tv BBC Business Live BBC News August 2, 2017 8:30am-9:01am BST
this is business live from bbc news with sally bundock and ben thompson. still hungry for more apple. the tech giant expects big things for the next i pone as it publishes its latest results. live from london, that's our top story on wednesday, 2nd august. growing demand for ipads and its other services helped deliver an $11.3 billion profit and send apple's shares to a new record high. also in the programme: standing up to china — is president trump about to take action against trade practices that he thinks are harming america? markets in europe are mixed right now despite a record close the night
before on wall street and a strong session in asia. if you're going on holiday, what do you do with these things, your pets? would you let someone stay in home for free if they agree to look after your pets for you? we will speak to the man who is trying to make a business from that very idea! we wa nt business from that very idea! we want to know how far would you relocate for work? let us know — just use the hashtag bbcbizlive. hello and welcome to business live. yes, do send in your thoughts and your questions about the stories we're covering. including staying in people's homes looking after their pets. in a decade apple has sold more than 1.2 billion iphones and it seems like the world's
most valuable company. it doesn't see any end to our enthusaism for one of the 21st century's most revolutionary products. it appeared to dismiss fears of a delay to the expected september release of its latest model as it told us it made $16.1 billion of sales in the three months from april to june. so its shares have hit a record high in after—hours trading. apple made a pre—tax profit of $11.3 billion in those three months from april to the end ofjune, helped by strong demand for ipads. this year the iphone is ten years old, but it's not been performing so well in china, where sales this quarter were flat and total chinese revenue for the company actually fell by 10% compared to the same quarter last year. apple trails its arch rival samsung
for smartphone market share right across the globe which some analysts say is a problem for a company so reliant on handsets for its profits. but one way apple has tried to decrease its reliance on iphone sales is its growing range of services. those grew by 22% year on year in 03, with the company raking in $7.3 billion from things like its app store and apple pay payment system. bryan glick, editor in chief at computer weekly is with me. i'm interested in your thoughts first of all on the figures and where the growth is coming from. because it's a familiar tale, isn't it? some bits are doing well and some bits aren't, but the stand—out services, and ipads? the ipad. this
is the revolutionary product that made apple what it is today, but at the moment people aren't renewing their phones as often. the pace of innovation in the hardware has slowed down. people are hanging on to their phones for longer so they are buying fewer and in apple's particular case there will be some new iphones coming later this year so new iphones coming later this year so people are waiting to buy. they referenced that in the figures that people might be waiting off waiting for the new iphone, they are thinking long—term it is good news? yeah, of course. every time there is a new iphone, there is a big peak in sales as die hard iphone fans wait to upgrade to whatever the new device is. if there was a firm that changes behaviour, it's apple. it gets us to do things we never expected to be doing. apple pay, so their mobile payment service accounting for nearly 90% of mobile payment transactions. that's a huge slice of that market and one that
they have sort of created themselves? because there is this slowdown in the smartphone sales themselves, apple wants to make, wa nts to themselves, apple wants to make, wants to keep us tied into its devices, but it wants people to use the devices for new things. so, you know, if apple can't make as much money as quickly from selling the devices themselves, it wants to make as much money from what people are doing on their devices. apple pay put them into the lead with that, being able to use it for payments, here in london where we are, you are used to seeing people using public transport by tapping their iment phone on to, as they get on to a bus 01’ phone on to, as they get on to a bus oran phone on to, as they get on to a bus or an underground. that area of innovation and the branding apple has around that has given them a big lead in services over some of the other smart based phones. 1.2 billion iphones sold. so we look at the numbers and it seems like it's up the numbers and it seems like it's
up and up and china is a problem. a, they have got a lot of tough competition and the regulatory environment is tough too? the competition there is the big thing. apple is a premium product. they charge a lot of money for it. there area charge a lot of money for it. there are a lot of much lower cost competitors in china based on the android operating system, notjust samsung, but local chinese providers who are proving to be extremely popular and i guess there is a lot of loyalty from chinese customers to chinese providers as well. so apple has got a challenge there to try and make the most of that premium positioning that works very well for it in the rest of the world. yeah, it's a fascinating story and one we talk about a lot, but with good reason, i think. talk about a lot, but with good reason, ithink. bryan, thank you. let's take a look at some of the other stories making the news: profits are up at germany's lufthansa — it's the world's tenth biggest
airline by passenger numbers. the company, which owns several other airlines, made almost $876 million in the three months tojune which is 70% more than in the same period last year. the carrier said it had got more passenger on to its planes and its cargo business performed much better. just days after apple yanked anti—censorship tools off its app store in china, another major american technology company has done the same. amazon's service in china has told its customers to stop using unauthorized virtual private networks which are used to circumvent china's censorship filters. the move appears to be part of a wider government clampdown. it pays to dig — the mining giant rio tinto has reported a 93% jump in first half net profits. the anglo—australian miner raked in $3.3 billion in the six months tojune, helped by higher commodity prices, but heavy rainfall in australia hit production of iron ore and coal.
the united states is reported to be considering taking action aginst what it considers to be china's unfair trade practices. yes, president trump is said to be close to starting an investigation that could lead to tariffs on imports from china. robin brant is in shanghai. what's this about? american business and now the trump administration believe that there isn't a level playing field when it comes to trade between china and the united states. they are particularly concerned about what they think is chinese firms stealing on some occasions intellectual property from american companies. there has been a dispute between the us and china about the idea of fair trade between the two countries, but now president trump has linked trade and any deal there
with diplomacy and action over north korea and the crucial part to the rumours that we are hearing out of washington that some kind of investigation maybe ordered by the president and possibly in a few months there maybe action and some kind of trade war really between the two, or certainly the beginnings of that, i think, two, or certainly the beginnings of that, ithink, crucialto two, or certainly the beginnings of that, i think, crucial to that is the failure we have seen in the last few days of the us administration to try and force the chinese to persuade north korea to give up its nuclear ambition. this is about trade and diplomacy and we are seeing a change in attitude from the trump administration. robin, thank you very much. something to keep a close eye on. the record night before on wall street. we will hear more about that ina street. we will hear more about that in a moment. that's how the dow ended. it's not far off 22,000 as you can see. in asia, the story that pushed the markets higher was apple's results. many tech companies listed on markets in asia. companies based in asia supply apple. make the bits that goes in the iphones. let's move on to europe. we've
mentioned the earnings stories. will you have stories. rio tinto continuing to push up the footsie 100. a mixed picture in europe. and samira hussain has the details about what's ahead on wall street today. electric car—maker tesla will be reporting earnings on wednesday. it has been selling more of its model s and model x luxury electric vehicles and that will likely boost revenues for the quarter. the trouble, of course, is that the company will continue to post losses as production efforts for its mass market model 3 really ramp up. now the model 3 is tesla's lowest priced electric car. investors will be looking for details about the car deliveries for the second—half of the year as well as any changes to its model 3 delivery plans. also reporting earnings time warner, the success of the film wonder woman
will help boost revenue for the quarter, but investors will be looking for details on at&t‘s purchase of time warner. sap samira there with the details about wall street. joining us is alex dryden, global market strategist, jp morgan asset management. welcome to business live. a new face on the programme. so let's stay in america because yesterday, as sally mentioned, the dow did particularly well and it was banking stocks that rose pretty sharply. why? well, there is a couple of factors driving it. good global growth has been helpful for banks in the it. good global growth has been helpfulfor banks in the us it. good global growth has been helpful for banks in the us and outside of the us, but also deregulation and the talk of potentially rolling back some of the regulation that was implemented after the financial crisis which has eaten into some of the profits for the banks, the potentialfor that. we are still talking about talk. we are not seeing much action when it comes to financial regulation, but also other elements in the us
economy? yes, there was a lot of hype at the end of 2016 about the potential of fiscal stimulus. however, there has been quite a lot of gridlock in washington which has held back some of that potential and maybe delayed it until 2018. we believe it will still come through, but maybe not on the scale that people originally anticipated. the wea kness people originally anticipated. the weakness of the dollar and how that to an extent is actualing the appetite for share markets because people are getting a return there. what do you think will be the triggerfor it to what do you think will be the trigger for it to go the other way? we're headed up and up and up, but it can't go on forever as we know only too well? what we are looking at globally is the acceleration in growth which has been going on for six to nine months. if we saw some faltering in that, maybe we would start to see equity markets sell off, but right now, we are looking ata off, but right now, we are looking at a good earnings season. us earnings has been quite strong in the second quarter and that's providing a nice support for us and
global equity markets. a word on tomorrow, the bank of england, all eyes on that, what are we expecting? there has been a lot of increasing anticipation of a rate hike from the bank of england. we believe that actually, without much sign of wage growth coming through, that actually the bank of england will stay on pause this year. the markets are slowly waking up to that, but it won't be until we get some clarity from tomorrow's meeting that the bank of england unlikely to raise rates this year in our view. we will keep a close eye on that and you will be back to talk us through the paper stories. alex, thank you. still to come: would you let someone stay in your home forfree if would you let someone stay in your home for free if they agreed it look after your pets? stay with us, you're with business live from bbc news. prices in the shops continued to fall last month, despite recent rises in inflation.
food prices are going up, but they're going up less quickly. the price of non—food items continues to fall. rachel lund is head of retail insight and analytics at the british retail consortium. good morning to you. a really different picture opens up, doesn't it, we're used to the idea of prices starting to creep up. we're told that inflation overall is on the way up, but there is a different picture in the figures? yes. that's right. what we have seen is since the beginning of the year prices have crept up, but they have just come to a halt this month because there was a halt this month because there was a number of dynamics in the market playing out at the moment. so, talk us playing out at the moment. so, talk us through the dynamics and what's going to happen in the future? because, of course, as we have said, we're traying to get used to prices in food going up, partly because of the browned and the brexit scenario, but what is going to happen in the months to come? well, so you've got
the impact of the currency depression which has fed through into prices, but, into food prices, but at the same time, you have got a highly competitive market in retail as well which is keeping prices lower in some areas and particularly on entry level products for retailers which is why we're seeing particularly non food prices, those prices creep up slowly. because there was some big drops at the end of last year, year—on—year, there is a lot of ground to make up. so what, how are retailers reacting. asda, a decline in sales. some of them are really suffering, aren't they? yes, it isa really suffering, aren't they? yes, it is a challenging market and for retailers. a lot are having to think ha rd retailers. a lot are having to think hard about how they do things. as ever, there are some winners and losers and what they are having to do is really innovate to capture a smaller and smaller consumer budget. 0k, smaller and smaller consumer budget. ok, for now, thank you for your time. a look at the situation in the retail market in the uk.
a quick look at the business live page. the details as they come into us are page. the details as they come into us are there. we told you about trinity mirror's results yesterday. it isjohnson trinity mirror's results yesterday. it is johnson press trinity mirror's results yesterday. it isjohnson press today. owning a lot of regional papers in the uk. trading conditions, it says for regional newspapers in the uk remain difficult, it is that crucial issue of advertising, much of that now moved online. away from traditional print publications and that's hitting the bottom line for groups like that. you're watching business live — our top story: once again apple astounds. it made more than $11 billion in pre—tax profits in april, may and june. i would like to be able to boast of that. and it is interesting where that. and it is interesting where that growth is coming from. still
iphones, ipads, but it is the services, things like apple pay, that are doing really well. let's look at the financial markets... europe seeing a bit of a mixed picture. the tech stock is doing well, so anyone linked to apple in any way is seeing their shares go up. now the sharing economy... what we have spoken about, the big disruption to traditional players. would you let a total stranger stay in your home for free — if they looked after your beloved cat or dog? llama, rabbit, giraffe, whatever. i want to know who has a giraffe! the website trustedhousesitters says it has nearly half a million members in 150 countries. they pay an annual membership fee, and in exchange a person can stay free
in people's homes as long as they look after the pets — which can mean everything from cats and dogs to llamas and ostriches. who wrote this? laughter but house sitting is a competitive industry, with many globalfirms including nomador and mind my house also vying for market share. there are also a lot of local people who advertise. they don't have websites but are all over the local media. joining us now is andy peck, chief executive and founder of trustedhousesitters. good morning. can we clear this up once and for all? does anyone have a giraffe? i'm not entirely sure people have looked after giraffes, but the great thing is people can find the right people... they are out there! that lady with a farm in botswa na just out there! that lady with a farm in botswana just waiting to sign up to andy's service. how did it start? we launched about seven years ago. we realised the need for a proper solution to a common problem, in some time when a lot of people are looking to go away on holiday and one of the biggest problems people face is who will look after their home and their pets, we provide that solution. a lot of people put pets
into kennels, a lot of cost outlay before you go away, and people don't have that peace of mind, or they rely on friends and family, or are they pay a sitter, and why do that when they can have someone who welcome to do it for free because they love animals. have to confess oui’ they love animals. have to confess our dog sitting scenario when we we re our dog sitting scenario when we were going to go away, two days ago. i managed to fill the gap and did not turn to your website, but when i thought about it, i thought, gosh, i don't know if i would want a total stranger turning up to my home, a stranger turning up to my home, a stranger to my dog, they wouldn't know how to put the lead on, were to walk the dog, there are so many things to tell that person, they must be some sort of handover period, i assure, must be some sort of handover period, iassure, or do must be some sort of handover period, i assure, or do they arrived early? how does it work? yes, great question. many people have those concerns of course because their homes and pets are the most trusted positions, so we have taken a lot of
time ensuring that we provide the best value proposition, so the pet can stay at home, people can find online reviews about people coming to pet sit, we use industry—leading trust and verification methods to ensure you can choose trust and verification methods to ensure you can choose your trust and verification methods to ensure you can choose your ideal person to come and look after your pets. reputation is really everything, so for example if you look at our online reviews, we have more 5—star reviews than any pet company globally. if i went to new york, and i don't have a pet, but pretend i do, so i went to new york to look after someone's pet, the chances are i would want to do some sightseeing, notjust chances are i would want to do some sightseeing, not just stay at chances are i would want to do some sightseeing, notjust stay at home and looking at the pet. how much time do people have to commit to walking the dog or whatever and not just have a great time being on holiday? this goes back to sally 's point, depending on the needs of person have. some people might need
a dog to be what three or four mike pence today, but if they might —— three orfour times per pence today, but if they might —— three or four times per day, pence today, but if they might —— three orfour times per day, but they might have a cat that needs looking after. we were pet sitting in new york in a beautiful penthouse, fifth ave, walking the dog every day, able to enjoy the local environment like any pet owner would, but making sure the pet is looked after. and away you make money, both sides put money in the pot once a year? so those who look after pets and those who want people to come to their home, they pay a fee, about £90 ? to come to their home, they pay a fee, about £90? but how does that cover a ll fee, about £90? but how does that cover all your costs, insurance cover all your costs, insurance coverfor cover all your costs, insurance cover for things wrong cover all your costs, insurance coverfor things wrong in cover all your costs, insurance cover for things wrong in the house, the pet dying, all these problems that could occur? we operate i think a very efficient business in terms of the fact we are able to reinvest everything we do into creating the business, so we are doubling in size each year. huge market, because 60% of western world own a pet and it
helps save in pet care travel costs. we have members in 150 countries, and that is why we are growing at quite a pace, because travel companies are realising there's not a great solution at the moment, so one infour a great solution at the moment, so one in four pet owners for example at the moment don't travel, period. so we can bridge that gap to help more people travel more often and more people travel more often and more affordably. andy, nice to see you. thanks for explaining all of that. an interesting business, and also how it all came about. andy peck there, the founder of trustedhousesitters. send in your thoughts because i am sure you have views on that. yes, and a lot of tweets about reallocating for work. germany's car manufacturers could agree a plan to slash diesel emissions at a summit later today. it's now two years since some of the country's biggest manufacturers were found guilty of cheating emissions tests. let's go live to berlin and speak to oui’ let's go live to berlin and speak to our correspondentjenny hill. tell
us more our correspondentjenny hill. tell us more about this big gathering today. yes, it is worth noting first of all that air pollution in many german cities now regularly exceeds the legal limit and that is what is really concerning politicians, and they remained it is an election year. it is being blamed the combustion engine. the city of stuttgart is looking at banning diesel cars outright from the city and other cities may follow suit. of course a huge headache for germany's all—powerful automotive industry. the idea of today's summit is not just trying to restore the rather tarnished reputation of germany's car manufacturers, but is also looking at how to reduce that pollution. expect some compromise. manufacturers may for example retrofit 2 million or so of the older diesel cars on germany's broads, but don't expect germany to go as faras broads, but don't expect germany to go as far as britain and france and commit to ending production of combustion engine cars altogether ——
the older diesel cars on germany's roads. jenny, thank you very much indeed. a big issue for many major cities in the world actually, and i am sure many will be watching about what goes on in berlin. thank you. yes, alex dryden is back to speak to us yes, alex dryden is back to speak to us but what is happening in the papers. this story about relocating. they are struggling to get their staff to go with them, the us agency. the story is that 75% of staff will not know. that will be a challenge for a lot of firms? yes, and at the moment we don't have a lot of details about how much access companies will have to the european union, so so those questions over that. and there will be a number of firms going through this challenge. it is very difficult to lift your workforce and just put them into another place. they have families, kids at school, whatever it might be. it will be more of a challenge. it is easier said than done. ritual has treated to say exactly that, disruption many times, with the children, isolation from friendships
—— rachel has tweeted. this one about relocating to glasgow, like another planet. i relocated to bristol, wonderful. david says i worked in 15 different countries and it was no problem for me. in fact i really enjoyed it. so itjust depends on the individual, doesn't it? yes, and someone three months ago, i relocated from london to new york and that was fantastic, something i wanted to do. having it forced upon you is a difficult change. a big debate for many firms at the moment. alex, really good to see you. —— i relocated from new york to london. that is it from the show today. we will be back at the same time and simplest tomorrow. i will be here tomorrow. see you tomorrow. goodbye. good morning. changeable weather
over the coming days and your umbrella will certainly come in handy. where it is drier, the rain will reach you later on, all thanks to this front pushing up from the south—west. notice the squeeze on the isobars. it will be pretty windy especially along the south coast and into the afternoon. northern parts of scotla nd into the afternoon. northern parts of scotland getting away with being larger drier brighter, but the rain in the south—west will gradually track north and eastwards, fragmenting as it does so. either time it reaches northern england and scotla nd time it reaches northern england and scotland it will be lighter. across devon and cornwall, drier around four o'clock this afternoon, some mist and fog. main rain band around the south coast and south—east. rain fragmenting in the midlands. so
breezy longbows coastal areas, a mixture of sunshine and showers for northern ireland and scotland, as i mentioned, the northern part is getting away with the largely dry day and temperatures around 16 celsius. into tonight, that rain band will continue to track north and eastwards. gradually the winds will ease and we will start to see a few showers into northern ireland and western parts through tonight. it will be rather muddy tonight, temperatures not dropping much. ranging from about 12—16dc. that will give us at the start of thursday morning. we do have a day of sunshine and blustery showers to deal with tomorrow but that further south and east you are staying brighter and drier. heavy showers continuing here and they could be mixed with hail and thunder. temperatures tomorrow not looking too bad. 14—22dc. as we head to the end of the week the unsettled weather continues, remaining
blustery with more westerly winds. some chain to deal with but again the risk of a few showers, especially across the northern half of the british isles. temperatures ranging between 15 and 22 celsius. the weekend not too bad, still the risk of a few showers and we can look forward to more sunshine. the best of the brightness on the southern parts of the british isles. hello. it's wednesday. it's 9am. i'm tina daheley in for victoria. welcome to the programme.