Japan Does Not Want a Bad Apple on Its Tax Rolls

January 25, 2023

Everyone is falling over themselves about a low-cost Mac Mini, just  not a few Japanese government officials, however.

An accountant once gave me some advice: never anger the IRS. A governmental accounting agency that arms its employees with guns is worrisome. It is even more terrifying to anger a foreign government accounting agency. The Japanese equivalent of the IRS smacked Apple with the force of a tsunami in fees and tax penalties Channel News Asia reported: “Apple Japan Hit With $98 Million In Back Taxes-Nikkei.”

The Japanese branch of Apple is being charged with $98 million (13 billion yen) for bulk sales of Apple products sold to tourists. The product sales, mostly consisting of iPhones, were wrongly exempted from consumption tax. The error was caught when a foreigner was caught purchasing large amounts of handsets in one shopping trip. If a foreigner visits Japan for less than six months they are exempt from the ten percent consumption tax unless the products are intended for resale. Because the foreign shopper purchased so many handsets at once, it is believed they were cheating the Japanese tax system.

The Japanese counterpart to the IRS brought this to Apple Japan’s attention and the company handled it in the most Japanese way possible: quiet acceptance. Apple will pay the large tax bill:

“Apple Japan is believed to have filed an amended tax return, according to Nikkei. In response to a Reuters’ request for comment, the company only said in an emailed message that tax-exempt purchases were currently unavailable at its stores. The Tokyo Regional Taxation Bureau declined to comment.”

Apple America responded that the company invested over $100 billion in the Japanese supply network in the past five years.

Japan is a country dedicated to advancing technology and, despite its declining population, it possesses one of the most robust economies in Asia. Apple does not want to lose that business, so paying $98 million is a small hindrance to continue doing business in Japan.

Whitney Grace, January 25, 2023

Billable Hours: The Practice of Time Fantasy

January 16, 2023

I am not sure how I ended up at a nuclear company in Washington, DC in the 1970s. I was stumbling along in a PhD program, fiddling around indexing poems for professors, and writing essays no one other than some PhD teaching the class would ever read. (Hey, come to think about it that’s the position I am in today. I write essays, and no one reads them. Progress? I hope not. I love mediocrity, and I am living in the Golden Age of meh and good enough.)

I recall arriving and learning from the VP of Human Resources that I had to keep track of my time. Hello? I worked on my own schedule, and I never paid attention to time. Wait. I did. I knew when the university’s computer center would be least populated by people struggling with IBM punch cards and green bar paper.

Now I have to record, according to Nancy Apple (I think that was her name): [a] The project number, [b] the task code, and [c] the number of minutes I worked on that project’s task. I pointed out that I would be shuttling around from government office to government office and then back to the Rockville administrative center and laboratory.

She explained that travel time had a code.  I would have a project number, a task code for sitting in traffic on the Beltway, and a watch. Fill in the blanks.

As you might imagine, part of the learning curve for me was keeping track of time. I sort of did this, but as I become more and more engaged in the work about which I cannot speak, I filled in the time sheets every week. Okay, okay. I would fill in the time sheets when someone in Accounting called me and said, “I need your time sheets. We have to bill the client tomorrow. I want the time sheets now.”

As I muddled through my professional career, I understood how people worked and created time fantasy sheets. The idea was to hit the billable hour target without getting an auditor to camp out in my office. I thought of my learnings when I read “A Woman Who Claimed She Was Wrongly Dismissed Was Ordered to Repay Her Former Employer about $2,000 for Misrepresenting Her Working Hours.”

The write up which may or may not be written by a human states:

Besse [the time fantasy enthusiast] met with her former employer on March 29 last year. In a video recording of the meeting shared with the tribunal, she said: “Clearly, I’ve plugged time to files that I didn’t touch and that wasn’t right or appropriate in any way or fashion, and I recognize that and so for that I’m really sorry.” Judge Megan Stewart concluded that TimeCamp [the employee monitoring software watching the time fantasist] “likely accurately recorded” Besse’s work activities. She ordered Besse to compensate her former employer for a 50-hour discrepancy between her timesheets and TimeCamp’s records. In total, Besse was ordered to pay Reach a total of C$2,603 ($1,949) to compensate for wages and other payments, as well as C$153 ($115) in costs.

But the key passage for me was this one:

In her judgment, Stewart wrote: “Given that trust and honesty are essential to an employment relationship, particularly in a remote-work environment where direct supervision is absent, I find Miss Besse’s misconduct led to an irreparable breakdown in her employment relationship with Reach and that dismissal was proportionate in the circumstances.”

Far be it from me to raise questions, but I do have one: “Do lawyers engage in time fantasy billing?”

Of course not, “trust and honesty are essential.”

That’s good to know. Now what about PR and SEO billings? What about consulting firm billings?

If the claw back angle worked for this employer-employee set up, 2023 will be thrilling for lawyers, who obviously will not engage in time fantasy billing. Trust and honesty, right?

Stephen E Arnold, January 16, 2023

Apple Signals and Messages Telegram Its Intentions

December 30, 2022

Apple is losing its touch. Once the outfit was a religion with chips. Now it is a subscription machine with no right to repair.

Telegram is an encrypted message service that has avoided paying Apple fees, but according to TechRadar that has come to an end: “Telegram Forced To Crack Down On Paid Posts Because Apple Wasn’t Getting A Cut.”

Telegram used to allow users to set up paid content posts with third-party payment bots. This allowed content creators to avoid paying Apple’s fees and their fans paid them directly. Content creators received close to 100% of their fans’ donations without sending a chunk to Apple. Unfortunately, Apple wants its 30% and Telegram is forced to comply. If Telegram does not comply with Apple, then it will be removed from the App Store.

Apple has a monopoly in the app market and even other tech giants, like Elon Musk and Spotify, are saying 30% is too much. South Korea passed a law that allowed content creators to use third-party payment services other than Apple:

“You have the likes of Spotify calling the tech giant “anti-competitive” because of App Store rules that make buying an audiobook overly complicated. Newfound Twitter wrangler Elon Musk said back in May that 30 percent is “10 times higher than it should be” and South Korea thought so, too. Last year, the nation passed a law forcing Apple and Google to allow developers to use third-payment systems and not pay the hefty tax.”

Apple does not care that it charges 30%, because they have a monopoly and all its decisions are unilateral. That is what happens when they use an OS other than Windows. Will Apple compete with Telegram to capture more encrypted messaging traffic?


Whitney Grace, December 30, 2022

Loving Tablets and Chromebooks: Sure, Like Going to the Dentist

December 29, 2022

Might smartphones make some devices irrelevant? We learn from The Register that “Tablet, Chromebook Shipments Come Crashing Down.” The article examines IDC’s report of third-quarter shipments. It states a mere 38.6 million tablets were shipped between July 01 and September 30, a decline of almost 9% since the previous year. Only Huawei grew its sales as demand escalated in China and Russia, where sanctions barred the way for Western tech. Writer Paul Kunert reports:

“Apple saw sales decline 1.1 percent to 14.5 million, according to IDC estimates. Samsung was down 4 percent to 7.1 million, Amazon fell 8.1 percent to 4.3 million, Lenovo shipments dropped 36.6 percent to 2.7 million, and Huawei grew 2 percent to 2.4 million. In its results filed late last week, Apple said iPad sales to end users were up 21 percent to $8.3 billion in Q4 of its fiscal ’22 ended 30 September despite supply constraints. IDC tracks sales into the channel, hence the difference in the figures. Chromebook shipments fell at a far faster rate, down 34.4 percent year-on-year to 4.3 million devices. This was the fifth straight decline for this sector of the PC industry. The downward trajectory began in the US, which accounted for 70 percent of global shipments. … IDC placed Acer as market leader with shipments of 1 million, albeit down 23.8 percent on a year ago. Dell shrank 19.9 percent to 900,000 units, HP was down 26.8 percent to 800,000, Lenovo plunged 54.8 percent to 700,000, and Samsung was down 37 percent to 300,000.”

Researchers point out Chromebook sales spiked during the pandemic as students connected from home, so its decline is simply a return to normal levels. As for the rest, a tough economy was likely at play. Apparently one can endure a slightly smaller small screen when fuel and groceries are difficult to afford.

The Arnold IT team has a different set of conclusions:

  1. Tablets and Chromebooks are like wearing clothing two sizes to small. Think discomfort.
  2. The promoters of tablets and Chromebooks are likely to use laptops to do “real” work.
  3. Tablets and Chromebooks make routine tasks difficult; for example, keeping an Internet connection in Buenos Aires during the World Cup Parade and finding a dongle in Hermanus.

Money and power allow some outfits to sell unusual stuff. Why not advertise these products on cable at 3 am?

Cynthia Murrell, December 29, 2022

Meta: Big Numbers, Bigger Problem

December 22, 2022

The European Union has been fiddling around with modest fines on outfits like Meta (the Zuckbook to the Arnold IT research team). Now the scale of fines is ratcheting up. “Meta Faces $1.6bn Lawsuit over Facebook Posts Inciting Violence in Tigray War” reports that Kenya is pegging the fine in nine figure territory. Will the Zuckbook write a check for more than $1 billion. Probably not.

The write up states as real news:

The lawsuit, filed in the high court of Kenya, where Meta’s sub-Saharan African operations are based, alleges that Facebook’s recommendations systems amplified hateful and violent posts in the context of the war in northern Ethiopia, which raged for two years until a ceasefire was agreed in early November. The lawsuit seeks the creation of a $1.6bn (£1.3bn) fund for victims of hate speech. One of the petitioners said his father, an Ethiopian academic, was targeted with racist messages before his murder in November 2021, and that Facebook did not remove the posts despite complaints.

What’s interesting is that the lawsuit puts a price penalty for the alleged action or inaction of the Zuckbook. Thus, when harm to individuals can be linked to an online action, the Kenya lawsuit means that other governments may set similar targets.

Net net: It may be expensive to implement the Silicon Valley, high technology “we want to bring people together and do good” under the umbrella of move fast and break things. The fines could, despite the Zuckbook’s revenue prowess, break the bank.

How long has the Zuckbook been using its methods for its advantage? A decade or more? Kenya may be taking steps to make the Zuck wish his company could go back in time and approach the company’s behavior in a slightly different way. If the Zuckbook wins, the Zuckbook may go full speed ahead and become even more frisky: TikTok-type videos on steroids, amped up data collection, and creating a super app designed to make bad actors drool. Disappearing messages. What’s not to like?

Stephen E Arnold, December 22, 2022

Ready for the Holidays, Facebookers and Googlers?

December 22, 2022

Despite an ongoing worker shortage, this economic downturn is proving to be bad for some folks’ job security. Business Insider: India reports, “Meta, Google Put Employees on ‘Notice Periods’ to Find New Role or Leave.” The write-up tells us:

“Facebook’s parent company Meta and Google are reducing staff to cut costs amid the economic downturn, apparently putting some of them on traditional 30 to 60 days ‘lists’ to find a new role within the company or leave. Meta plans to cut costs by at least 10 per cent in the coming months and has put out more and more workers whose jobs are being eliminated on its traditional ’30-day list,’ reports Wall Street Journal. On the other hand, Google’s parent Alphabet has reportedly deployed a similar approach, typically giving workers 60 days in which to apply for a new role if their jobs are set to be cut. ‘Facebook parent is looking to reduce costs by at least 10 per cent, people familiar with the plans said, while Google has required some employees to apply for new jobs,’ the report mentioned. …Last month, Google fired more than 50 workers at its incubator Area 120 and gave them extra 30 days to find another job at the company.”

A Google spokesperson assures us most of those folks were able to shift into another position. It is no coincidence the company has also suspended new hires while warning that any employee whose work is not up to snuff may find themselves out of a job. We also learn:

“In a company message viewed by Insider, Google Cloud sales leadership has threatened employees with an ‘overall examination of sales productivity and productivity in general’ and that if next quarter results ‘don’t look up, there will be blood on the streets’.”

Yikes. So much for Google being the most nurturing workplace around. As for the Meta-book, Zuckerberg has said the company plans to steadily reduce its payroll over the next year. But never fear. Whatever the fate of other workers, we suspect both Meta and Alphabet will protect their top executives’ lucrative positions. Which company is next? Salesforce perchance?

Cynthia Murrell, December 22, 2022

A Cheerful Look at Year End 2022 and Most of 2023

December 9, 2022

Year end and the New Year approach. It is time for reflection and prediction. I noted this Silicon Valley-esque real news write up titled “Tech Kept Talent Happy Doling Out Stock During the Boom. It’s Screwing Investors in the Bust.”

I circled this interesting chunk of prose:

In a period where investors are focused on profitability over growth, such retention and hiring efforts begin to look costly. Shareholders are still paying for the existing stock grants and now they’re going to pay for new grants…

Ah, ha. Presumably none of the high tech sector watchers noticed this?

Maybe in the midst of the 1998 downturn? What about 2008? And now stock based compensation is news.

What does this mean for 2022? Maybe a bit of gloom? And what about 2023? My thought is that MBAs and accountants will be beavering away in the grips of spreadsheet fever to make life better for themselves. I wonder if these folks keep their business school ethics lecture notes close at hand?

Stephen E Arnold, December 9, 2022

Alphabet, an Investor Is Grousing. Will That Person Be Assuaged?

December 7, 2022

Google’s parent company Alphabet is a multi-billion dollar corporation. Like any large corporation, it probably carries way too much fat, i.e. the books do not balance and it is because of the human ego. Google is a hot mess when it comes to human relations, but an activist investor believes Alphabet is a financial fiasco as well: “Investor Tells Google: Cut Costs Now And Stop Paying Staff So Much.

TCI Fund Management is an activist investing firm and they suggested that Alphabet cut costs at the search engine giant. During the pandemic, Google had a hiring spree and TCI says the company now has too many employees and they are all too expensive. Google pays its employees 67% more than Microsoft people and 152% more than the top twenty US technology companies.

Alphabet’s profits are down to $13.91 billion compared to $18.936 billion in 2021. Alphabet is reviewing all its other companies. Some are doing well, while others like the Best Bets division are not. TCI Fund Management said Alphabet is not serving the shareholders:

“Alphabet’s ability to pursue M&A is limited due to ‘regulatory scrutiny’ so it should follow Apple’s capital allocation strategy and become “cash neutral over time through increased share repurchases.’ The group’s stock price is down 34 percent in the year to date, the share price is ‘cheap’ and buybacks could take advantage of this, TCI said.

It concluded: ‘In the era of slower revenue growth, aggressive cost management is essential. We look forward to your announcement in a clear action plan as a matter of urgency.’”

Google is not too big to fail, because tech geeks have huge egos and could run the company into the ground if they are not careful. Alphabet will probably ignore TCI’s suggestions, unless a former Google came up with them.

Whitney Grace, December 7, 2022

Cheap Training for Machine Learning Is Not Hyped Enough. Believe It or Not

December 6, 2022

I read an interesting article titled “Counting the Cost of Training Large Language Models.” The write up contains a statement which provides insight into the type of blind spots that plague whiz bang smart software companies. Here’s the statement which struck me as amusing and revelatory:

It has been becoming increasingly clear – anecdotally at least – just how expensive it is to train large language models and recommender systems…

Two points. Anyone who took the time to ask about the cost of retraining a Bayesian and neurolinguistic system from the late 1990s would have learned: [a] Smart software, even relatively simple implementations, require refined and curated training data before a system is deployed. This work is tedious and requires subject matter specialists. Then there is testing and fiddling knobs and dials before the software becomes operational. [b] The smart software requires retraining with updated data sets, calibration, and testing on a heartbeat. For some Autonomy plc type systems, the retraining could be necessary every 180 days or when “drift” became evident. Users complain, and that’s how one knows the system is lost in the tiny nooks and crannies of lots of infinitesimals adding up to a dust pile in a dark corner of a complex system.

After three decades of information available about the costs of human centric involvement in making smart software less stupid, one would think that the whiz kids would have done some homework. Oh, right. If the information is not in the first 15 items in a Google search result, there are no data. Very modern.

The write up identifies a number of companies with ways to chop down training costs. To be clear, the driving idea for Snorkel from the Stanford AI Lab is reducing the costs of building training sets. The goal is to be “close enough for horseshoes” or “good enough.” Cut the costs and deal with issues with some software wrappers. Package up the good enough training data and one has a way to corner the market for certain ML applications. But it’s not just the Google. Amazon AWS is in the hunt for this off-the-shelf approach to machine learning. I think of it as the 7-11 approach to getting a meal: Cheap, quick, and followed by a Big Gulp.

The write  up has a number of charts. These are okay, but I am not sure about the provenance of the data presented. But that’s just my skepticism for content marketing type write ups. There are even “cost per one million parameters” data. Interesting but who compiled the data, what methods were used to generate the numbers, and who vetted the project itself? Annoying questions? Sure. Important? Not to true believers.

But I know the well educated, well informed funding sources and procurement officials will love this conclusion:

some people will rent to train, and then as they need to train more and also train larger models, the economics will compel them to buy.

Yep, but what about the issue of “close enough for horseshoes”? Yep, here’s another annoying question: Is this article the kick off for another hype campaign? My initial reaction is, “Yes.”

Stephen E Arnold, December 2022

Apple Factoid or Why a US Company Shows Affection for Pandas (Digital and Furry)

December 6, 2022

I spotted an article with a killer title: “Apple Reaches Highest Ever Monthly Market Share in China.” What’s the factoid? The write up provides what may be a semi credible factoid:

One in every four devices sold in China during October 2022 was an iPhone.

Here’s a passage from the write up I found intriguing:

Apple has been reaching new heights in terms of market share in China during the last two years. It reached a record monthly market share in November and December 2020, and in October, November and December 2021. Notably, 2020 was also the year when US sanctions were imposed on Huawei.

The article provides no information about why a US company is thriving in an environment of restrictions on certain Chinese-US interactions. Perhaps there is information to be found, but it is not in reports of what appear to be significant sales by a US firm in the Middle Kingdom.

Stephen E Arnold, December 6, 2022

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