Cupertino Needs A Reboot
Fintech used to be the shiny new car and in the last year or two, the sub-sector has entirely reversed.
Look at stock like PayPal (PYPL) or Square (SQ), their market cap is only 20% of what it was in 2021.
The fintech hype didn’t match the results and it definitely wouldn’t be something that Steve Jobs would be interested in getting into.
Getting into the weeds a little, the fintech industry has been saturated.
Too many vendors chasing after the same customers with the same homogenous products doesn’t seem like something Apple is usually associated with.
Almost as if the behavior suggests a mea culpa, Apple officially stopped issuing loans through Apple Pay Later, its buy-now-pay-later program that launched last year.
The move comes after Apple said it would start allowing installment loans later this year in its Apple Pay checkout process through third-party companies, such as Affirm, and credit and debit cards from issuers, such as Citigroup.
This Apple product certainly would have turned into a buy now – pay never platform.
I won’t say that Apple should stay in their lane – they certainly shouldn’t.
The reason is that they are a one-trick pony hoping to pivot into another lucrative cash cow business like the iPhone business. They desperately need to become a two-trick pony but they can’t find that special sauce yet.
Apple also recently announced they are putting their Apple Vision VR goggles on the backburner.
It is sad to see Apple go from project to project with such little follow-through.
They are Apple and many still think that brand still carries a lot of weight.
In the short term, they will get a pass for contracting some terrible projects, but only for so long.
One could argue that wearables like the Apple Watch and the iPad have been somewhat successful and I do acknowledge they have had some stickiness in terms of revenue.
However, the already saturated fintech payments business is a head-scratcher.
Sometimes it’s best to let fintech be fintech and allow them to experience the race to zero.
Apple is bigger and better – their customers deserve something that delivers higher value.
Clearly, the management at Apple at the highest levels is lacking the creative juices to push through something trendsetting or cutting edge and now that is starting to become a serious threat to future cash flows.
The OpenAI partnership was a copycat move and I am not sure if they have really planned how they will seemingly integrate this new tool into their products.
Remember, OpenAI could destroy some of Apple’s products because AI is still rife with errors and can even cause major losses to the share price.
What if the CEO of Apple Tim Cook wakes up one day and AI has deleted half of Apple’s internal software or emailed all of Apple’s intellectual property to a fierce rival?
What if AI magically wires $100 billion of Apple’s war chest to a 3rd world bank under the banner of improving world hunger or balancing income inequality?
Remember that AI has no common sense and that could be very dangerous.
Kids who grew up in front of computers all day are also notorious for having little common sense and the end of the day results show.
Nobody knows what will happen, but Apple sure appears defensive and that is always big trouble in Silicon Valley in an industry where you need to know what will happen in the future.
