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8/30/2014
08:06 AM
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Apple iPhone 6: Mobile Payments Pioneer?

Apple's latest iPhone could help bring mobile payments to the mainstream.

8 Things We Want In iPhone 6
8 Things We Want In iPhone 6
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The tech industry has made a number of attempts to ignite interest in mobile payments, and so far all have fizzled out. Sure, Google Wallet is still around, and Isis is available on a wide range of smartphones, but almost nobody uses them to pay for real goods in real stores. Apple, which might add such functionality to the iPhone 6, could change that.

The company has scheduled a media event for Sept. 9, when it is widely expected to debut two new iPhones and a smartwatch. The next-gen iPhone will differ from previous devices in many ways. Though many consumers may fixate at first on the larger screens (4.7 inches and 5.5 inches), others will be thrilled to learn the iPhone 6 adds NFC for the first time. NFC and mobile payments "will be one of the hallmark features of the device," according to Wired, which cited sources familiar with Apple's plans.

Not only will the device have the necessary components for mobile payments, but Apple is also well positioned to debut its own mobile wallet. As Wired points out, Apple has more than 800 million credit cards on file through iTunes. Further, it has invested in its Bluetooth-based iBeacon technology and has a massive user base eager to adopt new technology. Apple has patented ways for NFC and Bluetooth to communicate with a "secure element" -- needed to protect user identity and bank account data -- within the device, and Apple has held discussions with payment companies in recent months.

[Will Apple's upcoming smartwatch also give the wearable device market some much-needed disruption? LG, Samsung Debut Smartwatches, Apple Lurks.]

These signs all point to one logical conclusion: Mobile payments are about to take off.

Today's solutions are laudable but clunky. Google Wallet, for example, requires NFC and a Google Wallet account to function properly. Sadly, few retailers accept Google Wallet at their terminals. The same is true of Isis (which is rebranding for obvious reasons). It launched in November and is available on millions of devices throughout the US. The effort is backed by AT&T, T-Mobile, Verizon Wireless, and a growing number of retailers. But those retailers are still too few and far between -- "Pay with Isis" signs are hard to find in the real world.

Visibility is a real problem for mobile payments, and that's where Apple can differentiate and possibly succeed.

Consider its own retail stores. Apple Stores are found throughout the world, and Apple could easily allow iPhone owners to enter one and make a purchase by simply tapping their iPhone to another device. Then there's Passport, Apple's loyalty card account management system. Apple could give Passport-enabled apps preferential treatment when it comes to making mobile payments, or even just gently remind iPhone owners that they can use their device at the register. Apple has already given the iPhone a fingerprint sensor for security. The iPhone 6 will surely carry that feature over to help reassure iPhone owners that their data is safe and protected with their unique biometrics.

All the pieces of the puzzle are lining up for Apple and mobile payments. If Apple is able to convince iPhone users to make mobile payments, perhaps other mobile payment services will see a boost, too.

If the world wasn't changing, we might continue to view IT purely as a service organization, and ITSM might be the most important focus for IT leaders. But it's not, it isn't and it won't be -- at least not in its present form. Get the Research: Beyond IT Service Management report today (free registration required).

Eric is a freelance writer for InformationWeek specializing in mobile technologies. View Full Bio

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pcharles09
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pcharles09,
User Rank: Ninja
9/22/2014 | 9:55:02 PM
Re: Wait, What?
@jgherbert,

Guess you were right. Since iWallet was one of the only "NEW" features of the 6.
pcharles09
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pcharles09,
User Rank: Ninja
9/22/2014 | 9:53:49 PM
Re: Wait, What?
@shakeeb,

I'd say at least give them the benefit of the doubt.
SchwarzV703
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SchwarzV703,
User Rank: Apprentice
9/22/2014 | 6:52:25 PM
iPhone 6
I bouth already an iPhone 6 and i must admint that is working perfect , no problems , moving smoothly , and the price is quite acceptable on www. mobiles-world .com/ . Delivery arrived in 5 days , it took some time but i must say BIG THANKS to their team who always helped me with any questions i had about my order ! 
WaqasAltaf
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WaqasAltaf,
User Rank: Ninja
9/21/2014 | 2:01:23 AM
Re: Apple's already destroyed market share
Shakeeb, how do you foresee Apple's marketshare in the smartphone industry in a five year term ? Declining or growing ?
Rocwurst
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Rocwurst,
User Rank: Apprentice
9/15/2014 | 10:33:41 AM
Re: Apple's already destroyed market share
"in 3Q2013 Apple's market share was 12.1% (2% decrease YoY) of the revenue"

You're confusing unit sales marketshare with revenue.  They are not the same considering that 60% of Android devcies are worth below $200 vs the vast majority of iPhones cost greater than $600.  

As a result, it is not surprising that Apple captured 85% of the profits of the entire mobile phone industry last year, up from 72% the year before.

Considering the iOS platfrom is so large (closing on 1 billion devices) and growing at such a large rate (quarter of a billion per year) and making the lion's share of manufacturer and third party ecosystem revenue and profits, why would Apple want to change their policy of only targeting the premium high-end market just to gain "market share"?
WaqasAltaf
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WaqasAltaf,
User Rank: Ninja
9/15/2014 | 9:05:53 AM
Re: Apple's already destroyed market share
Rowcurst

Regarding your first point, in 3Q2013 Apple's market share was 12.1% (2% decrease YoY) of the revenue while for Samsung alone it was 32.1%, let be the other Android phones.

Regarding your second point, I was talking about Android and Windows combined against iOS and not Windows and Apple comparison in isolation. There is no about Apple being stronger than Windows' phones.
Rocwurst
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Rocwurst,
User Rank: Apprentice
9/13/2014 | 10:53:02 AM
Re: Apple's already destroyed market share
"market share is decreasing."

That doesn't matter with the iOS installed base rapidly approaching 1 billion at a rate of quarter of a billion devices sold per year and iOS continuing to bring in far more revenue for developers, content providers, e-commerce vendors and advertisers.

60% of Android devices are sub-$200 glorified feature phones that contribute little to the Android platform so are irrelevant to the discussion.

"...Windows phone entered and gave tough time to Apple"

Sorry but that hasn't happened. Not only did Windows phone not grow share last quarter for example, they actually lost unit sales dropping to 7.4 million devices sold, down from 8.2 million a year ago according to IDC (compared to Apple selling 43.7 million iPhones, 16.3 million iPads and around 2 million iPod touches for a grand total of 62 million iOS devices).
WaqasAltaf
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WaqasAltaf,
User Rank: Ninja
9/13/2014 | 6:21:14 AM
Re: Apple's already destroyed market share
Rocwurst, when I said sole king, I was referring to the time when smartphone was a new concept and Apple had almost no competitor. It was later when Android and Windows phone entered and gave tough time to Apple.

"Apple's loyal customer base is not contracting, it is growing "

I agree that it is growing in numbers but the % of market share is decreasing. 
Rocwurst
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Rocwurst,
User Rank: Apprentice
9/3/2014 | 6:01:30 PM
Re: Apple's already destroyed market share
"when Apple was almost the sole king of the smartphone industry, now it has lost a considerable market share"

Apple has never been the "sole king" of the smartphone industry in terms of marketshare. On the contrary Apple has only ever had a maximum of around 21% share of the smartphone market according to IDC with Nokia and then Android ever being able to claim that title.

However, Apple's iOS sales have increased every year since launch, growing from 62 million in 2010, to 140 million in 2011, to 206 million in 2012, to 238 million in 2013.  This year Apple is on track to sell over quarter of a Billion iOS devices.

Apple's loyal customer base is not contracting, it is growing and will soon hit 1 Billion devices sold.  In fact in terms of active users, Apple now has around 700 million active iOS users, only 30% less than Google's 1 Billion active Android users.
nzgeek
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nzgeek,
User Rank: Apprentice
9/1/2014 | 9:49:20 PM
Re: Wait, What?
You've hit the nail on the head. The lack of traction with mobile NFC payments has pretty much nothing to do with who makes the mobile device or its OS.

The big issue here is payment processor support. When you want to make an electronic payment, the payment processor needs to know how to handle the payment. This isn't a problem when you're just adding NFC payment support for an existing payment network. But for things like Google Wallet, that's a completely separate payment network that the provider needs to integrate with. These integrations aren't trivial matters, so the payment provider needs to know that it's going to make back its investment. However, until there are enough payment providers (and therefore enough retailers) using the network, nobody will bother using that payment method.

In other words, there's a bit of a catch-22. You need payment network support before people can pay using a new method, but payment provider support probably won't come until enough people are using the new payment method. This, more than anything else, is why Google Wallet hasn't really caught on.

The only way that Apple are going to make any headway here is if they manage to partner with an established, major payment network. We're talking the likes of Visa, Mastercard, Amex, etc - networks that most payment providers are already working with. If a retailer had the right equipment to be able to take NFC-based payments, they should (in theory) be able to instantly take iPhone NFC payments.

If Apple are going down this path, the question will be who they partner with. I have a lot of doubt around Visa and Mastercard, as they're more likely to want to build their own solution that ties in closer with their existing payWave and PayPass offerings. My guesses would be American Express or Diner's Club, as they're fairly widely accepted, and could use the Apple partnership to help expand their reach.
Page 1 / 7   >   >>
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