Apple's (NASDAQ: AAPL) iPad is working its way into the world's largest restaurant operator, and while it's just a test — and an imperfect one, at that — this could be huge for both Apple and McDonald's (NYSE: MCD).
The Orange County Register reported on a McDonald's restaurant in California that's allowing customers to sift through an iPad menu as they build customised sandwiches with broader toppings and options. Guests entering the restaurant in Laguna Niguel can step up to one of two iPad ordering stations near the entrance. Apron-donned employees are there to help confused customers navigate through the expanded choices.
This sounds great at first, but then the paper's description of the experience takes a turn for the worse. The iPad stations are essentially little more than touchscreen menus. An employee still has to re-enter the ultimate selection on a separate handheld tablet for the new burgers that are only available at the test store. A third device is then introduced to complete the payment end of the transaction.
Let's hope that having to go through three devices — instead of letting the entire transaction play out on the iPad — is temporary. The stations just went up last week, and, naturally, this is just a test. However, isn't it inevitable that touchscreen menus will become a bigger part of the process? If so, Apple stands to make some serious money if it becomes the platform of choice.
Keeping Android out
There are already several restaurants — typically forward-looking mum-and-dad independents — that allow customers to order on tablets. I made my way out to uWink in California four years ago, a high-tech concept created by Nolan Bushnell where guests would order from touchscreen terminals and use those same terminals to play games with others in the restaurant as they waited for their food. If Bushnell's name sounds familiar, he was also the co-founder of Atari, giving Steve Jobs his first tech job.
Unfortunately, uWink was a bust. The last of the three restaurants closed in 2010, which just happened to be the year that Apple made touchscreens cool with its introduction of the iPad.
If McDonald's should expand its test of iPad menus — and if the integration improves — this could be huge for Apple. Other chains would have no choice but to follow McDonald's in raising up their touchscreen-ordering ways. The key, of course, is for Apple to make sure that chains don't settle for cheaper Android tablets. Apple has seen its market share shrink from a majority to a minority of the tablet market over the past year alone, and it would be an opportunity missed if hospitality goes Android with these tablet terminals.
Apple doesn't need saving. It's profitable, and it happens to have more cash and equivalents on its balance sheet than anybody else. However, iPads in the world's largest restaurant operator could be a real needle-mover for a company that has been suffering through sluggish sales growth in recent quarters. Apple and McDonald's may make an odd combination, but at the end of the day, it's a positive for investors.
