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Quest Means Business
US Stocks Fall After Strong Jobs Report; Apple to Replace AT&T on Dow; Dow Closes Down 278 Points; European Markets Mostly Higher; Outgoing Malaysian Airlines CEO One Year After MH370; Germany Promotes Board Room Gender Equality; Vodafone Introduces Global Maternity Benefits; Liberia's Last Known Ebola Patients Discharged From Hospital; Rebuilding Liberia's Economy
Aired March 06, 2015 - 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)
POPPY HARLOW, HOST: The closing bell marks one of the worst days of the year for the Dow. It is Friday, the 6th of March.
Tonight, stock markets tumble in the United States. The US jobs report just clearly isn't working for Wall Street.
Also, the world's biggest company joins the world's most famous index. Apple finally joining the Dow.
And its last Ebola patient, as this last patient leaves the hospital with a smile, now Liberia looks to rebuild its broken economy.
I'm Poppy Harlow, and this is QUEST MEANS BUSINESS.
Good evening and welcome to the program. Good news for the US economy is very bad news for the markets. Stocks plunged after a strong jobs
report from the US Labor Department on Friday morning.
Let's begin with the good news. The US economy beat expectations to add 295,000 jobs in February. Unemployment fell to 5.5 percent. It hasn't
been that low in this country since 2008.
Now, however, the bad news. The Dow closed the session down nearly 280 points. The NASDAQ and the S&P 500 closed sharply lower as well.
Investors' thinking here is that the good jobs numbers may push the Fed to raise rates earlier than expected.
US president Barack Obama struck a cautious tone while speaking about the job numbers today. In a town hall meetings with students in South
Carolina, the president said the strong report does not fix everything for the US economy or for the labor market.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The unemployment rate across the country and here in South Carolina is still higher than we want,
which means we've got more work to do. And we've got to make sure those are good jobs that pay a living wage and have benefits with them. So, we
can't let up now.
(END VIDEO CLIP)
HARLOW: Earlier today, I spoke with US Labor Secretary Tom Perez. I asked him what he sees in today's jobs report.
(BEGIN VIDEOTAPE)
THOMAS PEREZ, US LABOR SECRETARY: The economy continues to be moving in the right direction. Last year was the best years since the late 90s,
and the first two months of this year, we're seeing that momentum continue. It's broad-based growth. The quality of jobs that have been created over
the last year continue to improve.
You see construction jobs, those are good middle class jobs. You look at 60 months in a row of private sector job growth and 12 million jobs, and
the area where we've seen the most job growth is business and professional services, which are very good jobs.
And so we clearly have the wind at our back, and we clearly have some more work to do. So, no one's spiking the football around here, because we
know that we want to continue this momentum.
HARLOW: Thirty one percent of the unemployed in this country are long-term unemployed. They've been out of work for six months or longer.
And we know the longer you're out of work, the harder it is to find a job.
PEREZ: Sure.
HARLOW: How concerned are you about that? What needs to be done to stem that?
PEREZ: The long-term unemployed, in terms of where we were a year ago, where we are now, the bulk of the people who have gotten work over the
last year, have gone from the ranks of the unemployed to the employed, have been long-term unemployed. So, it's moving in the right direction.
But I completely agree with you that it's still way too high. And that's why we've had a number of very targeted interventions to help pick
up the pace of long-term unemployed getting back into the workforce.
I'm heartened that so many have gotten back into the workforce, and I am motivated by the fact that there are way too many that still need to get
back into the workforce, and that's a huge focus of our efforts.
HARLOW: Wage growth is still stagnant. When you look at hourly workers' wage growth in this country, it's just rising about 0.1 percent
month over month. That is a concern for people, even though the top line number is higher. Are you worried about that?
PEREZ: Well, last month we had 0.5 percent. This month, I think it was 0.1 percent. With no inflation, that's helpful. So, it does equal
real wage growth. At the same time, we need to do better.
HARLOW: We just saw Walmart announce that they are raising wages for all hourly workers across the board. President Obama even called the CEO
of Walmart to applaud him on that. I wonder if you think, Secretary, that is going to be the beginning of a trend we see across American
corporations?
PEREZ: You see a lot of companies recognizing what Henry Ford recognized over a hundred years ago, which is, when you pay your employees
a decent wage, what they do with that money is they spend it, and it creates a virtuous cycle. Roughly 70 percent of GDP growth is consumption.
And this has been in the works of a number of employers who said to me, "This is a consumption-deprived recovery, because people don't have
enough money in their pockets.
HARLOW: Right.
PEREZ: We're beginning to see that change. The unfinished business of this recovery is to make sure that the tailwind that we're seeing
results in shared prosperity. Because a recovery that helps only those at the top of our income scale is not who we are as a nation. That's not the
shared prosperity. That's not middle class economics, and that's not who we are as a nation.
(END VIDEOTAPE)
HARLOW: Our thanks to the US labor secretary for that.
Well, it may be a bad day for stocks here in the United States. It is also an historic one as it bids farewell to one of its most well-known
members. We're talking about the Dow Jones Industrial, big shakeup today.
(BEGIN VIDEO CLIP)
WILL HAYS, 1926 MOTION PICTURE INDUSTRY SPOKESMAN: A development which is destined to create an entirely new art.
(MUSIC)
(END VIDEO CLIP)
HARLOW: That was a long time ago, and that was the introduction of the AT&T Vitaphone, one of the first systems to marry sound and film. Of
course, AT&T traces its roots back to Alexander Graham Bell over a century ago. It is being replaced, it was announced today, on the Dow by the
company of Steve Jobs, iPhones, and Apple Watches.
Take a look at this. This is a really big move, and it's one that people have been expecting for quite a while. The change is due to take
effect when trading closes on March 18th.
The main reason that it took this long is because Apple, the world's biggest company, now, the share price was just too high. The Dow is a
price-weighted average of 30 stocks, so the Apple split, seven-for-one split in June really made this possible.
Before the split, you'll remember, the stock price was just around $650 a share. And at that price, Apple shares would have skewed the Dow's
performance too much.
Let's talk about what this means. Is it just symbolic, or meaningful? CNN Money digital correspondent Paul La Monica with me in the studio. Good
morning to you, Paul, good evening to you.
(LAUGHTER)
HARLOW: I thought about you this morning when the news broke. I knew you'd be writing about it, and you did. I guess the first question I have
is, do you think this is symbolic, or do you think this is really meaningful?
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: I think it is symbolic, it is really the final validation, if you will, that Apple is
legitimately the world's most important company.
HARLOW: Right.
LA MONICA: But we kind of all knew that, because it's the world's most valuable company. It's worth more than $700 billion --
(CROSSTALK)
HARLOW: But does most -- but does most valuable mean most important?
LA MONICA: You could debate that. That's an interesting question. What I would point out is that AT&T owes a lot of its most recent success,
probably, to Apple.
HARLOW: Right.
LA MONICA: Remember, it got the iPhone on an exclusive basis before every carrier has it now. And think about how all these wireless companies
would be doing if you didn't have this smartphone revolution.
HARLOW: Yes.
LA MONICA: I think it's safe to say that Apple, at least in the world of tech -- because obviously, there is a world beyond technology.
(LAUGHTER)
LA MONICA: Apple is probably up there with Google among the most important companies in that sector.
HARLOW: Was it expected? A lot of people were saying, all right, when is Apple going to join the Dow? Then the stock split happened over
the summer, and then it could -- it was possible. But did most people expect that it would be replacing AT&T, or is that at all a surprise?
LA MONICA: I think it's a mild surprise. AT&T -- this isn't that -- to suggest that AT&T is now irrelevant. It's just that when you look at
the current makeup of the Dow, you have AT&T and Verizon both in that index, or average. I defy you to tell me what really is different between
Verizon and AT&T.
(LAUGHTER)
HARLOW: That's a good point.
LA MONICA: You don't need two big telecoms.
HARLOW: Right.
LA MONICA: So, one of them had to go. AT&T's just a little bit smaller.
HARLOW: What does this do for the weighting of the Dow? Because it's not really going to be so goes Apple, so goes the Dow, because you're got
stocks with higher share prices, and you've got Boeing, Cat, IBM, Goldman Sachs, Visa.
LA MONICA: Right. So, Apple right now has five companies that are ahead of it in terms of price.
HARLOW: Right.
LA MONICA: Apple could continue to climb in price and one day have the highest price and be the biggest contributor. Right now, that falls to
Visa. But interestingly, it seems like it was the Visa split that made this possible. Visa is at about $270 a share. It's going to split four-
for-one to bring its price down.
HARLOW: Got it.
LA MONICA: And because the Dow and S&P, the characterize Visa as a tech company.
HARLOW: Really?
LA MONICA: Even though I think most average people think of them as a financial firm. So, if you had Visa and Apple in at the same time before
Visa split, there have been some people saying that the Dow would have had 20 to 25 percent exposure to tech, which might have been too much. This is
all, like, very inside dodge ball.
HARLOW: But you're inside of all of it for us.
LA MONICA: I love it. This is all --
(CROSSTALK)
HARLOW: You break it down for us.
LA MONICA: -- it's all geeky, but I love it.
HARLOW: Interesting to see Apple have a really good bounce today, a nice day despite the dismal results for the broader market.
LA MONICA: Yes, I think average investors realize that this does further prove that Apple is a legitimate powerhouse.
HARLOW: Yes.
LA MONICA: It's not a fly-by-night firm. Oh, and by the way, what's coming out on Monday? More details about that Apple Watch.
HARLOW: Right. And guess who's smiling tonight? Carl Icahn.
LA MONICA: Carl Icahn's probably smiling.
HARLOW: Yes, he's happy.
LA MONICA: I think Tim Cook's a little happier.
HARLOW: I think Tim Cook's happy, too.
LA MONICA: He deserves a little bit more credit --
(CROSSTALK)
HARLOW: The CEO of Apple.
LA MONICA: -- than Carl Icahn.
HARLOW: I -- yes. Just a little bit. Good to have you on, Paul. Have a great weekend.
LA MONICA: Thank you.
HARLOW: Thank you. Well, Apple will be hoping that there won't be too many days like this when it does eventually join the Dow because, as we
said, it has been a miserable day for US stocks.
Ben Willis is with Princeton Securities Group. He joins me now, live from the New York Stock Exchange. Good evening to you, sir. Your
reaction? Why did we see such a big decline? Is this all because of the strong jobs report and concerns that the Fed is going to raise rates
sooner?
BEN WILLIS, PRINCETON SECURITIES GROUP: You hit it right on the head. That's exactly what happened. Actually, the first blush of the jobs report
was taken as a positive, but the Fed funds rate, or the anticipation of the rates in the United States saw a dramatic move, far more dramatic than the
Dow Jones industrial moving 300 points today.
So, again, this was the good news was bad news for all those people. This was the classic allocation design model, where the money started to
run scared because they thought the spigot was being turned off. It should not be a surprise.
HARLOW: But Ben, what interests me is that even if you dig into the jobs report today, wage growth was stagnant. It was 0.1 percent month-
over-month. The Fed wants to see much more robust wage growth before it raises rates, right?
WILLIS: However, the unemployment rate was at 5.5 percent. If you look back in history, that is traditionally a fairly low number, which is
one of the triggers when they said they were going to base it only on data and not take into consideration foreign markets, the EU, and the like.
And even at the one-tenth of a tick up, you're still at about 2 percent, which is their baseline for the inflation, if you will.
HARLOW: Right.
WILLIS: You really can't have inflation unless you have that number.
HARLOW: Yes.
WILLIS: What you saw was the Chicken Littles of the bond market starting to move because they knew that their belief that the Fed was not
going to move on rates until late in the year has been dismissed with this kind of strength in number.
It's an indication that the American economy is recovering, it is strong, and the place you want to be is in stocks, and a day when the
market is down 300 points is when the investors should be buying, not selling.
HARLOW: Said like a true trader on the floor of the New York Stock Exchange. Before I let you go, sir, interesting development this week in
the tech world.
Billionaire investor, tech entrepreneur Mark Cuban coming out and warning of what he believes is a tech bubble, one that he says is worse
than in 2000, talking about companies like Uber, Twitter, and Facebook. Any merit in that, in your opinion?
WILLIS: Well, I've got to give Mr. Cuban a lot of credit. He was probably one of the best traders in the history of the dot-come bubble. He
sold what had -- a company that was nowhere near worth what they paid him, and he knew it. So, he sold it when he got the bid.
We'll see if the other people in the stocks you mentioned in particular have the same wherewithal to realize that maybe the world is
valuing their particular taxicab company a little bit too more than it should be.
But the fact of the matter is, it is a taxicab company, so investors should look very carefully on whether they want to put their money in a
taxicab.
HARLOW: All right, we'll leave it there. Good Friday evening to you, sir. Thank you for being with me.
WILLIS: Thank you.
HARLOW: Ben Willis joining us from the New York Stock Exchange.
Taking a look at European markets making some headway during the week's final trading session. The better-than-expected US jobs numbers and
anticipation over Europe's full-scale bond-buying program, which begins on Monday, that helped push stocks higher. But in London, the FTSE dropped
nearly 0.75 percent after being dragged down by mining shares.
Well, this Sunday marks one year since the disappearance of Malaysia Airlines Flight 370. One year, wow. One man has faced the brunt of the
criticism since that tragedy. We will hear from him. The airline's outgoing CEO speaks to CNN after the break.
(COMMERCIAL BREAK)
HARLOW: Well, this weekend marks one year since the disappearance of MH370. The new man in charge of that troubled airline will soon be
Christopher Mueller. He's the former head of Air Lingus, and he'll face a big challenge as he takes over Malaysia Airlines.
Now, the chief executive who Mueller will be replacing, Ahmad Jauhari Yahya, he has faced sharp criticism for his handling of that disaster one
year ago. He spoke with our Anna Coren.
(BEGIN VIDEOTAPE)
ANNA COREN, CNN INTERNATIONAL CORRESPONDENT (voice-over): As the families of the 239 people onboard MH370 prepare to commemorate the one
year anniversary since the plane's disappearance, the CEO of Malaysia Airlines believes the search must continue, because the world deserves
answers as to what really happened.
More than 40 percent of the search area in the southern Indian Ocean has been covered, and authorities are confident that the four ships
scouring the ocean floor with sonar equipment looking for the wreckage will be finished by May. But the families are concerned that if nothing is
found in the priority area, the search will be called off.
AHMAD JAUHARI YAHYA, OUTGOING CEO, MALAYSIA AIRLINES: I wish that we'll carry on looking for the aircraft. I think the world needs an
answer. The families need answers as well.
COREN: Meantime, the airline's chief has defended the pilot of MH370, Captain Zaharie, saying that claims he was responsible for the plane's
disappearance are baseless and mere speculation.
YAHYA: It remains speculation, OK? We do not suspect anyone of our crew until such evidence -- the evidence is such. Captain Zaharie is a
very capable man. He's a 777 flight examiner, so he's not only instructor, but he's an examiner in the fleet, so we have no reason to suspect.
COREN: He also says that valuable lessons have been learned from the MH370 tragedy, with the airline stepping up its security protocols and its
flight-tracking system.
Anna Coren, CNN, Kuala Lumpur.
(END VIDEOTAPE)
HARLOW: And a year later, really, no answers. Join us for a CNN special report as told by the correspondents who were there when the plane
tragically disappeared, and who have continued to follow the search for Malaysia Airlines Flight MH370. That airs Sunday, 9:00 PM in London, 10:00
PM in central Europe.
Coming up after the break, a day after Liberia's last known Ebola patient is released from the hospital, we will speak to the country's
information minister about rebuilding Liberia's ravaged economy. That's next.
(COMMERCIAL BREAK)
HARLOW: Well, Germany is making a major move in the name of gender equality in the board room. The government not just encouraging companies
to elevate women to positions of power, it is mandating it by law.
Next year, about 100 of Germany's largest companies will be required to appoint women to 30 percent of the seats on non-executive boards. Also,
the plan is to increase that quota to 50 percent by 2018.
Now, critics of this say it doesn't do enough to rebalance gender inequality in management, where they say the real power lies. On average,
though, take a look at some of these statistics.
Women in the EU earn 16 percent less than men. That is according to the latest data from Eurostat. Also, Germany is among the worst offenders,
the pay gap there nearly 22 percent.
Women earn 10 to 20 percent less than men in most countries in Europe. Just eight European Union countries have a gender gap in terms of pay that
is less than 10 percent.
Well, the company's slogan is "Power to you" has taken a big step towards empowering its female workers. Vodafone making headlines today
rolling out a maternity leave policy meant to ease new mothers back into work.
New moms will get at least 16 weeks off, also reduced hours for six months after that. All of this while receiving full pay and benefits. As
Nina Dos Santos found out, encouraging women to stay on the job after having a child is not only good for them and their family, it's also smart
business.
(BEGIN VIDEOTAPE)
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT (voice-over): It's welcome news for expectant mothers and a major step for industry. By the
end of the year, Vodafone will increase its maternity leave to 16 weeks full pay and incentivize women to return to work part-time following the
birth of their child.
SHARON DOHERTY, PEOPLE DEVELOPMENT DIRECTOR, VODAFONE: Short term, this is an investment. But in the medium term, we actually think this is
really good for our business. As I said, there are hidden costs to women not returning to work.
DOS SANTOS: The benefits will be rolled out across the 30 countries where Vodafone operates, irrespective of their statutory policies.
DOHERTY: In the US and some of the India and Africa parts of the world, the women there will benefit most. And actually, our women are
thrilled that we're doing this. So, this makes sense for them, and this makes sense for Vodafone.
DOS SANTOS (on camera): But currently, such payouts are far from standard. When it comes to maternity pay, the world's biggest economy
comes bottom of the list. In fact, there are no federal legal obligations to pay new mothers any maternity leave at all in the United States.
Other major economies are also well below Vodafone's new allowance. Japan, the United Kingdom, and even Germany all offer less than 16 weeks
worth of paid time off.
At the other end of the scale, though, some of the Nordic nations and also the Baltic countries like, for instance, Lithuania, Estonia, and
Finland, which recently increased its maternity leave by two and a half weeks.
DOS SANTOS (voice-over): Support from others is one of several factors in "The Economist" magazine's glass ceiling index, a measure of
equality in the workplace.
ROXANA WILLIS, STATISTICIAN, EDITORIAL RESEARCH, "THE ECONOMIST": There definitely has been progress in the past few years. There are more
women in senior management, more women on boards. And women actually are more likely to have a degree.
DOS SANTOS: But offering women more time off after birth is only part of the solution.
WILLIS: In Sweden, they have parental leave, which means that the men -- fathers have to take leave, as well as mothers. And that equals out the
playing field. So men are leaving the workforce as well as women.
DOS SANTOS: When it comes to the financial cost, Vodafone says if everyone followed its example, businesses could save $19 billion a year.
Nina Dos Santos, CNN, London.
(END VIDEOTAPE)
HARLOW: Well, Liberia's last known Ebola patient has been discharged from the hospital. The woman was, of course, greeted by family and friends
and health workers on Thursday. There have been no new cases of Ebola reported in Monrovia in the last two weeks.
It is remarkable. It's quite a milestone in the country's fight against Ebola. But when you look big picture, this is a virus that has
ravaged West Africa over the past year, claiming the lives of nearly 10,00 people.
Liberia's president, along with her counterparts in Sierra Leone and Guinea, warning the world that there is still along road ahead to eradicate
Ebola. Also to rebuild the country's devastated economies.
(BEGIN VIDEO CLIP)
ELLEN JOHNSON SIRLEAF, PRESIDENT OF LIBERIA: We know it's going to take significant resources, not only to address our health care system, but
also our economic recovery, which will enable us not only to contain the virus, but to make sure that our economies, which have been hard hit by the
virus, can grow again.
(END VIDEO CLIP)
HARLOW: Liberia's information minister, John -- Lewis Brown, rather - - joins me live from Washington. Sir, thank you for being with me this evening. I appreciate it.
LEWIS BROWN, LIBERIAN INFORMATION MINISTER: Thank you. Thank you for having me.
HARLOW: Your country's president calling for a martial plan, of sorts, when it comes to the long road ahead and rebuilding the economy
after this horrific, horrific episode, that has lasted for more than a year now. What does Liberia, and West Africa as a whole, need the most right
now?
BROWN: Well, clearly we need infrastructure, and that cuts across the health sector, it cuts across the hard infrastructure, such as roads and
power. We need it yesterday.
If we must prepare our countries to be able to deal with any epidemic about this size and scope anymore, then we have to have the kinds of
systems and infrastructure that's in place to enable our people that have shown remarkable resilience throughout this scourge, to be able to handle
this.
And so, whether it be from health, building the kinds of hospitals, with capacity to teach as we move from treatment toward prevention.
HARLOW: Right.
BROWN: And then enabling the power sector, which is our greatest challenge we must face, that is enable infrastructure through the kinds of
power that we desperately need.
HARLOW: Experts have said the hardest part is getting to zero cases, right? What a phenomenal thing that has happened in your country this
week, with that woman, the last known patient there, being released from the hospital.
But it's not the case across West Africa yet, and I wonder if you're concerned, sir, when it's not top of mind here in the United States or in
Europe, for example, in the top headlines. If you worry about the international community becoming complacent.
BROWN: We are. Certainly, we are. And that is why the three presidents were in Brussels just a couple of days ago, again drawing
attention to this.
Let us not forget, what we're facing in our neck of the wood is truly, to borrow from the United Nations itself, the greatest public health hazard
that this generation has faced. So, it is not necessarily a Liberian, Guinea, or Sierra Leonean problem. It really is a global problem that the
world cannot afford to get its foot off the gas on.
HARLOW: Let -- Sorry. Just also before I let you go want to talk to you about the economy, because you have said that when you look at
Liberia's economy, the projected growth was 6 percent. Now the projected growth is 3 percent. That's a really dramatic decline.
The World Bank survey recently found that 41 percent of respondents who had jobs before the Ebola epidemic broke out are now unemployed. What
do you need to do to get the economy back on track?
BROWN: Well, there are common multipliers in our economy. I talked to you about the greatest constraint being power. The other is
infrastructure, including our roads. We must be able to get our people involved in rebuilding the economy.
But at the end of the day, the driver of our rebuilding process is truly the private sector. That's why we're looking at this ambitious
program, truly innovative, of letting our international partners grant us the flexibility we need to so that whether it be in the award of contracts
or concession, we can provide more opportunities --
HARLOW: Yes.
BROWN: -- to Liberia and to Sierra Leone and to Guinea up to and including, perhaps, 30 percent, so that they participate a little bit more
--
HARLOW: Right.
BROWN: -- in their own economy to rebuild it.
HARLOW: Lewis Brown, thank you very much, good luck to you and all of your people. Thanks for being with us tonight, we appreciate it. Thank
you, sir.
That is QUEST MEANS BUSINESS for this evening. I'm Poppy Harlow, thanks so much for joining me. We will be back with a check of your top
headlines in just a moment, followed by a special Tomorrow Transformed with Richard Quest.
(COMMERCIAL BREAK)
HARLOW: Hello, I'm Poppy Harlow in New York. The main headline this hour - archeologists and leaders worldwide expressing their outrage over
the destruction of the ancient Assyrian city of Nimrud in Iraq. According to the Iraqi Ministry of Tourism, the ancient site pictured here before the
attack has been bulldozed by ISIS militants. The United Nations Cultural Agency has called it a war crime.
Russia opposition leader Alexei Navalny has been released from a Moscow prison after serving a 15-day sentence. The Kremlin critic was
detained after being found in the subway distributing leaflets promoting an opposition rally. Navalny said that the murder of fellow opposition leader
Boris Nemtsov last week will not frighten nor silence him.
Actor Harrison Ford is battered but OK after a crash landing yesterday in this plane Ford was flying which was a single-engine plane. That engine
failed shortly after takeoff. The Hollywood star tried to return to the airport before being forced to land on this golf course instead. Stocks in
the United States took a hit during Friday's trading.
The Dow Jones Industrial average plunging 279 points at the close. The S&P 500 shed nearly 1 and a half percent. After, "CNN News Now."
"Tomorrow Transformed with Richard Quest" begins right now.
Male Voiceover: Welcome to the network society. "Tomorrow Transformed" in association with Ericsson.
QUEST: Hello, I'm Richard Quest in Barcelona. I'm about to go on a journey of discovery. A voyage if you will into the future. I'm in search
of "Tomorrow Transformed."
Like all major European ports, Barcelona has a rich history. Imagine what it was like when the Romans arrived here at the end of the first
century when we would only wonder what those early explorers would think if they could see this fair city today.
The Fira de Barcelona is the city's modern sprawling exhibition center and home to Mobile World Congress 2015. It's the (AUDIO GAP) for us to
explore how (AUDIO GAP) technology is transforming the world. Change, it seems, is everywhere. Transport with connected vehicles, media through
streaming video or mobile devices. Finance has the virtual wallet while energy owns the smart home.
The common thread in all of this is mobile technology. In the next 30minutes, we're going to explore its limits. Come with me on our journey.
Tomorrow never waits and Mobile World Congress is huge. With nearly 2,000 companies and tens of thousands of delegates, this is a vast monument
to tomorrow's technology. And nowhere do we see this more clearly than in the world of transport. Imagine if cars could talk to each other and bring
together all the data of the road. Imagine how easy that would make our journey. Not surprisingly, here there are several connected vehicles.
We've just got to find them.
The Fira de Barcelona is two and a half kilometers from one end to the other. And at the very end, we find Innovation City and those connected
cars. Vehicles are amongst the most visible signs of IoT - Internet of Things. AT&T Mobility's showcasing the Audi connected car where I was
joined by the company's chief exec Glenn Lurie.
So, from AT&T's point of view, what do you do - what makes it a connected car that's different?
GLENN LURIE, CEO, AT&T MOBILITY: Right, so what makes this car different and really what makes Audis different is Audi was the first of
our partners - and we have many - that put LTE in the vehicle. So LTE meaning they put in high-speed broadband. And when you start talking about
LTE, you're talking about a data pipe that you can do almost anything you want to do with it. And so what that's done is that's actually built in
the car. We're sitting in a connected device.
QUEST: But what's the advantage? I mean, many of us have been tethering (ph) through Bruteth (ph) our phones to the vehicle for a long
time. Why do I want to go to the trouble and expense of an extra SIM card with an extra vehicle?
LURIE: You know, when you talk right now to consumers and say what are you waiting for in the car? Eighty percent say their waiting for the
car to be fully connected, they're waiting for the car to be smarter, right?
And one of the key elements here is the car also having the ability not just to be smarter but to be safer, right? To give you better voice-
activation, better voice diagnostics. All the things you want so your hands stay on the wheel and your eyes stay on the road.
QUEST: Let's talk about safety because ultimately the connected vehicle is designed to connect to another vehicle so that they can work in
tandem. Is that what we're looking at?
LURIE: Yes, you are. So, when you have a LTE connected vehicle with a low latency, that actually is a reality. So that our networks are that
way now where if you're driving one way and another car's about to it you, we theoretically have the capability to stop you from doing that.
But also important is, is when you have an LTE-connected vehicle, it can be connected to the infrastructure. So it can be connected to the
lights and to the city you live in to make the city smarter.
So now if all the cars are connected and talking to infrastructure and talking to each other, now think about how you can manage traffic, think
about how you can really take the car and make your city smarter. That's where we're headed. I mean, think about this for navigation - this car has
the ability right now -
QUEST: Yes.
LURIE: -- where somebody could take a picture, send it to you on your smartphone, or send it to this vehicle and that picture has location in it,
and this car would know where to go. I mean, you're talking about - yes, it's -
QUEST: How far are we from that?
LURIE: No, we're there today. That's right now, this car does that today. So it's - I mean, think about that - when you have an iPhone, you
take a picture, it has location, send it to the car, this car can now take that location and you say 'go there' and the car knows to go there.
That's where we are. So what's amazing about this all, it's about your life's going to be connected.
QUEST: Now take me to the next stage. If that's possible now, paint for me a picture for five/ten years down the road.
LURIE: I think the picture is what we talked about earlier a little bit. It's about vehicles talking to vehicles and vehicles talking to
infrastructure. It's about moving closer to self-driving vehicles. Now, I'm a big believer in self-driving vehicles because the research is making
the car safer for us today - that's what's so important about that. It's about this working with your home, it's about inanimate objects taking care
of you versus you taking care of them.
QUEST: Whoa, that's risky.
LURIE: No, it's actually -
QUEST: Risky!
LURIE: But it's brilliant. Here's why it's so great. Because you've told the vehicle what to do when it drives up to your home. If you've told
your vehicle when I'm in this 20 yards from the house, I want my garage door to open, I want my doors to unlock, I want my security system to go
off, I want my thermostats to be turned up. It's about making people's lives better. That's what it's all about.
QUEST: "Tomorrow Transformed" means everything becomes connected and your home is a priority. Mobile technology means your home, sweet home is
controlled from the palm of your hand. Here at Peel, the remote control and the mobile phone - they become as one.
RYAN WILLIAMS, VICE PRESIDENT, PEEL: Bringing everything in to one cohesive experience to where that way you're able to connect everything
through your lights, your plugs, your thermostat. You could connect and control everything here - your doors, your air conditioners and your fans.
I believe in the future. Everything that's within your IoT-connected experience will be controlled just from the phone.
QUEST: At a time when smartphone makers are promising to do everything, here's a phone that promises the opposite. It's the Granite
phone, and all it does is make calls, e-mail text and messaging. But it does it with encryption that makes it super-secret. You can't access the
web on phone and you can't download any apps. No, this phone is designed for those who want to keep their calls private.
As our journey into "Tomorrow Transformed" continues, we discover all is not as it seems. (HUMMING).
(COMMERCIAL BREAK)
Male Voiceover: "Tomorrow Transformed" in association with Ericsson.
QUEST: From hall three to hall seven and a 25-minute hike across Mobile World Congress to the Future of Media. Now for something different
- let the magic begin.
THOMAS REINER, EXECUTIVE VICE PRESIDENT, AMS: These are all products which are sensors of AMS. So we're a sensor solution company and this just
gives you a little feeling of the different sensor products we have. Whether its optical color sensors, gesture sensors which help you to
recognize a gesture, a color sensor is something we use in our mobile phone. It's basically to help you better - get a better - feeling for the
color temperature on pictures, on computer screens or on your cell phone.
QUEST: But now let's see - ah ha - will it work with this. And indeed it does. Gets the color of my tie. Ah ha!
REINER: Now you go for NFC for example. This shows you for example how you can put your mobile phone into an electric field -
QUEST: Yes.
REINER: And you get an NFC or a contactless aura for each reaction (ph). For example for payment and all related kind of things.
QUEST: So these sensors are in our phones all the time.
REINER: In phones, in tablets.
QUEST: What are they doing with my phone - in my phone?
REINER: So for example, a gesture sensor helps you to move pages forward and back. Our color sensor helps you to recognize, for example,
the quality of the color on the screen or it adjusts the brightness of the screen depending on ambient light for example. NFC is a sensor where you
actually make a payment transaction with. Noise cancellation is something where you can remove the environmental noise from the headphones.
QUEST: Would there be a hologram to get me from side of this Congress Center to the other? Back in Innovation City, I find Anne Bouverot, the
director general of the GSMA - the mobile trade organization in charge of Mobile World Congress. It's huge, this event.
ANNE BOUVEROT, DIRECTOR GENERAL, GAMA: It is.
QUEST: Absolutely huge. Is this an industry in revolution or in transition?
BOUVEROT: It's an industry in transition, very much so. And it's a young industry. I mean, 20 years ago we were not making phone calls, ten
years ago we did not have smartphones. The iPhone is - was the first one was launched in 2007. That's not even ten years ago. Tablets - 2010 and
we now all use Tablets. So it's - a lot of new things are happening in this new industry, but it is at continuous transition.
We're starting to talk about the transition to 5G. So 5G does not exist today. Today in the world, 4G is starting to be a reality. But 5G
we're starting to think about, talk about and lots of exhibitors saying we think we know it will be this.
QUEST: What will 5G that 4G isn't?
BOUVEROT: The really difficult thing to do with 4G today is to transmit a huge amount of 3D data in real time and to be able to act on it.
So that's a remote operation, for example, one which is very delicate or remote controlling of an engine manufacturing or gaming.
So those things you can't really do. I mean, the remote operation you'd have to be really sure it works before you do it. You can't do it
today. But that's the things we would want to try and be able to do with 5G.
QUEST: 5G and the Internet of Things offers huge potential for mobile operators and phone makers to give us more services. Money - for centuries
cash was king. But no more. If there's one place in Mobile World Congress where this doesn't count, it's the mobile payment section. Instead of the
filthy stuff in your pocket, here it's all about digital ways to pay.
Time for a snack. Of course my phone is my vehicle to my stomach. Let's go for a Coca-Cola, and I'm going to buy. It's going to take it off
this because I'm logged now. So I'm logged in, it's processing the payment and here's the man who makes it run.
Male: Hello.
QUEST: Good to see you, sir. This is the future.
Male: It is.
QUEST: Tell me why and how.
Male: Well, I think that the first thing is it's a funny way to get your snacks. You can also personalize whatever you want to buy. When you
use your phone, you don't need to use any cash on you as a payment system.
QUEST: What you've done here is you put a game in front of the experience.
Male: Right.
QUEST: Why bother with the game? I just want to buy a drink. Why - what does the game give me?
Male: I think the game give you the idea that the loyalty programs that every retailer is having also for you to have a fun experience when
you visit the shop.
QUEST: At the moment we have a multiplicity of payment mechanisms. As a solutions manufacturer, how difficult is it for you having different
systems?
Male: So our idea of course is to be agnostics. We need to be able to cope with any payment systems and that's what we are doing. We're
working with Google, with Apple, with any other companies. But of course the fact is that we will benefit in having a more standardized payment
system that could be a benefit to all industries.
QUEST: Away from money, there's a wealth of ideas in the Green Pavilion where it's all about energy and efficiency - new ways of making
power. Now we just have to put it to the practical test.
Sierra Wireless and Phillips have partnered to produce cutting-edge lighting systems. But hopefully will save cities energy and money. The
Humboldt street light. It's been around for a very long time. What is different about what this does?
PIERRE TEYSSIER, VICE PRESIDENT, SIERRA WIRELESS: So what's different and new, thanks to all the technology inside, we connect this in a cellular
way to the internet. This mean that this goes through the 2G/3G/4G networks immediately without all the order (ph) to install it.
QUEST: What's the advantage.
TEYSSIER: So now it's connected. It allows the city/the government to fully control their city's lighting in their city.
QUEST: But it's quite revolutionary, it's very different, isn't it?
TEYSSIER: Absolutely. It completely connects the lamp to the internet and you can imagine a lot of new applications. Not only switch
on/off, but program manually according to your schedule. In case of accident, you can put light where you need. In case of bad weather
condition where it's unlimited possibilities. So each dot -
QUEST: Yes.
TEYSSIER: -- is a lamp. I can't count them, but have a look how many you can control remotely as an example of a big city.
QUEST: So now let's go back here. Because one of the other things it does allow you to do, it allows us to see how much energy's being used.
How could all of this be helpful? How does this all fit together for the future?
TEYSSIER: So in the future the city will be able to know in real time the consumptions, they can plan their use (ph) in a better way, they can
average, if need be they can use one lump out of two to reduce. They really control the consumption instead of undergoing it as of too late -
they know after. Now they can know before and plan for the (inaudible)'s further usage.
QUEST: And it's all because of this.
TEYSSIER: Because of this. It's all connected and so it's all because of this.
QUEST: Lighting our way into the future. After the break, more energy required. Our journey takes us to some new experiences.
Male Voiceover: "Tomorrow Transformed" in association with Ericsson.
(COMMERCIAL BREAK)
Male Voiceover: "Tomorrow Transformed" in association with Ericsson.
QUEST: It may look a bit strange, but these people are having an extraordinary experience. They've delved into the world of virtual
reality.
ANDREW PARKER, GSMA CONNECTED LIVING PROGRAM: So when you put these on, --
QUEST: Yes.
Male: You'll see a red dot -
QUEST: Yes.
Male: Yes. So you bring your head to around point (inaudible) -
QUEST: Put my head down, not my eyes?
Male: Yes, head down, looking at the dots into the white circle -
QUEST: Yes.
Male: -- and then you could be nosey and have a look around. OK? There we go.
QUEST: Oh, my word. This is quite extraordinary. Whoo this is very good. Wow. There. It's glor - oh my goodness. There's a car, a look out
of the window - from both sides.
Tell me what this was designed for? Where do you see it going?
ANDREW PARKER, GSMA CONNECTED LIVING PROGRAM: This was designed to show people what you can't see, simply. It's about immersing people in an
experience so you can show inside a vehicle, inside a car. You just can't show it video. This has got huge potential. You can see great
applications for this, especially in online retail - you can walk down the shop, see the product, walk 'round things. It's got a fantastic future.
QUEST: OK, it's got potential, but does it end up a bit like 3D. Everybody always said it was going to get there, it just never did.
PARKER: This is different. This uses a gaming principle, and gaming is going to be - is a huge future already. This gaming hardware will be
everywhere eventually. So in people's ordinary homes, see you haven't got to invent a new platform for a new experience. So therefore you don't need
to buy a 3D telly just for 3D, this is a platform designed for a wide range of things.
QUEST: So it's not just for strange people who want to sort of go and look at the stars or whatever it might be, you think this has real-life,
everyday applications?
PARKER: Absolutely. Because it allows you to go visit, walk 'round things, experience things you just couldn't possibly do with any other
medium.
QUEST: The virtual world could only get you so far. Eventually you need the real thing. This is Courage in name and nature.
Ooh very impressive stuff. So what's the technology behind this.
CASEY HAUSER, XENSR: Well, what we're doing here is taking GPS to the next level with making it 3D. So what you're seeing right now is our
sensor air product, and where you have typical GPS like those you've seen like in your smartphone another device, it doesn't give you any vertical
accuracy or anything.
What we want to know - like you saw before - is how high our friends are jumping. So this is packed with more sensors, accelerometers,
gyroscopes, magnetometers. And what it does is allows you to see everything in full 3D - jump height, distance traveled in air, air time.
QUEST: So it's a GPS (inaudible) -
HAUSER: At the start, but then extra sensors so we can see the 3D.
QUEST: And what do they do with it? All right, so you get a 3D view of this thing going up and down and 'round and 'round, but what use is
that?
HAUSER: We want to use it for competition, you know, because at the end of the day when we were riding, we decide which one of our friends
jumped higher - you didn't know. It became who was talking louder or anything like that. So we wanted the hard facts. And by doing this now,
we could say, OK, you jumped three feet but I jumped three and a half and I beat you there. And now with that idea, we got competition.
So where you have X games or any of these other subjectively-based competitions in action sports, now for the first time we're able to
integrate real data so you can see exactly one rider or the other in the field, in the moment and know who's going to beat out the other guy.
QUEST: What other sport would you use this on?
HAUSER: Well, you can use it for snowboarding or skiing, mountain biking. We started in windsurfing and kiteboarding actually. Big wave
surfing where you don't know exactly how big the waves are. There's a lot of applications in sports but as well as outside.
QUEST: This is all about the connected athlete, isn't it?
HAUSER: Precisely.
QUEST: Tell me what it means.
HAUSER: Well for us, when we started we wanted to know how high you can jump. But then like you said, what if you can find it out in real time
or what if you can use it for another application? What if you don't want your phone?
So with all the devices that you see now at NWC, there's a lot of tools for the rider. And at our foundation, the core is 'what do they
want?' And if they want to see it on their wrist or in their goggle or synch in with their video, our question is how can we make that easier for
them?
QUEST: How do you stop? There are no breaks on a BMX! (LAUGHTER). It really is all about the experience. And as my pictures truly show,
"Tomorrow Transformed" it's here today. And the best part about all of this is it will happen again tomorrow. I'm Richard Quest in Barcelona.
And whatever technology you're using, I hope it's profitable.
END
