Apple won a major patent on Tuesday for its "iWallet" technology, which is a digital system that uses Near-Field Communication (NFC) technology to complete credit card transactions directly on your phone. The iWallet, which gives the user complete control over their subsidiary financial accounts on the iPhone, could be the "killer app" promised in Apple's next-gen smartphone, presumably called the iPhone 5.
By 2017, there will be 108 million mobile banking users in the U.S., accounting for about 46 percent of all bank account holders in the country.
Mobile payment technology is a future multi-billion dollar industry, and one that looks to blow up in the coming years as we move to a more mobile, fast-paced society. Of course, cash will always be around, but it makes sense to make money digital and maintain those funds digitally, too.
Despite the advent of mobile payments, Apple has been reluctant to move into the space, leaving that work to others like PayPal, Square, and Google Wallet. But with this newly-granted patent, it looks like the Cupertino, Calif.-based company will take NFC into its own hands with the "iWallet."
So, how does iWallet work? Well, first there's the home screen. Users can see their entire credit card profiles, view statements, messages from their banks, and even adjust preferences or add additional cards. Within the preferences, users can schedule credit card payments and set parental controls on their children, should they also want to use their iPhones as wallets. In other words, if a child exceeds a certain limit -- set by the parent, of course -- the transaction could request an authorization from the parent's iPhone, or simply decline the request. It's extremely simple and easy for anyone to use.
Next, iWallet can also complete financial transactions. Merchants can set their own rules, restricting users from completing transactions based on item limits, spending limits, or time period or geographic limits, but when it comes time to pay for an item, the user could swipe their iPhone near a receiver, and the transaction is completed securely and automatically.
Users can keep track of their payments and statements within the iTunes billing system, which keeps credit card information and records safe and secure. There's a possibility that iWallet could also work with other Apple utilities, which could allow users to buy things like movie tickets directly within the apps, but time will tell with that one.
The iWallet would certainly be a "killer app" on the iPhone 5, but it's even a killer app of other NFC services like PayPal. Apple is the one company that gives its users the total package: A fully-integrated system where other devices intelligently work with each other to make life easy and enjoyable for the user. The iPhone, which is by far the most popular individual smartphone on the market, could easily be the device to replace our wallets if this piece of software becomes available. The iPhone is already a smartphone, an iPod, and an Internet all-in-one. Might as well add a wallet.
The iWallet is just one of many exciting features that many are looking forward to in the iPhone 5, which will be unveiled in September or October 2012, according to Japanese blog Macotakara, which believes Apple is moving away from mid-year launches in favor of a 12-month iPhone upgrade cycle starting in the fall.
Little is truly known about the iPhone 5, but given that Apple is expected to launch a new iPad with LTE on Wednesday, there's an excellent chance that the high-speed Long-Term Evolution network will hit the iPhone when it's released.
LTE features significantly higher download and upload speeds compared to 3G technologies, but the current implementations of LTE in phones appear to cause "very short battery life," which is a "major complaint by users." If Apple wanted LTE in the iPhone 4S, it would have been forced to increase the phone's thickness to accommodate a larger circuit board and a bigger battery. Apple CEO Tim Cook, in a company earnings conference call in April 2011, said "first-generation LTE chipsets force a lot of design compromises."
"The iPhone 4 PCB [printed circuit board] is already incredibly small, not leaving any room for an extra chip to enable LTE without shrinking the size of the battery," said Anand Shimpi, a chip expert and CEO of Anandtech.
Fortunately, Qualcomm recently unveiled the fifth iteration of its new chip, which supports TD-SCDMA, TD-LTE, HSPA+, EV-DO, embedded GPS, and LTE on TDD and FDD networks worldwide. The chip works with Android and Windows 8 devices, but by targeting so many different carriers, there's a high degree of likelihood that this will be the same chip inside the iPhone 5.
As of January, Apple was reportedly gearing up to begin production on the iPhone 5. A source from within China's Foxconn manufacturing plant told 9 to 5 Mac various sample iPhone 5 prototypes are floating around the floor, but there are a number of common features among the phones, including a display that measures at least 4 inches, and a longer and wider form factor that does not match that of the iPhone 4 or 4S. The iPhone 5 will also reportedly retain the rectangular shape of its predecessors, putting to bed rumors of a thinner teardrop shape.
Previous reports have said the Apple iPhone 5 will feature an improved version of Siri, the voice-activated AI system that was only released as a beta in the iPhone 4S, as well as a bigger screen. In November, Hitachi and Sony reportedly began shipping 4-inch LCD panels for final production of "new iOS devices" believed to be the next-generation iPhone. Upgrading the iPhone's 3.5-inch screen to a 4-inch display would require a rebuilt Retina Display, but a bigger screen would help Apple compete against phone makers that make bigger screens, such as Samsung, while also providing a more immersive iPhone experience.
Before Apple unveiled the iPhone 4S on Oct. 4, the Internet was flooded with photos of a thin, large-screen iPhone 4. The photos were widely believed to be doctored until one Chinese site discovered "mold engineerings" of an iPhone 4 with a noticeably larger screen. The renderings depicted an edge-to-edge design for the iPhone's screen, which looked to measure about 3.7 inches. Component industry trackers believed that the images represented Apple's wish to compete with rival devices with bigger screens.
Apple wants its next generation of mobile devices to look beautiful, and the company is reportedly working on giving its devices greater pixel density. Bigger screens with more pixels in the Retina Display mean higher resolution for watching movies and viewing detailed images, from PDFs to X-rays to MRIs to 3D architectural renderings. Even text will appear rich and razor-sharp. While the iPad 3 will double the pixel density of the iPad 2, it's likely that Apple would reconfigure the Retina Display not only feature more pixels, but also to match a slightly bigger screen. Apple fans and users would benefit from a bigger and more beautiful Retina Display, but this switch could force app developers to learn an entirely new way to write their iOS software.
Besides the iWallet, the iPhone 5 may also include a number of the company's recently granted patents. One handy patent for the next iPhone could be Apple's crack-resistant glass solution, which places a shock mount between the glass and the body of the device that instantly inflates if the device senses it's falling, which is determined by the device's internal accelerometer. An actuator within the device then sucks in the cover glass as it accelerates to the ground, thus protecting it from damage.
The fall could be a busy season for Apple, which could release the iPhone 5 alongside a smaller, 8-inch iPad, which is also expected to debut in October. The original report from Apple's Taiwanese supply chain was later confirmed by The Wall Street Journal, which said Apple is working on an 8-inch iPad.
On Jan. 24, Cook released Apple's record-breaking Q1 2012 earnings, announcing $46.33 billion in overall earnings, $13.1 billion in profit and $17.5 billion in cash for the quarter that ended Dec. 31, 2011. In the last 14 weeks of the year, Apple sold 37 million iPhones, 15.4 million iPads and 5.2 million Macs.
"We're thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs," Cook said. "Apple's momentum is incredibly strong, and we have some amazing new products in the pipeline."
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