Samsung To Make Additional $4 Billion By Supplying iPhone X Components to Apple

iPhone X Gestures - No Home button

As per research firm Counterpoint Technology, Samsung will reportedly make over $4 billion by supplying iPhone X parts to Apple. The analysis expects Samsung to generate $4 billion in revenues within the first 20 months of the iPhone X going on sale.

The firm arrived at the 20 months timeframe on the assumption that major sales of a new smartphone occur within the first 20 months of its availability. Counterpoint expects Apple to ship 130 million units of the iPhone X through the summer of 2019, with Samsung expected to earn $110 on every unit sold. For comparison, the Galaxy S8 is expected to ship 50 million units with Samsung earning $202 from each unit thanks to the various components used inside it like the chipset, display, NAND storage, and more.

Samsung will be supplying Apple with the 5.8-inch OLED display and NAND chips for the iPhone X which would add billions of revenue to its bottom line. With Apple charging a premium for the iPhone X and Samsung, in turn, charging Apple a premium for the OLED display of the iPhone X, both of them are expected to be among the most profitable companies in the world in 2017. No wonder Samsung employees refer to Apple as LO a.k.a “Lovely Opponent.” As for Apple, the company’s employees heavily criticise Samsung’s phones behind closed doors for their poor software and hardware performance.

Despite intense rivalry between Samsung and Apple in the smartphone market, Apple’s reliance on the Korean company has only increased in recent years. Right now, Samsung is the only company capable of producing high-quality bezel-less OLED panels on a scale that can fulfill Apple’s requirement. Similarly, the Korean company is the only one that can mass produce NAND chips without any reliability issues. Apple is trying to reduce its reliance on Samsung and is trying to set up an alternative OLED supply-chain for itself. The company is reportedly in talks with LG Display, and it is even ready to invest a few billion dollars in the company to help it in setting up an OLED factory. Similarly, the Cupertino company is a part of the consortium that is bidding for Toshiba’s NAND chip business. By acquiring Toshiba’s NAND business, Apple hopes to secure itself a steady supply of NAND chips thereby reducing its reliance on Samsung.

[Via WSJ]

Like this post? Share it!