Apple CEO Tim Cook delivers the keynote address at Apple’s annual Worldwide Developers Conference at the Bill Graham Civic Auditorium in San Francisco, California, onJune 13, 2016.
Gabrielle Lurie | AFP | Getty Images
Apple said on Monday that companies that offer digital classes through iPhone apps won’t have to pay Apple’s 30% App Store commission fee on in-app purchases through June 2021.
Apple said the extension was to help businesses by giving them more time to transition in-person events to digital events during the Covid-19 pandemic.
“Although apps are required to offer any paid online group event experiences (one-to-few and one-to-many realtime experiences) through in-app purchase in accordance with App Store Review guideline 3.1.1, we temporarily deferred this requirement with an original deadline of December 2021,” Apple wrote on its developer blog. “To allow additional time for developing in-app purchase solutions, this deadline has been extended to June 30, 2021.”
An Apple spokesperson did not have a comment beyond Monday’s announcement.
The move is the latest olive branch from Apple to critics of the App Store, which say the iPhone giant’s control over the platform and fees are anticompetitive. Apple also announced earlier this month that it planned to reduce its commission to 15% for app developers making under $1 million on Apple’s platforms in 2021.
Apple originally waived the 30% fee for group classes and events in September, after Facebook introduced a paid events feature and tried to include copy inside its apps warning that a cut of transactions for paid events would go to Apple. But at the time, Apple only suspended its fees through December. Monday’s announcement extended it for 6 more months.
Apple requires iPhone apps to use Apple’s App Store payment processing, which takes 30% of total payments, and has been an antitrust focus of policymakers around the world. However, in-person goods, like ordering a ride through Uber or buying something from an online retailer, are not required to use App Store payments.
In September, Apple clarified that one-to-one person classes through an iPhone app could be billed directly, but any virtual classes where an instructor or group works with multiple people were required to use App Store payments.
The New York Times reported in July that some app makers, such as Airbnb and ClassPass, were switching business models to include more digital classes as in-person experiences were negatively affected by the pandemic, and Apple had asked them to use in-app purchases which entitled them to 30% of the sale.
Apple CEO Tim Cook was asked about the company’s policies around virtual classes and events at a congressional hearing in July by House Judiciary Committee Chairman Rep. Jerry Nadler.
“The pandemic is a tragedy and it’s hurting Americans and many people from all around the world and we would never take advantage of that,” Cook said. “I believe the cases that you’re talking about are cases where something has moved to a digital service, which technically does need to go through our commission model.”
Jen-Hsun Huang, president and chief executive officer of Nvidia Corp., speaks during the company’s event at Mobile World Congress Americas in Los Angeles, California, U.S., on Monday, Oct. 21, 2019.
Patrick T. Fallon | Bloomberg | Getty Images
Nvidia beat analyst expectations on both earnings and revenue in its fiscal fourth quarter but shares barely moved in extended trading.
Here’s how Nvidia did in the quarter ending in October:
- Earnings: $2.91 per share, adjusted, vs. $2.57 per share as expected by analysts, according to Refinitiv.
- Revenue: $4.73 billion, vs. $4.41 billion as expected by analysts, according to Refinitiv.
Analysts had been expecting a big quarter from the Santa Clara chipmaker driven by sales of its graphics processing unit chips, which are increasingly important for both games and artificial intelligence developers who need processing power.
Nvidia said that revenue was up 57% from the same quarter last year, driven by the company’s graphics segment, which was up 25% from last year to $2.79 billion.
During the quarter, Nvidia revealed its new line of graphics cards based on a new technology it calls Ampere, and interest was strong. One of the new models, the GeForce RTX 3080, went on sale in September and immediately sold out.
Nvidia CEO Jensen Huang said in August that the company is expecting a strong half of the year in its gaming division. On Wednesday, the company said that both its gaming and data center divisions have also been boosted during the Covid-19 pandemic as customers need computers to work and play from home.
Last quarter, Nvidia’s data center line item surpassed gaming revenue for the first time. This quarter, Nvidia’s data center reported $1.9 billion in sales, behind the gaming division’s $2.27 billion in revenue.
In September, Nvidia said it planned to buy ARM from SoftBank for $40 billion, in a move seen as having significant implications for the semiconductor industry. ARM develops technology widely used across the industry to develop low-power chips for mobile devices and supplies technology to most of Nvidia’s competitors.
Nvidia said that it expected $4.8 billion in revenue in its fiscal fourth quarter, in line analyst expectations of $4.42 billion.
This story is developing.
Apple CEO Tim Cook speaks at Apple’s Worldwide Developer Conference (WWDC) at the San Jose Convention Center in San Jose, California on Monday, June 4, 2018.
Josh Edelson | AFP | Getty Images
Apple will cut its App Store commission rate to 15% for for software developers with less than $1 million in annual net sales on its platform, the company announced on Wednesday.
Apple currently takes a 30% commission from the total price of paid apps and in-app purchases from the App Store. For some small app makers, the new policy could cut the amount that they pay Apple in half.
Apple says the App Store Small Business Program will begin on January 1 and that developers that qualify for it will receive reduced App Store fees for paid app and in-app purchases. New developers who haven’t published on the App Store before will also qualify for the lower, 15% commission fee.
The move is an olive branch from Apple as lawmakers around the world are increasingly focusing on its business practices for the App Store, which is the only way for most people to install software on an iPhone or iPad. A report from the House Judiciary Subcommittee on Antitrust published in October says that Apple generates “supra-normal profits” from the App Store.
The new program is for small developers who make less than $1 million per year across all their apps on Apple’s App Store, after Apple’s fees. Once a developer passes that threshold, they’ll be billed at the standard 30% rate, Apple said. If they later fall under $1 million in sales for a calendar year, the lower commission can be restored. Apple said it will reveal more details about the terms of the reduced commissions next month.
Wednesday’s announcement is separate from Apple’s lower 15% fee on the second year of subscriptions billed through the App Store, which applies to big companies as well and was implemented in 2016.
Apple said last month in an annual filing with the SEC that reducing its App Store commission rate could hurt the company’s financial results. App Store revenue is a major part of Apple’s services business, which generated $14.55 billion in the quarter ending in September, accounting for 22% of the company’s revenue for the period.
But Apple will still charge a 30% fee for in-app purchases for top grossing apps, meaning the impact to Apple’s financials could be minimal. In addition, the maximum discount for each publisher is capped, because the commission goes back to 30% after sales after Apple’s fees cross $1 million.
Apple says there are about 1.8 million apps on the App Store, but apps are a winner-take-most business. The top 1% of app publishers generate 93% of the revenue across the App Store and Google’s Play Store, according to an 2019 estimate from app analytics firm Sensor Tower.
The change will help small companies offering virtual classes or sessions through an app, which have fixed costs like the instructor’s time and have grown in importance during the Covid-19 pandemic. In a separate post on its website, Apple highlighted a swimming coach app, a coding app for children, and an indie game as businesses that could benefit from the policy change.
Apple doesn’t charge a commission on physical goods purchased through apps, like booking a in-person class or an Uber. But it considers other classes or events held online, like a virtual yoga session, to be digital goods and subject to the commission fee. It suspended these fees through the end of the year after a noisy public dispute with Facebook.
The changes are unlikely to mollify Facebook or Fortnite maker Epic Games, which is embroiled in a legal battles with Apple over the company’s 30% fee and related practices. One estimate from August suggested that Epic Games has grossed over $1.2 billion on the App Store to date, making it ineligible for the reduced commission.
DoorDash releases filing to go public, reports $149 million in losses on revenue of $1.9 billion through September
Tony Xu, co-founder and chief executive officer of DoorDash Inc.
David Paul Morris | Bloomberg | Getty Images
DoorDash, the leading food delivery app in the U.S., filed its IPO prospectus with the Securities and Exchange Commission on Friday. The company will list its shares on the New York Stock Exchange under the symbol “DASH.”
DoorDash reported $1.9 billion in revenue for the nine months ended September 30. That’s up from $587 million during the same period last year. As its revenue grew, DoorDash also narrowed its net loss to $149 million over the same nine month period in 2020. In 2019, DoorDash had a net loss of $533 million over the nine month period.
The company said it has 1 million Dashers (or delivery workers) and more than 18 million customers.
DoorDash will offer three classes of stock with different voting shares. Class A common stock will grant owners one vote per share. Class B shares will come with 20 votes per share and Class C shares will have no voting rights.
Offering multiple classes of stock has become a common practice in Silicon Valley especially when the chief executive is also a founder, as is the case with DoorDash’s Tony Xu. The prospectus says Xu and his two co-founders, Andy Fang and Stanley Tang, are expected to enter a voting agreement that would give Xu the authority “to direct the vote and vote the shares” of Class B stock held by his co-founders.
“As a result, Mr. Xu will be able to determine or significantly influence any action requiring the approval of our stockholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction,” the filing says.
The company seeks to join competitors GrubHub and Uber on the public market. DoorDash has the lead in U.S. market share among them, with 49% of meal delivery sales in September compared to Uber’s 22% and GrubHub’s 20%, according to analytics firm Second Measure.
DoorDash is one of the most hotly anticipated IPOs of 2020. Though the pandemic threw a wrench in many companies’ plans, Airbnb, Roblox and Wish are all expected to go public by the end of the year, CNBC reported Thursday.
DoorDash’s last private valuation was $16 billion and it has raised $2.5 billion so far.
DoorDash will become the latest gig economy company to go public. The business model has raised questions about worker rights in recent years since gig companies often allow workers to pick up tasks without being full-time employees.
Voters in California recently supported a proposition backed by DoorDash and other gig companies that will allow them to maintain their workers as contractors, rather than employees, despite California’s new labor law that aimed to change that. That worker structure helps gig companies like DoorDash and Uber avoid expenses like unemployment insurance and paid time off, though the proposition did provide for some additional protections for workers.
Following the win, CEO Tony Xu indicated DoorDash would look to spread similar proposals across the country.
Food delivery has been a rare bright spot during the pandemic as consumers avoid restaurants and stay at home, sometimes under local restrictions to contain the virus. GrubHub’s stock, for example, has shot up more than 49% year to date, while the S&P 500 has grown about 9.5%.
DoorDash warned among its risk factors that it may not be able to continue growing at the pace seen during the pandemic.
“The circumstances that have accelerated the growth of our business stemming from the effects of the COVID-19 pandemic may not continue in the future, and we expect the growth rates in revenue, Total Orders, and Marketplace GOV to decline in future periods,” the company disclosed.
DoorDash has twice made CNBC’s Disruptor 50 list, which identifies 50 innovative private companies across various sectors.
This story is developing. Check back for updates.
A Disney cast member welcomes guests to Magic Kingdom Park at Walt Disney World Resort on July 11, 2020.
(Photo by Matt Stroshane/Walt Disney World Resort via Getty Images)
Disney is set to report earnings for its fourth quarter of 2020 after the bell on Thursday.
Here are the key numbers:
- Loss per share: 71 cents expected, according to Refinitiv survey of analysts
- Revenue: $14.20 billion expected, according to Refinitiv
The company continues to feel the strain of public health restrictions on its theme parks business and recently reorganized the company to prioritize streaming video.
Last month, California advised Disney and other theme park operators that they could not reopen until daily coronavirus cases fell below 1 in 100,000 in the surrounding county. Disneyland Resort President Ken Potrock called the guidelines “unworkable” in a statement following the announcement.
The executive director of California Attractions and Parks Association indicated the group would explore legal action in light of the restrictions. The trade group represents Disneyland Resorts and other parks including Universal Studios, which is owned by CNBC parent-company NBCUniversal.
The closures have forced Disney to cut back on costs. In September, Disney announced that the parks, experiences and consumer products division would lay off 28,000 workers. Disney has been able to reopen its theme parks in Florida, Shanghai, Japan and Hong Kong with limited capacity. However, Paris Disneyland was forced to close in late October and will not reopen until 2021.
Meanwhile, Disney announced a restructure of its media and entertainment divisions in October. Disney said it would centralize its media businesses into one organization tasked with content distribution, ad sales and its Disney+ streaming service.
CEO Bob Chapek told CNBC’s Julia Boorstin at the time that Disney was “tilting the scale pretty dramatically” toward streaming.
But, he said, the change was not “a response to Covid.”
“I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway,” Chapek said at the time.
Analysts will also be eagerly awaiting details about how the company’s film “Mulan” fared on the streaming platform during the quarter. The $200 million film was slated for release in March, but was postponed several times before being dropped on Disney+ as a premium $30 rental. Disney is expected to provide more information about the film’s performance during its earnings call.
Disney has shuffled a number of film releases into 2021 following a sharp rise in coronavirus cases in the U.S., as well as lackluster audience traffic and ticket sales. While most of its planned theatrical releases remain poised for runs in theaters, the company’s Pixar feature “Soul” will arrive on Disney+ in December for free.
Top tier releases like “Soul” could help bolster subscription numbers, further supporting Disney’s streaming push.
This story is developing. Check back for updates.
Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.