We already know that the biggest reason for Samsung’s success is the fact that they market the crap out of everything. For the past couple of years they were basically the only phone you’d see in ads, besides the iPhone. Of course this year that began to change. As competitors like HTC, LG and Motorola saw their market shares dropping, they decided to start marketing as well. Of course those guys are pretty far behind the 8-ball, and you can only spend what you have. For example, if HTC is only making a million per year, they can’t spend more than that. Since Samsung’s been on top for a few years, they have plenty of money to put into marketing. Not to mention they control their own supply chain. They make processors, displays, RAM and so much more that other OEMs use. For example, Apple’s iPhone is pretty much 100% made by Samsung.
There’s a chart coming out from Benedict Evans, which you can see above. It’s showing us Samsung’s patterns for marketing, and he notes that Samsung’s run-rate for marketing is $12.7 billion based on marketing in Q2. That’s more than Google paid to buy all of Motorola. That’s also 3-times HTC’s entire marketing cap.
In all honesty, it’s just an insane budget, that no other company can keep up, with besides maybe Apple. Samsung’s final bill for the year could be higher. Evans is stating that based on historical patterns, it will spend about $4.5 billion in the fourth quarter. He’s also stating that it tends to spend more in Q3 though less in Q1. Which makes sense since Q3 and Q4 is when the Holiday season is approaching, and Q1 is after the holiday season.
At this rate, Samsung is spending more on marketing, then most companies are making in revenue in a year. Now that’s pretty insane. I really wish other OEMs would market as much as Samsung does. For the average consumer, all they really know is Samsung. And that’s mostly due to their marketing.