Why Apple’s Big Bet with Wearable Technology Is Only One Part of the Story

Like many of you last Tuesday, I watched Apple’s big day unfold live on twitter and through the countless live feeds served up by catatonic bloggers who were so excited they could barely type.

Apple’s big white circus tent was like a weather balloon had landed on Cupertino’s Flint Center, and like all Apple events, everyone wanted to see if the brand was going to forecast the future of technology.

There were the usual feverish explosions of applause and hysteria, with some even jumping out of their chairs as if Oprah had just given them a new car.

Apple has their announcement events down to a science, a strategy that works so well for them you’d think even the audience was scripted.

Interestingly, while the introduction of the two new iPhones was predictable enough, the Apple Watch was not.

Never mind that Samsung had already beat Apple to the punch by coming out with their smart watch 5 days before Apple — and even boasting about it its imminent release long before that (now that smarts.)

But Apple’s new strategy seems to be that being first isn’t what’s important, it’s being better.

Apple’s devised a fashion strategy: hire some big fashion guns, and they did, with Patrick Pruniaux from Tag Heuer, Angela Ahrendts from Burberry, and Paul Deneve. No doubt they all got the brief early on: make the Apple Watch sexy, make it luxurious, and disguise any shortcomings it might have – namely that it’s so damn small.

Keep in mind that when Google tried to get the nod from the fashion world with Glass, they used Diane Von Furstenberg as their unofficial ambassador, but that didn’t get them much more than a relatively minor blip of PR. They didn’t get much buy-in from the real fashionistas and I think most people agree that the Glass just makes you look like the pretentious dweeb you are.

The Watch makes a compelling bid at a truly attractive wearable device, and with a $349 starting price and 34 different strap options, Apple might just be onto something but it’s doubtful anyone who’s really serious about doing something will want to use it. Consider it as an extra interface and nothing more — unless you enjoy texting with voice memos, dorky finger-sketches, or emoticons.

So what was Apple’s big win last Tuesday?

I’m betting on Apple Pay, which again, they didn’t exactly innovate (Google beat them with Google Wallet) but the difference here is in its proprietary security technology.

With Apple Pay, financial information is stored locally on the device in a separate secure element, so Apple’s servers aren’t engaged with the actual transaction. Instead of the device transmitting card numbers to a potentially unsecured receiving terminal, it sends only the device account number along with what they call a “transaction specific dynamic security code.”

Nevermind Google Wallet: Apple Pay could potentially do what Bitcoin thought it already had – except maybe better.

Apple has already set up their payment program with 220,000 stores, all mostly major brands like Walgreens, Staples, and MacDonald’s, but a host of apps like Uber, Sephora, and Open Table have also been added.

With the exponential growth in credit card fraud and data security breaches continuing to threaten consumer confidence, you can bet that more and more people will be willing to use a more secure ways of paying.

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