Upcoming Apple Pay shopping event in San Francisco offers discounts for iPhone-based mobil...

Comments

• Reply 1 of 16

  NY1822 Posts: 621member

  June 16, 2017 11:46PM

  i love Apple Pay, but to call it a "considerable driver of revenue" is a bit of a stretch. They make .15 cents on every $100 spent.
  
  from 2015:
  "Piper Jaffray’s low-end estimate forecasts that this fee will bring in $118 million in revenue in 2015, increasing to $310 million in 2016. On the high end, Nomura’s equity analysts estimated it could account for $1.6 billion in revenue by 2017 – two years from now."
  
• Reply 2 of 16

  SpamSandwich Posts: 33,407member

  June 16, 2017 11:54PM

  NY1822 said:

  i love Apple Pay, but to call it a "considerable driver of revenue" is a bit of a stretch. They make .15 cents on every $100 spent.
  
  from 2015:
  "Piper Jaffray’s low-end estimate forecasts that this fee will bring in $118 million in revenue in 2015, increasing to $310 million in 2016. On the high end, Nomura’s equity analysts estimated it could account for $1.6 billion in revenue by 2017 – two years from now."
  

  Well, it's just a part of their overall digital services, which are considerable. Each component part just has to perform solidly to add up to a monster revenue stream.

  
• Reply 3 of 16

  Soli Posts: 10,035member

  June 17, 2017 12:13AM

  NY1822 said:

  i love Apple Pay, but to call it a "considerable driver of revenue" is a bit of a stretch. They make .15 cents on every $100 spent.
  
  from 2015:
  "Piper Jaffray’s low-end estimate forecasts that this fee will bring in $118 million in revenue in 2015, increasing to $310 million in 2016. On the high end, Nomura’s equity analysts estimated it could account for $1.6 billion in revenue by 2017 – two years from now."
  

  I think $1.6 billion in revenue in a year with what I assume is low overhead is considerable.
  
  This site lists Square's entire revenue stream for 2016 as only $1.7 billion, which I've read elsewhere was up about 500% YoY (but I don't have a citation for that so I could be misremembering that stat).
  
  

  • https://www.inc.com/profile/square?cid=full500016-list-763

  
• Reply 4 of 16

  NY1822 Posts: 621member

  June 17, 2017 12:31AM

  Soli said:

  NY1822 said:

  i love Apple Pay, but to call it a "considerable driver of revenue" is a bit of a stretch. They make .15 cents on every $100 spent.
  
  from 2015:
  "Piper Jaffray’s low-end estimate forecasts that this fee will bring in $118 million in revenue in 2015, increasing to $310 million in 2016. On the high end, Nomura’s equity analysts estimated it could account for $1.6 billion in revenue by 2017 – two years from now."
  

  I think $1.6 billion in revenue in a year with what I assume is low overhead is considerable.
  
  This site lists Square's entire revenue stream for 2016 as only $1.7 billion, which I've read elsewhere was up about 500% YoY (but I don't have a citation for that so I could be misremembering that stat).
  
  

  • https://www.inc.com/profile/square?cid=full500016-list-763

  1.6 Billion ($400 Million per Quarter) in terms of Apple Revenue is far from considerable. If you take Apple's lowest quarterly revenue from 2016 ($42.4B) and divide by $400 Million, the % of Apple Pay contributing to revenue is less than 1% of quarterly revenue. And that's using their worst quarter of the year. Granted, it's part of a growing services category, and from that angle it can be given more weight. It's all adds up, and for that, I can appreciate it.

  
• Reply 5 of 16

  ronn Posts: 653member

  June 17, 2017 1:33AM

  NY1822 said:

  i love Apple Pay, but to call it a "considerable driver of revenue" is a bit of a stretch. They make .15 cents on every $100 spent.
  
  from 2015:
  "Piper Jaffray’s low-end estimate forecasts that this fee will bring in $118 million in revenue in 2015, increasing to $310 million in 2016. On the high end, Nomura’s equity analysts estimated it could account for $1.6 billion in revenue by 2017 – two years from now."
  

  Yeah, because these guys always get it right. Even taking their guesstimate, $1.6B is about what Square reportedly makes after several years in this space. IMO, that would qualify Apple Pay as a "considerable" source of revenue.
• Reply 6 of 16

  NY1822 Posts: 621member

  June 17, 2017 1:49AM

  ronn said:

  NY1822 said:

  i love Apple Pay, but to call it a "considerable driver of revenue" is a bit of a stretch. They make .15 cents on every $100 spent.
  
  from 2015:
  "Piper Jaffray’s low-end estimate forecasts that this fee will bring in $118 million in revenue in 2015, increasing to $310 million in 2016. On the high end, Nomura’s equity analysts estimated it could account for $1.6 billion in revenue by 2017 – two years from now."
  

  Yeah, because these guys always get it right. Even taking their guesstimate, $1.6B is about what Square reportedly makes after several years in this space. IMO, that would qualify Apple Pay as a "considerable" source of revenue.

  the article states "considerable source of revenue for Apple".....it's not comparing Apple, the largest market cap company ever, to a company in Square with a $9B market cap

  
• Reply 7 of 16

  LUCASNAVE Posts: 1unconfirmed, member

  June 17, 2017 2:18AM

  Me and millions of Brazilians would love to have Apple pay ! We do not have this service in Brazil yet
• Reply 8 of 16

  Soli Posts: 10,035member

  June 17, 2017 2:29AM

  NY1822 said:

  ronn said:

  NY1822 said:

  i love Apple Pay, but to call it a "considerable driver of revenue" is a bit of a stretch. They make .15 cents on every $100 spent.
  
  from 2015:
  "Piper Jaffray’s low-end estimate forecasts that this fee will bring in $118 million in revenue in 2015, increasing to $310 million in 2016. On the high end, Nomura’s equity analysts estimated it could account for $1.6 billion in revenue by 2017 – two years from now."
  

  Yeah, because these guys always get it right. Even taking their guesstimate, $1.6B is about what Square reportedly makes after several years in this space. IMO, that would qualify Apple Pay as a "considerable" source of revenue.

  the article states "considerable source of revenue for Apple".....it's not comparing Apple, the largest market cap company ever, to a company in Square with a $9B market cap

  You're oddly reading the term "considerable" as "making up a majority of Apple's revenue." That's not what considerable means.
  
  Here's an anecdote that's an amalgam of hundreds of people—friends, family, and strangers—over the last couple years as CA has started implementing a 10¢ fee for buying a plastic bag at stores in an attempt to reduce waste. Nearly everyone that comes across this for the first time is taken-aback by something that costs a dime simply because they expected it to be free. These are people worth many millions of dollars to those which a much lower net worth. The average person is recoiling my this "crazy" notion about the same in every case—if there's a discernible difference with people who are more affluent arguing with the teller or saying they have a bag out in there car they can use. Despite it only being a dime they found that cost considerable enough to be shocked by it, inquire about why it happened, when it started, where else it occurs (or doesn't occur), and more than a few simply refusing to pay the 10¢ so they awkwardly carry their stuff out in their hands. On person even dropped and broke their new glass bottle filled with something alcoholic outside the CVS and then wanted a free one. I didn't stick around so I don't know if they also blamed CVS for nothing using a bag.
  
  Will Apple shut their doors if they stopped getting Apple Pay revenue? No, but you better believe that billions of dollars is considerable—especially since the net profit is surely higher than other areas of business—and something that adds significant value to their products. If that value were to drop, you best believe Tim Cook would have some considerable concern.

  edited June 2017
• Reply 9 of 16

  StrangeDays Posts: 12,877member

  June 17, 2017 1:45PM

  Yeah if it is 1.6 billion or whatever, that's a considerable chunk of change coming in every year. Many businesses would love to have that as their annual revenue. It doesn't matter that it pales compared to their primary revenue stream, which is iphone, since iphone is the single most successful consumer product in human history. 

  
• Reply 10 of 16

  wigby Posts: 692member

  June 17, 2017 2:19PM

  Soli said:

  NY1822 said:

  ronn said:

  NY1822 said:

  i love Apple Pay, but to call it a "considerable driver of revenue" is a bit of a stretch. They make .15 cents on every $100 spent.
  
  from 2015:
  "Piper Jaffray’s low-end estimate forecasts that this fee will bring in $118 million in revenue in 2015, increasing to $310 million in 2016. On the high end, Nomura’s equity analysts estimated it could account for $1.6 billion in revenue by 2017 – two years from now."
  

  Yeah, because these guys always get it right. Even taking their guesstimate, $1.6B is about what Square reportedly makes after several years in this space. IMO, that would qualify Apple Pay as a "considerable" source of revenue.

  the article states "considerable source of revenue for Apple".....it's not comparing Apple, the largest market cap company ever, to a company in Square with a $9B market cap

  You're oddly reading the term "considerable" as "making up a majority of Apple's revenue." That's not what considerable means.
  
  Here's an anecdote that's an amalgam of hundreds of people—friends, family, and strangers—over the last couple years as CA has started implementing a 10¢ fee for buying a plastic bag at stores in an attempt to reduce waste. Nearly everyone that comes across this for the first time is taken-aback by something that costs a dime simply because they expected it to be free. These are people worth many millions of dollars to those which a much lower net worth. The average person is recoiling my this "crazy" notion about the same in every case—if there's a discernible difference with people who are more affluent arguing with the teller or saying they have a bag out in there car they can use. Despite it only being a dime they found that cost considerable enough to be shocked by it, inquire about why it happened, when it started, where else it occurs (or doesn't occur), and more than a few simply refusing to pay the 10¢ so they awkwardly carry their stuff out in their hands. On person even dropped and broke their new glass bottle filled with something alcoholic outside the CVS and then wanted a free one. I didn't stick around so I don't know if they also blamed CVS for nothing using a bag.
  
  Will Apple shut their doors if they stopped getting Apple Pay revenue? No, but you better believe that billions of dollars is considerable—especially since the net profit is surely higher than other areas of business—and something that adds significant value to their products. If that value were to drop, you best believe Tim Cook would have some considerable concern.

  Fiscally, Apple Pay is not truly considerable for Apple nor does it ever have the potential to grow into a substantial business by Apple standards. But your anecdote does prove the power of 'substantial' as it pertains to the psychology of the consumer.
  
  People and merchants that use Apple Pay will become more comfortable with Apple in their lives as a payment system, content delivery service, ridesharing service and so on. This could result in truly substantial future revenue the same way that the iOS ecosystem benefits from each and every component.
• Reply 11 of 16

  ronn Posts: 653member

  June 17, 2017 2:30PM

  NY1822 said:

  Yeah, because these guys always get it right. Even taking their guesstimate, $1.6B is about what Square reportedly makes after several years in this space. IMO, that would qualify Apple Pay as a "considerable" source of revenue.

  the article states "considerable source of revenue for Apple".....it's not comparing Apple, the largest market cap company ever, to a company in Square with a $9B market cap

  That's a convoluted way to be negative about Apple Pay. $1.6B a year is considerable no matter how you look at it. If there are any comparisons, it's simply between Apple Pay (a tiny fraction of Apple's overall business) and Square; so again, considering the lead Square had and how their readers are given away, AP is a considerable source of revenue. 

  edited June 2017
• Reply 12 of 16

  Soli Posts: 10,035member

  June 17, 2017 2:54PM

  wigby said:

  Soli said:

  NY1822 said:

  ronn said:

  NY1822 said:

  i love Apple Pay, but to call it a "considerable driver of revenue" is a bit of a stretch. They make .15 cents on every $100 spent.
  
  from 2015:
  "Piper Jaffray’s low-end estimate forecasts that this fee will bring in $118 million in revenue in 2015, increasing to $310 million in 2016. On the high end, Nomura’s equity analysts estimated it could account for $1.6 billion in revenue by 2017 – two years from now."
  

  Yeah, because these guys always get it right. Even taking their guesstimate, $1.6B is about what Square reportedly makes after several years in this space. IMO, that would qualify Apple Pay as a "considerable" source of revenue.

  the article states "considerable source of revenue for Apple".....it's not comparing Apple, the largest market cap company ever, to a company in Square with a $9B market cap

  You're oddly reading the term "considerable" as "making up a majority of Apple's revenue." That's not what considerable means.
  
  Here's an anecdote that's an amalgam of hundreds of people—friends, family, and strangers—over the last couple years as CA has started implementing a 10¢ fee for buying a plastic bag at stores in an attempt to reduce waste. Nearly everyone that comes across this for the first time is taken-aback by something that costs a dime simply because they expected it to be free. These are people worth many millions of dollars to those which a much lower net worth. The average person is recoiling my this "crazy" notion about the same in every case—if there's a discernible difference with people who are more affluent arguing with the teller or saying they have a bag out in there car they can use. Despite it only being a dime they found that cost considerable enough to be shocked by it, inquire about why it happened, when it started, where else it occurs (or doesn't occur), and more than a few simply refusing to pay the 10¢ so they awkwardly carry their stuff out in their hands. On person even dropped and broke their new glass bottle filled with something alcoholic outside the CVS and then wanted a free one. I didn't stick around so I don't know if they also blamed CVS for nothing using a bag.
  
  Will Apple shut their doors if they stopped getting Apple Pay revenue? No, but you better believe that billions of dollars is considerable—especially since the net profit is surely higher than other areas of business—and something that adds significant value to their products. If that value were to drop, you best believe Tim Cook would have some considerable concern.

  Fiscally, Apple Pay is not truly considerable for Apple nor does it ever have the potential to grow into a substantial business by Apple standards. But your anecdote does prove the power of 'substantial' as it pertains to the psychology of the consumer.
  
  People and merchants that use Apple Pay will become more comfortable with Apple in their lives as a payment system, content delivery service, ridesharing service and so on. This could result in truly substantial future revenue the same way that the iOS ecosystem benefits from each and every component.

  That's like the App Store as the quintessential example. Apple recently stated they've paid out $70 billion to developers, which I think means they've taken $30 billion in revenue for themselves. That's after 9 years with a current YoY growth of 70%. And if consider that it took nearly a decade to achieve that means that it's been a much lower revenue than Apple Pay for most of its existence, and I bet Apple has a much higher expense than they do for Apple Pay since they have to keep their own servers, update the IDE, and verify every app that comes through. Yet, I doubt anyone would say that the App Store isn't significant to Apple's success with the iPhone or think it's not important because it's just a blip compared to iPhone sales.
  
• Reply 13 of 16

  securtis Posts: 86member

  June 17, 2017 10:41PM

  Apple has enough money laying around to buy everyone new card readers, give users large kickbacks like this, or some combo of both. I wish apple wasn't so timid pushing apple pay. 
• Reply 14 of 16

  steveau Posts: 299member

  June 18, 2017 7:03AM

  Dear Malcolm, notwithstanding the considerable discussion on these pages regarding the accuracy of your assertion that "Apple Pay is a considerable driver of revenue for Apple", I urge you to continue to write using a graduate level vocabulary, rather than taking the easy option of dumbing down to a junior high vocabulary. Some of us appreciate your erudition.
• Reply 15 of 16

  fred1 Posts: 1,112member

  June 18, 2017 11:50AM

  If Apple Pay can be used for web purchases, why is this event limited to physical stores?
• Reply 16 of 16

  mpantone Posts: 2,040member

  June 19, 2017 12:14AM

  It is impossible to know for sure why Apple is promoting this event, but there are several notable points.
  
  This is happening at a select group of independent retailers (apart from Peet's) in two upper-income San Francisco neighborhoods for one weekend. Whether by coincidence or design, it also happens to be taking place during SF Pride Week whose activities are not concentrated in either neighborhood.
  
  We do not know if Apple is subsidizing the discounts at these retailers, if Apple is waiving or reducing the transaction fees, or if Apple has somehow subsidized some of the infrastructure/hardware costs at these retailers.
  
  I think it is safe to assume that Apple is not focusing this event to get major retail chains like Safeway or CVS to sign up for Apple Pay. My guess is that they are trying to get more independent retailers to adopt Apple Pay.
  
  For sure, there should be no deductions about Apple's relationship with companies like McDonald's which happens to be a franchise operation; the individual stores are pretty much owned by independent operators. McDonald's Corporate can "encourage" NFC transactional POSes amongst their franchisees, but can't control how well they are implemented and maintained, at least on a daily operational level.
  
  Also, the fact that Apple is promoting this event cannot be used to explain the deployment (or lack thereof) in any other foreign marketplace. In most cases, lack of Apple Pay adoption is largely due to the reluctance of local banks, not Apple's disinterest. But even if local financial institutions adopt Apple Pay, there is still consumer acceptance to earn, something that Apple has not done in Japan which has a long history of NFC payment systems (Suica, Pasmo, IC).
  
  Just a few thoughts.