Apple Pay: An Apple Digital Currency

Jonny Evans

Watching Apple since 1999. I don't say what they should do. I say what they might do. They sometimes do.

5 Responses

  1. melial says:

    Hi Jonny,
    Tomi Ahonen certainly has some interesting statistics and insight into the usage of SMS and the like in the developing world, but you might like to take some of his stats with a bit of a pinch of salt. He tends to have a bit of a pathological disdain for Apple most of the time (and being an ex-Nokia executive himself, he has an understandable palpable hatred of Microsoft).

    Tomi is also well and truly a staunch disciple of the Church of Market Share and refuses to entertain any discussion of active installed base. As a result he actively deletes comments from anyone daring to stray from his dictates on his forums.

    Needless to say this leads him to be eternally focused on Apple’s 12 – 18% quarterly market share figure rather than considering the implications of Apple’s 1 Billion active iOS devices compared to Google’s 1.4 billion active Android devices (tablets + smartphones combined) compared to the 400m active AOSP forked Android users. Tomi can’t seem to accept that iOS devices have significantly greater longevity than the vast majority of cheap throwaway Android phones.

    Anyway, apart from those caveats his blog posts can be an interesting if rambling read.

    • Jonny Evans says:

      Thanks for your comment. I see what you are saying, but Tomi’s fast pen and mastery of statistics help him build strong arguments, that doesn’t mean I agree with his conclusions at all times, but with Apple Pay it seems to me his main criticism is also Apples main opportunity — get into SMS and loyalty schemes!

      • melial says:

        Jonny, having read Tomi’s article, although he presents an interesting perspective, it is apparent that several glaring problems significantly weaken his argument.

        Firstly, Tomi’s hyperbole completely dismisses PayPal, Apple Pay and Bitcoin as “utterly trivial noise” and he yet neglects to mention that PayPal alone saw $100 Billion in Mobile transaction volume in 2016, a solid third as much as all SMS payments. I wouldn’t exactly call that “trivial noise” would you?

        Then there is the fact that he is ignoring the elephant in the room – that mobile phones are in fact the one and only “personal computer” for the majority of the population in the developing world.

        That means he should be comparing this against Mobile + Desktop PC e-commerce in the developed world if he wants to compare respective payments systems.

        From that perspective, just by itself PayPal’s $354 Billion in total transactions in 2016 beats the $325 Billion total for SMS. Again, “trivial noise”? Hardly.

        Now, let’s look at Apple Pay. One hostile estimate pegs Apple Pay transaction volumes at $10.9 billion in 2015. Apple recently reported a 500% increase in Payment volume in 2016, so gives us about $55 Billion dollars even if that lowball figure were correct. Now add in the fact that Apple Pay is now available on desktop computers as well as mobile and you can see these volumes will rapidly increase as Apple Pay rolls out to more and more countries. Again “trivial noise”? Not in my books when you factor in the rapid growth curve.

        Add to this the fact that the 1 Billion-strong Apple Device owning demographic is far more lucrative than the Android demographic with IBM and Adobe both reporting e-commerce transactions from the iOS platform are 400% greater than those from the Android platform. Basically Apple users shoot well above their weight.

        That is one reason why Apple Pay generated a massive 75% of all contactless transactions in the USA in 2015 – and that includes contactless credit cards as well as Android Pay etc.

        Tomi’s usual anti-Apple rhetoric extends to the Apple Watch which he derogatorily names the “iHandcuff’”. Partial observer? I think not.

        Tomi does bring a useful, more global perspective to the table, but he taints it with his hyperbola and attempts at disparaging competitors to try and emphasise his point.

        • Jonny Evans says:

          I do like/respect/crave/need smart readers like you (or Tomi, let’s be honest about that). I ‘grock’ your critique — but — truth is always in the middle, twixt one side and t’other…
          My best way to navigate cynicism is to tune it out. So I hear the bias, but still see wisdom in the maths. Thing is — where Tomi sees weakness, I see opportunity. Apple still — think about that — still — has a huge opportunity. I feel like that is really quite amazing, given its size and status as a huge corporate. What I do not understand is why the world does not go through a root and branch transformation to become more like Apple and less like the cynics. I think it is trying to do just that. I also think the rise of the authoritarian reactionaries is just a phase as the world moves to do just that. Tune Out The Cynicism. But listen to all wisdom.

  2. Jonny Evans says:

    I do think there is a mechanism to put market share into perspective, but I’m not sure I am equipped to do the math for it/

    So, we know most android phones are slower phones.

    So the question is: how many processor cycles does Apple sell each year (including all products) in comparison to its competitors?

    I’d argue that the value of the platform is predicated by its computational power, and the logic I have is that even though android has the numbers, it’s aaples platforms that have the computational power. Which is why they are more widely used, more loyal, and more important in mobile industry development terms.

    After all, what android device has the computational power of iPhone 7??
    Not one.

    I’m sure there is an argument in there, but assessing the computational power of deployed android is quite challenging, given its fragmentation.

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