Repost from Last Year: Three Problems the iWatch Will Solve

The Rumors of the iWatch is the hottest subject on the lips of Tech nerds around the web.  I maintain this blog primarily as a repository to which I can refer when I my awesome business and technology predictions are correct (which they always are: Facebook, GroupOn)…here’s my prediction on the iWatch:

Yes, the rumored iWatch will undoubtedly be cool…but I believe the iWatch will revolutionize more than just the way we tell time.  As a shareholder of Apple I was thoroughly dismayed that the iPhone 5 was not equipped with Near Field Communications (NFC) which would blend the lines between the physical world and the digital (basically replacing QR codes).  Then I heard about the iWatch and it made sense to me:  It didn’t matter that the iPhone 5 was lacking NFC…But why?

My “bold” prediction is that the iWatch will have Near Field Communication (NFC), or something like it, which will communicate with user’s iPhone.  It will be the breakthrough we have all been waiting for to let mobile payments and NFC technology to take off.  The iWatch will do so by solving three main problems for NFC by providing:

  1. A new and secure standard format for NFC, solving the chicken-or-egg problem for merchants developers and customers.
  2. A great user experience for NFC.
  3. The means for backward integration of NFC into existing devices.

Apple will be the Chicken…or the Egg.

One of the problems with NFC, but especially mobile payments, so far has been that there is no standard format that has emerged for NFC that merchants, developers and customers can all buy into.  It is the chicken or the egg problem:  For NFC and mobile payments to take off, mobile companies need a critical mass of merchants equipped with the hardware to accept a certain NFC communication format.  But for merchants to invest in the hardware that accepts a standard NFC format they need a critical mass of mobile providers and customers using that the same NFC format.

That’s where the iWatch comes in.  Apple secured a critical mass with the iPod by simply making it cool and easy to use.  They then used that critical mass to create a standard platform on which the music industry could converge to securely distribute its music digitally.  One of the benefits of NFC vs. Radio Frequency Identification (RFID)—which are those chips in books or clothing that set off security alarms at retail stores—is that NFC is more secure.

With NFC you have to be within inches of the chip to pick up its radio signal to read data where an RFID signal can be picked up many yards away.  This is especially important for mobile payments because if you were transmitting credit card data through an RFID chip anyone within a hundred feet could read your credit card information…but with NFC you have much more control because you can see what is right near your transmitting device.

So just like the iPod provided a secure platform for the record labels to securely and easily sell digital songs, I believe the same will happen with the iWatch, quelling the security fears of customers and credit card companies by providing a secure connection for payment through the iWatch.  I also predict that the iWatch will be intimately linked to the iPhone through something like Bluetooth but Bluetooth brings the same security concerns as RFID so I don’t know how but they’ll figure it out but I think they will.

Easy to Use

The next problem the iWatch will solve is the ease of use of NFC.  Let me explain with a personal experience:  I pretty much do all my shopping at the CVS down the street from me and I always use my member card to garner points.  I found out there is a mobile app and, being the technology geek I am, I immediately downloaded it and registered my card.  The app would allow the clerk to scan my CVS card from a barcode on my phone rather the physical card.

That evening I went to CVS excited to use my new app.  I purchased some food, some Red Bulls and some beer.  As I approached the clerk I piled my goods on the counter in front of him.  He checked me out and asked for my ID.  I took out my wallet and presented my ID.  Then the clerk asked if I was a CVS member.  Of course, I said yes and pulled my CVS card out of my wallet which I was holding.

Then I stopped (with a huge line gathering behind me, mind you), pulled out my phone, scrolled to the CVS application, waited for it to load, scrolled around for my digital member card, selected it, waited for that to load then finally presented it to the clerk which he had to scan three times before it read.  It literally added at least 30 seconds to a transaction that would have taken about 2.

With the iWatch I could have hit a button on the watch, held it up to an NFC reader which would communicate through the watch to the CVS application on my phone to read my card information.  Then, when it came time to pay do the same thing…with my credit card information stored on my phone (as I already do with iTunes) and my member information and payment information transmitted simultaneously.

Backward Integration

The final problem solved by the iWatch for NFC is what to do with all the existing mobile phones that are not equipped with such functionality.  NFC is going to be huge—no one argues with that—and having an NFC enabled phone would be great but what if I just shelled out $700 for the iPhone 5?  My solution to this problem was wearable technology.  I personally considered starting a business around the idea where a wearable bracelet like the Nike Fit or an enhanced iPhone case which would be NFC enabled.  These would communicate with a mobile phone allowing mobile payments or even better, an easy password archive where I just touch my bracelet or phone to my computer anytime it needs to confirm my password.  I considered this business until I realized how easy it would be for Apple to do the same thing…but way better.  Then 6 months later, I read about the iWatch rumors and quickly saw the pieces come together.

All the phones coming out from Apple’s competitors have internal chips built into the phone, which is great if you are in the market for a new phone but if you just purchased a new phone…you’re out of luck.  Creating an external piece of hardware is the only way to enable existing phones with NFC features…and who makes the coolest digital hardware on the planet…Apple.

Final Words

Apple is one of the most valuable companies in history by providing the best user experience; synchronizing our digital lives across all platforms.  This began with the iPod and Mac then the iPhone and iPad through iTunes, now it will be anything that requires security where someone would have to steal your phone and your watch and go on a spending spree before you log on to iTunes and remotely lock them both.

Who knows what the iWatch will bring.  It could just be another platform for developers to create cool apps; it could simply tell time; or it could revolutionize the way we live by getting technology out of the way and making us all happier in the process.


I am the President of The NorthStar Group where we help small businesses start or grow their business through branding, digital media, eCommerce and strategic planning.

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Posted in Business Insights

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