27/01/2016 BBC Business Live

This is Business Live from BBC News with Ben Thompson and Sally Bundock.

No longer a hyper growth company - Apple says iPhone sales are slowing

and the next quarter will be tougher.

Live from London, that's our top story on Wednesday,

So if Apple can't rely on ever-growing sales of its iphone

or a booming market in China - what next for the tech giant?

Also in the programme: What's not to like about Facebook's

We'll explain why it's been given a thumbs down.

And shares in Tokyp soared today, ending the session 2.7% higher

with investors concentrating on central bank meetings in Japan

and the US and shaking off worries over that slumping oil price.

We'll be getting a totally different take on the world economy from a man

Professor Steve Keen will explain why he supports so-called

people's quantitative easing

As reports suggest Facebook is resisting attempts by the UK

to claim back taxes - we want to know - is it time

the treasury got tough with the tech giants.

Technology giant Apple has reported the biggest ever quarterly profit

It came in at a staggering $18.4 billion.

But while that exceeded expectations for both revenue and profit,

For the first time ever, iPhone sales are slowing

and it's directly reflecting the slowdown in China.

The company's sold 74.8 million iPhones for the quarter -

That's a big slowdown on the same time last year when sales

And it warns sales will fall for the first time later this year.

Apple's share price hit a high six months ago -

just above $132 now it's below $100 mark.

Apple's sales in Greater China - defined by the company as China,

Hong Kong and Taiwan - rose 14%, but that was much slower

He's the Global President for digital marketing company,

The money is coming in but the iPhone sales are slowing. Your

response to this news we got overnight? It is tough, isn't it? On

the one hand you've delivered record numbers, record revenue, record

profit, unbelievable margin, something like 40%, but your core

product is a product that represents the lion's share of what you sell,

68% of what you sell, that's slowing down and that's what spooked

investors in the markets. We have highlighted the sales in China. A

massive drop off, but at the same time, it is not that long ago that

Apple did the deal with China Mobile and presumably lots of people in

China got their iPhones, they are not going to upgrade quickly, are

they? They're not cheap. China is 25%, more than Europe, 25% of what

Apple sell. And remember, 68% of that is the iPhone. The challenge is

lots of consumers, lots of those consumers in China are becoming

middle-class and they have moved in and bought product and there is no

incentive for them to upgrade. The difference between the iPhone 6 and

the iPhone 6 S wasn't great. All eyes are going to be on the new

this year. There is going to have to this year. There is going to have to

be a step change in that product to persuade consumers to step out of

the iPhone 6. We are obsessing about sales figures and they are still

growing and most companies would be glad of sales figures are that

growing. You touched on it, they are waiting for their next big thing? Is

it the iPhone or something different? There is lots that Apple

can do. The iPhone has been that killer product for the last few

years. But let's think about the advances it is making in other

areas. It bought Beats. It has really interesting potential in the

head phone market, the speaker market, it is thinking about cars,

people are exciting about an operating system to control the car

and perhaps going into manufacturing cars themselves. There is lots that

Apple can do, of course. But it is that iPhone, it is that core product

that everybody is looking at. Let's remember the watch that everyone was

excited about last year. That's clustered by Apple into a category

it calls, "Other" With a few other product and other represents 6% of

total sales. So, I think, we are all looking to see what's next, whether

it will be a substantial step up in terms of the iPhone and in terms of

innovation or whether it will be a new product that we don't know about

yet. Ben, thank you very much for coming in and giving us your

thoughts on Apple. There is more on our website too about Apple

including analysis from our technology correspondents.

The share price skirting with that $100, it is worth watching to see

what happens next. Toyota has clung onto its status

as the world's top-selling carmaker The Japanese firm says it sold

nearly 10.2 million vehicles in 2015 compared to VW's 9.9 million

and Gm's 9.8 million. Toyota, which also makes the Prius

hybrid and Lexus luxury models, has forecast sales at 10.1

million vehicles this year. Profits are up - slightly -

at the eurozone's biggest bank, It's posted a 0.3% rise

in fourth-quarter profits boosted by better than expected

lending income. The Spanish bank, which makes

the biggest portion of its profits in the UK and Brazil,

said that income came in at $8.6 It is the big lenders that are

moving markets in London today. The FTSE 100 being dragged down by Royal

Bank of Scotland. RBS shares down over 4%. It had a lot of things to

say, didn't it? Really putting their house in order. RBS is owned by the

UK taxpayer after the bail out at the height of the financial crisis.

Well, today more provisions. Provisions for its pension fund and

provisions for mis-selling of payment protection insurance, that

scandal that rumbles on and on. The US mortgage drama of 2008 is hitting

Royal Bank of Scotland. There you could see the Chief Executive. Also

on the BBC live page, other stories as well. It is looking at the

iPhone, of course. It says it is the most expensive smartphone in the

world. Interesting Apple sales in India went up by 76% in the quarter,

but many are asking how many people in India, ie the mass market in

India can actually afford one of these phones?

Hot on the heels of Apple, we will get an update from Facebook later

today and one of the company's key projects is providing free internet

access to people who haven't been able to afford it.

But critics say it goes against the principal of so-called

net neutrality and India's telecom regulator has stopped it for now.

Simon Atkinson is live for us in Delhi.

S Bring us up-to-date on the day that Facebook releases its earnings.

That's right. In the past year or so, Facebook has been on something

of a charm offensive really, trying to launch its free basics programme

here in India. This is something which exists in about three dozen

countries already. It has been introduced without too much

controversy, but here that hasn't been the case. There has been

protest in the big tech cities and the big comedy troop as well led a

protest against it. Now we are in a situation where India's telecom

regulator ordered the provider of the service, who Facebook tied up

with, to suspend it. Free basics isn't available in India. So what do

you think will happen next? Well, I think to be honest, we will expect

more of these charm offensive. Mark zuker burg has been in India. He has

been meeting the Prime Minister and he makes the point, he says, that

getting millions more people on to the internet is important to help

lift people out of poverty, but he has got his back against the wall

because of the strength of protest there has been from campaigners who

say that free basics goes against net neutrality, the idea that every

website should be accessible for the same price at the same speed and it

is all going to come down to the telecoms regulator. It is consulting

on it, we will get a verdict on what it is going to allow to happen in

the next few months, but it is a big market. India, lots of growing

internet users and one that Facebook is keen to increase its presence.

Simon, good stuff, thank you very much. Simon Atkinson for us in

Delhi. Shares in Tokyo ended up 2.7% today

with the focus firmly on central banks meetings

in Japan and the US - Stocks were higher yesterday too -

after oil staged another comeback, RBS dragging shares lower in London

- they're down more than 4% as it announces major clean-up plan

and puts more money aside for PPI Michelle Fleury has

the details in NY. America's Central Bank wraps up its

first policy making meeting of 2016 with the release of its statement

later this Wednesday. No one expects a change in interest rates, but what

will officials say about the future? Is the Fed still on track to raise

rates four times this year? Or will they use the statement as a chance

to reassess the US economy, given the rough start to this year? More

evidence, of course, on the health of the economy, will come on Friday

with the release of the latest growth figures, but until then,

there is plenty of corporate news. Social media giant, Facebook,

releases its fourth quarter profits as well as the usual focus on its

monthly active users, watch out for any updates on how much time people

are spending watching videos on the site. This is because it is a

potential area for advertising growth and therefore, a future

profits source. Some other big names reporting also include Beauing,

PayPal and eBay. Joining us is Colin McLean,

managing director at fund managers Good morning. Good morning. So there

is quite a bit going on. We've got big names in the world of business

reporting their earnings and telling us how they're doing. The Americans

companies are interesting with the strength of the dollar and the other

issues going on and the meetings of Central Bank. Your thoughts. Well, I

think we've since the Fed raised rates, we have had a lot of cooling

of the global economy. I don't think there is any appetite for doing more

just now. I don't think the market is worried about that, but some of

the company earnings show they are facing head winds. There is low

inflation, there is disinflation, slowing growth, so the biggest

companies, that get the headlines are generally struggling a bit,

yeah. It is interesting when you look at what the investors are

thinking about about the market. It is the old adage, spot something

signe and they get focussed. There is no consistency really in their

response and certainly what they are interested in hearing? Very often

when markets are turbulent, you know, volatile just now, people try

and correlate particular announcements, but as we saw in

2008, there is something else bubbling underneath, it was

sub-prime and other things going on, and bubbling under we have got this

US company debt, the corporate credit market and some of the debt

funds, the disinflation, there are things not in the headlines and they

are bubbling under. For the viewers thinking what does that mean?

Explain why it is a concern. In the US we're seeing a company borrowing

rates likely to increase and it is because some of the lending has gone

into energy firms. Ones that are being hit by all this shale oil

collapse. One or two of the businesses that are linked to

commodities are suffering and the lenders into that are suffering too

and that's the linkage into financials. Interesting. Thank you

for sharing that and Colin will return in five minutes to talk us

through some other stories out there in the press today.

Still to come: We meet the rebel economist who says we shouldn't be

pumping money into the financial system but into our pockets instead.

Professor Steve Keen tells us why austerity is wrong and why

quantitative easing for the people and giving ourselves a financial

bail out is the only way to kick start the economy.

You're with Business Live from BBC News

The story regarding Royal Bank of Scotland. It has announced a major

clean-up plan and put aside more money for PPI mis-selling and

scandal and bad debts. The Chief Executive says he is determined to

put the issues of the past behind them. Kamal Ahmed has the details.

Kamal flesh this out for us. What are the details we have of the many

announcements made by RBS this morning? It is remarkable that so

long after the 2008 financial crisis, the Royal Bank of Scotland

is still announcing some of those legacy issues. Two big numbers we

need to focus on. One is they are provisioning billions of pounds more

to deal with problems they have in America connected to mortgage-backed

securities. They are facing lots of legal actions there. The other

number is payment protection insurance, Mr selling here in the

United Kingdom. They have provisioned another 500 million for

that. There are another couple of bits in this clean-up operation. One

is around the pensions deficit, PPI has a huge pensions deficit. It will

accelerate its payments into its pensions fund to try to sort some of

that out. Also, it has written down the value of its private bank

Coutt's in the UK. It is writing down the value of that private bank

in the UK, which is not performing at the same value it once was. Quite

the big clean-up by Ross McEwen in preparation, at some point, for some

sort of major stake sale by the government. What does this mean for

that major sale? It is going to be slow and steady and probably

delayed. Let's look at the share price this morning. It has come down

a few pence. The government sold a 5% stake here when the share prices

went down by quite a lot more since then. It is now right down here.

What is called to be in price, the Price paid by the government, it is

now ?2 57. Long way off what government pay. A sale will be slow

and steady and over a number of years. The notion of a retail sold

to the general public, I think, is a long way off. Thank you very much.

We are following this story. Qatar is ready to back the new Sainsbury's

bid. The deadline is looming. Our top story: US tech giant Apple

says iPhone sales are slowing and the next quarter

will be tougher. Full details of that story on our

website. Ever heard the phrase

"rebel economist"? And he's got a very different take

on the global economy. Professor Steve Keen claims

that mainstream economic theory is not only uncomfortable

to hear, but just plain wrong. and what he sees as a misguided

policy of austerity - on a misunderstanding

of the role of banks, governments and money

play in our society. And his slogan -

"Quantitative Easing for the people" He suggests creating money

but instead of pumping it into the financial system,

giving it to individuals instead. Alice Baxter has been

speaking with him, and started by asking him

to explain his assumption that all banks, and most importantly

central banks, have the ability The funny thing is, the laymen

are closer to knowing what reality is like than mainstream economists,

because the ironic reality is that, back in the 19th century,

mainstream economists thought they could model capitalism

as if it is a barter system, Economists assume that

banks just play a role They stand between somebody

who is a saver and somebody They then enable the exchange

to take place and they charge a fee Banks have not, and

virtually never, do that. They create money by doing lending

and they create additional demand. The mainstream continues to pretend,

and is quite indignant when I say And it is also these high levels

of private debt, relative to GDP, In global terms, we're

at the highest level of private debt, compared to GDP,

in the history of humanity. When it comes to the role

of the banks particularly, you describe yourself as a rebel,

and yet, in its quarterly report in the first quarter of 2014,

the Bank of England So why do you think mainstream

economists, the likes of Joe Stiglitz and Ben Bernanke,

the former Fed chief, why have they got it so wrong

and why have institutions like the Bank of England not pointed

this out more vociferously? I take my hat off to

the Bank of England. They stick their necks out,

virtually write a letter to the economic profession saying,

you've got it wrong, guys. It has got past the point

where it is an academic job. -- It has got past the point

where it is an academic joke. This is a large part of why

we are still on the slump. Looking to the UK, how should

we reduce the private debt burden How do we get around

the paradox of thrift? What you would have to do is use

this capacity of the one other institution in a society

which can create money, Rather than putting money

in the hands of the pension funds and insurance companies,

which is what they are doing now, rather than that, if you actually

made a direct injection into people's bank accounts,

irrespective of whether they were a saver or a debtor personally,

and then require the debtors to pay their debts down

while the savers continue with the cash injection,

that could enable us to cancel some of the debt created money,

make it government backed, So converting quantitative easing

as we've known it in this country since March 2009 into people's

quantitative easing, We are living in an age of austerity

right across Europe. We've been told by the Chancellor,

George Osborne, that we must turn the government's deficit

into a surplus in order It just drives me barmy that this

is put across as wisdom. Fundamentally, the government

is another form of bank. If the government runs a surplus,

that's like a bank that takes in more in repayments every year

than it makes out of loans, which means the money

supply shrinks. What you are saying by saying

the government is running a surplus, you are saying it's a really good

idea for the government to destroy That will make the economy

grow really well. It will either force individuals

to go to borrow from banks themselves instead, or it means

you have a collapse in demand. Or you've got to have a huge export

surplus and it's some time By the end of 2017, the UK

is scheduled to host The Prime Minister says he wants

to stay within a reformed European Union, but in your opinion,

when the time comes, should we vote for

or against a Brexit? The best thing England did

was not join the euro. It makes it less significant is not

to be in the European Union than it would be if they had

taken on the euro. Someone has to leave to wake

the Brussels beaurocrats up, to make them realise they have

created Frankenstein's monster. I'm tossing a coin to decide

which way I vote. The self titled global economist,

speaking to Alex. Interesting stuff, especially when it comes to Brexit.

The debate goes on and on. We have weeks and months for that to come.

What other business stories has the media been taking

Colin McLean, managing director at fund managers SVM

Asset Management, is joining us again to discuss.

Let's talk about Facebook. This is another story that is grabbing

attention. Facebook requests -- resists UK backpacks. This will

heighten the mood against Facebook heighten the mood against Facebook

in the UK. They are not willing to make any public concessions until

they have such is out privately. I would be surprised if they don't

agree the same sort of settlement we have already seen. It would possibly

be a small amount because Facebook has not been as profitable as long

as Google. I think there will be some settlement. It will come back

to how much they managed to claim. That is the issue. The Treasury was

hailing this Google deal as a great deal and a landmark deal, and when

people crunched the numbers, it turned out they would pay two or 3%

tax, rather than the standard rate. It is about getting a level right

and that it is seen to be fair. When you are asking was concessions from

companies, it is difficult to force them into big sums. You have to

remember the UK is quite a winner out of this low tax regime. We have

other international companies here you are paying less tax. It is

swings and roundabouts. We're losing for the text giants -- tech giants,

but winning for others. We ask your thoughts on this. Thank you. We have

been fairly vocal. For Greece says, yes, the UK should be much tougher

with those who are evading tax and tech giants should be more

cooperative. We have TV news in the dock. This is a viewer who is

watching in Geneva, who says, yes, governments need to collect these

taxes. They are playing one country's rebate against another's.

If not, it will be a taxpayer. That debate will go on and on like PPI.

Let's look at List now. It is like Uber. They will give people $12.5

million in compensation. -- 12 .25. It is not so much these back

payments, but once you are employed, you have to get a lot of other

rights, all the social rights, ranging from the holidays,

maternity, everything else. There is a real risk for Uber and four Lift.

They will have to treat their employee is differently. We talk

about rise of the robots. I love the phrasing in this article. Lift has

agreed to pay them 12.25 million dollars, given certain benefits, and

warned them when they are about to be deactivated. This means they will

no longer be required, they are deactivated, not fired, not let go,

not laid off. It is this automation of the industry that many find so

staggering. It shows what it must be like working for some of these

companies. Deactivation. UK property boom is bigger than the 2007 housing

bubble in the US. This is talking about concern about the buy to let

industry. Bigger measure by the appreciation we have seen over the

last 20 years, but was not absolutely bigger in size. The

government wants to cool down the buy to let area, which is one area

overheating in the UK economy. They can possibly stimulate other areas

will stop this is not an aim to cool the overall economy, but to prick

one bubble that is developing. We shall see if they manage to do this.

Thank you for coming in. Thank you, too, for your company, as

well. We will be back again tomorrow.

See you then. Goodbye.