Last week’s launch made about as much impact as a particularly damp squib. But those who write Apple off are not looking beneath the surface. Here are four reasons why the markets have it wrong, and why the latest Apple launch is far more interesting than it is being given credit for. As for ARM, well – read on.
There are four reasons why the markets have Apple wrong: one is to do with marketing and pricing, and the other three relate to technology. Let me get the marketing point out of the way.
Okay, so Apple has not launched a cheap smart phone aimed at the developing world. Its failure to do this did not go down well, and probably explains why its share price fell at the end of last week. But those who sold Apple overlooked an important point. To illustrate this, consider the damage that might be done to Rolls Royce or, say, Aston Martin if they launched a cheap little runabout. The Apple brand is synonymous with quality, and across much of the developed world its products are seen as aspirational. If it had entered the cheap as chips end of the market, the damage to the brand name would have been enormous.
Now let me move onto to technology, and in particular three pieces of technology: iBeacon, WiFiSlam, and Touch ID.
The new iPhone 5S, as you may know, contains finger print technology called Touch ID. At the moment, the technology cannot be used by app developers, but this will surely change eventually. Here are two reasons why this product is potentially very important indeed. Reason one relates to why I am driven mad – you may share my feelings on this matter. I am driven mad by the number of different passwords I am forced to know, and indeed forget. Imagine if the process of logging into your bank account, favourite web site, Facebook, etcetera involved pressing your finger on a sensor, which connects with the service on which you are trying to log on. Reason two is more significant still. Touch ID has important ramifications for making payments. Making secure payments easily and very quickly from your smart phone (or maybe your smart watch) will become possible.
The second and third pieces of technology complement each other rather nicely.
WiFiSlam is technology bought by Apple earlier this year. It relates to indoor mapping software. It can pinpoint the location of your smart phone/watch, as well as that of your friends, within 2.5 metres. As for iBeacon, this entails sensors which emit a kind of beacon that is alerted when certain devices, such as smart phones or watches, pass nearby.
Why are WiFiSlam and iBeacon so important? The answer is this: Point of Sale advertising. Retailers will be able to send special offers and promotions to customers when they are in the vicinity of a very specific counter. Combine that with iTouch and the option to make payments and you can why these products are so important.
Amazon makes money by selling goods online. Google makes money by pointing relevant people at web sites. The new Apple products will bring together technology and traditional offline shopping. This is the way in which Apple can enter the advertising market. Furthermore, the advertising on which Apple is homing in is at the commercially lucrative point of sale and point of purchase.
Of course Google, Samsung and co will no doubt try to develop similar functionality. I am not suggesting they won’t be successful. What does seem likely to me, however, is that smart phones and smart watches, whether they are from Apple, or Samsung or someone else, will offer commercial benefits that the markets are not factoring in. Furthermore, it is simply not true to say that Apple has lost its edge as an innovator.
Let me finish with ARM. The iBeacon product is good news for the British chip designer because the beacons installed in shops, shopping malls, theme parks, and who knows where else, will contain chips designed by ARM – thereby providing another example of how ARM may be one of the big beneficiaries of what is being called the Internet of Things.
I appreciate that there is a potentially scary aspect of the technology I describe here, but the commercial potential is just as frightening – frighteningly enormous, that is.
These views and comments are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees