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Apple's Phil Schiller on how the tech giant has changed - and how it hasn't
For a company that has a storied place in technology history, Apple prides itself on being resistant to nostalgia. Each year, the tech giant presents new versions of its entire line of products, so that almost all its revenues come from items that have been released in the last 12 months.
Conversations with executives almost universally tend to be about the present, or the future. But this year, for a couple of brief moments, Apple has allowed itself to slip into the past. One came in the summer, with the opening of Apple’s new multi-billion dollar headquarters, whose auditorium was dedicated to late founder Steve Jobs. And the other came in January, which marked a decade since the iPhone was first unveiled to the world.
It’s no surprise that Apple remembers. Many of its top executives have been at the company for decades, since before the products that made it a global giant were invented. Phil Schiller is one of them. Apple’s senior vice president of worldwide marketing first joined the company 30 years ago, leaving before returning alongside Jobs in 1997.
Since then, it has become the world’s biggest company and turned many industries on their heads. Surely the company's growing size affects things "For me? No, zero," he says. "I don’t think it’s an exaggeration to say Apple is a really large company that feels like a small company, it still feels like the company I joined back in 1987," he says. "While so many things have changed, the very most important things haven’t at all."
The years Schiller has spent in the Apple fold are clear. During our conversation, he hugs the familiar language of the company's slick marketing operation: people "love" Apple products, which are never given the definite article (the iPhone is described simply as "iPhone").
But Schiller’s responsibilities extend beyond his marketing-chief title. He is credited with the spin wheel design of the original iPod, runs the App Store, and was deeply involved in the development of the first iPhone, released in 2007.
A decade later, more than 1.2bn iPhones have been sold, but this year, Apple did something new. It released two lines of the phone: the iPhone 8, a similar model to previous years with a smattering of upgrades; and the iPhone X, a re-imagining of the device that Apple has called the “future of the smartphone”.
Shaking up a playbook that has worked so well was seen by some as a risky move. "It was a very new kind of year for us," Schiller says. "It’s something we’ve been planning for quite a long time, we wanted the opportunity to create a new-generation phone as we’ve done every year and that was 8.
"At the same time we wanted to create something that was even more aggressive, even more of a departure from where iPhone had been going, and that’s iPhone X. It’s something we haven’t offered that way before but it’s worked really well."
The dual launch – the iPhone 8 was released in September and the X last month – underlines how Apple itself has inevitably changed as it has got bigger. The company used to be known for a handful of popular products, it now has seemingly dozens of different lines of computers, tablets and phones. In recent years it has branched into wearables and headphones, as well as vastly expanding its array of online services.
Even the iPhone now has five different lines on sale, from the iPhone X, which costs £999 and up, to the iPhone SE, a smaller model at a third of the price that appeals to more cost-conscious users and those who like small screens.
Schiller says they are all crucial, even the two-year-old SE - "it still exists in the line because it meets those needs". The model is rumoured to be due an update early next year, but true to form, Schiller gives nothing away. "I can’t make any statements about the future."
But Apple’s increasing sprawl has raised questions about whether it can handle it, and the company has been through an unfortunate series of events in the last few weeks.
In November, it was forced to delay the HomePod, its smart speaker rival to the Amazon Echo, until next year. A week before I spoke to Schiller, researchers discovered an embarrassing security hole in the latest version of Apple’s computer software, MacOS, that allowed anybody to log in without a password.
Recently users have found bugs in the iPhone that corrected letters to incomprehensible symbols, and allowed hackers to take control of smart home devices. Critics have asked if Apple is getting sloppy.
Schiller says there are "no excuses". "When we make mistakes it pains us all. We try to be very self honest. If we make a mistake we need to apologise and fix it quickly. The team has worked tirelessly to respond to these issues over the last week and put out updates and make things right very quickly."
But he rejects that such issues are becoming more common. "We just had a bad week. A couple of things happened, that’s all. The team is going to audit the systems and look carefully at the process and do some soul-searching, and do everything that they can to keep this from happening again."
The delay of the HomePod is undoubtedly a blow. The market for smart speakers is taking off, and having to release it on the other side of Christmas will hit sales. Schiller is unapologetic about refusing to hit a deadline for the sake of it. "I’ll just say that it’s not ready yet. One of the things a lot of our customers appreciate is that we’re never afraid to wait to ship something.
"Not everyone in our industry follows that model. We’re at the very, very beginning of this market of intelligent music speakers that we want in our home. Some companies like to put things out even if they don't think it will succeed at the start, we care a lot about the quality of the things we want to put out there and so if it's not ready its not ready yet."
Next year marks a new anniversary for the company, when another product turns 10: the App Store. Although somewhat less heralded than the iPhone, the portal of downloadable apps has been a central part of Apple’s success, as well as launching huge businesses like WhatsApp and Uber.
As sales of the iPhone itself have slowed, apps have become one of Apple’s most important growth areas. Spending on the App Store grew to $28bn (£21bn) last year, up 40pc from a year earlier, with Apple taking a 30pc cut. In the last quarter, Apple’s services business, which includes the App Store, grew 34pc year on year and is now the second biggest division in terms of sales after the iPhone.
However, there have also been suggestions that we are downloading fewer apps, as the millions that are available become overwhelming. Schiller, who was put in charge of the App Store in 2015, oversaw a redesign of the service from the bottom up, aimed at making it easier to find new apps. "We’ve had this great success, but we can’t sit on our laurels; we always try to make things better," he says.
"When we first launched the App Store it was an exciting thing to open it up every day and look at what showed up. That’s what we all used to do in the beginning and we wanted to bring back some of that excitement again." Schiller says there have been some "exciting numbers" but that it is too early to tell whether the changes have had an effect on the business.
Apple is making a big bet on augmented reality (AR), a burgeoning technology that adds virtual objects into a phone’s camera feed, blending the physical and digital world. This year it released software that allows developers to easily create AR apps, and Schiller says the company is a "super big proponent of it". Early examples of the technology include an Ikea app that allows users to see how furniture would look in their room before they buy it, and Pokémon Go.
"It’s just a fundamental technology that’s going to impact so many categories of software, of our experiences with technology," he says.
Apple is rumoured to be working on a set of AR eyeglasses, which could well be the epitome of the technology, but for now, Schiller says the phone is currently the best vehicle. "It’s ubiquitous and it makes sense; if the idea is to be able to see the digital world mapped onto the real world you need something that's with you and mobile. There has never been a technology product category as big as ubiquitous as the phone"
When I posit that many of the AR apps that exist today look more like demos than services that one might use every day, Schiller counters that nobody predicted what the most successful smartphone apps would look like. "[It’s] just like the first year of the App Store when none of us knew where it was going to go.
"There wasn’t an Airbnb when it started, there wasn’t an Instagram … these are all things to come as brilliant people build on top of the technology and apply them in amazing ways, that’s what’s going to happen in AR."