APPLE OPENS ITS WALLET
Partnership with American Express will bring mobile-payment system to Canada later this year,
Apple Inc. has unveiled a partnership with American Express that will bring the Apple Pay mobile wallet to eligible Amex customers in Canada and Australia later this year.
On an earnings call with analysts Tuesday, CEO Tim Cook said the partnership will make Apple Pay available in “key global markets,” with access to expand to Spain, Singapore and Hong Kong beginning in 2016.
Analysts said the initial rollout could be modest since it’s unclear if other banks and credit card companies in Canada and Australia will adopt the system, which competes with mobile-payment offerings from companies including Samsung and Morgan Chase & Co.
Apple Pay launched in the U.S. in the fall of 2014 and the United Kingdom last July but expansion beyond the two countries has been slow, with sources saying negotiations with the Canadian banks stalled over fees and security issues.
In its fourth-quarter earnings report, meanwhile, the world’s largest company by market value announced revenue and profit ahead of expectations but guided to sales in the holiday quarter at the low end of analyst forecasts.
It forecast low single-digit revenue growth of between $75.5 billion (U.S.) to $77.5 billion in the December quarter, slightly ahead of year ago sales and compared to the $77.1 billion projected by a consensus of analysts. Revenue grew 30 per cent in the prior year holiday quarter on the strength of the launch of the iPhone 6S and 6S Plus.
Apple reported 48.05 million iPhone sales in the fourth quarter to trail the average estimate of analysts for 48.72 million unit sales. Net in-
“The law of large numbers is working against them as they get bigger. It gets harder to show growth.” ALEX GAUNA ANALYST, JPM SECURITIES
come rose to $11.12 billion, or $1.96 per share in the period ended Sept. 26 from $8.47 billion or $1.42 per share a year earlier.
“The law of large numbers is working against them as they get bigger,” said JPM Securities analyst Alex Gauna. “It gets harder to show growth.” But Cook said the sales forecast reflects headwinds from the appreciation in the value of the U.S. dollar, along with global economic uncertainty.
“We believe iPhone will grow in Q1,” he said, citing “the highest rate on record for Android switchers” along with strength in Greater China, where iPhone sales more than doubled over year.
Cupertino, Calif.-based Apple derives more than 60 per cent of revenue from the iPhone as smartphone penetration reaches saturation levels in much of the developed world. Some analysts worry the company is overly reliant on cyclical iPhone upgrades to boost sales.
Cook said Apple is also focused on new growth drivers, pointed to a jump in services revenue in the fourth quarter on record App Store sales, especially in China, and gains in its enterprise services business.