What the New iPhone 6 Means for the Travel Industry
After months of speculation, the launch of the iPhone 6 and iPhone 6 Plus has been met with a great fanfare and is being touted as the most significant product refresh to Apple’s portfolio since the iPad. The launch last week has led to record levels of demand for four million pre-ordered devices and delays are expected.
Game-changer for m-commerce
The new iPhone 6 offers 4G for faster connectivity, integrates electronic payments via the new and long-awaited Apple Pay and includes Touch ID that works from a fingertip sensor. Apple Pay is being hailed as a game-changer for mobile payments as Apple plays catch-up with its competitors like Google Wallet by integrating NFC technology (near-field communication) to replace the traditional wallet.
Apple will enable its users to make payments via their phones at point of sale, perform online transactions in-app and also offline purchases at bricks-and-mortar outlets. For the offline channel, the new iPhone payment platform is also a great opportunity for premium-to-luxury travel retailers, including chains like Virgin and Kuoni as well as independents, to accept NFC electronic payments in-store.
Euromonitor’s Online Travel Analyst, Angelo Rossini predicts that the larger screen size of the iPhone 6 Plus is a very important development in making mobile bookings easier as small screens are the biggest deterrent to mobile commerce.
Gaining critical mass
Experts believe that mobile payments are expected to achieve greater acceptance with consumers and retailers thanks to Apple enabling mobile payments for goods and services in-app, paid for with a single touch, for added convenience and security.
Apple holds a 20% volume share of mobile phones sold in the UK, second to Samsung in first place with 33%. Globally, mobile already makes up almost 15% of all online travel value sales in 2014, according to Euromonitor International.
Apple Pay will allow Apple users to make purchases using their mobile and thereby help boost ancillary sales of travel products and services at the airport, in the hotel, on cruises and in-destination, allowing brands to engage with consumers before, during and after their trip. Tnooz reported that Groupon, OpenTable and Uber will be among the first to allow their users to book and pay using Apple Pay.
The integration of Apple Pay with Passbook will also provide more opportunities for brands to enhance their loyalty programmes, providing greater synchronisation between payments and rewards to drive engagement. For travel brands that currently do not already have an app or mobile website, now would be a good time to review their mobile distribution strategy – or lack of – because the mobile revolution is picking up speed.
What will Apple do next?
In future, it would be interesting if Apple decides that it wants to position itself as a consumer lifestyle brand and goes beyond the realm of online and mobile distribution to sell travel products and services directly to consumers, rather than acting solely as an online retailer. Apple may decide to provide proprietary Apple trip planning and travel booking services direct from its devices, provided either by a white label supplier or via preferred travel partners.
Alternatively, Apple may look to harness the power of its user base, enabling Apple users to exchange goods and services and marking a move into the sharing economy. For travel brands, these are exciting times and consumer electronics brands hold the key to how the travel industry will be transformed in future.