iPhone 6 – Apple’s Strategic Opportunity

8 September 2014

We are likely to see much innovation in the iPhone 6, but I suspect there is even more innovation that we won’t see. Purpose of blog today is to help my friends navigate through the coming tsunami of press, to what really matters. What are the things I’m looking for? If you are looking for a list of new iPhone 6 features in this blog.. you will be sadly disappointed.. I’m much more attuned to payments, network strategy, commerce, security/Auth.. admittedly myopic. Note payments stuff is in last paragraph


Don’t get caught up in buzzwords like NFC, payments, tokens, BLE, Secure Enclave. Will it have a new security architecture? Yes, industry leading from hardware through firmware, OS and Apps.. Will the iPhone be able to do payment? Sure… Emulate a hotel door room key? Yep, in fact it could virtualize and emulate any chip card including the GSM SIM. Yet focusing on this stuff is kind of like talking about what the internet could do…  can I email my Aunt in Singapore? Buy a book from a seller in Seattle… The key questions for investors and start ups in the Valley is: HOW WILL THE iPHONE 6 CHANGE COMMERCE?.

Why am I excited about the iPhone 6? It is the dawning of a new age of mobile “platform”. This leads to the obvious question of: what is a platform, and how can anyone lead it? My favorite book on platforms is Platform Leadership: How Intel, Microsoft and Cisco Drive Industry Innovation. The authors provided a great model to assess the 4 Levers of Platform Leadership

  1. Scope of Firm: What is done inside, how they encourage outside investment and focus
  2. Product Technology: Architecture, Interfaces, Modularity, What do they expose to partners?
  3. Relationship with Complimentors: Support of Complimentors, acting on ecosystem needs, path to consensus and standardization, profitability
  4. Internal Organization: What is the “core”, and how are resources allocated to core activities vs support for partners.

Apple has a massive check mark in #2 (Product Technology), as they are 3-5 years ahead of every handset maker (integrated hardware thru OS and Software). How do we measure this lead? Admittedly technology is a little harder to quantitatively measure than financials and market share, so for the later: Apple captures 70% of industry profits (from 18% market share), #2 in consumer brand (behind Google), and #1 in retail sales per square ft. Most would agree its hard to get to these stratospheric numbers on crappy hardware.

On the technology side, Apple is the only vendor (since RIM) to have developed a secure mobile platform for biometrics, encryption, smart card emulation, …etc. All using a proprietary architecture from A8 Processor, Secure Enclave, OS, Apps and integrated into cloud services. For example, Apple has thrown the GSMA’s NFC under the bus in favor of their own unique design. I think of it this way: RIM started with security in mind and then tried to bolt on a browser and other features consumers wanted beyond secure e-mail. Apple started with the consumer and is now (with the iPhone 6) rolling out the most secure mobile platform in history. I believe Google is 18mo-3yr behind (with ARM/TEE and SE Linux) primarily because they don’t have the same HW control as Apple (see Secure Element, NFC, HCE, EMV, Tokens and Cards).

From a platform perspective the REAL question is Can Apple pull levers 1, 3 and 4?

Platform Leadership

Most all of us know the Microsoft/Intel Story (see reference). WINTEL’s pace of innovation crushed Apple by creating industry standards (ex PCI Bus) and allowing hundreds of companies to specialize on many subcomponents (dives, processors, applications) which further increased performance, decreased price and expanded usage… which in turn drove more investment. Intel’s Architecture Lab (IAL) was centerpiece of this success: an investment in defining and supporting the platform (ex the common infrastructure “bus”) that allowed for specialization and defined interaction (and accelerated Intel’s dominance). No one asked Intel to lead.. they TOOK IT (with great success). Leadership is not creating APIs and taking a 30% cut of revenue, it is recognizing that a business where 100s of companies can succeed is a much bigger business. This is particularly true in Commerce.

In physical commerce, I look at Visa and Mastercard as the best “commerce” platforms. This comment will draw ire from all my merchant friends, but it is factual (total volume processed). The beauty of the V/MA business model is that 1000s of banks invest (and merchants pay) billions of dollars to make this work. They have struck a tremendous balance between bank, consumer, and merchant. They have become the standard for interaction. One that will start to shift significantly toward merchants in next decade (for another blog).

With respect to platforms and mobile, I was in Hong Kong last year constructing scenarios with a major investment bank, with the key question: Where will value flow in mobile once handset hardware is a commodity? (Battery life, processors, screen resolution, are all good enough). What are the FACTORs of competition today? Can someone else change the game? I went through this analysis in my blog on Stage 4 Value Shift.

As we look for where the form of mobile competition may change, it would seem to be outside: hardware, software and network bandwidth. If hardware is good enough, and not the primary factor of competition, it must be software, services or data that will drive competition in the next phase… If platform is decided on software only.. then software platform with most open standard and most users (ANDROID) should dominate as any connected devices (handsets and everything else) have lower cost and more ability to “specialize”, particularly if intelligence is in the network (not the device).  But software is currently not the point of competition either… If not DEVICE software, or hardware, or network connectivity.. then what?


… Orchestration and Trust:  mobile phone transforms into the networked device “bridging” the virtual and physical world then value (and profitability) will shift from platforms executing transactions to coordinating interactions.

Apple’s greatest asset is its ability to change consumer behavior (see blog Apple and Physical Commerce, and Consumer Behavior). Apple’s reputation is well deserved and earned “the hard way” by remaking: phones, music, mice, computers, apps, …etc.  Through consistent delivery of value within fantastic hardware delivering great (and fun) consumer experiences they earned trust for their products and brand. The greatest NEW opportunity for Apple to influence consumers beyond the individual (music/contacts/calendar) and eCommerce (browser, apps) to the real world: Commerce. Apple’s core gap? How will it allow for investment, specialization and define interaction of aligned participants.

Commerce Platform

I’m assuming Apple will get its consistent A+ in hardware, and there will be a bundle of new capabilities in the phone and connected devices (ie iWatch). But commerce is between a consumer and a merchant/manufacturer. What “platform” will exist to assist Merchants? What is Apple’s role in mediating platform (and consumer) with the merchant (beyond the app store)? How will Apple enable 100s of other companies to invest billions of dollars to make its Commerce Platform the centerpiece of value orchestration? Beacons (see Apple iBeacon Payment Experience)?

Google, Amazon, Facebook, all organize millions of businesses, and billions of consumers. Apple is missing the business side… in a BIG way (remember iAd). From a network strategy perspective, Apple has created a consumer focused nodal platform (vs hub centered orchestration). They certainly have the opportunity to create a hub (ie iCloud), but their hardware centric organization may keep this from maturing (Lever 4). Thus Apple is 5 years behind Amazon, Google, Facebook in delivering value to merchants, and orchestrating Commerce. As I stated above, handsets are becoming a commodity, Apple’s new handset will not lead in screen resolution or battery life.. consumers will start to look at the VALUE it provides in connecting to other REAL WORLD businesses.

A January 2001 Harvard Business Review Article: Where Value Lives in a Networked World put it this way:

In more general terms, modern high-speed networks push back-end intelligence and front-end intelligence in two different directions, toward opposite ends of the network. Back-end intelligence becomes embedded into a shared infrastructure at the core of the network (cloud), while front-end intelligence fragments into many different forms at the periphery of the network, where the users are. And since value follows intelligence, the two ends of the network become the major sources of potential profits. The middle of the network gets hollowed out; it becomes a dumb conduit, with little potential for value creation. Moreover, as value diverges, so do companies and competition. …. In a connected world, intelligence becomes fluid and modular. Small units of intelligence float freely like molecules in the ether, coalescing into temporary bundles whenever and wherever necessary to solve problems.

where value lives

Apple’s strategic opportunity is to orchestrate these information bundles and consumer insight in a way WHICH THE CONSUMER CONTROLS. This was the focus of my previous Apple Strategy Blog: Apple’s Platform Strategy: Consumer Champion.  Unfortunately, it seems that Apple’s management team may be so hardware focused that they are missing this opportunity. Retailers like Nordstrom, Macy’s, CVS, and Starwood will show (tomorrow) how excited they are to work with Apple. But Apple needs a version of Intel’s IAL, that is focused on Retailers, Gimbal and Commerce.  Actually, I believe Apple’s gap here is so large that they must find a way to partner/acquire someone else in this space (not paypal). This is a $100B opportunity, and if Apple doesn’t move on it, it will be left competing on screen resolution, and hyper sensitive affluent consumers seeking data privacy.  (Note to Apple, one of my companies would love to pitch you a few ideas here).

My top strategy questions for tomorrow

  • Does Apple see strategic growth for iPhone as working in real world (Commerce)?
  • What level of investment/support will Apple give to “community”? How (IAL)?
  • Where does Apple “Stop” and partners “stop”
  • Apple’s organization.. anything changing? Is it still H/W dominated?
  • Apple’s phone is no longer differentiated by external features.. so what is different and why is it valuable to consumers? Merchants? (Can Tim articulate)
  • Does Apple see itself as the Consumer data/privacy champion? How do you monetize anonymity?
  • How will retailers work with Apple?
  • How will beacons be supported?

Security, Authentication and Anonymity

The biggest features we will see (IMHO) surround  how Apple is completely reworking the role of authentication and security in the platform (see iPhone 6 Secure Enclave, great article from Networked World). Apple’s proprietary mechanisms for “smart” card emulation (credit card, hotel door key, transit pass) will impact many, many industries (see Authentication in Value Nets).  Apple has ROCKED THE CART substantially with this capability. My guess is that they will demonstrate the obvious tomorrow with contactless card emulation (V/MA/Amex) and security keys (Starwood hotels). The much more sensitive area is virtualizing the GSM SIM. I believe the iPhone 6 is capable of virtualizing the SIM, I have no idea if they will demonstrate the capability.

From a consumer perspective, the big changes will surround Apple’s efforts to limit ad tracking will significantly impact advertisers (see Tech times ). I believe there is hidden genius here as they turn themselves into the ultimate consumer protector… both online and in the physical world.  They are the gatekeeper and orchestrator… the only entity that can know what a consumer is doing. Question is can anyone else work with Apple (and the consumer) to request that the gate be opened. For example, will Apple be the primary publisher (please send phone ID 187349387 the following message .. and Apple approves).

Payment Stuff

Most of my readers are in this area.. so sorry for saving this till last. I described how payments will work in the new iPhone back in March: Apple’s iPhone 6: GSMA’s NFC thrown “Under the Bus”. The key innovation in iPhone 6 should be credited to Visa and Mastercard: tokens. No longer will Primary Account Numbers (PANs) be sent in the clear as we have with EMV, and NFC today (I know, hard to believe.. see this blog for background). Now if someone steals your phone.. and breaks Apple’s unbelievable security.. they have a number.. that is COMPLETELY worthless.. they can’t use it anywhere.  At time of manufacture and OS load, Apple has loaded 6 tokens: Visa credit, Visa Debit, MA Credit, MA Debit, Amex, China Union Pay, (and perhaps a few backups).  These numbers are locked up in the secure enclave, they are 16 digits long and are BINs that processors can route to the appropriate network. The networks operate as TSPs (Token Service Providers) and map the Tokens to the Actual Bins. The primary key for the mapping is Token, plus Token Assurance Information, plus Phone ID.  Technically.. everyone of us could have the same exact 16 digit token and Visa/MA/Amex could still map the correct card based upon the other unique information.

My biased view is that the networks emulated what Google (under Osama Bedier) put in place 3 years ago as Google also operates this Token environment within their TXVIA acquisition. The big plus for Google is that the consumer can register any card they want, as Google does not charge the banks anything.

The biggest “surprise” over last 2 months is that Apple has squeezed 15-25bps from the 5-6 participating banks at launch (C, BAC, COF, JPM, Amex and perhaps WFC). The challenge for phone wallet companies has always been there is no economic model for them. Banks know that wallets will not work without cards.. for example Apple has little chance of success if Chase, Citi and Cap One don’t participate. Thus someone must have “blinked” and the others followed. No one wants to be left out of the Apple launch. Thus to participate in the Apple wallet, Issuers will need to cough up the fee to Apple. There are 3000+ issuers in the US.. so this may be a little challenging on the consumer side. I also have firm G2 that BAC, C and possibly WFC will enable debit cards (have no idea how these will be priced).

My G2 tells me that the Issuers refused to give on CNP interchange, so even though Apple has tokens and can sign them with same assurance information a “tap” at the POS will have a different rate than an eCommerce/mCommerce CNP transaction. One of my bigger unknowns is how Paypal will play in all this launch. I understand Apple is near launch of an “off Apple” eCommerce payment scheme (?EasyPay?).. will Paypal be the merchant acquirer and white label a PayPal like button (pay with “Apple”).

Strategically, Payments are moving to be part of the Operating System. What does that mean? See blog. My favorite payment quote is from Ross Anderson at a Federal Reserve meeting. If you solve for Authentication in payments, everything else is just accounting. This is a key example of how Apple has the potential to completely turn the world of payments upside down. For start ups this means that payment is no longer a specialized function, just as TCP/IP was not in Windows 95 launch.. and became part of the standard stack.. so are payments with iOS and Android. There will be no more Paypals in the future.. A key WIN for Visa, Mastercard and Amex is that Amazon, Apple, and Google are all of one mind: Let consumers pay they way they want to pay.

Arcane payment stuff. I’m more than a little interested in how Apple will actually get paid beyond the honor system. Card emulation applications have no idea who they presented the card to, or size of transaction. Visa/MA/Amex will be able to track transactions, but don’t know of any formal facility to pay a wallet company within the settlement stream, meaning that the issuers will be cutting the check based upon data that only V/MA and/or the issuer themselves have. So beyond the pure “TSP” role, is there also a role for wallet settlement in the overall V/MA scheme. Optimally, issuers would have one way to register cards for participation in any given wallet, this was a significant flaw in the NFC TSM card provisioning flow. It would be very smart for V/MA to take this on. In other words a new V/MA process for registering card/token scheme/Assurance information/approved wallet (ex HCE).

Merchant Acceptance

My view is that the MUCH larger problem for Apple is merchant acceptance. As I outlined in Apple Payment Experience, Apple did not want to launch within network contactless specifications, they wanted certification of BLE.  Apple presented its solution back in August of 2013 and the issuers went “nuts”.. going to V/MA telling them “You are going to let Apple own the PATENT for how a card goes from phone to merchant.. I thought that was your job”. Thus we see the press release on tokenization in Oct 2013 that came out of no where.  The networks did not want to fragment acceptance infrastructure and give merchants the opportunity to accept Apple BLE and not NFC.

There will be 2 or more merchants moving from MCX to Apple tomorrow, one rumored is CVS. Of course they could still accept MCX, but rumor is MCX agreement precludes other forms of mobile payment acceptance. Payment acceptance is no peripheral battle to merchants. This is a VERY VERY big deal and I don’t believe Apple understands it at all. Net margin in retail is around 2.6%, so taking a 225bp card is VERY MATERIAL. Retailers tell me that mobile is the #1 thing they think about in strategy, and they are quite confident that they are in the best position to influence consumer adoption and value creation (ala Starbucks). My hope is that Apple can work out its desired BLE experience directly with MCX retailers.. and let the merchant/consumer decide how all this works. See  Value Creation and Distributed InnovationStatic Strategies and the Rewiring of Commerce and in Future of Retail

How will the iPhone 6 Change Commerce?

Remains to be answered pending Apple’s platform support strategy. Where does Apple see its role in value creation? (Or does Apple just see a role in consumer protection?) The Google, Amazon roadmap is much clearer to me.. I don’t want to buy into a hardware company.. hardware is becoming a commodity, value orchestration is the $100B+ opportunity.

This is not a clean wrap up.. but my football game is on and I want to watch it.




Who do you Trust?

Google and Apple are working to secure their platforms, and assume the central trust role in authenticating the consumer. I’m much more interested in the Apple’s new developer APIs than I am in the fingerprint app. How will they begin to “lock down” applications, what new authentication features will they expose to developers? How will they allow consumers to provision sensitive data to other apps?

9 Sept 2013

(sorry for typos.. on the road and will proof later)iPhone-6-Fingerprint-Detection-And-Apple-Release-Date-Rumors

WSJ article today on Apple’s biometric led me to believe the mainstream press is “missing” it. As I outlined in Payments as Part of the OS, generically for all handsets in Stage 4 Value Shift, and specific projections for Apple in Apple and NFC – Part 2:

  • Handsets are becoming a commodity, cameras screen resolution, battery life are no longer differentiators
  • New differentiator is “Value Orchestration” across physical and virtual worlds
  • Apple and Google are best placed to perform this service, and do so today from “cloud access” to music, pictures, calendars, documents, to storage of personal information like cards, social,
  • The “KEY” to value orchestration is owning the customer relationship. Identifying and Authenticating the customer is the first, primary, service that must be owned by a platform.  What was a separate “Trusted Services Manager” in the NFC world has been co-opted by platforms which will take a proprietary route.
  • Authentication is of little value if the platform is not “secure” and offers no unique services to Authenticate. IOS and Android started life as relatively unsecure operating systems, where “control” over individual app access to phone data was “regulated” by testing vs. enforced in platform security.NFCActors

Platform Future

Google and Apple are working to secure their platforms, and assume the central trust role in authenticating the consumer. I’m much more interested in the Apple’s new developer APIs than I am in the fingerprint app. How will they begin to “lock down” applications, what new authentication features will they expose to developers? How will they allow consumers to provision sensitive data to other apps?NFC Change

Hardware is evolving to software. From NFC to the SIM. Once security is in place, there is no reason Apple could not release a version of their phone with SIM virtualization/emulation. Could you imagine having 2-5 options at any given instant, using whatever carrier has best coverage and least cost given your current location… Perhaps even competing w/ Wi-Fi ? Of course this would destroy carrier subsidies.. but perhaps it may be worth buying an unlocked phone.. and carriers become dumb pipes competing to deliver the best service. There are a few regulatory roadblocks in the way.. but I am painting a future view that is already occurring in some markets (See dual SIM phones in India).

The implications for Android are much more significant than for IOS, given the number of Telecos that have leveraged Google’s baseline Android to create customized versions. If Google locks down Android with a new secure OS, they will be in a position to provision Google applications (Maps, mail, search, …), identities, and cloud based services (drive, Google Now, Commerce, …).  The “freeware” model could still exist, but without the cutting edge Google services it becomes a COMMODITY HARDWARE game.

Trust – Everyone wants to play

What we will see at Money 2020, is that there is an all-out war going on for the Trust role: Banks (see Tokenization), MA/V, MNOs, Samsung, retailers… everyone realizes this is the “key” to unlocking future value in the convergence of the virtual and physical world.where value lives

Bank strategy seems to center on control of existing networks. What they don’t realize is that the harder they work to build barriers to entry, the greater the value of finding ways around them. A public example is Google’s acquisition of Zave Networks in 2011.  Prior to taking your credit card at the POS, there is another settlement process in place.. one around coupons (which are a legal form of tender). In this coupon environment, P&G or General Mills’ accounts are debited and the consumers account is credited. In this financial settlement system, there is no limit on what accounts can participate… This example perfectly represents the “innovator’s dilemma” where a “good enough” network supplants an incumbent as the nature of competition changes.

I was with a top 3 bank CEO this year, who was confident that they would win the MCX business. I asked why. Response was “we have these Retailer’s investment banking business and handle most of their processing today”.. My response “when did you bring them customers or help with them compete”? He just did not understand the nature of his competition, it was not about cost of processing… the NATURE of competition in payments is changing.  (See Retailer as Publisher)

Who do I trust?

I’m an ex banker and can tell you that Banks take the trust role very seriously. They are regulated and monitored.. I had to take 40 online tests a year to ensure I understood compliance, regs, …etc. What a nightmare! Is it any wonder why this environment is not ripe for innovation. Can you imagine what the CFPB would do to a big bank when it had customer data not related to an account? It would have to explain why they had the data, how they obtained it, the customer agreement terms, what they would do with it, the safegaurds around use, storage, retrieval, how they planned to make money from it..  Its like your mother in law sitting next to you everyday asking you what you are doing.  I certainly Trust a bank.. but they will never ever get anything done here.  They need partners, but they want to dominate the relationship.. The country w/ most advance model of Bank led “trust” authority is Korea (see link).

I love Google and think everyone of their employees is working to “do no evil”. They are the most well meaning and least “nafarious” fortune 50 I have ever worked with.. but they are use to getting data for free and selling it back in services. Consumer safeguards seem rather absolute.. and their data stores are so massive and intertwined its hard to pull it apart, particularly when a “consumer” relates to an account(s) and device(s)… Google knows things about me that I have not specifically permissioned them for, They have the capability to be secure, but few current services where that is an imperative (payments, Google Drive).

Apple is from another planet, there is just no one else like them in keeping secrets. How do they do it? Yes I trust Apple.. they only know what I tell them…. I like this model.. If I added healthcare info to my iCloud account.. I have confidence it would be secure.

MNOs. This is a breakout business for them (See KYC $5B opportunity). GREAT authentication means physical verification of customer/credentials. I believe US MNOs are in a position to deliver this service through Payfone… but it must be integrated to local physical distribution channels for a “new” account type. This is where digital signatures could really take off… from signing mortgage documents to account applications..  I believe MNOs are best placed for the Trust role because of their physical distribution channels and knowledge of consumer.  Forget about ISIS.. if you own authentication everything else is dependent on you.

Side Note: Paypal is getting far too much attention

They had a slew of new product releases last week. All focused on “convenience” not on COST or customer acquisition. As I outlined.. Paypal is nowhere in off-ebay mobile payments ($1B – see my 10k Breakdown), they are under attack as processors like FirstData refuse to route their physical payment. The only prospective customers of Paypal are services, or Branded retailers that restrict distribution, as the eBay marketplace encourages price competition for distributed CPG products. Jamba Juice, Dunkin Donuts, and Under Armor are example prospects.. Consumer adoption is driven by frequency of use.. If Paypal can’t make traction in Grocery, Gas or Transit their prospects are very bleak.

From a network perspective Physical POS was NEVER PayPal’s focus.. it is not what they do, or why their current consumers and merchants use them.

Apple and NFC – Part 2

Could the new iPhone run Visa Paywave? sure.. however it may need an add on antenna.. my guess is that NFC in the next iPhone was not built around supporting someone else’s project (Visa/Banks) . This is the paradigm which must be broken. Don’t think of NFC in terms of payment, it is just another radio

Previous Blog – Apple and NFC 

Well, I was right last year… a lone voice in the wind with BGR. Let’s see if I can repeat.

Prediction: Apple iPhone 5s/6 will have NFC.

Caveat.. it will operate MUCH differently than what you think of todayExposure: 000 : 00 : 00 . 156%Accumulated%=0

Hardware? My bet is  Broadcom’s BCM43341 or BCM20793 chip 

Broadcom has launched the industry’s first quad-combo chip. The BCM43341 combines NFC, Wi-Fi, Bluetooth and FM radio on one chip and, says Broadcom, “offers OEMs unmatched size, power and cost advantages.”

A second new product is a single card solution that pairs a BCM20793 NFC controller as used in the Google Nexus 4 with an 802.11ac (5G) WiFi radio and is aimed at high end mobile phones and devices.

Broadcom’s BCM4334 combo chip (dual-band 802.11n, Bluetooth 4.0+HS & FM receiver) is already in the iPhone 5, and other versions in  iPad  yet other possibly extending into Mac  success as well. What I find most interesting is the BC 2079x family of “stand alone” controllers. Broadcom has also contributed its NFC software stack to the Android Open Source Project. A generic controller with software stack which manages both secure storage and multiple radios in multiple frequencies. This is NOT the NFC which MNOs and Bank’s envisioned (see SWP).


This is the billion dollar question.

My guess is that Apple will focus on creating a new security and authentication infrastructure on the phone, and in the cloud. This infrastructure has both software and hardware components, and will change the way other “apps” interact with customer data, customer sensitive information (ie location) and the OUTSIDE WORLD.  For example, today apps that require location must adhere to policies consistent with “location services“. Think about extending this type of control over your credit card information, name, address, e-mail.. what apps get access to which data? Now also think about this new service which can identify you are who you say you are (identification) which will be present with AuthenTec capabilities


Apples new lightening connector extends the iPhone security “platform” from the phone to external devices via proprietary cables which must contain embedded Authentication chips . I bet the folks at RIM just fainted reading this.. RIM built the most secure mobile platform in the world, with secure integrated corporate e-mail.. no developer community, “average” user experience.. and a completely STUNTED internet browser. Apple is going after security last.. after they have everyone hooked on the platform. Apple is completely brilliant, it took a “good enough” approach to security to build user base.. now it is adding services and security. .

All of this is completely consistent with what we see in Patents, acquisitions, evolution, phone architecture, … and Apple brilliantly evolving the company into orchestration as I outlined in blog on Stage 4 Value shift.

Could the new iPhone run Visa Paywave? sure.. however it may need an add on antenna.. as the design of NFC within the iPhone was not built to around supporting someone else’s  project (Visa/Banks).

where value lives

This is the paradigm which must be broken. Don’t think of NFC in terms of payment, it is just another radio.. actually it has 3 parts.. the radio, controller, and secure storage.. each of which can take on very different roles in a new Apple architecture. Why transfer data view NFC/ISO 14443 @  424kb/s when Bluetooth V2.1 is 2.1 Mbit/s and Bluetooth V4/V3 is 24Mbit/s… (60x faster).

I predict all of the phone platforms will spend whatever is necessary to retain ownership of customer and customer information. All commerce and financial services are dependent on consumer Authentication… it is the lynch pin for retaining the “hub” role in value orchestration and future margin..

Handset manufactures (Apple, Google, Samsung, …) are flipping the NFC value equation. From a SIM based SWP approach to an multi functional embedded approach with integrated consumer authentication. I’m amazed that there is not more press here. The implications are tremendous.

See previous blog KYC – $5B opportunity (I may have guessed low).