AppleInsider:

Apple has taken two different but complimentary approaches to this problem. The first is the iBeacon system, which depends on small palm-sized Bluetooth transmitters placed around a particular space.

When an iOS device sees an iBeacon, it can analyze the signal to determine approximately how far away from that beacon it is. Using multiple iBeacons with known locations, developers can roughly triangulate the user's position.

This isn't very helpful on a large scale, however, since there is no central database of iBeacon locations — such data is by and large only usable by the owner of the beacons. To address the larger problem, Apple acquired small indoor mapping firm WiFiSLAM in early 2013.

WiFiSLAM's technology combines data from on-device sensors with Wi-Fi signal trilateration to plot a user's path. The Wi-Fi signals provide relative positioning, while on-board sensors record movement.

Here's an example: your iPhone could analyze the signal strength of Wi-Fi networks around your house to determine approximately how far you are from each access point. As you move around, the accelerometer, magnetometer, and gyroscope on the handset measure forces exerted by maneuvers like turning left and then right again to avoid a coffee table.

Combining all of that data together over a period of time can bring detailed patterns to light; e.g. "there is an obstacle three feet from point A that can be avoided by moving left two feet." Extending that data capture and pattern recognition to many users — say, the thousands of iPhone owners that visit a shopping mall in a given day — allows for the development of detailed and highly accurate maps without the aid of overhead satellites or dedicated data gathering initiatives.

iBeacons, another "boring" feature announced two summers ago, will really shine when this indoor mapping system gains traction. Apple wants to be Google Maps, but for all indoor venues.

Patrick Salyer:

Consumers have been longing to get rid of passwords for years. Ad nauseam, we’ve heard the clamors for the end of passwords because of the deluge of usernames and passwords we have amassed and the inherent security issues and frustration they create. Imagine never needing to create another user name or password again for any site or app by using your Apple ID. That’s what Touch ID promises.

Ultimately, Touch ID and Apple Pay are proxies for Apple ID, which is becoming paramount to what is sure to be a strategy to overtake other identity providers.

Consumers will love using Apple ID for authentication on sites and apps because of the seamless experience – imagine being able to authenticate quickly not only at point-of-sale systems and mobile apps using your thumbprint but also on third-party sites just by having your phone in close proximity to your computer.

Businesses, or relying parties, will love it because they’ll get more registrations, identify more customers across devices, and have lower shopping cart abandonment. Apple, in turn, will establish more permanence with users, further entrenching them into the Apple ecosystem.

I've believed the exact same thing since TouchID was announced.

I've also been bullish on the Apple Watch being key to killing passwords.

TorrentFreak:

While it’s been fun and games for a while, makers of some of the world’s most expensive and well known watches are now targeting sites offering ‘pirate’ smartwatch faces in order to have digital likenesses of their products removed from the market.

TorrentFreak has learned that IWC, Panerai, Omega, Fossil, Armani, Michael Kors, Tissot, Certina, Swatch, Flik Flak and Mondaine are sending cease and desist notices to sites and individuals thought to be offering faces without permission.

I'd love to see the day these luxury watchmakers design official smartwatch faces and sell them online (at a premium). Hell, they could even design limited edition watchfaces and sell a fixed number of them. I'd personally throw down money for an official Panerai face.

If people are willing to spend on trivial things such as stickers for chat apps or epic beasts in World of Warcraft, why not embrace the digital marketplace?

Martin:

Apple built a generic, almost foolproof device-level identity security system around TouchID, Secure Enclave, and custom secure element hardware at the lowest level of iOS that can be opened up to pretty much anyone Apple wants to let in. This is unique, and I don't see anyone else who can replicate this. Apple is merely renting this security service out to the banks for the price of a percentage of the transaction. They don't need to build a proprietary payment network, or even be a link in the payment chain.

And this system can work equally as well for health providers securing user identity to exchange HIPAA covered health data for Healthkit (for a modest fee, naturally). They can rent it to employers to secure their employee identity - not just for getting into corporate applications but add HomeKit into the mix and a company can put an NFC lock on a door, issue tokens to the iPhones of the 10 employees allowed into that room, and that gives them the ability to unlock the door with their iPhone following a positive fingerprint check. The employer can remotely revoke those tokens as needed.

This is effectively a way to replace username and passwords for anything from your iPhone or Apple Watch, if Apple builds it out to its full potential. It relieves the burden of choosing good passwords, remembering them, securing them, and puts all of the control on the agency that needs to control the security, rather than on the one being secured.

The recent partnership with IBM might make more sense now.

Shout-out to the people who said TouchID is boring, not innovative, and no different than any other fingerprint scanner out there.

Intercom:

The idea of having a screen full of icons, representing independent apps, that need to be opened to experience them, is making less and less sense. The idea that these apps sit in the background, pushing content into a central experience, is making more and more sense. That central experience may be something that looks like a notification centre today, or something similar to Google Now, or something entirely new.

The primary design pattern here is cards. Critically it’s not cards as a simple interaction design pattern for an apps content, but as containers for content that can come from any app. This distinction may appear subtle at first glance, but it’s far from it.

I really love this cards metaphor that has been catching on lately; specifically, Google Now. And with the Smartwatch 2.0 era just coming around the corner, I think we'll be seeing this new design paradigm really start to blossom.

Remember, back in 2008 when the iTunes App Store was first introduced, nobody had any idea that we'd eventually have apps like Instagram, Snapchat, and Uber. I'm really stoked to think how wearable device user interfaces will evolve.

Jan Dawson:

Apple is entirely capable of pursuing this kind of model itself. This could be either the carrier financing model, with the cost of a phone spread over a 12-24 month period, or an “iPhone for life” program under which a customer pays a fee each month to always have the latest iPhone model. Under the latter model, the older device would be handed back to be refurbed and resold when the customer gets a new phone. Apple has the deep pockets to fund such a model, and it would help to smooth out its revenues across the year too even as most of the upgrades continue to happen in the third and fourth quarters.

In short, the Apple SIM is a step in the direction of a new relationship between Apple customers, Apple and the carriers. But in order to reach its full potential in the iPhone context, Apple needs to make another significant change: allowing customers to spread the cost of owning an iPhone over a longer period. Only if it does that will the Apple SIM be truly disruptive.

Fascinating idea that I think would be a tremendous success. Imagine the possibilities for developers knowing that most iPhone users out there were using the latest and greatest hardware.

Business Insider:

The wording here makes it sound as if there's a chance that Apple would be able to remove the S1 and replace it with, say, the S2 or S3 in the future. After all, Apple has the entire computer on one chip. It just has to rip out that little computer and replace it with a new one.

As Apple upgrades the computing power, it could replace the chip for, say, $500, Gruber suggests. This sounds high, but this is what it costs to service a high-end luxury watch every few years. If this were to happen, it would solve the problem of turning the watch into an obsolete brick after a few years.

This is only speculation but the potential for this is truly fascinating and it's the kind of innovative thinking I expect from Apple.

Every year, Apple proudly boasts how its latest iPhone is the thinnest, most powerful, and most power efficient iPhone ever. And every year, most of us yawn at it.

But what we're seeing now is the very best of Apple, using everything they've learned from compacting the iPhone to miniaturize an entire computer into a single chip. That alone is a huge innovative achievement. If the S1 chip ends up being swappable? Man, that would be a game changer for smartwatches.

Whatever Apple ends up doing, it's already pretty clear that Apple is approaching this as a modern, fashionable timepiece for the future, not a disposable $300 wannabe mini-smartphone for the wrist.

Now this is interesting. While I do believe there is a future for hybrid tablet-PCs, I do not believe the hardware technology is quite there yet. I'd love to one day be able to do full-time web development on a hybrid, while being able to hold my 500 GB of personal photos/video, and not having to pay over $999. That day will come eventually.

As for the software side, this "Continuum" concept seems like a great step in the right direction.

My biggest doubt for the success of the Apple Watch stems from the replacement cycle. How often does Apple want consumers to upgrade their Apple Watch? Why would a high-end consumer spend over $1,000 on an $18k Apple Watch if its technology will be outdated within two years?

But Nicolas Schobinger brings up an interesting idea:

How often does one need to buy an ‘eternal’ product? How often would you buy ‘ephemeral’? Look at iPod, iPhone, and even computers in general. Technology advancements and rapid innovation cycles make you lust for the newest gadget. And that’s just it: Ephemeral product lures customers to the next best thing.

I can easily imagine, that Apple could extract a higher lifetime customer value with its iWatch Edition, than the ‘eternal’ brands of Swiss watchmaking.

I could imagine that the Apple iWatch Edition will generate a lot of repeat buyers. A good trade-in program would recycle your precious metal and refund that to you. You could keep the straps. The price for your repeat purchase could be then a fraction of your initial buy. You could constantly renew your statement with the Edition line and stay current. Ephemeral disrupting Eternal.

Now this would be an awesome strategy for disrupting the timepiece industry.

In my mind, I've been telling myself that I won't spend over $400 on a first-gen Apple Watch, no matter how badly I want the polished stainless steel model on black leather. But if Apple can guarantee some sort of trade-in program that'll make it easy to upgrade, hell yes, I'll consider spending over $500 on launch day.

bigzaphod:

Apple now has everything they need to disrupt the game console industry in a way that none of them see coming. I predict that we’ll see a new AppleTV update (and hardware) this fall along with a new app extension type for AirPlay. AirPlay will become about more than just streaming video to your AppleTV - instead that’ll simply be one of the things you can do with it. Apps (mostly games, I suspect) will be able to bundle an AirPlay extension inside - just like how apps can now bundle photo editing or sharing extensions as of iOS 8. The key difference is where the AirPlay extension app actually executes - instead of running on your device itself from within another host app, the AirPlay extension app will be automatically uploaded to whatever AppleTV you are currently AirPlaying with and will run directly on the AppleTV natively instead. This means no video streaming lag and minimal controller lag. Your iPhone would then turn into a generic game controller with onscreen controls or, if you have a physical shell controller attached to your iPhone, it activates that instead. The game controller inputs are then relayed to the AppleTV and thus to the AirPlay extension app using the new game controller forwarding feature.

Wow. Super fascinating theory.

In my experience, mirroring a game from my iPhone to an Apple TV has been lame because there's always a significant delay between what I do and what I see on the TV. If Apple can solve that problem, this could be a total game-changer for casual gamers. (For hardcore gamers, probably not so much. They'll always stick to their powerful gaming PCs and consoles.)