1 00:00:02,480 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:09,640 --> 00:00:12,840 Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Doug Krisner. 3 00:00:12,920 --> 00:00:15,400 Speaker 2: You can join Brian Curtis and myself for the stories, 4 00:00:15,440 --> 00:00:18,520 Speaker 2: making news and moving markets in the APAC region. You 5 00:00:18,600 --> 00:00:21,439 Speaker 2: can subscribe to the show anywhere you get your podcast 6 00:00:21,520 --> 00:00:24,919 Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the 7 00:00:24,920 --> 00:00:29,040 Speaker 2: Bloomberg Business app. Let's get to our guest, Todd Walsh's 8 00:00:29,080 --> 00:00:32,479 Speaker 2: with us. He is the CEO of Alpha Cubed Investments. 9 00:00:32,520 --> 00:00:35,600 Speaker 2: Todd is normally based in California. Day today we find 10 00:00:35,680 --> 00:00:38,000 Speaker 2: him in New York City. Todd, good of you to 11 00:00:38,040 --> 00:00:40,120 Speaker 2: make time to chat with us. I think we can 12 00:00:40,159 --> 00:00:42,919 Speaker 2: agree that seemed like a lot of panic selling at 13 00:00:42,960 --> 00:00:45,960 Speaker 2: the end early part of last week. Things have settled down. 14 00:00:46,400 --> 00:00:48,960 Speaker 2: What do you make of the gyrations that we saw. 15 00:00:49,080 --> 00:00:52,560 Speaker 2: Was this all about an unwind of the end carrier? 16 00:00:52,720 --> 00:00:54,240 Speaker 2: Is there something else happening here? 17 00:00:55,520 --> 00:00:57,720 Speaker 3: Well, hey, Doug, thanks for having me on. And of course, 18 00:00:57,760 --> 00:00:58,960 Speaker 3: trees don't grow to the sky. 19 00:00:59,200 --> 00:00:59,360 Speaker 4: Right. 20 00:00:59,480 --> 00:01:03,280 Speaker 3: We've had eighteen months of a toward increase in the 21 00:01:03,320 --> 00:01:06,840 Speaker 3: AI ecosystem tech sector stocks, so you know we've all 22 00:01:06,840 --> 00:01:08,920 Speaker 3: been expecting a little bit of a correction. We got it. 23 00:01:09,000 --> 00:01:12,120 Speaker 3: We've been looking at questions about, you know, where is 24 00:01:12,160 --> 00:01:14,480 Speaker 3: the ROI going to be coming from? On all the 25 00:01:14,480 --> 00:01:17,360 Speaker 3: capex that's going on out there, there's an element of 26 00:01:17,440 --> 00:01:20,000 Speaker 3: this is kind of normal, but you know, when it happens, 27 00:01:20,000 --> 00:01:22,520 Speaker 3: it doesn't feel normal. And of course we have the 28 00:01:22,560 --> 00:01:24,920 Speaker 3: CPI print coming out, we think we're going to see 29 00:01:24,920 --> 00:01:27,039 Speaker 3: a little bit more volatility at it. It kind of 30 00:01:27,040 --> 00:01:28,920 Speaker 3: feels like we're at the doctor's office in the waiting 31 00:01:29,000 --> 00:01:29,560 Speaker 3: room right now. 32 00:01:29,640 --> 00:01:32,720 Speaker 2: Okay, So if you're expecting some volatility tied to that 33 00:01:32,959 --> 00:01:36,840 Speaker 2: report on consumer prices, is it possible that we don't 34 00:01:36,880 --> 00:01:40,040 Speaker 2: get a market friendly report, which is to say, something 35 00:01:40,080 --> 00:01:43,520 Speaker 2: that confirms that inflation is cooling at the same rate 36 00:01:43,560 --> 00:01:45,240 Speaker 2: that we have been expecting. 37 00:01:46,880 --> 00:01:51,279 Speaker 3: Well, don't say possible. Anything's possible, right. The biggest issues 38 00:01:51,320 --> 00:01:53,200 Speaker 3: if we stop and really think about what's going on, 39 00:01:53,280 --> 00:01:55,080 Speaker 3: we kind of need to thread the needle a little 40 00:01:55,120 --> 00:01:57,960 Speaker 3: bit here. If we get a strong CPI report, meaning 41 00:01:58,040 --> 00:02:01,200 Speaker 3: you know, it's not coming down, cpis up, rate cuts 42 00:02:01,240 --> 00:02:03,000 Speaker 3: could be off the table, and we know that's bad 43 00:02:03,040 --> 00:02:05,040 Speaker 3: news for the market. But if we get a weak 44 00:02:05,320 --> 00:02:09,840 Speaker 3: CPI report and we start leaning more towards an actual 45 00:02:09,919 --> 00:02:12,960 Speaker 3: recession that might even be worse for the markets. We 46 00:02:13,040 --> 00:02:16,840 Speaker 3: did a little study of initial rate cuts when the 47 00:02:16,840 --> 00:02:20,560 Speaker 3: FED starts cutting rates. Since nineteen eighty three, the market's 48 00:02:20,600 --> 00:02:23,400 Speaker 3: up about twenty one percent in the first year after 49 00:02:23,440 --> 00:02:26,400 Speaker 3: the first rate cut, but that's only if there's no 50 00:02:26,520 --> 00:02:30,440 Speaker 3: recession after the first recession rate cut. When there is 51 00:02:30,480 --> 00:02:33,240 Speaker 3: a recession two thousand and one, two thousand and eight, 52 00:02:33,280 --> 00:02:35,480 Speaker 3: the market was down in an average of fifteen percent. 53 00:02:36,080 --> 00:02:39,040 Speaker 3: So we are looking for what's been happening up to 54 00:02:39,080 --> 00:02:42,960 Speaker 3: this point, which is marginal slowing, marginal acceleration in the 55 00:02:43,000 --> 00:02:46,880 Speaker 3: economy with some mixed positive economic data to kind of 56 00:02:46,919 --> 00:02:49,320 Speaker 3: back that up. And what we want to see again 57 00:02:49,520 --> 00:02:53,320 Speaker 3: is marginal decrease in that inflation number. We kind of 58 00:02:53,320 --> 00:02:55,440 Speaker 3: need the right kind of inflation number to get where 59 00:02:55,480 --> 00:02:56,959 Speaker 3: we need to get here. We think we're going to 60 00:02:57,000 --> 00:02:57,240 Speaker 3: have it. 61 00:02:57,440 --> 00:02:58,959 Speaker 2: So I hear what you're saying when it comes to 62 00:02:59,040 --> 00:03:01,560 Speaker 2: kind of an one of me that shifting into lower gear. 63 00:03:01,600 --> 00:03:04,440 Speaker 2: All we have to do is remember the market's response 64 00:03:04,520 --> 00:03:09,560 Speaker 2: to that relatively disappointing employment report for the month of July, 65 00:03:10,240 --> 00:03:12,440 Speaker 2: and I hear what you're saying too about the lack 66 00:03:12,480 --> 00:03:15,880 Speaker 2: of ROI when it comes to AI. But I'm wondering 67 00:03:15,919 --> 00:03:18,160 Speaker 2: whether or not what we have viewed principally in the 68 00:03:18,200 --> 00:03:21,760 Speaker 2: market up until this point has been confined to let's 69 00:03:21,800 --> 00:03:25,320 Speaker 2: call it a market event rather than a macro economic event. 70 00:03:26,080 --> 00:03:28,000 Speaker 2: To go back to the question that I asked at 71 00:03:28,040 --> 00:03:30,799 Speaker 2: the top of the conversation about the unwind of the 72 00:03:30,840 --> 00:03:34,240 Speaker 2: carry trade in yen and whether or not this revealed 73 00:03:34,639 --> 00:03:38,120 Speaker 2: a lot of leverage and maybe a big part of 74 00:03:38,120 --> 00:03:41,200 Speaker 2: that leverage was tied to your trade on AI. 75 00:03:42,440 --> 00:03:44,920 Speaker 3: You know that's possible. We still aren't out of the 76 00:03:44,960 --> 00:03:47,760 Speaker 3: woods yet, and one of the possible catalysts for volatility 77 00:03:47,840 --> 00:03:52,720 Speaker 3: does revolve around that carry trade online. Are there unknown 78 00:03:52,760 --> 00:03:56,000 Speaker 3: victims out there? Is there leverage that we don't know about. 79 00:03:56,640 --> 00:04:00,160 Speaker 3: But underneath the surface, the recovery that we saw last 80 00:04:00,160 --> 00:04:05,520 Speaker 3: week was you know, enjoyable. But the daily technicals, relative strength, 81 00:04:05,600 --> 00:04:07,960 Speaker 3: amount of money flows, a lot of the daily technicals 82 00:04:07,960 --> 00:04:10,520 Speaker 3: we look at, they are all still in the negative 83 00:04:10,560 --> 00:04:13,280 Speaker 3: and they haven't crossed into the positive yet. And on 84 00:04:13,320 --> 00:04:16,720 Speaker 3: top of the CPI report, you know, Iran seems intent 85 00:04:16,839 --> 00:04:20,840 Speaker 3: on retaliating against Israel, and that's a big unknown. We've 86 00:04:20,880 --> 00:04:23,880 Speaker 3: got a lot of catalysts for volatility. Sell offs are 87 00:04:23,920 --> 00:04:27,160 Speaker 3: a lot like earthquakes, right we want to watch for aftershocks, 88 00:04:27,200 --> 00:04:29,920 Speaker 3: and let's not be too hasty about, you know, going 89 00:04:30,000 --> 00:04:33,120 Speaker 3: right in and buying. Because the guys have cleared, we 90 00:04:33,160 --> 00:04:35,679 Speaker 3: think we've got a little more volatility ahead most likely. 91 00:04:35,839 --> 00:04:37,480 Speaker 2: We saw a big move in crude oil in New 92 00:04:37,560 --> 00:04:39,640 Speaker 2: York today. We were up more than four percent in 93 00:04:39,680 --> 00:04:42,040 Speaker 2: the regular session. A lot of this is the market 94 00:04:42,080 --> 00:04:45,960 Speaker 2: really braced for Iran's response to that assassination that took 95 00:04:46,000 --> 00:04:50,080 Speaker 2: place in Tehran of the Hummas leader. Talk to me 96 00:04:50,160 --> 00:04:53,320 Speaker 2: broadly about the commodities trade right now? Do you want 97 00:04:53,320 --> 00:04:56,039 Speaker 2: to be exposed to commodities if you're assuming a down 98 00:04:56,080 --> 00:04:57,240 Speaker 2: shift in global growth? 99 00:05:00,400 --> 00:05:04,479 Speaker 3: You've got a short term catalyst with what's going on geopolitically, 100 00:05:05,000 --> 00:05:07,200 Speaker 3: But we don't think commodities are the place to be. 101 00:05:07,560 --> 00:05:10,200 Speaker 3: In fact, we think the FED is going to achieve 102 00:05:10,480 --> 00:05:14,640 Speaker 3: their desire to cut rates. When they pivoted back in 103 00:05:14,839 --> 00:05:18,719 Speaker 3: November of last year, the value dividend trade caught fire, 104 00:05:19,040 --> 00:05:21,239 Speaker 3: and for the first time in about two or three years, 105 00:05:21,279 --> 00:05:24,160 Speaker 3: that trade that had been left for dead has actually 106 00:05:24,800 --> 00:05:28,680 Speaker 3: returned almost the same amount since that November pivot. As 107 00:05:28,680 --> 00:05:31,719 Speaker 3: we've seen in the white hot Nasdaq one hundred they're 108 00:05:31,760 --> 00:05:34,680 Speaker 3: both from that date up plus or minus about twenty 109 00:05:34,720 --> 00:05:37,200 Speaker 3: five percent. And you know what, Doug, I don't think 110 00:05:37,240 --> 00:05:40,279 Speaker 3: most people know that. And now if the FED moves 111 00:05:40,320 --> 00:05:42,880 Speaker 3: to a more dubbish stance and starts cutting rates, we 112 00:05:42,960 --> 00:05:44,880 Speaker 3: might have the wind at the back of that trade 113 00:05:45,400 --> 00:05:47,640 Speaker 3: for you know, a year or two as the Fed 114 00:05:47,720 --> 00:05:50,520 Speaker 3: tries to achieve their dot plot goal of getting you know, 115 00:05:50,600 --> 00:05:52,600 Speaker 3: rates down to potentially two and a half percent over 116 00:05:52,600 --> 00:05:55,360 Speaker 3: the next two or three years. So we like the value. 117 00:05:55,360 --> 00:05:57,760 Speaker 3: We like dividend trade. The dividend trade right here. 118 00:05:59,000 --> 00:06:00,760 Speaker 2: You know, as I'm listening to I'm looking at the 119 00:06:00,760 --> 00:06:04,080 Speaker 2: bond market and whether wondering whether there's opportunity there as well. 120 00:06:06,680 --> 00:06:10,600 Speaker 3: There may be some short term opportunity there. In general, 121 00:06:10,640 --> 00:06:14,280 Speaker 3: though we think it's going to be marginal. The keyword 122 00:06:14,320 --> 00:06:17,920 Speaker 3: again is marginal on the on the interest right front. 123 00:06:18,120 --> 00:06:20,400 Speaker 3: We don't think rates are going to come crashing down. 124 00:06:20,440 --> 00:06:22,680 Speaker 3: We think the Fed's going to achieve its goal and 125 00:06:22,800 --> 00:06:25,480 Speaker 3: marginally bring down rates. You know, the FED Fund's futures. 126 00:06:25,520 --> 00:06:28,039 Speaker 3: I think last week we're looking at about one hundred 127 00:06:28,080 --> 00:06:31,000 Speaker 3: percent expectation for a fifty basis point rate cut. Where 128 00:06:31,040 --> 00:06:33,640 Speaker 3: are they at today? Now we're fifty to fifty. I 129 00:06:33,640 --> 00:06:36,200 Speaker 3: think as we go through as investors, we need to think, 130 00:06:37,440 --> 00:06:40,479 Speaker 3: catch our breath and think things through. Our thesis this 131 00:06:40,600 --> 00:06:44,400 Speaker 3: year was hold tack, but look for volatility. Let's not 132 00:06:44,480 --> 00:06:46,560 Speaker 3: pay too much, Let's slow down a little bit. Trees 133 00:06:46,640 --> 00:06:49,800 Speaker 3: don't grow to the scot The value dividend trade has 134 00:06:49,839 --> 00:06:51,840 Speaker 3: the wind at it's back, but we don't think it's 135 00:06:51,880 --> 00:06:54,000 Speaker 3: going to be an aggressive move. We think it's something 136 00:06:54,000 --> 00:06:57,240 Speaker 3: we can participate in marginally. And the same old's true 137 00:06:57,240 --> 00:07:01,039 Speaker 3: for the bond market. Bond market's been inverted depending on 138 00:07:01,080 --> 00:07:03,840 Speaker 3: which timeframes you're looking at, for a very long time. 139 00:07:03,880 --> 00:07:06,320 Speaker 3: We think the Fed is going to achieve it's cool 140 00:07:06,480 --> 00:07:09,200 Speaker 3: bringing rates down, and that'll happen all the way across 141 00:07:09,240 --> 00:07:11,480 Speaker 3: the curve. But the farther out we go, the more 142 00:07:11,520 --> 00:07:13,480 Speaker 3: marginal it's going to be. So the answer is yes, 143 00:07:13,600 --> 00:07:14,880 Speaker 3: but again marginally. 144 00:07:15,240 --> 00:07:18,000 Speaker 2: So how do you know when to enter any market 145 00:07:18,120 --> 00:07:20,320 Speaker 2: if there is a lot of volatility? I mean, and 146 00:07:20,400 --> 00:07:24,360 Speaker 2: you expect, let's say, whether it's stocks or bonds, you 147 00:07:24,440 --> 00:07:27,320 Speaker 2: expect those assets to trade in a certain range. How 148 00:07:27,320 --> 00:07:30,560 Speaker 2: do you know the entry point? I know we're talking 149 00:07:30,640 --> 00:07:33,120 Speaker 2: about timing here, and most people don't like to discuss 150 00:07:33,400 --> 00:07:36,200 Speaker 2: timing a market. But that's essentially what you're describing, isn't it. 151 00:07:37,200 --> 00:07:39,560 Speaker 3: Yeah, I love that question. It's the nine trillion dollar 152 00:07:39,680 --> 00:07:43,320 Speaker 3: question out there right now on the AI ecosystem, the 153 00:07:43,360 --> 00:07:45,760 Speaker 3: tech and AX. Everybody wants to know when do I 154 00:07:45,800 --> 00:07:48,440 Speaker 3: get in? How do I get in? Most investors, let's 155 00:07:48,480 --> 00:07:50,440 Speaker 3: face it, in a lot of professionals kind of missed 156 00:07:50,520 --> 00:07:52,800 Speaker 3: out on the bulk of that trade. The only way 157 00:07:52,840 --> 00:07:56,760 Speaker 3: to enter that trade is dollar cost average using volatility, 158 00:07:57,120 --> 00:08:00,400 Speaker 3: just incrementally move in. But we think of the market 159 00:08:00,440 --> 00:08:03,760 Speaker 3: has almost two big chunks. There's the AI ecosystem tech trade, 160 00:08:03,800 --> 00:08:08,240 Speaker 3: which the valuations got astronomical. We're seeing some consolidation there, 161 00:08:08,720 --> 00:08:11,520 Speaker 3: and we can slowly dollar cost average into some of 162 00:08:11,560 --> 00:08:14,400 Speaker 3: those areas for people coming in with new money. The 163 00:08:14,440 --> 00:08:17,000 Speaker 3: rest of the market the other four hundred and ninety 164 00:08:17,000 --> 00:08:19,320 Speaker 3: three stocks, which I call the forgotten four ninety three. 165 00:08:19,800 --> 00:08:22,000 Speaker 3: There's value in that value trade, so we want to 166 00:08:22,120 --> 00:08:24,120 Speaker 3: enter that trade sooner rather than later. 167 00:08:24,480 --> 00:08:26,400 Speaker 2: Todd will leave it there, always a pleasure. Thanks for 168 00:08:26,440 --> 00:08:29,400 Speaker 2: making time to chat with us. Todd Walsh, there, CEO 169 00:08:29,640 --> 00:08:41,200 Speaker 2: of Alpha Cubed Investments joining us from New York. Well, 170 00:08:41,240 --> 00:08:45,720 Speaker 2: Alphabet's Google is holding a major event tomorrow for a 171 00:08:45,920 --> 00:08:49,840 Speaker 2: tech hardware launch. We have a preview from Bloomberg's Charlie Pellett. 172 00:08:50,400 --> 00:08:54,440 Speaker 5: Google is trying to outshine Apple's annual iPhone launch and 173 00:08:54,679 --> 00:08:58,720 Speaker 5: is letting longtime executive Rick Ostrolo takes out her stage. 174 00:08:58,840 --> 00:09:01,920 Speaker 5: He's the former president of Motorola who joined Google in 175 00:09:01,960 --> 00:09:05,720 Speaker 5: twenty sixteen. He will helm the first major product launch 176 00:09:05,760 --> 00:09:08,800 Speaker 5: after the company this year, unified under his leadership the 177 00:09:08,880 --> 00:09:13,520 Speaker 5: teams developing hardware and the Android operating system. In a 178 00:09:13,559 --> 00:09:17,360 Speaker 5: sign of a more aggressive push into consumer devices, Google 179 00:09:17,440 --> 00:09:21,160 Speaker 5: moved up its annual flagship Pixel smartphone launched to August 180 00:09:21,160 --> 00:09:26,200 Speaker 5: from October, preempting the next Apple iPhone debut in New York. 181 00:09:26,280 --> 00:09:28,079 Speaker 5: Charlie Powlett's Bloomberg. 182 00:09:27,640 --> 00:09:29,679 Speaker 2: Radio, Well, let's take a closer look at the Google 183 00:09:29,800 --> 00:09:33,040 Speaker 2: Pixels story with our own Bloomberg Tech editor of Vlad 184 00:09:33,120 --> 00:09:35,720 Speaker 2: Savov joins us from our studios in Hong Kong Flat. 185 00:09:35,960 --> 00:09:38,520 Speaker 2: It's always a pleasure. Are we going to be overwhelmed 186 00:09:38,600 --> 00:09:39,720 Speaker 2: or underwhelmed tomorrow? 187 00:09:39,720 --> 00:09:40,360 Speaker 1: What do you think? 188 00:09:42,040 --> 00:09:44,560 Speaker 4: I think both extremes. There's always a shade of gray 189 00:09:44,600 --> 00:09:47,120 Speaker 4: with these things. I do believe that one of the 190 00:09:47,160 --> 00:09:51,240 Speaker 4: interesting things with Google this year is how far ahead 191 00:09:51,240 --> 00:09:54,319 Speaker 4: they're going to be in terms of their own design 192 00:09:54,400 --> 00:09:56,600 Speaker 4: and cameras technology and so on. That's kind of being 193 00:09:56,800 --> 00:09:58,760 Speaker 4: gone under the radar. I do feel like the company 194 00:09:58,840 --> 00:10:02,160 Speaker 4: is very confident about the how where itself and although 195 00:10:02,200 --> 00:10:05,160 Speaker 4: these things have kind of become commoditized, it does have 196 00:10:05,200 --> 00:10:08,080 Speaker 4: a leadership as far as camera software goes. And if 197 00:10:08,080 --> 00:10:10,760 Speaker 4: the thing that happens, which a lot of people are anticipating, 198 00:10:10,840 --> 00:10:13,560 Speaker 4: is that Google is going to increase sales, I feel 199 00:10:13,600 --> 00:10:16,320 Speaker 4: like there'll be much greater awareness of all the things, 200 00:10:16,360 --> 00:10:18,119 Speaker 4: all the strengths of the Pixel line. 201 00:10:18,040 --> 00:10:20,480 Speaker 1: To date, on top of all the AI stuff. 202 00:10:20,520 --> 00:10:22,959 Speaker 4: So immediately after the event, I guarantee you you will 203 00:10:23,000 --> 00:10:25,319 Speaker 4: not be overwhelmed, but I do feel like a lot 204 00:10:25,320 --> 00:10:28,400 Speaker 4: of people will see some of these strengths that just 205 00:10:28,600 --> 00:10:30,840 Speaker 4: the world hasn't known about with the Pixel line to date. 206 00:10:31,040 --> 00:10:33,440 Speaker 2: Do you think there's a change inside Alphabet when it 207 00:10:33,480 --> 00:10:37,600 Speaker 2: comes to the smartphone, I mean, developing your own technology 208 00:10:37,800 --> 00:10:40,960 Speaker 2: On the hardware side, it seemed like that they were 209 00:10:41,240 --> 00:10:43,360 Speaker 2: maybe a little bit more willing to allow some of 210 00:10:43,360 --> 00:10:46,800 Speaker 2: the other companies like Samsung. I'm thinking of primarily to 211 00:10:46,840 --> 00:10:48,600 Speaker 2: take the lead on that front. I mean, I know 212 00:10:48,720 --> 00:10:51,440 Speaker 2: that the Pixel story has been out there for a while, 213 00:10:51,480 --> 00:10:53,559 Speaker 2: but it never felt as though the company was being 214 00:10:53,600 --> 00:10:57,040 Speaker 2: super aggressive. Here is that beginning to change absolutely. 215 00:10:57,120 --> 00:10:58,800 Speaker 4: I mean, it's such a major change when you think 216 00:10:58,840 --> 00:11:00,160 Speaker 4: about it. 217 00:11:00,400 --> 00:11:01,160 Speaker 1: I was just thinking. 218 00:11:01,880 --> 00:11:04,160 Speaker 4: Google had an event here in Hong Kong launching one 219 00:11:04,200 --> 00:11:07,080 Speaker 4: of its smartphones in twenty eleven on its own brand. So, 220 00:11:07,280 --> 00:11:09,160 Speaker 4: like I say, it's been going for a very long time. 221 00:11:09,400 --> 00:11:11,400 Speaker 4: But when you launch your phone in October, what you're 222 00:11:11,440 --> 00:11:13,800 Speaker 4: saying is everyone who wanted an iPhone already has a 223 00:11:13,920 --> 00:11:16,319 Speaker 4: ninth phone, so you're giving up on that audience. Samsung 224 00:11:16,360 --> 00:11:19,400 Speaker 4: refreshes his devices early in the year and then around 225 00:11:19,400 --> 00:11:22,359 Speaker 4: this time July August, so you're kind of the afterthought 226 00:11:22,360 --> 00:11:24,360 Speaker 4: for a whole bunch of people. Coming in the middle 227 00:11:24,400 --> 00:11:26,679 Speaker 4: of August, coming a month ahead of the iPhone, says 228 00:11:26,840 --> 00:11:29,280 Speaker 4: we are going to compete directly against Apple. We're going 229 00:11:29,320 --> 00:11:32,640 Speaker 4: to compete directly against Samsung too. Even though Google rica 230 00:11:32,640 --> 00:11:35,840 Speaker 4: Osterolo we mentioned he's the leader now, he went immediately 231 00:11:35,880 --> 00:11:37,719 Speaker 4: as soon as he got the new job to talk 232 00:11:37,800 --> 00:11:40,560 Speaker 4: to Samsung to signal that the partnership and the collaboration 233 00:11:40,679 --> 00:11:42,800 Speaker 4: with the two companies is as strong as ever. But 234 00:11:43,040 --> 00:11:45,199 Speaker 4: the signal is the release date. 235 00:11:45,760 --> 00:11:46,000 Speaker 3: You know. 236 00:11:46,440 --> 00:11:48,480 Speaker 2: The elephant in the room I think we can agree 237 00:11:48,600 --> 00:11:51,600 Speaker 2: is artificial intelligence, right when it comes to the handset. 238 00:11:51,800 --> 00:11:54,080 Speaker 2: I mean, we know that that's what Apple is trying 239 00:11:54,120 --> 00:11:56,560 Speaker 2: to build in in terms of hype for the launch 240 00:11:56,600 --> 00:11:59,559 Speaker 2: of the iPhone sixteen. Do you think we're going to 241 00:11:59,600 --> 00:12:03,000 Speaker 2: get kind of a sense of that from Google tomorrow 242 00:12:03,280 --> 00:12:06,640 Speaker 2: where the company is going in terms of the smartphone 243 00:12:06,679 --> 00:12:10,080 Speaker 2: being a device where artificial intelligence is kind of baked 244 00:12:10,120 --> 00:12:10,760 Speaker 2: into the cake. 245 00:12:11,520 --> 00:12:12,280 Speaker 1: Oh absolutely. 246 00:12:12,320 --> 00:12:14,559 Speaker 4: And in order teasers that Google has done for this event, 247 00:12:15,160 --> 00:12:18,199 Speaker 4: it was Pixel meets AI, which is a fun thing 248 00:12:18,280 --> 00:12:20,720 Speaker 4: to say because Google is one of the companies that 249 00:12:20,760 --> 00:12:23,319 Speaker 4: has been putting AI into smartphones for years and years now. 250 00:12:23,400 --> 00:12:26,320 Speaker 4: Its own camera software is all about AI and machine learning. 251 00:12:26,720 --> 00:12:30,400 Speaker 4: But you have to now put it front of mind 252 00:12:30,400 --> 00:12:32,600 Speaker 4: for everybody. Something has been doing the exact same thing. 253 00:12:32,760 --> 00:12:35,280 Speaker 4: They talk about Galaxy AI every time they talk about 254 00:12:35,320 --> 00:12:38,440 Speaker 4: their products. Google likewise Apple with Apple Intelligence. That's going 255 00:12:38,480 --> 00:12:40,200 Speaker 4: to be the theme at least for the next year 256 00:12:40,320 --> 00:12:43,520 Speaker 4: or two. Everyone is going to turn AI as the 257 00:12:43,559 --> 00:12:46,280 Speaker 4: selling point for devices, and the devices we're talking about 258 00:12:46,280 --> 00:12:47,360 Speaker 4: smartphones and laptops. 259 00:12:47,360 --> 00:12:48,520 Speaker 1: Most people already have one. 260 00:12:48,800 --> 00:12:51,959 Speaker 4: So each company in the industry now sees AI as 261 00:12:52,000 --> 00:12:53,840 Speaker 4: the big selling point to get us all to upgrade 262 00:12:53,840 --> 00:12:54,480 Speaker 4: those devices. 263 00:12:54,760 --> 00:12:56,840 Speaker 2: Isn't there The risk though, when you jump in whole 264 00:12:56,880 --> 00:12:59,920 Speaker 2: hog like this so to speak, that as the check 265 00:13:00,080 --> 00:13:03,280 Speaker 2: technology changes, that you have to do a major kind 266 00:13:03,320 --> 00:13:07,880 Speaker 2: of re engineering or kind of a major tweak to 267 00:13:08,000 --> 00:13:11,120 Speaker 2: a device like a smartphone that needs to kind of 268 00:13:11,480 --> 00:13:14,600 Speaker 2: incorporate a lot of this AI technology, so that the 269 00:13:14,600 --> 00:13:17,520 Speaker 2: first generation maybe is going to be kind of radically 270 00:13:17,559 --> 00:13:19,640 Speaker 2: different from the next generation. 271 00:13:20,480 --> 00:13:22,160 Speaker 1: Yes, And as far as the companies that concerned, that's 272 00:13:22,160 --> 00:13:24,840 Speaker 1: great news. Stuff great next year as. 273 00:13:24,760 --> 00:13:27,920 Speaker 2: Well, right, right, So if it's a driver of sales 274 00:13:27,960 --> 00:13:30,360 Speaker 2: planned obs lescence, I think that's what they call it, right. 275 00:13:30,840 --> 00:13:33,079 Speaker 2: What are some of the things that you're looking out 276 00:13:33,120 --> 00:13:34,560 Speaker 2: for in particular. 277 00:13:35,040 --> 00:13:38,199 Speaker 4: Well, it really is this whole integration of hardware and software, 278 00:13:38,240 --> 00:13:41,160 Speaker 4: and I would actually say the ecosystem play again comes 279 00:13:41,200 --> 00:13:44,120 Speaker 4: to the surface is a very important thing. Samsung set 280 00:13:44,160 --> 00:13:46,280 Speaker 4: out is still much in the same way that Apple did, 281 00:13:46,360 --> 00:13:48,240 Speaker 4: and we kind of expect Google to do the same thing. 282 00:13:48,280 --> 00:13:51,240 Speaker 4: Google already has its Pixel watch. It already has its 283 00:13:51,240 --> 00:13:53,640 Speaker 4: own in house design process. Going back to the first 284 00:13:53,640 --> 00:13:55,600 Speaker 4: thing I mentioned, Google has been putting all. 285 00:13:55,520 --> 00:13:56,280 Speaker 1: The pieces together. 286 00:13:56,320 --> 00:13:58,200 Speaker 4: It's just most people don't know about these picks of 287 00:13:58,240 --> 00:14:01,319 Speaker 4: phones and the whole lineup. So in this event that's 288 00:14:01,360 --> 00:14:03,360 Speaker 4: coming up, we're probably going to get another watch, We'll 289 00:14:03,400 --> 00:14:06,839 Speaker 4: probably going to get several smartphones, and it's the ecosystem 290 00:14:06,840 --> 00:14:09,000 Speaker 4: of devices is the way that they work together. Also, 291 00:14:09,040 --> 00:14:12,960 Speaker 4: don't forget, under Rick Osterlo's leadership, you have Google Nests, 292 00:14:13,000 --> 00:14:16,000 Speaker 4: which are the home devices, home cameras, such things, thermostats. 293 00:14:17,440 --> 00:14:20,239 Speaker 4: You have a whole bunch of other home devices, personal devices, 294 00:14:20,680 --> 00:14:23,600 Speaker 4: all the Internet software. If Google makes all these things 295 00:14:23,640 --> 00:14:26,120 Speaker 4: work together as seamlessly as it hopes, there will be 296 00:14:26,160 --> 00:14:28,560 Speaker 4: a lot of people who can be swung to the 297 00:14:28,720 --> 00:14:29,640 Speaker 4: pixel side of things. 298 00:14:30,000 --> 00:14:33,000 Speaker 2: Is this a device that will have an opportunity in 299 00:14:33,040 --> 00:14:33,760 Speaker 2: the China market? 300 00:14:33,880 --> 00:14:37,520 Speaker 1: You think zero? Google services are not there? 301 00:14:38,880 --> 00:14:41,720 Speaker 4: The Google Play Store, which is a real big selling 302 00:14:41,760 --> 00:14:43,480 Speaker 4: point for Google because that's where you get all your 303 00:14:43,480 --> 00:14:48,000 Speaker 4: international apps, it doesn't play there. And the Chinese smartphone manufacturers, 304 00:14:48,080 --> 00:14:50,960 Speaker 4: let's give them their own new credit. They are right 305 00:14:51,040 --> 00:14:53,800 Speaker 4: up there in terms of cameras, technology. They have their 306 00:14:53,800 --> 00:14:56,880 Speaker 4: own app stores, they have we chats, and an entire 307 00:14:56,880 --> 00:15:00,400 Speaker 4: ecosystem that Google has no presence in. So unfortunately, Google, 308 00:15:00,480 --> 00:15:03,040 Speaker 4: the world's big smartphone market where Apple is a big player, 309 00:15:03,480 --> 00:15:04,280 Speaker 4: is out of bounds. 310 00:15:04,400 --> 00:15:07,080 Speaker 2: Do we know anything about the part suppliers here and 311 00:15:07,120 --> 00:15:10,320 Speaker 2: where this device is being kind of created or manufactured. 312 00:15:11,280 --> 00:15:14,120 Speaker 4: Well, Fox contends to be the company that Google has 313 00:15:14,160 --> 00:15:17,440 Speaker 4: been worked has worked with in the past. It does 314 00:15:17,600 --> 00:15:21,240 Speaker 4: it's manufacturing in Vietnam in Taiwan. Taiwan is actually plays 315 00:15:21,240 --> 00:15:25,040 Speaker 4: host to Google's hardware engineering hub. We can remember that 316 00:15:25,360 --> 00:15:29,120 Speaker 4: Google took over HTC smartphone design team. They took on 317 00:15:29,160 --> 00:15:31,640 Speaker 4: a bunch of design and engineering people, so you can 318 00:15:31,760 --> 00:15:33,960 Speaker 4: say Taiwan plays a really big role in developing all 319 00:15:33,960 --> 00:15:34,120 Speaker 4: of this. 320 00:15:34,320 --> 00:15:37,920 Speaker 2: So very quickly vled what markets in Asia might Google 321 00:15:38,120 --> 00:15:40,680 Speaker 2: kind of target for this new pixel phone. 322 00:15:40,960 --> 00:15:43,600 Speaker 4: Japan absolutely, Japan has always been a really big market 323 00:15:43,680 --> 00:15:46,920 Speaker 4: for Google. It has good relationships and one of the 324 00:15:46,960 --> 00:15:49,240 Speaker 4: interesting things in Japan is that the Chinese players don't 325 00:15:49,280 --> 00:15:51,760 Speaker 4: have that much of a presence, needed does Samsung, so 326 00:15:51,920 --> 00:15:54,520 Speaker 4: it has the biggest opportunity there. It's a developed market, 327 00:15:54,600 --> 00:15:56,040 Speaker 4: there's a lot of potential there, but. 328 00:15:56,240 --> 00:15:58,880 Speaker 2: It's always a pleasure. Thanks for making time to chat 329 00:15:58,880 --> 00:16:02,240 Speaker 2: with us on this launch tomorrow taking place for the 330 00:16:02,360 --> 00:16:06,160 Speaker 2: new Google Epixel phone. Vlat's have off Bloomberg's Tech editor 331 00:16:06,560 --> 00:16:15,760 Speaker 2: joining us from Hong Kong. So we know that the 332 00:16:15,800 --> 00:16:19,880 Speaker 2: Democrats are rallying around Vice President Kamala Harris and her 333 00:16:19,960 --> 00:16:24,040 Speaker 2: running mate Tim Walls. Walls, you may know, has had 334 00:16:24,080 --> 00:16:26,880 Speaker 2: a long history with China. He taught English in China 335 00:16:27,120 --> 00:16:29,720 Speaker 2: in nineteen eighty nine and nineteen ninety and since that 336 00:16:29,840 --> 00:16:32,880 Speaker 2: time he's visited at least thirty times. Let's take a 337 00:16:32,920 --> 00:16:36,240 Speaker 2: closer look now with Michael Sobolik. He is senior fellow 338 00:16:36,280 --> 00:16:40,360 Speaker 2: at the American Foreign Policy Council. Michael, good of you 339 00:16:40,400 --> 00:16:42,240 Speaker 2: to make time to chat with us about this story. 340 00:16:42,240 --> 00:16:45,440 Speaker 2: Do you have a sense of how mister Walls's backstory 341 00:16:45,480 --> 00:16:48,080 Speaker 2: regarding China may play out in this campaign. 342 00:16:49,440 --> 00:16:49,760 Speaker 5: Yes. 343 00:16:50,000 --> 00:16:53,960 Speaker 6: Governor Walls is really unique. He has so much personal 344 00:16:54,080 --> 00:16:57,840 Speaker 6: experience living in China and working in China, far more 345 00:16:57,880 --> 00:17:00,360 Speaker 6: than the average American politician and far more than the 346 00:17:00,440 --> 00:17:05,160 Speaker 6: average vice presidential candidate. It could cut one of two ways. 347 00:17:05,359 --> 00:17:09,200 Speaker 6: On the one hand, Governor Walls, by all accounts, has 348 00:17:09,280 --> 00:17:14,479 Speaker 6: one of the strongest records on China human rights that 349 00:17:14,520 --> 00:17:16,960 Speaker 6: we've seen from any member in the House of Representatives 350 00:17:16,960 --> 00:17:19,200 Speaker 6: in recent memory. When he was a member of Congress, 351 00:17:19,240 --> 00:17:22,119 Speaker 6: he got photos with the Dalilama. He and his wife 352 00:17:22,160 --> 00:17:25,960 Speaker 6: literally got married on the anniversary of the Tenaman Square 353 00:17:26,000 --> 00:17:31,400 Speaker 6: massacre on June fourth, So he has a strong record 354 00:17:31,560 --> 00:17:35,160 Speaker 6: on being publicly vocal on the need for human rights 355 00:17:35,160 --> 00:17:37,960 Speaker 6: in China. On the other hand, he's also an equally 356 00:17:38,080 --> 00:17:43,320 Speaker 6: vocal proponent on engaging China and promoting exchanges between Washington 357 00:17:43,359 --> 00:17:46,199 Speaker 6: and Beijing. And in this day and age where national 358 00:17:46,240 --> 00:17:49,520 Speaker 6: security concerns tend to trump a lot of others, it's 359 00:17:49,640 --> 00:17:53,080 Speaker 6: unclear how those two competing priorities would play. 360 00:17:52,880 --> 00:17:55,280 Speaker 2: Out for it. You know, it's very interesting because there 361 00:17:55,320 --> 00:17:59,239 Speaker 2: was an article written back in nineteen ninety after he 362 00:17:59,280 --> 00:18:01,639 Speaker 2: returned from a teaching in China. I think it was 363 00:18:01,680 --> 00:18:05,119 Speaker 2: the Star Herald maybe in Minneapolis, and he was quoted 364 00:18:05,160 --> 00:18:08,800 Speaker 2: as saying, if the Chinese people had proper leadership, there 365 00:18:08,840 --> 00:18:12,000 Speaker 2: are no limits on what they could accomplish. They are 366 00:18:12,040 --> 00:18:15,359 Speaker 2: such kind, generous and capable people. They gave and gave 367 00:18:15,520 --> 00:18:20,520 Speaker 2: and gave to me. That was nineteen ninety. Relationship between 368 00:18:20,560 --> 00:18:23,919 Speaker 2: the US and China very very different these days, isn't not. 369 00:18:25,400 --> 00:18:27,639 Speaker 6: It is as different as it could possibly be. But 370 00:18:27,680 --> 00:18:30,760 Speaker 6: I'll say this, Governor Wallas, like when he wrote those 371 00:18:30,760 --> 00:18:33,639 Speaker 6: words so long ago, tapped into something that is still 372 00:18:33,640 --> 00:18:37,400 Speaker 6: true today in twenty twenty four, which is, the Chinese 373 00:18:37,480 --> 00:18:40,600 Speaker 6: people are not the enemies of the American people at all, 374 00:18:40,680 --> 00:18:44,200 Speaker 6: nor should they be. I've been to China as well, 375 00:18:44,240 --> 00:18:49,520 Speaker 6: and I've experienced that same hospitality and generosity that Walls 376 00:18:49,600 --> 00:18:52,320 Speaker 6: experienced when he was there too, and I think many 377 00:18:52,320 --> 00:18:55,320 Speaker 6: Americans would attest to the same thing. The problem for 378 00:18:55,560 --> 00:18:58,800 Speaker 6: Washington policymakers is not the Chinese people, it's the Chinese 379 00:18:58,800 --> 00:19:02,719 Speaker 6: Communist Party. And that distinction is quite meaningful, and I 380 00:19:02,760 --> 00:19:06,520 Speaker 6: am gratified greatly that Governor Waltz recognizes that difference. 381 00:19:06,800 --> 00:19:09,880 Speaker 2: Yeah, that's an important distinction to make. But in terms 382 00:19:09,960 --> 00:19:14,240 Speaker 2: of influencing policy, imagine a world where Kamala Harris is 383 00:19:14,280 --> 00:19:17,040 Speaker 2: the next president. Is it the role of the vice 384 00:19:17,080 --> 00:19:19,600 Speaker 2: president at all to kind of get involved with setting 385 00:19:19,800 --> 00:19:21,520 Speaker 2: the agenda? 386 00:19:21,680 --> 00:19:24,840 Speaker 6: So that's going to vary from administration to administration. To 387 00:19:24,880 --> 00:19:27,880 Speaker 6: be sure, We've had vice presidents like Dick Cheney, who 388 00:19:27,960 --> 00:19:31,240 Speaker 6: are one of the most prominent presences in any room 389 00:19:32,040 --> 00:19:35,520 Speaker 6: and played a major hand in national security. I think 390 00:19:35,600 --> 00:19:38,239 Speaker 6: Vice President Joe Biden when he served Barack Obama, in 391 00:19:38,280 --> 00:19:41,879 Speaker 6: some cases fit that bill as well. If Kamala Harris 392 00:19:41,960 --> 00:19:45,160 Speaker 6: wins the presidency, that'll be her decision to make. But ultimately, 393 00:19:45,200 --> 00:19:47,679 Speaker 6: if she wins, she is going to face this million 394 00:19:47,680 --> 00:19:51,960 Speaker 6: dollar question in American foreign policy. Is China the Chinese 395 00:19:52,000 --> 00:19:56,960 Speaker 6: Communist Party a potential competitor or an adversary? And Shijinping, 396 00:19:57,119 --> 00:20:00,159 Speaker 6: the leader of China, is not really leaving America with 397 00:20:00,240 --> 00:20:02,240 Speaker 6: much of a choice. We're going to have to choose 398 00:20:02,280 --> 00:20:02,920 Speaker 6: one or the other. 399 00:20:03,400 --> 00:20:03,760 Speaker 1: How do you. 400 00:20:03,800 --> 00:20:07,359 Speaker 2: Imagine Beijing would react to this type of situation where 401 00:20:07,359 --> 00:20:11,840 Speaker 2: you have someone in the administration who knows so much 402 00:20:12,320 --> 00:20:13,080 Speaker 2: about China. 403 00:20:15,720 --> 00:20:19,359 Speaker 6: I think they'll probably try to play this much like 404 00:20:19,480 --> 00:20:23,120 Speaker 6: they have attempted to work with President Joe Biden. So 405 00:20:23,200 --> 00:20:27,119 Speaker 6: President Biden talks regularly about how many hours he spent 406 00:20:27,760 --> 00:20:31,280 Speaker 6: meeting with Schijingping when he was Barack Obama's vice president, 407 00:20:31,560 --> 00:20:34,160 Speaker 6: and that was quite intentional. Barack Obama and the US 408 00:20:34,200 --> 00:20:38,240 Speaker 6: government around twenty twelve twenty, even as early as twenty 409 00:20:38,280 --> 00:20:41,120 Speaker 6: ten and twenty eleven, knew that Chijingping was the heir 410 00:20:41,160 --> 00:20:44,840 Speaker 6: apparent in China, and Joe Biden spent a lot of 411 00:20:44,880 --> 00:20:49,920 Speaker 6: time cultivating a very personal relationship with Chijingping and what not, 412 00:20:50,000 --> 00:20:52,439 Speaker 6: just she at the most highest levels. But what Chinese 413 00:20:52,520 --> 00:20:56,280 Speaker 6: diplomats will often do is try to fall back on 414 00:20:56,760 --> 00:21:02,320 Speaker 6: mutual feelings of friendship and cooperation and shared cultural experiences 415 00:21:02,760 --> 00:21:06,359 Speaker 6: to try to get American politicians to give a little 416 00:21:06,400 --> 00:21:09,920 Speaker 6: bit on the competitive agenda. I am certain they will 417 00:21:09,920 --> 00:21:11,840 Speaker 6: try to do the same thing with Walls if he 418 00:21:11,880 --> 00:21:15,520 Speaker 6: assumes the vice presidency. In fact, as governor of Minnesota, 419 00:21:15,600 --> 00:21:18,840 Speaker 6: he's already received some of those diplomatic overtures. 420 00:21:18,600 --> 00:21:21,600 Speaker 2: So we know, and you mentioned the Walls record on 421 00:21:21,680 --> 00:21:25,400 Speaker 2: when it comes to human rights, particularly in China. How 422 00:21:25,400 --> 00:21:28,280 Speaker 2: do you think he's going to frame the conversation around 423 00:21:28,320 --> 00:21:31,040 Speaker 2: the South China Sea. 424 00:21:31,160 --> 00:21:34,240 Speaker 6: So he's on record as a member of Congress saying 425 00:21:34,640 --> 00:21:37,800 Speaker 6: that the United States needs to stand up to China 426 00:21:37,880 --> 00:21:40,680 Speaker 6: and call out their illegal territorial claims in the South 427 00:21:40,800 --> 00:21:44,119 Speaker 6: China Sea, and listen, that's great. We need to hold 428 00:21:44,400 --> 00:21:48,639 Speaker 6: the Chinese Communist Party accountable for their illegal actions with 429 00:21:48,680 --> 00:21:51,239 Speaker 6: our rhetoric. But we are at a point in our 430 00:21:51,280 --> 00:21:55,080 Speaker 6: security situation where we need to move beyond words. We 431 00:21:55,200 --> 00:21:59,720 Speaker 6: need to start making the Chinese Communist Party pay for 432 00:22:00,080 --> 00:22:03,080 Speaker 6: dangering the security of our allies and our partners and 433 00:22:03,119 --> 00:22:06,360 Speaker 6: frankly American interests in the South China Sea. And this 434 00:22:06,440 --> 00:22:08,960 Speaker 6: is the big question with Governor Wallas. He has a 435 00:22:09,000 --> 00:22:12,840 Speaker 6: strong rhetorical record on human rights with China, but he hasn't, 436 00:22:12,960 --> 00:22:15,439 Speaker 6: in the position of a representative, really been in a 437 00:22:15,520 --> 00:22:19,920 Speaker 6: position to make those hard executive level decisions on how 438 00:22:19,920 --> 00:22:21,880 Speaker 6: do you assess those trade offs, because if you want 439 00:22:21,880 --> 00:22:24,600 Speaker 6: to hold them accountable, you're probably going to have to 440 00:22:24,680 --> 00:22:28,360 Speaker 6: give a bit on the cooperative agenda with Beijing. And 441 00:22:28,520 --> 00:22:31,440 Speaker 6: it's really unclear how he's going to make that calculation 442 00:22:31,640 --> 00:22:32,919 Speaker 6: if he wins the selection. 443 00:22:33,040 --> 00:22:35,800 Speaker 2: With Kamala Harris, I'm sure that this topic will come 444 00:22:35,880 --> 00:22:39,320 Speaker 2: up during the vice presidential debate. Michael, thank you so 445 00:22:39,400 --> 00:22:42,119 Speaker 2: much for making time to chat with us. Michael Soberlik, 446 00:22:42,560 --> 00:22:46,280 Speaker 2: Senior Fellow at the American Foreign Policy Council. He was 447 00:22:46,320 --> 00:22:49,800 Speaker 2: speaking to us from right outside the District of Columbia 448 00:22:49,880 --> 00:22:56,560 Speaker 2: in Alexandria, Virginia. This has been the Bloomberg Daybreak Asia podcast, 449 00:22:56,680 --> 00:22:59,320 Speaker 2: bringing you the stories making news and moving markets. 450 00:22:59,320 --> 00:23:00,000 Speaker 1: In the Asia PAS. 451 00:23:00,800 --> 00:23:03,960 Speaker 2: Visit the Bloomberg Podcast channel on YouTube to get more 452 00:23:03,960 --> 00:23:07,560 Speaker 2: episodes of this and other shows from Bloomberg. Subscribe to 453 00:23:07,600 --> 00:23:11,399 Speaker 2: the podcast on Apple, Spotify, or anywhere else you listen, 454 00:23:11,480 --> 00:23:14,600 Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the 455 00:23:14,600 --> 00:23:15,680 Speaker 2: Bloomberg Business app.