Apple Pay the 'Killer App' for Apple Watch, Jefferies Says (AAPL)

Jefferies maintains Apple (NASDAQ: AAPL) at Hold rating with a price target at $135. Jefferies mobile payments analyst Jason Kupferberg's work says Apple Pay is likely to be "one of the most compelling killer apps for Apple Watch as awareness grows through 1) broader merchant acceptance of Apple Pay, and 2) higher competition from Samsung Pay and Google Wallet"

Jefferies Apple analyst Sundeep Bajika comments "We think the convenience of using Apple Pay on Apple Watch with or without a tethered iPhone, while ensuring a higher level of security and privacy as compared to using physical credit cards, is likely to gain traction as a smarter way to pay."

He added, "By the end of 2016, we estimate that roughly 90% of the global iPhone installed base would be Apple Pay (NFC) capable. We expect Apple Watch penetration to also steadily increase over that period, in some cases as an accessory to an older iPhone 5/5s/5c. More broadly speaking, we expect Apple Watch to become a convenient and secure repository of electronic credentials not just for mobile payments, but also for identity/authentication across a variety of usage scenarios - e.g. airline boarding passes, membership cards, hotel room key, or even Enterprise access".

You May Also Be Interested In

• Midday movers: PepsiCo, JetBlue fall; GM, Danaher and UPS rise
• Apple's Q1 smartphone shipments in China tumble 19%, data shows
• Apple’s iPhone sales plummeted 19% in March quarter, per Counterpoint data