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The buzz around Apple’s much-awaited developer conference has been focused mainly on a new iPhone, a smartwatch and initiatives geared to a smart home.
But one analyst says Apple AAPL +0.08% could also make news in an area where it could pose a problem for e-commerce powerhouse eBay EBAY +0.22% : mobile payments.
EBay’s mobile payments business, PayPal, “is doing great,” Topeka Capital’s Victor Anthony told clients in a note.
“However, we believe investors should watch Apple’s ambitions in payments and its impact to PayPal given its nearly 800 million credit cards through iTunes,” he said. “Look for possible announcements at the Apple Developers Conference next week relating to their payments ambitions.”
PayPal is such a robust business investor Carl Icahn even launched a campaign to force eBay to spin it off, though he eventually backed off.
But Anthony said PayPal could face a serious threat from Apple, which he portrayed as an “800-pound gorilla” in mobile payments.
Anthony cited public statements by Apple Chief Executive Tim Cook, who in the company’s last earnings said, “We now have almost 800 million iTunes account, and most of these with credit cards.”
He also pointed to an interview with The Wall Street Journal, in which Cook said mobile payments are “an area of interest to us.” Another article also noted that Eddy Cue, the head of iTunes, had met with industry executives to discuss the possibility of expanding to payments for physical goods and services.
“We also understand that Tim Cook has been actively engaging with investors on the issue of payments. It is clear that Apple is moving towards offering a mobile payments solution for the purchase of physical goods and services,” Anthony said.
Mobile payment is an increasingly important and competitive battleground for Internet giants. Anthony said an Apple offensive in that arena could cause eBay headaches.
“Given Apple’s size, with 800 million cards, relative to PayPal, 148 million active users, Apple has the potential to be a formidable competitor in the payments space,” Anthony said. “If Apple gets serious about mobile payments, or an all-round payments solution, the growth curve and margin profile of eBay’s payments business could be at risk.”
How Apple can turn into a big problem for eBay - MarketWatch
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