CNBC’s Jon Fortt and CNBC’s Julia Boorstin Speak with Amazon SVP of Devices and Services David Limp; Impossible Foods CEO Pat Brown, and Head of Uber Ellevate Eric Allison
WHEN: Today, Tuesday, January 7, 2020
WHERE: CNBC’s “Squawk on the Street” and CNBC’s “Squawk Alley” – Live from CES
Q4 2019 hedge fund letters, conferences and more
The following are transcripts of CNBC interviews live from CES today, Tuesday, January 7th, which aired on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) and CNBC’s “Squawk Alley,” (M-F 11AM – 12PM), including: CNBC’s Jon Fortt EXCLUSIVE interview with Amazon SVP of Devices and Services David Limp; CNBC’s Julia Boorstin FIRST ON CNBC interview with Impossible Foods CEO Pat Brown; and CNBC’s Jon Fortt FIRST ON CNBC interview with Head of Uber Ellevate Eric Allison.
Links to videos of each interview are provided below.
Transcripts from additional CES interviews will be distributed later today.
All references must be sourced to CNBC.
CNBC Exclusive: Amazon SVP of Devices and Services David Limp Speaks with CNBC’s Jon Fortt on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) Today
Watch CNBC’s exclusive interview with Amazon’s SVP of devices David Limp
JON FORTT: Morgan, thanks. Dave, welcome.
DAVE LIMP: Thanks, Jon.
JON FORTT: This is more and more becoming your show. Not just Amazon but you’re one of the major players here. Tell me how you see the interface changing around voice, because that’s where a lot of your focus is.
JON FORTT: Yeah, we see voice as a new paradigm of user interface. We like to call it an ambient user interface. It gives customers a different way – it doesn’t replace the phone that we all know and love, but it gives customers a different way to interact with the things around them. We started with the home, and you know, being able to turn on your lights with voice is magical, to play music is magical. But now, we’re extending that. On the go --
DAVE LIMP: In the car.
DAVE LIMP: In the car. Some auto partners.
JON FORTT: What are people going to be doing in the car? Because, I mean, you’re driving it. I guess there’s some music stuff, navigation. But what’s your vision there?
DAVE LIMP: The big thing in your car, at least until we get to full automation--autonomy, is to make sure you’re not looking down at your phone. That’s unsafe. And so, voice is perfect user interface for that. The ability to, as you said, play music, listen to an audio book in your commute or to just get information as you’re going throughout your day. It’s very, very helpful.
JON FORTT: Have we gotten to the point we can admit that full automation is a pretty long way off? It seems like for a couple of years people talking about, ‘Oh, it’s right around the corner.’ And it’s like a long corner. So, the more realistic companies, it seems to me, are talking about the technologies we’re going to use in the next year or two and stuff like this.
DAVE LIMP: Yeah, I think that’s probably right. When we get to level five autonomy sometime in the future, it’s going to happen but it’s probably a little ways out, then what you want to do is add more things that give customers convenience in the car. And in the front seat, that’s going to be voice-based interfaces, and good interactions with their phones, and navigation. In the rear seat, we announced Fire TV, that we’d be putting Fire TV addition in rear seats with BMW and Fiat Chrysler, so people in the rear seat can get access to all this great streaming media as cars get increasingly get connected.
JON FORTT: And Fire TV Edition is a platform you make available to others so they can build software and services into their own devices whether it’s soundbars, TVs. You’re kind of competing with Roku TV there, right?
DAVE LIMP: Yeah. It’s an operating system and a platform on top of that for applications. And exactly, it goes into all sorts of devices. I mentioned cars. We’re in TVs with Best Buy, Toshiba, and Insignia. And most recently, we announced TCL with soundbar. So, we’re excited about that.
JON FORTT: It looks like an inflection year based on the way you’ve laid it out. Because you’re in about 50 devices with it now, but you plan 150 by the end of the year. I mean, that’s a big ramp.
DAVE LIMP: Yeah. I think that not only that, but we’ve also ramped internationally. We just launched our first TVs in India, our first TVs in the UK and Germany, including what we’ve done in the U.S. So, it does appear we’re getting sort of a flywheel effect. And it’s such an amazing time with streaming media, you included, you know, as we see new services coming on board on top of Netflix and Amazon Video with things like Apple Plus and most recently Disney Plus. You know, Baby Yoda works. And customers are increasing disconnected.
JON FORTT: Yeah. He’s a busy little guy. He’s very popular. So, I always ask you about the business model behind Alexa. It seems like you always say, ‘Well, we’re trying to get it out there as much as possible, no hard profit and loss calculation.’ But it reminds me of the browser and search, the way Alexa is rolling out there. The interface on the one hand and then a sense of people’s intent. How much are you learning from the data that’s coming in that way that’s cycling through and making Alexa smarter and smarter?
DAVE LIMP: Well, that’s what we’re focused on right now. Which is as we see what customers resonate with that could be smart home, it could be music, it could be podcast, then what we do is try to double down on research and development and innovation in those areas and increase the breadth of the features. When we first started with smart home, as an example, Alexa just knew how to turn on and off lights. But now, we have over 100,000 devices from 9500 different companies that allow people to connect to Alexa. And you can control everything from, you know, your toaster oven to ceiling fans now. It’s unbelievable.
JON FORTT: How does data affect your strategy? Are you looking at the data and saying, ‘We’ve got to do toaster ovens now because people are asking for that with Alexa’?
DAVE LIMP: What you do see is where people are interested in, and where they be putting Echos and Alexa. So, for example, we see a lot of usage in the kitchen. And that leads you down a path where you start experimenting with things in the kitchen. And there you do do oven APIs and you do partnerships with people like Discovery, with, you know, Food Network Kitchen, to see ‘Will customers resonate with recipes?’ In fact, half of Alexa customers last year interacted with a recipe. You wouldn’t have thought about that if you didn’t experiment across these different areas.
JON FORTT: How is the feedback that customers have given you about privacy changed over the past year? You guys have Ring now, there have been all sorts of controversies around what the cameras are picking up in the neighborhood, how police get access to that footage. Are you getting a different kind of feedback over the last few months that’s changing the way you communicate to customers about what this is and what your policies are?
DAVE LIMP: Yeah. We continue to see incredible momentum with the Ring business, too. They had another record holiday. Customers loved their door bells and increasingly the smart lighting. But you’re right, there’s a lot of bad people in the world that are trying to penetrate networks and try to get access to people’s devices and their homes.
It’s ours responsibility as technology providers to build world-class security and protections. So, after we saw some of these breaches -- they weren’t breaches of our system but they were people using the dark web and finding ways into individual cameras, we added more protections over the holiday.
We’re going to have two-factor authentication, which we already had, but we’re going that the default moving forward. In addition, over the holidays we added notification if anybody logs into -- a new user logs into any Ring camera, the existing owner gets a notification so they know something is happening.
JON FORTT: Those are important moves. So, how long before the data that consumers are putting in through the system through their Alexa request, et cetera, starts informing ad placement more and more and becomes a real revenue driver?
DAVE LIMP: Yeah. We haven’t really focused on ads that much. There’s certain types of capabilities on Alexa that are already advertising driven. For example, I can set a news briefing in the morning and listen to CNBC or listen to another news briefing, and if that’s already advertising driven, we do support that. But we haven’t really concentrated much on specifically building ad networks out for Alexa at this point. It just feels too early.
JON FORTT: But you have got to be experimenting with it, right? Taking the data that you get and saying ‘Well, how would we target advertisers, make the experience better when we eventually roll that out?’
DAVE LIMP: We’re not experimenting with that yet. I can imagine someday we might see that if it adds value to customers. But right now, that’s not something we’re working on.
JON FORTT: What’s going to determine when you do that?
DAVE LIMP: I think when we can find products that will resonate with customers where the advertisement adds value. So, one example, where, another place on Alexa we do have ad-supported content is with music. There’s plenty of great momentum with ad-supported, subscription-supported music services. Amazon has one. Spotify has one.
But, some customers want the value where it’s free. And so, we have put Amazon’s free music service, that’s ad supported, and also Spotify’s free music service, on Alexa to give customers that choice. And many do. Tens of millions of customers have opted for that. So, if we actually see that there’s a value proposition for customers, and it resonates with them, then I think that’s when we’ll experiment.
JON FORTT: Alright. We’ve covered ground because Amazon is covering a lot of ground literally here at CES this year. Dave Limp, thanks for being with us. Carl.
First on CNBC: Impossible Foods CEO Pat Brown Speaks with CNBC’s Julia Boorstin on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) Today
Impossible Foods CEO Pat Brown on the launch of a new pork alternative product
DAVID FABER: Let’s get back out to Las Vegas now and the CES show, of course. Our own Julia Boorstin is sitting down with a special guest. Julia.
JULIA BOORSTIN: Thanks so much, David. That’s right, I’m joined by CEO of Impossible Foods Pat Brown. Thank you so much for talking to us today. You just announced a big new product, Impossible Pork. How important will this new product be to accelerate your growth?
PAT BROWN: It’s huge. Our mission is to completely replace animals as a food production technology by 2035. And pork is the single most widely consumed meat in the world. More than 250 billion pounds are consumed annually. And our mission is global. In the U.S., beef and ground beef are the most iconic meats, but global it’s pork. So, this is going to be extremely important for our future, particularly internationally.
JULIA BOORSTIN: Your main rival, Beyond, had pork alternative sausages and patties back in 2017 and 2018 was when they launched those two products. What took you so long to get this pork alternative, and are you concerned about playing catchup?
PAT BROWN: First of all, our main rival is not Beyond Meat or any other plant-based company. As far as I’m concerned, I wish them nothing but success. They have the same mission we have. The only rival we care about is the incumbent animal-based industry. And we are not going to launch a product until we feel like we have something that passes our very high standards. And so, this is something we’ve been working on for a while, and it’s gotten to the point where you feel like, okay, this can go head-to-head against any pork from a pig. It’s good to go.
JULIA BOORSTIN: In terms of good to go, you know, you do have a partnership in place but they are having concerns about the supply chain. Will you be able to produce enough to really expand this?
PAT BROWN: Yeah, actually, a very good question and that’s also something that is -- we learned a hard lesson last year when the demand got ahead of our ability to produce. We’re not going to make that mistake again. And it’s a factor when we launch a new product, we’re not going to launch a product and we’re not going to launch a new customer until we know we have the capacity to meet whatever demand might come our way. So, I think we’re good there.
JULIA BOORSTIN: So, how do these new products and your new partnerships impact your IPO plans?
PAT BROWN: Well, we don’t have any IPO plans at this point. I think it’s reasonably likely at some point that we’ll go public. But, it’s really not an important consideration right now.
JULIA BOORSTIN: Do you think it will happen this year?
PAT BROWN: I really can’t say.
JULIA BOORSTIN: Morgan, you want to jump in here.
MORGAN BRENNAN: I do. Thanks, Julia. Pat, Morgan Brennan here. Thanks for joining the show. I’m curious, given the fact that you are looking to expand in China, especially now with this new non-pork product, also awaiting regulatory approval in Europe as well. How are trade dynamics been affecting the company? And how are you navigating those tensions right now?
PAT BROWN: Yeah, that’s a very interesting question. And it’s definitely been an issue that’s come up in some of our conversations with China. But-- and as much as actually we are actually waiting for regulatory clearance to sell in China, it hasn’t really affected our business yet. It’s definitely something we’re keeping an eye on.
JULIA BOORSTIN: Now, Morgan, do you want to keep going there or should I keep --
MORGAN BRENNAN: Go ahead, Julia.
JULIA BOORSTIN: Sorry. So, one question as you introduce these new products is you face a lot of criticism about the health benefits of these. They are processed. They are made with oils. And I’m wondering how you address concerns that these are just not that much healthier than actual meat, as you continue to expand your product line?
PAT BROWN: Well, one of our core principles is we’re never going to put a product out that we don’t believe is significantly healthier for the consumer, better for public health, better for the world, then the product it replaces. Our pork product has 40% lower calories, 60% less fat and 40% less saturated fat, 0 cholesterol, higher iron and none of the contaminants that are prevalent in pig-based products. So, I think that it’s a clear winner from a consumer health standpoint.
JULIA BOORSTIN: and do you feel like you’re going to need to iterate the products and make them even healthier?
PAT BROWN: For sure.
JULIA BOORSTIN: So, will these products change to become healthier over time?
PAT BROWN: First of all, I think this is a way healthier product for the consumer than the pig derived product. I mean, just in terms of calories alone. But yes. The thing is the core advantage that we have over the incumbent industry is that we can continue to innovate and improve. And the pig stopped getting better at making meat a million years ago. So, yes, we’re constantly working on improving nutrition, deliciousness, versatility, all those things.
JULIA BOORSTIN: And what about new products? What’s going to be your next thing? Are you working on a bacon?
PAT BROWN: We have done some work on bacon. We’ve worked on pretty much anything -- any product that comes from an animal, whether it’s terrestrial or fish or shrimp or anything like that, there’s work ongoing about it and you can be sure in the next few years we’re going to be launching products to cross all those categories.
JULIA BOORSTIN: It took a while to get this one right. Do you think your pace of product introduction will be faster going forward?
PAT BROWN: Yes, it definitely will be. First of all, it took us a long while to just understand meat at the molecular level so we could be smart about creating new products. And not only I would say is the pace of new product development getting faster, but we’re getting better at getting better. The whole innovation cycle is accelerating. And, on top of that, we have been building up our R&D team. We’re probably going to double the size of our R&D team in the next 12 months because this is the most important problem in the world. It’s a really hard scientific problem, and we’re all in on it.
JULIA BOORSTIN: We look forward to tasting the new pork product. I’m sure it will be very interesting to compare that to the animal-based one. Thank you so much for joining us here from CES. We really appreciate it.
PAT BROWN: Thank you.
JULIA BOORSTIN: Morgan, back over to you.
First on CNBC: Head of Uber Ellevate Eric Allison Speaks with CNBC’s Jon Fortt on CNBC’s “Squawk Alley” (M-F 11AM – 12PM) Today
Uber aviation head Eric Allison on new partnership with Hyundai
MORGAN BRENNAN: Let’s head back out to Las Vegas now. And Jon Fortt live on the ground and sitting down with a special guest. Jon.
JON FORTT: Morgan, that’s right. I’m here with Eric Allison, Head of Uber Elevate. And you guys are making quite a splash here. You and Hyundai showed off the SA1. The world already has helicopters. Why do we need this?
ERIC ALLISON: Yeah. So, we have a vision of bringing a new type of transportation into the world where we can seamlessly weave the flight of these electrical vertical takeoff and landing vehicles into the Uber platform, and connect cars to these vehicles, to cars, so that you can kind of get where you want to go faster than you ever could before.
JON FORTT: Are they safer?
ERIC ALLISON: Yes. So, the idea is that with the new technology that’s been applied to cars, that have made electric cars possible, like powertrain batteries, electric motors, we can make a new class of aircraft that can take off and land vertically, like a helicopter, but uses multiple different rotors instead of one large one, that allows it to have built-in inherent redundancies that makes them both safer to operate and cheaper to operate, at the same time.
JON FORTT: And parachutes.
ERIC ALLISON: That’s right. You can actually add a parachute into a vehicle like this, and just can’t do that with a helicopter.
JON FORTT: So, is that parachutes for people or parachutes for the whole vehicle?
ERIC ALLISON: For the whole vehicle, actually.
JON FORTT: Okay. Makes sense. So, when does this happen? Because we’ve heard Uber talk about 2023. Hyundai seemed to say 2028 for this particular vehicle. Clarify.
ERIC ALLISON: So, we have actually taken an ecosystem approach as we’ve built out Uber Elevate. So, Hyundai is our eighth partner as part of this ecosystem, and the vehicle partners are all developing vehicles that are different and they’re going to bring them to market at different paces. And so, we’re actually pretty confident that some of our vehicle partners will have vehicles ready to start operating in 2023. And Hyundai, we’re excited to see them getting into the game. We think it’s really important that a big player like Hyundai is actually going to be investing a significant amount into this space. But they’re starting now. And so, it’s going to take a bit longer for them to bring their vehicle to market.
JON FORTT: So, give me your view. What are you going to be pitching for me to fly in in 2023? You say you expect it will be an affordable shared ride. How far will it be able to take me and what kind of vehicle is this going to be? A helicopter?
ERIC ALLISON: So, in 2023, we want to launch with these types of Electric VTOL Aircraft. And so, we have to – they have to get certified first. And so, the different partners are working on -- working with the FAA to go through the certification process to bring these vehicles to market. We can’t do any operations without that. And so, what we want to do is we want to launch in 2023.
We’ve announced three different launch cities that we’re working in to be able to do in an initial commercial offering in those cities: Dallas, L.A., and Melbourne, Australia. And you’ll be able to open up the Uber app and just like you can in lower Manhattan right now with Uber Copter, you’ll see an Uber Air option. That you’ll be able to select Uber Air and we’ll be able to save you time and get you where you want to go faster.
JON FORTT: So, how is this business model going to work? Is Uber going to own the craft or are you going to expect other companies to own the craft and you sort of act as a connector putting passengers on it?
ERIC ALLISON: So, we’re working out the details. There are several different options. Obviously, with this type of a shared vehicle like this, it’s a bit of a different situation than with the way the cars work right now. And so, what we’re doing is talking to lots of different partners who have interest in being part of the value chain, basically. There are companies in aerospace and aviation, a long tradition of, you know, leasing companies owning aircraft and leasing them to the airlines that operate them. And so, I think there’s many different models that can be explored. And with this new technology opens up new possibilities for new type of businesses, that we have a lot of partners that are very interested in exploring with us.
JON FORTT: Are you expecting that Uber is going to have to commit a significant amount of capital to it though, to literally get it off the ground? Because if there’s a lease option, that’s great. But if it’s sort of an untested type of vehicle and model, somebody has got to take the risk.
ERIC ALLISON: Yeah, so we’re still working out the details on that. But we are, basically, very focused on, basically, working this through in a partnership way. So, we are working with these partners to bring these vehicles to market. And we’re not a vehicle manufacturer. And so, that’s why we’re partnering with these world-class companies in order to -- and they’re making investments on the vehicle side to bring the vehicles to market. We’re pretty confident we can deploy them in an effective way, in a very commercially relevant way to really save people time at an affordable price point when they’re ready.
JON FORTT: About decade ago, I think, you helped start Zee.Aero.
ERIC ALLISON: That’s right. Yep.
JON FORTT: A flying car company. Larry Page invested. Flying cars have kind of become this byword where people say there promised to be flying cars and all I got was fill in the blank. Why don’t we have flying cars?
ERIC ALLISON: So -- well, we’re closer. We’re closer than we’ve ever been. I think it’s a hard problem. It’s not something that you can just with two or three people in a garage put something together and, you know, operate in a reliable way. That’s why it’s so significant that a company like Hyundai is going to be investing in this space to bring a vehicle to market.
And the other partners that we have too are investing significant amounts of money in this space to bring these vehicles to market. These are real engineering efforts that take large teams to get certified and in order to be commercially relevant. That’s really the key. The other thing from a technology standpoint, it wasn’t there, even ten years ago, it was barely there. The battery, the motors, to make these things affordable and reliable, electric propulsion is kind of a key enabler. That’s really the differentiator that’s making it happen.
JON FORTT: I want to go back to the question--you mentioned commercial viability. How much does this have to cost to hit the mass market that you want? And how far does it have to be able to go?
ERIC ALLISON: So, we have set up -- what we’ve done is built a detailed simulation of networks and cities in this way. So, from that we’ve kind of derived the right specification, that we can work with the partners to build the right kind of vehicles for this. So, we think about 60 miles of max range, plus some FAA mandated reserve on top of that, is the right specification. They need to fly between 150 and 200 miles an hour in order to, on average, save the amount of time so we can, you know, get the demand to where we want it to be. So, those are kind of the basic specifications. We think electric is key for both hitting the price points and for the reliability.
JON FORTT: And what is the price?
ERIC ALLISON: We think we can launch at Uber Black pricing, at a – on a per seat mile basis. We think of this as a shared product from the very beginning. So, we are selling seats, not full vehicles. And we think we can launch at Uber Black pricing. And just from exercising the operation efficiency that we can bring and frankly, that we’re learning right now with Uber Copter in Manhattan, we can actually drive the price down to something like UberX on a per seat mile basis within a couple years of launching.
JON FORTT: Okay. So, if you’re going 60 miles, that’s kind of close to what you’d pay for a short-haul flight, right?
ERIC ALLISON: So, you know, 60 miles at Uber X pricing, is going to be like $100 or something.
JON FORTT: $100.
ERIC ALLISON: So, we think that that’s pretty achievable in the medium-term, not at launch.
JON FORTT: Okay. In the medium-term. At the launch, a lot more expensive.
ERIC ALLISON: More at Uber Black pricing. Yes.
JON FORTT: Okay, alright. Eric, thank you. From Uber Ellevate, with Hyundai as partner and a vehicle concept, at least, a few years away but caught a lot of eyes. Carl.
