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Some Apple staff fear losing sales to phablets

An internal document from Apple has shown that at least some of its employees are of the opinion that competition from Android phones with larger display or drastically cheaper price tags could start to hit iPhone sales. The document was used in the cross examination of Apple’s senior vice president of marketing, Phil Schiller, by Samsung’s legal team as part of  the ongoing legal battle between the two companies which started up again last week.

The document comes from a meeting by Apple’s sales team in preparation for 2014 and notes their fears over the fact that competitors using Google’s Android operating system have come a long way in closing the gap to the iPhone and in some respects may have products that could steal sales from them.

“Competitors have drastically improved their hardware and in some cases their ecosystems,”

The document showed research which suggested that the majority, if not all, of the growth in smartphone sales was coming either from large-screen phablets which cost more than $300 (around R3 200) or from devices that cost less than $300, with the segment that included the iPhone showing decline. It’s an easy statement to believe after the IDC showed that more phablets were sold in Asia than notebooks and tablets combined.

There was also an interesting note that Apple’s competitors, more than likely directly referring to Samsung now, were “spending ‘obscene’ amounts of money on advertising and/or carrier channel to gain traction” which could be a factor in slowing iPhone sales going forward. Carrier channel spending is the term used to describe the incentives that most smartphone manufacturers will use to get the sales people in retail outlets to offer a specific phone over another, usually in the form of other products like Microsoft offering an Xbox for selling more Windows Phones.

While Schiller, of course, denied that the document represented Apple’s policies and in particular said that he disagreed with it, the rumours are beginning to mount a strong case for the introduction of a larger-screened iPhone model when the iPhone 6 is inevitably announced some time around September. For now though, we’ll be keeping an eye on the information coming from the court rooms in California.

[Image: Source: Re/code]

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