Tag Archives: Apple

Despite speculation Apple’s iPhone 5 will come with NFC Digital Wallet

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Recently the speculation about the inclusion of Near Field Communications (NFC) in Apple’s iPhone 5 switched from “Yes it is definitely In” to “No it’s definitely Out“.  I believe there is a strong case to support Apple including NFC in the iPhone 5 based on Apple doing things a little differently.

The original speculation was driven by a photograph of a partly assembled iPhone 5 front panel with what looked very much like an NFC chip installed (see picture).  

Later, further analysis of the photographs and the iPhone 5 construction came out with the view that NFC could not be included because the metal back of the new iPhone wouldn’t allow enough room for the NFC antenna and because of power consumption concerns in conjunction with the new LTE 4G comms technology that will be in the phone.  See article here.

However, this is Apple so “Think Different“.  Apple was granted a patent in April 2011, which covers the addition of an NFC antenna to the front touch screen sensor panel, eliminating the need for a separate space consuming RFID antenna.

With the inclusion of Passbook in iOS 6, Apple has implemented the infrastructure for an iWallet (as well as loyalty, coupons, tickets).  Along with this, some 250 Million iTunes accounts all with Credit Card payment information, give Apple the ability to be a game changer yet again, this time in Payments.   All that is missing is NFC, to actually transmit the payment information at Point of Sale – it has to be there.

With the recent acquisition of AuthenTec finger print security technology, Apple also has the ability to add additional bio-metric finger print scanning security to iPhone payments. This will address a lot of the security concerns with mobile payments and further smooth the way for the introduction of mobile payments and a great customer experience.

Meanwhile, Visa, MasterCard and major retailers have been quietly rolling out Contactless payment terminals at Point of Sale globally (over 150,000 in Australia alone) putting the retail infrastructure in place for NFC payments to take off.  Watch this space.

All this, even without the recent moves that the competition (Google Wallet, ISIS, Square, PayPal) are making in mobile payments, means that Apple must move now or risk loosing the advantage in what will be a huge market.  Hence, NFC must be there in the iPhone 5.

Apple’s expanding retail store staffing levels

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On the 26th June, an interesting article appeared in the online publication Technology Spectator by Horace Dediu from the Helsinki based company Asymco.  It was about “Expanding Apple’s Retail Army“, specifically about Apple’s retail store staffing practices.  The full article is available by clicking here

The basic premise from the article is that Apple has in the last 5 years tripled the number of employees per retail store from 37 in Q1 2007 to 117 in Q1 2012 and yet still retains extremely high per employee profitability and sales.  See the graph below:

Apple has also set the benchmark for retail in terms of sales and profit per square foot (more than double 2nd placed Tiffany’s) as well as sales and profit per employee.  Last year in Apple’s 327 stores globally each Apple retail store employee brought in $473,000.

The products are desirable and the staff are astonishingly good at selling them (even though they are not on commission).  There have been some rumblings about staff wage levels and staff retention in the US, however there is always a plentiful supply of bright young people lining up to apply for jobs at Apple stores – they can still take their pick of the best.  Why is this?

I think it has a lot to do with the strong Apple brand and the consistency of the customer experience with Apple products;  whether that is online, in store or when they get home an unbox the latest iPhone or iPad.  A consistently great experiences.

Store staff are well trained and empowered to solve customer problems straight away, they have access to all the information they need on their iPod Touch or iPad and their store retail application is well integrated with their website including their Genius Bar booking system.  Apple are even taking this a step further with their Apple Store iPhone app where customers can go into a store and buy a (admittedly a lower price point) product and pay for it with their iTunes account using their iPhone and walk out – without the need to even interact with any Apple Store staff.

Recently Apple’s new head of Retail John Browett, who took the reins in April, was looking at tinkering (read reducing) with Apple’s store staffing levels, using new schedules and staffing formulas.  However this was quickly hit on the head (most likely by CEO Tim Cook), with Browett coming out and saying that “We messed up”.

With all the doom and gloom about retail and retail store staff employment prospects – Apple is showing the way by increasing store staffing levels.  In difficult retail conditions Apple is still setting a stellar example for retailers to follow:

  • It’s all about the brand and a consistently good customer experience
  • Stores are well staffed by well trained, engaged and motivated employees
  • Store staff are empowered to solve the customers problem there and then
  • Store staff have the mobile tools and information they need  on the floor
  • Online and in-store systems are consistent and well integrated
  • Customers are given all the information they need in store on their iPhone or iPad

Apple iPhone 5 mobile payment wild card

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The new iPhone 5 with iOS 6 is due to be released in September.  Historically Apple has set the trends in Smart Phones which others have followed, but this time around the iPhone 5 will need to respond to the challenge laid down by the Android phones some of which already have Near Field Communications (NFC) payment capabilities.  Rumours are rife that Apple will integrate NFC with the new iOS 6 Passbook iWallet, giving Apple the ability to leverage markets such as mobile payments, ticketing, coupons, loyalty programs and secure access.

It is estimated that Apple has over 250 Million active registered iTunes accounts each with valid Credit Card details to allow for app purchases, which would give Apple a significant advantage in the mobile payments race making Apple the Wild Card in the mobile payments pack.

See the full article here.

August New Retail Technology News

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Thanks for taking the time to read the second edition of the New Retail Technology Newsletter for August.

Thanks also to those of you who contacted me after the first edition, I really appreciated the great feedback and concern expressed over my unfortunate Achilles predicament. For those interested, my Achilles is progressing really well – I should be out of the Moon-Boot and (almost) back to normal in a week or so (still a fair bit of Physio to go though).

This edition will focus on what is currently happening in the Mobile Payments space that will have a huge impact on how products and services are going to be paid for in the future in the world of retail.  So it is worth taking note of some the key trends.  Firstly, Smart Phone adoption is skyrocketing around the world – in Australia the smart phone adoption rate is nearing 65% (and you can bet that is much higher in the demographics most retailers are focused on).  Secondly, retailers are gearing up for Contactless Payment – currently being driven by Visa payWave and MasterCard PayPass, a new generation EFTPOS payment terminals are being rolled out that have the option for Contactless Payment (tap and go).  Companies like 7 Eleven and bigger IGA supermarkets have had contactless terminals for some time and Coles has just completed rolling out 750 Supermarkets, while Australia Post is now rolling them out to over 4,000 outlets.  The move to Contactless payment is being driven by customer convenience and speeding up the payment process.  The Visa payWave ad captures this beautifully. See it by clicking here.

The feature this week will concentrate on some key events in Mobile Payments in the last couple of weeks.  Starbucks decision to use relatively new start-up Square to process all Credit Card payments across all 7,000 outlets in the USA has some significance as it is the first time a major retailer (Starbucks) has partnered with a new generation mobile payments organisation (Square) to process all of their payments.  This will replace Starbucks own internally developed mobile payment application and future functionality promised by Pay with Square is quite exciting (see next post).

The other major player in the Mobile Payments space is PayPal with their PayPal Here application – again PayPal are making some early, but significant inroads into retail that will also be very disruptive to the traditional payment services (Credit Card companies, Banks and Payment Networks).  As interesting and disruptive as Square and PayPal are to retail payments, the one that has the potential to be the most disruptive will be Apple who will be launching the iPhone 5 in September that is rumoured to have NFC (Near Field Communication – contactless payment) capability utilising the new iOS 6 feature Passbook which could also be used to facilitate customer loyalty schemes, discount coupons and event tickets.

In Australia the major banks are also starting to get in on the Mobile Payment action with CBA’s Kaching, ANZ’s goMoney and Westpac’s PayWay.  There are also numerous mobile application developers around the world building apps that will process credit card payments eager to jump on the mobile payments bandwagon and get a cut of each payment transaction, all of which will have the effect of driving the cost of processing payment transactions down (good for both the merchants and for the consumers).  Some of the mobile payment names to watch are PayMate and iCCPay in Australia, GoPago in the USA and iZettle in Europe.

Ha, I’ve just pulled my copy Time out of the mailbox (still getting the print edition) and guess what is on the cover of this weeks edition?  The Wireless Issue – 10 ways your mobile phone is changing the world.  One of those 10 ways is mobile payments.

As Bob Dylan famously sang in 1964 “The order is rapidly fadin’/ And the first one now/ Will later be last/ For the times they are a-changin” is still very relevant for today.

Keep well,

Vaughn Clair
@jvclair