26/10/2016 World Business Report

Shares in the tech giant slide, as it reports its first fall

The biggest fine in US automotive history.

Volkswagen agrees to pay $14.7 billion over its diesel emissions

scandal, and there could be more to come.

Welcome to World Business Report, I'm Sally Bundock.

Also in the programme: How are the two giants

Boeing and Airbus report their latest earnings today.

We get an expert view on what they will reveal.

Could there be a problem with Apple's core?

The world's biggest tech company has reported its results for the last

year, and they don't make for pleasant reading.

It is the first time since 2001 that the darling of Wall Street has

posted a decline in annual revenue, ending one of the hottest corporate

If we take a look at its sales numbers, Apple's net sales in 2016

That is a huge number, but it is a fall of 8% compared

A fall in iPhones sales for the third quarter in a row

is one of the key reasons why Apple's numbers are not

In the last three months, Apple sold more than 45 million iPhones.

That is better than expected, and it is important to note

the new iPhone seven was launched after this last quarter ended.

When looking at profits, in the last quarter they made $9 billion.

That is a fall of 19% compared to the same time last year.

Some analysts say this is a sign of a saturated a smartphone market.

Revenue from China, which is seen as a growth market,

In many ways, it has been a difficult year for Apple.

In August, the European Commission ruled that the company owed

the Irish Government $14.5 billion in back taxes.

With me is Jason Mander, director of research at GlobalWebIndex.

Good morning. So it does sound, doesn't it, like they have had a

really tough quarter and a tough year. Give us your take on the

numbers. Let's not forget they are still making a huge amount of money,

but a lot is being based on the promise of what is to come and China

is down by a big number. They are pointing to other markets including

India, where they are seeing lots of promise. Sales have not been what

they could have been but the iPhone seven is yet to make an impact and

there are renewed Macs coming on Tuesday as well. They are seeing

increases in their services department, so things like Apple Pay

and Apple Music are good news for them, as it suggests they can

extract more revenue from their existing user base even if hardware

sales are not as exciting as people would want to see. There is this new

opportunity coming from the services division. The other opportunity is

Samsung's words, the Galaxy Note 7 being withdrawn completely from the

market for the time being. Many see this as an opportunity for Apple but

there are many other players in the market now, including Google's Pixel

phone. In the competition is very hot. Absolutely, the timing is

fantastic for Apple, an ideal moment to capture market share from its

traditional rival but the market place is so much more competitive

than it used to be. Google could make waves with its Pixel phone, and

in China rants such as Huawei will make it much more challenging for

Apple to grab the market share once have taken for granted. -- brands

such as Huawei. No matter whether Apple is doing fantastically or not

so fantastically it is still shifting huge numbers of units and I

think investors always give it a tough time, perhaps forgetting just

how much money this is still making and if it can up the money which is

coming from services, especially those from revenue based models,

there is a lot to be positive about here. And as well, things come in

waves. One report I read yesterday said they will be a wave of volumes

of people wanting to upgrade in a year or so, so the iPhone seven may

miss that at the next phone that comes after that. You could argue

that the iPhone seven is here to keep things ticking over, to meet

demand from the next holiday season. It is the next wave of releases

which people are excited about, an anniversary release where we can

expect some serious consumer interest. Thank you for giving your

analysis on Apple. It has had an impact in trade on Asia. Many

suppliers were hit in the beginning of the day and have recovered, and

Taiwan in particular. A federal judge in the United States

has approved a $15 billion settlement with the German carmaker

VW, to settle claims with customers and regulators in connection

with its manipulation It is the biggest fine

in US automotive history. Volkswagen will begin buying back

475,000 diesel vehicles The German car giant admitted

cheating emissions tests in the US last year, by fitting a defeat

device in the vehicles. The vehicles affected emit

up to 40 times legally Michelle Fleury in New York says

there could be more bills The company, we understand, has set

aside around or up to 20 billion. At the same time, given how many more

issues are still out there, it is hard to see whether or not they will

need to put more money aside. The Justice Department in the United

States is still investigating. A settlement may be reached which will

involve more money. The other sums it is paying to its dealers in

America. There are lawsuits not just in America but in other parts of the

world. So the bill is still mounting, the final tally has not

yet come in. The world's two biggest aircraft

makers, Airbus and Boeing, both have their third-quarter

results out today. Both firms are having to deal

with slumping sales. We should hear from Airbus

within the next hour. In September, the firm indicated

that it was embarking on a cost-cutting and

restructuring plan. Attention is also being focussed

on prospects for the troubled A380. Jasper Lawler is a market analyst

at CMC Markets in London. Good morning. Let's start with

Airbus. What are we expecting? Well, the general expectation is that

sales are going to tip slightly higher. The worry is more on the

profit side, because really when you look at these airlines, both Airbus

and Boeing, they are coming off the end of a supercycle, if you like, of

strong orders. They have a big backlog. The worry is that that

backlog will diminish as demand and sales come down but in the meantime

they have the more short-term problem of actually meeting the

demand and hitting those targets. So in a number of divisions, the

military aircraft, the A380, there is demand, and even the A350,

another wide-body jet, they have been having some supply problems and

that is expected to weigh on the margins as they have to pay out if

they are late deliveries. And when it comes to Boeing, any good news

for them? Their results are out for the market opens later today. Where

Boeing have the edge on Airbus is that they haven't yet said that they

are going to cut the 777 production. So those big jumbo planes, it seems

like airlines are unable to fill them with passengers. Boeing are

looking better on orders and a very small single passenger jets are

actually ahead of schedule, Boeing, so they are looking good, meeting

customer demand. Airbus, unfortunately, in their 737 series,

they have fallen behind with those of supply issues. Thank you for

getting up so early for us. The empty trading floor will fill up in

the next hour, I am sure. General Motors has

warned that it may cut car production further in Europe

as a result of Britain's vote to leave the European Union,

as uncertainty caused by the vote The Detroit-based carmaker vowed

to take whatever action is necessary to offset the impact of the Brexit

vote, which has already cost it $100 million in the past three months due

to currency fluctuations. US construction and mining equipment

maker Caterpillar has cut its 2016 profit target, for the

third time this year. The firm says it has been hit

by the downturn in commodity prices, which has translated

to a decrease in mining activity. Caterpillar says it now expects

sales to be about $39 billion this You are now up-to-date on the

business stories. I will be back in a couple of minutes and we will talk

through the papers then. See you soon.