Friday, August 07, 2009

Apple Considering a Paypal Competitor Using iTunes Store Accounts? No, But Here's What They Are Doing.

MacRumors summarizes a report from Silicon Alley Insider:

Apple may be considering creating a competitor to eBay's PayPal online payments system, allowing users to make purchases at third-party sites via their iTunes Store accounts.

Wall Street gossips tell us that Apple executives have dropped hints suggesting the company is considering creating a service that would allow iTunes Store account holders to use those accounts to make purchases on participating third-party sites across the Internet.

Remember, this is Wall Street gossip and not confirmed news. But you want to be in the loop, right?

The report also notes that it is not clear what Apple's motivation for pursuing an online payment service would be, given the company's history of focusing its ancillary services on driving hardware sales. For example, Apple has primarily viewed the delivery of third-party content through iTunes (music, video, and applications) as a "break-even" proposition to drive sales of its iPod and iPhone hardware.

While the source did not elaborate on what that reason might be, the report speculates that Apple could be eventually planning to use iTunes Store accounts (and thus iPods and iPhones) for offline purchases, or perhaps the company simply views the online payments industry as an easy one for it to penetrate to help diversify its business.

I know where all of this stems from ... Apple isn't looking to make a Paypal competitor ... which is a HUGE problem customer service-wise (being a Quasi Bank). Apple is actually negotiating with retailers to allow iPod/iPhone/Accessory purchases and allow in store kiosks for app & music downloads. Right now, one can only buy apps and music from one's home computer. Apple would like to make deals with distributors and retailers to sell physical objects ... in turn, Apple would like to be able to sell things like the Tom Tom GPS Adapter for the iPhone in it's store. Right now ... you can't do that. If all went as planned and from what I've heard ... I suppose you'd buy the adapter and Apple would allow immediate download of the app and ship you the adapter in the mail. I'm sure Apple would love to market cases and sync cables and chargers through the app store as well.


Anonymous said...

What you say certainly makes more sense, but, I'm fairly certain you can buy music and apps directly on your iPhone.

As for the Tom Tom situation... I had wondered about that. How will hardware+app bundles work.

FYT said...

I'm sorry about the confusion ... I meant that one can currently only make non tangible app and music purchases ... They want to essentially turn iTunes gift cards into a form of debit card so accessory and retail purchases could be sold through the store as well. Another instance ... HP could bundle a wireless printer with their iprint app ... You would download the app and pay for the printer with an iTunes gift card / iTunes account ... The printer would be shipped to you

Anonymous said...

Ahhh! This makes sense, and it's something that's always bothered me. I can get an Apple giftcard and buy hardware, but I have to buy an iTunes giftcard with it to be able to buy music. It's weird. And also I've wanted to "gift" someone from my iTunes account so they could buy an accessory, but that's not possible.

So ya, your idea makes a lot of sense, and I hope that's what they do.

Paul Douglas said...

I think we're missing a possible third angle on this. Allowing people to make online purchases via their iTunes accounts would streamline online shopping on iPhones...

Speaking of which, on an unrelated note, I finally have mine and I add my voice to the "they're awesome" perspective.