloud Business. A new target seems to be retail customers. First, to our top story. Last year, apple ceo tim cook stunned investors when the company readjusted its forecast due to struggles in china. Official Government Data shows the apple smartphone shipments in china grew almost 19 . That marked a big jump from previous months. It is particularly remarkable when shipments of phones of all brands were down nearly 14 in the same period in china. Surprised about the amount of bullishness we seem to have on china . That number is a surprise. The broad push in china to focus on huawei and have consumers by huawei funds instead of iphones. That was the concern for a lot of last year. Some of the trade tension has come down. Athink more to the point is device like the iphone 11 is a little bit cheaper. The battery life is very long. The photos you can take are a lot better than the previous version. When you put all those things together and combine it with a large backlog of older iphones like the iphone 6 and iphone 6 asked, which were huge hits, aose devices, there comes point where millions of people are going to upgrade. Are they going to upgrade to Something Else . Theyre probably going to upgrade to a new iphone taylor one of the other things that surprised us was the fact that the iphone 5g funds are not out yet. What is driving the big push we saw in december. Partly, it is this upgrade wave. Even if they did not produce the iphone 11 and had the same phones from last year, if you , which ishone six s four years old, you have to upgrade at some point. Jumping to an Android Phone nowadays is becoming a bigger step for people because a lot of your digital life is run through these devices. There are other ways that apple hoax people into bit apple s people apple hook into the ecosystem. Taylor i want to touch on a company he mentioned earlier, huawei. I am surprised we have not seen more talk about nationalism in china. Part of it is this ecosystem issue. If you already have a huawei phone, you are used to the android operating system. You will probably stick to that. Is a lot lower than two years ago, investors were investing were expecting growing. Ny to keep after the shock last year, that reset the bar. Now, if apple gets 5 growth a year, investors will be over the moon because there are other things that are coming after the growth. Taylor you mentioned the ecosystem. They really try to draws in. The services and the wearables business, where else do you see apple trying to tie us in when it comes to keeping us in the ecosystem . We were discussing earlier the idea there has not been a lot of bad news about apple. When you look at the stock chart, it is incredible. It keeps going up and up. Another one of the stats driving performance over the holiday. Apple always puts out a number. This is app store spending by consumers. That was up 16 yearoveryear. Even if you have not bought a new iphone, you bite you might buy a new app with a subscription. Taylor i want to look at a chart inside my terminal. The apple share price is at 309 today. Even the median price target on the street is a 275 or so. What is this bullish consensus you get from the street that what else could drive the stock higher . One in a quarter trillion dollar market captured one ofr market cap. One of our colleagues who a story last week wrote a story last week that addresses that. Apple has been seen as a hardware company. Company,are a hardware you have lower margins. All of your revenue is a bit more up and down. Now, when it is adding a lot of these services to the hardware business, that is a lot of recurring revenue and new subscriptions and things like that through apple music. That revenue is steadier. Are, investorsns are rereading the company. Taylor great analysis on all things apple and the one in a trillion dollar market cap. Thank you for joining us. Another company we are looking. T is wework leases took a dive in the fourth quarter. Space in london also grew the least since the brexit vote in 2016. All of this comes as they scrapped plans for an ipo and needed. To be rescued by softbank. I want to bring in allen who has been i want to bring in ellen who has been covering the company. What do we know about the slowdown . Ellen these are major drops. Asically, as early september, the company was putting the brakes on signing new leases for the last quarter of the year, which is a huge change from how the company had rategrowing at a very fast before that. They had been pushing for that much more than usual in the months leading up to well with leading up to what they expect they would be an ipo in september. Things like new leases are off. We will probably see a continued slowdown in growth Going Forward. Taylor is a slowdown appropriate given that the company is in the middle of trying to write size itself . What it seems on top of they have said is important to them. Investors are looking at this and probably saying this is prudent. Signing thesee very long leases. That being said, the company says they have opened a Record Number of offices in december. I think that is a continuation of a pattern of signing releases earlier in the year and continuing construction. We are going to continue seeing offices opening. Of there still remanence eminantsowth r of the ultra growth period. Taylor i want to show you a chart i am showing inside my terminal. You know this story more than anyone. The bond prices have appeared to stabilize. Wey are way off of the lows so in november at . 70 a dollar. We saw the market bond price yield stabilization. As the company appearing as stable internally as the market appears to think they are . Ellen i think there are still question marks about where the company is going to go in the next six months. They have a huge leadership cap. Ceoshad these new co step in. I am sure people are thinking that these replacement ceos are not long for the position. They have a new executive leader in the form of their executive chairman who was in solved who was installed from softbank. I think people feel pretty shaken up as well. Employees went through very serious layoffs in the last couple of months. People probably feel their future is a little uncertain. The Company Seems or stable than it did in the rocky times of september and october, but the future is still probably a little unsure. Taylor thank you for joining. Coming up, the food Delivery Business is getting crowded. Grubhub may be looking to consolidate. If you like bloomberg news, check us out on the radio. You can listen on the radio app, bloomberg. Com, or on sirius xm. This is bloomberg. Taylor wall street is weighing reports that grubhub is exploring Strategic Options in the midst of intense competition and steep discounts. Gives fresh evidence that Food Delivery Companies have no choice but to merge or acquire. We are joined by tom and brent. Brent, you have been covering grubhub. Get your thoughts on grubhub being bought or buying someone else. Both are logical outcomes. You have seen consolidation of space with door buying caviar. You are seeing other smaller players getting road up by others in the industry. I think it could go either way. There has been a lot of pressure on the revenue. Doordash uber and doordash has come in. Our thesis is grubhub is dislocated because they had great margins, but longterm, the economics can be restored. I think the ceo of grubhub has said that consumers should not get used to the prices they are seeing right now because they are not sustainable. In any market, you see too many vendors chase the market. There is way too much competition. That will consolidate. Potentially, economics will restore. There is a standalone case for grubhub or they can do very well among three big players, which they think they would be the third biggest. There is another case where you could see, would amazon want to acquire this . Shuld uber or doorda consolidate some of the assets together . I think there are a lot of options where shareholders could win at this level. We do believe you could see a higher price. Taylor you mentioned uber eats. Let me pose this question to you. You have been covering uber and uber eats. Do potential for uber eats to come in and take up grub . Tom i think i do. Echoing the comments of my colleague, this is a space that is ripe for consolidation. We have a lot of businesses that have similar if not identical business models. They are burning cash coming chasing growth burning cash, chasing growth. On paper, consolidation seems to make a lot of sense. For luber, and makes a ton of sense to explore this. I think there are reasonable questions as to whether or not they could get a deal done. I think uber has a target on their back. That is an open question. With these sorts of deals when antitrust folks look at it, it depends on how they define the market. Are they going to define an define itonline narrowly as Online Food Delivery or just sort of restaurant volume overall . There are some questions there. Thing thatnt, one could also go against the deal is a could result in prices going up. That is not something regulators like to see when they are going to approve a largescale injury. A deal would probably accelerate that timeline. On ar your thoughts potential evaluation on grub. Similar to a deal when you had takeaways pending purchase of just eads . . Just eats you agree with that valuation . The street has a massive deceleration in growth. You could argue, is the street looking too far in terms of deceleration in the growth rate given the investments they are making. If they could show better growth, you are looking at a multiple that is three times three and a half times four sales. That is below that of just eads. If you look at other industry leaders, you have seen multiples that are fetching five to six or seven times we do with a lot of Software Companies that have sold for 15 times revenue. I think the right range for tech mna, a code tech mergers and acquisitions, you are seeing assets trading between five and high single digits. You can get to a higher multiple assuming the revenue does not implode. You can get a higher stock price organically and in organically if they execute a little better than they have in the last year. E are obviously a lot of what ifs. Taylor talk to me a little about the organic versus inorganic growth. It has been said that uber eats would be that are served by growing organically. Can they get there . I think optimally, you would be able to grow organically. Anr has also put out aggressive timeline for achieving profitability. I think consolidation in Online Food Delivery of meaningful scale would. Help accelerate. The timeline i does wanted to touch on the idea of valuation. Help accelerate the timeline. I does want to touch on the idea of valuation. In deals like this where you have a Strategic Asset that is somewhat scarce, a large Online Food Delivery network that has a lot of potential suitors looking at it, this could be one of those situations where the ultimate winner is the guy willing to pay what it takes to keep it out of the hands of what they view as they are serious longterm competitors. As their more longterm serious competitors. Taylor that was tom of da davidson. Brent, you are sticking with us. We are going to discuss how we see how jeffries sees more room to run. This is bloomberg. Spiked snap shares thursday after the social media received two upgrades. Targetboosted its price to 20 from 16. The move comes on the heel of jeffries lifting its rating from a five to a hold in a note published on january 8. Print raised the own targets from the 17. Hr i am showing inside my terminal take a look at a chart i am showing inside my terminal. Your take on the path from 17 to 21. Taylor last year was a huge last year was a huge move. They put the company back on track with a rebuild of the android version. There were a lot of things they got set up. We missed part of that run. Our review Going Forward is that, does it still have more room . The answer is yes. Getting the low 20s is not as big as an ad from a single digit stock ending the following year to what happened last year. I review is that our view is showingis a good story improvement in terms of users coming to the platform. Financially, they are showing bottomline support by getting towards profitability at the end of the year. We think all of these things are moving in the right direction. That is why we do not expect the stock to double from here. Tohave enough room for a buy get over 15 upside from current levels. Facebook is still our number one pick in social. We see a pathway to 250 a share for facebook. Snap would be number two. Snapr stake with me on for a little bit stick with a little bit. I if a domestic user appears to be more profitable, why the attention on the International User growth . Brent clearly, it is a global platform. There is an opportunity to get a lot more users to this. Of usefully, those users are not as profitable as they are in the u. S. Their goal is to get into the hands of as many of the users as they can. They are selling advertising in the broader base. That i i look at this is have kids on the platform. I asked my own kids what they use. Today, they use it mainly for communication. The map tells them where their friends are. If you are a restaurant or retail owner and you want to opera something to those individuals, they know where you are on the map. These are things they have not baked in. The International Opportunity follows the same pathway that other social Media Companies have done. Clearly, higher dollars to serve right now. There is a ton of different ways they can monetize through video games, through content, through the map, which i am most excited about when we interview teens about what they like about it. Igger is a b opportunity on the map over time. There are a lot of different drivers in place. We have a healthy at market that is in place right now as evidenced by what you are seeing with google and facebook. Taylor you mentioned facebook earlier. I wondered, where does snap fit in to Bigger Companies like a facebook . Terms a biggern share of those advertising dollars . Brent it is a younger audience. It is the midteens to the mid20s. We think there is a big opportunity. Kany are concerned, is tik to taking shares away from snap . You can export to instagram and snap through tik tok. There are some risks this year. Does the younger audience go to the audience go toe the new launch . We think ultimately, there is room for a couple apps. There is a tremendous opportunity. Taylor we will have to leave it there. Thank you for joining us. Coming up, we will take a look at chinas information were on onwan information war taiwan and why it is heating up. This is bloomberg. Taylor this is Bloomberg Technology global link or rejoin bloomberg daybreak australia to bring you the latest in tech news. I am taylor riggs with sophie in hong kong and haidi in sydney. Sophie apple ceo tim cook will receive an award in dublin later this month to mark 40 years in of investment 40 years of investment in ireland. The company has been hit by a 13 billionuros euros which is now valued at 5 billion. The deal will allow the cloud data and Schmidt Company to expand into new geographies. It sympathize backups for virtual machine. It also helps customers manage analytics and software and data in the club. Alibaba and tencent are ranked as the second and third best Environmental Citizens in research by greenpeace. It cause attention to the sectors ballooning energy consumption. Majoritye says the lack of Public Disclosure removing to taiwanese election nears, joseph wu says china has become more text sadly in its alleged interference. We saw that china is using modern technology. The social media platforms to discussionsrupt our on the internet either through facebook or twitter or even a Popular Online chat mechanism called line. The fake new situation seems to be serious. Haidi lets discuss more on chinas disinformation campaign. I want to bring in Stephen Engle who is live in taipei today. What are we seeing . Tephen we are seeing at least from the dpp, which is the incumbent ruling party here that there has been increased interference by china in the division in sew society and control the narrative because there are divisive camps. Different visions for the future of hong kong. One is more pro status quote. The other one, a longtime ruling party, but now on the outside trying to get back in to the president ial office. They want more economic integration with china. The Information Warfare is interesting because an institute says taiwan has the highest rate among the highest rates of cyberattacks in the world. Get a load of this figure. The National Security bureau reports approximately 30 million cyberattacks a month hit taiwan. That is about a million a day. The National Bureau also saying that 60 of those attacks are coming from china. Tech doingt is big about the increased misinformation . Is it is an interesting topic. Fake news is an issue anywhere in the world if you want to use that term. What is interesting about the taking overow it is the narrative here. It is bigger and better integration with china economically a plus . If you look at the latest numbers, the taiwanese economy is doing really well with the opposition to china candidate in office. The taiwanese economy was expected to grow last year at two and a half percent. 2020. To 3 in the u. S. China trade were has benefited taiwan. Morenufacturers have manufacturers have come back to taiwan. There has been lots of Foreign Investment as well. Then, there is the uptick in the chip cycle, which is benefiting the likes of taiwans semi conductor. Hong kong is a big issue. China is. The economy playing an essential role as well. Haidi we are just getting some lines causing the bloomberg that mike pompeo is going to meet with Tech Companies in japan and south korea. Those taking place in califo