Apple Inc. chief executive Tim Cook reiterated Wednesday what his counterpart at The Goldman Sachs Group Inc. said two weeks ago: the Apple Card’s debut was the most successful launch of a credit card in U.S. history. Cook didn’t provide numbers, though he did announce a no-interest promotion when the customers use the card to buy an iPhone.
Apple Card, issued by investment bank Goldman Sachs’s consumer unit, is closely tied to the Apple Pay mobile-payments service, which in turn is closely linked to Apple’s flagship product, the iPhone. During an Oct. 15 conference call, Goldman Sachs CEO David Solomon termed the Apple Card’s August debut “the most successful credit card launch ever,” but he didn’t back up that claim with numbers.
Cook used nearly identical wording during Apple’s quarterly earnings call late Wednesday. “We believe this has been the most successful launch of a credit card in the United States, ever,” he said. But, like Solomon, he didn’t provide data to support his claim, and a spokesperson for Cupertino, Calif.-based Apple did not respond to a Digital Transactions News request for comment.
Yet given the millions of loyal users of Apple’s iPhones, Watch, Mac desktops and laptops, and iPad tablets, it’s likely Goldman Sachs is cranking out a lot of Apple Cards. The titanium card offers tiered cash rebates on purchases, including 3% on items such as an iPhone bought at an Apple store. Cook on the call announced an upcoming promotion linking the card to the iPhone, which saw sales decline 9% year-over-year in Apple’s fourth quarter of fiscal 2019 ended Sept. 28. “Customers will be able to purchase their new iPhone and pay for it over 24 months with zero interest,” he said.
Apple is trying to lessen its heavy dependence on the iPhone. The product generated revenues of $142.4 billion in fiscal 2019, good for 55% of $260.2 billion in total sales but down by $22.5 billion from a year earlier, when it commanded 62% of fiscal 2018’s total sales of $265.6 billion. At the same time, Apple wants to get the iPhone growing again even though the smart-phone market is saturated, or nearly so, in many countries. Quarterly iPhone revenues slipped 9% to $33.4 billion, while the 2019 total was off 14% from $164.9 billion in 2018.
Apple’s fastest growing segment is services, which includes Apple Pay. Cook said Apple Pay had 3 billion transactions in the fourth quarter, more than double from a year earlier, and that volume is growing “four times as fast” as PayPal’s. Apple Pay is now live in 49 countries and has 6,000 participating card issuers, he said.