The Galaxy S6 and S6 edge are Samsung’s “next big thing” that are soaking up the limelight, but a new report out of Korea says that Samsung’s already testing the “next next big thing” – that is, post-Galaxy Note 5.

A source says that the Galaxy S7, codenamed “Jungfrau,” is being tested by the Korean manufacturer and has an Exynos processor in some units and a Qualcomm Snapdragon processor in others. Usually, Samsung’s developers will work on the following device (in this case, the Galaxy Note 5) before turning to the next Galaxy successor(s), so don’t assume the report is 100% true at this point. Nevertheless, there are some reasons why this report could be true.

Reason #1: The Note 5 announcement is around the corner, the S7 announcement is seven months away

First, the Note 5 will be announced on August 12th this year, which is early for the Note arrival. With that said, Samsung’s Galaxy S devices are always unveiled at MWC, and, in the case of the Galaxy S7, is only seven months away. What this means is that Samsung has already started working on it, since the company has to have time to manufacture a certain number of expected units before announcing the product and releasing it to carriers and retail stores. You’d be surprised at how much time it takes to craft and manufacture devices, even if Samsung’s work force is the size of a small country by itself.

If Samsung is testing the Galaxy S7, however, it would give some credence to the idea that the Note 5 may go live in August – which would give six months in-between the rumored Note 5 unveil and the Galaxy S7 unveil. While consumers tend to think that one phone every two years is plenty, smartphone makers must continue to innovate because without it, they can’t do R&D, pay their employees, and stay afloat. That pretty S6 edge in your hands didn’t come without some financial sacrifice.

Update: at the time this article was written, the Note 5 reveal date hadn't yet been revealed. Any errors regarding the Note 5 in this article are due to prediction before the date reveal for the device. 

Is Samsung flirting with Qualcomm and its processors for the Galaxy S7?

Next, as for the “flirtation” going on with Qualcomm’s Snapdragon processor, there are a few things we must think about. First, the Qualcomm Snapdragon processor in testing is unknown, so we have to believe that this Snapdragon could be either the 820, which has been confirmed for the Huawei Nexus (and other upcoming flagships) and should arrive at the end of the year, or some other processor beyond the 820 (maybe an 821; this is just a thought, not fact). Beyond the type of processor, we don’t want you to think that Samsung will necessarily go with Qualcomm’s processor in the Galaxy S7. After all, the Exynos 7420 octa-core processor is the fastest thing on the market right now, and Samsung wouldn’t want to utilize Qualcomm processors when its own are doing so well. Companies never want to defer to others in production, and do so only when it’s beneficial for them. Samsung is no different from any other, in regards to making money and taking glory for its smartphones.

What are some reasons behind Samsung testing the Galaxy S7 with a Qualcomm processor? First, Samsung is said to be involved in manufacturing the next Qualcomm Snapdragon processor. So, testing the Galaxy S7 with it wouldn’t be a bad idea, should it contain Samsung’s own optimizations. Next, Samsung could be testing a new Snapdragon processor to see if it matches the company’s own Exynos processor. The reason for this would be to decide which processor of the two will go into the new Galaxy S7 to be announced early next Spring. Samsung could decide to 1) implement Snapdragon and Exynos processors side-by-side, with some devices bearing one processor and some another (as has been common practice with flagships before the S6), or 2) test whether Qualcomm’s processor will compete (and win) against Samsung’s own Exynos processor for GS7 production.

Samsung utilized both Sony’s camera sensor and its own ISOCELL sensor in the Galaxy Note 4, with some Note 4 models bearing the Sony camera sensor and others the ISOCELL sensor, and the same thing may happen with the Galaxy S7.

Why would Samsung revert back to Qualcomm for the Galaxy S7 processor?

One of the obvious reasons why Samsung would revert back to Qualcomm pertains to the company’s own processor: if Qualcomm’s processor outperforms Samsung’s Exynos, then the company would likely go with the Qualcomm processor in order to stay on the cutting edge of the processor competition. Surely, Samsung wouldn’t want to have an underperforming processor in comparison to the rest of the Android world, would it? Qualcomm’s Snapdragon 810 processor has been a disappointment, to say the least, but rumors suggest that Qualcomm’s been trying to earn a bid for Samsung’s Galaxy Note 5 (though we highly doubt Samsung would opt for the Snapdragon 810 over the high-end, octa-core Exynos processors it’s churning out at this point in time). Things could change between now and the Galaxy S7’s release, though.

There is another valid reason as to why Samsung would go with another processor: to maintain production speed. This past week, Samsung’s declining profits were publicized from one end of the Web to the other. As for the reason behind the 4% profit decline, one explanation pertains to the company’s slow Galaxy S6 and S6 edge production. The logic goes like this: Samsung underestimated Galaxy S6 edge demand, and the company could’ve/would’ve made more money if Galaxy S6 and S6 edge production had been met. In order to meet production with the Galaxy S7 and the Galaxy S7 edge, Samsung could be outsourcing its S7 and S7 edge processors to Qualcomm.

Why would Samsung outsource its processor manufacturing to Qualcomm? In order to earn more money. With the need to appease investors, Samsung could outsource its own processors for the 2016 devices in order to earn more clientele and thus, more money. Think about it: If Samsung manufactures the new Qualcomm processor, which usually surfaces in benchmarks around the end of the year (which explains why the Galaxy S5 had a Snapdragon 801 processor while the Note 4 carried a Snapdragon 805), then Samsung will have its hands full with manufacturing processors for, ultimately, all Android OEMs, including Google’s new Nexus devices (we’re told two will arrive, one from LG and one from Huawei) and possibly a high-end LG device. After all, LG’s G4 flagship only featured a hexa-core Snapdragon 808, not an octa-core device, and rumors peg a new LG flagship that can match Samsung’s Galaxy Note 5 at the end of the year.

Aside from Qualcomm and Android OEMs who release smartphones at the end of the year and would need a Samsung-manufactured Qualcomm processor, Apple devices must also be taken into account. Samsung will manufacture displays for Apple alongside of DDR4 RAM, so Samsung would need to invest months into production. It’s likely the case that Samsung has already started producing its RAM chips and displays for Apple, as Samsung has been trying hard to win the majority of iPhone 6s display and RAM chip production. With Samsung working to earn the business of both Qualcomm and Apple, the company is trying to earn extra money from its semiconductor business to offset declining smartphone sales.

With Apple dominating in smartphone sales at this point, it wouldn’t be unusual to see Samsung capitalize on the market so that it ends the year on a good note (pun intended). Samsung’s clientele would increase the company’s overall revenue and profit, helping ease the minds of investors and may eliminate the company’s 4% profit loss and give Samsung a financial comeback in Q4. By the time Samsung manufactures displays and RAM for Apple, and possibly processors for Qualcomm (if Qualcomm outsources to Samsung), Samsung would be forced to turn to the Galaxy S7 after the Christmas season if not before – and would have to unveil the Galaxy S7 in February 2016. With crunch time underway, Samsung could outsource the S7 and S7 edge processors and focus more on its own financial gains.

Sure, outsourcing its processor manufacturing to Qualcomm would likely anger investors, but the question boils down to economics: would Samsung gain more from manufacturing and implementing its own Exynos octa-core processors, or working for Qualcomm in manufacturing the next-generation Snapdragon processor and Apple with RAM and displays? Apple and Qualcomm are still giants, and working for Qualcomm would bring business from every angle with Android OEMs. And every Android smartphone bearing a Qualcomm processor would bring money into Samsung’s camp.

Last but not least is Samsung’s upcoming S6 Plus and S6 edge+. Samsung intends to bring both of these devices to market for its customer base, and, if the Note 5 is scheduled to arrive in September as usual, Samsung will have to devote time to them – which means that from now through December, Samsung will have its hands full with manufacturing.

Conclusion

Aside from all the musings above, there are a few things to take away from the news story itself. First, the Galaxy S7 is already in existence. Companies can’t wait around these days if they hope to sell great smartphones, and Samsung cannot wait until too late to manufacture the S7 – so it likely exists, though the devices assumed to be the S7 and perhaps the S7 edge could be nothing more than “fakes.”

At the same time, however, with the need to take advantage of its portfolio diversifications, Samsung could decide to spend more time manufacturing other processors instead of its own. Smart companies learn their skills and then use them with clients in order to churn big bucks. Samsung hasn’t earned its place as a smartphone giant without exercising wisdom.