Apple Turnover

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When Tim Cook gives up the CEO job at Apple later this year, he will be remembered for many things. Over his tenure, Apple’s market value grew from $300 billion to over $4 trillion, driven by supply chain wizardry, capital management, product innovation (including AirPods and Apple Watch) and a focus on services. In his final year in charge, Apple is expected to sell 250 million iPhones, contributing to product sales of $350 billion, while generating another $125 billion from services like the App Store, music and TV subscriptions, Google traffic acquisition fees, cloud services, advertising and extended product warranties.In the world of finance that Net Interest caters to though, Cook may be remembered for something else: his role in reshaping payments. When Apple shipped the iPhone 6 in 2014 with a near-field communication (NFC) chip embedded inside, it was, in the words of Capital One CEO Rich Fairbank, “a game changer in terms of security.” The chip allowed iPhone users to make contactless payments by holding their phone near a terminal. Crucially, it never transmitted actual card numbers – instead generating a one-time code for each transaction. Combined with fingerprint or face authentication, it was significantly harder to defraud than a physical card.Cook’s initial motivation was to monopolise what people keep in their pants:“We’re about making the user’s life better, making the experience better. We saw all the mobile payment stuff that had been done and none of it was making anybody’s life better. It was more about creating a business model for someone else to ma…