Apple analysts are very excited about the company's newest product. No, not the Apple Watch — but rather Apple Pay.

"While the new iPhones and watch delivered on high expectations, we believe that Apple Pay was the star of the show and should fuel investor belief that Apple could develop a meaningful payments service that could improve earnings over time," Gene Munster, an Apple analyst with Piper Jaffray, wrote in an investor note provided to Mashable.

The payments service will use Near Field Communication (NFC) chips to enable shoppers to swipe their phones in stores rather than their credit cards. Apple has partnered with several big banks and credit card companies for transactions on the platform and says the service will work in more than 200,000 retail locations in the United States.

Apple Pay may not dial up the company's revenues significantly in the immediate future, but analysts say it has the potential to improve the company's net income. Apple will reportedly receive fees from banks for each transaction through the service, bringing in a steady stream of revenue with minimal investment on its end.

"Apple's payment offering — Apple Pay — was likely better than most investors' expectations," Toni Sacconaghi, an analyst with Bernstein Research, wrote in an investor note provided to Mashable. "The capability appears secure, seamless and has traction and momentum with both retail and financial partners."

As for the Apple Watch, Sacconaghi raised concerns about the price ($350 and up), the fact that it only works with the iPhone 5 (and more recent models), and the lack of details on battery life. He also questioned how useful the device can be, given that it needs to be "in near physical proximity to an iPhone."

Katy Huberty, an analyst with Morgan Stanley, was generally positive about the watch's mix of "fashion, personality and customization," but still raised some concerns. "[W]hile health/fitness is clearly a focus for Apple, the product demo focused on a 'Swiss Army knife' of functions, raising some questions around whether a killer app exists yet for the category," she wrote in an investor note, via Fortune.

All of these issues may be addressed over time — just not right now.

Estimates for how many watches Apple may sell vary widely among analysts. Munster predicts Apple will sell close to 10 million watches in the first year. Sacconaghi originally predicted sales of 30 million watches in the first year, but now says it "could potentially be substantially lower." Huberty had previously estimated that Apple would sell between 30 million to 60 million watches in the first year.

"On the mobile payments front, we believe the company made a major breakthrough and cracked an important and vexing issue that has plagued the industry for several years regarding customer ownership," analysts with William Blair wrote in an investor note, provided to Mashable. "On the Apple Watch front, we believe the company has laid the groundwork for a wearable device that has multiple compelling use-cases for an average consumer."

"Bottom line," the William Blair analysts wrote, "Apple has laid the foundations in two large and untapped markets (mobile payments and wearables) that have the potential of contributing multibillion-dollar opportunities over the next several years."

The company's stock was up as much as 3.5% in midday trading Tuesday following news of Apple Pay, but ended the day down slightly — a trend that has occurred on most iPhone launch event days. The stock was essentially flat in early trading Wednesday.

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