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Apple Card promotes iPhone, steers users from Android

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The back doesn’t have any personal information.

Todd Haselton | CNBC

Apple’s highest-profile launch this year hasn’t been a new phone or tablet — it’s been a credit card. Investors and analysts have placed a lot of hope in the card as a high-profile new product in Apple’s online services business that management has highlighted as a growth engine for the company.

But the Apple Card could end up being a smashing success even if it doesn’t contribute a meaningful amount to the company’s services revenue or end up being Apple’s beachhead in the financial industry.

Rather, the Apple Card is all about keeping users glued to Apple’s most important product: the iPhone.

The Apple Card can only be signed up for on an iPhone. Sure, there’s a metal card, but the primary interface for the credit card is on your iPhone — and that includes for paying bills.

If you lose your iPhone, you have to pay your bill from another iOS device, or you can call an Apple support phone number, which will connect you to Goldman Sachs to pay your bill, according to Buzzfeed. There’s no web portal on Apple’s website.

All this means is that if you have an Apple Card, it’s going to be hard to switch to Android, at least before you pay off your balance. The credit card makes the phone much stickier.

And people with iPhones are much more likely to buy AirPods, Apple Watches and apps for their devices, all of which essentially require an iPhone to work properly, and all of which feed back into the cycle — when the person with all those Apple products wants a new phone, they’ll buy an iPhone, because it works with all of their Apple products.

Tracking switchers

Apple’s leadership used to make a big deal about “switchers. ” From time to time, Apple CEO Tim Cook would drop nuggets of information in earnings calls or interviews that suggested that Apple was having a lot of success getting people to move from an Android phone to Apple’s ecosystem.

Switchers are important to Apple because 81% of Americans own smartphones, according to a Pew study, with similar rates of penetration in other rich markets. Many people in the market for a new smartphone either had an iPhone or Android phone before.

Getting Android users to switch is a big enough priority for Apple that some Apple advertisements last year focused on it. Apple has also released software to help people easily transfer data from an Android phone to a new iPhone.

The other side of that coin is that people who have iPhones might want to buy an Android phone when it’s time to upgrade. The latest generation of Android phones are thin, light and powerful, and some are significantly less expensive than the $999 starting price for an iPhone XS.

That’s where the card comes in: as a way to reduce iPhone churn.

Lots of financial details about the relationship between Goldman Sachs and Apple aren’t public, like if Apple is getting a bounty for sign-ups or whether it gets a cut of transactions. But even if those sums aren’t material to Apple, the number of iPhone users who stick in the Apple ecosystem because of their shiny titanium credit card will be.

Goldman Sachs is even approving customers with low credit scores, CNBC previously reported. Even someone with a low FICO score needs to buy a new smartphone eventually.

Apple not a financial company

For what it’s worth, Apple’s leadership pointed to the card last month as a part of its services business, a catch-all line item including App Store fees, search engine fees from Google, AppleCare warranties, and subscriptions to iCloud and Apple Music.

But although the card is a financial product, Apple’s not really transforming into a regulated financial company. Goldman Sachs is providing backend API services to Apple, whose Apple Pay team is in charge of the user interface and product, CNBC previously reported. When you sign up for the card, fine print makes it very clear that the lending and payment aspects are being handled by Goldman Sachs.

This means that Apple can focus on the user experience, which is where its strengths lie. The Apple Card has a lot of nice user interface features. It tracks your spending, charts it, and you can even visualize where you bought things on a map. Apple frames the software as a way to improve your personal finances and as a secure way to pay for things in person and online.

It’s not the most groundbreaking stuff, but if you’re comfortable with Apple software and hardware, it’s nice to have. And in exchange, it will make Apple hardware and software something current iPhone users need to have.

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US-UK trade deal within a year of Brexit will be tight, UK PM Johnson

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It will be tight to meet the United States’ desire to do a post-Brexit trade deal with Britain within a year, British Prime Minister Boris Johnson said on Sunday.

Johnson, who took office last month, had his first bilateral meeting with U.S. President Donald Trump earlier on Sunday at the G7 meeting in France and the two discussed a range of issues including trade.

In interviews with British television media afterwards, Johnson said the United States wanted to do a deal within a year of Britain leaving the EU on Oct. 31.

“Years and years is an exaggeration, but to do it all within a year is going to be tight,” he told BBC TV.

Johnson also said the chances of Britain agreeing a Brexit deal with the EU were improving but it would be “touch and go”.

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Hong Kong police briefly turn water cannon on protesters, fire tear gas

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Protesters gather in Kwai Fong in Hong Kong on August 24, 2019.

LILLIAN SUWANRUMPHA | AFP | Getty Images

Hong Kong police briefly fired water cannon and volleys of tear gas to force back brick-throwing protesters on Sunday after violent clashes a day earlier during which police also fired tear gas for the first time in more than a week.

At least one petrol bomb was thrown by protesters. The water cannon, which had not been used in years of anti-government protests, soon pulled away.

The Chinese-ruled city’s MTR rail operator suspended some services to try to prevent people gathering but protesters made it to a sports stadium in the vast container port of Kwai Chung, from where they marched to nearby Tsuen Wan.

Some dug up bricks from the pavement and wheeled them away to use as ammunition, others sprayed detergent on the road to make it slippery for the lines of police. Clashes spread in many directions.

Police had warned earlier they would launch a “dispersal operation” and told people to leave.

“Some radical protesters have removed railings … and set up barricades with water-filled barriers, bamboo sticks, traffic cones and other objects,” they said in a statement.

“Such acts neglect the safety of citizens and road users, paralysing traffic in the vicinity,” the statement said.

Activists threw petrol bombs and bricks on Saturday in the gritty industrial district of Kwun Tong, on the east of the Kowloon peninsula.

The vast majority marched peacefully on Sunday.

‘Last Chance’

M. Sung, a 53-year-old software engineer in a black mask emblematic of the many older, middle-class citizens at the march, said he had been at almost every protest and would keep coming.

“We know this is the last chance to fight for ‘one country, two systems’, otherwise the Chinese Communist Party will penetrate our home city and control everything,” he said.

“If we keep a strong mind, we can sustain this movement for justice and democracy. It won’t die,” Sung said.

Protesters say they are fighting the erosion of the “one country, two systems” arrangement under which the former British colony returned to China in 1997 with the promise of continued freedoms not enjoyed on the mainland.

The protests, which started over a now-suspended extradition bill and evolved into demands for greater democracy, have rocked Hong Kong for three months and plunged the city into its biggest political crisis since the handover.

They also pose a direct challenge for Communist Party leaders in Beijing, who are eager to quell the unrest ahead of the 70th anniversary of the founding of the People’s Republic of China on Oct. 1.

Beijing has sent a clear warning that forceful intervention is possible, with paramilitary forces holding drills just over the border.

Transport to the airport appeared normal on Sunday, despite protesters’ plans for a day-long “stress test” of transport in the international aviation and financial hub.

Police said they strongly condemned protesters “breaching public peace” and that 19 men and 10 women had been arrested after Saturday’s violence. More than 700 have been arrested since the demonstrations began in June.

The neighbouring gambling territory of Macau, a former Portuguese colony that returned to Chinese rule in 1999, elected former legislature head Ho Iat Seng as its leader on Sunday – the sole approved candidate.

Ho, who has deep ties to China, is expected to cement Beijing’s control over the “special administrative region”, the same status given to Hong Kong, and distance it from the unrest there.

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At G-7, Trump says he is not happy about North Korea missile tests

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SAINT-JEAN-DE-LUZ, France — President Donald Trump said Sunday he was not happy after North Korea launched short-range ballistic missiles over the weekend.

“I’m not happy about it but again he’s not in violation of any agreement,” Trump said when asked about the recent string of tests from the North’s Kim Jong Un.

“I discussed long-range ballistic and that he cannot do and he hasn’t been doing it and he hasn’t been doing nuclear testing. He has done short-range, much more standard missiles, a lot of people are testing those missiles, not just him. We are in the world of missiles folks, whether you like it or not,” Trump said.

Meanwhile, Japanese Prime Minister Shinzo Abe said North Korea’s test was in violation of UN Security Council resolutions.

On Saturday, North Korea fired what appeared to be two short-range ballistic missiles into the sea off its east coast, the South Korean military said, the latest in a series of launches in recent weeks amid stalled denuclearization talks.

North Korea, the only nation to have tested nuclear weapons this century, spent most of Trump’s first year in office perfecting its nuclear arsenal. The newest member of the world’s exclusive nuclear weapons club has stopped testing of its nukes for now as the U.S. and international community offer the possibility of relief from crippling economic sanctions.

Under the third-generation North Korean leader, the reclusive state has conducted its most powerful nuclear test, launched its first-ever intercontinental ballistic missile and threatened to send missiles into the waters near the U.S. territory of Guam.

Since 2011, Kim has fired more than 90 missiles and had four nuclear weapons tests, which is more than what his father, Kim Jong Il, and grandfather, Kim Il Sung, launched over a period of 27 years.

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