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Piper Jaffray Cos
Steve Jobs always oversaw Apple’s (AAPL) blockbuster product launches, but he was never a one-man show. Phil Schiller, the company’s longtime senior vice president of product marketing, often hammed it up onstage as the lower-brow counterweight to Apple’s cool, polished chief executive officer. In 1999, Schiller jumped off a 15-foot platform to show off Apple’s new iBook. In 2007, he demoed new videoconferencing features by superimposing his mouth on a photo of Steve Ballmer. “I love my Mac!” Schiller had the Microsoft (MSFT) chief declare.
Offstage, Schiller wasn’t a clown but one of Jobs’s most trusted, influential lieutenants. He helped Apple’s late CEO work through the meat-and-potatoes of creating new products: Defining target markets, determining technical specs, setting prices. It was Schiller who came up with the spin-wheel interface on the original iPod, and he was a champion of the iPad when other executives questioned its potential. “Because Phil’s title is marketing, people believe he’s focused on what’s on the billboards,” says Gene Munster, an analyst with Piper Jaffray (PJC). “He’s much more important than people give him credit for.”
Since Jobs’s death in October, perhaps no Apple executive other than CEO Tim Cook is under more pressure to fill the void. Apple declined to make Schiller available for this story, which is based on interviews with more than a dozen former Apple managers, business partners, and industry analysts, most of whom asked to remain anonymous to avoid harming their relationships with the company. Besides helping software chief Scott Forstall and hardware designer Jonathan Ive define new products, Schiller is the steward of Apple’s relationship with app developers. He has taken over all of Apple’s marketing, including a global advertising budget that hit $933 million last year. And he will increasingly be Apple’s public face, a role that should be evident at the company’s annual Worldwide Developers Conference starting on June 11. There, Schiller is likely to emcee much of the keynote, during which Apple is expected to unveil new Mac laptops and an upgraded operating system. This could be one of Apple’s biggest years ever for new products, starting with the new iPad in March and likely including an upgraded iPhone this fall and possibly a television.
According to a person who met with Schiller recently to discuss Apple’s future, the marketing executive knows he’ll get more than his fair share of blame if the new products aren’t hits. Schiller has the daunting task of keeping Apple cool. And that’s harder to do now that the company is a $535 billion behemoth, subject to antitrust reviews and labor-practice criticisms, rather than the underdog he rejoined in 1997.
At that point, the Boston native had already held various marketing positions at technology companies including Macromedia and FirePower Systems, and did an early stint at Apple. After his return, he and Jobs became close. When Jobs penned the 2004 e-mail that first alerted employees of his fight with cancer, Schiller was one of only two other people in the room. When Jobs cut short a vacation in Hawaii to deal with complaints about the iPhone 4 antenna in 2010, Schiller spent a tense weekend by his side crafting the company’s response, says Regis McKenna, a longtime Silicon Valley marketing consultant who was also there. During Jobs’s final medical leave, Schiller often attended weekly sessions at his Palo Alto home, where the CEO met with Apple’s advertising firm to refine ads and brainstorm new campaigns.
Fairly or not, Schiller and other Apple executives are being measured against their former boss. Superficially, the two men had little in common. Jobs had no interest in sports; Schiller is a rabid hockey fan. Jobs eschewed public displays of wealth; Schiller collects high-priced sports cars and has kept miniature replicas of some in his office. Yet in business, Schiller channeled Jobs’s perspective so consistently that he was known within Apple as Mini-Me. He found the nickname flattering and kept a cutout of the Austin Powers character in his office. Like Jobs, he is ruthlessly disciplined when it comes to choosing new products or features, which has yielded another nickname: Dr. No, for his penchant to shoot down ideas, according to one former manager.
Schiller has become the fiercest defender of Apple’s brand. When product specs leak, Schiller is the one pushing for investigations to find the culprit, say two former Apple managers. He helped craft Apple’s bluntly worded guidelines for app developers, which state that “if your app looks like it was cobbled together in a few days … please brace yourself for rejection.” When Instagram launched an Android version of its initially iPhone-only app, Schiller stopped using it.
A father of two, he’s also the cop keeping Apple’s ecosystem free of porn and other objectionable material, which has resulted in criticism for an overly restrictive approval process for app developers. When Liz Perle, co-founder of children’s advocacy group Common Sense Media, visited Apple to describe her group’s rating system for movies, apps, and other media, Schiller was brusque. “Okay, I’ve got five minutes. We’re already taking care of this,” she recalls him saying. After Perle noted some oversights by the approval team, Schiller chatted with her for 2½ hours.
Schiller shares many of Jobs’s passions and impulses. The big question is how well he can channel them into new ideas and products. Four former Apple managers say many consider him overly controlling and worry that he lacks the bold creative instincts needed to maintain Apple’s edge. Particularly in his expanded marketing role, some fear he will be a more conventional leader, prone to hyping products in ways that tarnish Apple’s hard-won brand loyalty.
Under Jobs’s control, Apple’s advertising yielded a string of unforgettable campaigns, such as the silhouetted iPod dancers and the “Mac vs. PC” ads. Apple’s latest spots feature celebrities using Siri, the iPhone’s voice-recognition feature. It’s a departure for a company that typically avoids celebrity endorsements, and so far they’re falling flat by Apple standards, says Peter Daboll, CEO of ad-tracking firm Ace Metrix. One new spot featuring John Malkovich asking about the meaning of life scored 559 on Ace Metrix’s 900-point scale. “They haven’t been in the 500s in years,” he says. The ads have met with mockery in some circles, in part because the actors’ experience with Siri is laughably different from real-life uses of the imperfect technology. Customers have even filed a class action against Apple claiming Siri doesn’t work as advertised. Apple denies the allegation and plans to fight the suit.
The biggest problem will be if Apple’s upcoming products can’t meet expectations. Along with Siri, Apple’s other heavily promoted feature since Jobs’s death has been the new iPad’s high-resolution “retina” display, which is nice but not exactly revolutionary, according to Trip Chowdhry, an analyst with Global Equities Research. “The real question is what new multibillion-dollar market can they create with a new device that you and I can hardly even imagine,” he says. “They’re at the top—and when you’re at the top, there’s only one way to go if you don’t reinvent yourself.”
The bottom line: Schiller controls Apple’s nearly $1 billion advertising budget. Recent campaigns have fallen short of expectations.