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Samsung's marketing budget bursts out of the galaxy, might be hurting profits

Samsung's mammoth budget might be hurting its smartphones' profitibility
By: Anthony Garreffa | Business, Financial & Legal News | Posted: Nov 30, 2012 7:33 am

Samsung are pretty much the fighting force against the dominant player in the smart device market, Apple, but it looks like their 2012 success has come at a huge cost to the company in terms of their marketing expenditure.

 

samsung_s_marketing_budget_bursts_out_of_the_galaxy_might_be_hurting_profits_04

 

Samsung thus have lower gross margins on their smartphones, with Asymco's Horace Dedieu tapping down on his calculator working out some of the numbers associated with Samsung's profit margins on their smartphones.

 

It's sitting pretty at 17%, but it is far behind even struggling players like RIM who used to rake in 30% margins, and Nokia used to enjoy a slice of 25%. Dedieu says that Samsung spends more on marketing than every other competitor, pegging their advertising expenditure at an insane $4 billion for 2012 alone. Comparing this to Microsoft, who spent half of that, and even Apple - who surprisingly spent just a quarter of that number.

NEWS SOURCES:Bgr.com

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