Apple & the Dawn of i-Commerce: What the iPad Means for Payments

It will take a couple of iterations, but the iPad will open new frontiers for “e-transactions”


Yes, you read it first on, the new member of the commerce alphabet soup will be “i-commerce”! That’s what I believe Apple really started yesterday with the introduction of the iPad.

Granted, Apple’s announcement, given the amount of hype and anticipation was not overwhelming. In short we can say that the iPad is a big iTouch. Great! Nonetheless even for contrarians like me, it would be ridiculous to discount the importance of this introduction, for three reasons:


  1. History does tend to repeat itself when the same team plays again: The iPod was introduced in 2001 amid great skepticism about the business model. Yet in FY2009 the iPod line and Music sales drove $12 B of Apple’s revenue. By comparison on its 8th anniversary Google revenues reached only $10.6B. Beyond its own commercial success, Apple changed the way music is bought and sold as demonstrated by the disappearance of Tower Records in the U.S., and the tug of war between Hollywood studios and Apple. Likewise the introduction of the iPhone sparked an entire new segment of phones with touch screen devices, and brought down the mobile walled gardens. It stands to reason that Mr. Job’s team will perform with the same flair and develop a new category of devices and uses that not so long ago were considered the realm of science fiction (like the Star Trek PADD).

  3. Size does matter when it comes to consumer experience: At the 2006 3GMS conference, TV on the mobile was all the rage. Yet the use case flopped with consumers, in my opinion simply because watching your favorite show on a two-inch screen is paramount to torture. By comparison internet video traffic in 2008 (largely seen on PC and TV with Xboxes) equaled that of the entire U.S. Internet backbone in 2000 (Cisco) demonstrating the consumers’ thirst for on-demand video with the right experience. So while I wouldn’t expect from Steve Jobs anything less than hyperbole for the iPad, Internet traffic analysis does support his thesis that the time is right for a device that will allow one to browse a page at scale! What most caught my attention in today’s announcement was less the immediate business opportunity of the iBook store than the possibilities offered by the ePub format, the standard for embedding multi-media content in publications. As proven by Avatar, experience is paramount to success with media and the type of mash-ups afforded by the iPad will enable new genres. Imagine what Lewis Carol would do with that!

  5. Like the iPod, the iPad will morph: From a music device to a data terminal, the iPod went through a number of iterations. It is doubtful that anyone anticipated such app as the “cyber beer“, or the always on pc terminal, or “Bump“. Personally two years ago my iPod Touch was a great MP3 player with a fantastic way to browse music. Today I use it also as a portable radio (Pandora), a gaming device (The Quest), a movie database (Showtime), a tool (Level Tool) and my morning paper (CNN Money). So while many will lament the lack of an SD slot (largely driven by Apple’s pricing strategy), it is safe to expect a flurry of radical apps, a camera (as with the latest iPod nano), OLED screens and other enhancements, in addition to accessories produced by third parties. For all we know a year from now Square will introduce an enhanced version of its service and card reader for the iPad (let’s call it “Cube”) to provide low end merchants with POS functionality up to now reserved for systems integrated with a cash register.


So, why am talking about new commerce category? Because the user experience and ecosystem that the iPad will enable will create very novel opportunities for commerce and transactions. Imagine for a moment:


  • An unbridled Facebook (not the mobile version) augmented with social commerce (thanks to PayPal X) anywhere, any time

  • Shopping at an appliance store with an interactive OEM agent to assist you

  • Digitally signing a commercial contract directly on the screen and triggering in real time the product delivery

  • Negotiating with a foreign client, assisted with real time audio translation


So to the risk of losing face I will therefore make the following predictions


  • Amazon will be selling the iPad before Christmas regardless of the future of the Kindle.

  • Google Wave will find its real footing not on Nexus One but on the iPad

  • Independent multi-media producers will distribute their content outside of studio control, directly on a “iMarketplace” within three years

  • Netbooks will disappear from the retail shelves by 2011 and be replaced by a variety of slate devices running Windows 7.

  • The iPad will become a video calling mobile device by the time 4G networks are reliably deployed

  • The next iteration of the AppleTV (let’s call it iTV), rumored for 2011, will interact with the iPads, iPods and iPhones to extend the viewer’s experience across multiple screens simultaneously.


My only wish and recommendation would be to see Near Field Communication integrated in the next generation of iPads, not for the purpose of taking contactless payment but to allow a simple intuitive interaction between my various Apple products. Synchronizing information with the tap of two devices, without configuration steps or network latency, would be as transformational to me as the use of touch screen was to zoom and pan across an image. More importantly for Apple, it would give me one more reason to trade-in an older iPod/iTouch/iMac or Wintel machine and to advocate with my friends that they should own one as well.

Agree / Disagree ? Contact me at or twitter/PRGauthier

Follow Patrick Gauthier’s blog, The Commerce Fault Line

Patrick Gauthier, is a senior payment industry executive with 20 years of experience in developing, selling and deploying new technologies for payment and commerce, on a international basis, in private and public companies ranging from start-ups to global organizations.

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