The iPhone X – the top-of-the-line new iPhone – will be a bigger moneymaker for smartphone rival Samsung than its own flagship Galaxy S8, new research has claimed.
Samsung is on course to earn around $4 billion (roughly £3 billion converted) more in revenue making parts for iPhone X than from the parts it builds for its own Galaxy S8 handset.
According to research conducted by Counterpoint Technology for The Wall Street Journal, the NAND flash memory chips and OLED display used in the iPhone X will be hugely profitable for Samsung.
Counterpoint Technology based its prediction on projected sales in the 20 months following the launch of the iPhone X on November 3rd 2017.
According to the industry analysis company, that timeframe was picked because the majority of sales for a new smartphone model will occur within the first 20 months after its launch.
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Counterpoint Technology said it “expects Apple will sell 130 million iPhone X units, earning Samsung $110 on each through the summer of 2019, while Galaxy S8’s global sales are expected to be 50 million, earning Samsung $202 each from components such as displays and chips in its first 20 months of sales, according to estimates based on a projected bill of materials.
“The Counterpoint analysis includes parts sales from Samsung Electronics plus two Samsung affiliates that make batteries and capacitors.”
Apple and Samsung will become the most profitable profitable companies in the world this year – excluding Chinese banks, according to S&P Global Market Intelligence.
Samsung remains the only company will the capacity to fulfil an OELD display order of the magnitude Apple is purported to have placed ahead of the iPhone X launch.
The South Korean firm is also one of a small number of semiconductor manufacturers that can make large amounts of NAND flash memory.
According to the Wall Street Journal, “At meetings, Samsung executives are known to tell attendees who pull out iPhones: ‘It’s OK. They’re our best client,’ according to people familiar with the matter.
“Samsung employees often refer to Apple with code names. One of the most popular is ‘LO,’ short for ‘Lovely Opponent,’ people familiar with the matter said.
“Apple’s descriptor for Samsung, meanwhile, is Samsung, according to people with knowledge of the situation.
“Employees at the iPhone maker are often critical of its rival’s devices, pointing out software and hardware flaws behind closed doors.”
Prominent KGI Securities analyst Ming-Chi Kuo, who has an almost-faultless track record when it comes to Apple products, believes the OLED iPhone panel supply is “controlled wholly by Samsung”.
This monopoly may have contributed to the upcoming smartphone’s eye-waveringly £999 price tag.
In a bid to reduce its dependency on Samsung, Apple recently injected $2.67 billion into LG’s OLED production for smartphones, The Investor has claimed.