What Would Adam Say?

Is Apple a Blessing, or a Curse in Disguise? Apple's convenience, ease of use and Ecosystem is what people are hooked on. How long would it be until you are also banking with Apple products?

What Would Adam Say?

The original Adam had an experience with an apple that changed his life; not to mention others.

Today’s Adam has a different relationship with an Apple; he eats them rarely.  He does not consume them; but is he consumed by them?

When we wake, many of us grab an iPhone. How else will one know what one has missed while sleeping?

This Apple will accompany our new Adam throughout our day.  It helps him be more productive, he maintains; but it helps strangers learn more about him, we now know.

This post is neither PRO or ANTI Apple; it merely asks, if Apple has Adam by the proverbial balls?!  Is the grip getting tighter?

Consider the following;  last month, Apple introduced their new Pay Later product, which allows users to split their purchases into four payments with 0% interest, and NO FEEs. This was the first instance of Apple directly lending to consumers; but it may not be the last.

The artificially low rates over the last decade or more, have encouraged even cash rich companies like Apple to borrow (what is to any trained financial engineer) free money and use it for growth initiatives.  Apple wants to grow in a new way.

Apple wants to grow into our financial lives. Earlier this week they announced a high-yield savings account for US customers, offering a 4.15% interest rate.  This is definitely one of the highest.  More importantly, it is 10 TIMES THE NATIONAL AVERAGE.

Apple Card’s new high-yield Savings account is now available, offering a 4.15 percent APY
With no fees, no minimum deposits, and no minimum balance requirements, users can easily set up and manage their Savings account directly from Wallet.

Of course the deposits will sit with Goldman Sachs, AKA, Government Sachs. But we’ll come to that later.

What does it mean to Apple users?

My wife and I both signed up for the Apple Card when it came out. It's the default card on our phones and with the increasing acceptance of Apple Pay, we have been racking up that 3% cash back for the past 3 years. The cash back itself has paid for many Apple gadgets we own.

Once a Savings account is set up, all future Daily Cash earned by the user will be automatically deposited into the account. The Daily Cash destination can also be changed at any time, and there’s no limit on how much Daily Cash users can earn. To build on their savings even further, users can deposit additional funds into their Savings account through a linked bank account, or from their Apple Cash balance.

Now your cash back has the potential to earn some interest money.

Users will also have access to an easy-to-use Savings dashboard in Wallet, where they can conveniently track their account balance and interest earned over time. Users can also withdraw funds at any time through the Savings dashboard by transferring them to a linked bank account or to their Apple Cash card, with no fees.

My money is already parked in a high-yield savings account but it does not match Apple's 4.15%.  Do, I want the extra .20% - absolutely.

Will I get the Apple Savings account - Yes.

Will I move my life savings there - time will tell.

Looking at Apple's latest earnings report, its services which include their subscription, AppStore payments, etc generated $55 Billion in profit last year. This number is higher than JPMorgan and Citi combined. And here is the kicker, services only make up one fifth of its total revenue.

Patrick McGee and Joshua Franklin writing for the Financial Times: Will Apple take a big bite out of the banks?:

The question for banks and other providers of financial services is how worried they should be about a tech company with 1.2bn iPhone users, a $2.6tn market cap and a history of disruptive innovation making moves on to their territory.

IMO, with Privacy at its core, it's a no brainer to bank more with Apple.

Chance Miller writing for 9to5Mac: Warren Buffett: ‘If someone offered you $10,000 to never buy an iPhone again, you wouldn’t take it’:

“If you’re an Apple user and somebody offers you $10,000, but the only proviso is they’ll take away your iPhone and you’ll never be able to buy another, you’re not going to take it. If they tell you if you buy another Ford car, they’ll give you $10,000 not to do that, you’ll take the $10,000 and you’ll buy a Chevy instead."

As far as I know, Warren Buffett is not a tech savvy person. On the contrary he has made his money and investment in the past on non-tech firms. However, I think he understands the value that Apple offers. Apple has customer loyalty (cult following as some people like to call it). You don't earn loyalty by just offering a service but it's earned through building an experience that other companies can't match.

Apple's convenience, ease of use and Ecosystem is what people are hooked on. How long would it be until you are also banking with Apple products?

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Jamie Larson