:00:00. > :00:00.significant decrease in violent crime. Shoplifting and street thefts
:00:00. > :00:15.are up. Time for the latest business news.
:00:16. > :00:27.Changing fortunes: Samsung's mobile division posts a drop in earnings.
:00:28. > :00:32.Chinese PC maker Lenovo expand its product lineup, snapping up IBM's
:00:33. > :00:40.server business. Welcome to Asia Business Report. We start with
:00:41. > :00:43.Samsung, there has been a mixed bag of earnings from the South Korean
:00:44. > :00:48.company. They posted a 30% jump in net profit, but for the final
:00:49. > :00:54.quarter of last year, operating profit at its mobile division, which
:00:55. > :00:59.has its main revenue generator, fell by 18%. New phone models from rival
:01:00. > :01:04.apple to away sales during the holiday period. Samsung aims to
:01:05. > :01:08.maintain its status as market leader in the smartphone business by
:01:09. > :01:13.diversifying products. That could be a tough challenge. Our correspondent
:01:14. > :01:16.has more. Samsung became the world's biggest maker of mobile
:01:17. > :01:23.phones in 2012, when it overtook Nokia. Sales of its prose account an
:01:24. > :01:29.early 60% of its operating profit. Until late last year, as was the
:01:30. > :01:36.most popular model. Sales started to slow when apple released its latest
:01:37. > :01:43.iPhone. Samsung is now banking on its larger screens. Even these will
:01:44. > :01:47.come under competition, with Apple expected to release a similar sized
:01:48. > :01:54.phones later this year. We will find out what consumers think. I have
:01:55. > :02:06.been using Apple since 2008. It is user-friendly. I do not like Apple
:02:07. > :02:14.products. Samsung is very customisable. Samsung is more
:02:15. > :02:21.customisable. Apple is quite restricted. Samsung has done well in
:02:22. > :02:25.emerging markets, especially with the strategy of developing different
:02:26. > :02:28.models at different prices. It faces new challenges in China, wear it has
:02:29. > :02:34.been a dominant player. Apple has started selling its iPhone is with
:02:35. > :02:37.China Mobile. With the smart phone market selling to mature, it is
:02:38. > :02:43.putting pressure on all green nations. Some analysts say Samsung
:02:44. > :02:47.is going to have to innovate and come up with something unique if it
:02:48. > :03:06.is going to create new areas of growth.
:03:07. > :03:10.Samsung's brand may be under threat. The largest advertising company in
:03:11. > :03:16.the world was in Singapore. I asked about his views on Samsung. I am
:03:17. > :03:23.here Samsung is a brand that has been particularly successful. Ferry
:03:24. > :03:30.and rubble. I will be very critical here and say, actually, it tends to
:03:31. > :03:38.be a copy. Where is the originality? Is a dangerous word. Where is the
:03:39. > :03:42.fresh perspective? Yes, you can look at everything they have done, it is
:03:43. > :03:49.like a copy of an apple product. There is a place that. The future
:03:50. > :03:54.for Samsung is that they have to be more innovative and leading. The
:03:55. > :04:03.past five years has been hard on your industry. Many companies are
:04:04. > :04:07.spending big money on advertising. How is that hit your company? Are
:04:08. > :04:20.industry always suffers when a recession comes along. In a peculiar
:04:21. > :04:23.way, when cells are slowing down, I always imagine that when the firm is
:04:24. > :04:30.closed down, the advertising would increase. But they cut advertising
:04:31. > :04:37.as well. We are beginning to see advertising budgets increasing. I do
:04:38. > :04:42.not say they should do that because it is what I want is an industry, I
:04:43. > :04:46.think the right kind of advertising can stimulator the economy. It
:04:47. > :04:54.stimulator and investigation of products. It encourages
:04:55. > :04:58.productivity. If economics is a state of time, then the more
:04:59. > :05:03.positive people are, the better the economy will be. There is a great
:05:04. > :05:09.deal of consolidation happening in your industry. Is that killing off
:05:10. > :05:15.competition as well as creativity? There is always a risk of eight
:05:16. > :05:20.reduction of competitiveness. That is a concern. The counter argument
:05:21. > :05:29.is that by consolidating and you can get more information. We can assist
:05:30. > :05:33.and make our product better. Are they cultural impediments to
:05:34. > :05:39.creativity in Asia? Creativity is the occupation, it is a
:05:40. > :05:47.preoccupation. It requires ego. An overuse of respect will deaden
:05:48. > :05:53.creativity. Thank you. From March this year, the Indian
:05:54. > :05:58.central bank will withdraw all currency notes printed before to
:05:59. > :06:06.those in five. It is an attempt to curb the circulation of black money.
:06:07. > :06:10.Time to check my bank notes. A new water by the central bank will
:06:11. > :06:14.withdraw all banknotes issued before 2005. It is an attempt to curb the
:06:15. > :06:19.amount of black money in circulation. Cash that has not been
:06:20. > :06:23.declared and not taxed. By some estimates, India's underground
:06:24. > :06:28.economy accounts for nearly 50% of national output. This new order will
:06:29. > :06:33.have people worried. Anybody holding a lot of cash will have to go to
:06:34. > :06:38.retail banks to exchange them. Anybody not an existing customer of
:06:39. > :06:43.the bank has to show some kind of ID proof if they want to exchange more
:06:44. > :06:52.than ten of these 500 or,000 Ruby notes. Most people do not know about
:06:53. > :07:03.the new order. We live draw money in small to nominations. Working in a
:07:04. > :07:10.company, there is no way that you will have that kind of money. It is
:07:11. > :07:17.not bother me at all. The notes will still be valid legal tender, but
:07:18. > :07:23.retailers. -- will stop accepting the money. The central bank has
:07:24. > :07:26.issued an advisory. If you look at the currency notes and see the
:07:27. > :07:34.middle, there should be a year than it was issued. If the note was
:07:35. > :07:41.issued prior to 2005, it is no longer valid. The central bank has
:07:42. > :07:44.advised retail banks to shore up currency chest operations, expecting
:07:45. > :07:49.long queues of people, and is to be ready to handle the rush.
:07:50. > :07:56.Shares of China's Lenovo are higher by 8% this morning after the company
:07:57. > :08:02.agreed to buy IBM's low end server business for $2.3 billion.
:08:03. > :08:10.Brightside in talks last year. They could not agree on pricing. -- both
:08:11. > :08:13.sides were in talks. The Chinese company has since diversified into
:08:14. > :08:23.smartphones and tablets. It overtook Hewlett-Packard is the top PC maker
:08:24. > :08:31.in 2012. We asked why it was the right move. They have seen the PC
:08:32. > :08:34.business slowdown. We have seen slower shipments in the
:08:35. > :08:41.Asia-Pacific. They are looking at new avenues for growth. This fits
:08:42. > :08:47.nicely with our strategic direction. They have become one of the largest
:08:48. > :08:55.technology companies. It gives them a new revenue pool but also helps
:08:56. > :08:59.the bottomline. This is a business IBM does not want. Lenovo has done
:09:00. > :09:12.well with businesses IBM has wanted in the past. Canada the same with
:09:13. > :09:15.this? -- can it do. Once it goes through an integrated business into
:09:16. > :09:19.their organisation, I think the key will be understanding that this
:09:20. > :09:25.business is different from the PC business. There are elements of
:09:26. > :09:30.excellence and discipline that Llanover house that make it succeed.
:09:31. > :09:35.The same time, it requires a strong ecosystem of technology partners
:09:36. > :09:43.such as the software vendor is, system engineers, that deliver a
:09:44. > :09:49.complete sweep. It is not just a selling point. It will have to
:09:50. > :09:57.compete with others. The cloud is another issue. People moving away
:09:58. > :10:04.from traditional infrastructure. Lenders like HP, Dell, Cisco, they
:10:05. > :10:10.are fierce competitors. They would go aggressively after the customer
:10:11. > :10:24.base once the deal is closed. They will be a huge challenge for Lenovo.
:10:25. > :10:27.That ends this is -- addition of Asia Business Report.