Apple's Schiller talks iPhone, iPad birth -- and gambling - CNET

Apple VP Phil Schiller at a recent Macworld keynote presentation.

(Credit: James Martin/CNET Networks)

SAN JOSE, Calif. -- To help tell the story of how it came up with the iPhone and the iPad, Apple enlisted the help of the same man it uses to help sell the products to potential customers.

Apple's marketing chief, Phil Schiller, who is a frequent face at the company's product launches, retold the creation story of the iPhone and the iPad -- a slightly expanded version of the tale jurors heard during the company's opening statements earlier this week. That included the fact that the tablet was meant to be first but that the technology lent itself more immediately to a smartphone.

But the real story Apple was trying to get across was the risk involved, something Schiller referred to as a gamble with both devices, though especially the iPad.

"This was a new category of devices," Schiller said. "People were already buying phones. And companies had tried to make tablets before, and failed miserably."

Schiller made the case that Apple had come out on top, but not without the potential to have lost everything if things had gone pear-shaped. It was just part of Apple's effort to show how much of an impact it had on the technology world. That's a crucial angle for Apple as it hopes to convince a jury of its originality when compared with Samsung.

To that point, Schiller said he was "shocked" when he first saw Samsung's first Galaxy S phone and tablet, saying he believed it looked similar to Apple's iPhone.

"I was pretty shocked at the appearance of the (Samsung) Galaxy S phone, and the extent to which it appeared to copy Apple's products, and the problems that would create for us as a marketing team," Schiller said. Later on, he added that he had a similar reaction when seeing Samsung's first tablet.

"My first hought was 'wow they've done it again, and they're just going to copy our whole product line,'" he said.

Apple's ad budget, market research
During the testimony, Schiller went into detail about how Apple advertises its products, from online to video ads. That included viewings of initial iPhone and iPad TV advertisements, which Apple wanted to depict as ways the company was illustrating for consumers how to use its products. He also took some of the secrecy off the gritty details of how much the company had invested in advertising, saying Apple spent $97.5 million on advertising just for the iPhone in 2008, $149.6 million in 2009, and $173.3 million in 2010 -- all part of a campaign he said he considered successful.

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.

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.

This morning's testimony is a continuation from earlier this week. Schiller took to the stand earlier, providing approximately 10 minutes worth of testimony before the court adjourned for the day. Up after him is Apple's president of iOS software, Scott Forstall.

More to come.