Sometimes it’s important to step back and look at the business landscape through a wide angle lens. Right now is one of those times.

In the last ten years Apple shares have returned 1000%, while the S&P has gained 70%.

This incredible run has largely been fueled by one thing: AAPL has captured 80%+ of all smartphone profits that have ever been made in the history of the world. What’s even more remarkable, is that the company has done so with a global market share of just 20%.

It’s the 80-20 rule in its most artful form.

The big bet, placed way-back-when, was to dominate the high end segment where brand and performance matter…. and price is no object.

The bet has paid off beyond belief.

iPhones sell for $600-$1,200, while the worldwide average for Android phones hovers just above $200. The App Store supercharges margins even more. It’s a case study in price inelasticity and portfolio theory that will be taught for decades to come.

Now, though, smartphone shipments are contracting. So, what’s Apple doing?

It’s adding proprietary services.

Apple has always well-anticipated the needs of its devotees and, whenever possible, plumbs them into the iPhone stack at very low levels. Messaging and Payments are great examples, but it’s their combination that may turn out to be magical.

Apple will soon release Apple Pay Cash, the native money inside Wallet. Apple Pay Cash is USD that can be sent/received over iMessage and spent at Apple Pay merchants, both in-app and in-store. Balances are held by a regulated bank and can be transferred to and from a user’s core checking account at any time.

As expected, the Apple Pay Cash experience is elegant from start to finish. It resonates with a wider audience than Venmo and it’s easier to use than Zelle.

Yet, there’s an even bigger picture to take in here.

Apple Pay Cash might just be the spark that finally ignites mobile payments on a broad scale. With its focus on premium influencers and its control over a large ecosystem, Apple is in a unique position to effect massive change where others simply cannot. If that happens, fees related to iPhone commerce will markedly add to Apple’s bottom line.

Miles to go with this scenario, but many view it as a quite reasonable outcome.


About RevChip

RevChip is the most comprehensive and affordable EMV and Apple Pay software built for the U.S. market. It connects to major processors without a transaction fee and runs equally on Verifone and Ingenico devices. Using RevChip, merchants eliminate card data from their systems and shrink the burdens of PCI. The RevChip SDK provides POS developers with a quick and thorough integration without the hassles of middleware.

To learn more about how RevChip solves for EMV and Apple Pay, download our POS Developer Guide or reach us at (800)560-0415.