Expert: 50% Of New iPhone Buyers Will Adopt Apple Pay Within 2 Years

Apple Inc. AAPL shareholders received some news regarding Apple Pay on Sunday. Only 6 percent of iPhone 6 and 6 Plus owners are thought to be using the mobile payment service. At first glance, this might sound like a relatively low number. If investors look at the millions of iPhones that are sold each quarter, the Apple Pay estimate sounds much more impressive. "If it's only 6 percent right now -- just imagine how much growth is left," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "It makes sense if you think about the technology deployment." Udall said he would be "shocked" if more than 50 percent of iPhone owners (iPhone 6 or later) aren't using Apple Pay within two years.

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Crowded Space

Rob Enderle, principal analyst at Enderle Group, thinks that 6 percent is "reasonable." "What you want to look for now is growth," Enderle told Benzinga. "If it stops at six, 10, 15 percent, then you've got issues. In terms of performance to date, it's doing as well." Enderle said the mobile payment space is "getting crowded." He noted that while the credit card companies have played nice with their partners, they haven't officially handed the market over to another firm. "At this phase, more people in it and trying to do it will actually help Apple out," he said. "Long-term, it's the competition they will have to overcome."

An Advantage You Can Take To The Bank

Enderle believes that the mobile payment provider closest to the banking industry will be the one that gets the most market share. "At the end of the day, this isn't a cell phone activity -- it's a banking activity," he said. "And it's the other services that you wrap around this that'll make it attractive to users. The typical stuff we get in a Capital One card and the various other cards that motivate people to use them. That's where the banks have a pretty big advantage." That advantage may prove to be irrelevant if the banks wait too long to act. "I think the banks, for the most part, are letting other people plow the field and then they're gonna move to steal the market," said Enderle. Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.