28/10/2015 BBC Business Live


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This is Business Live from BBC News with Sally Bundock and Alice Baxter.


The enduring demand for the iPhone helps the technology giant defy it's


Live from London, that's our top story on Wednesday 28th October.


Apple's success story has been written by record demand in China -


Also in the programme - where are the best places


We'll tell you what the World Bank thinks - and some


And it's a bumper day for corporate news and European trading is


underway. We will tell you all you need to know, and the winners and


losers. And we'll be getting the


inside track on a girl's best friend - diamonds -


from the chief executive of the Is the slowdown in China taking


the sparkle out of the industry? Philippe Mellier will join us


in the studio. Today we want to know do you need to


have the latest gadget - How often do you update


your smartphone or tablet? Let us know.


Just use the hashtag BBCBizLive. A packed agenda today, let's get


cracking. The world's largest tech giant is


claiming its most successful year ever, after posting encouraging


fourth quarter numbers. The company's revenue reached $51.5


billion for the three months to September,


up more than 20% It meant the company made a profit


of over 11 billion dollars. It's thanks largely to strong iPhone


sales - the firm sold more than 48 million


of them in the last three months. And despite slowing economic growth


in China, sales there have nearly doubled to over 12.5


billion dollars - that's nearly I am joined by a technical analyst.


Apple claiming 2015 to be its most successful year ever recorded,


income of 11.1 billion US dollars. Incredible year in total, generating


$234 billion in revenue over the last 12 months. The increase last


year was more than the total revenue of 19 companies in the Fortune 500,


showing the sheer scale of the Apple business at the moment. It's really


about the iPhone. At its heart Apple remains a device manufacturer. It's


a bit unfair but you could call it the iPhone company, the iPhone


accounts for two thirds of its revenue. IPhone sales, selling more


than 48 million in the last three months. Sales of the iPad are


flagging. Yes, but it's a much less important product. The iPhone is


what's the growth. But the iPad will not replace the iPhone in our hearts


any time soon. Sales were down, so the company is hoping the new iPad


professional launching next month will reinvigorate sales. Right now,


I think we are swapping tablets for larger smartphones. Another small


but high profile section of the business, we don't know how many


Apple watches were sold in the quarter. In the raft of numbers,


according to the Chief Executive, as much as 30% of iPhone buyers are


Google android converts. The highest ever conversion rate. That's very


important, the one question is, I will be iPhone business develop,


with the iPhone seven coming out next year. -- how will the iPhone.


Asking about China. We often feel Apple is quite US centric, but 62%


of revenues generated outside the US with China accounting for a huge


chunk of that despite concerns about the slowdown. It doesn't seem to


have affected Apple. Sales of the iPhone up 120% year-on-year with


overall sales doubling year-on-year, and they are opening more Apple


stores. China market is looking very strong. Sales in China almost double


what they took last year. Thank you for your analysis. Apple shares went


up in half an hour's trade. Normally they go down. Not this time.


And sticking with the tech theme - Twitter disappointed investors with


Its revenues for the third quarter rose, but less than expected


and the number of active users only grew by 3 million since June.


This is Twitter's first earnings report with founder Jack Dorsey back


at the helm as its permanent chief executive.


Twitter shares lost as much as 11 percent in after market trading.


China's online retailing giant AliBaba also reported its results


The firm posted record revenues of almost $3.5 billion


thanks to strong sales on mobile devices.


The latest results pushed up its shares,


Also numbers out from japanese carrier All Nippon Airways-six-month


net profits soared 51 percent thanks to a big jump in its international


business, strong inbound tourism and falling oil prices.


ANA Holdings, the parent company of the airline said its profit


in the April-September period was $448 million, while revenue rose


Just to take you to the business live page, to flag up a few stories


catching our eye. Volkswagen making lots of headlines. Registering its


first quarterly loss in about 15 years. This is in reaction to the


rigging of diesel emissions tests. The first quarterly deficit in 15


years. Operating loss of just under 3.5 billion euros. That was walks


like a's announcement about 15 minutes ago. Offering a pre-tax loss


of around 2.5 billion euros. What's more on this, talking about that


diesel scandal, as you mentioned, and then going down as well. We can


see news from Barclays, giving their bosses a bumper pay package, making


headlines again. Barclays will have a new Chief Executive of the


Barclays group. A former chief executive at JP Morgan. Details on


his pay deal. Results coming from Nintendo. We can go to Singapore.


Sales are up but operating profit is not so good. Yes, we are seeing


mixed results from the video gaming giant. Strong sales of its new super


Mario game drove its revenue up nearly 20%. But net profit fell by


nearly the same amount and was lower than market expectations. These


earnings reflected the bumpy ride Nintendo has been on this year. In


July the company lost its pioneering Chief Executive to cancer. He was


leading the push for Nintendo to start making games for smartphones.


That has hurt Nintendo in the past, the decision to ignore mobile


devices and focus on gaming consoles. The company said little


about its future in smartphone games today, but they confirmed a gaming


app was scheduled to be released. Nintendo's numbers out, and it's a


busy day for corporate news with Japan closing up by 0.67%. Hong Kong


and Shanghai had a bad day. The stocks listed in Hong Kong for


China, their biggest drop in a month. It's predicted Wall Street


will be given a boost, given the news we had from Apple after the


closing bell last night, and it could give a real boost to Wall


Street when they open later. In Europe, we have mentioned


Volkswagen, Barclays confirming a new boss taking over. We had numbers


from Lloyds, BT and EE merging. As well as drinks giants merging. These


markets are fairly flat. And the Federal reserve has its meeting


today, its announcement of what interest rates will be. European and


Asian markets are treading water in many ways ahead of news from the US


Federal reserve. With more from the US. The central Bank of America


wraps up its annual meeting with a statement at 2pm Eastern time. Few


are expecting interest rates to go up, and it could be December, if not


next year, before we get any move. Hilton worldwide reported its


third-quarter earnings. The hotels have benefited from the US economic


recovery. Rivals, Starwood hotels, making most of its money outside


America, the strong dollar might be a drag for them. The results, a day


after reports that at least three big Chinese companies are vying to


buy the hotel chain. Don't forget to check out the make-up of Oreo


cookies, as well as PayPal also reporting this Wednesday. Plenty of


people reporting. Richard Dunbar, investment director at Aberdeen


Asset Management is with us. A flurry of earnings. What has caught


your eye. We are trying to see the aggregate, particularly of the US


earnings, halfway through the third-quarter earnings results, a


little bit better than expected, albeit expectations that had been


downgraded. We are watching the banks closely to see what happens


there. The tech companies are being watched closely. Some are good and


bad. Microsoft and Google have been good, Twitter and others, less good.


Same themes running through Europe and Asia. Trying to get a feel for


what the corporate sector is thinking about what's going on


throughout the world and what we have been talking about in the last


few weeks and months. How do you think they are interpreting this,


and are you with the majority expecting no news today? I think


everybody expects no news today. The debate is whether we get the news in


December or whether it is next year. The investors in the market, the


consensus is that any rate rises in the US will be pushed into next


year. Is that too late? She's reflecting a view on a very strong


US economy, but also a view on a slightly weaker global economy. I


think she's balancing those factors. If she was purely making the


decision on the US, she would perhaps put interest rates up


today, but she's taking a wider view, as the Fed is normally done.


On the flurry of earnings, beverage firms will be in focus because


Heineken reported strong sales growth in America and Europe. Sab


Miller is not doing so well. These companies are focused on where they


are doing business. Tech three Mac is focused on the e-mail urges.


Mergers and acquisitions has been a huge element in the last three


months. With Sab Miller and Inbev, they have


more time to grapple with that merger. The original 5pm deadline


today has been extended until 5pm on the 4th of November, more time to


nail down at megamerger. Still to come, a real gem, we will be talking


all things diamonds with a leader in the industry, the Chief Executive of


De Beers in the studio. First we moved to Lloyds, Europe's second


biggest bank by market value, and it has taken another 5.5 million pound


charge. It takes its total bill to about ?13.9 billion, more than


double any other bank. -- another ?5.5 billion charge. This is the


second largest bank in the UK and three of them are reporting this


week. Three of the top four. It's an interesting time to look at what is


happening in the underlying economy cars banks are a good pre-emptive


reflection of that in terms of the lending they are doing and therefore


the underlying profits. It's not looking too bad for Lloyds. We had


disappointing GDP figures from the UK yesterday, but the underlying


growth of the economy is not too bad. What Lloyds had content with


was the fact it had to put more aside by far than any other bank to


deal with this PPI mis-selling. ?13.9 billion. But the total amount


put aside was ?28 billion. It's shouldering quite a bit of the


burden. The regulatory environment is a bit clearer now. The regulation


of investment and retail banking within the bank, and the amount of


capital a bank has to put aside. In the coming months we might see the


ability to draw a line under the PPI scandal, and we might see a better


reflection of how banking will fare in the future. The regulators hope


it will be a lot more boring. Tell us about BT and EE. They are getting


the thumbs up regarding their tie-up.


It is worth saying BT has about 10 million customer, over 24 million


for EE, they are operating in different parts of the market.


Clearly the Competition and Markets Authority didn't think that


broadband and mobile were going to converge to the degree it caused a


competition problem, so it will be interesting and a big tie up. I


forgot to tell you what happened with Lloyds. It has gone with the


market. Quickly flag up this story trending on the BBC page, a quote


from the BT chief executive, saying we are very pleased it has been


The enduring demand for the iPhone helps the technology


giant defy its sceptics with blockbuster results - with an extra


And now let's get the inside track on the very sparkly


subject of diamonds - with De Beers CEO Philippe Mellier.


Founded in 1888, the De Beers group is a driving force in the diamond


industry with activities in exploration, mining, retail, trading


They're the largest supplier of diamonds onto


the global market in the world by value and responsible for about 35%


The company operates in 28 countries with mines in Botswana, Namibia,


But all that glitters is not gold - or diamonds.


Production fell 27% year on year to September and sales have fallen


Philippe Mellier, chief executive of De Beers Group is here.


Welcome. Thank you. I just want to take this back, because you joined


De Beers as CEO five years ago, prior to that, looking through your


CV you were a cars man, what attracted you to diamondses and what


attracted diamonds to you? And train, also, I was selling trains. I


was head hunted by the family at that time. They were looking for


somebody without any diamond knowledge, because all the CEOs


before me were coming from debeer, mostly South African and we are


living in an era where De Beers was very strong, was the only player in


the world of diamonds. Now, we are only 35% of the market, we are the


leader, and we are opening the company to competition. Not only


from our competitors from Russia and elsewhere but competition from other


luxury goods. It was important to position the company and to do a


little bit of a rebirth of company for the future, so that we can be


the leader for the next 100 years. Was it a steep learning curve for


you? Oh yes it was. I could bring some management skills coming from


a, having run big global companies before, I was pretty aware of


Government relations which is very important, because I have a


government on my board, but I didn't know diamonds. My wife knew quite a


bit about it! I had to learn, and I think today I am OK. I want to ask


you about some of the initiatives you have brought in. One that


interests me, the mine to demand ethos, talk me through that It is


very important. It's a luxury product. We mine to deMonday and,


and this is something -- demind, it is something we thought could be


possible but in the mining world we have huge investment it is difficult


to adapt. Since I arrived we have put in place in the mine, that is


very technical ways of scaling down the production when there is, the


demand is softening, we have what we call tailing plants we are can


process material that has been mined before. We can switch them on or


off. We have our own 30% flexibility in mines today. We can cope with any


demand. That is flexibility, that is key to success now with, you know,


the modty markets in the state they are in, many -- commodity. Many


competitors in mining, they are battling and being able to be


flexible is not something they can do. Depending on what they are


getting out of the ground. We are a mining company but not... We are not


comparing apples with apples We are consumer driven. Any type of


consumer driven company you have to adapt what you produce, manufacture


with the demand. This is what we are trying to do, in a mining company


which is a bit of a special world. We are getting there. Are you


worried about what is happening in the commodities market at the


moment? Of course, there is the slow down in China that we talk a lot


about, but also, there is becoming an increasing scarcity of diamonds


in the world. You and another company are if a real race to try


and find new diamond fields to explore, you are using technology, I


have been reading reports we saw a strong performance in 2014. They


think diamond sales will peak in 2017 but then they might drop off a


cliff No new mines have been found in the last 20 year, we are looking


for the next big mine. Some small ones have been found but not big


ones. The largest was in 1995. In Canada Yes, it was one of our mine,


so, since then, we are working with existing mines, so at constant rate


of production, after a window of three years we will see the


production going down, we are o lucky because De Beers have a long


life, most of them, but it is a bit worrying yes. Unfortunately we are


running out of time. I have one question for you, you are French,


you operate with debeer, of course, which is heavily involved in South


Africa and Canada, who did you support during the rugby World Cup?


I lost the French team quickly. I was fully behind the South African


team. You were behind the Springboks. Yes. Thank you so up


many for coming in. It has been a fascinating conversation. Many


We'll be talking to Brian Duffy, chief executive of Aurum Holdings,


which runs Watches of Switzerland stores.


So who's buying expensive wrist pieces and is this the best time


Here's a reminder of how to get in touch with us.


The Ben page is where you can they ahead. We will keep you up-to-date


with the latest detail, with insight and analysis from the BBC's team of


editors right round the world. We want to hear from you too. Get


involved on the BBC business live web page.


Or on Twitter. You can find us on Facebook as well.


Business Live on TV and online whenever you need to know.


Some of you have been getting in touch. This has come from Twitter. I


have had a message from Sebastian, this was in response to our question


where we asked you how much of a tech addict or Luddite you are. Do


you have to have the latest update? Sebastian said utility work, if it


does what I want it to do and I am a heavy phone user that is great for


me. I use a Samsung A5. Richard, are you a technology dinosaur, where are


you? I am at the dinosaur spectrum. Is your mobile phone this big? I am


happy with what I have got. Is Let us look at some of the other


stories. Is This caught our eye. So looking at the gulf news at the


economy section. Is World Bank has brought out this list, ranging the


best places in the world to do business. On the overall list,


Singapore scored number one, but this article looking at particularly


in this region, the Middle East and North Africa has done badly. It, the


UAE scored highly They are looking at things like title to assets,


these areas that make it easy or difficult to do business. The UAE


does well. The Middle East as a whole doesn't do as well as they


would like. I would suggest given the travails in that part of world,


both politically and economically, with the falling oil prices... The


UK came sixth. So that is not bad. Above the US and. And Germany.


George Osborne will be interested about that. Some much-needed good


news for him. Let us look at the Wall Street Journal. This is


interesting. So Facebook, in recognition of the fact that a huge


proportion of their business lies in emerging markets, where most of the


people they have to rely on 2 G connections. It is making its


employees work with 2 G internet. For an hour. To quote this article,


using 2 G is so onerous they couldn't subject it on their


employees for any longer. I suspect some of their developed world


customers have to put up with that performance, so maybe they are doing


it more for their total customer base. It is interesting firms like


that can be miles ahead of their, the bulk of their consumers and that


is what they are saying. Most of growth will be in the developing


world and they don't have the access to the speedy technology we


allegedly do. Quickly Richard, we have about 20


second, BP is in all the paper, we have a lot of oil giants coming,


there is a real theme there Poor results not surprisingly giving the


halving of the oil price. We will see more of that as the results run


through this sector. We will have to leave it there.


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