Speaker 1: From the heart of where innovation, money and power COLLI
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily check in San Francisco, and this
Speaker 1: is Bloomberg Technology coming up in the next hour. It
Speaker 1: was a bad week for tech stock that just kept
Speaker 1: getting worse from big names too small. It was the
Speaker 1: worst five days for the nast accents January as investors
Speaker 1: wonder what the Fed does next. Plus Grinder, the dating
Speaker 1: app focused on the l g B t Q plus
Speaker 1: community as a new CEO or conversation with George Harrison
Speaker 1: as it readies for a public debut, And bad news
Speaker 1: for Star Wars fans, Disney has pulled the upcoming film
Speaker 1: Rogue Squadron from its three release calendar. How this will
Speaker 1: impact theaters globally this hour. I am a hacker. That
Speaker 1: is the Slack message that Uber employees received from an
Speaker 1: unknown source late Thursday, prompting the company to shut down
Speaker 1: its internal Slack messaging as it investigates a massive cyber breach.
Speaker 1: This according to The New York Times. My next guest
Speaker 1: casey Ls is the founder and ct O of bug Crowd,
Speaker 1: a bug bounty company that specializes in identifying errors or
Speaker 1: vulnerabilities in other companies software systems. He joins us now
Speaker 1: to break it all down. So it sounds pretty serious. Casey,
Speaker 1: I know, there's a real fire drill happening inside uber
Speaker 1: right now. How did this happen? Yeah, so thank you
Speaker 1: for having me. Um. You know, bug crowd works with
Speaker 1: hackers all the time, but this was one of the
Speaker 1: bad ones that we try to stop. Essentially, what we
Speaker 1: know at this point is that there was either through
Speaker 1: text messaging or possibly a multi factor push message notification,
Speaker 1: basically a spam campaign conducted against people with with elevated
Speaker 1: privilege within uber. Um. That spam campaign was successful, and um,
Speaker 1: you know, because of that success, the the attacker got
Speaker 1: access to credentials that got them inside the network. Once
Speaker 1: they're inside, they're able to to move around, you know,
Speaker 1: find additional information to escalate their privilege and and do
Speaker 1: some of the things that caused, you know, some of
Speaker 1: the weirdness that was on Slack for example, to that
Speaker 1: started to break yesterday. Let's talk about the weirdness. One
Speaker 1: of my sources says there are unseemly pictures all over
Speaker 1: their internal networks. Aside from wreaking havoc. What kind of
Speaker 1: valuable information could they've gotten their hands on. Yeah, it's
Speaker 1: it's speculation at this point because you know, I think Uber,
Speaker 1: as of two hours ago, they're they're basically posting precautions.
Speaker 1: There was there was obviously the notice and the report
Speaker 1: of them, you know, telling their internal employees to stop
Speaker 1: using Slack and so on. Um So it looks from
Speaker 1: from the outside in that you know, nothing is necessarily
Speaker 1: off the table at this point, and there's still obviously
Speaker 1: a lot of incident response going down, like Uber is
Speaker 1: having a very busy Friday and quite likely a very
Speaker 1: busy weekend just being able to reverse this thing out
Speaker 1: and work out exactly what has happened so they can
Speaker 1: take the appropriate response steps and and obviously alert people
Speaker 1: um as as necessary as well. But you know, as
Speaker 1: at this point in time, they're they're saying that, you know,
Speaker 1: things like private user data has not been accessed, uh
Speaker 1: and and so on. So it's not necessarily um an
Speaker 1: assumption that the attack has gone and gotten everything and
Speaker 1: and used all of that. But obviously they've had a
Speaker 1: lot more access than they should and when anything like
Speaker 1: that happens, especially with some of the kind of trolling
Speaker 1: that seemed to go on and off the back of
Speaker 1: the hack, inside the inside the corporate environment of of
Speaker 1: uber Um. There's a lot of work to be done
Speaker 1: to figure out, you know, what exactly has happened so
Speaker 1: it can be fixed, you know, as you say, Uber
Speaker 1: says they have no evidence that the incident involved access
Speaker 1: to sensitive Uber data. It doesn't seem like the Uber service,
Speaker 1: the public Uber right sharing service has been impacted yet, right, Yeah,
Speaker 1: it seems like yeah, correct. They seem to be focusing on,
Speaker 1: you know, continuing operations and providing business as usual. But
Speaker 1: obviously Um you know, talking to folk on on the
Speaker 1: inside and folk rounds the situation. They are very busily
Speaker 1: burning the whole thing down and working out exactly what
Speaker 1: needs to be taken as a as a response step
Speaker 1: and as future precautionary steps as well. All external services
Speaker 1: operational to this point. Now, there's an interesting bug bounty
Speaker 1: tie in here in that the perpetrator also got into
Speaker 1: their hacker one system, which helps the company um pay
Speaker 1: bug bounties to people who find vulnerabilities in Uber system.
Speaker 1: This is similar to what your company bug crowd does.
Speaker 1: What do you make of this yeah, it's it's similar
Speaker 1: to to a big part of what we do for sure. Look,
Speaker 1: I think what I what I make of that is
Speaker 1: that that's actually how I first lewent of of of
Speaker 1: the issue. There was there was basically more spam. So
Speaker 1: you talked about some of the inappropriate pitch is and
Speaker 1: there was you know, apparently bands are going on on
Speaker 1: on the corporate slack um, you know, people interacting with
Speaker 1: with the attacker and so forth. UM. Kind of carrying
Speaker 1: along that same line, there was messages that got sent
Speaker 1: out to basically everyone in the researcher community or in
Speaker 1: the white called the white hat hacker or the good
Speaker 1: guy that thinks like bad guys um community who had
Speaker 1: submitted an issue into hacker one in the past, basically
Speaker 1: saying this is what's happened, like I'm in here now
Speaker 1: just so you know. UM. They didn't really seem to
Speaker 1: be much of an intend or purpose to that other
Speaker 1: than just to make a bunch of noise, but it
Speaker 1: definitely did UM. And you know, at that point in time,
Speaker 1: you've obviously got a whole bunch of computer security experts
Speaker 1: receiving this message. They jumped straight into like what the
Speaker 1: hecks happened mode um, at which point, you know, I
Speaker 1: noticed it and got involved and obviously started taking you know,
Speaker 1: whatever steps might be necessary. From from our perspective at
Speaker 1: bug crowd, it's like, Okay, if there's weird stuff going
Speaker 1: on that's impacting the vulnerability disclosure and bug bounty space,
Speaker 1: and we're obviously a large part of that spice, we
Speaker 1: need to make sure that you know, there's nothing affecting
Speaker 1: us as well, which sure enough it w wasn't decompy
Speaker 1: too careful and this sort of thing starts to go
Speaker 1: down well. Interestingly, at this very same time, Joe Sullivan,
Speaker 1: the former chief security officer at Uber, has been on
Speaker 1: trial for a data breach, a huge data breach that
Speaker 1: happened back in sixteen that the company allegedly didn't notify
Speaker 1: the public about when they should have. Uber at the time,
Speaker 1: as I understand it paid this hacker a hundred thousand
Speaker 1: dollars to make the hacker go away, but didn't properly
Speaker 1: disclose it. Um, what do you make of of the
Speaker 1: timing and also the history of Uber maybe not having
Speaker 1: a great track record here. Yeah, it's it's interesting because
Speaker 1: obviously that cases is ongoing at this point. I think
Speaker 1: it's actually you know, it's in session today. It's been
Speaker 1: in session pretty much a week, um, to my knowledge,
Speaker 1: And you know, I think Joe's side of the story
Speaker 1: and kind of the internal side of the story through
Speaker 1: discoveries is playing out now. Um. You know, that whole
Speaker 1: that whole incident, I mean, probably the other thing that
Speaker 1: got my spidey sense is tingling just a little bit,
Speaker 1: um with with the timing of all of this, was
Speaker 1: obviously that that whole thing is going on currently with
Speaker 1: respect to the to the breach. Um, You've got you know,
Speaker 1: a bunch of other things happening that that are just
Speaker 1: generally um, you know, encouraging I guess activist, Um, you know,
Speaker 1: activism activity around you know, Bay Area tech. At the moment,
Speaker 1: there's a there's a string of things that are happening
Speaker 1: that's getting people's attention. You Mudge's testimony h earlier on
Speaker 1: in the week was respect to Twitter, you know, the
Speaker 1: stuff that's going on with cloud Flower over the past
Speaker 1: couple of weeks. There's a lot of very heightened and
Speaker 1: very passionate subjects kind of all boiling up at the
Speaker 1: same time. Um. And that was frankly the correlation between
Speaker 1: all of those things, and then this happening at Ober
Speaker 1: was was one of the things that kind of you
Speaker 1: caused me a bit of a sleepless, sleepless night last
Speaker 1: night trying to figure out what that is going on.
Speaker 1: But yeah, and so of you know, speaking to how
Speaker 1: that reflects on Uba and how it reflects on all
Speaker 1: of that, It's it's too early to say any of that,
Speaker 1: you know. I think my my main thought right now
Speaker 1: is is frankly, um, you know, sympathy and kind of
Speaker 1: my heart going out to the security team that's having
Speaker 1: to work a very long weekend coming up to burn
Speaker 1: this whole thing down. So I think just starting there
Speaker 1: is probably the right place to start long hard weekend
Speaker 1: for sure, ahead of them. Casey Ellis, founder and CTEO
Speaker 1: of bug Crowd, Thank you for stopping by. Coming up.
Speaker 1: Grinder gets a brand new CEO. We're gonna speak with
Speaker 1: George Arison next about his ideas for the popular dating
Speaker 1: app Mrs Bloomberg. The dating app Grinder just announced the
Speaker 1: new CEO, George Arison, co founder and former CEO of
Speaker 1: the auto e commerce marketplace Shift. The ftill has applied
Speaker 1: to a point someone who identifies with the lgbt Q
Speaker 1: plus community in this top role. As the company prepares
Speaker 1: to go public, George Arison joins us Now for more
Speaker 1: on the big news. So stepping into a big role here, George.
Speaker 1: But you have some experience with UM obviously a car
Speaker 1: marketplace and on the board. What did you learn behind
Speaker 1: the scenes that you think you bring to the table here. Look,
Speaker 1: Grinder is an amazing company. UM I build a company
Speaker 1: taken in public, but margins are always a challenge in
Speaker 1: our on the auto business, and with Grinder, margins are
Speaker 1: amazing and so that's obviously a very big difference. Grinder
Speaker 1: is a really awesome business, but more importantly, it's a
Speaker 1: really awesome mission. Right You're serving a community that's been
Speaker 1: underserved and then uses this product in a really dramatic
Speaker 1: way to connect And that mission to me is super
Speaker 1: killing and I'm really excited to be UM to be
Speaker 1: a part of it. Uh. And obviously Grinder has been
Speaker 1: around for a long time since two thousand and nine.
Speaker 1: The product, as we haven't really finally changed in that
Speaker 1: time period. People have used it the same way for
Speaker 1: for a long time, but the features that it offers
Speaker 1: have obviously expanded. It's come from being just about sex
Speaker 1: to being about dating, and now it's used that in
Speaker 1: a lot of pub ways. And my goal, let's see,
Speaker 1: I was going to be to try to continue nurture
Speaker 1: this really incredible product um and the community that it
Speaker 1: serves in the best way. We can talk to us
Speaker 1: a little bit more about how Grinder is used globally,
Speaker 1: because I think there's you know, one impression it is,
Speaker 1: you know, quote unquote just a dating app, but it's
Speaker 1: actually so much more. Yeah, I mean, in so many
Speaker 1: there's so many other things. People use it for. Travels
Speaker 1: and massive feature said that people use it for and
Speaker 1: it's all, by the way organic. It's not like Grinders
Speaker 1: built products to facilitate travel, but people logged into a
Speaker 1: city they might be visiting to start talking to people
Speaker 1: about where they should say, what they should do, where
Speaker 1: they should um go out to dinner or go out
Speaker 1: to have fun. So in a very organic way, people
Speaker 1: use it for travel. Health information is another massive feature
Speaker 1: and Grinder with the market pops epidemic right now, Grinder
Speaker 1: has been very active in helping our user base understand
Speaker 1: that there's a problem and where to get vaccines, how
Speaker 1: to get them. There's even like a feature inside the
Speaker 1: app to find out a way should go get a vaccine.
Speaker 1: So people use Grinder in a ton of different ways.
Speaker 1: One of the interesting things for me on the board
Speaker 1: the last couple of months, we left one of the
Speaker 1: very challenging countries UM to be operating in and to
Speaker 1: be gay in UM recently because we just didn't feel comfortable.
Speaker 1: And you know, we heard that so much feedback from
Speaker 1: using in that country and and use in that country
Speaker 1: pleading with us to come back. So the board with
Speaker 1: us decides should we go back or not? And I
Speaker 1: mean it's like a life wort deficio almost in some ways.
Speaker 1: On the one hand, people want to use the product
Speaker 1: to connect and it's super valuable. On the folk side,
Speaker 1: we know that the state uses the product to try
Speaker 1: to find people who are gay, And like which society
Speaker 1: you kind of go on, right, you deny people product
Speaker 1: that's really important to them, or do you allow them
Speaker 1: to have the product at risk their security? Really tough issue.
Speaker 1: I won't rebuild the country it's in because I don't
Speaker 1: think that's appropriate. But like that kind of describes how
Speaker 1: critical Grinder is to so many people, and this amazing
Speaker 1: product that it is for that community. Now, you've gone
Speaker 1: through one spack process with Shift, and I know you're
Speaker 1: trying to get Grinder over the finish over the finish
Speaker 1: line now, but how are you thinking about that given
Speaker 1: pretty dreadful market dynamics out there and and a tough environment. Yeah,
Speaker 1: it's I mean, spack is great in that kind of
Speaker 1: situation because it's a guaranteed way to get the transaction
Speaker 1: done right. You are not depending on market conditions. Um
Speaker 1: and Grinder's partner for for the stock transaction is a
Speaker 1: very strong stock. There's a for purchase agreement in the
Speaker 1: transaction which insuresn't there's no need for any capital to
Speaker 1: come into the transaction, and redemptions are not an issue.
Speaker 1: The last many many of the most recent spects haven't
Speaker 1: done well. That most spots have not done well, no question.
Speaker 1: But there are about two dozen spacts in the last
Speaker 1: twelve months are doing very well, and but they share
Speaker 1: one trait. They're all profitable businesses. So Grinder kind of
Speaker 1: falls into that bucket as well. It's a very profitable
Speaker 1: business and no one is selling in this transaction, So
Speaker 1: all the current owners of Grinder are going to roll
Speaker 1: over and continue holding the business. UM, so we feel
Speaker 1: pretty good about the transactions from that perspective, grind, I
Speaker 1: mean a spost is the mechanism or getting the transaction
Speaker 1: done so we can become a public company. I think
Speaker 1: the outcome will be the same way that we've had
Speaker 1: done a regular way at PO or a stock transaction.
Speaker 1: You're one of very few openly gay CEOs, certainly as
Speaker 1: it comes to public companies. Is there a precedent that
Speaker 1: you want to set here or a message that you
Speaker 1: want to send. I'm very fortunate and I think, look,
Speaker 1: people should believe that anything is possible, right Like one
Speaker 1: of my core values as an operator is that impossible
Speaker 1: things are possible. And my whole life is almost an
Speaker 1: example of that. Where I was born in the Soviet Union,
Speaker 1: UM came to the U S as a as a
Speaker 1: young teenager to go to prep school. Now this is
Speaker 1: a second company. I'm going to take public incredible things
Speaker 1: that are achievable as long as you work hard and UM.
Speaker 1: You know, for those people who are you know, part
Speaker 1: of the ludic community living in countries where they feel
Speaker 1: like they're being marginalized or they can't be out, things
Speaker 1: are going to get better. Because that's the direction that
Speaker 1: the world is heading into kind of every day, and
Speaker 1: we're really really fortunate to be living in a country
Speaker 1: where we can be ourselves and not be under threat
Speaker 1: all the time. And how are you thinking about monetization
Speaker 1: and boosting the opportunities that Grinder has already explored. Subscriptions
Speaker 1: and ads are of course the money makers. Yeah, we
Speaker 1: make money in two ways. We have ads in the
Speaker 1: product and we have subscriptions. Are percentage of users that
Speaker 1: are paying uses is actually not that high, it's about
Speaker 1: six percent versus you know, Bumbles at I think nine
Speaker 1: percent and Matches at eighteen um, so we have a
Speaker 1: huge you need to grow the paid user base. One
Speaker 1: of the ways we're going to do that is by
Speaker 1: building more adjacent features that people then want to pay for.
Speaker 1: Grind has been behind in that regard. It's only recently
Speaker 1: started to monetize its functionality and add new functionality. So
Speaker 1: for example, we just recently launched boost, which has been
Speaker 1: a very popular feature. Doing more things like that I
Speaker 1: think will be really important. And then with ads, obviously
Speaker 1: there's a huge oputy to have more relevant ads. When
Speaker 1: we have ads that are relevant to our community, they're
Speaker 1: actually very effective and they service the community really well,
Speaker 1: for example with with health related ads, and so my
Speaker 1: focus will be to ensure that the ad quality is
Speaker 1: really good and it really enables the community use the
Speaker 1: product in a in a good way if they don't
Speaker 1: want to take her all right, George Harrison incoming, CEO
Speaker 1: of Grinder, Thanks so much for stopping by. We'll keep watching.
Speaker 1: Thank you for having me all right. Coming up, FedEx's
Speaker 1: guidance springs doom and gloom to the markets and especially
Speaker 1: commerce starcks. We're going to tell you more about that.
Speaker 1: Next US is Bloomberg. One story you don't want to
Speaker 1: miss in Bloomberg's Big Take this Thursday, about how a
Speaker 1: Chinese spy tried to steal gees secret but got caught
Speaker 1: by the US and gave the world an unprecedented glimpse
Speaker 1: into China spy system. Here's how the arrest of a
Speaker 1: burned out intelligence officer exposed an economic espionage machine. When
Speaker 1: a Chinese spy was extradited to the US, the FBI
Speaker 1: got his hands on a remarkable resource, his iPhone. It
Speaker 1: shed valuable light on how Asia's largest economy steals top
Speaker 1: secret technology. Chuian Jun was an agent of China's Minister
Speaker 1: of State Security when he was arrested in Brussels. In
Speaker 1: how could the FBI prove it well? On his iPhone
Speaker 1: was an official form that listed his job as deputy
Speaker 1: Division director at the MSS. It might as well have
Speaker 1: said profession spy. Shoe's main job was stealing defense and
Speaker 1: aviation innovations from firms such as General Electric. For instance,
Speaker 1: a colleague distracted a British engineer over a banquet in Nanjing.
Speaker 1: While she was upstairs in his hotel room copying the
Speaker 1: content of his laptop, Shoe said he needs three hours
Speaker 1: speeded up. Became the response between messages to seemingly extramarital lovers.
Speaker 1: Shoe are specialists from China's top aviation companies. What sort
Speaker 1: of intel they needed? Then set about cultivating the sources
Speaker 1: who could provide it. One such source was a ge
Speaker 1: engineer who would ultimately precipitate his downfall. After being rumbled
Speaker 1: by the FBI, the engineer turned double agent and offered
Speaker 1: to meet Sue at a cafe in Brussels. It was,
Speaker 1: of course set up. En route to that fateful meeting,
Speaker 1: Shoe messaged his wife that there was a USB stick
Speaker 1: hidden at home for which should be given. The password
Speaker 1: was something to happen to him, She responded, Oh my god,
Speaker 1: don't scare me like this. The next day he was arrested.
Speaker 1: He now resides in Ohio jail, facing up to sixty
Speaker 1: years in prison. Quick takes alex web for that, and
Speaker 1: of course you could check out the Big Take Thursday.
Speaker 1: Here are some other stories were following. Shopify is now
Speaker 1: changing its compensation practices to let staff decide how much
Speaker 1: of their pay comes in cash versus equity, with the
Speaker 1: ability to withdraw equity immediately. This is Volatility continues to
Speaker 1: beat down shares of tech companies. The Canadian e commerce
Speaker 1: firm saw its own share price fall this year, and
Speaker 1: Google cloud making some changes, with plans to unfreeze hiring
Speaker 1: by October, reversing a pause that was set back in July.
Speaker 1: This according to Business Insider, which cited an internal memo
Speaker 1: from Google Clouds Vice president of Technical Infrastructure Brad Calder,
Speaker 1: saying then it must clarify its priorities. Welcome back to
Speaker 1: Boomore Technology. I'm emily changing in San Francisco. The new
Speaker 1: iPhone fourteen is out the latest generation of Apple's handset
Speaker 1: in stores now in the high end pro coming in
Speaker 1: at a thousand dollars base price. Apple isn't raising process
Speaker 1: from last year this year, perhaps to counter the pain
Speaker 1: of rising inflation, but still more customers pay up, are
Speaker 1: at ludlow. Back in New York with the dates, will
Speaker 1: they add that, yeah, I mean, this is a global
Speaker 1: rollout of the iPhone fourteen, next generation of Apple watches.
Speaker 1: But here in New York City, Apple CEO Tim Cook,
Speaker 1: He's been in town, he's been on the Upper West side,
Speaker 1: he's been on the East side, he's been on Fifth
Speaker 1: Avenue meeting customers, and there seem to be excitement, there
Speaker 1: seems to be demand. But the question the streets asking
Speaker 1: will it fuel a global wave of upgrades? Will it
Speaker 1: fuel a boost to Apple sales? Let's bring up this
Speaker 1: pie chart, Mrs Director, because we need to contin actualize
Speaker 1: how important the iPhone is in the context of overall sales.
Speaker 1: It's more than right now. Apple was reserved the most
Speaker 1: important new features, the biggest upgrades for that most expensive handset.
Speaker 1: And you know, I've been talking all week about the
Speaker 1: data for early orders or pre orders, which shows that
Speaker 1: actually there is demand for that most expensive handset. The
Speaker 1: other story we've been talking about is the evidence that
Speaker 1: actually demand for consumer electronics is really slowing down. Now,
Speaker 1: let's look at the numbers for iPhone sales over the
Speaker 1: last few years. I'm just I'm going to walk all
Speaker 1: the way over here, m and go straight to one.
Speaker 1: That was an incredible year for Apple, right record iPhone sales.
Speaker 1: The thing is, the early data also shows that the
Speaker 1: demand for the highest price point handset with the nicest,
Speaker 1: the fanciest, the most high spect features is actually outdoing
Speaker 1: what we saw in one as well. So there's debate
Speaker 1: about this. There's actually a guy who works at Bloomberg
Speaker 1: Intelligence here in New York. I think you might be
Speaker 1: about speech to him. He might not see it the
Speaker 1: way that some of the streets sees it in terms
Speaker 1: of this big wave of upgrades that's coming, but some
Speaker 1: of the street does. All right, I'd love the thank you.
Speaker 1: I want to continue this conversation with Carolyn and Milan
Speaker 1: as of creative Strategies and our very own Bloomberg Intelligence
Speaker 1: senior analyst on ra Grana, who covers Apple for US. UM.
Speaker 1: Carolyn and I'll start with you, since we spoke to
Speaker 1: last week from the Apple event we got your sort
Speaker 1: of preview. Take there. Now that you've seen some of
Speaker 1: this pre order data, how good does it look? It
Speaker 1: doesn't surprise me that we see a skew of sales
Speaker 1: towards the higher end of the portfolio. That's always the
Speaker 1: case with pre orders. Usually the customers that pre order
Speaker 1: our early tech early adopters higher income level, So you
Speaker 1: always see that, and I always warrant people not to
Speaker 1: judge the kind of a long tail of the rest
Speaker 1: of a portfolio just by pre orders. I think what
Speaker 1: Apple has done though this year with the pro line
Speaker 1: is appealing to a broader audience than just the camera lovers.
Speaker 1: So I think that Dynamic Island really is refreshing the
Speaker 1: look and feel of that higher and family to to
Speaker 1: appeal to a broader consumer audience. A wag. I know
Speaker 1: Apple didn't raise the prices, but we're in a downturn.
Speaker 1: Everybody's hurting. We're paying more for gas and groceries and
Speaker 1: everything else. Are We're gonna upgrade our devices right now,
Speaker 1: so you know, our our cake is that Apple runs
Speaker 1: on about the three point six or three points seventy
Speaker 1: year refresh cycle, So if you take the big installed base,
Speaker 1: they have, they're gonna sell more than two in a
Speaker 1: million units every year. It doesn't matter what year it is.
Speaker 1: But for us, Apple, iPhone fourteen does not move the needle.
Speaker 1: We think it's going to be the next year's model
Speaker 1: with bigger hardware changes. But I do agree that the
Speaker 1: Pro model is good. It has a better camera. There
Speaker 1: will be some people who will move it. And and remember,
Speaker 1: people who can afford to buy a thousand dollar phones,
Speaker 1: you know, the cash prices and things don't really bother
Speaker 1: them as much. So Carolina, what else are you watching here?
Speaker 1: I mean, FedEx just cut its own guidance, bringing Amazon
Speaker 1: down with it, and there are broader warnings here about
Speaker 1: what's happening in the global economy. I think from an
Speaker 1: Apple perspective, would be interesting if the skew to the
Speaker 1: Pro and also the fourteen plus models is going to
Speaker 1: impact their average selling price, so we might see a
Speaker 1: higher selling price compared to last year before we see
Speaker 1: a difference in volume. And then the other part is
Speaker 1: as the early adopters kind of die off as the
Speaker 1: cycle continues, to see how the previous models are going
Speaker 1: to impact the overall sales and then beyond iPhone, of course,
Speaker 1: we're all looking at Apple Watch, both at the very
Speaker 1: low end with DSc for more people are entering the ecosystem,
Speaker 1: and then the very high end with the ultra model
Speaker 1: at eight hundred dollar price point. What do you read
Speaker 1: into this sex data? They specifically called out Asia and Europe,
Speaker 1: and of course Apple is a global company. Yeah, and
Speaker 1: this is part of the note that you wrote a
Speaker 1: month ago. I said, list for Apple, fort of the
Speaker 1: sales come from Europe and China combined, and those are
Speaker 1: the regions that are really struggling. In fact, I would
Speaker 1: say Europe is going to have bigger issues going in
Speaker 1: the in the near term with with fuel prices and
Speaker 1: energy prices going up, so which is one of the
Speaker 1: reasons we said that you over here, we don't see
Speaker 1: iphold sales growing more than one to two percent. Now
Speaker 1: for a lot of people, that may be bad things,
Speaker 1: but in all, honestly, it's not bad at all. In
Speaker 1: a downward market, you know you're not going to see
Speaker 1: negative sales that compared to last year. So all in all,
Speaker 1: I think it's a it's a good cycle, I mean,
Speaker 1: but not as strong as next year. Next year, we
Speaker 1: think it's going to be a much much bigger refresh
Speaker 1: for the iPhone. Now, as far as the watch is concerned,
Speaker 1: it's a beautiful watch. They hunt it. All of watch
Speaker 1: is amazing. But fact be speaking, there was thinks really
Speaker 1: don't move the financial need of Apple. Callin and does
Speaker 1: that jive with your projections? It does. I think that
Speaker 1: next year, for sure, the upgrade cycle will be higher,
Speaker 1: not just because of a hardware, but there's there's going
Speaker 1: to be a step forward in the processing powers well.
Speaker 1: So I think that that, especially for the markets that
Speaker 1: seem to be struggling more this year from a financial perspective,
Speaker 1: chine in particularly that pays a lot of attention to
Speaker 1: the inside of the device, not just the look and
Speaker 1: feel of the outside, That will matter a lot. M
Speaker 1: and I tend to agree that generally, you know, while
Speaker 1: the sales of the other products don't make a huge
Speaker 1: difference to the bottom line from a from a revenue perspective,
Speaker 1: it does tie in more of the customers, which longer
Speaker 1: term is what Apple will benefit from and more loyal,
Speaker 1: more unified user base. All right, obviously, so much to
Speaker 1: continue to follow when it comes to Apple utterag. I
Speaker 1: do want to ask you about another story we've been following.
Speaker 1: You've got a new note out on this, Adobe buying
Speaker 1: Figma for twenty billion dollars. Of course, Figma was a
Speaker 1: you know, pretty big competitive threat to Adobe. I wonder
Speaker 1: if this is kind of an admission of defeat a
Speaker 1: bit either way. That is a huge, huge number. Is
Speaker 1: this a smart deal? So one of the things we said,
Speaker 1: you know, technology was it may be a smart deal,
Speaker 1: but I think this is the wrong time to do it.
Speaker 1: We know, software valuations have created since last November. And
Speaker 1: for a company that was valued at ten billion last
Speaker 1: summer to buy them for twenty billion, I mean, nobody's
Speaker 1: liking get the I think they've lost what thirty five
Speaker 1: billion in market gap right now for a company that's
Speaker 1: going to generate about four million in revenue for next year.
Speaker 1: So I think they really need to think hard and long.
Speaker 1: That investors have clearly made a point that they are
Speaker 1: looking for margin expansion, you know, profit growth, even if
Speaker 1: it grows slows down a little bit so much. And factually,
Speaker 1: you know, in our view, Adobe is such a widely
Speaker 1: diversified company with an installed it's very large of you know,
Speaker 1: creative products, and if in one idea of the product
Speaker 1: is getting competition. It's not a big deal to me, frankly,
Speaker 1: all right on a Ronald Bloomberg intelligence along with Caroline
Speaker 1: and Milan Aisy principle analyst at Creative Strategies, Thank you both,
Speaker 1: Um all stuff we're gonna continue to follow well. It
Speaker 1: is potentially a worrying sign for the global economy. FedEx
Speaker 1: has withdrawn it's earnings forecast due to worsening business conditions.
Speaker 1: As we mentioned earlier the package delivery giant, pointing to
Speaker 1: weakness in Asia and challenges in Europe. FedEx taking immediate
Speaker 1: steps to cut costs, including parking some aircraft, cutting workers hours,
Speaker 1: and closing more than nine FedEx office locations coming up
Speaker 1: as we enter a post etherory emerged world, what happens
Speaker 1: next and what's a long term view we'll talk about that.
Speaker 1: This is Bloomberg with the merge now complete, Let's take
Speaker 1: a look at how significant this successful update was for
Speaker 1: the community and what comes next. Joe Loud, co founder
Speaker 1: of Alchemy, a web three development platform to build and
Speaker 1: scale decentralized apps, is with us now. Joe, thank you
Speaker 1: for joining us. So it seems like everything went according
Speaker 1: to plan. What are your key takeaways? Aside from some
Speaker 1: pretty funny pandamimes. Hi, Emily, thanks for having me today,
Speaker 1: and yeah, the merge happened a couple of nights ago.
Speaker 1: Happened at midnight. Our entire team stayed up to watch it,
Speaker 1: as did a lot of the Ethereum community. I think
Speaker 1: the biggest takeaway was this was a monumental effort. It's
Speaker 1: part of a year's long road map UM many years long,
Speaker 1: multi year long road map by hundreds of hundreds of stakeholders,
Speaker 1: and there's not one single centralized decision maker or anything
Speaker 1: like that. So the fact that it all came together
Speaker 1: as it did, UH super smoothly is incredible. I think
Speaker 1: I would like in the merge to uh to swapping
Speaker 1: out the engine of a plane that's already in the air.
Speaker 1: So you have the Ethereum blockchain. It's a multi hundred
Speaker 1: billion dollar ecosystem UM and the fact that they're able
Speaker 1: to keep it live, keep it working, and swap out
Speaker 1: essentially one piece of the core and have have no
Speaker 1: hiccups is incredible. What does this actually mean for Alchemy's ecosystem,
Speaker 1: that's a great question. So Alchemy, for those that don't know,
Speaker 1: UM is a blockchain developer platform. What that means you
Speaker 1: can think of us as the Amazon Web Services for
Speaker 1: blockchain and web three. What it means is we help
Speaker 1: developers and companies build applications much better by providing them
Speaker 1: a developer platform to build on top load. So we
Speaker 1: started the company about five years ago. Five years ago,
Speaker 1: we've grown extremely rapidly in just the last few years.
Speaker 1: Today we power about a hundred and fifty billion dollars
Speaker 1: in transaction volume UM, a big chunk of the top
Speaker 1: ethereum um, the top companies in blockchain and Ethereum and
Speaker 1: blockchain in general. UH. And we also work with a
Speaker 1: lot of the biggest companies that are moving into the
Speaker 1: blockchain and web through space today like Meta, Adobe, Shopify,
Speaker 1: and Stripe. What the merge means for Alchemy, So we're
Speaker 1: a developer platform. Our goal is to make sure developers
Speaker 1: always have access to the infrastructure that they need to
Speaker 1: build applications that they need. The merge basically upgraded Ethereum.
Speaker 1: Upgrade Ethereum to um to basically allow to allow the
Speaker 1: etheroreum to allow the network to run on proof of
Speaker 1: stake instead of proof of work. For us, it means
Speaker 1: making sure our services are always up so that developers
Speaker 1: can have access to them, and that's exactly what we did.
Speaker 1: So of course we've been talking about the merge for
Speaker 1: years and now it's finally happened. What is the cryptome
Speaker 1: blockchain community buzzing about now what's next? So the merge
Speaker 1: is just the first step and again in multi years
Speaker 1: long road map, UH, this first piece was about moving
Speaker 1: from proof for work, which uses energy, to proof of steak,
Speaker 1: which allows which allows users to stake their tokens on
Speaker 1: the network the value itself on the network. So that's
Speaker 1: a something like a ninety nine and nine reduction UH
Speaker 1: in energy users, for the blockchain, for the theory of blockchain,
Speaker 1: which is incredible. UM. What's next is going to be
Speaker 1: a lot of investments into scaling. So there's been a
Speaker 1: lot of excitement. So Intherium as a network is UM
Speaker 1: it's just it's you know, just getting started. It's gonna
Speaker 1: get a lot faster, it's gonna get a lot cheaper,
Speaker 1: and that's where a lot of the focus is going forward.
Speaker 1: The merge was the first step to unlocking the ability
Speaker 1: to perform some of these other technical upgrades in the
Speaker 1: future that make Ethereum faster and cheaper, and so those
Speaker 1: are going to be the areas of focus next well,
Speaker 1: and it needs to get faster and cheaper in order
Speaker 1: for you know, apps, killer apps, if you will, to
Speaker 1: have that killer impact. But I still hear people say
Speaker 1: that killer app for crypto hasn't been made yet. What
Speaker 1: do you think that is? That's a that's a really
Speaker 1: great question, Emily Um, and that's something that everyone in
Speaker 1: this space is always working towards. I think the thing
Speaker 1: that's really interesting is all technologies start out slow, inefficient
Speaker 1: and expensive. If you look at the Internet back in
Speaker 1: the nineties, when we're using Dala, you couldn't even load
Speaker 1: a picture. The picture of like load over a couple
Speaker 1: of minutes, right in pieces on a screen. But you
Speaker 1: fast forward to today and not only do we have pictures,
Speaker 1: we have video, we have YouTube, we have TikTok. Something
Speaker 1: like this, you and me talking on a live stream
Speaker 1: would be unimaginable if you zoom back, and so I
Speaker 1: would look at ethereum and more widely the web three
Speaker 1: blockching ecosystem with the same lens. It's just an early space.
Speaker 1: It's getting started. But what's gonna happen is you have
Speaker 1: upgrades like the merge, which makes the technology better. We
Speaker 1: have more developers build more applications, That in term drives
Speaker 1: more investment into making the technology even better, and so
Speaker 1: on and so forth, and you get better and better
Speaker 1: and better applications, and eventually killer application emerges. We're already
Speaker 1: seeing a lot of excitement around not just docurrencies stores
Speaker 1: of value, but also gaming and creator monetization and things
Speaker 1: like that. And I think that's just the beginning. Alchemy
Speaker 1: has its own vcar and grants program, and I'm curious
Speaker 1: what kind of projects you're backing right now. How the
Speaker 1: macro environment, a dreadful market situation is impacting your decision decisions,
Speaker 1: and whether valuations are they coming down That's a great question.
Speaker 1: So I think there are valuations in the market, and
Speaker 1: that obviously has changed over the lass six months. The
Speaker 1: really exciting thing about our ecosystem is developers have not
Speaker 1: stopped building. And the thing that's important to something like
Speaker 1: the blockchain. If your ecosystem is as long as developers
Speaker 1: are building, new applications will come out that will bring
Speaker 1: in more users, It will bring in more developers the
Speaker 1: UH and the ecosystem, and the technology gets better. So
Speaker 1: our ventures are mas seen actually a tremendous amount of growth.
Speaker 1: It's I think we're seeing three quarter over quarter growth
Speaker 1: in terms of fuel velocity. We're seeing more and more
Speaker 1: people coming from traditional technology and other other other industries
Speaker 1: into the space to work on brand new things. UM,
Speaker 1: and it's been very very exciting. We're also we also
Speaker 1: have educational properties that are aimed at bringing people into
Speaker 1: the space and teaching them how to develop in Web
Speaker 1: three for free, and we're seeing lots of growth there.
Speaker 1: So all across the board, I think it's been a
Speaker 1: very very positive outlook. Um, we're actually out of time, Joe,
Speaker 1: but I so appreciate your very thoughtful insights there. We'll
Speaker 1: we'll have to do this again, um as the market
Speaker 1: continues to evolve. Alchemy co founder Joe Lau, thank you
Speaker 1: so much for stopping by. Disney has pulled the upcoming
Speaker 1: Star Wars film Rogue Squadron from its release calendar, a
Speaker 1: disappointment for theaters still trying to recover from the pandemic.
Speaker 1: Joining us Now Bloomberg's Chris Paul Mary So, Chris sounds
Speaker 1: like they're still going to make the film, but it's
Speaker 1: not coming out next year. Right, that's right, And it's
Speaker 1: your reflection of a lot of things going on the
Speaker 1: movie business. One of them is, of course, the pandemic.
Speaker 1: It's hard to get things up and running again. And
Speaker 1: and you've got a director in this movie, Patty Jenkins,
Speaker 1: who's uh done the Wonder Woman films. She's working on
Speaker 1: a third one of those that's also not started production yet.
Speaker 1: So scheduling something of this magnitude is difficult. Of course,
Speaker 1: this is Star Wars and you want to get it right.
Speaker 1: You broke the news three years ago in an interview
Speaker 1: with them CEO Bob Igers, and uh, you know, there
Speaker 1: were some disappointment when when they rushed out a lot
Speaker 1: of Star Wars films initially and they put the films
Speaker 1: on a hiatus. That the last one was in two
Speaker 1: thousand nineteen, and so there's a lot of pressure to
Speaker 1: make sure that they get this right. But I'm told
Speaker 1: that this film is still in development, as are some
Speaker 1: other Star Wars films. All right, Um, not good for
Speaker 1: theaters though, I mean, were they really counting on this one? Yeah,
Speaker 1: I mean you can even a bad Star Wars films,
Speaker 1: there's a lot of money, a billion dollar box office. Um,
Speaker 1: it's uh, you know, it's a story we keep hearing.
Speaker 1: Theaters are coming back, theaters are coming back. Reality is,
Speaker 1: the industry is probably to do eight and a half
Speaker 1: billion dollars this year. The Pink a few years ago
Speaker 1: was over eleven billions. So it's it's still it's still
Speaker 1: far from where it was. You know, you had some
Speaker 1: big movies this year. Top Gun obviously was huge, But
Speaker 1: they're really counting on these big tentpoles as they're as
Speaker 1: they're called to to drive people to theaters, and Star
Speaker 1: Wars is certainly one of them. Well, it's in keeping
Speaker 1: with the story that you just wrote called the bad
Speaker 1: news in Hollywood is arriving almost daily. At least that's
Speaker 1: the opening line. So what other bad news are we hearing? Well,
Speaker 1: you know, there's been this whole rethinking of the streaming
Speaker 1: business for years. Everyone was following the sort of Netflix
Speaker 1: model of it's all about signing up subscribers, spending a
Speaker 1: ton of money on movies and TV shows and you know,
Speaker 1: the business will revenue and profits will follow. That all
Speaker 1: got reset of this year. Netflix, Uh, you know, as
Speaker 1: we've reported as a low subscribers and so all of
Speaker 1: the stocks in the entertainment business have collapsed. Uh, and
Speaker 1: everyone's now focused on what are we gonna make money
Speaker 1: off of our street business? Many of them are losing
Speaker 1: billions of dollars and so we've seen, you know, particularly
Speaker 1: in Netflix and Warner Brothers, which just did a big
Speaker 1: merger with Discovery, big cutbacks and staffing, the canceling projects.
Speaker 1: Everyone's dialing back, uh you know, the budgets for TV series. Uh,
Speaker 1: and things are just sort of languishing as everyone sort
Speaker 1: of weights to see how this all plays out on
Speaker 1: Wall Street. Um. Well, on that uplifting note, what are
Speaker 1: you watching this weekend? But well to pivot back to
Speaker 1: Star Wars even though the and I this, you know,
Speaker 1: their fourth one of the TV series is coming out
Speaker 1: next weekend or uh and so far looks pretty good.
Speaker 1: And gosh, I am really in the Drones House of Dragon.
Speaker 1: It's terrific. Okay, I'm liking House of Dragons too. I'm
Speaker 1: excited for Sunday, Chris, Paul Mary always good to have you,
Speaker 1: um and happy Friday. Everyone to have a wonderful weekend. Uh.
Speaker 1: That does it for this edition of Bloomberg Technology. I'm
Speaker 1: Emily Drag in San Francisco. This is Bloomberg,