05/05/2014 Asia Business Report

is due to start. Members of the RMT union are set to walk out from nine

o'clock in the evening. Time for Asia Business Report.

Apple against Samsun. Have we seen the end of the long and drawn`out

battle between the two technology giants? Investing in Myanmar will

stop why businesses are drawn to the frontier markets despite the

hurdles? Welcome to Asia Business Report. When a jury in California

ordered Samsung to pay Apple $120 million over the weekend, it was

viewed by some as a defensive victory for Samsung. Apple had been

seeking more than $2 billion, claiming that the South Korean

company had infringed its patents. Where does this leave the legal

battle between the smartphone giants? Earlier, I spoke with our

technology correspondent in San Francisco and ask him if this

signals a victory for Apple. It is hardly a victory. The only thing

Apple can say is that Samsung were found guilty on two counts of

infringing their patterns, one of which was wilful infringement.

Samsung were rewarded a small amount of money for what the jury found was

one case of Apple having infringed one of their patterns. Frankly,

something of a stalemate yet again. Could you say it is a victory for

Samsung? In some ways, although the jury had found that Samsung had

wilfully `` wilfully infringed the patents on Apple's smartphone. It

does lend credibility to Apple's claimed that Samsung had copied the

software inside the device. In that sense, not great for Samsung but

clearly, the damage is much less than Apple 's claiming and it's

highly unlikely there will be a sales ban on any handsets, which

again is what Apple was seeking. Who is benefiting from this battle? You

could argue that the lawyers are the big winners in all of this. One of

the other victors that you could argue is a competitor. These

companies are going into trial in a court like this, so it is all in the

public. There are a lot of internal discussions that were happening

inside Apple and Samsung that were revealed in the process of

testimony. How Apple felt about its advertising agency, how Samsung felt

it had to compete in the marketplace. It has provided insight

into what the companies were thinking as they brought these

products out. Interesting perspective. Did this decision

surprise you? Not really. I did not think it would stop any of these

companies from selling their products in the US. But on the other

hand, it did reveal how small the monetary amounts turn `` turned out

to be. In the end, the companies keep making the money. And it will

have no impact on the product itself? Features will not change?

Samsung has been doing a lot more that is quite different from Apple

in that sense. In addition, keep in mind that the products that were

involved in this worthy previous generation products. Even if an

injunction were put in place, it would not have that much of an

impact. Australia's Westpac bank has reported an 8% jump in profits in

the six months to March. That's a record profit for Australia's

second`biggest bank, following robust lending and a fall in bad

debt. Banks in Australia are on track for another year of record

earnings as the country's low interest rate environment encourages

borrowers to take up loan. A Chinese still company is partnering with an

Australian rail company in an attempt to take over and iron ore

developer in the country. The two parties have made a bid for

acquittal of resources. China's largest listed steel maker already

owns 20% of the company. Indonesia will be releasing its first`quarter

growth figures later today, expected to show an expansion of almost 5% in

the first three months of the year. The government has already eased

foreign investment rules for its pharmaceutical and car industries

and the economy will play an important role in July's

presidential elections. Indonesia's new shopping mall is just one sign

of the country's gross. In the last five years, the biggest economy in

South East Asia has expanded by an average of 6%, and in the coming

months, and whether voters believe can maintain that growth may be

voted in as the next president. Currently, the governor of Jakarta

is leading in the popularity polls. He is ahead of the former minister

of the economy and a former military general. But they face significant

challenges. Rising power among the country's trade unions. Last week,

thousands gathered to demand higher wages and better benefits. They say

it has become harder to keep up with the rising cost of living. The gap

between the rich and poor is also growing. Millions of people live in

slums and experts warn that as inequality rises, so does the risk

of social unrest. The growth figures for the last few months will set the

tone for the election campaign. Major reforms are needed to maintain

economic growth. The voters will decide who can deliver them.

Myanmar, formerly known as Burma, has only recently opened its economy

to foreign investment after decades of military rule but it is already

becoming one of the region's hottest investment destinations. Seven out

of ten Asian businesses plan to expand into Myanmar within the next

year, according to a recent survey. But there are still a number of

challenges to setting up shop there. Myanmar has a population of about 55

million people and over the last several decades, they have had very

limited access to modern consumer goods and services. There is a ready

market for foreign companies to come in, particularly if they are looking

to sell consumer goods and people here. There is also a sense that

there is an un` exploited resource sector particularly in gas, so many

companies are looking to invest in resource extraction. But this is a

far from easy place to do business. Just look at the infrastructure, for

example. The banking sector is extremely basic by modern

standards. The things people need to operate businesses, the internet,

mobile phones, all of them do not work very well here at the moment.

But the two main obstacles to companies coming here and investing

in a big way our corruption and uncertainty. If you are going to

come and start a big operation here in Myanmar, it is generally accepted

that you do need to have connections and local partners, and almost

always, that will involve doing this with one of the big local

conglomerates here, and those big companies almost always are

connected with either the Burmese military all the Burmese government.

But the biggest single obstacle, particularly to Western and American

companies, is uncertainty. There is an election scheduled for the end of

next year and it is far from clear that the reforms we have seen over

the last few years will continue. If the military decides to reassert

itself, that could mean a return to isolation and a return of

sanctions. And of course, that would not be good for business.

Earlier, I spoke with someone who worked on that survey for the

overseas banks, and I asked why businesses were keen to set up in

Myanmar. We have seen strong economic growth. This year, the

country is expecting economic growth of 7%, 8%, which makes Myanmar one

of the fastest`growing economies in Asia. And the other attraction is

that it has a very good strategic location, located at a crossroads in

mainland South East Asia. That adds a huge asset to the consumer market

with a combined population of 2 billion people. Another point is

that uncertainty is perhaps the largest challenge, the question of

whether reforms will continue. How do businesses cope with that

uncertainty? One has to understand that the reform in Myanmar is

unprecedented and still in its early stage. Whether the country can

continue with this reform and Edmonton and whether the reform can

be sustained... `` reform momentum. Business will have to grapple with

this as it invests in Myanmar. How do businesses deal with that

uncertainty and the physical challenges of infrastructure and

communications? What is the best way to work around those challenges? We

always advise our clients that one of the main ways to help them

overcome those challenges is to find the right local partners. People

have good local connections that can help them overcome and navigate the

complexities of doing business in Myanmar. Currently, we all

acknowledge that there are still challenges like... There are

challenges to foreign companies that intended to operate in that market.

Thank you for joining us. Sport is next.

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