2006. This indicates the possible exit of greece from the eurozone. Before an exit is conceivable that someone would leave you cannot cheap somebody in. If the greek population decides to leave, then you can leave. You cannot hold anyone back. And that means the contagion effect would be a lot less because this is a great event. A great event. A greek event. Internet Money Transfer company zoom says they were the victim of international fraud. The company says the fraud was not about customer money or comedy systems, but employee in person nation and fraudulent requests. And the spacex gearing up for a major launch tomorrow. They plan to launch the falcon rocket to the International Space station. On his return to earth, spacex will attempt to land the rocket on a platform floating in the middle of the atlantic ocean. They have landed rockets on platforms twice before. The holidays are done. That means it is time for the Consumer Electronics show in las vegas. It opened it to the media today the public tomorrow. 600,000 people in the crowds there. This year, the internet of things was the major showcase. Smart cars, wearable gadgets and tvs. The big names will be there including samsung, sony, automakers. And some big names will not be there. Indeed, apple. Neither will microsoft. Joining me, the president of check analysis Tech Analysis Research as well as our regular contributor joining us from swanky san diego. Paul, good to see you. Bob focusing here on the internet of things there is something we have hearing about for a year. It could have talked about any number what is new this year in the internet of things . I think what is new this year is we are seeing a variety of devices we have never seen in the past. I got press releases about smart toothbrushes. And bracelets. We are seeing a range of stuff we have never seen before. [indiscernible] bloomberg. Com the issue is we have a bunch of individual products and what people want, i think, is this idea of a connect did home. But the reality is it is more of a disconnected home. I wrote a guest column in usa today on friday. You have this that has its own set of absent this has it set of apps and there is no way of pulling these together. That is the challenge i see. Paul, there are so many Consumer Electronics shows. I know. And as an investor there were important points i was able to pull out of this. It was not just me not knowing what was going on, but the circles on the calendar. When you go to the Consumer Electronics show, how do you separate the signals from noise . By not going, actually is the best way to separate. The risk of going, it is so overwhelming. To separate this incredibly splashy i dont know connected dishwasher to a genuine signal and say, you know what . Does not only has legs for the company, but it will cause problems for companies a, b, and c as well. So, it is really important at shows like ces to stand back and say, this has importance to an individual company, but as far as affecting the stock and that good stuff, it will also cause damage to other people. I kind of look at both of those. It is not enough to have the novelty. It has to be novelty with consequences for somebody else. Right now we are showing one of my favorite ridiculous connected devices which is the connected refrigerator. I see this year after year after year. Someone comes out with a refrigerator with a screen that is connected that no one ever figures out how to use. But because of low power bluetooth and devices like some of the nest devices, the drop cam and so far acting as hubs and their ability to be controlled by android or the iphone is this your different for connected devices in the internet of things . Paul, to you . I am hugely optimistic about what is happening. You have to think about the feverish pace of products and the perspective of wearables right now. I was looking the sort of idea of the bluetooth wearable thermometer. Helicopter pilots and people who want to max out can monitor their kidss temperature during the night. But the notion this is possible and you can manager with respect to power consumption is really important. Wearables will quickly become the fabric of everything around you and that is when the stuff really becomes interesting. Not that you have a great big gadget hanging off your wrist. Today we saw a ring wearable which looked like something that might eventually turn into ironman or something area iron man or something. The idea is important. It probably augurs well for apple and the new watch product. I think if you buy shares of tesla you may turn into iron man. What makes it different this year . What makes it believable this year . What has been so unbelievable in years past. The topic of wearables is a good one. We see a bunch of lowcost pretty high quality sensors bringing in a huge amount of information. One of the interesting things i think we will see happen this year from this is this idea about big data about you. You can have big data about yourself because of all of the sensor data between your health and fitness wearables, the thermometer, all of these wearables, the environmental information. You combine that with all the tracking online. All of a sudden you have this big potential. Scary on one hand. In opportunity on another. Then there is the sensors in the quality of the sensors out there. Paul, you mentioned the damage done. When i went to this as a money manager i will give you an example. The firm i went to work for was a short on shares of what i think is a great company. They had a product that i thought might be undermined by a product coming out of asia. And sure enough, there were dozens of competitors with similar technologies. Is that something useful to look for, where other Companies Might feel pain . You know, i really agree. From the standpoint of an investor, that is really where to look. Who knows what will help in terms of which products will succeed . Garmins is everyones great white whale or favorite whipping boy, take your pick. Specifically, garment announced three new wearable products various watch products that are really interesting, but in some ways they are of what happened in the early days of the pc industry. They are stand alone. They are proprietary devices. Theyre really fascinating devices. But then you look at android and ios with respect to using mobile platforms that are emerging. The days of proprietary wearables will pass pretty quickly. So maybe this will finally be the year that garmin gets harpooned. Having that against them, im not going to take that bet. Let me ask you have you picked the losers when you go cbs new products when you go see these new products . The losers are the ones who will try to do things that are too outlandish right now. Right now, i think you will see some crazy promises, crazy things out there and to me, those are big red flags. People who think theyre going to change the world are medically. I think we will have to see incremental changes for these things to work. And do not forget when we talk about wearables. We have the apple watch hanging up in the distance. Apple brings credibility to a lot of markets. When apple enters the market with their watch that will give credibility to the category and in general get more people looking at it, considering it. The idea generation, it will be an interesting show this year. Are you going . I am going. Bob odonnell, Paul Kedrosky always appreciate your time. Where ariel left off dishs new streaming service. We are online on apple tv and amazon fire tv. This is bloomberg west. Cory johnson. Dish Network Plans to unveil the First Streaming Service from a cable or satellite company. Hbo is also announcing off during an overthetop Service Later this year. Joining me, paul sweeney in new york. It would appear that the dam has finally broken. The major programmer is saying, screw the cable companies. We are going directly to consumers and giving them what we want. Yet, and they have thrown down the gauntlet here. This is a key issue for the whole media ecosystem. The big thing about these distributing cable companies, satellite companies, Media Companies like disney. They have all lived and died the last 30, 40 years with the concept of the bundle where consumers can pay 80 dollars when hundred dollars a month for a whole suite of channels, and now the question is that bundle at risk . Is there a market of consumers who want to pay a much lower price point for fewer channels . Dish is putting out a channel lineup that interestingly does include espn and we will see the market a man. Lets talk about that. Espn and hbo are the two Single Properties that people pay up for and get stuck with a package or whatever. Particularly with espn i watched a lot of espn this weekend. There was some spectacular football and also the stuart scott coverage. My heart goes out to his family. It just really spoke to how powerful that franchise is for disney, but how espn really drives the cable business. If you talk to the disney folks, when they think about espn, they think about it as a brand, not necessarily a cable channel. Multiple channels of espn. Online digital properties. They treat espn as they would their other brands, whether it is a disney character. Espn is one of the key drivers probably for any package that is going to be brought over the internet. It is going to have to some have to have some major sports component. We do know that consumers continue to watch sports. Those ratings continue to be outstanding. The College Football semifinals games the two highestrated cable shows ever. Really be brisk here, if you were a big media company, how much programming do a put out direct over the internet ala hbo, versus how much do i try to keep in the bundle . It is pretty clear that is where the customers want to be. But the rapid move toward mobile, people watching tablets, both screens, it is clear that people want to have access to content wherever they are. They absolutely have to be there. Again, the fine line that these Media Companies walked and that includes the cable distributors how they protect to their existing ecosystem where they are getting 80 to 100 a month, while at the same time realizing a big chunk of their Subscriber Base is getting content outside of the package online, whether it is net licks or hbo netflix or hbo Something Like that. They have to make sure that they do not suffer the same fate as the Music Industry 15 years ago. The Media Companies have to maintain pricing control of their content, to make sure that they get paid every step of the way, whether it is inside or outside of the bundle. We have seen a lot of baby steps. Dish, late last year, it hbo going direct to the consumer. That is one of the things we have highlighted for 2015. How well will be big Media Companies manage that transition from the mandated cable bundle to a direct consumer approach . Bloomberg Television Director of market research, paul sweeney, think you very much. Bloomberg west will be right back. On cory johnson and this is bloomberg west. We are constantly hearing about big new things and technology and here is one. It is always a way by about 20 years. Wearable technology. A company in rochester, new york has been trying to mine this for years, but has just gotten a big boost from intel. Scott travers joins me via skype. Still with me, Paul Kedrosky. Your company has been going after this for a long time, and all of a sudden, oculus happens and they invest in your company. Why . I cant speak to all of intels reasons for investing in vuzix. One of the really grails of these spaces wearable display systems. There are some and he things you can do that you just cannot do with any other form of wearable technology. At the problem is most people do not want to look like a nerd when they are wearing their systems. Oculus is a prime example. Oculus google glass also has challenges. You look so out of sort of odd. Ultimately these things will look just like a pair of glasses. Maybe that is one of the reasons they wanted to invest in vuzix, thats because where we are going. By the end of this year, we will have a device that looks like conventional sunglasses. From the financials, it looks like you are spinning plates really just staying in existence long enough to get to that spot. Talk about the decision to sell your Tactical Defense unit which seems to be a Firm Business for you. I wonder if that is a lesson for something that looks at work that is too far away are taking too long . Actually our defense business is a 13 million on an annual basis, 50 60 up and down between consumer and defense. The technology that we used was good for the defense space, but it was not the technology that was needed in the consumer space and then the industrial space. This is a business that up until just recently was very difficult to find. Typically Companies Like oculus have changed that paradigm. C the market itself is changing in a big way. So yeah the market itself is changing in a big way. So, yeah we sold the Defense Division because we knew this change is coming. Tell us something that people could not do before that they will be able to do that we can see from your financial . Vuzix is making the smart glasses, and you can maybe see a pair of them here. In the industry, they do a great job. There is a list of companies now that are trying to employ this Technology FieldService Applications stuff like that. You could see that not everybody would wear this walking down the street. That said, the dollars from intel are being used to help move this technology to the market. All right, vuzix ceo paul travers. We will be right back. Time now for Bloomberg Television on the markets. Im olivia sterns. Traders have gone back to work with the full first week of trading after the holidays. We saw Energy Stocks took the biggest tip. Oil fell below 50 a barrel for the first time in five and a half years. Also on concerns of greece leaving the euro. Bloomberg west we are watchingbloomberg west, and i am cory johnson. Delivering apple watch early this year, and it may set the tone for the Consumer Electronics show that starts today. Of course, the new wearable device will be pricing the highend version at we do not know, but can apple pull off another home run with this watch as it did with the iphone and the ipad . Joining us is an analyst. Good to see you. This apple watch. Obviously, it is going to lead a lot of the discussion that is happening in las vegas this week. What about the size of this market . We are thinking about a smartwatch market, not the broader watch market, so that will be initially a smaller market, and what we have been doing is we have been serving a lot of people, about 10,000 people in the u. S. , and some of them knew before earlier in the year and did not know what the watch looked like, and the ones later on did know, but the interest level is low surprisingly low. About 10 of iphone buyers say they are going to buy the watch. It is clearly the big topic, but it is going to take maybe some more powerful apps to drive the value for consumers to understand why they need the watch versus just use their phone. Greg specifically, and you do as much work as anyone i know, and i feel like trying to figure out what trend to tie it to me sit bit, and some people wear their heart rate monitors, and do you take that and multiply it . What sort of logic do you attach to that growth rate . We think the general wearable market is a good starting point and there is about 5 million of those per year, so it is a good starting point. I think it shows that this is not the phone market. This is not a one billion units per year market, so the value and really the power of the apple watch is it is going to go beyond fitness. It is going to be a platform. To answer your question, we start with the base level of how many sit bits are out there, and then the expanded size. We think a good way to think about this is a subsection of what the current iphone uses are, so the big picture is this. About this as it is somewhere between 10 Million Units and 20 Million Units in the first year, and that is going to compare with about 200 million iphones, and down the road, this could be a 50 million unit type of business, but it is not going to be a 300 million unit type of business. Ever . I think it would be tough. You do not want to say never but probably down the road, that is a possibility, but not in the near term. I guess my question is, what is the thing that is going to make this incrementally where you say, oh, my god, this is taking off . I mean, what is the one thing that can change that . If you look at the basic level, the watch part, and obviously people use their phone as their watch, but the pocket watch was basically eliminated when the wristwatch came out, so there is a lot of utility having some things readily accessible on your wrist, so i think to answer your question, to some the value will be for things that are easily accessed whether it be apple pay or opening locks, and they used the starwood example, where you go up to your room and wave your watch, and your car, assuming the battery holds up, and you can access your home, so i think some of the value is going to be some of those everyday things that are kind of annoying that you take out of your pocket. To take keys or your phone out of your pocket, and putting that on your wrist i think is going to be some of the initial big value. Longterm, health and wellness is going to be something bigger and we need developers to build those applications. So we talk about the price point for the entrylevel model, and i wonder about the next few weeks and months the addition and the cost of the addition. How much will the apple edition cost . We think it can be well above 1000. If i could guess, it is going to be about 1100 dollars or 1200 so it will be a big ticket item. I thin