Apple appears to quickly be morphing into a fintech company in 2022, after a string of launches and one notable acquisition, but a decade and a half since its launch it’s worth note you wouldn’t have the digitalisation of finance without its most successful product.
Image source: Pexels/Caleb Oquendo
Think back 15 years exactly. 29th June 2007. What were you doing?
No, I can’t remember either.
If you were a superlative early adopter of technology then you may well have been queuing to buy – in person, of course – Apple’s latest product to hit the shelves. It was called the iPhone. You may have heard of it, perhaps you even own one.
Chances are, over the past decade and half your financial life has increasingly moved to your iPhone (or similarly inspired smartphone) and ever-increasing array of clever fintech apps.
The financial crisis of 2008 and the knock-on effects of tighter regulation, a venture capital boom, cloud computing and software eating the world have also all played their very important parts, of course, in the fintech story. But you can’t underestimate the effect of the iPhone on our financial lives.
To be an iPhone user is to be in a global club of about one billion members today. While in 2007 1.39 million original iPhone units were sold, last year Apple moved 240 million units.
‘’The release of the iPhone sparked a revolution in our everyday lives, with smartphones becoming the home computer in the pocket – indispensable to millions of people around the world,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
The App Store, which followed a year after the iPhone’s launch, was where things got interesting for the digitalisation of finance. Today there are about 2.22 million available apps for iOS and a huge and ever-increasing number are related to your finances.
“The app store has become an engine of growth for ingenious software applications around the world, and still creams off a lucrative 30 per cent revenue for developers earning more than $1m through the app store on an annual basis,” Streeter said.
Financially focused apps have been one of the biggest areas for development in the past 15 years with the past five years, in particular, giving rise to countless digital challengers including neobanks, robo advisors and stock trading apps.
“There has been a surge of interest in investment apps during the pandemic, as locked down consumers turned to trading as a new past-time, to invest savings being built up and to try and benefit from stock market volatility,” Streeter said.
In 2021 there were globally 230 billion new app downloads. 5.9bn of these were finance apps, according to data.ai, formerly App Annie.
Since its launch, Apple’s share price has soared by about 100x and of the company’s annual revenue, still over half of its net sales come from the iPhone with the company’s market cap rising to about $2.2trn. Roughly over the same period about $700bn has poured into fintech startups from venture capitalists.
Now Apple appears to be fully harnessing its explosive growth and network effects by launching a volley of products aimed squarely at the fintech market.
This includes at the start of June the launch of its competitor to the BNPL players such as Affirm and Klarna called Apple Pay Later.
In addition, the company is imminently set to launch an update for iPhone users to allow it to compete with the likes of Square and turn the handset into a peer-to-peer payment terminal. Users will be able to pay each other directly by tapping together their iPhones.
Apple’s fintech ambitions have been fully evident in 2022 after years of speculation about whether it would look to compete materially in financial services. Having taken three floors of London’s newest skyscraper 22 Bishopsgate in later 2021, a move that greatly expands its presence in the City, the UK’s main financial district, Apple may well be hatching larger fintech ambitions.
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