*from www.reuters.com, April 5, 2013 (To view original article click here.)
Take Away #1: Samsung Electronics is spending more on marketing than R&D for the first time in at least three years.
Key Facts and Figures:
- This has prompted some pundits to warn that the tech giant is sacrificing innovation at a time when the market is teeming with ever smarter gadgets.
- The South Korean firm warned on Friday it will not post record quarterly earnings for the first time since 2011.
- That marks the end of five straight quarters of record profits for the world’s biggest technology firm by revenue.
- Samsung looks set to spend big bucks on marketing upcoming mobile devices, including the Galaxy S4 smartphone.
- This comes in an effort to convert more iPhone and iPad users loyal to arch rival Apple Inc.
Take Away #2: While the new Galaxy smartphone will boast a number of new features, industry watchers say the device would not overturn an industry that lives and dies by innovation.
Key Facts and Figures:
- The Galaxy S4 was unveiled to much fanfare in New York last month.
- The smartphone boasts a motion-detecting technology that starts and stops videos depending on eye movement, and flip between songs and photos with a wave of a hand.
- “Samsung lagged behind in creating a new category. Apple created a new category with tablets,” said Rachel Lashford, an analyst at Canalys.
- “We are waiting to see something like that happen from Samsung,” said Lashford.
Take Away #3: Samsung spent a record 13 trillion won ($11.6 billion) on marketing least year, more than $1.3 billion than what it poured into R&D.
Key Facts and Figures:
- The firm does not provide marketing and R&D spending forecasts.
- Some analysts expect Samsung to continue spending more on its marketing campaigns than on R&D this year as it fights the next wave of products from Apple.
- “We’ll keep boosting our R&D spending, while marketing will be executed flexibly according to market conditions,” a Samsung spokesman said.
Take Away #4: Apple has tumbled nearly 40% since the stock soared to more than $700 in September, while shares of Samsung hit a record in early January but have since fallen nearly 3%.
Key Facts and Figures:
- “There is not that much visibility on products next year, but we expect Galaxy Note 3 later this year,” said Mark Newman at Stanford Bernstein.
- The Galaxy Note, a smartphone-tablet hybrid was a surprise hit in 2012 and appeals to users who prefer larger screens to better access visual content.
- Samsung estimated its January-March overall operating profit rose 53% to $7.7 billion.
- Mid-tier smartphones and sales in emerging markets helped Samsung tide over the off-peak season
Take Away #5: Samsung stays ahead of Apple in R&D spending.
Key Facts and Figures:
- Apple ramped up its R&D expenditure to $3.38 billion in the year to September 2012, from just $712 million in 2006.
- Yet that is still far less than what Samsung spends.
- “Samsung keeps investing in R&D. They’ve boosted their smartphone R&D workforce to 25,000 or so from less than 20,000,” said Lee Do-hoon of RBS.
- “I think they have an exciting product line-up ready, probably in the second half, to upend the market,” said Lee.
- This is a significant departure for a company, which used to tear apart a Sony television tin 1970s to reverse engineer rivals’ products.
- Samsung overtook Sony to become the world’s top TV maker in 2006.
- Samsung did so largely aided by slim designs and super-thin displays produced as a result of aggressive capital investment.
- By contrast, Samsung’s mobile devices business now generates 70% of its total revenue.
- “The Note 3, which I expect to be available in the fourth-quarter, will be quite innovative. It’ll have a bended display and the screen size will be bigger without having a bigger phone,” said RBS’s Lee.
*To view original article from www.reuters.com click here.