Samsung spent billions on marketing to ‘change the game on Apple’

“Though Wall Street has lost faith in the company’s future growth prospects over the past six months, Apple (AAPL) has launched a number of game-changers over the past decade,” Zach Epstein reports for BGR.

“The iPhone turned the smartphone industry on its head, the iPad opened up a whole new category of consumer devices, and iOS itself forced a complete overhaul of the mobile computing experience,” Epstein reports. “According to Forbes, however, Apple has stepped aside and top rival Samsung is now in the process of changing the game — but in a completely different way.”

Epstein reports, “Forbes contributor Adam Hartung doesn’t believe Samsung’s wildly popular smartphones are game-changers. The company’s tablets have been far less successful than its smartphones, so they haven’t changed the game either. None of Samsung’s products and services are driving this new shift in the market, Hartung suggests — instead, it’s Samsung’s massive marketing and advertising budget that has “changed the game on Apple.””

Read more in the full article here.

“Samsung spent almost 4.5 times Apple – and $1B more than perennial consumer goods brand leader Coca-Cola on advertising!” Adam Hartung reports for Forbes.

Hartung wrties, “Can you imagine having the following conversation in your company in 2010?: ‘As Vice President of Marketing I propose we take on the market leader not by having a superior product. We will change the game from feature and function comparisons to availability and awareness. I intend to spend more than anyone in our industry on advertising – even more than Coke. And I will open so many information and sales locations that our products will be as available as Coke. We’ll be everywhere. Our products may not be better, but they will be everywhere and everyone will know about them.'”

Read more in the full article here.

Related article:
World’s best-selling smartphone: Apple iPhone 5; iPhone 4S #2, third place Samsung Galaxy 3 brings up rear – February 20, 2013

63 Comments

  1. It’s impossible to deny that Samsung has made their name well known. On the other hand, it’s hard to imagine that this level of spending could be sustainable. When they reduce their spending on promotion and advertising, will their products be able to sell on their merits ?

    I think we know the answer to that.

    1. In the short run, yes. Like a NASCAR team only changing 2 tires on a pit stop. They’ll pay for it later, like Microsoft is doing now. Ballmer thinks that hype is the answer too. How’s that working for ya. Steve?

      1. The two tire change is a great analogy. I think the next time I pit, I won’t change any tires or even get gas. Think of how much time I’ll be saving over the rest of those fools with my quick pit stop.

          1. Good points made in replies.

            Dale Jr. illogically made far more money than he deserved over a lot of dismal goose egg seasons or wins by rain outs. Though he’s gotten luckier lately.

    2. I guess Apple will just sit back and let Samsung get all the smartphone mind share while Apple stock just stays in the toilet. Mind share is important and Samsung is getting the word spread. Apple could afford to spend another billion or so on marketing and advertising. It couldn’t be any worse than just letting Apple’s shares tank while the world proclaims the death of Apple.

      What’s the point of saving if you’re going to lose more by doing nothing. Investors expect companies to shake up things. Apple could easily afford to do just that. I’m really sick of hearing lopsided stories against Apple. Let Apple get some good press occasionally even if they have to make it themselves.

    1. Alas, I wish. But most people are idiots, and there are still a lot of idiots using Windows. And Android. Apple really should start making hip ads again so the idiots may at least take notice. Their ads range from forgettable to horrible. Not as bad as Microsoft and their annoying Slate commercials, but Samsung is doing Apple-type ads now (what else?). Plus, we’ve lost some formerly reliable Apple pundits to the Dark Side. Macworld itself seems to be mostly about “How to Make the Most of Your Disappointing Apple Experience.” And Andy- lose some weight in those fat hands and join a tech junkie’s 12-step group. Pogue has expensive tastes, tries to make everyone happy, should probably join the same group.

      1. Most people are idiots? Really? That’s a bit rude don’t you think? A bit narrow minded. Pissed off because everyone doesn’t agree with you perhaps? I’ll bet you have lots of friends. And they’re all fanboys.

          1. Wrong, only 15% are below average. 70% fall under the average part of the normal curve, with 15% on either side of average. Ever wonder why 70% is considered passing or average in school?

            Now, that being said, the further you get away from the middle (85%), the more obvious the difference…

            1. Under a normal curve, the mean is in the middle and half of the area is less than the mean. 70% is within one standard deviation of the mean, but that’ not at all what quiviran was talking about.

            2. And 70% being a passing grade is what’s wrong with American education. When I taught anything below 75 was an “F” Then if a student was dumb enough to complain, I asked if they’d go to a dentist that only pulled the right tooth 3/4ths of the time or to a doctor that only operated on the correct body part 3/4ths of the time? “FACE IT KID. IF YOU DON’T KNOW WHAT YOU’RE TALKING ABOUT MORE THAN 3/4 of the time, YOU DON’T KNOW WHAT YOU’RE TALKING ABOUT!”

    2. You are giving idiots too much credit. Why else would the MS trio of Bill Gates, Steve Ballmer and Paul Allen have a combined net worth of $100 billion? Idiots are obviously more than willing to buy third rate products.

  2. Microsoft is the master of pissing away billions to sell crap.

    As Microsoft dies, Samsung shows their pissing power.

    Samsung has to piss away a lot more money to take the crown.

    I think Samsung can do it.

  3. Samsung only lives in the gap where Apple gives it . If Apple is to release the exactly what samsung releases , Samsung is destined to die . An example is , ipad mini and ipad , Samsung doesn’t have any gap to sell more than Apple , even Samsung tablet includes their old technology stylus .

  4. Is Samsung an American company? Sounds like an American marketing strategy. Don’t make money. Don’t innovate. Don’t improve people’s lives. Just lift money from their pockets and put it into ours!!! Microsoft, Coca-Cola and LOTS of other companies do exactly that.

    1. Last time Coca-Cola tried to innovate the cola a couple times and it didn’t sell. In a few cases what you’ve already got is better than what you think you should have.

      Microsloth missed the boat for change. Coca-Cola needs to leave it alone.

  5. Guys, this is OOOOLD news. From our friend Horace Dediu in November 2012:

    http://www.asymco.com/2012/11/29/the-cost-of-selling-galaxies/

    and no, it is not sustainable. Apple is applying a slow, relentless choke hold on Samsung, between continued growth of market share, especially in some very desirable sectors (affluent adults, teens), sucking away their oxygen by not renewing chip / manufacturing contracts with them, and leading the innovation of new electronics. Talking about Samsung / Android having greatest market share is meaningless. A huge portion of Android phones are not used as smartphones, but were purchased at a good price or at the recommendation of the phone vendor. Internationally this same phenomenon is observed. Finally Apple still commands the greatest net profit on sales (70%) despite its lower market share.

    I find Samsung’s bluster to be typical Korean-macho, and if you use their recent keynote rolling out the Galaxy IV, you might agree that they do not understand their purchasing audience very well.
    dd

    1. exactly.
      that is why they are called Slamdung.

      Just spitting out crap without understanding what really is needed.

      A flexible screen – nice but how honest;ly will this benefit consumers. The form of any iDevice does not need to be changed — flexibility would help in terms of impact or dropping the device — it will help in thinning the device out and becoming lighter… but it does not mean the device needs to be Warped and Distorted into new shapes.

    2. And let me add that the greatest marketing is a positive user experience from end to end, not trying to create a vibe that has little or no shelf life. Apple’s money remains well spent on R&D, their retail store, great customer service, and sparing use of advertising. If you look at the link above, Samsung spends an astonishing amount on payola in subsidies and bonuses to the sales team to push their products over others. That is the part of the bar graph that is creepiest to me.
      dd

  6. Why does everyone have to buy Apple? What’s wrong with buying a Samsung product? My parents have a Samsung TV. Nice TV.

    Are you fanboys so blinded? Answer me this: what is wrong with buying a Galaxy S3? Please explain it to me.

    1. Because Samsung, like Google, took advantage of a one time friend, mentor, investor, and partner which was Apple. Samsung took advantage of Apple as a partner then competed against them. Steve Jobs was all about competition however, stealing one’s creativeness and thinking is one thing, stealing inventions, copying code, copying patents and making products that look identical to your competition is wrong. It is like plagiarism. That’s why he declared war on Android, then Samsung.

      Apple spent tons of money, hard work, long hours to do what they do. They put the name of the company on the line and produced devices that everyone scoffed at and had been labeled as failures. The reason people tend to buy Samsung phones and tablets is because they copied Apple. Why should they be rewarded for copying?

      Samsung, is a sad, law breaking, selfish, anti-Apple company that will do anything to undermine Apple.

      Why would you buy from them, should be the question.

      They can spend all they want to lure and buy customers on advertising but as long as people like me boycott them, they won’t buy me.

      BTW, Steve Jobs drove a Porsche 911. Imagine of a Korean automaker started making cars that copied the iconic 911. How would Porsche feel about that?

      1. I understand you’re emotional about a corporate brand. I am too. I love Apple. But nobody has provided a cogent argument that we should all be “at war” with Samsung, and that Samsung is the “enemy” and to blame for all of Apple’s problems, is ‘the’ copy machine, etc. Why not HTC? Why not Blackberry? Why not Sony? Why not any OEM smartphone maker.

        Google is the main driving force behind what people seem to be blaming Samsung for. Samsung is not the maker of Android. Without Android, Samsung and the rest wouldn’t be OEMs for smartphones. But that’s all they are. You’re distracting and convoluting the issue by pointing at the kids playing in the pool. The real “criminals” are Google and Eric Schmidt.

        Did one of Samsung’s phones look like Apple’s original iPhone? Yup. But they’ve made gazillions of phones, and literally everyone besides that one looks nothing like Apple’s iPhone. In fact, the Galaxy S3 is the most distinctly designed smartphone on the planet outside the iPhone. It’s original, unique, etc.

        And I’m saying this as an Apple fanboy. I use all Apple gear. I just feel this Samsung bashing is totally out-of-control and misguided as a result of the media pushing it.

        Apple’s case against Samsung was very design heavy… look and feel. The problem is it has nothing to do with today, and today’s designs.

        What’s actually happened is that Apple has locked themselves into a narrow design language… if they make a smartphone that looks anything like a Samsung S3, an HTC One, or one of the numerous others out there, they’re going to look ridiculous and somebody, somewhere, is going to retaliate against them.

        And I hate to be the bearer of bad news, but Apple copies too. Just recently they were caught copying the famous Swiss clock face with the Clock App on the iPad. They then paid a licensing fee to the owners of that copyrighted design after they were caught.

        I just want the delusion to stop. I love Apple but I’m still not convinced Samsung is to blame for much of anything here. Look at Eric Schmidt and Google: those are the real culprits.

        As for the Porsche, etc. Should industry sue Apple if they come out with a “Square display technology with a thin frame around the edges, integrated speakers, and a stand, with cable input and HDMI source”… in other words, a TV? That the design of the TV has already been created by others. Is Apple going to claim some design ownership on a square screen?

        Should the original maker of the laptop sue Apple for stealing its portable computer design? I mean… this look and feel stuff (hardware design) is really flakey and arrogant. The software, now that’s another story…

        Thanks.

    2. Here’s what’s wrong with buying from Samsung or any known copier. They suck the innovation right out of the industry. Its really no different then counterfeiting. Why should I spend $10k on a Rolex, when I can spend $25 dollars on a “Nolex”? that tells time and from 2 feet away looks just as good as the $10,000 dollar watch?

      Why should I buy a TV from Sony when I can get one from Samsung that has all of the same features but costs less?

      Here’s the answer to your question and to the ones I posed. it has to do with innovation and getting a return on the company’s R&D. Toss in the fact that company’s like Samsung ride the coattails of the companies that do legitimate R&D. If the companies can’t get the return on investment of their R&D because another company reverse engineered their designs and undercut them on price, they’ll wind up leaving the market or going out of business (i.e. Sony not making any money on their TV’s)

      Where does this leave us? If thieving companies like Samsung make their living off of stealing the intellectual property of other companies like Sony and Apple, then what happens when the Sony’s and Apple’s of the world leave the market? What is the thief to do next? There’s no one left to steal from except the consumers who are now left with a company that has no ethics, no inovation and no reason to improve their products since they’re the only ones left in business.

      By buying from Samsung and other companies like them, the consumer may think they’re winning because they got a TV or phone “just as good” as the innovative company, but at a cheaper price, (like buying that “Nolex”) but the consumer will eventually be left without a choice and the innovative ideas will die out along with the companies since they will have lost money.

      Samsung pretends to be a legitimate business and they are run financially like a legitimate business. But as the court ruled last year, they stole their ideas from Apple without making an R & D investment themselves. So instead of working for years and spending their own money developing a phone that end-users would desire to use, they simply waited on Apple to deploy their phone, then based on court records, spent the next few months reverse engineering the design and copied it in their own implementation of Android so that it looked like an iPhone. they were smart too, because they did it for far cheaper than Apple did

      So the next time somebody intentionally buys a device from a known copier like Samsung, they are actually buying from an intellectual property thief and they are contributing to a future economy where the innovators do not get to see the results of their hard work.

      I personnally won’t buy anything from Korea anymore. Their cars are designed to mimic high end luxury cars, their TV’s and household appliances copy Japanese and American manufacturers, and of course their personal electronic devices copy American designed electronics.

      Once the original companies either quit or go out of business, what will happen to whats left of the marketplace? Who will Samsung copy?

      Netcruizer99

      1. Please show me the facts… demonstrate how Samsung stole from Sony and others. Demonstrate that Samsung breaks the law and doesn’t engage in its own innovation.

        I’m an Apple guy, but I don’t believe this media bullshit about Samsung this, Samsung.

        What I do see is the main problem is Google and Android and Eric Schmidt. And you know all about that story.

        1. Check out this link from everyone’s favorite analyst. He disses Apple, but he really slams Samsung.

          http://www.digitaltrends.com/apple/innovate-or-stagnate-why-your-next-phone-will-suck-if-samsung-beats-apple/

          Agree with him or not, the principle is the same. If a company has a culture of stealing ideas or innovation (either through real corporate espionage or through simply reverse engineering or copying a product or idea), once the original innovator is gone and the copier doesn’t change their culture, you’re left with a company that isn’t able to innovate. Which leaves consumers with stagnate technology.

          While the TV market has some glimmer of hope in 4k, OLED, etc. the fact is, TV’s are commodized due to the undercutting by companies like Samsung,

          Goldstar (now LG) is very similar. They undercut and flooded the market with cheap, typically low quality electronics and TV’s, only to buy Zenith a few years ago.
          So now the TV market is basically stagnate without anyone really leading the innovation in the TV market.

          As far as proof that Samsung is a thief, head over to Fosspatents.com and check out the numerous law suits that show that Samsung copied from Apple.

          netcruizer99

          1. I find Enderle to be wrong in most cases. He is definitely wrong when he states the following: “Apple took the ideas for the mouse and graphical user interface from Xerox, and Microsoft in turn took them from Apple. But this was almost a case of stealing someone’s garbage; Xerox’s PARC, like a lot of labs, didn’t have a clue what to do with much of what was developed. The company thought GUIs and mice were stupid and useless. You could also argue that, had Apple licensed these technologies rather than stealing them, it might have received exclusive rights and been able to block Windows in court. Of course, it’s hard to tell.”

            He is wrong because he is perpetuating the myth that Apple “stole” the concept of the GUI and the computer mouse from Xerox’s Palo Alto Research Center (PARC) when neither is even remotely true. APPLE PAID XEROX a princely sum in the form of per-IPO common share stock, a share of ownership of the company, for the mere right to visit PARC and use what they learned there. Apple LICENSED the mouse from SRI (Stanford Research Institute), an adjunct of Stanford University, and Douglas Englebart, the researcher who INVENTED the mouse in 1964-1967, years before Xerox established PARC in 1970! Ergo, Robert Enderle, whose lips were moving, was lying, as usual… Or, giving him the benefit of the doubt, he is just his usual completely ignorant FUD spreading, anti-Apple self.

  7. Apple turned the smartphone industry on their heads because, Apple looked what was in it’s research labs – studied where improvements could be made with existing solutions – patented and purchased rights to glue innovations together — and made a mark.

    For Apple again to revolutionize the same needs to occur… see the pit holes of the industry and offer major repairs.

    iPod was created where Sony failed to venture.
    iPod succeeded even though the market was flooded with mp3 players… no one but Apple saw the entire picture.

    iPhone was created where Nokia and Ericsson failed to venture.
    iPhone succeeded because no one expected such brilliance in such a small package. And that Apple was a computer company who knew nothing about phones.

    So – Apple needs to watch over the different industry and see where to embed iOS into daily electronics in a profound way to better and improve where other companies grew old dry and lazy.

    Let Samsung believe what they wish… They can never be Apple. They are a trading company by nature… or is that a traitors company?

  8. Now I’m remembering the Mac vs PC commercial with Justin long, the one where PC was putting money in piles of fixing windows and advertising and puts it all in advertising

  9. “Can you imagine having the following conversation in your company in 2010?: ‘As Vice President of Marketing I propose we take on the market leader not by having a superior product. We will change the game from feature and function comparisons to availability and awareness. I intend to spend more than anyone in our industry on advertising – even more than Coke. And I will open so many information and sales locations that our products will be as available as Coke. We’ll be everywhere. Our products may not be better, but they will be everywhere and everyone will know about them.’”

    No, I can’t imagine it. But apparently, whoever said this wasn’t paying attention to how it’s worked for Steve Ballmer and Microsoft in the long run.

  10. I can talk to anyone in my family, 80 year old parents included. They know about iPhone and iPad. However Samsung is only good at making TVs.. So the phone thing is not working as deeply as they expected. People don’t want what’s next to them. They want Apple iPhones and iPad.

    Dialog I had with my wife:

    Me: Honey, HP has blown a gasket and is selling their iPad like tablets for $99. What do you say?
    Wife: Does it run iPad apps?
    Me: No, not really, they have their own.
    Wife: Then I don’t want it.

    To this day she has neither. We have the money, but she’s waiting for the iPad Mini 2nd Gen.. Bless her heart.

    1. A keeper!
      I had to bring my BF over from “The Dark Side” years ago …..or else he would not be my husband now. ; ) And a loyal Apple Fan he is now too, ditched the ‘Droid for an iPhone (much happier now with his phone experience), but has developed an iPad big screen envy for my latest purchase. Might get him his own iPad for his Birthday so he’ll stay out of my HayDay farm.

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