26/01/2016 BBC Business Live


26/01/2016

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This is Business Live from the BBC with Sally Bundock and Ben Thompson.

:00:00.:00:12.

Iran's Hasan Rouhani signs billions of dollars worth of contracts

:00:13.:00:15.

in Rome - just weeks after sanctions were lifted.

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Live from London, that's our top story on Tuesday

:00:20.:00:21.

Rome is just the start of Rouhani's state visit -

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with European businesses eager to get in on the action -

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with more deals due to be signed this week.

:00:49.:00:52.

Steep losses on the markets in China and there are falls across Asia

:00:53.:01:01.

as investors worry about the price of oil.

:01:02.:01:11.

Look at the impact that is having in Europe. Heavy losses across the

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board. We will talk you through the winners and losers.

:01:19.:01:19.

And have you ever considered what goes into making

:01:20.:01:21.

We'll get the inside track on the industry from a firm that

:01:22.:01:25.

designs the hardware used in millions of mobile devices.

:01:26.:01:27.

And as the boss of the Marriott hotel chain says top bosses

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SHOULDN'T be applauded for getting by on little sleep.

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He calls it a "misplaced show of toughness".

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So we want to know - can you function on less

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Iran's President, Hasan Rouhani is in Rome - and and has signed

:01:39.:01:57.

billions of dollars worth of contracts - on his first official

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It comes just weeks after sanctions were lifted following a deal

:02:01.:02:09.

Italian officials say agreements worth $18 billion

:02:10.:02:16.

They include an Italian firm building a 2,000 kilometre

:02:17.:02:25.

pipeline, a steel agreement worth more than $5 billion

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and a joint venture called Persian Metallics.

:02:29.:02:29.

Later in the week in Paris - President Rouhani is expected

:02:30.:02:32.

to finalise a deal with Airbus to buy 114 new planes -

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Over the weekend, Iran signed a trade an energy pact with China

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I am joined by Nicholas Niksadat, Correspondent for BBC Persian.

:02:42.:02:54.

Welcome. The issue is this apparent gold rush. This rich by European

:02:55.:03:09.

firms into Iran because it is a big untapped market, it has been closed

:03:10.:03:13.

for so long. Where do we think the majority of deals will be signed in

:03:14.:03:21.

the early days? I am sorry, I didn't catch that final part of your

:03:22.:03:26.

question. Where will the deals be signed, in which industries, in the

:03:27.:03:31.

early days? Where will the biggest deals be signed? Of course there is

:03:32.:03:40.

a bit of everything. Only yesterday, 13 deals with different Italian

:03:41.:03:43.

companies were signed. Some of them you just mentioned. Some will be

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signing more deals, they are expected to sign more deals. For

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example, the Italian mining giant signed a contract worth 5.7 billion

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euros. More than $6 billion. They will be signing another contract

:03:59.:04:06.

with another Iranians mining entity. There is an infrastructure. Rail as

:04:07.:04:12.

you mentioned, high-speed rail lines. Modernising some of the

:04:13.:04:20.

already existing rail lines. Ports. An Italian chip-making giant based

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in Genoa, they signed another deal. The president made it clear they

:04:26.:04:33.

want to give more privileged to the sectors such as export, shipping,

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aviation, and Iran has a very ageing civilian aircraft fleet. That is

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maybe something they will be discussing in Paris because of our

:04:45.:04:50.

boss. Then again, we have other sectors. -- Airbus. A lot of sectors

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recovered and today there will be a huge business forum where the

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Iranians delegate, which is comprised of about 120 people, will

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be meeting with about 500 Italian big industry directors or investors

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to further explore possibilities. Briefly, the issue is about it being

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a two way relationship. What's doing about the intentions of the

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president when it comes to who he wants to work with. The Italians are

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in focus, but what other indications do we have about whereas and who

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else deals will be done with? There is a lot of competition. There are

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many sectors where Italy and their neighbours France will be competing.

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For example, oil and gas industry. Italy has been traditionally strong,

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but it was made clear they do not want to limit themselves to this

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area of cooperation with Iran. We have the Italian giant and Ben Total

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in France. The automotive industry, where Italy can maybe be stronger in

:06:01.:06:09.

luxury car, where as France has quite a substantial experience in

:06:10.:06:12.

Iran already before the sanctions. Obviously, choosing Italy and France

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has not been a coincidence. Iran has made it very clear that Italy has

:06:17.:06:21.

had a positive attitude towards Iran. It helps Italy a lot that it

:06:22.:06:25.

was not a member of the Security Council. Therefore, it was not that

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hostile and couldn't be. Traditionally, Italy has been quite

:06:31.:06:34.

mild toward a lot of middle eastern countries, including Iran. Perhaps

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because of its needs. We can think about Germany, as well. At times

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when Italy was not Iran's first European partner, Germany was the

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first. Italy and Germany together accounted for 60% of the trade with

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Iran. I would not leave Germany outside, either. Thank you very

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much. Ford is shutting down

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all its operations in The US car giant holds less than 2%

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market share in both It began operations in Japan more

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than four decades ago but has struggled to compete

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against Japanese rivals. Instead, it will focus on China

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where sales hit a record An official investigation into how

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money appeared in the Malaysian Prime Minister's account has

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concluded it was a gift. It has caused months of political scandal

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in Malaysia, but the eternal general was satisfied there was no criminal

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wrongdoing -- Attorney General. Rising passenger numbers in easyJet,

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up by 8.1%, and capacity is growing. It is laying on more planes, but

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there is still concern about its cost per seat. That is a crucial

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indicator for the airline about how much it is costing them to fly

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people. That is falling slightly, but EasyJet says it expects profits

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to be fully in line. Sharm el Sheikh is a key destination. Paris is also

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important. Shares opened down 3% today off the back of that is news.

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Plenty of details that on an update from Dixons carphone. We will talk

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about that later. That is the merger of the mobile phone retailer and the

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PC maker. Both industries that are struggling, but they suggest that

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they are turning things around despite closure of some stores. That

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is to refocus our business. Not just to focus on phones or PCs.

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There have been big falls again on the markets in Shanghai.

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I feel like we have been here before. Why today? This is of course

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all about sentiment. The markets are feeding off each other and in

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particular of course feeding off the declining oil prices. That is what I

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think started the market of lower. It was down about 2% at lunchtime.

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The story of the afternoon has been one that we have seen before on the

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Shanghai stock exchange. Too many times over the last six months or

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so. That is the spectre of panic. Panic simply feeding into panic. Of

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course what is going on, the markets, the oil price may have

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started it, but it begins to have very little bearing when investors

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simply want out. The real thing that is driving that kind of sentiment is

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the wider concerns over the Chinese economy. The slowdown in group. The

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manager in expected slowdown that the market had supposedly placing,

:10:05.:10:08.

will it be faster and more prolonged than expected? We have had a few

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indicators. Energy consumption, freight volumes, over the past few

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weeks, that have led some to suggest that is what we are seeing. A more

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prolonged and faster slowdown in growth. That is probably what is

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spooking investors today. Thank you. Let's look at the markets. Japan

:10:24.:10:32.

closing over 2%. Hong Kong down 2.5%. Wall Street never bodes well

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for a session in Asia the morning after. Looking at the Europe now,

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this all follows through. The oil price is falling. Brent crude down

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nearly 3% below $30 per barrel. That doesn't help London. The Japanese

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yen very much in favour and the gold price is going up, as well. What

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will happen on Wall Street? Apple reports its earnings and share

:11:05.:11:10.

price has taken a beating. Investors will be looking at the numbers to

:11:11.:11:13.

decipher how quickly iPhone sales are slowing. The strong US dollar is

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expected to crimp Proctor and Gamble sales. The company has been cutting

:11:22.:11:26.

down the number of products it sells to try to concentrate on higher

:11:27.:11:30.

margin brands. Also a drop in seat prices is partly to blame for

:11:31.:11:41.

Dupont. An economic front, look out for the latest housing data and the

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board 's consumer index which will show if Americans are feeling

:11:47.:11:49.

rattled by the latest stock market fluctuations.

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Joining us is Richard Dunbar, Investment Director

:11:51.:11:52.

We are here again. It is like Groundhog Day. Markets in China are

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falling, European markets opening like that. Why? Markets are still

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focusing on the Chinese economy. The prospects for the US economy. And on

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what the oil price, if anything, is telling us about what is going on in

:12:16.:12:20.

the global economy. That is leading to rather skittish markets. Is its

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telling us something? We have talked about this a lot and clearly it

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tells us that story of slowing demand, particularly in China, but

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there are just as is getting out of step. It is just fear that is making

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the oil price fall significantly and concern rather than solid evidence.

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We know that with markets anyway, but nonetheless, either two really

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in line? You can pull textbooks off-the-shelf and they will tell you

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that falling oil prices are positive for global growth. At the moment,

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the negative side of the oil price, from Saudi Arabia, Brazil, Africa,

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you see me to the problem that the falling oil price is causing. You

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don't see the benefits. Millions of people around the world are paying a

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lot less for their gasoline than they were six months ago. You are

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perhaps interviewing fewer people who are seeing that benefit.

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Hopefully the time we will see that country. Richard will be back very

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soon to talk about some of the other stories out there. The Federal

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reserve begins its two day meeting and deliberations.

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Still to come: We take them for granted, but what goes

:13:24.:13:26.

We'll get the inside track on the technology that

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And why firms are battling it out control the power in your pocket.

:13:30.:13:34.

You're with Business Live from BBC News.

:13:35.:13:38.

Young people are now spending more time online

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An annual survey tracking children's viewing habits found five

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to 16-year-olds use the internet for around three hours a day -

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The research agency Childwise described it as a "landmark change"

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Our Technology Correspondent Rory Cellan-Jones has more.

:13:58.:14:00.

In an age when tablets and smartphones give us instant

:14:01.:14:02.

access to all kinds of viewing material, our media habits

:14:03.:14:06.

But it is children who may be showing us what the future looks

:14:07.:14:11.

The Childwise survey of 5- to 16-year-olds shows

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they are watching an average of 2.1 hours of traditional TV a day.

:14:15.:14:18.

But that has been overtaken by the three hours they spend online.

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That may be because two thirds of them now own a tablet computer.

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And YouTube is top of the list of their favourite websites.

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Children are moving away from watching linear television.

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They are watching television when they want to watch it,

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where they want to watch it, so on tablets and on-demand services

:14:40.:14:42.

But there is still a place for children to watch television

:14:43.:14:48.

with their families, on the weekends, sort

:14:49.:14:49.

In just a few years, children have got used to playing

:14:50.:14:55.

We asked these young visitors to the London Toy Fair

:14:56.:15:00.

When you're on your phone, you can text, and can get in contact

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with your friends, and you can watch TV.

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With the telly, you can't play games, and there's,

:15:09.:15:13.

like, not a lot of options what you can do.

:15:14.:15:18.

Children are still watching plenty of television.

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But in the touchscreen era, they are demanding greater control

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I want to take you to this story that's in The Telegraph. You will

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know Slough doesn't have the best reputation for perhaps being a town

:15:44.:15:47.

that you would want to go to or a city, but The Telegraph says it is

:15:48.:15:52.

the UK's new start-up hub. It has been the king of new businesses for

:15:53.:15:56.

the last five years, but Northampton is eyeing its crown. For start-ups,

:15:57.:16:01.

for new business to be a place that attracts you, it is growing its

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corporate presence by 29%. It is really close to Heathrow. Well,

:16:07.:16:10.

that's one of the benefits, clearly. And it is very close to London as

:16:11.:16:11.

well. Well, there you go. You're watching Business Live.

:16:12.:16:18.

Our top story: Iran raes president is doing his

:16:19.:16:30.

tour. He is in Rome and he is heading to Paris tomorrow. We're

:16:31.:16:33.

keeping track of what he is up to and who is getting the big business

:16:34.:16:38.

offers. The gold rush begins for European firms who are eyeing up

:16:39.:16:43.

opportunities in Iran and what it could mean for them. We will keep

:16:44.:16:44.

you posted as the deals are signed. We might take them for granted,

:16:45.:16:49.

but what about the businesses who make a living from designing

:16:50.:16:52.

and making the parts Imagination Technologies

:16:53.:16:54.

is a UK-based firm which designs the hardware used inside billions

:16:55.:17:00.

of mobiles devices for brands including Apple, Intel,

:17:01.:17:02.

LG, Samsung and Sony. It has more than 1,700 staff -

:17:03.:17:05.

80% of those are engineers. It doesn't make the hardware itself,

:17:06.:17:08.

but instead licences Imagination is also known for it's

:17:09.:17:10.

successful digital radio It has sold more than five million

:17:11.:17:23.

units around the world. Sir Hossein Yassaie,

:17:24.:17:28.

chief executive of Imagination Lovely to see you. Thank you for

:17:29.:17:35.

coming in. We will talk about Pure in a minute because there is all

:17:36.:17:40.

sorts of stories out there about its future. But let's just start with

:17:41.:17:45.

your company and what you do because when we were chatting earlier, I

:17:46.:17:48.

thought it was very interesting how you talked about why you decided to

:17:49.:17:53.

licence, as opposed to make the chips. It was a strategic choice

:17:54.:17:58.

sometime ago, wasn't it? It was 15 or 20 years ago and being in the UK,

:17:59.:18:04.

it was quite clear to me that the revolution will come from silicon

:18:05.:18:07.

and being a chip maker required a massive capital. The question is how

:18:08.:18:12.

do you achieve the same thing and the influence and then the licensing

:18:13.:18:16.

is a better model and very suited to the UK as you can see our friends in

:18:17.:18:20.

Cambridge do a similar thing. It works for both of us. It was a

:18:21.:18:27.

really great idea at the time? Unusual because, you know, licensing

:18:28.:18:31.

technology wasn't really a normal thing 20, or 15 years ago, but it is

:18:32.:18:36.

now, for us, being able to use the know how and the capability here

:18:37.:18:39.

without requiring massive capital was the basis of starting this path.

:18:40.:18:45.

On that issue of know how and knowledge, we talk there about 80%

:18:46.:18:48.

of your staff are qualified engineers and we have made a lot of

:18:49.:18:54.

this skills shortage of people not necessarily having the right skills

:18:55.:18:57.

or the right jobs. How do you find the market? Can you get the people

:18:58.:19:03.

to do the hi-tech jobs? The skill is a megaissue. The way we've worked

:19:04.:19:07.

around it, we are working closely with the universities at the very

:19:08.:19:11.

early stage. We go to schools and try to encourage young people to

:19:12.:19:15.

pick up the electronics as a subject and through that, we get what we

:19:16.:19:18.

need, it is a very difficult subjectment we also are a global

:19:19.:19:22.

company. If you can't get what we need in the UK, we have gone to

:19:23.:19:26.

Poland and other places. I prefer to be based in the UK because having

:19:27.:19:30.

engineers in one place is much more effective, but we've done a

:19:31.:19:33.

combination of UK and overseas through that. We are talking about

:19:34.:19:38.

obviously smart devices, smartphones, etcetera, we have all

:19:39.:19:42.

got them and everyone is using multiple devices, it would seem, for

:19:43.:19:45.

you, it is a gift, but the internet of things is an area that you're

:19:46.:19:49.

moving into a significant way which is seen as the next big thing, isn't

:19:50.:19:53.

it? Of course. I think really if you look at the mobile phone, the focus

:19:54.:20:00.

on them has been, you know, communication, internet access,

:20:01.:20:02.

etcetera, but with the technology it is now possible to take the

:20:03.:20:06.

technology to other major areas such as healthcare, we have seen wearable

:20:07.:20:12.

devices, etcetera, we've prepared technologies that will drive the

:20:13.:20:16.

deployment of advanced solutions in healthcare and in energy management,

:20:17.:20:21.

etcetera. And it is very much moving away from not just the thing you've

:20:22.:20:25.

got in your pocket. This is to do with the internet of things. It is

:20:26.:20:29.

about these devices that are connected to the internet and it

:20:30.:20:33.

means that so much of what we do now, will be controllable or

:20:34.:20:37.

governed by by the internet? Everyone talks about it, but when

:20:38.:20:41.

you ask people what it is, 90% of people can't tell you what it is. So

:20:42.:20:48.

what we've done here. We have a collection of technologies. This is

:20:49.:20:51.

really different sensors, a temperature sensor, this is a

:20:52.:20:55.

switch, this is, you know, a different kind of sensor, so you can

:20:56.:21:00.

build modules like this and district them around the home and this is a

:21:01.:21:03.

central hub that can control the system and you can begin to do all

:21:04.:21:08.

the normal things that you expect in either healthcare or energy

:21:09.:21:11.

management, etcetera. The phone would still be a major element. It

:21:12.:21:16.

will still be controlling a loft these devices, etcetera, but we see

:21:17.:21:21.

this as a big megatrend coming up. We have been told we have got to

:21:22.:21:25.

leave it there which a shame. Not least the fact that you're from Iran

:21:26.:21:28.

which is extremely interesting, but I will get into big trouble if I ask

:21:29.:21:31.

you another question. So we will move on. No problem. Thank you for

:21:32.:21:37.

coming in. We really appreciate it. We have been asking for your tweets.

:21:38.:21:43.

The head of Marriott Hotels has been talking about the perceived wisdom

:21:44.:21:47.

of people who say, "I survive on three or four hours a night of

:21:48.:21:54.

sleep." We have had a tweet saying, "For over seven years, I have only

:21:55.:21:58.

had four to five hours sleep, but still manage to function better than

:21:59.:22:02.

other people." Other people may disagree with you. That's what I

:22:03.:22:08.

get, four to five hours sleep. Another viewer says, "I can function

:22:09.:22:14.

on three hours. Do that for a couple of days, it depends on the events

:22:15.:22:19.

and how busy I am." How many hours sleep a night do you get? Normally

:22:20.:22:26.

four or five. Go on, but... If I do three or four hours for five days, I

:22:27.:22:31.

need an eight hours to recover from it. Power through the week and have

:22:32.:22:37.

a binge on sleep. You must do, the power sleep which is a 20 minute

:22:38.:22:42.

sleep now and then. I learned that from the Japanese. You and I should

:22:43.:22:46.

write a book. It would be a best seller!

:22:47.:22:50.

Philips, the Dutch maker of LED lights and medical scanners,

:22:51.:22:53.

has reported core fourth quarter earnings ahead of expectations,

:22:54.:22:55.

but the company issued a cautious outlook for 2016.

:22:56.:22:57.

Earlier, the company's chief executive Frans van Houten explained

:22:58.:22:59.

Let's look at the year. We ended well. We saw 15% order intake growth

:23:00.:23:15.

in healthcare overall 4% growth in health technology. Led lighting grew

:23:16.:23:22.

26%. I think that's a rewarding number and our operational

:23:23.:23:27.

profitability ended at 11.9% which was a 13% improvement. So we do see

:23:28.:23:33.

that Phillips is gaining traction, the accelerate programme is working

:23:34.:23:39.

well and then as you mentioned, we had a setback on luminar which was

:23:40.:23:45.

disappointing after we thought back in April we constructed a good

:23:46.:23:56.

transaction. Let's look at what the business

:23:57.:24:01.

pages have. Richard is back. South China Morning Post. People living

:24:02.:24:05.

around the world always think their city is the most expensive. Hong

:24:06.:24:10.

Kong is the most expensive market in the world for the sixth year in a

:24:11.:24:16.

row? Hong Kong is 20 times average earnings. This snap was taken in

:24:17.:24:20.

September. So with what we have seen going on in China, in commodity

:24:21.:24:24.

prices in the global economy, I suspect this maybe a peak in Hong

:24:25.:24:27.

Kong, but nevertheless, it is a dynamic, exciting economy and that,

:24:28.:24:31.

those house prices would reflect that. I thought Singapore might pip

:24:32.:24:36.

it to the post, but clearly, Hong Kong, holding that title and it is

:24:37.:24:39.

not necessarily a good title to have, is it? Well, it's not. 19

:24:40.:24:46.

times earnings? It is 19 times the average residents erchtion.

:24:47.:24:55.

Residents earnings. Let's get your take on this, the boss of Marriott

:24:56.:25:01.

Hotels saying you have got to have at least seven-and-a-half hours

:25:02.:25:04.

sleep a night. He is proud of that and he thinks those who boast they

:25:05.:25:10.

have less, they are not really being honest? It is really a badge of

:25:11.:25:16.

honour. Margaret Thatcher had four hours a night. It is seen as a badge

:25:17.:25:20.

of honour and it is interesting there is some push back from one of

:25:21.:25:24.

the senior executives. It is a hotel executive so she is keen that people

:25:25.:25:28.

use her product to increase their amount of sleep!

:25:29.:25:32.

It is that move about work-life balance, getting better balance when

:25:33.:25:36.

it comes to what we do at work and what we do at home and the paternity

:25:37.:25:40.

leave and maternity leave. Business should not be cut and dry, it is

:25:41.:25:44.

about having a balance and that makes you a better person or a

:25:45.:25:48.

better business leader. You can see that in the high time industries

:25:49.:25:52.

that we are trying to make it more attractive to bring people in.

:25:53.:25:55.

Richard, nice tows. That's it from us. We will see you very soon, same

:25:56.:26:00.

place, same time tomorrow. Thank you for your company. Bye-bye.

:26:01.:26:07.

Good morning. Remember the record snow that was across the United

:26:08.:26:14.

States over the weekend? That same weather system has been charging

:26:15.:26:17.

across the Atlantic. It is this area of cloud here and it is showing its

:26:18.:26:21.

hand in the UK. But it has

:26:22.:26:22.

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