For over two years the companies have clashed in a scale almost unprecedented in Business History and engaged in a series of tit for tat lawsuit has cost more than 1 billion. The battle is being fought outside the courtroom. On tuesday, apple is set to unveil not only a new ifeen or iphones but details on a long awaited smart watch. Wholl ultimately come out on top in the great smart phone war between apple and samsung . I spoke with Michael Gorman and ryan, the director of mobile device at i. D. C. I started by asking ryan what his biggest wish for the new iphone is. What are you asking for . This has been confirmed at this point. This is the most important thing for a few reasons. Youve got this iphone user base that have been using the same screens for the duration of iphone. This will be the game changer. It changes the computing experience and more real estate. Will it be a game changer if they are like the last . Its a bigger screen. They have been doing ok without it, but the real opportunity there, i think you ad a lot of people that were choosing android simply because they could get bigger screens. A lot of people like having more room to look at their phone and you will pull in more folks. What else is on your list. A few things, i dont expect it next week, which would be wireless charging. Pretty confident in that. For those of you who have used it, it is a game chinger in my opinion. Changer in my opinion, it makes things a lot easier. This is their way into making mobile easier and pairing devices with other products as well. Thats something that i expect to see. Widgets . From the services side. It is not something that we expect but we kind of know what is happening. But i think this does kind of change the landscape and you see android had widgets as well. I think it does change how you interact with the device. But again, not something i expect because i think its less about software next week. All right, michael, your turn. Pin it down for me. Let me kind of cast it in terms of what i like. Mostly i dont like having cases on my phones. I dont either, but its dangerous. A few of mine are making it durable. The sapphire display, you dont need any kind of screen protectors. Super hard. We think that is going to happen, right . That is one of those we are likely to see. They are using that glass on touch buttons and camera lenses. That is first and foremost and the next is waterproof. I want that too japanese manufacturers have been making waterproof phones. Samsung is doing it now too. You hear about people dropping their phones into a toilet or out in the rain, wherever it might be. It would be nice to have a waterproof iphone. A lot of people end up having to replace theirs because of water damage. That would be a way to remove hat. So those are for durability. One thing i want that im almost guaranteed not to see is better integration with dual services. I use gmail and google maps. And google calendar. And i want the same experience on an android iphone. You cant get that because apple and google are not the best of friends. You also wishing for a twoday battery life. A larger display, mobile payments, a sapphire screen. Any surprises on tuesday . I feel like were bound to see a surprise. Apple usually does that. I dont know what it could be, though. For me, the Biggest Surprise is going to be a lot of emphasis on the battery. When you double the size of the screen or the device itself, it gives yourself the opportunity to a bigger battery. Im expecting roughly the double the size of the battery and 50 increase in battery size as well. This is going to give people that longer lifetime on the device itself. Do you think these phones are going to be that impressive . Are they going to be enough . I think i have mentioned this before. Ive been saying this for a long time. The bigger screen is what people want. Iphone users have not necessarily gravitated towards his. Is the mobile platform so important because that is the first computing that many people in china will ever do . Absolutely. To me it is too big. You guys came up with a report that said fablets are going top tablet sales in a couple of years. Right . There is a lot of people around the world where the phone is it. That is their whole computing world. It is why youre seeing cheaper large screen phones showing up in china and elsewhere around the world. Exactly. A lot of that is cheaper Android Device outside of apples target audience and they will never go towards that either. I think so this will help refresh current customers but apple now has the opportunity to steal back those who only went to samsung because of the larger screen. Was ming up, an apple also in the news after some lebrity iphone accounts were hacked. We look into it next. Welcome back to the best of bloomberg west. Im emily chang. Apple says its icloud service was not breached by packers. But apple said the celeb accounts were compromised by a targeted attack on user names, pass worsd, security questions. Meantime home depot is working with authorities to investigate a possible data breach that could involve thousands of cards. Nd debit i asked ken what exactly happened with apple . Odds are that the attacks were highly targeted specifically toward the celebrities. Using social engineering or guessing their passwords. Usually if an attacker, they can gather a lot of information, they can begin to guess on their security questions, possibly what their passwords are. Try to bruce force them. I think that is what happened here. They say icloud wasnt breached but it is unclear if photos stored in icloud were taken and icloud password and user names were taken. Eric, is apple at fault in any way here . Is anyone who is an apple user be concerned . Apple as a company has icloud as a service. The icloud service itself could obviously improve security. Making it the default choice for users. Things of that nature. Across the board Cloud Services can improve security not just Apple Services but across the board. Ken, what kind of things can ple do to make things more secure . They have two factors of thent indication. One thing that is difficult to find and implement. If you go there now and try to implement it there is a twothree day waiting period before it can be implemented. Raising more awareness around existing security tools that they have and provide training and better education of resources around that can do a lot to help protect that information. It is also scary that you know, your apple i. D. Is also tied to ps and s for buying ap things like that. Apples big event is just a week away. We expect them to unveil two new iphones and an watch. And that requires us to give more sensitive information. How big a deal is it, we are talking about healthkit. Where were supposed to be giving them our Health Information as well. We will probably learn more about this attack even if apple wont tell us. Fundamentally it is about how this happened and why. The how might tell us the wide. Eric, let me ask you is there a sense that, was it the incredible and penetrable wall of apple or was it the incredible appeal of naked celebrities that drove this thing . It always was more that celebrity factor. What led to these breaches. Apple itself on the back and has had a lot of room for improvement. When you sign into gmail they keep track of your ips when you login and they have systems that correlate when youre supposed to log in and look for anomalies. These things are not as prevalent in apples cloud systems. As you mentioned as these things control more information, they should be. Lets talk about this home depot incident as well. It seems everywhere, nothing is secure. What are we supposed to do as users with credit cards . It is funny. About a year ago a reporter asked me what i would do to help my best protect my information and i said i get a new credit card every three months. We use them in restaurants when they are out of sight and at all these different stores. And seeing all these data breaches i am paranoid enough to where it is easier to get the new credit card every three months and it provides me piece of mind. Peace of mind. It is a hassle to go through and reset your automated payments but having that piece of mind is more important. There is more retailers are going to be coming out with announcements. Im guessing at least one or two a week. The secret service said there is 1,000 that have been impacted at least one family so we will see more shoes drop. We know apple is very involved in its investigation. The f. B. I. Also investigating that case. Can we find the people who did this and can apple and the f. B. I. Find these people, eric . Absolutely. Computer forensics experts have gotten more advanced through the years and the people that usually execute these type of attacks not really criminal motivated attacks but more just for fun attacks. They are not very good at hiding their tracks. In 2011 the last person who had hacked celebrities got 10 years in prison. Would you guess that this is a single hacker or a ring of hackers or hackers who are not necessarily related to each other . I think with the apple hack, thenes that are targeting individuals, it is a Loose Knit Group of folks that are involved in that. With the hack hitting the Retail Stores like home depot, that is a much more Sophisticated Group and odds are they are operating outside the u. S. And that raises a big challenge to be involved in some discussions with people ho work those cases. Nce those credit cards get exfiltrated outside the country, when the end of in russia and Eastern Europe it is almost impossible to follow up on the investigation from there. In many cases these organizations operate with impunity within those countries. Here in the u. S. , it is more difficult for them to hide. Odds they will not be able to find them. You will be in cupertino at this event. Do you think were going to hear anything about this from apple at that time . The topic is so salacious it is hard for it to go away. The discussion about the home depot attack is going to be forgotten the same way the target attack is only discussed i those in the cybersecurity. I suspect this will linger for some time because there is such a salacious element to naked celebrities particularly in our culture. Theres nothing like it. Cory johnson and eric and she has helped googles moon shots. Now megan smith is head to washington to become the nations new chief Technology Officer. We talk about what she brings to the table next. Welcome back to the best of bloomberg west. Im emily chang. From google to the white house, president obama has named long time google executive megan smith as the nations new chief Technology Officer replacing todd park. They are creating moon shot products like the self driving car and delivery drones. She isnt the only executive heading to washington. Alexander mcgilray. Their mission, to help the United States stay on top of Technological Innovations and dealing with free speech issues and for, we are joined by the very first chief Technology Officer who served from 2009 to 2012. I started by asking him what he thinks of these appointments. A great selection for our country. It really affirms the opportunity to make sure we have the best team in place to harness the full power of technology, data and innovation to both grow our economy and ensure that the internet is a source of innovation and problemsolving in areas that we need in health, energy and education. Sergey brin, cofounder of google said megan inspired so many people. We will miss her and excited to see what the future holds for her in washington. Google would like a lot of things from washington, they want selfdriving cars and drones delivering things to our doorsteps. Is that the kind of stuff she is going to be pushing for . Lets begin with the history. Do you know where the origins behind the technology of the selfdriving car came from . Darpa. You got it. That was my point. You have a long history in our country where research and development is a Building Block for an innovation economy and as our nation invests in r d, it will open up sectors in the economy not yet known. I would say megan has a frontrow seat how the commercialization model is working. And can help support the next generation of breakthrough innovations. Let me rephrase the question. How does she represent google and Silicon Valleys interest without it being a conflict of interest . I dont think it is about representing any given country. I think if you look back at the role of government, as president obama has identified it, he wrote a strategy for American Innovation in the first term which continues to be the road map for this role. It basically stays country invests in these Building Blocks and making sure we have the Human Capital to be successful in a Global Economy and broadband. The s. E. C. Chairman today gave a speech on broadband competition. What megan will do is continue to advocate for Infrastructure Investments that will facilitate innovation for decades to come but it is also about rules of the road. A big part of what they will take on is to make sure that the force for n be a innovation by making sure we get privacy and security right. We had a lot of principles that the president adopted in the first term and will continue to be successful. Last, but not least, harness all of these technologies to face the challenges of our day, health, energy, education, and more open and collaborative government, megan has done a phenomenal job in all of her history in bringing new ideas to the market. And alex was actually a big champion of free speech at twitting. Should google and twitters rival like twitter and facebook be worried . This is about talent. Two individuals with incredible capability. They understand the technology in question and they understand the opportunity to bring seeds of an idea out into big commercial opportunities. And i think that talent is what matters and will have an impact for the entire innovation economy. Not just a individual company. What are the Biggest Challenges they are going to face . The president has embraced technology but there are problems like the rollout of healthcare. Gov. We will have plenty more challenges operationly in the years to come. You dont move a big 80 billion operation inside the federal government on a dime. You put the seeds to make sure you have longterm success. Suggest the following. One, we are in execution mode. They are going to take the playbook that my successor started in the first term and execute, execute, execute. I wouldnt imagine new surprises or concepts. They are going to put their stamps on these playbooks. They are going execute with great rigor. The at did you find was hardest part of the job . Its culture and change. Its ok to try new ideas and fail. Part of innovation is creating the capacity for failure, that doesnt happen every day. It is less a technological challenge and kind of a cultural change issue, how do you bring the mindset to people. That this is possible. That we can in fact have ubiquitous data flying and people doing what they need to do. There are so many technological issues on the plate. The hacking of jp morgan, what should be the first thing on megans todo list . Execute the plan that todd park set up for her. Launching with rigor a playbook for the Digital Service for the government and ensuring we have r d investments, to create longterm Economic Opportunity and working as i hope alex will take the lead on, execute the internet policy principles so when we make these tough decisions on cybersecurity and privacy that we execute. The policies have already been written. We are not inventing new privacy policies but how we execute new ideas and see them to the finish line. What does it mean in practice for Silicon Valley and Technology Companies like google . Like facebook . Like apple . How does the c. T. O. Impact them . I hope its an opportunity for an interface and not solve problems with government on its own or the private sector on its own but the publicprivate interface and i think the principle role is to foster greater improvements between the public and private sector. As government opens more data, it allows to build new products and services. As the Government Works to shape rivacy and security policies, it is working to ensure that we engage on commerce on the internet, we can do so with confidence. The publicprivate interface is critical and having an individual at the white house makes the process easier. She is also an engineer. Does that help . It does. What a statement that our third c. T. O. Is a woman and see a lot of room for improvement to bring a woman in. What an inspiration for the country. Im excited for her arrival. Former u. S. C. T. O. Coling up, the wait is going to get a bit longer for alibabas i. P. O. Well tell you what the delay means for alibaba next. We focus on innovation, technology and the future of business. Im emily chang. Alibabas i. P. O. Has been dried with the potential to be the rgest offering in u. S. History. The road show will now start the week of september 8 because the s. E. C. Wants some answers to some questions. This according to a person with knowledge of the matter who stays company may price on september 18 with trading starting the following day. I spoke with our bloomberg contributing editor paul kedrosski. Jeff and leslie. According to the sthures gave me this information, depending on how detailed they were, that would decide when they would start the road show. It became clear that what they were requesting was much more detailed and much more informationheavy than what they had initially anticipated. Does this have anything to do the alipay situation . For example, the subsidiary that alibaba spun off a few years ago . I know there were questions about that. It is most likely something different. He company hazardsed alipay in two filings earlier. The most recent where they amended their agreement for alipay which lifted the cap. The Parent Company could receive procee