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Apple forecasts its first sales drop in years because of slowing iPhone | :00:16. | :00:24. | |
sales. And as Vietnam hosted Communist Party Congress, we look at | :00:25. | :00:27. | |
the future of the country's state owned enterprises. Good morning | :00:28. | :00:39. | |
Asia, hello world. Glad you could join us for this Wednesday version | :00:40. | :00:44. | |
of Asia Business Report. We start with technology and for almost a | :00:45. | :00:47. | |
decade the iPhone has been Apple's golden goose. One of the most | :00:48. | :00:53. | |
successful products in history, but shares of the tech giant are nearly | :00:54. | :00:58. | |
2% down in after-hours trade in the US after reporting lower than | :00:59. | :01:01. | |
expected iPhone sales and its slowest ever gross in shipments. -- | :01:02. | :01:09. | |
growth. There is concern that Apple is indeed losing its appeal. Earlier | :01:10. | :01:14. | |
our correspondent gave more details on the results. That is a big worry | :01:15. | :01:22. | |
for investors, they are depended on the iPhone sales and it is the first | :01:23. | :01:25. | |
time ever that they are predicted to be down. It has always gone up since | :01:26. | :01:31. | |
he came out in 2007 but now it seems to be going down. When of the other | :01:32. | :01:36. | |
problems Apple is facing is with China. Tim Cook said that China | :01:37. | :01:39. | |
wasn't going to be a problem six months ago, that people were still | :01:40. | :01:43. | |
going to purchase luxury gadgets, but it seems even they have been hit | :01:44. | :01:48. | |
by the worries in the Chinese economy. They're predicting loss, | :01:49. | :01:53. | |
particularly in Hong Kong. I spoke to an analyst and investor about how | :01:54. | :01:57. | |
worried Apple should be about China. Really what the focus now | :01:58. | :02:03. | |
is, is China remaining strong? If China falls, so does Apple. They | :02:04. | :02:07. | |
have really got the house on the Chinese growth opportunity. The | :02:08. | :02:10. | |
concern people have on the economy, I don't get really applies to | :02:11. | :02:14. | |
Apple. You were talking about a different kind of consumer when it | :02:15. | :02:18. | |
comes to Apple. Although there have been lower income levels, you're | :02:19. | :02:23. | |
still talking about what would be here, mid to upper class. Apple is | :02:24. | :02:32. | |
starting to feel the pinch, particularly in the softness of the | :02:33. | :02:36. | |
Chinese economy and we have also seen over the past year, weakness in | :02:37. | :02:41. | |
the Chinese currency against the US dollar. According to many analysts, | :02:42. | :02:45. | |
the lackluster revenue is also because of the volatility. | :02:46. | :02:55. | |
Absolutely. Tim Cook is trying to encourage people to look at the | :02:56. | :02:58. | |
benefits that will come this year from Apple, who can hopefully turn | :02:59. | :03:02. | |
around their fortunes. They are hoping that things like the iPhone | :03:03. | :03:07. | |
seven, despite China having problems, that people will still | :03:08. | :03:11. | |
purchase new phones. They still have loads of space to grow in China, | :03:12. | :03:16. | |
there are only 30 Apple stores in the country compared to 53 just in | :03:17. | :03:23. | |
California. Investors are worried, shares are falling at the moment but | :03:24. | :03:26. | |
there is a lot Apple can do to turn around. Vietnam's Communist Party is | :03:27. | :03:37. | |
meeting in Hanoi to discuss the next five years. The Congress has been | :03:38. | :03:40. | |
unusually divided with the reformist Prime Minister aiming for the top | :03:41. | :03:48. | |
position. And he has been blocked by his conservative rivals. But he has | :03:49. | :03:52. | |
driven the opening of Vietnam's economy, in particular pushing for | :03:53. | :03:58. | |
the selloff of the country's state-owned sectors. There will be | :03:59. | :04:01. | |
questions as to how far it can go. Now we go to our correspondent. | :04:02. | :04:10. | |
Factory fitness, Vietnam style. Workers on a men's suit assembly | :04:11. | :04:15. | |
line take these brakes to keep themselves fresh and efficient. Most | :04:16. | :04:20. | |
of their output goes for export to the United States or the European | :04:21. | :04:23. | |
Union. Quality is critical in a cutthroat industry. But there this | :04:24. | :04:31. | |
is a very old company. It was founded 70 years ago and it is part | :04:32. | :04:38. | |
of a much larger umbrella company which, like so much of Vietnam's | :04:39. | :04:43. | |
corporate sector, is state-owned. The company has done much better | :04:44. | :04:47. | |
than most in reforming itself and may well be able to compete in what | :04:48. | :04:51. | |
is a brutally competitive global market. But the health of other | :04:52. | :04:55. | |
state companies, still a big chunk of the economy, is a lot more | :04:56. | :05:00. | |
shaky. This company has spent the past ten years restructuring | :05:01. | :05:05. | |
itself, getting rid of unprofitable subsidiaries and slowly reducing the | :05:06. | :05:08. | |
level of state ownership. But it hasn't been easy. As a state-owned | :05:09. | :05:13. | |
enterprise, we were bound by many conditions and regulations. A lot | :05:14. | :05:19. | |
more than a private company. You couldn't just go in and shut | :05:20. | :05:24. | |
factories down? No, we can't. And yet he still had to try to be | :05:25. | :05:27. | |
competitive and profitable at the same time. That is why I say it is | :05:28. | :05:34. | |
remarkable for us to be able to do what we have done and remain | :05:35. | :05:39. | |
profitable. And it is worth remembering what the victorious | :05:40. | :05:43. | |
faction said that the Congress party conference last week. That socialism | :05:44. | :05:46. | |
and the state must remain a part of the economy. A pledge critics | :05:47. | :05:52. | |
believe is unrealistic in the 21st century. If the state sector plays a | :05:53. | :05:56. | |
leading role, it is not a competition. In Vietnam is already | :05:57. | :06:03. | |
deeply integrated into the world economy. Except the TPP and the free | :06:04. | :06:15. | |
trade agreement, and there are many changes Vietnam most abundant. This | :06:16. | :06:20. | |
company may be an exception, a state industry that can be competitive and | :06:21. | :06:25. | |
make money. It may also be privately owned one-day, says its manager, but | :06:26. | :06:30. | |
it is hard to guess right now whether their Communist Party rulers | :06:31. | :06:38. | |
will allow that to happen. The end of China's government statistics | :06:39. | :06:40. | |
bureau is under investigation for alleged corruption -- head. The | :06:41. | :06:52. | |
national Bureau of statistics head oversees the data on the GDP, | :06:53. | :07:00. | |
consumer prices and other economic indicators. Staying with China, the | :07:01. | :07:04. | |
Shanghai composite Index took another beating yesterday, closing | :07:05. | :07:11. | |
6-.4% lower after oil prices dropped again, reviving concerns about their | :07:12. | :07:16. | |
growth. Let's look at where markets are at this hour. A volatile day so | :07:17. | :07:30. | |
far. The -- let Ross over to Hong Kong, where we are joined by our | :07:31. | :07:37. | |
Asia correspondent -- let's cross. A lot of volatility? That's right. It | :07:38. | :07:44. | |
looks like it is going to be another one of those days. The Shanghai | :07:45. | :07:49. | |
market gained at the open but have since surrendered those gains. There | :07:50. | :07:54. | |
are now in negative territory. A slightly better picture in Hong | :07:55. | :07:57. | |
Kong. It looks like it is rebounding with the Hang Seng up more than one | :07:58. | :08:04. | |
and a half %. We will have to see how investors in China and Hong Kong | :08:05. | :08:09. | |
respond to those industrial profits come at the figures of which have | :08:10. | :08:13. | |
just been released. Analysts are saying there is not a lot of | :08:14. | :08:17. | |
conviction in the markets. Generally there is a feeling that they want to | :08:18. | :08:22. | |
sell on any bad news, and they are not buying on good news. So, | :08:23. | :08:29. | |
certainly that is why China's markets are down more than 20% so | :08:30. | :08:36. | |
far this year and it has only been a few weeks of trading so far. Only | :08:37. | :08:41. | |
yesterday, Shanghai markets ended at the lowest level since December. | :08:42. | :08:45. | |
There is no obvious reason for it. Traders say it may have been driven | :08:46. | :08:49. | |
by the fact that oil prices were down again. Low oil prices are good | :08:50. | :08:55. | |
for consumers, but it suggests continuing weakness in the global | :08:56. | :08:59. | |
economy. No positive economic fundamentals to support the mainland | :09:00. | :09:04. | |
market at this point. What about the probe into the data chief and his | :09:05. | :09:08. | |
practices? Is this impacting the market in any way? This is really | :09:09. | :09:17. | |
not helping at all. The news that the head of the China National | :09:18. | :09:23. | |
Bureau of Statistics is being investigated for alleged corruption | :09:24. | :09:26. | |
came as a real shock and it was especially shocking because he's the | :09:27. | :09:31. | |
phase of the Chinese statistics bureau and all the data releases. He | :09:32. | :09:38. | |
was presiding over that GDP Presser last week and barely two hours | :09:39. | :09:42. | |
before the announcement came that he was being investigated, he was | :09:43. | :09:47. | |
presenting a summary of 2015 data to journalists in Beijing. There is a | :09:48. | :09:53. | |
lot of surprise over what is going on and there are perpetually | :09:54. | :09:56. | |
questions being asked on the accuracy of Chinese data. This news | :09:57. | :10:00. | |
is definitely not helping the markets. Thank you. Before we go, | :10:01. | :10:07. | |
here's a quick look at the regional stock markets. It is a tale of two | :10:08. | :10:11. | |
markets at this point where you have the mainland markets in negative | :10:12. | :10:14. | |
territory but most of Asia in positive territory. Thank you for | :10:15. | :10:24. | |
investing your time with us. Goodbye for now. | :10:25. | :10:31. |