Aug. 3 (Bloomberg) -- Apple Inc. marketing chief Phil Schiller said the company counts on free press coverage and products placed in film and television shows, sometimes over pricey advertising, to promote its devices to users.
Testifying in federal court in San Jose, California, where Apple has accused Samsung Electronics Co. of copying features from its mobile devices, Apple executives also discussed early planning for the iPhone and deliberations over whether to introduce a smaller version of the iPad.
Schiller, senior vice president of worldwide marketing, described how Apple benefits from widespread media attention. The remarks offered rare glimpses of decision making at a company that ordinarily goes to great lengths to shroud its inner workings in secrecy.
"We would love to see our products used by stars," Schiller said in testimony today.
Apple seeks $2.5 billion for its claims that Samsung infringed patents covering designs and technology for mobile devices. Samsung, based in Suwon, South Korea, countersued and will present claims that Apple is infringing two patents covering mobile-technology standards and three utility patents.
Apple executives have also debated whether to unveil a smaller iPad, according to today's testimony. An attorney for Samsung showed an e-mail from Eddy Cue, Apple's senior vice president for Internet services, advocating for a 7-inch tablet, compared to the 9.7-inch model now on the market. In the e-mail, Cue discussed trying to persuade Apple co-Founder Steve Jobs to build a smaller iPad.
IPad Market
"I believe there will be a 7-inch market and we should do one," Cue said in the e-mail. "I pressed this to Steve several times since Thanksgiving and he seemed very receptive the last time."
Jobs died in October 2011.
Schiller, discussing the iPhone, said Apple decided not to pay for any advertising during a brief period after the device was introduced in January 2007 and when it went on sale later in the year.
"We didn't need to," Schiller said. He read from several rave reviews of the iPhone and iPad, explaining that such stories did a better job than advertising to build buzz.
Schiller, Apple's first witness called today at the patent- infringement trial, said Samsung is taking advantage of Apple's design and marketing work by introducing similar smartphones and tablets, which "creates a huge problem" for marketing.
"Customers can get confused about whose product is whose," he said. "It dilutes the way customers see Apple."
Hollywood Collaboration
Apple and Samsung are battling for leadership in the global smartphone market valued by Bloomberg Industries as $219.1 billion last year.
Schiller described Apple's advertising philosophy as the "product as hero." Apple's attorney showed jurors one of the earliest iPhone ads, with a person's hand moving between different applications, which Schiller said was an effort to show people how the smartphone works.
One of Apple's employees works closely with Hollywood on so-called product placement so its gadgets are used in movies and television shows, Schiller said.
Earlier this week, an Apple designer outlined how a small team within the company comes up with ideas for products around a kitchen table.
Later in the day, Scott Forstall, Apple's senior vice president in charge of iPhone and iPad software, described the creation of the iPhone.
'Fight Club'
Forstall said Apple started developing the iPhone in 2004 because company executives were frustrated with the features of their own mobile phones. The company had already begun working on the iPad, working with touch-screen technology. Apple set the tablet project aside and incorporated the touch features into the iPhone.
The iPhone project was top secret, Forstall said. He was put in charge of the iPhone's software and Steve Jobs said he couldn't hire anybody from outside the company to work on it.
Apple used colors to describe the work. The first iPhone was called "Purple," he said. The floor where Forstall's team worked was locked off from other employees and cameras were set up for security, he said.
"We put a sign up that said 'Fight Club,'" Forstall said, referring to the movie starring Brad Pitt. "The first rule of 'Fight Club' is you don't talk about 'Fight Club.'"
The case is Apple Inc. v. Samsung Electronics Co. Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose).
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