Samsung is slated to receive massive revenue from the iPhone X
Apple will undoubtedly make a fortune with the release of the iPhone X on Nov. 3, but it won't be the only major tech company to benefit from the phone's launch. Samsung, Apple's chief rival, also has a major stake in the iPhone X's success.
Samsung is estimated to earn about $110 for every iPhone X sold, according to analysis conducted by Counterpoint Technology Market Research for the Wall Street Journal. The reason is actually pretty simple: Samsung is the exclusive supplier of the iPhone X's new OLED displays and also provides the phone's memory chips. If the iPhone X ends up being a major hit, it could even be one of Samsung's biggest revenue sources.
Counterpoint estimates Apple will sell 130 million units through the summer of 2019, and if the phone actually sells as well as it's projected to, Samsung will earn about$4 billion more in revenue making parts for the iPhone X than it will for making the components for its own Galaxy S8 phones. The disparity is actually quite surprising.
SEE ALSO:Tim Cook thinks you should stop whining about the iPhone X's $1,000 price tagSamsung makes about $202 per Galaxy S8 sold from components alone, according to Counterpoint. The business analysis firm projects sales of about 50 million units over the next 20 months, which adds up to about $10.1 billion in revenue. Meanwhile, the iPhone X could make Samsung $14.3 billion during the same period.
Samsung's good fortune is mostly due to the prices it was able to negotiate for its OLED displays. The South Korean company is estimated to be charging Apple about $120 to $130 per display panel, according to a report from trusted Apple source Ming-Chi Kuo that correctly predicted the iPhone X's $999 starting price. The per display cost is about $75 higher than what Apple typically pays for LCD displays from other suppliers.
Samsung relies heavily on its component business for revenue. Last year, Samsung's component business made up about 35 percent of the company's $195 billion revenue last year, according to the Wall Street Journal. Of course, that could change if Apple finds other suppliers.
Apple is rumored to be exploring the OLED screens from LG Display, and others claim that Apple might eventually build its own OLED facility. Future versions of the iPhone might even use new LCD tech from Japan Display for the edge-to-edge screen design, according to the latest rumors.
For now, though, Samsung will reap massive benefits from the iPhone X launch, and the company has the Note 8 on the market, too. So when it comes to smartphone sales, Samsung just can't lose.
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