By Prince McLean

Published: 02:00 PM EST

Apple retail stores are looking to move away from Windows Mobile-based handheld checkout devices in favor of iPod touches with custom accessory add-ons, with a transition expected to follow the release of iPhone 3.0 later this year.

Apple's EasyPay terminals

Starting back in 2005, the company's retail outlets began using EasyPay, a specialized PDA device built by Symbol and running Windows Mobile, after a pilot program validated the practice of using employees with mobile devices to speed checkout lines. Apple has pushed to expand the program ever since.

The company has obvious interests in replacing the EasyPay devices with its own technology, however, both to improve reliability and efficiency, as well as to show off its own devices in action. Apple retail stores have already begin using iPod touch units running a Concierge app to triage visitors needing support and schedule appointments for them. Internally, store management also uses a Red Zone Report application to track store sales and performance.

However, Apple's initial positioning of its mobile technology as a smartphone has limited the company from using the iPhone to replace the more generic EasyPay devices outright. The main barrier has been a lack of support for peripheral devices in the iPhone hardware. EasyPay terminals need to plug into a credit card reader, something that hasn't been possible on the iPhone, but will become available with the move to the new iPhone 3.0 software.

Heal thyself

While Apple could build its own point of sale (POS) system from scratch based on the iPhone's technology, doing so would be an expensive undertaking just for the couple dozen devices needed by each of the 225 retail stores. It would also result in a completely proprietary system that the company probably couldn't successfully sell outside of a narrow niche of retail stores with similar needs. Devices like the EasyPay are open enough to allow for a wide variety of customization using Microsoft's Windows Mobile software, even if the tools and the underlying software aren't that reliable or desirable. That specialized market isn't enormous, so it would be difficult for Apple to justify trying to compete with its own iPhone-based POS device.

Instead of introducing a dedicated POS sibling to the iPhone and iPod touch family, Apple instead worked to expand the iPhone platform to suit the needs of developers. With iPhone 3.0, that includes new support for working with peripheral devices over USB through the Dock Connector and wirelessly using Bluetooth.

Demand for participation in the accessory program from developers proposing new hardware devices has exploded, with insiders noting that Apple is overwhelmed with interest. Apple itself will benefit from those platform stretching efforts. At last year's release of the iPhone 3G, various problems with the EasyPay Pocket PC devices ranging from unreliable hardware to buggy software resulted in frustrating delays that created long lines for buyers, particularly people trying to get the new iPhone 3G.

There's an app for that

This year, a software app is expected to help iPhone 3.0 devices sell themselves, quite literally. There's already POS titles available in the App Store, including CCTerminal, which costs $50 and enables users to ring up purchases using a credit card merchant account. Apple began promoting the new app in one of its latest ads showing how small businesses can ring up sales, print shipping labels, and track shipments using various iPhone apps.





Sources familiar with Apple's plans say that the company's retail stores plan to begin rolling out iPhone units running customized POS software with support for an external credit card reader unit as early as July, with expectations of completing the rollout by September. The new iPhone 3.0 devices will pack concierge, ordering, and store management features into a single device, allowing Apple to dump its large inventory of problematic and clunky looking Pocket PC PDAs with sleek new iPhones that show off how relevant the company's mobile platform can be to businesses.