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TECHNOLOGY: APP FETCH BUILDS ON NEW SHOPPER THRIFT B4
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The Goldilocks Effect
AppleInc. this year re-
leased five new iPhone mod-
els, the most in the device’s
history. Apple started in 2007
with one iPhone but soon es-
tablished a “good-better-
best” strategy, where budget
and premium products flank
“Goldilocks” options.
For years, the company did
this by keeping older models
around at slashed prices. Inrecent years, it has intro-
duced more new options at
various price tiers. This
year’s lineup ranged from the
$399 late-adopter-targeted
iPhone SE to the feature-
packed $1,099 iPhone 12 Pro
Max—with a “just right”
iPhone 12 in the middle. The
company gave Apple Watch
shoppers three tiers of op-
tions for the first time.
While it may be more con-fusing for consumers to navi-
gate the differences between
the models, this kind of price
ladder is strategic and ubiqui-
tous—from airliner cabins to
gas pumps.
The trick with offering
multiple versions of a prod-
uct is to offer enough to help
people identify their own
strike price but not enough to
overwhelm them, says Rags
Srinivasan, a pricing consul-tant. “Apple is best at this,”
he said.
While Apple’s strategy was
in play long before the pan-
demic, one benefit of multi-
version pricing is its resil-
ience to hard times, said Mr.
Srinivasan. “The ‘good’ op-
tion gives firms the opportu-
nity to keep customers within
the brand, for those who face
economic pressure to down-
PleaseturntopageB4Ant has matched small banks with users of Alipay, its payments app. A customer scans an Alipay code to buy fruit.HECTOR RETAMAL/AGENCE FRANCE-PRESSE/GETTY IMAGES
PERSONAL TECHNOLOGY|By Nicole Nguyen
Pricing Becomes the Ultimate Pandemic Pivot
Free Zoom,
$13 unlimited
Walmart de-
livery, a $30
Disney movie,
a $399 iPhone
and a $2,495 Peloton bike:
These are just some exam-
ples of how companies in
technology and other indus-
tries this year used the lever
of pricing in ways that man-
aged the pandemic’s obsta-
cles or even capitalized on
its opportunities.
Ordinarily, an economic
downturn causes a decrease
in demand for many prod-
ucts and services. Yet the
Covid-19 pandemic’s widely
varying impact on different
corners of the economy
tested traditional pricing ap-
proaches.
Companies played up con-
veniences, knocked down
barriers and offered new ser-
vices and new choices—with
mixed results. Here’s a look
at some intriguing price
moves this year:2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020iPhone
3G44S (^5) 5S
5C
6Plus
6
X
8Plus
8
XS
Max
XS
XR
11Pro
Max
11Pro
11
12Pro
Max
12Pro
12Mini
12
SE
3GS
6SPlus
6S
7Plus
7
SE
ApplequicklyevolveditsiPhonestrategyfromofferingasingle
phonetomultiple“good-better-best”optionspeakingateight
choicesin2017.Thisyearfeaturedthemostnewmodels,with
seventotalchoices.
AppleiPhonemodels
Source: the company
New Existing
Exxon MobilCorp. is facing
the threat of a proxy fight from
a newcomer activist investor
with a sustainability bent that
wants the beleaguered energy
giant to act faster to remake it-
self.
Engine No. 1LLC, an invest-
ment firm launched by Chris
James last week, is preparing
to send a letter to Exxon’s
board urging the Irving, Texas-
based company to focus more
on investments in clean energy
while cutting costs elsewhere
to preserve its dividend. The
letter, a copy of which was
viewed by The Wall Street
Journal, identifies four people
the firm plans to nominate to
Exxon’s 10-person board.
The San Francisco firm has
the support ofCalifornia State
Teachers’ Retirement System,
the big pension investor, and
expects other shareholders to
be sympathetic to the cause,
given widespread frustration
over Exxon’s share perfor-
mance, a person familiar with
the matter said. Calstrs holds a
more than $300 million Exxon
stake, while Engine No. 1 has
one worth around $40 million,
this person said.
Their combined ownership
is smaller than what is typical
for an activist taking on a com-
pany of Exxon’s size, and it is
possible the campaign will fall
flat. Still, Calstrs holds sway as
the country’s second-largest
pension fund and there have
been instances of well-timed
campaigns led by small share-
holders gaining traction with
other investors and yielding re-
sults.
“Without having seen the
letter, we will decline to com-
ment,” said Casey Norton, an
Exxon spokesman.
Key to the outcome will be
PleaseturntopageB9
BYCARALOMBARDO
ANDDAVIDBENOIT
Exxon
Faces
Activist
Pressure
sharply curb the company’s
growth ambitions.
In 2018, the Hangzhou-
based startup approached
banks with a proposition that
many lenders found hard to re-
sist. Ant offered to match them
with users of Alipay, its ubiqui-
tous payments app used by
hundreds of millions of Chinese
citizens and many of the coun-
try’s small businesses.
The banks were asked to
supply funds for short-term on-
line loans, and Ant would con-
nect them with borrowers, pro-
vide them with some credit-
risk metrics and channel
payments back to the lenders.
In return, Ant collected fees for
helping to originate the loans,
while banks earned interest in-
come on the debt.
PleaseturntopageB2
In the span of a year,Ant
GroupCo. originated loans to
half a billion people in China
and accounted for nearly a fifth
of the country’s outstanding
short-term consumer debt as of
June.
The figures, disclosed by the
company in August, showed
how Jack Ma’s financial-tech-
nology giant has quickly be-
come one of China’s biggest
originators of unsecured loans
to individuals and why Ant is
now under intense regulatory
scrutiny. Chinese authorities
last month stopped Ant from
raising more than $34 billion in
record-breaking initial public
offerings in Shanghai and Hong
Kong and are planning to im-
plement rules that would
BYJINGYANG ANDXIEYU
Ant Exposes China’s Banking Holes
Ant'sasset-backed
securitiesissuance
Sources: Wind (issuance); WSJ calculations based on Ant Group disclosures (funding sources)
Data through Nov. 30 †Data As of June 30
Note: 1 yuan = $0.15
300
0
100
200
billion yuan
2014 ’ 15 ’ 16 ’ 17 ’ 18 ’ 19 ’ 20
Ants
subsidiaries
0.03
Asset-backed
securities
0.17
Banksandtrust
companies
1.53
SourcesofAnt’sfunds,
intrillionsofyuan†
store, the documents show.
The concern is a big one for
IAC and Google, which collect
hundreds of millions of dollars
in revenue through deals with
each other, the people familiar
with the matter said. Google
earlier this year took down five
IAC browser extensions, the
documents show, but many
more remain operational.
A Google spokesman, Scott
Westover, said the two compa-
nies remain in discussions.
“We’re reviewing the remaining
extensions and our enforcement
options, and have not made a
decision regarding IAC’s status
on the store,” he said.
An IAC spokeswoman, Val-
erie Combs, disputed that the
PleaseturntopageB5
The search company’s con-
cern with IAC centers on
browser extensions, which are
external applications that run
inside Google’s Chrome browser.
IAC-made browser extensions
promise users quick access to
content such as daily Bible quo-
tations, power-tool manuals and
government forms.
Google’s investigators found
that IAC’s browser extensions
often promise functions they
don’t deliver and steer users
toward extra ads, according to
documents reviewed by the
Journal. The Google report said
the behavior was egregious and
recommended “immediate re-
moval and deactivation” of
IAC’s browser extensions from
the search company’s web
TheAlphabetInc. unit so far
hasn’t acted on the internal
recommendation of its Chrome
trust and safety team regarding
IAC in part because the two are
rivals in some categories and
because the search company’s
executives, including Chief Le-
gal Officer Kent Walker, are
concerned that penalties could
be viewed as anticompetitive,
according to people familiar
with the matter.
Google was sued in October
by federal prosecutors for al-
legedly operating an antitrust
monopoly in search. State offi-
cials are wrapping up their own
investigations, which may re-
sult in additional charges.
Google has said it would con-
test any allegations in court.
Google is deciding whether
to impose severe penalties on
the online conglomerateIAC/
InterActiveCorp. over what
the search giant concluded
were deceptive marketing prac-
tices, according to documents
reviewed by The Wall Street
Journal and people familiar
with the matter.
Google, which determined
that IAC misled users about its
browser extensions, could go as
far as banning those products
from its Chrome browser. IAC,
under Chairman Barry Diller, is
pushing back, saying such a
move would devastate a key
part of its business.
BYJEFFHORWITZ
ANDROBCOPELAND
Google Weighs Penalties for Diller’s
IAC Over Its Browser Extensions
INSIDE
WASTE
MANAGEMENT
Big brands bend on
paying for recycling
costs.B6
MARKETS
Five bitcoin investors
are riding the digital
currency’s wave to
new highs.B9
AirbnbInc. plans to boost
the proposed price range of its
initial public offering, the latest
sign that the red-hot IPO mar-
ket is ending the year on a high
note.
Airbnb is boosting the range
to between $56 and $60 a
share from $44 to $50, people
familiar with the matter said.
The new range would give the
home-rental company a valua-
tion of as much as $42 billion
on a fully diluted basis and in-
cluding proceeds from the of-
fering.
DoorDashInc., the food-de-
livery company that is expected
to debut Wednesday, the day
before Airbnb, plans to price its
shares at the high end of or
above its range of $90 to $95 a
share—already raised from be-
tween $75 and $85, people fa-
miliar with the offering said.
That would give the San Fran-
cisco company, the largest
among its peers, a valuation of
as much as $36 billion or more,
on a fully diluted basis and in-
cluding proceeds from the of-
fering.
Taken together, the develop-
ments are the latest sign that
the market for new issues, al-
ready at a record in terms of
money raised in the U.S., is set
for a climactic ending to the
year. The market has been
buoyed by soaring stocks, in-
cluding those that have re-
cently made their own debuts.
So far this year, more than
$140 billion has been raised in
initial public offerings on U.S.
exchanges, far exceeding the
previous full-year record set at
the height of the dot-com boom
in 1999, according to Dealogic
data that date to 1995.
Valuations of both Airbnb
and DoorDash have been
boosted after roughly a week of
investor meetings known as
roadshows.
December is typically a quiet
time in the IPO market. This
year there will instead be a
flurry of offerings. In addition
to Airbnb and DoorDash, video-
game companyRobloxCorp.
and the parent of online re-
tailer Wish,ContextLogicInc.,
are expected to debut before
the year is through.
For companies now, includ-
ing Airbnb and DoorDash, road-
shows have been conducted dif-
ferently than they would have
in the pre-Covid-19 world. Ex-
ecutives have been marketing
their offerings to mutual funds
and hedge funds in Zoom meet-
ings rather than in the typical
whirlwind tour across the
country.
Both Airbnb and DoorDash
and their respective underwrit-
ers will set their final IPO
prices in the coming days.Mor-
gan Stanley and Goldman
Sachs GroupInc. are leading
Airbnb’s IPO, while Goldman
andJPMorgan Chase&Co.are
leading DoorDash’s.
BYMAUREENFARRELL
Airbnb
Boosts IPO
Price Range
Increase would give
home-rental company
a valuation of as much
as $42 billion