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Internal Apple Document Shows Worries iPhone Growth Could Stall

The planning document was introduced Friday in the Apple-Samsung trial.

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Internal Apple documents show the concern, at least from the company’s sales force, that the portion of the market occupied by the iPhone was on the wane amid growing competition from Android devices that have either larger screens or lower prices than the iPhone.

The shift in the market was accompanied by a rising Google ecosystem, the documents noted.

“Competitors have drastically improved their hardware and in some cases their ecosystems,” a member of Apple’s sales team wrote in a document that was prepared as part of a fiscal 2014 offsite meeting. Portions of the document were shown Friday to the jury in the Apple-Samsung case.

The document, which was presented as part of Samsung’s cross-examination of Apple Senior VP Phil Schiller, noted that all the growth in smartphones was coming either from large-screen devices costing more than $300 or from devices that cost less than $300, with the segment that included the iPhone showing decline.

Other concerns noted in the document included the idea that Android rivals were “spending ‘obscene’ amounts of money on advertising and/or carrier channel to gain traction” and that mobile carriers had an interest in limiting iPhone sales because of, among other things, the high subsidies they had to pay on the device.

Schiller noted in his testimony that he didn’t agree with much of the document, which he said didn’t represent Apple policy.

In a 2013 e-mail, though, Schiller expressed concern that Samsung’s ads were striking a nerve.

“I watched the Samsung pre-superbowl ad that launched today,” he wrote in one missive. “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.”

Samsung’s cross-examination of Schiller covered a variety of other internal documents, including a 2011 email from Steve Jobs telling Apple that a Top 100 executive meeting should focus on Apple waging a “Holy War with Google.”

Among the other revelations was the fact that Apple was so upset with Apple’s advertising in early 2013 that it considered replacing Media Arts Lab, the agency that has handled its ads since 1997.

Schiller began testifying on Tuesday, telling mostly the same tales of the iPhone’s early days as he did during the first Apple-Samsung trial.

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