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The iPhone's future is in AI, says Apple's boss

Cook talks with children learning how to code Mac apps at an Apple store in Tokyo 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 in mid-October and asked him about artificial intelligence, his plans for Asia and the experience of succeeding Steve Jobs.

Apple CEO Tim Cook poses for a selfie with an iPhone user in Tokyo on Oct. 13.

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."

WITH MARIO 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 in such technology.

Rival Samsung Electronics of South Korea has been grappling with potentially dangerous defects with its Galaxy Note 7 smartphone at a time when it is also in a protracted court battle with Apple over intellectual property.

Noting that Samsung's parts business is "really good," Cook said Apple partners with the South Korean company "in places where there is common interest" and competes "in areas such as smartphone areas and others."

But Samsung "copied us," he continued. "We don't think that is appropriate behavior."

"You can imagine how you could feel if you had worked years on something and right before you signed it, somebody put their names on [it]. ... I absolutely hate litigation. To me, it is a very very last resort" for protecting Apple's engineers and designers, Cook said.

While some critics say Apple is suffering from so-called big company disease, Cook said, "We don't see ourselves as this big company, and I don't want Apple to ever act like it, either."

But, he said, "I think there are some challenges and scrutiny that comes with size. We open ourselves to ... any kind of government inquiry. [But] our focus is always on the users, how we do best for the user."

On Apple's dispute with the FBI over the protection of privacy, Cook said that although Apple was "working closely" with the U.S. authorities, "we were shocked they asked us [to unlock a shooter's iPhone following a terror attack in San Bernardino, California, in December 2015], and we said no."

While cybersecurity is a "very complex topic," Apple has a responsibility to protect users' privacy, Cook said. As the protection of privacy is built into the U.S. Constitution, "we felt a very strong responsibility to stand up no matter how hard it got, and it did get hard, but we did it because it was right to do," he said.

DESTINATION: CHINA 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."

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