Return to Transcripts main page

Quest Means Business

BlackBerry 10 Unveiled; BlackBerry Shares Tumble; BlackBerry CEO Talks Company's Future; BlackBerry Reborn; US GDP Falls; Fed Statement Released; Spanish Economy Shrinks; European Markets Fall; US Economy; Dollar Down; Bank of Israel Chief Stepping Down

Aired January 30, 2013 - 14:00   ET


RICHARD QUEST, HOST: Tonight, we're all the Bs. BlackBerry: it's a new device and it has a new name to boot.

Ben Bernanke: the US economy goes backwards. At this hour, the Fed's next move.

And Boeing and the batteries: the company beat earnings, the Dreamliners are still on the ground.

I'm Richard Quest, another B: I mean business.

Good evening. We are minutes away from hearing the outcome of the US Federal Reserve's first meeting of 2013.


QUEST: Stocks are paring back early losses, and there was a surprise, worrying, some say. Quarterly contraction in US GDP in Q4. Jargon, perhaps. We'll explain what it means later in the program.

We'll be looking for clues, not only about what happened in the last quarter of 12, but also QE3. That's the market, so just pulling back ever so slightly. Pretty much even Stevens, as you take it overall.

BlackBerry 10 has arrived. It may be a year behind schedule. It still arrived to a heck of a fanfare.


UNIDENTIFIED MALES AND FEMALES: Two, three, four, five, six, seven, eight, nine, ten!




QUEST: With the global launch in New York, the handsets were unveiled simultaneously in cities around the world. There are two of them. Now, there is the Z10, which is a full touchscreen device, and that's the first to go on sale. And then you have the -- that's the one on the left of your screen.

Then you have the Q10, with the traditional push-button keyboard, the physical keyboard, which comes in a few months' time. With BlackBerry 10 in, Research in Motion is out.


THORSTEN HEINS, CEO, BLACKBERRY: From this point forward, RIM becomes BlackBerry.


HEINS: It is one brand. It is one promise. Our customers use BlackBerry. Our employees work for BlackBerry. And our shareholders are owners of BlackBerry.


QUEST: The popular musician Alicia Keys joined the party. She's been named as BlackBerry's new global creative director. You might remember Polaroid did a similar trick with Lady Gaga.

Now, with all this hoopla and hype, shares in BlackBerry are sharply down. They're at $14.71, a loss of 6 percent on the day. The new ticker BBRY soon might be saying TTFN.

BlackBerry's global market shares fallen around 20 percent in 09 to 5 percent last year, according to Gartley -- Gartner. Ali Velshi spoke to the chief executive, who you saw at the unveiling, that's the chief executive, Ali Velshi.

Anyway, the chief executive's Thorsten Heins. Before the Research in Motion name was announced, Heins explains what he thinks will bring customers back to BlackBerry.


HEINS: All these people are hyper-connected, right? They run several social networks, business networks. They want to be quick and fast. I think we will attract them by the flow that we provide. Just go across all your channels and all your applications.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Are there enough of those users in the world, though? Who are you trying to steal from, iPhone users or Android users?

HEINS: I'm not stealing, I'm winning.


VELSHI: Who are you trying to win from?

HEINS: We're not excluding anyone from what the future BlackBerry experience is going to be, so we want to win as many as we can.

VELSHI: Let's talk about the delay. What was the delay in getting the BlackBerry 10, when you look back at it. I know it was a number of things, but when you look back at it, was it worth it?

HEINS: We had to do this, because it is a defining milestone in the history of RIM. We had to make sure that we had the quality that everybody expects from a BlackBerry. And there were some quality risks when I looked into the program that we detected, and we needed to make sure that we deliver the quality that people expect from us.

Right call, and frankly, we got out of the noise and the holiday season. Would I have loved it to launch it earlier? Sure. But I think now we have a lot of attention, as you can see, and it was the right call.

VELSHI: Now you've got the basis to build a future. You really have gotten to live another day. What does the future look like?

HEINS: So, two horizons. What we will do on BlackBerry 10 is we will continue to build a portfolio of product. As for those markets that you referenced to, like Asia-Pac, Africa. We want BlackBerry 10 to also succeed in those markets. So, low debt portfolio in this year.

Second, what we did is we built this platform not just with SmartPhones in mind. We think about this -- on your head is your personal mobile computing power. Now, think about what that does for you in enterprises, in heath care, in automotive. So, we want to go with BB 10 into those verticals. That doesn't mean it's the BB 10 hardware.

VELSHI: Right.

HEINS: But it's the BB 10 platform in the cards, the BB 10 platform in a health care element, right? And that's what we're going to explore as the second horizon of RIM. And then we have the devices, we have the services, we have the mobile computing end point management with BES 10. Here you go.


QUEST: And here you go. That is the BlackBerry Zed 10 -- Z10. Jim Boulden has given it a go, and he's with us now. Jim?

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: You know, I like it. I have to say. It is a brand-new BlackBerry. You think of it as like a different, brand-new phone from a different carrier, if you will. Different handset maker. It's got a lot of bells and whistles in this.

And the things that I like a lot is Balance, if you know what Balance is. It's the difference -- you've got the corporate side and you've got the personal side, and I think things like that is what might -- might -- might -- get companies to think again about going back to BlackBerrys if they choose to.

And earlier today, I did get a demonstration with the COO, Kristian Tear. Let's have a look at some of the bells and whistles on this.


KRISTIAN TEAR, COO, BLACKBERRY: This is the first full-touch BlackBerry that we do, but it also provides a fantastic keyboard. A lot of our users have been sharing BlackBerrys because they have fantastic keyboards. This one also has an absolutely stellar keyboard and the best keyboard experience that you can expect.

BOULDEN: But you've got virtual keyboard, but there will be also one that still has the physical keyboard, right?

TEAR: There is one coming later on with a physical keyboard as well.

BOULDEN: And when will we see this in stores in Europe?

TEAR: We will start selling basically in the UK tomorrow, or tomorrow in the UK, and we'll keep on rolling out in different countries throughout the month of February.

BOULDEN: Reliability has become an issue with BlackBerry, and there have been some very well-known failures. Even if it's been a couple days and even if it was a year and a half ago, people haven't forgotten that.

TEAR: The BlackBerry service is very, very reliable, and we're continuously working on making it even more reliable. And BlackBerry 10 is absolutely supporting that as well, and making it the most secure experience you can have.

BOULDEN: With my current BlackBerry, obviously, if I'm in something, I kind of have to get out of it to go into something else. You've changed all this with this software.

TEAR: We've changed that. It is a completely new experience, like I said. With one gesture, we'll always get back to the most important site for you, which is the hub. That's where everything comes together, and you don't have to close an application, you don't have to open up another one and then close it and then go deeper down into it.

So, with one gesture, you will come back to the hub again, and you can do multitasking and you keep several applications running at the same time.

BOULDEN: So, how can you convince companies in Europe that have migrated away from BlackBerry to come back to BlackBerry?

TEAR: The Balance feature is definitely one of those. So basically, it provides a good consumer experience, it provides a great enterprise experience. Balance is a feature where basically it allows a consumer and an enterprise to fulfill the needs for both.

So, if you're -- as a consumer, you want to browse the internet, you want to do your things, your IT manager, he would definitely not want you to do certain things. This phone allows you with the feature of Balance to actually have to personas. So, you have one side, which is completely secure behind the firewalls, controlled by the CIO and providing a very, very and the most secure experience.


QUEST: So, that's what you think -- or that's what they think. What was your impression?

BOULDEN: Well, I'm sorry that it doesn't have the physical keyboard yet, because that's what so many people want. And of course, I'm addicted to using my thumbs, as they say, so that doesn't come out probably until April.

Also, there's some apps missing. There's 70,000 apps at launch. They think 100,000 apps in a few months, but there's no Netflix, no Instagram, a few of the ones that people probably would like to have. And it doesn't connect to the Cloud the way it does in iPhones, so I think that's one of the things that they're going to have to work on as well.

QUEST: These are the two. I'm showing -- these are the two of the competitors.

BOULDEN: That's the iPhone, course --


BOULDEN: -- the smaller. So, the new one, the new BlackBerry Z10 is bigger. A bit more, to me, like a Samsung. Look, we're talking about third place, here, aren't we? We know, like we said last night, the single-digit market share at the time, can they get corporate customers to come back? Can they get people to be interested in it?

They talked a lot more about what the phone can do and they didn't talk a lot about e-mailing, which of course is why a lot of people have them.

QUEST: Right.

BOULDEN: They wanted to talk more about the whole experience with this new phone.

QUEST: By the way, while we're talking, I am just tweeting @RichardQuest, why oh why didn't they launch the model with the physical keyboard? Which strikes me as being the extraordinary thing. Why didn't they do that?

BOULDEN: Well, they didn't tell us why, but it is already a year delayed, but it's clear that I would say that -- they said to us the reason that we're launching tomorrow in London first and then a few countries over the next few weeks, not to the US until -- for a couple more weeks.

They want to make sure they have supplies, they want to make sure they get ready. But people like me are going to probably wait for the physical keyboard.

QUEST: Yes, you see, I'm a great lover of the physical keyboard, having been a devotee of the original typewriter.


BOULDEN: Right. "Quick brown fox," right?


QUEST: Sorry?

BOULDEN: "Quick brown fox jumps over the moon?"

QUEST: "The quick -- " Yes. "The quick --" Yes. By the way, anybody who doesn't -- who wants to know why -- anybody who's maybe under 40 or maybe even to 30 wants to know why the keyboard is QWERTYUIOP, that is the reason why, because under the old keyboard, you risked all the keys getting stuck in the middle. Did you know that, Jim?

BOULDEN: I didn't. But I've used typewriters. I learned how to use a typewriter.

QUEST: You didn't.

BOULDEN: But there we are. "The quick brown fox jumps over the moon." Five seconds.

QUEST: No, it wasn't. It was "The quick brown fox jumps over the --" "The quick brown fox jumps over the lazy dog."

BOULDEN: Well -- different --

QUEST: Finally on --

BOULDEN: -- different cultures.

QUEST: One more question on BlackBerry.


QUEST: In a word, are they betting the ranch on the 10?

BOULDEN: Absolutely. This is it. This has got to work for them.

QUEST: This has got to work.


BOULDEN: Unlike that.

QUEST: Don't you mock my --


QUEST: "The quick --" When we come back --


QUEST: -- the Fed statement's about to come out. Investors have already had a bit of a shock. Get the smelling salts ready.


QUEST: The US economy shrunk for the first time since 2009. It was the fourth quarter of 2012. Join me at the CNN super screen --


QUEST: -- and you will see exactly what I'm talking about. Look at this number. If you go back to 09, this is the Great Recession, and then we have this -- 09 you -- massive contraction in the various quarters. Then you get this growth, and the story very much fast growth, and then it peters off, and people get very worried around here.

Then it builds up again, and we get fast growth, and it peters off in the middle of last year, and people think it might be growth redux, and then it builds up again in Q3 of last year, but look at that number. Look at that. That is quite simply worrying, because there was a contraction of minus 0.1 percent in Q4 on an annualized basis. That's the way the US does their numbers.

A drop in government spending, cutting back on inventories, depressed growth in the final three months of the year. There was -- these were all the reasons. Maggie Lake is in New York. Maggie, whichever way we cook -- we cook? Whichever way we cut this cookie, that is a worrying number.

MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: It is, Richard, but look at the market reaction. They're not terribly worried about, at least not yet, and I'll tell you why. It's because so much of that was concentrated into that defense drop. That 22 percent decline in federal defense spending was the largest quarterly drop in 40 years.

And the other two, the exports and the inventory could be related to Hurricane Sandy. This is going to be a number that's revised twice.

And of course, a lot of this is linked to the political situation. In fact, the White House taking great pains to point this out, saying listen, this is a sense of what could come if that sequester cuts were to be put into effect. Remember, a lot of them concentrated in the defense area. And this is a -- an urging Congress to prevent a self-inflicted wound to the economy.

So, because of that, investors are really taking a step back and saying it's not a great number, we don't like it, but it's likely to change, this is choppy. You want to take the trend over three months. And so right now, they're sort of taking a step back, watching for other things.

Of course, where this number is likely to feed in is to the debate at the Federal Reserve as they try to determine how long to keep the stimulus in effect. We all know they're going to do it in the near future, but when do they start to exit? It's a little bit of a sort of hot topic within the Fed walls, so they're going to take this number, along with all the economic numbers, and shoo it over.

And of course, that statement, we're waiting for the full statement to come out, Richard.

QUEST: Yes, and I'm -- I'm just looking for it now, but we understand no change on rates, Maggie. That seems to be the way it's going. No change on rates, and I suspect we're going to have to look at it a bit more closely for the minutia of the wording to see if they -- if anything majorly is altered on that.

LAKE: Yes. And we're not expecting it to be, Richard. This is not a meeting where we're even expecting a lot of changes in the statement, because frankly, we haven't seen a lot of changes in the economy. We're at what someone called -- an earlier guest called "stall speed," right?

Outside of that defense number, the economy looks OK, especially in some really important areas, like housing. We got an ADP private sector reading today on jobs that showed a pretty good-looking increase. We're expecting over 100,000 on Friday. So, that's good.

It's not great, though. It's not the kind of robust recovery we'd like to see. Again we hear time and again because of the politics in Washington. A lot -- I just talked to a business owner, a small business owner yesterday said that said --

QUEST: All right. Maggie --

LAKE: -- if they would just get their act together and give us clarity, that would help a lot.

QUEST: I've got the statement here. It continues to talk about fostering maximum employment, recovery over time, the committee will continue purchasing additional ABSs up $40 billion a month and long-term treasuries at $45 billion a month.

So, QE 3 continues, maintaining reinvestment, closely monitoring incoming information, and to support it, the committee expects a highly commitative stance of monetary policy for a considerable time after the asset purchase.

So, pretty much everything remains the same, there's nothing that I can see at first blush, Maggie.

LAKE: That's right. And remember, what they're looking at is now both unemployment at 6.5 percent and inflation. And again, there's no sign of inflation, which is why a lot of people feel like those devilish voices, those in favor of stimulus, are going to carry the day again at the Fed.

There are concerns about how they exit, but with no inflation and an economy that's sort of bumping along, the feeling is the Fed's going to do what they can for as long as they can. And Richard, again, someone earlier --

QUEST: Right.

LAKE: -- today telling me they think that's until 2015.

QUEST: Maggie Lake is in New York. We're going to talk about Spain in a minute. Very quickly, though, Bronwyn Curtis is just with me. No surprise from what they've done, but we'll put it in the context of Spain in just a moment. No surprise.

BRONWYN CURTIS, SENIOR ADVISOR, HSBC GLOBAL: No surprise. We think it will be 2015 before they start moving rates from zero. So, QE continues, growth is not good.

QUEST: All right. We'll talk more about all these things -- we'll factor it all in, Bronwyn, in just a moment.

If you were worried about the US, you're not going to like the Spanish GDP numbers. Spain's economy's sinking further into recession at the fastest rate in more than three years. Al Goodman is in Madrid for us tonight. Al, the -- look. The number was where it was supposed to, but that will be cool if not cold comfort to the Spanish.

AL GOODMAN, CNN MADRID BUREAU CHIEF: That's right, Richard, because the problem is this year. The Spanish government says the contraction, the recession will continue but at a slower rate. They'll just be a half a point of negative growth this year.

But the IMF says no, it'll be three times that this year, 2013, 1.5 down of negative growth. So, that is a problem because the budget has already been approved, and if the IMF's number for this year is the true one, that could impact more job -- more job cuts, more budget austerity, more tax hikes, more pain for Spaniards.

QUEST: All right.

GOODMAN: There's already 26 percent unemployment here, Richard.

QUEST: Al Goodman in Madrid for us tonight. Al. European stocks down across the board, Italy's benchmark index down more than 3 percent, pulled down by the oil company stipend, which is often worth 35 percent, warning investors to expect a very significant reduction in profits. Those are the numbers. Everybody's down. Italy is the worst of them all.

Bronwyn's with me. Good to see you, Bronwyn. Busy day. What do we make of it all?

CURTIS: Well, I don't think the Fed was a surprise. I mean, the numbers, the GDP numbers were a surprise, but if you --


CURTIS: Well, because actually, all of the indices we've seen, whether it's housing, whether it's consumption, all of those confidence indices are all up. Now, that may be because the stock markets are up as well, and that always helps everyone to feel a lot better. But -- so they're up.

But the trouble is that actually the US economy -- you showed that chart, and that big fall in 2009? And the bounce back. But compared to previous recessions, it hasn't bounced back nearly as fast.

QUEST: But the fact you get this -- you weren't expecting anything like a minus 0.1.

CURTIS: No, nobody was, but then remember, it was inventories and government spending. So the fact that companies were still investing and consumers had accelerated their spending meant that everyone focused on that.

QUEST: Right. But it does mean that as we look -- as we push forward, any form of weakness in confidence that transmits itself into 2013 becomes critical.

CURTIS: Yes. And we're still not -- well, of course we've got all these fiscal problems still in the US --

QUEST: Right.

CURTIS: -- and they may have tax increases and all sorts of things. We're only forecasting something like 1.7 percent growth, 1.72 percent growth --

QUEST: Because we've still got the contractory -- the contraction effect of the deal that was already done, the high social security taxes, the spending cuts. So, that still has to draw out of the economy.

CURTIS: That's right. And here's the Fed still pumping money in every month, as you just said, but they're going to be doing quite a lot, and rates are going to stay at zero, as you said a minute ago, until probably 2015, because unemployment, we're going to be watching nonfarm payrolls on Friday, we're going to be back to that time when we're watching nonfarm payrolls every month.

QUEST: OK. If -- if you're looking at, say, 1.8 to 2 percent. I mean, it's the same thing, basically. 1.8 to 2.2 percent or whatever. That's nowhere near enough to get unemployment down to the Fed's target of 6.5.

CURTIS: That's right. You need to create about 200,000 jobs a month over a period of time. But they'll also be looking at other things: how many people are in the workforce --

QUEST: Right.

CURTIS: -- whether it's part time, full time, that sort of thing. But we're not creating enough jobs.

QUEST: We -- you just heard Al talking in Spain. Spain went to the market, it got a great auction, it started to -- it's well and truly put itself back on the map in that sense. But at these GDP numbers with the high unemployment numbers, that is -- I guess I'm trying to find out from you where you put Spain in the great worries at the moment.

CURTIS: Well, it's not a comfortable place to be. The problem is that a lot of the risk in Europe has been taken off since late last year when the ECB stepped in and said, we will back this up.

But you look at Spain, it's been down 14 percent in real terms since the crisis started. We see growth negative this year, negative next year, and the fiscal situation is really worrying.

QUEST: Bronwyn, good to see you. Busy day. Thank you for taking time to, in a busy day, to come and help us understand it all. Always good to see you.

CURTIS: Pleasure.

QUEST: Bronwyn Curtis from HSBC joining us. Now, a Currency Conundrum. So, if I gave you $1 million and I'm using only $100 bills, what would it weigh? Is it 5 kilograms, 10 kilograms, or 15 kilograms? A million dollars in $100 bills, 5, 10, or 15 kilograms? Absolutely no idea. The answer later in the program.

The dollar is down against the euro and the pound and up against the yen. Those are the rates --


QUEST: -- this is the break.


QUEST: Governor Stanley Fischer says he is leaving the Bank of Israel because he's achieved most everything he set out to achieve. The central bank governor is regarded as one of the best in the world. He even taught the Fed chairman, Ben Bernanke, and the ECB president, Mario Draghi, at university.

Earlier, I was joined on the line by Governor Fischer. There was only one question: why leave now?


STANLEY FISCHER, GOVERNOR, BANK OF ISRAEL (via telephone): Now because I came with certain goals in mind. They've almost all been achieved. I'm not a believer in hanging around until people think it's time for you to go.

And -- I -- think the economy's in reasonable shape. It's clear the people know what has to be done. There will be a competent team, I'm sure. And so I thought it was time to step down, and that's what I -- that's what I'm doing. There's no deep motive. There are all sorts of things in our newspapers, which happen to be wrong.

QUEST: People always wonder whether it's health, whether it's wealth, whether it's family, or any of those reasons. Can we rule them out?

FISCHER: You can rule out health as a problem. You can include the fact that I would be closer to my family. And with regard to wealth, well, I don't talk about wealth.

QUEST: Would you be in favor of continuing the biannual -- the two-year budgetary process that the government has pioneered?

FISCHER: I think that except in exceptional circumstances, it would not be wise to continue the two-year budget. The government will, I believe, try to pass a one and a half year -- one and a half years' worth of budgets when it begins to operate on the budgetary system. That is, they'll probably give budgets to the Knesset by the --

QUEST: Right.

FISCHER: -- by May, June. And they'll get -- they'll try and pass both the budget for 2013 -- the remnant of 2013 and the budget for 2014 at the same time.


QUEST: That's Governor Stanley Fischer. Now, his comments on the two-year budget are in stark contrast to the Israeli finance minister, Yuval Steinitz. On this program earlier this week, the finance minister told me the two-year budget was crucial to keeping Israel stable during the crisis.

Questions, of course, being raised about whether Minister Steinitz will survive the coalition negotiations, and now Stanley Fischer is going as well, so the only question is whether Israel's two-year budget survives.

In a moment after the break, it's Boeing's big day. No fix for the 787 battery, and the plane-maker's upbeat on its results.



RICHARD QUEST, CNN HOST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. This is CNN and, on this network, the news always comes first.

The head of America's largest gun rights group says new laws won't stop criminals from committing violent crime. Wayne LaPierre of the National Rifle Association told the U.S. Senate hearing that officials should focus on better enforcement of existing laws.

One police chief who testified said the argument that Americans needed assault rifles to protect themselves is, in his words, "scary, creepy and not based in logic."

Israeli fighter jets attacked a convoy along the Lebanon-Syrian border overnight, according to a senior U.S. official. The Israelis said they believe the convoy was carrying missile parts and equipment, which could have been used to attack Israel. That report from another source. In the past hour, the Syrian military has said the target was a scientific research center.

French troops have seized the airport in the city of Kidal in Mali. Kidal is the last urban stronghold of Islamist militants who have been taking territory in the country. The militants are believed to be retreating to the desert as French-led troops advance further.

Strong storms are crossing the southern eastern United States right now. The U.S. state of Georgia, tornado damaged buildings and overturned cars, there's extensive storm damage being reported in several other states where the storms have already passed over, believed at least two people have died.

The U.S. Fed says weather disruptions and other transitory factors help to bring growth to a standstill. The U.S. central bank says weather disruptions chose to keep interest rates on hold and maintain its asset purchase program worth $85 billion a month.



QUEST: The Dreamliner, the 787 grounded by the FAA and regulators all over the world. And Boeing says its top priority for this year is to get the Dreamliner back into the air. Boeing had quarterly numbers out today and guidance for the year ahead.

Join me in the library -- actually, join me in the cabin. And you will notice we actually have Dreamliner windows, larger and photoclivic (ph) -- whatever the word is -- that basically when you touch the button -- photochromic, I think is the word, that when you touch the button, it -- anyway, you've got them.

What you will get is the guidance in the -- in the latest report. Boeing says no significant financial impact to the 787. And now what it means by that is the reference to the FAA directive, the order to ground the planes on January the 16th, pending the inquiry into the battery overheating problem.

Boeing's boss said on the conference call with investors he's doing everything he can to fix the problem.


JIM MCNERNEY, CHAIRMAN/PRESIDENT/CEO, BOEING: We do believe good progress is being made in narrowing down the potential cause of the events.

We have assigned hundreds of experts from across Boeing, brought in experts from outside and are working around the clock with the NTSB, JTSB and the FAA to identify the problem and develop any corrective action that may be needed to get the airplanes safely back into the air and to resume deliveries to customers.

We deeply regret the impact this situation is having on our customers. Nothing is more important to us than the safety of the flight crews and passengers who fly our airplanes. We will get to the bottom of this, and in so doing, we will restore confidence in the 787 and Boeing.


QUEST: Now the result that they actually did publish, 4th quarter income down 30 percent to the best part of a billion. That's down roughly 3 percent on full year. It was better than the market had expected.

And so the shares were somewhat more optimistic. And this is perhaps interesting for Boeing. They delivered more than 600 planes last year. It beat Airbus into second place for the first time in many years.

And it reclaims the title as commercial aviation market leader, not only for orders and for deliveries, but even as these numbers are taken, people will be very closely watching to see what the effect is from the 787. No significant financial impact. Let's keep that in mind as we look at the share price on the superscreen.

Look at Boeing's prices as it bobbed up and down like turbulence that you can imagine in the air. And today we had a bit of a bumpup. They're trading around 1 percent higher. If you look at the whole month, it's been a rocky road ahead since it began. The troubles at the start of the year, every moment, the battery problem is unresolved. It costs the company goodwill and reputation.

Now coming up after the break, while the charts are firmly on the 787, international tourism is flying high. A record-breaking year for the industry. We hear from the chief exec of Marriott after the break.




QUEST: Around the world, more than a billion people took international travel trips last year. It was a record-breaking number and it was put out by the UNWTO, the world tourism organization, who also predict this year will be even bigger. Think about it, a billion tourists in Davos, a veritable feast for business travelers. I sat down with Arne Sorenson, the president and CEO of Marriott International.

He's the first person at the company's helm who isn't a member of the Marriott dynasty, been in the job now for 10 months. Arne told me in the hotel business you've got to put on a good show from the word go.


ARNE SORENSON, CEO, MARRIOTT HOTELS: That welcome that comes from the associate. And it might just be a minute long conversation. But if it's friendly and it's open and if the guest feels this person likes being where they are, they're going to feel a much more genuine welcome.

QUEST: Within the brands that you've got, which ones are you most comfortable with now? And which ones do you now believe need work?

SORENSON: Well, we've got a really full set of brands. We think we got the greatest set of brands in the business. But let me use the two extremes to illustrate sort of what's happening.

Ritz-Carlton, one of the great luxury brands in the lodging space, is growing like crazy. And it's growing as the middle and upper middle class develops around the globe.

On the other hand, Fairfield is our economy brand in the United States. We will be opening our first Fairfields in India this year because there is a dramatic need in India for a reliable product to serve the local travelers at a value point.

And both are huge growth opportunities for us.

QUEST: And you've got how many in between?

SORENSON: Oh, 16 or 17.

QUEST: There are too many!

SORENSON: It's not too many. (Inaudible)


QUEST: Why not?

SORENSON: Because we still see that people are attracted to one feature or another in those brands. Most of them are at very distinct places. So you get an extended stay brand or you get a luxury brand, or you get a four- star full service brand. You get a meeting shop, that sort of thing.

But there are also bits of personality which we are making sure that we are accentuating, so that the customer knows that there's a real difference in feel and personality, brand to brand, because there are customers with different personalities.

QUEST: In the next 12 months, what's your priority?

SORENSON: I'd pick -- I'd pick three, I think. One is transcending that culture to our global growth. How do we make sure that our culture resonates with associates in China or India or Brazil or Russia, for that matter?

Second, how do we make sure we keep focused on Gen X and Gen Y, that we're relevant to them, that we have as dominant a leadership with them as we had with the baby boomers. And that is making sure we appeal to what their needs are when they travel.

And, third, it's somewhat related to that, is about technology. How do we make sure we're using the mobile tools that we all carry today to connect with our guests to make it easy for them to connect with us and to know them better?

QUEST: By jingo, that's a hard task, because you've got to appeal to the oldies like me. You want -- you really -- you want to keep me on board, but you actually -- I'm on the way out. It's the next lot that's coming behind that you want to, isn't it?

SORENSON: The funny thing about it is it's really not age-driven. It's attitude-driven. You probably have an iPhone or a BlackBerry in your pocket. You live on the road. You've connected --

QUEST: But I'm not Gen X or Gen Y.

SORENSON: No, you're not, in age. But you're connected all the time and you expect those tools to serve you. And you expect them to be relevant to the way you communicate with us. You're young at heart. And so you're not disappearing very soon.

But we also want to make sure we get those to our young biologically. And so we'll do both.


QUEST: Now while I was at Davos, I had the rare opportunity to talk to Arne again. And this time an even rarer moment. It's not often that you get two CEOs in the same industry, standing next to each other.

That is Arne on the left, and it's Chris Nassetta, the president and CEO, Hilton Worldwide. And they're talking about working together to urge governments to adopt smart visa problems and policies to make travel easier and secure. You can see the interview online. It's at I posted a link on my Web -- on my Twitter page @RichardQuest. (Inaudible).

So CEOs galore. The Fed statement's out. We're going to talk about on the U.S. economy the reaction from the trading group floor in just a moment.





QUEST (voice-over): The answer to tonight's "Currency Conundrum," how much would a million dollars weigh using $100 bills? The answer is 10 kg, a big suitcase. One single note of any value weighs around 1 gram. Now we didn't have time to give you last night's answer to the "Conundrum;" we were -- well, the president got in the way, President Obama.

I asked you to name the oldest currency still in use. Was it the peso, the pound sterling or the yen? And the answer was the pound sterling. It was in circulation in Anglo-Saxon times when pennies were minted from sterling silver. And 240 pennies or sterlings weighed one pound.


QUEST: I could make some comment about Jenny Harrison remembering some older currencies.

I would hesitate, Ms. Harrison, to suggest you do remember the pre-decimal days of pounds, shillings and pence.

JENNY HARRISON, CNN METEOROLOGIST: Oh, I do, actually. I used to collect sixpences. That was my coin of choice. Yes. They were nice, weren't they, sixpences? I like them.

QUEST: Right. So very serious weather, very serious weather.

HARRISON: There is. These are the line of really severe thunderstorms which have already spawned a number of tornadoes working their way across the southeast of the U.S. This is the satellite. You can see this is where all the action is.

Let me just show you first of all the broader view because as you will certainly understand over the last few hours there have been just numerous tornado watches, severe thunderstorm watches in place. And then I can also show you the closer view and this shows very closely where those thunderstorms are.

Now you can see the yellow boxes. That indicates a thunderstorm warning, because there are severe thunderstorms already on the ground. And then you'll notice, this is the South here -- we've got this red box that's just popped up. And this on this closer view actually indicates a tornado warning.

So again, because a tornado has been spotted, we've got some very dramatic images to show you of earlier this day about 11:00-11:15 in the morning, this Wednesday, Adairsville, which is about 90 kilometers north of Atlanta. This is a tornado that actually came down. Now it was on the ground for about 15 minutes.

I-75, which is one of the major highways in the east of the U.S., goes from north to south, this was certainly shut for a time both ways. There were various cars, as many as 100 vehicles actually reported overturned, injuries reported as well and triage centers were set up at that time. But there is more of this on the way, as some storms work their way across the southeast of the United States.

Now the actual size of that (inaudible), you can see it was not filmed from a particularly far distance. So they're thinking of putting it about an F2, which is of winds of over 190 kph.

Now this has all been happening because we've got this very, very warm air in place across the southeast, very warm ,very moist. And then this really cold air behind. And of course, it's as those two air masses come together, we get this clash and the severe storms work their way eastwards.

So there are plenty warnings. They will stay in place as we continue through Wednesday, really into the late hours of the day. So the warnings have been moving again in line with those severe thunderstorms.

And there's a lot of damage possible, some of the winds in some of these severe thunderstorms already at about 90-120 kph. And that's not the tornadoes. That's just literally the severe thunderstorms. They're moving very swiftly.

So really by Thursday, they should be completely out of the picture. And it will be a much calmer picture, too. It'll be a much cooler picture with that air coming in from the west.

Then across in Europe, we've had that mild spell for the last few days across the southwest. Still plenty of rain, some thunderstorms and also a little bit of snow, even some snow to the highlands of Scotland, but that cold air beginning to filter in again to the north. So be prepared for that, but a very unsettled picture, Richard.

QUEST: Jenny Harrison at the World Weather Center, Jenny, we thank you for that.

And whilst Jenny is talking there on, of course, the really bad weather, the first Fed statement of the year proves the point on whether -- and its effect on the economy -- growth activity pause largely due to weather and bad problems taking place in transitory factors.

As expected, interest rates are being held at their low levels. The Fed continues to buy $85 billion worth of assets. There's only one dissenting voice, Esther George from Kansas City Fed. It's the first time she's voted on Fed policy.

Jeffrey Lacker, who's been at the silver center, is no longer a voting member of the committee. How is the U.S. market suggested this over the course of the year?

Alison's at the New York Stock Exchange.

We had three B's. We had BlackBerry, Boeing and Bernanke. Let's start with Bernanke and what -- and, well, you take the B's.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Let's start with Bernanke and then we'll chat about the other B's. Yes, so not seeing much reaction in the market, Dow down only 31 points after the statement came out. You know, no surprises there.

I'm here with Kenny Polcari. He's the director of O'Neill Securities.

Kenny, (inaudible) reaction. It's sort of like they told us what we already knew, right?

KEN POLCARI, FINANCIAL ANALYST: Right. But you know, what's very interesting is that he also made it very clear -- and if there was any reason for the market to really sell off, it would have been today.

But Ben Bernanke made it very clear that not only is he not going away, that stimulus, you know, is not -- he's going to be there. But he'll be there until he's completely satisfied that it's done, that they don't need -- that we don't need him anymore.

That, then you talk about sequestration cuts that were supposed to come in March. But there's another reason for them not to do anything in March. It's exactly because of the 4th quarter numbers today ,because it went negative, completely negative, right? And so they're going to be very concerned about kind of where the economy is going.

So quite honestly I think what the market's telling you is that it's looking forward to continued stimulus and the fact that maybe these sequestration cuts get pushed back.

KOSIK: OK. The second theme we want to get to, that Richard, I know, wants to get to, so Dreamliner. Let's talk about Boeing. Dreamliner says that it's -- Dreamliner's not going to affect their earnings. How is that possible?

POLCARI: Well, it's going to be very interesting. You know, if this drags on, listen, if it stops right now, and they fix this problem and everything goes, I might say to you I believe that. But if this problem continues to persist and these planes are grounded and they're not going anywhere, I would start to guess, if we go another 3-4 weeks, that it's going to start to affect their numbers into the next quarter.

But you know, we're going to just have to watch as, you know, that story develops, right? The stock's kind of just not doing a whole lot right now. It's stuck within that -- within a trading range. It's not, you know, moving -- making a move either way. And it's just kind of assessing. It's going to wait and see. Just kind of giving it a hall pass.

KOSIK: All right. The third B, BlackBerry, BlackBerry coming out with the BlackBerry 10. Can this phone save the day for this company that's been plagued?

POLCARI: Well, listen, certainly BlackBerry's hoping, even with the name change, they're hoping that they kind of change the mood of the company, right? It's an interesting space between the iPhone and the Android and can BlackBerry -- are they too late for the game?

Or are they, in fact, going to come up with some (inaudible) product that's all of a sudden going to bring them right to the forefront?

I think it's interesting to see how this stock is reacting. It's had a nice move. It's had a couple of gaps, which it has to fill, which it's doing now. But overall, it's going to be an interesting deal. The next six months it's going to be interesting.

KOSIK: Oh, I hear -- I hear sound coming from Richard.

What is it, Richard? What is it?

QUEST: I want a little bet -- not a bet, because we don't bet on the way the market's going.

Fourteen thousand on the Dow, when do you, Ken, myself, when do we think, if at all, when?

KOSIK: When are we going to see the Dow hit 14,000 if?

POLCARI: Listen, I think -- I don't think we're going to see the Dow hit 14,000 any time soon right now, just because not that we're going to crash, either. I don't expect a crash. But I suspect that we're going to test 1,475 on the S&P, which is down, you know, 25 points from here before we make another move higher. It's going to come back and test that level of support.

So we're going to go low before (inaudible) 2,000. And I got to tell you, with March 1st coming and the discussion of sequestration, I think that's going to keep it capped. So I think we're going to struggle with 14,000 for a while.

KOSIK: So much for the party, Richard. We won't be having a 14,000 party, Richard.

QUEST: Thank you very much, Alison.

KOSIK: Any time soon, if he's right.

QUEST: Well, if he's paying whatever party next week, many thanks, Ken Polcari, Alison Kosik.

One of the fascinating things about markets, just look at the Dow. It gets within 30 or 40 points of the 14,000. But it just can't do it. That's one of the fascinating parts about the markets, the way in which they get so close and yet just cannot get there in the end. And in fact, as Ken Polcari seems to suggest, it is coming back down again.

You'd have thought it was easy, 30 points. Not a bit of it.

"Profitable Moment" next.



QUEST: Tonight's "Profitable Moment," I have a confession to make to you.

I'm a fan of the BlackBerry. In actual fact, when I travel, it's the one instrument I really wouldn't want to leave behind for the very simple reason that it works most often and it seems to be the most reliable, at least that's always been the way so far.

Well, the smartphone market and the BlackBerry was the colossus of that market. And the arrival of the iPhone and other devices cut sharply into its share.

The new model launched today, the 10 or whatever they call it, gives it another critical and perhaps final throw of those dice. And it calls to mind that famous poem by Shelley, "Ozymandias," which tells of an ancient traveler coming upon the remains of a statue in the desert.

"And on the pedestal, these words say (sic), 'My name is Ozymandias, king of kings: Look on my works, ye Mighty, and despair!' Nothing beside remains 'round the decay of that colossal wreck, boundless and bare, the lone and level sands stretch far away."

Now let's hope a BlackBerry, the 10 isn't the modern-day equivalent of that fallen statue, because if it is, then RIM to BlackBerry may be TTFN, ta-ta for now.

Quite a thought.

And that is QUEST MEANS BUSINESS for this midweek edition. Don't forget @RichardQuest, you and I have the discussion, the debate, the convention once we are off the air. And as always, whatever you're up to in the hours ahead, I hope it's profitable.



QUEST (voice-over): The news headlines on CNN at this hour:

The head of America's largest gun rights group says new laws won't stop criminals from committing violent crimes. Wayne LaPierre of the National Rifle Association told the U.S. Senate hearing officials should focus on better enforcement of existing laws.

Israeli fighter jets attacked a convoy along the Lebanese-Syrian border overnight, according to a senior U.S. official. Another source says the Israelis believe the convoy was carrying missile parts that could have been used to attack Israel. In the past hour, the Syrian military has said Israeli aircraft also bombed a scientific research center.

French troops have seized the airport in the city of Kidal in Mali. Kidal is the last urban stronghold of Islamist militants who have been taking territory in the country. The militants are believed to be retreating to the desert as French-led troops advance.

The strong storms that are crossing the southeastern United States right now, in the U.S. state of Georgia, a tornado damaged buildings and overturned cars, extensive storm damage is being reported in several other states wherein storms have already passed over. And at least two people, it is reported, have died.


QUEST: You are up to date with the world news headlines. This is CNN. Now to New York, "AMANPOUR" is live.