The Reason for Samsung's Dominance: $11 Billion on Marketing & $10.6 Billion on R&D

[dgstorm]

Samsung holds the crown of the world's largest phone maker and the world's largest smartphone maker. They didn't get there because they make excellent and appealing devices. It also wasn't just luck. Nope. Samsung is dominating because they are pushing forward with a hyper-aggressive marketing and R&D budget. In fact, Samsung spent more money on advertising than HTC’s entire revenue for a year. Sammy spent $11 Billion dollars last year just in marketing. Here's a quote with some more specifics,

Samsung’s 2012 marketing war chest was 38 percent higher than last year, and a staggering 6.8 times larger than what the company spent back in 2005. To put this figure in perspective, the 2012 marketing expenses were 6.5 percent of Samsung’s total sales. Moreover, Samsung spent more money on promoting its products than HTC’s entire revenue in a year.

People at Samsung are aware that they owe their good fortunes to marketing:

“Samsung’s focus on marketing was the main reason the company was so successful last year,” said a source inside Samsung, asking not to be identified.

Of course, great marketing will only get you so far if you offer a crappy product. Although some will argue Samsung sometimes has a "plastic-y" feel to their devices, not everyone agrees with this. Regardless, it's hard to argue they don't offer cutting edge features. In fact, many of the most useful things that consumers can do on a smartphone OS can be found on the Samsung Galaxy of products, and this is even beyond what you find on stock Android. Plus, Samsung seems to always push the edge on the hardware inside their devices as well. From brilliant displays to powerful processors, Samsung develops a lot of the components for their devices themselves. They are constantly pushing to innovate both in software and hardware.

These innovations aren't cheap either. Last year Samsung spent almost as much on Research & Development as they did on marketing, to the tune of $10.6 Billion dollars. Their success seems to prove the old saying, "It takes money to make money." I wonder what their budget will be like this year?

Source: AndroidAuthority

 

[kodiak799]

Yep, Sammie "stole" that idea from Apple ....meanwhile, Moto, HTC and others have simply begged for promotional scraps from VZW.

And you can see the results even throughout this board, because I'm not convinced Sammie's phones are all that better or different - but their marketing does a good job of making you think that. HTC Rezound is a great example because it flopped, and not because it wasn't an excellent phone.

 

[jspradling7]

They didn't spend any of that money on the radios for my Charge or GNex. : )

Sometimes I feel like I need to go outside and tie a steel wire with a kite on it to my phone to get a signal or gps lock.

 

[xeene]

since 4.1.1 my gnex has been pretty good with signal and gps lock. on 4.2.2 it's instant and 3g/4g hand off is flawless.

my wife's razr maxx still has the best reception of the two phones.

 

[jroc]

I dont like Samsung phones....but one thing I give them credit for is being one step ahead in the specs and features dept. They try to cover all the bases, with specs, features, low and mid range phones. HTC too. What HTC is missing is the marketing.

 

[kodiak799]

What HTC is missing is the marketing.

That's their big problem, and they don't have the money to really pump into marketing. Sammie is a huge company and had the resources to invest in marketing.

It's no coincidence why Sammie and Apple are dominating the game. Question is at what point do consumers realize the market is commoditized and, as with pc's, there's no real value in paying for the marketing.

 

[JoeeDB]

I'm assuming this is for the company as a whole, and not just the mobile phones sector, right? Just curious.

 

[johnomaz]

since 4.1.1 my gnex has been pretty good with signal and gps lock. on 4.2.2 it's instant and 3g/4g hand off is flawless.

my wife's razr maxx still has the best reception of the two phones.

My wife's GNex i sway better on 4.2.1 when it comes to 4G and GPS. Even she noticed and she never notices that kind of stuff. She still has VZW unlimited data and tends to use that instead of wifi because her work has horrible wifi speeds so she turns off wifi and never turns it back on when she's at home. Doesn't see the difference.

 

[GAstorino]

Samsung Vs Apple

Would love to see what Apples R & D Budget is compared to its lawsuit budget. I am sure those are some interesting numbers. When all of these companies spend hundreds of millions on lawsuits to me its just a waste of everyones time and money which could be better utilized making better products. If I was a shareholder of Apple I would be pissed. I can see protecting certain aspects of your technology but suing because your phone is a 4.1" Square which is too close to our phone size of 4.099" square is insane. Apple doesn't really invent anything. They are great at stealing others ideas and improving them to the point they are usable.

 

[skennelly]

HTC Rezound is a great example because it flopped, and not because it wasn't an excellent phone.

I thought it flopped because it was an HTC. Lol

 

[droidbionicmaster]

I'm not a big Samsung or HTC. Motorola needs to push more high end specs and newer software faster. Samsung would have good competition then.

Sent from my DROID RAZR using Droid Forums

 

[MissionImprobable]

I'd be willing to be the average consumer has no idea who HTC is if they were asked, and many wouldn't even know LG makes phones. I have seen relatively few LG ads, minus a short push for the Optimus G, which was only available on Sprint so bleh. I'm sure any non-Verizon users rarely give Moto a look. Out of sight really is out of mind. Even if you don't like every Samsung ad, I bet you can describe it to some extent if asked. Can't recall the last Apple commercial I've seen. The spotlight is king.

 

[kodiak799]

To be honest, I've not noticed much Samsung ads on tv. I'd bet most consumers, if you asked them to name a cell phone maker, Samsung comes 4th or 5th behind Apple, Moto, Blackberry and Nokia (outside the US).

Of course, if that buyer does any research at all they'll see Samsung plastered all over the place. But that same buyer likely shops on value and some basic specs - and we all agree, spec-wise, that Samsung has done a better job than the others in terms of bang-for-your-buck.

Sammie gets you with marketing, but they also get you with a superior value proposition. But if you are a completely brain-dead consumer, you'll probably go Apple or Moto (not saying all their buyers are brain-dead).

At this point, the market is pretty heavily commoditized, and HTC has no real brand or value proposition. Same for LG (and I may be wrong, but IMO LG is a mid-tier electronic mfr, which is what many will think when looking at their phones).

So Sony has quite a bit it can leverage to build share. And that's another thing worth mentioning - people know Sammie makes great tv's (among other things), so when all these phones look the same for about the same price, if you know nothing else you probably choose Sammie.

 

[sweeeeet]

have u met the guy Sam Sung? lol

if u asked anyone to name 3 TVs and 3 cell company's... samsung will be on most; if not all of those lists... they are beasting and rightfully so... they put out good products

Sent from my DROID BIONIC using Tapatalk

 

[jroc]

I like Samsung for TV's and monitors, appliances. At work Samsung and Sony get mentioned alot for TV's. For phones it might be Samsung or Galaxy, Apple or iPhone, Blackberry.. in no particular order. And not necessarily HTC but EVO.

...And I think some ppl still refer to Android phones as Droid phones at my job....lol Or Android phone.