Lesson from Apple's Beijing Loss
I had noted in the past that Apple is beatable in businesses where everyone matters: poor, rich and in-between. Walmart Pay which is used in only Walmart Stores is giving Apple Pay a tough challenge. Walmart had declined to work with Apple Pay, passing over the exclusivity, for a product that welcomes anyone with a smartphone to the Walmart fold. That is a strategy that makes sense. It is working for Walmart.
A similar loss seems to be playing for Apple in Beijing, China where subway upgrade has cut-out Apple and its technologies. Any subway rider in Beijing can now swipe NFC (near field communications) Android phone at the gantries. With the exclusivity Apple has for its technology, Beijing could not include Apple: Apple restricts contactless payment to only Apple Pay. No one expects Beijing to be sending free money to Apple. Other districts plan to deploy the same technology. So, just like that, Apple may lose all of China subway markets.
The path to services requires volume, and Apple’s closed iOS will be a challenge when the company stalls in its evolutionary finite hardware improvements. I do think that Apple must learn from the Walmart Pay and Beijing experiences: in a consumer market, especially on services, the best model is to welcome everyone. Simply, the exclusivity of iOS may not be strength, going forward.
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