Apple 'considered' buying mobile payment firm Square, but Google deal seen as more likely

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Comments

  • Reply 101 of 128
    I never understood why people defended companies like they have a stake In them (unless you do). Ready to strike anyone when they make the slightest negative inclination, as if they were apart of your family. Let's be serious companies only care about that $$$$$$$. People in the comments " The thought of Jack Dorsey working for Google makes me want to vomit"
  • Reply 102 of 128
    georgeip5georgeip5 Posts: 225member
    I definitely think Apple should buy them. From the Verge it says Square said they'd prefer Apple to buy them, makes sense since they only make for iPhone and iPad
  • Reply 103 of 128
    ezhikezhik Posts: 101member
    Muwah! Goodbye Android. :)
    I know we hate Android here but fucking people over just because they picked Android is not fair.
  • Reply 104 of 128
    MarvinMarvin Posts: 14,230moderator
    danox wrote:
    Still a utter waste of money Apple doesn't need them, Apple isn't going to spend more money on one company than what they have spent in ten years of acquisitions it's not going to happen.

    But they are spending that because they generate so much revenue now that they don't know what to do with it. They already spent $12b on a stock buyback. They just blew through that in a couple of weeks and it did nothing for them. This kind of acquisition would cost less than their buyback and it generates massive amounts of growing revenue. It's also a marketing opportunity. Imagine every stand in every store with an Apple logo embossed on the back staring at every customer as they buy anything - every day for coffee, Apple logo. Every time people buy things now, there are these crummy POS systems and the idea is that although Apple is cool, all this junk hardware is still needed to keep commerce ticking over and it's not. It's the same idea people get that Windows will always be needed for companies to rely on.
  • Reply 105 of 128
    SpamSandwichSpamSandwich Posts: 31,499member
    melgross wrote: »
    Other than constantly stating that Apple shouldn't do so, you've given no real reason for them not to. I disagree totally. I think this is a mistake.

    Apple doesn't need Square because their upcoming wallet app will sidestep the entire traditional POS transaction process. Digital P2P (or in this case, Person-to-Business) money transfer beats cash registers.
  • Reply 106 of 128
    Quote:
    Originally Posted by SpamSandwich View Post





    Apple doesn't need Square because their upcoming wallet app will sidestep the entire traditional POS transaction process. Digital P2P (or in this case, Person-to-Business) money transfer beats cash registers.

    The biggest headwind will be what everyone else trying to get into B&M has experienced - will the majority of merchants trade current 'card present' rates and liability protection for digital payments that will be considered 'card not present' and put liability back on the merchant. 

     

    Apple may even get some card issuers around the world on board to take liability, but getting broad and global acceptance is very hard. So do we really want/need another piecemeal payment method that only is accepted in some places, meaning I still need to carry my normal credit cards. 

  • Reply 107 of 128
    evilution wrote: »
    I can't see Square being a worthwhile investment unless they have some IP that Apple can't find an alternative for and Square wouldn't licence. Considering there are other companies doing the same thing and Square aren't suing, I'm guessing the IP is elsewhere and Square just licence it themselves.

    All Apple need to do is package their version of PayPal Here, make it work nicely and they'll be away. If they could do a tie in with PayPal so you could iMoney to a PayPal account and vice versa, they'd have it all sewn up.

    Nothing would be worse. I can't stand PayPal.
  • Reply 108 of 128
    ezhik wrote: »
    I know we hate Android here but fucking people over just because they picked Android is not fair.

    If you pick Android, you've got what's coming to you.
  • Reply 109 of 128
    melgrossmelgross Posts: 31,981member
    danox wrote: »
    What in the last 17 years of acquisitions by Apple, indicates that Apple will waste so much money? On a company whose tech Apple already has in house, there is nothing Square does that Apple can't do in house in 1 year, it's like HP buying Compaq or Apple buying Netflix a utter waste of resources.

    Well, you see, it's your opinion that they would be wasting money. That doesn't mean much. It's just your opinion, after all. Mine is different. And you don't know what Apple is doing in house, so stop pretending that you do. Marvin made a very good post showing what Square is doing. If you don't want to read his post, and check out the links, then you can't have an opinion about any of this, just a feeling.
  • Reply 110 of 128
    melgrossmelgross Posts: 31,981member
    solipsismx wrote: »
    I still don't see what Apple would have to do from scratch? What does Square offer Apple? The CC reader that plugs into the 3.5mm stereo jack? Apple has plenty of experience with moving data over that with their iPod Shuffle. The knowledge of processing a card or dealing with accounts? Apple's iTS accounts surely exceed Square's by excessive numbers.

    Even if the purchase was for something that was completely out of Apple's range of expertise or depth they have yet to pay $8 billion for a company. I think NeXT, from 1997, is still their largest about $450 million.

    Read Marvin's post, and look at the links. It's very good. I'm seeing a lot commenting about this that isn't really cognizant of what Square is, or what they do when compared to Apple.

    It isn't that Apple can't do certain things on their own, they can. But companies like Square have big valuations these days, and that's just the way it is. as Apple apparently made a bid for Nuance for about the same amount of money, this isn't out of line. At so e point, Apple is going to spend a lot of money on something, and I expect most people here will not be happy.
  • Reply 111 of 128
    melgrossmelgross Posts: 31,981member
    solipsismx wrote: »
    Which is decades upon decades of IP that Apple doesn't have nor can recreate in any reasonable time frame.

    The decades bit isn't important. No company that comes later into the game needs to reproduce all of the many years of work that was already done. Much of that is now understood, and so can be worked on at a point that assumes knowledge that wasn't known earlier. It wouldn't take Apple 20 years to duplicate nuance,s work. But it could take three to five.

    Square has also donr a lot of work, and they've been around for years. Do they have patents of some of it? No doubt! Could Apple work around it if they wanted to? Maybe, maybe not. But the fact that they were interested shows that Square has some things they could want. Why didn't the deal go through? Who knows, cold feet?
  • Reply 112 of 128
    ezhikezhik Posts: 101member
    Quote:

    Originally Posted by Benjamin Frost View Post





    If you pick Android, you've got what's coming to you.

    Well that's a bit judgmental. Did you also exclude all Android users from your social circle? It's just a phone, man!

  • Reply 113 of 128
    ezhik wrote: »
    Well that's a bit judgmental. Did you also exclude all Android users from your social circle? It's just a phone, man!

    Google 'just' believe that stealing is fine.
  • Reply 114 of 128
    melgrossmelgross Posts: 31,981member
    Apple doesn't need Square because their upcoming wallet app will sidestep the entire traditional POS transaction process. Digital P2P (or in this case, Person-to-Business) money transfer beats cash registers.

    It will take a long time for that to happen. And Square does more. I go to street fairs, and most vendors now use either a standard credit card reader, or Square. Smaller vendors almost all use Square. Apple's wallet app won't work under these circumstances. And it's not just street fairs. It's trade shows as well. Square is very easy to get, and set up. It's also cheaper to use over the long run for smaller merchants. And cash registers won't be going away for a long time either.
  • Reply 115 of 128
    ezhikezhik Posts: 101member
    Quote:

    Originally Posted by Benjamin Frost View Post





    Google 'just' believe that stealing is fine.



    ...I didn't say anything about Google? I was talking about Android users?  

  • Reply 116 of 128
    solipsismxsolipsismx Posts: 19,566member
    melgross wrote: »
    Read Marvin's post, and look at the links. It's very good. I'm seeing a lot commenting about this that isn't really cognizant of what Square is, or what they do when compared to Apple.

    It isn't that Apple can't do certain things on their own, they can. But companies like Square have big valuations these days, and that's just the way it is. as Apple apparently made a bid for Nuance for about the same amount of money, this isn't out of line. At so e point, Apple is going to spend a lot of money on something, and I expect most people here will not be happy.

    I have no issue with Apple paying a large sum for an acquisition, my issue is paying for something that appears pointless, as in something they also can do or already have done. It would like paying Pebble $8B when there is no IP Apple doesn't already have, needs to recreate, or can do better. With Nuance that is far out Apple's league so $8B makes sense. I'd even say Dropbox would make sense for at least $4B since it's a great service that Apple can't seem to match in utility or ease of use.

    Marvin's post in no way told me what Apple needs from Square. Apple already far outstrips Square with their online infrastructure and ability to accept CCs. Apple even has their own CC readers in every Apple Store. It would seem like a complete waste to me if they bought it for the IP; but I could see a strategic move of keeping it from Google so that they don't make Android-only (even though I am not a fan of such maneuvers and don't think Apple would spend that much when the competition will just copy them anyway).
  • Reply 117 of 128
    solipsismxsolipsismx Posts: 19,566member
    melgross wrote: »
    It will take a long time for that to happen. And Square does more. I go to street fairs, and most vendors now use either a standard credit card reader, or Square. Smaller vendors almost all use Square. Apple's wallet app won't work under these circumstances. And it's not just street fairs. It's trade shows as well. Square is very easy to get, and set up. It's also cheaper to use over the long run for smaller merchants. And cash registers won't be going away for a long time either.

    No one is denying the usefulness of Square, but rather what Apple gains from an $8B purchase.
  • Reply 118 of 128
    MarvinMarvin Posts: 14,230moderator
    solipsismx wrote: »
    I have no issue with Apple paying a large sum for an acquisition, my issue is paying for something that appears pointless, as in something they also can do or already have done.

    Apple even has their own CC readers in every Apple Store. It would seem like a complete waste to me if they bought it for the IP; but I could see a strategic move of keeping it from Google so that they don't make Android-only (even though I am not a fan of such maneuvers and don't think Apple would spend that much when the competition will just copy them anyway).

    The Apple products would be these:

    http://appleinsider.com/articles/09/11/03/exclusive_look_at_apples_new_ipod_touch_based_easypay_checkout

    "the system has drawn complaints from employees about software crashes, sluggish operation and the need to frequently reboot.

    Customers have also complained about Apple's check-out method, saying that it's confusing to make a purchase without a conspicuous, well-identified POS counter or waiting line."

    http://www.macworld.com/article/1168261/when_using_apple_stores_easypay_isnt_so_easy.html

    Like I mentioned earlier, Apple can do lots of things themselves but like with MobileMe, we can't assume they will all be done well if they don't already have the expertise in-house. Square currently controls $15b of 3rd party payments just now that Apple currently isn't. Now, the profit margins are worked out here roughly:

    http://www.businessinsider.com/square-new-pricing-plan-math-2012-8

    "If a merchant does $10,000 a month at $75 per transaction, Square brings in $275. It will cost Square $178 at the 1.65%/10-cent rate to process those transactions. So that's a $97 per month profit on that merchant.

    If a merchant does closer to the max—an average of $20,833 a month—at $75 per transaction, it will cost Square about $370. So it will lose $95 a month on that merchant.

    Breakeven is about the midpoint of $15,000 a month."

    The profit margins under those models aren't very high but say it's 1% and they manage to scale to $50b worldwide. They make $0.5b/year in gross profit plus whatever they make in iPad sales. $8b is high but not outrageous and they don't know what to do with the ~$140b they have. Even if it ends up break-even, it's marketing - every retail transaction gets to see an Apple logo.

    They may not need Square but maybe they didn't need Lala - how hard could it be to match songs up? But they bought Lala anyway because it was a quick way to get what they wanted.
  • Reply 119 of 128
    solipsismxsolipsismx Posts: 19,566member
    Marvin wrote: »
    The Apple products would be these:

    http://appleinsider.com/articles/09/11/03/exclusive_look_at_apples_new_ipod_touch_based_easypay_checkout

    "the system has drawn complaints from employees about software crashes, sluggish operation and the need to frequently reboot.

    Customers have also complained about Apple's check-out method, saying that it's confusing to make a purchase without a conspicuous, well-identified POS counter or waiting line."

    http://www.macworld.com/article/1168261/when_using_apple_stores_easypay_isnt_so_easy.html

    Like I mentioned earlier, Apple can do lots of things themselves but like with MobileMe, we can't assume they will all be done well if they don't already have the expertise in-house. Square currently controls $15b of 3rd party payments just now that Apple currently isn't. Now, the profit margins are worked out here roughly:

    http://www.businessinsider.com/square-new-pricing-plan-math-2012-8

    "If a merchant does $10,000 a month at $75 per transaction, Square brings in $275. It will cost Square $178 at the 1.65%/10-cent rate to process those transactions. So that's a $97 per month profit on that merchant.

    If a merchant does closer to the max—an average of $20,833 a month—at $75 per transaction, it will cost Square about $370. So it will lose $95 a month on that merchant.

    Breakeven is about the midpoint of $15,000 a month."

    The profit margins under those models aren't very high but say it's 1% and they manage to scale to $50b worldwide. They make $0.5b/year in gross profit plus whatever they make in iPad sales. $8b is high but not outrageous and they don't know what to do with the ~$140b they have. Even if it ends up break-even, it's marketing - every retail transaction gets to see an Apple logo.

    They may not need Square but maybe they didn't need Lala - how hard could it be to match songs up? But they bought Lala anyway because it was a quick way to get what they wanted.

    1) What do some complaint have to do with Square? Is Square known for having superiors iDevice SW than Apple? I'd think Apple's HW would be much, much better than the 3.5mm jack accessory used by Square, which oft requires the merchant to hold the device and swipe it carefully.

    2) If Apple wanted a "well-identified POS counter or waiting line" they could make one. It's not like they even need to do anything else but incorporate their current HW into an iPad or Mac. This isn't a MobileMe situation. All of this in is Apple's wheelhouse.

    3) No one is denying that Square is making a decent profit for themselves but they aren't even close to the scale that iTunes Store, App Store and iBookstore revenues are. Apple has hundreds of millions of CC's on file which means their "infrastructure" already far exceeds Square's on every level.

    4) I don't see Apple going for that cheap CC reader in the headphone jack or incorporating a CC reader into every single iDevice they make which leaves making a specific device for business use (even though they have shown no interest in that) or going a completely different route by leveraging their extensive expertise by allowing a secure method that iPhone users can pay merchants without using a physical card.

    5) "How hard is it" isn't the question, it's whether they can do it and/or have it. With Lala they didn't have it and it only cost them around $80 million. So what don't they have or can't do that Square has and can do?

    I will be extremely shocked if Apple pay anything for Square.
  • Reply 120 of 128
    melgrossmelgross Posts: 31,981member
    solipsismx wrote: »
    I have no issue with Apple paying a large sum for an acquisition, my issue is paying for something that appears pointless, as in something they also can do or already have done. It would like paying Pebble $8B when there is no IP Apple doesn't already have, needs to recreate, or can do better. With Nuance that is far out Apple's league so $8B makes sense. I'd even say Dropbox would make sense for at least $4B since it's a great service that Apple can't seem to match in utility or ease of use.

    Marvin's post in no way told me what Apple needs from Square. Apple already far outstrips Square with their online infrastructure and ability to accept CCs. Apple even has their own CC readers in every Apple Store. It would seem like a complete waste to me if they bought it for the IP; but I could see a strategic move of keeping it from Google so that they don't make Android-only (even though I am not a fan of such maneuvers and don't think Apple would spend that much when the competition will just copy them anyway).

    Only Apple knows what it needs. We don't. Square has developed some excellent solutions. Does Apple need them? I don't know. Maybe not, after all, they chose not to buy them, at least, so far. We may never know. But they have what Apple doesn't seem to have. They were interested, so that means that they think the company looks interesting to them. They must have had a good reason to look. Since they didn't dismiss it out of hand, I'm not either.
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