Walmart SVP Publicly Argues with Visa Executive over Apple Pay

 

Walmart SVP Mike Cook (MCX and CurrentC was his idea) used the Q&A portion to publicly grill Visa's Global Head of Innovation (interesting title). Basically, Cook didn't like that Visa was being so complementary to Apple Pay boosting about it's lower card-present rates (applies when a card is actually being swiped) when such a large portion of brick-and-mortar (in-store) purchases already qualify as card-present.  

The video is embarrassing. It's not too common to see such a public confrontation between two executives. Recode's take away is that Walmart will never accept Apple Pay. I disagree. Companies change their minds on large corporate initiatives all the time. The video does show what the Apple Pay vs. CurrentC boils down to: principles (and we know how hard it is to move past principles). Mike Cook has been beating the MCX drum for years. A few months of Apple Pay success won't change much for Walmart. I wonder though about the fringe MCX members; the companies who don't have as much invested in MCX and CurrentC. Will they jump ship in 2015? It remains to be seen.  For Apple (who has skin in the game as a successful Apple Pay launch has immense tangible and intangible benefits), the battle is being fought day-to-day, bank-by-bank, retailer-by-retailer.

Apple Supplier Pegatron to Boost Cap Ex in 2015

Event: Apple Supplier Pegatron To Boost Capital Expenditures by 50% in 2015 Likely due to iPhone 6 and 6 Plus

I have a pretty simple policy when it comes to Apple supplier news.  1) Don't focus on the details, 2) Look for actual numbers and not just year-over-year percentages, 3) Put more weight on larger suppliers, especially the assemblers (those at the top of the supplier chain).  As a reminder, Pegatron was rumored to have won a contract for assembling somewhere between 30-50% of iPhone 6 units, which traditionally had been Foxconn's expertise. Judging by Tim Cook's comments during last month's earnings call and the popularity of the larger iPhone 6 Plus, I would assume Pegatron's capital expenditure boost represents new iPhone production capacity coming online versus simply reshuffling the deck between Foxconn and Pegatron. Demand is still outpacing supply in the U.S., and it's even worse in China. Apple will sell every iPhone it can produce this quarter so the rush is on to ramp up production. 

 

 

 

Microsoft Band Review Hits A Snag

Event: WSJ reviews the Microsoft Band, Microsoft's foray into wearable technology.  Basically, the device didn't work leaving the reviewer with nothing but negative things to say about the device and Microsoft's intentions. 

This review stood out to me, not because I'm interested in the Microsoft Band, but because of how negative a tone it had toward the device (and Microsoft). Very reminiscent of the old Microsoft that we all are still familiar with.  I don't think Microsoft has passed the litmus test for this device - why does it exist?  For Apple, Apple Watch hits a couple of "why it exists" points: iPhone notifications, a new form of communication, Apple Pay, personalized watch-faces (shocking how many people have mentioned this to me), and of course third-party app support. 

Taylor Swift Flees Spotify

Event: Taylor Swift pulled all of her songs from Spotify. 

We have been hearing the theme that artists aren't getting paid using Spotify.  Every once in a while someone will come out and try to refute the claim but to no avail. Paid downloads on iTunes have been on the decline, while paid streaming has been on the rise.  This Taylor Swift news reinforces the theory that Spotify isn't about making money for artists, but rather building exposure for content creators. If other big-time musicians leave Spotify, one has to assume the streaming model is put into question. 

MCX is Doing More PR and It's Just as Bad as it Sounds

Event: MCX gave an interview with USA Today. 

It's becoming clear that MCX was caught off guard by the sheer velocity and passion of backsplash aimed at the retailer consortium following the Apple Pay launch. While MCX has tried to do some PR in the past, the result has been nothing short of a disaster with confusing and conflicting answers. It seems that MCX is learning as they go. I continue to think MCX's fundamental purpose was made void by Apple Pay's ease and security focus. When Apple brings loyalty programs to Apple Pay and retailers have the ability to track purchases and know more about who is shopping in their stores, I have a hard time seeing retailers stick with CurrentC. In the meantime, we have a waiting game, and I assume more PR opportunities for MCX.