August 12, 2020

Internet Sales Tax Coming Too Late for Some Stores

Now that Congress seems ready to do that, she is no longer sure it matters. Even in losing, the e-commerce powerhouse is triumphant. It no longer needs the tax break to vanquish its foes — and could even make money by collecting the new taxes for other retailers.

“I’m surprised and glad this is happening,” said Ms. Demetropoulos, who owns three toy stores with her husband. “But Amazon won’t rest until it gobbles up everyone and everything.”

The Senate is poised to pass a bill to require all but the smallest online sellers to collect the tax. The House appears likely to follow suit. Although Amazon’s desire to avoid the tax played a fundamental role in its founding and growth, it is a supporter of the legislation.

As it builds new warehouses and extends its already considerable reach, Amazon is relying less on price than speedy delivery, free shipping and a selection that encompasses just about everything. Small retailers say Amazon was always a significant opponent, and is now a fearsome one.

“It’s beyond frustrating that Congress waited until Amazon became so dominant that having a massive tax advantage is no longer essential to its strategy,” said Stacy Mitchell, a senior researcher with the Institute for Local Self-Reliance. “The right time to fix this was a decade ago, when it could have saved many local businesses.”

Analysts who closely follow the fortunes of Amazon say collecting taxes is unlikely to drive away its customers. They say it may even help the Seattle company while simultaneously defusing a potent political issue.

In the few states where the company has already begun collecting, said Gene Munster, an analyst with Piper Jaffray, sales dip for about a year. “Then the customers come back for the convenience and selection,” he said.

Figuring out the tax in thousands of jurisdictions could be a logistical nightmare for merchants just above the legislation’s threshold of $1 million in annual revenue. That is another place where Amazon is expected to benefit; it could sell tax collection services to tens of thousands of third parties.

For some store owners, the digital world’s momentum can seem overpowering.

Ms. Demetropoulos tried to sell specialty toys online, but business dwindled as Amazon sought out her competitors and signed them up to sell through its Web site. The company courted her as well. “I’m like, ‘Are you kidding?’ ” she said.

Customers come into one of the branches of Island Treasure Toys, she said, scan a toy on their smartphone, and inform the sales clerk that Amazon sells it cheaper. Would the store be willing to make a deal?

The tax will not help this situation much, which is regularly played out in all kinds of stores across the country.

If retailers say no, Amazon often gets the business.

Amazon reported this week that its first-quarter revenue rose 22 percent, to $16.07 billion, an amazing increase for a retailer of its size. Wal-Mart, by contrast, is expecting no sales growth at all this quarter.

“This is the moment when Internet commerce was finally forced to stand on its own two feet,” said Michael Mazerov, a senior fellow at the Center on Budget and Policy Priorities who wrote the definitive report on Amazon’s long-held intransigence on the issue. “But it’s coming very late in the game.”

Under the current system, an Internet company has to collect taxes only in states where it has a physical location. For most companies, that means the state in which it has its headquarters.

When Jeff Bezos had the idea for Amazon in the mid-1990s, he explored setting up shop on a tax-free Indian reservation. Foiled in that goal, Mr. Bezos chose the State of Washington, which had an abundance of software programmers but a relatively small population. “It made no sense for us to be in California or New York,” he explained in an unguarded 1996 interview.

For years, Amazon rejected the notion that it should collect money in states where it had no employees. “It’s not fair,” Mr. Bezos told stockholders in 2008.

Consumers are supposed to add up their Internet purchases and pay the appropriate tax directly to their state revenue collectors. In practice, however, few do, and enforcement is minimal.

Nick Wingfield contributed reporting.

Article source: http://www.nytimes.com/2013/04/27/technology/internet-sales-tax-coming-too-late-for-some-stores.html?partner=rss&emc=rss

Bits Blog: The iPhone 5 Now on the Loose

Lucas Jackson/Reuters

The grumbling over a new Apple maps service didn’t deter customers from once again jamming stores to get the latest iPhone.

The phone went on sale at 8 a.m. local time Friday morning in Apple retail stores and those of its wireless carrier partners. Crowds were heavy, especially at flagship Apple stores like the one on Fifth Avenue in New York. Although Apple won’t say anything yet about the sales it’s seeing for the iPhone 5, Gene Munster, an analyst at Piper Jaffray, sought to do some educated guesswork by counting the number of people waiting in line before stores in New York, Boston and Minneapolis opened.

Piper Jaffray counted 775 people in line in front of the Fifth Avenue store, for instance, 68 percent more than queued up at the same store when the iPhone 4S went on sale last year, Mr. Munster wrote in a research note. Mr. Munster said the heavier store traffic gave him confidence in his estimate that Apple could sell eight million iPhone 5’s through this weekend.

Apple has already said on Monday that it sold two million iPhone 5’s over the Internet after allowing people to submit pre-orders for the product. That figure was double the one million pre-orders it took for the previous record holder for 24 hour sales, the iPhone 4S.

Apple doesn’t provide many clues as to whether the iPhone 5 is still in stock in specific stores. Apple’s Web site says people who order the iPhone 5 now will receive it in three to four weeks.

The apparently strong demand for Apple’s phone shows that, in the near term at least, the company’s sales haven’t been hurt by the reaction to Apple maps, a new service that comes on the iPhone 5 and older iPhones and iPads that users upgrade with the latest Apple operating system. The new service has been blasted by early users for inaccurate directions, misplaced landmarks and a lack of street-level imagery, especially in comparison with the more polished Google Maps service it replaced.

Apple on Thursday said that its service will improve over time.

Article source: http://bits.blogs.nytimes.com/2012/09/21/the-iphone-5-now-on-the-loose/?partner=rss&emc=rss

IPhone 4S Gets More Power, a Better Camera and Siri

Instead, the company unveiled something that looks an awful lot like an iPhone 4 on the outside, with an innovative feature that turns the device into a voice-activated mobile assistant for scheduling appointments and performing other tasks.

It’s a measure of how Apple has habituated its legions of fans to regular, eye-catching design changes that the news about the latest version of the iPhone qualified as a disappointment for some. Grumbling about the announcement of the new phone, the iPhone 4S, spread on Twitter throughout the day and the company’s shares fell as much as 5 percent, though they regained most of those losses by the end of trading.

“At the end of the day, there are still going to be long lines for this,” said Gene Munster, an analyst at Piper Jaffray. “They could have been even longer if they’d changed the hardware more.”

The new model of the iPhone, which will go on sale Oct. 14, with preorders starting Friday, is virtually indistinguishable from its predecessor on the outside. But beneath its skin Apple made big changes, packing it with a better camera that shoots crisper pictures and video. The device also includes a more powerful chip, the A5, the same microprocessor that is the brains of the iPad, for producing better graphics and other improvements.

Timothy D. Cook, Apple’s chief executive, presided over the event just as Steven P. Jobs had on similar occasions before he left the top job in August. Mr. Cook said that although the iPhone 4 is the best-selling smartphone in the world, Apple believes that the company still has plenty of people it wants to convert.

“We believe over time all handsets become smartphones,” he said. “This market is 1.5 billion units annually. It’s an enormous opportunity for Apple.”

Mr. Cook and other Apple executives also highlighted an array of supporting products for the new phone, but the centerpiece of the presentation, and of the new device, is the “virtual assistant” feature, Siri, named after a company Apple acquired last year that originally developed the technology. While the iPhone 4 already responds to some basic voice commands — to make phone calls, for example — Siri is designed to comprehend a much broader range of instructions in natural language.

For example, Apple executives demonstrated the technology by asking an iPhone, “Do I need a raincoat today?” to which the device responded, “It sure looks like rain today.”

While Apple’s decision not to call its new phone the iPhone 5, as many expected, raised some eyebrows, it has some precedent. A couple of years ago the company introduced the iPhone 3GS, which made modest improvements over the iPhone 3G. Michael Mace, the chief executive of a mobile application start-up and a former Apple and Palm executive, said Apple most likely wanted to telegraph that the iPhone 4S was an incremental change to the product, rather than a big redesign denoted by a change in the model number.

“You don’t want to oversell what you’re doing so you hurt your credibility,” Mr. Mace said.

Even incremental changes to the iPhone can help sales. Mr. Munster of Piper Jaffray said the annual growth rate in the number of iPhones that Apple sold during the fiscal year the iPhone 3GS was introduced was 93 percent, compared with 78 percent when the iPhone 3G came out.

With the new phone, Apple is taking on a growing challenge in the mobile market from the Android operating system made by Google. Smartphones powered by Android now outsell iPhones by more than two to one. While Android phones also let people use basic voice commands to do simple tasks, Apple is betting that the more sophisticated capabilities of Siri will make it stand out.

Many of the best minds in technology in the last several decades have been stymied by how to decipher speech, given variations in how people talk. Mr. Mace called what Apple is doing the “holy grail” for mobile devices; voice recognition could make it much easier for people to use them on the go without having to peck words into a keyboard. But he said the technology needed to be accurate or users would ignore it.

“When you start talking to a computer you expect it to really understand you, and if it doesn’t, you get really frustrated,” he said. “If Siri is like that, forget about it.”

This article has been revised to reflect the following correction:

Correction: October 4, 2011

An earlier version of this article misstated the previous price of the iPhone 3GS. It had been $49 (from ATT), not $99. Because of an editing error, the article also misstated the day of the Apple announcement. It was Tuesday, not Wednesday.

Article source: http://feeds.nytimes.com/click.phdo?i=2330ecc33053ccfc56f3b1aa41453768