THINK BIG

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    Posted: 01 February 2011 01:46 PM #16

    I’ve been working with some people on debit cards and mobile payments.  If Apple doesn’t get into that field, then it should.  If Apple isn’t getting into that field, then they should watch out when others do and still away Apple’s market share.

    Going into the field is literally printing money for yourself.  Suppose you offer your mobile payment customers 15% off on all Apple product purchases.  In effect, you just printed money.  If Apple then make agreements with various companies: Starbucks, Whole Foods, Southwest Air, Avis Rental, whatever, so that if a customer uses a mobile payment, they get 10% off, then they’ve just in effect printed money.  $90 in 4 $20s and a $10 is worth $100:  Apple just printed an extra $10.

    So, the Apple environment: dining establishments, transportation, entertainment, everyday consumables, utilities, everything that most people want or need on a daily basis, will be tied to Apple.  Apple makes money on every transaction, the associated businesses in the Apple environment gets an almost locked-in customer base, and perhaps have to offer less discount (no Priceline discounts or Open Table discounts) and people are happy.

    It’s almost the Disney-fication of a lifestyle.

         
  • Posted: 01 February 2011 02:12 PM #17

    Apple have enough money to buy a small country!!!

    They could buy Ireland. It should be going at a good knock down price by now. St. Patrick drove the snakes out of Ireland so there is no fear that Adam might take another bite and force Steve Jobs to go back to the patents office to re-apply on the logo design.

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  • Posted: 01 February 2011 03:10 PM #18

    I agree, the one gaping vulnerability that Apple has is that ISPs have a chokehold on Apple’s (and everyone else’s) cloud computing neck.  With net neutrality in danger of being totally obliterated, the wired and wireless carriers might very soon acquire the ability to extract profits from Apple (and Google, Microsoft, Facebook, etc.) by demanding priority premiums.

    It would be nice though if wireless technology reaches the point where it can supplant wired internet connections.  Then we’d just have one account for mobile and home internet access.

    Another acquisition I think Apple might contemplate is one of the cable companies.  Jobs said it himself, the cable companies are the ones holding back full development of AppleTV.  Why not just buy Comcast and fix their horrible, horrible cable TV interface?  And you get a wired ISP thrown in to boot.

         
  • Posted: 01 February 2011 03:24 PM #19

    aardman - 01 February 2011 07:10 PM

    Why not just buy Comcast and fix their horrible, horrible cable TV interface?  And you get a wired ISP thrown in to boot.

    Because it would solve only a local problem, 60% of the revenue is non-us. I don’t see Apple selling anything just to one market/country.

         
  • Posted: 01 February 2011 05:06 PM #20

    seba - 01 February 2011 07:24 PM
    aardman - 01 February 2011 07:10 PM

    Why not just buy Comcast and fix their horrible, horrible cable TV interface?  And you get a wired ISP thrown in to boot.

    Because it would solve only a local problem, 60% of the revenue is non-us. I don’t see Apple selling anything just to one market/country.

    Well then there’s no point in pouring resources into developing AppleTV if they’re resigned to just letting it run into a dead end because they don’t want to get into a purely local operation like a CableTV carrier.

    I don’t know why you would make this a hard and fast rule that Apple is not interested in anything that’s purely local.  Did Steve Jobs tell you that? grin

    Besides, it’s not purely local if Apple-Comcast becomes a demonstration project and Apple then sells this fully developed AppleTV platform to cable TV providers the world over.

         
  • Posted: 01 February 2011 10:05 PM #21

    Apple puts Making awesome products first as their rationale for growth.  That’s in their DNA.

    Companies like Microsoft think about making money and are not driven to make awesome products.

    What’s awesome about becoming a bank?

    Besides, all of Apples products bear a Technological relationship to each other.

    Being able to supply information and data wirelessly, bypassing the current collection of ISPs would be awesome, and it would make A lot of money.

    [ Edited: 01 February 2011 10:13 PM by westech ]

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    The measure of the worth of a product is how much people are willing to pay for it, not how many people will buy it if the price is low enough.

         
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    Posted: 01 February 2011 10:07 PM #22

    1stplacemacuser - 01 February 2011 05:46 PM

    I’ve been working with some people on debit cards and mobile payments.  If Apple doesn’t get into that field, then it should.  If Apple isn’t getting into that field, then they should watch out when others do and still away Apple’s market share.

    Going into the field is literally printing money for yourself.  Suppose you offer your mobile payment customers 15% off on all Apple product purchases.  In effect, you just printed money.  If Apple then make agreements with various companies: Starbucks, Whole Foods, Southwest Air, Avis Rental, whatever, so that if a customer uses a mobile payment, they get 10% off, then they’ve just in effect printed money.  $90 in 4 $20s and a $10 is worth $100:  Apple just printed an extra $10.

    So, the Apple environment: dining establishments, transportation, entertainment, everyday consumables, utilities, everything that most people want or need on a daily basis, will be tied to Apple.  Apple makes money on every transaction, the associated businesses in the Apple environment gets an almost locked-in customer base, and perhaps have to offer less discount (no Priceline discounts or Open Table discounts) and people are happy.

    It’s almost the Disney-fication of a lifestyle.

    And here in this NPR podcast is an example of this actually already happening & transforming a nation:  ?In Haiti, Cell Phones Serve As Debit Cards?.

    Moreover, since this apparently doesn’t even require mobile internet service (just mere cellphone service), there are no obvious limits to how widely and deeply this Apple-financed banking innovation could spread over the whole world.

    [ Edited: 01 February 2011 10:19 PM by BurmaYank ]

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    Dave J.

    - my most favorite Chinese Cookie fortune:  “Stiff in opinion; always in the wrong.”

    - my second most favorite Chinese Cookie fortune:  “There is something seeing and there is something being seen.”

         
  • Posted: 01 February 2011 10:30 PM #23

    Gregg Thurman - 31 January 2011 09:59 PM
    incorrigible - 31 January 2011 09:44 PM

    Think about what you’re saying:  Apple, the most visionary and successful consumer electronics company headed by a Zen-like CEO, becoming a bank!?  Doubtful.

    And why not?

    [...]


    Greg, I think you and others here on AFB with the NFC ideas, are onto something.  But consider a paradigm shift.

    NFC, yes.  Transaction handling, perhaps.  Adding value to iOS, absolutely.  A bank, no way.  As with other Apple disruptions, the model will change.  Transactions will be handled without banks.

    Poof.

         
  • Posted: 01 February 2011 10:33 PM #24

    1stplacemacuser, welcome to AFB.

    And FWI, there is a previous thread on this topic which is worth checking out.

         
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    Posted: 01 February 2011 10:37 PM #25

    westech - 31 January 2011 03:44 PM

    A lot of people ask what Apple will do with their pile of cash.  That is the wrong question.  The right question is ?What unfilled opportunity is there that Apple sees that everyone else misses?? ...  Is there some kind of breakthrough technology that could be used?  Are there any other such opportunities?  THINK BIG.

    Instead of, or in addition to banking via NFC enabled devices, as per my post above, this is what I really wish Apple would invest in :

    Apple should buy Hydra?s Solar-Hydrogen Power system to power the S.C. plant and all its other manufacturing operations worldwide with this 100% solar & hydrogen fuel-cell-generated electricity (using the stored electrolyzed hydrogen harvested/created from its constantly-recycled water and excess solar-cell-generated electricity during daylight hours, +/or from electricity generated from other free energy sources on its properties such as wind, geothermal, tidal/wave, etc.)

    Then, when Apple?s operations have made economies of scale and public familiarity with this process finally cheap and available enough to compete with fossil fuels and nuclear energy, Apple could choose to transform the world by making this system economically available to any country/company.  Then, when hydrogen as a fuel thus becomes commonplace, fossil fuels would only be needed for making plastics and fertilizer, and the nuclear industry would only be needed to make weapons of mass destruction, therapeutic devices and rare research isotopes.

    Apple could thus end poverty & most (non-religious) causes of warfare, to say nothing of stopping global warming singlehandedly.

    [ Edited: 01 February 2011 10:46 PM by BurmaYank ]

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    Dave J.

    - my most favorite Chinese Cookie fortune:  “Stiff in opinion; always in the wrong.”

    - my second most favorite Chinese Cookie fortune:  “There is something seeing and there is something being seen.”

         
  • Posted: 01 February 2011 10:43 PM #26

    BurmaYank - 02 February 2011 02:07 AM

    Here in this NPR podcast is an example of this actually already happening & transforming a nation:  ?In Haiti, Cell Phones Serve As Debit Cards?.

    Moreover, since this apparently doesn’t even require mobile internet service (just mere cellphone service), there are no obvious limits to how widely and deeply this Apple-financed banking innovation could spread over the whole world.

    Nice catch. I’m going to transfer this post over to the Mobile Payments thread where we’ve been having a similar conversation regarding Near Field Communications (NFC) technology.

         
  • Posted: 01 February 2011 10:48 PM #27

    capablanca - 02 February 2011 02:30 AM

    Greg, I think you and others here on AFB with the NFC ideas, are onto something.  But consider a paradigm shift.

    NFC, yes.  Transaction handling, perhaps.  Adding value to iOS, absolutely.  A bank, no way.  As with other Apple disruptions, the model will change.  Transactions will be handled without banks.

    Poof.

    Exactly. I willing to think outside the box long enough to consider Apple becoming a bank. But the point is, they don’t have to. They have all the infrastructure, all the expertise, all the experience and all the front end iOS devices necessary to enter the money transfer business without doing any banking at all.

         
  • Posted: 02 February 2011 02:19 AM #28

    jimlongo - 01 February 2011 04:39 PM

    I can’t believe Apple pays anywhere near the typical merchant rates for CC payments.

    Nobody said they did, but you can bet your bippy that 99% of merchants do, and that is where Apple can use its cash horde to take over an inefficient, horribly expensive service/industry, AND as a side benefit reduce whatever fees it does pay on the thousands of credit card transaction it processes every day.

    I’d wager a month’s options earnings (yours or mine, it doesn’t matter) that between revenue generation and cost savings, Apple would realize more than 2% per month, vs the 1% per year that it now earns on its cash.

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  • Posted: 02 February 2011 11:32 AM #29

    Apple has always been about making an awesome product that people want.  They may not know that they want it until they see it, touch it and feel it.  Product first, money follows.  This is thinking big.

    “I was worth about over a million dollars when I was twenty-three and over   ten million dollars when I was twenty-four, and over a hundred million   dollars when I was twenty-five and it wasn’t that important because I never did it for the money.”
      ?  Interview in the PBS documentary Triumph of the Nerds: The Rise of Accidental Empires (1996)

    This is what people don?t get about Apple.  Most companies start with the premise of how can we make money, not how we can make the best product.  This is thinking small.

    Microsoft MP3 players went with the subscription model of buying music.  If successful that would bring them the most money.  People hated it. 

    “The subscription model of buying music is bankrupt. I think you could make available the Second Coming in a subscription model and it might not be successful.”
      ?  As quoted in “Steve Jobs?: The Rolling Stone Interview” in Rolling Stone (3 December 2003)]

    On Apple?s approach:
    “It will go down in history as a turning point for the music industry. This is landmark stuff. I can’t overestimate it!”?—On the iTunes Music Store (iTMS), Fortune, May 12, 2003

    There is nothing awesome about being a bank.  Use an iPhone as a credit card to access Visa and MasterCard?  Yes.  Nice feature.  Use it to bankroll and set up a credit card business?  Not a chance.  Not by the man who said:

    “Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?”
    Steve Jobs, The line he used to lure John Sculley as Apple’s CEO

    Get off it, guys.  Don?t let the billions burn a hole in your pocket and do something that is not part of your DNA.

    “I’ve always wanted to own and control the primary technology in everything we do.”?—BusinessWeek Online, Oct. 12, 2004

    Making wireless internet access available would be awesome.  And it could make them a lot of money, too.

    “I wish developing great products was as easy as writing a check ... if so, then Microsoft would have great products.”
      ? As quoted in “Apple iPhone?: more secrets revealed” (11 May 2007)

    The question is, how might Apple pull it off?

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    The measure of the worth of a product is how much people are willing to pay for it, not how many people will buy it if the price is low enough.

         
  • Posted: 02 February 2011 12:55 PM #30

    westech - 02 February 2011 03:32 PM

    Apple has always been about making an awesome product that people want.  They may not know that they want it until they see it, touch it and feel it.  Product first, money follows.  This is thinking big.


    On Apple?s approach:
    “It will go down in history as a turning point for the music industry. This is landmark stuff. I can’t overestimate it!”?—On the iTunes Music Store (iTMS), Fortune, May 12, 2003

    There is nothing awesome about being a bank.  Use an iPhone as a credit card to access Visa and MasterCard?  Yes.  Nice feature.  Use it to bankroll and set up a credit card business?  Not a chance.

    “I’ve always wanted to own and control the primary technology in everything we do.”?—BusinessWeek Online, Oct. 12, 2004

    Much of what you said is absolutely correct.  To a point.

    You can’t something better than someone else, if everybody uses the same technology.  Apple’s response to NFC will absolutely be their vision of how NFC will work (iTunes, App Store, etc).

    Apple is more liquid than any Bank I know of, but that doesn’t mean using all of that cash to provide credit card services.  Less than $2 Billion cash would make Apple Credit Card services bigger than Visa and MasterCard combined (without the nearly $1 Billion in debt they carry).

    Merchants must buy their credit card readers, then pay high fees so that their customers can use credit cards to buy their product.

    Just like music and application distribution, Apple can change the way the credit card industry operates, to the benefit of merchants and customers alike.  That would be a huge impetus to expand sales of Apple branded products.

    I think the items above that I highlighted from your post illustrate that becoming a credit card service is well within Apple’s DNA.  It is an industry just like music, music players, cell phones and tablets ripe for exploitation from someone that can do it better.

    Providing services that cause the sale of hardware.

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    You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.