Square Starts Shipping New iPhone 4-Compatible Credit Card Reader
There was a lot of hoopla yesterday about the fact that the old version of Square's little plastic credit card reader doesn't work with Apple's newest iPhone, the iPhone 4. That's because the metal fitting …
Context & Ripple Effects
Square's dongle business just absorbed a lesson in platform dependency: the original reader's metal fitting did not work with the iPhone 4, confirmed on October 21, 2010, leaving the company's core device briefly incompatible with Apple's newest phone at the height of its growth push.
The fix arrives against a competitive backdrop set in August 2010, when Mophie and Intuit launched their Complete Card Solution for iPhone explicitly aimed at unseating Square. A compatibility stumble is exactly the opening a rival bundled offering needs.
First-order effects
- Square merchants using the iPhone 4 regain the ability to accept card payments as the new reader ships, closing the gap that had sidelined them since Apple released the phone.
- Mophie and Intuit lose the window in which Square was effectively unusable on the newest iPhone, forcing their Complete Card Solution to compete on price and features rather than availability.
Second-order effects
- Every iPhone accessory maker in payments now prices in Apple's industrial-design decisions: a single connector or casing change can orphan inventory overnight, pushing vendors toward faster redesign cycles and deeper coordination with Apple's hardware roadmap.
- Rivals like Mophie can market multi-device or case-integrated readers as insurance against exactly this kind of single-point failure in Square's free-plastic-dongle model.
Third-order effects
- If connector changes keep recurring, mobile payments hardware consolidates around players who can afford rapid respins and Apple relationships, squeezing small accessory makers out of the card-reading market.
- Square's long-term answer likely trends toward software-led acceptance that leans less on any one physical attachment point, reducing its exposure to another manufacturer's design cadence.
The trend: Mobile card-reader vendors are discovering that building on Apple's connector makes their core product hostage to each iPhone redesign, accelerating a shift toward software-first payment acceptance.