Why Apple's Most Important News Was About a New Service

 
 
By Chris Preimesberger  |  Posted 2014-09-09 Print this article Print
 
 
 
 
 
 
 
Apple Pay

NEWS ANALYSIS: Apple Pay, if it really works and gets widespread adoption, can be a major game-changer in the U.S. economy.

CUPERTINO, Calif.—Apple Watch, introduced Sept. 9 and destined to go into general availability early next year, is a huge deal for the world's most successful IT company: It is the first new Apple product in four years—since the iPad in January 2010. It represents an all-new direction for the company: wearables.

It is also the first new product launched since Tim Cook became CEO the year before Steve Jobs died in October 2011. The chances are that this wearable computer—"The most personal product Apple has ever made," Cook said—will become a key definer of his tenure at the company.

The one big question about it is this: Will people who already have a laptop, a tablet and a smartphone or two going to really want a connected watch—especially one that's fairly expensive? Pricing starts at $349, and Apple isn't saying yet what the high-end gold and silver Apple Watch Edition units will cost.

Many People Won't Buy First Editions

There are some important factors to consider here. Many people simply won't buy the first version of anything. Look at the first iPad; it's practically useless now, because it won't support any version of iOS past 5.1. It's ridiculous that this should happen, but it's a very common occurrence.

Thus, a percentage of the buying public—I'll venture 20 percent, conservatively—won't even consider buying an Apple Watch until v2.0 comes out. Even then, it'll sell best in the usual-suspect areas of the country—the coasts, mostly. I can't see it being a Middle America-type device for at least a couple of years; many people in that category are still getting used to tablets.

Another factor is simple device inundation, as noted above. How many devices does one really need?

Yet another thing to remember is this: You need an iPhone to be able to use the Apple Watch. It's the interconnection between the two that gives the Watch its store of information. That leaves out most of the world's current smartphone users, who are already invested in Android phones.

Apple reminded us again with its Apple device-only webcast of the event that it is, and probably always will be, a closed-system company. In this day of multiple partnerships between vendors and experts, Apple is pretty much going it alone on the IT side, as only a company with its track record of success can do.

The Long-Tail News: Apple Pay

The devices are certainly significant, but the most important news on Sept. 9, in my estimation, was Cook's announcement of Apple Pay. If this really works and gets widespread adoption (that's the real key), it can be a major game-changer in the U.S. economy. Devices come and go, but a payment method that cuts off credit-card security problems at the knees could be around for a long, long time.

Apple Pay uses one-touch (with either iPhone or Apple Watch) checkout, with fingerprint second identification; it requires no card number entry; it has no need to type addresses; and no card information is shared with the merchant or with Apple. Everything stays between the bank and the buyer.

There is no plastic card to lose or have stolen; no crooked cashier can copy your card and try to use it; no personal information going over the Internet, and so on.

For another perspective, see Wayne Rash's article here.

We'll be hearing a lot more about Apple Pay as time goes on. It won't be the death knell for credit cards, but it will change the way a lot of people buy things. All the major U.S. banks have already bought into it, and leading retailers such as Disney, McDonald's, Whole Foods, Subway and a list of others are already making accommodations for it.

This will provide stiff competition, too, for current NFC payment vendors, who haven't been able to get the traction they need in the market.

Pricing, Storage Capacities for iPhone 6, iPhone 6Plus

For the record, some facts and figures: iPhone 6 (4.7-inch screen): $199 for 16GB, $299 for 64GB, $399 for 128GB; iPhone 6Plus (5.5-inch screen): $299 for 16 GB, $399 for 64GB; and $499 for 120GB.

Some final observations from the end of aisle 27 and from the Big White Mystery Building at the Flint Center:

--It occurred to me afterward that there was not a single reference to the Internet of things during the entire two-hour launch event—not from Cook, not from Phil Schiller, not from Jony Ive, not from anybody. Apple Watches, Apple Pay and the new, more powerful iPhones will certainly play a major role in information gathered and stored in the IoT in the years to come, and maybe that's all we need to know.

--The Big White Mystery Building erected next door to the Flint Center on the De Anza College campus was made of undetermined materials. It wasn't a tent; it wasn't a framed, walled and roofed structure. It appeared to be made of slick particle board which was painted stark white. Its three rooms served to house the new products (mostly in glass cases) and for a few hands-on trial sessions, which were closely curated by Apple geniuses.

--U2, which has been a major Apple advertising collaborator for years, came blasting in at the end of the session and were way too explosive for the relatively small auditorium, which holds about 2,700 people. U2 is a band built for big, open-air, 60,000-seat sports stadiums.

I, for one, wasn't sticking around to hear a couple of tracks off its new album when my ribs were vibrating against the smartphone (not made by Apple) in my vest pocket.

 

 
 
 
 
Chris Preimesberger

Chris Preimesberger is Editor of Features and Analysis at eWEEK. Twitter: @editingwhiz

 
 
 
 
 
 
 
 
 

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