Apple Pay

Apple’s (Continually) Blue Christmas

Generally speaking, the good news about a bad week is that things usually get better by comparison. The day after your car breaks down is, for the most part, better than the day before when it did, since although you may have lacked a working car on both days, only one of them was spent on the side of a highway waiting for AAA to show up.

Unfortunately, that is more a guideline than a hard-and-fast rule and why the superstitious among us never utter the phrase “well, at least, things can’t be worse.”

After reading the payments and commerce headlines drifting through the ether this week, we can’t help but wonder if someone over at Apple, coming off of last week’s buffet of bad news, accidentally said, “Well, at least, it can’t get any worse.”

Because however rocky things may have looked for Apple Pay and Apple Watch last week, they both look a little worse this week. And, adding worry lines to those in Cupertino, Apple TV seems to have suffered a major setback, and the iPhone is looking a lot less invincible.

So, what went wrong?

Apple Pay, Meet Walmart Pay. Now, Marvel At Its Scale.

Walmart managed to pull off what will almost certainly be registered as the payments and commerce shocker of the year with the announcement that it is jumping into the payments arena with both feet.

Like, starting right now, with 5,000 merchant locations and 22 million consumers enrolled in its payments method.

With none of the fanfare and fireworks of the various “… Pay” products, Walmart launched Walmart Pay in Bentonville, Arkansas, yesterday (Dec. 10). Early 2016 will see the quick rollout of the planned abbreviated beta, and by the halfway mark of next year, Walmart Pay will be in all 5,000 U.S. Walmart locations.

A longer way of typing: Walmart Pay will be available in locations that are within 15 minutes of where 87 percent of the American population lives.

Walmart reports that 140 million consumers (or 77 percent of the U.S. adult population) visit its physical stores each week. Online, in November and December alone, Walmart.com is anticipating 210 million visits, up from 18 million two years ago. The Walmart app ranks among the top 3 retail apps in the Google and Apple app stores every month, and according to comScore, Walmart already has 22 million customers using its app in store each month.

To gain that kind of scale, Apple would almost have to capture every other retailer in the U.S. by 2016 and hope for an insane upswing in the usership of Apple Pay.

Which is nearly impossible.

Apple Pay is a service restricted to owners of the most recent two models (more or less). Walmart Pay was designed somewhat differently: to accept any payment form, on any type of phone, running any type of operating system, at any Walmart register.

Apple Pay uses NFC, which is available at scant merchant locations and not at all at Walmart. Walmart uses the Walmart.com app, the cloud and QR codes to simulate an eCommerce transaction in the store.

So, it’s easy, it’s accessible, it’s familiar and, now, it’s going to a retailer that sees 77 percent of the U.S. population on a weekly basis. That is beyond bad news for Apple and Apple Pay, which is struggling to get even 5 percent of the few consumers who can use Apple Pay (right merchant, right hardware) to engage with it.

Apple may have been mobile’s great white hope in 2015, but it just watched mobile payments Black Swan swim by, maybe.

Plug Pulled On Apple Cable Before Any Cords Could Be Cut

Much of the spring and summer was spent speculating that Apple might be the killing blow for the much maligned, big, bloated cable packages consumers are forced to buy if they want the handful of digital channels they are actually interested in.

And while that day may be coming, it won’t be coming from Apple anytime soon. Apple announced this week that it will suspend its plans to develop a Web-based television service in favor of focusing on being a platform to which media companies can sell directly to consumers via the Apple Store and apps.

Reports also indicate that Apple has not entirely given up on the notion of offering a 14-or-so channel package for $30–$40 a month, but for now, at least, strong resistance from media companies seems to be sufficient to keep Apple on the sidelines. A main issue was money, specifically the high costs media firms want for their programming.

Hmmm … It is almost as though they were watching the less-than-wonderful experience the telecom and music industries have had being Apple’s “partner” and decided to take a pass — or, at least, requested some very rich compensation for access to their content.

CBS Corp. Chief Executive Officer Les Moonves noted on Tuesday that despite the pause, he still thinks the service is coming.

But, for now, it’s not happening, and it seems worth wondering what that will mean for Apple TV, Apple’s newly redesigned digital media streaming device that was widely expected to be the vessel for the coming streaming service. The Apple TV costs more than either the Roku or the Amazon variation, and both make it easy to tap into digital subscription streaming.

Some wonder if Apple TV is a device without a purpose.

Apple Watch Update

So, good news for those who have been on the fence as to whether or not they want to surprise someone with an Apple Watch this Christmas. It is increasingly being priced to sell.

Best Buy has taken $100 off the price of every Apple Watch and Apple Watch Sport in its online shop. That is actually a better deal than what Best Buy was offering during Thanksgiving weekend, when the big electronics retailer was taking $100 off higher-end Apple Watch models but the Sport was only getting a $50 discount.

And though Best Buy is lowest on sticker price, it is far from the only sale on offer. Target is also selling the Apple Watch at a discount, though the $100 comes in the form of a gift card. B&H is also going the gift card route, though it is only giving out $50.

The goods news? Those big cuts in price will probably move a lot of fence-sitters toward an Apple Watch. But, man, there must have sure been a lot of them to make an Apple product go down in price by so much right before its first year of Christmas retail.

The Creeping Android Menace

Throughout what has thus far been a very difficult fall for Apple, there has been one common refrain offered as an explanation of the bright spot.

There is always the iPhone, which was killing it in the sales department.

And that is actually a pretty strong refrain, because as long as the iPhone remains as dominant as it is, Apple’s other products don’t have to do well immediately.

But about that dominance…

The latest report from Kantar Worldpanel indicates that Android has been gradually eating away at Apple’s market share in the U.S. and Europe.

Between August and October, the iPhone’s smartphone share in the U.S. fell to 33.6 percent, compared to the 42.9 percent it was clocking in this time last year.

Google’s Android operating system was up 9.5 percentage points to 62.8 percent from the same period a year ago, Kantar reported.

On the other side of the pond, the picture was also one of loss during the fall months. The iPhone’s market share declined 2.2 percent in France, 1.7 percent in Italy and 0.6 percent for the top five nations in Europe (France, Germany, Italy, Spain and the U.K.) combined. Kantar considers the overall drop in Europe to be minimal, driven primarily by a deceleration of growth in Great Britain and Germany.

Now, analysts are not overly concerned. There were a variety of high-profile Android hardware launches this year from Samsung, LG and (shockingly) BlackBerry, while Apple’s upgrade was to an interim S model. Generally, the successes in off-years are, well, off.

But for a firm as centrally associated with its smartphone as Apple, any dip is notable.

Particularly if the other products in the stable are meeting with a tepid response, like the watch, or at risk of being knocked out of the market, like Apple Pay.

Cue Elvis.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The May 2019 AML/KYC Tracker, provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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