Apple is clearly continuing to chart out it’s post-iPhone future, one in which services reign supreme. Yesterday Apple announced a suite of revamped digital services as it looks to diversify away from it’s traditional products amid falling sales in iPhones, iPads and MacBooks.
And the announcement showed both a further push into the mobile payments industry by Apple and the importance of brands growing their ecosystem.
So what did Apple announce?
Apple’s take on subscription TV giant Netflix with “Apple TV+”, “Apple News+” which is like standard Apple News on steroids and “Apple Arcade” which is a subscription based offering of the ‘games’ section on the app store.
But the most surprising announcement?
Apple’s attempt to take on the banks through the launch of their own credit card, the “Apple card”.
The Apple card is interesting in a few respects. Firstly, like most Apple products it looks cool. Part luxury status simple, the card is titanium and unlike your typical credit card, has been designed with no actual numbers on it (coincidentally this make it easy for younger users to share / brag about it on social media).
And it doesn’t stop there. There’s incentives for consumers to purchase Apple products as the card gives discounts to customers who purchase anything Apple. The card is also designed to be simple to acquire, Apple has significantly reduced the number of steps that a customer has to go through to signup. And unlike other banks, Apple want to be the only tech company you actually trust – Apple will not collect data on your transactions and won’t sell it to third parties.
Whilst the card has some cool features, the Apple Card doesn’t reinvent the wheel. For example, it doesn’t have contactless capabilities like newer cards from competing banks.
So whats the point of Apple giving consumers a no-frill credits card?
The card is actually a cleverly disguised way to push Apple Pay adoption and usage. The card can only be used through Apple Pay on your iPhone. Whilst Apple Pay is growing and currently the most common of mobile-wallet payment services, currently only 13% of all smartphone users have tried it.
It seems that consumers are still slow to take up mobile payments, it’s just easier to use a physical card.
“As the adoption of e-commerce increases, and we’ve seen that at an exponential rate over the past few years, the relevance of having a physical card or lack thereof will track really closely to the adoption and migration from physical shopping to fully online shopping. The card could be a game changer to the mobile payment industry” says Rash Katabi, CEO and co-founder of credit card and digital payments startup Brim Financial.
The card could be exactly the spur the mobile payments industry needs, not too mention a potential shakeup of the banking industry. And only time will tell whether it will provide a disruptor to Afterpay (both in Australian and their expansion into the US).
Apple’s strategy with its push into services is beginning to mirror that of the worlds biggest ecosystem – Amazon.
Apple is building its ecosystem not by reinventing the wheel, but by sprucing up traditional, boring products. With Apple’s push into services, they are taking its cues from Amazon’s subscription approach to further lock iPhone owners into a broader ecosystem.
Like Apple, Amazon has since used the consumer goodwill it has garnered (from best in-class products like the Kindle and AI-powered Echo speaker) and the power it wields over it’s digital storefront to sell you products and services for everything in-between. This is important as they bring buyers into the ecosystem before and keeps them there after the purchase. With Apple’s continued push such things like financial services, the company is going one step further and trying to capture not just what you consume, but also the financial means you use to do so.