Apple CEO promises scaled-up local manufacturing, more features on iPhones.

A year after Tim Cook became the first Apple CEO to visit India, the Cupertino-based technology giant is clearly looking to take a larger bite into India’s burgeoning digital economy. The maker of iconic products like the iPhone and the Mac is looking at a multi-pronged strategy to ramp up its presence in one of the fastest growing smartphone markets in the world. This includes scaling up its manufacturing, developing localised features on its OS, setting up self-owned retail outlets and creating an ecosystem for developers to shift from Android to the iOS platform. The company is also looking to engage with the government to seek approval for import of certified pre-used iPhones to make its devices more affordable.

In an interview with The Hindu over a sit-down lunch at Apple’s campus at Cupertino, California, Mr. Cook said he was very happy with the progress made by the company so far in India.

On importing pre-owned iPhones, Mr. Cook said the company is hopeful of an agreement with the government. “I still believe that certified pre-owned phones will be good for India... Over time hopefully we will get an agreement,” he said.

The tech giant is also embarking on localisation of its new operating platform iOS 11 — including features in Hindi and introducing cricket on its voice assistant Siri. This comes even as Apple is facing multiple challenges, including declining sales in China and the U.S. 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).

Excerpts:

Since you visited India last year there has been much progress for Apple. What next for India ?

I am very bullish on India because of its people, its culture and the leadership. I love the culture and warmth of people. Every time I meet Prime Minister 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. I am extremely happy and it’s ramping up nicely. We want to continue to ramp up the production which means more volumes and more products for us. We have some work to do there but it’s headed in the right direction.

In the accelerator we have 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 their network up and running faster than any other carrier in the history of the world. I see all these things and I get super excited. 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.

The key thing though is that 95 per cent of Indian ecosystem is on Android.

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. As I told you last time we met, this is not about a quarter or a year or a decade, we want to be in India for a 1,000 years.

One of the things that Apple wanted to do in India was to import certified pre-owned iPhones. This would have opened up a whole new market segment for you at lower price points. Now that the Indian government has not given consent, is there a plan B to make Apple products more affordable?

I still believe that certified pre-owned phones will be good for India.

It’s a programme that’s widely used in the U.S., all throughout Europe and almost every country in the world where we sell. We just have to do a better job explaining it and talking about the advantages. Over time hopefully and eventually we will get an agreement on that.

We have not closed that option. I believe that if things are fundamentally good, it will ultimately happen over time. It may take a while but that’s okay, we are patient. Meanwhile, we do have products like the iPhone SE and iPhone 6 that caters to the segment.

You recently said that India is where China was few years back. You have invested in China’s cab hailing company Didi Chuxing. As you expand into India, would you also make investments into local Indian businesses?

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. So if something like that presents itself in India we would certainly look at it.

Will you replicate the growth you have seen in China?

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 then 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 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.

When do we see Apple starting its own retail in India as that would enhance consumer experience several notches up?

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.

Should Indian policy makers be doing more to attract foreign investments in general?

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 protection— 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 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 U.S. 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.

How are you dealing with the localisation aspect especially with making iOS11 more relevant for Indian users?

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.

What is your take on Chinese phone brands which have taken away your market share in China. In India the same brands have wiped out the Indian brands. Can they come in the way of your India ambitions?

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

Everyone wants to know what’s the next big innovation from Apple. You recently said that Augmented Reality is as big as the smartphone in terms of disruption. When you moved from Mac to smartphones, Apple disrupted the market. Can you give insights into how much of a shift will AR bring to what you do?

The difference is that the earlier shift was very focussed on products. What we are seeing happening now, faster that what we thought, 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 will see unique products in the AR space, the biggest advantage is that this technology will be ready to use but AR on smartphones and tablets. It instantly has an audience of over a billion people from day one. That’s a big difference.

So essentially what you are saying is that Apple is looking at AR from the point of making this available to the masses over existing devices than it being delivered as moonshot ideas for which users will have limited uses like cyborg eyes or neural links?

There will also be unique products on AR, I am not denying that. But it won’t be essential for customer 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.

The other big technology that everyone is talking about is Artificial Intelligence. But there is a debate on this in terms of the impact it will have. While Elon Musk has expressed major worries over AI, others like Masayoshi Son of Softbank has predicted that AI will surpass human IQ. How are you viewing this at Apple?

Many technologies can be used in bad ways. Technology in itself is not bad or good. It’s the people who design it who decide whether it’s going to be put to good or bad use. You can see that happen earlier also so this is not a new concept. 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.

Do we now know these areas where AI will surpass human IQ?

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 re-skill them for the next thing. Many countries, including U.S., haven’t done a very good job on that front.

Is that because there’s no clarity on how AI will play out?

I wouldn’t say that. It’s different in each country. In the U.S., 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 different view of that. We ought to be able to work together as companies and governments to help think through these disruptions, predict these in advance and take proactive measures, instead of waiting until there is a problem.

Technology is changing human social behaviour drastically. Not all of this is good. For example, the art of conversation is taking a back seat to texting. Do you think about it when developing products?

We try to stand at the intersection of technology and liberal arts. So for example in iOS11, 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 a message, when they should be driving.

We are really are thinking very deeply about how technology may be used which is not good and prevent it. It’s a big topic and we spend a lot of time on this. I worry as you do.

As technologies like AI and AR permeate into our lives, how are you going to get users involved because if you ask a user what he wants to do with AI, chances are he may not know?

The beauty of AI is that the user does not have to think about launching an application or think like ‘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.

So what happens to the silicon as all these technologies would need higher processing power? Will Moore’s Law get redundant?

So 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.

You have placed bets on autonomous cars, healthcare and new technologies. Is this the end of Apple as we know it today and the emergence of a completely new beast?

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.