26/01/2012 World Business Report

Greece is still in the headlines. In Kent Nokia it make a comeback in

the smart phone war? -- and can. The welcome to World Business

report. The headlines: deadlocked and running out of time. Greece and

its creditors return to the negotiating table to try and avoid

a looming default. Here at the World Economic Forum in Davos the

focus is still on the eurozone crisis as the German Chancellor

keeps the pressure on budget cuts and the UK Prime Minister is set to

call for more competitiveness. Nintendo is facing tough times as

it loses market share to other gadgets. Plus the declining

fortunes of not here. Another fall in earnings as it struggles in the

brave new world of the smart phone. -- Nokia. As ever, the devil is in

the detail and time is running out for Greece s talks on a debt swap

resumed. Greece is trying to get creditors to swap government bonds

for new ones with half their face value, then by slicing Behan's off

the Greek debt. But agreement has stalled over interest rates on the

new bond. -- billions. Let's talk about these discussions that have

been going on for days. Is it just about that interest rate? No, it is

not just about the interest rate. There is much more going on. That

relates to the European Central Bank's role. The big question is,

can the European Central Bank itself face reducing the debt stock

on its holdings and take a haircut. It has not been clear whether the

ECB will do that. Yesterday Christine Lagarde said very

strongly that that should be what the ECB should do, yet we had

German leader saying the ECB should not take a haircut. This is

fascinating because this debate has been going on in private for a

while. This is the first time it has come out in public. In my

opinion the ECB must be the one to play. There are use of history

between dozens of countries and the rule is that the public and private

sectors take the same reductions in debt stock. The ECB should do the

same. Where do you believe things should go? Greece must make this

huge payment by 20th March. This is just the first step. That date is

one of the most important economic periods in history. We may not get

an agreement. The Greek government will force some pressures to join

in on the debt reduction. Then you will get some sort of deal, maybe

in time, may be a default. Then there is the other big issue, what

happens to Greek banks. Will they be sufficiently capitalised?

situation remains critical indeed. We will keep you across any

developments from Athens. The eurozone is dominating proceedings

in Davos. It seems that the opening tone for this conference in Davos,

this World Economic Forum, is negative. Confidence has not yet

arrived. We can hoped that it may do so in the next few days as some

ideas may emerge about how Grothe can be promoted or will it the use

of stagnation. Martin is here to muddle through this with us. Mardon,

are you feeling gloomy about economic prospects? Actually, we

have had meetings and I find that business people have the view we

will muddle through. They believe it will be difficult and messy.

Part of the problem is if the creek before came it would be

unpredictable. We need a fireball around Italy, which people are

trying to build. -- firewall. If Creek -- Greece defaults and

contagion spreads to Italy, it will be a problem for French banks. But

people do not see a real default. Angela Merkel says Germany paid too

high a price for East Germany. But I don't think so. The Germans are

also paying to bail-out the rest of Europe, so they are exacting the

hard bargain. They want fist full integration. She is negotiating. --

fiscal. The biggest issue will not be in Europe. This time next year

we will be worrying about America. Some people don't agree, but some

Americans believe the US deficit is the real elephant in the room and

after the election, when Barack Obama will probably be re-elected,

he will have to do with that. will be a lot of talk about

structural change this week. David Cameron, the UK Prime Minister, is

about to talk today about compared deafness within Europe. Kent the

structural changes promote growth fast enough to pay off the debt? --

candies. -- can these. Nokia has been trying to catch up with market

leaders. Up until two years ago, Nokia had a 40% share of the global

market of mobile phones and 80% of the profits. Then Apple and Samsung

lodged hugely popular smart phones. Nokia has found it hard to catch up.

Lastly it abandoned its own smart phone software and brought in

Microsoft technology. Now it has problems selling its stock. The

sales of its all products and declining much more quickly than

its new products are increasing. Their financial results will show

of a big gap between those things. Nokia is two different businesses.

The first one is smart phones based on the Windows platform. The second

one is based on more rudimentary phones based on its own technology.

But Nokia sells 400 million of this type of phone worldwide every year.

This makes it by volume and the world's biggest manufacturer of

mobile phones. Nokia is very popular in countries like India,

but even here that is threatened. That loyalty will be pressured when

we get low cost smart phones coming into China and India. Nokia fears

that there will be a difficult time ahead. Investors are losing

confidence in Nokia. Last year its share price slumped by 50%. It has

begun to sacking 10,000 staff. There are questions about whether

or not yet can survive in its current form and talk of with

splitting up altogether with its smart phone division merging with

another technology giant. Now all about Nintendo. Tell us about

Nintendo. We are waiting for its result. That is right. They are

forecasting gloomy quarterly earnings. The Japanese company is

expecting a 50% slide in profit. It had to reduce its prices to improve

sales. It has been hit by weaker global demand and a strong Japanese

currency. Late last year it announced it would report its first

ever annual loss later this year. For many use it dominated the

industry. But it is now struggling to keep up with more versatile

gadgets like apple smart phones and tablets. The markets are doing well,

though. Yes, doing quite well today thanks to the news from the Federal

reserve about keeping interest rates low. But that is being

contained by lingering concerns that Greece will default on its

debt. Hong Kong is higher. South Korea is supported by hi-tech

prices. The dollar is weaker against Asian currencies after the

Federal reserve statement. We appreciate your input to the

program. Before we go, eyeball mentioned that the big story is the

focus on Greece and Athens with discussions about debt. Currencies

are on the move. The dollar is doing rather well. The euro is

remaining jittery. That news from Ben Bernanke saying they will keep