The Geek’s Reading List – Week of February 14th 2014
I have been part of the technology industry for a third of a century now. For 13 years I was an electronics designer and software developer: I designed early generation PCs, mobile phones (including cell phones) and a number of embedded systems which are still in use today. I then became a sell-side research analyst for the next 20 years, where I was ranked the #1 tech analyst in Canada for six consecutive years, named one of the best in the world, and won a number of awards for stock-picking and estimating.
I started writing the Geek’s Reading List about 10 years ago. In addition to the company specific research notes I was publishing almost every day, it was a weekly list of articles I found interesting – usually provocative, new, and counter-consensus. The sorts of things I wasn’t seeing being written anywhere else
They were not intended, at the time, to be taken as investment advice, nor should they today. That being said, investors need to understand crucial trends and developments in the industries in which they invest. Therefore, I believe these comments may actually help investors with a longer time horizon. Not to mention they might come in handy for consumers, CEOs, IT managers … or just about anybody, come to think of it. Technology isn’t just a niche area of interest to geeks these days: it impacts almost every part of our economy. I guess, in a way, we are all geeks now. Or at least need to act like it some of the time!
Please feel free to pass this newsletter on. Of course, if you find any articles you think should be included please send them on to me. Or feel free to email me to discuss any of these topics in more depth: the sentence or two I write before each topic is usually only a fraction of my highly opinionated views on the subject!
This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
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1. LEDs Change Thinking About the Light Bulb
A rather disappointing article: LED lighting changes many things and focusing on woo (i.e. likely pseudo-science regarding lighting and health) doesn’t do the subject justice. Item 18, below, is a much better read. Regardless, LED technology is moving rapidly, prices are coming down and I firmly believe LED will displace all forms of lighting within a decade or so.
“Lights are no longer just for lighting. With the development of LED lamp technology, the lowly light bulb is doing more than turning on and off. A lamp can be the centerpiece of an environment meant to improve health, moods and even food.”
2. Perspective: Microsoft asks for volunteers to join its kill-XP army
I guess it can’t hurt to ask your customers to do your promotion for you, however, it is hard to imagine there are enough Microsoft fanboys to make a measurable difference. If I were running Windows XP and a friend suggested I move to Windows 8 (the only option left), I’d probably lose a friend right then and there.
“Microsoft today implored its technically astute customers to help friends and family who are still running Windows XP get rid of the soon-to-be-retired operating system. The Redmond, Wash. company’s appeal was akin to General Motors asking customers to help the Detroit automaker sell new 2014 Cadillac Escalades, or General Mills asking consumers to convince friends to switch from their monochrome Cheerios breakfast cereal to something more colorful, like Trix or Lucky Charms.”
3. Phones, Browsers, and Search Engines Get a Privacy Overhaul
Every crisis presents opportunity, and the NSA revelations have created many opportunities for vendors of secure products. Unfortunately, there is a good chance some of these products are ‘honeypots’ for security agencies, or will be co-opted by those agencies (or the corporate equivalents like Google) over time. Only active open source projects should be considered as potentially secure and/or private.
“Some small companies are now redesigning smartphones and Web browsers to give people more control over that kind of data collection. The founders of these startups claim that many people want an alternative to the data-slurping status quo, and that services such as search engines can be run profitably without harvesting much data.”
4. The fall of MtGox: MtGox down for hours may herald the end of an era
Lots of hilarious news regarding Bitcoin over the past week. Anybody who understands capital market knows that a loss of liquidity should result in devaluation of a commodity, so the recovery of Bitcoin pricing subsequent to the closure of Mt. Gox and a massive denial of service attack on Bitcoin exchanges demonstrates beyond a shadow of a doubt this unregulated market is a scam.
“Reports are flooding in that MtGox has been down for several hours. This comes on the heels of an announcement by the Bitcoin exchange that bitcoin transfers out of the exchange had been frozen. As this news hit the market, BTC market price began to plummet, falling from $810 and down to $684. People unable to move BTC off MtGox and unable to easily turn it into local currency means that the service itself is non-functional.”
5. Silk Road 2.0 ‘Hack’ Blamed On Bitcoin Bug, All Funds Stolen
Yet another tragic outcome for the fools who speculate in Bitcoin. An exchange or marketplace was set up, ‘deposits’ taken, and Bitcoins pillaged by persons unknown (but who are almost certainly the folks who set up the business). After all, there is no reason to believe ‘stealing’ Bitcoins is even illegal so it truly is the perfect crime.
“On Thursday, one of the recently-reincarnated drug-selling black market site’s administrators posted a long announcement to the Silk Road 2.0 forums admitting that the site had been hacked by one of its sellers, and its reserve of Bitcoins belonging to both the users and the site itself stolen. The admin, who goes by the name “Defcon,” blamed the same “transaction malleability” bug in the Bitcoin protocol that led to several of the cryptocurrency’s exchanges halting withdrawals in the previous week.”
6. What the Heck is Happening to Windows?
Apparently, the author is, in general, a Microsoft fan, so his angst must be viewed in that context. What the heck is happening to Windows is that Microsoft screwed up, badly, by trying to move its customer base onto tablets and phones and managed to alienate a broad swath of the customers who matter. Now Microsoft is in a state of panic: their mobile strategy is a fiasco and, while they cram Windows 8 licenses down the throats of anybody who buys a PC, few are happy with the lack of choice and most businesses prefer to reinstall Windows 7.
“When critics described Windows 8.1 as a step backwards, I disagreed: Responding to customer complaints is never wrong, I argued, and the new version of the OS made it more acceptable on the many different types of PCs and devices on which Windows now runs. With Update 1, however, I’m beginning to question the validity of this new direction, and am now wondering whether Microsoft has simply fallen into an all-too-familiar trap of trying to please everyone, and creating a product that is ultimately not ideal for anyone.”
7. Over 50% of All Homes to Have 3D Printers By 2030 – Market Worth $70 Billion Annually
My usual caveats regarding the complete absence of value or utility of industry reports particularly applies here. I am a big fan of 3D printing but the idea half of homes will have one by 2030 – or 2200 is flat out silly. How many homes have an electric drill or a complete set of hand tools? The word consumer means just that: most people buy their clothes rather than knit or sew and few people will find any use whatsoever with a 3D printer.
“We have seen a lot of research analysis on the 3D printing market over the last year. Gartner has estimated that the market could grow as much as 1900% over the next five years, while others think that the consumer market will be slower to grow than the manufacturing market. Either way, 3D printing is here to stay and will likely continue its torrid growth rate. The questions is, “how much will it grow, and when will the fastest growth |occur?”.”
8. Experiment Alleges Facebook is Scamming Advertisers out of Billions of Dollars
These sorts of stories have been around for some time now, along with others suggesting the youth are turning away from Facebook. Nothing seems to affect the stock, however. Mind you, the way Wall Street works, things don’t matter until they matter and then they matter a lot.
“The world’s largest social media network is scamming advertisers out of billions of dollars, according to a popular science blog who put Facebook’s paid reach system to the test. A video posted to Veritasium’s YouTube channel Monday alleges that Facebook’s advertising model – designed to generate page likes, and increase post engagement – is flawed.”
9. New fossil bed found by scientists hailed as ‘motherlode’
The Burgess Shale was an extremely important find when it was made 100 years ago because it held the fossils of numerous soft bodied critters which represent likely ancestors to all present day species. This is a similar find, however, it may be more scientifically significant due to the variety of novel forms present.
“Scientists say a recently located fossil site west of Calgary in B.C. is already yielding major new discoveries about early animal evolution. The Marble Canyon fossil beds were located in 2012 by a team of Canadian, U.S. and Swedish researchers in Kootenay National Park, about 40 kilometres from the 505-million-year-old Burgess Shale in Yoho National Park — which is considered one of the most important fossil fields in the world.”
10. Microsoft Earns $2 Billion A Year From Android: Is It Time To Drop Xbox?
I’d hesitate to refer to Microsoft’s Android revenues as royalties, because royalty implies a proprietary relationship to property. In this case “the proceeds of extortion” is the most suitable description as Microsoft has become the world’s largest patent troll.
“Android is a more profitable business for Microsoft than the combination of their Skype, Windows Phone, and Xbox units according to Nomura analyst Rick Sherlund. The tech giant earns $2 billion a year from patent royalties on Android alone, and according to Business Insider, Sherlund estimates that this figure has a 95% profit margin.”
11. Pentagon’s Robot Sewing Machines Take Aim at China’s Factories
A big part of the industrial revolution was the development of looms and other machines which drove prices down and rendered many unemployed. Given the dexterity required for sewing, I am rather skeptical that such a modest investment could lead to a robotic tailor. No doubt it will happen eventually, but we are probably talking decades, not years.
“Americans may never again buy clothes labeled “made in China” if robot sewing machines can beat Chinese costs of labor. The Pentagon has given $1.2 million to a Georgia Tech spinoff company to turn that futuristic concept into reality.”
12. New iPhone – now upsized – set for release in September
It must be hard to stoke hysteria when you lead with “been there, done that”. The Sapphire glass sounds cool, however, it is a lot more expensive ($10 vs $3) than Corning’s market leading “Gorilla Glass” and it will be interesting to see whether consumers consider better scratch resistance at the expense of greater susceptibility to shattering is worth it.
“App developers need to be poised for a redesign because Apple’s iPhone is getting bigger. The tech giant will roll out the iPhone 6 in two sizes – 4.7 inch and 5.5 inch – in September, according to industry insiders who have seen the prototypes. The new iPhone screen will be made entirely from scratch-resistant sapphire crystal glass, they said. Sapphire crystal, second to diamond as the hardest material, is now used by Apple for its iPhone camera lens cover and touch identification.”
13. Mozilla plans to sell ads in Firefox browser
Mozilla is my preferred browser, mostly because of things like AdBlocker and other products which limit tracking and distracting content. I don’t see a downside to advertising on “Directory Tiles”, but I guess that depends on how much bandwidth it uses and how annoying it is. No doubt a ‘blocker’ will emerge for that as well, and if it doesn’t there is always the option of IceWeasel, which is an unbranded version of Firefox and which will likely not include the ads.
“Mozilla, the company behind the Firefox Internet browser, will start selling ads as it tries to grab a larger slice of the fast-expanding online advertising market. The company said in a blog posting on Tuesday that it has reached out to potential corporate sponsors about its fledgling “Directory Tiles” program, targeted at first-time users.”
14. Scientific method: Statistical errors
I recently listened to an interesting podcast (transcript www.sciencebasedmedicine.org/5-out-of-4-americans-do-not-understand-statistics/) which demolished the use of p-values in medical research. The problem is that good statistical results can’t make up for badly designed experiments, small sample sizes, and miniscule effects. Besides p-values are supposed to be tested after multiple independent experiments to determine whether the data even hold up.
“The results were “plain as day”, recalls Motyl, a psychology PhD student at the University of Virginia in Charlottesville. Data from a study of nearly 2,000 people seemed to show that political moderates saw shades of grey more accurately than did either left-wing or right-wing extremists. “The hypothesis was sexy,” he says, “and the data provided clear support.” The P value, a common index for the strength of evidence, was 0.01 — usually interpreted as ‘very significant’. Publication in a high-impact journal seemed within Motyl’s grasp.”
15. … the Internet of Things is more on par with the Industrial Revolution than the digital revolution.
This is probably a teaser for the guy’s conference presentation, however, the idea is a good one: Internet of Things (IoT) is more than a bunch of soft drink machines doing data dumps or ‘smart’ thermostats. It is big data (for better or for worse), control, and optimization, on a highly granular scale. The technology will probably spawn benefits which we can scarcely understand today.
“The 1876 exposition didn’t mark the beginning of the Industrial Revolution, says Stogdill. Rather, it signaled its fruition, its point of critical mass. It was the nexus where everything — advanced steam technology, mass production, railroads, telegraphy — merged.”
16. Boom or bust: The lowdown on code academies
Code academies, or programming boot camps, smack of the expensive (faux) technical colleges and diploma mills which crank out unskilled graduates by the tens of thousands. I recall near the end of my hardware engineering career, when digital design skills were scarce, such companies popped up to ‘fill the need’, though I suspect they mostly lined their own pockets. Computer languages can be learned fairly quickly – programming and program design is another story completely. If you could learn those in a few months there would not be a shortage.
17. The ReactOS Project
I don’t think I have covered this before. As near as I can tell, this is a Free Open Source Software (FOSS) effort to replicate Windows. It is probably pretty rough around the edges, however, it might provide an alternative to those who need to run a Windows application but have no desire to buy a Windows license (in particular a Windows 8 license). Lots of FOSS projects fizzle, but you never know.
“The main goal of the ReactOS® project is to provide an operating system which is binary compatible with Windows. This will allow your Windows® applications and drivers to run as they would on your Windows system. Additionally, the look and feel of the Windows operating system is used, such that people accustomed to the familiar user interface of Windows® would find using ReactOS straightforward. The ultimate goal of ReactOS® is to allow you to use it as alternative to Windows® without the need to change software you are used to.”
18. How Philips Altered The Future Of Light
This is a much better article on LED lighting. I am not sure that consumers will express much interest in different hues except in rare circumstances however other attributes will be of considerable interest. One remarkable thing about LED lighting is that Philips is a market leader – I used to work for Philips and many of my former Philips colleagues believe Dilbert is a documentary about life as a Philips engineer.
“Not far from its Amsterdam headquarters, at the end of a hallway on the ground floor of a squat modern office building in the small Dutch city of Eindhoven, Philips has set aside space for what it calls an Innovation Lab. It looks a lot like a living room, with a large-screen television, soft leather couches, and a plush beige carpet. There are no windows, and when the door shuts it seems easy to imagine nodding off to a soccer game and awakening in what you think is not a cozy den in the middle of Holland but a high-end apartment in New York or London.”
19. GE develops high-tech fridge magnets that could save the world billions of dollars in energy costs
Of course, like many apparent breakthroughs, real world considerations like cost and reliability could be very important. This system appears to have no moving parts, such as compressors, which should be good for durability, provided the fluids last. As for cost, none is mentioned, which probably means “too high”. My heating system is geothermal, which is basically a large refrigerator, and systems such as heat pumps would similarly benefit.
“One of the world’s biggest draws of electricity is refrigeration and air conditioning. … General Electric, GE, believes it has discovered a new method of magnet-based refrigeration that is 20-30% more efficient than existing refrigeration technology, which almost universally uses a liquid refrigerant and compressor. GE launched the first commercial electric refrigerator in 1927 — and fridges have fundamentally remained unchanged for almost 100 years. GE hopes that its magnet-based tech can become the refrigeration method of choice for the next 100 years.”
20. Tesla Model S catches fire while sitting in a Toronto garage
I can almost predict the company’s reality distortion field issuing a press release to the effect that there is “Nothing to see here: cars catch fire all the time and the owner was pleased with his vehicle up to the point it spontaneously burst into flames.” The facts are that cars rarely burst into flames, even in collisions, and most of those which do are old and poorly maintained. Fires of any type are extremely rare in brand new vehicles. Tesla clearly has a problem. Hat tip to my friend Luigi Di Pede for this item.
“Earlier this month, a Tesla Model S sitting in a Toronto garage ignited and caught on fire. The car was about four months old and was not plugged in to an electric socket, says a source. Fires are a touchy issue for the company, which reports Q4 2013 earnings on February 19th.”