In something of an ironic twist, Samsung is set to make more money from Apple’s upcoming iPhone X than its own flagship Galaxy S8.
That’s according to analytics firm Counterpoint Technology, which reckons that the Cupertino Mac-maker is so reliant on Samsung components that the Korean giant will net more cash from the parts in the new iPhone. This is largely thanks to Apple’s dependency on Samsung’s NAND flash memory chip and DRAM chip which has been ongoing for years, but in this year’s model the phone includes a pricey Samsung OLED display as opposed to the Retina screens used for the past few iterations.
But what does that all actually mean in terms of monetary gains?
Well, with the iPhone X jammed full of its parts, Samsung will reportedly pocket a profit of about $110 (around £85) per unit sold. That means if Apple sells, as believed, 130 million phones in the first 20 months that Samsung will make roughly $14.3 billion (around £10.8 billion) in profit. By contrast, while Counterpoint claims Samsung makes $202 (around £155) from each Galaxy S8 sold, it’s expected that only about 50 million units will be sold in the first 20 months.
So what that all means is that Samsung is likely to make about $10 billion (about £7.5 billion) from its own phone, with the iPhone X bringing in about $14 billion (about £10.5 billion).
Asides from the new iPhone’s buttonless display, the most eyecatching thing of the device has been its hefty price tag of £999. The cost of the components – in particular the OLED screen – go some way to explaining why the phone’s price is so high. And those component costs are somewhat unavoidable. Even if it wanted to, Apple would be hard pressed to drop Samsung as a component manufacturer.
In order to produce the volume of devices that Apple is expecting to sell, it needs a components vendor that can meet demand in terms of both quantity and quality – Samsung is pretty much the only one. It was reported in August that Samsung had committed all of its OLED display production line to the iPhone X, jumping up from 15,000 displays produced in a month to 105,000.
That’s not to say that Apple hasn’t tried to make it without Samsung. In 2014, the company attempted to use TSMC to make its iPhone chips, but the Taiwanese firm couldn’t keep up with demand. This resulted in Apple reverting back to Samsung for this iPhone iteration, as AppleInsider reported.