Seeking Alpha

Internal Apple docs show advertising, growth concerns

  • "I watched the Samsung (SSNLF) pre-superbowl ad that launched today. It’s pretty good and I can’t help but think ‘these guys are feeling it’ ... while we struggle to nail a compelling brief on iPhone. That’s sad because we have much better products," wrote Apple (AAPL -1.5%) marketing chief Phil Schiller in a 2013 e-mail to ad agency Media Arts unearthed during the latest Apple-Samsung trial.
  • In another e-mail, Schiller asked Tim Cook if Apple should consider finding a new agency. Media Arts saw the exec behind Apple's panned "Genius" ad campaign resign in 2012. Nonetheless, it remains Apple's ad agency today.
  • Interbrand estimates Apple's brand was worth $98.3B in 2013, +28% Y/Y and #1 globally. Samsung's brand was given a $39.6B valuation, +20% Y/Y and #8.
  • "Consumers want what we don't have," reads the title of a 2013 internal slide noting all of the smartphone industry's 2012 unit growth came from devices featuring sub-$300 unsubsidized prices and/or 4"+ screens. Apple is widely expected to launch two 4.5"+ iPhones, but there are no signs it plans to sacrifice its margins and $600+ iPhone ASP by going after the sub-$300 segment.
  • An Apple slide containing an Android logo states "competitors have drastically improved their hardware," and are "spending 'obscene' amounts of money" on ads and carrier/channel promotion. It also states carriers "have strong interest" in capping iPhone sales due to their steep subsidies and Apple's policies, among other factors.
Comments (26)
  • ispank
    , contributor
    Comments (534) | Send Message
     
    Cash is KING, Apple should hoard all the cash for raining days. Shut down all the noises of activist investors as they don't care about Apple at all beside money.
    7 Apr, 12:37 PM Reply Like
  • Malph
    , contributor
    Comments (28) | Send Message
     
    Can someone certify the authenticity of this slideshow?
    7 Apr, 12:55 PM Reply Like
  • rsbduff@gmail.com
    , contributor
    Comments (438) | Send Message
     
    Deja vu!

     

    The Chinese and Koreans ran me out of the board business....years ago. We kept saying...our quality will matter. Then they caught up on quality. They were selling retail for less than our parts cost....with subsidized programs.

     

    Apple is caught in a bubble that could pop. They want to protect the profit on the sales they can make, while most sales growth will go to lower cost units. Maybe management knows the inevitability of this happening, and will make adjustments....or, maybe....like we did, they will say...."Nah...that could never happen.

     

    I'm still bullish on Apple. Hopefully they can use some of that cash to find profitable businesses.....in other fields. Sorry, I know you didn't want to hear that.

     

    (Remember...my insight, is worth what I charge for it)
    RSBDuff
    7 Apr, 01:04 PM Reply Like
  • DanoX
    , contributor
    Comments (2577) | Send Message
     
    So the Chinese and Koreans now have a desktop and mobile OS that they own and design from scratch? Until they do they can't get over Apple or Microsoft.
    7 Apr, 02:37 PM Reply Like
  • dayo soyemi
    , contributor
    Comments (118) | Send Message
     
    Samsung has big plans for Tizen. You will be surprised what will happen to Android by the time they are done.

     

    Don't forgot that Samsung make TVs and home appliances, all of they have Tizen for OS and they can easily tie them all in.
    7 Apr, 04:03 PM Reply Like
  • Jack Baker
    , contributor
    Comments (886) | Send Message
     
    These court documents are quite illuminating. Schiller is quite a disappointment. He sends an e-mail to Media Arts bemoaning the fact that Samsung is beating on Apple even though Apple has better products. Does he do anything about it? No. Does he ask Media Arts to come-up with a clever add campaign to show why Apples ecosystem is superior to android's or why Apple phones are better than Samsung's? No. Does he fire Media Arts even thought they have been with Apple for 16 years and most companies fire their Ad Agencies every 2-3 years to get fresh ideas? No. He does nothing and allows Samsung to use Apple as their punching bag. What about an add highlighting how easy it is to upgrade you OS with Apple? How about an add that talks about how seamlessly interoperable Apple devices are? How about an add that talks about a stable and virtually virus-free OS? How about an add that talks about world-class customer service? How about an add that talks about a 64bit chip or a dedicated M7 chip for graphic performance? No. Nothing. Nada. We get warm fuzzy ads about a kid making a video of his families Christmas.

     

    I have read blogs from people that have worked within Apple that say that the marketing department drives everything within Apple. If this is true, then feckless Schiller has way too much power within Apple. Media Arts needs to go and so does Schiller.
    7 Apr, 01:06 PM Reply Like
  • GRojasHruska
    , contributor
    Comments (64) | Send Message
     
    If it was all about the benefits of your OS BlackBerry would win, Apple doesn't want to play that game, at least not until they finalize the hire of that BlackBerry SVP...
    7 Apr, 01:33 PM Reply Like
  • DanoX
    , contributor
    Comments (2577) | Send Message
     
    He's paid to worry, notice Apple didn't change Ad companies, in his it's ok to worry that's part of his job.
    7 Apr, 02:39 PM Reply Like
  • Jack Baker
    , contributor
    Comments (886) | Send Message
     
    GRojas,

     

    It's not all about the OS. It's about the complete ecosystem and Apple cleans Blackberry's clock on ecosystems. And, comparisons to Blackberry don't matter as Blackberry has insignificant market share. The smart phone market is a duopoly. It's only Apple and Samsung and the rest are insignificant. So, the only comparisons that need to be made are between those two.
    7 Apr, 04:51 PM Reply Like
  • JamesBlaugh
    , contributor
    Comments (6) | Send Message
     
    A couple of points:

     

    Seems like some of this info is coming from the lawsuit between Samsung and Apple. It is perfectly understandable that Apple is going to emphasize the bad to show how much they have been hurt by Samsung.

     

    Carriers are subsidizing other brands besides the Apple, so to me this is a non-issue. I would hope that management would consider worst case scenarios and plan accordingly. One slide doesn't tell the whole story.
    7 Apr, 01:12 PM Reply Like
  • pocohonta
    , contributor
    Comments (535) | Send Message
     
    well, at least Apple execs are not complacent.
    7 Apr, 01:24 PM Reply Like
  • chopchop0
    , contributor
    Comments (3112) | Send Message
     
    Yup.... this shows that Apple's execs are more with the program and pulse of the market than the AAPL perma-bulls and fanbois on Seeking Alpha
    7 Apr, 02:19 PM Reply Like
  • johnragin
    , contributor
    Comments (43) | Send Message
     
    Is Apple already selling as much and thus making as much money as possible? Could Apple be holding its own valuation down (to the dismay of insiders not privy to the strategy) while actively buying back its stocks? Could Apple be advantageously presenting itself as a victim in its legal pursuits? Could all of this be a head fake strategy to take over the world? I sure hope so. If not, us longs may be doomed to a slow mediocre death. If yes, then us longs are all going to be rich someday.
    7 Apr, 01:46 PM Reply Like
  • jec3
    , contributor
    Comments (81) | Send Message
     
    I would be far more concerned if Apple execs were NOT having these conversations.
    7 Apr, 02:55 PM Reply Like
  • netflixlong
    , contributor
    Comments (23) | Send Message
     
    A typical beginning of the week sell off for AAPL. At least half of the current Samsung S users would have an Apple iPhone if the company, under Cook's asleep-at-the-wheel leadership, had a 5" iPhone in the market when former AAPL loyalists first started clamoring for one. 2014 will be another year of making excuses for the former king-of-the-world brand. AAPL is one Jeff Gundlach downgrade away from revisiting a $400 stock price.
    7 Apr, 03:04 PM Reply Like
  • chopchop0
    , contributor
    Comments (3112) | Send Message
     
    Don't worry, by the time the 5"+ model is available it will be "groundbreaking" just like "4G" was on the IPhone 5.
    7 Apr, 03:12 PM Reply Like
  • Jack Baker
    , contributor
    Comments (886) | Send Message
     
    Number 1, Jeff Gundlach doesn't rate stocks. Number 2, his opinion had no impact on the stock the first time he opened his mouth. Number 3, Gundlach is a bond guy and has no track record investing in equities.
    7 Apr, 04:54 PM Reply Like
  • littup
    , contributor
    Comments (310) | Send Message
     
    GUNDLACH?

     

    I saw his interview where he spoke about APPLE..I used to like his opinions, i thought he was smarter. But the comments he made, the way of thinking...it was very amateur value investing.
    8 Apr, 05:59 AM Reply Like
  • donnie15
    , contributor
    Comments (16) | Send Message
     
    all of this is old news. all companies fret over their competition. nothing new here.
    7 Apr, 03:05 PM Reply Like
  • User 12599981
    , contributor
    Comment (1) | Send Message
     
    Get the same ad agency that Delta Airlines is using. They are killing it!!

     

    WAM in ATL
    7 Apr, 03:05 PM Reply Like
  • ultraz2@aol.com
    , contributor
    Comments (291) | Send Message
     
    Apples competitors that are taking Apples R&D fruits and not paying for their own R&D can channel Billions of dollars in saved R&D expenses and channel those slimy dollars to pay for advertising to be used against Apple.
    7 Apr, 05:38 PM Reply Like
  • ultraz2@aol.com
    , contributor
    Comments (291) | Send Message
     
    These internal Apple slides and memos, to me represent a positive as Apple has been addressing and continues to address the competition. Now that two larger Apple phones are on the way ,a good part of the competitive problem will be solved. Look for a strong Apple last month in third quarter, very strong Apple 4 th quarter and an extremely strong Apple 1 st and 2 nd 2015 quarters. There could be upside this coming earnings report , but most stock holders do not expect it and see it as a coin toss possibility. Apples near term future ( 6 to 12 months out ) is fantastic.
    7 Apr, 05:53 PM Reply Like
  • JasonMiles
    , contributor
    Comments (88) | Send Message
     
    Apple Invents.Samsung Copies
    7 Apr, 10:47 PM Reply Like
  • Warren Buffet007
    , contributor
    Comments (908) | Send Message
     
    Yeah, and I'm married with the Pope.
    8 Apr, 10:32 AM Reply Like
  • PGWFTW
    , contributor
    Comments (90) | Send Message
     
    Cash may be king, but Apple's level of cash borders on being a symptom of paranoid personality disorder.

     

    Apple isn't a like auto companies, which bleed cash by the tens of billions in the slightest of recessions.
    8 Apr, 05:23 PM Reply Like
  • Doc's Trading
    , contributor
    Comments (588) | Send Message
     
    Technical AAPL...Technical analysis...AAPL.... Despite reversal today and low of 218.70 would only take token long position since further market deterioration can be expected and the best AAPL will be able to do is perhaps successfully test this low, giving a long better confidence that he may be right on his entry point .
    If you are courageous, take a small long position but place your stop at 517.90 and expect to be stopped out before the stock reaches earliest supply levels of 530-535, which would be the recommended area to sell longs and try a small short position before earnings appear. Not for the faint of heart...
    More later.......
    8 Apr, 11:56 PM Reply Like
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