Media & Entertainment

Iterations: The Unbundling Potential Of Apple’s Passbook


Editor’s Note: Semil Shah is an EIR at Javelin Venture Partners and has been a contributor to TechCrunch since January 2011. You can follow him on Twitter at @semil.

This post is about Apple’s Passbook. It’s not about mobile wallets, or Google Wallet, or Square, or anything else. I realize the space is vast and dynamic, but I only have an iPhone, and I’m here to write about Passbook. With that disclaimer out of the way, I’d like to share some thoughts about Passbook, a thesis I’ve developed around “cards vs. apps,” the big opportunity this creates for Apple, and how potentially disruptive Passbook could be.

A few weeks ago here on TechCrunch, I wrote a column about the unbundling power of mobile, and how fierce competition at the application layer is fragmenting audiences. To take this a step further, I believe Passbook Cards could actually unbundle some native applications, stripping out the most essential features of apps and placing them in a format that, in many cases, is easier to access, easier to use and navigate, loads faster than apps, is more intelligent about time and location, and is much more lightweight as a consumer experience.

I’ll share a personal example. Sometimes, I’m “dragged” to Target to go shopping. I’m not going to download the Target iPhone app — which, I will admit, is actually fully stacked with information and very responsive. We’ll sometimes scramble to find a coupon in the car, and at checkout, every time, someone asks us if we have our Target number. We usually don’t, and we don’t want to sign up for it again. This would be a case of where I’d just want my iPhone to know I’m at a Target and push a Card notification to me with my payment information, whatever coupon code I may be entitled to. The UPC scanners at stores like Target will also read QR codes, so I just want to fire up Passbook in line and be done with it. In this case, the native app is too much of a commitment for me, I just need the Card.

So, whereas mobile apps unbundle in a disruptive manner by often leading to fragmentation, in many cases Passbook Cards could unbundle native apps but, in doing so, also create new opportunities for companies, brands, and developers striving to build larger audiences on mobile in the face of app discovery challenges and distribution challenges. Earlier this week, Urban Airship acquired Tello for its Passbook management tools, and I’ve heard from many enterprising builders around the world who are creating tools and platforms like PassMaker Pro (which empowers merchants to easily create Cards for tickets, coupons, etc.) and PassForce (which can convert information traditionally stored in apps into cards). Tools exist for developers and merchants to create and distribute their own cards, especially through a reliable channel like email.

Given all these possibilities, it seems to me that Passbook is underrated and under-promoted, at least for an Apple product, and not getting the attention it deserves, especially from the majority of app developers, merchants, and brands. Despite my excitement for Passbook, I was surprised to hear that many experienced technology observers and operators weren’t impressed with Apple’s handling of the launch and subsequent lack of marketing of the platform. In only a few months for me, I’ve used it for many store purchases, boarding passes, and movie tickets, and each time it worked flawlessly. I’m waiting for Passbook to completely replace my wallet to include things like ID cards, driver’s licenses, and it feels like it’s just a matter of time before this happens.

Obviously, the shift to mobile devices is the overarching, mega-tectonic technology platform shift of our times. Consumers expect mobile experiences for any and every function or brand. On iOS, native app performance surpasses the experience mobile browsers or other non-native solutions provide, and usually delivers more delight and utility to users, including new functionalities like iOS push notifications. However, apps are hard to discover, oftentimes difficult to navigate, sometimes too heavy, clunky, and slow, and somtimes unnecessarily complex for the everyday consumer. Many users could be more likely to understand how to use Cards and potentially adopt them more rapidly. Cards also help solve the fragmentation problem between customers and merchants. As Cards unbundle certain apps, it gives Apple a powerful bundling opportunity, as well, the chance to control the payment, rewards, and redemption layers of mobile commerce. And, as these Cards can unbundle apps, Passbook ironically affords Apple an attractive bundling opportunity to lock down mobile payments and better connect merchants with their customers at the point of sale.

Photo Credit: kalleboo / Creative Commons Flickr

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