Despite apparent confidence, Apple is anxious about Android, internal emails show

April 5, 2014
Competition is not as "confused" as Tim Cook wants it to be

CNET Competition is not as “confused” as Tim Cook would want it to be

Apple’s top executives, including CEO Tim Cook and marketing boss Phil Schiller, often dismiss competition in their public appearances, sometimes in disparaging terms. But in spite of this outward cockiness, the Cupertino company is fretting about Android, and Samsung in particular, as internal documents revealed this week clearly show.

The documents are emails penned by Steve Jobs and Phil Schiller showing that the rise of Samsung has left Apple scrambling for an adequate response. The emails were brought as evidence by Samsung’s legal team in the Apple vs. Samsung trial that began this week in San Francisco. Apple alleges the infringement of five patents and demands two billion in compensation, while Samsung has a much smaller claim of about seven million, over two patents that Apple has allegedly infringed.

The Next Big Thing

Samsung’s successful marketing strategy made Phil Schiller doubt Apple’s own efforts, to the point that he considered changing ad agencies. Here’s what Schiller wrote (via The Verge) to a Media Lab Arts (Apple’s agency) executive, referring to Samsung’s Super Bowl ad:

I watched the Samsung pre-superbowl ad that launched today. It’s pretty good and I can’t help but thinking ‘these guys are feeling it’ (like an athlete that can’t miss because they are in a zone), while we struggle to nail a compelling brief on iPhone.

And then:

I now have Apple board members asking 'what is going on with advertising and what are you going to do to fix it. The team is too good to be in this spot.

Schiller was apparently referring to this spot, that mildly pokes fun at Apple’s litigation against Samsung:

Then Schiller told Tim Cook that a new agency might be needed, as Media Lab Arts was apparently losing faith in Apple:

Instead of getting charged up to do great work on an iPhone campaign for us, they came back and asked to be able to talk to us about how much Apple needs to change as a company (corporate responsibility, greed/margin, channel strategies, sales spiffs, etc) and they compared 2013 to 1997 and the need to reboot a beleaguered Apple. Nothing about creating a great iPhone campaign. They don't seem to accept that first and foremost they need to do a better job for us this year.

“Consumers want what we don’t have”

Another document, a slideshow used at a meeting where the company’s top executives discussed strategy for 2014, shows Apple’s core problem – “Consumers want what we don’t have”, referring to affordable, large screen devices. Here’s how Apple describes competitors (read Samsung):

  • Competitors have drastically improved  their hardware and in some cases their ecosystems
  • Spending “obscene” amounts of money on advertising and/or carrier/channel to gain traction

cdn3.vox-cdn.com_assets_4244447_DX-413.pdf 43 001284

Even as far back as 2010, Apple was acknowledging internally that it had some catching up to do with Android and Google. One of the points that CEO Steve Jobs proposed for a strategy meeting was “catch up with Android where we are behind (notifications, tethering, speech, …) and leapfrog them (Siri, …)” 

Another bullet point mentions a “Holy War with Google” for 2011, a grand effort to catch up with the Mountain View company in the crucial cloud services area, where Steve Jobs thought Google was “way ahead” of Apple.

War talk

Of course, there’s nothing wrong or surprising for a company to discuss the strengths and weaknesses of competitors, all while showing a carefully constructed mask of indifference to the public. But Samsung’s lawyers are hoping that this evidence of internal anxiety will help portray Apple as a player that’s no longer able to compete, so it’s using litigation to hamstring competitors. Apple, for its part, downplayed the significance of the emails brought up by Samsung. Phil Schiller said the slideshow above was not Apple’s official point of view and that he didn’t agree with much of it.

For us tech enthusiasts, this treasure trove of internal information (much like Samsung’s similarly embarrassing internal presentations from the last trial) gives us a peek inside the workings of the multi-billion corporations that influence so much of our digital lives.

Samsung's internal design slides were a key part of Apple's success in the 2012 trial

Samsung’s internal design slides were a key part of Apple’s success in the 2012 trial

They also help us put in context the moves of big players. Apple, for instance, is reportedly abandoning its long time preference for small screens, with a recent Reuters report pegging a 4.7-inch and even a 5.5-inch iPhone model coming this year. While we always knew Apple is eventually going to react to the rise of large Android devices, we now have some solid proof that the move is reactionary, rather than voluntary.

More internal documents from both sides could emerge in the following days, as the Apple vs Samsung trial is expected to last about a month.

Comments

  • https://pbs.twimg.com/profile_images/412035973686366208/r14EeLu9.jpeg CPVideoMaker101

    can’t wait for the iPhone 6. Hopefully they don’t make it too large. This Nexus 7 (grouper) will go nicely with iOS companion

    • Alex James Simon

      No screen is too large for me, I carry around my Nexus 7 (2013) with a Dodocase on it in my Jeans pocket. :)

      • https://pbs.twimg.com/profile_images/412035973686366208/r14EeLu9.jpeg CPVideoMaker101

        caseless also in my pocket, but it’s uncomfortable and it has crocked before in it and it did again, so it’s now a nice paperweight. i liek small devices, they fit nicely in my pocket

  • Mhmd Ahmd

    can’t wait for the iPhone 6

    http://sm-phone.blogspot.com/

  • Brendon Brown

    Yes ..They’re shaking ! Android 5.0 must get a killer feature and then .. we can put them to sleep !

    • Mozaik

      I hate to say this , we need apple it drives competition among OEM and OS , I don’t want Google to be lazy ass like windows in olden days.

      • Android Developer

        Maybe even without IOS, Android will keep being worked on frequently, as it has competition between the manufacturers, and there is also WP…

        • THatch

          I think they are also working hard to keep samsung from moving to tizen (I always forget how to spell that). Samsung took a huge step with releasing the new gear watches that run tizen. You could also argue that that had a part in Google selling Motorola.

          • Android Developer

            Seems logical too.

      • Brendon Brown

        Agreed, just the inner fanboy voice :D

      • thecokedragon

        Can’t lie that that’s the truth; just look at places where Google does get to relax and not cater properly to users because they have no (significant enough) competition (*cough* YouTube *cough*)!

        • joser116

          On desktop, they should let us continue watching a video while searching for other videos to play next.

        • Lucas Teixeira Gouveia

          Or they simple direct their resources where competition is higher to keep up with them…..we’ll never know!

  • Aniruddh

    I remember many Apple fanboys touting that the iPhone was just as large as it needed to be. Seems like Apple doesn’t agree xD

    • Shark Bait

      “At least my thumb can easily reach the top corner”
      Shut up your screen is small and stupid

      • Aniruddh

        Exactly! While Phablets like Note 3 are at the top end of the spectrum, the S4 is actually very comfortable. My thumbs pain if I type with one hand, so I end up using two hands most of the time anyways.

        • Sebastian Nuñez Del Prado

          my current phone is a note 2. I have no issue whatsoever with one hand operation, my thumb reaches the top corner with ease. Then again I do have guitarist hands.

        • TheWay

          S4 is actually very comfortable? are you stupid?

          • Aniruddh

            No I am not. My dad owns one and I speak from personal experience.

    • Android Developer

      Actually that also changed on the Iphone 5 compared to previous ones – it got larger.
      However, I can still read those stuff being written even for Iphone 5 (or 5S).

      • Aniruddh

        Well it got longer, and added an extra row of icons. The iPhone just got better! Revolutionary!
        That really doesn’t count because even the current size is small for the norm in Android.

        • Android Developer

          yes now it looks like a TV remote .

          • TheWay

            No!, it looks like a phone…however S4 looks like a cheap ugly iPad nano

          • danishdhanshe

            Someone’s jealous!

    • https://pbs.twimg.com/profile_images/412035973686366208/r14EeLu9.jpeg CPVideoMaker101

      it is. i know others don’t like the smallness of it. feel free to use your preference

  • dogulas

    Great piece. One typo: “Holly war”

    I almost don’t want Apple to release large phones, since I want them to crash and burn. But ultimately it will improve everything for consumers, including process across the board.

    Now if only someone could get Verizon to start having reasonable prices and policies.

    • http://AndroidAuthority.com/ Bogdan Petrovan

      Fixed, thanks!

    • Chris Eager

      A part of me agrees…like to see them crash and burn but only because of the frivolous litigation they impose on Samsung/Google/Android, but I’m afraid if they went under, losing the competition will make software and hardware devs lazy and boring. Less focus on innovating will occur.

    • THatch

      I would also like to see them crash and burn. But I like Mac. I prefer it over windows, on a desktop. I have the surface pro 2, and windows 8 is awesome for a device like that. I would like to see blackberry have the success apple has, as they listen to customers, and play fair.

  • dogulas

    Apple isn’t ditching their smaller size though are they? I can’t imagine why they would get rid of it. So many people still love that size.

  • Skya

    “Consumers want what we don’t have”
    As if you ever listening to what consumer want, apple. :/

    People want bigger display and expandable storage but you give them retina display, 64-bit, fingerprint scanner, and 5c. LOL.

    • Guest123

      companies want you to buy what will make them the most money. . . sadly, most customers fall inline.

      • Anthonydotcom

        So true. it explains why Apple has Scrooge McDuck money on hand.

  • MasterMuffin

    Well that last slide is embrarrassing. Apple will make a bigger iPhone, people will love it and Apple will live on and Samsung will live on and everyone will live on, maybe even Nokia :)

    • Chris Eager

      Every iPhone user I know wants a 5 inch screen…jealous of my N5. If Apple listens, they’ll succeed.

      • MasterMuffin

        4.7″ 1080p would be nice!

    • jeff

      Reminds me of DUELING BANJOS !!!!

  • http://nsood.in/ Naman Sood

    No. No, no, please, no. Please don’t say that. The *only* thing I liked about Apple was its small screens. If they start making large phones too, I’m probably doomed.

    • hex

      I wouldn’t worry, they might keep the smaller screens as one of the options.

      • http://nsood.in/ Naman Sood

        Heh – thanks for confidence. :)

  • logicdefyer

    Apple needs to change as a company (corporate responsibility,
    greed/margin, channel strategies, sales spiffs, etc) and they compared
    2013 to 1997 and the need to reboot a beleaguered Apple.

    – THEY NAILED IT

  • MeanDroid

    So…
    If Apple releases a iphart with 5 inch or bigger screen.
    -Are they going to claim to be the inventor of the idea as well?
    -Are they going to patent the concept (phablet) in the process?

    How low can you go Apple?
    European courts call you nuisance.
    American (patriots) courts defend you only because of the nationalistic agenda.
    But at the same time, your government and President perfers to use a BlackBerry phone instead.

  • gils001

    Prepare! Young android enthusiasts, it is time to fight against the incoming fanboys that will plague this article. I pray for us all

  • joser116

    “Even as far back as 2010, Apple was acknowledging internally that it had some catching up to do with Android and Google. One of the points that CEO Steve Jobs proposed for a strategy meeting was “catch up with Android where we are behind (notifications, tethering, speech, …) and leapfrog them (Siri, …)” ”
    One more weapon to use against Apple fanboys.

    • abazigal

      How so? That email was in 2010, it’s already been 4 years since then, and many of the concerns which may have been suggested in that letter are probably no longer relevant today.

      • joser116

        It doesn’t matter.

    • Robbie Bone

      Just because Jobs said iOS was behind in those areas, doesn’t mean Jobs thought iOS was behind Android in general. Back then Android didn’t even have google music or any iTunes competitor, and the android market was seriously lacking apps compared to the app store!

      • joser116

        No kidding! Apple had a head start in the app department and a huge one in the music department! Look how quickly Google caught up and quickly surpassed them that even Steve Jobs admitted it! The fact that Apple had a head start just makes Google’s accomplishments even bigger.

  • Milton

    A world with only lagdroids would be too boring…

    • Hector

      A world with OS security flaws sucks….*cough* iOS,7 *cough*

      • Milton

        True, IOS is crap too

        • danishdhanshe

          Is crap too?
          Wp fan?

    • Jiwaku

      And a copy of notification bar *cough* *cough*

      • Milton

        Agreed

  • jack

    I don’t think they are anxious since they already know what new features Scamsung’s “next big thing” will have (gold color, fingerprint, 64bits, s-voice, s-car, etc)

  • KILLAPPPLE

    KILL THEM WHILE THEY’RE WEAK!!!!!!!!!!!
    SMOTHER THEM WITH A PILLOW!!!!!!!

  • SimonC

    Prepare yourself for Apples iPhone 6 and most likely soon afterwards the iPhone 6 mini. Apple are just too predictable these days it’s almost comical.

  • harrydevlin

    Apple has become a follower, copying their competitors when they finally realize that consumers want the features that Apple has chosen not to offer. But the thing is,

    Apple could easily come out with compelling products if they chose to do so. Larger screens, USB ports, MicroSD card slots, more Bluetooth profiles, Flash, etc., these aren’t hard things to do..But there are downsides too. Come out with a 5″ or 6″ screen phone and iPad Mini sales will suffer. Offer Flash support and battery life suffers. Add a USB port and support costs go up. It’s a trade-off of how many sales they lose by being behind versus the costs of catching up.

  • Adina Nechama Hirschmann

    Nobody seems to mention LG in discussions. The big advantage I have over the iphone fanboys (and girls) is that, with my Mach, I can slide out my keyboard and have full view of my display as I type away on whatever I choose, including Word documents, Excel spreadsheets and Powerpoint presentations, (all from scratch) just like on a laptop. Eat that, Tim Cook!