On Thursday, Morgan Stanley analyst Katy Huberty, who recently met with Apple management, said in a note to investors, that the company could shake up the next version of iOS with the introduction of a mobile wallet.
The mobile wallet feature would appear as part of iOS 7, which Apple is expected to preview at its Worldwide Developers Conference in June.
Huberty asserted that Apple might charge either developers or users for some of the services, which could increase Apple’s annuitized revenue stream and better monetize its large user base. In order to provide an example, she emphasized that Apple could offer a streaming music service using a freemium model. The freemium applications allow users to download and use certain titles for free. The costs are recouped through advertisements or in-app purchases. In some cases, these apps offer to remove ads for a certain price.
She continued her statement asserting that Apple Internet Software and Service manager Eddy Cue are believed to be working to update current services like iCloud and Maps, but at the same time is intending to introduce different initiatives.
Apple began evolving in this area last year with the introduction of Passbook. However, the Passbook is not a true digital wallet in the sense that it lets users pay for items directly through your phone. What the app does is to allow users to store digital coupons, which they can sync with a membership card at retailers such as Starbucks to pay for items.
Adding a mobile wallet to iOS and iOS devices would possibly, but not certainly, require support for near-field communications (NFC). Regarding this issue, analyst Gene Munster states that Apple’s digital wallet would use a technology other than or in addition to NFC. However, its system would still work with existing mobile payment solutions.
Furthermore, Huberty predicts that Apple will possibly present a cash return program, stating that the company could nearly double total annual revenue to $25 billion to $30 billion. This would be achieved by establishing a dividend yield increase to over 3 percent, up from 2.5 percent while buybacks would return the remaining cash.
In addition to her anticipations, Huberty believes that the company will launch the iPhone 5S and the much-rumored low-cost iPhone in September and a new 9.7-inch iPad and iPad Mini sometime in the September quarter. Huberty also sees the potential introduction of Apple’s Smart TV or iWatch next year.