How Apple will reach $1 Trillion.

Valued at around $500 Billion today, Apple certainly is doing well for itself.  Lot's of iPads, iPods and iPhones continue to roll out of Foxconn in China and into the hands of the masses worldwide.  Including China.

That's where it started. Where it'll end up is somewhere amazing. I predict as soon as NFC is added to iDevices rolling off the line, the Apple ecosystem for payments, loyalty and other channels will be firmly in the clutches of Tim Cook and co.

Think about this:

Banks want to own mobile payments, but can't because they hate risk, are laggards in technology and can't innovate.

Merchants want to own mobile payments, but can't because there are too many of them and they're too busy competing to cooperate on something this big.

Startups want to own payments, but can't because as soon as they get a good idea, they need adoption which eventually leads to acquisition by a big tech player.  OR they get kicked in the nuts by others in the payment world on things like security, encryption, accessibility, availability, etc.

Credit Card companies (you would think) are poised to own mobile payments, but can't agree on technology, form fragmented relationships with carriers, hardware providers or others and generally don't interact with customers directly anyway (See Banks above).

Telcos and Mobile Carriers want to own mobile payments since they are the link between the customer and the world and already have a billing relationship with every customer, but can't because they won't innovate fast enough.  They're also fragmented and would require cooperation beyond just oligopoly-like partnerships like ISIS.

Paypal would love, love, love to own the mobile payments space.  They're trying hardware solutions, software solutions, POS workarounds, cloud solutions, mobile app solutions, merchant integration and everything else you can think of (including making awesome videos to convince everyone they're the right choice)...but they can't do it. Why? Because no matter what, they still have to make nice with the merchants to make it work for the consumer, and there are a LOT of merchants.

And that leaves...   The Tech Giants.

Google is on an interesting path with Google Wallet.  Payments and Loyalty in one slick NFC-enabled experience.  The problem for Google is that it's limited phones (the Sprint Nexus) on one carrier, with one bank partner.  If I'm the consumer, am I going to switch Carriers and banks just to be able to use it?  Nope.  But eventually I'm sure it'll open up.  The problem becomes adoption.

So, that brings me back to my title.  Apple and the $1 Trillion dollar market cap.

Apple doesn't have to worry about adoption.  They have have a billing relationship with over 225 Million credit cards (and since I'm sure some of those are one-to-many examples like a family) that's even more actual customer relationships.  They don't have to pick a bank or a Credit Card company to work with, because to start, the existing relationships are there.  They don't have to pick a Carrier, because they work with virtually every carrier already and they control the hardware AND the software.

I will be able to walk into a retailer that has any NFC enabled payment terminal (and there are lots) and tap my iPhone5 (or other iDevice) to pay. Authentication will be through the AppleID and payment will be to the credit-card connected to my iTunes account. Loyalty and other value-added services can then be integrated into the experience at payment or as a 'trailer' experience back on the phone using an app

Here's where this gets sick.  Could Apple become a bank?  They've got the cash.  Imagine if I made a deposit directly to apple (like we do already with PayPal) and it's held by Apple--- accessible via AppleID or iTunes at any partner.  Credit Cards no longer have clout in the relationship chain as their influence diminishes.  Retailers continue to work with their merchant terminal and POS providers eventually upgrading to NFC (which everyone says is coming) but some decide that they would rather explore Apple's more novel payment approaches:  Geo-aware, iTunes-enabled, non-POS, cloud-based check-out, etc...

Disruption occurs in: Payments, Location marketing, Loyalty & Retention, Customer Rewards, Billing & Accounting, Offers & Daily Deals...

They've got the devices which means penetration, reach, ubiquity and brand appeal. They've got trusted billing relationships with over 200 Million for things like apps, music, movies and TV-- why not extend that to sandwiches, t-shirts and diapers?

When they do adopt this strategy, it will be a lot of regulatory hurdles in each country in which they operate, but this could be what creates the worlds first $1 Trillion company.

How close are we?  When the LTE capable iPhone 5 reaches consumers in the fall, it will undoubtedly have a fast chip and a better camera, but it will also have NFC.  This will be the catalyst.