I recently replaced an Apple product. Having not kept up with their products for the last few years, I did some research. As I read their website and spoke with their customer service, I observed several things. The main one: Apple is edging into financial services.
- Trade-ins – People can dispose of an old device and receive a credit toward the cost of a new one. Reminds me of the car dealership business. I suspect this is handled by a third-party company behind the scenes, but it’s still a smart way to make products more affordable without using discounts or sales. The brand integrity is maintained. I’m pretty sure this reduces the average time between device upgrades.
- Financing – New purchases are eligible for 0% interest for a year if the customer signs up for Apple Card (more on this). This stretches the cost of a sizeable purchase into digestible monthly payments, making the products more accessible to more people. If you can afford the monthly payment, you can get a device now instead of having to wait until you have the cash for the full purchase price, and you don’t have to pay interest for a year. More importantly, this is an ingenious way to introduce consumers to the new Apple Card product.
- Apple Card – This is a credit card product, but done the Apple way. It offers a lot of things consumers value, such as cash back and no fees. The software and user experience appear to be very different than those of traditional credit cards. It integrates tightly with Apple devices and services that consumers already use every day. iPhones conditioned people to think of Apple as a company that helps them communicate. Apple Card will likely kick-start people into thinking of Apple as a company that can help them manage their money. If Apple builds a significant financial services business, this product will have paved the way.
- Apple Pay – This product is focused on making it easier for consumers to pay. It’s a mobile payment and digital wallet service. It’s been around since 2014, so it’s not new. It has gained traction. It positions Apple between consumers who love their devices and merchants who want to sell to those consumers. I noticed that Apple Card offers a 2% cash back on charges made via Apple Pay. Another great way to entice consumers to use multiple products.
Apple is a strong company whose hardware and software have heavily influenced our society since the release of the iPhone fourteen years ago. I suspect financial services (in addition to other unannounced businesses) will further solidify its role in consumers’ everyday lives. If it’s successful, I can see a day in the future when people will think of Apple as a place to go for help with managing their money.