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The Apple Card is a brilliant move by Apple to keep people shackled to the iPhone
The Apple Card is a brilliant move by Apple to keep people shackled to the iPhone
Ben GilbertAug 13, 2019, 01:49 IST
Apple CEO Tim Cook.Getty
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Apple is entering the credit card business this month with the launch of the first-ever Apple Card.
The card works very similarly to other credit cards, with one major difference: It's tied into the Apple ecosystem.
Apple's new credit card may be Apple's strongest-ever services tie in with the iPhone. If switching to an Android phone means changing credit cards, are you still going to do it?
Apple's latest product is unlike anything the company has done before - the Apple Card is a Goldman Sachs-backed credit card that's issued by Mastercard.
This is the same Apple that makes your iPhone, and the same Apple that's been making computers since the late '70s. But now, in 2019, Apple is getting into the credit card business.
Like me, you might be wondering why. It turns out the reason is obvious: Like everything else Apple does, it's about selling iPhones. Here's why:
Apple Card is an all metal rectangle that looks exactly what you'd expect a credit card from Apple to look like:
The physical Apple Card is, essentially, an analog extension of Apple Pay — the service that allows you to connect your debit and credit cards to your iPhone so you can pay for things without getting out your wallet.
"If you find a place that doesn't take Apple Pay yet, there's this," Apple's website about the card says above a graphic of the "titanium, laser-etched" rectangle.
You don't need to get a physical card from Apple if you sign up for an Apple Card, but it's a free option when you sign up.
Most importantly of all, Apple Card can only be used if you have an iPhone.
Regardless of whether or not you want a physical credit card from Apple, the only way to sign up for and use an Apple Card is by owning an iPhone.
It's not just that Apple is making the card — an iPhone is outright required just to sign up.
Allow me to be all the way clear here: The only people who can sign up for and use an Apple Card are iPhone owners.
It's a choice that hard limits the potential number of Apple Card users to the percentage of the population who use iPhones, yes, but Apple isn't making the credit card to compete with other credit cards: It exists to keep people locked to the iPhone.
The Apple Card is intended to keep you locked to Apple's ecosystem.
Do you pay for Apple Music? iCloud? Have you ever bought something on iTunes, or on the App Store? Or maybe you're an iMessage user?
These services are foundational to Apple's ecosystem, and they're critically important for keeping people locked to the iPhone.
Any iPhone owner who's ever considered switching to Android has no doubt thought about these services. "But what about all the stuff I bought on the App Store?" you might wonder. That stuff doesn't come with you to Android — it stays tied to your iOS account — and that might be enough to keep you from making the switch.
Now try to imagine how you'd feel if switching from iPhone to Android meant abandoning a credit card. This is the entire point of the card's existence: It's the latest hook from Apple that's intended to keep you within Apple's ecosystem, continuing to buy and use iPhones.
The Apple Card is a brilliant business move in an era where switching phones is easier than ever.
In an era where the baseline iPhone costs $1,000, Google sells a $400 competitor, and Samsung has a fleet of gorgeous smartphones, there are more reasons than ever to jump from iPhone to Android.
Apple is keenly aware of this, and declining iPhone sales demonstrate that reality. As such, Apple Card is a strong move by the company to retain the 900 million-some iPhone users it already has.
Though Apple already has several strong hooks for existing iPhone users in services like Apple Music and iMessage, the Apple Card is its strongest hook yet.
The Apple Card is an aspirational luxury item that makes perfect sense for iPhone owners.
Why is the Apple Card made of titanium, and why does it have your name laser-etched on its front? Because it's premium, just like everything else Apple does.
The Apple Card, like the American Express Centurion card before it (aka the "black card"), is intended to demonstrate wealth. It's the credit card equivalent of driving a Ferrari, just as having the latest iPhone is the phone equivalent of driving a Ferrari.
For most credit card users, the Apple Card doesn't really compete with existing credit card programs. Its benefits are meager, and its APR is a relatively standard range.
As The Points Guy's Jason Steele wrote earlier this month, "If you don't have an iPhone, or if you're less interested in its unique features like the card design and Touch ID integration, you have plenty of other strong credit card options, from no-annual-fee cards that can help you build credit like the Petal Card to compelling cash-back options like the Capital One Savor."
Simply put: There are better credit card options out there. But that's not really the point of a card like Apple Card, is it?
