An Internal Document Reveals How Terrified Apple Is Of Android

An internal Apple document Samsung used as evidence during its ongoing patent trial shows that some people in the company fear that sales of the iPhone could fall as the competition releases better hardware and services.

Re/code's Ina Fried reports that Samsung presented the document during its cross-examination of Apple Senior VP Phil Schiller.

The document, which was put together by an Apple sales team and was not intended to be seen by the general public, reveals that people inside Apple do worry about the possibility of the iPhone declining despite the public reassurances Apple executives give when questioned about the iPhone's market share.

Here's what we learned from the portions of the document shown to the jury during today's trial:

• Internally, Apple acknowledges that hardware and Google's Android ecosystem are starting to catch up to the iPhone: "Competitors have drastically improved their hardware and in some cases their ecosystems," the document notes.
• Most of the growth in smartphone sales is coming from big-screen devices or cheap devices, while the segment in which the iPhone resides - "small," pricey phones - is in decline. That would certainly explain the rumors that Apple is going to start producing a big-screen iPhone as early as next month.
• While Apple is known for its distinct marketing, they're being vastly outspent in advertising by competitors like Samsung. The document says that Android device makers are "spending 'obscene' amounts of money on advertising and/or carrier channel to gain traction." Carrier channel refers to the incentives some device makers give to carriers for pushing their devices onto customers.
• Apple became so dissatisfied with its ads in early 2013 that it considered replacing Media Arts Lab, the ad agency it has used since 1997. That's not a huge surprise - last summer, Bloomberg reported that Media Art Labs execs were frustrated by the lack of focus in their meetings with Schiller, who runs marketing at Apple and has led the meetings since Steve Jobs' death in 2011.

Schiller responded to questions about the document by saying that he didn't agree with much of what it said and that it does not represent Apple policy.