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This is Business Live from BBC News with Sally Bundock and Ben Thompson.
A surprise fall in iPhone sales takes a bite out of Apple's share
price as customers wait for the tenth anniversary upgrade.
Live from London, that's our top story on Wednesday, 3rd May.
The world's most valuable company saw another whopping rise
in revenues as services like iTunes grew but tough competition in China
We'll get an expert view on the latest numbers from Apple.
The biggest slice of Germany's biggest bank
But will it make any difference to Deutsche Bank's problems?
The FTSE is down. The size of the divorce bill has
investors worried and we'll explain why.
And how do you fancy dinner with a stranger?
No, we're not talking about a first date, but a new app that promises
to serve up a local, authentic home-cooked dinner
And so today we want to know if Sally or I nipped
round to your place, what would you make us?
Let us know. Use the hashtag BBCBizLive.
Send in your invitations. We'd love to come round for dinner sometime!
Apple is the world's most valuable company and it made another huge
profit in the first three months of the year.
The California based giant sold just under$ 53 billion worth of products
as it continues to dominate the smartphone market.
But surprisingly iPhone sales actually fell by 1%
mainly because customers are holding off purchases while waiting
for the tenth anniversary model expected this autumn.
They still sold over 50 million of them though including
more of their expensive 7 Plus smartphone.
Apple shares were down 2% in after hours trading,
but that is a mere blip if we look at the stock's long
You can see here how Apple's share price has been rising over the last
It hit a record high of $147.51 just ahead of this
trading update making the company worth a whopping $773 billion.
Over the last year alone there has been an increase of more than 60%
this is partly because during that time iPhone sales have gone up.
But also because investors are betting that if Apple brings back
to the US its huge cash reserve that now tops $250 billion,
Iphones are, of course, Apple's best selling
product but services are the second biggest part
That includes App Store downloads, Apple Pay and Apple Music
and they are now worth 13% of total revenues.
Let's talk in more detail about what it means.
Gareth Holmes is Managing Director for Europe, the Middle East
and Africa at Sonobi which is an advertising
Welcome to the programme. Thank you. Sally running through all the
numbers. I wonder what was the stand out thing for you. What's surprising
about the figures? The continued growth. Some say it is a rapid
growth. I think it is indicative of the general success we're seeing of
the technology industry. The softening in China is fascinating.
It looked early that they were looking strong, late 14, early 15.
However, that seems to have softened somewhat and they have met the head
China. They are local manufacturers China. They are local manufacturers
and they are retaining shares. We see Apple continue to strengthen
whilst facing a head wind in China. You look at this very much from a
technology point of view in term of what Apple knows about us and how it
will determine what they make for us in future and it is a fascinating
journey. All the information that I provide by using devices, they are
using all of that to determine what I'll buy five or ten years from now?
Yeah, it is also what you'll buy, but where we as a species are going,
they're understanding what our consumption habits are. They realise
whilst they produce hardware they produce a software that we interact
with on a daily basis. They are looking at the experienceal side of
what we do. It is a smartphone also, but as humans, as a species, where
are we going? So Apple are innovating and they're meeting what
we need at the moment, but they are setting that expectation what's
coming next for Apple? That expectation is so important, the
idea that people are hanging on, they are not really convinced that
what Apple is offering is revolutionary enough to upgrade so
they won't change their phone yet so they have got to pull something
drastic out of the bag to persuade us to part with money to buy the
next one? They have certainly made a rod for their own back and they have
commented themselves upon that. They have seen strong upgrades for
existing Apple users upgrading to the new phone, they have seen strong
transition from other smartphones into themselves, so what will be
next? I think, we are waiting on what's the next phone coming out on
an annual basis? For Apple they manage to do that themselves, don't
they? They change our behaviour, they are making us want things we
don't know that we want? Correct. The important thing to realise
people too and they are broad, people too and they are broad,
diverse types of people so they understand where we're going and
what we want. From a research and innovation prospective, they're
right on the money. They have us on tenterhooks. What's next shall we
take a new upgrade for wait for the 10? Gareth, thank you.
The world's biggest carmaker Volkswagen has seen a massive jump
in profits for the first three months of this year.
The company made $4.77 billion which is 40% more than a year ago.
The chief executive says cost-cutting and greater
efficiencies have been driven the improvement.
But the diesel emission scandal also continues
So far it has cost more than $20 billion.
You've got 15 days to express your interest says
Italy's Industry Minister this morning.
The troubled flagship airline is in administration
after the Italian government formally approved the move.
The company said its flight schedule would continue
to operate as planned, while administrators
examine whether the firm can be turned around.
Alitalia has received more than 7.5 billion euros
from the Italian state over the last decade but without further help,
Indian IT firm Infosys will hire 10,000 workers and open
four technology centres in the United States
It comes amid criticism that firms are using lower-paid foreign
That's the visa President Trump has told federal agencies to review.
More information on the BBC Business Live page. The FTSE opened down this
morning. We will look at the markets and look at the impact of sterling
on all of that as well. We have seen that rise this morning. Full
details, of course, on the website, the BBC Business Live page and
dominated as you can see this morning by a UK story, Sainsbury's
one of the biggest retailers here in the UK. It's sales are down and
profits have fallen. Deutsche Bank is Germany's
biggest lender and one of the most important pillars
of the international banking system. China's HNA Group has
increased its stake to nearly 10%. John, talk us through the
significance of this if you would. Well, Deutsche Bank, of course, is a
bank looking for cash because of its legacy issues and China's HNA Group
is seemingly a company with a lot of money to spend. It has been on an
acquisition spree around the world. As you say, it would make it
Deutsche Bank's biggest shareholder with something like 10% of shares.
So it's great news for Deutsche Bank. What I think is interesting
from a Chinese prospective, it is against the trend. 2016 was the
bumper year for outward investment, Chinese companies heading off
abroad, but the Government has been putting the brakes on out of a fear
of a sliding currency, Deutsche Bank is the next one in its sights.
Interesting. Thank you John. An unusual day in Asia. Most of the
main markets were shut for another Bank Holiday. A midweek one which is
unusual. So we had Australia open. You can see down by nearly 1% and
Bombay and also this is Wall Street the night before.
Europe, in Asia, lilacs on financial minister kets. You can see they are
all down slightly at the moment. It is partly about the earnings we have
been getting through. Companies like in London for example, Sainsbury's,
the big retailer is down 2% at the moment as are other stocks that have
come out with disappointing earnings, but there is a little bit
of concern about the UK's exit from Europe, how much it will cost,
that's causing sterling to wobble, but also as well, Sunday in France.
What will the outcome of that be? Political risk is back on the agenda
in Europe. Samira Hussain has the details about
what's ahead on Wall Street Today. The Federal Reserve will release
a statement at the end of their two day meeting on Wednesday where it
will release its decision Most people don't expect a hike this
time around as the Fed will be looking at the economic data
from the first quarter of this year. In other news, social media giant
Facebook will be reporting earnings Facebook's mobile ad sales have been
soaring and it has been boosting its overall growth,
but in November the company warned that ad growth
would likely slow meaningfully. And finally, luxury electric car
maker Tesla will report earnings. The company said in April that
deliveries jumped 69% from a year ago bouncing back
from previous delays. The last month Tesla became a bigger
car company than the US giant, Ford. Joining us is Richard Dunbar,
Investment Director Let's pick up on that theme that
Samira was touching on there, we have the raft of the results and the
size of the companies is staggering. We talk about what they do to our
day-to-day lives, if you look at the value of them, some hefty numbers.
Talk us through that? Well, these success of the past ten years and
they have led the US stock market up, Facebook,am zorngs Netflix,
Microsoft, these are the ones that have been growing and producing the
innovative things that we are all using. They have started to bring in
profits on the back of that particularly companies like Netflix
and Amazon which do a lot of the same, but a lot of the profit. I
remember when it listed on the markets and we asked if it would
make money? They have managed to bring in millions of customers and
they are starting to monetise the customers and getting advertisers to
pay to access those customers. We are starting to see profits coming
through and cash coming through and the stock markets are describing
huge valuations and huge size. From the point of what's going on in
markets in trading of these stocks, people are buying the stocks, these
particular companies in anticipation that they will be repatriating their
cash, that it is growing overseas in the anticipation that President
Trump will give them a tax incentive to do that? There is two sides of
it. Fur' buying Apple, you are buying a huge cash pile. The
management are charged with using that well and with the results
yesterday, they said they would return some of the that cash to
shareholders. Donald Trump would like to see a lot of that cash
sitting in the United States in a lower tax regime and being invested
or used to make acquisitions in the United States. Shareholders own that
cash and have a vested interest in making sure the cash is used wisely.
Let's get back to Brexit. Theresa May pointing out that she will be a
bloody difficult woman as far as the negotiations are concerned. We will
talk about the implications of that later. What do the markets make of
that? The markets would like her to be wise, far-sighted and intelligent
in the negotiations as well as being a bloody difficult woman! Over the
last couple of days we have seen the complications of what's going on
with Brexit... The personalities involved? Exactly. So I think these
are early skirmishes. I hope things continue slightly better than we
have seen over the past couple of days, but we will see. One to watch.
You will be back to talk us through some more stories later.
Still to come, fancy dinner with strangers?
How about a home-cooked dinner in a foreign city,
We meet the woman behind the app that lets you find
somewhere to eat, anywhere in the world,
You're with Business Live from BBC News.
Have a first, though, let's Lingle The Open linger a little longer on
this. Supermarket giant Sainsbury's has
just announced a 8.2% fall in profits for the year as it warned
of a challenging trading market. Recently prices have been falling
amid a fierce price war between supermarkets,
but a new report this morning suggests prices are now falling
at their slowest rate Rachel Lund is from
the British Retail Consortium. Rachel, tell us a little bit more
about the trend you are seeing in the future. Our data we released
today showed that shop prices are down 0.5% on last year. As you said,
the lowest rate of deflation to nearly three years. It is clear the
underlying cost pressures are finally feeding through into the
shop floor. So prices are going to be going up, that is what you are
saying? Yes, but we should put it into perspective, not huge price
rises. The retailers are increasing far greater increases in costs that
are filtering through to the shop floor. And this is the problem, why
Sainsbury's is struggling, because they have to pay more for the goods
because of the fall in the value of sterling but they cannot pass it on
to the customer fully. That is a problem across the industry.
Sterling is down 12 or 13% compared to where it was in June. These are
big increases in the cost base combined with the impact of the
national living wage, the apprenticeship levy, is this rates
for evaluation. All of these things are putting massive pressure on
retailers cost space. Thank you, Rachel. Prices are on the rise in
the shops in the near future. That is a theme on the Business Live
page. We have touched on the fact we are talking about Sainsbury's, but
ahead of that we have also had a warning of Wetherspoon 's. It echoes
the same theme. Wetherspoon 's, the boss is very pro-Brexit but some of
the impact of that is a fall in the value of the pound that has made
imports more expensive. The firm runs about 900 pubs in the UK and
Ireland but says it is expecting this year to be a little bit better.
It has reported a 4% rise in like-for-like sales.
This is Business Live, the top story, the world's biggest company
by market value, Apple, has reported a mixed set of results. There was a
surprise fall in iPhone sales force that we have been discussing that,
about customers who are maybe hanging on and not upgrading
straightaway. That is having an impact on the bottom line for Apple.
A quick look at how markets are faring....
In Europe slightly down across the board and the pound wobbling a
little. Lots of discussion about how expensive it will be for the UK to
leave the European Union in the press today, causing a bit of a
headache. We will show you some of those stories later.
Now - how do you fancy nipping round to someone's house
Something you might do with friends, but what if you've
That's the idea of an app that lets you find somewhere to eat -
anywhere in the world - cooked by a local.
It's just the latest in app to disrupt a traditional market
and cash in on the so-called 'sharing economy'.
Revenues in the sharing economy are forecast to grow over 20 times
times to ?335 billion between 2015 and 2025.
One business hoping to benefit from this is Vizeat.
The platform allows diners in over 110 countries to connect
with locals in order to go to their house to eat.
Vizeat currently has over 22,000 hosts and was selected by Apple
as one of the top three apps of 2016.
She's the co-founder and chief operating officer of VizEat,
which lets travelers book food experiences in destinations
Good to have you here, Camille. I must admit, I have been looking at
your website this morning in research, and I was fascinated by
it, looking at all the various posts, the kind of food they cook,
what you can expect when you go to their home. So many questions came
to mind. To start with, how did you start all of this? You were very
young in 2014 when you began this. We started the company in July 20
14. I was living and working in China, in Beijing. I was invited by
my Chinese friends to share Chinese New Year and other special occasion
dinners with their family and it is the first time I have experienced
Chinese culture from the inside. I found it was such a shame to travel
to a city where millions of people living but you don't actually meet
any them. The perfect moment to meet the Miz around a food experience
like a dinner or walking class. So let's say IM in Paris and I decide I
want an authentic French meal. What happens then? What if I turn up with
Sally's kids and we all arrived on the doorstep and that is not quite
what they were expecting? Usually what happens, it is like about
meeting someone, you talk to them before you get to their house. They
have their profile, so you can imagine the moment, you have
pictures sent to the host as well to that the place and the type of food
and everything. So you know them before getting there. They will ask
a question about your children for example. That is all about meeting
new people. The relationship starts before the meal. I understand you
have all your ducks in a row, because I was grilling you about
that horrible scenario where you go to someone's home, and it turns into
something very scary after desert. You have Lloyd's of London to cover
you from an insurance point of view, and that is to cover any issues for
the host or the dinner guests. Exactly, from the very beginning,
the security and it was our top priority. The peace of mind of the
guest and the host is key for us. Lloyd's of London covers hosts and
guests for the periods up to ?1 million. But we have never called
it, it has been more than three years now. But the idea is to show
we are doing our best to get all of the host. We have one-to-one
interviews with each of them, and we have hosts in the country now and we
have never had any problem. It would not be a disruptive at it didn't
come with some criticism. I know you got up the noses of some French
restaurateurs, and the unions went to happy. How can you persuade
people that you are not taking away business, you might be adding to it?
It is different because you don't do a VizEat experience when you are
hungry, you do it as an activity. It is about meeting locals. They don't
do it like five times a week. The idea is to keep this occasional. I
would imagine it is a very cultural thing? Exactly, and food culture, in
Europe it is our key focus on the main cities are Paris, Barcelona and
Rome for now. But we have hosts everywhere, we see in very strongly.
We work with London and partners as well to promote London as a food
destination and we have lots of things to do on that as well.
Camille, really nice to you. She is 27! It is very frustrating when we
meet someone who are way more successful than us at a much younger
age. She doesn't need the bank of mum and dad. I just want to take you
through some tweets. Tom says I have a Nigerian, Italian, Yorkshire
family so he is offering a roast dinner with some spice. Has the BBC
canteen closed, the presenters are desperately begging for invitations.
Still loads more in the programme, stay with us but in the meantime
this is how to keep in touch. The Business Live pages where you can
stay ahead with all of the breaking news. We will keep you up-to-date
with all the latest details, with insight and analysis from the BBC's
team of editors ride around the world. And we want to hear from you
too. Get involved on the BBC Business Live web page. On Twitter,
we are at BBC business. You can find us on Facebook. Richard is back. If
I came to your home, what would you cook for dinner? My signature dish
would be salmon poached in white wine served with salad. That sounds
good. Dinner tonight sorted, thank you, Richard. Let's talk about
someone who may not be getting many more dinner invitations. Theresa
May, all of the stories that have come out this week of the meeting.
Now the headlines say that Juncker will find her a bloody difficult
woman, not often we can say that word on the telly but it is relevant
here. In the Financial Times on their front page, they have a story
about the Brexit bill. How do they work that out? Good question. All
analysts are looking at assets between zero and 100 billion and
liabilities of zero and 100 billion, and the difference between those two
is the figure that one comes up with. A fairly wide range, I suspect
some tricky negotiations. How does this line about her becoming a
difficult woman play out? Does it suggest you will take a hard line
and it gets the UK further advanced in these talks, or actually this
puts up a wall and these negotiations become much more
difficult than maybe they need to be? I suspect it is the latter but
I'm not sure anyone really knows. Some of the noise emanating from the
dinner at Downing Street, from Brussels, I'm not sure we have an
awful lot of clarity. Still as much uncertainty as there was. Thank you
could walking us through that and we will keep an eye on how all of those
in this years and is progress. Thank you for your company, have a really
lovely day, we will be back tomorrow.
A very good morning to you. The weather