If you thought the sky was the limit for Apple (AAPL), you were wrong. Apple is heading to the skies via JetBlue (JBLU) starting next week, according to USA Today.
It seems like just yesterday that we couldn’t even use our cellphones in flight, but now, customers will be able to pay for things via Apple Pay and near field communication (NFC) technology. That means, in English, that flight attendants will have iPads that communicate with your phone so you don’t have to awkwardly reach under your seat and fish out your credit card the next time you want to buy a craft beer in flight. Wireless Internet won’t be required.
The FAA was initially skeptical about using NFC communications in flight, but after testing it approved the technology. JetBlue will start accepting ApplePay on cross-country flights next week and should have it available on all flights by the summer.
Whether this has a material impact, though, remains to be seen. “I think only a small percentage of a people on any given flight are buying anything,” said Yahoo Finance Senior Columnist Michael Santoli. While airlines are increasingly making money off of “ancillary fees” this is largely related to things like baggage and seat selection – no one is yet talking about the staggering amount of money airlines make off of in-flight booze. That said, passengers are 30% more likely to buy in-flight if their neighbor is, so you never know if convenience will change the game. “It wasn’t that long ago they went away from cash all together, almost all airlines don’t accept cash. And this way you don’t have to fumble with your cards,” said Santoli.
Apple thinks JetBlue using the service will put pressure on other airlines to keep up. Apple’s Senior Vice President for Internet Software and Services, Eddy Cue, told USA Today, "Somebody else doing it always puts pressure on the other guy.” So keep an eye on American Airlines (AAL), Delta (DAL) and United (UAL).
It’s not just in the air, either. Apple may be changing the game on the road, too. USA Today also got to test out new Hyundai vehicles equipped with Apple’s CarPlay as well as Android Auto. Expect those services to be available in cars this year. The new vehicles will be equipped with both systems so you don’t have to commit to the same type of phone for the entire time you have your car. The thought is to allow drivers the same interface on their car that they use on their phone. The USA Today review dubs the technology “worth the wait.”
“I like this because I don’t want to learn a new system to play music in every car I get in,” said Yahoo Finance’s Jen Rogers. “People always have their smartphone with them and it kind of is the nexus of their life… that is exactly what the idea is,” added Santoli. It makes sense for cars and phones to integrate their systems to create “ease of use” for drivers.
But there’s a hidden business opportunity there as well. There’s a reason new media has never been able to fully kill radio advertising – people in their cars are captive audiences. Many media companies have worried that as drivers move away from traditional radio to commercial-free options like iPhone/Android hosted music on the road, they’ll lose a valuable opportunity to target customers. “Media companies and technology companies say that’s the one big chunk of a person’s day where we can’t get to them directly,” said Santoli. And these new systems may change that. “Now if [drivers] can effectively be on their phone the entire time they’re driving to and from work, we can get them advertising messages and everything else we like,” he added.