Mobile & Money
As the details of Apple Pay become clearer, analysts are generally positive – although not quite as bullish as the Chamath Palihapitiya view we shared last week. Many people site Starbucks as evidence that payments can and do work.
In the last data we saw, Starbucks dominates mobile payments in the US. In 2012 around $500m was spent using mobile payments – and Starbucks was around 90% of that. They have been hugely successful – and now 15% of all their US transactions are using their app – but the Starbucks Chief Digital Officer points out it’s not just about payments – the loyalty aspect has been a big driver.
They are one of the brands that Apple have partnered with for Pay – but interestingly they don’t intend to let people but coffee with Pay – just top up their Starbucks app. Their brand is so strong they have ambitions to expand outside of Starbucks;
A smart Fix reader made a similar point about the Oyster card and how it could have become a means of paying for items outside of Tube tickets. Now with a plethora of new players like PayM, Zapp Powa etc as well as the Mobile Operator wallets, PayPal and Google iPhone et al users have a lot of options. But it seems to us that Pay will become a real Anchor for Apple by making it so easy.
And as more people use Pay, more retailers will come on board. Talking with UK supermarkets, they have resisted payments because they tended to slow down the checkouts. Starbucks have focused on their point of sale tech and processes;
If Apple Pay can contribute to that sort of improved efficiency, people will rush to sign up.
(btw – one of most hyped mobile money startups has been Clinkle; ran by a 23 year old, they raised $25m seed money and has a long list of VCs as investors, along with Richard Branson. Lots of smart people have joined and many have quickly left. And it was in stealth so no-one knew quite what they were up to.
The Chinese are coming
The Alibaba IPO was the biggest float ever, raising $25bn – eclipsing the $16bn that Facebook raised. Some have questioned the ethics of investing here – largely because the BAT Chinese digital giants (Baidu, Alibaba, Tencent) benefit from having no competition from Google, Facebook, Amazon, eBay etc in their home market.
There is a lot to learn from how these companies operate and we now look at BAT when consider the vertical stacks of GAFA. And this good article looks at how important China has become to the global tech economy – with good insight into their M&A activity.
But perhaps the most immediate effect of the IPO is that it (probably) puts Yahoo into play.
So someone could buy Yahoo and sell those stakes and essentially get Yahoo for free. Who could that be? No doubt clever Private Equity people are hunched over their calculators right now, but to GAFA, Yahoo would be a valuable acquisition.
Given that Yahoo is still a major player in search its hard to see the EU etc allowing Google to swallow them without divesting the search business to Bing. But for Facebook and Apple they would get lots of content to feed their userbase. And Amazon would get lots of potential buyers that it currently has to advertise with Google to reach. And perhaps even Microsoft or Murdoch could be interested?
Or how about Softbank?. This Japanese company has been very aggressively trying to grow the US business with the merger with Sprint, but its pursuit of TMobile has been unsuccessful. Combing an operator with a content business like Yahoo has been talked about lots, but this could be a first.
As JV partners in Yahoo Japan, the two sides know each other well. And, of course, Softbank now has a new leader who knows a little about the digital space; Nikesh Aurora moved over from Google a few months ago. Is this how he makes his mark in his new role?
We think it’s unlikely that the Wolves of Wall Street will leave something this vulnerable (and valuable) alone, so watch this space.
Just like Big Data there is rather more talk about Beacons than there is action. It’s clear there is huge potential, but so far few people have actually started to use them. This piece looks at some of the innovations around the internet of things that use beacons – but there isn’t a killer app. Yet
The people at Estimote have done much to shape the market, and this article considers how they see the potential – including indoor locations. We think that Beacons will be used for simple ideas that improve various situations. For example when Starbucks get around to pre ordering, how do they stop the coffee going cold before you get there? A beacon could detect when you arrive at the store and the coffee is made then and there – and you don’t need to wait.
This example of coupons in Passbook working really well shows the potential – and Beacons could add another dimension. There is a huge opportunity for good old fashioned sales promotion thinking (or Shopper Marketing as its now called).
We’re keen to help kick start this area, so hungry to work with retailers, restauranters etc to test out ideas and try and make some progress.
Apple have bought a firm that makes it easy to create magazines for mobile. Another sign that content creation is being democratized. Will we see the return of the fanzine?
More proof that Apple are only human. After the live screening debacle at the launch event, the latest iOS update has been withdrawn.
Finally…we are big believers in the sharing economy and are looking to rollout our collaborative consumption platform SkratchMyBack in more regions. But the some elements of this movement are proving controversial.
In New York lots of people don’t approve of their neighbours renting to strangers and this long piece looks at both sides of the argument. And the way Uber treats its drivers is questioned in this MIT article. Enabling people to share their assets makes perfect sense but we need to consider the losers as well as celebrate the winners.