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

In spite of Apple's outward cockiness, the Cupertino company is fretting about Android, and Samsung in particular, as internal documents revealed this week clearly 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:

[quote qtext=”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. ” qperson=”” qsource=”” qposition=”center”]

And then:

[quote qtext=”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. ” qperson=”” qsource=”” qposition=”center”]

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:

[quote qtext=”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. ” qperson=”” qsource=”” qposition=”center”]

“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.