Warren Buffett holds Apple (AAPL) stock for a reason. The No. 1 company in his portfolio and the world’s largest company by market cap has all the boxes checked: from cutting-edge design and technology to popularity and even a cult following.
X
Users of Apple products, however, know that the smooth home screen on its devices hides a slew of technical feats.
The design can frequently make us forget the childlike ease of use that makes Apple products so popular. That ease of use is not easily attained.
Apple quit using Intel‘s (INTC) core processors in 2020 and started making its own.
The microprocessors and chips that power Apple products are among the most advanced. Its high-end M1 Ultra is touted to be more powerful than the most powerful Intel chip.
But that is not the main advantage. After it started making its own chips, Apple has been integrating its advanced software and hardware on its own platform.
The software-hardware integration powers the beautiful home screen that is the iOS interface and makes Apple products incredibly intuitive.
It also makes Apple as much a consumer services company as the technology giant that it is.
Apple’s Tap to Pay With Crypto Support Feature
In February, Apple announced that its Tap To Pay on the iPhone XS and later models would support crypto payments.
In March, a leading crypto wallet and popular NFT app, Metamask, said it would support Apple Pay. Until then, any crypto purchase had to go through an exchange like Coinbase (COIN) before being transferred to Metamask.
Metamask is a popular digital wallet with over 30 million monthly active users. It is easier to use than digital exchanges. Now it can be downloaded from the App Store.
Folks can buy crypto through the app instead of using an exchange. The transaction will go through what is known as an application programming interface that is integrated with Apple Pay.
Crypto on iPhones would provide customers the ease of use that has evaded the emerging asset class.
Apple’s user friendly design does not require people to understand how things work behind the screen. Its solid hardware-software integration backs smooth performance and upgrades most of the time.
Cryptocurrencies Lack A Customer Interface
Cryptocurrencies lack a customer interface. Their complex technology is difficult to understand.
The blockchains they operate on follow different protocols and these also are hurdles for anyone who is trying to track cryptos.
Understanding digital wallets and how they work is part of this challenge. Security worries haunt its adoption.
Crypto has introduced a whole new set of terms that are unfamiliar, such as hashrate, native coins and fungibility. Even mining means something very specific in the crypto world.
Should Apple Pay support crypto purchase directly in the future instead of going through third parties, it could become a crypto exchange.
According to some views, that would mean that Apple would buy Bitcoin.
If the tech and consumer services behemoth starts offering crypto directly through the same intuitive interface, the barriers to using crypto may evaporate.
Crypto on the iPhone can change the crypto community as well. Until now, it is a community of developers, investors and fans who speak crypto language to each other.
Apple on the other hand is above all a consumer electronics play. It seeks to understand consumers and that is the market crypto needs to penetrate.
IPhone Sales, Apple Revenues and Acquisitions
iPhones made up 52% of Apple’s 2021 sales. Services made up 18%.
The company hit 1.8 billion active users in January. An active user is one who has connected to an Apple service in the most recent 90 days.
For the quarter ended June 30, iPhone sales were $40.6 billion, just 3% higher than $39.5 billion the previous year. Services revenue grew 12% to $19.6 billion.
Slowing global handset demand, however, has led the company to back out on its production increase plans.
It had aimed to make 6 million more iPhone 14s this year. It will now make the same number as last year, which is 90 million.
The company is known for making unconventional moves because of its extreme customer focus.
Its acquisitions have frequently landed on an iPhone feature. Chomp’s app searching tool landed on App Store after Apple acquired it in 2012. Mapsense was included in Apple Maps after being acquired in 2015.
Apple is the largest company by market cap, currently at $2.3 trillion, whereas crypto’s smaller players add up to $960 billion.
There is no telling whether a crypto feature could land on its home screen or the App Store.
In late 2021, Apple CEO Tim Cook observed that the giant was looking into cryptocurrencies but did not have any immediate plans.
Apple is known for its ability to combine the latest and most complex technology and an ultra-sleek and simplified design.
It is also an innovative company that places design on an equal pedestal with technology. The design focuses on user experience.
Its customer focus has made the company venture into novel and successful products, from iPhones to iPads, iPods, and AirPods. That is why it makes up 40% of Berkshire Hathaway (BRKB) holdings.
YOU MIGHT ALSO LIKE:
Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest
What Is CAN SLIM? If You Want To Find Winning Stocks, Better Know It
