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Phil Schiller on History of the iPhone, Advertising, and Market Research
People suggested all kinds of things Apple could do, Schiller recalled: “Make a camera, make a car, crazy stuff.”As part of his testimony, Schiller was led through a number of public reviews and comments about the iPhone and iPad, demonstrating how the devices were considered revolutionary but that many observers believed Apple would fail in its efforts.
Schiller said the company had been working on the tablet computer that would later become the iPad, but decided to shift its attention to the phone.
“At the time, cellphones weren’t any good as entertainment devices,” Schiller said.
Schiller also revealed a bit of information on iPhone marketing, noting how the company's U.S. iPhone advertising budget expanded from $97.5 million in fiscal 2008 to $173.3 million in fiscal 2010. As Apple has previously revealed in public filings, the company's overall advertising budget in fiscal 2010 came in at $691 million and grew substantially to $933 million in 2011. Still, Apple's booming sales have typically meant that the company's marketing expenditures have been shrinking as a percentage of revenues.
CNET also highlights Schiller's comments on how Apple uses targeted market research surveys, which have shown how important design is to Apple's customers.
Of note, Schiller also went into how the company performs market research, a controversial topic given the fact that late Apple co-founder Steve Jobs once pooh-poohed such studies, saying the company would design products people didn't even know they wanted yet. Apple brought up market research in this case to point out how important design is to consumers, 85 percent of whom, according to Apple's own 2011 study, said design and appearance were important.As CNET noted earlier today, Schiller will be followed on the witness stand by Scott Forstall, Apple's head of iOS software. Other Apple-called witnesses will include Samsung executive Justin Denison, Samsung engineer Wookyun Kho, Apple's early icon and interface designer Susan Kare, and a pair of independent expert witnesses.
Schiller did his best to finesse how these surveys came to be, saying they did not go out to random people but to customers who had already purchased one of the company's devices. Schiller also said that Apple purchases third-party reports of market trends and other data.
Update: Samsung's lawyers asked Schiller whether the design of the iPhone would be changing with the next version of the device, but he declined to comment on future products and Samsung apparently declined to press the issue further.