MacRumors

Apple's ambitious new mobile payment initiative, Apple Pay, was announced on Tuesday during the company's iPhone event. Many questions still linger about the service, but information is beginning to trickle out from various sources as retailers, banks, and credit card companies prepare for the service's October launch.

According to a new report from The Financial Times, Apple stands to make quite a bit of money from its payments service. Banks and payment networks will be forking over 0.15 percent of each purchase to Apple, which equates to 15 cents out of a $100 purchase.

They are also paying hard cash for the privilege of being involved: 15 cents of a $100 purchase will go to the iPhone maker, according to two people familiar with the terms of the agreement, which are not public. That is an unprecedented deal, giving Apple a share of the payments' economics that rivals such as Google do not get for their services

According to bank executives, Apple was able to negotiate with so many partners and receive choice deals because the industry didn't see anything threatening in Apple Pay. One executive suggested that Apple's payment model continued to put banks "at the centre of payments." Apple may also have been able to negotiate better deals due to the tight security it has in place for Apple Pay. Payments will be made via NFC with a one-time token, and also secured with a Touch ID fingerprint.

Additional details about Apple Pay's security have been unveiled by MasterCard executive Jorn Lambert, who spoke to Bank Innovation, explaining how each transaction will be secured.

Along with the cryptogram generated between a standard debit or credit card and a point of sale terminal, Apple Pay takes advantage of a token system that encrypts every step of the payment process. Tokenization is already built into the standard NFC specification, so what Apple is really doing is utilizing existing technology and further securing it with its own Touch ID fingerprint authorization system.

Every card added to Apple Pay (and located in Passbook) is assigned a token, which Apple calls a Dynamic Account Number. Each Dynamic Account Number is stored in the secure element of the iPhone and accompanied by a unique cryptogram for each transaction.

[Touch ID] authentication prompts the "secure element" to send the token and cryptogram to the merchant. The network decrypts the cryptogram and determines whether it is authentic or not. If it is deemed authentic, the network will pass it along to the issuer (i.e. the bank), which then decrypts the token. In other words, every party to the transaction decrypts something.

Once the issuer decrypts the token and determines that it is authentic, the issuer/bank authorizes the transaction. Money is then credited to the merchant and marked as an amount owed by the cardholder.

The token system essentially provides an extra layer of security to payments made through NFC, which, as mentioned earlier, allows merchants to pay a lower "card present" rate for NFC purchases. Merchants still pay the higher "card-not-present" rate when payments are made over Bluetooth LE rather than NFC, however, or when a purchase is made in-app using Apple Pay.

According to Lambert, Apple is not handling tokenization, instead leaving it up to credit card companies like Visa, MasterCard, and American Express. He describes Apple's role as a "channel and not a party," and Apple itself has confirmed that it won't store any information about transactions conducted by customers.

Apple has plans to roll out Apple Pay beginning in October, and promises the program will work with more than 220,000 U.S. retailers including Walgreens, Macy's, Nike, Bloomingdales, and more. Some stores like Walmart and Best Buy claim to have "opted out" of Apple Pay, but users should be able to make payments via the service at any location that has an NFC-capable point of sale system.

Many retailers are currently in the process of updating their point-of-sale hardware, as an upcoming change will see merchants that do not support EMV credit cards being liable for fraudulent, lost, and stolen cards. EMV credit cards, also known as "chip cards," include integrated circuits to authenticate debit and credit card purchases. The updated point of sale systems with EMV card support being adopted by retailers also generally include NFC, which means Apple Pay may work even at stores that have not specifically chosen to support the service.

Though iCloud Photo Library was available during the iOS 8 beta testing period, Apple appears to have demoted it to beta status and removed it from the iOS 8 golden master, the software that will be distributed to the public next week.

Apple has also stripped mentions of iCloud Photo Library from its iCloud preview page, where it used to be prominently featured at the top of the site. Apple's preview page now focuses on iCloud Drive, the new iCloud storage plans, Family Sharing, and iCloud Photo Sharing, with iCloud Photo Library getting no mention at all.

It is unclear why Apple has demoted iCloud Photo Library back to beta status and removed it from the golden master, but it is possible that the company has decided to push it back in light of the negative press iCloud has received in recent weeks due to the celebrity photo leak.

Along with iCloud Photo Library, it appears that Apple has also decided to delay the SMS Relay feature of Continuity until October as well (via iLounge). According to Apple's iOS 8 press release from Tuesday, SMS Continuity will be added to iOS 8 in October, while iCloud Photo Library will be available as a beta during that same month.

Touted as one of the major features of iOS 8/OS X Yosemite, SMS Continuity lets Macs and iOS like iPads receive SMS text messages and phone calls through the iPhone.

Though it will be missing a few features, Apple has plans to release iOS 8 to the public on Wednesday, September 17, two days ahead of the September 19 release date of the iPhone 6 and iPhone 6 Plus.

Despite some significant hurdles that saw the U.S. Apple Online store remaining down until almost 3 AM Pacific Time and issues with ordering in the Apple Store app, it appears that Apple has set a new record for iPhone orders with last night's iPhone 6 and 6 Plus pre-orders.

An Apple representative who spoke to Re/code mentioned that a new record had been set, but did not comment on the number of devices that were sold.

An Apple representative said that the overnight sales of the new iPhones set a record, though Apple did not say how many have been sold.

"Response to iPhone 6 and iPhone 6 Plus has been incredible with a record number of preorders overnight," Apple told Re/code.

Apple's statement follows a similar comment from AT&T executive Ralph de la Vega, who said "It's amazing to see the volume" in reference to iPhone 6 and 6 Plus orders. De la Vega went on to say that demand for the phones is "better" than last year and the year prior.

At the beginning of the pre-order period last night, users were having trouble getting devices ordered due to continual errors in the Apple Store app and issues with carrier websites. Apple's own online store didn't come up until after 2:45 AM Pacific Time, nearly three hours after pre-orders were available in the Apple Store.

Apple's iPhone 6 Plus was in short supply and shipping estimates slipped to 7 to 10 days for all models before the online store was even up, shortly after slipping further to 3 to 4 weeks. The company does, however, appear to have ample supply of the iPhone 6 as many models continue to be available for delivery on 9/19.

Prospective buyers iPhone 6 Plus buyers who missed preorders can still potentially pick up a device on September 19 by waiting in line at an Apple Store.

As part of its iPhone 6 and Apple Watch announcement, Apple featured U2's latest "Songs of Innocence" album, making it the company's biggest album release ever by providing the title to 500 million iTunes customers for free. The album and its lead single "The Miracle (Of Joey Ramone)" are the cornerstone of an upcoming marketing campaign by Apple that is worth an estimated $100 million, although the deal has received some criticism from users who do not wish to have the album added to their iTunes accounts and in some cases automatically downloaded to their devices.

But the deal is a significant one by any measure, and Billboard Magazine sat down with U2's new manager Guy Oseary to talk about the deal and the band's future plans with the Cupertino company.

In the Billboard interview, Oseary shot down criticism that the deal was disruptive to the music industry and detrimental to other artists, arguing that the release is a "big concept" and should serve to inspire other musicians to innovate in their own way.

Well first of all, when music becomes a piece of the conversation at an Apple event, that’s always a good thing. Two is, the power of music and the fact that it can actually be shared with 7 percent of the planet in one push of a button. That’s a pretty big concept. Any sort of innovation may inspire other people to do things that are innovative. We may see someone sitting with another manager, or another band going, "Hey, what can we do that's interesting maybe with our lyrics or our videos or something interactive with the ticketing to our shows?"

Oseary also confirmed that the Apple-U2 deal is a "long-term relationship", with the parties working together to promote innovation in music.

We're working on other things as well with Apple that have to do with how music is heard and innovation, with [iTunes VP of content] Robert Kondrk leading that charge. There’s a lot of things still to come that are really interesting. The band really wants people to engage with albums, they want them to support the art form of artwork and lyrics and video content and just get into their music in a much different way than an MP3 file.

Focusing on the deal itself, Oseary stopped short of confirming that Jimmy Iovine played a role in negotiating the deal, saying only that the Beats co-founder and now Apple employee has long been "a source of support and guidance" for the band. Given Apple's long-standing interest in music and its dominant position that has been threatened in recent years by subscription services, Iovine has been viewed as a key reason for the Apple-Beats deal for his extensive relationships within the music industry.

At its "Apple Pay" introduction earlier this week, Apple outlined a host of partners for the mobile payments initiative, ranging from credit card companies to the banks that issue the cards to retailers representing over 220,000 retail locations in the United States. Questions have remained, however, about how willing other retailers will be to sign on to the program and how quickly those that do will be able to get up and running.

In the wake of Apple's announcement, several major retailers such as Walmart and Best Buy were in fact quick to state that they do not plan to support Apple Pay, as noted by The Wall Street Journal

Best Buy and Wal-Mart are instead backing a retailer-owned mobile technology group called Merchant Customer Exchange, which also counts Target Corp. among its members.

MCX's payment service requires only a software download and can be used on existing iPhones and Android devices, whereas Apple's is only for the latest generation handset.

For those retailers considering joining Apple Pay, however, it appears that Apple has timed its rollout perfectly. As highlighted by Pando Daily, Apple is taking advantage of regulatory changes that essentially require merchants to deploy new payment hardware in their retail stores over the coming year. This mass upgrade by over nine million merchants is the result of an updated credit card liability policy adopted by major credit card companies.

As of October 2015, any merchants that do not support EMV credit cards – smart cards with integrated circuits that enable point of sale authentication and help prevent fraud – will be liable for the fraudulent use of counterfeit, lost, and stolen cards. [...]

These EMV cards and the resulting transactions are far more difficult to counterfeit than what Americans consider "standard" credit cards. While EMV is the norm around the world, only about 14 percent of US merchants support this technology today and very few consumers own credit cards incorporating these chips.

As a result of this change in credit card liability, merchants are upgrading their payment processing hardware to support EMV credit cards and other payment technology. With Apple now on board with NFC, a greater number of merchants who are in the middle of this decision-making process may choose NFC-capable POS hardware so they can process payments via Apple Pay.

Apple's new Apple Pay service takes advantage of the Touch ID fingerprint sensor, stored credit cards, and a secure NFC connection to authorize payments at retailers' physical stores and in compatible apps. Both the iPhone 6 handset lineup and the Apple Watch will support the wireless payment method.

While Apple's launch-day supplies for the iPhone 6 are holding up fairly well so far, the larger iPhone 6 Plus has been sold out as shipping estimates move to 3-4 weeks. Overall, demand appears to be high as many expected, with the new form factor and larger displays serving to entice new and upgrade customers.

AT&T executive Ralph de la Vega addressed the iPhone 6 launch in comments at the the Goldman Sachs Communacopia Conference this morning, citing "amazing" volume with hundreds of thousands of orders taken according to Fierce Wireless.

"It's amazing to see the volume," he said, adding that the "systems are rocking" and "everything is going well." He said demand for the new phones is "better than last year and they're better than the prior year [before that]."

"Every time there is a change in [iPhone] design, there's an uptake," he said. "I think this design is particularly good."

Carriers are battling fiercely for iPhone 6 customers, with many touting trade-in offers to help keep customers on board or attract new ones. Carriers are also pushing hard to convert customers to newer plans that uncouple device and service pricing, financing the device over a period of 12 months or more rather than offering outright subsidies.

Several hours after Apple began taking pre-orders for the iPhone 6 and iPhone 6 Plus, Apple Store shipping estimates for new orders of the 5.5-inch iPhone 6 Plus have now slipped beyond their original September delivery date in the United States.

The larger 5.5-inch model now shows an estimated ship time of 3-4 weeks, pushing online availability of the handset into October. Customers still may be able to secure select configurations for launch day in-store pickup, but availability varies based on geographic location. Supply of the smaller 4.7-inch iPhone 6 remain strong with most colors and capacities still available for September 19th delivery.

Those who attempted to pre-order the iPhone 6 at Apple's after 12:01 AM PST experienced a number of problems, including frequent crashes and errors with Apple's own Apple Store app on both the iPhone and iPad. Apple's own online store also did not go up until more than an hour after the target Midnight start time.

Customers may still be to purchase launch-day iPhone 6 Plus units by going to an Apple Retail Store on September 19. The phone will also be available through carrier stores and select third-party retail outlets, although supplies at those locations are usually more limited than at Apple's own stores.

Last year it took around four hours for pre-orders of the iPhone 5s to sell out, as all gold iPhone 5s models saw their shipping estimates slip to October. In 2012, it took all of one hour for pre-orders of the iPhone 5 to sell out.

Three hours after it began taking pre-orders via the Apple Store app, Apple has now begun taking pre-orders for the iPhone 6 and iPhone 6 Plus through its official U.S. online store. Currently, all iPhone 6 models are showing a delivery date of September 19, while all iPhone 6 Plus models are estimated to ship in 7-10 business days.

Apple's online store comes back online as many users experienced technical problems while attempting to pre-order both models on the Apple Store app. Several U.S. carriers including AT&T and Verizon have also been experiencing problems with pre-orders, with both of their respective sites crashing for many users. Those interested in buying an iPhone 6 or 6 Plus directly from Apple's website should do so soon, as supplies will likely run out over the next few hours.

The iPhone 6 and 6 Plus will be available in stores beginning next Friday, September 19. The smaller 4.7-inch iPhone 6 is offered in 16, 64, and 128 GB capacities for $199, 299, and $399, respectively, with a two-year contract. Contract-free pricing for the device also begins at $649. Meanwhile, the larger 5.5-inch iPhone 6 Plus is available in 16, 64, and 128 GB storage capacities for $299, $399 and $499, respectively, with a two-year contract. Contract free pricing for the larger device begins at $749.

Update 3:20 AM: Some iPhone 6 Plus models are now showing an estimated ship date of 3-4 weeks. All iPhone 6 models remain available.

Apple has begun accepting online pre-orders for the iPhone 6 and the iPhone 6 Plus in several different countries around the world, including the United States, Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore, and the UK. There have been many technical problems with the load of users, so users in some areas might not be able to reach the website, or the app at this time.

Several U.S. carriers, including AT&T, Verizon, and Sprint are also accepting pre-orders for the devices. Multiple retail stores like Best Buy, Target, and Walmart will be accepting iPhone 6 and 6 Plus pre-orders when the stores open in the morning, at varying times. T-Mobile's website claims it is accepting pre-orders on the 12th, but did not begin taking orders at midnight like other carriers.

Thus far, there have been few reports on available supply, but it's typically best to make an order right away if possible because in past years, pre-orders have sold out within mere minutes. iPhone 6 Plus supplies appear constrained, as AT&T and Verizon have shipping estimates of 14 to 21 days on several models.

In the United States, Apple is offering the iPhone 6 in 16, 64, and 128 GB capacities for $199, $299, and $399, respectively, with a two-year contract. Contract-free pricing begins at $649. Apple's higher-priced iPhone 6 Plus is available in 16, 64, and 128 GB capacities for $299, $399, and $499, respectively, with a two-year contract. Contract-free pricing on that device begins at $749.

The iPhone 6 and 6 Plus will be available in stores beginning on Friday, September 19, and the first crop of orders should arrive on that day. Apple is also allowing in-store pickup for iPhone 6 and 6 Plus pre-orders this year.

Update: It appears that while the app is up, the website is still down in the U.S. The app is also experiencing issues at times, giving users errors and listing all iPhone 6 Plus models as unavailable. Verizon and AT&T were taking preorders early, but appear to be overwhelmed.

Apple has taken its online store down in order to prepare for the launch of iPhone 6 and iPhone 6 Plus pre-orders. Pre-orders for the two devices are expected to begin at 12:01 AM Pacific Time or 3:01 AM Eastern Time on September 12, on Apple's site and on several carrier sites.

Ahead of pre-orders, prospective iPhone 6 buyers should make sure to check both their upgrade eligibility and their trade-in options for old devices.

Apple's iPhone 6 is available in 16, 64, and 128 GB capacities in the United States for $199, $299, and $399, respectively, with a two-year contract. Contract-free pricing begins at $649. Apple's higher-priced iPhone 6 Plus is available in 16, 64, and 128 GB capacities for $299, $399, and $499, respectively, with a two-year contract. Contract-free pricing on that device begins at $749.

Apple will be accepting pre-orders in the United States, Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore, and the UK, with the phones available in retail stores beginning on September 19.

Future versions of the Apple Watch will include "richer health features and additional sensors," according to a new report from Reuters. Though the Apple Watch was only unveiled on Tuesday, the site says that some healthcare professionals who were hoping for "groundbreaking health features" were left disappointed with the watch's fitness capabilities.

Observers say there is little evidence for now that the device's fitness capabilities surpass the competition. Others, hoping for groundbreaking health features from a company whose Chief Executive Officer Tim Cook spoke of how sensors are "set to explode," were left wondering what's in store for the product.

Two people familiar with Apple's plans told Reuters the company is planning to unveil richer health features and additional sensors in later versions, the first iteration not hitting the market until early 2015.

Apple Watch rumors had initially suggested the device would come with more than 10 sensors to track various health and fitness metrics, with Apple aiming to go beyond the fitness tracking capabilities of smart watches currently on the market.

Early speculation about the device was linked to the Health app and Apple's health-related hires, with rumors pointing towards features like sleep tracking, glucose monitoring, and hydration tracking, but those functions did not make it into the device.

Instead, Apple's Watch measures fitness activity through the use of Wi-Fi and GPS (via the iPhone), an accelerometer, and a heart rate sensor, which is built into the back of the device. Data derived from the Watch is displayed in two separate fitness apps that will be included with the device, both of which aim to encourage users to increase their activity levels.

Apple Watch's inability to measure metrics beyond movement and heart rate put it on par with many other fitness devices on the market, but the Watch also includes several other distinguishing features like deep connectivity with the iPhone, Apple Pay support, and unique input methods with the Digital Crown and Taptic Engine.

Apple has not yet announced a specific release date for the Apple Watch, but says the device will be available starting in early 2015. Pricing for the Watch is expected to start at $349.

With Apple's Mac notebooks continuing to prove popular with consumers, the company has been rumored for some time to be working on a 12-inch notebook that could feature an ultra-slim form factor, Retina display, a new buttonless trackpad, and a fanless design. Rumors of such a machine have surfaced from several sources over the course of the past year, suggesting Apple has indeed been working on the device.

While such a machine has yet to debut despite early rumors of a mid-2014 launch, perhaps due to continued delays with Intel's next-generation Broadwell chips, a new report from Jack March of A Tech Website claims the machine remains in the works. According to the report, Apple appears to be targeting a mid-2015 launch for the machine and, most interestingly, the company is said be planning to offer it in the same silver, gold, and space gray colors used on its iPhone lineup.

The most fascinating part of this report is that Apple is also planning to change the colours for the first time with an Aluminium MacBook, the source says that Apple is planning to add Space Grey and Gold colours to their MacBook lineup, which would be consistent with the colours on the iPhone 6.

While the claim of multiple color options for this new notebook appears outlandish, MacRumors has reason to believe this information is correct and that Apple has at least considered launching the 12" notebook with several different "special edition" color options.

The report notes that timing for release of the new notebook has shifted several times as Apple has continued development, with that uncertainty also reflected in a recent report from Digitimes pegging the timeframe at a wide open "end of 2014 or in 2015."

It appears that Apple will be allowing users to select "Personal Pickup" when placing iPhone 6 pre-orders, which means that users may be able to pick up their iPhone 6 or iPhone 6 Plus at an Apple retail store on launch day, September 19, rather than waiting for it to be shipped to their homes.

Apple's retail iPhone page suggests that in-store pickup will indeed be available, noting that users can have an iPhone shipped for free or pick it up in store.

iPhone 6. Pre-order online starting September 12. The big day is coming. Pre-order iPhone 6 and have it shipped to you for free, or pick it up in store. You can also buy at the Apple Retail Store beginning at 8:00 a.m. on September 19.

9to5Mac has confirmed the information with several retail stores and an online chat representative, who told the site that there will be in-store pickup options available at "most stores" with the option existing "while supplies last."

Though Apple did not offer in-store pickup for the iPhone 5s or the iPhone 5c, it has offered the option for pre-orders in the past. With the iPhone 4, for example, Apple accepted reservations for in-store pickup on launch day.

With that device launch, Apple had two separate lines outside of retail stores, one for those who were waiting in line to buy a device and one for those who had made a reservation during the pre-order period. It's likely a Personal Pickup option for iPhone 6 and 6 Plus pre-orders will work similarly.

Pre-orders for the iPhone 6 and iPhone 6 Plus will begin at 12:01 AM Pacific Time tonight, with the device becoming available in retail stores on September 19.

One of the biggest rumors for the iPhone 6 was a new sapphire display cover courtesy of Apple's partnership with GT Advanced Technologies. Some rumors had suggested sapphire might be limited to high-end models, but at the device's unveiling earlier this week the feature was nowhere to be found on any of the new models.

GT's stock took a significant hit as it became clear the iPhone 6 was not using a sapphire display, and analyst Matt Margolis has issued a new report based on supply chain sources claiming sapphire displays missed being included in the iPhone 6 by just "weeks".

According to Margolis' sources, the issue was not GT's production, as the company is said to have been steadily shipping out sapphire from its factory in Mesa, Arizona. The issue appears to have occurred in the next step in the supply chain, where finishers in China struggled with yield issues turning the sapphire into display covers.

The issue that emerged is that the finishers were still having trouble creating the sapphire edges and yields were only at 25% or less. I am under the impression that GT’s management knew about this last minute shift away from sapphire screens prior to the August 5th conference call and it may have resulted in lower guidance for 2014 by $100m.

Margolis reports the sapphire supplies have been diverted for the Apple Watch for the time being as the finishing yield issues on the iPhone displays is resolved, and GT continues to manufacture sapphire as rapidly as it can.

What is unclear is how the omission of sapphire displays from the iPhone 6 will affect GT's deal with Apple, which involves certain milestone payments from Apple to GT. It appears unlikely that Apple would bring sapphire to the iPhone until it unveils an "iPhone 6s" a year from now, so it is not entirely clear whether it needs or wants to stockpile GT's output for an entire year or if it has other nearer-term plans for the material beyond the Apple Watch.

I believe GT and Apple still have very big plans for sapphire as a cover screen on mobile devices. Apple may pay continue to pay GT for sapphire bricks that they ship even though the iPhone is not covered up by a sapphire cover screen. Another option thrown on the table is that Apple could even push back the Apple prepayment requirements until the finishing yields are addressed. One item that remains clear is that GT will continue to push out as much sapphire as humanly possible from Mesa.

Apple's iPhone 6 and 6 Plus without sapphire display covers will see pre-orders launch in a number of countries at 12:01 AM Pacific Time tonight, with availability coming on September 19.

Update: Cult of Mac has received evidence of a delivery confirmation showing nearly two tons of sapphire being shipped from Lens Technology back to GT, perhaps for reprocessing before being reused for another purpose.