NFC: Near Field Communications

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    Posted: 17 November 2010 08:58 PM #16

    Let me try and REALLY SIMPLIFY the “Apple Trick.”

    One - do right by your customers.

    Two - Do right by your employees.

    Three - Do EVERYTHING as if it really counts.

    There.

    Now, the “trick” is just believing THAT and making it your all in all, day by day, year by year.

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    “Even in the worst of times, someone turns a profit. . ” —#162 Ferengi: Rules of Acquisition

         
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    Posted: 17 November 2010 09:39 PM #17

    TanToday - 18 November 2010 12:58 AM

    Let me try and REALLY SIMPLIFY the “Apple Trick.”

    One - do right by your customers.

    Two - Do right by your employees.

    Three - Do EVERYTHING as if it really counts.

    There.

    Now, the “trick” is just believing THAT and making it your all in all, day by day, year by year.

    I don’t think it’s that simple. Also, I’ve come across plenty of examples where such lofty goals, without a carefully thought out strategy, led to failure. I think Mace and FalKirk were talking about Apple’s strategy. Doing right by customers and employees is certainly an important part of the strategy, but one that many companies follow, yet will never achieve Apple’s level of success.

         
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    Posted: 17 November 2010 09:41 PM #18

    FalKirk - 18 November 2010 12:39 AM
    MacOz - 18 November 2010 12:25 AM

    Reading your post made me think of the poem from Kipling called IF.  Read it if you do not already know it. Could Steve Jobs have been inspired by this poem? Could this be part of the reason for Apple’s success?

    Thank you for directing me to that poem and allowing me to re-learn it once again. It’s worth posting, I think.

    FK and MO - I like the philosophical bent this thread has taken! Food for thought.

         
  • Posted: 17 November 2010 11:25 PM #19

    Could I gently nudge us back to the topic? 

    MasterCard is an unlikely partner now that they have thrown in with the phone companies.  More likely in my opinion would be First Data Corporation, now in private hands. 

    Also intriguing is Visa with a market cap of $37B.  A mostly cash acquisition would not be impossible.  But at a P/E of 15, Apple could pay a premium in a stock for stock deal, and it would still be accretive.

    Even if there is no acquisition, I find it very hard to believe that Apple will leave NFC to Google, Microsoft, and the phone companies.

         
  • Posted: 18 November 2010 03:15 PM #20

    Google and Apple looking to introduce NFC capable smartphones

    http://www.networkworld.com/community/node/68665

    The above, is a link to an article on NFC. I might normally have extensively quoted from the article, but the article contains patent diagrams and a 44 minute video of Eric Schmidt discussing NFC. He discusses NFC at the very beginning of the video, so you can glean all you need to know with regard to NFC from the first minute or two of the video.

    Considering that this article is directly addressing many the questions discussed in this thread, I recommend that you all take a look. The article is not terribly deep, but it summarizes the current status of the technology and Apple and Google’s place in it rather succinctly.

         
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    Posted: 21 November 2010 02:54 PM #21

    Context from the $50B thread…

    Before we get too carried away with the NFC phone payments idea, let?s clarify the boundaries of Apple?s participation. Wikipedia helpfully delineates parties involved in a credit card transaction.

    I assume that we don?t really want Apple to become a bank (issuer) but would rather provide a mechanism for banks to issue Apple accounts in lieu of a credit card (such as Visa or MC), in other words Apple would substitute for credit card association and its transaction network. Problem is, the associations (Visa, MC) are comprised by banks who set the regulations, transaction limits and the like. I don?t think they?ll want to deal with a 3rd party (Apple). Unless people are thinking of only replacing the transaction network, essentially putting Visa + MC on the iPhone.

    I just don?t see it happening today. PayPal has been around for more than a decade, and it?s still a drop in the bucket compared to credit card volume. I just googled around, PayPal is at ~70B (annually) I presume worldwide, while credit card volume in the US alone was 1,325B in 2004 (source). Add debit cards and such and expand worldwide, and PayPal will be 1% of volume. That?s nothing. Maybe things will develop faster in the next decade than in the last one.

    Also, on revenues. Let?s say Apple will charge 1% of transaction (to be competitive with Visa/MC industry average which I think is higher). IF it has PayPal volumes, that?s 1% of 70B. $700M of yearly revenue with unknown margins? I?m not impressed.

    As a final thought, I?d absolutely welcome NFC payment technology in the iPhone soon, but I expect that it will be more of a competitive feature to attract customers to buy the iPhone / smartphone, than a revenue stream for Apple. Which makes this post not belong in this thread, because Apple won?t spend its cash on a financial institution? rolleyes

    And another…

    Roman - 21 November 2010 06:48 PM
    danthemason - 21 November 2010 11:44 AM

    There was a day, not too distant, when the idea of Apple producing a cell phone was thought too implausible. What’s harder, manufacturing the most technically advanced cell phone and software, ..... or keeping track of credits and debits?

    For Apple, I’d argue the latter is harder. The iPhone is not a cell phone, it’s a portable computer that is at the intersection of advanced hardware and software, integrated in a package that created a $100B category almost overnight. Apple has been proficient in both hardware and software, and integration of the two on top, for 35 years. Keeping track of debits and credits is another matter entirely. It’s in an ancient industry that does need innovation/disruption but I don’t think I want Goldman Sachs IB’ers or Bank of America branch manager type people coming and diluting Apple’s mix of engineering and design.

    Another question important to me as a shareholder is not “What’s harder” but “What’s more profitable”. Profit margins in retail banking and lending are one of the lowest of all industries. Profit margins in smartphones are highest. 1% vs. 50% type stuff.

    Don’t get me wrong, Apple should absolutely go and innovate with instant payments, just without purchasing financial institutions or starting its own money-lending. They’d sooner purchase content for iTunes (which I doubt they will) and become a content provider. Best to partner.

         
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    Posted: 21 November 2010 02:56 PM #22

    Here’s one simple and non-intrusive way to introduce this: Just charge NFC payments to the credit card on file with Apple. Perhaps impose some limits, but overall Apple is then just a regular merchant and defers responsibility to the CC issuer.

    Problems with this approach?

         
  • Posted: 21 November 2010 03:13 PM #23

    Before the iPhone there were profits in cell phone mfg. There are still profits in the cell phone industry it’s just that Apple takes more than the others. Enjoying large margin activities where previously there were none. Because the current players in finance carve out a living does not preclude a more profitable model from coming along.

         
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    Posted: 21 November 2010 03:19 PM #24

    danthemason - 21 November 2010 07:13 PM

    Before the iPhone there were profits in cell phone mfg. There are still profits in the cell phone industry it’s just that Apple takes more than the others. Enjoying large margin activities where previously there were none. Because the current players in finance carve out a living does not preclude a more profitable model from coming along.

    Sure, agreed. But what can Apple do, practically? PayPal does charge higher rates than CCs, and it’s a debit-based system to boot (largely, anyway). I use PayPal a lot, but I’m not the average consumer. As an early adopter, I might pay even more for an NFC convenience of the iPhone but I don’t see the majority giving up the plastic - or cash for that matter - and switching over to their phone if transaction costs are much higher.