Today, the US Patent & Trademark Office granted Apple a patent relating to an all-new iWallet Credit System Architecture. It's a surprising patent win for Apple considering that it was an acquired patent from two inventors in Finland and originally published in Great Britain. Apple refilled it in March 2011. The new credit system architecture is a separate wing of Apple's originating iWallet architecture and deals with a subsidization program that works with sponsors and advertisers. If a consumer doesn't chose a subsidized iPhone, then the credits earned for working with advertisers and sponsors could be used to purchase Apple products and/or services. Last week we learned that Research in Motion's BlackBerry will be the first smartphone in Canada to offer consumers a viable mobile wallet system this fall. With that aggressive schedule in play, you have to wonder how far behind Apple's iWallet really is now.
Apple's Patent Background
Usage of cellular or mobile telephones is very popular and common. In a typical arrangement for use of a mobile telephone, a user subscribes to a mobile telephone service offered by a mobile telephone operator or carrier and enters into a pre-paid or post-paid plan with the mobile telephone operator. A pre-paid subscription plan is usually an arrangement where the user pays in advance for the telephone services to be used over a future period of time. A post-paid subscription plan is usually an arrangement where the user pays for the telephone services after using the services.
The services available using the mobile telephone may be voice services (i.e., making and receiving telephone calls), messaging services such as Short Message Service (SMS), Multimedia Message Service (MMS), data services such as Internet browsing or Wireless Application Protocol (WAP) browsing, video calls, downloading content, streaming content, purchasing applications such as games or other software, using location, guidance or navigation services, finding information, and communicating with a group of people and others.
Mobile telephones could also be used as a payment method in point of sales transactions. One example of such usage involves use of the near field communication (NFC) capabilities of a mobile telephone to use it as credit card in the point of sales transaction. Furthermore, mobile telephones could receive coupons for discounts which may be used in a point of sales transaction.
Apple's invention is directed at least in part to a method and system for providing credits, vouchers or coupons representative of monetary value to users of iOS devices for the purpose of purchasing goods and services.
First Exemplary Credit Delivery System Architecture
We begin with an overview of system 10 of the credit deliver system architecture noted in patent FIG. 1 below. The system may be implemented to provide credits having monetary value to mobile devices arranged to use a communications network such as GSM, WCDMA, CDMA, LTE WiMax and broadcasting over DVB-H, ISDB-T and DMB. In one case, users may be required to view advertisements in exchange for credits.
The Billing System
Apple's system (see patent point #10 above) also includes a billing system operatively coupled to the communications network and may be arranged to maintain an account of available money for each mobile device. Further, billing system may be arranged to monitor and/or meter usage of the communications network by each mobile device and monitor and/or meter usage and payments of or for the advertisements being delivered to each mobile device.
The billing system may be a real-time billing system or a close-to-real-time billing system. The billing system or other suitable means associated with the system could thus arrange for payment from users of the mobile devices based on their usage of the communications network. Payment may be pre-paid, i.e. the user has paid for the service before using the communications network and the billing system monitors and reduces the paid amount in the user's account based on usage. Alternatively payment may be post-paid and a billing system monitors usage of the communications network and the user pays for the services after usage.
Usage of the communications network may entail voice services, messaging services (Short Message Service, Multimedia Message Service, Instant Message Service, Electronic mail services), video telephony services, push-to-talk services, data services such as Internet or Wireless Application Protocol (WAP) browsing services, content usage (television, radio, video) services, download services, premium SMS (pSMS) service, among others.
In one embodiment of the invention, the billing system meters usage of the services by each user and compares the metered usage with a free or subsidized balance allocated to each user. In this manner, although invoices are not sent to the users, the metered usage is compared with business rules associated with the users and the cost for providing the free or subsidized services to the users is invoiced directly or indirectly from advertisers.
Other techniques to provide subsidized or free telephone services to the users are also envisioned. For subsidized telephone services, the users may be responsible for a portion of their usage and thus they would be interested in eliminating unnecessary use of such telephone services.
The Wallet Service Server
Apple's Credit Delivery System Architecture also includes a wallet service server which in one embodiment, is a computer system running the wallet service. The wallet service server communicates with mobile devices via the communications network and is operatively coupled to the billing system.
Sponsors and Advertisers
In conjunction with Apple's credit delivery system, there may be one or more sponsors which sponsor some of the mobile service such as voice or messaging or a sponsor could be an advertiser which, in exchange for sponsoring a portion of the mobile service being provided to users of the mobile devices, sends advertisements via communications network to the users' mobile devices.
A sponsor may also be a party which wants to sponsor some specific payments to users of mobile devices. Each sponsor is provided with access to the billing system and the wallet service server. The billing system would manage the payments from each sponsor for whatever credits or services they have sponsored.
Alternative Credit Delivery System Architectures
Although the iWallet service described in Apple's patent is mainly focused on a credit system associated with an advertisement system such as iAd, the fact is that patent claim 2 states the following: "The system of claim 1, wherein the billing device comprises one of a billing system, a bank, or a credit card company." So there is a direct connection between Apple's future iWallet credit delivery system and banks and/or credit card companies.
Apple's newly granted patent was originally filed in Great Britain by inventors Janne Aaltonen and Sami Saru of Turku Finland in 2007. Apple acquired the patent and refilled it under Apple with US Patent and Trademark Office in March 2011.
Closing Thoughts on iWallet
Due to the fact that today's granted patent is in fact an acquired patent, it's very difficult to ascertain which aspects of this invention interested Apple. More importantly, we're in the dark as to which aspects of the invention Apple may implement. Therefore we only covered the basics of this credit system architecture patent so as to not get too ahead on how Apple will play this out.
Case in point: the invention describes prepaid phone systems which may have made sense in 2007 but may have no bearing today – especially for the iPhone. So on that point, Apple may execute an alternative plan for implementing a subsidization program which is briefly touched on in this patent but which was covered in depth in our 2009 report titled "Apple Prepares to Rock the Market with Hardware Subsidizing Program." Subsidization is totally in line with Apple's previous patent.
In March we posted a report titled "Apple Wins Patent Relating to Nano SIM and iWallet Chip" which discussed how future iDevices could contain both SIM and ICC cards in a single tray. And this week we learned that Apple's SIM card design was chosen by the European Telecommunications Standards Institute. So slowly but surely the pieces of Apple's future iWallet are coming together.
Today's granted patent is squarely about adding a unique credit delivery system architecture to Apple's future iWallet. This system will in some cases help to subsidize future iPhones or assist non-subsidized program users with the ability to accumulating credits that could be cashed in for purchases such as iBooks, iTunes or other products available from Apple, Amazon or other online retailers.
In the big picture, the mobile wallet will play a huge part in the electronic payment ecosystem alongside single credit and debit cards. However, how it will eventually play out for Apple's iWallet remains to be seen. Will Apple's iWallet simply facilitate bank cards via a bank-ICC card in a dual tray alongside a nano-SIM? It's starting to look that way.
The move to push the mobile wallet into the marketplace was advanced last week with announcements that mobile payments were coming to Canada by the end of this year. The wireless carrier Rogers Communications and the Canadian Imperial Bank have teamed up to launch a "mobile wallet" that puts credit card credentials onto smartphones.
The article stated that "Canada's banking industry on Monday published a blueprint to support open standards for secure transactions using near field communications (NFC) chips that are available in a growing number of the latest smartphones." This is a technology that many of Apple's iWallet patents support.
The Calgary Herald report went on to state that "The existing readers that currently used with fast food outlets, gasoline stations, grocery and convenience stores and coffee shops work with existing credit and debit cards that emit similar signals. NFC chips are considered a safer alternative to traditional magnetic strips, which are more easily hacked."
Apple's noted patent that discussed incorporating an ICC bank card into a SIM-like card may be one of the ways that this will all play out. In that scenario, consumers would get to choose which carrier SIM Card and which ICC banking SIM-like Card to put into their future iPhone or iPad LTE at the time of purchase.
However it plays out, Research in Motion's BlackBerry is going to be the first smartphone in Canada to introduce the mobile wallet program and I'm sure that Apple is going to make sure that they comply with whatever standards needed in order to compete. The only thing in question is the timing of the iWallet.
In today's granted patent, we're able to see that Apple is working on a parallel Credit Delivery System Architecture that will be implemented under the iWallet umbrella of financial services.
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