Chevy, its volt . Lets go to apple. M. I. T. s john leonard. You see technology for doing very precise localization in mapping. Some of the sort of parts of this whats involved in the google car. So its a different sort of set of techniques and skills than sort of the traditional detroit auto making industry. Tim higgins, i love i didnt think about this but then i saw it. Oh, yeah. Tim higgins came from detroit. You come here to cover apple. What are the similarities between these companies . For one thing apple is a Global Company with a lot of cash. Costs, about 1 billion for a new car to be created. It costs 1 billion to build a new car . Generally speaking. Its an expensive timeconsuming process. So apple has a lot of money, 178 billion. So not short of cash. Theyve got Global Operations used to doing supply Chain Management around the world, used to doing industrial design. Used to dealing with retail network. So they have a lot of things in place. That said, designing and building cars is very complicated. Something that trips up even long experienced automakers with regulations and safety and marketing. Its a very long lead time for developing a car. Lets talk about the r d spending those companies do. They spend boat loads of money on top of containerships full of money. The history of knowledge that theyve built up. I guess its the question is there an accumulated bit of knowledge, or is it a calcified bureaucracy that thinks about the way they do things as opposed to a blank sheet of paper . Silicon valley feels frustration when they deal with automakers. Guys in detroit say theres a reason why were so slow. Some has to do with safety and regulations and the challenges of putting a product on the road where peoples lives are going to be in jeopardy. Is it about the way the cars are made, though . Theyre wrestling with Union Contracts and existing factories and relationships with dealers . Because theyve got to figure out what to put in their pipeline as to what to put on the road. Exactly. They have a lot of legacy issues. Teslas emergence, you can say what you will about their Business Model, but they have created an interest in the auto space from new players who have said, look at the challenges in the past, but look as these new entrants. I think thats where some of the excitement is coming from. John, when you look at the excitement what is it that you feel like is right there ready to be improved upon the most . Is it battery, the duration of the battery . Is it selfdriving aspects or road awareness . I think its safety. I think that the number of lives lost to traffic accidents over 30,000 per year in the u. S. Alone and 1 Million Worldwide is just a tragedy. I think that with the better sensors and Artificial Intelligence coming online, we should have the capability to radically reduce accidents. So i think that is the thing thats really exciting about what can happen now. Safety is a really great thing to talk about, but apple google is probably also looking at what the user is doing with that time when theyre driving. These are companies who want to create a business where your digital life is at the center of their devices. Right now when youre driving a car, to his point, the safety is important. So if youre pushing a product that allows folks while theyre in the car to be in digital safety, that opens up a whole new marketplace for commerce. Well, the horrible irony is the Company Responsible for more techdriving accidents, giving people devices in their hands while they are driving, are now looking at cars. I also wonder if there is a different sort of pace of innovation, when youre safely aside from both you witness what goes on in detroit, you see the Engineering Centers here. Is there a different pace of innovation in Silicon Valley . I think so. Ive been told that the typical Silicon Valley investor wants a return in 18 months or 24 months. Thats a rapid turn around. Interesting, google and building their prototype cars, theyve said they want to work with the sort of detroit ecosystem. So theres an acknowledgment that it could be winwin. Theres parts Silicon Valley could be good at and eastern u. S. Industries would be good at, and they could come together. Bloombergs tim higgins and m. I. T. s john leonard. Meanwhile, apple is being sued by a123 systems for poaching employees. I spoke about how critical Battery Technology is with author of the powerhouse, steve levine, one of the foremost voices of batteries. The battery was invented in 1799. The architecture has not changed much since then. So much of that time we werent really trying to create the super battery for the last few years we have been. The question today is which way is apple going . Is it going the gm route . Will it try to create the super battery . Or is it going to go the tesla route, go off the shelf . Among the interesting things about apple going into the business, is apple the business that its typically relied on outsource component manufacturer taking the best that other companies are making, the best chips made by qualcomm or taking the best batteries made by a panasonic and assembling them together in a way the software performs the magic. Theyve changed it a bit. Do you get a sense that they are going to go for their own design and even maybe manufacture the battery . The latter part we dont know whether they will manufacture. But yes the signs are that they are trying to inhouse create design the battery. And the car around it is very exciting because already i have been looking at that race between tesla and gm, the 200mile car as the Inflection Point. Thats the proving ground. That brings on the electric age. Now you have apple coming in and this is critical mass. Was gm going to be able to match tesla . Apple can. I dont trade stocks now, but when i did that for living, i one time decided ive got to find some other crazy bet against something thats not going to work. Theres got to be a publicly traded Battery Company that my firm is not already short. I did a search and found were already short every single one and every single one worked out to be a pie in the sky promise or a stock fraud outright. Is that the nature of this battery business . That it is a pie in the sky dream and its going to limit we look at teslas car sales you can see the limitations of the market. Theyre selling more cars than they ever have before but its not a big number. And in a lot of markets its already slowing down. Im wondering if the better Battery Technology is never going to work out. Like perpetual motion or something. Batteries have been a special province of exaggerators and hucksters. This is the Thomas Edison said this back in the 1920s. 100 years later its the same. In the book there is an Inflection Point where pursuing everyone is pursuing the race and at one point everyone including me finds out that someone has been deceiving everyone the whole time. But i think that there are real players in the race that tesla and gm and now apple have put well, two of them. And it seems apple, too, have put their chips down on the battery, on the electric car, i think shows that its authentic, that it is real. That was steve levine the author of the powerhouse. Check it out. Now, Mark Zuckerberg. Up next. The topic connecting the world through internet. Org. Im cory johnson and this is the best of bloomberg west. Facebook Ceo Mark Zuckerberg has revolutionized the way the world communicates, and now he wants to connect the next billion people. To provide free basic mobile Internet Service to poor areas all around the world. The app has been rolled out in certain african countries as well as india and colombia. Emily chang sat down with mark for an exclusive interview. It is one of the most populous countries in the world. The internet is how we connect to the modern world. But today, unfortunately worldwide only a little more than a third of people have any access to the internet at all. In india, the numbers are even more dire. Of 1. 1 billion people, only 15 are online. And so we find Mark Zuckerberg visiting students in a village on the outskirts of new delhi. The founder of facebook revolutionized how people communicate. Now he has an even more ambitious goal. We believe that connecting everyone in the world is one of the great challenges of our generation. And thats why were happy to play whatever small part in that that we can. Zuckerberg calls his plan to wire the world internet. Org. And he has been spreading the word from india to indonesia. We launched internet. Org. Its our effort with a handful of other technologies to bring affordable basic services to everyone in the world. From the lips of the guy who created facebook, it sounds possible. But his team admits its been far from easy. Its challenging because there are Market Dynamics in every market that are different. You go to these villages and you ask them do you want the internet . And people are like, why would i want the internet . You ask them if they want facebook, and they are like, absolutely. Theyve been crisscrossing the globe. How do you think having the internet has changed peoples lives . Their mission to convince mobile carriers to offer a limited version of the internet for free. Heres how it works. Facebook Custom Building a website for each partner country. The site links weather, health jobs, resources, and finally to facebook, all at zero cost. The idea is that users get hooked and buy it when the period ends. Creating new carriers and new users for facebook. Why call it dot org . Is this a nonprofit . Is this charity . If we were primarily focused on profits, the reasonable thing to do would focus on the first billion people. You said connectivity is a human right. You want to do good things. Why not give access to the complete access . The model that we consider this to be most similar to is 911 in the u. S. So even if you havent paid for a phone plan, you can always dial 911. Tim wu is a professor at Columbia University and a Public Policy advocate. Why would the company want to give a product away for free . They think they can build the worlds most powerful device for accessing hearts and minds of the human race and sell that to somebody else. And facebook is just one of many internet giants in an epic global battle to win heart and mind share. We have about 7 billion people on the planet. Whoever gets the biggest share of that might be expected to dominate the future of media period. One, two, three. Not to be dominated, google has project loon, a fleet of High Altitude balloons, beaming the internet down to earth. A new Company Called oneweb and spacexs elon musk both recently announced plans to launch low orbit satellites that will carry the internet everywhere. And facebook has some moon shots of its own led by a Mad Scientist of sorts, yael maguire. Laser communications is a new frontier where you can get much higher data rates than typically done. In a Southern California lab still being built, mcguire and a team of former nasa engineers are developing lasers that will send the internet to earth in a beam of light. For all of the developed markets that were looking at trying to improve access, we want to use Laser Communications everywhere. Maguire plans to put lasers inside unmanned aerial vehicles, solarpowered planes that continuously circle above the earth. The world record is around two weeks. We need to figure out how to make these planes last for months to years at a time. They dont rely on cell towers or any earthbased infrastructure. Mcguire says connectivity from the sky is still three to five years out for internet. Org but expects to test the first facebook drone later this year. Once you get people connected, once you have the power to reach them, how do you use that power . For us its really all about enabling people. Whatever that means, in india and indonesia, zuckerbergs plan seems to be working. Carriers in both countries recently announced partnerships giving millions of new people access to the internet and to facebook. How will you judge that this has been a success . If we can make it to that Free Basic Services are available in 100 or more countries, then that is going to be a huge win for all of these people who will now have access to new information on jobs and health care and education. You said you hoped for more than 1 billion people by 2020. Do you think you can get there . Well see. Whether its the internet or the internet according to facebook, its the kind of grand plan you can only expect from Mark Zuckerberg. The real question is can he change the world not once but twice . Emily chang, bloomberg, menlo park, california. Heres more of emilys interview, this time focusing on china where facebook has been officially blocked since 2009. Take a listen. Your mandarin has gotten pretty good. Whats the likelihood internet. Org could help you get back into china, get facebook back into china . I dont know. Thats not something that were focused on right now with internet. Org. Its right now there are countries where they reach out to us and say, connectivity is a national priority. And a lot of people in our country use facebook. And if theres a way to Work Together to do that. For example, in malaysia, i was meeting with one of the leaders in the government there, and making it so that everyone in their country is connected is one of their top national priorities. Similar to indonesia. India i think as well. Theres a lot of priority around making sure everyone can get connected. So it makes sense for us to try to connect countries who are reaching out to us. You can catch more of the interview online. Check out studio 1. 0 airing thursday night on bloomberg tv. Is the nsa secretly installing spyware on your desktop computer . A shocking new report about hard drive hacking is out. Well tell you about that next. Im cory johnson. This is the best of bloomberg west. Nsa spyware may be hidden in hard drives around the world. Researchers in moscow base kasperski found spyware made by Western Digital, toshiba, and ibm, would give the nsa the ability to eavesdrop on the majority of the worlds computers. I spoke with stuart mcclure, the ceo of the cyber firm cylance. No matter what you do, even if you can find it and its made to avoid detection, you can try to wipe it but it will come right back. Thats usually planted at the manufacturers. This is not the first time the industry has seen this kind of a type of attack inside firmware. Its simply the complication and sophistication of this type of attack that gives it some merit to talk about. And its also widely spread. Now, getting the leading manufacturers at Western Digital or somewhere else its right across the industry. Every major manufacturer disk drive, according to this report, is infected by this software. We dont know the full scope quite yet, but the indications are that there are real opportunities with these hard drive manufacturers to implant this kind of stuff in the firmware. Whether or not it was preproduction or postproduction is a little bit up in the air, and i dont know if we will know that quite yet. That needs to be fleshed out quite a bit and investigated. What we do know is the ability to get on to these systems is really quite trivial. And then to stay there with persistence is quite trivial. So it becomes really easy for any adversary, whether a nationstate or a simple bad guy cyber criminal to do whatever they want to on the box. So what kinds of things do you think the nsa can pick up with a hack such as this as opposed to the data hacks that we know about in the past . Well, and it could be nsa, it could be even Israeli Defense as well. They have similar targets in of course middle east and asia that nsa or other organizations are. And in terms of attribution its very, very difficult to give smoking gun proof back to the people that are on the keyboard. But certainly possible highly possible and probable that someone like nsa is a part of this. We just dont know definitively yet. In terms of what they can do geez, darn near anything. They could pretend to be the user of the computer. They could infect it in such a way where they could capture screen shots, follow your video. They could capture all your passwords and become you on your internet, take your persona. They could infect your access to your bank account. You name it. It really is just up to the creativity of the adversary. So the adversary, again, they dont say who it was. And i say the nsa because reuters reported that and lets go to the gets when it comes to reporting on cyber crime. At least my strong opinion. But the report out of russia listed the countries most affected. And yes it listed russia. But it went on to list syria china, mali, yemen, algeria, and afghanistan. Those seem to be in particular targets of the u. S. Is there a notion about what kinds of things they may be after because this is a hard drive attack that tells you maybe these arent adversaries who are keeping data stored at Amazon Web Services or something . They definitely wanted to surveil the targets. So it wasnt a destructive attack like sony where they wanted to humiliate and terrorize and destroy. They simply wanted to observe, surveil, understand what theyre doing. And allow them to stay one or two steps ahead of what they perceive as the adversary, which is the victim in these cases. And the countries youre absolutely right. Theyve long been held target countries for the u. S. As well as israel and neighboring countries that are friendly. So it could easily be those two entities for sure. Lets talk about what this means for busin