As a second wave of Apple Watch reviews questions its raison d’etre, Jefferies analyst Sundeep Bajikar argues that mobile payments via Apple Pay will be the killer app for the new smartwatch.
“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,” Bajikar said in a research report Monday. Apple‘s (NASDAQ:AAPL) mobile payment service will become even more compelling when it ties payments to retailer loyalty programs, he said.
The Apple Watch also is well positioned to become a convenient and secure “repository” of “electronic credentials” including airline boarding passes, membership cards and hotel room keys, Bajikar said.
Bajikar rates Apple stock as a hold with a price target of 135. Apple stock was down a fraction near 129 in afternoon trading on the stock market today.
Meanwhile, more lackluster Apple Watch reviews are trickling in.
San Jose Mercury News columnist Troy Wolverton said the Apple Watch is a fun gadget, but not a must-have.
“After living with the Apple Watch for more than a week, I’m still not sold on it,” Wolverton said in a review Saturday. “I just haven’t found much use for it. It has some fun features, but nothing that I couldn’t live without.”
The Apple Watch went on sale April 24 in nine countries with models ranging from $349 to $17,000.
Like Bajikar, Wolverton says Apple Pay and apps for storing boarding passes, transit tickets and keys could make the Apple Watch worth buying in the future as adoption grows.
Silicon Valley Business Journal senior technology reporter Cromwell Schubarth also isn’t sold on the Apple Watch.
“Is it worth hundreds (or thousands) of dollars to not have to reach into my pocket to buy a latte or salad? Is there anything that it allows me to do that I couldn’t do as easily, or in some cases more easily, with my iPhone, iPad or MacBook Air?” he said in a review Friday. “So far I remain unconvinced, as impressed as I am with the design and technology that Apple has put into its smartwatch.”
Apple retail strategy criticized
Apple is hindering sales of the Apple Watch through its restrictive retail policy, Global Equities Research analyst Trip Chowdhry said in a note Sunday.