Apple, Google, Epic Games, Novavax, Johnson & Johnson and U.S. Retail Sales

Apple and Google drop Fortnite, while Epic Games sues, Novavax and Johnson & Johnson ink vaccine deals in the U.K. and retail sales rise.
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(By BigTunaOnline)
(By BigTunaOnline)

Good morning! Today’s word count is 1,356 words, or a 9-minute read. Let’s get to it:

“Major U.S. stock indexes edged lower after data showed a slowdown in U.S. retail sales and investors awaited high-level trade talks between U.S. and Chinese officials over the weekend,” The Wall Street Journal writes.

  • S&P 500: $3,368.66
  • Nasdaq: $11,042.20
  • Bitcoin: $11,806.09
  • U.S. 10-Year: 0.701%

Fortnite Kicked Off Apple and Google App Stores After Epic Games Moves to Bypass Fees

“Apple and Google yanked ‘Fortnite,’ one of the world’s most popular videogames, from their app stores in an escalating battle over the fees they charge developers to distribute their software and process in-app purchases,” The Wall Street Journal writes.

Why It Matters

It’s a statement against the policies of Apple’s App Store and Alphabet’s Google Play.

  • Both companies take a 30 percent cut of digital transactions within apps.
  • Spotify and Netflix also have “butted heads” with Apple on developer fees.
  • The global market for mobile apps is worth more than $100 billion annually.
  • Both Apple and Google have said they are willing to work with Epic Games to bring the game back to their stores, but Epic CEO Tim Sweeney has “waged a yearslong public campaign” in protest of the tech giants’ developer fees.

Epic took legal action.

  • The game developed sued Apple and Google in U.S. District Court in San Francisco.
  • The suit alleges that the removal of ‘Fortnite’ is a clear example of monopolistic behavior on both companies’ digital payment practices.
  • Epic isn’t seeking monetary damage but asked for an injunction to end the “unreasonable and unlawful” practices.

Apple pushed back and has continually defended its policies.

  • Last month, Apple CEO Tim Cook appeared before congress touting economic research it commissioned to show its fees are in line with the industry.
  • The European Union opened an antitrust probe into Apple in June regarding its App Store practices.
  • Spotify also filed an antitrust complaint against Apple in Europe, accusing the tech giant of using the App Store to limit competition against Apple Music.

Numbers to Consider

  • $120 Billion – The value of the global app market.
  • $39 Billion – Apple’s App Store revenue for the first seven months of the year, while Google Play reached almost $21 billion.
  • $1.2 Billion – What ‘Fortnite’ has produced in App Store spending since the game’s creation, according to Sensor Tower.

Read More: (WALL STREET JOURNAL)

Novavax, J&J Ink Covid-19 Vaccine Deals with U.K. for Tens of Millions of Doses

“Novavax and Johnson & Johnson said Friday they have agreed to provide tens of millions of doses of their experimental coronavirus vaccines to the U.K. for undisclosed sums, as countries move to secure supplies of the shots,” The Wall Street Journal writes.

Under the agreement, the U.K. will fund a late-stage trial of Novavax’s experimental vaccine this quarter and contract a partnership between Fujifilm and Mitsubishi to manufacture ingredients. The U.K. will also work with J&J on a late-stage study.

Why It Matters

The candidates are encouraging, but not the leaders.

  • Novavax’s early-stage testing generating promising immune responses and was generally well tolerated.
  • J&J has started testing its vaccine in a small number of healthy volunteers, and late-stage studies could begin as soon as this fall.
  • Shots from AstraZeneca, Moderna and Pfizer-BioNTech are further along.

The U.K., the U.S. and other countries have spent billions of dollars to secure vaccine doses.

  • Last month, the U.K. agreed to buy 30 million doses from Pfizer-BioNTech.
  • It also agreed to pay AstraZeneca for 100 million doses, and Valneva SE of France for 60 million doses.

While the terms of the deals are undisclosed, there’s a baseline.

  • The U.S. agreed to pay up to $1.6 billion to Novavax to fund its Phase 3 testing and obtain 100 million doses.
  • Novavax has also struck several deals with governments, companies and foundations to see its vaccine distributed in South Korea, Japan and India, among other places.

Numbers to Consider

  • 52 Million – The total doses, including options, the U.K. agreed to purchase from Johnson & Johnson.
  • 9,000 – The number of adults (ages 18 to 85) intended to participate in Novavax’s late-stage study.
  • 180 Million – The expected total yearly production of vaccine doses of Novavax’s vaccine by Fujifilm each year.

Read More: (WALL STREET JOURNAL)

A Quick Look

U.S. July Retail Sales Increased Even as Coronavirus Cases Rose

  1. Retail spending increased 1.2 percent in July, with sales rising above pre-pandemic levels “in a sign the economy continues to heal from the recession despite a rise in virus infections.”
  2. It’s the third straight month retail sales have risen. Sales grew 8.4 percent in June after a double-digit percentage increase in May. Among the things boosting spending: electronics, appliances, health products and restaurant meals.
  3. Still, more recent data suggests a slowdown as coronavirus cases continue to rise in several big states, and the expiration of the $600-a-week enhanced unemployment benefits leaves consumers with less disposable income.
  4. Data from research firm GlobalData shows only 36 percent of consumers tracked spent more or the same amount on retail purchases the first week of August as they did a year ago. That is down from 57 percent who did so during the last week of June.

Read More: (WALL STREET JOURNAL)

Worth Your Time

Public Highway: Sports e-commerce giant just raised $350 million in what should be its last round of financing before going public. The company, which did around $2.5 billion in sales last year, now has an estimated $6.2 billion value. Fanatics, owned by billionaire Michael Rubin, has become the “dominant force in licensed sports apparel.” It’s an official e-commerce partner of all five major U.S. sports leagues and operates online stores for more than 300 collegiate and pro teams. (SPORTICO)

Only The Strong Survive: Microsoft has shown sustained success with its hands-off takeover strategy. Both LinkedIn and GitHub have registered strong growth among their user bases since being acquired. But if the tech giant’s acquisition of TikTok does go through, Microsoft will have to abandon its typical playbook to face a new challenge. How does it “reshape a just-bought business quickly, without damaging its successful formula?” (WALL STREET JOURNAL)

Restricted Area: In response to China’s sweeping national security law in Hong Kong, Google says it is no longer cooperating with data requests from the territory’s authorities unless they go through diplomatic channels. It’s the latest development in a line of western tech companies (Twitter and Facebook have made similar moves) distancing themselves from Hong Kong since enacting the law. Google plans to treat the territory in the same regard as the rest of China. (THE INFORMATION)

Imagine That: What might a Joe Biden-Kamala Harris administration look like for tech giants? It suggests, “Big Tech might avoid the hammer blow of a breakup if the ticket wins the White House.” Sen. Harris, a San Francisco Bay Area native, served as California’s attorney general during the early stages of companies such as Facebook and Alphabet. Her experience gives her an edge to navigate the space, pursuing reforms like consumer privacy protection, and helping the industry out on issues such as immigration reform. (WALL STREET JOURNAL)

Tidbits

“Shares in Nasdaq-listed Iqiyi, a video-streaming site backed by Baidu, fell after news of a probe by the Securities and Exchange Commission.”

With the pandemic shifting companies to work from home, WeWork’s revenue fell between the first and second quarters of this year. 

Major League Baseball likely gave more than $200 million back to fans last week as part of refunds for its MLB.TV streaming service to adjust for the shortened season.

“General Atlantic plans to acquire a 21 percent stake in Gymshark Ltd. in a deal that values the U.K. fitness brand at more than 1 billion pounds ($1.3 billion).”

“Daily fantasy sports companies like FanDuel and DraftKings must pay federal excise tax on their entry fees, the IRS has decided, in an internal memo that could cause a major shakeup in the industry.”

“Canada’s antitrust watchdog said it has launched a civil investigation into Amazon’s conduct in the domestic marketplace and whether it is impacting consumers and companies operating in the country.”

A Couple Cents Content

In case you missed last night’s Live Show, Justin Oh discussed Tesla’s stock split, Nvidia, Fundrise, Beyond Meat, Square and more. (YOUTUBE)

Teladoc and Livongo are merging. Justin Oh breaks it down. (POST)

Earlier this week, I looked at the success of Nintendo and the Switch console’s breakthrough performance. (POST)

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