Apple's Powerful Trojan Horse: The Ecosystem

With tremendous fanfare, Apple introduced new hardware and services this week. Among the offerings: larger iPhones, a new method of paying for purchases called Apple Pay, and a brand new product category — the Apple Watch. On this last announcement, Apple CEO Tim Cook was completely unable to contain his joy. And why not: this is the first Apple product that truly stamps his tenure as CEO in a way that most closely resembles his predecesor.

If you've never seen Tim Cook this happy before, it's because he never has been.

As usual, it didn't take long for the press -- the tech press specifically -- to start panning Apple's announcements. Mashable featured a writer who declared that he already knew he wouldn't be buying an Apple Watch. Business Week headlined "These Top Designers Aren't Impressed". Engadget: "Much Ado About Nothing". San Jose Mercury News: "Apple Watch Underwhelms". LA Times: "Don't Call It Stylish".

As usual, it didn't take long for the press -- the tech press specifically -- to completely forget that their opinions — good or bad — don't matter. What they forget — what they always forget because they're too busy trying to come up with a strong point of view — is that consumers are just ordinary people. And ordinary people don't, as a general rule, read technology reviews before buying their electronics: they make purchases based on a gut-level instinct. Either the product attracts people to WANT to use it or it doesn't. 

Apple's mastered the art of making devices that appeal to hundreds of millions of people, not to journalists or tech bloggers. And, because they now have a history of reliably delivering on this front, Apple is the most valuable company in the world. With that position comes a massive user base who actively depend upon it's ecosystem of products and services. 

That last point - the ecosystem - is Apple's trojan horse that most bloggers and journalists seem to have missed in the wake of Apple's September 9th announcement. Tim Cook said as much himself.  Go back and watch the event. Right around minute 56, Apple's CEO says the following, just seconds before introducing the new watch:

"We love to make great products that really enrich people's lives. We love to integrate hardware, software and services, seamlessly. We love to make technology more personal and allow our users to do things that they could never have imagined."

Bingo. 

It doesn't matter if the new phone isn't big enough, powerful enough or cheap enough. It doesn't matter if the new watch doesn't sell 95 million units in the first year because it's too much glitz, too much money, and not enough substance. While Apple's hardware is, in and of itself, well-engineered and very polished: the hardware wasn't the big announcement.

The big announcement was, as it always is: the ecosystem, in this case, the triumvirate of the new iPhones, Apple's iOS running the Apple Pay software, and a massive partnership with credit card companies and merchants nationwide. The big announcement was that Apple was going to do for using credit cards what it did for buying music: making it fully digital, making  more secure and making it really, comedically easy.

Now all the parts are in place:

  • Apple designed the new iPhone6's to come with a special NFC chip.
  • Apple designed the Apple Pay app, facilitating making credit card payments using the NFC chip.
  • Apple created partnerships with retailers and services who will provide Apple Pay availability during check out.
  • Apple partnered with six major credit card companies to allow the payments to be accepted and processed.
  • Apple integrated touchID functionality into all new phones to use a unique, biometric identifier — your fingerprint — to authenticate that it's you making a purchase with your credit card creating, hopefully, a more secure and hacker-proof method of payment.

All you and I see is the end result: buy something, take out your phone, wave it, place your finger on the home button and.... you're done. It's simple, elegant and powerful. That's what Apple is selling and that's what Apple has always sold: the experience. Average people who already have an iPhone will love this. And they'll love it enough to buy a new iPhone 6. And now, maybe, also an Apple Watch. 

And, since Apple receives a profit each time a customer uses its experience, you can be sure the company's profits will continue to soar. And, with those profits will surely come more ecosystems that make life easier: medical, scientific and artistic. Who knows what the future holds?

Well, actually: Apple does. They're building it.