Apple… It’s Happened

When the first iPhone came along, it was a pretty revolutionary device. Nothing else was quite like it. Since then, every release of the iPhone has been accompanied by a crowd of drooling fans, eager to give Apple their money for the latest shiny toy. Something interesting is beginning to happen though. People are getting wise to the fact that the new iPhone isn’t that much better than the last one. By Apple’s standards, the 5c was a bit of a disappointment, and Android is growing its market share like an unstoppable juggernaut. With the release of the iPhone 6, it would appear Apple is going in a new direction.

The biggest thing with the new iPhone is actually how big it is. The iPhone 5 upped the screen size from the 3.5 inches of the 4S to a whopping 4 inches. At the same time Android devices were already pushing 4.7 inches and more. Steve Jobs is said to have hated large phones, hence why the iPhone was designed to be held in one hand. Conversely, the market loves big phones. It wants big phones, and Apple has had to respond to prevent people from defecting to Android devices. The iPhone 6 then comes in two varieties; the standard 6 is a 4.7 inch device while the 6+ weighs in at a pocket filling 5.5 inches. This is all well and good, except that in the rush to copy Samsung et al, they have abandoned the people that wanted an iPhone because they wanted a small phone that wasn’t the crippled version of a bigger one. Unlike the 5C which never really worked, an iPhone 6C that preserves the 4 inch screen would likely be a big seller amongst the people who don’t want a big phone.

Like almost everything in technology, the field of wearable computing is decades old. It’s only today however that the technology can keep up with the ambition and vision of the designers. Over the past few months a slew of Android based smartwatches have come along. All promise a lot, but deliver very little that can’t be achieved by taking your phone out of your pocket and having a look at it. The built in pulse monitor is certainly useful, but given that most of these watches will not work without a phone in Bluetooth range. Compared to dedicated sports watches that are standalone and offer GPS tracking etc. they offer little benefit when exercising.

Despite this, Apple has decided it absolutely has to get on the smartwatch bandwagon. That this will happen has been rumoured for a long time, but now it has been confirmed. Not as the iWatch, but rather as the Apple Watch which will come in a variety of sizes, colours and strap styles for almost as much money as the cost of an iPhone. Despite being launched last week, the watch will not become available until some point early next year. This suggests that while Apple has got the design nailed down, there are still some issues which are proving difficult to get right. While the Apple Watch is likely to sell well, it’s unlikely to represent the same runaway success of the iPhone, especially in the first few generations. Perhaps then, the industry will require a couple of more years for the technology to meet expectations.

One area where Apple may have pulled the rabbit out of the hat is in their payments system. Up until now all the mobile payment systems that have been proposed have been met with a muted reaction from businesses, banks, and users. In the UK at least, paying by card is easy. The worst it gets if you don’t have use of contactless payments is to put your card into the machine and enter a four digit pin code. Oh no! On the other hand the service operators for the mobile payment systems want a cut of the transaction value and there is the rigmarole of having to navigate your way through the phone in order to actually make the payment. What it boils down to is “Why Bother”?

Apple on the other hand has decided to make the iPhone 6 a replacement for your debit or credit card. Having secured the cooperation of the major card networks, you will be able to register your card on your phone and use your phone as a contactless payment card. What is unclear about this new system is how Apple will profit from it, especially given that other schemes have failed because the operator wants too big a percentage of the transaction. On the other hand, Apple won’t be offering this service for free, relying on the hardware sales to make up for the cost of providing the service, because, why bother? Why spend a huge amount of money to do what you can currently do with your card. So while Apple’s system may have the biggest chance of success out of all that have gone before, it’s certainly not guaranteed. We will need to see whether the card networks tolerate this middleman and whether the market actually finds it useful.

For over a decade, Apple has been an innovator, with the iPod, iPhone, and iPad, they have brought devices to the market that have changed the way people use technology, their competitors have then improved upon their ideas to make devices that people need rather than want because they’re shiny. The Galaxy Note is a good example of this; it was widely mocked by all those supposedly in the know when it was announced. Once the sales numbers were in on the other hand, the mocking stopped. It turned out that despite what Steve Jobs proclaimed, what people actually wanted was a big phone with a removable battery, SD card, and a stylus. Now though, it has finally happened. Apple have stopped trying to lead the market and have become a “me too” player. Nothing they have revealed is earth shattering, and while they will likely enjoy sales success with the new iPhone and their watch, it will be interesting to see how their next decade pans out.

Update: Since publishing this article, it has become known that Apple’s cut of the transaction value for payments made using its service is 0.15% or fifteen pence on a £100 transaction. If this is the case, then the banks and card networks must be relying on this expanding their reach in return for a small cut of the 2-3% that they charge retailers for use of their services through merchant fees. On the other hand, it is hard to see what is in it for Apple. If it sells ten million devices and each one of these makes £1000 of transactions, then a 0.15% cut of that is only fifteen million pounds. Discuss.


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