4:57am PT by Eriq Gardner
Apple Products Shown in 30 Percent of Hollywood's Top Movies, for Free
In the so-called "tech trial of the century," Apple is showing off just how much it has captured the hearts and minds of Hollywood.
Apple is in the midst of a jury trial that accuses rival Samsung of infringing its patents and trademarks on its iPhone and iPad products in creating and marketing the Galaxy devices. The trial continues this week after a San Francisco jury heard testimony from top Apple executives about the making and marketing of the consumer technology that took the world by storm. Apple now demands some $2.5 billion in damages from Samsung. Jury selection began July 30.
Apple has long insisted that it doesn't pay for product placement in movies and television, but that doesn't mean the Cupertino, Calif.-based company doesn't care. In fact, highlights from the trial evidence that Hollywood has been a huge part of the company's marketing strategy over the years.
When Apple first worked on the iPhone, it was called "Project Purple."
According to testimony by Apple mobile software head Scott Forstall, secrecy about the project was so immense that a sign on the front door where the work was being done said “Fight Club." The allusion was obvious. "The first rule of Fight Club is you don't talk about Fight Club," testified Forstall.
Apple executives say that building the iPhone was risky, but there were great rewards promised for a successful project.
More than five years ago, when the company was working on the prototypes, Apple saw what cell phones weren't doing well at the time. "We started to look at whether you could put entertainment content on cellphones," testified Phil Schiller, Apple's global chief of marketing. "We realized at the time that some phones weren't any good as entertainment devices."
The iPhone was introduced in June 2007. Before it launched, Apple used a commercial during the Academy Awards to announce its impending arrival. But then the company decided it could “go quiet" on the advertising front, according to more testimony.
For one thing, Apple realized the press would lavish attention on it. But the company also decided that Hollywood would embrace it.
"We would love to see our products used by stars in movies [and] TV shows, and we have a person who helps provide products to people that want to do that," said Schiller.
The jury saw a chart that documented all of the product-placement successes.
In fact, Apple has been getting hundreds of millions of dollars of possibly free publicity over the years. According to a survey by Brandchannel this year, Apple-branded products have appeared in more than a third of all films topping the box office from 2001 through 2011 (and 17 of the 40 top films last year). That's more than McDonald's, Pepsi and the Sony Vaio combined for the past decade. In Mission: Impossible -- Ghost Protocol, for example, Apple got more than five minutes onscreen, which analysis from Front Row Analytics estimates to be worth more than $23 million. Perhaps most amazing, according to Brandchannel, is that Apple says it doesn't pay for product placement.
At trial, Schiller testified that in 2007, the company concluded that it "didn't need" to put any money into its advertising budget. That's changed somewhat. According to what the jury heard, from 2008 to 2011, Apple spent $647 million on iPhone publicity and $457 million on iPad publicity. For a company that has sold some 250 million iPhones, though, that's a rather paltry sum.
Nevertheless, Schiller says that Samsung's introduction of similar smartphones and tablets "creates a huge problem" for his marketing division.
Samsung's lawyer asked whether it's really possible that consumers "accidentally buy the Droid Charge thinking it's an iPhone."
"I believe they may be confused," responded Schiller.
Samsung will have an opportunity to bring its own witnesses and evidence soon. Confusion is one part of the fussing in court. The parties also are debating who gets credit for going first with the important design work on mobile devices. Samsung tried in vain to show off its F700 phone to the jury and got in trouble with the judge for possibly leaking excluded evidence to the media. Samsung also could attempt to show "prior art" by pointing to more Hollywood content. After all, Samsung once brought forward the argument that an iPad-like device could be seen in Stanley Kubrick's 1968 film 2001: A Space Odyssey. Apple doesn't get credit for that one.
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