Sold a record 10 million new iphones over the opening weekend, but the shine is starting to come off a bit due to some technical problems, which have caused headache after headache. Apple had to pull its update after some customers couldnt make calls. A new report says apps are crashing. 67 more often than the previous version. And healthkit had to be dropped from the rollout due to a bug adding to the users complaining that the new iphone bends when tilted in your pocket. This showing an iphone 6 plus getting, well, bent. But apple is fighting back say the phones go through rigorous testing and meet very high standards. So how serious are the problems for apple . I spoke with our editor at large cory johnson, gene munster, Senior Research analyst at piper jaffray, and lewis hilsenteger, the man behind that video who also just tested an iphone 6. I started by asking him what exactly happened when he tested the 6 compared to the 6 plus. The 6 did much better as i expected it would, the fact that it has a smaller form factor. I put as much pressure as i could in the same location and attempted to bend it in the same fashion. And i mean, it kind of had a tiny little bend but nothing significant and completely useable. So at this point, im willing to say based on that little piece of evidence that the 6 is going to be probably a little bit more durable than the 6 plus. You also compared it to a few other phones. I did. How do they stack up . Even with the standard iphone i could feel that there was a tiny bit of pliability, like it sort of seemed like it would probably give way sooner than some of the other devices that i tested. The most impressive is this one here, which is the new moto x, and i especially wasnt able to get any kind of creaking or cracking, twisting, bending, nothing out of it. I can actually replicate that right here. This phone is just solid and i actually didnt know that when i first received it because these tests werent really even a thing at that point. But the moto x as well as the other very popular phones did really well in a similar test. All right. How big a problem . Lets start with the bending because there are a few problems happening right now how big a problem is the bending . I think its topical today but ultimately it will blow over. And if people just use the fobe reasonably, i dont think its going to cause any significant change in the overall demand. But lets assume that it is a big problem just for the sake of argument. We estimated that about 30 of the iphone use are going to be the 6 plus. So i think when you put it in the context of the mix between the two, it really isnt much of a problem. And the Software Problem is something that gets fixed over time. That is easy to fix. Gene, let me explain why youre wrong. But heres why i think this matters. The essential brand argument of apple is you dont have to be an expert, you dont have to know how to ctrlaltdelete. These are simple devices. You dont have to worry about the updates, downloads. This is apple. And i wonder if a series of problems in both hardware and Software Start to erode the brand value itself. I think that if they dont get the Software Issues fixed, in the past they do have new software hiccups. For example, when the last iphone came out there was the touch id, which had some problems. So i think the concept of them trying to get some bugs out isnt anything unique. And theres been issues that have drained power faster. So if i they dont get this tightened up that could potentially be a bigger problem, but i think there is a window that people will give them the benefit of the doubt. Is it bigger or smaller because so many people are eligible for upgrades and phone shopping literally right now . I think it gets definitely magnified and theres just no place for apple to hide when youre selling 10 Million Units over a short period. This stuff is going to come out. But its just part of developing hardware and software you go through these factors. But if they can get the patches fixed in a month, people arent going to be talking about this. Lewis, what do you recommend to users right now . Millions of people have watched your video. People care about this. The real time analytics that im looking at show 16 million views in the last 24 hours. So they havent updated the public figure yet. Youve had more views than there have been iphones sold . Thats hilarious. Its still accumulating close to 1 million views every hour. From youtubes realtime analytics where im getting that data. So this is something that people are interested in, whether theyre iphone owners or not, this is an incredibly highprofile company and an incredibly highprofile product, and people want to know about these devices intimately. I suppose thats what videos like this provide. Is this going to be a real issue that everybody has, that your neighbor has and family members have . Probably not, but it doesnt mean that it isnt useful information. People always want to buy things that are overengineered, that are tougher and stronger than they need to be. So when i tried the same test my impression of the moto x changed immediately when i saw it didnt do anything similar to what the 6 plus did. So part of the pride of ownership comes through recognizing how robust the device that you have purchased is and the fact that the other models from other brands fared so much better is meaningful to me. Earlier, john chen, the ceo challenged everyone to try to bend the new blackberry passport and cory johnson grabbed my passport on the set and tried to do it himself. Luckily he was not successful. I dont know if that means the phone is stronger or he is weaker than you. I think he needs to hit the gym. I completely agree. The passports are thicker, fatter. The tough every thing is that emily didnt care if i grabbed the passport. I cared. I almost had a heart attack. I thought you were more defensive of your iphone. I think thats the way people have this attraction to the phone, they have this real intimate relationship with the iphone. The iphone is my primary device. I use the blackberry for more business things. But really, gene, added altogether, what do you recommend for users . I think you have to make your decision. At the end of the day i think youre going to probably feel like the bigger phone, even with the issues, the 6 plus is probably a great phone. Gene munster of piper jaffray, lewis hilensteger, and cory johnson. Coming up, more on blackberrys new phone, the passport. I speak with Ceo John Chen about whether the squarescreened model aimed toward business customers can turn blackberry around. That is next. Welcome back to the best of bloomberg west. I am emily chang. As we mentioned, blackberry has just unveiled its newest smartphone, the passport, which as Ceo John Chen claimed, does not bend like the apple iphone. How many of these squarescreen phones can blackberry sell . Can it really help turn around the struggling company . I spoke with john chen and started by asking him why he opted for the square design. Because we talked to the customers and they look at how they use the device and for productivity and looking at the new style apps, looking at the vertical apps and health care apps, we figure that the wider and more onetoone aspect ratio is what everybody will need for achieving more. So thats how we came up with it. Whats your goal for this phone . How many do you think youll sell . I am not disclosing it right now, but we expect it to be successful. But the market will tell me that. We have various different ideas that we could kind of use as a motherdaughter type approach. So well, were going to have to gauge the market response. So far seems to be pretty good. Lets talk about the market. You and i have talked about market share. Idc is saying global shipments are lower than 1 and by 2018 market share will be 0. 3 . Where do you think it will be . My job so to make sure that doesnt happen, right . So i think we have a good plan, we have a good set of portfolios. Despite everything weve gone through, this is the third phone that we released this year, and there is also one coming out in a couple of months called a classic and so we started out with the z3 in may, and now it is in about 13 countries and seems to be received quite well. Then we Just Announced the porsche designed phone on september 17, and now were doing it obviously here in toronto myself and my colleagues in dubai and london releasing that phone. So things are i think we can pick up the pace and we should be gaining market share as we move forward. Your job, john, is to also. Your job, john, is to also make sure the phone doesnt bend. You took a little jab at apple saying you challenge us to bend the passport. What do you think of these reports that the iphone can bend . Ive seen it happen in a video. I have no idea. I just read before i came here this morning, and i thought it was a little amusing. You know me, i cracked that as in good humor and not to mean to be mean to anybody, but on the other hand our passport is extremely wellbuilt. And i would its somewhat of a challenge, but you have to do it the same way, put it in your pocket and then see whether it bends or not. I doubt it would happen. Seriously, does this pass the bend test . Did you guys actually test this for bending . We do a lot of mechanical testing. I dont know whether we particularly do the bending itself. But we actually here showcase the kind of five layer of the phone including the antenna layer, which is a complete steel frame around the inside the phone. So bending that needs a little effort. What do you think of the new iphones and the apple watch . What do i think . I really dont know enough. Ive been so busy i dont know enough how to comment on that. Obviously they have their audience, and im hoping to go after my audience, which is about the people who strongly need productivity, and this phone should appeal to them. One thing you do know is that the president is also addicted to his blackberry. Did you send him a passport to test out . I dont think we gave it to the white house yet. I dont know. I could be wrong. But i would love to have president obama use it. A lot of the heads of state use the blackberry with extra security and this will continue on. How about this blackberry shares are up almost 70 since you took over. So investors are counting on you. They seem to believe in you. You said that blackberry will be profitable by 2016. Whats the time line now . Any likelihood you can do it sooner . I told people were very profitable in fiscal year 2016. So sometime in 2015 calendar, and im Still Standing by it, depending on the receptivity of all these phones and the classics coming out in about two months, our Software Releases next month, im expecting to see some growth next year. So with that, if i could get some growth on the top line, i would be able to make it profitable sooner. My interview with blackberry Ceo John Chen. How will apple pay to work with major Credit Companies . And when is chip and Pin Technology going to be mainstream . We put those questions to visas chief risk officer next. Welcome back to the best of bloomberg west. Im emily chang. One feature the millions of new iphone owners will use next month is apple pay, which will allow users to wave their iphones or watches in front of a reader to make a purchase. Mastercard and visa are official partners. This is just starting to penetrate the united states. So what does visa think about all these technologies . Cory and i spoke with visas chief enterprise risk officer ellen richey. I started by asking her just how apple pay exactly works. The way it works is you provision your card on to an apple phone very simply by taking a photo of it. In the background, Visa Technology working with your bank that issues the card will verify that it is really you adding that card. Once youve done that, very simple step, all happens in the background. When you come into the store, you can simply wave the phone after pressing your fingerprint to the reader on the phone and it will make the payment for you. From a risk perspective, obviously weve seen major credit card breaches at target and home depot. Had apple pay been more mainstreamed would that have happened . We say in security can never solve the problem because we have very enterprising criminals attacking our system every day. But apple pay and similar technologies will be a big part of the solution along with those new chip cards that you mentioned. Specifically about these technologies, does visa have more cards using this technology than say using different wallet formats . Well, right now most of our payments in the u. S. , as im sure you know, are taking place on plastic cards. So the mobile technologies are relatively new. We think they will be taking off. But right now the overwhelming majority is on your plastic cards, which are going to be swapped out for those new chip cards over the next two or three years. How fast will you actually be swapping them out at visa . Great question. Thats just what i was about to tell you. Visa itself doesnt put the cards out. Its our issuing bank partners, so whatever bank issues your card. They have told us that by the end of 2015 we should have 575 million chip cards in the u. S. Market, huge numbers. Ellen, specifically, do you think that the apple proposition is different because theyve got biometric id on the device so therefore they will have a lot less risk . I think the proposition is really a strong one from a security position point of view, but it isnt really about the finger print so much as the technology that operates in the background. And that includes Chip Technology which generates a onetime code, cant be replicated by a criminal. So it really makes the data useless to criminals and will be a big part of devaluing the data and making the system a lot safer in the future. Exactly the same thing as those chip cards do. I dont understand the fundamental difference here. Right now today when you use your plastic card the store reader will read the card and it will have a series of numbers that could be used to make a fake card. Thats why theyre stealing the data from places like target and home depot. But once you have a onetime code it wont matter whether that data is ever stolen because you cant use it without a new onetime code generated by that little chip either in the card or the phone. So in other words what youre saying is the retailer never has that cache of credit card numbers, so hackers can break into target and home depot all they want. Theres nothing in there. Essentially correct. Thats why we say these types of technologies can take the Retail Industry out of harms way from criminals trying to steal data. The technology thats integrated, thats different from chip and Pin Technology. How do you see these working together . Is this adding layers of security to the actual transaction . Yes. Its adding layers of security to all the transactions. So its important to know that in security the criminals will always go to the weakest link. So you have to secure the physical point of sale where youre going to use your card in the terminal physically and also the digital point of sale, whether that be mobile or electronic. The technology will be operated on much the same principle, but its implemented differently depending whether youre there with your card or transacting remotely. You mentioned that visa is going to have 575 million chip and pin cards out there by the end of next year. Will retailers have the hardware to accept these cards . The retailers are coming along perhaps a little more slowly. They have to take the trouble to swap out their terminals. Theyve done a lot of that work already. So many of them right now are upgrading their backend systems to read the information. We expect there will be significant numbers, but some of the industry gurus are projecting up to 30 of all payments will be chip on chip. Chip card meets chip terminal by the end of 2015. So thats quite a lot. So to explain why the processing business is so hot right now. If i were apple i would be saying to you visa i dont care. The thumb print is reducing your risk and therefore we should get a piece of the transaction. Explain to me why the thumb print biometric is not reducing risk. Well, let me start with the tokenization piece. Its what makes that data useless by creating a single digital account number similar to the one time code on the chip card. So that is what is really reducing the risk. The thumb print is a great thing. Dont get me wrong. But it is what we call static data. It doesnt change from use to use. So in theory our ingenius criminal minds could be able to counterfeit that phoneprint data as we will. It is good but its the combination of things that make it work and especially eliminating the static data. As i understand it apple is taking a portion of bank fees from the apple transactions, but its not taking anything from the credit card companies. Does your take away change . Is apple taking any part of your cut . Apples arrangements are primarily directly with those Financial Institutions and the economics for visa doesnt change. Ellen richey, risk officer for visa, and cory johnson. Google pulls out of alec due to differences over Climate Change and other Tech Companies are following suit. Weve got the latest on the growing controversy coming up next. From pier three in san francisco, welcome to the best of bloomberg west, where we focus on innovation and technology. Im emily chang. Googles executive chairman eric schmidt has admitted that it was sort of a mistake to give film support to alec which opposes u. S. Action on Climate Change. We spoke with forecast the Facts Campaign director brant olson. That organization has led a campaign against alec over Climate Change. I started by asking olson if he is satisfied with googles move. Its certainly a step in the right direction. I think schmidt said this was the wrong thing. Alec was not aligned with the companys values nor that of their users, so were very encouraged. It makes sense to me that the Koch Brothers support alec. It makes sense to me that exxon mobile supports alec. It doesnt make sense to me that google is getting involved in funding a group thats opposing understanding about Climate Change. Why is google involved with alec . Thats a great question for google