Return to Transcripts main page


Turmoil in Ukraine; Ukraine Grieves; Next for Ukraine; Ukraine's Crippled Economy; US Markets Up; European Markets Up; CEO Summit; Cocoa- Nomics; Samsung Launches Galaxy S5; Nokia's Android Phone

Aired February 24, 2014 - 16:00   ET



RICHARD QUEST, CNN INTERNATIONAL HOST: The bell is ringing, the market is up, the S&P and the Dow are both higher, but there's no record in sight, at least not what we can see so far as trading comes to an end on Monday, it's February the 24th.

Tonight, a call for help from Ukraine's new government. Billions of dollars are needed, says the government. Now the question is, who will pay?

It's a case of blackouts, walkouts, and bow-outs, as power cuts and strikes hit Egypt's economy. The prime minister heads for the exit.

And call it rude health on Wall Street. Well, the US stocks are higher, but they might not be a record.

I'm Richard Quest, live from outside the Stock Exchange where, of course, I mean business.

Good evening from Wall Street in New York, where the market has just closed. Having been on my travels for the past couple of weeks, we decided that this was a perfect opportunity to take the temperature, which is quite chilly, frankly, and actually be at the heart of the American economy, so to speak. From Main Street, tonight, we're coming from Wall Street.

We start, though, of course, with details and from Ukraine, where political upheaval continues in the country tonight. The ousted president, Viktor Yanukovych is nowhere to be found. A warrant for his arrest has been issued on charges of mass killings.

Yanukovych was last seen on Saturday on television when he declared that he still believes he's the legitimate president, despite a parliamentary vote to remove him from office.

Ukraine's parliament, the Rada, aims to have a full interim government in place by Tuesday. As the political turmoil unfolds, the country's crippled economy remains first on the agenda. Ukraine's new finance minister, Yuri Kolobov, said today the country needs $35 billion in foreign aid by the end of next year, and he plans to hold an international donor conference in the next few weeks.

Rada has also brought in a new central bank governor. The Russian prime minister, Dmitry Medvedev, however, is now questioning the legitimacy of the new political leaders.


DMITRY MEDVEDEV, PRIME MINISTER OF RUSSIA (through translator): Our foreign partners, our Western partners, think differently, that those are legitimate bodies. I don't know what constitution and what laws they have been reading. It seems to me it is an aberration to call legitimate was essentially the result of an armed mutiny.


QUEST: We'll have a live report from the Ukrainian capital in just a moment. First, though, as Phil Black now tells us, while the new government may be taking shape, the people of Kiev are still in mourning for those who were killed.



PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT (voice-over): The life lost. Igor Tkachu was a father of three. He left his wife and children in a small village in the west of the country to join opposition protests in Kiev. Igor's sister, Orysya, traveled to Kiev to bring him home.

"I asked him not to join the protest," she says. "He said he had to go to make sure his children have a better life." Igor was shot and killed, along with dozens of other protesters, at the height of the violence on streets near this square.



BLACK: After that terrible morning, this has become a regular event.


BLACK: The fallen --


BLACK: -- laid out before the crowd to be mourned and prayed for.


BLACK: To the crowd, they are heroes.


BLACK: For their families, the loss is overwhelming. This woman collapses. Grief now hangs over this revolutionary square. Memorials, candles, and flowers now line the barricades.

BLACK (on camera): There is no sense of celebration or victory here. The mood is somber, because people are focused on the human cost of this revolution, the blood spilled and the lives lost on the streets of this city.

UNIDENTIFIED MALE: And this is a lesson for our country, and a lesson that will help us to prevent this happening ever in this country again.

UNIDENTIFIED FEMALE: They had been so courageous. They sacrificed the highest price for our rights and freedom. I'm sure they are the best.


BLACK (voice-over): As Igor Tkachu is carried from the square, the crowd chants one word: "Glory." There is great pride in his sacrifice, but also great sorrow and anger that it was necessary.

Phil Black, CNN, Kiev.


QUEST: So, to the latest developments now in Kiev, let's go to the capital. Nick Paton Walsh joins me. Nick, first of all, the view tonight and how the people are reacting, and really, what the mood is.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, behind me yet again, it's somber, mourning, flowers laid on the floor, increasingly large numbers, now almost a carpet in some points over the burned ashes, the rubble, what used to barricades, but what used to be on fire during the clashes of last week.

But I think a slow realization that a lot of the difficult times may be slowly emerging ahead now. We've had the violence, we've had the deaths.

Now they're waking up to billions of dollars that are urgently needed right now, the government today saying, the new government, voting itself in very quickly in a series of constitution majority votes here, the new government saying they need $35 billion as quickly as possible.

The question being, will that come from the United States, from Poland, the European Union? They seem to be less swift in their desire to assist than perhaps the Russians were before with larger amounts of money.

But we understand, too, that the British foreign secretary, William Hague, is flying to Washington tonight to talk to John Kerry about Ukraine, see if they can get some sort of response that's formulated and coherent together. But the real issue now is exactly how quickly can the government get itself together to deal with the economic crisis.

We know they've been put in a cabinet, key posts decided, but still no name for the prime minister. That's a pressing concern for the days ahead. Richard?

QUEST: Now, the government, in whatever political complexion it is finally formed, has to do this balancing act, though, doesn't it? It needs the money. Where's it going to get the money from? And at the same time, not alienate the Eastern side of the country, which of course prefers the Russians.

WALSH: Well, Ukraine will always face this delicate balancing act, the issue, really, is how hard do the two different sides, the West or the East, want to try and pull? The Russians had been pulling extraordinarily hard in the past few months to keep it from signing deals with the European Union.

We've heard, I think it's fair to say, a comparatively muted response from Moscow today. Only Dmitry Medvedev and the foreign ministry sounding off Russian concerns about the legitimacy of the government here, about how armed rioters have taken over the capital.

And I think that really begs the question, what does Vladimir Putin himself think? We haven't heard one of those usual big, overarching statements from Putin laying out his cards, here. We're wondering what their finances do.

There's been a lot of speculation, and all of it from Western officials, in fact, warning against Russia doing anything involving military intervention at all. No sign of that at all at the moment, the acting Interior Minister saying he'd seen troop movements near the border, but they've seemed to go back to their base. So, a lot of concerns about Russia's next move, but no real idea what it's going to be as yet. Richard?

QUEST: Nick Paton Walsh joining me live from Kiev at the moment. Now, at the heart of the political turmoil in Ukraine is the country's devastated economy that we've just been hearing, the huge sums of money now being sought.

Protest began when President Viktor Yanukovych rejected the trade deal with the European Union and turned to Russia instead for a $15 billion lifeline. The vast majority of that money is still in Russia's hands.

As Nick was saying, the British foreign secretary, William Hague, says Ukraine's financial stability is crucial for the entire region.


WILLIAM HAGUE, BRITISH FOREIGN SECRETARY: The Ukraine financial situation is very serious, and without outside assistance, may not be sustainable. An economic crisis in Ukraine would be a grave threat to the country's stability and have damaging wider consequences.


QUEST: That's the British foreign secretary. Now, I spoke to Bob Parker, the senior advisor to Credit Suisse, and I asked him why Ukraine is asking for the massive sum of $35 billion.


BOB PARKER, SENIOR ADVISOR, CREDIT SUISSE: The first issue is, obviously, the liquidity in the banking system. And the banking system, obviously, has been losing capital flows. It is net short the US dollar, the currency has depreciated.

So, liquidity is required for the banking system. Now, that's separate, obviously, from funds which are required on a day-to-day basis for the government.

I think one thing to make -- one point to make about Ukraine is that if one looks at their sovereign debt -- in fact, debt-to-GDP is only just slightly above 40 percent, so there is not a solvency problem with respect to the overall level of debt, but there is a serious liquidity problem. And in terms of rebuilding the country, clearly, structural funds are required as well.

QUEST: Is it your gut feeling that if -- whatever the economics, for geopolitical reasons and strategic reasons, the Europeans, along probably with the IMF, find the money?

PARKER: Oh, I think the answer to that is absolutely yes, because politically, geopolitically, Ukraine is a very important country, and I don't think it's in anybody's interest to see a major default or a liquidity crisis, whether it be the Ukrainian banks or whether it be the state of Ukraine. So, I think it's in everybody's interest to make sure the funding is provided.

QUEST: When we look at what's happening in Ukraine at the moment, the IMF originally required quite strict conditionality before they would lend money. They wanted economic reforms. Economic reforms which Christine Lagarde told me were badly needed in the country.

If the IMF and the Europeans are to come in now, do you still expect they will attach some pretty rigorous conditions to that money?

PARKER: I think the simple answer to that is no. I think because of the political pressure that we've seen on the Ukraine, the changes that we're seeing, I think it's inevitable that we will see the IMF and other lenders probably say yes, we want conditions, but over the medium term.

I very much doubt that they're going to impose those conditions in the short term, and I define the short term as the next six months. And clearly putting Ukraine back on a sound financial footing is job number one.

Then restructuring their country so it becomes competitive, so its competitiveness is improved. There's labor market reform, there's financial market reform, there are a whole range of structural reforms, which the IMF quite rightly says are required in the medium term. But you don't do that in the short term.


QUEST: Bob Parker of Credit Suisse talking to me earlier. A quick look at the markets and how they traded on Wall Street. There were no gains -- sorry, there were no records. The Dow Jones up 105 points, 16,209. The S&P closing just shy of a record tonight.

How appropriate that we're coming tonight from the steps of Federal Hall. Our lead story is about Ukraine, and it was actually here on federal steps at the Federal Hall in New York where the United States' first president, George Washington, took the oath of office. QUEST MEANS BUSINESS, live from Wall Street, back in just a moment.


QUEST: Doubt on Wall Street today. I could of course tell you that it is rather parky. In fact, it's downright freezing here. Although no snow, possibly some snow towards the end of the week. I'll find out more from Tom Slater when we look at the weather forecast a little later.

The forecast on the markets, the S&P 500 came very close towards a record high on Monday. We are outside the building. Ms. Kosik, who is keeping herself nice and warm, is on the inside. Alison, no records today.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: No records. Close, but no cigar for the S&P 500, closing just below that record high it was trading at all day. Go figure, when the closing bell rings, it just doesn't make it across the finish line.

Investors really seeing a glass half full rather than glass half empty when it comes to earnings and the economy. Even though we've gotten all of these weak economic reports lately, including weak guidance, the widespread belief is it's the weather's fault, and it's temporary.

Plus, even though many companies once again have given the negative guidance, they've really, a vast majority at least, have beaten in the earnings game. So that really combined today, Richard, to drive the market higher. After seeing the sell-off in January, we're seeing the exact opposite happen in February. Richard?

Alison Kosik inside and warm and wise to boot. European markets closed the trading day, they were higher when all was said and done. The FTSE was up four tenths of one percent and reached its highest close in almost 14 years. It's the second-highest close ever recorded in London.

Look at that FTSE at 6,865, less than 100 points from its all-time peak. Just in case you're wondering, that was in 1999 at the end of the year. In Paris, the CAC 40 up nearly nine tenths of one percent.

Here in New York, there were CEOs at the New York Stock Exchange. They were here as part of a regular group of chief execs who come together to discuss major issues of social trends and societal change.

Marilyn Carlson Nelson from the Global Hospitality Group Carlson was here, and was -- she is one of the number of leaders who decided to be at the Stock Exchange focusing on such issues as health, the environment, and human trafficking. A few moments ago, she joined me to tell me why it's so important that companies use their corporate philanthropy to focus on these issues.


MARILYN CARLSON NELSON, CO-CEO, CARLSON HOLDINGS: There's a fight for talent. Even though we have jobs, we need jobs around the world, we're all competing for the high-energy, smart, capable people who are willing to work.

And a lot of the young people are saying, I want to work for a company that I'm proud of, and we want to -- I want to work for a company that's making a difference. And so, it's in companies' best interest, it's in the employees' best interest --

QUEST: But I can hear my viewers saying, oh, all companies say they're going to do it, but they never actually go and do it. They pay lip service to it. And you know, Marilyn, because we've talked about it before, there's nothing less authentic than a company that doesn't mean what it says.

NELSON: That's one of the reasons the CECP is meeting, because what happens is, if we find -- if a business finds a subject that is really relevant to their own strategy -- we're in the travel and hotel business. Carlson Wagonlit Travel, hotels, and TJI Friday's restaurants.

We've taken on -- we've taken on the role of trying to help with the fight against human trafficking, trafficking for labor purposes and trafficking for sexual purposes because we can talk to our industry. This is something that happens in hotels, restaurants, and with the air travel. So --

QUEST: And as we have spoken about this a few times, as you know, and as viewers know, this week, we're going to be talking about it on the Freedom Project. There's no issue closer to our hearts at the moment, is there?

NELSON: I know. No, because it's a growing issue. But it takes -- this is a perfect example, Richard. It takes law enforcement, it takes national policies, it takes corporations, awareness. It takes prevention, it takes rehabilitation of the individuals who've been trafficked. It takes all of us working together. It's exactly the kind of thing -- and CNN, getting the public awareness.

QUEST: Right. So, final thoughts on -- what's the first thing that somebody who's interested in this should do?

NELSON: In -- ?

QUEST: A company decides -- a company says I want to advance my agenda in this corporate philanthropy.

NELSON: So, the first thing the CEO should -- the CEO should get involved, because the people can't do it without the CEO involved. Secondly, they should talk to somebody like the CECP and look to make connections with others who have the same interests.

QUEST: Right.

NELSON: Because no corporation can afford to spend a lot of time far from its core mission, but can collaborate on these problems. Water, energy, environmental sustainability --


NELSON: It's in everybody's interest.


QUEST: Marilyn Carlson Nelson joining me a short while ago. Now, it is two years since CNN told the story of children forced into back-breaking work in cocoa plantations of the Ivory Coast in order to feed the global appetite for chocolate. Many of those children had never even tasted it for themselves.

It's a story we knew we had to stay with. So, I returned to Ivory Coast, along with the executives from Nestle, the major chocolate company.


QUEST (voice-over): Jose Lopez is responsible for Nestle's global operations. That's 468 factories in 86 countries.

QUEST (on camera): Why do you think it took the industry so long to admit the issue of child labor?

JOSE LOPEZ, EXECUTIVE VICE PRESIDENT, NESTLE: Probably finding solutions was not as easy, but it is now such process where nothing gets done, and all of a sudden, things get done.

QUEST: But you seem to be having the difficulty accepting that the industry was late to dealing with this.

LOPEZ: I have to say that we were late, because a problem like this has to be dealt with. So any time that has been lost was lost. And that should not have happened.

QUEST (voice-over): We arrived in Zebu Yaakro. It's a small village with a big welcome for chocolate's royalty.


QUEST: Lopez is here to see how Nestle's work to prevent child labor is working with the local community.

LOPEZ: The solutions that we see today, and I'm really very, very encouraged by what I see, have taken many institutions, NGOs, companies, traders, many people in the value chain have decided to step further and move, and we are moving.


QUEST: There's much more in our documentary exploring whether the chocolate industry is really changing its ways and its effect. It's a lesson in "Cocoa-Nomics," Thursday at 9:00 PM in London, 10:00 PM in Berlin, and of course, it's only on CNN.

And find out more about what CNN's doing to shine a light on efforts to end modern-day slavery around the world. You know the address:

Now, when we come back, a totally different direction. There are new SmartPhones everywhere you turn to. It's at the Mobile World Congress, it's in Barcelona, and some of the world's biggest phone-makers have launched new models today. We'll show you what they are and why you might think about them. It's QUEST MEANS BUSINESS in New York.


QUEST: Just hours ago, Samsung launched its latest Galaxy S5 SmartPhone. It all happened at the Mobile World Congress in Barcelona. The South Korean firm says their new model has a faster processor, a bigger screen, a better camera, and seems to me now becoming ubiquitous, a fingerprint sensor.

Samsung hopes this new SmartPhone will do better after disappointing sales of the S4. It will go on sale in April.

Meanwhile, Nokia has taken the wraps off its X family of SmartPhones at the Congress in Barcelona. The Nokia X and the X+ and the XL are the first range by the phone-maker that use Google's Android operating software. Now, this is fascinating. This is Nokia making phones with the Android system. They'll sell for around $149. They are aimed at emerging markets.

It may run on the Android OS under the hood, but Google won't be anywhere to be seen. Gone are Google Maps, G-mail, all replaced with Nokia and Microsoft's own services.

It's all very complicated now. The launch comes just months after Microsoft bought up Nokia devices and services business. It's a rum business, when you think about it. Stephen Elop stepped aside as Nokia's president and chief exec to head that division as a new president. He helped unveil the Nokia X in Barcelona, where Jim Boulden caught up with him.


STEPHEN ELOP, NOKIA EXECUTIVE VICE PRESIDENT, DEVICES AND SERVICES: First of all, what we introduced today was a family of devices known as the Nokia X family, and these are deliberately targeted at growth markets where there's a real boom happening in low-cost, affordable SmartPhones.

What we've done is we took the Android open source project, so the common code, but what we did is we added to that the unique Nokia experiences, like HERE Maps and Mix Radio. We also introduced the Microsoft Cloud services, so Skype, One Drive,

The net effect for Nokia and for Microsoft is we have a whole family of SmartPhones, from the higher-end Nokia Lumia devices down into the Nokia X family, all tied together with a common Cloud infrastructure.

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: To be clear, that's open source. You've not licensed Android from Google.

ELOP: That's correct. We've deliberately set aside or taken out the direct Google call-outs and replaced them with Microsoft and Nokia experiences.

BOULDEN: Does that mean it proves that Android is the system that people are going to use for cheap phones, and Windows Phones is not one that's going to have a future.

ELOP: No, what we also talked about today, and Microsoft made some announcements at the show as well, is the Windows Phone platform itself will continue to push down in price point while it maintains the quality of experience that it has. And with Nokia X, we will push its price point to lower points below what we're doing with Lumia.

BOULDEN: So, very much looking at emerging markets, no doubt.

ELOP: Yes, so the focus for Nokia X is very much on emerging markets. And one of the powerful things for Microsoft is that we will be connecting tens of millions of people who have never been introduced to Microsoft before in any context.

These are people who typically have never had a personal computer or tablet or anything, and they'll have an affordable SmartPhone experience that will introduce them to Microsoft through the Cloud-based services.

BOULDEN: You've also announced some BBMing. So, you're done a deal with BlackBerry as well. What does that tell us about how popular BBM is?

ELOP: So, BBM in certain geographies around the world has a very strong foothold for messaging, just as you see other applications in certain countries, like WhatsApp and certainly Skype in a number of markets. BBM is important in certain markets, particularly certain emerging markets, and so we're very pleased to have announce today that that's coming both for Lumia and for the Nokia X products as well.

BOULDEN: What about Windows Phones for 2014? It's been a very uphill battle, it hasn't gone well. Do you think you can crack that?

ELOP: Actually, we think it has gone quite well. The Windows Phone ecosystem is the fastest-growing ecosystem on the planet today. Our sales of Windows Phone doubled year-on-year, and we have some exciting announcements coming in the very near future around Lumia as well. You should check out the Microsoft build conference that's coming up. We'll have more news there.

BOULDEN: Is that more about apps? Because people keep saying there aren't enough apps on the Windows platform.

ELOP: So, there's been a steady growth in the number of apps, and today, to be able to talk about Instagram or Vine or BBM and so many others shows that that momentum is growing, so we're pleased with that. But we also have device announcements ahead as well, about new products and new capabilities. So, there's a lot of excitement immediately ahead for Lumia and Windows Phone.

BOULDEN: So, you're still CEO of Nokia in Finland, or are you now in Seattle?

ELOP: So, I am leading the devices business for Nokia, based in Finland, and at the same time, we're doing a lot of planning with Microsoft so that we can bring the companies together seemlessly when the deal closes.

BOULDEN: Finally, as far as the CEO goes, you were on the list, were you not?

ELOP: So, I'm really excited to be joining Microsoft. I'm looking forward, I've spent quite a bit of time with Satya Nadella, the new CEO at Microsoft. I'm excited to be joining that team, to be working and supporting him, so it's going to be a very bright future for me at Microsoft.


QUEST: A bright future for Stephen Elop at Microsoft. That's wait and see. Come -- still to come on QUEST MEANS BUSINESS tonight, live from the New York Stock Exchange, Egypt's government throws in the towel. We'll take a look at the economic problems that the country is facing in a moment.


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.

The hunt is on for the ousted president Viktor Yanukovych. Yanukovych has not been seen since he declared he's still the country's legitimate president on television on Saturday. Meanwhile, Ukrainian Parliament continues to fill the interim government. The new finance minister says the country needs $35 billion in foreign aid by the end of next year. Uganda's president has signed a controversial anti-gay law into law, despite opposition from the West. It toughens penalties against gays and lesbians and defines some homosexual acts as crimes punishable by prison time. Mr. Museveni says the West should respect African values. Ant- government protesters in Venezuela have set up barricades all across the capital city of Caracas, creating traffic jams. Meanwhile President Nicolas Maduro is holding a routine meeting of governors but he main opposition leader says he's not coming.

The United States is planning to see the expedition of the Mexican drug lord, Joaquin "El Chapo" Guzman, the leader of the Sinaloa Cartel was arrested at a beach resort in western Mexico on Saturday during a joint Mexican/U.S. operation.

And CNN has confirmed with the police at Los Angeles International Airport -- LAX -- that there's an ongoing incident at LAX's terminal 1. A bomb squad is on the scene. We have no more details at the moment from L-A-X, LAX. When we get more details, we'll let you know.

Egypt's military-backed government resigned on Monday as strikes continue to ripple through the country. The Prime Minister Hasim Bevlary turned in the government's resignation to the -- to President Adli Mansour who promptly accepted it. Now, we take a look at the Egyptian economy at the heart of dissatisfaction with the government is a failure to fix the economic problems.

So, those strikes we mentioned have involved doctors, they've involved police officers, postal workers and textile workers too. The next government will need to develop a clear energy plan. Fuel consumption's expected to outstrip output for the first time starting in July. There have already been some winter blackouts, and three years of political unrest have taken a toll on investment in Egypt. Weeks before it resigned, the government launched a stimulus package worth nearly $5 billion. Most of that money was aid from the UAE. The journalist Ashraf Khalil joins us now live from Cairo. Ashraf, the loss of the government -- what in reality, what in practical effect -- will it mean to ordinary Egyptians?

ASHRAF KHALIL, EGYPTIAN JOURNALIST: Well, Richard, I think what this means for ordinary Egyptians is a continuation of the paralysis and the political drift that has drawn so much criticism and created so much anxiety here. As you just mentioned, Hasim Bevlary's government was beset with economic challenges, was the target of a lot of criticism, saying that they have not put forward a coherent economic plan. And keep in mind, Bevlary is himself a highly-regarded economist prior to becoming prime minister.

But by switching horses right now -- by starting over with an entirely new cabinet, and a cabinet which -- you know -- is only going to last another two months, it makes it nearly impossible for whatever cabinet is going to follow Bevlary's cabinet to really do anything of substance. Which means several more months of drift, several more months of paralysis.

QUEST: Am I overstating the situation or would you say it's fair -- Egypt effectively doesn't have a working government, and if you're right, doesn't look like it's going to have a working government anytime soon.

KHALIL: Well, I think the best-case scenario is that whatever government comes in, in April and May and brings in its own cabinet and its own people, would somehow right the ship -- that is the hope among most ordinary Egyptians here. But there's also a real sense of anxiety as you said. There's a sense of drift, there's a sense that nobody's really been running the show. You have an interim government and now you're going to have an extremely interim government coming in, and that's not a recipe for any kind of proactive planning or really taking on the challenges that the country is facing. The economy is in very bad shape. The economy is essentially kept afloat by foreign aid. The vital tourism industry was in trouble even before last week's terrorist attack targeting tourists in the Sinai Peninsula, and that's the first time in years that any kind of attack has targeted tourists. So the economic situation is grim, the emotional and psychological situation is grim. There's a real sense of anxiety. There's a sense that this current direction of Egypt in the wake of the coup that ousted an elected president a year ago that this current direction really has to work because there's not really a sense that there's a plan B if this fails. So, yes, there's a lot of anxiety, there's a lot of fear and, you know, switching governments at this late stage is not going to help the situation.

QUEST: We'll leave it there for the moment. Khalil, many thanks for joining us and putting that into context, particularly the economic with the psychological as well. I appreciate that. Now, one thing to bring to your attention -- a moment ago I told you about a security alert at Los Angeles International Airport -- LAX. The police have not said in Los Angeles there's an all-clear. We know that -- we'll find out what that was all about in the hours ahead. It's a chilly day here in New York. Still to come on "Quest Means Business" -- predicting what technology will look like and feel like in the decades ahead. We speak to the man who Intel turns to when it wants to look to the future.


QUEST: Intel has launched a new mobile chip that it says is strides ahead of the competition. The chip maker says it's called the Metafield Atom, and it's (factored) in Apple's A7 chip and will give phones a longer battery life. And more, there are ideas about from where it came. In this week's "Executive Innovator," Samuel Burke speaks to Intel's chief futurist about how we will use tech devices in the future.



SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: And what does that mean exactly?

BROWN: It means I figure out what it's going to feel like to live ten or 15 years from the future. What will it be like to be a human being living on planet earth? (Inaudible) understand how do people live their lives, what they want, what are they afraid of? To think about the technology and what's going to be possible when, and then think about the business side of things -- when will business and the ecosystem be ready to absorb all this core technology and deliver it to people?

BURKE: What are some of the big trends that you see coming our way?

BROWN: The first is computers are getting smaller and smaller. And we're getting to the point where ten years from now, you will be able to turn anything into a computer. And you're going to make everything smart so that the world around us will become smarter. And we can even turn anything into a computer, even including our bodies for one. We'll watch (inaudible) and begin see and understand objects and the relationship between objects. It's that technology that will allow cars to drive themselves and that will allow robots to finally move from something which has been the thing of science fiction to becoming something which is -- becomes part of our daily lives.

BURKE: You know a lot of the research that you and Intel are doing right now is focused on the future of cities -- no?

BROWN: Yes, we've been looking at Intel at not just what might be possible, but what do people want in their cities? And what we found in a study we did recently was that 44 percent of Americans are actually really optimistic about the idea of a totally driverless city. Wouldn't it be nice if instead of being in a car and having to listen to the radio because that's the only thing you can do because you've got to keep your eyes on the road -- you could actually do whatever you want. You could listen to the radio, you could watch TV show, you could watch a movie while you're being driven on your commute.

BURKE: So we have this thing right here on the table --


BURKE: What is this?

BROWN: This is my show-and-tell for the day. This is an air quality egg. So, this is an egg that sniffs the air. Why would you put it here? This is a product that Intel Labs has been doing in partnership with some other companies to create an egg that anybody can buy. So, if you are an asthmatic or you have breathing problems, it can make a big difference to the quality of your day as to knowing this information. It's providing information so people can make decisions. If you're going out jogging, maybe you want to go this way versus that way. If you are driving your asthmatic child to school, maybe you want to go one way but it's another.

BURKE: When I think about the future, I wonder if there's going to be a trend of less technology. Right now there are no limits, we keep on adding and adding and adding and that's the cool thing to do. But I wonder if in the future, a futurist like you can see a place where there might be zones with no technology or it might be the cool thing to go to a restaurant where that's not in anymore.

BROWN: Yes. I think the ultimate technology is technology you're not even aware of. It melts out of the way, but just allows you to be in the flow as we call it. So a lot of the research we've done at Intel shows people love technology when they're not aware it's there. And the best technology is ones where it just melts away.


QUEST: Now, as you saw earlier, chief execs from around the world rang today's closing bell here at the New York Stock Exchange. They've gathered for a closed-door summit of chief executives. Richard Edelman is the chief exec of Edelman and been here at the exchange -- he joins me now. Why were you all here today?

RICHARD EDELMAN, CEO, EDELMAN: The committee encouraging corporate philanthropy is trying to push an agenda for corporations to actually step up and lead the change process in the United States. Not only to do philanthropy, but also to change their business models.

QUEST: How do you -- you've obviously been interested in these issues. How does corporate philanthropy change the -- something -- in the United States, for example? Give me an example of what you're talking about.

EDELMAN: Well, I think a good example would be how Gap has worked with the Product Red and actually created a, you know, branded tee-shirt and contributed to funds to the global fund to fight HIV and Malaria. And that's a perfect example of something that suits their business but also helps in combating ills.

QUEST: Haven't corporations been doing philanthropy for some time? So I'm wondering what need -- what's new about it and why do you suddenly feel the need to give it this push?

EDELMAN: It's actually, Richard, a move from philanthropy only to changing their business models. If you look at a Walmart and moving to sustainability, you look last week at CVS pulling all the tobacco off of its shelves, you look at Gap raising the minimum wage. It's all sort of in their core business model.

QUEST: Right, to you run a company -- yours is a large company. How many of you -- how many people?

EDELMAN: Five thousand people.

QUEST: Five thousand people. How do you incorporate it in your business?

EDELMAN: Well, actually in PR we have the benefit of being able to advise companies on how to do it --

QUEST: Right.

EDELMAN: We do our own version of sustainability and what-not, but I think more aiding and pushing clients to be brave.

QUEST: Be brave.


QUEST: That's a risky strategy in a time when most companies want to do exactly the opposite.

EDELMAN: But actually I think the smart CEO is realizing today that he or she actually has to step out in front. Indra Nooyi, for example, changing the product mix of the company, sourcing differently, supply chain. All these things actually are not going to be run by government, they have to be run by business. Business is a much better leader of change.

QUEST: Well, let's give you an example. Let's just take for example Richard Branson who has basically said he will not do business in a, say, country like Uganda with its new anti-gay laws or in let's say a Nigeria with its own laws like that. Is that the sort of situation where you would say corporations need to take a stand or if it takes them into controversial areas. Or are you just wanting sort of say non-controversial?

EDELMAN: No, I think countries should take on the controversial. I think that companies in the energy business for example that have big businesses in Africa need to help push change. And they are doing it. Chevron for instance makes a big effort to get all of its employees tested for HIV. This is a key change in the behavior of health supply actually.

QUEST: Well, we're glad that you have come and joined us. It is cold here, isn't it? At least it's dry.

EDELMAN: Just one more week of cold, Richard -- it's a change --

QUEST: How do you know?

EDELMAN: I don't know -- I have a guy up there.

QUEST: (LAUGHTER). Well, let's -- send Him a message. Good to see you, Richard. Thank you (inaudible).

EDELMAN: As always.

QUEST: Now, the very latest in Smartphone technology is on show in Barcelona. We see what's trending among those at the Mobile World Congress. That's coming up next.


QUEST: Back to the Mobile World Congress in Barcelona, where the attendees have been taking to social media to cast their verdicts on the latest in smart phones. CNN's Jim Boulden reports.


JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Monday night here at the Mobile World Congress and there really was only one topic of conversation. That's the speech by Mark Zuckerberg, the CEO of Facebook. Many of these people you see behind me are streaming out from listening to what he had to say. So I've enlisted the help of Irene Chapple from our Digital Business Unit to go over some of the social media. Let's start with Instagram, because a lot of people took photos while they were queuing up waiting to go in and see Zuckerberg, weren't they?

IRENE CHAPPLE: CNN.COM: Well they were queuing for up to two hours, Jim. So they had a lot of time on their hands. There were message queues. Once you got in, you couldn't leave. He was the star of the show. Everyone wanted to see him.

BOULDEN: So Instagram did very well out of that I would have to say. Also of course there were a lot of tweets. I saw one tweet with -- a number of tweets actually -- where people said it was like waiting for a rock concert just to go hear Mark Zuckerberg's speech.

CHAPPLE: Yes, he is a rock star for Mobile World Congress. He hasn't been here before and it really does show that Facebook is serious about mobile in the future.

BOULDEN: And what about Trendsmap, I mean I wonder if his name came up a lot?

CHAPPLE: It did, it did. MWC is the hashtag that was being used -- MWC14. And that was -- that hashtag was very live from the Trendsmap over Spain and over Barcelona also in London and other parts. And indeed Zuckerberg's name came up as well as did (Inaudible).

BOULDEN: Right, thank you Irene. So, Mark Zuckerberg was the talk of the first day of Mobile World. Jim Boulden, CNN Barcelona.

QUEST: Now, Netflix users may soon notice that their movie streaming service is flowing much more smoothly. That's because Netflix has agreed to pay Comcast to connect directly to its broadband network, effectively sending movies and TV shows straight down the pipe. Comcast says its more- direct pipeline deliveries are better user experience. Netflix eats up a huge amount of bandwidth. During peak time, the streaming website accounts for up to a third of all U.S. broadband traffic. Columbia Law School professor Tim Wu thinks the Comcast Netflix deal could be a bad one for consumers overall. He joins me now. Professor, this is all about that dreadful phrase, "net neutrality," isn't it? Where supposedly everybody's using the net, should be equal using the same speeds.

TIM WU, PROFESSOR, COLUMBIA LAW SCHOOL: That's exactly -- that's exactly right. I mean, one of the things about this deal -- it's the first deal where in fact a internet company is actually paying a broadband provider to reach its customers, and that opens the possibilities for violations of net neutrality. For some, things go faster than others.

QUEST: But what's wrong with this? We had a little debate in our office --

WU: Yes.

QUEST: What is wrong with it? You call it the water in the basement --

WU: Right.

QUEST: -- if an internet company wants to pay -- or if a provider wants to pay for faster access, isn't that just a market economy working as it should?

WU: Well, you know, the internet's grown very well in a system where they've avoided being extorted by the carriers. I mean, the problem is that all of carriers are monopolies, and so they have the opportunity to try and -- to leverage a lot of money out of the internet economy. So, it's not a really -- I mean, I would agree with you if it's a fully competitive economy, but in a situation where you have just a few providers in a position to sort payments --

QUEST: Right, but --

WU: -- go ahead.

QUEST: But bandwidth is limited. It's not unlimited. So, if you -- look, I can see an argument on both sides here.

WU: Right. I'd say it's a false scarcity. I think Comcast is building a business model based on creating scarcity and then charging for it. It's notable that other companies who aren't as powerful as -- who face more competition -- like British Telecom. They've agreed to let Netflix send their traffic for free. It's only because Comcast has market power that they're able to do this.

QUEST: Right. So what do you fear is going to happen here?

WU: Well --

QUEST: Do you fear that eventually that Comcast will be the highway robber on the road charging anybody to pay extra?

WU: I think the worst situation is that Comcast and other carriers become toll booths to extract a tax on the economy -- if they take 10 or 20 percent out of the internet economy and just keep it for themselves. And they're not particularly innovative. They don't really do anything except for collect money. It's been the internet sector driving growth.

QUEST: So who will ultimately turn this around? Will it be the consumer saying no, will it be the regulators saying no or the end of it -- the Department of Justice getting involved and saying no?

WU: The consumers don't have any choices right now, so it's got to be someone stepping in and telling Comcast there's a point they have to stop -- trying to collect extra rents, extra tolls.

QUEST: Right. So, but it's to keep the tolls open.

WU: That's right. I think -- just think toll booths are bad for the economy, I mean --

QUEST: Oh -- they're OK on roads.

WU: Are they good for roads? You prefer a road with toll booths or not? Let me ask you that much.

QUEST: A good question, one we should argue more about on the program.

WU: Thank you very much.

QUEST: Thank you very much for joining us. Now, when we come back after the break, a "Profitable Moment" from New York.


QUEST: Tonight's "Profitable Moment." You heard Richard Edelman and you heard Marilyn Carlson Nelson both talking about corporate profitability and philanthropy and the work that's being done in the community. It makes very interesting thinking, and we'll be talking a lot about it during the course of "Quest Means Business" this week. Our documentary "Cocoa-nomics" you can see on Thursday. And it all raises the question about what companies can and should do to help the societies in which they trade and the employees in which they're employed in the company. What role and responsibilities do they have as well? There's much there that we'll get to grips with during the course of the week. It's corporate philanthropy -- it's the "Freedom Project" and we'll be talking about it this week on the program. Because that's "Quest Means Business" for this Monday. I'm Richard Quest outside the New York Stock Exchange in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable.