In an event held on Oct 16, Apple (AAPL) announced that the much-anticipated mobile payment system Apple Pay will become operational from Oct 20. The company also unveiled a new thinner iPad Air 2.
Apple Pay will debut as part of iOS 8.1 software update. The new mobile payment system will allow iPhone 6 and 6 plus users to pay bills through Apple’s Touch ID application at any wireless pay terminal.
The Touch ID functions through finger print sensors or a one-time password for each transaction along with device-only account number and the near-field communication (NFC) chip. Dutch chipmaker, NXP Semiconductors NV, is supplying the NFC chips to enable iPhone users to pay through touch.
NFC refers to a short-range high frequency wireless communication technology that allows the exchange of data between devices. Apple Pay is supposed to be more secure than the existing payment systems as it will not store any data related to the transactions made via the system.
Apple announced Apple Pay along with iPhone 6 and iPhone 6 plus in an event held on Sep 9. Currently, Apple Pay will be available at selected retailers like Walgreen’s, Bloomingdale's, Macy's, McDonald's, Staples and Whole Foods. Major payment networks like American Express, Visa and MasterCard (MA) will also support Apple Pay.
Banks including JPMorgan Chase, Bank of America Corp and Citigroup have also agreed to integrate their cards into the system. Since the announcement of Apple Pay, the company has added 500 new banks to the service, which significantly expands the purview of the system.
We believe that Apple Pay will benefit from Apple’s brand recognition among consumers, superior security feature and strong support of the financial institutions. Apple Pay will be a befitting reply to rival Google’s (GOOGL) Wallet, wireless carrier-backed Isis and eBay’s (EBAY) PayPal in the long run.
Apple’s new, thinner iPad Air 2 carries Touch ID, which is used in iPhone. The company also upgraded the isight camera. The new device’s 16 GB version is available for $499. Apple also unveiled iPad Mini 3 that also carries Touch ID and is priced at $399.
Of late, tablets have been experiencing a slowdown in their demand especially with the advent of large-screen smartphones. Apple’s iPads have also witnessed a drop in its sales in the last two consecutive quarters. Whether these new updates spice-up iPad sales will be something to watch for, in our view.
Apple also launched new iMac with Retina 5K display powered by OS X Yosemite and is priced at $2,499. We believe that a resurgent personal computer market bodes well for Apple’s new iMac, going forward.
Currently, Apple has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment