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Apple to reduce App Store fees for small businesses with under $1 million in revenues

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Amid increased regulatory scrutiny over how it runs its App Store, Apple today announced it will reduce the App Store commissions for smaller businesses. Under the new guidelines of the “App Store Small Business Program,” as it’s called, developers earning up to $1 million per year will only have to pay a 15% commission on in-app purchases, rather than the standard 30% commission.

The new program will launch on Jan. 1, 2021, and will be based on the business’s revenues in the previous calendar year — meaning 2020. This $1 million threshold will be based on how much existing developers made across all their applications on a post-commission basis, Apple notes. That means the businesses could actually earn up to $1.3 million in gross revenues. The reduced fee will also apply to new developers launching their apps for the first time.

If, during the course of the year, the developer’s apps surpass the $1 million threshold, they’ll be moved to the standard commission rate, generally 30%, for the remainder of the year. They’ll also then enter the following year at that standard rate, as well. Depending on the developers’ business, however, the “standard” rate may not always be 30%. For developers running an auto-renewing subscription business, for example, the standard commission drops to 15% in year two on a per-user basis, based on Apple’s existing guidelines. This will not change.

Developers can have their eligibility for the App Store Small Business Program reassessed on an annual basis going forward, Apple says.

Despite the lowered commissions, there are no planned changes to the services offered by the Apple Developer program as a whole. Smaller businesses will continue to have access to Apple’s development applications, like Xcode, its programming languages, like Swift, its secure payments interface, over 250,000 APIs, as well as new technologies like HealthKit, ARKit, CoreML and others.

Apple today has 1.8 million apps on its App Store, which reaches over 1.5 billion Apple devices across 175 countries worldwide. In 2019, the App Store facilitated $519 billion in commerce worldwide, with over 85% of that total accruing solely to third-party developers. Apple only commissions the smaller 15% of apps that sell digital goods and services through either in-app purchases or through paid application downloads.

While Apple didn’t provide an exact number of how many apps will be impacted by the new program, it did say that it believes the “vast majority” will qualify.

The company plans to announce further details about the eligibility process in December.

Given that a large number of developers could potentially qualify for the new reduced commissions, Apple’s bottom line within its growing Services business may be impacted.

In addition to the App Store, Apple’s Services business includes other subscription offerings, including AppleCare, Apple Music, Apple Pay, Apple TV+, Apple Music, Apple News+, and more. This business hit an all-time high of $14.5 billion in Apple’s fiscal Q4 2020. While the Services business has heavily leaned on the App Store in years past, Apple has more recently found ways to reduce its reliance on App Store fees. For example, the company recently launched Apple One, a family of subscription bundles that make it easier and more affordable for consumers to pay for Apple’s subscription services.

The changes to the commission structure follow a year that’s been particularly tough on small businesses due to the coronavirus pandemic and the resulting hit to the global economy. Meanwhile, Apple cracked down harder than ever in 2020 on developers skirting its rules over in-app purchases.

Apple’s demands for a 30% cut — which the company recently argued is comparable to other marketplaces of this nature — led it to do battle with its own developers over the course of 2020.

It rejected apps like Basecamp’s Hey from the the App Store for failing to offer support for in-app purchases, and it rejected apps that directed users to other ways to pay outside the App Store, like WordPress for iOS. It’s also now battling in court with Epic Games over the latter’s refusal to pay App Store commissions for its game Fortnite, which Apple yanked from the App Store. The growing chorus of discontent from the developer community, led to the creation of the Coalition for App Fairness, an advocacy group comprised of developers large and small fighting against what they perceive to be anti-competitive behavior from Apple and Google.

Apple’s battle with developers wasn’t limited to the fee structure itself. This year, the company oddly to burn developer goodwill in other ways, too, like when it announced iOS 14 would launch in less 24 hours, leaving developers unable to have their apps iOS 14-ready on day one.

And as the battles over App Store played out, Apple rolled out an increasingly complex set of rules around how apps can operate and when fees are assessed, under the guise of being developer-friendly. What’s actually developer-friendly, however, is what Apple is doing now: simply dropping the commission rate for smaller businesses.

“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We’re launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love,” said Apple CEO Tim Cook, in a statement about the new program. “The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new program carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives,” he said.

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Cultured meat has been approved for consumers for the first time

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The first lab-grown, or cultured, meat product has been given the green light to be sold for human consumption. In the landmark approval, regulators in Singapore granted Just, a San Francisco–based startup, the right to sell cultured chicken—in the form of chicken nuggets—to the public. 

Just had been working with the regulators for the past two years and was formally granted approval on November 26. Singapore’s regulatory body assembled a panel of seven experts in food toxicology, bioinformatics, nutrition, epidemiology, public health policy, food science, and food technology to evaluate each stage of Just’s manufacturing process and make sure the chicken is safe to eat. “They didn’t just look at the final product; they looked at all the steps that led to that product,“ says Josh Tetrick, Just’s cofounder and CEO. “We were impressed with how thoughtful and rigorous they were.”  

An as-yet-unnamed restaurant in Singapore will soon be the first to have Just’s cultured chicken on the menu, but Tetrick says he plans to expand after that. “We’ll go from a single restaurant to five to 10 and then eventually into retail and then after that, outside Singapore,” he says. 

Most cultured meat is made in a similar way. Cells are taken from an animal, often via a biopsy or from an established animal cell line. These cells are then fed a nutrient broth and placed in a bioreactor, where they multiply until there are enough to harvest for use in meatballs or nuggets. A slew of startups have been founded using variations on this approach, in the belief that cultured meat will appeal to flexitarians—people who want to reduce the amount of meat they eat for ethical or environmental reasons, but don’t want to give it up entirely.

The budding industry has progressed a long way since a $330,000 burger was famously cooked on TV in 2013, driven by the idea that if it’s done right, meat could be produced with far lower greenhouse-gas emissions and zero animal suffering. But cost is still a hurdle: the high price of the growth factors required to develop the cells mean the price tags for pure cultured meat products are still measured in hundreds of dollars per pound, far too expensive to compete with regular meat. So Just’s first chicken products will be chicken “bites” that use cultured chicken cells mixed with plant protein—although Tetrick wouldn’t say in what proportion. “Chicken nuggets are already blended—this one wont be any different,” he says. The bites will be labeled as “cultured chicken” on the restaurant’s menu.

Singapore’s decision could kick-start the first wave of regulatory approvals around the world.

“We are hoping and expecting that the US, China, and the EU will pick up the gauntlet that Singapore just threw down,” says Bruce Friedrich, executive director of the Good Food Institute, a nonprofit that works in meat alternatives. “Nothing is more important for the climate than a shift away from industrial animal agriculture.”

While Just has beaten them to the punch, many big firms are already working with regulators to get their own products to market. This is not something to be rushed, Friedrich says: “It is critical for cultivated meat companies to be extra careful and to go beyond consumer expectation in ensuring consumer comfort with their products.”  

Memphis Meats, which counts Bill Gates, Richard Branson, and traditional meat manufacturer Tyson Foods among its many investors, has teamed up with a number of other firms, including Just and cultured-seafood makers BlueNalu and Finless Foods, to form a lobbying group that is working with US regulators to get their products approved.

The way that might actually happen was only hammered out relatively recently. In March 2019, it was announced that the FDA would regulate the early stages of the cultured-meat process, including cell banks and cell growth. The US Department of Agriculture’s Food Safety and Inspection Service will then take over at the cell harvesting stage and will inspect production facilities and approve labels used on cultured-meat products. In Europe, companies must apply for authorization and meet the European Union’s regulation on novel foods. The process is likely to take at least 18 months, and no cultured-meat company has yet applied.

Both Singapore and Israel have actively made themselves welcoming to startups in plant and cultured meat, Freidrich says. Governments should follow their lead and start treating this like initiatives in renewable energy and global health, he says.

“We need a space-race-type commitment toward making meat from plants or growing it from cells,” he says. “We need a Manhattan Project focused on remaking meat.”

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Longtime investor and operator Adam Nash says he just launched a new fintech startup

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Adam Nash, a Silicon Valley-born-and-bred operator and investor, is back at it again.

Today, on his personal blog, he announced that he has started a consumer fintech company that has already garnered initial funding from Ribbit Capital, along with other “friends and angels” who appear to have also pitched into the round, including Box CEO Aaron Levie, Mighty Networks founder Gina Bianchini, Superhuman founder Rahul Vohra, and Amy Chang, who sold her startup Accompany to Cisco in 2018.

Nash didn’t reveal many details in the post or later on Twitter, saying he’ll have more to say when the company is closer to launching. All we really know at this point is that he cofounded the company with Alejandro Crosa, an Argentinian software engineer who most recently spent five months at Slack but logged more than three years at both Twitter and LinkedIn before that.

Nash said on Twitter that the two met at LinkedIn, where Nash was himself VP of product management for four years beginning in 2007. It’s a good detail to know, considering that Nash has logged time at a wide variety of tech outfits over the years, making it hard to guess at whom he knows and from where.

A computer science graduate of Stanford, where he later nabbed a master’s degree, Nash began his career interning at NASA, HP, and Trilogy before landing his first big job as a software engineer at Apple in 1996 (when former PepsiCo exec, John Sculley, was briefly running the place).

After moving on to a bubble-era company that no longer exists, Nash tried his hand at VC for the first time, joining Atlas Venture as an associate. To get more operating experience, he then jumped to eBay, where he was a director; LinkedIn, where he met Crosa; then Greylock, where he spent just over a year as an entrepreneur-in-residence (EIR) before joining the wealth-management startup Wealthfront as its president and CEO, a job that the company’s original CEO and founder, Andy Rachleff, reclaimed in 2016.

Nash didn’t disappear from the scene. Instead, he rejoined Greylock as an EIR for another year before joining Dropbox shortly after it went public in 2018 as its VP of product and growth, leaving that post back in February to start his own thing, he said at the time.

That Nash would start a fintech company specifically isn’t surprising, considering his involvement with Wealthfront, as well as some of the personal investments he has made in recent years.

In 2018, for example, he wrote a check to LearnLux, a five-year-old, Boston-based educational startup that helps employees better understand their 401k, health savings accounts, and stock options. He is also an investor in Human Interest, a five-year-old, San Francisco-based startup that offers automated, paperless 401(k) plans.

Nash is also riding a very big wave.  According to Pitchbook, consumer fintech is on pace to attract a record amount of venture funding in 2020, at least in North America and Europe.

We’ll let you know more about what Nash is building as soon as he’s ready to share more. The little that Nash is saying publicly for now is that he and Crosa believe there is “still a lot more to do in consumer fintech, and that through software we can help bring purpose to the way people approach their financial lives.”

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Apple’s MagSafe Duo charger is now available

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Back in October Apple announced the MagSafe Duo, a folding travel charger capable of charging both the iPhone and either an Apple Watch or AirPods simultaneously/wirelessly. In an unusual move, the company didn’t specify exactly when it’d start shipping — or even when it’d go up for sale. Some rumors suggested late December, while others were uncertain it would even make it out before the end of the year. When was this thing actually going to be released?

The answer, it seems, is today. The MagSafe Duo just appeared on Apple’s own store and, with delivery estimates as soon as this week, it looks like they’re shipping them immediately.

TechCrunch Editor-In-Chief Matthew Panzarino gave the charger a spin a few weeks ago, calling it “useful, but expensive and underwhelming” while noting that it feels like something that should cost around $70 rather than $129.

 

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