Tuesday October 21, 2014

• Apple's earnings sizzled, IBM's fizzled: Apple's earnings were spectacularly good (revenue at $42B, up 12% Y/Y, $8.5B in net profit, up 13% Y/Y), powered by surging iPhone sales (although the iPad continues to drag) and IBM's were spectacularlybad (like Oracle and SAP, IBM is struggling to stay relevant as cloud computing gains; IBM shares are at a three year low despite billions spent on buybacks and dividend. Those buybacks are now attracting harsh criticism. IBM revenue is now about the same as it was in 2008.

• Apple Pay Insight#1: It could substantially simplify in-app purchases - potentially be a huge win for Apple (via the App Store revenues) and for Facebook (which dominates in-app ad sales) but a bummer for Google (whose Play Store business is growing increasingly important as ad revenue growth slows). Although many people only associate Apple Pay with the ability to pay at point-of-sale at a growing number of supported retailers, Apple Pay also enables in-app transactions to take place with just a touch of the finger. That means that more consumers will be able to purchase things in apps, and this will be easier than before because they’ll no longer have to remember their Apple ID and password. Instead, just by touching on the fingerprint reader on new iPhones and iPads running iOS 8, they’ll be able to pay using the credit or debit card information on file, already associated with their Apple account. (Apple already offers Touch ID for in-app purchases, but Apple Pay could enable even more types of transactions to occur easily – like ordering food or ordering an Uber, for example)

• Apple Pay Insight #2: Apple's timing might be excellent (as usual): By next fall, though, American merchants face a deadline to upgrade their credit card terminals to accept E.M.V. — which stands for Europay, MasterCard and Visa — a technology that makes credit transactions more secure for consumers. Many believe those new terminals will also accept payments from Near Field Communication-enabled devices like the iPhone 6. “Apple’s timing here is an astute stroke of brilliance,” said Norm Merritt, president of ShopKeep, a start-up that sells point-of-sale products for small businesses. “People will already have to invest in new E.M.V.-enabled machines. N.F.C. is just a few bucks more.” Apple is also promoting Apple Pay’s security measures, calling it far safer than the credit cards consumers use on a daily basis.

• Walmart's smart way of gaining audience and competitor info: a mobile app that scans competitor receipts: This summer, Walmart rolled out a new mobile app called Savings Catcher that pulls in pricing information from competitors by scanning a customer’s receipt. If a product is cheaper elsewhere, shoppers get the money back on a gift card. In addition to saving consumers money, the app also helps Walmart collect troves of data on shoppers.