The Apple Inc. (NASDAQ: AAPL) share price fell 1% yesterday after the company announced a new streaming service and its new credit product, Apple Card.
While investors were less than thrilled about the lack of pricing detail given in the presentation, the bigger question for ASX investors is what does this mean for Afterpay Touch Group Ltd (ASX: APT) and its US expansion plans?
Introducing the Apple Card
The world's second most valuable tech company unveiled the Apple Card as it looks to diversify away from its traditional products amid falling sales in iPhones, iPads and MacBooks.
Apple said there's no fee involved with its new card, while it also has no digits on the front and has the individual's name engraved in metal in a very Apple way.
The card will leverage off the company's existing Apple Pay capabilities and Apple has said the no fees involved with the card includes no late fees, annual fees, and overdrawn fees amongst others.
In keeping with the Apple ecosystem, it will only be available to iPhone users but does have the handy perk of providing instant benefits such as cashback.
What does this mean for Afterpay?
The Afterpay share price has exploded so far this year and has climbed more than 60% on the back of lower regulatory risk and a favourable outcome from the recent Senate inquiry.
Much of Afterpay's lofty valuations are based on its growth potential and given the size of the US retail market compared to Australia's, a lot of the $19.60 per share price is tied up in the company's US growth prospects.
Competition in the US market is not new, as Afterpay already competes with the likes of Klarna in the "buy now, pay later" space while Amazon.com Inc. (NASDAQ: AMZN) already offers credit products to its customers.
But Apple wading into the consumer credit space will surely raise the heat on Afterpay's strategy in the US and creates an additional execution risk abroad for the company.
The current Afterpay valuation is a little high for me, and I'd be waiting for the company to post a profit before I consider investing.
For those Fools looking for ASX growth opportunities, this buy-rated stock could be set to soar as it builds its share of a booming $22 billion industry.
