Economist 2/27/15

  1. Xiaomi’s worldwide sales were 61m handsets last year, a rise of 227% on the year earlier, making it the sixth-biggest mobile-phone firm in the world. In China, Xiaomi had leapt ahead of all its rivals, foreign and local, by the final quarter of last year, to become the top-selling brand of smartphones.This year Mr Lei wants to sell 100m units worldwide.Last year it began selling phones in a few South-East Asian markets, including Singapore. It also struck a deal with Flipkart, India’s leading e-commerce firm, to sell handsets in that market.Profitability is also a big concern. Xiaomi, still private, releases few details of its finances.Even the firm admits it has enjoyed higher margins from selling millions of fluffy promotional toys.Unlike its more experienced local rivals, Lenovo (which has bought Motorola’s smartphone division from Google) and Huawei, Xiaomi does not have a huge patent portfolio.Given these obstacles, why is Samsung still worried?Its best handsets are not quite as good as Apple’s or Samsung’s best, but they are far better than those from other, cut-rate rivals—and they cost half what an unsubsidised new iPhone does.The other reason incumbents should worry about Xiaomi is its financial firepower. Some reckon that this latest investment, which values it at $45 billion, makes the Chinese upstart the world’s most valuable startup.
  2. Between 1877 and 1950 almost 4,000 black southerners were lynched, according to a new report by the Equal Justice Initiative (EJI), a human-rights group. That is 700 more than previously reported. During the days of Jim Crow, a black man could be murdered for speaking “disrespectfully” or for knocking on the door of a white woman’s house.Georgia saw more such murders (586) than any other state, followed by Mississippi. Tyrone Brooks, a member of Georgia’s House of Representatives, has spent years researching the lynching at Moore’s Ford Bridge with the Southern Christian Leadership Conference (SCLC), after past investigations went nowhere.On February 13th he sent a letter to Charles Grassley, chairman of the Senate Judiciary Committee, asking for an investigation and hearings into what happened.His campaign is unlikely to get far.
  3. AS THE peninsula this year marks 70 years since its division, South Korea’s president, Park Geun-hye, is pushing the idea of unification as a “bonanza”. For the North, whose minuscule economy is roughly 40 times smaller than that of the South and is only beginning to show signs of reform, that would certainly be the case. But what of South Korea’s gains? The costs of reunion will be staggering—by conservative estimates about $1 trillion, or three-quarters of annual GDP. Its social-security system would need to provide for 25m Northerners, many of them brutalised and malnourished, and including tens of thousands of prisoners in the North’s gulag.Yet the South would also merge with a population that is younger and has almost twice as many babies. That would be a demographic boon, as South Korea’s working-age population begins to shrink from 2017. Disbanding the North’s standing army, the fourth-largest in the world, would free up workers. In total, about 17m workers would join the South’s 36m—though admittedly with far lower skills and education.Under Japan’s occupation from 1910 to 1945, Korea’s industrial heartland lay in the north, and therefore North Korea has more railroads than the South.Under the Japanese, Pyongyang (now the North’s capital) was also a thriving centre of Protestant Christianity. Indeed the parents of Kim Il Sung, North Korea’s first dictator, were devout Christians.
  4. People may be buying fewer takeaway burgers, but they have a growing appetite for pizza, from both independent pizzerias and pizza chains. One of them, Domino’s Pizza, saw its global sales jump by 14% in the last quarter of 2014, compared with a year earlier. Sales outside the United States grew for the 84th consecutive quarter. Pizza has long been a favoured form of inexpensive fast food in Italy, where people started putting tomato on flatbread sometime in the 18th century.Demand boomed after the second world war, thanks to returning American soldiers, who had gained a taste for pizza in Italy.But the secret ingredient that keeps consumers hooked on pizza is menu innovation. Pizza chains are constantly coming up with alluring new variations of their product to maintain consumers’ interest and loyalty.
  5. THE announcement on February 24th by the British prime minister, David Cameron, that Britain is to send 75 military trainers to Ukraine next month has been interpreted by some commentators as an escalation of Western attempts to deter Russian aggression. In fact, the deployment was agreed during NATO’s summit in Wales last September along with a range of other support measures. About 800 American troops will also be arriving in western Ukraine in March to train three Ukrainian battalions in battlefield tactics.According to NATO, five other member countries are thinking about sending in trainers, while Canada and Germany have also agreed to help upgrade the Ukrainian army’s antiquated command and communications systems.However, pressure is growing from Congress for lethal aid. On February 10th the Republican chairman of the House Armed Services Committee, Mac Thornberry, and the ranking Democrat, Adam Smith, introduced legislation calling for a $1 billion package of immediate lethal defensive aid to help Ukraine.A range of equipment is being considered to enhance the Ukrainian army’s ability to inflict heavier costs on the aggressor. These include: light anti-armour missiles; counter-battery radars to identify and target the Grad rockets and artillery that are responsible for about 70% of Ukrainian casualties.The war is losing popularity in Russia and Mr Putin might not want to deal with the political consequences of increased numbers of Russian soldiers returning home in body bags.
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