04/02/2013 World Business Report

ceremony. Those are the latest headlines from BBC World News. It's

now time for the latest financial news with Sally and World Business

The smartphone battle claims another victim. Thai man's HTC gets

set to announce a 90% fall in profits as it falls behind Apple

and Samsung -- Taiwan. And will economic uncertainty be the death

of Spain? The Prime Minister is facing calls to resign over

corruption claims. The welcome to World Business Report. In a minute

we will have details of another top banker under investigation. But

first, the battle to stay ahead in the crowded mobile phone market is

a tough one. Many once mighty companies, Nokia, Motorola for

example, have fallen victim to the sheer power of apple and Samsung.

It seems HTC is to endure a similar fate. -- Apple. Their profits and

sales have plummeted in the US two years after they were the second

most popular maker. They are set to report 90% falls in the last few

months of last year. So why has it got wrong? The Butter five are some

of the many new models the company has bought up in recent months --

the Butterfly -- brought out. It was the No. 2 smartphone vendor in

the US two years ago and it was selling well globally. In the past

year and a half it has seen their fortunes plummet. Net profit has

fallen quarter after a quarter as their phones fail to keep up with

the iPhones and the Galaxy series from Samsung. HTC has tried to

catch up by launching new phones. It has also focused more on selling

cheaper phones in China. It recently introduced its products in

Burma. But analysts say these strategies may not be enough. They

say sales of cheaper phones in China may not significantly boost

company revenues. One of their key problems is that it is competing

with much bigger rivals with deeper marketing pockets. It is an area

they need to improve on because HTC has great technology but it has yet

to let the consumers know. We can speak to Rico Hizon in Singapore.

Lovely to see you. Tell us more about HTC and why it is not staying

ahead in the way that others are. It has fallen behind the

competition, Sally. When I spoke to analysts' earlier, they were

hopeful about the future of HTC but they say they really face many

challenges going forward. Continuing to innovate and keeping

in step with Samsung, Apple and BlackBerry. Also they need to

expand on two fronts, the content strategy and the portfolio of

devices. According to experts, one positive helping them build their

market share once again is having both the Android and the Windows

operating systems on their devices. HTC 2 is looking to tap into new

markets like further as it looks to get a foothold in one of Asia's

last investment frontiers. -- Burma. But overall, analysts say it will

be an uphill task for HTC to dislodge the top two makers and it

will have to fight it out with BlackBerry for the No. 3 spot.

familiar tale I think. Tell us about some of the other companies.

A lot of big names have been reporting in Japan and elsewhere in

Asia. That's right. All eyes on corporate Japan as well today,

Sally. Later today we will be getting the latest results from

Japan Airlines, analysts will be looking out for any guidance from

the carrier in particular. They will look at the financial impact

from the grounding of the Dreamliner fleet, now into its

third week. You have other Japanese companies unveiling earnings today

including the likes of consumer electronics firm Hitachi and a

pharmaceutical company. Panasonic, their shares are higher by more

than 15% today in Tokyo trading after reporting an operating profit

for the three months to December. It reverts a massive loss from the

previous quarter. Investors are relieved they are sticking with

their full year earnings forecasts. People are positive about the

Japanese earnings season, especially in the last quarter of

2012, because of the depreciating yen against the US dollar. Thank

you for joining us. Let's turn our attention to Spain where over the

weekend riot police clashed with protesters angry at claims that

Prime the Prime Minister and his party have been claiming secret

payments. There are worries this latest scandal could destabilise

markets, which have recovered significantly in recent months.

Jobs data today is unlikely to calm nervous markets. Unemployment is

stubbornly high at a staggering 26%. No signs of becoming down, though.

Tom Burridge reports. -- of it coming down. In Sevilla, there are

now mounds of uncollected rubbish. This is the result of austerity. A

strike by workers because some of them are set to lose their jobs.

The local government is trying to make savings. Cuts to the public

sector here are for now deepening the recession, and unemployment in

Spain is now at 26%. But as this economists argues, such a high

jobless rate is mitigated by other factors. TRANSLATION: A country can

hardly hold out with 6 million unemployed. 26% of the workforce

unemployed! But Spain has a lot of resources. Family, a strong

institution. And also welfare benefits. Retirees are too many to

maintain the unemployed and Spaniards use the money they have

saved, but when the savings are exhausted they will be problems.

There have been more problems for the government over the past week.

Anger over austerity has only been compounded by the anger over

allegations that the ruling party received improper payments. Claims

the Spanish prime minister was forced to publicly denied. If the

Spanish government wants to clean up its image, a fall in

unemployment would help. There are signs that will come later in the

year. TRANSLATION: The Spanish economy is becoming progressively

have its own exchange rate. I hope there will be a net job-creation in

the second half of this year thanks to the reforms of the labour market

and the return of growth. Today the Prime Minister travels to Germany.

support. But both leaders know that at some point austerity needs to

make a difference in the real economy. And also in the lives of

people in places like Spain. Let's squeeze in some other

business stories. The finance director of Barclays Bank, Chris

Lucas, is stepping down. He is one of four current and former

employees being investigated by the UK regulatory body for financial

services over questionable payments between the bank and investors in

Qatar. This comes months after resign over the attempted

manipulation of libor interbank lending rates. As you were hearing

from Rico, shares in Panasonic has soared over 13% this morning after

the firm announced it had swung back into -- back profit of the

first quarter. Panasonic said a weaker yen had helped to improve

its bottom line. The Iraqi mobile phone operator Asia Sell has raised

more than $1.3 billion in a share offer on the Iraqi stock exchange.

They sold 25% of their share capital and what was the biggest of

flotation in the Middle East for more than five years. Most of the

stock was bought by foreign investors, and it is seen as a test

of confidence in Iraq. Let's have a quite

quite a strong end to the week in Dow and the Scottish National Party

500. They are trading this week with that as a backdrop. The reason

for the concession in the States was the jobs data, it was totally

in line with expectations. Also today we have had some news out of

China. China's and service industries crew at their fastest