Could the iWatch actually be the iWallet?
There’s been question of why Apple Inc. (NASDAQ:AAPL) has not included near field communication (NFC) payment capability with the iPhone. Perhaps one reason for leaving NFC out is Apple Inc. (NASDAQ:AAPL) believes that smartphones do not provide the ideal payment experience. Watch customers using their iPhone to pay at Starbucks to see a less than ideal solution. (You’ll see people holding phones awkwardly in line, double checking to make sure their phone screen is illuminated, cutting short phone conversations, reply to emails while trying to bounce-back to Passbook, etc.).
Inclusion of NFC (or other payment protocol) into an iWatch would provide for a hands-free payment system for users. With an iWatch on their wrist there is no need to for a customer to reach in their pocket or purse for a wallet, or phone. Apple Inc. (NASDAQ:AAPL)‘s ability to incorporate Authentec (acquired by Apple) fingerprint scan technology – could provide an intuitive, simple, seamless wallet-free, protected payment system that is
poised, at all times at the customer-retailer point of sale.
Not convinced? Don’t forget that Apple Inc. (NASDAQ:AAPL) has in its database over 200 million active credit card accounts making Apple Inc. (NASDAQ:AAPL) one the biggest credit card hubs in retail. Migrating that payment power onto the wrists of one of the most demographically attractive market segments in retail (iPhone owners) would provide Apple Inc. (NASDAQ:AAPL) with an incalculable advantage in the burgeoning wireless payment arena.
Also, keep in mind Google Inc (NASDAQ:GOOG)‘s interest in developing a glasses-based wearable. Creating a wrist-based payment system for the iWatch could provide Apple Inc. (NASDAQ:AAPL) with a significant advantage over the Google system. (Apple Inc. (NASDAQ:AAPL) leads in payments with their vast credit card trove as well as the intuitiveness of a hand-based payment system. I suspect some wearable users would be uncomfortable with a payment system that involved a swipe of their glasses?)
But, will Nike mind?
Based on the ability to position Apple Inc. (NASDAQ:AAPL)’s iWatch as a next generation mobile instant access/wireless payment system, it is difficult to see Nike complaining too vociferously over an Apple Inc. (NASDAQ:AAPL) move into wrist-based computing. More than likely, Nike would see the iWatch as a significant opportunity to expand the Nike-Apple partnership with “Fuelband-like” applications specifically for the iWatch. (The Fuelband targets the serious fitness buff – there is likely a larger market for the more general “health conscious” consumer, who would have an interest in a Nike branded iWatch app.)
iWatch: The revenue potential could be huge
Based on the opportunities that I’ve outlined, I think a wrist-based wearable tethered to an iPhone would provide Apple Inc. (NASDAQ:AAPL) with a market opportunity that could have a material impact on the company’s revenue. (It should be noted, this is a position that some analysts and those in the media disagree with.)
Whether Apple Inc. (NASDAQ:AAPL) recognizes (or is interested in) this type of wearable application remains to be seen. However, given the leaks of an Apple watch-like device hitting the media, it makes sense for Apple Inc. (NASDAQ:AAPL) investors to analyze possible areas for the company to leverage their clear market advantages.
The article Is the iWatch Actually an iWallet? originally appeared on Fool.com and is written by Bill Shambllin.
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