An Apple a Day

Things are heating up, folks. When I originally posted about Apple’s move towards a unified payment system united under the iTunes umbrella, I was thinking pretty big picture, but there’s even more possibility here that I hadn’t considered. Run with me.

Recently, I was turned on to a company called Green Dot (GDOT) that has made a name for itself supplying pre-paid reloadable debit cards, mostly on the west coast. I was intrigued by the company’s quick growth during a time of economic recession, and I realized that, of course, people are moving away from credit cards and more towards debit transactions. Green Dot allows people from a myriad of income levels to have access to all the conveniences that a credit card allows in the modern marketplace with the added benefits of security and anonymity. Awesome.

So when I predicted a near-field payment system, I wasn’t considering a marriage of the two ideas, but the notion seems even more powerful now that I’ve read this piece by Tim O’Reilly and this post by Peter-Paul Koch. See what’s happening here, in my opinion, is a sea change in the way people are going to be managing their money, and it’s going to be Apple-based.

This may sound crazy, but we’re running with it, remember? Apple will introduce a mobile payment system, with the hardware to support it being present in all new models of iOS devices going forward (iPhone, iPod Touch, and iPad). As these devices proliferate (even moreso than they are now), we’re going to start seeing adoption of devices with these NFC capabilities start to rise significantly as the older models are phased out (think 2-3 generations of devices, which is 2-3 years in Apple land) and the NFC-equipped models become prevalent and cheap. As people start turning to these devices as their mobile wallets, they will also start using iTunes as their primary hub of payment, again with possible banking/credit services being offered by some new branch of Apple (not likely, but possible). As NFC becomes a de facto standard, people will start to see the iPhone as part of their lifestyle to a greater degree than they do now. At present, people still view the iPhone as a luxury item, something that is generally incompatible with their budget/spending patterns, or something that doesn’t fit their image. This will change as the iPhone begins to shift from a high-SES indicator to a mainstream societal mainstay. Apple will undoubtedly continue to produce products that will hold a significant amount of mindshare and indicate a high SES, but the fact is that the iPhone, or, more specifically, owning an NFC-equipped iPhone, will no longer be out of reach for the majority of people in just a few short years. This will bring about a massive paradigm shift in our handling of transactions across the country, and possibly the world. It will be a beautiful thing to see people of all income levels and socioeconomic strata using the same device, deriving the same enjoyment out of it. This may even signal a societal shift towards a resource-based economy, but I believe I’m being a tad optimistic there.

As Apple continues to grow, I am still amazed that their innovation does not show any signs of slowing down. Get ready, folks, this will be an interesting two years.

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Standing On the Brink of iWorld

It has come to my attention that Apple may be interested in integrating some sort of contactless payments into its new iPhone. This doesn’t strike me as too far-fetched, but also hints at something much, much larger that may be going on under the surface.

For quite some time now, the iTunes store has been something of a misnomer. Sure, the store has music available for purchase, but there are a few other things the store sells now that muddy the waters. Through a single “iTunes” portal, a person can purchase music, movies, applications, and literature. Basically, media of all kinds. Using Apple’s delivery system, a person has access to these things 24/7. Apple has created a media outlet that is always open, offers competitive pricing, and boasts a huge library of all kinds of media that people can sink their teeth into.

When Apple introduced the iPod Touch, iPhone, and iPad, they put those devices as media hubs, able to access and purchase from their online stores at any time, just like on the computer; only this time, the capability was brought into real time and placed right into the hands of the consumer. People love the ability to purchase full albums whenever they desire, they go crazy when new, useful, or really well-designed apps are released that enrich the way they interact with the world, their media, or their data. Businesses use these devices to help their employees be more productive, people use them to have fun. They’re incredible.

An integral part of every single Apple event that has developers as a focus always brings up the idea that the iTunes store has millions upon millions of members with active credit cards, waiting to buy things. The market is huge already, but those numbers are ultimately stagnant unless they are coupled with some sort of long-term goal of expansion. Reports indicate that there are 50 million iOS devices on the market, which means that there are 50 million people already taking advantage of the media that Apple is offering through its iTunes store.

But it also means something else: that there are 50 million people invested in the Apple ecosystem. If a person has ever purchased a movie or app through iTunes, they cannot (without considerable effort and know-how) watch that movie on anything but a Mac or iDevice. Period. For customers, it means that Apple has committed to providing them with products that will allow them to continue to enjoy their purchases. For content providers, it means that they can feel better knowing that their media isn’t getting seeded everywhere.

For Apple, it means that they are now the hub of countless transactions every single day. Transactions that used to take place in physical goods are now occurring in a digital space that Apple has become synonymous with. Now watch this.

Just recently, Apple did a neat trick. They released an app that brought the shopping experience of the Apple Store right into your palm. They broke through the digital wall and used a person’s existing iTunes account and billing information to allow them to purchase an actual, physical product.

Not quite just music anymore, is it?

Apple has something huge up its sleeve, and it will use the massive established customer base to drive the creation and expansion of a vast network tied to the existing customer base in their iTunes store (which will most likely be re-branded as something else more in-line with media consumption, or even Apple goods in general). Think about it: Apple payments. Apple credit cards. An entire network of Apple finance that is made possible by hip, tech-savvy, relatively high-income consumers who demand the very best in design and quality. A retailer that puts the iTunes (or whatever) sign on their store is telling the world, “Yeah, we know you, we have stuff that is designed for you, and we want to provide it in a way that makes you feel good.”

This isn’t something that anyone should take lightly. This is power. This is control. This is the warm glow of the Apple future.

We’re standing on the brink of iWorld.