When Apple (NASDAQ: AAPL ) bought Beats Music for $3 billion in May, it also surprised many people by announcing plans to keep subscription apps alive on both Google's (NASDAQ: GOOG ) (NASDAQ: GOOGL ) Android and Microsoft's (NASDAQ: MSFT ) Windows Phone. This was a 180-degree turnaround for Apple, which has historically discontinued apps on competing platforms immediately following an acquisition.
Now, Google has reciprocated, returning Apple's favor with an announcement on June 11 that it will offer iOS support for Instant Buy. Instant Buy is a Google Wallet-based authentication and payment platform that allows customers to bypass shops and make purchases with just a few clicks. By using the Instant Buy API for iOS, which leverages Google's authentication back-end as well as Google Wallet, companies now have a better chance of converting app visitors to sales.
What Google Wallet Instant Buy really does
Studies have shown that an average of 72% of online buyers across multiple platforms do not complete purchases once they initiate the process, a practice commonly known as shopping cart abandonment. But, for mobile devices, the average shopping cart abandonment rate is an astonishing 97%, meaning that only 3% of mobile buyers complete online purchases once they initiate the process.
Potential buyers usually fail to follow through on their purchases because of factors such as difficulty in creating accounts, difficulty typing in billing information and payment details, and so on.
Instant Buy makes checkouts via mobile devices painless and hassle-free by reducing the steps required to complete a transaction to as little as two clicks. The potential of the app to improve mobile shopping is, therefore, tremendous.
Welcome move for iOS users
Google's Instant Buy should be welcome for iOS users, as Apple currently does not have a dedicated wallet service for apps. However, Apple plans to make online shopping easier in the upcoming iOS 8 by implementing credit card scanning. Additionally, there are rumors that Apple could also be working on a comprehensive payments tool that may incorporate the Touch ID fingerprint recognition system, although the date of the actual launch remains unknown.
The fact that Google will not charge a fee for Instant Buy on iOS will likely accelerate its adoption by merchants and developers. The app has been around for about a year, and is apparently working well. RueLaLa recorded a 400% increase in purchase conversion using the app; Eat24 saw its order value increase by 11%, while Fancy saw its conversion rate jump by 20%.
Borders blurring with multi-platform computing
Historically, Apple, Google, and Microsoft have jealously guarded their ecosystems by stubbornly refusing to offer support for rival operating systems. Apple had dabbled in other platforms before, most notably iTunes for Windows PCs. However, Apple did that as matter of necessity, as it came at a time when the company was pushing its iPod media players, which required syncing with the desktop to transfer music.
Microsoft was first to break the barriers with Office for iPad, announcing a major shift from its earlier dogmatic policy of supporting Windows first, while other platforms were treated as second-class citizens. More importantly, Office for iPad is not simply a case of a Windows app ported to iPad, but rather, each application is native to iOS and supports documents from both the device and Microsoft's OneDrive cloud service.
Microsoft's strategy is to get users hooked on its cloud services such as Windows InTune device-management, Azure Active Directory Premium, and OneDrive Cloud storage. Microsoft's cloud is now the second-largest after AWS.
Apple may soon support Android on iTunes
With the current trend of multi-platform computing, it won't come as a surprise if Apple releases a new iTunes application for Android to shore up its slackening sales. Apple's iTunes sales are down 24% year over year, although the slack is being picked up by increased app sales. Falling iTunes sales has been brought about by shifting consumer behavior, with users opting to subscribe to streaming services instead of paying for downloads. That's a big reason why the company purchased Beats Music.
Apple made $16.051 billion from sales of iTunes, software, and services in fiscal 2013, almost 10% of its total revenue. This segment has been growing at 30%-40% for the last four years, compared to Apple's 9.2% top-line growth last year.
The move by Google to offer iOS support for Instant Buy is not only likely to increase its adoption, but also pique the interest of iOS users in other Google apps, possibly inducing them to try them out. Breaking down platform barriers not only means more business for the providers, but is also a welcome move for enterprises and individual users.
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