Entrepreneurs

With 1 Move, Apple Just Entered–And Cornered–This $40 Billion Market


Apple is a technology powerhouse, and yet its known for overly long development times and slow releases. It notoriously sits on technology for months, sometimes years before it moves forward with a launch, whether that’s the Airtag or the foldable iPhone. While everyone else races to be the first to release the latest innovation, Apple sits back and shares what it plans to do, while letting others do it first. 

And yet it is the industry leader with consistently high product adoption rates and an incredibly loyal following. But that’s because Apple isn’t actually slow. 

The brilliance for Apple is not just its innovation capabilities, but it’s approach to launching products strategically, entering the market seemingly late–when in reality, it arrives with perfect timing. In doing so, it has become a unicorn with an annual revenue of over $274 billion. It has done it time and time again, and this time its doing it with the payments processing industry. 

The concept of an Apple credit card is said to be the brainchild of Steve Jobs, which he had wanted to create back in 2004. His vision was to create an iTunes credit card where users would spend money and get free music the way you might get airline miles or points on other cards.  

Just over a decade later, Apple first entered the payments processing market with Apple Pay in 2015. The new-age concept of making payments through proximity appealed to many early adopters, but ultimately, never took off in the mainstream market. The concept of tapping a card to pay didn’t sit well in the minds of many and there was little to no perceived benefit of using it. 

However, Apple isn’t out to pursue an innovation as trivial as to tapping instead of swiping. It’s not even looking to simply transform the checkout process. It’s looking to eliminate it, or at least eliminate it in the way in which we know it.  

The future of register-free checkout is already in the works. Earlier this year, Amazon opened the first register-free supermarket in Connecticut. And this isn’t the first of it’s kind. The future of in-store retail shopping will evolve into a checkout-free checkout process that involves no cashiers, no lines, no tills. Just pick out the products you want and off you go, where the card reader at the exit will automatically pick up your products and your card information, similar to how the electronic toll collection systems function, like E-Z Pass. 

And Apple Pay will be the first payment processing system that enables businesses to easily implement contactless payments. 

But until the market adapts and adopts the concept of cashier-free checkout, Apple is simply sitting on Apple Pay. But that doesn’t mean Apple is just sitting around. 

In the meantime, it’s working to lower barriers to entry and increase the adoption of Apple Pay. And because many aren’t ready for what Apple Pay offers, Apple is offering the Apple Card–something familiar in the minds of consumers everywhere, and thus a product that is widely accepted by the mass market. 

As more people acquire the Apple Card, the formerly foreign concept of making payments via a tech product company known for computers, phones, and similar devices, Apple becomes synonymous with payments. And with that, once Apple has its foot in the door, and a tool in consumer’s wallets, it can then more easily grow its adoption of Apple Pay. 

In other words, Apple Card is a marketing tool for Apple Pay. With a lower barrier to entry combined with a clear and attractive value proposition, it gives Apple a near friction-free way to enter the market. And with a superior credit card and payment processing system designed to both meet the needs of consumers and retailers, in both the present and the future, Apple has entered–if not cornered–the nearly $40 billion-dollar payments industry.

Apple takes it time to innovate, baking familiarity into its products for market entry and product adoption, the same way Uber strategically lowered barriers to entry with its $0 marketing strategy. What we see with Apple–and other unicorns–is that perhaps its not slow and steady that wins the race, but slow and strategic that wins the race. The most successful companies aren’t wasting time seeking one-time, short-term wins, but are taking their time to become the champion, time after time.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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