Samsung will earn around $110 for each iPhone X sold – component analysis

Totting up the cost of the Samsung-made components believed to be used in the iPhone X suggests that the Korean company will earn around $110 for each one sold.

The highest-profile Samsung component in the iPhone X is also the most expensive: the new OLED screen. This is a custom-made display built to Apple’s specifications. But the company also makes a range of other components for use in iPhones …

The Counterpoint Technology Market Research conducted for The Wall Street Journal says that Samsung also makes batteries and capacitors for the new flagship iPhone.

The analysis notes an irony here:

Samsung is likely to earn about $4 billion more in revenue making parts for the iPhone X than from the parts it makes for its own flagship Galaxy S8 handset.

It’s not quite a fair comparison, for a couple of reasons. First, it’s only looking at the money earned by Samsung’s component division, not the profit that Samsung Mobile will make when it sells the Galaxy S8. Second, as the piece notes, it reflects predicted sales for the two handsets.

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.

In other words, because Samsung makes more components for its own smartphone than it does for the iPhone, it makes more money from each sale – but because the iPhone X is expected to sell in far higher volumes, the total value of component sales will be higher for the iPhone.

And if you needed any more illustration of how much Samsung is dependent on Apple business, investment bank CLSA estimated that the iPhone maker’s component orders make up more than a third of Samsung’s revenue.

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