Apple CEO Tim Cook is in India on multi-city visit, laying the ground for deeper engagement for the tech giant in India. He spoke to IndianExpress.com about how Apple views India, it plans and how this market is important for them. Here is the full text:
How big is India in your scheme of things at the moment?
It’s huge and not just from a market point of view. We are looking at India more holistically than that. We look at it as an unbelievable source of talent for both our internal operations like R&D on maps we announced yesterday, but also as a developer population with a lot of entrepreneurs who want to develop and create apps they want to offer to the world. They don’t want to spend their lives figuring how to do that. They just want it kind of done and focus on the product. I was just meeting the Zomato guys and they are a great example. The app store sort of enabled them to offer their product — they are in 23 countries around the world — and enabled them to scale really fast. We are looking at it from that point of view.
We are obviously thinking through the supply chain piece. We had an idea with the certified pre-owned and we are working with the government on that. There is some misunderstanding that it is refurbished, and it is not that at all. These are things we do in the US, Japan and pretty much every country in the world. And so that would be bring a level of operational responsibility and training into the country, which I think is really important. It is clear that we need an Apple retail presence over time, so we are working on that as well. Again, we are looking at it from many different angles and not solely from a market point of view.
Apple has been in India for many years, but it’s been a bit aloof. But now that you are trying to enter in a big way, is India playing hard to get?
No, I don’t see it that way at all. In fact, we have been here for a while, but we have sort of prioritised India as one of the top things we are working on. What I have seen in my previous meetings with the Prime Minister, I felt there was a very warm reception and lots of talking about different priorities and listening. I don’t sense that at all.
Also, yesterday with Chief Minister KCR, I would tell you I have never felt more recruited, more welcomed as a new business. In terms of the speed the government was moving at, they are already encouraging us to do more. This is what we want. It is great for India. I see a reform-minded government, perhaps still in the early stages, but clearly moving things to welcome businesses. And when I look at the top objectives like Digital India, the focus on skills and education, the focus on Made in India, I think they are exactly the right priorities. I feel very much welcomed.
You have been focusing on the services side. But in India you have the problem that people are not willing to pay for content. How are you going to tackle that? Are you looking at operator billing for instance?
In India, that is something we are looking at. Operator billing is something we don’t need in the US. But in India, it is something the customer would want and help us move faster.
We are also looking at things like bringing Apple Pay. I met one of the key banks and tried to understand how their view of mobile payments would play out. But having said that it is important we move faster on scaling on the ability to pay in a manner that is wanted and desired by the customer.
Some people here think of certified pre-owned as dumping. What will you say to them?
It is not dumping at all. If you look at the automobile in many countries, there is a certified pre-owned market for Lexus, BMW and many other brands. When you buy a high-end smartphone you can expect the same kind of a situation there. In fact, ours is better than the automobile because we give the same kind of guarantee, as we take the product and sort of make it in a pristine manner and we are certain of the quality and that is why we pass the warranty along. It’s about recognising that we are able to provide even more people the opportunity to have our products. We have always been about creating the best products that enrich people’s lives, we can do that even better if we can reach more people. Again, we do this in many other countries, not just India.
How will you counter the popularity of cheap Chinese phones in India, which offer really good specs, at least on paper? Is certified pre-owned the counter in the price ranges where India has great volume or will you make something to cater to those segments?
We are about making the best products and we are not going to lower the bar, and say we will reduce our standard to make another product. That is not who we are, and that is not something our customers expect from us. So the pre-owned market allows us to reach customers who really want an Apple device, but can’t really reach that point. I think it is great for people, or otherwise we wouldn’t we doing it. If we were not proud of the product, we wouldn’t be doing it.
Is it bad business to make a good phone? You have the example of Nokia which had really long refresh cycles, and in India only the iPhone has any resale value. But is that good?
I think so. Our focus is on the customer and doing the best thing for the customers, we put our own interests second. We believe that if we do the right thing for the customer, the byproduct of doing that is that you have a good business. It makes me feel great that our products have a higher resale value, that they continue to work and I think that is great. I don’t subscribe to the view some people have in the industry that you should purposefully design products that do not last that long. I don’t think it is good for anyone.
Smartphones are changing lives across the world, creating jobs, pulling people out of poverty. But are you happy about technology’s ability to trigger social change? Can it, or should it be doing more, especially in places like India?
I think it has done a lot, and I think it must do more. For us, the most important thing we can do is raise people up, that is either by giving the ability to do things they could not otherwise do, allow them to create things they couldn’t otherwise create. It’s about giving them tools, it is about empowering people. I think to me that is the primary objective of technology — for you to live better, longer. Certainly technology can help from a health point of view, it might be entertainment oriented, bringing more joy in life. All these things must be about improving human kind. I recognise that some things were done in technology that aren’t like that, but for me this is the primary purpose by far. Making people more productive means that they can spend their time doing things that have nothing to do with technology. We always look for the higher purpose of a product, I think that is extremely important.
You stood your ground in the iPhone unlocking case. Are you anticipating more of these debates happening across the world, for technology is used for negative things too?
That subject is a complex subject. We had given the (US) government all the information we had on that phone. So there was no dispute about we had more information we wouldn’t give, we gave everything we had. They they asked us to create a new operating system that took out the security controls in order to gain information we didn’t have. We considered what they asked, and then we said no. The reason we said no, is that there are certain things technology can do that you should never create. This was one such thing.
The tool they asked for was not something we should be creating. If that tool got out in the wild it could be used for a lot of nefarious things. I don’t just mean stealing your data, but your smartphone has so much information about you, where you are, where your kids are… You might be the IT administrator of a power grid and you think about somebody gaining access, and this has happened, by the way in Ukraine. To me the FBI tried to position this as privacy versus security; this was a public safety versus security. I think their intention was in the right place, but I don’t think they have a deep understanding of the technologies and we are weighing the deep implications of what they were asking for.
We felt we needed to stand up and say no, we are not going to do this and really push the courts of the Congress to get involved in this and that is what transpired. It was a very uncomfortable position to be in, opposing the government, but we work for our customers and we think they depend on us to provide data security. We did deliberate, but there was no hesitation on what we should do.
Is it a scary thought that now you have an entire generation that is way ahead of all of us in terms of accepting technology and access to the entire world of content out there? Are you worried about that aspect of technology?
I think it is important that a parent exercise a level of control over that. So yes, I do have concerns. So we spend a lot of time thinking about what we should do to give the parents tools to do that. We put a lot of parental controls in, because a four-year-old, or eight-year-old, or in my view a someone several years older than that, you want to protect them and not surface something to them before they can adequately judge for themselves.
At those ages we can’t rely on people to do that. It is something we worry about and we changed that worry into action, because that iPad should be an enormous source of education for that child. And we know from tests that a child using an iPad learns faster, but you need to protect them from the negative parts of it. There are negative parts and things I wish didn’t exist. But they do and we want to use technology to also control those.
You have said how 4G is going to be a big trigger for a market like India. But most of the country is still is 2G and other half pay for 3G but get 2G? How important is good network to get the best out of services like that of Apple’s?
Yah, I think that is where we are today. The level of things you can do are not brought to life fully because of the level of infrastructure here. This week I have seen some very bold plans on 4G and a lot of commitment to it. I think there is going to be a fairly rapid change. It is not going to happen tomorrow and there is a journey there, but I see the seeds already planted and we are going to grow very fast over the next several months. My own observation is that video is more important to the Indian consumer, and yet they are held back from enjoying it because of the network. I do think that 4G will have a profound effect, I am not talking about evolutionary, but it will be profound. It will be great to see that happen.
The Valley has taken a stand on Donald Trump, what is your stand?
We just come back and think about our North Star. Our North Star is about making the best products that enrich people’s lives. Our values are that we are open for everyone, we believe strongly in diversity and believe the best products are made by the most diverse people and we welcome everyone. Those are our North Stars and we focus on those… we are pretty good at tuning out a lot of the other stuff.
Has your perception of India changed during the trip, and what is your biggest learning?
My goal was to learn, really focusing on people, culture and how businesses have done, sort of helping people think a bit more. Obviously, I have a lot more to learn. The thing that sticks more is how warm the people are. Unlike other parts of the world, you instantly feel a part of the community. You feel accepted. I think there is an incredible competitive advantage for India to feel like that. It must be the most diverse place in the world and that is something that must be celebrated. I think I knew that before, but you don’t really know it until you experience it. The other thing is that the energy and vibrancy is unbelievable. Part of that is is youth perhaps, or it is more than that. I was with people of all ages at the temple (in Mumbai), at cricket (in Kanpur), these are really passionate people with so much enthusiasm in life. I think there is a lesson there for the world.