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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.

@anthony256
Published Fri, Nov 30 2012 1:33 AM CST   |   Updated Mon, Oct 19 2020 8:14 PM CDT

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 | TweakTown.com

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 SOURCE:bgr.com

Anthony is a long time PC enthusiast with a passion of hate for games built around consoles. FPS gaming since the pre-Quake days, where you were insulted if you used a mouse to aim, he has been addicted to gaming and hardware ever since. Working in IT retail for 10 years gave him great experience with custom-built PCs. His addiction to GPU tech is unwavering.

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