Apple, Spotify Continue to Trade Barbs -- Tech Roundup

Apple and Spotify continue to take jabs at who's right about whether Spotify should be able to reroute potential paying subscribers to its own site, therefore avoiding a revenue split.
By Bret Kenwell ,

On Thursday, we took a closer look at Spotify's stance against Apple (AAPL) - Get Report , as the former argued that the latter was putting into place tracts that raise "serious concerns under both U.S. and E.U. competition law."

But Apple doesn't feel the same way.

Before getting to Apple's retort, let's flesh out the gist of the situation. Spotify doesn't want to pay Apple a cut of its revenues when paying subscribers sign up for its service via Apple's App Store. 

Rather, Spotify is trying to push paying subscribers to sign up on its own site, then downloading the service from the App Store as an already paying subscriber. That way, Spotify doesn't have to split its revenues.

In response, Apple denied Spotify's latest app update, saying that Spotify needs to use its billing system if "Spotify wants to use the app to acquire new customers and sell subscriptions." Those actions caused Spotify to allege that Apple is raising unlawful concerns.

Phew! Now we're all caught up.

Apple's response didn't carry much humor, saying "we find it troubling that you are asking for exemptions to the rules we apply to all developers, and are publicly resorting to rumors and half-truths about our service."

Let's give these guys the holiday weekend off and see who blinks (or at least responds) next week.

Shares of Apple closed at $95.89 Friday, up 0.3%.

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

It's like watching a toddler grow up in hyper drive when looking at the virtual reality market and its different applications.

At first thought, video games are the most natural fit for VR, as it allows customers -- who already show a willingness to plunk down hundreds of dollars on consoles and equipment in addition to recurring costs in games and online access -- to take an even more immersive step into these alternative worlds.

It could be used for people that want to get exercise but find a treadmill too boring. Heck, even the army could use it for training. It's these alternate users for VR that's allowing for such explosive growth opportunities in the market.

Another VR opportunity? Sports. STRIVR Labs is already working with seven NFL franchises, which began with the Dallas Cowboys last year. It allows coaches and players to put themselves onto the football field -- seeing, analyzing, planning and adjusting to the game -- without actually having to step foot on the field.

This virtually takes away the risk of injury and allows film sessions to be that much more productive. Also, if a player is already injured, it allows them to keep pace with the game plan.

Here's a video of Stanford Football showing how it can used:

With six NFL teams on board already, CEO and founder Derek Belch expects more in the next few months. Honestly, it wouldn't be surprising to see most or all 32 teams using VR in the next few years, and it would be surprising if it was only limited to football. In fact, STRIVR has already made inroads into the NHL and NBA, too.

As a private investor, it can be difficult to get in and out of positions. In fact, it's very hard as a private company does not have the same liquidity as a public company. Therefore, there are larger risks -- as well as rewards -- and many investors are generally in for the long haul. 

And as a long-term thinking private investor, there are a few worst-nightmare scenarios. Aside from bankruptcy, one of the worst comes when the company you're invested in takes a big nosedive in valuation. However, this situation was different than simply a lower valuation.

Zenefits, a cloud-based human resources company, slashed its valuation from $4.5 billion to $2 billion. CEO David Sacks explained the move, saying investors "can re-commit to the company and get fully aligned with the new Zenefits."

Zenefits, while offering software as a service human resource solutions to companies, specializes in health benefits. However, the company allowed its employees to sell that insurance without a license. As a result, its former CEO was ousted and the company slashed hundreds of jobs.

Although most employees have stayed (rather than accepting buyouts), the scandal has wreaked havoc at Zenefits. The valuation is getting significantly lowered as the company reorganized its previous Series C round from May 2015.

In that round, investors committed roughly $500 million for an 11% stake. That stake has now been readjusted to 25%, giving the company a total valuation of $2 billion -- a 55% reduction from the $4.5 billion it previously held.

Big shareholders, like Andreessen Horowitz and Fidelity are on board with the move and the company is now looking to get back on track.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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