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

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,

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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?