Apple Payments and Smart Watches: Just the Beginning

Over the past few years, Apple has been building a loyal user base. Zero sum game analysis of market share is irrelevant to the market dynamics playing out in mobile. So when it relates to Apple, my analysis centers on two fundamental buckets. One bucket is, “What is Apple doing to add compelling, useful, and convenient new features for their existing customer base?” The other bucket is, “What are they doing to expand their customer base?” Most of what Apple launched today falls into bucket number one.

Bucket number one is significant because Apple has not only some of the most loyal customers on the planet but also the most profitable. Apple customers generally spend more in the iOS ecosystem on average than those in the Android ecosystem. It is with this point in mind that Apple getting into payments is significant.

Mobile Payments

I’ve been saying for a while we are on the cusp of the era of digital identity. We will increasingly move our analog banking, payments, identification, and more into the digital realm. Apple has been laying the hardware and software foundation to help their customers transition from the analog era of payments and identity to the digital one. Apple took the first step in this direction with Touch ID last year with the launch of the iPhone 5s. They have taken another step now with Apple Pay.

In years past, the timing was simply not right for NFC. Even though the technology was there, the infrastructure was not. That is all poised to change now that Apple is including NFC in both their new iPhones. Furthermore, it seems the retail environment is poised to embrace and advance the retail experience, thanks to Amazon, and NFC along with Bluetooth LE beacons are poised to play a role.

Why is this important? First some US credit card statistics:

  1. Total number of credit card transactions in the U.S. in 2012: 26.2 billion ((2013 Federal Reserve Payments Study))
  2. Total number of credit card accounts in the U.S. as of Q3 2013: 391.24 million, vs. 457.64 million in Q3 2003 ((New York Federal Reserve, Quarterly Report on Household Debt and Credit, November, 2013))
  3. Average value of a credit card transaction in the U.S. in 2012: $94 ((2013 Federal Reserve Payments Study))
  4. Total value of credit card transactions in the U.S. in 2012: $2.48 trillion ($2.21 trillion for general purpose cards and $270 billion for private label cards) ((2013 Federal Reserve Payments Study))

On top of those statistics, Apple shared today that, in the US, there are 12 billion dollars a day in credit card transactions which adds up to over 4 trillion dollars per year. Credit card payments are an everyday experience for many consumers. It is also one which feels antiquated in the digital age. Apple is looking to change that. It will take some time but the plastic credit card is dead. With Apple Pay, Apple is looking to be positioned in the middle of this environment by adding layers of security, simplicity, and ultimately, eliminate as much friction as possible from both the in-store and e-commerce transactions. This is good for Apple, their customers, and their ecosystem.

Apple has laid a foundation,and seeing as the US market appears to be on the cusp of a transition to adopt NFC at many retailers, it will be interesting to see if and how Apple meaningfully advances this market. As I said before, Apple has the right customer base to do it.

The Apple Watch

The big surprise was the release of the Apple Watch. Apple is looking to redefine the smartwatch category and until we all get to try the product sometime early next year, we will debate whether or not they have. I’ve been continually skeptical of the smartwatch category. What the job is for the mass market for a smartwatch has been the central tension for me. I’ve noted notifications alone can not be the central value of the smartwatch. In other words, not just duplicating what is on your phone.

Without having much time with the Apple Watch, I think a few points are worth noting on the product. Firstly, and this has been said by many, this is just the 1.0 product. The Apple Watch of today will look and behave dramatically different in three years or less. Second, software is the key. Over the past few weeks, as a watch from Apple seemed to become inevitable, I have been thinking about how this product evolves. More importantly, could–through software–a smartwatch eat the smartphone? Marc Andreessen loves to talk about how software eats the world, but in many cases software allows hardware to eat other hardware. So could Apple evolve iOS and, through natural user interfaces like voice and a number of other advancements, enable the wearable to eat the smartphone? Is the watch/wearable really the evolution of the category? It is a valid question to ask at this point whether or not my 9 year old daughter will use a smartphone when she is a teenager. But again, the point all comes down to software.

Apple has created an architecture for their developers and their ecosystem where they are placing their bet on the smartwatch with the developer community. This is no different than what they did with the iPhone. Giving developers the SDK and APIs now for the smart watch is essential as they build momentum and create a robust ecosystem by the time it is available next year.

While I’m stil not sure what the mass market appeal of smartwatches is today, it is clear that, if they do appeal to everyone, assuming that is indeed the goal (maybe it isn’t), how the software, apps, and functionality advances will be the key driver of this category. This is where Apple’s third party developers come in, and if any company has the third party developers to advance this category it is Apple.

One thing Apple added to the watch that no other smartwatch has is NFC to create the ability to pay for things with just the watch. This could be a key differentiator. We addressed this value proposition specifically in this post, where we learned first hand how Disney World was deploying wearables for payments, and the level of convenience it provided. Payments and health are likely to be cornerstones of Apple’s wearable strategy.

The Brand

The intersection of liberal arts and technology includes fashion. Apple appears to be taking their brand more into this realm. Think about the names for two new products. The Apple Watch and Apple pay are not the iWatch and iPay. Where did the “i” go? Apple is clearly thinking long term and is making the Apple brand even more prominent.

Apple understands this and they began to address it with “Apple Watch”. By releasing three different collections, and a range of bands to choose from, Apple is just scratching the surface in designing a wearable for the masses. Fashion is subjective and for Apple to truly bring fashion to tech, they will need to make even more collections. But this is just the beginning.

The intersection of liberal arts and technology extends well beyond desk, lap, and pocket computers. There are so many directions it seems Apple can now go. Their future is up to them and it will be interesting to see where they go and who follows.

Published by

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

1,141 thoughts on “Apple Payments and Smart Watches: Just the Beginning”

  1. Starting tomorrow i will wait on in line at any Apple store to be the first to buy the Apple Watch to Give to John Kick so that he could not tossed it aside lightly. but instead thrown it with great force with the rest on the market. as he suggested here

    I know this site is an Apple blog and that you are not necessary objective, but Ben Bajarin you got to give credit where credit is due. and admit that this year with the beautiful and Elegant Moto 360, Moto Hint, and Moto x, Motorola has out shine, out execute out innovate every one in the market including Apple. I wish they could put the Apple logo on their product and run away with the market.

    i said this and i would say it Again Motorola is the New Apple.

      1. @Vicious Cur

        Motorola can hardly be called Apple as long as they are not profitable.

        But at least when it comes to exterior design the Moto 360 is simply much better designed than Apples watch. Ironically the latter looks a bit like something made by… Samsung.

        But software is key. Maybe Apple has done something revolutionary here.

        1. My biggest surprise with the Apple watch is the software that make it look more Like a small IPhone with gimmick feature than an intelligent conduit for glancable services similar to Google now.

          1. Without playing with either yet, Apple has addressed the size problem right out of the gate, at least as it is presented today, so that is the expectation set by Apple. Motorola should have done likewise, even if it isn’t released simultaneously.

            Personally, though, I don’t think either company nailed it. Whoever does better at making it something other than just a smartphone peripheral will be the one that nails it. It needs to be something I can use independently, especially, as you point out, when my smartphone battery dies.

            If smartwatches really do become a thing, so far it seems like it is Motorola’s and Apple’s to define. These two are definitely the v1’s of the smartwatch. Everyone so far has at best been beta, if not alpha. But for Motorola, either Google needs to step up their wearable development platform or Motorola needs to not wait for Google.


          2. The Problem i have with the Apple watch is not about the Hardware rather with the thinking behind the software that make it look very confusing and gimmick with no design limitation.

            they seems to expect that people would play with their watch the same way they do with their phone instead of simply provide you with useful information, notification, at a glance when you need.

            whats the point of pinching zooming and sending tweet, heartbeat or emoticon on my watch when i already have my smartphone with me.

            by the time it will take for Apple to ship this watch next year
            Moto 360 and ASU Zenwatch the two best right now will already be on their second generation that would probably answer many of the issue to raised above.

            the next version of Android Wear will include offline music playback and GPS support so that you can listen to music stored on your watch via Bluetooth headphones and track your distance and speed without the need for your phone.

          3. To me that’s kind of the cool part of competition. At this point everyone is trying to out do each other, which is a good thing and should be expected.


          4. Of Course the Apple Watch is a blessing from God, that will give a lot of Credence to ASU and Motorola by making this category a most have product simply with the power of their brand and their army of bloggers who will no longer be able to criticize Motorola or Android Wear without looking like an idiot.

            Apple doesn’t need to make the best product to succeed anymore,
            they will market the watch the same way beat by Dre market the Headphone and people will buy it no matter what which in itself is a Good thing for the rest of the industry.

            Same is also true for the Apple Pay

          5. “Best” is a relative measure, particularly in the consumer space. Best is always relative to use. At the hope that you are not the cynic (and I mean cynic, not skeptic) you present yourself to be, has there ever been a time that you thought Apple successfully made the best product?


          6. The IPhone and the Mac is the best in their category when it come to design and ecosystem.

            I used to be an Apple fan up until they become this giant corporation with a powerful brand that act more like a company run by businessman and marketer rather than the product company that they used to be under Jobs,

            I love rooting for the underdog like Motorola because they remind more of Apple in the past than Tim Cook Apple itself.

          7. Got it. I like underdogs who seem more like dark horses rather than just losing steam. Motorola seems like it could be a dark horse. They have a lot of spunk. I tried to root for RIM, but the more they drug their feet the less I could get behind their offerings.

            Contrary to public opinion, however, keep in mind, great marketing does not make a product great. A great product makes great marketing possible. You might be able to fool people for a short time, but not for long.

            Tim Cook is definitely not the same kind of product guy Jobs was. But he seems to have the right people with him and he seems to let them do their thing with a keen eye of oversight and leadership. Cook is not like Sculley, I don’t think. I could be wrong.


          8. the difference with Apple Tim Cook and Steve Job is the influence of Wall street.

            Jobs would never let Carl Icahn influence its business decision or overreact because of Apple’s stock because of the luxury he enjoyed as the founder and savior.

            Im still not sure how Tim cook would react in a worst case scenario at Apple, (ie) a Bad product Launch

          9. If you’re not sure how he’d react, how can you say there’s any difference between him and Jobs in this manner?

          10. ” the thinking behind the software”

            A really good comparison at Ars helped me get a clearer picture of that thinking. Probably being a bit too reductionist, but I think it boils down to the 360 is meant to be a smartphone peripheral and the Apple Watch is closer to as a tablet is to a PC so the watch is to the smartphone. IMHO, both companies have done an good job of being clear in the software on why their device exists.

            While I think a lot of people on Ars are superficially correct in that it looks like Moto and Apple seemed to have switched the minimalist approach, I think that is affected by “the job to be done” thinking of each approach. Moto seems to see the watch as quick, minimal feedback on what is on your phone, so the stripped down information (not really interface) makes sense. Not meant to keep your phone in your pocket, but helping you figure out if you might need/want to take it out. While Apple seems to want you to be able to do more on your wrist without needing to take out your phone.

            I think both approaches are valid and I think both companies have done well (from a strictly second hand view) of accomplishing that. Of course I don’t know what it is like to _actually_ use either, but that’s what it looks like so far. In this regard, I think Apple’s approach is marginally more paradigm shifting and closer to accomplishing what Samsung tried to communicate about their watch.

            The “bulky” comments on either watch is a subjective point and I think needs to just be removed from comments except in how it might materially affect someone (like in the Hodinkee review where he talks about the cuff test). There are a LOT of contemporary watches with a “bulky” design and people love them. I don’t, but that’s just me. And so is it “just you” with everyone else who comments on the bulk.

            That said, I do think _size_ (not necessarily bulk) matters for many people, and like I mentioned, Apple addressed this right out the gate, and I think that makes a big difference. Moto should have and could have done likewise, but there is always tomorrow… until there isn’t.


        2. I don’t know. A couple of reviews I’ve read say that in the flesh, or in the metal, Watch looks good, not what they expected based on the pictures shown on the keynote. So I won’t judge until they show me the gold. And alumin(i)um and stainless steel.

          As to round v rectangular. Round makes sense for analog watches. But as I raised in an earlier post, making a smart watch look like an analog timepiece smacks too much of skeuomorphism which is anathema in Cupertino these days, or so I’ve been told. Besides, I fear that forcing smart watches to go around in circles (love my lame pun?) leads to a lot of wasted real estate. I mean, be kind to your app developers, don’t make them design apps for a circular screen.

          1. Along that line, I was kind of surprised to see a crown, digital or otherwise. It would have actually been cool if they could have figured out a way to make it recharge the battery by turning it, aka rewinding.


          2. Me, I was really hoping that they could put in a charger like the Seiko Kinetic’s. But the laws of physics probably wouldn’t allow such a mechanism to be both compact and produce enough juice.

    1. “i said this and i would say it Again Motorola is the New Apple.”

      Umm, no. Just no.

      No mobile OS, no wearables OS, no PC OS, no desktop, no laptop, no app store, no pro apps, no chip designers, no payments system, no retail stores, no server farms, no solar farms, NO PROFITS.

      Well in a way they are like Apple in that the No’s far outnumber the Yes’s.

      1. you just need to buy a Moto X Phone, and take a look at what they just unveil to understand my point.

        when it come to quality of product and experience
        in have a lot of trust in the Company that brought me Moto x, Moto 360, Moto Hint Moto Voice and Moto Assist etc..

        besides everything you point above make no Logical sense,

        1. It is a list of things that Apple has that Motorola doesn’t.

          I won’t contest your personal opinion that Motorola’s products are great. But until Motorola demonstrates the ability to offer Apple’s breadth of product and expertise and PROFITS, claiming that Motorola is the New Apple is, by any stretch of the imagination, just wishful thinking. Logical enough for you?

          And nope. Android is Google’s OS not Motorola’s.

          1. when i said that Motorola is the new Apple i was referring to the their new category of product that provide a very easy and useful experience that work beautifully well together, not their business side.

            right now they are the company that others are trying to copy.
            with the Moto 360, Moto Hint, Moto Voice, they set a design and hardware standard that even Apple could not Match itself. hence my reference to them as the new Apple

          2. I think it’s fascinating that you think Motorola, a company that was acquired by Google, stripped of its patents then sold again to Lenovo, is somehow better than Apple.

            Saying “Motorola is the new Apple” should include more than a phone, a watch and a Bluetooth headset. Beyond that I don’t see a competitive iCloud service, a competitive office suite (iWork), Garage Band, MacBook Air, iPad, iPad mini, iPod (yes, it’s still relevant), universal payment system, activity and exercise apps, CarPlay, SDK “kits” (HomeKit, CloudKit, HomeKit, WatchKit, SceneKit, Metal), Continuity, Handoff; like aardman already pointed out, the list goes on and on.

            Clearly you’re a fan of Motorola and that’s cool. Apple products aren’t for everyone, but your comment feels incredibly and solemnly desperate.

            While design is good the software experience is equally if not more important and that’s an area where Motorola has zero influence or control. Android L and Wear are fully controlled and in many respects locked down by Google, which means Motorola’s products will only advance as far as Google takes the OS.

            But I get it. You want Motorola to get more credit for what they’re bringing to the table and that’s understandable. It’s just that for all Motorola is doing it’s an incredibly small player when compared to Apple. They’re a great company and have some great products and designers but I prefer to stick with the company that makes a variety of products that have an innate synergy that no other manufacturer — not Google, not Microsoft, not Samsung — can come close to.

            Motorola is great but an Apple, Inc. it is not and frankly lacks the infrastructure to be even 1/10 of what Apple is and represents.


          3. when i said Motorola is the new Apple i am looking at the Future not the past nor the present.

            While Motorola may not have all the stuffs you point above but Google Do, when it come to service they are many time better, faster, and more ambitious than Apple with a very close relationship with the folks a Motorola that come from Google itself.

            the current Moto offering have Google influence all over it, and if you ever try a Moto phone you’ll get a clear vision of where they want to move the industry.

            other than that i love rooting for Underdog like Motorola they remind me of Apple before the iPhone.

          4. I suppose if a company that doesn’t make nor has direct control of the operating system they implement on their hardware reminds you of a company that has complete control over both hardware and software then yes, I guess Motorola is a lot like Apple.

            Obviously Motorola has a strong group of supporters that prefer their products over Apple, which is great. If everyone bought the same thing Apple could get lazy and slow down or stifle innovation.

            We just disagree on how to appropriately compare the two companies in relation to their place in the market today and tomorrow.

            The future of all technology is not in hardware but rather in software and services. Apple is clearly out in front of this with revenue streams from iTunes (yes, the music thing is slowing up because of Spotify but movies and TV shows still represent a big chunk of money for Apple), the App Store, iTunes Match and soon iCloud Drive. And now that Apple will be getting a portion of every credit card purchase made they’ll be reaping even more monetary rewards that will keep the company afloat for generations regardless of what happens in the hardware space.

            Again, I think it’s great that you root for the underdog and if Motorola truly is the next, great innovative company that Apple is today then time and people spending their money on Motorola products over Apple will be a clear sign that Motorola is moving in the right direction.


          5. You must first stop comparing how Google developed Android in conjunction with other manufacturers. to the old Microsoft way because it is clearly not the same.

            Android is a Free and open system that Google developed closely with input from all major OEM that are part of the Android consortium.

            much of what you said above akin to Intellectual laziness which is why I often tell to people that they need to learn what the other guys is doing and open your mind your time and your wallet to it to have a clear idea of its value.

            It will be very hard for any die hard Apple user to understand the value of what Motorola is doing just as it was very hard for many die hard Blackberry fan to understand value of IPhone because of they Emotional attachment to it.

            the idea that Apple is better simply because they control the hardware and the software is non sense. unless you haven’t use a Moto X phone to see how Motorola optimize and integrate the two together which provide the best Android experience in the Market.

            ii will said this

            the biggest advantage that Apple have nowadays over Motorola is their brand Power and their army of die hard follower and evangelist.

          6. “It will be very hard for any die hard Apple user to understand the value of what Motorola is doing”

            Maybe, but that is irrelevant to Motorola’s success. There are obviously enough people out there who are not Apple fans that Motorola can operate without ever having to worry about what Apple does. So maybe you should stop worrying about Apple fans and start trying to figure out how Motorola can become more relevant than it is. One doesn’t have to belittle Apple or their customers in order for Motorola to succeed. Likewise, what Apple customers think of Motorola is irrelevant to Motorola’s success.


          7. There’s a lot wrong with your response. First, I never once mentioned Microsoft so clearly you’re seeing what you want to see rather than actually reading, discerning and comprehending my comment.

            Secondly, how does a die-hard Apple fan differ from a die-hard Motorola fan? You’re clearly defending Motorola because you believe in their product and their brand. So much so that you feel as though that with their limited portfolio (compared to Apple) that they’re on the verge of becoming bigger than the company you appear to enjoy vilifying. Or are you more agnostic to any platform/manufacturer so long as it’s not Apple? What about HTC? Why can’t be the next Apple? What, because they don’t offer a Bluetooth headset and an Android Wear watch?

            But I think what’s most telling is your lack of recognition of all of the things Motorola doesn’t do that Apple is doing and what Motorola’s answer is. You’ve yet to address Motorola’s answer to iTunes, App Store, iCloud Drive, iWork, MacBook, iMac, iPad, Apple Watch and Apple Pay yet continue to belittle Apple (as jfutural pointed out) and its fans as the only recourse to defend Motorola’s supposed rise in the marketplace.

            As I’ve said many times, I think Motorola is a great company with great designers, engineers and so on but their success or failure won’t be won in our little volley but rather in the market with people’s money.

            Motorola’s fate will be decided by people passing up on the iPhone 6/6 Plus and the Apple Watch for a Moto X and Moto 360. We’ll see celebrities and films featuring people using their Moto X and not an iPhone. We’ll see Apple focusing their marketing on trying to differentiate their products/services to Motorola. If that happens then yes, Motorola’s stance in the market will change but until such time I don’t see how Motorola can truly compete with the juggernaut that Apple has become.

            By the way, I have used a Moto X. It’s a great phone and the Moto 360 does look like a decent product but since the Moto 360 doesn’t do anything differently than a Galaxy Gear,LG G Watch or any other upcoming Android Wear watch the only thing the Moto 360 has going for it is its looks, which is stunning. I just believe that what Apple is doing with the Apple Watch goes beyond anything Android Wear is doing or can do.

            One more thing: with the release of Android L could spell the end of the openness it’s been known for. Android Wear is identical no matter what device it’s running on so whatever relationship Motorola has with Google it won’t mean a whole lot if the watch responds and functions the same way it does on every other Android Wear watch on the market.

          8. I am not defending Motorola, i am just debating the value for what they’ve done versus that of other OEM

            my Focus and love for Motorola is not base only on preference but also on the fact that over the last two years they have out innovated every other OEM including Apple when it come to Hardware design and intelligent software integration.

            as i said already you are making a mistake by thinking that Apple is only competing with Motorola, when in fact they are also competing at the same time with Google superior integration in android with best in class service that is unmatched by any one, and their strong loyal base with a Brand that is as powerful and aspirational as apple itself.

            Of course business wise, Motorola is no match for today Apple, just as apple wasn’t a match for Nokia and Blackberry in smartphone in 2007.
            success doesn’t happen overnight and Apple is a giant with enough power to bully any Small player in the market however one thing that is clear to me, is that Motorola is moving the technology landscape in a new direction where it will be difficult for Apple to compete which in itself doesn’t mean that Apple is doom just that they wont be the leader that they used to be since the IPhone. but only time will tell.

            my reference to Microsoft was because many Apple Fan often want to compare Google/Android with Microsoft/windows, thinking that Apple user experience is totally better than that of Android which i think is not really the case.

          9. “I am not defending Motorola…”

            Really? We’ve gone back and forth for a couple days about Apple and Motorola; you’ve stated time and again that Motorola is surpassing Apple in innovation, service and products, and yet you lay claim to NOT defending them.

            It’s also interesting that you vilify Apple fans being blindly loyal saying,

            “…the biggest advantage that Apple have nowadays over Motorola is their brand Power and their army of die hard follower and evangelist”

            while at the same time saying,

            “…my Focus and love for Motorola…”.

            So in your eyes you’re NOT a die-hard follower of Motorola although you use the word “love” when referring to them.

            Fascinating stuff.

            And alas, you’ve yet to offer a single competitive Motorola product or service to Apple’s wide berth offerings.

            I don’t know, this entire conversation is becoming an exhausting and futile exercise of in incomprehensible dialog, unsubstantiated claims, and some of the worst grammar, sentence structure and total disregard for proper capitalization I’ve seen.

            I’m all but praying that you’re under 25-years of age as it would explain a lot and help me rationalize your, let’s call it “unique” perspective.

          10. Kenny, why don’t you just admit you just plain hate, okay dislike if you wish, Apple and Apple fans. Then people won’t get on your case anymore because that sort of irrational sentiment –people understand that there’s no point in arguing.

            Instead you pretend you’re being rational and objective but you’re so obviously not because you are professing the same blind loyalty and devotion to Motorola that you accuse of Apple fans.

            I admit, I’m an Apple fan. And it’s based on my experience with the company, their business model that is respectful of my privacy, their customer service, and their products. If those things deteriorate, then I won’t be an Apple fan and customer anymore. I dislike Google and Facebook because they have no respect for our privacy and my dislike of Google spreads to any company that supports Google’s quest to gather all the information it can about us. These vaunted Google services that you are so proud of, they are basically information harvesting devices and even if they work better than the Apple counterpart, I’m avoiding them as much as I possibly can.

          11. So in your world if I’m not praising Apple, is because i have a deep seeded hatred for the since there is no other alternative. Sir that says a lot more about you and your devotion for the company than it says about me. For someone who said to be really care about his privacy , I wonder how you sleep at night knowing that Apple knows your name, where you live, where you are or going all the time, your credit card number, your phone number, Who you call and chat with What you bought, what music or movie you listen and watch , and in the future probably you medical history. How do you protect yourself against such violations of your privacy

          12. No, you don’t need to praise Apple, but you need to have a logical and reasonably plausible basis for your assertions. Especially highly debatable ones like “Motorola is the new Apple.”

            And I sleep much better at night than if Google had all this information. One of the reasons Google Wallet failed was that they insisted on harvesting all the information generated by the purchases and the merchants hated that. Apple said ‘We don’t even want to know’. I like that. I will eat my iPhone the day Google announces “we will no longer gather every single piece of information about you that we can get our hands on.”

          13. here’s what I know.
            when we love someone every stupid stuffs he or she does is perfect for us, but when we’re not no matter what he or she does even if it’s perfect or not we find it to be stupid.
            that’s exactly what you just did.

            You like many others who Love to complain about Google violating your privacy which i think is Fair still does not really care about protecting your privacy or your personal Data otherwise you will not happy letting any for profit corporation having access to your personal information period because they worry more about their share older than the worry about your complain.

            the only reason you claim to care about your privacy is because you hate Google who happen to be the biggest in this Game.

            Now let take a Look about what we know from Apple and your privacy.

            There is no way in hell for Apple to provide good services and compete with Google effectively without mining your data and violated your privacy as Google is doing, whether with their Map, iMessage, iTune, Payment, Siri, in fact, they have billions of credit card with all the information about its users store in their server which they consider to be of a huge competitive advantage, ask yourself why? do you not worry about that? what about their advertising platform calls IAds do you know about it? do you know how many nude photo they have on their server about their users?
            have you heard of some customer service agent at Apple who called celebrities on their cellphone to harass them, after having access to her personal information in Apple’s Database?
            just as with the NSA there nothing to prevents some employees at Apple from stealing all this information about you and sell it on the black market or the Tor network for fraud.

            Apple primary business might not be to selling Ads but they are still in the business of mining and storing your personal information and activity to improve and provide better service and the fact Google is doing more and better at it doesn’t make Apple less of a problem unless you do not really care about your privacy.

            also what makes you think that Apple doesn’t want all this data that Google is getting from its users, are you so naive to think that Apple doesn’t want to better compete with Google in services.

            why do you think that all of a sudden they’ve became the champion of user’s privacy and love for cheap chat Google about it, do you really think that this is not because they are afraid of Google monopoly on data and their inability to really compete with their service just like Microsoft. don’t let big corporation fool you my friend.

            i will be more worry about Apple because unlike Google who clearly let me know exactly what they’re doing with all of my personal Data Apple not only do i have no clue of what they intend to do with it but they’re Also trying to fool me into thinking that they are not that interested in mining my personal data which a big Lie. Big Big Lie.

            Stop the nonsense my friend
            there is nothing wrong with not liking Google, but stop pretending like many others here that it is about protecting your privacy, that is Bullcrap, if Apple were doing the exact same things, your excuses to letting them would still be the same.

          14. “Motorola is great”

            I have to disagree. I’m on my third piece of crap PVR box which is made by Motorola. It is such a piece of junk. For me that speaks to a culture that is okay with shipping crap.

          15. Well then thank you for finally clarifying what you really meant. That is certainly not what comes to most people’s minds when someone says “Motorola is the New Apple”. And by the way, what I described is not just the ‘business side’. Frankly I don’t know what you mean by a company’s ‘business side’ because everything a company does –design, marketing, retail, charitable giving,– everything is geared towards maximizing its business viability. i.e. Everything is ‘business side’ as long as you are a for-profit business.

      2. Kenny seems to be a relatively patient Samesung booster with the continual sniping and diminishing. The moto comment is a dead giveaway, never mind the generic “I’ve had every apple product (for the last forty years) but this one is a dud and means that apple is doomed, etc..” It gets a bit tedious. Kim is probably in his cubicle in Seoul, on the clock as we speak. It would be funnier if he was using google translate (or is it Tizen now) but his English is quite passable so he must be a team leader.
        Can we move on to real discussions instead of trying to point out the bleedin’ obvious to the apparently clueless?

    2. Nice try kenny with that passive-aggressive “this is an apple site so…” start, it dosn’t change the fact that you tried to hijack the thread with your fact free comment. Nor that their is much point to Lenevons watches, but again, nice try kenny.

  2. I have no interest in a “smartwatch” until it can essentially replace the phone.

    When you marry “Smartwatch” and mobile payments, that will be cool.

    1. Until the technology in Minority Report becomes a reality the Watch will never replace the phone. There is too much you can do with the size of the smartphone screen that can never be reasonably replicated on the tiny screen of the Watch.

      But I don’t think that’s the point – to me the Watch is a device of convenience and not meant to replace the smartphone. Based on what we saw yesterday the first step will be to augment the capabilities of the smartphone. There are a ton of people out there who can afford it who will absolutely buy something that will save them 5 seconds here and there.

      But what I am excited about, and what I think will drive the success and adoption rate of the Watch are the apps apps apps. For the people who argue that they don’t need a Watch because they can just pull their phone out their pocket and do the same thing, just wait until app developers starting building apps for this thing. It’s going to be amazing.

      1. “There is too much you can do with the size of the smartphone screen that can never be reasonably replicated on the tiny screen of the Watch.”

        That’s an interesting point. So a larger screen iPhone that can stay in your pocket or bag more because you have an Apple Watch makes a lot of sense.

  3. Sundry items:

    1. Is it verified then that Watch will do Pay even if your phone is a mere 5s?

    2. Jony is pretty hardcore about form follows function. At least in the sense that he won’t do a round face because a lot of real estate will get wasted given the rectangular screen footprint for Apps. Anti-skeuo aesthetics goes into this as well.

    3. IIRC, iPod Touch & iPhone started out Mac-tethered then grew up and broke free. I expect Watch will eventually sever the umbilical to iPhone. Components, just need to get smaller to fit all the additional functions in the watch. I will probably keep the phone though, even if I get the watch.

    4. Is this it for the 4″ phone? Even the 6 seems bigger than my personal preference. I hope Apple keeps an updated 4″ phone in their product line.

    5. So what’s in the Land Barge they built?

    1. Apple says, “Apple Pay works with iPhone® 6 and iPhone 6 Plus through a groundbreaking NFC antenna design, a dedicated chip called the Secure Element, and the security and convenience of Touch ID™. Apple Pay is easy to set up, so hundreds of millions of users can simply add their credit or debit card on file from their iTunes Store® account. Apple Pay will also work with the newly announced Apple Watch™, extending Apple Pay to over 200 million owners of iPhone 5, iPhone 5c and iPhone 5s worldwide. ”

      I read that as saying it works directly with the iPhone 6 but only in conjunction with the Apple Watch on the iPhone 5.

      1. The Apple pay is very similar to Google wallet,however I do not expect it to be a widespread succes because of many scenario such as security issue or your IPhone battery dies while you’re in a store
        Stil I see it more as a marketing tool to sell the iPhone 6 as they did with the iPhone 4S and Siri

        1. I see the payments issue being super complex, and it’s really hard for me to say either way. Gathering from what Ben is tweeting, he seems to be talking to credit card companies and banks so hopefully he will share some insight.

          Regarding security, the bar is pretty low. Apple Pay is simply a convenient replacement for credit cards. With credit cards, all the information that a thief needs is on that card which you physically entrust to the cashier. A malicious shopkeeper could simply copy the information on the magnetic strip with a swipe (there are devices to do this).

          Regarding battery life, if your battery dies, all you have to do is dig out your wallet. Even if you use Apple Pay most of the time, you’re probably still going to carry around your card in your wallet.

          Although I can’t say if it’s enough to succeed or not, my impression of Apple’s solution is that it is such a thin (but important) layer on top of what is already being done. Apple doesn’t do anything. They don’t store any data in the cloud (unlike Google) or try to be an intermediary in any way. They don’t irk merchants or credit card companies at all.

          They just make credit cards more convenient and more secure.

          And that might be the key to success.

          1. I agree that payment systems are tremendously complex. Not just technically, but especially contractually. Most credit card set ups involve contracts between at least four parties (the bank and customer are only two of them).
            Getting merchants to pay for expensive credit card terminals has always been a major issue. This, at least in part, explains why the US is still on magnetic strips for the most part, while in Europe credit card transactions rely on the security chip. That means that the US has more to gain from a move to new technology then other parts of the world.

          2. while you may consider not being in the cloud as an advantage for me is a drawback.

            it is safer and more convenient to use a cloud base payment solution than one store locally, because losing your phone means losing all your information, and it’s easier for someone to hack your data in your phone than it is to break the cloud, and having your payment information store in your phone will make you a more exciting target for hackers.

            The Apple Pay is a very good solution primarily for E-Commerce, however so long as i still need to Cary my credit card with me, it will not be that much of a convenience to take my phone on my pocket to pay for good than it is to take my credit card on my wallet.

            the good thing is that it’s Free.

          3. You need to educate yourself a bit on how this is set up. First off, Apple Pay won’t work on a phone without fingerprint authentication. Second, the actual payment cannot be accessed through software hacking. From CNet:

            Software-based security solutions are weak, easy to hack, and will hopefully one day phase out. Knowing that, there’s no way Apple — or any other smartphone manufacturer — would base its mobile payment security on a software solution.

            Instead, Apple introduced a two-part hardware-based security solution for Apple Pay. The first lies in your fingerprint, which is required for each transaction initiated. Apple users are familiar with using Touch ID to authorize iTunes purchases, and now Apple is applying the same process for in-store transactions.

            The second hardware solution is the real key to keeping our financial information locked away: the secure element.

            Built as a chip and only available in the iPhone 6 and iPhone 6 Plus, the secure element is where your financial information is stored. It is only accessed when a random 16-digit number must be generated for a transaction. The data stored on the secure element never makes their way onto your phone’s software, so even if someone hacked your operating system, there would be no way to extract your financial information.

            The secure element found in the iPhones are also safe from hardware attacks. In fact, if a thief dismantled your phone, the secure element would sense tampering and immediately shut down.

            So security on these things is WAY higher than the cards you use confidently every day. With Apple Pay, a criminal would need physical access to the device and a very specific set of skills to get your money. And it would only be YOUR money if the thief were successful.

            By contrast, cloud-stored account data is a huge target. Millions of accounts all in one place. Anonymous theft. Data stolen without users even knowing about the theft (Jennifer Lawrence didn’t know she’d been hacked until the pictures appeared online. She surely would have known immediately if her phone itself had been stolen). Password protection much weaker than biometric protection.

          4. First of all, touch ID is more of a convenience than a security feature since you still need a password as backup that for many people is still 123456.

            second of all
            (Jennifer Lawrence didn’t know she’d been hacked until the pictures appeared online)Joe_Winfield_IL

            that my whole point with the Could base payment system
            Is is easier for a cloud company to build multiple Level of security and 24 hours monitoring around a cloud base system than for one user at a time.

            adding more and more vital information digitally to your phone just make it more of a target for hacking and loosing that say phone mean loosing a lot hence my the reason why i prefer a cloud base solution rather than a Local one.

          5. Touch ID is the name for the physical fingerprint reader built into the phone. On the 5s, it was only used for a few basic functions (unlocking the phone, iTunes purchases). But this was the beta test for what is coming. Physical biometric security has VASTLY more potential than what we have already seen. Do you really think Apple has sunk hundreds of millions (maybe billions) on this proprietary technology just to avoid swiping the home screen??? Your unique fingerprint ID can be used to access anything secure. It can’t be hacked remotely. Users can’t forget their fingerprint like they forget their passwords. Hackers can’t gain access to fingerprints via social engineering.

            The celebrity phones were hacked through the cloud. Apple already had 2-factor authentication in place, which the users had ignored for convenience sake. There were many layers of security, but the incentive was too strong. None of the celebrities had their physical phones hacked, and none knew of the theft before the pics started appearing online.

            And this was still a manual, social engineering-based attack. It pales in comparison to the Target attack last year. Or the Home Depot one announced this week. Or the Sony Playstation attacks. Or the countless bank attacks. In each case, the attackers managed to navigate past layers of software security undetected. All were “cloud” attacks. All big companies with lots of encryption. In each case, millions were affected. In most cases, users don’t even update their passwords because they can’t be bothered to remember lots of different and complicated passwords for each individual service.

            Are you terrified of losing your wallet? It is way easier to use a stolen wallet than a stolen phone. Like orders of magnitude easier. Apple Pay is a huge step forward in data and financial security, far beyond any other solution on the mass market today.

          6. First of all
            my point was Touch ID use a backup password in case your fingerprint does not work which mean that i can still access your phone by guessing your backup password just as we can do without it.

            when it come to Cloud base solution and security Apple is weak very weak compare to other player in the market like Amazon, IBM, Google Microsoft. that a lot of company including NSA use to store their Data in the cloud.

            Home depot, Target etc.. they all use very old non cloud technology with out date security protocol that is many time less secure than a lot of cloud base solution that exist today.

          7. You’re completely missing my point. If someone steals your phone and guesses your password, all they have is a phone. They can’t make purchases without the thumbprint. Contrast that with today’s solution…which is your wallet. If someone steals your wallet, they have everything. Immediately. No password, no thumbprint. Static account numbers. You can’t shut it down, and you need to replace all your cards. You are without accounts for several days, and your credit score is at risk. This is the real target for Apple Pay, and Tim Cook was very clear about that. It’s a huge step forward from magnetic stripes.

            If you want though, you can contrast it with cloud based online security. Do you have a totally unique password for each of your accounts? Not slightly different (add a “1”, different capital letter, etc.) for each, but totally unique and robust? If you do, you are the only person I’ve ever met. So when a major player like Sony gets hacked, thieves have millions of user IDs and passwords. They can then write fairly simple code to walk right through the front door of every single account for each user. Most cloud solutions don’t mandate 2-factor authentication, and most users ignore it. A would-be hacker with user/password combo will go to town, checking every major financial institution for a match. Maybe user X doesn’t have a Fidelity account with the same credentials, but maybe user Y does have a BofA account. Thieves don’t need to have a very high batting average to get rich; they have nearly unlimited at-bats.

            With account data on the physical phone only, hackers need to also be muggers. They need to identify a target and physically remove the phone undetected to even begin the process. If a user knows the phone is stolen, they can shut it down remotely. If undetected, the thief will need to get through the biometric security to get anything of value. They need to bat 1.000 to make money, and the risk is immeasurably higher.

            Hardware is a very personal attack. It’s like knifing someone in trench warfare. You have to look a victim in the eye and cause them pain. There is not a huge overlap between people smart enough to break biometric security and people dumb enough to risk lifting a phone. Cloud attacks are more like nukes launched from a drone. Account holders are nameless and faceless. It’s a VERY difficult attack to pull off, but it’s also very easy to attack repeatedly without detection. But one successful bomb can totally wipe out a population.

          8. when it come to Touch ID, you can access the IPhone or reset your thumbprint if you know the backup password,

            The Cloud base security solution that i was referring to is the same one that major business including the NSA use to secure their data in the Cloud, or the same one that Google use to protect all the data they have on you or your Gmail.

          9. “Do you have a totally unique password for each of your accounts? Not slightly different (add a “1”, different capital letter, etc.) for each, but totally unique and robust? If you do, you are the only person I’ve ever met.”

            Many people do. I use 1Password for exactly that reason. Unique passwords for *every* site that needs one. So complicated, I couldn’t possibly remember them.

          10. 1Password is awesome. Apple’s keychain is pretty good too. But the vast majority of users still just use the same couple of lazy passwords they’ve had for 15 years.

          11. My actual comment was hyperbolic, but I stand 100% behind the point I was trying to make. The storage of account information on an individual, physical device protected by biometric security and passwords is superior to a cloud based solution.

          12. Whether or not cloud base payments are more secure can be intensely debated, as the replies have shown. I tend to think that the Apple TouchID solution is better, but I’m no expert.

            However, I don’t think that security is *that* important. This is because the current state of affairs is horrendous. The security of credit cards is insane. For example, more than a decade has passed since we started sending out credit card numbers over the Internet. These are validated for purchases for thousands of dollars, without even a signature The only additional security feature that has been added since is a 3-digit security code. This would be comical if it wasn’t actually true.

            That is why I think discussing high-level security issues is missing the point. The bar is insanely low.

            The level of security will not be the reason why Apple may succeed where others have failed. It may not even be convenience for the end-user. I sense that the key will be cooperating with banks and merchants, and giving them a good solution that does not irk them. Merchants in particular will be important because they will be the ones who will nudge customers to pull out their phones instead of their wallets. And we will have to understand the flow of money and the margins in the payments business to see what may incentive the merchants.

          13. Agreed. Apple Pay is just what I expected, a modular solution that plugs into the existing infrastructure easily. It’s as convenient as a card, and much more secure.

        2. “Stil I see it more as a marketing tool”

          Well, yeah, sort of. Isn’t that why every company adds features to their product in a competitive market, as a marketing tool? Let’s be honest. If they hadn’t done this people would be complaining that Apple is behind the times. I know. Hard to believe people would say such a thing! And now, when they do, it is blown off as a marketing tool? Come on. You constantly complain about pro Apple-bias. This is no better, simply just the inverse.


          1. I am not saying that it’s a Bad Thing, in fact i see it as a very good solution primarily for E-Commerce

            my point was it’s more of a feature that will help to sell more IPhone similar to the way Samsung does business than anything else and there is nothing wrong with that.

        3. One great feature of Apple Pay is that Apple has no intention of disrupting merchants or banks. It shows in their store-no-data implementation.

          And it is this feature that may be the difference between success and failure.

          Despite the technical prowess of Google and Amazon, that is a feature that they cannot copy.

  4. The watch…I agree Ben. The first question a new product needs to answer is, “Why does it need to exist?” I don’t think Apple really answered that today for me.

    BUT I don’t think I’m the audience. I’m 43. To me, a digital watch is for kids (and maybe cyclists/runners), which makes me think it’s geared for kids in high school. To quote Tim Cook at All Things D (or Re/Code maybe) when asked about the current slate of wearables on the market…

    “There’s nothing that’s going to convince a kid who has never worn glasses or a band or a watch to wear one, or at least I haven’t seen it,” he said. “So I think there’s lots of things to solve in this space.”

    I suspect this is key to Apple’s area of focus. That feature where a teenager can feel the heartbeat of their boyfriend/girlfriend (or just friend), I suspect it’s going to be a hit. Maybe even a crazy big hit, along with the doodle and emoji-centric communication. Especially as this stuff sees integration into social networks and messaging apps.

    And those kids take the Apple Watch with them through life. By the time v3 or 4 comes out, they’ll be starting families. The watch that once relayed the heartbeat of their husband or wife will be handed down. Now it relays the heartbeat of their first child. New watches are given as gifts to their parents, watches that now have the market-ready health features that Apple started working way back in the early 2010’s. And Apple Pay is old hat now. Nobody in their generation even has a credit card. They’ve been using Apple Pay since they were 15, when their parents got them their first Apple Watch.

    1. Many people are saying the same thing; that there is not reason for the Apple Watch to exist.

      I agree.


      When I think of all the things around me, or even human customs like giving each other Christmas presents, or what we eat and drink (Beer?), not all things are rational choices. Far from it.

      And a watch I think, has been one of the favorite gift items for ages.

      I don’t know how well it will sell. And sadly, I don’t expect my luddite wife will buy me one. I’ve never studied marketing for this kind of market. I’m pretty clueless.

      My gut feeling is though, way too many people are asking that “Why does it need to exist?” question. I sense that this is the wrong question to ask.

      I think the right questions are “Will it me bring happiness?”, “Will it bring my spouse/father/mother happiness?”.

      And I think it will.

      1. I can imagine a ton of very handy use cases for the Apple Watch. It seems to have NFC, Bluetooth, and Wifi. I should be able to do stuff like set reminders and add notes without digging out or finding my iPhone. I should be able to control the Apple TV. How about a wireless speaker in each of the bedrooms of my kids and I can use the watch as a walkie talkie, choose which bedroom to speak into. I should be able to control accessories in my house with the watch as well. Plus there’s all the glanceable info I can get from it. Oh, also the Apple Pay aspect. There’s a lot of meat here, I think most people are going to be very surprised by how the Apple Watch gets used. And of course even in the face of actual users doing stuff with it the Apple Watch will be declared mostly useless.

        1. I agree. But most people don’t share your imagination, I’m afraid.

          I don’t think that the tech-oriented features/functions will be the value proposition for the Apple Watch. At least, initially. Instead, I expect Apple marketing to start out by adopting a strategy that is similar to watches and jewelry.

          When introducing customers to a new device of category, I believe you have to start with something familiar. In the case of Apple Watch, I think they have to start with the “watch” or “jewelry” part. Then, as people start to use Facebook, messaging, or as other new apps and use-cases emerge, the “non-watch” functions will start to gain in perceived value and sell the device.

          Why else would they hire big names from the fashion industry?

          This is probably also why smartwatches have failed to gain any traction outside of the tech-obsessed. Without a strong, typical “watch” or “jewelry” value proposition, customers won’t even try them on.

          1. I agree, it’s smart to start with the fashion/jewelry angle. I think the hires from the fashion industry are related to this but I also think we’re going to be seeing more forms and designs in future wearables. As Apple solves technical issues and limitations I would guess different designs are a natural evolution. The third generation Apple Watch is likely already in the lab being worked on by these people.

            But I also think the use cases are going to happen so quickly and be so obvious, even normal consumers will pick up on this. I probably should not have said “most people are going to be very surprised by how the Apple Watch gets used”. That’s not quite right. It is analysts and pundits that will be surprised. Normal consumers won’t think about it, they’ll just use the watch.

            It also occurs to me that the digital touch sketchy feature could work for Mandarin characters. Although I don’t know enough about the complexity of sketching those characters, maybe the screen isn’t big enough. But how long before a standard emerges around glyphs on the Apple Watch? Or maybe teenagers start learning Mandarin?

          2. Totally agree. Apple is pulling the right levers with its full weight. Levers that previous smartphone attempts didn’t or couldn’t pull. And the consequences are going to be very interesting.

            As for the Chinese characters, yes they could work. But I think that the animated emoji that you can tweak is more appealing. Remember that emoji originated in Japan, one of the few countries that also use Chinese characters in everyday life. LINE, the whatsapp of Japan generates a huge amount of revenue by selling stickers, which are custom emoji that you buy.

            So yes, China, like Japan has a culture of explaining an emotion or concept with a single character. Instead of the ancient characters though, I expect animated emoji will take that role.

    2. that make some sense except that Kids can already do all of this stuff and better with their 700$ IPhone and to expect a lot of parent to spend close to 400$ on a watch for their children just to send heartbeat of a broken heart to their ex girlfriend is laughable.

      the second aspect is the Gold version which i believe will cost around 1000$ +, that unlike a regular Watch that can be use for more than 20 years, the Apple Watch is an Electronic gadget with a big batteries inside that will bug down after 3-5 year of continual use. which mean after a couple years this very expensive Gadget will just stop functioning.

      I’m excite to see how this stuff will play out.

  5. Re: watch eating smartphone — I don’t think this is going to happen until a breakthrough comes in battery technology. There is not a software issue here, it’s hardware and the physics of cell radios.

    A cell radio has to be on all the time (at least intermittently) to keep the network advised of the location of the phone to route incoming phone calls. This takes a fair amount of power, which is going to be hard to stick into something reasonably watch-sized without taking the battery lifetime down to a few hours, at least with current battery technology. And “talk time” is going to be pretty bad.

    Also, I’m not a radio guy, but I know enough to be concerned about making a cell antenna small enough for a watch without having potential problems with antenna gain, maybe even making the power problem worse.