Calling apples next generation. Ur guests include keith rabois to talk about the look and feel of these new products. Joe brown, who always gets into a straight. Paul kedrosky, earlystage venture investor. And much more. I want to head to cory johnson, who was outside the event at the flint center in cupertino. Corey, what is going on there . Let me give you a visual here. We are here the anza college, on the outer edges of Silicon Valley in cupertino. They have taken the center of the courtyard and next to the performing arts center, with a product will be announced, where a lot of important events of happened, whether it was the hewlettpackard shareholder vote, or going back to the original macintosh announcement, it will be the home for the announcement of what we expect to be too new iphones, iwatch, a payment system, and who knows what else. They builtcourtyard, a giant white structure that people are calling a qubit. It is not acute, its a weird trapezoidal shape. It presumably will be a demo hall or Something Like it. It is a beautiful spot here in Silicon Valley. Its a lovely day in the foothills of the nearby mountains. Digeroti, tech ceos like Melissa Meyer just arrived a little while ago. Her id being checked. Dr. Oz was here a little while ago. About how these devices will help people in real time tracker health, and convey that information to their doctors. The importance of the iphone, and what it means to peoples by theis really stressed attendance here. In cupertino,n where steve jobs unveiled the very first macintosh computer. For more and what to expect from apple today, i want to bring in also paulfrom wired, kedrosky. Joe, i will start with you. Is apple going to make History Today . Apple kind of makes history anytime it makes one of these events. With the gets one of the biggest thing thats ever happened. Think apple is turning over a new page. Previously, these events have been really close down. Whether they are going to release two new iphones, or one new iphone and a wearable, or a brandnew thing for health, the thing we should focus on is how much more of a public event this has been. To the big building, to the number of press. There, andizmodo are they do have this big demo center. Its a big change from what the old steve jobs era used to have. You wouldnt really be able to get your hands a phone unless you were part of a very elite copyright cadre of press. They are taking the stage in cupertino. Apple, we expect, to come out with something already exists. Iphones, that other companies are already making. A smart watch potentially that other companies are already making. How much more can apple really move the needle . I think it can a lot. Steel shares from itself. Weve seen what happened ipad sales in recent quarters. One of the problems is they are being eaten away by lowerpriced products. Apple will take a shot potentially at their own product iphones. Ching larger in a sense, they can Grow Business by stealing from themselves. The second one is by launching a whole new product line. Apple hasnt done anything to launch whole new product for at least three years. This is the first time they have gone outside to try something new. I give them credit for trying both things. Raking the formfactor, and breaking into new product lines. The apple store is currently down. When he goes back up, we are expecting new products to be there, including larger phones. Steve jobs once said this was something they would never do. You cant get your hand around it no one is going to buy that. Expectingday, we are a 4. 7 inch screen, a 5. 5 inch screen phone i dont know if that is still a phone. Steve jobs is no longer with the company. I dont mean to be crass about it, but people want big phones. The market is showing up. Sales,look at phablet they are huge. One, and eight. This is the hottest phone. Its big enough i can get in my pocket. I cant get it in my pocket. Its a big departure from them. And your hand cant get around it. Or at least mine cap. We are hoping they will release software that will help. New technology will allow you to use the phone onehanded, and accepting thirdparty key part keyboards that allow gesturebased typing. We will see how it works. Features are you expecting . Camera. Nothing different this year. We are also expected to see maybe a sapphire display. Something that will be more durable than gorilla glass. Isn though gorilla glass super strong, our phone still get scratched and cracked. Sapphire is stronger. We are also going to see an fc nfc payments. Theyre giving into near field communications. In the United States, nearly half of iphone owners have a phone that is three years old. At least. Isl, we know that the iphone apples biggest moneymaker. From a business perspective, how much of these new phones going to impact the bottom line . How much more money will they make . Is this going to be a massive upgrade cycle . I think so. I think it is probably going to be the largest, certainly getting back to iphone two. This will be the Largest Cycle and apples iphone history. Its the latent demand for and apple is, finally adding one to its product family. One is this deterioration in the ipad and tablets sales. People are voting with their dollars, saying i would rather have a phone. That is important, not just because it eats at ipad sales, but because the upgrade cycle on phones is turning out to be much faster than the upgrade cycle on tablets. Apples into troubled by the idea that people might move away from tablets to larger phones, because they can push an upgrade cycle much faster than they can on a tablet. Thats great for upcoming quarters. Upgrade theot tablets, but they will upgrade their phone. Cory, apple is showing off a phone that has curved edges, a protruding camera. Some things we had respected, coming true. Expected, coming true. When we talk about payments, and we talk about ancillary Business Models they might get littleike a watch, this they sold 150 million phones last fiscal year alone. There is an enormous ecosphere that apple has control of. 800 really credit cards out there, and lets them build a strong base and use the things that base has given them to launch businesses that no one else could launch with such scale. Apple, unveiling a phone with curved edges. Ve hase we currently ha square edges. We will head to break, more with kedrosky after this quick break. Im emily chang, and this is streaming onst, your phone, your tablet, and apple tv. Joining me now is paul kedrosky, and john maeda, former president of the Rhode Island School of design. John, weve just seen the new phones unveiled at apple. They have encouraged it a curved edge, 4. 7 and 5. 5 inch screen. What do you think of the curved edges . That has been forecasted for money years. We see them in tvs, and here we have it. Is it more comfortable . We will bel told is more couple. But it is a brick. Paul, how about you . Im in the same camp. The televisions didnt excite me, and its not clear to me that even with the portable devices will change very much. I more adjusted in the dimensions coming out. Its remarkable how much thinner these things are getting. Story inre important the end than the curved screen. Kudos to apple for shrugging the size. How much of a design challenges that, jon, to make the phones that are thinner . Its huge, given the software the hardware inside that thing. A Curved Surface might fit easier in our pocket. Some of it will play out in how we where it and feel it . Will be more enjoyable . Slightly. What will be interesting to see is who gets squeezed . A thinner devices that are volume, thinner volume generally means fewer components, which is unlikely, or someone gets squeezed out as something gets consolidated into something else. Interesting in the component supply chain who got pushed out, or whose devices are smaller. That will be important, to see how those companies do in the coming weeks and quarters. Now that we have seen the phones, i want to talk about the expected smart watch, or some sort of wearable device whether it is the iwatch or i banned. It will be the first new product unveiled under tim cook. I know you are very intricate and wearables, you wear them sometimes. What are you expecting from this . And expecting to save a lot of time. People dont have to pull their phone out of their purse. It takes over half an hour every day just taking it out of the holster. It saves us time. I like that. Ball, do people want to wear a smart watch . Im people, and i want to wear one. Maybe im not people. Im people, and i dont want to wear one. These, itsnt of really high. I have this Elephant Graveyard of abandoned wearable devices. Them to my kids, i let my kids look at the latest mark watches and wear them. They abandon them in hours. Its not clear to me what the real killer app is in terms of driving people to say i want to put something on my wrist that i had largely abandoned in favor of another device. Stuff gets consolidated, it doesnt get to come back again. This is a market where samsung already has the galaxy gear. The moto 360 was just unveiled. What does it mean for regular watches . E challenges to great something that people want to wear. Watches have been a similar style. And i thing about a watch platform is that it is small. The design constraints are severe. Developers the iowa now working on a smaller screen size. We will see new apps because of the formfactor. Should rolex be worried . No. They have the power of a time was mechanical platform. The new stuff pushes the old stuff new again. Statisticsoking at that women dont wear watches as much as men, yet they are two times more likely to use a fitness app. Perhaps this could be geared to a more female audience than people like you. Me again. Darn. Demonstrablymen, unlike me. It will people that want all of this personal of limitation data about their body and how it functions. Health and fitness will be the place to focus. I get all of that. Im just unconvinced that this is a major new market for apple, absence some sort of app that changes how you think about this device in your wrist. All that functionality is rapidly disappearing and going at other places. We will talk about that very thing in the next section of the show. Talking about what kind of impact this will have on our habits and health care. Wel kedrosky, john maeda, will be right back. Howurned a wearable and apple smart watches stand up against fitness trackers like that bit. Welcome back to bloomberg west. We are covering apples event in cupertino. Unveiled two new iphones, the iphone 6 and the six plus. A 4. 7 inch screen and a 5. 5 inch screen. I want to continue our conversation about what is to come, which is a wearable device from apple. Paul kedrosky is still with me, as well as john maeda, former president of the Rhode Island School of divine design. I want to talk about this in the health care space. There are other wearables out there, the job own, the fitbit, the nike band, the misfit, which i note you wear. U wear. H i know yo misfit is thing for the battery life. Alas for three months, is disposable, but i dont have to tend to it. What kind of features did you want to have in a smart watch . I wanted to last a long time on a single charge. Like a about things pedometer, a heart rate monitor, a blood sugar monitor, sweat monitor, a breath monitor . It will all be in there. Im most excited about what apps will come by having such a formfactor, and having all of the developers make some thing for it. Something will happen. When you think about the potential for all of these different features . Much doll matter how they all matter . They all matter in these niche markets for people who want to create data or track health issues. Maybe apple can innovate in terms of how you collect heart rate data. No one likes using those wraparound straps that you used to have to use to collect heart rate data. There is lots of room for innovating area it still ducks the question about who wants to track that data, and what good is it . Many medical practitioners will tell you the larger the data that you collect, the more likely you find anomalies. And the more likely those anomalies mean nothing. The problem is we collect more and more data, we have to be careful about what applications we draw from that. From this giant archive of explorable data that we have about our own bodies. There is all kind of interesting things that will come up from this, some of them very positive. Some of them worrisome. We know apple has been working with the mayo clinic on in the future, the possibility of your doctor being called when some things wrong with you, before you even know it. Is that really possible . Paul . Sorry. It is possible, but i think you had better really have good health insurance. You will get sued. Its like having something abduct your 911 system, and you are constantly calling the police. Theres a reason you cant mainline your home alarm into , there are fault in many far too many false positives. Physicians cringe at the idea of your monitoring load sugar blood sugar through eye secretions. You are not going to have emergency. Laring an what constitutes actionable data . Its interesting, but so far away given the wild fluctuations in the data collection. From a design perspective, do you need a different sensor for each one of these things that this device may be able to monitor . There are so many sensors out there, it is not hard. What is hard is making an experience on your wrist that consumes less power over time. From a design perspective, a lot of great designers will make great things on that platform if it comes out. Companiesre a lot of doing this already. Can apple do it better than anyone else . Its the people that design and build ios applications. Design turner at kleiner perkins. Bloomberg contributor editor john could rossi. Paul kedrosky. We will have more than a hour. You are watching a special edition of bloomberg west, apples next generation. We learned they are adding a new motion processor for the new iphone. We focus now on their plan to turn to mobile payments. Had tok on what they unveil today. Today, we are launching the biggest advancements in the history of iphone. Joining me again is joe brown, Deputy Editor of wired. ,lso with us is keith rabois former member of the paypal mafia. Cory johnson is is with us from cupertino. We know the health chip is in there, we know its going faster, we know its bigger. What else. . It has a great big screen. When million pixels on the iphone 6, more on the iphone 6 plus. Im a little bit heartbroken that all the rumors are true. No surprises anymore. Is really good for something elevation. If you give you great health access. Your elevation, thats one more variable the phone can use to track you. The maps will be better. Also, an accelerometer. All phones have an accelerometer. On this new iphone, because its basically a tablet, it has that new landscape orientation for the homes green, which we have been wanting since the original iphone came out. We still dont know if it c capability, or chip that will allow you to pay with your phone. Keith, what do you think about what has been unveiled. . The haste which have gone to the announcements, which seems to say they have more to come. Usuallyt 10 minutes are updates, and went right to new devices. That suggest in the next half hour, they will see cool stuff. We will get the payments in a moment. Cory, your reaction . New iphones, bigger iphones, but also, what we expected. You mentioned the accelerometer. Every nuclear bomb also has an accelerometer. Hopefully there will be no Nuclear Devices attached to this iphone. The house focus is really important here. The Corporate Culture reason in ways that steve jobs certainly was not, tim cook is a health nut. Of time trudging around the apple campus with a bottle of water and handed and an energy bar in the other. We see the health focus of the iphone, when we know there is a watch coming around, we imagine what sort of capabilities it will have. Paul was talking about the heart rate monitor, predominate, dr. Ross was here earlier and i was talking to him about things in the phone that will be held focus. You start to imagine tim cook is thinking there is a big market for these Technology Devices the phone, the watch, the software and the semiconductors in them to give Us Health Information that could be a much bigger market for apple going forward. What about chips, and will it open up the market for apple . Keith, you know this market better than anyone. What does that actually look like right now . Its hard to figure out who is winning this market, if anyone is at all . I dont think mobile devices have transformed payments yet. Apple has a couple of key ingredients, but they are mostly removing obstacles. Has a lot of those cards, they talk about. Authenticating a device or payment is a copy gated pay more complicated painful procedure. There is not a Value Proposition. How theyresting to me will frame a payment project. Thats been missing from all of the rumors. If they partner with the zen master card, does that mean much . It fundamentally comes down why would consumer change behaviors. Credit cards are in a bad project arent a bad product. If you have a new Value Proposition, consumers will switch. Well howerstands quite to frame value positions. Im awaiting to see how the announcer, and why they announce it. 41 of people know about Google Wallet. Only 8 of actually used it. Thats being quite charitable. People arent using these your products. Where can you use Google Wallet . There was a wild you could use it in taxis, cvs and walgreens. Square the same problem. Square is not focused on the can on the consumer side. Square is for merchants. Analytics, payments, remote selling. It has really become a Merchant Services product suite. Putting on my consumer hat square is the best credit card reader for me. When i use square, im delighted. I know i will get the email. I dont have to sign a piece of paper, and hold the thing still. Its just super easy. Ads and nfp chip, retailers have to follow with the right hardware. There is hardware that substitutes for nfc. Do they frame it as backwards compatibility . Do they move to bluetooth only, more vast technology. It may be a superset. It also may be a security out on. Add on. Is it possible that apple could on this market . Yes. What do they need to do that . Have a value position. Explain why people should change