Dialing Up Some Mobile-Payment Plays

There have been many reasons over the last few days to be bullish on the mobile-payments industry. Let's take a look: Starbucks and Google's Android Pay First came the news that Starbucks (SBUX) will begin accepting Android Pay from Google (GOOGL) later this month. Up until now, SBUX had essentially an exclusive relationship with iOS devices from Apple (AAPL) for mobile payments. From my vantage point, Starbucks' move to accept Android Pay opens up mobile payment from millions of additional devices from Samsung, LG, HTC, Lenovo (LNVGY) and other Android-based device makers. Sorry Apple lovers, but Starbucks is looking to expand its total mobile-payment market -- and with cashless consumption serving as one of my big investment themes, I'm a fan. Strong Apple iPhone Preorders Second, Apple is already saying -- less than a week after announcing its new iPhone 6s and 6s Plus models -- that preorders for both are very strong. In fact, sales are on pace to exceed last year's iPhone launch-weekend record of 10 million handsets. One of the reasons is the addition of China among countries that will sell the devices when they first hit store shelves on Sept. 25. Historically, Apple only offered new iPhone models in China a few months after their initial introduction elsewhere. Skyworks, Qualcomm and PayPal With roughly 60% of Apple's revenue coming from iPhones, the preorder news is obviously good for AAPL shares. But the stronger-than-expected sales also bode well for Skyworks (SWKS), Qualcomm (QCOM) and other suppliers. Apple's news also means there will likely be 10 million+ more Apple Pay-enabled iPhones in consumers' hands before October -- and millions and millions more in the following months. That's good news for PayPal (PYPL), as one of its sleeper assets is its Braintree payment gateway -- which Airbnb, Uber and, yes, Apple Pay (among others) use to complete transactions. This makes PayPal a bullet play on mobile-payments guns like Apple Pay and others. Just because we don't see people paying with PayPal in stores doesn't mean it's not being used. Maybe that's why Ferguson Hill, PayPal's senior vice president of consumer operations, scooped up more shares last week -- once again building his position just as he did in mid-August. Mobile Phones and Holiday Shopping As we head into the holiday season, all forecasts are calling for a pick-up in online and mobile payments as consumers continue to shift toward online gift shopping. According to the latest Demandware Shopping Index, mobile phones accounted for 94% of the year-over-year increase in global e-commerce, 74% of gains in basket creation and 47% of the order growth. If you're wondering what people are buying with their smartphones, Demandware's finding point to home goods -- think of the Home Goods division of TJX (TJX). That segment accounted for the highest phone-order share (23% globally). Health-and-beauty brands -- like those from Proctor & Gamble (PG), Avon Products (AVP), Estee Lauder (EL) and others -- drove the most phone traffic (46%), but the least amount of orders (17%). Active-apparel brands such as Nike (NKE) and Under Armour (UA) saw the biggest jump year over year in phone orders (+76%). In the coming weeks the National Retail Federation and others will begin to publish their 2015 holiday-spending forecasts. I'll be watching closely to see what their predictions are for mobile payments, mobile commerce and mobile shopping (call it what you will).

Dialing Up Some Mobile-Payment Plays

How to invest in the growth of paying for things with smartphones.

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