Samsung will get more money from iPhone X sales than from Galaxy S8

Experts believe that Apple will be able to sell more than 130 million iPhone X in about 20 months. Samsung will earn about $ 110 on each sale. South Korean company makes less money selling its own Galaxy S8



Partnerships between different technology companies are so interesting that you can write books and make films about it (which, in fact, some writers and directors do). If you take the development and manufacture of the phone, then no company in the world can cope with this on their own (if we are talking about complex smartphones like the iPhone or Galaxy S8). Chips are made by one company, screens - another, protective glasses - the third. Someone else is engaged in the final assembly of components. The complete chain of development and sales is very complicated, and not only purely technologically, but also organizationally.



In principle, even if someone wanted to develop everything on their own, this is hardly a real task, since technology giants own patents on key technologies and forbid each other to produce similar things. If we take the real situation, there is also the issue of volumes. So, no company in the world, except Samsung, is able to produce and supply for the same Apple as many displays, NAND, DRAM chips as it needs. Inveterate competitors actually turn out to be business partners who have very close cooperation. And while the South Korean company earns on the sale of the iPhone X more than Apple.



At Samsung, the supply of components for electronic devices is a very significant part of the business, which brings the company about 35% of its revenue. Apple is one of the largest customers for Samsung.



Each iPhone X sold by Apple will bring Samsung about $ 110. Experts believe that in 20 months after the start of sales of the flagship Apple, Samsung will receive about $ 14.3 billion in revenue. Over the same period, revenue from sales of the Galaxy S8 will be approximately $ 10.1 billion.



What is interesting, despite all the litigation, both companies have been operating for more than ten years. Just ten years ago, the grandson of the founder of Samsung agreed with Steve Jobs on the supply of memory chips for the iPod. Since then, cooperation has only expanded, it has acquired new forms, the South Korean company has begun to supply not only components for the iPod, but also electronic elements for other Apple products, plus screens for the company's phones.



Samsung’s current capabilities are the production and supply of about 130 million 5.8-inch OLED displays per year. But this is a purely theoretical possibility; in practice, a corporation will be able to produce about 40% less screens. Nevertheless, this should be enough for the uninterrupted release of the iPhone X. By the way, it is not yet known how popular and marketable this phone will be, since the same “eights” have not been bought up by anyone yet. This time there were no usual queues, people who occupy a place in the queue to buy a phone many days before the start of sales. In general, no rush, so it may well happen that Apple does not need as many displays.



When asked about their attitude towards Apple, Samsung executives answer that everything is fine, because the corporation from Cupertino is the best customer. In the process of working on various Samsung components to the customer, Apple, given code names. This is, for example, “favorite opponent” (LO, Lovely Opponent). Despite this, in 2011, both companies entered into open conflict, which dragged on for many months and was not resolved until the end. Then Jobs called this problem a "thermonuclear" legal war.





This conflict has led to the fact that sales of devices of the participants in the litigation were prohibited alternately in different countries. And in South Korea, the Seoul District Court at one time and generally banned selling devices and Apple and Samsung. The judge decided that both companies were guilty of violating each other’s patents.



Experts believe that Samsung is now completely dictates the terms of supply of Apple. In this case, the American company can not do anything, because the same OLED-displays installed in the iPhone X, no one else is able to produce, especially in such quantities as Samsung does. As a result, the price of a single screen for Apple is $ 120-140, while the screens for the iPhone 7 Plus cost the corporation $ 45-50.