CNN CNN


 

Return to Transcripts main page

QUEST MEANS BUSINESS

BlackBerry Cutbacks; BlackBerry Stock Plunges; Uncertainty Weighs on US Markets; European Markets Close Lower; India Central Bank Raises Rates; Central Bank Facebook; Central Bank Surprises; Barclays Cyber Raid; EU Cyber Security; Typhoon Usagi; Interview with Dennis Woodside; America's Return to Prosperity; Basketball Without Borders; Interview with Amadou Gallo Fall

Aired September 20, 2013 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(NEW YORK STOCK EXCHANGE CLOSING BELL)

RICHARD QUEST, HOST: What a week it's been. We've been surprised by the Fed, we've seen record highs. My word, thank good ness it's Friday, September the 20th.

In the last hour, BlackBerry has announced huge job cuts and a massive loss.

India raises rates, raising investors' temperatures.

And the tale of an old-fashioned bank robbery that used new technology.

I'm Richard Quest. It may be Friday, but I still mean business.

Good evening. Just as Friday afternoon was coming to a close here in New York, the markets were once again taken by surprise, this time, an announcement from BlackBerry, the SmartPhone manufacturer, if you can still call them that. Certainly bad news, indeed. The share prices down 20 percent and if you join me over at the super screen, you'll see exactly why.

BlackBerry has announced 4,500 layoffs in the last hour. Now, that's about 40 percent of the global workforce for BlackBerry. But more than just that, the company has announced a $1 billion loss in the second quarter. Actually, $995 million, if you're going to be pedantic about it. And the company, BlackBerry, is struggling to hold onto its market share.

And the reason for such a massive loss: these. Basically, these are the Q 10 and in particular the Z 10. And what BlackBerry told us today is that they haven't sold many of them, just a few million, and therefore have had to take a massive billion-dollar inventory cost.

BlackBerry also said it was slashing by half the number -- of slashing down, too, the number of phones that it actually will offer. Put it all together, with the company already saying that it's looking for its future direction and options, you've got to ask, was today's announcement the end of BlackBerry?

Joining me to discuss exactly that point, CNN Money's assistant managing editor, Paul La Monica. So, what on Earth do we make of today's announcement in the last hour?

PAUL LA MONICA, CNN MONEY ASSISTANT MANAGING EDITOR: This is obviously very, very bad news for BlackBerry. It's not entirely unexpected, but the biggest problem for BlackBerry going forward is just there's too much competition.

Apple, Samsung, all the other companies operating on Google Android, now you have Microsoft buying Nokia. BlackBerry's a distant fourth in a three-horse race.

QUEST: I noticed that the numbers -- I mean, they say in the statement they've sold something like 3.7 million SmartPhones in the second quarter. Now, unless I'm mistaken, Apple's hoping to sell 5 million iPhone 5Ss, or whatever they're calling them, in one weekend.

LA MONICA: Correct. It really is a case that BlackBerry once had a stranglehold on the mobile device market. They weren't even SmartPhones back then, they were really just fancy phones that let you also e-mail. But we've evolved past that stage where all you need a phone for is to make phone calls and e-mails, and BlackBerry was too late to catch up.

QUEST: So, these two devices, the Q 10 and the Z 10, they basically have been a failure. Am I being too brutal when I say that?

LA MONICA: I don't think you are. Some of the reviews were decent, but most of those reviews were -- they had the big qualification that there's nothing in either of those devices that was substantially different than what we saw with Apple's iPhones and all the other Android devices out there.

QUEST: So, Paul, help me understand, where does this go now? Four and half thousand jobs gone. They're making BBM open source to Apple and to Android. What does BlackBerry do next?

LA MONICA: BlackBerry has to probably hope for a savior. The good news is that they still have about $2.6 billion in cash and no debt, so they have some time before they burn through all that cash. There's a lot of speculation that a company called Fairfax Financial up in Canada, run by Prem Watsa, who's widely --

QUEST: What would he want with them?

LA MONICA: Well, he's widely referred to as the Warren Buffett of Canada, maybe he sees some value, maybe he -- helps management take the company private.

QUEST: But what's the --

LA MONICA: Again, you're right, it's not exactly a lot of value.

QUEST: -- but what's the gain? What's the gain? What's the game plan? Fine, you go private and you lose money. Fine, you've got $2.6 billion in the bank and you fritter it all away. What's the longterm game plan?

LA MONICA: There isn't really much of a longterm plan, I'm afraid. Maybe they can sell some of the patents, but even then, asset sales aren't exactly something that companies that are growing do. So, it's really, really troublesome, obviously.

QUEST: I'm trying to be fair to BlackBerry here.

LA MONICA: Well, no, there's no sugar-coating it. This is terrible news. A stock doesn't fall 20 percent in a matter of minutes even though everyone expected this anyway. I guess just maybe there were some people naively hoping that BlackBerry would find a white knight in shining armor before they had to come to this, but it just didn't happen.

QUEST: Paul, good to see you.

LA MONICA: Thank you.

QUEST: Thank you for joining us, Paul. Now, Alison Kosik is live at the New York Stock Exchange. Alison, 20 percent, Paul says, the BlackBerry stock price fell just after the announcement. It was pretty low to start with.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It was pretty low. It was around $10 when you saw trading actually was halted because of this news that we were going to get, and then once trading picked up again, yes, Paul La Monica is absolutely right. You saw that stock drop like a rock.

Within minutes, it dropped more than 17 percent, and that's where it ended, at $8.73. We're going to see if it fares any better when investors have been able to kind of process this news over the weekend.

Meantime, we're looking at a market that didn't have such a great day today, the Dow falling 184 points today. You know what this is, Richard? This is a market that's easily spooked now that the talk has turned to when the Fed may begin to taper, so the mere mention will set off the market.

And the mention today came form comments from one Fed member in a speech, James Bullard saying that time could come in October. Also, it's quadruple witching today, a variety of --

QUEST: Ah!

KOSIK: -- seekers and options are expiring. I'm hearing -- do you hear the noise on the floor?

QUEST: I do, and --

KOSIK: It's after hours, there's a lot going on.

QUEST: If we look at that graph again, we can see exactly the triple witching effect, because those losses escalate towards the end of the session. That is exactly what you expect to see on a day of triple witching. Alison, thank you very much, indeed. Alison at the New York Stock Exchange.

There was uncertainty in the European share markets in London, Frankfurt, and Paris, and they all closed their sessions lower with -- not dramatically down, but there were losses that were seen overall.

A busy day in the business world. It may be Friday. When we come back, there's much more to talk about. QUEST MEANS BUSINESS, good evening.

(COMMERCIAL BREAK)

QUEST: Now, tonight, India's central bank has gone where the US Fed fears to tread. It tightened policy. The benchmark interest rate is up, and that shocked investors. It seems India's new central bank chief has chosen to combat sky-high inflation rather than tackling economic -- or slack economic growth.

There was an absolute rock and a hard place that the governor of the Bank of India found himself in. And that's why he chose to raise rates a quarter of a percentage point to 7.5 percent, the first rise since 2011, and to many, it seems like a very odd time to do so.

Because on the one hand, there was a faltering stock market and the currency had been absolutely under pressure from a Fed-inspired capital flight. So, raising rates in such a fashion certainly supports the currency, although it didn't today. But at what cost in terms of economic growth?

The Mumbai Sensex index dropped nearly 2 percent on the news, and ironically, forget -- never mind supporting the currency, that also fell. The rupee dropped against the dollar as well.

There were some bold moves from India's central bank governor, Raghuram Rajan. Now, when he was appointed, he was famous for saying running a central bank is not designed to win likes on Facebook. He will go down in history as saying it is not designed to win likes on Facebook.

So, if Facebook had a central bank feed, this is what it would look like today. So, have a look. First of all, on Raghuram Rajan's page, he would have changed his relations status with rupee to "It's complicated." And the Goldman Sachs economist, the RBI has risk sending a confused signal to markets.

On the central bankers' feed, if we look at Ben Bernanke's page, oh! He's canceled the event known as tapering. And look -- ha ha! The stock markets like this.

Larry Summers on his Facebook page this week, he updated his status. "I'm writing to withdraw my name from consideration to be chairman of the Federal Reserve Bank." Not surprisingly, Janet Yellen liked this, and the stock markets certainly loved what they got to see.

Let's put all this into perspective. Nathan Sheets is the global head of international economics at CitiGroup. Good to see you.

NATHAN SHEETS, GLOBAL HEAD OF INTERNATIONAL ECONOMICS, CITIGROUP: Very good to be here, thank you.

QUEST: What a week.

SHEETS: Indeed, it has been.

QUEST: Where do we start?

SHEETS: It's been a roller coaster. Fed tapering, or lack of tapering.

QUEST: Right. Let's start -- let's do -- we'll just -- let's do India. Why has he raised rates? Is it to support the currency? Because it didn't do that. But the cost to growth.

SHEETS: I think you're right. It's about the currency, it's about India has a current account deficit that needs to be financed. India has an inflation problem, and Raghuram Rajan is coming in and saying job one is to reestablish confidence in the currency.

QUEST: He called it -- bullet-proof balance sheet -- government balance sheet. But a quarter percent will not do that.

SHEET: A quarter percent by itself won't, but I also think this is symbolic of his determination, that he's coming in, and it's a new regime at the RBI. And he's showing it by this rate hike, and I'd assume he's prepared to do more if necessary.

QUEST: Even at the cost of growth in a country that's already not growing fast enough for its middle class?

SHEETS: You have to remember that his background as a former chief IMF economist, and their strategy is first you hike rates, you reestablish confidence, and then over time, growth will return. So I think, yes, even if there's some short-run sacrifice in growth.

QUEST: I'm going to put you on the spot. A mistake to do the move, or just an unusual strategy?

SHEETS: I think he's moving in the right direction, so I think he's doing the right thing for now.

QUEST: Let's talk about the Fed. I haven't met an economist who isn't surprised, shocked, frustrated, and irritated at what the Fed did by the lack of transparency, but leading you all up the garden path. What are you?

SHEETS: All of the above.

QUEST: Are you really?

SHEETS: All of the above. On the one hand, I very much understand why the Federal Reserve did what it did. The economy seemed like it had decelerated a bit. There were questions about what was going on in the housing market. The run-up in rates seemed like it was having an effect on expenditure in the economy, and things were maybe softening a bit.

But nevertheless, I expected that they were going to go because their communication had led us to believe that, and particularly they said by the time the unemployment rate gets to 7 percent, we want to be done with QE. Well guess what? The unemployment rate's already at 7.3 percent, and the Federal Reserve hasn't even gotten started yet.

QUEST: Will there be -- and I hesitate in this sense, because the Fed -- where does the central bank -- where does the Fed sit? Wherever it wants to. It's the 6,000-pound --

SHEETS: Exactly.

QUEST: -- gorilla.

SHEETS: Exactly.

QUEST: But will there be, as I'm starting to hear, longer-term or even medium-term damage done in its relationship with markets and the transparency necessary to effectively run monetary policy?

SHEETS: I think there is some risks that that might happen. The jury's still out, but we are watching very closely what the next steps are.

QUEST: But what is -- what is the next step, do you think?

SHEETS: I think that the Fed, through its communications, through the various speeches, through its minutes, is going to fully explain what it did, and it's also going to explain what it's looking for to eventually begin tapering.

And once they explain themselves, I think they'll be able to repair this ruptured relationship that you're describing with the markets.

QUEST: All in all, as we go to the weekend, I can't decide --

(LAUGHTER)

QUEST: -- I mean, take the US, take Europe -- I can't decide whether we are a little bit worse off, in a bit more trouble, or we really should be getting the umbrella out for the rainy day.

SHEETS: And we haven't even spoken about what's going on in Washington with --

QUEST: Ah!

SHEETS: -- continuing resolutions and debt ceilings and so forth. So all-in-all, maybe it's --

QUEST: What are you worried about in Washington?

SHEETS: I am worried about Washington, and maybe it's time to get that umbrella out you mentioned.

QUEST: You're worried about it, it's time for the umbrella.

SHEETS: I think so.

QUEST: Do you think, finally, that they really could -- I was going to use another word -- but they could mess it up all over again? We've had a warning. We've had warning from the Fed. There was a very bleak warning from the Fed in its statement. We've had warning after warning that -- close the government down, the US government, and you'll be in trouble.

SHEETS: I hope the answer is no. But what worries me is this is really the Republicans' last chance to get their hands on Obamacare. If it's not now, then Obamacare goes through, so we could see some fisticuffs in DC.

QUEST: There you go. Many thanks, indeed, for joining us. Good to see you.

SHEETS: My pleasure.

QUEST: Now, when we come back after the break, take a cable with some connections and something called a KVM, police say that the men who used this managed to rob a bank in London of more than a million and a half dollars. When we come back, we'll explain how they did it. The low-tech heist at the bank.

(RINGS BELL)

(COMMERCIAL BREAK)

QUEST: Now, this is what they call a KVM. Many of you will know exactly what it does. Well, apparently, it's just about $20, and using equipment like this, a gang of thieves were basically able to steal more than $2 million from a London branch of Barclays bank.

The device they used is called a keyboard video and mouse switch, the KVM. Eight people have been arrested, including a man that police are calling the Mr. Big of UK cyber crime. CNN's Jim Boulden is in London.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: So, this is the branch of Barclays bank where the Metropolitan Police say eight men conspired to steal 1.3 million pounds. That's just over $2 million. And this is how the police say they did it.

BOULDEN (voice-over): This is a photo of something called a KVM switch. Police say one member of the gang talked himself into the bank branch back in April and attached this to one computer through a 3G router.

These are normally used to allow people to access their work computers remotely. In this case, the police say the gang used it to steal money from a host of accounts in just one day by remotely controlling the branch's computer system.

TERRY WILSON, METROPOLITAN POLICE: The size and sophistication of the operation has shocked us, and we're actually having to draft in more resources, techs, with the amount of evidence that we've recovered.

BOULDEN: Recovered, the police say, from houses around London. Authorities called one of these sites a cyber control center. In all, they found cash, jewelry, drugs, thousands of credit cards, and personal data. The police are now linking the Barclays heist with another using a KVM switch at a London Branch of Bank Santander. In total, 20 people have been arrested.

WILSON: We would consider one of those to be extremely significant. I would class him as the Mr. Big of UK cyber crime at present.

BOULDEN: The police say, however, not all the money has been recovered.

BOULDEN (on camera): Now, for its part, Barclays bank says no customers lost money from their accounts because of the alleged actions.

Jim Boulden, CNN, London.

(END VIDEOTAPE)

QUEST: Finding the right balance between safety and low regulatory burden is no easy task. Neelie Kroes is the Europe commissioner for the digital agenda. She joins me tonight here in the C Suite, and we're delighted to have you with us, Commissioner.

First of all, this balancing act between cyber security and privacy and the need for regulation, we are still a long way from understanding where we need to go with this.

NEELIE KROES, VICE PRESIDENT, EUROPEAN COMMISSION: Well, in a way, it's not that long from now on. So, there is a proposal from the Commission, and it is about cyber security, and it's clearly directed in a line where all those who are having experiences like this bank are mentioning that and are taking their measures.

So, they always denied it so far, and every time, it's the same situation. It is, indeed, absolutely one of the responsibilities of the business world.

QUEST: You've got to get on with it.

KROES: Absolutely. And we do have a directive now, and that has to be accepted by the Council. And I'm absolutely certain that they'll be done within a couple of months.

QUEST: The digital environment in the EU is still not a single market. There is still so much work. And on the anniversary of Maastricht just coming up. Are you embarrassed that it's not a single market yet?

KROES: It is an embarrassing situation. In my former life as a national politician and as a minister in the 80s, we were already dealing with starting this whole process. So, it takes a bit too long, so to say. But now, there is a proposal, and that is solving the problem. It is not only taking away the barriers, now we have 28 member states and 28 markets. That's crazy.

QUEST: It's crazy, but you're the woman, the commissioner, who can do something about it. You've got to have teeth.

KROES: I can assure you, I have them. And the proposal is just accepted by the Commission, and now will be dealt with the European Council, and that is the meeting in October, with all the leaders of the member states, presidents and prime ministers, and then going to Parliament.

So, if we have a little bit of realism in as well the Council as well in Parliament, then we can deal with it before the elections of the European Parliament.

QUEST: Commissioner, you and I have talked many times on this, and you know where I'm going to go with this. Two words: roaming charges.

KROES: It is outrageous. If it wasn't that serious, it should be hilarious for you are paying for something that is not anymore there. When you are passing a border in Europe, then it is an artificial border, for it's one single market. So, we don't have borders anymore. And still, when you have your mobile --

QUEST: Last night on this program, the CEO of Portugal Telecom said progress was being made and it's not a single market and we can't run it like the United States runs theirs with AT&T or Verizon. Do you basically tell him nonsense, get on with it?

KROES: No. If he has said that, then I'm pleased, for I need the backing of the incumbents and of the alternatives, I need the backing of the consumers, and I feel certain we've got the backing of the consumers, but also of the manufacturers and of all the other players in this market.

QUEST: We have an antique on the set in the form of the commissioner's BlackBerry.

KROES: This is my private one, and --

QUEST: Oh, sorry.

KROES: No, no, no, no, no!

QUEST: We can be --

(LAUGHTER)

KROES: No, no, no, no, no, no, no! But I'm using it since the early 90s, and it's great.

QUEST: Good! Thank you very much, Commissioner, thanks, indeed, for joining us.

KROES: Yes.

QUEST: Jenny Harrison, who's a woman always at the forefront of technology, is with us at the Weather Center this evening. Good evening.

JENNY HARRISON, CNN METEOROLOGIST: Hello to you, Richard. I'm going to start talking about Super Typhoon Usagi. The reason for this is because, of course, it's beating down in Taiwan, but also bearing down on that south coast of China, Hong Kong in particular.

It is a vast storm, look at this. Winds 240 kilometers an hour, still a super typhoon. It is going to lose some of its strength, but the size of this thing is actually over 1,000 kilometers in diameter.

But look at the progress it's going to make. It will actually lose some of its strength in terms of winds over the next couple of days. It is forecast to actually make landfall in Hong Kong sometime late on Sunday.

So, this gives you just a slightly different view of the same forecast. So you can see here throughout Saturday, very, very strong winds still impacting Taiwan and the northern Philippines.

And then, as it continues to make its progress, it'll lose some of that strength. Still, a very, very strong typhoon, and very heavy rain coming in with this storm as it heads towards Hong Kong later on Sunday.

There are no warnings yet, no signals being put up by Hong Kong. Of course, the travel delays already beginning to kick in, but it will get worse than this. No doubt about it, the airlines will begin to actually cancel their flights. There is probably no doubt that there will actually be no flights at all coming out of Hong Kong and also potentially out of Taipei.

The rain coming through will be very heavy. Landslides, mudslides, and of course, flooding. And look at this, the next 48 hours, over 400 millimeters to Taiwan, and then also beginning to really add up in Hong Kong, so we'll keep you well updated in the hours and the couple of days to come.

Meanwhile in Europe, as we go through the weekend, really feeling cool and autumnal across much of the north-central regions and the east. That warm-up in place across the west and the southwest.

It is also Oktoberfest. It kicks off this weekend. Not sure if you kick off when you start to drink, but that is what's going on. Saturday, Sunday, and Monday, they've actually got a bit of a warm-up by Monday.

We've got some pretty good weather conditions, a little bit of clouds, but some sunshine as well. Chilly in the overnight hours for Munich, but even so, that never, of course, spoils anybody's fun.

And how about this? Do you fancy flying away on your Friday? I'm sure plenty of you do. Well, here's a couple of destinations for you. How about the beautiful island of Majorca? Palma will be beautiful Saturday and Sunday, temperatures in the high 20s. Mostly sunny on Saturday, glorious sunshine on Sunday. The overnight hours pretty nice, as well, 16 and 15 on Sunday night.

And then, if you fancy a city destination, how about that glorious city of Venice? Saturday, 23. Sunday, 22. Little bit more clouds around, but some very nice weather for doing some very nice sightseeing, and still not too cold, of course, to get out there on the canals in a gondola.

But if you're not going anywhere, you're stuck at home, have a look at these temperatures. There's some pretty good sunshine around.

QUEST: Right.

HARRISON: 31 in Madrid, 22 in Paris, and 17 Celsius in Vienna. So, something out there for everybody, Richard, apart from you. You're in New York.

QUEST: Fly Away Friday. We love it. Thank you very much, indeed, Jenny Harrison at the World Weather Center.

When we come back, Motorola's chief executive thinks he knows what SmartPhone customers want, and he is making it in America.

Then to Texas, where people are riding the bull of prosperity in the state's oil boom town.

(BEGIN VIDEO CLIP)

QUEST: Later in the program, all the fun of the Midland County Fair. On QUEST MEANS BUSINESS tonight.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest.

There's more QUEST MEANS BUSINESS in just a moment.

This is CNN. And on this network, the news always comes first.

Iran's new president wants to mend -- mediate an end to Syria's civil war. Hassan Rouhani made the offer in a column in "The Washington Post." It follows Iran's recent overtures toward the West. Mr. Rouhani heads to the U.N. General Assembly in New York next week.

At least 18 soldiers and eight police officers were killed in Southern Yemen early this morning. Car bombs and heavy artillery were used to attack military and police installations. There's been no claim of responsibility, though Yemen's Defense Ministry suspects al Qaeda to be responsible.

Chicago's police superintendent is calling for a ban on assault weapons in the United States after a shooting in a city park which wounded 13 people. The condition of one victim, a 3-year-old boy, has stabilized after he was shot in the ear. Police say the shooting is gang-related.

BlackBerry has announced it's cutting about 40 percent of its global workforce. The phone maker also said it was expecting a loss of almost a billion dollars for the second quarter of this year. The shares plummeted more than 20 percent after briefly being halted following the announcement.

The U.S. House of Representatives has taken America one step closer to a federal government shutdown. The Republican-led House passed a defiant short-term spending plan which would take away all the funds from the president's ObamaCare.

Needless to say, that is unacceptable to the Democratic-led Senate, where it goes next.

So the plan, as they say, is almost certain to be DOA -- dead on arrival.

The stalemate over the budget is an urgent problem, as you heard Nedton Chiefs (ph) talking about on this program, because without the ability to spend, services will have to shut down in less than two weeks.

President Obama put some physical distance between himself and Washington today. He hit the road for America's heartland, where the president took his economic message to Ford's new stamping plant in Liberty, Missouri.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We've worked with labor, we've worked with management. Everybody had to make some sacrifices. Everybody put some skin in the game. We bet on the American worker. We bet on you and today, that bet has paid off, because the American auto industry has come roaring back.

(END VIDEO CLIP)

QUEST: It's not just auto manufacturing that's seeing a resurgence in America. In Texas, Motorola opened a new factory that provides final assembly for its latest smart phone, the Moto X, the first smart phone designed and engineered, assembled in the United States.

Dennis Woodside is Motorola's chief executive.

And last week, I asked him why bring assembly back to the higher cost United States.

(BEGIN VIDEOTAPE)

DENNIS WOODSIDE, CHIEF EXECUTIVE, MOTOROLA: There are over 150 million mobile devices in the hands of Americans. And until now, not a single one of them has actually been made here.

And when we looked at that, we realized that there were some assumptions that were made 10 years ago, when a lot of the consumer electronics moved offshore that just weren't true anymore.

You can produce products here at a reasonable cost and with incredibly high quality. And we think, over time, we're going to be able to innovate much faster because our production is much closer to the engineers that build the products.

QUEST: Now, I -- I don't want to seem begrudging in this regard, but it is an assembly plant versus a manufacturing plant. And the critics and the naysayers will say, well, but they're not actually making them here. They're sort of making them where it's cheaper, bringing them back and window dressing by putting them together.

WOODSIDE: Well, that's completely not accurate. The way that we do things, as you can see behind me, there's over 2,000 people actually manufacturing, making phones here. There is a legal distinction between being able to say that something is completely manufactured in the U.S., which requires every single part to be made here, and assembled in the US.

It's a lot like like the auto industry. If you go to an auto plant, the parts are coming in from all over the world. And that's true here, as well, some from the U.S. and some from outside the US. But the actual assembly of the product, the work that employs 2,000 people, that's taking place here.

And we think that's important.

QUEST: You're involved in the single most competitive, I would venture to suggest, industries at the moment. Apple has just announced its new iPhone. Nokia now with Microsoft will be ramping up for Windows 8.

So I ask you, sir, where do you see yourself fighting that competition now you're part of Google?

WOODSIDE: Well, this industry is driven by innovation. And if you just play the clock back five years ago, the players who were leading the industry at the time, that had the market share, were vastly different than the ones who are leading today.

So we think we've built a product that's incredibly innovative. You can speak to the phone and it will make calls. It will navigate for you without you touching the phone.

So it actually listens to your voice and the commands that you're giving it. You don't need to touch it.

QUEST: Motorola, one of the grandest names in mobile technology, the first phone I ever had, the Brick, was one of yours.

So, what is it that people want for the future of mobile telephony?

What is it we really want?

WOODSIDE: People want to participate in the design and manufacture of their products. They don't want the same thing that everybody else has. So the phone that we've built is manufacturable in 256 different combinations. You can actually customize your phone.

So we think that has a long way to run.

We also think there's a lot that's going to be done at lower price points. And we have a lot of work that's going to come to fruition over the next couple of months there, with products that are just far more affordable than what's out there today.

(END VIDEO TAPE)

QUEST: Get back. No, keep away. We finally got one and everybody else wants to now have a play with it or make off with it.

The iPhone faithful line up for Apple's latest offering around the world today. This is a real one, absolutely, from London to Tokyo to Sydney and in New York, they gathered, as they always do. Some have been cueing for days. Barking mad.

Others have flown in from countries. And all for the new 5S and the cheaper iPhone 5C. Well, frankly, you couldn't get this one, but you could get the other one.

There were those lining up to break the thing.

Now, this is the first iPhone with fingerprint sensor technology. And there's been a variety of generous and varied bounty for those who manage to hack into it.

So, first of all, on offer -- $16,000 in cash; there's bit coins of various values, a bottle of Makers Mark whiskey; a patent application. There are many other things amongst them, a dirty book of erotica. I'm not sure how much incentive that's adding to anything.

But all of this is for the first person who manages to break the iPhone fingerprint technology. Some would say that's rather sick and sad, that you're having competitions to break something that's only just been created.

The U.S. senator, Al Franken, isn't sold on the technology. He's written to the Apple chief raising his concerns. While hacked passwords can be changed, fingerprints cannot. And he wants to know more about that.

All this week, we've been focusing on America's return to prosperity, America's return. On my road trip through the great state of Texas, the evidence was everywhere -- the car market that's revving up, the reviving oil and gas industry and there was plenty of just revving at the county fair. Without irony, they tell me they've never had it so good.

(BEGIN VIDEOTAPE)

QUEST (voice-over): There are frightening rides and super-sized food. I have no idea how to eat this, but I suspect it's going to be very messy and a bevy of crushing bulls. They work long and hard in the oil and gas field. So tonight, Midland, Texas is ready to relax.

A day at the fair -- it doesn't get much more Texas than this.

You know the saying in Texas...

What happens in Texas?

UNIDENTIFIED FEMALE: Everything is bigger. Evening is bigger.

QUEST: And that includes what goes on your head.

So what hat was right for me?

UNIDENTIFIED FEMALE: So let's just...

QUEST: Ooh.

UNIDENTIFIED FEMALE: Now look. There is a cowboy for you. Square it to your face. There you go.

QUEST: How much of a noise do I need to make?

UNIDENTIFIED FEMALE: Heehaw.

QUEST: Try that again. Go on. Come on.

UNIDENTIFIED FEMALE: Heehaw.

QUEST: There's quite a bit of Wild West left in West Texas.

Who are you?

UNIDENTIFIED MALE: Well, I'm the duke, of course.

QUEST: You're John Wayne?

UNIDENTIFIED MALE: Bigger than life, kid, bigger than life.

QUEST: Tell me what you're doing here.

UNIDENTIFIED MALE: Well, I'm just trying to spread a tradition -- rodeos and fairs are part of the American tradition, just as much as me.

QUEST: It doesn't get much more Texas than a man in a big hat who's about to do a bit of bull riding.

UNIDENTIFIED MALE: Yes, sir. Bull riding is great here this year.

QUEST: So these are your bulls?

Which is the best?

Which is the best bull there, come on?

UNIDENTIFIED MALE: The best bull, in my opinion, would be this black bull right here, 641 Revolution.

QUEST: He looks mean.

UNIDENTIFIED MALE: He's probably one of the easier ones in there to get along with.

QUEST: Probably?

You bulls at the Midland Fair tonight seem easy to get along with.

They they do bull riding isn't clear. The purpose is to hang on tight for eight long seconds. Only one, Guthrie Long (ph), could stay for that long duration.

What's the moral of doing all of this?

UNIDENTIFIED MALE: To just have fun. I mean don't let anything bring you down, because it's going to -- it's going to cause problems in the long run. Just have fun and live life with a smile.

QUEST: In other words, seize the moment. And as you might say, take the bull by the horns.

(END VIDEO TAPE)

QUEST: And so tonight's Profitable Moment.

You can learn a lot about the state of the global finance from that trip to the county fair. For months, investors the world over have been on wild, scary rides as the Fed threatened to cut economic stimulus. The Fed put that off this week.

The fun times at the fair may continue. Easy money will flow. And then smart investors will continue to climb the wall of worry. Tapering will come not this year, then surely next, as the economy strengthens slowly and steadily and reactions will be uncertain.

And it's not just the Fed, of course, that will be doing this. Like all keen investors, this county fair gives a prominent place to Germany -- danke, Germany -- where they will be having an economic powerhouse with elections that take place this very weekend -- a more generous hand to the struggling Eurozone.

Finally, like the children who bob up and down at the county fair, volatility could rule the day until we get clarity from the governments and central bank. And it all ends with the giant Ferris wheel, because the economy just keeps turning.

And that's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in New York.

Whatever you're up to in the hours ahead, I hope it's profitable.

I'll see you on Monday.

(COMMERCIAL BREAK)

ROBYN CURNOW, HOST: Hi, there.

I'm Robyn Curnow.

You're watching MARKETPLACE AFRICA.

Now when it comes to sport on the continent, football is king. But that hasn't stopped the National Basketball League in the United States from opening up an office in Johannesburg and from developing the game throughout Africa.

And its strategy, say officials, is long-term.

(BEGIN VIDEOTAPE)

VLADIMIR DUTHIERS, CNN CORRESPONDENT (voice-over): Some of South Africa's best young basketballers train in the shadow of Johannesburg's sky line.

Their coaches?

The NBA's Al Horford

AL HORFORD, NBA: It's all about making a difference. And I feel like when we come in here and some of these players see us, I think we do have an impact. I know when I was younger, I always wished to have NBA guys, you know, come around me and -- and teach me about the game.

DUTHIERS: And Thabo Sefolosha.

THABO SEFOLOSHA, NBA: So it's a joy to see them play, you know, the energy that they have and the passion that they paly with, I think, you know, it's things that we, you know, we all benefit from seeing. And, you know, it reminds all of us, from, you know, when we -- when we were -- when we were young and coming up. So it's a -- it's refreshing.

UNIDENTIFIED MALE: At the NBA draft.

DUTHIERS: It's the 11th year for the league's Basketball Without Borders camp in Africa. But make no mistake, developing the game on the continent is also about growing a business.

UNIDENTIFIED MALE: We think there's a huge opportunity. I mean there's roughly a billion people on the continent of Africa. So just a little small sliver of that billion people can result in a very successful business for us.

DUTHIERS: Incoming NBA commissioner, Adam Silver, says programs like Basketball Without Borders are helping to build the league's brand beyond the United States.

ADAM SILVER: It's not just guys, it's girls, as well. So we have a woman's camp, a girl's camp and a boys camp. It's the very best from throughout Africa, about 60 of the best young men who are here. I spoke to them this morning. They're passionate. They know all about the game. They're asking me questions -- the same questions, by the way, I get in the States, the kids saying you have big shoes to fill, you know, are you nervous?

DUTHIERS: Silver will no doubt have a lot on his to-do list when he takes over for the long-time NBA commissioner, David Stern. On the top of the list, keeping the National Basketball League's (INAUDIBLE).

SILVER: My focus is going to be on a lot of the things we're focused on now, international is going to continue to be very important to the growth of our business. Like a lot of other U.S.-based businesses, we're growing at one rate in the U.S., but we're growing exponentially to that rate outside of the United States.

The continent of Africa, China, increasingly India, Europe, Latin America -- there are opportunities for basketball throughout the world. So that's going to be my focus.

DUTHIERS: And to do that means tapping into Africa's potential. Already, 30 basketballers from Africa have reached the NBA, starting with the likes of Hall of Famer, Hakeem Olajuwon.

SILVER: There might be a lot of diamonds in the rough out here, that may not be well known right now to college programs or to NBA scouts, but we're seeing some really great basketball out here.

DUTHIERS: For All Stars like Horford, that's good news.

HORFORD: And if you look at the league, it's become more of a global league now. You have, you know, guys from Africa, from Asia, just all over the place, they're playing in the NBA. And you want to play -- you -- you want to be able to play against the best players in the world, not only in the US.

DUTHIERS: A chance for him to compete against the best in the world and a chance for the world to dream about the NBA.

Vladimir Duthiers, CNN, Johannesburg.

(END VIDEO TAPE)

CURNOW: From developing future talent to building up a fan base, after the break, we speak to the head of the NBA's operations here in Africa.

(COMMERCIAL BREAK)

CURNOW: Welcome back.

Now, the NBA is international, with its talent extending way beyond the US' borders. Hakeem Olajuwon and Dikembe Mutombo are two NBAers from Africa with Hall of Fame careers. And building on that success is the job of Amadou Gallo Fall. He's this week's Face Time.

(BEGIN VIDEOTAPE)

AMADOU GALLO FALL, VICE PRESIDENT FOR DEVELOPMENT, NBA: As a league, you know, we've expanded, you know, across the globe. And I think we saw an opportunity here to really build on those 10 years of Basketball Without Borders and also the long history that the continent had with the NBA, with having tremendous players come from the continent, start in the league, like Hakeem and Dikembe and Manute, you know. So, yes, there was a lot of, I guess, elements that were signs that kind of, you know, pointed us in this direction.

But just coming for 10 successive years and actually players coming out of the camp and getting into our league, you know, we saw that there was an opportunity here to grow the sport and really grow our business.

UNIDENTIFIED MALE: How does the NBA hope to at least make inroads into a continent that is football crazy?

GALLO FALL: We will focus on the excitement and the popularity of our sport. Basketball is the number one -- number two sport globally, and, of course, too, in Africa.

We don't really, you know, feel like we're coming to, you know, compete or -- you know, we love football. And our players, a lot of them are big football fans, and vice versa. A lot of, you know, big circuit stars love our games. They love coming into our arenas.

So we think there's a mutual respect there and I think that, you know, there's room for all sports in Africa. And we -- we like our chances in terms of young people being drawn to our game, because it's exciting, it's fun it's a cool game. And our players are, you know, global icons, are very big influences.

And now that we have players from the continent playing in our league, I think, you know, that that makes my job easier, because I could look and we travel (INAUDIBLE), you know, over four countries this summer. I mean, we had over 20 NBA players come on the continent this summer, you know, to experience different aspects and work with different partners, NGOs, to really use the celebrity of our game to give back to communities.

UNIDENTIFIED MALE: So now that the NBA is firmly here, lay out for us what your plan over the next three to five years are, what the goal of the NBA in Africa is.

GALLO FALL: Well, the goal is to continue to really build the sport, you know, increasing participation, because for us, we feel that as basketball grows, the more player the sport is, the bigger number of children that get involved in playing it, the bigger it is for -- in terms of growing our fan base.

And the reason why there's always the debate with football is because that's a game that you could play anywhere. So we are working to make sure that children who have a passion for our sport will have access to playing it and continuing to increase our television footprints, because part of making the game accessible is also putting it on television so that viewers can view it.

But it's not just about the players who play or the coaches that coach the game, but also we have a number of fans who could just -- who needs to have access to the game. And I think across television and especially in the digital space and where we are making great progress and it makes, really, things exciting for NBA fans and basketball all across the continent.

So I think in, you know, three to five years, we are going to also bring our aspirational events. So, you know, more players love coming on the continent. So we are going to have games here, just like we stage in Europe, in different forms, you know?

So we'll have elite NBA players come in the market and interact with fans, play in front of our fans across Africa. We have great capital emerging cities here, you know, obviously, Johannesburg. I was in Addis Ababa last week and Lagos. The fastest growing economies are on this continent.

So I think we are planting seeds. It's been three years. We're very encouraged with where we are. Obviously, there's still a lot of work to be done, but very, very exciting.

UNIDENTIFIED MALE: So how would you, in your mind, categorize it?

Is it more important to develop talent in Africa or is it more important to develop the brand and to acquire television rights and ultimately develop some kind of a profit motive for the NBA?

GALLO FALL: I think for us, you know, the priority is about the game. Everything we do, the game is at the core of it. So, obviously, the healthier the game is, then everything else falls into place.

Making the game accessible, increasing participation, growing a fan base, that's really a priority. You know, and in Africa, what's exciting, both at a personal level and our -- for our organization -- is the opportunity, really, to use our sports and, you know, our -- just our brand -- to impact communities.

I think for us, that's the priority, because that priority will lead now to everything else we are talking about, our business, our television footprint, marketing partnerships being formed, bringing out big events.

But I really think that we are on the right path to kind of, you know, have all those goals, business goals, be met. But first, we have to focus on the fundamentals just about the sport.

Growing it, you know, giving an opportunity for young people who love the game to have access to the game.

(END VIDEO TAPE)

CURNOW: A reminder, you can watch this week's show on the business of basketball as well as all of our other episodes at CNN.com/marketplaceafrica.

I'm Robyn Curnow.

See you next week.

END