Just get this out of the way first. Alt currencies are not “in competition” with Bitcoin. The communities mining and holding those currencies may be in competition with the miners and holders of BTC, but Bitcoin and Litecoin themselves are no more in competition than the metals gold and silver are in competition with each other. These are things. Things don’t compete.
OK, Recent action from Apple to cut the last Bitcoin App from their phones seemed to help a recent price drop, i think, because speculators believe Bitcoin just got a new competitor. Gloves are off, a big company is going to take them on sort of thing.
Businesses who process money are going to be hurting from virtual currencies, but its more like how the bottled water company is in competition with the river. You could buy their product, or drink from the river free (supposing rivers weren’t gross).
So what are Apple’s options here to take on Bitcoin with their own currency system.
1)They launch their own p2p crypto currency, the Apple Coin (already taken). Premine a crap load and then have a huge ad campaign and flashy wallet and miner. The coin would have a healthy community of I-miners from the popularity of the brand, but the success would be very short lived. Sure the company stashed a crap load, but what happens when people start independently trading the currency? The volatility in price would force them to either constantly adjust their product pricing- which would surely be terrible for sales or buy and sell coins to regulate the price, but this wouldn’t last long either. If the company needs to keep buying coins to keep the price up, that could get expensive. If they need to sell their stash to keep the price low, they’ll lose their dominant position. This is the nature of a crypto currency. Once you create it and a community adopts it, it is beyond your control.
2)They create a self hosted scam coin currency where they control supply and regulate transactions- essentially no different than a gift card or coupon. This costs money; bitcoin is free. They would either need to charge fees or eat the cost. They could try and get people to mine it and thereby process the transactions, but there is no incentive or hope for growth for the miner. Give miners too much profit, its expensive for the company, give them too little, and they won’t bother mining for you. This is no different than hiring workers for any part of the company’s operations. Their product line and brand might be able to carry the cost, but then why? It would make more sense for them to have paypal host it- hire a company who specializes in the service already. Or better yet, buy a couple bitcoins and colour them Apple so they can have their currency operate free of charge. . . wait a minute.
In short. To compete with bitcoin, a company/bank could sync a gift card like currency to USD and pay all the associated costs or create a crypto that would soon be out of their control and useless to them. Hopefully Apple wastes money on both.