Samsung forecasted record profit and sharply increased revenue in an earnings guidance release on Friday. Samsung expects its operating profit to increase 72% to $12.1 billion and revenue to rise 18% to around $52 billion.
Samsung is best known as a brand that sells phones like the Galaxy S8. But its most profitable division actually sells parts, like screens and memory chips, to companies including Apple.
In fact, Samsung is reported to be the only supplier of the new next-generation OLED screen that will be a key selling point of the iPhone 8.
Wall Street analysts expect Apple’s iPhone 8 to be a sales monster, with a new design and a backlog of loyal customers waiting to upgrade spurring a “super cycle” of sales. If Apple plans to launch the iPhone in September, it’s probably already taking shipments of parts from its suppliers, including Samsung.
“Final June sales for our Apple Monitor rose by 18% month-over-month and well above the average decline of 2% over the past twelve years. This compares to the five year average decrease of 7% and a 2% increase in June 2016,” Drexel Hamilton analyst Brian White wrote in a note looking at Apple’s suppliers that he calls “Apple Monitor.”
“We believe the initial ramp of certain components for the new iPhones this fall, combined with recently launched Macs and iPad Pros, contributed to this performance,” he continued.
Samsung’s operating profit this quarter may even top Apple’s for the first time. Analysts estimate Apple’s operating profit this quarter at $10.52 billion, according to Bloomberg data.
So even though Samsung‘s vice-chairman and heir apparent Lee Jay-young is on trial for his role in an alleged corruption scheme, the company continues to deliver huge results.
Samsung will announce its actual earnings at the end of the month. Apple’s earnings report is scheduled for August 1.
Qualcomm is trying to ban iPhones from being sold in the US
In the latest escalation of its global legal fight with Apple, Qualcomm is asking the US government to ban new iPhones from coming into the country. It also wants sales halted on iPhones that have already made their way in.
Qualcomm says that Apple is violating six patents that have to do with extending a phone’s battery life. None of the patents are essential to a standard, Qualcomm says, which means it isn’t required to license them — as it is with the other patents the two companies are in disagreement over.
The complaint is being filed with both the the US International Trade Commission and the US District Court for the Southern District of California, where the two companies’ other claims are being hashed out.
“Qualcomm’s inventions are at the heart of every iPhone and extend well beyond modem technologies or cellular standards,” Don Rosenberg, Qualcomm’s general counsel, says in a statement. He also says, “Apple continues to use Qualcomm’s technology while refusing to pay for it.” Qualcomm even put together an infographic to explain what the six patents are used for.
Today’s filing was an expected escalation in the dispute between Apple and Qualcomm, which kicked off at the beginning of this year. After the Federal Trade Commission began suing Qualcomm for anti-competitive practices relating to sales of its smartphone modems, Apple filed its own lawsuit alleging much the same thing.
Apple has since expanded that suit to two other countries, while Qualcomm has filed its own lawsuits in an effort to strike back at Apple and its suppliers.
Apple claims that Qualcomm is charging “disproportionately high” fees for the use of its patents and abusing its position as the market leader in smartphone modems. Qualcomm is the primary supplier of LTE modems; if a company like Apple wants to ship a lot of smartphones, it pretty much has to cut a deal with Qualcomm, giving the company a lot of leverage. Many of those patents, however, are “standard essential,” which requires them to be licensed at a fair and reasonable rate.