Banks have lost nearly $1 trillion in deposits over the past year as money flowed into higher-yielding money-market funds. One company grabbing some of the cash: Apple. The iPhone maker recently launched a savings account with a 4.15% yield, 10 times the national average for banks. “We are very pleased with the initial response,” Apple CEO Tim Cook told analysts in early May.
Apple (ticker: AAPL) doesn’t aspire to be a bank, but it’s pushing deeper into financial services, aiming to generate extra income while keeping its one billion-plus iPhone users hooked on the Apple ecosystem. The company is expanding into payments with its Apple Pay service. It has built a credit-card business with Goldman Sachs Group (GS), its partner for the savings accounts, and it’s muscling into buy now, pay later, facing off against companies like Affirm (AFRM), Block (SQ), and PayPal Holdings (PYPL).
None of this is likely to move the needle financially for Apple, which is estimated to book $391 billion in revenue and $96 billion of net income this year. But services, including cloud, music, and video, are becoming a major revenue driver, accounting for 20% of total sales. Apple takes 30% of app sales and a cut of games, music, and video revenue. Building out its payment services adds another source of revenue and another reason for consumers to stick with their iPhones through the next upgrade cycle.
Source: BARRONS
Omni Talk is the retail blog for retailers, written by retailers. Chris Walton and Anne Mezzenga founded Omni Talk in 2017 and have quickly turned it into one of the fastest growing blogs in retail. 