13/09/2014

What's the big deal about an iPhone 6 and Apple Watch

Last week Apple announced the new iPhone 6 and 6 plus (the 6 being the updated version of the iPhone 5s with slightly larger dimensions and the 6 plus being a phablet with a true 1080 display). These will both be available on September the 19th, through carriers or an Apple Store.

Of course, the Apple Watch was also announced which caused swoons from legions of fanboys worldwide (not available until 2015 though). It's pretty, but no beauty, but does it really mater? Apple will still sell lots of them.

Let's start with the new iPhones, they have a new Apple A8 ARM CPU which can be twice as fast as the old A7X in the iPhone 5s and a new graphics chip (also faster). They also come with an updated M8 co-processor which as well as looking after things like the compass, gyroscope and accelerometer, now handles pressure as well. The older M7 off-loaded these functions, the M8 does the same. Allegedly it's a chip manufactured by NXP so probably a very low power 32bit ARM MCU which off-loads all the data collection from the actual sensor chips and then triggers the main (A8) CPU when it's got some usable data for it - it probably does a bit of data pre-processing too.

The M8 allows the phone to diligently collect movement data using very little power and applications can access the data as they need, the barometer adds the ability to track the height of the device (altitude), so can now measure the user's climbing stairs etc activity - Apple are doing their best to own the health market and it will make a big dent into applications when HealthKit hits iOS 8 allowing multiple health apps to aggregate their data into a central application. Why wear a Nike Fuelband, when your iPhone collects the same data, might as well take the data from the iPhone and send it back to Nike's Plus service (and Nike has recently got out of the tracker market, at least for separate wearables - maybe Tim Cooke [CEO of Apple] who sits on Nike's board gave them a heads-up).

Then there's the NFC stuff that's now in the iPhone, that will be used for Apple Pay. Apple has previously publicly rejected NFC completely saying the market wasn't ready and the NFC market was too fragmented, that's all about to change.

Then there's the Apple Watch, it's square, but Apple have done a fantastic job on the UI, it's nice now and can only improve. It too has a new chip (the S1), but there's not much detail on that yet.. It also has 'health' features and can track movement (independently from the phone), it's got LEDs and sensors on the base which can measure your pulse-rate (many read that to be heart rate, but it's not quite the same, pulse rate is just measuring the blood squirting through the veins - heart-rate generally means taking an ECG reading and measuring the number of beats per minute - that gets tricky and can mean FDA approval, which is a pain that Apple just may not want to go through YET). It has health apps built-in, though it will use the iPhone GPS to measure real distances moves etc.

Currently the LED/sensors just measure pulse-rate, but (probably very much like Withings did with the Pulse) they can also measure O2 concentration in the blood (pO2), then glucose/sugar levels and who knows what else, the technologies there, it just requires enabling bits of software.

The Apple Watch also has that nice little NFC subsystem in it, which will allow older iPhones (and iPads) to utilise Apple Pay (see what they did there!).

However, it's Apple Pay which is the real game changer. NFC on Android phones is fragmented, everyone has their own way of doing things. All the mobile carriers are trying to do mobile wallets, banks are trying to do mobile wallets, Apple is now doing a mobile payment system with agreement from the major card issuers (MasterCard, Visa, AMEX). Admittedly is US only at launch, but it will surely roll out to at least European countries reasonably rapidly. The US hasn't adopted Chip and Pin (C&P) yet, however stores are accepting NFC cards for small payments (NFC cards have a symbol on them, like a wireless signal radiating out). Apple now allows a user to store the card details (in a secure area) on the iPhone and uses that info to make an NFC transaction. It doesn't need all the card info, just enough to tell the merchant who the user is and that gets passed back to the card issuer, the transaction is done (all using secure tokes and secured on the phone using Touch-ID). Presumably Apple takes a small cut of the transaction from the card companies, but they get reduced fraud (mag stripes are easy to clone and until C&P is rolled out in the US, this is a MUCH more secure method). There's also only a single payment system that merchants have to worry about that uses their existing merchant accounts and systems. This will be HUGE for Apple.

That's just the beginning - take TfL's Oyster system in the UK, they're trying to get rid of dedicated Oyster cards and allowing users to use their normal (NFC) bank cards for pay-as-you-go journeys, this will eventually extend to all types of journeys (season tickets etc). Apple can now step in and support Oyster on the phone (and Apple Watch), no more searching for the right card that's registered for Oyster, dangle your watch near the reader.

Moving forwards, as the technology is adopted, Apple can start removing the need for the card companies themselves, it becomes the card issuer, it becomes the bank. The card companies are needed now, but for how long? The technology is there built into the iPhone and Watch. It links into your iTunes account and you have central control.

In the future, Apple produce an NFC reader in their desktop offerings (MacBooks, Airs, iMacs, Mac Pros) and e-commerce sites can access this, go to a site which is Apple Pay enabled, pay through your phone, the possibilities are endless - and the revenue streams to Apple with them.

The big losers? Well Pebble has just been blown out of the water, ok it's cheaper, but it's dumb compared to Apple's Watch. A lot of Android Wear watches are also likely to be hit hard, though some of them are prettier - at least now. Apple have built a watch eco-system - they currently support 3 watch designs and lots of different bracelets, they are all designed and made beautifully (even if the watch itself isn't the prettiest out there, it's a version 1). Now Apple work with the high-end watch designers - Apple Watch inside, designer watch outside. If Apple do this properly, they've corned the smart-watch market for a long time.

The BIGGEST losers though - eventually the card companies, Apple is disrupting them from the inside, much like it did with the music industry and is slowly doing to the film/video industry. The other major loser is COIN, such a good idea (though only for the US's antiquated mag stripe card system, it has a long way to go to support multiple C&P cards, if they ever get the technology and agreements to do so), it's business now looks very shaky indeed, killed by Apple before they've even got beta units out to people. Another loser is potentially POWA, they've got a great system for e-commerce sites so people can pay with their mobiles (and have just raised $200m), Apple Pay potentially kills their services too.

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