30/10/2015 BBC Business Live


30/10/2015

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This is business live from BBC News. Good news is brewing for the largest

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beer make in the world. Revenues rising. All of this as it prepares

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to take over its closest rival. Live from London, that is the top

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story today, Friday the 30th of October.

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A firm could produce one third of all beer around the world but what

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does that mean for consumers? We find out. Also, fixing the price of

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toilet paper. A decade-long deal between the two

:00:55.:00:58.

map probe biggest forestry companies in the world. And we get the inside

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track on a tonne of technical stories.

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Apple, Twitter and talk talk making the headlines for different reasons.

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Thank you! Do you want to sit down and do this as well? We will get

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that from our expert Rory Catlin Jones and we want to know from you,

:01:22.:01:26.

tomorrow, it is Halloween and it is huge business in the United States

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and getting bigger in the UK. You spent a lot of? Do you go trick

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or treating or do you hate it when the little ones come to your door?

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Tell us what you think. I would not want to turn up at his

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door! Welcome to the programme. The world's, just black has had solid

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results with revenues rising to $4.4 billion. It is a key player in a

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rapidly growing market. To give you an idea of the scale, the global

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beer market made revenues of $440 billion last year, expected to grow

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to 688 billion 2020. The company will more of that market if its

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takeover of its smaller rival SAB Miller is successful, it it would

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create the world's first global brewer and it would make around a

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third of the world's beer so the market could become even more

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concentrated with less suppliers and that could push up prices. The

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drinks market has the George in North America and Europe and growth

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has all but disappeared. Big Rory is now compete with smaller craft

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breweries. Latin, South America, India and China are growing markets.

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With that RGI, I would not want you showing up at my door! Alex, great

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to have you with us # With that RGI. We had been talking

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about this. Surely the biggest hurdle for these two has to be

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regular treat in terms of addition, that is a third of the world's beer

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market in the US, 70%, are they going to allow that? Surely not and

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it is being well fed. The deal has been in the works for so long. They

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have the playbook, they need to divest SABMiller brands in the US.

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We have looked at Australia and Brazil, but the US, 75% of beer, it

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is an easy move. AB Inbev owns Budweiser and other brands.

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SABMiller has Miller, just so that part. I am wondering, we talk about

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deals. Does one need the other more? Does AB Inbev need SABMiller

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more #. You could argue that and people have

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argued that. That is one reason they are able to attract considerable

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premiums. It is Africa, is that the clue? If you look at the map of the

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world, Africa is SABMiller. AB Inbev, if you get their annual

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report of Africa, there is nothing in it. And we talk about controlling

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a third of beer sales around the world. But we talk about these other

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players so it seems counterintuitive that the competition is from niche

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players in North America and Europe they go for this mass global appeal

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to flood the market with this stuff rather than concentrating on smaller

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rivals. Yes, this deal will give AB Inbev control of the world basically

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in terms of beer. Beer markets, they are national so although it is one

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and three worldwide, you have to look at every country separately. In

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terms of the regulations. The competition is from Kraft brewers,

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Heineken have taken them in the US. That is one of the questions, why

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are you not focusing more on entering that space? It could be

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that in the US, the expansion for these two, or the 1 after the deal,

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it is not to buy those up. Are they just to big to enter that space? It

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seems you have to be nimble and well tuned. They do mass-market well and

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they do not get that individual niche market. That is a hurdle but

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they have to figure out how to do that. SAB Miller has been trying

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things out with tasty beers in Latin America and the US. You have to been

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embroiled but they have existing players who might be buying them up.

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Great stuff, we appreciate that and you will keep across the deal. We

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will talk to you again sometime. Other business stories now in the

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meantime. The Bank of Japan has cut its growth

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forecasts and pushed back the target for reaching key inflation targets,

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thanks to a slowing economy. The central bank in the world's

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third-largest economy says it now expects growth to come in at 1.2%

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in the year to March 2016. That's down

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from an earlier forecast of 1.7%. British Airways owner IAG has

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reported a 43% surge in pre-tax profits of $1.2 billion

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for the three months to September. That's compared to the $818 million

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for the same period last year. Profits were boosted

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by lower fuel costs. Shares of baby products have risen

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sharply after China announced Companies including Danone and

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Nestle stand to benefit because baby formula sales in China are expected

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to double in the next five years. We are going to look at the business

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page. We are talking about British airways, Iberia, Spain. And a

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Spanish low-cost airline. Try saying get fast! And is now telling this.

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It is highlighting, Willie Walsh, former boss of British Airways and

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now of IAG, that was a smart move. We talk a lot about how important it

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is for oil prices and the effect on businesses around the world,

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especially BP and Shell and the fall in profits. But good news for

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profits including the airlines. They have all been making profits off the

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back of lower fuel prices. The trick is to watch when the fuel prices go

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up, can they continue making profits? And another question for

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IAG, who is next? They are quite hungry. They have money to spend.

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Let's take you to China. And Japan. An 86% fall in profits at Sharp. Our

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correspondent has the story. Ashley, good to see you. So a sharp fall,

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excuse the pun! Indeed! Another disappointing result

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for a company that was once a giant of Japan's electronics industry.

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Sharp's operating profit, bold to $29 million in the three months to

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September. The reason is falling sales in its smartphone display

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screens. The firm has also posted its steepest half-year loss in three

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years. Sharp has been struggling to stay afloat, receiving two bailouts

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in three years, and in May, thousands of jobs were put on the

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line. The company has been under pressure from creditors to sell off

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its loss-making business and its Chief Executive has confirmed today

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it is in negotiations with several companies to do just that. Even

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before today's results, shares at Sharp closed 1.5% to a year low.

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Good stuff, have a great weekend in Singapore. And we made to Friday!

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What have the markets done this week? This is how the week finished

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in Asia. Tokyo stocks higher at the bank of Japan made it hired there

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would be -- made it clear there would be no more stimulus, creating

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speculation it may be trying to slow growth. A Chinese rate cut, the

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European Central Bank has said it might offer more stimulus and the

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Central Bank in America is about to pull the trigger on a rate rise by

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the end of the year. Watch that December meeting. The upswing in

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Asia has translated to a mixed opening across Europe. We will

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discuss that in a moment. First, Wall Street. The details from New

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York. Two oil giants will both post

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earnings and low oil prices will wait on the company's earnings as

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the industry feels the pain. Last year, Exon Mobil posted its worst

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results and the amount Americans are spending rose in September, another

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sign domestic demand is healthy despite the fact the global economy

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is struggling. And we will see how people feel about the economy when

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the new consumer index comes out, analysts say it rose slightly from

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September. Richard Hunter, a familiar face to

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the channel, good to see you, welcome. Starting with the US, the

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biggest economy and came out with the three-month growth numbers, we

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expected about 1.7%, we got 1.5%. The previous three-month period,

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they had growth of 3.9%. So not good.

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That is the reason why the Fed had been so indecisive over the last

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couple of months, will they, won't they? We have no meeting in

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November. Were they want to spoil Christmas and bring it in December?

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Prior to yesterday's announcement and the minutes of the other day,

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smartphone was on a rise last year and it is now 50-50. 50-50 for

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December. They could pull the trigger. I wish they would do it.

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Nothing is going anywhere fast, what are they waiting for, for rates to

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go up in the US and the UK? You are right, it needs to be out of the

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way. They will not do more of a quarter of 8% so arguably they could

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have done in September. Tiny. It is the direction and speed of travel,

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they will not derail what little recovery they have got. And also, we

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are in the middle of the third-quarter reporting season in

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the United States and that has been a mixed bag. Good numbers from

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technical stocks, poor numbers from the banking stocks. Banks should in

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theory and effect from the interest rate rise but in terms of corporate

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America, that mirrors the economic figures we see, a mixed bag. Can we

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go from the world's biggest economy to the third biggest, Japan? It has

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not done anything at the moment although it cut its inflation target

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and forecast for this year. It does not have a lot of tools left, does

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it, to do much? Not after the three arrows and all the rest of it which

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have yet to show any signs of success. A big problem for Japan,

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biggest trading partner China which is slowing down. You will take us

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through the papers later, thank you, we will make you work!

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This week has been fantastic, record results for Apple. Twitter. TalkTalk

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had to deal with a hacking. Our technology editor will be here to

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take us through the ups and downs. Will he? That is business live from

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BBC News. It has been a big week for banking results in the UK, RBS has

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just released its latest set of results and Tanya has been wading

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through the numbers, and is up-to-date. They have a pre-tax

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profit of ?952 million which is an increase of 6% last year. Would

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argue it is not the number that is important. This is a bank that was

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rescued at quite a bit of cost to the taxpayer in the wake of the

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financial crisis and since then, the government has sold off some of the

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shares, they have bought the stake down to 73% and that cost the

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government about ?1 billion, that was a loss, getting rid of those

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shares. Shares have been hovering around ?300 at the height of the

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pre-financial crisis. They were 500 before that. They have recovered

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quite a bit but is desperate it is going to a restructure, getting out

:14:31.:14:36.

of 25 countries, costing a lot of money, the restructuring costs. It

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is also losing the business associated with that and it has sold

:14:40.:14:46.

off citizens in the United States. This is the real problem, there are

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a couple of misconduct issues still for RBS. The other banks for the

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most part have started to see the end of that. RBS does not know how

:14:56.:15:00.

much it will cost to settle claims in the US about security mis-selling

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and there is a question in the UK about how it handles small

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businesses so this is a bank with an uncertain future in a sense it is

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difficult to know how the costs will stack. On the bright side, it now

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has money to pay a dividend and that is what it is doing and it is

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reforming in a clear way, it is just taking a bit of time.

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Solid numbers reported ahead of signing of this bust a deal to buy

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its Red Bull -- its rival SAB Miller. It makes Budweiser and

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Stella. Profits went up I9.6% in the third quarter.

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Profits likely to get bigger as it continues. It is Friday, it is

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casual, he has one button more and we will take a step back behind the

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headlines and get the lowdown on the big technical week, we have covered

:16:52.:16:55.

big stories here. A quick reminder of what we have learned this week.

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Apple reported a record profit of 11 billion dollars from iPhone sales,

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48 million. Twitter shares fell 11% after announcing results, despite a

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rise in revenue because of all growth of active users joining the

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social network. Only 4 million in the third quarter in the last three

:17:18.:17:23.

months. TalkTalk became the subject of discussion after it revealed a

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significant and substantial hacking, a 15-year-old boy in Northern

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Ireland has been arrested with a second teenage boy arrested today. A

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16-year-old boy arrested in Feltham. So clearly issues. Rory is here.

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Good morning. Happy Friday. A heck of a week. Starting with Apple.

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Where do you go with this? 51.5 billion in revenue in three months,

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11 billion profit, 48 million in iPhones.

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There is a pattern. It's all about this. It's all about the iPhone, the

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single most profitable product I reckon any company's ever had in

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history. But, it's becoming, funnily enough, it's becoming a bit of a

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worry for those who follow the company. They're saying two things.

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How long can this go on? And isn't Apple a bit overdependent on it? The

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proportion of its profits that come just from this are getting ever

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higher. They bring out other products, they bring out the watch.

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Too many eggs in one basket? Yeah but every time Apple then comes

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along and knocks it out of the park. This time, in particular, we have

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been expecting possibly a little worry about China, China's obviously

:18:51.:18:55.

been huge for Apple in the last year or so. After not really making much

:18:56.:19:00.

of an impact, suddenly it's been making an impact and this time huge.

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One thing that refreshed my memory with these Apple numbers, you tend

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to think Apple favours the US market with stuff it brings out there. 62%

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of all the money Apple rakes in comes from all of us, international.

:19:16.:19:20.

We are the one who gives the gusto to Apple. It's a global superpower

:19:21.:19:26.

in technology. We know that. Completely focussed on one product,

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increasingly focussed future growth prospects on one territory, China.

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People are beginning to say, yeah, but how much appetite is there? You

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can get, here is another phone... Look at you! You are a walking

:19:40.:19:47.

mobile shop. Lovely phone. Google Nexus. Lots of great phones out

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there. And they all do much the same. What Apple has managed to do

:19:54.:19:58.

brilliantly is maintain the differentential. It's selling at a

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huge price. Overer smartphone, manufacturers are getting less for

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them. How long can they hold on to the stunning margins, that's the

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question? So far, they've pulled it off. A quick word on Twitter. This

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is on the BBC news website. Twitter's first TV advert confuses

:20:18.:20:21.

viewers. You can see it there. What is this? Well, Twitter is in a lot

:20:22.:20:29.

of trouble. The new chief executive, its old chief executive, who came

:20:30.:20:32.

back, is trying to turn things around. One of the things is this ad

:20:33.:20:38.

trying to make Twitter appeal to a new range of people, get them

:20:39.:20:40.

excited about it again in a way they excited about it again in a way they

:20:41.:20:45.

haven't been. Here is a Twitter story, actually this week's numbers

:20:46.:20:48.

from the financial point of view weren't that bad. Revenue, they've

:20:49.:20:53.

learned how to start making money. The trouble is the whole company is

:20:54.:20:59.

predicated, the share price, on the theory it will grow like Facebook.

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Facebook kept on growing, one-and-a-half billion users.

:21:04.:21:08.

Twitter's growth has begun to plat toe. Analysts are beginning to worry

:21:09.:21:13.

it will never justify the sky high valuations. The share price has come

:21:14.:21:20.

down. It's still massively higher valued than Apple in terms of ratio

:21:21.:21:27.

of price to earnings. Something like 34 times earnings, whereas Apple is

:21:28.:21:32.

six times. It says, you know, Apple, mature business, not going to grow

:21:33.:21:36.

much further according to the market. Twitter still expected to

:21:37.:21:40.

grow massively and every time it fails to grow massively, huge

:21:41.:21:45.

disappointment. Quickly move on to TalkTalk. This second arrest. Apart

:21:46.:21:49.

from the second arrest, where are we at with this mess? We are still

:21:50.:21:55.

trying - what we are seeing is a lot of anxiety across the corporate

:21:56.:21:59.

world about vulnerability to hacks. More than that, how you deal with

:22:00.:22:03.

them. At first it seemed TalkTalk had done quite well. They had come

:22:04.:22:07.

out, been very bold in saying this could be terrible. Then they dialled

:22:08.:22:11.

down the message and said maybe it's not as bad as we first thought. What

:22:12.:22:16.

they've left is a vast amount of confusion. What they've done to

:22:17.:22:20.

reassure the market is actually be tough with consumers and say you

:22:21.:22:27.

won't be able to leave us without penalty and unless you can actually

:22:28.:22:31.

prove that you have lost money because somebody's got hold of your

:22:32.:22:35.

data. Lots going on. You will keep across that story. Have a great

:22:36.:22:38.

weekend. Thank you for joining us. Always a pleasure.

:22:39.:22:43.

We are talking there, the police arresting a second teenager boy in

:22:44.:22:46.

connection with that investigation into the alleged data theft at

:22:47.:22:49.

TalkTalk. Full coverage of that continuing across the BBC.

:22:50.:22:53.

In a moment we will look at the business pages. Remember always we

:22:54.:22:55.

want to hear from you and here is how to get in touch with us.

:22:56.:23:01.

The business Live web page is where you can stay ahead with the breaking

:23:02.:23:06.

news. We will keep you up to date with the latest details, insight and

:23:07.:23:10.

analysis from the BBC's team of editors right around the world. And

:23:11.:23:16.

we want to hear from you too. Get involved on the BBC business live

:23:17.:23:25.

web page. You can find us on Twitter and Facebook. Business live on TV

:23:26.:23:30.

and online whenever you need to know.

:23:31.:23:38.

Richard is back. Let's start with The Guardian. A conspiracy to affect

:23:39.:23:47.

the price - even loo paper there is a conspiracy! Affecting poor people

:23:48.:23:51.

the most, but they've been brought to task. OK. Right. Anything else to

:23:52.:23:57.

say on that, Richard? I think it stinks, the story. OK. Google.

:23:58.:24:04.

Google famously pulled out of China. It couldn't get its own way with

:24:05.:24:07.

security, safety all that sort of stuff. It says now the parent

:24:08.:24:12.

company may go back in on its own terms and make sure we all know this

:24:13.:24:16.

is a different thing it's going back into. Two things at play here.

:24:17.:24:22.

Firstly the whole issue of the Chinese and how they regulate their

:24:23.:24:26.

own internet and won't let certain foreign institutions in, etc. I

:24:27.:24:31.

suspect the other thing is that Google or Alphabet have probably

:24:32.:24:35.

been looking sideways rather enviously of what Apple is doing

:24:36.:24:40.

there. They can't afford not to be there, regardless of what they think

:24:41.:24:44.

or morals they need to be there financially. You are right, of

:24:45.:24:48.

course. China is the second largest economy in the world. Most estimates

:24:49.:24:52.

would say it's going to be the largest economy in the world within

:24:53.:24:56.

ten or 15 years. Clearly it's a massive piece of business, they not

:24:57.:25:01.

only need to start trading there but become rather entrenched in the

:25:02.:25:03.

Chinese psyche, as well. Interesting. Let's try to get this

:25:04.:25:08.

before we have to wrap up. Some retailers stepping back from Black

:25:09.:25:14.

Friday, the day after Thanksgiving. Retailers turn a profit. Is this

:25:15.:25:20.

because of online? Partially. It's also, and something because this is

:25:21.:25:24.

taken off in the UK the last couple of years, retailers are finding,

:25:25.:25:32.

hold on, all we are doing is putting forward Christmas sales. Christmas

:25:33.:25:35.

sales pop off a cliff because they're waiting for January sales or

:25:36.:25:38.

it's prebought on Black Friday as is. They're finding the same in the

:25:39.:25:43.

States. I am sure it won't see an end to the crazy pictures of people

:25:44.:25:48.

fighting over TVs and stuff. Thank you, Richard. Thank you for your

:25:49.:25:50.

company. You are up to date with the business news. From him and me,

:25:51.:25:52.

goodbye. Hello. The weather has the potential

:25:53.:26:12.

to be really quite warm this weekend but only if low cloud

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