More Smart Octopus

I assumed the Smart Octopus Coming to Apple Pay post would be ignored in the end of year rush period. However the timing perfectly coincided with an Octopus Cards Limited press conference where the CEO demurred any Octopus tie-up with Apple and the post got much more attention than I ever anticipated. Obviously there are lots of iPhone users in Hong Kong who want Smart Octopus Apple Pay. A few readers were confused by the situation and asked for some clarification.

First of all the source who correctly predicted last years Smart Octopus on Samsung Pay launch tipped me about the Apple Pay launch. That in itself was enough for me but here’s the thing: if Octopus Cards Limited (OCL) is really serious about expanding Octopus use on mobile platforms, taking the next step of getting Smart Octopus on Apple Pay is the only way to achieve that.

Digital Wallets like Apple Pay and Samsung Pay are the most tightly integrated NFC software and hardware digital wallet platforms out there with integrated FeliCa, but Apple is the only one to integrate the necessary Secure Element on their own A Series/S Series hardware with FeliCa Networks keys, and sell the package globally. All the major NFC technologies are standard on Apple Pay: NFC A-B-F, EMV, FeliCa, MIFARE, VAS.

Smart Octopus on Google Pay might look nice on paper but it can’t achieve anything of scale yet because of the highly fragmented nature of Android: to date hardware manufacturers have yet to produce an answer to Apple’s global FeliCa iPhone and Apple Watch, even though everybody’s smartphone has a NFC A-B-F chip. Not even Google has pulled it off. Huawei says they are planning to add global Felica but it will take time.

OCL is playing coy because majority shareholder Hong Kong MTR has added QR Codes and EMV contactless to the transit gate mix removing the exclusive Octopus Card franchise, but the technology and market politics don’t mesh. On one hand you have a fast, established and ‘open’ in-house contactless payment system (as in anybody can buy a plastic Octopus card and ride) basically run by public transit companies. On the other hand you have slow and ‘closed’ contactless payment systems (as in only people with certified credit cards and bank accounts can ride) run by major outside credit/debit network companies chipping off money from both customers and transit companies.

In this context putting Smart Octopus on Apple Pay isn’t just adding a card to a digital wallet platform, it is also a statement of who ultimately controls, operates and benefits from the public transit gates. It’s more about market politics than technology, in other words another battle in the contactless payment turf wars. The outcome will be fascinating to watch but determines whether Octopus will remain a great transit payment platform for Hong Kong with a future, or not.

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Chinese users reportedly dumping iPhone in retaliation to Huawei arrest

An ominous sign? All NewsNippon (ANN) reports that just 4 days before the arrest of Huawei CFO Meng Wanzhou “a large Chinese technology company” issued a company policy stating any employee caught using an iPhone would be fined the entire purchase price and that any employee using a Chinese smartphone would be reimbursed for 15% of the purchase price. The video reports some evidence out of Hong Kong and various Chinese SNS sites that users are supporting Huawei in the ‘trade war’ and dumping iPhone.

Like all news out of China it’s impossible to know how much of it is real as other news sources report that the Huawei arrest isn’t being reported in official Chinese news channels. Take it with a grain of salt but either way it’s not a good development.

Huawei hopes to steal Japanese iPhone Market Share with Global FeliCa

Huawei released the Mate 20 Pro in Japan November 30 with a clear goal of offering a lower priced smartphone in the Japanese market where carrier subsidies are going away and iPhone XR sales rumored to be so-so. IT Media Mobile reports that Huawei’s Jeff Wang, regional president for Japan and Korea said that, “long-term the Japanese mobile market is becoming a fair and level one” competitively, with opportunities to offer users “revolutionary products.” The remark clearly alluded to the Japan Fair Trade Commission investigation of Apple iPhone sales strategy in Japan which resulted in the call to end carrier subsidies.

There’s just one catch: only the Docomo Huawei P20 has FeliCa, the Mate 20 Pro does not.

Wang said Huawei recognizes the need for FeliCa in the Japanese market and is working to add global FeliCa to all Huawei smartphone models. If this turns out to be true, Huawei will first smartphone manufacturer to follow Apple’s lead in adding global FeliCa. The sooner global FeliCa becomes a boring standard check box item for smartphone manufacturers everywhere the better.

Huawei Joins the FeliCa Android Party but Only in Japan

HUAWEI P20 Pro FeliCa only works on the Docomo carrier locked versionDespite the Google Pay Japan flop, Huawei made good on its promise to deliver a FeliCa capable Android smartphone for the Japanese market in 2018. The HUAWEI P20 delivers it via a Docomo carrier locked UIM card arrangement that activates FeliCa.

Google Pay Suica will be the same mess on HUAWEI that it is on all other Android smartphones, and of course there is no joining the FeliCa party for inbound visitors. After all Android has yet to come up with an answer to the Global FeliCa iPhone.

I’m unsure how well any HUAWEI FeliCa device will be received by Japanese customers in light of the weird remarks that HUAWEI’s Jeff Wang made last February. We live in the age of supply chain risk so make your device choices carefully.