BL EXCLUSIVE. I’m very bullish on India because of its people, culture and the leadership: Apple’s Tim Cook

After Tim Cook’s whirlwind trip to India in May last year, Apple ramped up its India game significantly. The tech giant has set up an accelerator for developers in Bengaluru and a software development centre in Hyderabad, and has started assembling iPhones in a limited way. This comes even as Apple is facing multiple challenges, including declining sales in traditionally strong markets like China and the US. In addition, the Cupertino-based company is under pressure to keep up its leadership in bringing out innovative products, especially with new technologies such as Artificial Intelligence (AI) and Augmented Reality (AR). BusinessLine met Cook at the Apple’s iconic campus at Cupertino over a sit-down lunch, the first Indian media entity to do so, to know how Apple is democratising these new technologies and the next steps it is taking in scaling up its India presence further. Excerpts.

I am very bullish on India because of its people, its culture and the leadership. Every time I meet Prime Minister Narendra Modi and listen to him and then see his actions, including GST, I see bold things that I don’t see in any other place. I am super impressed and optimistic. So what we are doing in India is to ramp up. We just got started on local production of iPhones and it’s very successful so far.

We want to continue to ramp up the production, which means more volumes and more products for us. In the accelerator, we already have hundreds and thousands of folks who have gone through it. There are now 7,50,000 iOS developer ecosystem-related jobs in India. That number is increasing, and so you will see more iOS applications debut in India. I think with ARKit and other things, it opens up a whole new vector. Entertainment is another area, with India being one of entertainment capitals of the world. I see all of these vectors act as catalysts. Add to this how Reliance Jio has got its network up and running faster than any other carrier in the history of the world. We are looking at taking the next steps, including developing the channel and expanding touch points. We are keen on going ahead with our own retail so we are investigating that. We are going to keep expanding.

That means we have a huge opportunity. But it’s never been about volumes for us. I definitely want more. With all the things we are doing, I am confident that growth will come. We are patient.

I still believe that certified pre-owned phones will be good for India. It’s a programme that’s widely used in the US, all throughout Europe and almost every country where we sell. We just have to do a better job of explaining it and talking about the advantages. Over time, hopefully, we will get an agreement on that. We have not closed that option. I believe that if things are fundamentally good, they will ultimately happen. Meanwhile, we do have products like the iPhone SE and iPhone 6 that cater to the segment.

I certainly would not rule it out, but it’s unusual for us to invest. We invested in Didi Chuxing because we were very impressed with the company, with the management team.

We are intrigued with the sharing economy, especially transportation and accommodation, like Airbnb. We thought we could help them in certain scenarios and they could help us in other areas. So, there seem to be joint benefits. If something like that presents itself in India, we would certainly look at it.

Our goal is not selling the most number of units. If it happens, then it’s wonderful. But I care about providing great products that Indian customers really love, and playing a key role in building up the ecosystem. If we do that well, our business will grow. Whether it will take the exact curve as China, I don’t know, but I sense several similarities. In terms of infrastructure, India was a few years behind in terms of cellular network, but the speed at which that is changing is magnificent. So I see a lot of things moving in the direction, which gives me the confidence that India has an exceptional future.

We have had lots of positive discussion on that front. I do think we will have retail stores in India eventually, not tomorrow but over time.

The things that attract businesses are rule of law, certainty of law, little or no friction from an import and export point of view so that you can readily get things in and ship things out. The ability to set up business quickly — I don’t mean cutting corners on things like environment protect — but things like faster permissions and the ability to freely move money from business to business. We hope to have retail, manufacturing, indirect channel and a maps development centre in India and we would want the flexibility to freely move money between them because that’s how we run business here in the US, where we have just one bank account. Things like that make life simpler and makes business nimble. In India, we are really impressed with the leadership: be it State or Centre, they all want to do the right thing.

We are bringing Hindi to dictation. We have brought cricket to Siri. After going for a cricket match during my visit to India last year, I realised that this was something we should have done already. We are also localising our keyboards within iOS. So, we are trying to think through every single way to make the user experience better for the Indian customer.

I don’t worry about someone else’s growth. The market in India is big enough for several brands. For us, it’s about innovation, making the best product and making the ecosystem better and better. If we do that well, more people will switch from Android to iOS. That’s what we did in China, and that’s what we are doing in India.

The difference is that the earlier shift was very focussed on products. What we are seeing happening now is that AR is literally impacting across all parts of life from enterprise use case to gaming, learning, healthcare and so on. It’s a horizontal technology as opposed to a vertical one. There’s nothing else other than AR that will effect that many parts over a lifetime. We are still in the early days. But the promise is there. While you will see unique products in the AR space, the biggest advantage is that this technology will be ready to use on smartphones and tablets. It instantly has an audience of over a billion people from day one. That’s a big change because when you moved from a notebook to the smartphone revolution earlier you had to buy a smartphone to enjoy the benefits.

There will also be unique products on AR, I am not denying that. But it won’t be essential for customers to experience AR. Last year, you saw the excitement created by Pokemon Go. It was a simplistic application of AR but you can see the power of mixing the physical and virtual world.

I think AR is much more powerful than virtual reality. VR can be cool, but the use case is narrower and it takes the user away from the physical world completely, which has its worries. It’s fine to do that for 4 or 5 minutes, but we don’t want — from a societal point — for people to use that a lot.

Many technologies can be used in bad ways. It’s the people who design it who decide whether it’s going to be put to good or bad use. While infusing technology with humanity, we are trying to make sure it’s used for good and also trying to foresee some of the ways it can be used in a bad way and eliminate those. AI is incredibly powerful. It will get closer and closer to human capabilities and at some point, for some functions, they will far surpass human capabilities.

Probably not. Some of these are predictable, but a lot of things may not be predictable. Apple is going to use AI for good and we will try to anticipate possible misuse and prevent that. All of us have that responsibility. Should governments also be involved in this?

The answer is: absolutely, they should. It’s very clear that AI will replace some type of jobs, but it will create other jobs. So, like some other technologies in the past, it will create and it will disrupt. We all could do a better job in anticipating those areas where disruption will happen and reaching out to those people in advance and reskill them for the next thing.

It’s different in each country. In the US, for example, there’s a feeling that the individual is responsible for their future. So if I happen to do a job that automation will eliminate, then it’s my responsibility to get retrained. I think we have to come to a different view of that. We ought to be able to work together as companies and governments to help think through these disruptions, predict these, and take proactive measures, instead of waiting until there is a problem.

We try to stand at the intersection of technology and liberal arts. So, for example, in iOS 11, if you are in a car, it will shut off notifications automatically. It will detect you are on the move. You have the option of circumventing it, but shutting off notifications will be the default option. We did this because we find that some people get distracted if they receive It’s a big topic and we spend a lot of time on this. I worry as you do.

The beauty of AI is that the user does not have to think about launching an application or think ‘okay, I am going to do some AI now’. This is embedded in things which you don’t even get to know. For example, if you use Apple Music, AI is embedded in it to do things like giving recommendations based on your usage. It is embedded into the phone to alert you on your next meeting. So AI is not like a thing or a physical robot. If you talk to our various teams — the software team, Apple TV team, the mail team, the home pod team — all of them have AI projects going on. AI is sort of like air. It’s invisible, yet all-permeating.

On the silicon, the CPU advancements are slower but the GPU advancements are exponential. These advancements allow things that are at the core of machine learning, which you could not have done a year ago. This would allow you do even more in the next 5 years. This is a huge competitive advantage for Apple because we have such an enormous deep expertise in silicon. The rest of the players in the industry have to go to somebody else for the chip, someone else for the software. The old vertical model has its limitations in a world that’s moving so fast.

Apple at its core is about integrating hardware, software and services together to create an experience that users love. So will Apple’s DNA change? The answer is no, but the product categories will change. Fortunately, the products that we are in now are really very good and they have a long life and lots of growth. But you can bet that we will do more and more things.