Samsung, the sole provider of sophisticated OLED panels to Apple, will earn an estimated $110 on each iPhone X sold through the summer of 2019, according to an analysis conducted by Counterpoint Technology for The Wall Street Journal.
In the first month of the iPhone X debut, Counterpoint expects Apple will sell 130 million iPhone X units, earning Samsung $110 on each through the summer of 2019. By comparison, 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.
The analysis includes parts sales from Samsung Electronics plus two Samsung affiliates that make batteries and capacitors. All told, Samsung is projected to earn $4 billion more in revenue making iPhone X parts than from the parts it makes for its own Galaxy S8 handset.
Here’s an interesting excerpt:
At meetings, Samsung executives are known to tell attendees who pull out iPhones: “It’s OK. They’re our best client,” according to people familiar with the matter.
Samsung employees often refer to Apple with code names. One of the most popular is “LO,” short for “Lovely Opponent,” people familiar with the matter said. Apple’s descriptor for Samsung, meanwhile, is Samsung, according to people with knowledge of the situation. Employees at the iPhone maker are often critical of its rival’s devices, pointing out software and hardware flaws behind closed doors.
Aside from OLEDs, Apple also buys NAND flash chips from Samsung.
As the world’s leading OLED panel producer for smartphones with a 95+ percent market share, small wonder that Samsung Electronics, the company’s components-making arm, has leveraged its dominant position to charge a premium for OLEDs.
With per-unit OLED panel cost three times that of an LCD panel, it doesn’t come as a surprise that iPhone X will boost Samsung’s bottom line—according to KGI Securities analyst Ming-Chi Kuo, Apple is paying an estimated $120-$130 per Samsung-made OLED panel unit versus the average $45-$55 unit cost of LCD panels.