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Samsung and Apple are usually rivals, trying to outsell each other’s flagship smartphones. While this is still the case with the two companies’ current lineups, the South Korean giant now has a lot to gain if the iPhone X sells well. Apple is basically buying components from Samsung, which could be worth billions to the Galaxy S8 maker.
According to a Wall Street Journal report, Samsung will make $110 with each sale of the iPhone X. This is due to the fact that the Apple smartphone is using an OLED screen that the company can only get from its rival. To be more specific, however, the profit will actually go to Samsung’s components manufacturing arm and not Samsung Electronics, the maker of the Galaxy line of phones.
The other parts that Apple is getting from Samsung include the NAND flash and DRAM smartphone chips that power the iPhone X. While there are other manufacturers that sell such parts, none of them do so at the same capacity and consistency in quality as Samsung.
The WSJ also points out that this particular part of Samsung’s business makes up about 35 percent of its total revenue. As such, the South Korean giant might actually make more from the iPhone X than it does with its own smartphones.
As to how much money Samsung is going to make from the iPhone X, analysts predict that it will be around $14 billion in two years, Forbes reports. In comparison, the Galaxy S8 is only expected to make about $10 billion over the same time period.
So, what this development makes absolutely clear is that there is no such thing as absolute competition in the tech industry. Rivals can also be the most profitable of business partners under the right circumstances. In the case of Samsung and Apple, it’s a billion-dollar compromise.
