24/01/2014 Asia Business Report

significant decrease in violent crime. Shoplifting and street thefts

are up. Time for the latest business news.

Changing fortunes: Samsung's mobile division posts a drop in earnings.

Chinese PC maker Lenovo expand its product lineup, snapping up IBM's

server business. Welcome to Asia Business Report. We start with

Samsung, there has been a mixed bag of earnings from the South Korean

company. They posted a 30% jump in net profit, but for the final

quarter of last year, operating profit at its mobile division, which

has its main revenue generator, fell by 18%. New phone models from rival

apple to away sales during the holiday period. Samsung aims to

maintain its status as market leader in the smartphone business by

diversifying products. That could be a tough challenge. Our correspondent

has more. Samsung became the world's biggest maker of mobile

phones in 2012, when it overtook Nokia. Sales of its prose account an

early 60% of its operating profit. Until late last year, as was the

most popular model. Sales started to slow when apple released its latest

iPhone. Samsung is now banking on its larger screens. Even these will

come under competition, with Apple expected to release a similar sized

phones later this year. We will find out what consumers think. I have

been using Apple since 2008. It is user-friendly. I do not like Apple

products. Samsung is very customisable. Samsung is more

customisable. Apple is quite restricted. Samsung has done well in

emerging markets, especially with the strategy of developing different

models at different prices. It faces new challenges in China, wear it has

been a dominant player. Apple has started selling its iPhone is with

China Mobile. With the smart phone market selling to mature, it is

putting pressure on all green nations. Some analysts say Samsung

is going to have to innovate and come up with something unique if it

is going to create new areas of growth.

Samsung's brand may be under threat. The largest advertising company in

the world was in Singapore. I asked about his views on Samsung. I am

here Samsung is a brand that has been particularly successful. Ferry

and rubble. I will be very critical here and say, actually, it tends to

be a copy. Where is the originality? Is a dangerous word. Where is the

fresh perspective? Yes, you can look at everything they have done, it is

like a copy of an apple product. There is a place that. The future

for Samsung is that they have to be more innovative and leading. The

past five years has been hard on your industry. Many companies are

spending big money on advertising. How is that hit your company? Are

industry always suffers when a recession comes along. In a peculiar

way, when cells are slowing down, I always imagine that when the firm is

closed down, the advertising would increase. But they cut advertising

as well. We are beginning to see advertising budgets increasing. I do

not say they should do that because it is what I want is an industry, I

think the right kind of advertising can stimulator the economy. It

stimulator and investigation of products. It encourages

productivity. If economics is a state of time, then the more

positive people are, the better the economy will be. There is a great

deal of consolidation happening in your industry. Is that killing off

competition as well as creativity? There is always a risk of eight

reduction of competitiveness. That is a concern. The counter argument

is that by consolidating and you can get more information. We can assist

and make our product better. Are they cultural impediments to

creativity in Asia? Creativity is the occupation, it is a

preoccupation. It requires ego. An overuse of respect will deaden

creativity. Thank you. From March this year, the Indian

central bank will withdraw all currency notes printed before to

those in five. It is an attempt to curb the circulation of black money.

Time to check my bank notes. A new water by the central bank will

withdraw all banknotes issued before 2005. It is an attempt to curb the

amount of black money in circulation. Cash that has not been

declared and not taxed. By some estimates, India's underground

economy accounts for nearly 50% of national output. This new order will

have people worried. Anybody holding a lot of cash will have to go to

retail banks to exchange them. Anybody not an existing customer of

the bank has to show some kind of ID proof if they want to exchange more

than ten of these 500 or,000 Ruby notes. Most people do not know about

the new order. We live draw money in small to nominations. Working in a

company, there is no way that you will have that kind of money. It is

not bother me at all. The notes will still be valid legal tender, but

retailers. -- will stop accepting the money. The central bank has

issued an advisory. If you look at the currency notes and see the

middle, there should be a year than it was issued. If the note was

issued prior to 2005, it is no longer valid. The central bank has

advised retail banks to shore up currency chest operations, expecting

long queues of people, and is to be ready to handle the rush.

Shares of China's Lenovo are higher by 8% this morning after the company

agreed to buy IBM's low end server business for $2.3 billion.

Brightside in talks last year. They could not agree on pricing. -- both

sides were in talks. The Chinese company has since diversified into

smartphones and tablets. It overtook Hewlett-Packard is the top PC maker

in 2012. We asked why it was the right move. They have seen the PC

business slowdown. We have seen slower shipments in the

Asia-Pacific. They are looking at new avenues for growth. This fits

nicely with our strategic direction. They have become one of the largest

technology companies. It gives them a new revenue pool but also helps

the bottomline. This is a business IBM does not want. Lenovo has done

well with businesses IBM has wanted in the past. Canada the same with

this? -- can it do. Once it goes through an integrated business into

their organisation, I think the key will be understanding that this

business is different from the PC business. There are elements of

excellence and discipline that Llanover house that make it succeed.

The same time, it requires a strong ecosystem of technology partners

such as the software vendor is, system engineers, that deliver a

complete sweep. It is not just a selling point. It will have to

compete with others. The cloud is another issue. People moving away

from traditional infrastructure. Lenders like HP, Dell, Cisco, they

are fierce competitors. They would go aggressively after the customer

base once the deal is closed. They will be a huge challenge for Lenovo.

That ends this is -- addition of Asia Business Report.