It is premiere battle in the smart phone world. Samsung versus apple. For over three years, the two companies have clashed in a scale almost unprecedented in Business History and engaged in a series of tit for tat lawsuits that have cost more than 1 billion. The battle is being fought outside the courtroom as well, of course. Samsung just unveiled its galaxy note edge and other devices at an event in new york. On tuesday, apple is set to unveil not only a new iphone 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, editor in chief at engadget and ryan reith, director of mobile device at i. B. C. I started by asking ryan what his biggest wish for the new iphone is. You have this iphone user base that has been using the same size screen relatively for the life of the iphone since it has been around. This will be the game changer with regard to the screen size. It changes the user experience. It is more real estate. Will it be a game changer if they are the last to market . They have been doing ok without it, right . I think the opportunity there is i think you have a lot of people that maybe were choosing android simply because they could get bigger screens. People are watching more media. They are reading things on their phone. A lot of people like having more room on their phone. Ryan, what else is on your list . Run it down for me . I think a few things. One ill throw out there that i dont expect next week would be wireless charging. Pretty confident in that. For those of you who have used it, it is a game changer in my opinion. It makes things a lot easier. Nfc is one i do expect to see. This is their segue into making mobile payments easier and pairing devices with other products as well. Thats something that i expect to see. Widgets or live icons . 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 has widgets from the beginning. It is starting to display your information and scroll through this on the device. 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. Run it down for me. Let me kind of cast it in terms of what i want. Mostly i dont like having cases on my phones. I think generally iphone hardware is beautiful. I dont either, but its dangerous. Correct. 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 . Yes, that is one of those we are likely to see. They have already been using sapphire glass on their touch buttons and camera lenses. That is first and foremost. That is kind of easy. That is first and foremost and the next is waterproof. I want that too japanese manufacturers have been making waterproof phones for a long time. Samsung galaxy a5. Waterproof. 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 that. So those are for durability. The one usability thing that i really, really want and im almost guaranteed not to see is better integration of google services. In what way . I use gmail and google maps and google calendar. And i want the same experience on android and iphone. You cant get that because we all kind of know that apple and google are not the best of friends. You also wishing for a twoday battery life. Some of these things we are expecting. 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. People forget that when you double the size of the screen or the device itself, it gives you more opportunity to have a bigger battery. Im expecting roughly the double the size of the battery with the larger display. Probably a 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 that have been there from the beginning have not necessarily gravitated towards this. I think this is going to be the first opportunity for them to experience computing on a larger device despite those who maybe went to the ipad mini. It really does change how you interact with a device when you have that much more real estate. I do have an iphone. To me 5. 5 inches is too big. 4. 7. Am i going to love it . Am i going to love it . Everyone has different preferences. You guys came up with a report that said fablets are going to top tablet sales in a couple of years. Right . I think that is probably that is not so much maybe in the well, ok. There is a lot of places around the world where the phone is it. That is their whole computing world. That is why the fablet makes a lot of sense. It is why youre seeing cheaper large screen phones showing up in china and elsewhere around the world. Because people want to have a bigger screen, but it still needs to be portable. So that is kind of i think where you see the trend going. Exactly. A lot of that is cheaper Android Devices which is outside of apples target audience and they will never go towards that ever. I think so this will help refresh current customers but apple now has the opportunity to steal back those who only went to samsung or huawei or someone else because of the larger screen. Michael gorman, editor in chief at engadget, and ryan reith, director of mobile device at i. B. C. Coming up, apple was also in the news after some celebrity iphone accounts were hack attacked leading to the release of nude photos. So how secure are apples products . 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 hackers who obtained pictures of nude celebrities including Jennifer Lawrence and rihanna. But apple says the celeb accounts were compromised by a targeted attack on user names, pass words, security questions. Meantime home depot is working with authorities to investigate a possible data breach that could involve thousands of stolen credit and debit cards. I started by asking 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 brute 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 if icloud password and user names were taken. Eric, is apple at fault in any way here . Should 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. It will really improve security. Across the board Cloud Services can improve security not just Apple Services but across the board. Ken, what kind of things can apple do to make things more secure . They have two factors of authentication. One thing that is difficult to find and implement. If you go there now and try to implement it there is a two day, three 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 accounts for buying apps and things like that. Deploying the two factor authentication is critical. Apples big event is just a week away. We expect them to unveil two new iphones and a possible iwatch. And they are expected to reveal a mobile Payment System 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. I think that is really going to tell us. Fundamentally it is about how this happened and why. The how might tell us the why. Erik, let me ask you is there a sense that, was it the incredible impenetrable wall of apple or was it the incredible appeal of naked celebrities that drove this thing . It probably was more the celebrity factor that 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. Ken, 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 protect my information and i said every three months i actually get a new credit card. Our cards are promiscuous 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 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 that 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 of pointofsale malware, so we will see more shoes drop. We know apple is very involved in this investigation. The f. B. I. Also investigating in that case. Can we find the people who did this and can apple and the f. B. I. Find these people, eric . Yeah, absolutely. Computer forensics experts have really gotten their trade craft 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 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, the ones that are targeting the individuals, it is a looseknit 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 who work those cases. Once those credit cards get exfiltrated outside the country, when they 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 be able to find them. Cory, you and i 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. I think 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 cyber security. I suspect this will linger for some time because there is such a salacious element to naked celebrities, particularly in our culture. Theres just nothing like it. Cory johnson, erik cabetas and ken westin, tripwire security researcher. Up next, she has helped googles moon shots including the selfdriving car and delivery drones. Now megan smith is headed 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 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. Smith was most recntly head of secretive google x lab. They are creating moon shot products like the self driving car and delivery drones. Smith isnt the only executive heading to washington. Former twitter general counsel alexander macgillivray. Their mission, to help the United States stay on top of Technological Innovations while dealing with tough questions of cyber security, free speech and more. We are joined by the very first chief Technology Officer, aneesh chopra, 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 it most in health, energy and education. Sergey brin, cofounder of google, said megan inspired so many people through her commitment to innovation. 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 on the roads 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 . At darpa, right . 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 more opportunities for commercialization for billion dollar 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 interests without there being a conflict of interest . I dont think it is about representing any given company. 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 roadmap 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 f. C. 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 i think alex will take on is to make sure that the internet can be a force for innovation by making sure we get privacy and security right. We had a set of baseline internet policy principles that the president adopted in the first term and will continue to be successful. That will help everyone in the internet ecosystem, every american. 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 twitter. He also worked at google for six years before that. Should google and twitters rival like twitter and facebook be worried . No, rising tide lifts all boat. S 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. Sure. We will have plenty more challenges operationally in the years to come. You dont move a big 80 billion i. T. Operation inside the federal government on a dime. You plant the seeds to make sure you have longterm success. I would 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 a lot of surprises or new concepts. They are going to put their stamps on these playbooks. They are going to execute with great rigor. What did you find was the hardest part of the job . Its about people and culture and change. Its ok to try new ideas and fail. Making sure that the industries understood that 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 flowing and people doing what they need to do. There are so many technological issues on the plate. N. S. A. Revelations. The hacking of jp morgan. What should be the first thing on megans todo list . Execute the plan that todd park and his team had 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, to execute the internet policy principles so when we make these very tough decisi