29/04/2014 World Business Report


29/04/2014

Similar Content

Browse content similar to 29/04/2014. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

BBC World News. Now, it's time for World Business

:00:00.3:59:59

Report. Sales at Samsung, the world's

:00:00.:00:19.

biggest phone maker, decline. It reports a 4% fall.

:00:20.:00:25.

Ipanema Beach in Rio de Janeiro, now one of Brazil's property hotspots,

:00:26.:00:26.

but can soaring prices be sustained? Welcome to World Business Report.

:00:27.:00:43.

In a minute, we'll also have a report ahead of Volkswagen's thought

:00:44.:00:50.

to be record`breaking results. But first: Alarm bells have been

:00:51.:00:53.

sounding for a while over Samsung's reliance on smartphone sales in

:00:54.:00:56.

mature markets such as Europe and the United States, and increasingly

:00:57.:00:58.

competitive emerging markets such as China. The world's largest

:00:59.:01:11.

smartphone maker has a diverse product line ranging from memory

:01:12.:01:13.

chips to home appliances, but more than half its profits are generated

:01:14.:01:16.

by mobile devices. Now the company has reported a 4%

:01:17.:01:19.

fall in sales at its mobile phone unit. Revenues in the sector fell to

:01:20.:01:28.

33.4 trillion yuan, that's $32.3 billion dollars in the

:01:29.:01:35.

January`to`March period. But, the South Korean company said operating

:01:36.:01:37.

profit for its mobile phone unit rose 18% from the previous three

:01:38.:01:40.

months, in part due to positive impact from adjustments of one`off

:01:41.:01:45.

expenses. Sharanjit Leyl joins us from

:01:46.:01:56.

Singapore. The second consecutive quarter of disappointing numbers for

:01:57.:02:01.

Samsung. You listed all the numbers. Declining sales for mobile

:02:02.:02:11.

phone division, which is not great on a day when it is facing a court

:02:12.:02:14.

battle with Apple, due to take stake in the US in a couple of hours ``

:02:15.:02:19.

Apple. In terms of those earnings, the revenue fell to $32 billion.

:02:20.:02:24.

Still, it is doing incredibly well. These are not numbers you turn your

:02:25.:02:31.

nose up at. It is a decline in profits, due to competition in the

:02:32.:02:39.

mobile phone sector and how it has been rising around the world,

:02:40.:02:45.

forcing manufacturers to lower their prices, hurting profitability.

:02:46.:02:48.

Demand for smart phones in developed markets, the key drivers are

:02:49.:02:52.

growth, which has begun to slow. Competition is heating up as you can

:02:53.:02:56.

imagine for mobile phone makers. Samsung is the world 's biggest at

:02:57.:03:00.

the moment and handsets account for a bulk of the profits. The success

:03:01.:03:06.

of the Galaxy range has been a big driver for the growth of the company

:03:07.:03:09.

in recent years. It helped the company dislodge Kiir as the world

:03:10.:03:14.

's biggest `` Nokia, as the world 's biggest phone maker in 2012. Hoping

:03:15.:03:17.

to maintain its lead, speaking of intense competition, but what they

:03:18.:03:22.

are trained to do is tap into emerging markets. Of course, facing

:03:23.:03:26.

increased competition on that front as well, with these emerging

:03:27.:03:32.

markets. You have Chinese firms doing particularly well. Of course,

:03:33.:03:38.

recall is also of some Samsung phones announced yesterday. These

:03:39.:03:45.

numbers come just after that happened, and it was announced, it

:03:46.:03:51.

wasn't just Samsung, it was also Apple, issuing alerts on faults on

:03:52.:03:57.

some of their phones. Samsung revealing that some of the Galaxy as

:03:58.:04:00.

five handsets have been shipped with a non` camera. Apple, meanwhile, had

:04:01.:04:05.

some of its handset with a faulty sleep wake button, so it is

:04:06.:04:12.

affecting both of them. Samsung say they have found a limited number of

:04:13.:04:15.

handsets shipped with this fault, and they have traced the problem and

:04:16.:04:18.

they will ensure it doesn't rear to in future productions as well. We

:04:19.:04:23.

are expecting another turn in the ongoing Apple versus Samsung tussle.

:04:24.:04:32.

We'll shortly get the latest financial results from Volkswagen,

:04:33.:04:34.

Europe's biggest carmaker, and they're expected to be

:04:35.:04:36.

record`breaking. VW, which makes car brands ranging from Audis to Skodas,

:04:37.:04:39.

is expected to announce it's now selling ten million vehicles a year.

:04:40.:04:43.

Operating profits are expected to top $16 billion. But some analysts

:04:44.:04:49.

say all this success could be masking some fundamental problems at

:04:50.:04:52.

the company as Jeremy Howell reports.

:04:53.:05:02.

VW's strategy for the past three years has been a relentless drive

:05:03.:05:08.

for growth, with a stable ranging from supercharged Porsche is too

:05:09.:05:12.

cheap runabouts, it controls one quarter of the European car market.

:05:13.:05:18.

VW's revenues have risen by 25%, which is celebrating `` something to

:05:19.:05:25.

celebrate. Profits however have only grown by 3.5%. Their empire covers

:05:26.:05:29.

mass`market cars, luxury cars like Porsche and Audi, vans, lorries, 17

:05:30.:05:40.

different marks, 310 different models. They are made on many

:05:41.:05:43.

different types of platforms and they use many different types of

:05:44.:05:46.

part. That pushes up production costs. VW's biggest rival, Toyota,

:05:47.:05:52.

produces a narrow range of cars and makes a 9% offered on every

:05:53.:05:58.

vehicle. It's mass`market car division, VW, makes less than 6%

:05:59.:06:07.

profit per vehicle. If you have all the different brands, and the

:06:08.:06:08.

different variants of existing products, reducing their derivatives

:06:09.:06:14.

of derivatives of fodder, that is not as efficient as producing the

:06:15.:06:17.

same car over and over again, because it leads to these different

:06:18.:06:19.

life cycles, different content per vehicle and managing that complexity

:06:20.:06:26.

is an issue and a challenge. Something the sheer range of cars VW

:06:27.:06:33.

offers gives it White you get to a point where people might like a

:06:34.:06:36.

brand and a big interest a, everyone else has this as well. You do need

:06:37.:06:43.

more than one or even two brands to do that, which is what Volkswagen

:06:44.:06:50.

has got. They have probably got the most powerful portfolio of brands in

:06:51.:06:53.

the world motor industry. Few carmakers can manage such vast

:06:54.:06:59.

product ranges for long. Peugeot Citroen decided to cut in half the

:07:00.:07:03.

number of models it reduces in its bid to climb out of loss. Profit

:07:04.:07:08.

hungry shareholders are beginning to urge Volkswagen to consider cutting

:07:09.:07:15.

its range as well. House prices have soared in Brazil's

:07:16.:07:19.

big cities in the past few years as peoples' salaries have grown and

:07:20.:07:22.

mortgages have become easier to get hold of. But with eyes on the

:07:23.:07:25.

country ahead of the World Cup and the Olympics, and not always in a

:07:26.:07:28.

good way, with recent violence in Rio, is this a bubble that could

:07:29.:07:32.

burst any time soon? Katy Watson now reports from Rio de Janeiro.

:07:33.:07:41.

Brazilians are taking advantage of Ipanema Beach, the marvellous city.

:07:42.:07:48.

This part of radio is becoming a destination for more than just

:07:49.:07:50.

sunworshippers, it is now one of the country 's property hotspots. ``

:07:51.:08:00.

Rio. We are going to the terrace, a highlight of the apartment. This

:08:01.:08:02.

woman runs a luxury estate agent here in Rio. We sold it for $2

:08:03.:08:12.

million and it is now on the market for 3 million, even though it is a

:08:13.:08:15.

high price. It is an apartment with 360 degrees views, amazing location.

:08:16.:08:19.

It is seen as an opportunity to make a good return, a good return of the

:08:20.:08:26.

investment. By Ian, renovating and putting it on the market for

:08:27.:08:28.

foreigners to buy or four Brazilians. `` buying. The talk is

:08:29.:08:35.

not of high and penthouses overlooking Ipanema Beach. It used

:08:36.:08:40.

to be one of the most dangerous favelas. Now it is pacified by the

:08:41.:08:43.

police ahead of the World Cup and prices here have soared. It has

:08:44.:08:46.

become a symbol of the booming real estate market in the city. Recent

:08:47.:08:52.

figures show that house prices have risen 250% in the last few years and

:08:53.:08:56.

in Sao Paulo, they have risen nearly 200%. That is in the context of

:08:57.:09:02.

slowing economic growth in Brazil and interest rates being at their

:09:03.:09:09.

highest point in two years. That is some cause for concern for some

:09:10.:09:11.

economists who say there is a housing bubble. It is a controversy

:09:12.:09:13.

will subject. Mortgages have become easier to get in recent years. Last

:09:14.:09:18.

year, home lending rose 32%. Some say that is a worrying sign. Home

:09:19.:09:25.

loans still only account for 8% of the economy, compare that with

:09:26.:09:30.

chilly Mac at 20% and the US at around 70% and Brazil has a long way

:09:31.:09:36.

to go. `` Chile. TRANSLATION: It is a psychological bubble. Resilience

:09:37.:09:40.

thing having a house is a good thing. It gives them an asset that

:09:41.:09:47.

will make them money. People think it will give them more security than

:09:48.:09:53.

putting it in a bank. People feel richer. While experts debate the

:09:54.:09:57.

bubble, there is no doubt increase credit is fuelling Brazil's growth

:09:58.:09:59.

in recent years. New consumers will want to take advantage of that while

:10:00.:10:02.

they can. That's all for this hour.

:10:03.:10:17.

We will get to the newspapers in a while. New figures show that half of

:10:18.:10:26.

people diagnosed will scan so will survive at least a decade, based on

:10:27.:10:29.

information from more than 7 million patients in England and will since

:10:30.:10:32.

the 1970s. Cancer Research UK says it means the fight against cancer

:10:33.:10:34.

has reached a tipping

:10:35.:10:35.

Download Subtitles

SRT

ASS