🍏 Apple could lose billions


September 13, 2021

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The Hustle

iPhone vs. Android: It’s one of the great debates of our lifetime, and we want to know what side you’re on. Let us know here.

Today’s rundown:

  • Apple vs. Epic ruling: Apple is *not* a monopolist but its massive App Store profits ($15B in 2020) are at risk.
  • WTF is Loot? And why have people spent $46m+ on descriptions of fantasy objects?
  • Digits: A $3.6m Spider-Man comic, and more wild numbers from around the web.

Let’s do it.

The big idea
Apple headstone

The Apple vs. Epic ruling, explained

Last August, the creator of “Fortnite” (Epic Games) sued Apple over its App Store payment policies.

Specifically, Epic wanted to sell digital goods within its own game without having to pay Apple’s 30% in-app purchase commission.

On Friday, a federal judge issued a ruling on the case

And the iPhone maker won out on one major point: Epic could not prove that Apple is a monopolist in relation to its App Store. However, another decision could put billions of Apple’s profits at risk.

A court injunction, which takes effect in 90 days, will stop Apple from blocking developers “from steering their users to third-party payment options,” per Polygon.

Apple’s App Store profit…

… may have reached $15B in 2020, which is >20% of the company’s entire profit, according to trial details reported by The Information.

Other highlights from the judge’s 185-page ruling:

  • Gaming apps provide the majority of profits (wow)
  • The top 1% of spenders were responsible for 64% of revenue (absurd)
  • These big spenders dropped ~$2.7k on average annually (insane)

The App Store money train will slow…

… if enough apps route their payments away from Apple’s 30% tax. Developers still can’t make their own payment service within apps, and there’s no guarantee users will leave the App Store to make a payment.

However, shares for game maker Zynga (+6%) and subscription dating firm Match Group (+4%) gained on the ruling as investors eye larger App Store takes.

Apple’s stock fell 3% on the ruling, knocking $80B off its market cap. No one is crying for the company, though… It’s still worth ~$2.5T.

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SNIPPETS

Shopify invested in Yotpo and launched a multi-year platform partnership to help merchants use its customer review technology to grow. #ecommerce-retail

Toyota will spend $13.5B on battery tech over the next decade…but the carmaker still wants to leave room for hybrid vehicles. #clean-energy

Fertility funding: Flo, a fertility tracking app with ~200m users, raised a $50m Series B round, valuing the company at $800m. #emerging-tech

Ransomware risk: Hackers leaked passwords of 500k Fortinet VPN accounts, many of which are still active, which could lead to future ransomware attacks. #privacy

Prime POS: Amazon is developing a new POS system to compete with Shopify, Square, and PayPal. #fintech-cryptocurrency

Apple+ gets the green light: Apple announced plans to invest $500m+ in the streaming service and ramp up launches of new content to 1+ per week. #big-tech

NFT News
NFT Lists

These lists of words cost tens of thousands of dollars. Why not? (Source: Robe Market)

People are buying items for an NFT game that doesn’t exist. Why?

The Fetid Sprinkler and Handguards of Perdition sound pretty intense.

They’re also examples of the armor, weapons, potions, and other helpful items — AKA “loot” — fantasy RPG characters find on their quests.

Paying real money for in-game loot is already a big business, and some game studios have jumped on selling NFT items, which players — not studios — would own indefinitely.

But… what if there is no game?

Last month, Vine co-founder Dom Hofmann announced Loot, “randomized adventurer gear” generated and stored on the blockchain.

For no fee, aside from gas, people could score “bags” of items like:

  • Divine Hood
  • Necklace of Enlightenment
  • Grimoire of Titans

Looters snatched up the available ~8k bags immediately, per The Verge. Within 5 days, Loot bags had generated $46m in resales.

Wild NFT sales in the millions happen…

… but here’s why people love Loot

Because items came with only a simple text description, the newfound Loot community came out with art, songs, stories, and merchandise. A host of derivative projects have sprung up for Loot holders, including maps, monsters to fight, art, and quests.

It’s essentially an open-source playground. Creators build on top of it and are responsible for deciding its value.

Creators can also choose to accept Hofmann’s update, Synthetic Loot, which allows players to participate without spending $$$ on the OG drops.

Because who can afford a Divine Robe when the floor price is ~$50k?

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Free Resource

The all-in-1 business planning kit

If your business is in the early stages…

… you may have all of the blueprints in your head, but you best get them on paper.

It makes it much easier to see what’s solid and what’s not.

Enter HubSpot and Monday.com’s 14-page PDF guide

This kit contains all of the need-to-knows, and provides a ton of supplemental resource links.

Included here are all your strategic planning needs:

  • Best practices for different departments
  • How to communicate mission, vision, and goals
  • How to conduct market research and competitive analyses
  • Guidelines for allocating your operating budget
Prep like pros →
By the numbers
Spider-Man comic

Yep, $3.6m right there (Source: Heritage Auctions / The Hollywood Reporter)

Digits: A $3.6m Spider-Man, e-cigs get smoked, and ATVs kick into high gear

1) Spider-Man, Spider-Man, does whatever a spider can — like notch a record $3.6m for a near-mint condition copy of the character’s 1st ever comic appearance in Amazing Fantasy No. 15.

2) E-cigs just got smoked. The Food and Drug Administration rejected ~950k applications for e-cig products, though it’ll take more time to review Juul, which accounts for ~½ of the $4B market.

3) Walmart is getting ready for Christmas early, with US inventory up 20% to avert supply chain issues.

4) Off-road is in. In 2020, ATV sales jumped 33%, trail permit sales in West Virginia hit all-time highs, and ATV permits in Maine were up 6%.

5) Amazon placed 49 of its lockers throughout public parks in Chicago, with 53 more planned. At most, Amazon will pay Chicago $137.6k for use of the land. To date, Amazon has received $741m in Chicago-area tax subsidies.

6) Holy ship. The top 6 shipping container operators control 70%+ of container capacity. Meanwhile, shipping prices are up 4x since last year.

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AROUND THE WEB

🚘 On this day: In 2004, Oprah gave away 276 cars to her talk show audience and thus, the “you get a car” meme was born.

🥘Mmm: The “Nero Wolfe” cookbook, Denny’s “Hobbit” menu, “Game of Thrones” booze. Atlas Obscura explores fandom food.

📈 How to: If you’re a stock market newb, you need to figure out your risk tolerance. Here’s how.

😴 That’s interesting: Inc. asked the leaders of Inc. 5000 companies for productivity tips and got some weird answers. Like doing pull-ups and “thinking lazy.”

🐻Wild story: Spirit bears are black bears, but a recessive trait makes their fur white — which makes it much easier to hunt salmon.

🧟Weird job: FinanceBuzz will pay someone $1.3k to watch 13 horror movies while their heart rate is monitored. The goal is to determine if high- and low-budget films produce the same scares.

Meme of the day

Someone actually went into an Apple store and did this LOL (Source: Reddit)

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