Here’s a funny thing about your modern technology landscape: The competition isn’t quite what it seems. Although Korean tech giant Samsung and iTitan Apple both sling out new high-end, flagship smartphones every year to entice the gadget-loving consumer, under the hood it’s a bit of a “heads I win, tails you lose” situation for Samsung, which stands to win big if Apple does — because it supplies a number of the key parts that make your iPhone go.
Samsung’s got to be at least as excited for Apple’s new fancy flagship iPhone X to do well as Apple is, the Wall Street Journal reports, because it’s going to make more money from Apple than it is from its own Galaxy line of phones.
An analysis the WSJ commissioned found that over the 20 months after the iPhone X launch, the parts Samsung makes for Apple’s device are likely to generate $4 billion more for Samsung than the parts for the company’s own Galaxy S8 do.
That’s based on an estimation that Apple will sell 130 million iPhone X devices worldwide during that time frame. Each of those thousand-dollar smartphone sales sends about $110 Samsung’s way.
Samsung pockets more from each Galaxy S8, the analysis finds — about $202 — but Samsung is only expected to sell about 50 million units of the S8 line in that same timeframe. The math says that Samsung is thus going to make more revenue from the Apple phone than it will off its signature device.
Tangled Supply Chain
Although Samsung’s devices are generally selling well as the world’s top high-end Android devices, the company has been part of competitor Apple’s supply chain for years.
Samsung made more than 75% of the actual processor chips — the tiny silicon brains that make computers work — for several generations of iPhone. These days, that business falls to a different company, but Samsung still provides other components for the iPhone, including the OLED screens that make the new iPhone display so sharp and bright.
The WSJ reports that despite a long-running patent infringement lawsuit, the two companies still work closely together… although Apple is also ramping up development and production of OLED tech in-house for 2019.