Apple Inc. is a multinational company in America with headquarters in Cupertino, California, known for developing, designing and selling online services and computer software. For many decades, Apple Inc. has remained at the forefront of technology innovation. The innovations have positively impacted Apple Inc. increasing its competitive advantage in the IT sector. The information technology industry faces varying disruptions due to technological advancement. This has led businesses to pressures and overturning the business model, in turn, resulting in better markets countering the market disruptions. Apple operates in a stiffly competitive industry with frequent disruptions but the company has been leading direct competitors like Samsung, Microsoft, and Google. This work will explore how Apple Inc. has adopted new technologies to maintain a competitive advantage.
The success of Apple Inc. is based on the fact that the company has large and loyal customers. This places Apple in a position where they can just launch any product and attract high sales. Johnson et al (2012) explains that the market positioning of Apple is based on its strong elite status in the technology industry. The elite status provides opportunities for a customer franchise extension where Apple can disrupt the market due to customer loyalty. The extension idea for Apple is the introduction of a virtual credit card, Apple Card or Apple credit card. The virtual credit card will be included solely in the iPhone Wallet app. Other products in this line include Apple Card that does not require a signature, has no expiration date, CVV security code, or card number. Apple introduced Apple Pay years ago and Apple users can use the virtual card to make payments within minutes.
The product will increase customer experience in a healthier financial lifestyle. Garver (2015) explains that Apple will employ an easy-to-understand interface where color codes will be employed to illustrate recent transactions. Another component of the Apple credit card is the ‘Daily Cash’ feature where users enjoy 3% of cash on Apple purchases while 2% on other purchases. The success of the Apple credit card is based on the success of Apple Pay which is accepted by 70% of businesses in America. Better, there is a higher customer base all over the world. Customers using this brand will benefit as they are late fees, over-limit fees, international fees, and annual fees.
Due to the security concerns, Apple Card is the first virtual card containing biometric protected (Face ID or Touch ID) rotating security code. In case one loses their gadgets, the money is protected using the rotating security code. A person cannot access the finances without finer or face identification. Therefore, the brand extension of the Apple Card will increase the financial lifestyle of the users.
Apple Inc.’s mission is to provide, “best user experience to its customers through its innovative hardware, software, and services” (Chikhale and Mansouri, 2015). The introduction of the Apple Card in alignment with Apple’s mission as the company’s main aim is to improve its user’s experience. Apple’s credit card will help Apple clients achieve a “healthier” financial lifestyle. Apple had introduced the Wallet app and the Apple Pay in their gadgets. The introduction of a virtual credit card will enhance the experiences of Apple users. From Apple’s mission, the company aims at best user experience, innovative hardware, and innovative software and services.
The aspect of user experience precedes other structures meaning the product design is more valued than the engineers. However, the aspect of innovative hardware is critical as Apple products are well-crafted with more attention to details. Chikhale and Mansouri (2013) explain that Apple leverages the software and services aspect which increases the value of its products. Based on its mission, Apple introduced the Apple Card to make the experiences of the users better.
The target market for the Apple Card is persons with iPhones. The majority of people have embraced the paperless form of payment. Apple Inc. targets this market as the mobile bank is on an increase through the introduction of virtual card which is more secure. The target market comprises business persons who rather than transacting with cash would prefer this form of payment. The segment for this form of extension is the millennial that are more open to new forms of payment. Moreno et al (2017) explain that 63% of millennial do not own credit cards but due to technology advancement, this population embraces mobile wallet solutions. Besides, the debit card compatibility will influence the use of Apple Card among the millennial.
Apple Card allows the users to be more intentional about using Apple Pay and in particular the millennial. The daily cash show is helpful to clients as it promotes the psychological planning of the user. This is a unique element of the virtual card that is unavailable in other gadgets including Apple Pay. Apple Card allows users a 3% bonus on al Apple products they purchase and 2% on non-Apple products. Thus, the user can transfer their subscriptions and iTunes pay to Apple Card to enjoy the benefits which will increase the ability of users to see Apple as a market place for services and commerce. Apple Inc. has increased the number of subscriptions to approximately 420 million subscriptions where Apple users can benefit from the 3% benefits from Apple purchases.
The Near-field Communication (NFC) has increased the adoption of contactless technologies which led users to search for alternatives to plastic cards. Apple Inc. entered the growing market where instead of introducing a brand for profits, Apple introduced this service to boost customer loyalty which indirectly boosts their sales. Johnson et al (2012) explains that Apple Inc. adopts systems that encourage their customers to stay and invest in their ecosystem. For example, the introduction of the Apple Card not indirectly increases the sale of Apple subscription through the 3% benefit initiative for every product.
One ethical consideration is the protection of non-public information of the users which is stipulated in section 501 of GLBA where they require users to protect security and maintain confidentiality (Bajarin, 2019). This includes identifiable information which consumers provide to banks during registration. Apple through the virtual card protects the personal information of the users through biometric identification where only the user can access their accounts and not third parties. This is facilitated by secure data storage of privacy information by ensuring that public information is not stored in the mobile.
There is a chip attached to the card that allows the storage of information in the cloud. This increases the security and safety of the user’s information and money. Apple should not sell users’ information to the third party but should allow the consumers to control tracking programs like the location. Hence, Apple must review and completely understand the features and functionalities of a virtual card to increase the user’s experience.
Bajarin, B. (2019). Apple’s Strategy with Apple Card. Techpinions. Retrieved from https://techpinions.com/apples-strategy-with-apple-card/57498
Chikhale, M. M., & Mansouri, M. (2015). An agile and collaborative framework for effective governance to enhance management in large-scale enterprise business systems: The case of Apple Inc. Global Journal of Flexible Systems Management, 16(3), 283-293.
Garver, P. (2015). Apple Inc. and Tax Avoidance.
Johnson, K., Li, Y., Phan, H., Singer, J., & Trinh, H. (2012). The Innovative Success that is Apple, Inc.
Moreno, F. M., Lafuente, J. G., Carreón, F. Á., & Moreno, S. M. (2017). The characterization of the millennials and their buying behavior. International Journal of Marketing Studies, 9(5), 135-144.Selvadurai, J. (2013). Legal and Ethical Responsibilities in Mobile Payment Privacy. International Journal of Scientific & Technology Research V, 2(6).
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