Report: Samsung to Make $4 Billion More in Revenue from Components in the iPhone X than S8
With the new iPhone X scheduled to be release soon, an analysis from Counterpoint Technology was done on behalf of The Wall Street Journal. According to their report, Samsung is expected to earn $4 billion more in revenue thanks to the components Apple is using in the iPhone X than if the company was to use them in the Galaxy S8 and S8+. This is despite the fact that Samsung earns more per component from their own sales than they would earn from Apple.
Samsung is under contract from Apple to supply both OLED panels as well as NAND flash memory chips for the new iPhone X. According to research from Counterpoint Technology, Apple is expected to sell about 130 million iPhone X devices worldwide. Each of these devices are said to give Samsung $110 for the OLED panel and the NAND flash memory chip it uses. This accounts for almost half of what Samsung earns in revenue for those components when they’re sold in the Galaxy S8 and the Galaxy S8+.
The report says Samsung will earn about $202 in revenue from those components that are used in the Galaxy S8 and the Galaxy S8+. So even though the company is earning more per unit from their own device sales, Apple is expected to sell a lot more iPhone X units than the S8/S8+ will sell. So naturally, it makes sense that the company will earn an estimated $4 billion more through the summer of 2019 from their contract with Apple.
Apple doesn’t generally like to source components from one particular company and just like Google, they have invested in LG for their OLED hardware as well. Not only will it benefit Apple in having another source of OLED panels for their products (to help keep prices down), but it also allows them to expand capacity and possibly use OLED for all of their future iPhone devices.
Source: The Wall Street Journal
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