:00:00. > 3:59:59BBC World News. Now, it's time for World Business
:00:00. > :00:19.Report. Sales at Samsung, the world's
:00:20. > :00:25.biggest phone maker, decline. It reports a 4% fall.
:00:26. > :00:26.Ipanema Beach in Rio de Janeiro, now one of Brazil's property hotspots,
:00:27. > :00:43.but can soaring prices be sustained? Welcome to World Business Report.
:00:44. > :00:50.In a minute, we'll also have a report ahead of Volkswagen's thought
:00:51. > :00:53.to be record`breaking results. But first: Alarm bells have been
:00:54. > :00:56.sounding for a while over Samsung's reliance on smartphone sales in
:00:57. > :00:58.mature markets such as Europe and the United States, and increasingly
:00:59. > :01:11.competitive emerging markets such as China. The world's largest
:01:12. > :01:13.smartphone maker has a diverse product line ranging from memory
:01:14. > :01:16.chips to home appliances, but more than half its profits are generated
:01:17. > :01:19.by mobile devices. Now the company has reported a 4%
:01:20. > :01:28.fall in sales at its mobile phone unit. Revenues in the sector fell to
:01:29. > :01:35.33.4 trillion yuan, that's $32.3 billion dollars in the
:01:36. > :01:37.January`to`March period. But, the South Korean company said operating
:01:38. > :01:40.profit for its mobile phone unit rose 18% from the previous three
:01:41. > :01:45.months, in part due to positive impact from adjustments of one`off
:01:46. > :01:56.expenses. Sharanjit Leyl joins us from
:01:57. > :02:01.Singapore. The second consecutive quarter of disappointing numbers for
:02:02. > :02:11.Samsung. You listed all the numbers. Declining sales for mobile
:02:12. > :02:14.phone division, which is not great on a day when it is facing a court
:02:15. > :02:19.battle with Apple, due to take stake in the US in a couple of hours ``
:02:20. > :02:24.Apple. In terms of those earnings, the revenue fell to $32 billion.
:02:25. > :02:31.Still, it is doing incredibly well. These are not numbers you turn your
:02:32. > :02:39.nose up at. It is a decline in profits, due to competition in the
:02:40. > :02:45.mobile phone sector and how it has been rising around the world,
:02:46. > :02:48.forcing manufacturers to lower their prices, hurting profitability.
:02:49. > :02:52.Demand for smart phones in developed markets, the key drivers are
:02:53. > :02:56.growth, which has begun to slow. Competition is heating up as you can
:02:57. > :03:00.imagine for mobile phone makers. Samsung is the world 's biggest at
:03:01. > :03:06.the moment and handsets account for a bulk of the profits. The success
:03:07. > :03:09.of the Galaxy range has been a big driver for the growth of the company
:03:10. > :03:14.in recent years. It helped the company dislodge Kiir as the world
:03:15. > :03:17.'s biggest `` Nokia, as the world 's biggest phone maker in 2012. Hoping
:03:18. > :03:22.to maintain its lead, speaking of intense competition, but what they
:03:23. > :03:26.are trained to do is tap into emerging markets. Of course, facing
:03:27. > :03:32.increased competition on that front as well, with these emerging
:03:33. > :03:38.markets. You have Chinese firms doing particularly well. Of course,
:03:39. > :03:45.recall is also of some Samsung phones announced yesterday. These
:03:46. > :03:51.numbers come just after that happened, and it was announced, it
:03:52. > :03:57.wasn't just Samsung, it was also Apple, issuing alerts on faults on
:03:58. > :04:00.some of their phones. Samsung revealing that some of the Galaxy as
:04:01. > :04:05.five handsets have been shipped with a non` camera. Apple, meanwhile, had
:04:06. > :04:12.some of its handset with a faulty sleep wake button, so it is
:04:13. > :04:15.affecting both of them. Samsung say they have found a limited number of
:04:16. > :04:18.handsets shipped with this fault, and they have traced the problem and
:04:19. > :04:23.they will ensure it doesn't rear to in future productions as well. We
:04:24. > :04:32.are expecting another turn in the ongoing Apple versus Samsung tussle.
:04:33. > :04:34.We'll shortly get the latest financial results from Volkswagen,
:04:35. > :04:36.Europe's biggest carmaker, and they're expected to be
:04:37. > :04:39.record`breaking. VW, which makes car brands ranging from Audis to Skodas,
:04:40. > :04:43.is expected to announce it's now selling ten million vehicles a year.
:04:44. > :04:49.Operating profits are expected to top $16 billion. But some analysts
:04:50. > :04:52.say all this success could be masking some fundamental problems at
:04:53. > :05:02.the company as Jeremy Howell reports.
:05:03. > :05:08.VW's strategy for the past three years has been a relentless drive
:05:09. > :05:12.for growth, with a stable ranging from supercharged Porsche is too
:05:13. > :05:18.cheap runabouts, it controls one quarter of the European car market.
:05:19. > :05:25.VW's revenues have risen by 25%, which is celebrating `` something to
:05:26. > :05:29.celebrate. Profits however have only grown by 3.5%. Their empire covers
:05:30. > :05:40.mass`market cars, luxury cars like Porsche and Audi, vans, lorries, 17
:05:41. > :05:43.different marks, 310 different models. They are made on many
:05:44. > :05:46.different types of platforms and they use many different types of
:05:47. > :05:52.part. That pushes up production costs. VW's biggest rival, Toyota,
:05:53. > :05:58.produces a narrow range of cars and makes a 9% offered on every
:05:59. > :06:07.vehicle. It's mass`market car division, VW, makes less than 6%
:06:08. > :06:08.profit per vehicle. If you have all the different brands, and the
:06:09. > :06:14.different variants of existing products, reducing their derivatives
:06:15. > :06:17.of derivatives of fodder, that is not as efficient as producing the
:06:18. > :06:19.same car over and over again, because it leads to these different
:06:20. > :06:26.life cycles, different content per vehicle and managing that complexity
:06:27. > :06:33.is an issue and a challenge. Something the sheer range of cars VW
:06:34. > :06:36.offers gives it White you get to a point where people might like a
:06:37. > :06:43.brand and a big interest a, everyone else has this as well. You do need
:06:44. > :06:50.more than one or even two brands to do that, which is what Volkswagen
:06:51. > :06:53.has got. They have probably got the most powerful portfolio of brands in
:06:54. > :06:59.the world motor industry. Few carmakers can manage such vast
:07:00. > :07:03.product ranges for long. Peugeot Citroen decided to cut in half the
:07:04. > :07:08.number of models it reduces in its bid to climb out of loss. Profit
:07:09. > :07:15.hungry shareholders are beginning to urge Volkswagen to consider cutting
:07:16. > :07:19.its range as well. House prices have soared in Brazil's
:07:20. > :07:22.big cities in the past few years as peoples' salaries have grown and
:07:23. > :07:25.mortgages have become easier to get hold of. But with eyes on the
:07:26. > :07:28.country ahead of the World Cup and the Olympics, and not always in a
:07:29. > :07:32.good way, with recent violence in Rio, is this a bubble that could
:07:33. > :07:41.burst any time soon? Katy Watson now reports from Rio de Janeiro.
:07:42. > :07:48.Brazilians are taking advantage of Ipanema Beach, the marvellous city.
:07:49. > :07:50.This part of radio is becoming a destination for more than just
:07:51. > :08:00.sunworshippers, it is now one of the country 's property hotspots. ``
:08:01. > :08:02.Rio. We are going to the terrace, a highlight of the apartment. This
:08:03. > :08:12.woman runs a luxury estate agent here in Rio. We sold it for $2
:08:13. > :08:15.million and it is now on the market for 3 million, even though it is a
:08:16. > :08:19.high price. It is an apartment with 360 degrees views, amazing location.
:08:20. > :08:26.It is seen as an opportunity to make a good return, a good return of the
:08:27. > :08:28.investment. By Ian, renovating and putting it on the market for
:08:29. > :08:35.foreigners to buy or four Brazilians. `` buying. The talk is
:08:36. > :08:40.not of high and penthouses overlooking Ipanema Beach. It used
:08:41. > :08:43.to be one of the most dangerous favelas. Now it is pacified by the
:08:44. > :08:46.police ahead of the World Cup and prices here have soared. It has
:08:47. > :08:52.become a symbol of the booming real estate market in the city. Recent
:08:53. > :08:56.figures show that house prices have risen 250% in the last few years and
:08:57. > :09:02.in Sao Paulo, they have risen nearly 200%. That is in the context of
:09:03. > :09:09.slowing economic growth in Brazil and interest rates being at their
:09:10. > :09:11.highest point in two years. That is some cause for concern for some
:09:12. > :09:13.economists who say there is a housing bubble. It is a controversy
:09:14. > :09:18.will subject. Mortgages have become easier to get in recent years. Last
:09:19. > :09:25.year, home lending rose 32%. Some say that is a worrying sign. Home
:09:26. > :09:30.loans still only account for 8% of the economy, compare that with
:09:31. > :09:36.chilly Mac at 20% and the US at around 70% and Brazil has a long way
:09:37. > :09:40.to go. `` Chile. TRANSLATION: It is a psychological bubble. Resilience
:09:41. > :09:47.thing having a house is a good thing. It gives them an asset that
:09:48. > :09:53.will make them money. People think it will give them more security than
:09:54. > :09:57.putting it in a bank. People feel richer. While experts debate the
:09:58. > :09:59.bubble, there is no doubt increase credit is fuelling Brazil's growth
:10:00. > :10:02.in recent years. New consumers will want to take advantage of that while
:10:03. > :10:17.they can. That's all for this hour.
:10:18. > :10:26.We will get to the newspapers in a while. New figures show that half of
:10:27. > :10:29.people diagnosed will scan so will survive at least a decade, based on
:10:30. > :10:32.information from more than 7 million patients in England and will since
:10:33. > :10:34.the 1970s. Cancer Research UK says it means the fight against cancer
:10:35. > :10:35.has reached a tipping