United Airlines announced this week a plan to begin charging extra for passengers to reserve economy seats near the front of the plane, a reserve fee already practiced by others in the industry, notably American Airlines and Delta Air Lines.

According to USA Today, United announced the new policy which will allow passengers the option to pay more for basic seats that offer the convenience of being closer to the front of the plane. These seats, which will be just behind their Economy Plus row, will be available for purchase by the public, but certain United Corporate Preferred clients can reserve them for free and certain elite-level frequent fliers can reserve them without a fee.

These are not seats with any extra leg-room or perks like those economy seats in United's Economy Plus rows, Delta's Comfort+ rows, or American's Main Cabin Extra. They are simply closer to the front of the plane to offer passengers the convenience of boarding and exiting without having to wait in a longer line.

In a statement to Business Insider, United Airlines spokesperson Maddie King said, "If these seats are not filled, they will be opened for all customers to select at check-in, free of charge. These preferred seats will be available for purchase for all other customers at time of booking."

The USA Today reported United plans to incorporate the practice before the end of the year, but did not give an exact start date or what the cost for reserving a select economy seat would be.

This is not the first instance of airlines charging fees for optional passenger conveniences. In fact, this is actually standard industry practice and is known by a name: unbundling.

Unbundling first began in the late 2000s when airlines recognized the necessity of gaining extra revenue to counteract the higher price of crude oil, which had hit $132 a barrel in the summer of 2008. Unbundling is the practice of separating various costs of services like baggage check, security check, seat assignments, meals, wi-fi use, and early boarding into their own price points. In short, charging little fees for different elements of travel.

According to Bob Mann, President of RW Mann & Company, an airline analysis firm with over 40 years of experience in the industry, American Airlines was the first to charge $20 for a baggage check.

"With that out of the box pretty much everybody else did it," Mann said. "It was the first big gasp of how to get unbundling started."

Things took off. By 2011, unbundling was embraced by the entire airline industry. What's more, Mann said these ancillary fees are not subject to the 7.5% Federal Excise Tax, which applies only to domestic airline tickets sold in the U.S. This loophole gives the industry even more reason to charge these fees.

"It gives them a huge incentive to do it," Mann said, adding that this is not regulated by the Department of Transportation. "You can give away the airfare and then charge everybody for every other element."

Switch sales are going to surge as Nintendo rolls out its new Pocket Monsters Smash Brothers games ahead of the the holiday season, according to Morgan Stanley.

These first-party titles that are solely for Nintendo consoles give the Japanese game maker a key advantage — a strong pricing power — over its global competitors such as PlayStation4 and Xbox One, and will help lift Nintendo shares over the long term, Morgan Stanley analysts Masahiro Ono and Yui Yasumoto wrote in a note sent out to clients on Monday.

"Margins on 1st party software are high, as these margins are driven up further by digital downloads, we think the validity of valuation comparisons with powerful US publishers is stronger in the case of Nintendo than for a con- sole maker such as Sony," said the two analysts from Morgan Stanley.

They view the recent ¥37,232 share price as a near-term bottom and say shares could hit ¥51,000 — 38% above where shares were trading Tuesday.

Ono and Yasumoto stated that the Switch has a longer life cycle than the company's Wii generation but will match Wii's peak annual sales, because they see an effective "one person, one console" penetration strategy that brings 3DS user migration to Switch and Switch Online's popularity among younger users.

"The strategy for Switch is radically different from that of the Wii generation - which was sold bundled with Will Sports in Europe and the US, and tapped demand from adult users - making it tough to appeal to child users with a console price tag of $300 in the off season, and we expected Switch demand to be particularly heavily skewed towards the Oct-Dec holiday season," they said, reiterating that the current sluggishness in Switch sell-throughs won't have an extensive impact on Nintendo's share price.

Morgan Stanley is not the only Wall Street firm that's bullish on the Japanese video-game maker. Of the 23 analysts who show coverage on Bloomberg, 20 have a "buy" rating and just three have a "sell."

Atul Goyal at Jefferies, who has a ¥65,100 price target, believes shares could soar 80% even if Switch sales are flat.

Nintendo shares were down 14% this year through Monday.

Markets Insider

Stockton, California — which announced plans last year to start the first major basic income pilot in the United States — will kick off its 18-month trial period in February 2019, Mayor Michael Tubbs announced Monday.

The program, named the Stockton Economic Empowerment Demonstration (SEED), will provide 100 residents with $500 a month for the duration of the trial. Recipients do not need to be working during the trial, and there are no restrictions on how the money can be used.

Stockton residents can qualify for the trial if they are at least 18 years old and reside in a neighborhood with a median income of $46,033 or less. Individuals who earn more than $46,033 can still be eligible as long as their neighborhood fits the criteria.

SEED organizers will randomly select 1,000 initial residences across the eligible neighborhoods, and each one will receive a notice in the mail asking about interest in participating. From those who choose to fill out a form with demographic questions, organizers will select 100 people (also randomly) to begin receiving basic income.

Researchers will regularly check in with the recipients to determine how basic income affects their health, financial security, and civic engagement. The researchers will also monitor a control group.

The city's basic income pilot is fully funded by private donations, not tax dollars, according to a SEED report released Monday. Donors include Facebook co-founder Andrew McCollum and sociologist Gretchen Sisson, who is McCollum's wife. The Economic Security Project— co-chaired by Facebook co-founder Chris Hughes, Center for Community Change Action president Dorian Warren, and Peers.org co-founder Natalie Foster — is a major donor as well.

"We hope to challenge the entrenched stereotypes and assumptions about the poor, and the working poor, that paralyze our pursuit of more aggressive solutions," SEED wrote in its report. "We aim to illustrate how widespread and episodic poverty is."

While Tubbs' basic income initiative garnered national attention, some Stockton residents criticized the mayor for unrelated actions and launched a petition in January to remove him from office. The petition, which alleged wasteful spending and disregard for the community, failed to gather the necessary votes.

Stockton was the largest city before Detroit to declare bankruptcy, but its economy has improved in the past several years as the population grew and crime rates fell. However, the city's median household income of $46,033 remains below California's median of $61,818. The unemployment rate in Stockton is about 7%, which is significantly higher than the state average.

Tubbs previously told Business Insider that the basic income pilot could give people more opportunity to find fulfillment in their lives.

"In our economic structure, the people who work the hardest oftentimes make the least," Tubbs said. "I know migrant farm workers who do back-breaking labor every day, or Uber drivers and Lyft drivers who drive 10 to 12 hours a day in traffic. You can't be lazy doing that kind of work."

The Stockton experiment is starting shortly after other highly-publicized basic income pilots either ended abruptly or were not renewed.

Most recently, the provincial government in Ontario, Canada, killed a three-year pilot after only one year. About 4,000 people were receiving a monthly stipend through the program, and many recipients expressed shock and outrage after Premier Doug Ford broke his promise to continue the program.

Earlier this year, officials in Finland announced that a two-year pilot program giving basic income to 2,000 people will end in January 2019. Four months into the pilot, some of the people receiving $600 a month had reported lower stress levels.

Finland's program will run for the intended two years, but the government denied a request for additional funding from Kela, the country's social security agency, and said it is looking at different social welfare projects instead.

Elon Musk has offered an explanation via Twitter why he has quit Instagram.

"Instagram is so thirsty, yet gives you Death by Water," Musk tweeted in response to a question about what drove him to delete his account on the social media platform.

Musk also tweeted an alternative explanation: "Didn't 'like' it".

Musk's Instagram account, which had more than 8 million followers, disappeared in the early hours of Monday morning.

Musk's philosophical tweet seems to possibly be a reference to T.S. Eliot's 'Death by Water,' one of the section of 'The Waste Land.' Musk tweeted the link to the Wikipedia page of Eliot's poem earlier in the day.

The deactivation of the account came soon after rapper Azealia Banks posted a series of messages about Musk on her Instagram account, demanding in a series of updates that the billionaire returns her phone. She also threatened to call the police.

"It's a f---ing mess I want my phone and I want to go home," Banks told Business Insider when asked for further details via Instagram DM late Monday evening Pacific Time. According to Banks, her own lawyer took away her phone at Musks' lawyers' instruction.

"I'm like in tears right now," she added. "This has nothing to do with me."

A spokesman for Musk said: "Elon doesn't know Azealia Banks. He doesn't have her phone and neither do his lawyers."

Earlier in August, Banks made headlines when she stayed at one of Musk's Los Angeles properties soon after Tesla's CEO announced he had secured funding to take the company private. According to Banks, she overheard Musk "scrounging for investors to cover his ass" as he sought funding.

For years now, Apple and Google, in addition to their main businesses, have had a growing and profitable side gig going charging developers hefty commissions when the developers sell apps, subscriptions, and other items through their app stores.

But maybe not for much longer.

Apple and Google face regulatory threats and pushback from developers that could hamper their app store businesses and force them to reduce the cut they take from each sale, Ben Schachter, a financial analyst with Macquarie Research, said in a research note Monday. Even though the companies' app stores are just sideshows to both companies' main businesses, they could both take a significant hit to their financial results if they are forced to reduce rates, he said.

Apple, for example, could take a $16 billion hit to its adjusted earnings if its forced to take a major cut to its App Store commission rates, he said in the note.

"We believe that the traditional ... commission rates for app distribution may come under pressure," Schachter said in the note. He continued: "Changes in the commission rates would meaningfully impact profits."

Apple started taking a 30% cut when it launched the App Store

Both Apple and Google charge a 30% commission on purchases made through their app stores, including on buying apps, subscription sign-ups, and in-app purchases of digital goods. Both companies also now charge 15% on subscription charges after the first year; a reduction to entice developers to focus on subscription-based business models.

Tim Sweeney, CEO of Epic Games, which announced earlier this month that it won't distribute "Fortnite" Google Play. Epic Although the basic 30% commission has been the norm since Apple launched the iPhone App Store 10 years ago, it's starting to come under increasing scrutiny. Earlier this month, Epic Games announced that it would distribute the Android version of its megapopular game "Fortnite" through its website rather than through the Google Play app store. It opted out of Google Play specifically because it didn't want to pay the search giant a commission on in-app purchases, which is the main way it makes money off "Fortnite."

Epic's move drew widespread publicity, because it was so unusual for a developer to opt out of one of the two major global smartphone app stores. But it may soon be followed by others, Schachter said.

"We've had behind closed door discussions with game developers who claim that [Apple] and [Google's] commission structure is unfair, and that they may take a more public role in pushing back against the business model," he said.

Developers are starting to push back against those commissions

And it's not just game makers who are getting fed up. Spotify, in a recent regulatory filing with the Security and Exchange Commission called out Apple and Google for charging it commissions that aren't applied to their rival subscription music services. The statement was only the latest move by Spotify to bring the issue to the attention of consumers and regulators, noted Schachter.

Daniel Ek, CEO of Spotify, which has repeatedly criticized Apple and Google for the commissions they charge in their app stores. Greg Sandoval/Business Insider Like Epic Games, Spotify has essentially opted out of that model. Although iPhone users can download Spotify from the App Store, they can't sign up for its premium subscription service through it. Instead, they have to do that through its website.

Apple and Google could also see pushback from other developers, particular from streaming video providers such as Netflix, Schachter said. As that market starts to mature, and the players become less focused on signing up new users, they may start to become more concerned about the commissions they're paying to Google and Apple, he said. Those concerns might be heightened as the two giants rev up their respective video services, he said.

Already, Netflix is testing directing smartphone users to sign up for a subscription to its service via their web browsers, rather than through its app, Engadget reported Tuesday.

"As [Google] and [Apple] continue to add more services and directly compete with app developers, we suspect some of these voices from the music, video, game business, and others may become louder," he said.

Apple and Google also face increased regulatory and legal pressure

But the app store commissions are likely to come under pressure from other places besides developers, most notably from the legal and regulatory arena, Schachter said.

In the next year, the US Supreme Court is scheduled to hear an appeal of an antitrust lawsuit by consumers filed against Apple that targets its commission fees directly. The consumers charge that Apple's monopoly over the distribution of apps on the iPhone means that developers have no choice but to pay its commissions, which the developers then pass on to their customers in the form of inflated prices. Should the court allow the case to continue, it could eventually upset the whole business model of the App Store.

Margrethe Vestager, the European Commissioner for Competition, recently hit Google with a $5 billion fine for abusing its dominance of Android. Reuters Meanwhile, Google's business practices have been under scrutiny for years now by European competition regulators. Last month, they hit the company with a $5 billion euro fine for forcing smartphone makers to install its apps.

Such regulatory scrutiny may only increase, Schachter said. Developers such as Spotify are complaining directly to regulators, he noted. With the market big and growing rapidly — global app sales hit $86 billion last year — and with Apple and Google offering increasing numbers of services that compete with those of leading app makers — their commissions and app stores will also be increasingly likely to draw regulators' attention, he said, referring to the companies by their ticker symbols.

"We are concerned that given AAPL and GOOG's dominance of mobile [operating systems] combined with their growing efforts to add value and services to customers using those OSs, it will draw regulatory and legal attention," Schachter said. He continued: "We are particularly concerned that as AAPL and GOOG add more features and offerings such as voice assistants, Apple Music, YouTube Red, a potential video service from AAPL, and more, that competing developers will claim that AAPL and GOOG's position as owners of the platforms may give them 'unfair competitive advantages."

Apple and Google could take a big hit to sales and profits

Should all this pressure on the app store commissions lead to decreased prices, the two giants could take a big hit, Schachter said. Over the last year, 14% of Apple's total revenue came from its services business, much of which is derived from commissions on App Store sales.

If nothing changes with commission rates, Apple should see an average commission rate of about 27% on such sales in its 2020 fiscal year, he estimated, taking into account the 15% rate it charges on ongoing subscriptions. The company's App Store revenue would be about $20.1 billion that year, while its total company earnings before interest and taxes (EBIT) would be about $78.6 billion, he said.

Sundar Pichai, CEO of Google, which has generally followed Apple's lead in terms of app-store commission rates. Getty But if Apple is forced to slash its average commission rate to 15%, its App Store sales would fall to $11.2 billion in fiscal 2020, and its total company EBIT for the year would drop to $69.7 billion. If it has to cut commissions way down to 5% on average, its App Store revenue would be just $3.7 billion, and its company-wide EBIT — essentially its operating profit — would be $62.2 billion.

Those estimates "highlight just how levered operating profit is to the high-margin dollars of the App Store," Schachter said.

Google could see a similar hit if it is forced to slash Google Play commissions, he said. Assuming everything stays the same as it is now and the company continues to get an estimated average commission of 27% on app store sales, Google will pull in $10 billion in such revenue in 2020 and its company-wide EBIT will be about $40.2 billion.

But if its rates are cut to 15%, Google's app store revenue would be just $5.6 billion that year and its EBIT for the year would be $35.8 billion, he said. If rates plunge to just 5%, its app store revenue would be about $1.9 billion, and its total EBIT would be $32 billion.

Legal marijuana is one of the fastest-growing industries in the US. It generates hundreds of millions in tax revenue in states where selling the drug is legal, and it's expected to become a $32 billion global market in the next four years. It's also considered illegal by the federal government.

But for a few cannabis-specific funds, federal marijuana prohibition is the opportunity of a lifetime.

While many of the biggest Wall Street banks and institutional investors may want to do business in the cannabis industry, their limited partners — typically large pension funds or insurance companies — are spooked by federal prohibition.

Jon Trauben, a partner at the New York City-based Altitude Investment Management, which manages around $25 million, told Business Insider in a recent interview that the firm is taking advantage of that short "window of opportunity" to invest in marijuana before prohibition recedes and the big institutional players jump into the sector.

"It's unique, timely, and you can't ignore it," Trauben said.

Here's how it works: canny investors like Trauben hit up high-net-worth individuals or family offices for capital. These entities are willing to take on tons of risk putting their money to work in what amounts to a legal grey area.

Through dedicated funds — structured as venture capital, private equity, or hedge funds— that capital can be quickly deployed to finance growth in the booming cannabis sector, especially for US-based companies that are working under severe capital constraints.

Most of these funds invest in ancillary companies, like tech startups that provide software and payroll services to the booming marijuana industry but don't actually grow or sell the plant itself. That shields them from most of the risks involved with doing business in an industry the federal government considers illegal, but still allows them to reap profits.

Jenny Cheng/ Business Insider

The chaos theory of investing in cannabis

Many investors in the marijuana industry are taking a page straight out of the "Game of Thrones" playbook: Chaos, in this case, is a ladder to strong returns.

"When there's complexity, when there's chaos, when there's uncertainty, that's when the people who are really good at doing what they are doing stand to make really strong gains," Micah Tapman, a managing director at Colorado-based Canopy, which focuses on early-stage investments in the cannabis industry, previously told Business Insider.

"The lack of banking and lack of access to capital is creating a huge opportunity," Danny Moses, a hedge funder behind the famous "Big Short" trade chronicled by Michael Lewis said at the Cannabis World Congress and Business Expo in New York. "It's a gold mine, but it's also a minefield."

Moses, who has called investing in marijuana the "big long," has put some of his personal money into Merida Capital, a New York-city based private equity fund led by a former corporate attorney, Mitch Baruchowitz.

To Baruchowitz, who told Business Insider in June that his firm manages around $50 million, the best investments are those that build the "scaffolds" for the marijuana industry.

"So our investment thesis is one that is much more geared towards that scaffolding," Baruchowitz said. He pointed to Merida portfolio companies like Simplifya, a software service that helps cannabis dispensaries comply with byzantine operating regulations, which tend to differ state-by-state.

As with any cutting-edge industry, there's a learning curve for investors. But it's easier when they're not competing with multibillion-dollar funds.

"There's no truer way to learn something unless you spend your own money," Trauben, of Altitude, said. "And right now, we don't have to compete with the Goliaths."

Wall Street is banging at the door

The legal grey area the cannabis industry finds itself in is slowly shrinking, and the window of opportunity for investors will eventually close.

Big institutional firms are already pushing into marijuana as attitudes around the drug change, and a number of bills legitimizing the industry at the federal level work their way through Congress.

Karan Wadhera, the managing partner of Casa Verde, a Los Angeles-based venture capital fund focused on ancillary cannabis companies, told Business Insider in April that his fund is receiving a lot of inbound interest from large institutional investors.

"I think this is a testament to both the size and pace of growth in the cannabis industry," Wadhera said, adding that last year, "many top VCs would not be ready to entertain a conversation on cannabis."

Just last week, Constellation Brands — the beermaker behind Corona — sunk $4 billion in a stock deal into Canopy Growth, a publicly traded marijuana company. It's the largest corporate investment into a marijuana cultivator to date.

And guess who advised Constellation on the transaction? None other than the most institutional of institutional firms: Goldman Sachs. Bank of America, one of the largest banks in the world, provided the financing.

Read more of our cannabis industry coverage:

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here. Current subscribers can read the report here.

Business Insider Intelligence

The healthcare industry is undergoing a profound transformation. Costs are skyrocketing, consumer demand for more accessible care is growing rapidly, and healthcare companies are unable to keep up.

Health organizations are increasingly turning to tech companies to facilitate this transformation in care delivery and lower health expenditures. The potential for tech-led digital health initiatives to help healthcare providers and insurers deliver safer, more efficient, and cost-effective care is significant. For healthcare organizations of all types, the collection, analyses, and application of patient data can minimize avoidable service use, improve health outcomes, and promote patient independence, which can assuage swelling costs.

For their part, the "Big Four" tech companies — Google-parent Alphabet, Amazon, Apple, and Microsoft — see an opportunity to tap into the lucrative health market. These same players are accelerating their efforts to reshape healthcare by developing and collaborating on new tools for consumers, medical professionals, and insurers.

In this report, Business Insider Intelligence explores the key strengths and offerings the Big Four will bring to the healthcare industry, as well as their approaches into the market. We'll then explore how these services and solutions are creating opportunities for health systems and insurers. Finally, the report will outline the barriers that are inhibiting the adoption and usage of the Big Four tech companies' offerings and how these barriers can be circumvented.

Here are some of the key takeaways from the report:

Tesla reported an adjusted loss per share of $3.06 for the second quarter, which was larger than what analysts had predicted, and revenue of $4 billion, which beat analyst projections. Its cash burn, $739.5 million, was lower than analysts expected. The company said it expected to be profitable during the second half of 2018.

"Going forward, we believe Tesla can achieve sustained quarterly profits, absent a severe force majeure or economic downturn, while continuing to grow at a rapid pace," the company said.

During the company's earnings call, Musk apologized to Sanford C. Bernstein & Co. analyst Antonio Sacconaghi. During Tesla's first-quarter earnings call in May, Musk had referred to Sacconaghi's questions as "boring" and "boneheaded."

"I'd like to apologize for being impolite on the prior call. Honestly, I really think there's no excuse for bad manners, and I was kind of violating my own rule in that regard. There are reasons for it in that I had gotten no sleep, had been working 110-hour, 120-hour weeks, but nonetheless, there's still no excuse," Musk said during the second-quarter earnings call.

A new survey has some good and bad news for the smart-speaker makers.

The devices, such as the Amazon Echo, Google Home, and Apple HomePod, appear to encourage owners to listen to more music and web radio according to a survey of 3,000 respondents by MusicWatch, a market research company.

Since all three companies also offer music services, the devices could help drive growth in businesses like Amazon Prime Music, Google Play Music, and Apple Music.

But the bad news is that MusicWatch also found that nearly half of those surveyed (48 percent) said they were concerned that voice-assistant devices and smart speakers are becoming too intrusive, Russ Crupnick, managing partner at MusicWatch, told Business Insider.

"It's clear that these devices are driving music consumption," Crupnick said. "However, as powerful and pervasive as these devices are becoming consumers still have a healthy fear about their privacy."

Smart speakers likely will become the hottest consumer-gadget of the year. Though none of the top manufacturers reveal sales figures, research from Canalys and Strategy Analytics both estimate that sales grew 200 percent in the first quarter of 2018 from the same period a year earlier.

People love smart speakers but don't yet fully trust them

Smart speakers and digital assistants enable owners to speak commands, rather than keying them in. The machines can also talk back. People ask them the time, the weather, to schedule reminders and sometimes to shop. To perform these functions, some of the devices must record what owners say and then send back the information to the company. The thought of being recorded spooks some people.

Some people also fear --though there's no proof that this has happened -- is that some bad actor will intercept the recordings or somehow rig the devices to eavesdrop. A family in Portland, OR., who owned an Amazon Echo, learned that the machine erroneously interpreted commands, and recorded a conversation in their home and sent the recording to an associate.

REUTERS/Mark Blinch

Beyond just that episode, there have been incidents that made some people unsettled about having these devices in their home. Google had to disable a feature on its Google Home Mini speaker after it turned out that a hardware problem caused it to listen in on a reviewer all day. More recently, Amazon had to issue a fix after some of its Echo speakers randomly erupted in a creepy laugh.

Now, the burden is on these companies to be transparent about these devices, when they record, and how much control they have over their data.

And there are signs that these companies are taking on the challenge. On Monday, when a reporter asked Google Home if it was listening, the device responded this way:

"Google Home listens for the hot word ("Hey, Google" or "Ok Google") and after it hears it, or after you've physically long pressed the top of your Google Home device, it sends a recording of what you say to Google."

That's a more serious response but one that some people still may find unsettling.

Smart speakers could take us back to the future

Still, Crupnick said that he found nothing in his survey that indicates the privacy concerns are affecting sales or usage. On the contrary.

It calls to mind how, decades ago, people would listen together to albums played on turntables — a kind of social music sharing which no longer exists, but that looks set to re-emerge thanks to smart speakers.

"When we conducted focus groups of smart speakers," Crupnick said, "It was incredible to see families again gathering to listen to music. I hadn't seen that since high school."

One of the things that's surprised me most is how easily Google Assistant has become integrated into my life.

Before getting the Google Home Max, I didn't think I needed or wanted a digital assistant inside my home. My main experiences up until that point had been with Siri on the iPhone and Amazon's Alexa on an Echo Dot speaker, and in both cases, they never really became a part of my daily routine.

But Google Assistant has been different, and I find myself using it several times a day. I most often use it to set cooking to timers, or for asking about the weather, travel times, what song is playing, or random facts. The next feature I plan to try now that I have two Google Home Minis is using Chromecast to play music in every room of my apartment.

If you're thinking, "This thing costs $400 and that's all she uses it for?", that's a fair critique. The fact is, that's all I've needed it for — so far. The Google Home Max has tons of other features, but I don't have a smart home so it can't control my lights or thermostat, and I prefer a physical planner over a digital calendar, so I don't review or create appointments using the device. Everyone uses smart assistants differently and places different valued on convenience, and so far, these features are the most important to me.

If I have one complaint about the internal smarts, it's that Google Assistant is easily triggered by my TV. Its lights will illuminate almost every time I have my TV on, and for words that sound nothing like "Hey Google." It's not a deal-breaker, but it can be annoying.

Get the latest Tesla stock price here.

Samsung announced its first smart speaker, the Galaxy Home, during its event in Brooklyn, New York, on Thursday.

The "smart" part comes from Samsung's Bixby artificial-intelligence voice assistant. Much as with Amazon's Alexa, Google's Assistant, and Apple's Siri, Bixby is designed to answer questions and perform voice-activated tasks.

Samsung

So far, Bixby hasn't received the most positive reviews compared with its competition. Samsung announced several improvements to Bixby during its Thursday event, but it feels as if the company is playing catch-up with Google, Amazon, and even Apple's Siri.

The Galaxy Home is meant to be a smart-device hub, giving customers voice control over other smart devices such as door locks or lights.

As a speaker, the Galaxy Home features 360-degree sound, but it apparently can also direct sound toward a specific area rather than spreading it around a room. It also houses a subwoofer for bass.

Design-wise, it seemingly sports a fabric exterior in shape that is somewhat similar to Apple's HomePod. The major difference is the tripod stand. From the photos during Samsung's event, it looks as if it could be a fairly large device.

Samsung

Samsung didn't reveal much about the Galaxy Home during its event. More details are expected in November during the Samsung Developer Conference.

Once you've established how much RAM you think you need — and then doubled it — the CPU (processor) should be the next spec you look at.

Many of the computers you'll be looking at will come with CPUs from Intel, and they generally come in more-or-less easily discernible performance packages. The Core i3 line is a relatively low-powered line of CPU. The Core i5 is mid-range, and the Core i7 is top of the line. Some computers have ultra-powerful Core i9 models, but people who buy those computers already know what they're looking for.

With Intel's latest 8th generation of CPUs, almost all of its models have at least four cores, including the low-power Core i3 models. Higher-end models have six or more cores. The more cores a CPU has, the faster it can open and run several apps at the same time. With that in mind, a Core i3 will actually suit a lot of people for basic tasks, more so than previous generations of Core i3 CPUs that only had two cores.

The reason why you'd want a mid-range Core i5 or high-end Core i7 is if you want to open and run many apps at the same time even faster.

As it is with RAM, casual users who don't really use computers that often will be fine with Core i3 CPUs. But those who use computers a lot will want to look at the Core i5 at least, and potentially Core i7 models.

Personally, I don't buy a computer with anything less than a Core i7. I want apps to open quickly when I need them, and I want them to do the things they do as fast as possible for my work. For example, I benefit from using a Core i7 when I run Photoshop to bring you some of the pretty photos of products I write about. I have no time to waste for things to load and render while editing and saving photos. And as for web browser tabs, I have no time to wait for slow tab switching while researching for a story.

Some computers come with AMD's line of Ryzen processors. I don't have much experience with AMD's processors, so I can't accurately say which one will work for what type of user you are.

In April 2017, a group of over 30 software developers gathered at a luxury loft in New York City's trendy Tribeca neighborhood after receiving an invitation from Apple. They didn't know exactly why they had been summoned, but all of them had one thing in common: they developed apps for Apple's devices, according to people who attended the event.

The developers at Apple's loft soon realized the hardware giant needed something from them: Apple was a few months into a major shift in the App Store's core business model, and it needed buy-in from developers.

Developers, Apple said, needed to realize the business model of apps was changing. Successful apps tended to focus on long-term engagement instead of upfront cost. Indie developers who wanted to capitalize on this needed to move to a subscription model, as Apple had made possible in the past year in a splashy announcement.

Why Apple, one the strongest forces in the world of technology, held an invite-only meeting for smaller, often one-or-two person indie developers is a story that goes back to the beginning of the App Store in 2008. Shortly after the App Store was turned on for iPhones, people realized that the market for apps had a tendency to drive prices for software down.

Eventually, iPhone owners got used to apps costing only $1 or $2.

Months after the App Store launched, former Apple CEO Steve Jobs referenced the shifting market for apps in a 2008 interview that was recently unearthed.

"I think some of the folks have come down from $10 to $5, and see their sales go up more than 2X. I think these guys are trying to maximize revenue and they're experimenting," Jobs said at the time. "They could ask us, 'What should we do?' and we're going to say, 'We don't know.' Our opinions are no better than yours because this is so new."

10 years later, the App Store isn't new anymore, and Apple continues to tweak its rules so that developers can create sustainable business models, instead of selling high-quality software for a few dollars or monetizing through advertising. If Apple can't make it worthwhile for developers to make high-quality utilities for the iPhone, then the vibrant software ecosystem that made it so valuable could decay.

Apple's main tool to fight the downward pricing pressure on iPhone apps is subscriptions.

Some apps are 'hammers'

VFS Digital Design/FlickrSome software is like a network, and other software is like a hammer.

For example, an app for connecting you to friends and family, like Facebook or Snapchat, is a network. On the other hand, an app that allows you to, say, crop or alter a photo is more of a tool, like a hammer.

The advent of the App Store in 2008 made most software for iPhone and iPads ever-cheaper as Apple's userbase was exploding, which was great for network-style apps: they got access to a huge userbase, and since they make money through advertising or other methods, the race to the bottom in terms of pricing didn't hurt them.

But the App Store put a lot of stress on hammer makers, people and small businesses who developed tools for people to draw, or write, or program — basically, apps called "utilities" in the App Store. These developers would sell an app for a few dollars in a one-time transaction, and then they were stuck paying server costs and upkeep indefinitely with free updates.

"Once the customer is acquired and they pay the money, they don't get charged again. So what keeps the app up?" Ish Shabazz, an indie iOS developer, said.

In response, in 2016 Apple introduced what was reportedly internally called "Subscriptions 2.0," a way for developers that made utilities and other kinds of apps to bill their customers on a regular, recurring basis, creating the cashflow necessary to keep a hammer-style app up-to-date and effective.

It also, according to developers that Business Insider spoke to, made it possible to create a large and sustainable software business based on App Store sales.

This September, "Subscriptions 2.0" turns two year old. Subscription-based apps remain a very small fraction of the 2 million apps available from the App Store, but Apple is pleased with the uptake.

"Paid subscriptions from Apple and third parties have now surpassed $300 million, an increase of more than 60% in the past year alone," Apple CEO Tim Cook said during a conference call last month.

"What's more, the number of apps offering subscriptions also continue to grow. There are almost 30,000 available in the App Store today," he continued.

A secret developers conference

Tinder has a lot of success selling premium subscriptions. Tinder The emphasis Apple is putting on subscription business models for app makers is clear from the invite-only meeting that the iPhone giant held in New York in 2017.

Apple holds an annual developers conference in San Jose, but it held a separate session that year for smaller developers encouraging them to adopt subscription business models.

But if the transition didn't go well, and developers stopped making hammer-style apps, Apple could lose some of the vibrant software that made its iPhone and iPad so valuable.

Up until 2016, when a developer sold an app to a customer, 30% of the transaction went to Apple, and the other 70% arrived in the form of a check to the app's creator.

The new way Apple wanted to promote: Instead of users paying for apps once, they'd pay on a regular basis, putting money into developer coffers on a regular schedule. Apple would still get a 30% cut of the subscription's cost, but if a customer continued to subscribe after a year, Apple's cut would go down to 15%.

At the meeting, Apple underscored that the app model was changing. The meeting touched on topics including launching, customer acquisition, testing and marketing, engagement, retention, monetization, and paid search ads.

An Apple representative said at the meeting that paid apps represent 15% of total app sales and is on the decline, according to a person who was there who did not want to be identified to maintain their relationship with Apple.

This meant that developers needed to spend time turning free customers into high-value customers, and also worry about churn — the percent of customers that used to subscribe but canceled. Apple suggested several tactics, like offering 2-4 options to improve conversion rate, segmenting users by price. Apple also suggested that after a month, it was seeing 41% retention on apps that increased their prices, only slightly lower than the 61% retention that it was seeing when subscription prices were kept the same.

The message was clear: successful apps now focus on getting regular engagement from their users, not one-time sales. For developers, that meant embracing the subscription model.

If you focus on paid apps, instead of subscriptions, Apple warned, your business will eventually hit a cap.

An elite developer finds prices can go even higher

Lucy Yang/INSIDER One of the biggest winners from the changes to the App Store is Lightricks, an Israel-based developer which makes several serious photo editing apps for iPhones and iPads under the Enlight brand.

It makes FaceTune, a fun app that improves selfies — smoothing out imperfections, fixing the lighting, and generally making you look your best.

FaceTune was the No. 1 most downloaded paid app on the United States App Store on Friday. It's a paid app that costs $3.99. But although most developers would love to have those kind of numbers, Lightricks cofounder Itai Tsiddion is more excited about FaceTune 2, which uses the subscription app model.

FaceTune 2 has over 500,000 active subscribers, Tsiddion said, and through research he's been able to figure out that the people who are engaged and using the app value it highly enough to pay much higher prices than what a paid app could command.

If you want to sign up on a monthly basis, FaceTune2 costs $5.99 to unlock. Annually, it costs $32. And if you just want to buy it outright forever, it's a whopping $69.99.

"Those are the prices we can command with subscriptions," Tsiddion said. "We were pitching, 'we'll get to $20.' We're at $36 now!"

Lightricks achieved a $40 million run rate this year and is profitable, Tsiddion said, but in the early days, there were questions from Silicon Valley investors about whether it's possible to build a real business making mobile apps on the Apple App Store.

"Even on Sand Hill Road, nobody believed it was a sustainable ecosystem," before the subscription changes, Tsiddion said, speaking of Lightricks' early days.

With paid apps, he found they were "hitting a ceiling around $10 million per year in revenue, which is not very much when you have serious R&D."

But now, the recurring revenue from the company's App Store subscriptions have transformed a company whose primary product is iPhone and iPad apps into a "real business" with 140 employees.

Dominated by big players

HBO makes one of the top grossing apps in the App Store. HBO Still, even with some hammer-makers finding huge success, the majority of Apple's subscription revenue doesn't appear to come from apps that are specific tools — instead, it's coming from big content businesses like Pandora, HBO, and Netflix.

"My suspicion is that a good portion of those subscriptions are content subscriptions," independent Apple analyst Neil Cybart wrote in May.

"Really, the growth of those applications has been cemented by the subscription applications,"Alex Malafeev, co-founder of Sensor Tower, an app analytics firm, told Business Insider. "It's definitely a top-heavy market right now in terms of the revenue."

"If you look at maybe the top 20 or 30 apps and companies, these are going to be the names you hear in the media all the time, they're generating a lot of that revenue. Netflix. Spotify. Tinder. YouTube," he continued. "Part of this is driven by these companies introducing new media subscription monetization and doing really well."

One of the apps that is the best example of content subscriptions is Tinder, Malafeev said — a network-style app, and as a part of giant IAC, certainly not an indie developer.

"Tinder probably being the best example where the majority of their monetization is from "Gold" premium subscriptions, but they also have considerable purchases that you can buy as well to boost your profile or something like that," he said.

Apple likes to tout its payouts to developers. In June, it said that it had paid out $100 billion to App Store developers, of which there are 20 million. But some smaller developers worry that figure is misleading, with the majority of that going to the big players.

"They say they paid developers $100 billion dollars, which I think is hilarious. Who are they paying $100 billion dollars? HBO and Netflix are two of the top-grossing apps on the App Store. It seems disingenuous to take credit for 'Game of Thrones,'" Shabazz said.

Capsicum, a daily planner app, will be sold with subscription pricing. Ish Shabazz

One way that "hammer" developers are adapting to the new subscription focus is to bundle content into their tool apps.

Shabazz is working on a daily planner and notebook app called Capsicum, which will be monetized through subscriptions. He's shooting for $19.99 per year.

"The way that works is we're going to be adding content constantly over time," Shabazz said, citing additions like weather, backup features, and daily graphics inside the journal.

It also costs money and time to retool a popular app for subscriptions. Popular iOS app Ulysses changed from a $25 app to a $5 per month app last year, for example. "Adding subscription to Ulysses took us 7 months, with 1 man-year engineering, 1.5 man-years total effort. It's 22k lines of production code," Ulysses cofounder Max Seelemann tweeted.

There's also a danger that consumers may not want to pay on a monthly basis for a utility. "You've seen many apps changing their business models, and the consumer reactions are mixed," Denys Zhadanov, a VP at Readdle, which makes Spark, a mail client, as well as other utilities, told Business Insider in an email.

The trick is to "provide recurring value, so that you can ask for a recurring fee. If the app/service is a more of a tool (hammer) that is used once a month — charging for that every month doesn't make much sense," he continued. "Yet there are exceptions on the App Store who trick users into free trials and charge them $3.99 a month, making $1M revenue per month."

How many subscriptions?

Tim Cook. Apple Apple hasn't said how many in-app subscriptions are currently being paid for and didn't respond to a request for comment for this story.

Apple has 300 million people paying it for subscriptions, according to its most recent earnings call. Some are subscriptions to Apple's own services, like Apple Music, but the majority are subscriptions to third-party apps.

The number certainly stacks up well to other content subscription services: Netflix has 125 million subscribers and HBO Now only has 5 million. Spotify has 83 million paid subscribers.

Apple is quietly building one of the biggest subscription businesses in the world — something that's core to the company as iPhone sales growth slows. Apple wants its services, supported by the App Store, to be a Fortune 50 business by 2020, or about $55 billion per year in revenue.

While a lot of that lifting can be done by content, to build a business that big, Apple is going to need a lot of hammers too.

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There was a minor scandal last year when it was discovered that Apple sometimes reduced the power to iPhone processors with old and spent batteries.

Basically, Apple did make some iPhones appear to run slower. It fixed the issue in a software update and offered $29 replacement batteries to users.

But just because you can get a battery for $29 doesn't mean it will solve all your battery life issues. For some people, it could. But if you go to an Apple store and the technician said your battery seems fine, it probably is.

"I would say less than 10% of the phones we have ordered batteries for actually need a battery, based on diagnostics," a Genius at a Midwestern Apple store told Business Insider earlier this year.

To check if your battery needs a replacement, go to Settings > Battery > Battery Health (Beta).

If you don't see it, you probably need to update your iPhone software.

If your "maximum capacity" is under 80%, you might want to change it. Otherwise, if you're only missing a few percentage points, you can probably wait.