Apple Inc. (AAPL)’s Apple Pay Will Be Used To Sell More Iphones – James Gautrey

Apple Inc. (NASDAQ:AAPL) is in the process of setting up Apple Pay, a platform it believes will have an impact on the way people carry out transactions in the future using iPhones. During an interview on CNBC, Schroder’s technical specialist, James Gautrey, questioned Apple’s motive with the launch of Apple pay as he believes it will not have a significant impact on the company’s total earnings.

“I’d question whether there is a good revenue model ahead of it. For Apple Inc.(NASDAQ:AAPL) what this is really about is locking you in, to continue to use its products, to continue  buying iPhones each time they come  out, “said Mr. Gautrey.

Gautrey argues that Apple Inc. (NASDAQ:AAPL)’s iPhone sales in the future will be more than guaranteed should iPhone users become addicted to the service. There are already reports that Apple has sealed deals with a number of banks that will see it get some fees from any transactions that consumers carry-out on the platform in place of debit and credit cards.

Gautrey also remains skeptical about the mobile payment systems market potential, and whether it will have any significant impact on Apple’s total revenue in the years to come.

“[…] Apple Inc.(NASDAQ:AAPL) is a big company already they are $200 billion worth of revenue. Actually, numbers I came up of people even if spending significant amount makes perhaps about 4 or 5% difference to Apple’s revenue growth. So this is really about getting you to buy new iPhone as soon as they come out not transforming Apple’s financial model. Margin is too thin in the payment space”

Swipe fees on credit and debit cards have over the years acted as one of the revenue streams for banks, a stream they will have to share with the emergence of more mobile payment systems in the future. Apple Inc.(NASDAQ:AAPL) could not have got it right, any better, with the unveiling of Apple Pay, at a time when consumers are yearning for products that make their lives easy especially in carrying out transactions.

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