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The future, predicted: How Apple can “own” mobile payments



One of the domains I pay particular attention to is person-to-person and mobile payments (I’ve also done some design work in this space). Right now, there is a lot of discussion/debate/chatter around near field communication (NFC) technology and how it can be intergrated with mobile devices to support payments “on the go.” Several mobile hardware manufacturers have already integrated NFC chips in their shartphones, and Google has an active strategy around integrating NFC and mobile with their Google Wallet product.

This is all well and good, except the 800-lb gorilla in mobile, Apple, has not presented their mobile payments solution yet. I think that they will reveal it soon, though… in September, with the release of the iPhone 5. I suspect that Apple will present a complete integrated solution at that time, and if they leverage assets they aready have effectively they could very quickly dominate the space.

Here’s what I think Apple is going to do, based on years on following the company as well as some other research.

Apple will zig, instead of zag: It won’t be NFC

Apple tends to define their own path, so they can “own” it. NFC is what everyone is talking about… so I think Apple will go in a different direction, and adopt the low-energy bluetooth protocol. Not just because it’s different, but because of some of the benefits that the protocol provides that NFC doesn’t… primarily compatibility and security. More on “compatibility” in a moment…

They’ll provide an complete end-to-end solution

Apple will not put out half a solution, they will roll out a complete infrastructure to send, recieve and process payments. How? Through all their products: the iPad, the iPhone, and the MacBook. Apple can quickly push software updates and apps through their app stores to allow all these programs to securely send payment information to each other, using bluetooth. They can also provide simple accounting and reporting apps for small businesses, allowing for analysis and easy transfer of payments recieved into business accounts. An iPad is a lot cheaper than a dedicated point of sale system. Personal payments can be transferred to customer’s checking accounts… or converted to credits that can be used on the app store.

They can leverage a huge user base

There is no need for Apple to ask customers to setup an account to make these mobile payments from… They already have customer’s credit cards on file, through their iTunes accounts. Millions of customers. That “default payment method” will be all that most customers need to use the service, and the setup process will be as simple as installing a new payment app and logging in to authorize the app (and probably agree to some new terms and conditions).

They’ll purchase Square

Square provides a great payment system with integration with iOS and Android devices. I expect Apple to buy it, for its talent and technology… and to remove a competitive solution from the marketplace.

Apple will emphasize security and guarantee transactions

Apple already has the “find your iPhone” service, and offers remote wiping, and I’m sure that they will emphasize this when they roll out their mobile payment process. One of the main fears customers have of mobile payments is losing their phone and someone using it to buy things with it. Apple can easily “force” a PIN login is required if you have activated mobile payments, as well as additional gurantees that can alieviate customer concerns.

The End Game

Why does Apple want to get into mobile payments? Primarily to prevent the competitors from dominating the domain… and also to sell more devices. Easy mobile payments would be a huge value-add to motivate many users to buy Apple hardware. They can structure the “rules” to get a chunk of every payment made with such a service. And if Apple wanted to they could “lose money” on such a service for years in order to dominate the channel (they only have $100 billion on hand, after all). It’s the razor-razor blade scenario – lose money on the razor, make money on the blades. They can lose money on each payment made through such a system because it locks customers into the Apple hardware ecosystem… an ecosystem with very high-margin devices.

Apple has already started testing a mobile payment system… in their Apple stores. If you download their Apple Store app, you can buy items in the store right now… scan a barcode with the iPhone camera and the app will charge your iTunes account for whatever you want (again, using the credit or debit card you already have on file). Expect their mobile payment to leverage the camera in a similar way.

Finally, customers love Apple and hate banks. Apple has incredibly high customer satisfaction numbers, much higher than most financial institutions have. Therefore consumers will be a lot more open to a payment system that comes from Apple than from a bank. This will help Apple get to a “critical mass” with users… and change how people do things. Again.

Posted in Technology

Apple’s Next Big Thing could be revolutionizing software development



I used to code. And when I say “code,” I mean write HTML, JavaScript and active server pages – not full desktop applications. This was close to a decade ago, and while I have taken some software development classes since, I haven’t used any coding skills in any meaningful way since then. It’s not that I don’t want to code, I just I don’t need to do so in my job. Additionally, and to be frank… I think software development is much harder than it should be, and the varying levels of quality in the software development tools out there doesn’t help.

That may soon change, dramatically, and this change may come from an unexpected place: Apple.

Last month a patent application from Apple for “content configuration for device platforms” detailed specifications for a basic WYSIWYG tool to build apps. Now, Apple patents a LOT of stuff, and many of their patents have historically ended up going nowhere… but I think this one isn’t such a case. I suspect that Apple is working to change how software for their platforms are created, to open up their platform to… well, everyone. It’s a huge shift in the traditional approach of working with software developers that aligns with both Apple’s history, it’s aesthetic, and it’s growth strategy.

Apple has a long history of taking complicated tasks and making them easy and obvious for customers. It started with desktop publishing, with Apple making the first consumer computers and printers that provided accurate typography and page layout tools (Apple didn’t create Pagemaker, the first successful desktop publishing app, but produced the first Macintosh that made such an app possible). Though it wasn’t there first, Apple produced software that made video editing accessible and easy, with Final Cut Pro and then iMovie. It created software to make producing DVDs as simple as dragging and dropping content (not used much now, but at the time iDVD was a very popular app for creating content). It made music production accessible to the masses through Garageband, multi-media presentations dead simple with Keynote… And so on and so forth, with the most recent effort, the iBook Author tool, focused on supporting the creation of multimedia eBooks.

Software development requires specialized knowledge that most people don’t have… just like like video editing and desktop publishing used to be. The eccentricities of a particular language, the processes of doing software builds, the specific functionality that exists in the development environment being used… all of this requires a learning curve, and for many people it’s a steep one that is discouraging and frustrating. Apple can remove a lot of this complexity by releasing a program exactly like the one they detail in their patent – an app that allows for simple object-oriented programming that lets users compile and run apps without having to know how to call APIs, create preference files and deal with stuff like memory managment and database calls.

Would this be a solution for the professional developer to use? Probably not. It would be like iMovie for apps… the pros can still use XCode or their preferred development environment to custom build their own apps. But just as iMovie has allowed people who have never heard of SMTPE timecodes to quickly edit a short movie together, an “iMovie for apps” would open up programming to the masses, allowing people who are intimidated by the prospect of coding the ability to creating simple apps they want and need with a minimal effort.

Such an app would also support Apple’s growth strategy. The more apps that are created and available, the more desirable it makes the devices that run them… devices that are all sold by Apple. Since Apple gets a cut of every app sold, the more apps in the marketplace the more money they make. And the “App maker” or whatever Apple calls it will only work on… yup, you guessed it, Apple hardware. Will many of the apps created by such a tool be… well, crap? Yup. But many of the apps available in the app store today aren’t very good as well… the quality apps will usually rise to the top.

Will Apple reject a huge number of apps submitted? Yes, but consider this: Apple can develop this new “App maker” program in a way that lets users distribut their own apps on an ad hoc basis… imagine if a small business could roll their own integrated inventory app for their staff? Apple might not make money off every app sold in such a scenario, but such a feature could motivate many companies to buy iPhones for all their employees… Which is a perfectly satisfactory result for Apple and thier growth strategy.

I may be reading too much into a patent application, but to me it makes sense that this is something Apple would do, for the reasons cited above and for one more thing: It would be a bold move, something that would differentiate Apple’s OS from Android and Windows in a huge way… especially if such an “App maker” allows users to create apps that work on ANY Apple device – Mac, iPad or iPhone. Apple has a history of making similar bold moves, and making them work. I can see no reason for that stopping now.

Posted in Technology, UX Articles

The ghost of Steve Jobs



I recently watched the video of Apple’s announcement of the new iPad. It was, like all Apple product announcements, a familiar affair. It started with statistics, it teased features, it detailed specs, and demonstrated new programs designed to take full advantage of the new hardware. It was polished, professional… and kinda boring.

Apple CEO Tim Cook, who oversaw the presentation, is a good public speaker, but… he’s not Steve Jobs. In fact, the whole thing suffered from everyone on stage not being Steve Jobs. For years, Jobs famously presented new products with an enthusiasm and a passion that showed how proud he was of what Apple was delivering to the buying public… and when you combine such passion with his charisma and pitch-perfect presentation style, well, it was not just a product roll-out. It was an event. It was special… and you didn’t even have to be an Apple acolyte to be impressed by it.

The management at Apple has done quite well in the post-Steve Jobs era. The Apple stock is up 60%, the company has more cash-on-hand than ever before (enough to buy some countries), and products such as this new iPad are selling exceedingly well. But here, in their product presentations, we see the ghost of Steve Jobs at every moment of the agenda. The Apple braintrust are slavishly following the same script that Jobs perfected, and… it’s not the same.

Apple needs a clean break from the past. Even if these media events do exactly what Apple hope for, they need to change how they do them, because Steve is gone and nobody can ever do these things better than he did. Trying to follow the same approach comes off as being stuck in the past, dated and not forward-thinking… something that Apple clearly does not want people to think they are. So for that, and to move on… Apple should say goodbye to Steve’s way of doing these things, and try something new.

Like, maybe, just releasing a product and letting it’s qualities speak for itself.

Posted in Technology

Lessons in UX: The “tender trap” of the iPhone



If you’ve been paying attention to the stock market lately, you may have noticed that Apple is doing quite well. At the time of this writing the stock is over $500 a share, the company has just had another quarter of record earnings, and Apple is worth more, in market capitalization, than Microsoft and Google combined. And some analysts say its growth rate is accelerating…

What is driving such amazing financials? Primarily, it’s being driven by a device that didn’t even exist until five years ago: the iPhone. The share of revenues accounted for by iPhone sales was almost half Apple’s total, and that half was more than Microsoft’s TOTAL revenue in the same quarter. The iPhone is one of the most profitable and successful products, ever. And almost every customer who buys an iPhone is going to be “locked in” to their iPhone for a long long time. Not necessarily because the iPhone is “better” than competing mobile devices from Google, Nokia or Microsoft… but because of Apple’s secret weapon: the app store.

I’ve spent quite a bit of time research user habits and behaviors, and have some observations about why people are resistant to change and get stuck in “ruts.” A primary reason is people are either comfortable or afraid of change… or both. But another key factor is cost… both tangible and intangible. We say, “I can’t exercise more, I don’t have the time!” because we think we don’t have the currency – time – to spend doing it. “I can’t change phones, I have everything setup the way I like it” is the inverse of that argument, in that we look at the amount of time setting up and personalizing our phone as an “investment,” one that would be lost if the user switches to a different type of phone.

Directly aligned with this is the Apple app store, where both actual and perceived cost comes into play. As Apple has the biggest app store, and has made the process of buying apps as simple as possible, it’s easy for users to start loading apps that suit their lifestyle… and the more apps users add and use on the iPhone, the more users become locked into the “tender trap” of the iPhone. Since the majority of apps cost money, this very quickly results in a lot of additional costs for the new iPhone customer, which this (perhaps unconsciously) increases the value of the phone to the user.

Beyond that “sunk cost” of apps, the customer’s use of the apps and the phone over time is another “investment” – the phone becomes more “valuable” because through use, content is created – notes, photos, game achievements, to do lists, etc. This results in a perceived cost to switching, a loss of that created value (which, like the “investment” above, would have to be “respent” with a new phone). This is how the “lock in” happens: the customer personalizes the phone to reflect his or her interests and load it with their own content… and there’s no easy way to “get that stuff out.” Unless, of course, they upgrade to the next version of the iPhone… then it’s easy!

A final point: The factors referenced above were the same reason that Windows has dominated computers for years – the hard and soft cost of the applications and the data that was created in them made it hard for customers to “switch” to another OS. This need to continue to keep customers on Windows, was one of the reasons Microsoft has focused on backwards compatibility with their apps and operating systems. With a new generation of consumers and an active effort by Apple to convince the world that “switching” was a positive painless thing, that is now far less a factor. If rival phone manufacturers want to “break” the lock the iPhone is creating with customers, they would be well advised to take a page out of Apple’s “switch” campaign.

Posted in UX Articles

Why don’t Mac Mini’s have MagSafe power connectors?



Being a close follower of Apple and their design decisions, I'd say a primary reason the Mac Mini doesn't have that connection is simple: it's not a portable computer, and it doesn't have a battery.

The idea behind the MagSafe connector is to prevent laptops from being yanked off tabletops when someone trips over the cord. When this happened before, the laptop inevitably ends up damaged. This, obviously, is a bad experience. As  the MagSafe is a great solution to this problem, it was added to the laptop family.

The Mac mini is a desktop computer. While it is a very small form factor, and is easily portable, it still needs the "trappings" of a desktop computer to work – a monitor, mouse and a keyboard. So adding the MagSafe connector will only benefit the minority who takes this computer with them… And could very well tick off the majority if the MagSafe connector is pulled out in the middle of an important task (see the "no battery" comment, above).

See question on Quora

Posted in My Quora answers

What are some of the things that Apple decided not to do?



Lots of things.

They decided not to build a MIDI "break-out" box a couple of years ago, even though the product was ready for production according to some sources.

They decided to stop making printers.

They decided to simplify thier product lineup, to have two (then three, then four) lines to sell. Desktops, laptops, (and eventually) mobile phones and tablets.

They decided to stop licensing their OS to third-party hardware manufacturers.

They decided to not go open-source.

They decided to no longer sell previously successful products when they felt they had reached end of life (iPod Mini) and when they didn't align with the rest of their products (white MacBook).

They decided to not sell computers based on specifications, but instead on the experiences that such devices provide, allow, and support.

They decided to not have a physical keypad on their phone.

And so on.

See question on Quora

Posted in My Quora answers

Which mobile apps offer a perfect user experience?



Perfect is the enemy of good, and perfect is also a very high bar to achieve. I don't know if I'd say that the following are perfect, but they ae very good indeed:

Simplenote let's you take notes and write. It also syncs your text to all other devices that have the appropriate software in the background. It's simple and just works.

Instagram let's you take and share photos, and the UI is very very good. It's a app that is both usable and fun to use.

Another "insta" app, Instapaper let's you read web pages offline, and presents the text in a way that is quite readable.

Finally, I look at Zite as an interface that is incredibly useful but one that "gets out of the way" and let's you concentrate on reading, which is the key to a good mobile UI.

See question on Quora

Posted in My Quora answers, UX Articles

Now available on iBooks: Captured Moments, a book of my photography



Captured Moments is an interactive book of my photography. It is available exclusively from the Apple iBooks store and is available for the low low cost of FREE. Please check it out, I hope you like it

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About Joe…

Joseph Dickerson is a User Experience Architect focused on designing effective and innovative on-line and mobile applications. With over a decade of experience in software design and user research, Dickerson has made it his mission to make technology easier for people to use.

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