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Economy

The Apple-Samsung War Turns 10

The two tech giants are engaged in an all-out struggle for market supremacy. Samsung may sell more smartphones, but Apple generates more profit. Where will each turn next?

Stop fighting already
Stop fighting already
Fabienne Schmitt

PARIS — Come September, with the simultaneous release of the iPhone 7 and Galaxy Note 7, tech giants Apple and Samsung will launch the next great battle in their now decade-long war for smartphone supremacy.

Together, the companies dominate the market, though in terms of units sold, Samsung has a clear edge right now over its U.S. competitor. So far this year, the Korean brand has sold 324.8 million smartphones. Apple cleared 231.5 million. The gap widened in the first quarter with a strong drop in iPhone sales.

The trend marks a reversal of fortune for Apple, which kicked off the war in 2007 with the launch of its first iPhone and maintained its edge over Samsung for years. It may also be the reason that Apple, which has been buying chips from Samsung for its iPhones and iPads, decided for its new phone — the iPhone 7 — to employ the services of TSMC, a Taiwanese company.

Samsung may sell more smartphones than Apple, but in terms of revenue or profit, the U.S. company dominates. "Samsung generates 15 to 20% of operational profit on its top-end smartphones, while Apple makes doubles those figures, according to estimates," says Leslie Griffe de Malval, an analyst from Fourpoints.

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Photo: Eduardo García Cruz

Unlike Apple, which concentrates on high-end products, Samsung has a whole range of smartphones, including basic and mid-range products. The Korean also depends less on its smartphones than does Apple, which earns two thirds of its revenue from iPhones.

On the stock exchange, the market capitalization gap that had widened between the two countries since the advent of the iPhone has significantly tightened in recent months, from approximately $600 billion in 2015 to $328 billion.

The telephone titans also compete over intellectual property. In 2012, Samsung lost a $1-billion patent case against Apple. But two years ago, the old enemies buried the hatchet by putting an end to their respective judicial proceedings, except in the U.S. And in the license field.

Another front in their decade-long war is the public relations field. Samsung, the master of media hype, has become, over time, one of the largest advertisers in the world, with public relation budgets that reach billions of dollars. It even began using comparative advertising against Apple, mocking the latter's products in favor of its own.

Apple may spend less than its Korean rival on advertising, but still leads the battle of the brands. The U.S. firm has long stood out for its stellar marketing and iconic product launches, every September, that its competitors still can't seem to match.

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FOCUS: Russia-Ukraine War

The Real Purpose Of The Drone Strikes Inside Russia? A Decoy For Ukraine's Counterattack

Putin is hesitant to mobilize troops for political reasons. And the Ukrainian military command is well aware that the key to a successful offensive lies in creating new front lines, where Russia will have to relocate troops from Ukraine and thus weaken the existing front.

The Real Purpose Of The Drone Strikes Inside Russia? A Decoy For Ukraine's Counterattack

Police officers stand in front of an apartment block hit by a drone in Moscow.

Anna Akage

This article was updated at 8 p.m. local time May 31 with reports of new strikes inside Russia

-Analysis-

On the night of May 30, military drones attacked the Russian capital. There were no casualties – just broken windows and minor damage to homes. Ukraine claims it had nothing to do with the attack, and it is instead the frenzied artificial intelligence of military machines that do not understand why they are sent to Kyiv.

While the Ukrainian president’s office jokes that someone in Russia has again been smoking somewhere they shouldn’t, analysts are placing bets on the real reasons for the Moscow strikes. Many believe that Kyiv's real military target can by no means be the capital of Russia itself: it is too far from the front and too well defended – and strikes on Russia, at least with Western weapons, run counter to Ukraine’s agreements with allies, who have said that their weapons cannot be used to attack inside Russia.

Eight apartment buildings, four homes, a school and two administrative buildings were damaged during the shelling in Shebekino, a village in the border region of Belgorod, its governor said, as the oblast increasingly becomes a hotbed of straying violence.

On Wednesday, new reports of a “massive” shelling attack inside Russia's borders that injured at least four people in Belgorod and a drone sparked a fire at an oil refinery further south.

If the goal is not directly military, maybe it is psychological: to scare the residents of the capital, who live in a parallel reality and have no idea how life feels for Ukrainian civilians. Forcing people to live with this reality could push the Kremlin to retreat, or at least make concessions and negotiate with Kyiv. If neither sanctions nor the elite could sober Vladimir Putin up, could angry Muscovites?

But neither Russia's military command nor its political leadership depends on the opinion of citizens. And there are enough special forces in Moscow to crush any mass protest.

Laying bare Russian President Vladimir Putin’s inability to guarantee his country's security, in front of Russia’s remaining international partners or among the country’s elites, is also an unlikely goal. The Russian army has already seen such embarrassing failures that a few drone strikes on the Kremlin can’t possibly change how Putin is seen as a leader, or Russia as a state. So why would Kyiv launch attacks on Moscow?

Let's go back to the date of the shelling: May 29 is Kyiv Day, a holiday in the Ukrainian capital. It was also the 16th attack on Kyiv in May alone, unprecedented in its scale, even compared to the winter months when Russia had still hoped to cut off Ukrainian electricity and leave Kyiv residents, or even the whole country, freezing in the dark.

The backdrop: the Ukrainian counter-offensive to liberate the occupied territories, which is in the works, if not already launched.

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