By Jefferson Graham, USA TODAY
David Reeves works in advertising in Atlanta, helping clients such as Baskin-Robbins, the Publix grocery chain and Dunkin' Donuts navigate the digital waters.
Right now, he's extremely excited about a new feature that will soon be available for the iPhone and iPod Touch. It's called Passbook, an app that will put all your digital coupons, tickets and loyalty cards in one place, and potentially, be a way one day to use the iPhone as a digital wallet.
"Every opportunity I have to get in front of a client, it's the first thing I talk about," says Reeves, vice president of the 22squared agency. "This is huge. Apple doesn't do anything halfway. This is a tremendous opportunity to revolutionize the way we use our wallets."
Wednesday, Apple is expected to introduce the highly anticipated new iPhone, which will include Passbook and several other new features, such as Apple's take on mapping and seamless integration with Facebook and Yelp. The iPhone, as well as the iPod Touch and iPad, will have the new iOS 6 software that will drive the devices. For owners of many older Apple devices, such as the iPhone 4 and 4S, the new iOS 6 software will be available as a free upgrade to effectively modernize your existing device.
Apple hasn't announced a launch date for iOS 6, but it's expected by the end of the month.
Cards, coupons, cash in one spot
There has been much talk in the past few years about turning phones into digital wallets - letting people use their phones to surf the Internet, make calls and pay for lattes and muffins.
Visa, MasterCard, Starbucks, Google, Square, PayPal, Intuit and others have been working feverishly to make mobile payments a way of life, but the practice has yet to go mainstream, because businesses are waiting for it to become more widespread.
Tech analysts don't expect the new iPhone to include tools such as a near field communications chip (NFC), which can communicate with scanners and let consumers easily swipe and pay at cash registers. "The technology isn't there yet," says Shaw Wu, an analyst at Sterne Agee. "Plus, the NFC chip is a battery hog."
But Wu does expect Passbook to pave the way for mobile payments eventually, once Apple gets a critical mass of consumers using it. At that point, Apple will be able to persuade retailers to modernize their payment equipment to work with the iPhone.
Apple could come at it with strength of numbers, Wu says. It has sold nearly 250 million iPhones to date, and Piper Jaffray analyst Gene Munster expects nearly 200 million more iPhones to be sold by the end of 2013.
"Of the iPhone owners we surveyed, over half said they wanted to buy the new one," Munster says. "There's a huge pent-up demand for the new iPhone."
Analysts expect the new iPhone to come with a bigger screen, spiffier design, a faster processor and improved camera. There's also the new iOS 6 software and Passbook.
"With Passbook, you can scan your iPhone or iPod Touch to check in for a flight, get into a movie and redeem a coupon," Apple says on its website. "You can also see when your coupons expire, where your concert seats are and the balance left on that all-important coffee bar card."
Developers hard at work
Apple gave demonstrations of Passbook and other new iOS features at a developers' conference this summer, a way to get the people who create the apps to learn about what was possible, and get them to start adding the features to existing apps.
Cyriac Roeding has been working feverishly since then to adapt his Shopkick shopping rewards app for Passbook. He has good company in movie ticket service Fandango, United Airlines, Target and Starbucks, all of which are touted on Apple's website as Passbook participants.
Shopkick, which has 3.7 million members, already works with retailers Macy's, Best Buy and Target to offer rewards to shoppers in-store - but they have to have the Shopkick app open while shopping to find out about the rewards.
The difference with Passbook: The offers not only show up without the app being open, but they're sent your way before you even enter the store. The iPhone's GPS detects your location. That might raise privacy hackles for some shoppers or be welcome benefit - "You can save $10 in bedding today!"
"This is a big leap forward in making apps more contextual and relevant," Roeding says. "They pop up when they should."
Daniel Delshad is putting the finishing touches on his new app, Loyaldash, which will launch in a few weeks. "It will work with Passbook to tie together our memberships in all those loyalty programs," he says. "Say you're flying on United, and checking in with Passbook," Delshad says. "Maybe you want to upgrade, but don't know how many points you have or need. You can use Loyaldash within Passbook to find out."
Passbook is one of 200 new features being touted in iOS 6. Other highlights:
•Maps. Google Maps (which Google will replace with a free-standing app) will no longer have a prominent position on the main iPhone screen, replaced by Apple's new map program, which promises spoken turn-by-turn directions and spiffy graphics. "It takes navigation to the next level," Wu says. "And it looks cooler."
•Facebook plus iPhone. Facebook will be more closely intertwined with iOS 6 on Apple devices. When users want to make calls, their Facebook friends will be listed in the contact area. Photos will be easier to share on the social network, with fewer clicks. "Apple is partnering with the most powerful social network," Wu says. "Google couldn't do that. Android users only have the option of Google Plus," which has a much smaller user base.
But it's Passbook and its potential that has analysts and developers most excited.
"Your mobile device will become your wallet. Whether it's in a few months, a year from now or longer, it's going to happen," Delshad says.
Worldwide mobile payment transactions will grow to $617 billion in 2016, from $171 billion in 2012, researcher Gartner says.
According to Wu, the long-range game plan for Apple is to have the smartphone do everything - start the car, lock it, open the house and garage, turn on the air conditioner and heater - and, of course, become the vehicle to pay for goods with a swift swipe of the phone.
"(Passbook) is just the beginning," he says.