I think the bigger picture here is being overlooked.
Apple IS primarily a hardware company. However they have struggled of late to continue being profitable simply riding iPhone sales.
For the past couple of years every financial analyst I have heard speak on this topic has said the same thing - “Apple must expand into services.”
To that end, I see the AppleCard as a stroke of genius…and perhaps the most well thought out product developed under Tim Cook.
Will they earn more money by being in the “credit card business”? Probably so, but that is the icing on the cake. I don’t think their primary goal is to be a credit card company.
The real genius behind this is developing a product that increases the likelihood of customers staying in the Apple ecosystem.
Let’s face it, there is a LOT of churn in the market these days as manufacturers are constantly trying to “one up” each other. But people are not as likely to change credit cards as they are to chase after the sexiest new electronic gadget.
By having an AppleCard, you are choosing to use a product which is designed to keep you using the iPhone/iOS in the future. Since the card is designed and deeply embedded into iOS and is almost, if not completely, unusable without an iPhone, it may serve as a motivation for those who may be considering switching to an Android to reconsider yet another benefit of the iPhone they would lose.
And if a customer stays with using iPhone/iOS, they are even more likely to stay in the broader Apple ecosystem because the entire system becomes so much more powerful and convenient together than any single device is on its own.
Eight years ago I bought my first iPhone. I wasn’t interested in any other Apple product at the time…and honestly wasn’t even all that sure about the iPhone. But I quickly came to love its simple reliability.
But over time, I added an iPad Air. Later I decided to get the larger iPad Pro. Then when I wanted a streaming TV box and was considering a Roku…well, I bought an Apple TV instead.
And so it went. Finally, four months ago, I bought my first Mac and am now completely inside the Apple ecosystem…Apple Watch, HomePod the works! In spite of the very loud (and justified) complaints from those who have had problems with their Apple products, for the majority of us, “They just work!”
That simple synergy is what people love about Apple…and AppleCard is one more product that embeds into and further strengthens that synergy.
This isn’t about having just ANOTHER credit card. It is about developing long term customer relationships.
Honestly, I ordered the Titanium physical card…but I doubt I ever use it. For only 1% cash back and the hassle of dealing with carrying yet another card, it’s not very convenient for me. But, it is EXTREMELY convenient and private to use Apple Pay and earn 2% cash back! And with ApplePay finally being widely accepted in my city, that is exactly what I will be doing!
The card won’t be for everybody. But for the person who is happy and plans to stay with Apple over the long term, this is a very nice addition that further enhances the power and convenience of using their iPhone.