One of the most striking examples of economic strategy in tech isn’t about what’s flashy — it’s about what’s strategic. Samsung, long known as Apple’s rival in phones, actually made more revenue from supplying components to the iPhone X (OLED displays, NAND flash memory, DRAM chips) than it earned from its flagship Galaxy S8 over a comparable period.
Here’s a breakdown of the facts:
- Samsung sold 180–200 million OLED panels for the iPhone X. Android Authority+1
- Its parts business—from supplying Apple components—was estimated to bring in $4 billion more over 20 months than Phoenix’s own parts revenue from its Galaxy S8 model in the same time frame.
- The component sales to Apple included displays, memory, and flash chips – areas where Samsung has significant scale, manufacturing prowess, and economies of production.
SAFe Principle #1: Take an Economic View
From the Scaled Agile Framework:
“Economics should inform and drive decisions at all levels.”
“Achieving the shortest sustainable lead time requires each individual in the decision-making chain to understand the economic implications of delays. Delivering early and often isn’t always enough.”
In other words:
- You must sequence work so that what you build delivers the highest economic benefit first.
- You need visibility into trade-offs: what you gain vs what you lose by choosing one path over another.
- You must understand the full value chain (including hardware, suppliers, downstream impacts), not just your own product version.
What This Means for Hardware, Agile, & Innovation
Using the Samsung example and SAFe’s Principle #1 as reference, hardware and product teams can learn:
- Component Supply as Value Stream
Sometimes the biggest profits lie in the supply chain, not just final product. If you own or partner in component manufacturing, scaling that capability can be a strategic differentiator. - Economic Decision Criteria Over Ego
Samsung could have focused all energy on its Galaxy phones. But by recognizing that supplying Apple would bring more value (via scale, demand, and premium margins), they made a more economically sound bet. - Balancing Short-Term Product vs Long-Term Platform/Capability Moves
Investing in OLED and memory fabs and supply capacity (which takes years) vs pushing incremental updates on Galaxy phones shows how long-term capability investment matters. - Agile Hardware is Possible, but Needs Flex
Hardware companies often work with long lead times, big capital expenses, rigid supply chains, and fixed tooling. To be agile here means applying lean portfolio thinking, staging investment, modular hardware design, scalable manufacturing, supply chain robustness, and making informed economic trade-offs early.
What To Watch & Do
- If you’re leading product or hardware strategy: map out not just your product roadmap, but your supply/partner network economic contributions.
- Build scenarios: what if component prices drop? What if demand shifts rapidly? How does your supply side adjust?
- Embed “economic view” in your decision-making: cost of delay, manufacturing costs, dependency risks, supplier readiness, and how those ripple out.
The Samsung / Apple partnership is not just a quirky anomaly — it’s a real-world business case for why taking an economic view isn’t optional. It’s essential if your organization wants to remain competitive as hardware-software convergence accelerates.
#SAFe #LeanAgile #HardwareInnovation #TakeAnEconomicView #ProductStrategy #BusinessEconomics
