this is business live from bbc news, with maryam moshiri and sally bundock. poison apple for investors, as the tech giant takes the rare step of slashing its forecasts. live from london, that's our top story on thursday 3rd january. at the core of apple's problems — slowing sales in china and fewer people updating their iphones. also in the programme: as democrats take control of the house of representatives, what will be the implications be for president trump's economic policies? the market are opening in europe and it is not looking particularly good. and — what covers you up, can give you control, but can sometimes ladder and roll? we are talking about tights. we have the boss of an underwear company, which has tapped into the multi—billion

dollar hosiery market, with brand—new tech. they believe it will change how you dress. today, we want to know... as apple lowers its revenue outlook for the first time in two decades, we want to know, have you got tech fatigue? is the next smartphone just not exciting enough? let us know. just use the hashtag bbcbizlive. hello and a very warm welcome to business live. we start with a question. is the phenomenal smartphone era — a period which made apple the world's richest company — now winding down? well, the tech giant has rattled global investors with its first warning about its financial results in more than a decade. in a letter to shareholders, the ceo, tim cook, said he expects

revenues of $81; billion this quarter — as much as 10% down on the november forecast. the news sent its share price plunging in after—hours trade. the reasons — fewer people upgrading to newer phones. and weakness in china. the crucial market for apple. a concern for the global economy. mr cook said the company "did not foresee the magnitude of the economic deceleration, particularly in greater china". sally. we can cross live to shanghai and our correspondent, robin brant. this news from apple coming hot on the heels of very weak manufacturing data out of china. one can't help but get the picture that china is getting in a tight spot. yes, there is no doubt growth in china's economy, still growing at 6.5%, but slowing down. there is a slight problem with this analysis

put forward by the man in charge of apple, tim cook, that it is no surprise that apple is a major player in the smartphone market in china, its position has been falling, that has been happening for yea rs falling, that has been happening for years and it is not even top five in smartphone sales. is dominated by domestic players, names many of you will not have heard of. samsung is also there. greer. there are some who see this maybe as an acknowledgement that they did not get it right on how slowly the chinese economy really is going now. but also, it is a more tactical shot from tim cook may be to china's leaders and donald trump in the white house about the trade war and their concern about that. remember, apple gets about a fifth, 20% of its revenue from china and there is a huge number of suppliers who rely on apple. a taiwanese company assembles many of the devices here. is this a

warning about the trade war and a warning about the trade war and a warning to the chinese leaders that apple may look elsewhere? some think this is what this is about. this has impacted trade in asia today with lots of suppliers to apple and companies that help put the iphone together, shares hit quite hard. yes, as i said, the supply chain is huge. this is something we have talked about when it comes to the trade war, the impact of the trade war, currently at a ceasefire, is not just war, currently at a ceasefire, is notjust on war, currently at a ceasefire, is not just on the war, currently at a ceasefire, is notjust on the big players, it is on the tens of thousands of companies that supply them and part ofa companies that supply them and part of a very complex supply chain in mainland china or across asia. when tim cook talks and says something he has not said for 20 years in such worrying terms, there are thousands of companies across this country alone on which it has an impact. for now, robin, thank you very much. let's take a look at some of the other stories making the news. uk firms are being squeezed by labour shortages and a slowdown in sales, amid uncertainty over brexit.

that's according to a survey by the british chambers of commerce. it says growth in the service sector was the slowest in two years in the last three months of 2018. and four out of five employers in manufacturing, and almost as many in the service sector, are struggling to find the right workers. tesla shares fell in late trade after the electric carmaker revealed that it's missed expectations for deliveries and will be cutting its vehicle prices by $2,000 in the us. the price cut, which will apply to model 5, model x and model 3 cars, is in response to a reduction in green tax credits. the italian government says it's monitoring developments at the ailing carige bank after the european central bank appointed three temporary administrators to take charge. the move is designed to save the bank after it failed to raise e400 million in capital last year. the chief executive resigned on wednesday. so, there was no budget

breakthrough at wednesday's meeting at the white house between president trump and congressional leaders. the clash over spending — and his planned border wall — has led to a partial shutdown of us government services, now entering its 13th day. it could be just the start of many policy battles this year, as democrats take majority control of the house of representatives from today. the president is insisting on more than $5 billion to build a wall along the border with mexico, which democrats refuse to support. joseph sternberg, from the wall streetjournal, is with me now. it is nice to see you again, joseph. this is when the tough times begin for the president, is that right? yes, because first, on the immediate issue of the shutdown, it is much harder to see an ending for either side of this debate than we have had in shutdowns in the past. they have not really been able to leave themselves graceful exits from this

and in the short—term, we can expect that stasis to continue and it will be part of this two—year process where you have a divided congress. very unconventional president making it difficult for either side to get any of their priorities ahead. the divided congress, the separated congress, it is going to lead to a policy paralysis for two years, what kind of impact will it have? policy paralysis for two years, what kind of impact will it have ?|j policy paralysis for two years, what kind of impact will it have? i think in terms of economic impacts in the short term, the big issues, when you can getare short term, the big issues, when you can get are renegotiated free trade agreement, nafta, through congress. over the longer term, there are good things and bust —— and bad things with the stasis. you are not going to have an opportunity, you may have an opportunity to roll back some positive economic reforms we saw in the first team agrees that the administration but on the bad side, you don't have the opportunity to forge a new consensus on supporting trade or any of those other issues

still lingering. trump saying he wa nts a still lingering. trump saying he wants a meeting again on friday and the democrats not saying whether they will even agree to that, how long are we seeing a partial shutdown for and what impact will that have? again, it is hard for me to see what the exit ramp here is. because the democrats of very dug in on the idea of opposing trump personally, that is something a lot of the voters they will count on in two years to try to win the presidential election against him. trump is in conventional and has not let himself many exit point either. what you think the impact is going to be in the coming times, looking forward to elections and trump's ratings? i think the big point here isa ratings? i think the big point here is a political rather than economic because she was the a lot of different economic policies, that will have an effect over the next two years. you will see a lot of

arguments over the economy and politicians positioning themselves and trying to persuade voters ahead of the 2020 election which will be pretty important. thank you, good to see you as ever, joseph. we will keep a close eye on that story. we will indeed. now let's return to the markets. this is the picture in asia. the mccain is closed for public holiday, but the rest of asia is down, and number of factors. apple is the majorfactor, lowering its revenue forecast, having a major impact across the board, especially as markets of them today in the holiday season. cani holiday season. can ijust holiday season. can i just point holiday season. can ijust point out that holiday season. can i just point out that that number is not right on the yen, the yen is really strong, over i% number is not right on the yen, the yen is really strong, over 1% versus the dollar. safe havens like the price of gold rising as well. and for a look ahead to the session on wall street, and we have to remember the apple

factor. here's michelle fleury. it's continued to be plagued by fears of a global slowdown. no doubt they'll be poring over the latest economic report out of america for any signs of trouble in the us economy which, so far, has seen fairly robust growth. now, this thursday sees the release of a barometer of factory activity. the ism manufacturing index is expected to dip to 57.9 from november's very strong reading of 59.3. remember, any number over 50 is considered a sign of expansion. now, a separate report on wednesday showed that business confidence among us manufacturers was already at its weakest point since october 2016. the big car—makers like ford, toyota and fiat chrysler are expected to release sales figures for december. car information specialist edmunds is forecasting a 0.3% increase from december 2017. they noted, in a recent statement, that car—makers are really pulling

out all the stops in december to close the year on a high note. that is michelle from new york. joining us us sophie kilvert, senior investment manager at seven investment management. it is nice to see you. and behind as is what is happening in europe, similarto is what is happening in europe, similar to what we saw in asia. a very negative start to the year and the news from apple is like the cherry on the cake. it is not going to help, and on the back of a very disappointing end to 2018 as well. it isa disappointing end to 2018 as well. it is a difficult time for investors, but it is driven a lot by fear. when you look at the fundamentals of what is going on with economists, global growth is slowing, it is not a synchronised growth story we had in 2017, but economies are still growing around the world. china is slowing but still growing over 6%, the us has slowed but is still growing somewhere between 2%, 2.5% in the coming year so it is certainly not the end. but investors, maybe

markets have got ahead of themselves and they are reining back in. on the point it is not the end, the reve nu es point it is not the end, the revenues apple will make in three months is $4 billion, that is a massive figure. their pre—tax profits figure is going to be huge regardless. at the point is, if china is slowing at an unexpected rate for the likes of apple and all those very smart people they have there to look ahead to these things and predict consumer behaviour in an economy like china, that is a worry. it isa economy like china, that is a worry. it is a worry, but for apple especially, china is not the big base of their consumers. their consumers based in the us and the eu and people in china prefer using android phones, especially now with the trade wars, they have switched to domestic producers. and that is a big issue. and that means the trade war between the us and china is going to be as it was last year the real basis of how investors feel for

the rest of this year. lovely to have you won, we will come back to talk through the paper shall be so stay with us. still to come... bringing innovation to lingerie. can tech really transform your bodywear? yes, we'll be meeting a man who says the answer is yes! you're with business live from bbc news. first, let's focus on the big retailers in the uk. we have heard from next this morning. next has released its trading statement for the final quarter of 2018. a big fall in sales. bbc correspondent theo leggett is in the newsroom for us now. what are the numbers tell us about the state of next and the wider retail sector? overall, next is not doing too badly, sales for the year

in the run—up to christmas rock 1.596, in the run—up to christmas rock 1.5%, forthe yearas in the run—up to christmas rock 1.5%, for the year as a whole, they will be up 3%. investors wallowing ina warm will be up 3%. investors wallowing in a warm bath of relief, shares are up in a warm bath of relief, shares are up around 5%. dig deeper into the figures and there is an issue here, not a lot of comfort for the high street because sales in november and december in next‘s high—street stores were down 9%. there were expecting a poor performance but that was worse than expected. on the other hand, online sales went up more than 15%, better than expected, so the overall picture is, it is not as bad as anybody was fearing, it is not brilliant, but not too bad. share investors looked as though they are enjoying themselves a bit today. but within the figures, there are things to be worried about.” today. but within the figures, there are things to be worried about. i am still thinking of that i am still thinking about that warm bath of relief, and how nice it sounds! other retailers, john lewis in focus, telling us how christmas

trading went. christmas trading in the final week before christmas was pretty good. 11% rise in sales over that weak compared to last year. again, we do have to caveat this. last year at christmas, christmas eve was on a sunday and this year it was a proper trading day and there isa was a proper trading day and there is a big rise in people like me panicking that the last minute going out and buying stuff at the last minute. but it is still a right of light in an otherwise gloomy retail environment which was made much worse in the week after christmas when hmv said trading had been terrible and it filed for administration, and we know that last year, the high street was very bad as a whole. you had your christmas sorted months in advance, i am sure! next up 6%. m&s, by mark, all higher on the news. —— pre—mark.

you're watching business live. our top story: shares in apple plunged after—hours following a rare cut to the tech giant's quarterly sales forecast and a warning on its revenue. it's blaming economic weakness in china. and sales of its iphone. innovation is changing many industries — and is considered the lifeblood of growth. but how do you innovate underwear? that's not as flippant as it might at first sound. according to one study, the market is worth around $40 billion. iamat i am at least 10 billion of that! well, our next guest has set out to disrupt the sector — with technology. that sounds a bit scary! he's the boss of heist, which makes tights and other bodywear, with the emphasis very much on what it calls

"intelligent design". toby darbyshire is the boss of heist and joins me now. the man behind the idea and the company. hello, three years old. the company, not you! how did it start? it started walking through the tube and looking at an advert for women's underwear and thinking, handgun this how we to women today? like what? a picture of a woman in suspenders and in a library. i thought, a woman in suspenders and in a library. ithought, this a woman in suspenders and in a library. i thought, this is stuff you had been seen for years. i said to my wife, is this... she shrugged and said, this is underwear, yes. we started asking, does it work? it is not a $14 billion industry, $110 billion. the same size as athleisure except a lot of money goes into r and d every year to make better

sweaters and innovation and were almost as not exist. why do you think there has been no innovation? underwear exists to sell a promise of sexiness. if you look at them and traditional companies that they are selling you an idea that you can look a certain way and not selling an idea that you can feel a certain way or you should feel a certain way. or you can be comfortable? or you can be comfortable. so they don't need to innovate, they took just put more l;ace on it and that is why there has been no change. you have come up with new tech for tights and body were. you say it is co mforta ble, tights and body were. you say it is comfortable, i have not tried it myself. tell us about that. we started in a different way, we have an innovation team and innovation tea m an innovation team and innovation team led by fiona fairhurst who invented the sharks swim suit in 2006 and we do deep innovation. that sounds expensive. the funny thing

is, asa sounds expensive. the funny thing is, as a company, it is a huge investment. once you manufacture it at scale, we just do things differently. how are the tights different? we figured out a different? we figured out a different way of making them, instead of sewing two tubes together with an uncomfortable seam around the gossip, we so on to it a waistband which has 18 different measurements that perfectly fit your body. they are not cheap, a pair of tights is £20 and body shaping all in one is around £120, but you have very well—known famous people wearing these advocating them. most of your sales, 40% in the uk, 70% of the eu, tell us about brexit and how you are preparing for it. we don't know what brexit means any more than anybody else does but if you assume anybody else does but if you assume a hard brexit, it doesn't look great. we will be moving a lot of our supply chain great. we will be moving a lot of oursupply chain and great. we will be moving a lot of our supply chain and almost all our distribution out of the uk to

somewhere like amsterdam. we have real concerns about our team because they come from all over the world, but we have a lot of european nationals and we rely on them as much as anybody else. we just have questions about the economy. attempting to uk economy does nothing for anybody. people cannot afford £20 pair of tights if that is the case. if they are really bad forecasts, people cannot afford anything. we will be at the same as everybody and we are worried about that. interested in how, when you have started the asian market yet, their plans to sell these tights in asia? totally, you cannot build a global business without having real asia operations. what is the difference between the asian markets and the market she working already? there is a big difference between mainland china and japan. it is not homogenous. we are still working through those points. the answer is, you can't expect to win in china by

translating your website and turning on local advertising. you need to build and operations there. we're looking at pictures now of some of your body were. are you saying that if you want underwear to be co mforta ble if you want underwear to be comfortable and practical, it can't be sexy? we're not saying that at all, we are saying it does not need to be designed purely for being sexy. people should not in any way feel how they look, that is up to them, we are saying you don't have to feel uncomfortable doing it. and tell us about this new brett technology coming out, i does laughed out loud at the green room but it is quite fascinating. that is a year of but it is quite fascinating. that is a yearof r but it is quite fascinating. that is a year of r and d and it is a massive development. but we think we have the science to prove that today, bras don't work very well. in

what sense? bras are causing breast ageing as much as preventing it. we all developing a prototype and it will be a year before we see anything hit the shelves. it is symptomatic, the industry, nobody can change the make you wake sp and one of the most uncomfortable things women wear is spanx and it doesn't need to be like this. it is great to have you here and good to hear about the business. toby darbyshire, from heist. this is how you stay in touch. stay up—to—date with the business news as it happens with business life, with analysis from our team of editors around the globe. and we wa nt to editors around the globe. and we want to hear from you. editors around the globe. and we want to hearfrom you. get editors around the globe. and we want to hear from you. get involved on the business live web page. on twitter... and you can find us on facebook. business live, on tv and

online at what you need to know, when you need to know it. sophie has joined as again which is great. we will talk more about other stories but let's mention your comments. we asked you to get in touch about apple. is the iphonejust asked you to get in touch about apple. is the iphone just too expensive? have you got tech fatigue? angela says she does not update her iphone as much as she used to, it is too expensive and little difference in each model. mark said, i recently got rid of my smartphone because it is so addictive, it is freeing about having access to it all the time. how could you lose your smartphone, it is losing my arm! new like it is not living without it, it is not upgrading often. apple mentioned that people use to upgrade that iphone because the battery life so rubbish and now apple has had to make improvements to add battery life which has an impact. apple

battery is not great, they don't compare to android. i don't have an opinion on either but they are not great. apple have done very well, they charge a higher margin, they get higher margin on their products and they charge a lot, they cost a lot. the battery life isn't great but people still buy them. let's talk about another stock that was a darling for a while, on wall street, tesla having a rough year for many reasons and is now cutting prices, margins are being squeezed. the incentive for consumer to buy green ca rs incentive for consumer to buy green cars has gone down significantly in the us. yes, there was a green tax levied for us consumers and that is being halved so tesla are having to reduce the prices of their cars which is affecting them. they have missed production targets yet again which was the biggest challenge to our 2018. toward the end of the year, our 2018. toward the end of the yea r, tesla our 2018. toward the end of the year, tesla one of the big tech darlings that rose in 2018 and finished 7% up on the year, which

was wiped out yesterday. what does that tell us about being a darling of anything? probably that you don't wa nt to of anything? probably that you don't want to be that darling at the moment! and it announced it was going to invest heavily in china and build a big factory in china and try and hit that market if china is having a tough time. and if the us market, the us economy is slowing as we think it will do, consumers going to investing a lot of money in tesla which, even though the new model is much cheaper, it is still a very expensive car? is your cup half empty or half full for 2019? about halfway in 2019. i am on the fence! it can get a bit uncomfortable on that fence! with the right underwear, it helps! thank you for your time today. goodbye, thanks for joining thank you for your time today. goodbye, thanks forjoining us. good morning. there has been a fair

amount of cloud this morning preventing temperatures from falling too far. there have been clear skies across east of scotland to remit and south wales and south—west england where temperatures have fallen below freezing. —10 celsius in braemar in aberdeenshire, the coldest night of winter so far. high pressure still dominating things across the uk. that is going to mean things change very, very slowly today. the wind rotating around that area of high pressure in a clockwise direction. mild air moving into western areas while that cold air moving south across eastern parts. today, sunny spells in eastern scotland, mid and south wales, south—west england, sunshine developing towards the east of the pennines. otherwise, it will remain quite cloudy today and feel quite chilly. temperatures 3—4dc,

lest cold in northern ireland and west of scotland with mild air from the south, 8—9dc here. tonight, keeping a lot of cloud, but like last night, some breaks in the cloud. where you get those breaks, temperatures falling below freezing. some patchy frost on friday morning. temperatures potentially down to —2, —4 celsius where you have the clearest spells for longest. otherwise, keeping cloud and temperatures up above freezing at 2-4dc. temperatures up above freezing at 2—4dc. friday, patchy fog first thing in the midlands and central and southern parts of england, some sunny spells here, but it is about chasing cloud throughout friday and there will be a fair amount of that in northern and western areas. temperatures again 3—6dc, less cold in the west. into the weekend, this area of high—pressure still dominating things but a few weather fronts around the north and the west. lots of cloud over the weekend

in that area of high pressure so during saturday, while there will be some breaks and some sunny spells, for most, it will remain cloudy throughout the day. maximum temperature is struggling to gain for many parts, 5—6dc, 8—9d across the north and the west. sunday will be fairly similar. a lot of cloud around again, some breaks to give some sunny spells, plenty of dry weather is temperatures may be a little higher, 8—9d. that is it for me, goodbye. you're watching bbc news at 9 with me, — the headlines: a giant leap into space for china. it makes history by successfully landing a robotic spacecraft on the far side of the moon. apple says it's been caught off—guard by china's slowing economy. two people are arrested in manchester on suspicion of helping migrants cross the channel into the uk illegally. the environment secretary says brexit will give farmers a "world of opportunity", and says

robots will play a part too. for the first time, the uk's gaming market is worth more than both music and video combined. pep guardiola's manchester city prepares to take onjurgen klopp's liverpool tonight in the biggest game of the premier league so far.