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Those who know don't talk. Those who talk don't know.

Week 19, 2010

Apple, a newcomer in the universe of mobile communication, just for the last couple of years has taken a central place, having huge growth rates, and high penetration levels among smart phone vendors. More specifically, Apple, when it entered the mobile phone market has brought a disruption by sidelining the mobile network operators.

Apple only embraces a technology if it can fit with its own business model. Apple’s real wealth nowadays is its iTunes customer base, of millions of users who are happy to purchase music, applications, films, etc… and to be billed on their usual credit card. With this move, Apple has taken away the customer relation which was considered as a core asset for mobile network operators and is now managing directly its customers. Apple aggregates micro transactions and then processes them, becoming a major merchant able to have a strong bargaining power with financial institutions on acquiring fees.

The whole ecosystem has dreamt of building a core of NFC developments around small amount payments. Now Apple has taken this place, and is becoming a payment processor.

Apple will be ready to launch NFC services, and a NFC handset as a consequence, when it will have found a way to monetize them. Building the NFC business model is the subject that has hampered the development of NFC technology for the last few years. Apple may bring a disruption in this game thanks to its positioning, being at the same time the terminal provide, a major application developer, an advertisement company, a payment processor, and, even most important, managing the end user relation.

So we will have to wait a little bit more to know if the mobile payment disruption will happen in summer 2010 or not…

Thierry Spanjaard

Chief Editor

Smart Insights