First thing first
Now that you are wondering how this is possible for Samsung to earn from competitors sale. As they are the top notch brands competing with each other. Let us put more light and logical reasoning to it.
The Wall Street Journal claimed, based on analysis by Counterpoint Market Research has more to say on it. They got us more details on the complex business relationship that exists between Apple and the South Korean manufacturer (Samsung). Earlier Apple has also sued Samsung in 2016. And been engaged in a lengthy legal battle even though continuing to conduct business with them.
“Counterpoint 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,” claims The Wall Street Journal.
Counterpoint has also suggested that Samsung will make “$4 billion more in revenue making parts for the iPhone X”. Than for its Galaxy S8 handset in the first 20 months, totaling $14.3 billion from iPhone X sales, and $10.1 billion from estimated Galaxy S8 sales”. According to The Wall Street Journal, the company stands to make around $110 from each phone which will be sold. Which could result in billions more than the company even made on its very own most-recent flagship, the Galaxy S8.
How Samsung benefits
The only leverage that Samsung is able to take is by its curved AMOLED display. Majority of Apple Phones has IPS LCD display technology. Apple been keen to utilize a curved display for its “flagship” iPhone product, it had to employ a good quality LED panels and Samsung being the only supplier of high-quality mobile OLED displays capable of meeting Apple’s huge unit demands has a advantage working in their favor. It not only made the OLED display,but also the NAND flash and DRAM chips in the iPhone. It’s currently the only company capable of manufacturing these items at a volume to satisfy Apple needs, which means Apple currently has to buy the parts from Samsung.
The strategy which benefited Samsung’s Semiconductor and Display businesses brought in more than 78 trillion. Has won of its 201 trillion won total Samsung Electronics sales, and also accounted for more than half of Samsungs total operating profit. Now Samsung has to indeed focus and work hard to maintain Apple’s continued reliance on it.
It is already in plans to building the world’s largest OLED factory. Which may add to its efforts for retaining apples business. But no doubt that other companies are aware of the opportunity. Apple which would not give much preference in making profits for its main rivals, and that may lead to a whopping components contract with someone else (some Chinese firms are already said to be making a play in this regard is what is also in the air).
