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Apple, Square Acquisition Talks Went South Over $3B Offer [Update: Nope]
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Me too. I think Apple Pay is TERRIFIC!!! I just don't see it killing off everyone's credit cards in one year or putting a "greedy" player like Square ("greedy" because they didn't take Apple's $3B offer when they would be worth $6B just a few months later) out of business.
For all this gushing love for Apple Pay and the NFC that underlies it, I encourage anyone to use this sites Search-Advanced Search function, type NFC and choose "search titles" and then hop back a year or two and read threads where "we" were bashing NFC as "useless", "insecure" and on and on even just 2 years ago. Now Apple is rolling it out and it is going to transform the world almost immediately. I like Apple as much as the next guy but wow!!!
You nailed it about how NFC was bashed a year or so ago, especially when it was learned that it wouldn't be included on the 5 and 5S.
I know that Square is mainly for small businesses, but imagine if Apple took the the small payment to the next level to small sales; the ease of paying at garage sales or Craigslist with anPay to make purchases between individuals.
That would be awesome.
When iPads get NFC lots of POS solutions for S&M businesses will only need the app and they will be set. Magnetic band cards will be a thing of the past. Not having to swipe multiple times with an old/aging card will make moving into NFC a bliss. No PIN to get cash from an ATM! NFC makes sense when parking, getting meds from an automated dispenser. Lots of uses where paying or authenticating as an individual without a password make sense.
HobeSoundDarryl
macrumors G5
That article was dated Sep 12, 2011 and was talking about something that happened in the past. This is 3 years later and we're still in a "it's coming" state and it's still foggy if it will really compete with Dropbox or be little more than Mobile Me's iDrive reincarnated.
The point of the post was in answer to Square being called "greedy" for not selling itself to Apple for half of what it would be valued at just a few months later… or that Apple's solution would put it out of business in no time at all. Last I checked Dropbox was worth a LOT more than what Apple was offering and is still going strong(er) many years after Apple tried to buy them at a discount too.
No hate against Apple here (I like Apple just fine)- just poking fun at the halo some of us put around Apple… and/or the fault "we" find with anyone who would dare not do anything that Apple wants.
Hmm, just looked it up. Foo, I thought the NFC secure protocol was some kind of NFC standard, but it's not. It appears to be a secure, apple-designed protocol that requires special support from financial institutions.
If anyone else wants the details, see here: http://prolificinteractive.com/blog/2014/09/09/announcing-apple-pay/
Square is embracing "chip and pin" technology because the US finally got off its *** and realize that magnetic strips are an obsolete, incredibly insecure method of payment. Most of the world is using this technology already.
While smart phone transactions will likely increase considerably in the next few years, I don't see them completely replacing debit/credit card transactions anytime soon.
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HobeSoundDarryl
macrumors G5
We'll see.
I find myself doubting that iCloud drive = Dropbox.
But I'll hope right with you.
HobeSoundDarryl
macrumors G5
I understand the security issues better than most. I was one of those offering counter-point to this crowd when NFC was being bashed to no end just a few years ago. Look up the threads. Do the search and hop back even 2 years- probably 65% posts by the Apple faithful on why NFC was "stupid", "useless", "insecure", and on and on. Then Apple implements it and it's transforming the world in the next year.
Does Apple joining the party yield big impact? Yes.
Will all credit cards be gone in one year? No.
In our wildest but still remotely realistic estimates, what percentage of the world's 7B people will own an iPhone 6 so that we could do these (Square-like) iPhone 6-to-iPhone 6 transactions if such a feature was implemented?
Seen way too many companies go under after buyout talks like this fail. Founders looking forward to payout leave and it cascades from there.
Square has a lot of competition and now with the embedded NFC payments and the soon to follow Andriod NFC, their business model will not gain marker share.
Square has a lot of competition and now with the embedded NFC payments and the soon to follow Andriod NFC, their business model will not gain marker share.
Someone who's company just a few months later is valued at $6 billion?
With Square plus a smart phone, anyone could take a credit card payment for anything- no special hardware to purchase. I've bought hot dogs at sporting events through Square. With Apple Pay, the retailer is probably going to need to be BIGGER so they can buy the hardware that supports NFC. Square will give you the hardware (dongle) so you could take credit cards at a garage sale, a fund raiser, or anywhere else.
The part that makes me worried for Square is the report that Apple showed Square a range of hardware they could use. I don't imagine it would be entirely different than Square's dongle.
I do love what Square is doing for small business. I use it for mine and it works slick. Customers appreciate how fast it works and I think it's great their email confirmation system works so fast as well. I certainly wouldn't want them to get crushed. Plus, I think competition is good.
HobeSoundDarryl
macrumors G5
Valid point. However at the time NFC was "insecure." Apple was obviously working on a very secure NFC implementation. Was it unusual we knew nothing of it? Hardly. This is now ready for deployment. Instead of trying to be first, Apple tried to get it right. The timing is also spot on. Time will tell, but IMO this is the story. Not iP6, Apple Watch, or Sapphire.
HobeSoundDarryl
macrumors G5
If I want to buy a company that looks like it could be worth $6B in a few months but I want to pay $3B and I have Apple's resources, I go in with everything I can muster to freak out the "rookies".
Jobs did the same thing with Dropbox, threatening to crush them with Apple's version of Dropbox- (launched not too much time later as iCloud)- trying to get them to sell for (apparently) $800M when- not long thereafter, they were being valued at $4B or more. See this to see how much not selling to Apple hurt Dropbox valuations: http://www.bloomberg.com/news/2014-...be-worth-10-billion-in-blackrock-funding.html
That said, it certainly may prove out that Square (and Dropbox) should have sold to Apple and that Apple Pay or something else will pop up and kill Square. Then, again, maybe someone will invent the Star Trek replicator and put all companies that make anything (including Apple) out of business.
Personally, I just think the bulk of Square's market is much too small, too transient, too poor, etc to be very important to Apple. Getting .15% of a few garage sale or flea market transactions is at the very shallow end of the retail revenue fee pool. I would guess the offer was much more about buying the Square human resource talent than buying the dongle technology.
Would not be surprised to see a consolidated payment system like Apple Pay using the Android NFC by the end of the year with their existing drivers.
I find it funny that you americans still use credit cards the way we did in the 80's.
I generally agree with you, and I don't recall being one of those who laughed at NFC. Feel free to quote any old posts you find where I may have done that.
However, at the risk of taking this thread down a PRSI rathole. With the way that income is distributed among the 7B, you don't need to cover a large percentage to access much of the globe's disposable income.
I think that there is some evidence that Apple's implementation of non-RF based NFC via Passbook has been quite successful! I use it regularly for my boarding passes and it's mostly seamless and compatible with paper too! And to boot it's not limited to iDevices. This transition from paper only boarding passes to web based passes to app based passes has been pretty disruptive. At one airport that I fly out of frequently, boarding has now become like rising the subway, automated turnstiles with limited human staff to man the gate.
Anyhow...
I just witnessed this first hand on a plane (which I boarded with Passbook). Gentleman seated in front of me wanted food and did not have a credit card to make the purchase. (His row mate who did not know him ended up picking up the tab for him and would not accept reimbursement.) Yet, his traveling companion (seated next to me) has an iPhone 5S.
Those with credit cards are also a small number of those on the globe, and there will always be times when you have your phone, but not your wallet.
Vendors always give business up when they do not accept some forms of payment. It's all about the cost/benefit. Most US airlines have decided at this point that the cost of accepting cash is too high and have restricted their customers to those with credit/debit cards, And that transition from cash only to cards only was abrupt. I certainly didn't expect how quickly they turned about face.
I think you're underestimating how disruptive Apple Pay can really be.
Aside: Earlier this summer, my local stationer was complaining about the large upfront cost that his card processor charges for his credit card machine. On top of the card processing fees, he had to pay $2500 to replace his 2 year old machines with new ones, on top of the transaction fees, but since 80% of his customers use plastic, it's the cost of doing business.
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Wonder if 2 iPhone 6's could make and accept payments with each other?
If so that is a lot better than needing a dongle!
If not, Apple is most likely working on their own dongle to allow an iPhone to accept NFC payments. In fact that is probably what was meant by this:
Well Apple is just finally releasing iCloud Drive so it's not like Apple has been competing all this time with Dropbox. So only now can we really judge the kind of impact iCloud may have on Dropbox.
These tech companies piss me off. They are all way overvalued. Square is not worth $6 billion...hell, last year they didn't even make $150 million in revenue (and that's not even talking about profits). It's not even worth $1 billion. I cannot believe they turned down Apple's offer. Now, Apple is gunning after their entire business model. I'm willing to bet that they will either be acquired for wayyyy less than $3B of file for bankruptcy within 5 years.
Snapchat turned down a $3 billion offer as well and I doubt they are actually even worth half a billion. Beats was never worth even half what Apple paid for it.
I think these egomaniac CEO's in Silicon Valley are in for a nasty surprise when the inevitable stock market correction turns they billion dollar companies in to sub $100 million companies. It's a bubble, it's all paper and computer spreadsheets, none of it is real value.
Snapchat turned down a $3 billion offer as well and I doubt they are actually even worth half a billion. Beats was never worth even half what Apple paid for it.
I think these egomaniac CEO's in Silicon Valley are in for a nasty surprise when the inevitable stock market correction turns they billion dollar companies in to sub $100 million companies. It's a bubble, it's all paper and computer spreadsheets, none of it is real value.
HobeSoundDarryl
macrumors G5
What if you want to transact with someone who doesn't own an iPhone 6? If we don't know it, far, FAR more people do NOT own iPhone vs. those who do. So even if Apple launched iPhone 6 with this feature already in place, there will still be MOST people who couldn't pay us that way because MOST people don't have an iPhone 6 (and won't by this time next year either).
Again, this is like thinking that Skype is obsolete because we can FaceTime. Sure, if that group of "we" all happen to have Apple iDevices. But typically, that group of "we" don't. Only a relatively small group of us have iDevices.
Again, I think Apple Pay is TERRIFIC. I simply don't fault Square for not selling at such a huge discount, nor do I find huge fault with Square now that Apple has this. I personally doubt that Apple wants to compete in the market where Square lives, which is NOT the Nordstroms & Macy's but is instead the smallish, one-location kiosks, flea markets, hot dog stands and the like.
Recall how each company needs to strike a deal with Apple to accept Apple Pay. Do we really picture all of the little Mom & Pop businesses striking an individual deal with Apple to accept Apple Pay? Do we picture Apple actually wanting to make the time to strike such deals? With the lady running a garage sale this weekend? With the guy selling a few things at the flea market this weekend? With the guy who's going to set up his grill at the little league game and sell some hot dogs? Etc. That's where you'll see Square in action.
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And yet Apple has already "gone there" with the iTunes and App Stores, giving small artists, authors and developers an opportunity for a revenue stream that they otherwise would not have been able to tap into.
They significantly lowered the bar for entry and disrupted those markets.
Please note that I'm certainly not implying that every app developer gets to have their own "flappy bird" or that everyone who self publishes on iTunes or iBooks can make a living off of it. Most are in the same space as those who take square, small mom and pop operations with an off and on opportunistic business.
Anyhow we have our "nope" either Apple never made an offer, or the offer wasn't $3B or it wasn't rejected for being too low.
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Every one knows that grid would have played a part if the offer was there at all any way.
Huh? I never mentioned an article, and I'm certainly not talking about 2011.
I'm talking about Apple's recent (as in June 2014) iOS8 announcement about iCloud drive, like:
https://www.apple.com/ios/whats-new/icloud-drive/
Note the reference to dragging files on the PC into an iCloud folder. There's also a picture of a finder folder called "iCloud".
Edit: of course, this doesn't mean that iCloud drive will compete well with dropbox, but the indications seem favorable so far.
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The more I read, the more I get the impression that the only real deals that are made are with the banks and not the merchants.
The merchants are just endorsing it or not.
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