By Alex Plough October 31, 2014
Apple Store, Michigan Ave., Chicago, IL © Adam Fagen
Apple Wins a Round in e-Wallet Wars
This week, Apple’s new smart phone payment system, known as Apple Pay, won an early victory in the burgeoning e-wallet market after a rival product developed by US retailers was hacked.
Soon after Apple Pay’s launch last Monday, some of the country’s biggest retail merchants announced they would pull support for all tap-to-pay mobile payments systems, which includes Apple Pay, Google Wallet and Softcard. Pharmacies CVS and Rite Aid as well as other retailers including Best Buy, Home Depot and Dunkin’ Donuts have all sided against the tech company.
As members of the Merchant Customer Exchange (MCX), a consortium of US retailers, the retailers are developing a rival platform to Apple Pay know as CurrentC, due to be launched in 2015. But this week MCX admitted that hackers had accessed e-mail addresses of CurrentC’s users during a pilot project for the system.
Public concern about the security of smartphone payment systems could fuel a consumer backlash against CurrentC, particularly if retailers continue to block Apple Pay.
Who’s the Handset King?
Apple CEO Tim Cook has even more reason to celebrate after the company’s latest quarterly earnings report beat both its own and market expectations, largely on the back of blowout sales of iPhone 6 and iPhone 6 Plus.
The company sold 39.3 million iPhones in the fiscal fourth quarter, ending September 27, a 16% increase versus the previous year. Net profit rose 12.7% to $8.5 billion for the quarter, while revenue was up 12.4% to $42.1 billion.
The company is also expecting a strong holiday season this year. It forecast $63.5 billion to $66.5 billion in sales over the next three months, representing up to 15% growth year over year.
Rival Samsung saw a 60% drop in year-over-year profits, down to $3.8 billion, with losses concentrated in its mobile division, where annual profits fell 73.9%. While still the world’s number one smart phone manufacturer, the South Korean firm’s market share fell from 35% to 24.7% during the three months ended September 30, according to data provider Strategy Analytics.
Meanwhile, low-cost Chinese smart phone companies have expanded rapidly in recent years to put pressure on both Apple and Samsung’s emerging markets businesses.
Xiaomi Inc, an upstart Chinese phone maker, saw its global handset shipments more than triple during the period. Despite hitting the market just three years ago, the new entrant is now in third place with a 5.6% share of the global smart phone sales.
Takata Recall: When Safety is Deadly
The news just keeps getting worse for Japanese automotive parts manufacturer Takata, whose potentially faulty airbags prompted a worldwide vehicle recall over fears they could spray shrapnel at occupants.
On Wednesday, the US National Highway Traffic Safety Administration (NHTSA) announced that at least 7.8 million cars and trucks were covered by recalls this year and in 2013, an increase of 28% over previous estimates.
Bloomberg Businessweek has published a comprehensive report on the issues facing Takata, including horrific details of shrapnel-induced injuries linked to the defective airbags.
Thankfully for journalists looking to investigate the story and drivers worried about their own cars, the highway safety regulator has opened its databases of recalls and fatal traffic incidents.
Inside Candy Land
Anyone who has read Roald Dahl’s children’s classic ‘Charlie and the Chocolate Factory’ has fantasized about life inside a company that makes candy.
This week Annie Gasparro from the Wall Street Journal took readers into Mars Inc’s new factory in Topeka, Kansas – the first US factory the firm has opened in 35 years. While there was no mention of Oompa Loompas, Dahl’s fictional chocolate factory workers, the trip did uncover some insights about the 100-year-old family owned firm.
As well as commanding over a quarter of the US chocolate market, Mars Inc is also one world’s biggest purveyors of dog food and other pet-care product. “You’d be surprised how similar pet-food and chocolate factories are,” said Bret Spangler, director of the new Topeka plant.
Rate Rigging Mapped
Investigations into the alleged manipulation of foreign-exchange rates have turned global with authorities on three continents now looking into claims of rate-rigging. While no one has yet been accused of wrongdoing, firms involved in currency markets are under close regulatory scrutiny. Bloomberg has mapped all 19 probes into the industry with links its related stories.
