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Shares in the tech giant slide, as it reports its first fall | :00:00. | :00:21. | |
The biggest fine in US automotive history. | :00:22. | :00:26. | |
Volkswagen agrees to pay $14.7 billion over its diesel emissions | :00:27. | :00:32. | |
scandal, and there could be more to come. | :00:33. | :00:42. | |
Welcome to World Business Report, I'm Sally Bundock. | :00:43. | :00:44. | |
Also in the programme: How are the two giants | :00:45. | :00:47. | |
Boeing and Airbus report their latest earnings today. | :00:48. | :00:50. | |
We get an expert view on what they will reveal. | :00:51. | :00:52. | |
Could there be a problem with Apple's core? | :00:53. | :00:58. | |
The world's biggest tech company has reported its results for the last | :00:59. | :01:01. | |
year, and they don't make for pleasant reading. | :01:02. | :01:04. | |
It is the first time since 2001 that the darling of Wall Street has | :01:05. | :01:07. | |
posted a decline in annual revenue, ending one of the hottest corporate | :01:08. | :01:11. | |
If we take a look at its sales numbers, Apple's net sales in 2016 | :01:12. | :01:19. | |
That is a huge number, but it is a fall of 8% compared | :01:20. | :01:26. | |
A fall in iPhones sales for the third quarter in a row | :01:27. | :01:35. | |
is one of the key reasons why Apple's numbers are not | :01:36. | :01:38. | |
In the last three months, Apple sold more than 45 million iPhones. | :01:39. | :01:51. | |
That is better than expected, and it is important to note | :01:52. | :01:54. | |
the new iPhone seven was launched after this last quarter ended. | :01:55. | :01:57. | |
When looking at profits, in the last quarter they made $9 billion. | :01:58. | :02:00. | |
That is a fall of 19% compared to the same time last year. | :02:01. | :02:03. | |
Some analysts say this is a sign of a saturated a smartphone market. | :02:04. | :02:07. | |
Revenue from China, which is seen as a growth market, | :02:08. | :02:10. | |
In many ways, it has been a difficult year for Apple. | :02:11. | :02:15. | |
In August, the European Commission ruled that the company owed | :02:16. | :02:17. | |
the Irish Government $14.5 billion in back taxes. | :02:18. | :02:29. | |
With me is Jason Mander, director of research at GlobalWebIndex. | :02:30. | :02:37. | |
Good morning. So it does sound, doesn't it, like they have had a | :02:38. | :02:44. | |
really tough quarter and a tough year. Give us your take on the | :02:45. | :02:48. | |
numbers. Let's not forget they are still making a huge amount of money, | :02:49. | :02:53. | |
but a lot is being based on the promise of what is to come and China | :02:54. | :02:58. | |
is down by a big number. They are pointing to other markets including | :02:59. | :03:02. | |
India, where they are seeing lots of promise. Sales have not been what | :03:03. | :03:06. | |
they could have been but the iPhone seven is yet to make an impact and | :03:07. | :03:10. | |
there are renewed Macs coming on Tuesday as well. They are seeing | :03:11. | :03:15. | |
increases in their services department, so things like Apple Pay | :03:16. | :03:21. | |
and Apple Music are good news for them, as it suggests they can | :03:22. | :03:26. | |
extract more revenue from their existing user base even if hardware | :03:27. | :03:30. | |
sales are not as exciting as people would want to see. There is this new | :03:31. | :03:34. | |
opportunity coming from the services division. The other opportunity is | :03:35. | :03:39. | |
Samsung's words, the Galaxy Note 7 being withdrawn completely from the | :03:40. | :03:43. | |
market for the time being. Many see this as an opportunity for Apple but | :03:44. | :03:47. | |
there are many other players in the market now, including Google's Pixel | :03:48. | :03:56. | |
phone. In the competition is very hot. Absolutely, the timing is | :03:57. | :04:02. | |
fantastic for Apple, an ideal moment to capture market share from its | :04:03. | :04:05. | |
traditional rival but the market place is so much more competitive | :04:06. | :04:09. | |
than it used to be. Google could make waves with its Pixel phone, and | :04:10. | :04:16. | |
in China rants such as Huawei will make it much more challenging for | :04:17. | :04:20. | |
Apple to grab the market share once have taken for granted. -- brands | :04:21. | :04:25. | |
such as Huawei. No matter whether Apple is doing fantastically or not | :04:26. | :04:29. | |
so fantastically it is still shifting huge numbers of units and I | :04:30. | :04:34. | |
think investors always give it a tough time, perhaps forgetting just | :04:35. | :04:37. | |
how much money this is still making and if it can up the money which is | :04:38. | :04:41. | |
coming from services, especially those from revenue based models, | :04:42. | :04:44. | |
there is a lot to be positive about here. And as well, things come in | :04:45. | :04:49. | |
waves. One report I read yesterday said they will be a wave of volumes | :04:50. | :04:54. | |
of people wanting to upgrade in a year or so, so the iPhone seven may | :04:55. | :04:58. | |
miss that at the next phone that comes after that. You could argue | :04:59. | :05:03. | |
that the iPhone seven is here to keep things ticking over, to meet | :05:04. | :05:07. | |
demand from the next holiday season. It is the next wave of releases | :05:08. | :05:12. | |
which people are excited about, an anniversary release where we can | :05:13. | :05:16. | |
expect some serious consumer interest. Thank you for giving your | :05:17. | :05:23. | |
analysis on Apple. It has had an impact in trade on Asia. Many | :05:24. | :05:27. | |
suppliers were hit in the beginning of the day and have recovered, and | :05:28. | :05:29. | |
Taiwan in particular. A federal judge in the United States | :05:30. | :05:30. | |
has approved a $15 billion settlement with the German carmaker | :05:31. | :05:33. | |
VW, to settle claims with customers and regulators in connection | :05:34. | :05:36. | |
with its manipulation It is the biggest fine | :05:37. | :05:38. | |
in US automotive history. Volkswagen will begin buying back | :05:39. | :05:41. | |
475,000 diesel vehicles The German car giant admitted | :05:42. | :05:44. | |
cheating emissions tests in the US last year, by fitting a defeat | :05:45. | :05:48. | |
device in the vehicles. The vehicles affected emit | :05:49. | :05:51. | |
up to 40 times legally Michelle Fleury in New York says | :05:52. | :05:54. | |
there could be more bills The company, we understand, has set | :05:55. | :06:20. | |
aside around or up to 20 billion. At the same time, given how many more | :06:21. | :06:24. | |
issues are still out there, it is hard to see whether or not they will | :06:25. | :06:30. | |
need to put more money aside. The Justice Department in the United | :06:31. | :06:33. | |
States is still investigating. A settlement may be reached which will | :06:34. | :06:37. | |
involve more money. The other sums it is paying to its dealers in | :06:38. | :06:42. | |
America. There are lawsuits not just in America but in other parts of the | :06:43. | :06:46. | |
world. So the bill is still mounting, the final tally has not | :06:47. | :06:48. | |
yet come in. The world's two biggest aircraft | :06:49. | :06:49. | |
makers, Airbus and Boeing, both have their third-quarter | :06:50. | :06:51. | |
results out today. Both firms are having to deal | :06:52. | :06:53. | |
with slumping sales. We should hear from Airbus | :06:54. | :06:56. | |
within the next hour. In September, the firm indicated | :06:57. | :06:58. | |
that it was embarking on a cost-cutting and | :06:59. | :07:00. | |
restructuring plan. Attention is also being focussed | :07:01. | :07:02. | |
on prospects for the troubled A380. Jasper Lawler is a market analyst | :07:03. | :07:05. | |
at CMC Markets in London. Good morning. Let's start with | :07:06. | :07:25. | |
Airbus. What are we expecting? Well, the general expectation is that | :07:26. | :07:28. | |
sales are going to tip slightly higher. The worry is more on the | :07:29. | :07:33. | |
profit side, because really when you look at these airlines, both Airbus | :07:34. | :07:39. | |
and Boeing, they are coming off the end of a supercycle, if you like, of | :07:40. | :07:44. | |
strong orders. They have a big backlog. The worry is that that | :07:45. | :07:49. | |
backlog will diminish as demand and sales come down but in the meantime | :07:50. | :07:52. | |
they have the more short-term problem of actually meeting the | :07:53. | :07:56. | |
demand and hitting those targets. So in a number of divisions, the | :07:57. | :08:00. | |
military aircraft, the A380, there is demand, and even the A350, | :08:01. | :08:07. | |
another wide-body jet, they have been having some supply problems and | :08:08. | :08:11. | |
that is expected to weigh on the margins as they have to pay out if | :08:12. | :08:16. | |
they are late deliveries. And when it comes to Boeing, any good news | :08:17. | :08:20. | |
for them? Their results are out for the market opens later today. Where | :08:21. | :08:25. | |
Boeing have the edge on Airbus is that they haven't yet said that they | :08:26. | :08:30. | |
are going to cut the 777 production. So those big jumbo planes, it seems | :08:31. | :08:35. | |
like airlines are unable to fill them with passengers. Boeing are | :08:36. | :08:39. | |
looking better on orders and a very small single passenger jets are | :08:40. | :08:44. | |
actually ahead of schedule, Boeing, so they are looking good, meeting | :08:45. | :08:50. | |
customer demand. Airbus, unfortunately, in their 737 series, | :08:51. | :08:56. | |
they have fallen behind with those of supply issues. Thank you for | :08:57. | :09:02. | |
getting up so early for us. The empty trading floor will fill up in | :09:03. | :09:04. | |
the next hour, I am sure. General Motors has | :09:05. | :09:06. | |
warned that it may cut car production further in Europe | :09:07. | :09:09. | |
as a result of Britain's vote to leave the European Union, | :09:10. | :09:11. | |
as uncertainty caused by the vote The Detroit-based carmaker vowed | :09:12. | :09:14. | |
to take whatever action is necessary to offset the impact of the Brexit | :09:15. | :09:18. | |
vote, which has already cost it $100 million in the past three months due | :09:19. | :09:22. | |
to currency fluctuations. US construction and mining equipment | :09:23. | :09:26. | |
maker Caterpillar has cut its 2016 profit target, for the | :09:27. | :09:29. | |
third time this year. The firm says it has been hit | :09:30. | :09:31. | |
by the downturn in commodity prices, which has translated | :09:32. | :09:35. | |
to a decrease in mining activity. Caterpillar says it now expects | :09:36. | :09:37. | |
sales to be about $39 billion this You are now up-to-date on the | :09:38. | :09:58. | |
business stories. I will be back in a couple of minutes and we will talk | :09:59. | :10:02. | |
through the papers then. See you soon. | :10:03. | :10:05. |