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Apple and Samsung end fight, but tech has long since evolved

Services, not hardware, now central to competition as Chinese players rise

Samsung Electronics and Apple still lead the smartphone market, but they have lost ground to Chinese competitors in recent years.

PALO ALTO, U.S. -- While Apple and Samsung Electronics have settled their seven-year dispute over smartphone technology, a changing landscape has robbed what was once called the "patent trial of the century" of much of its significance.

Thursday's move to lay the matter to rest comes a month after the district court in San Jose, California, awarded Apple $539 million for patent infringement by Samsung. "This case has always been about more than money," Apple said in a statement after that verdict.

"It is important that we continue to protect the hard work and innovation of so many people at Apple," the statement said. The U.S. was the last front in the two tech companies' legal battle.

The row began in April 2011, when Apple took Samsung to court in the U.S. for allegedly copying the basic design and user interface of the iPhone. Samsung quickly countersued in countries including Japan and South Korea, claiming that the American company infringed on mobile technology patents. The legal battle eventually spanned courts in 10 nations.

The dispute proved valuable to Samsung, which was then starting to pull ahead of the iPhone maker. Executives at the South Korean company gloated each time the press billed the battle as Apple vs. Samsung, putting the two on an even footing.

The fight escalated as it did because it revolved around a technology that was beginning to change how people lived and worked. Annual global smartphone sales in 2011 came to around 500 million units.

By 2014, when the two agreed to drop all lawsuits outside the U.S., the market had grown to 1.3 billion units, but low-cost Chinese rivals such as Huawei Technologies and Xiaomi had started to encroach on the duopoly.

The situation has only changed further since then. Global sales shrank for the first time last year -- a sign of a maturing market -- while Huawei, Xiaomi and Oppo together shipped more phones than market leader Samsung. With devices growing increasingly commoditized, consumers in developed markets are waiting longer between upgrades.

Samsung's global market share in smartphones came to 21.6% last year, versus Apple's 14.7%, according to IDC. Huawei was hot on the iPhone maker's tail, with 10.4%. 

It is no longer a surprise when Chinese players outdo the big two in terms of features. Huawei announced at Mobile World Congress Shanghai this week that it will release a phone compatible with fifth-generation, or 5G, wireless service in mid-2019.

Smartphones are also being eclipsed by services as an economic driver. The furor over Facebook's mishandling of user data and targeted advertising stems from its enormous influence. Parts makers such as U.S. chip supplier Qualcomm have also garnered more attention over the past seven years.

Xiaomi, too, is looking beyond phones, with CEO Lei Jun calling the company "a new species" ahead of its $6.1 billion initial public offering.

Services such as apps and music make up a growing share of Apple's profits. CEO Tim Cook has been using the term "ecosystem" more often recently: the iPhone has become a gateway for accessing services and other devices such as smartwatches and smart speakers.

With smartphones now a part of everyday life, even the most cutting-edge models spark less excitement than they once did. To stave off decline, smartphone makers must focus on how consumers use their products. The end of the Apple-Samsung fight is another sign of the waning importance of hardware.

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