Tim Cook’s India visit may really be about Apple TV, not iPhones
India has an estimated 160 million cable and satellite TV subscribers, expected to reach 174 million by 2020. The top 10% of that would mean a neat 15 million high-end market for Apple TV.
Apple CEO Tim Cook’s visit to India last week witnessed media hype, but I do think that in the din over his agenda, some clues on the company’s drive into the country got overshadowed.
There was a lot of attention on Apple’s attempts to sell pre-owned iPhones in India, plans to set up captive stores and of course, questions on whether Apple – or its partner Foxconn – would manufacture in India, to which Cook’s reply for now has been a vague “We are constantly looking at it.”
My view is that Cook’s visit to India was not really about the past but about the future – and that means not so much about the iPhone as about Apple TV. Cook made mild noises about Apple TV in response to questions and spoke of bringing Apple Pay, its digital wallet service, to India. I think they are much bigger to the company’s future in India because, as Cook made it clear enough, Apple is not really into making an “affordable” iPhone and is in fact looking at the high end of the market.
Cook says Apple is eyeing India for “a thousand years” – and that means the game is not really about smartphones but about convergence as a full experience in which bandwidth, apps and devices come together to create new “ Wow!” experiences for customers. In the US, it could mean smart ways to ride cars with Apple technology. In India, it could well be about new ways to watch TV because there is an under-served high-end smart TV market waiting to be wooed. Apple’s famous rival Samsung has just waded in.
Imagine a future in which four members of an Indian family are watching a video show together, and talking to each other – only, they are sitting in different continents, which is now quite common for India’s well-heeled. How about their talking to each other on the show using a messenger app?
Cook, who spoke of the potential for 4G services, met Bharti Airtel chairman Sunil Mittal and saw his son Kavin make a presentation on the Hike messenger. A high-end broadband TV service with a messenger attached may be a perfect match for a futuristic TV experience.
Read | Apple CEO Cook meets Airtel chairman, eyes bigger partnerships
Apple TV has an official slogan: “Apps are the future of television.” In Bengaluru, Cook announced an accelerator facility for developers and entrepreneurs and in Hyderabad, he inaugurated a technology centre for maps. For all we know, the apps in question may serve TV – for which Apple has a separate tvOS --rather than iOS meant for smartphones and tablets that can anyway be paired up with TV.
Last month, Apple showed its first year-on-year fall in iPhone sales since its start in 2007. Why would it look at the low end of phones in India when Cook is officially saying Apple is all about the high-end?
Smart TVs have arrived in India, but only as devices. For true experience, you need elaborate back-end content linkages for streaming video, which is what Apple TV is good at. Remember, it already did it with music when it pioneered iTunes.
Apple is sitting on $216 billion in cash (That’s Rs 920,000 crore!). I see Apple throwing a bit of that into India for futuristic TV apps, content partnerships and phone apps that make TV viewing smarter.
“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,” Cook says.
Read | Apple’s Tim Cook discusses with Modi plans to manufacture in India
Now, take a look at the potential for Apple TV in India, where BMWs and Audis have been selling like hot cakes.
The World Wealth Report for 2015, released by Capgemini and RBC, said India had 198,000 US dollar millionaires, up from 156,000 a year earlier, indicating high-end potential. The FICCI-KPMG report said this year that India has an estimated 160 million cable and satellite TV subscribers, expected to reach 174 million by 2020. The top 10% of that would mean a neat 15 million high-end market for Apple as 4G/LTE broadband takes off.
Apple TV acts like a one-stop shop for videos and combines service providers such as Netflix, Hulu, TED and Vevo alongside YouTube. Some reports say Apple may work with companies such as PayTm to enhance product experience. Imagine now an Apple Pay kind of service in partnership with PayTm for Apple TV.
The latest fourth-generation Apple TV has a voice search with a “Siri remote” and gaming support, and also offers an app store. There is still some way to go, but the direction is clear.
Read | Apple CEO touched by Indians’ warmth, opens facility in Hyderabad
While we talk Apple TV, Google is not sitting quiet, and that certainly must be in Tim Cook’s vision. Last week, Google announced Xiaomi, called “Apple of China” as its hardware partner for Android TV and Google Cast to watch Web content on screens. Xiaomi’s latest “Mi Box” with voice control is shipping into the US sometime soon, and India cannot be far behind. Google is also partnering Sony and others for Android TV while Google Cast will work with Toshiba, Philips and others.
Apple TV is already available in India upwards of about Rs 13,000. Its 5th generation version with better features is expected sooner than later and I expect it to be a lot smarter. Who knows, Apple may have significant India-specific plans with content partnerships for that – or the version that would follow.