Good morning. Welcome to the pulse. We are live from bloombergs European Headquarters in london. We begin with a deal between apple and china mobile. After six years of negotiations, the two companies have struck a negotiation struck an agreement. Us withine high joins the details. It has been a while coming. Six years of haggling and finally, apple is able to access a Customer Base that is more than double the population of the United States. 1. 2 billion. This is a big gap in the distribution of the apple iphone. They have already been in china since 2009. But via the secondlargest carrier, china unicom. Finally, the deal is sealed with china mobile. Just below two thirds of the market they currently control. The customers7, can lay claim to an iphone 5c or 5s. What sort of sales growth are we likely to see . Morgan stanley says this could add 12 million iphone sales for apple in 2014. That is about an eight percent increase on the amount of iphones they sold in 2012. They sold 150 million. The entire amount that china mobile has as its Customer Base . The cousin it is so expensive. Generally, anch, iphone will cost you in china. There are less subsidies in china and far less discounts. Generally, only a smaller portion of the chinese population will be able to put up that kind of cash. Still, more units being sold. They have got to make this work, apple and china mobile seeing growth slowing. This could be just the pick me up they need. In china, apple is the fifth biggest handset provider in the country. Well behind the likes of samsung, lenovo. They see their market share being eaten into across the globe. Saturation when it comes to the higherpriced smartphones. In the Fourth Quarter of 2013, apple is expecting singledigit growth in sales. The first time we have seen such slow growth since 2008. We know that iphones are particularly profitable for apple. They are desperate to start boosting sales again. China mobile also feeling the strain in terms of a growth slowdown. First year we are expecting for profit to decline in more than a decade. They have been investing in the likes of 4g. Interestingly, it is their own 3g and 4g homegrown networks that put off apple. Now it is all about growth. Hsbc says one of the main reasons china mobile is seeing a slowdown is a slowing revenue because of the iphone deal. Finally, they clinched it. Thank you very much indeed. The amnesty continues in russia. Putin has released one of pussy riots members after Mikhail Khodorkovsky says he will work to get other Political Prisoners out of jail. German chancellor Angela Merkel helped broker the deal for his freedom. Ryan chilcote joins us from berlin with the details. Please be advised, some of our pictures do contain flash photography. Weekend was the first time that Mikhail Khodorkovsky has announced has addressed the press as a freeman in more than a decade. He walked into that rest conference, that is where you got flash photography. He was greeted like a rockstar. I have not seen a kind of pandemonium in more than 20 years as a reporter. Room was absolutely packed. The cameraman and i were not even were not even able to get a Camera Position as we were stuck behind hundreds of people. They were just trying to get a photo of the man as they applauded him and he came into the room. When you take that kind of reception coupled with where this was happening, a museum at checkpoint charlie, all of the cold war symbolism was there. Perfect situation to be the Freedom Fighter and lash out at president putin, who he says kept him behind bars as a result of a political vendetta for more than a decade. What did he do . He says he has no issue with resident boudin and does not intend to try to overthrow the russian president or enter politics or fund the opposition or even reenter business. He was asked if people should boycott the winter games. He said no, it is a celebration of sport. That is no reason why people should not go there. When he was arrested, he was russias richest man with a 13 billion fortune at the helm of a 36 billion company. Him what investors should do today with russia. I thought it was a softball where he should say people would not in invest in russia. He said, god forbid i should answer that question. Pardoninges putins say about boudin putin right now . On the one hand, it is clearly a concession to the west. Germany, other countries have been working for the freedom of Mikhail Khodorkovsky and the activists from pussy riot for some time. Mikhail khodorkovsky talked about this yesterday. It is a bit of the symbol of the strength that president boudin believes he has, that he can let these dissidents, if you will, go. And not worry about any threat to his rule. If Mikhail Khodorkovsky had said that he thought any of them could mount some serious opposition to his leadership, then he probably would not have let them go. So yes, concession. Sign of weakness, i do not think so. Certainly a great political exercise ahead of the sochi games. Ryan chilcote with the latest on the release of Mikhail Khodorkovsky. It is time for a bloomberg exclusive. Says he mayson build individual Casino Resorts in major european cities after aborting plans or a 35 billion megaresort in spain. He was speaking to our middle east editor, elliott gotkine. Elliott joins us now. ,espite the downturn in europe he does not seem to be that put off. He is not. In fact, he seems to be eyeing major european cities. Barcelona, paris, even athens as locations for such an individual integrated resort. His expectations for europe are more modest than what they were when compared to the metro the megaproject in spain. Largestwould be the resort development under taken on a commercial basis. I cannot, neither can any other company, afford to bet that kind of money. U. S. Dollars or even euros. A new government could come into power and change everything that is part of the agreement. I needed some sort of indemnification. That hes also concerned would not get guarantees from theeuropean commission, European Union itself, as well as spain on an individual basis. With that in mind, he ditched the whole project. He sold it, if you would like. In addition, he has been lobbying against Online Gambling in the u. S. He is a serious opponent to Online Gambling. He is lobbying furiously against it. I tried to get him to put a number on that. He would not be drawn on exactly how much he would spend. Certainly, he was adamant that this is not something that is good for america. Takes to spend what it get the point across. It is not going to take a significant amount of money. In my position, whatever it takes is ok. I am just very much against it. I am morally against it and i think it is going to kill the entire industry. It has the potential to kill the entire industry. They just willynilly allow internet gaming in europe without any consideration for the landbased casinos. It is also selfpreservation. It has nothing to do with my business. I am not in the category where my customers would play on the internet. We take bets that are quite significant. We take bets up to 1 million per hand. In singapore. Taking thereisk with anyone who has that kind of cash to throw around. , land is saying is look that hesinos, the sort is involved with, you can see who is coming in and you know who you are dealing with. It is easier to get a handle on things like Money Laundering and underage gambling. He says he is against it from a moral perspective because Online Gambling allows anybody with an aectronic device to turn into casino. You do not know who you are dealing with. It could be used by criminals and underage people. Certainly, you cannot imagine many people gambling 1 million on a hand of poker. Thank you so much. What a character. The 12 richest man in the world. Elliott gotkine with that exclusive interview. What else is on our radar this monday morning . A British Airways plane has collided with a building. Four employees were slightly injured. The plane took the wrong taxiway as as it prepared to take off. It hit an Office Building adjacent to the runway. 182plane carried passengers, none of whom were hurt read none of whom were hurt. 2400 canada, more than people without power. Trees came crashing down on cars, homes, and power lines. The electricity provider has called it one of the worst ice storms the province of ontario has ever seen. Tiffany has been ordered to pay 450 million to swatch after a joint venture between the companies failed. A dutch panel ruled tiffany was in breach of contract. Swatch lamed tiffany blocked claimed tiffany blocked development to create swatch watches with tiffany branding. He once called himself the Louis Vuitton don. These days, kanye west is boycotting the brand. We will tell you what turned them off to the label. Welcome back to the pulse. Tv,re live on bloomberg streaming on bloomberg. Com, your tablet, your phone, and any Windows Phone as well. Lets talk about phones and little bit more, continue our conversation on the longawaited deal between apple and china mobile. The two companies have struck an agreement to give chinas 1. 2 billion wireless subscribers access to the iphone. Joining us for more on the impact of this agreement is the founder of China Market Research group he he joins us on the phone from indonesia. Give us a sense of how significant this is. I was speaking to an analyst before and he was saying, beef because the price point is so high, it is great that they secured the deal, but we look not see margins are sailed anything like in the u. S. It is great to be here. It is actually not about price. If you take a look at it, the inone 5s has outsold the 5c china because the apple products have always been the aspiration, must have project products for the chinese. It gives them access to 759 million mobile subscribers. China mobile controls about 62 of the market. This is key for apple. The real challenge is that only 20 of china mobile users actually use 3g. Most of them are still using the 2g network. It will be critical for apple and china mobile to convince most of the user base to 4g,pfrog over 3g and go to which will be released in january 2014. This is going to be very difficult because most chinese subscribers do not like to sign multiyear deals with carriers. , whereefer to buy cards they buy seven dollars or a dollars worth of phone cards and when they are done using it, it will buy another. It is not as great a game changer as a lot of people think , but it is a good step for apple. How good a step . It took a long time to get this deal to bed. You kind of wonder who has come out on top. Give us your assessment. That is a great question. I think apple is five years too late to doing this. China mobile was the dominant player five years ago, but their market share has gone from 70 to about 62 over the last three years. Apple itself saw 23 billion of u. S. Sales in last year. In china, that was double from the year before. This year, they flatlined. They have been losing to samsung at the highend, and they have been losing at the mid and low end. It will not be a game changer for apple. We expect that they will sell 8,000,00010,000,000 more handsets in 2013. The adoption will be very slow. It will be a lot slower than many of the analysts were estimated were estimating. Ofs deal was more of a deal you are not going to see many more new subscribers signing up for this. Your company has worked with apple on their strategy in china in the past. How exactly do the chinese use their phones . A lot of chinese consumers like having to phones. Apple is not the cool new thing. It is not it is now samsung. What is the positioning of apple in china . That is a great point. A year ago, apple was the must have product. Rich people wanted it. Middleclass chinese who were aspiring wanted it. I interviewed a girl making 250 u. S. Dollars per month who had a 1000 ipad. I asked her how she was able to afford it and she told me that she saved up for six months so that she could have it. Apple products were the must have product. This year, people have been switching to the Samsung Galaxy at the highend. That is why i think you will see a lot of the early adopters are actually signed up for contracts on their 3g system. The early adopters will not be able to switch to the iphone and this new system. Nevertheless, there will be a lot more phones coming out of the supply chain. Is the supply chain capable of renting this one up . Are there going to be issues . Apple has always had supply chain problems in china because their products have been so popular in the west. Year,lly, until this apple released new products in china six months after the United States. What is key is that they will be launching this new iphone in january. That will give them enough time to be able to manage the supply chain for the Christmas Season in europe and the United States and be ready, hopefully, for the Chinese New Year on january 17. Chinese new year starts january 2014 and it is a time when the chinese do their biggest spending. The supply chain will definitely be an issue, but they will hopefully be able to work to get it out. It will also continue to face increased margin pressure. Placeis no longer a key to do business. The salaries of the factory workers for apple suppliers in china continue to go up. That is also negative for them on the supplychain side. Thank you so much. Now lets get some company news. Bloomberg news. The first detailed glimpse into fraud allegations. Fraud at massive agfeed chinese operations. One email translated by bloomberg shows a frustrated finance manager. He says he wants to work on the real stuff, but they need to falsify data takes up too much of his time. Ford is said to debut and aluminum s series at next months auto show. They have asked alcoa to lend a military grade metal for the display. Alcoa makes aluminum glass shields for battle bound cars. It sequel ranks number one again in the u. S. And canada. It raked in 31 million. 2 opened a second. And we have not seen it yet. As we had to break, it is time for todays pulse number. That is how much the worlds richest lottery has paid out in spain. Gave 400,000ize euros per ticket. It is a welcome reprieve for spaniards from brutal economic problems. Welcome back to the pulse, live on Bloomberg Television and radio. To the markets. A little lighter on volumes, but lets see what is going on. Caroline hyde is going to tell us. We are Still Holding onto our gains at the moment. Spain just heading into the read. Overall, we are still higher. The dax up by almost 14 . The ftse 100 also trading up. A bullish sentiment. The imf optimistic on the United States in terms of growth. They say the budget deal in washington, the Federal Reserve starting to taper, that removes an awful lot of uncertainty. Of course, the data backs it up. Thirdquarter gdp of more than four percent on an annualized basis. That is what we got on friday. Consumer spending and Business Investment driving at higher. Credit agricole says look for the rest of the year to close on a more positive sentiment. End to have a positive trading. The stoxx 600 up. 2 overall. On the year, only one Industry Group is lower and that is mining. Everything else traded higher. Today, it is all about the financials. Thats begin with tech. Apple suppliers here in europe and arm holdings is the key one amongst them. Technology all driving higher this morning. Finally, we see apple sign a deal with china mobile. Swatch up. 3 . 400 million swiss francs coming its way from tiffany after it won some legal the negation. They could be selling premier foods could be selling shares next year. Thank you very much indeed. Up next, the Airline Industry year next a skyhigh year. What is going to take flight in 2014 . He was even a moment. Will come back to the pulse live from bloombergs European Headquarters in london. Here are bloombergs top headlines. The amnesty continues in russia. Vladimir putin has freed up ryans members with another band member expected today. This is after former oil tycoon Mikael Khodorkovsky says he will work to get other prisoners out of jail. The imf is raising its outlook for the u. S. Economy. Managing director Christine Lagarde said there is more turnkey there in 2014. She credits the budget deal in washington and the feds plan to taper its bond purchases for improving conditions. Tiffany has been ordered to pay 450 million to swatch after a joint venture between the companies failed. A dutch panel ruled tiffany was in breach of contract. Swatch claims tiffany blocked the development of the venture to create watches with tiffany branding. You have more on this now. Certainly do. Lets bring in david tweed from berlin. Tiffany will take a 300 million charge in the Fourth Quarter. Run us through what we are talking about here. Of all, this relates to a joint venture that was set up is2007 between swatch which switzerlands biggest maker of watches, not watch it plastic watches they make but they make rent including amiga. Their plan was to make a brand called tiffany and it would be sold by the joint venture. Alleged thatch tiffany was actually blocking the development of this joint venture. That is why they brought this case. ,hat we see here is this award 499 million against tiffany. As you say, quite a charge. Put that in context. Talk to me about how big that is to the companys bottom line. Lets look at the earnings. The diluted earnings for the year wh