Return to Transcripts main page
QUEST MEANS BUSINESS
iPhone 5 Frenzy; Apple Major Economic Force; Apple Maps Backlash; Analyzing Apple; Romney Releases 2011 Tax Returns; Pound Hits 13-Month High; Japan-China Flights Cut; Traveling With a Disability
Aired September 21, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NINA DOS SANTOS, HOST: Apple's new iPhone has them queuing around the block. Its new maps, however, had them walking around in circles.
In one hour from now, presidential candidate Mitt Romney is set to release his tax returns for 2011, but we already have the details.
And questionably effective or quite simply excellent? The world's top economist is currently split on the subject of QE.
Hello, I'm Nina Dos Santos in for Richard Quest, and I mean business.
Good evening. Tonight, gadget lovers right across the world are lining up to get their hands on the new iPhone 5. The first handsets went on sale in Australia many hours ago, and then as the sun rose across the rest of the world, well, Apple stores in places like Asia and also in Europe started opening their doors to those queuing fans.
Now, analysts expect the iPhone 5 to be the biggest of Apple's successful products so far to date, and forecasts actually reckon that it could top about 10 million units sold by just Monday.
New Yorkers also lining up for a bit of a bite of the Apple in the Big Apple. Maggie Lake is outside the company's flagship store over there in New York. So, Maggie, you've covered so many of these Apple launches. What's the atmosphere like there? Is it set to become the biggest and best yet?
MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: We know that they already broke records, and I have to say, Nina, there does feel like there's a lot of energy here today, maybe even more energy than the last time.
And of course, this is what it's all about, courtesy of my colleague Mario. It's not mine, don't get jealous, but it is the iPhone 5. If it looks a lot like the last one, that's the point. They wanted to sort of keep the feel the same, but it's much lighter and it's much faster.
Talking about the people here in New York, as we've been discussing, some of them have been here for days. The line was around the block in the wee hours when we started this morning. And much to my surprise, it has continued to be steady all day. It's not wrapped around the block, but it has sort of kept people in those tens behind me.
But Nina, as you know, this is not just about the product, it's about the sort of festival and the event itself. I want to share with you a little piece of what we've been enjoying today. Have a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (singing to tune of "Old Time Rock N' Roll" by Bob Seger): Now take that iPhone off the shelf, I'd rather have it all by myself.
UNIDENTIFIED MALE (singing): The other phones ain't got the new HD, now --
UNIDENTIFIED MALES (singing in unison): -- everybody sing with me. I want that iPhone 5 today! I want that iPhone 5 today!
(END VIDEO CILP)
LAKE: There you go, Nina, everybody getting in on the act and everybody getting their couple of minutes --
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALES (singing): I want that iPhone --
(END VIDEO CLIP)
DOS SANTOS: OK, Maggie --
LAKE: There you go, Nina, everybody getting in on the act and getting a little bit of their -- of their 15 minutes of fame, or 5 seconds, if you will. But the first person on line, there for 8 days. When he finally got a chance to get in, give it a little test drive, and he came out, we asked him what he thought. Here's what he had to say.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's incredible. I have both the 4S and the iPhone 5, and it's really remarkable. The feeling, the texture, the difference in weight. I played with it, installed some software on it. It's much faster.
The new maps -- I know people have been critical of it, but for the things I've been using it so far, it worked really well, and the three-dimensional imagery and rendering is quite beautiful.
(END VIDEO CLIP)
LAKE: There you go. So, he is an Apple fan, to be sure. But we've gotten a lot of good feedback. That map app, Apple already responding to, you're probably going to talk about it later. They say they're going to improve it.
Meanwhile, investors, Nina, you know, are loving this day. Estimates are they could sell 50 million of these by Christmas. That's absolutely astounding.
DOS SANTOS: Yes, it is. Some of the figures that have come out around about this launch are absolutely mind-blowing. We'll get into the semantics and details of that in a minute, Maggie.
But every time we have one of these Apple product launches, we ask ourselves, is there going to be the same appetite, or is there going to be exhaustion by the time they've launched, say, the iPhone 15? How long could it last?
LAKE: Yes, it's a very, very good point, Nina, and I've been asking tech experts about that. There is this sense that there's so much more competition, now. The Android platform's out there, Samsung has a lot of phones that are very competitive.
There is a feeling that we're going to reach the saturation point, at least in some of the industrialized nations. It's going to be hard to grow them at the rate that they've been growing the iPhone before.
Which is why a lot of people who watch Apple are looking for them to disrupt the next technology, the next industry. And a lot of people think it's going to be TV. We keep waiting. The rumor mill is rife, but so far, we haven't seen anything, Nina.
DOS SANTOS: OK, Maggie Lake there, enjoying the atmosphere around the Apple store in the Big Apple. Thanks so much for that. Have a great weekend.
Well, six years ago, Apple didn't actually even make phones at all, and now, as Maggie was just saying, it's a major player in the mobile telephony world. Now, according to ComScore, these are some of the kind of figures that Maggie was referring to before.
Apple, according to ComScore, held about a third of the total US SmartPhone market just in July. Google, on the other hand, just over -- had just over around about half, as you can see here in orange.
But it's also worth noting that Google's Android software actually runs on a whole range of different brands of phones, so it's not necessarily comparing Apples with Apples, or rather perhaps comparing Apples with pears there in that case.
Now, a JPMorgan analyst has recently predicted that the new iPhone 5 could actually add up to half of the total US GDP in the fourth quarter of the year. That is pretty impressive, isn't it? A sizable chunk of the 2 percent growth, according to JPMorgan, could be coming from just sales of the iPhone 5.
And speaking of GDP, Apple's market value is currently slightly bigger than the total GDP of Sweden just last year. Apple shares also, what I want to show you, keep on rising year-on-year. They've actually gained more than 70 percent so far this year, as you can see on the chart behind me.
And in fact, in April, this dot here, first dot on the chart, this company's share price actually overtook that of Google's. Then, in August, as you can see here, its market cap actually beat the previous record that was held by Microsoft as the most valuable company in the world. That was struck Microsoft back in the year 2000. Now, on paper, Apple is currently worth more than both of those two companies combined. Just goes to show how impressive it is at a price of $700 a share.
Now, the new iPhone includes the latest version of Apple's mobile operating system, the iOS 6. Owners of older iPhones and iPads have been able to upgrade to that latest software over the past few days, but it seems as though many of them aren't happy. Let me just show you why.
This is because the older iOS 5 actually came with this, Google Maps. And just to give you an example, this is a region of Dubai and how that region looks on Google Maps.
But what I want to show you is how the same exact location looks on the new Apple's iOS 6 operating software. As you can see, it's rather different. In fact, some might say it looks like it was a mirage, because there doesn't appear to be anything there, according to the new Apple Maps. As Jim Boulden now reports, this kind of thing is just the tip of the iceberg.
APPLE MAPS VOICE: Turn left onto Lombard Street.
JIM BOULDEN, CNN INTERNATIONAL CORRESPODNENT (voice-over): After all the complaints that Apple's new mapping service does not live up to the Google Maps it replaces, I borrowed an iPhone with the new operating system, iOS 6, and took it for a walk.
BOULDEN (on camera): Our building, in fact, is in the right place, but down here -- the bar that closed here a year ago is still listed. Well, listed sometimes. Sometimes this new place is listed. That's what's confusing.
BOULDEN (voice-over): That's part of the problem, apparently. Apple is melding data from various sources, and some of it is clearly outdated.
BOULDEN (on camera): And this hair dressers is now a coffee shop.
BOULDEN (voice-over): And some of it is just plain wrong.
BOULDEN (on camera): It says here this is the cinema in Westfield's, in Stratford City. Clearly not here. In fact, the cinema is eight miles east of here.
BOULDEN (voice-over): Social media is full of examples of streets in wrong places or spelled wrong, landmarks or towns missing, airports in Irish farm fields, on and on and on.
Apple said in a statement that it appreciated all of this feedback it's getting from customers and that it's working hard to improve the map app. Well, at least the Apple Store on Regent Street is in the right place. So, what do enthusiasts lining up to buy an iPhone 5 have to say?
UNIDENTIFIED MALE: Not the least bit concerned, because when I want to go to London, and according to the newspapers today it takes you to London, Ontario, that's of no great concern to me. I'm very -- I'd be very happy to end up in London, Ontario.
UNIDENTIFIED MALE: This would be one of the most user-friendly phones that I've ever used, so I think so, with that iOS 6 problem or without it, I'll be happy.
BOULDEN: Apple had enough of giving rival Google access to iPhone and iPad users. Apple created this in-house mapping service after numerous acquisitions, and teaming up with Yelp and navigation firm Tom Tom, and dropping Google Maps with Street View.
GRAEME BURTON, WRITER, COMPUTING: They all want to monopolize a channel to the consumer, and in that way to make money. The Google Maps, the Apple Maps, the Nokia Maps, even, they're the equivalent today of the Yellow Pages ten years ago.
BOULDEN: But the new maps are not just for those with the new iPhone 5. You can upgrade to iOS 6 with older iPhones and iPads as well.
BOULDEN (on camera): No thank you for now, Apple. I'll stick to iOS 4. I love the phone, but I love Street View as well.
Jim Boulden, CNN, London.
DOS SANTOS: I love Street View, as well. Well, Apple admits the software still has some way to go. A spokeswoman for the company said this, quote: "We launched this new map service knowing that it is a major initiative, and we're just getting started with it. We're continuously improving it, and as maps is a cloud-based solution, the more people use it, the better it will get."
We'll see if it will indeed get any better from here on, or whether this is just the best yet for this company. Nick Wingfield is a technology reporter for the "New York Times." He joins us now, live from the United States.
Good to have you on the show, Nick. What do you make about the whole furor surrounding this apps launch, especially the maps launch, and then the iPhone 5? It's sort of coming at a difficult time, isn't it?
NICK WINGFIELD, TECH REPORTER, "NEW YORK TIMES": Well, it's an interesting contrast. We've seen unusually negative response to this map situation over the past couple of days, but if you take a look at the demand that we seem to see in stores, here, it doesn't seem to have tarnished the iPhone 5.
Now, I think what we're going to have to do is wait and see how customers who get this phone actually respond to it, and over time, we'll start to see more of the problems emerge from this mapping service. But it really doesn't seem to have diminished the public's appetite for the phone.
DOS SANTOS: OK, so what is so great about this phone that if you wanted to use it as sat nav, you'd be willing to forgive Apple all the problems that its map app has caused?
WINGFIELD: I think it's the whole package. If you look at the reviews of the phone, the thing that Apple gets credit for is integrating better than anyone else all of these different technologies.
They're not the first to have the high-speed LTD network in the phone, but they were able to put it into the phone and give you pretty good battery life. And that makes a big difference for people.
And you see examples of this across the board. The industrial design is very elegant, it's better integrated with the software. So, I think -- and you can't discount the Apple brand, which is magic to so many consumers out there, and they seem to be willing to put up with a lot.
DOS SANTOS: Yes, they certainly do. Have you got one?
WINGFIELD: Not yer.
DOS SANTOS: OK. Nick Wingfield, thanks so much for joining us there from New York. Great to have you on the show.
Well, coming up next, tax has been the source of all sorts of controversy for Mitt Romney, and now he's releasing those famous tax records for 2011. We'll have a full breakdown just in a minute's time.
DOS SANTOS: Within the next hour, the US presidential candidate Mitt Romney will be releasing his 2011 tax return online for all to see. But a summary ahead of that shows that Romney and his wife Ann actually paid an effective tax rate of 14.1 percent last year. They donated more than $4 million to charity. That represents around about a third of their total income.
CNN's Christine Romans has been pouring through the details we have so far and joins us, now, live from New York. So, 14.1 percent, Christine, for a very rich man, that's an odd signal for people around the world to digest. It doesn't sound like an awful lot.
CHRISTINE ROMANS, CNN CORRESPONDENT: On paper, someone of that wealth should pay 35 percent. That's what we call the marginal tax rate for the very richest Americans. And the reason he's not paying 35 percent on all that income is because on investment income, the tax rates are actually lower.
So, because so much of his income, $13.9 million of income, Nina, coming from investments last year, his tax rate is lower.
Also, when we get these documents -- and again, they're all going to be posted in about 43 minutes online -- all of us will be looking very carefully at where the income came from.
What kind of maybe passed through investments in other countries. What kind of stakes he may have had in different kinds of funds and different kinds of avenues around the world. What kind of foreign interest -- or foreign investments he had. These are the things that the tax experts and the political wonks will be really poring over here.
Another interesting political angle to this story is that there's been some criticism in the United States that he has not released 20 years of tax returns from the days he started at Bain Capital, that private equity firm that he helped run.
And what they are going to release at 3:00 Eastern Time in the US is a letter, a notarized letter from PricewaterhouseCoopers, a bit international accounting firm, that's going to say that over the 20 year period from 1990 to 2009 that he paid an average effective tax rate of 20 percent -- 20 percent, that every year he owed money and he paid money.
Now, look at it this way: in this country, a couple in the middle class, their marginal tax rate, what they were supposed to pay on their income, would be about 15 percent. So, this is the Romney campaign positioning that their candidate over those 20 years actually did pay more than the middle class, but certainly not the 35 percent advertised for the wealthiest Americans, Nina.
DOS SANTOS: Well, his reluctance to release these tax returns has been something that's just more or less dogged his campaign right from the start, hasn't it, Christine? And of course, he's been dragged into the tax furor this week with his comments about the 47 percent who he says don't pay tax.
ROMANS: It's so interesting, isn't it, that in this country, this election season, we've become obsessed with how much you pay in taxes, what the fair share is, the 1 percent versus the 99 percent?
What we do know about Mitt Romney from these tax returns -- and frankly, from returns that we've already seen from 2010 -- is he is a very wealthy man. He is the top 1 percent. And he has had troubles connecting with the middle, with the middle class, through a variety of comments and gaffes.
And also he's been private about his wealth and private about his religion, and those are two other reasons that, quite frankly, people are saying that they -- in some of the polls, it looks like they're not quite connecting with him.
So, the fact that he is so wealthy has been something that has sort of dogged his ability to connect with the middle class, even as he has been saying over and over again, look, I worked in business, I know how to create jobs, I have created jobs, I can fix this, like I helped fix other countries -- other companies, rather, in other industries.
So, it'll be interesting to see how the campaign plays it. It's a Friday afternoon at 3:00 PM, which means we'll spend the weekend looking over these tax returns. I think the timing of the release is interesting on that matter, because you'll only have sort of one prime time day of discussion of it, if it lasts until Monday.
DOS SANTOS: That's an absolutely excellent point. The last thing people want to do when they're just finishing up to go home for the weekend is to read somebody's tax returns. Well, thank you so much, Christine Romans, for that -- ending on that interesting note. Have a great weekend. I'm sure she'll be reading Mitt Romney's tax returns when they're released in about 45 minutes from now.
Well, time for a Currency Conundrum for you out there. Nigeria Central Bank today revealed plans to release its largest-ever denomination note. Here's my question of the day: how much is it actually worth? Is it worth A 500, B 5,000, or C 10,000 naira. The answer coming up after this break.
Speaking of currencies, the British pound hit a 13-month high against the US dollar today. That was after UK borrowing data turned out to be quite a bit better than expected. The euro is also stronger, as well. That's on the back of hopes that Spain may soon eventually ask for financial aid.
DOS SANTOS: Airlines are cutting back on services between Japan and China as the two countries continue to squabble over a cluster of islands in the East China Sea. A number of carriers say that passenger demand is sharply down at the moment.
Japan Airlines says that it's operating 10 scheduled flights a day, that's 3 less than normal, until the end of October. It says that there'd been what it calls, quote, "irregular changes to travel demands on those routes. And China Eastern Airlines has delayed the launch of a new service to Sendai.
From frosty relations to friendlier flights: designers are trying to make aircraft cabins a more welcoming place for disabled passengers. As Ayesha Durgahee now reports, most planes are still so inaccessible for wheelchair users that they just need help to get onboard, even when they're Paralympians.
AYESHA DURGAHEE, CNN INTERNATIONAL CORRESPONDENT (voice-over): Women's wheelchair basketball, Great Britain versus the US. These athletes travel three to four times a year to train and compete.
For Jen Browning, assistant coach for Team GB, the travel experience by air for wheelchair users could be vastly improved.
JENM BROWNING, WHEELCHAIR BASKETBALL COACH: It's the only time in my life when I feel disabled. I'm a physically active. In my everyday life, I can do everything for myself. I drive a car, I have my own home.
Everything in my life is independent until I get to the door of an aircraft, and suddenly I have to rely on the staff to get me to my seat, to get me to the toilet. It's dehumanizing to push that little button and then sit there like children and wait for somebody to come and fetch us.
DURGAHEE: Design company Priestmangoode, which creates cabin interiors for airlines like Swiss Air and Lufthansa, believe they've come up with a better solution with Access Air, an airline seat that's also a detachable wheelchair.
PAUL PRIESTMAN, PRIESTMANGOODE: The foot rest pops down, the arm rest comes up, it's released from the seat structure, and then it can be wheeled horizontally into the aisle and then wheeled off the aircraft as necessary, and then wheeled back in again. But it allows all of the safety regulations of high-impact crash tests and things like that to be resolved in this special design.
And the advantage being is that if it's not being used in its wheelchair mode, it can actually be used as a normal seat. So, we think this is a proper solution, and one that perhaps we can start a debate with all of the regulatory people.
DURGAHEE (on camera): And do you think it's long overdue to have a rethink for the design of the aircraft itself to accommodate passengers with wheelchairs?
PRIESTMAN: The thing about it, you don't actually see what goes on, because people in wheelchairs are normally put onto the plane before everyone else gets on, and then taken off afterwards. So, you're not aware of the physical lifting that goes on, and also the indignity of the process.
DURGAHEE (voice-over): There are no requirements under European law to have a wheelchair onboard or aircraft specifications. In the United States, however, new generation aircraft like the Boeing 787 must have bigger and more accessible toilets and moveable armrests with space to stow one foldable wheelchair.
According to airport operator BAA, out of the 69.4 million passengers who passed through London Heathrow last year, 890,000 of them were passengers with reduced mobility. For business traveler Michiel Oppenheimer, a design rethink could encourage more wheelchair users to fly.
MICHIEL OPPENHEIMER, BUSINESS TRAVELER: Having that integrated into the seat cuts the time up and it makes it much more convenient and you're not making sort of a big scene in front of everybody on the aircraft.
DURGAHEE: A lightweight wheelchair that docks into an aisle seat. Its backer say this has a potential to improve airport services that also empowers passengers to travel with ease and independence.
Ayesha Durgahee, CNN, London.
DOS SANTOS: Now, to Rome amid the rumors. European leaders are gathering in Italy as speculation mounts that Spain is about to ask for help. We're going to be live in Madrid in a moment's time.
DOS SANTOS: Hello and welcome back, I'm Nina Dos Santos. These are the main news headlines this half hour.
Rival crowds have been taking to the streets in Benghazi, Libya. One crowd is calling for less violence and a crackdown on armed groups. Well, that march converged with a demonstration by Islamist hardliners. Our very own Arwa Damon was there and tells us that there was some back and forth shouting, but no serious clashes.
Violent protests killed at least 15 people across Pakistan today. Demonstrators torched movie theaters and banks in Peshawar and in Karachi. The anger erupted over a US-made film that insults Islam and also French cartoons interpreted as depicting the prophet Mohammed.
The so-called troop surge of US military personnel in Afghanistan is over nearly three years after it began. A senior Washington defense official says that the last 30,000 troops added in late 2009 have now left the country, but around about 68,000 others still remain, while violence in Afghanistan continues.
In the United States, the Republican presidential candidate Mitt Romney is to release his 2011 tax return. It will show the former Massachusetts governor paid an effective tax rate of 14.1 percent last year. Romney has been under increasing pressure to make his tax records public.
And the Space Shuttle Endeavor is expected to land in Los Angeles at some point this hour. It's flying on the back of a specially-modified jumbo jet. This is the last flight that this retired shuttle will ever make. It'll be delivered to the California Science Center in Los Angeles by next month.
DOS SANTOS: The Spanish prime minister Mariano Rajoy has been holding talks with his Italian counterpart, Mario Monti, in Rome today. They met against the backdrop of rumors and reports that Spain could be about to request a bailout. E.U. officials are said to be working on the plan to be announced next week, according to the "Financial Times."
Such a plan would trigger unlimited bond buying from the ECB helping to bring down those Spanish borrowing costs. Well, both the Spanish government and the European Commission are playing down these kind of reports.
On Thursday, Spain borrowed nearly $6.3 billion at the most favorable rates that we've seen in quite a while. Next week, the government is set to announce its 2013 budget as well as plans for large-scale structural reforms and official requests for aid before the weekend at the moment it appears unlikely.
We're joined now by Madrid bureau chief, Al Goodman, who joins us from the Spanish capital with more on this.
So, Al, this is supposed to show how feverish the rumor mill is with regard to Spain. Everybody's expecting some kind of announcement, but it's not really likely to come, is it?
AL GOODMAN, CNN CORRESPONDENT: Hi, Nina, the end of another week and we don't have a full sovereign bailout. You got to remember that the bank bailout -- and you were here for that -- came -- the announcement came late, really late on a Friday and it was unveiled over the weekend.
But that is the bank bailout and the work for up to 100 billion euros and the pressure has been on, will Spain go for the full sovereign? But right now, the interest rates on the 10-year bond are down, as you just mentioned, that they were able to sell 10-year bonds yesterday at favorable interest rates. And they've got this breathing room.
Now they, in addition to announcing the 2013 budget, which is expected to be severe, there's lots of speculation about where the cuts will come, possibly in pensions. The government says that's not the case.
But there's a lot of speculation they haven't really touched the pensions yet. They could save a lot of money there. And the structural reforms, so far, the government from the prime minister on down is saying that the bailout is not in the works at this time. But the rumor mills are going strong, Nina.
DOS SANTOS: Al, you've also got regional elections taking place in Spain. We saw famously the head of the Catalonia republic, president of the Catalonia part of Spain, let's say, autonomous region, rather than republic. Speaking with Mariano Rajoy, not getting what he wanted but there seems to be some dissent among the ranks in Spain, isn't there?
GOODMAN: Well, indeed, and there's some here in Spain say that he won't be seeing the prime minister announce any bailout if it comes to that before regional elections in two key regions in northwest of Spain in Galicia and in the north in the Basque country.
Those elections scheduled in October now. The prime minister's candidate, his man, who is currently the leader up in northwest Galicia is facing a tough fight. And the thinking is that the austerity measures and the tax hikes that have gone nationwide are starting to bite hard in Galicia, which is a traditional fight, then, with the conservative party.
And so there may be no sort of bailout talks before that. On the other side of the country in Catalonia, the capital of Barcelona, not a republic, although some there would like it to be, they are pushing hard on getting more home rule there, even independence. And so that's a whole new front.
And as they push for independence, some of Spain's 17 other regions are also clamoring for more. So you've got a political problem on top of the economic problem, very tough times for the conservative prime minister, Mr. Rajoy, Nina.
DOS SANTOS: Yes, they certainly are. I think that was a Freudian slip of mine, wasn't it, the Catalonian republic.
Going back to how the international markets view this situation, Al, is (inaudible) some kind of sense where you are in Madrid that we're stuck in this catch-22 situation, aren't we, where Spain is now paying quite a bit less for its debt each time it has to hold a debt auction in issue bonds. And that could, let's say, lull them into a false sense of security, that a bailout isn't necessary.
GOODMAN: International analysts are hitting hard on exactly what you said and you know, there is some speculation that this 100 billion euros that's earmarked for the weakest of the Spanish banks, of course, which got in trouble when the real estate boom went bust, they're holding huge debts, that maybe not all the 100 billion euros that's earmarked for the weakest banks is needed for the weakest banks, and there might be some plan in the back rooms to use the excess of maybe up to 40 billion euros to try to ease this sovereign bailout.
So you've got all sorts of speculation. But basically the international analysts are saying look at the structure reforms and the reforms in the austerity measures that the government is putting into place right now.
It seems like they're already putting into place the kinds of conditions that Brussels and in the IMF might actually want so that if it comes to the bailout they might be trying to get some wiggle room policy, the government here, to say, look, we got a bailout without conditions. That will also be kind of a tough sell, if it happens, Nina.
DOS SANTOS: Indeed. That's the big question. Hopefully not one that's going to keep you up all weekend, though. Al Goodman, thanks so much for joining us there on that from Madrid.
We'll have more from the technology world next, when we'll be looking at what some of you out there have been saying about the new iPhone (inaudible) pioneer Alan Sugar (ph) thinks that the (inaudible) bad timing for (inaudible).
(BEGIN VIDEO CLIP)
DOS SANTOS (voice-over): Time now for the answer to today's "Currency Conundrum," earlier in the show we were telling that Nigeria's central bank announced plans to release its largest-ever denomination of notes. And my question before is what denomination was it? Well, the answer was B, 5,000 naira.
That's about five times the highest denomination that's currently used right now in that country. The printing of the new notes has been suspended, however, due to a public outcry here. In fact, the central bank has been given more time to explain why this new note is needed. Oh, dear. The herald of inflation, some might say.
(END VIDEO CLIP)
DOS SANTOS: Let's go back to the world of technology, because the CEO of BlackBerry may get Research in Motion has apologized for a service disruption that occurred earlier today. Well, in the statement that was released a few hours ago, Thorson Heinz (ph) admitted some users were left without email for more than three hours.
He said that BlackBerry service is now fully restored and operational. Mind you, other people haven't been quite so complimentary here. Alan Sugar, the chairman of Amstrad, the Amstrad Group and also the member of the House of Lords in the U.K., tweeted about this and this is what he wrote.
"BlackBerry say that the server problem is currently fixed and it's all back to normal. Not a good day for them to conk out when Apple iPhone 5 is being released." (Inaudible) show host and comedian, Ellen DeGeneres also has been voicing out about this, and she's been writing, "I found out about a new feature of the iPhone 5. The iPhone 5 can now wait in line for the iPhone 6." That's rather witty, isn't it?
Well, as we saw earlier, though, plenty of people waiting in line here in London to get their hands on the new iPhone 5 today. And here's what some of them had to say.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Well, I've got (inaudible) 4S. I've got (inaudible) and it's just like (inaudible) a glitch and you just sort of keep going (inaudible).
UNIDENTIFIED MALE: I'm actually from Canada. I just extended my (inaudible) for the (inaudible).
UNIDENTIFIED MALE: (Inaudible) and (inaudible) video and (inaudible). (Inaudible). It's very good, very good quality (inaudible).
(END VIDEO CLIP)
DOS SANTOS: Well, they've been transforming the way we live and work for many times now. And they've also been transforming the way we exchange information among ourselves. Starting on Monday, we're devoting a full week of coverage to our very own mobile devices.
Each day here on QUEST MEANS BUSINESS, we'll be exploring our mobile society from the evolution of our phones to all of the kind of things that we can do with them today. Is it possible for anybody to completely unplug? Find out; we'll tackle that question.
And we'll also ask what's acceptable and what isn't when it comes to mobile etiquette. Can you text at dinner, for instance? What about private conversations in public places and how does all of this very connected world impact our businesses and also our health? It's just the start of a big week of coverage.
That's "Our Mobile Society" starting here on CNN. You can also join the conversation right now at CNN.com/ourmobilesociety.
Now let's move over to things stateside, because what we're seeing at the moment is the shuttle Endeavour, making its very last landing live. So as you can see there, it's circling LAX airport over in Los Angeles on the back of a specially-modified jumbo jet, which is designed to fly these shuttles. It's currently doing a tour of California.
It's been through Sacramento, San Francisco. And as I was saying, it's going to be ending up at Los Angeles. It's ending to -- it's scheduled to end its three-day, three-leg transcontinental journey, as I was saying, at Los Angeles airport. And one of the things that (inaudible) these kinds of flights is, of course, the weather. And as you can see, it seems rather fortuitous.
Let's go over to Jenny Harrison at the CNN International Weather Center.
It looked pretty good, didn't it, Jenny? And of course, that was good news, wasn't it, for people who were piloting that shuttle and the plane.
JENNY HARRISON, CNN METEOROLOGIST: Really, I mean, it's -- it was delayed, of course, by a couple of days, and it just had sunny skies all the way across the southern United States. In fact, right now, the temperature in Los Angeles is 28 degrees Celsius.
So the reason, of course, they're going to do this hour-long sort of flyaround is for people who are on the ground, I imagine like they did last time (inaudible) to take plenty of pictures and (inaudible) temperatures are just lovely.
You've got clear blue skies. Maybe apart from some of the smog closer to Los Angeles at the most part, yes, beautiful day to capture those pictures. And (inaudible) talking about pictures that you, the viewer, will be capturing for us, too, tomorrow, in just a minute. But first of all, let me just talk about conditions in Europe.
There's some pretty good sunshine and good temperatures across much of the south. But it is getting to that time of year and so cooling off across the north, also we've had more rain, some thunderstorms coming in over the last few hours. There's a bit of a system developing out there in the Bay of Biscay (ph) or will be, as we head through the weekend.
So it's moving in, bringing those showers and thunderstorms. The high pressure gets squeezed even further south which is still nice across Spain, the western end of the Med and certainly central and southern areas of Italy.
You can feel that rain that will soon be moving in towards the west, and of course, scattered areas of cloud and showers across the north, too, as that first front actually clears out of the picture. And then mostly fine as I say, throughout the south. But it is that time of year and so we've got those cooler temperatures to the north with the air, of course, so much cooler.
But the warm conditions in the south and so for Saturday 32 in Madrid, 26 in Rome but a rather chilly 15 in Berlin. Now remember, Saturday, it is the 22nd of September. That is the first day officially of autumn between the Northern Hemisphere, the first day of spring if you're in the south. Remember, it's when the Earth tilts away from the sun or towards it.
Now the reason we're telling you about this, let's bring up the pilot and show you because again talking about a mobile society, we've got this one- day iReport challenge. Get out your phones, get out there, whatever your mobile device is, and take a picture. Take a landscape picture or horizontal if you prefer.
Don't use your filters, just take the photograph. Upload it to iReport.com or you can post it on Twitter. We've got #hellofall or hellospring is the other one. And of course we may well be showing them online, but also on CNN TV. Nina?
DOS SANTOS: Great stuff, Jenny Harrison, thanks so much for that.
And on that note, it's time to say goodbye. That's it for QUEST MEANS BUSINESS. I'm Nina dos Santos. MARKETPLACE AFRICA continues on CNN.
ROBYN CURNOW, CNN HOST: You're watching MARKETPLACE AFRICA. I'm Robyn Curnow in Mozambique. Now this country has vast tracts of fertile land, and the growing global demand for food, many governments and corporations have invested in megafarms here in Mozambique and, in fact, across Africa.
Now the government says it's just leasing the land to investors, not selling it off. But there has been criticism that this new scramble for African land is not benefiting local communities.
(BEGIN VIDEO CLIP)
NKEPILE MABUSE, CNN CORRESPONDENT (voice-over): In this village of western Mozambique, people are gathering to celebrate. They've been given new homes after being relocated from land that the government has turned into a national park.
But now their lives are going to change again. This area of scrub land (inaudible) will be transformed into a 30,000-hectare sugar plantation, just outside the town of Massingir.
UNIDENTIFIED FEMALE: (through translator): For me, it's great to see a foreign company coming here to use our land, because with their help, we can produce more.
MABUSE (voice-over): But some locals (inaudible) groups warn these villages are getting an unfair deal.
CAMILO NHANCALE, ENVIRONMENTAL ADVOCACY ORG.: What's happening now, they are giving away the land, the sort of land grabbing from the communities.
They are giving away the land.
MABUSE (voice-over): Some of the land will be left for the villagers, but the vast majority will be off-limits, producing sugar, 80 percent of which will be exported to Europe. The rest will go to domestic and regional markets. In this project like this one that are under intense international as well as local scrutiny.
LEONOR TIVANE, PROJECT COORDINATOR (through translator): Obviously there are some people saying that this is not a positive project. But that's natural. We always have this resistance when we have something new, especially in Africa.
MABUSE (voice-over): Some watchdog groups warn Africa's government are giving away land cheaply to investors with little or no regard for the people currently living off the land.
DEVLIN KUYEK, RESEARCHER, GRAIN: To imagine, over 80 million hectares within a few short years changing hands, going from really the -- some of the most marginal and poorest communities to the world's richest investors, I mean, that's a scandalous situation.
MABUSE (voice-over): Across the continent, Africa's governments are entering into land deals with foreign investors. According to data released by Land Matrix, an organization that keeps track of international land deals, Africa is the most targeted continent for land deals.
(Inaudible) and reported deals since 2000, 83.2 million hectares of land are involved in developing countries worldwide. But these 6.2 million hectares of that is in Africa. That's almost 5 percent of the continent's total agricultural area.
The exact nature of these deals are often kept secret. But analysts believe Africa's governments do benefit.
SIMON FREEMANTLE, SR. ANALYST, STANDARD BANK: Some of the deals, such as the Saudi company, Saudi Star (ph), which has invested heavily in Ethiopia, ranges between 100,000 and 200,000 hectares of agreements in the (inaudible) feasibility place (ph).
How these benefit the governments, of course, from the Saudi government, that's an elevation of food security. For the African governments, if those funds can be channeled into the agro sectors, they should elevate domestic food security and of course that influx of capital is a very necessity means to elevate agricultural potential and yields on the continent.
MABUSE (voice-over): Alda Salomao has been studying the new land deal in Massingir. She specializes in an environment law and has taken the Mozambican government to court over one of the land deals they negotiated.
ALDA SALOMAO, ATTORNEY: Our main issues -- issue and concern is to ensure that the -- whatever initiative comes to the country, we need to be conducted according to the national laws and policies.
MABUSE (voice-over): The local administrators of the district deny that the government has handled this deal in Massingir badly, the sort of view shared by the company.
OCTAVIO MUTEMBA, MASSINGER AGRO INDUSTRIAL: They would be grabbing land if they can. They (inaudible). They implemented their projects. They took money out without any benefit for the population (ph). But in these particular case, that situation doesn't happen.
MABUSE (voice-over): Milagre Machava farms three hectares of land just outside Chokwe, a town in southern Mozambique. He's suspicious of the large agro companies operating in the country. But he's one of 3,000 farmers in this area who benefit from working with Mozfoods, a U.K.-owned company that provides local farmers with feed, fertilizers and a guaranteed price for the rice (ph) they grow.
MILAGRE MACHAVA, FARMER (through translator): The Mozambican farmers need the help of companies like Mozfoods to develop, because sometimes we do not get to reach our goals by ourselves.
MABUSE (voice-over): In exchange for assisting these farmers, Mozfoods is cultivating 550 hectares of rice and maize to produce seeds and crops (ph) that it processes and sells on the open market.
Arnaldo Ribeiro, the general manager of Mozfoods says this model has benefit for everyone.
ARNALDO RIBEIRO, GEN. MANAGER, MOZFOODS: In the two miles that we are buying, we pay to the farmers about 1 million -- 1.1, 1.2 million dollars that we put -- we pay to the farmers. What it means, a big contribution to the economy in these -- in these areas.
MABUSE (voice-over): Rural communities (inaudible) between their governments' need to promote agricultural development through foreign investment, and protecting the rights of citizens who depend on the land. That volatile food prices, hungry populations, and investors wanting to feed those cravings is making the continent's land a rich and prized commodity.
(END VIDEO CLIP)
CURNOW: Now Mozambique doesn't just have agricultural potential. They're also massive reserves of coal and gas. Well, after the break, we speak to Vale (ph), the Brazilian mining giant, about how to balance the expectations of big business, government and local communities.
CURNOW: Vale (ph), the Brazilian mining company, says they've invested about $2 billion in a coal operation and a new rail in Kier (ph) in Mozambique. In the process, they had to resettle a number of local communities.
But there has been criticism that when they relocated people, they put them in areas with less-than-ideal living conditions. Well, to talk about that and the so-called "resource curse" is Ricardo Saad (ph). He's Vale's (ph) director of projects for Australia, Asia and Africa.
(BEGIN VIDEO CLIP)
CURNOW: Your job is to oversee Asia, Australia and Africa's operations for Vale (ph), and you're based in Maputo.
RICARDO SAAD, DIRECTOR, VALE (PH): Yes. Actually, I'm responsible for new capital projects, OK? And I'm based here in Maputo because our investment here in Mozambique are the most important.
CURNOW: More than 50 percent of Mozambique's (inaudible) comes from donor countries. Now the mining companies, in a way, are determining Mozambique's development agenda.
In a way, a lot of that's your responsibility.
SAAD: Yes, for sure, for Mozambique. The mining opportunities, it's a great opportunity for the country to become, we can say, emerging country in mining district, because they have a huge or a very important reserve in terms of coal, but because of the -- of the -- of the opportunity, we now have a plan and we have a certain up (ph) to the investment to double the capacity, to 22 million pounds per year of coal, and the same time invest in the infrastructure.
CURNOW: So the rail corridor that you're investing in and building is one way Vale (ph) is sort of contributing to the wider infrastructure needs of this country.
Tax rates, though, are very, very low, aren't they? I mean, the government has created quite a business for (inaudible) environment?
SAAD: The government, they prepare the environment to attract investment and we are investing in the mechanical (ph) corridor in partnership with CFM, (inaudible) Mozambique, which is the state company that holds the railway operation. And in the balance of the investment, Vale (ph) will hold 60 percent and the CFM 40 percent. So it's really a partnership.
CURNOW: When we talk about a company like Vale (ph), you're just one part, in a way, of Brazilian wave coming into Africa. Just explain to me why Brazil is look east, essentially.
SAAD: For us, it's opportunity. We see Africa as a new opportunity and not only because of the nature of research, but also because it's a good environment. So it's a good opportunity.
CURNOW: Many Africans are sensitive to some sort of neo-colonialism, a new scramble for Africa, Brazilians, the Chinese, the Indians. Do you feel responsible in a way to try and act ethically?
SAAD: For sure. And I don't feel that it's a neo-colonialism, because in my understanding, it's a totally different approach.
When we talk about Africa, it's not possible to talk about (inaudible) not thinking in a sustainable development. And respect to the people, respect to the environment, respect to the planet, but having the sense that our development is going to be also a local development. We are here to be a Mozambican company. We are not -- we come from Brazil, but we are Mozambican now.
(END VIDEO CLIP)
CURNOW: Remember, you can always find us online at CNN.com/MarketplaceAfrica. (Inaudible) Twitter and Facebook pages. But for me, Robyn Curnow here in Mozambique, see you again next week.