This Week in Tech: Apple, Tesla, Yahoo, and More

The Battle For Developers Heats Up

Given that iPhone sales have leveled off due to the strong dollar and weak macro-economic climate, Apple Inc. (NASDAQ:AAPL) is adjusting its app store to realize more growth. According to the Verge, iOS developers who maintain a subscription with their customers for longer than a year will have Apple’s share of the subscription fees halved to 15%. Apple will also allow all developers to offer subscriptions rather than just a certain subset, as before. The subscription price cuts could win Apple more loyalty from developers and strengthen the iOS ecosystem. The more quality apps and services Apple offers, the more likely consumers are to buy its high-margin iPhones.

Not to be outdone, Alphabet Inc (NASDAQ:GOOG)‘s Google subsidiary said it too will cut subscription fees in half, to 15%. Given that Alphabet makes most of its profits elsewhere, the company is offering more generous terms by cutting the price of subscriptions down to 15% at the onset, rather than after one year. Although the price cuts will hurt Apple and Alphabet’s short-term subscription software revenue, the two companies could end up ahead in the long run if more compelling subscription services pop up. The two tech giants are also big enough for the negative financial results from the price cuts to not matter much in terms of their overall earnings. Of the 766 funds in our database, 152 owned shares of Apple Inc. (NASDAQ:AAPL) at the end of the first quarter, while 223 were long Alphabet Inc (NASDAQ:GOOG), which included 155 shareholders of its class A shares and 142 shareholders of its class C shares (74 firms owned both classes of the company’s shares).

Weekly Stock Performance

Disclosure: None