Why Apple Will Become a TRILLION Dollar Company
After seeing Apple’s recent launch of their new iPhone, Watch and Apple Pay, they will undoubtedly be at the trillion dollar level before any other company in the world.
Apple Pay Will Add $100B in Market Cap
Tap your phone or watch to a base station and pay with one click. You sign with your fingerprint reader.
There are no credit card numbers stored into the phone so the person at the counter can’t steal them.
People were doing this five years ago in Tokyo and Seoul.
Why did this take so long to make here? Does it matter?
Apple gets credit for taking something ordinary in Asia and making it “extraordinary” in the U.S.
Apple Watch Will Add $100B in Market Cap
The Apple Watch will cost $75, maybe $100, to build. It’s got a $349 price tag — to start.
Apple will make at least $250 for the base model. 20% of iPhone users will buy it in year one. 25–50M sold in year one, easily. $10B in cash money.
Profit. Bank it, baby.
Oh yeah, they got one made of gold and you know they will launch partnerships with brands like Gucci, Prada & Jay Z.
Those will be blinged out in diamonds and precious metals and have $1k-5k in profit. They’ll sell a couple of million of those per year as well.
And you’ll be able to replace the chips on the inside (a first for Apple), so you can feel fine about your 50-year investment in a watch that you’ll give your kids.
iPhone 6 Plus Catches Apple Up
We’ve all been dogging Apple for not getting this product out two years ago, when Samsung started taking high end users from their ecosystem with the Note.
That absurdly sized phone, or phablet, is LOVED by geeks who gave up their iPhone for it.
They love to torture Apple users with it and now they’ll all come back to the iOS ecosystem with their tails between their legs — and the rest of us can’t wait to bust their chops!
Samsung’s biggest advantage over Apple was the larger screens and that just went “poof!”
Apple was religious about sizes because a) Steve Jobs and b) they didn’t want to torture iOS app developers with adapting their apps for multiple sizes.
Steve would have changed his position on sizes, and convinced us all that he supported the idea early on.
Apple is not over.
Apple is as strong as ever. Today proves it.
U2’s Free Album is Beats By Dre Teaser
Tim Cook is our charming uncle who we can’t wait to spend time with, and Bono fawned over him as such.
Tim was so proud of U2 and excited to help them get their album to the rest of the world and capture the record for the largest distributed album of all time.
I’m guessing Apple paid $10–30M to get the exclusive rights to give every iTunes user a copy of U2’s new album. I mean, U2 sold 1.1M copies of their album “No Line on the Horizon” from 2009, so at $8 net (not retail) price that’s $8.8M.
Why not reach 727x your audience and get one check from Apple?
Oh wait, that’s a new f-ing business model. Apple could simply buy the exclusive rights to the top five albums every month for $20M each.
That’s $1.2B a year for 60 albums — or the cost of selling 4.8M watches with a $250 profit margin.
So, why not do that? That’s probably what the Beats by Dre model is all about: Apple as a label.
Just buy the albums and promote the hell out of them.
Everyone wins: free music for us, another selling point for Apple & artists get absurd exposure through sampling.
Ticket sales will certainly pop, as folks don’t want to go to the concert without knowing the lyrics right?
Apple saved the album today!
Startups Killed: Pebble, FitBit, Voxer…
Pebble and Fitbit I love you. I love all founders who innovate and create amazing products, but when Apple comes into your market like they did today, well, even Nike gets out of the way![Nike shut down their health band last April]
Apple or Google/Nest should buy both companies now. Get those teams and step up the fight with Apple.
Back to Apple Pay
If iPhones did just 10% of the revenue of movie tickets sold in the U.S. via this method, it would be $1.2B of the $10.17B spent in 2011 on tickets.
That’s a billion in pure profit. (imagine what that number is 3 years later)
Remember, Visa and American Express still get their take and they still handle all the billing.
Apple is just charging a convenience tax that would be well worth it to internet brands and retailers.
The biggest hurdle in buying movie tickets on your phone is trying to type the characters it takes to enter your name, expiration date, security code, credit card number and zip code.
If iPhones accounted for 1% of restaurant sales, that would be $6B of the $604B spent in 2011.
Again, pure profit. What if they get 2%+ of restaurant sales — that seems possible to me? $15M in pure profit.
Start doing the math and it gets scary: Apple would have massive margin, and vendors who didn’t accept iPhone payments would be at a massive disadvantage the same way folks who didn’t take credit cards were in the 70s and 80s.
Apple is creating this effect with their NLP-lead marketing.
Not writing this post myself (so all credit to the original authors in the 2 links above) but I found it so incredibly powerful that Apple is building a world around them, not themselves around the world.
Hence why I took this opportunity to highlight the important parts of both articles.
It’s going to be an interesting 12 months till their next launch…