Former Apple exec says mobile payments are all about selling hardware

Former Apple exec says mobile payments are all about selling hardware


Apple profits
Jean-Louis Gassée thinks mobile payments are, first and foremost, a way to sell hardware.
Illustration: Cult of Mac

Former Apple exec Jean-Louis Gassée has posted a new edition of his always enjoyable Monday Note blog, arguing that Apple isn’t intending to disrupt banks and credit card companies with its entry into the mobile payments world.

It’s an interesting read, and makes a whole lot of sense: pointing out that Apple’s mobile payment drive is simply an extension of the company’s current strategy.

“Credit card companies, for example, play a hard-to-replace role in policing transactions,” Gassée writes. “It’s not always pretty or convenient when one has to call a US number from Europe because the system ‘tripped’ over an unusual transaction, but it works.  One can’t imagine Apple even thinking of storing and lending money, of trying to ‘capture a fraction of the flow.’

So if Apple’s not interested in being a disruptor to banks and credit card companies, where’s the value in mobile payments? To Gassée — and to anyone who’s followed Apple since the launch of iTunes back in 2003 — the answer is simple: it’s another way to sell hardware.

“Hardware is the star; everything else supports the big shots’ volumes and margins,” Gassée notes.

The whole article goes into more detail on this idea, and delves into the history behind Apple’s mobile payment interest, as well as discussing the reasons other many payment systems such as Google Wallet have failed to gain traction. It can be read at the link below.

Apple is widely expected to announce its mobile payment debut at tomorrow’s September 9 event, where we also expect to see the public unveiling of the iWatch and 4.7-inch iPhone 6.

Source: Monday Note