How Apple CEO plans to counter iPhone worries

Apple has more to show for its efforts in artificial intelligence, where it was an early pioneer with its Siri digital assistant.

As iPhone sales declined for the second straight quarter, Apple chief executive officer Tim Cook peeled back the curtain ever so slightly on its work in artificial intelligence and augmented reality, aiming to reassure investors that the company is ready to ride the next wave of technology.

Raving about hit smartphone game Pokemon GO, Cook stressed that Apple is "high on [augmented reality] for the long-run" and investing heavily.

Augmented reality, in which computer-generated content is overlaid on the real world, is one of the latest fixations in the technology business, with Pokemon GO among the first applications to catch on.

Cook also highlighted Apple's investment in artificial intelligence, which the company now uses to recommend content to users and even spot usage patterns to improve a device's battery life.

It was a small glimpse of the future from the notoriously secretive tech giant, which fiercely guards its product pipeline. But analysts said Cook must do more to show his cards as sales of the iPhone slow.

Augmented reality and artificial intelligence are often regarded as an uneasy fit for Apple, a hardware maker that tends not to embrace new technology until it matures.

And Apple's habit of keeping quiet until it has a finished product to show -- in contrast with rivals such as Google and Facebook, which iterate products in the open -- doesn't help, said analyst Bob O'Donnell of TECHnalysis Research.

"They're in this weird position where they want the world to know that they are working on it, but they have nothing to show for it," he said.

As rivals such as Google and Facebook double down on augmented reality, Apple has made no public display of its aptitude in the field.

But Cook stressed that the company is hard at work behind the scenes.

"We have been and continue to invest a lot in this," Cook said.

"We think there's great things for customers and a great commercial opportunity."

Apple has more to show for its efforts in artificial intelligence, where it was an early pioneer with its Siri digital assistant.

But the company has been dogged by doubts that it has fallen behind rivals such as Amazon and Google and will be hard-pressed to catch up due to its strict privacy stance.

"They are running behind, and they are trying to catch up both in perception but also in fact," said Oren Etzioni, who is CEO of the Allen Institute for Artificial Intelligence and a professor at the University of Washington.

Cook maintained that Apple had found a way to strike the balance between progressing in artificial intelligence and maintaining users' privacy, detailing features in Apple's latest operating system.

"The deployment of artificial intelligence technology is something that we will excel at because of our focus on user experience," he said.

Ultimately, Cook argued, phenomena such as artificial intelligence and augmented reality will only reinforce the importance of the iPhone.

He said the company was working to make sure its products worked well with third-party products like Pokemon Go.

"That's why you see so many iPhones in the wild right now chasing Pokemons," he said.

Image: Apple Inc. CEO Tim Cook speaks on stage at the company's World Wide Developers Conference in San Francisco, California, June 13, 2016. Photograph: Stephen Lam/Reuters