Sep 11, 2014

Apple Pay and Apple Watch Are Bigger Than You Think

The Apple hype machine rolled into hyperdrive on Tuesday. It was a spectacle that did not disappoint. Not only did Apple release two new iPhones, they launched two new categories.

Apple Pay and Apple Watch (or the iWatch) demonstrate why Apple has one of the most recognized and sticky brands in the world.

Apple didn’t just launch two new products alongside the new iPhones. They redefined two new categories!

Apple doesn’t invent products

Apple did not invent the wearables category. Nor did they create the mobile payment category. As Android users are quick to point out, Google has offered those products for a while now.

From a product perspective, Apple is late to the party. But from a category perspective, it just got interesting.

According to David Aaker, Apple is the only company to create five new categories or subcategories in less than a decade — the iMac, iPod, iTunes, iPhone, and the iPad.

We look at these devices as commonplace now, but their impact on the consumer electronics industry and their respective categories is nothing short of revolutionary.

Apple Pay and Apple Watch have a similar opportunity. These two products will redefine their categories, and set the standard for the rest of the industry to follow.

A total solution

When Apple redefines a category it makes everything that came before them obsolete.

Mobile payments via a NFC-enabled device have been around for a long time. Blackberry had NFC on its devices in 2011, and Samsung included it on the Galaxy S devices in 2012.

The problem was the mobile payment category was immature. The industry was fixated on point solutions, and no one had pulled the entire ecosystem together. So it didn’t matter if you had a NFC-enabled device. You couldn’t use your phone to make payments, because the infrastructure was missing.

Apple Pay is redefining the mobile payment category by launching a total solution: partnerships with credit card companies and major retailers, complete software system with security and privacy as key features, and a well defined business model.

Apple Pay will succeed where others have failed, because it has a complete solution that builds off the existing behaviors of consumers and merchants.

What’s interesting is yet to come

The launch of Apple Pay and Apple Watch are just the first step. The real excitement will unfold over the next three years.

The playing field has been set, and the rules are defined. Now we will see advancements in product innovation. Device makers will rethink their wearable devices, and payment platforms will evolve based on Apple Pay.

Apple has a head start, but the other guys will be quick to respond. It will be exciting to see where this goes.

What do you think?

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