Passbook is the iPhone's ugly ducking - but it won't stay that way for long

Passbook has been touted as one of the most innovative new features in iOS 6. Right now, there's not enough to get excited about — but could that be about to change?
Written by Steve Ranger, Global News Director

Apple has taken a lot of criticism over the iOS 6 Maps app fiasco, but for some Passbook is — at least at the moment — a greater disappointment.

Passbook allows iPhone users to keep tickets, store cards, coupons and boarding cards in one place, and is seen by some as Apple's first step into the extremely complicated but potentially very lucrative world of mobile payments.

Passbook for iOS 6 lets iPhone owners store retailer coupons and cards.

But while there are a number of services in the US that use the new iOS 6 feature, right now in the UK your options are limited: there are only four 'Apps for Passbook' listed on the local App Store. And as three of those are United Airlines, Lufthansa and American Airlines, they will only be of any use if you are leaving the country.

Starbucks has just updated its iOS app to work with Passbook, but not in the UK (although according to the coffee shop's local Twitter feed, it is "working on bringing this to the UK"). Similarly, if you're in the US you can use Gyft to add giftcards to your Passbook account, but currently the Gyft app is not available in Britain.

In the UK, Odeon Cinemas is offering a money-off voucher that can be downloaded into Passbook, but otherwise there seems to be little else out there yet.

While iOS 6 has been available only for a matter of weeks, Passbook was previewed long before, which is why the lack of UK apps is puzzling.

Ben Wood, chief of research at CCS Insight, blamed Apple's secrecy for the lack of Passbook apps so far. However, he is bullish about its future.

"To integrate into Passbook requires a certain amount of effort and testing," Wood said. "I have no doubt that we are going to see a flurry of Passbook integration emerge over the next six to eight months. It's going to be a big thing."

Wood said he was aware of lots of companies that are working actively on Passbook integration. "It will happen, and it will become one of the signature apps on iPhone," he told ZDNet.

"My long-term view of Passbook is that is still remains incredibly disruptive and is yet another vehicle for Apple to lock users into the platform. Any retailer, restaurant owner or airline that isn't actively trying to integrate into Passbook is making a big mistake: it's going to play big."

Ecosystem essential

According to Rob Bamforth, principal analyst at Quocirca, mobile wallet apps need a driven and promoted software developer community — and it takes a lot of effort to get the ball rolling. And it's even harder, when you have to get the corporate agendas of mobile operators, handset makers and credit card companies in alignment.

Passbook dodges some of these problems, he said, because it's a convenience app first rather than transaction revenue generator. But he said those investing in it — such as airlines and retailers — "will still need to be convinced that there are savings and brand awareness benefits for them."

"It is here that Apple should be using the halo effect of its own brand — at least to win over those whose egos and brands are not at the same level as Apple," Bamforth said.

But the so-far underwhelming debut of Passbook reflects a bigger problem with mobile wallets and mobile payments in general — consumer apathy.

Retailers are keen — they get to cut out cash, which is expensive to handle, and can get more information about customers, which they can then use to hone their business strategy.

Handset companies are keen to offer new applications, and adding mobile payments is another way of locking in customers. And banks and credit card companies are keen to grab a bigger slice of the billions of transactions that people make every day.

The big problem is that most people are quite content with the combination of cash and plastic cards that they are using today. The benefit to the shopper on the high street is the vital element that no mobile wallet has really cracked yet.

While Passbook is steering clear of mobile payments right now, it's an obvious option for the future. Wood also sees Passbook as a first step by Apple towards mobile payments, with near-field communications (NFC) replacing the barcodes it currently uses, over time. "I think Passbook is an application that is beautifully designed for evolution to NFC in the next-generation iPhone," he said.

The trick for Apple, he said is to get past the initial disappointment at the lack of apps. "Overall I'm very positive about Passbook, though I'm disappointed it hasn’t fired on all cylinders out of the box."

Apple had not responded to a request for comment on Passbook at the time of publication.

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