SIMON YEUNG, media analyst with Lippo Securities, sounds almost biblical when he describes the Chinese language newspaper market: 'The weaker will become weaker and the stronger will become stronger.' It is a worn adage but one that looks ever more appropriate for the war-weary sector. Apple Daily and Oriental Daily News may have been at loggerheads over the past six months in a costly and harmful price war, but as the battle-cries die, both find themselves in a strong position to reap the spoils of victory. Both sought to inflict damage on one another, yet ironically both could end up winners, at the expense of other competitors. The fight has cost many jobs, hundreds of millions of dollars and the loss of five publications, but analysts say that with other competitors wounded and limping, the big two now find themselves in a healthy position to pump up their cover prices and advertising rates. Giordano International founder Jimmy Lai, having recently sold his stake in the clothing firm for $1.45 billion, has put himself in a financially sound position to personally assure Apple Daily 's survival, if necessary. Meanwhile, Ma Ching-kwan, though he has not managed to kill off his new-found rival, has inflicted enough damage to keep Apple Daily in second place - for the time being at least. It is the other papers that got caught in the crossfire that are suffering and in a weak position to stage any comeback. Having lost out on readership, income from cover sales and advertising, some lack the wherewithal to pump fresh resources into editorial and stage a comeback in an ever-more competitive field. Readers initially reaped the benefits of the price war by picking up papers for as little as $1 or $2, as opposed to the former standard $5 price. As the prices creep back up, they no doubt will have to pay. When Mr Ma's Oriental Daily News and competitors such as Hong Kong Daily News slashed prices in December, Mr Lai tried his best not to respond. Being only an infant, Apple Daily needed the income from its cover price to help meet its hefty start-up costs. However, as the others quickly began to steal back readers from him and boost circulation, he felt obliged to join in, if only modestly. When he finally did cut Apple's price by $1 to $4, he boldly and publicly made a promise to his readers to maintain that price until at least the transfer of sovereignty. Last week he ate his words and lost face, printing a full-page apology to his readers explaining that at the end of the month he would be increasing the price to $5. Mr Lai could have carried on ploughing in his own money, but at the end of the day he thought it more important to try to bring forward the day the paper would break even. Not until that happens can he realistically contemplate a public listing for Next Media Group, which includes the highly popular and controversial Next magazine. And analysts believe that not until he does that will Apple Daily 's long-term future be secured. This, suspects Mr Lai, was Mr Ma's ulterior motive in mounting the price war. Analysts say Mr Lai, who is not exactly popular in Beijing, also faces a race to try to list the group before the transfer of sovereignty By doing so, he not only would earn himself a windfall, but also possibly would make it more difficult for China to attempt to close his publications in the event of any political fall-out. Mr Ma responded by announcing the Oriental Daily News also would increase its cover price by $1 to $4, gloating in an editorial in his Eastern Express last week: 'The longer a price war is, the more casualties are likely. Those that remain will be more fit to face the real challenge of the post-1997 political climate.' Lippo's Mr Yeung expects Oriental Daily News also will put its price back to $5 before the end of this year, and predicts it will rise to $6 in 1997. No one gained financially out of the price war, except of course the readers. Mr Lai conceded last week that his newspaper, launched on June 20 last year, had suffered $600 million in losses. However, he said the imminent price rise would boost monthly income by $9 million. When Hong Kong Daily News cut its price to rock bottom $1 a copy, it gained in circulation but lost on the bottom line. 'It acted as an incentive for people to go out and buy their own copy of the paper and not to wait for someone else to bring one home,' the director of media research at Survey Research Hong Kong, Steve Garton, said. For every paper sold for $1, a publisher would need to give another $1 to the news vendor to pay his costs, a senior newspaper executive said. At $2 a copy, most papers could just about cover their printing and distribution costs, but would not make any revenue, the executive said. With lower prices, circulation shot up as readers took advantage of lower prices to buy more papers. Some readers regularly bought two a day. At the same time, publishers were struck by a sharp escalation in worldwide newsprint costs which had climbed 100 per cent in two years. Only now are paper prices starting to subside. Those that entered the price war suffered greatly from subsidising their print runs. Those who stayed out of the war and retained their price levels, lost out on readership, which in turn impacted on advertising. 'It's been a costly learning experience,' one executive said. For the Express News and United Daily News , it all became too much and owners called it a day. As Oriental Daily News increases its cover price, its circulation may fall - by 5-10 per cent for every $1 rise, say analysts. However, this could be more than compensated for by increased sales revenue and cheaper print runs. Before Apple Daily was launched, Oriental Daily News was said to have a readership of 1.69 million people over the age of nine. By the time the price war began, this was said to have been whittled to about 1.42 million as Apple Daily stole readers across the board with its sharp racy coverage. In March, Survey Research Hong Kong estimated Oriental Daily News had recovered to hold 28 per cent market share, with 1.513 million readers over nine. Apple Daily was said to hold 25 per cent with 1.359 million readers, with other rivals a long way behind. Both the leaders now are expected to concentrate on making money rather than spend it fighting each other. A string of buy recommendations have gone out on Oriental Press Group shares over the past week, as investors smell better times ahead. With the Hong Kong economy coming back, advertising should pick up, and the Oriental Daily News in particular is likely to benefit from the recent recovery in the property sector. Li Ka-shing's Cheung Kong (Holdings) is said to be boycotting Apple Daily after a string of unfavourable stories on his family. Apple Daily meanwhile still could see its circulation rise to further challenge Mr Ma. Its contract printer PPG is said to be installing new press units which will enable the paper to increase its print run by 10 per cent. A media analyst with UBS, Kaushik Shridharani, says Apple Daily has been held back not by the lower cover price for Oriental Daily News but because it cannot print enough copies to meet demand. Also, construction work is under way for Apple Daily to open its own printing plant in Tseung Kwan O next year, which will double its print-run capacity. With that in mind, Mr Shirdharani bullishly says: 'I am of the view that next year Apple Daily will be the number one paper.' With improved circulation and revenue, both Apple Daily and Oriental Daily News will have more resources to dedicate to improving their products. Meanwhile, more of their competitors may fall by the wayside, analysts say. Whichever paper ends up in the top slot, one thing is for sure: the Chinese-language newspaper market will never be the same.