iPhone maker Apple (NASDAQ:AAPL) has announced a strategic shift in its financial services offerings by discontinuing its Apple Pay Later program. This buy-now-pay-later (BNPL) service, introduced last year in March, allowed users to split online purchases into four interest-free installments for items up to $1,000. This move facilitated easier payments for consumers and helped Apple drive customer loyalty.
This transition will not leave current users hanging, as existing Apple Pay Later loans and purchases won’t be impacted.
Rationale Behind the Strategic Shift
Starting later this year, Apple will integrate installment loans directly into the Apple Pay checkout process. In this regard, Apple will collaborate with third-party companies such as Affirm (NASDAQ:AFRM) and major credit card issuers, including Citigroup (NYSE:C) and Synchrony (NYSE:SYF). AAPL’s strategic move is designed to offer users a broader range of installment loan options at checkout and expand Apple’s financial services beyond the U.S. market.
In essence, Apple is refining its approach to financial services, aiming to cater to a broader customer base by offering more diverse and flexible payment solutions.
Enhancing AI Capabilities
Amidst its restructuring of financial services, Apple is also bolstering its artificial intelligence (AI) capabilities. Recently, Apple unveiled “Apple Intelligence,” a suite of AI-powered features designed to drive user engagement across its devices.
Further, Apple collaborated with Microsoft’s (NASDAQ:MSFT)-backed OpenAI. This partnership signifies Apple’s strategic effort to stay competitive in the rapidly evolving AI landscape. It’s worth noting that the integration of ChatGPT into Apple’s platform will provide advanced AI capabilities to its users, enhance writing tools, and support content creation and image generation.
Additionally, Apple introduced a new and improved version of Siri, which now features enhanced language understanding and context retention.
Is Apple Stock a Good Buy?
Apple’s recent efforts to enhance its financial services and strengthen its AI capabilities reflect a broader strategy to expand its ecosystem, potentially driving higher user engagement and loyalty.
Apple stock has 24 Buys, 10 Holds, and one Sell recommendation for a Moderate Buy consensus rating. It has gained about 13% year-to-date. The analysts’ average AAPL stock price target is $209.28, implying 3.41% downside potential from current levels.
