October 17, 2016 1:00 pm JST
Interview

Apple CEO says iPhone's future is in AI

WAICHI SEKIGUCHI, Nikkei senior staff writer

Apple CEO Tim Cook talks about the potential of AI aboard a bullet train on Oct. 13. (Photo by Ken Kobayashi)

TOKYO -- Apple will celebrate the iPhone's 10th anniversary next year, but in chief executive Tim Cook's view, the technology is anything but mature. The Nikkei Asian Review caught up with Cook aboard a bullet train last week and asked him about artificial intelligence, his plans for Asia, and the experience of succeeding Steve Jobs.

Cook, who was visiting Japan for the first time as CEO, said Apple will open a research and development base in Yokohama, near Tokyo, later this year. The facility -- the first of its kind outside the U.S. -- will develop new component technologies. Cook described it as a center for "deep engineering" and said it will be "very different" from the R&D base Apple plans to build in China.

"I cannot tell you the specifics," he said. "The specific work is very different." 

Cook did say Apple intends to capitalize on AI in various ways, in cooperation with Japanese companies. AI is "horizontal in nature, running across all products" and is used "in ways that most people don't even think about."

"We want the AI to increase your battery life" and recommend music to Apple Music subscribers, he continued. As another example, he said AI could "help you remember where you parked your car."

Meanwhile, Cook said Apple intends to pour further resources into mobile payments in Japan and other Asian markets. This month, the new iPhone 7 will become the company's first handset to work with Japan's FeliCa contactless payment system.

Some analysts say a sales slowdown in China has prompted Apple to shift back toward Japan, where the iPhone commands a large market share. Cook said Apple sees "kindred spirits" in Japan, since it has "a lot of partners, supplier partners, and the developer community here is so vibrant."

Asked why Apple Pay -- the company's mobile payment service -- will use the FeliCa standard, Cook said: "Japan is important to us. FeliCa was born in Japan. So by extension, FeliCa is important."

Beyond that, Cook suggested his company wants to use Apple Pay, the iPhone and the Apple Watch to promote a cashless society. "We would like to be a catalyst for taking cash out of the system," he said. "We don't think the consumer particularly likes cash."

One of Apple's Japanese partners is Nintendo, which is set to bring a Super Mario game to the iPhone. "We have been working on FeliCa for a while and really hoped that Nintendo will come to iOS first," Cook said, "so it just came together." He stopped by Nintendo's offices during his visit.

Apple has also teamed up with IBM and Japan Post Holdings to offer health care services for the elderly, centered on the iPad tablet. Given the rapid aging of the country's population, Cook said "Japan is in the best position to lead" the way on such technology.

"The right thing to do"

China, of course, remains a priority. Earlier this year, Apple invested $1 billion in the country's top ride-hailing service, Didi Chuxing. Cook said the decision was made, in part, because the "sharing economy" is of "great interest to us." 

"We thought China was an unbelievable spot for it," because the nation's growing middle class will want "a little better way to move around."

"We were so impressed with [Didi's] management that we felt the two companies can do great things together," he added. Apple decided to "make a good-size investment because it is not something we normally do ... but in this case it seemed like the right thing to do."

That is the sort of decision-making the late Steve Jobs espoused. "I don't want you to ever ask what I would do," Cook quoted Jobs as saying. "Just do what is right."  

Cook remembered being called to Jobs' home in August 2011, about two months before the Apple founder's death. That was when Jobs asked him to take the reins.

Jobs, Cook recalled, stressed that "Apple had never had what he called a professional transition at a CEO level in its entire history. ... Someone was forced out and someone came in. He didn't want that to happen. He wanted a professional transition and he felt that this was the right time."

On filling Jobs' role, Cook said, "I never tried to replace him. I've just tried to be myself and do the best thing that I can do. ... I think if he were here, I would have loved it, because I would have loved going through many of these things with him. But it unfortunately wasn't to be."

Cook seemed unperturbed by criticism that Apple has produced few innovative products in recent years. He emphasized the company's strategy of expanding the scope of smart devices from accessories for life to tools for business, medical care and other purposes.

Smartphones are 9 years old, he noted. "We are not even teenagers yet. We just got going." Given the promise of AI and other new technologies, Cook said, "I think there is an incredible future ahead."

 

 

Nintendo Co., Ltd.

Japan

Market(Ticker): TKS(7974)
Sector:
Industry:
Consumer Durables
Recreational Products
Market cap(USD): 49,858.35M
Shares: 141.66M

Japan Post Holdings Co. Ltd.

Japan

Market(Ticker): TKS(6178)
Sector:
Industry:
Finance
Life/Health Insurance
Market cap(USD): 55,703.73M
Shares: 4,499.99M

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