Tech companies hate each other, right? Reading the popular tech press certainly makes you think so, but don’t buy into it.
As much as Samsung would like to sell more phones, they also make money when Apple sells more iPhones. Google gets paid when Apple sells more iCloud subscriptions, and even Amazon stands to gain financially if Netflix keeps growing.
Sound strange? Of course it does. But these companies aren’t just rivals: they’re also each other’s customers.
iPhone X: By Samsung, Toshiba, Intel, and Texas Instruments
The iPhone X just might be Samsung’s most profitable phone.
Apple makes the iPhone X, of course, but Samsung manufactures the OLED display that makes it stand out so much. That display amounts to $100 of the phone’s $1000 price tag. Combine that with a few other high-margin Samsung parts, and some analysts think Samsung made more from each iPhone X sale than each Galaxy S8 sale—about $130 per unit.
Regardless of whether that’s true, every iPhone X sold is profitable for Samsung, as this video by The Nerdwriter outlines quite nicely.
And Samsung isn’t the only tech company with parts in the iPhone X. Bloomberg’s Mark Gurman reports that Intel and Quallcomm both provide modems, Toshiba provides flash storage, and even Texas Instruments provides a part or two. That’s right: the iPhone X is built, in part, by the company behind that graphing calculator we all had to buy in high school.
Apple, of course, competes with these companies on some level. But that doesn’t stop Apple from purchasing their parts. It can’t. The iPhone is the best selling phone year after year, and making millions of phones means working with whoever can offer the best price—even your rivals.
Google Hosts Apple’s iCloud Service, Spotify, and Evernote
If you like using iCloud because you don’t trust Google, I’ve got some bad news: iCloud data is stored by Google, and has been for years. Apple didn’t go out of their way to publicize it, but in 2016 they started using Google’s Cloud Platform for hosting.
This makes sense. Google has been building up servers for a long time, and can offer storage space at lower rates than Apple could, even Apple built a bunch of their own server farms. And Apple is far from the only company to use Google’s storage: Spotify and Evernote also pay Google for storage, according to Google.
That’s right: Google hosts Spotify, the chief rival to Google Music. They host Evernote, which competes with Google Keep. And they host iCloud, which competes with both Google Photos and Google Drive for subscribers. Whatever service you use, Google gets paid.
Amazon Hosts Basically Everything Else
Google isn’t even the biggest player in the cloud storage space game. That title belongs to Amazon, whose Web Services power at least one service you use every day.
You probably think of Netflix and Amazon as rivals, and they are. But Netflix is also a big customer of Amazon Web Services, who they pay for server space. So Stranger Things and The Man In The High Castle are both on brought to you by Amazon, in a way.
Hulu and PBS also use Amazon to serve up videos. Reddit, Airbnb, Lyft, and Dropbox are hosted on Web Services. And even if you use none of these apps, odds are a website you opened today stored at least its images on Amazon S3.
This is a huge part of Amazon’s annual revenue, and one that’s almost completely invisible to the average internet user. It also earned Amazon $17.4 billion in revenue last year.
Foxconn Builds Basically Everything
The Playstation 4, the Nintendo Switch, and the XBox One are all built by the same company. So is the iPhone, the Kindle, and laptops from companies including Dell, Toshiba, and HP.
Foxxcon, a Taiwanese company that owns many factories in mainland China, earned $131 billion in revenue last year building products for other companies. If you’ve heard of this company, it’s probably because of terrible working conditions and employee suicides—that’s about the only part of Foxconn that gets coverage in the western world.
That’s an important thing to think about, but it’s also worth noting how many major tech companies depend on this one manufacturer to build their gadgets. While Nintendo, Sony, and Microsoft are battling it out for console supremacy, one company stands to benefit regardless.
Tech Companies Compete, Yes, But Also Collaborate
It’s easy, as a user, to think in black and white terms. Maybe you like Google and think Apple is terrible, or vice versa. But tech companies themselves cannot think exclusively in these terms, because they depend on one another to build their products and offer their services. Maybe keep that in mind the next time you’re talking smack about someone who uses a different platform.
Photo credit: Antonio Guillem/Shutterstock
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