WEBVTT - Japan Leads Asian Stocks Higher, Google Pixel Launch 0:00:02.480 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio news. 0:00:09.640 --> 0:00:12.840 This is the Bloomberg Daybreak Asia podcast. I'm Doug Krisner. 0:00:12.920 --> 0:00:15.400 You can join Brian Curtis and myself for the stories, 0:00:15.440 --> 0:00:18.520 making news and moving markets in the APAC region. You 0:00:18.600 --> 0:00:21.439 can subscribe to the show anywhere you get your podcast 0:00:21.520 --> 0:00:24.919 and always on Bloomberg Radio, the Bloomberg Terminal, and the 0:00:24.920 --> 0:00:29.040 Bloomberg Business app. Let's get to our guest, Todd Walsh's 0:00:29.080 --> 0:00:32.479 with us. He is the CEO of Alpha Cubed Investments. 0:00:32.520 --> 0:00:35.600 Todd is normally based in California. Day today we find 0:00:35.680 --> 0:00:38.000 him in New York City. Todd, good of you to 0:00:38.040 --> 0:00:40.120 make time to chat with us. I think we can 0:00:40.159 --> 0:00:42.919 agree that seemed like a lot of panic selling at 0:00:42.960 --> 0:00:45.960 the end early part of last week. Things have settled down. 0:00:46.400 --> 0:00:48.960 What do you make of the gyrations that we saw. 0:00:49.080 --> 0:00:52.560 Was this all about an unwind of the end carrier? 0:00:52.720 --> 0:00:54.240 Is there something else happening here? 0:00:55.520 --> 0:00:57.720 Well, hey, Doug, thanks for having me on. And of course, 0:00:57.760 --> 0:00:58.960 trees don't grow to the sky. 0:00:59.200 --> 0:00:59.360 Right. 0:00:59.480 --> 0:01:03.280 We've had eighteen months of a toward increase in the 0:01:03.320 --> 0:01:06.840 AI ecosystem tech sector stocks, so you know we've all 0:01:06.840 --> 0:01:08.920 been expecting a little bit of a correction. We got it. 0:01:09.000 --> 0:01:12.120 We've been looking at questions about, you know, where is 0:01:12.160 --> 0:01:14.480 the ROI going to be coming from? On all the 0:01:14.480 --> 0:01:17.360 capex that's going on out there, there's an element of 0:01:17.440 --> 0:01:20.000 this is kind of normal, but you know, when it happens, 0:01:20.000 --> 0:01:22.520 it doesn't feel normal. And of course we have the 0:01:22.560 --> 0:01:24.920 CPI print coming out, we think we're going to see 0:01:24.920 --> 0:01:27.039 a little bit more volatility at it. It kind of 0:01:27.040 --> 0:01:28.920 feels like we're at the doctor's office in the waiting 0:01:29.000 --> 0:01:29.560 room right now. 0:01:29.640 --> 0:01:32.720 Okay, So if you're expecting some volatility tied to that 0:01:32.959 --> 0:01:36.840 report on consumer prices, is it possible that we don't 0:01:36.880 --> 0:01:40.040 get a market friendly report, which is to say, something 0:01:40.080 --> 0:01:43.520 that confirms that inflation is cooling at the same rate 0:01:43.560 --> 0:01:45.240 that we have been expecting. 0:01:46.880 --> 0:01:51.279 Well, don't say possible. Anything's possible, right. The biggest issues 0:01:51.320 --> 0:01:53.200 if we stop and really think about what's going on, 0:01:53.280 --> 0:01:55.080 we kind of need to thread the needle a little 0:01:55.120 --> 0:01:57.960 bit here. If we get a strong CPI report, meaning 0:01:58.040 --> 0:02:01.200 you know, it's not coming down, cpis up, rate cuts 0:02:01.240 --> 0:02:03.000 could be off the table, and we know that's bad 0:02:03.040 --> 0:02:05.040 news for the market. But if we get a weak 0:02:05.320 --> 0:02:09.840 CPI report and we start leaning more towards an actual 0:02:09.919 --> 0:02:12.960 recession that might even be worse for the markets. We 0:02:13.040 --> 0:02:16.840 did a little study of initial rate cuts when the 0:02:16.840 --> 0:02:20.560 FED starts cutting rates. Since nineteen eighty three, the market's 0:02:20.600 --> 0:02:23.400 up about twenty one percent in the first year after 0:02:23.440 --> 0:02:26.400 the first rate cut, but that's only if there's no 0:02:26.520 --> 0:02:30.440 recession after the first recession rate cut. When there is 0:02:30.480 --> 0:02:33.240 a recession two thousand and one, two thousand and eight, 0:02:33.280 --> 0:02:35.480 the market was down in an average of fifteen percent. 0:02:36.080 --> 0:02:39.040 So we are looking for what's been happening up to 0:02:39.080 --> 0:02:42.960 this point, which is marginal slowing, marginal acceleration in the 0:02:43.000 --> 0:02:46.880 economy with some mixed positive economic data to kind of 0:02:46.919 --> 0:02:49.320 back that up. And what we want to see again 0:02:49.520 --> 0:02:53.320 is marginal decrease in that inflation number. We kind of 0:02:53.320 --> 0:02:55.440 need the right kind of inflation number to get where 0:02:55.480 --> 0:02:56.959 we need to get here. We think we're going to 0:02:57.000 --> 0:02:57.240 have it. 0:02:57.440 --> 0:02:58.959 So I hear what you're saying when it comes to 0:02:59.040 --> 0:03:01.560 kind of an one of me that shifting into lower gear. 0:03:01.600 --> 0:03:04.440 All we have to do is remember the market's response 0:03:04.520 --> 0:03:09.560 to that relatively disappointing employment report for the month of July, 0:03:10.240 --> 0:03:12.440 and I hear what you're saying too about the lack 0:03:12.480 --> 0:03:15.880 of ROI when it comes to AI. But I'm wondering 0:03:15.919 --> 0:03:18.160 whether or not what we have viewed principally in the 0:03:18.200 --> 0:03:21.760 market up until this point has been confined to let's 0:03:21.800 --> 0:03:25.320 call it a market event rather than a macro economic event. 0:03:26.080 --> 0:03:28.000 To go back to the question that I asked at 0:03:28.040 --> 0:03:30.799 the top of the conversation about the unwind of the 0:03:30.840 --> 0:03:34.240 carry trade in yen and whether or not this revealed 0:03:34.639 --> 0:03:38.120 a lot of leverage and maybe a big part of 0:03:38.120 --> 0:03:41.200 that leverage was tied to your trade on AI. 0:03:42.440 --> 0:03:44.920 You know that's possible. We still aren't out of the 0:03:44.960 --> 0:03:47.760 woods yet, and one of the possible catalysts for volatility 0:03:47.840 --> 0:03:52.720 does revolve around that carry trade online. Are there unknown 0:03:52.760 --> 0:03:56.000 victims out there? Is there leverage that we don't know about. 0:03:56.640 --> 0:04:00.160 But underneath the surface, the recovery that we saw last 0:04:00.160 --> 0:04:05.520 week was you know, enjoyable. But the daily technicals, relative strength, 0:04:05.600 --> 0:04:07.960 amount of money flows, a lot of the daily technicals 0:04:07.960 --> 0:04:10.520 we look at, they are all still in the negative 0:04:10.560 --> 0:04:13.280 and they haven't crossed into the positive yet. And on 0:04:13.320 --> 0:04:16.720 top of the CPI report, you know, Iran seems intent 0:04:16.839 --> 0:04:20.840 on retaliating against Israel, and that's a big unknown. We've 0:04:20.880 --> 0:04:23.880 got a lot of catalysts for volatility. Sell offs are 0:04:23.920 --> 0:04:27.160 a lot like earthquakes, right we want to watch for aftershocks, 0:04:27.200 --> 0:04:29.920 and let's not be too hasty about, you know, going 0:04:30.000 --> 0:04:33.120 right in and buying. Because the guys have cleared, we 0:04:33.160 --> 0:04:35.679 think we've got a little more volatility ahead most likely. 0:04:35.839 --> 0:04:37.480 We saw a big move in crude oil in New 0:04:37.560 --> 0:04:39.640 York today. We were up more than four percent in 0:04:39.680 --> 0:04:42.040 the regular session. A lot of this is the market 0:04:42.080 --> 0:04:45.960 really braced for Iran's response to that assassination that took 0:04:46.000 --> 0:04:50.080 place in Tehran of the Hummas leader. Talk to me 0:04:50.160 --> 0:04:53.320 broadly about the commodities trade right now? Do you want 0:04:53.320 --> 0:04:56.039 to be exposed to commodities if you're assuming a down 0:04:56.080 --> 0:04:57.240 shift in global growth? 0:05:00.400 --> 0:05:04.479 You've got a short term catalyst with what's going on geopolitically, 0:05:05.000 --> 0:05:07.200 But we don't think commodities are the place to be. 0:05:07.560 --> 0:05:10.200 In fact, we think the FED is going to achieve 0:05:10.480 --> 0:05:14.640 their desire to cut rates. When they pivoted back in 0:05:14.839 --> 0:05:18.719 November of last year, the value dividend trade caught fire, 0:05:19.040 --> 0:05:21.239 and for the first time in about two or three years, 0:05:21.279 --> 0:05:24.160 that trade that had been left for dead has actually 0:05:24.800 --> 0:05:28.680 returned almost the same amount since that November pivot. As 0:05:28.680 --> 0:05:31.719 we've seen in the white hot Nasdaq one hundred they're 0:05:31.760 --> 0:05:34.680 both from that date up plus or minus about twenty 0:05:34.720 --> 0:05:37.200 five percent. And you know what, Doug, I don't think 0:05:37.240 --> 0:05:40.279 most people know that. And now if the FED moves 0:05:40.320 --> 0:05:42.880 to a more dubbish stance and starts cutting rates, we 0:05:42.960 --> 0:05:44.880 might have the wind at the back of that trade 0:05:45.400 --> 0:05:47.640 for you know, a year or two as the Fed 0:05:47.720 --> 0:05:50.520 tries to achieve their dot plot goal of getting you know, 0:05:50.600 --> 0:05:52.600 rates down to potentially two and a half percent over 0:05:52.600 --> 0:05:55.360 the next two or three years. So we like the value. 0:05:55.360 --> 0:05:57.760 We like dividend trade. The dividend trade right here. 0:05:59.000 --> 0:06:00.760 You know, as I'm listening to I'm looking at the 0:06:00.760 --> 0:06:04.080 bond market and whether wondering whether there's opportunity there as well. 0:06:06.680 --> 0:06:10.600 There may be some short term opportunity there. In general, 0:06:10.640 --> 0:06:14.280 though we think it's going to be marginal. The keyword 0:06:14.320 --> 0:06:17.920 again is marginal on the on the interest right front. 0:06:18.120 --> 0:06:20.400 We don't think rates are going to come crashing down. 0:06:20.440 --> 0:06:22.680 We think the Fed's going to achieve its goal and 0:06:22.800 --> 0:06:25.480 marginally bring down rates. You know, the FED Fund's futures. 0:06:25.520 --> 0:06:28.039 I think last week we're looking at about one hundred 0:06:28.080 --> 0:06:31.000 percent expectation for a fifty basis point rate cut. Where 0:06:31.040 --> 0:06:33.640 are they at today? Now we're fifty to fifty. I 0:06:33.640 --> 0:06:36.200 think as we go through as investors, we need to think, 0:06:37.440 --> 0:06:40.479 catch our breath and think things through. Our thesis this 0:06:40.600 --> 0:06:44.400 year was hold tack, but look for volatility. Let's not 0:06:44.480 --> 0:06:46.560 pay too much, Let's slow down a little bit. Trees 0:06:46.640 --> 0:06:49.800 don't grow to the scot The value dividend trade has 0:06:49.839 --> 0:06:51.840 the wind at it's back, but we don't think it's 0:06:51.880 --> 0:06:54.000 going to be an aggressive move. We think it's something 0:06:54.000 --> 0:06:57.240 we can participate in marginally. And the same old's true 0:06:57.240 --> 0:07:01.039 for the bond market. Bond market's been inverted depending on 0:07:01.080 --> 0:07:03.840 which timeframes you're looking at, for a very long time. 0:07:03.880 --> 0:07:06.320 We think the Fed is going to achieve it's cool 0:07:06.480 --> 0:07:09.200 bringing rates down, and that'll happen all the way across 0:07:09.240 --> 0:07:11.480 the curve. But the farther out we go, the more 0:07:11.520 --> 0:07:13.480 marginal it's going to be. So the answer is yes, 0:07:13.600 --> 0:07:14.880 but again marginally. 0:07:15.240 --> 0:07:18.000 So how do you know when to enter any market 0:07:18.120 --> 0:07:20.320 if there is a lot of volatility? I mean, and 0:07:20.400 --> 0:07:24.360 you expect, let's say, whether it's stocks or bonds, you 0:07:24.440 --> 0:07:27.320 expect those assets to trade in a certain range. How 0:07:27.320 --> 0:07:30.560 do you know the entry point? I know we're talking 0:07:30.640 --> 0:07:33.120 about timing here, and most people don't like to discuss 0:07:33.400 --> 0:07:36.200 timing a market. But that's essentially what you're describing, isn't it. 0:07:37.200 --> 0:07:39.560 Yeah, I love that question. It's the nine trillion dollar 0:07:39.680 --> 0:07:43.320 question out there right now on the AI ecosystem, the 0:07:43.360 --> 0:07:45.760 tech and AX. Everybody wants to know when do I 0:07:45.800 --> 0:07:48.440 get in? How do I get in? Most investors, let's 0:07:48.480 --> 0:07:50.440 face it, in a lot of professionals kind of missed 0:07:50.520 --> 0:07:52.800 out on the bulk of that trade. The only way 0:07:52.840 --> 0:07:56.760 to enter that trade is dollar cost average using volatility, 0:07:57.120 --> 0:08:00.400 just incrementally move in. But we think of the market 0:08:00.440 --> 0:08:03.760 has almost two big chunks. There's the AI ecosystem tech trade, 0:08:03.800 --> 0:08:08.240 which the valuations got astronomical. We're seeing some consolidation there, 0:08:08.720 --> 0:08:11.520 and we can slowly dollar cost average into some of 0:08:11.560 --> 0:08:14.400 those areas for people coming in with new money. The 0:08:14.440 --> 0:08:17.000 rest of the market the other four hundred and ninety 0:08:17.000 --> 0:08:19.320 three stocks, which I call the forgotten four ninety three. 0:08:19.800 --> 0:08:22.000 There's value in that value trade, so we want to 0:08:22.120 --> 0:08:24.120 enter that trade sooner rather than later. 0:08:24.480 --> 0:08:26.400 Todd will leave it there, always a pleasure. Thanks for 0:08:26.440 --> 0:08:29.400 making time to chat with us. Todd Walsh, there, CEO 0:08:29.640 --> 0:08:41.200 of Alpha Cubed Investments joining us from New York. Well, 0:08:41.240 --> 0:08:45.720 Alphabet's Google is holding a major event tomorrow for a 0:08:45.920 --> 0:08:49.840 tech hardware launch. We have a preview from Bloomberg's Charlie Pellett. 0:08:50.400 --> 0:08:54.440 Google is trying to outshine Apple's annual iPhone launch and 0:08:54.679 --> 0:08:58.720 is letting longtime executive Rick Ostrolo takes out her stage. 0:08:58.840 --> 0:09:01.920 He's the former president of Motorola who joined Google in 0:09:01.960 --> 0:09:05.720 twenty sixteen. He will helm the first major product launch 0:09:05.760 --> 0:09:08.800 after the company this year, unified under his leadership the 0:09:08.880 --> 0:09:13.520 teams developing hardware and the Android operating system. In a 0:09:13.559 --> 0:09:17.360 sign of a more aggressive push into consumer devices, Google 0:09:17.440 --> 0:09:21.160 moved up its annual flagship Pixel smartphone launched to August 0:09:21.160 --> 0:09:26.200 from October, preempting the next Apple iPhone debut in New York. 0:09:26.280 --> 0:09:28.079 Charlie Powlett's Bloomberg. 0:09:27.640 --> 0:09:29.679 Radio, Well, let's take a closer look at the Google 0:09:29.800 --> 0:09:33.040 Pixels story with our own Bloomberg Tech editor of Vlad 0:09:33.120 --> 0:09:35.720 Savov joins us from our studios in Hong Kong Flat. 0:09:35.960 --> 0:09:38.520 It's always a pleasure. Are we going to be overwhelmed 0:09:38.600 --> 0:09:39.720 or underwhelmed tomorrow? 0:09:39.720 --> 0:09:40.360 What do you think? 0:09:42.040 --> 0:09:44.560 I think both extremes. There's always a shade of gray 0:09:44.600 --> 0:09:47.120 with these things. I do believe that one of the 0:09:47.160 --> 0:09:51.240 interesting things with Google this year is how far ahead 0:09:51.240 --> 0:09:54.319 they're going to be in terms of their own design 0:09:54.400 --> 0:09:56.600 and cameras technology and so on. That's kind of being 0:09:56.800 --> 0:09:58.760 gone under the radar. I do feel like the company 0:09:58.840 --> 0:10:02.160 is very confident about the how where itself and although 0:10:02.200 --> 0:10:05.160 these things have kind of become commoditized, it does have 0:10:05.200 --> 0:10:08.080 a leadership as far as camera software goes. And if 0:10:08.080 --> 0:10:10.760 the thing that happens, which a lot of people are anticipating, 0:10:10.840 --> 0:10:13.560 is that Google is going to increase sales, I feel 0:10:13.600 --> 0:10:16.320 like there'll be much greater awareness of all the things, 0:10:16.360 --> 0:10:18.119 all the strengths of the Pixel line. 0:10:18.040 --> 0:10:20.480 To date, on top of all the AI stuff. 0:10:20.520 --> 0:10:22.959 So immediately after the event, I guarantee you you will 0:10:23.000 --> 0:10:25.319 not be overwhelmed, but I do feel like a lot 0:10:25.320 --> 0:10:28.400 of people will see some of these strengths that just 0:10:28.600 --> 0:10:30.840 the world hasn't known about with the Pixel line to date. 0:10:31.040 --> 0:10:33.440 Do you think there's a change inside Alphabet when it 0:10:33.480 --> 0:10:37.600 comes to the smartphone, I mean, developing your own technology 0:10:37.800 --> 0:10:40.960 On the hardware side, it seemed like that they were 0:10:41.240 --> 0:10:43.360 maybe a little bit more willing to allow some of 0:10:43.360 --> 0:10:46.800 the other companies like Samsung. I'm thinking of primarily to 0:10:46.840 --> 0:10:48.600 take the lead on that front. I mean, I know 0:10:48.720 --> 0:10:51.440 that the Pixel story has been out there for a while, 0:10:51.480 --> 0:10:53.559 but it never felt as though the company was being 0:10:53.600 --> 0:10:57.040 super aggressive. Here is that beginning to change absolutely. 0:10:57.120 --> 0:10:58.800 I mean, it's such a major change when you think 0:10:58.840 --> 0:11:00.160 about it. 0:11:00.400 --> 0:11:01.160 I was just thinking. 0:11:01.880 --> 0:11:04.160 Google had an event here in Hong Kong launching one 0:11:04.200 --> 0:11:07.080 of its smartphones in twenty eleven on its own brand. So, 0:11:07.280 --> 0:11:09.160 like I say, it's been going for a very long time. 0:11:09.400 --> 0:11:11.400 But when you launch your phone in October, what you're 0:11:11.440 --> 0:11:13.800 saying is everyone who wanted an iPhone already has a 0:11:13.920 --> 0:11:16.319 ninth phone, so you're giving up on that audience. Samsung 0:11:16.360 --> 0:11:19.400 refreshes his devices early in the year and then around 0:11:19.400 --> 0:11:22.359 this time July August, so you're kind of the afterthought 0:11:22.360 --> 0:11:24.360 for a whole bunch of people. Coming in the middle 0:11:24.400 --> 0:11:26.679 of August, coming a month ahead of the iPhone, says 0:11:26.840 --> 0:11:29.280 we are going to compete directly against Apple. We're going 0:11:29.320 --> 0:11:32.640 to compete directly against Samsung too. Even though Google rica 0:11:32.640 --> 0:11:35.840 Osterolo we mentioned he's the leader now, he went immediately 0:11:35.880 --> 0:11:37.719 as soon as he got the new job to talk 0:11:37.800 --> 0:11:40.560 to Samsung to signal that the partnership and the collaboration 0:11:40.679 --> 0:11:42.800 with the two companies is as strong as ever. But 0:11:43.040 --> 0:11:45.199 the signal is the release date. 0:11:45.760 --> 0:11:46.000 You know. 0:11:46.440 --> 0:11:48.480 The elephant in the room I think we can agree 0:11:48.600 --> 0:11:51.600 is artificial intelligence, right when it comes to the handset. 0:11:51.800 --> 0:11:54.080 I mean, we know that that's what Apple is trying 0:11:54.120 --> 0:11:56.560 to build in in terms of hype for the launch 0:11:56.600 --> 0:11:59.559 of the iPhone sixteen. Do you think we're going to 0:11:59.600 --> 0:12:03.000 get kind of a sense of that from Google tomorrow 0:12:03.280 --> 0:12:06.640 where the company is going in terms of the smartphone 0:12:06.679 --> 0:12:10.080 being a device where artificial intelligence is kind of baked 0:12:10.120 --> 0:12:10.760 into the cake. 0:12:11.520 --> 0:12:12.280 Oh absolutely. 0:12:12.320 --> 0:12:14.559 And in order teasers that Google has done for this event, 0:12:15.160 --> 0:12:18.199 it was Pixel meets AI, which is a fun thing 0:12:18.280 --> 0:12:20.720 to say because Google is one of the companies that 0:12:20.760 --> 0:12:23.319 has been putting AI into smartphones for years and years now. 0:12:23.400 --> 0:12:26.320 Its own camera software is all about AI and machine learning. 0:12:26.720 --> 0:12:30.400 But you have to now put it front of mind 0:12:30.400 --> 0:12:32.600 for everybody. Something has been doing the exact same thing. 0:12:32.760 --> 0:12:35.280 They talk about Galaxy AI every time they talk about 0:12:35.320 --> 0:12:38.440 their products. Google likewise Apple with Apple Intelligence. That's going 0:12:38.480 --> 0:12:40.200 to be the theme at least for the next year 0:12:40.320 --> 0:12:43.520 or two. Everyone is going to turn AI as the 0:12:43.559 --> 0:12:46.280 selling point for devices, and the devices we're talking about 0:12:46.280 --> 0:12:47.360 smartphones and laptops. 0:12:47.360 --> 0:12:48.520 Most people already have one. 0:12:48.800 --> 0:12:51.959 So each company in the industry now sees AI as 0:12:52.000 --> 0:12:53.840 the big selling point to get us all to upgrade 0:12:53.840 --> 0:12:54.480 those devices. 0:12:54.760 --> 0:12:56.840 Isn't there The risk though, when you jump in whole 0:12:56.880 --> 0:12:59.920 hog like this so to speak, that as the check 0:13:00.080 --> 0:13:03.280 technology changes, that you have to do a major kind 0:13:03.320 --> 0:13:07.880 of re engineering or kind of a major tweak to 0:13:08.000 --> 0:13:11.120 a device like a smartphone that needs to kind of 0:13:11.480 --> 0:13:14.600 incorporate a lot of this AI technology, so that the 0:13:14.600 --> 0:13:17.520 first generation maybe is going to be kind of radically 0:13:17.559 --> 0:13:19.640 different from the next generation. 0:13:20.480 --> 0:13:22.160 Yes, And as far as the companies that concerned, that's 0:13:22.160 --> 0:13:24.840 great news. Stuff great next year as. 0:13:24.760 --> 0:13:27.920 Well, right, right, So if it's a driver of sales 0:13:27.960 --> 0:13:30.360 planned obs lescence, I think that's what they call it, right. 0:13:30.840 --> 0:13:33.079 What are some of the things that you're looking out 0:13:33.120 --> 0:13:34.560 for in particular. 0:13:35.040 --> 0:13:38.199 Well, it really is this whole integration of hardware and software, 0:13:38.240 --> 0:13:41.160 and I would actually say the ecosystem play again comes 0:13:41.200 --> 0:13:44.120 to the surface is a very important thing. Samsung set 0:13:44.160 --> 0:13:46.280 out is still much in the same way that Apple did, 0:13:46.360 --> 0:13:48.240 and we kind of expect Google to do the same thing. 0:13:48.280 --> 0:13:51.240 Google already has its Pixel watch. It already has its 0:13:51.240 --> 0:13:53.640 own in house design process. Going back to the first 0:13:53.640 --> 0:13:55.600 thing I mentioned, Google has been putting all. 0:13:55.520 --> 0:13:56.280 The pieces together. 0:13:56.320 --> 0:13:58.200 It's just most people don't know about these picks of 0:13:58.240 --> 0:14:01.319 phones and the whole lineup. So in this event that's 0:14:01.360 --> 0:14:03.360 coming up, we're probably going to get another watch, We'll 0:14:03.400 --> 0:14:06.839 probably going to get several smartphones, and it's the ecosystem 0:14:06.840 --> 0:14:09.000 of devices is the way that they work together. Also, 0:14:09.040 --> 0:14:12.960 don't forget, under Rick Osterlo's leadership, you have Google Nests, 0:14:13.000 --> 0:14:16.000 which are the home devices, home cameras, such things, thermostats. 0:14:17.440 --> 0:14:20.239 You have a whole bunch of other home devices, personal devices, 0:14:20.680 --> 0:14:23.600 all the Internet software. If Google makes all these things 0:14:23.640 --> 0:14:26.120 work together as seamlessly as it hopes, there will be 0:14:26.160 --> 0:14:28.560 a lot of people who can be swung to the 0:14:28.720 --> 0:14:29.640 pixel side of things. 0:14:30.000 --> 0:14:33.000 Is this a device that will have an opportunity in 0:14:33.040 --> 0:14:33.760 the China market? 0:14:33.880 --> 0:14:37.520 You think zero? Google services are not there? 0:14:38.880 --> 0:14:41.720 The Google Play Store, which is a real big selling 0:14:41.760 --> 0:14:43.480 point for Google because that's where you get all your 0:14:43.480 --> 0:14:48.000 international apps, it doesn't play there. And the Chinese smartphone manufacturers, 0:14:48.080 --> 0:14:50.960 let's give them their own new credit. They are right 0:14:51.040 --> 0:14:53.800 up there in terms of cameras, technology. They have their 0:14:53.800 --> 0:14:56.880 own app stores, they have we chats, and an entire 0:14:56.880 --> 0:15:00.400 ecosystem that Google has no presence in. So unfortunately, Google, 0:15:00.480 --> 0:15:03.040 the world's big smartphone market where Apple is a big player, 0:15:03.480 --> 0:15:04.280 is out of bounds. 0:15:04.400 --> 0:15:07.080 Do we know anything about the part suppliers here and 0:15:07.120 --> 0:15:10.320 where this device is being kind of created or manufactured. 0:15:11.280 --> 0:15:14.120 Well, Fox contends to be the company that Google has 0:15:14.160 --> 0:15:17.440 been worked has worked with in the past. It does 0:15:17.600 --> 0:15:21.240 it's manufacturing in Vietnam in Taiwan. Taiwan is actually plays 0:15:21.240 --> 0:15:25.040 host to Google's hardware engineering hub. We can remember that 0:15:25.360 --> 0:15:29.120 Google took over HTC smartphone design team. They took on 0:15:29.160 --> 0:15:31.640 a bunch of design and engineering people, so you can 0:15:31.760 --> 0:15:33.960 say Taiwan plays a really big role in developing all 0:15:33.960 --> 0:15:34.120 of this. 0:15:34.320 --> 0:15:37.920 So very quickly vled what markets in Asia might Google 0:15:38.120 --> 0:15:40.680 kind of target for this new pixel phone. 0:15:40.960 --> 0:15:43.600 Japan absolutely, Japan has always been a really big market 0:15:43.680 --> 0:15:46.920 for Google. It has good relationships and one of the 0:15:46.960 --> 0:15:49.240 interesting things in Japan is that the Chinese players don't 0:15:49.280 --> 0:15:51.760 have that much of a presence, needed does Samsung, so 0:15:51.920 --> 0:15:54.520 it has the biggest opportunity there. It's a developed market, 0:15:54.600 --> 0:15:56.040 there's a lot of potential there, but. 0:15:56.240 --> 0:15:58.880 It's always a pleasure. Thanks for making time to chat 0:15:58.880 --> 0:16:02.240 with us on this launch tomorrow taking place for the 0:16:02.360 --> 0:16:06.160 new Google Epixel phone. Vlat's have off Bloomberg's Tech editor 0:16:06.560 --> 0:16:15.760 joining us from Hong Kong. So we know that the 0:16:15.800 --> 0:16:19.880 Democrats are rallying around Vice President Kamala Harris and her 0:16:19.960 --> 0:16:24.040 running mate Tim Walls. Walls, you may know, has had 0:16:24.080 --> 0:16:26.880 a long history with China. He taught English in China 0:16:27.120 --> 0:16:29.720 in nineteen eighty nine and nineteen ninety and since that 0:16:29.840 --> 0:16:32.880 time he's visited at least thirty times. Let's take a 0:16:32.920 --> 0:16:36.240 closer look now with Michael Sobolik. He is senior fellow 0:16:36.280 --> 0:16:40.360 at the American Foreign Policy Council. Michael, good of you 0:16:40.400 --> 0:16:42.240 to make time to chat with us about this story. 0:16:42.240 --> 0:16:45.440 Do you have a sense of how mister Walls's backstory 0:16:45.480 --> 0:16:48.080 regarding China may play out in this campaign. 0:16:49.440 --> 0:16:49.760 Yes. 0:16:50.000 --> 0:16:53.960 Governor Walls is really unique. He has so much personal 0:16:54.080 --> 0:16:57.840 experience living in China and working in China, far more 0:16:57.880 --> 0:17:00.360 than the average American politician and far more than the 0:17:00.440 --> 0:17:05.160 average vice presidential candidate. It could cut one of two ways. 0:17:05.359 --> 0:17:09.200 On the one hand, Governor Walls, by all accounts, has 0:17:09.280 --> 0:17:14.479 one of the strongest records on China human rights that 0:17:14.520 --> 0:17:16.960 we've seen from any member in the House of Representatives 0:17:16.960 --> 0:17:19.200 in recent memory. When he was a member of Congress, 0:17:19.240 --> 0:17:22.119 he got photos with the Dalilama. He and his wife 0:17:22.160 --> 0:17:25.960 literally got married on the anniversary of the Tenaman Square 0:17:26.000 --> 0:17:31.400 massacre on June fourth, So he has a strong record 0:17:31.560 --> 0:17:35.160 on being publicly vocal on the need for human rights 0:17:35.160 --> 0:17:37.960 in China. On the other hand, he's also an equally 0:17:38.080 --> 0:17:43.320 vocal proponent on engaging China and promoting exchanges between Washington 0:17:43.359 --> 0:17:46.199 and Beijing. And in this day and age where national 0:17:46.240 --> 0:17:49.520 security concerns tend to trump a lot of others, it's 0:17:49.640 --> 0:17:53.080 unclear how those two competing priorities would play. 0:17:52.880 --> 0:17:55.280 Out for it. You know, it's very interesting because there 0:17:55.320 --> 0:17:59.239 was an article written back in nineteen ninety after he 0:17:59.280 --> 0:18:01.639 returned from a teaching in China. I think it was 0:18:01.680 --> 0:18:05.119 the Star Herald maybe in Minneapolis, and he was quoted 0:18:05.160 --> 0:18:08.800 as saying, if the Chinese people had proper leadership, there 0:18:08.840 --> 0:18:12.000 are no limits on what they could accomplish. They are 0:18:12.040 --> 0:18:15.359 such kind, generous and capable people. They gave and gave 0:18:15.520 --> 0:18:20.520 and gave to me. That was nineteen ninety. Relationship between 0:18:20.560 --> 0:18:23.919 the US and China very very different these days, isn't not. 0:18:25.400 --> 0:18:27.639 It is as different as it could possibly be. But 0:18:27.680 --> 0:18:30.760 I'll say this, Governor Wallas, like when he wrote those 0:18:30.760 --> 0:18:33.639 words so long ago, tapped into something that is still 0:18:33.640 --> 0:18:37.400 true today in twenty twenty four, which is, the Chinese 0:18:37.480 --> 0:18:40.600 people are not the enemies of the American people at all, 0:18:40.680 --> 0:18:44.200 nor should they be. I've been to China as well, 0:18:44.240 --> 0:18:49.520 and I've experienced that same hospitality and generosity that Walls 0:18:49.600 --> 0:18:52.320 experienced when he was there too, and I think many 0:18:52.320 --> 0:18:55.320 Americans would attest to the same thing. The problem for 0:18:55.560 --> 0:18:58.800 Washington policymakers is not the Chinese people, it's the Chinese 0:18:58.800 --> 0:19:02.719 Communist Party. And that distinction is quite meaningful, and I 0:19:02.760 --> 0:19:06.520 am gratified greatly that Governor Waltz recognizes that difference. 0:19:06.800 --> 0:19:09.880 Yeah, that's an important distinction to make. But in terms 0:19:09.960 --> 0:19:14.240 of influencing policy, imagine a world where Kamala Harris is 0:19:14.280 --> 0:19:17.040 the next president. Is it the role of the vice 0:19:17.080 --> 0:19:19.600 president at all to kind of get involved with setting 0:19:19.800 --> 0:19:21.520 the agenda? 0:19:21.680 --> 0:19:24.840 So that's going to vary from administration to administration. To 0:19:24.880 --> 0:19:27.880 be sure, We've had vice presidents like Dick Cheney, who 0:19:27.960 --> 0:19:31.240 are one of the most prominent presences in any room 0:19:32.040 --> 0:19:35.520 and played a major hand in national security. I think 0:19:35.600 --> 0:19:38.239 Vice President Joe Biden when he served Barack Obama, in 0:19:38.280 --> 0:19:41.879 some cases fit that bill as well. If Kamala Harris 0:19:41.960 --> 0:19:45.160 wins the presidency, that'll be her decision to make. But ultimately, 0:19:45.200 --> 0:19:47.679 if she wins, she is going to face this million 0:19:47.680 --> 0:19:51.960 dollar question in American foreign policy. Is China the Chinese 0:19:52.000 --> 0:19:56.960 Communist Party a potential competitor or an adversary? And Shijinping, 0:19:57.119 --> 0:20:00.159 the leader of China, is not really leaving America with 0:20:00.240 --> 0:20:02.240 much of a choice. We're going to have to choose 0:20:02.280 --> 0:20:02.920 one or the other. 0:20:03.400 --> 0:20:03.760 How do you. 0:20:03.800 --> 0:20:07.359 Imagine Beijing would react to this type of situation where 0:20:07.359 --> 0:20:11.840