Smartphone Wars: Apple Leaps Ahead of the Competition

This week Apple (AAPL) walked the red carpet with its new iPhones, Apple Watch and Apple Pay. The iPhones are the attention grabbers for a smartphone with a wait of up to a month to own one. However, when we analyze the three innovations in interlocking devices, we see that Apple has stolen the lead, not only in iPhones but in the electronic payments arena. Apple is setting the stage for a dynamic and profitable new technology that changes the way we pay for purchases. Let’s take each product separately, then link them together in a seamless whole:

Apple iPhones.

Users are moving to larger smartphones. At present, only 1/3 of smartphone users have a screen larger than 4.5 inches. That number is expected to jump to 44% this year. There is a growing appetite for larger screens that provide more data. A second innovation that is gaining traction is the use of “wireless” technology. Apple iPhones have a wireless chip, so calls can be made from areas with poor reception. 83% of users favor wireless transmission.

The New iPhone 6

Both iPhones have a larger battery that provides 12 hour viewing and 44 hour talking. IPhone 6 has a 4.7 inch screen. Apple has added new sensors to its camera for better shots. Introductory price is $199.00

IPhone 6 Plus is the real attention grabber. It has a 5.5 inch screen. Pixels have been increased from 326 to 401. Probably the greatest leap forward is the feature that lets you use the iPhone in horizontal view. This lets you read your email. You also have a wider screen for your key pad texting. Introductory price is $299.00.

Apple Watch. It comes in two sizes with several styles of straps. It has a zoom in and out and lets you receive phone calls and messages, play music and pay for goods. The Watch goes on sale next year at $349.00.

Apple Pay. We save the best for last. Apple has all their ducks lined up to move into the electronic payments arena. The Apple Pay does not use a credit card. You simply take a photograph of you credit card with your iPhone and Apple stores it on a separate storage unit. To pay for an item you just walk up to a pay terminal with your iPhone and press a button. Since your card is not used, you don’t have to worry about card theft data. You are given a transaction number and a code. Apple says it doesn’t care where or when you bought something or what you paid for it. The transaction is between you and the vendor. Apple will use Master Card, Visa and American Express and has working relationships with Bank of America, Capital One, JP Morgan Chase, Citigroup, Wells Fargo and other banks.
They already have a lined up of merchants who will participate in Apple Pay including: Blloomingdale, Macys, McDonalds, Sephora USA, Subway, Walgreens and Whole Foods.
This is the giant leap forward. The electronic payments market processed $12.8 billion in 2012 and is expected to jump to $90 billion in 2017.

The Apple Store. It generated $10 billion in gross revenues in 2013 with 1.2 million apps in 2014.

Apple’s Corporate Dominance. Apple iPhone and iPad are the dominate devices used in the workplace. Apple serves 90% of the world wide largest corporations. The iPhones and iPads always have the latest apps or lets users download the latest apps on their existing units. Compared to Samsung that has only 1/5 of its latest version available to corporations.

Putting it all together, Apple has charged into the lead, especially in linking its iPhone to Apple Pay electronic technology.

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