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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. |