Apple Plays the Joker

A few weeks ago, Apple unveiled its latest offering to a salivating public. No, were not just talking about the much anticipated release of the iPhone 4S, were talking about Apples new greeting card app – Apple Cards.
This seemingly innocuous app was quietly announced as part of the iPhone 4S launch. Quietly? Well, that is until the shockwaves sent Greeting Cards stock prices tumbling. American Greetings Corp dropped 10% and Shutterfly Inc. fell almost 20 per cent (both have recovered somewhat since).

Knee-jerk reactions
There is little doubt that the launch of Apple Cards will disrupt the industry. Were talking more than just a few knee-jerk reactions in share prices. Will Apple do to Hallmark and Clintons what it did to the HMV and Virgin Megastores (RIP) of the high-street?

The greetings cards industry is surprisingly large. According to a report released last year by Global Industry Analysts, the global greeting cards market is set to exceed $30bn by 2015, with over 1.5bn card sent in the UK alone (according to UKs Greeting Cards Association). Compare this to the music industry, which was worth an estimated $60bn globally when Apple turned it on its head with the launch of iTunes. iTunes is by far the largest music retailer on the planet, and Apples entry into the music industry was an unmitigated success. Not only has it reinvented how people consume music, it has redefined the industry. Nobody saw Apple coming, and nobody took them seriously.

So is Apple about to do an iTunes on the greetings industry? Well the success of iTunes shows how adept Apple is at disrupting incumbent players within mature industries. In spite of the success of mobile services such as eBay and PayPal (expected to generate more than $5bn in 2011) mobile is not just about revenue. Its about perception and consumer engagement. Thats where some of the big players in the space have really lost the edge to start-ups, as well as to innovative corporations.

Personal expression
Apple has seen that the face of personal expression has changed – Facebook and BBM have become two of the main ways we communicate. We use the photos we take on our phone to express who we are, and use services like Instagram to ensure that we present ourselves exactly as we want to. When was the last time you hand-wrote a letter? Could you even write a letter neatly?

Apple is the only company playing in the mobile-to-physical greeting card area, though. A lot of smaller businesses have been carving out this space successfully over the past few years – at Touchnote weve been a proud London success story since 2008, and have sent hundreds of thousands of cards from iPhone, Android and other handsets. Apples entry to this space confirmed what many have known for quite some time – that there is a market for physical photo sharing from mobile.
It may be somewhat of a stretch comparing iTunes to Apple Cards, but based on Apples history of quietly disrupting existing industries, you wouldnt want to bet against them.


Raam Thakrar is co-founder of Touchnote