The Geek’s Reading List – Week of January 4th, 2013
I am an independent analyst and consultant with 19 years of experience as a sell side technology analyst and 13 years of prior experience as an electronics designer and software developer.
The purpose of the Geek’s Reading List is to draw attention to interesting articles I encounter from time to time. I hope that what I find interesting you will find interesting as well. These articles are not to be construed as investment advice, even though I may opine on the wisdom of the markets from time to time. That being said, it is absolutely important that investors understand the industry in which they are investing, along with the trends and developments within that industry. Therefore, I believe these comments may actually help investors with a longer time horizon.
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!
I blog at www.thegeeksreadinglist.com.
Happy New Year everybody!
1. Semi upswing seen for 2013
If you are an industry forecaster you want to get your optimistic forecasts out early on so you have plenty of time to revise them downwards as the months go by. Two issues of note – first: people who are buying smartphones are not buying dumb phones (which weren’t that dumb anyway) so there is an offset, even in a growth market. The second issue is stock market related: why do semiconductor companies, few of which grow beyond single digit percentages (and fewer yet generate free cash flow) trade at valuations above brick companies?
“Strength in mobile devices and weakness in PCs will characterize the coming year and drive global semiconductor market growth of 4.9 percent in 2013 after a flat 2012, according to market forecast firm International Data Corp. (Framingham, Mass.).”
2. Fujitsu to miss sales target due to ‘weak’ Windows 8 demand
I don’t think you can entirely blame Windows 8 (though, I admit I wished I could have bought a non-Windows 8 laptop when I bought a new one recently). The consumer only has so much money and with smartphones and tablets costing more than the average PC, replacing a perfectly functional notebook is no longer a priority so replacement cycles continue to extend.
“Japan’s biggest IT services company said it will miss its annual shipment target for personal computers amid sluggish demand for Windows 8, according to Bloomberg. Fujitsu President Masami Yamamoto was speaking to reporters in Tokyo on Thursday.”
3. Is Windows 8 Adoption Rate Really Trailing Vista’s?
I am not really certain that the statistics are meaningful. Online usage share is bound to be impacted by the nature of the applications installed, age of the user, etc.. Oddly enough though, in this case, you’d think the bias would actually favor Windows 8.
“Data compiled by Web analytics firm Net Applications put Windows 8’s online usage share at just under 1.6 percent through Dec. 22 as measured in relation to all desktop and laptop PC operating systems. Microsoft made its next-gen PC and tablet platform available on Oct. 26. Computerworld’s Gregg Keizer tabbed back through the data to find that Vista, after the same period of time following its 2007 release, had shown up on 2.2 percent of all Windows systems (you can access the same data by clicking back through the Net Application report.)”
4. Lessons in Technology and Innovation from the iPad 3 Graphics and Display
An interesting write up which looks into the iPad 3 and, indirectly, how Apple uses a Jobsian reality distortion field to convince people they need something they really don’t get. They use marketing to position a display (which Apple doesn’t make) as a ‘breakthrough’ despite a lack of needed performance to exploit its capabilities. This does provide a stepping stop for further enhancements, but most companies would not be able to get away with it. Fortunately, Apple has legions of fanboys to smooth out the wrinkle in the distortion field. For now.
“As a company, Apple’s success is not due to superior technology, nor to customer service, and certainly not to low prices. Apple’s unique niche is discerning untapped or unmet consumer needs and designing products that unlock or reshape markets. While Apple is rarely first to a market, the products are typically far better suited to the majority of customers. Largely, this is a combination of excellent aesthetics, industrial design, and adopting the right technologies for the product.”
5. Apple Killed the Netbook
What an idiot! I would have thought that it was becoming politically acceptable to not assign Steve Job’s brilliance to every market shift in technology land, but no, it seems you have to find an Apple Angle (probably patented) in everything. You see, Macbook Airs are, actually netbooks, albeit expensive ones. What killed the netbook is the fact that you can now buy a 15.6” quad core notebook computer with 500Gb to 1Tb HDD and 6 to 8Gb of DRAM for about $400. That meant that, outside of fanboy land there is no room for a ‘netbook’, though, last I looked, Apple still sells them (at an astronomical price).
“Netbooks were terrible machines, a technological blight that threatened to become the future of computing. They had awful, nearly unusable keyboards, very slow processors, and they ran versions of Windows or Linux that were a trudge to use on tiny screens. Yet despite their awfulness, they were embraced by the world’s largest tech firms—Intel, Microsoft, HP, Dell, and Lenovo were all gaga for them.”
6. Report: TSMC building A6X chips for Apple
Suing your largest supplier on multiple fronts is bound to have negative ramifications for both parties. Samsung can do without Apple as a customer, and Apple can do without Samsung as a semiconductor supplier (though displays may be another matter). That being said, changing foundries is not without risk, especially at the bleeding edge.
“The Taiwanese-based TSMC has reportedly been tapped to manufacture future batches of Apple ARM-based A6X chip that currently powers Cupertino’s most recent iPad. According to the Taiwan Commercial Times, trial production of the mobile chips on a 28nm process (as opposed to Samsung’s 32nm) will kick off during the first quarter of 2013.”
7. Docomo joins smartphone OS project / New device may reach market in 2013
I rather doubt the objective here is to compete with Google and Apple on the global stage as much as to provide a proprietary ‘Japan friendly’ alternative. What works in Japan is not necessarily reflective of what would work anywhere else on the planet.
“In an effort to compete with U.S. tech giants Google and Apple, NTT Docomo Inc. is jointly developing a new operating system for smartphones that it hopes to put on the market next year, The Yomiuri Shimbun has learned. Docomo, Japan’s largest mobile communication company, has joined with South Korea’s Samsung Electronics Co. and other firms to develop a system that will take a larger slice of the smartphone pie. Google and Apple hold a 90 percent share of the market.”
8. Amazon spinning out Kindle’s Lab126?
It certainly looks like something is going on with Amazon’s Kindle lab, though the author’s speculation may be only one of a set of possible outcomes. With $99 tablets on the way one has to wonder about the future of e-readers, especially when they are purportedly being sold at cost. Amazon probably has the choice of getting in to the tablet business with both feet, or getting out of it altogether and focusing on the software (books, etc.).
“The Kindle team is apparently on fire (excuse the bad pun). It aims to hire everything short of a CEO and dishwasher. The broad and diverse set of openings made me wonder whether Amazon might be spinning Lab126 out as a stand-alone company.”
Golly – a system which lets anybody see my name associated with a physical location. What could go wrong with that? After all, thieves would usually prefer you not be home when they break and enter, and stalkers need a break sometimes as well.
10. U.S. Internet Users Pay More for Slower Service
I was surprised to see this article on Bloomberg, though it does accurately portray the anti-competitive tactics used by the large players. I do think Internet services should be a utility (after all – how are they different from electricity or telephone services?), however, regulation would almost certainly be structure to benefit the large players and frustrate innovation. I’d prefer a ‘clean slate’ approach and eliminate many of the antiquated rules regarding installation of wireline and the structure and nature of wireless licenses.
“Push-back from the local telephone company, BellSouth Corp., and the local cable company, Cox Communications Inc., was immediate. They tried to get laws passed to stop the network, sued the city, even forced the town to hold a referendum on the project — in which the people voted 62 percent in favor. Finally, in February 2007, after five civil lawsuits, the Louisiana Supreme Court voted, 7-0, to allow the network.”
11. ‘The Hobbit’ Creates Big Data Challenge For Moviemaker
A major challenge for movie cameras is dealing with the rather massive amounts of data which comes out of them. This, in turn, results in enormous files, though at least you can deal with that in non-real time. Every advance creates a new bottleneck, and those bottlenecks get solved. This will be ho-hum technology in a few years.
“When it comes to manipulating massive amounts of digital information, few creative industries can match the data-intensive workloads of movie and TV production. And the advent of cutting-edge motion picture and HDTV technologies, including high frame rate (HFR) 3-D and 4K TV, will generate even more data.”
12. CES 2013: The Year the “Connected Home” Becomes a Reality?
We are seeing an increasing number of CE products which use WiFi to deliver connectivity. Unfortunately, many such devices have byzantine set up procedures which are likely beyond the capacity of the average homeowner. Probably this is because routers need a ‘gadget’ device class to simplify set up and use, especially out of the box.
“But at this year’s International CES it could be the smaller home devices that win the spotlight — likely a Wi-Fi connected spotlight.”
13. Wireless Power May Cut the Cord for Plug-In Devices, Including Cars
Wireless charging makes some sense for low powered, portable devices like mobile phones, tablets, and so on. Fewer connectors means better reliability and the inefficiencies inherent in wireless charging are offset by the convenience. That being said, I am a little curious about what happens to your credit and debit cards in the presence of ‘resonant magnetic fields.’
“In the bumper of an electric BMW coupe, WiTricity has placed a wireless coil that receives power from a resonator embedded in the floor beneath the car. The system can transmit up to 3,300 watts per hour and takes four to six hours to fully charge the vehicle.”
14. Toyota sneak previews self-drive car ahead of tech show
In my opinion, the major obstacle to commercialization of the ‘self-driving car’ is lawyers, not technology. I was listening to a podcast recently (http://thefutureandyou.libsyn.com/the-future-and-you-december-19-2012) which included a brief discussion of the ramifications to society and the auto industry. I think they got some bits wrong (beyond the limits of this comment, in any event), but there could be profoundly positive effects to society and the need to completly restructure certain industries. After all – self driving cars would be the first practical robotic servant.
“The car maker revealed a video clip of a Lexus fitted with safety features designed to minimise car crashes. The technology includes on-board radar and video cameras to monitor the road, the surroundings, and the driver.”
15. Micro stars, macro effects
Actually, the fact is economics has a pretty abysmal history, though you would not expect The Economist to acknowledge such. Seriously – this is a ‘science’ which lacks any evidence (let alone proof) of predictive skill. Yes, if you work at it, you can find economic theories which worked, once or twice, and laud those occasions as proof of their utility. I believe economists have the societal utility of poets: they sometimes tell interesting stories. Sadly, however, policies are determined by the popular economist stories of the day …
“ON THE face of it, economics has had a dreadful decade: it offered no prediction of the subprime or euro crises, and only bitter arguments over how to solve them. But alongside these failures, a small group of the world’s top microeconomists are quietly revolutionising the discipline. Working for big technology firms such as Google, Microsoft and eBay, they are changing the way business decisions are made and markets work.”
16. Bill may recoup lost gas tax revenue
One of the things I find amusing about ‘alternative energy’ proposals (including the ‘Hydrogen Economy’) is the fact that so much of the ‘advantage’ arises from subsidy and differential taxation rather than the merits of the particular approach itself. This is not, in general, how things get started. However, the reality is the bills have to be paid and if enough cars were made to run off electricity or whatever, you’d have to tax that to pay for the roads. Mind you, Oregon could simply raise the tax on gasoline, which would also raise the ire of their pickup truck driving constituents. (Mind you my pickup truck gets pretty good mileage …)
“Drivers of certain fuel-efficient vehicles who skirt paying a gas tax at the pump may have to pitch in to fund the state’s roads. The state Legislature is expected to consider a bill that would require drivers with a vehicle getting at least 55 miles per gallon of gasoline or equivalent to pay a tax per mile after 2015. Drivers would also have the option of paying a flat amount annually.”
17. Indiego’s 2012 In Crowdfunding: Campaigns Raised 20% More Than In 2012
Crowdfunding is becoming an increasing popular option for entrepreneurs, though it is not without its challenges. Entrepreneurs and small businesses have been more or less shut out by investment banks, who prefer to help foist the latest private equity fiasco in waiting onto an unsuspecting public. I suspect crowdfuding will grow in size and scope and eventually take over the low end of the capital markets industry, provided regulation doesn’t prevent it.
“All told, campaigns launched in 2012 raised 20 percent more than they did on average in 2011, and ran for only 49 days. In 2011, the average campaign not only brought in less cash, but also ran for 60 days, or 22 percent longer. Among successful campaigns in 2012, the funding periods were even shorter: on average, projects that met their goal lasted for only 39 days. This decrease in the time required for a project to meet its goals, coupled with higher funding amounts, pretty clearly points to an increase in the overall comfort level and popularity of crowdfunding with the general population: more funders more eager to donate would definitely lead to this kind of result.”
18. Outmaneuvered at Their Own Game, Antivirus Makers Struggle to Adapt
Every now and then scare stories emerge regarding the threat from viruses and other malware. I am not saying it is not a problem, but asking the anti-virus remedy vendors about a threat is probably not going to yield much in the way of objective information. My experience is that, over the years, less and less traffic I see is virus or malware related and more and more is ‘legitimate’ spam: why do I need three emails a day from Amazon or Expedia?
“Consumers and businesses spend billions of dollars every year on antivirus software. But these programs rarely, if ever, block freshly minted computer viruses, experts say, because the virus creators move too quickly. That is prompting start-ups and other companies to get creative about new approaches to computer security.”
19. Wind turbines ‘only lasting for half as long as previously thought’ as study shows they show signs of wearing out after just 12 years
Why do I think that the UK government’s response will be to increase subsidies (and thereby the cost of electric power in the UK), rather than question their starting assumptions? The problem seems to be that large wind turbines may be more efficient, but they don’t last as long. The idea that some magical solution will arise regarding wind turbine reliability is laughable: a machine is a machine.
“Wind farms have just half the useful lifespan which has been claimed, according to new research which found they start to wear out after just 12 years. A study of almost 3,000 turbines in Britain – the largest of its kind – sheds doubt on manufacturers claims that they generate clean energy for up to 25 years, which is used by the Government to calculate subsidies.”
20. Great Barrier Reef corals found at ‘mind-blowing’ 410 feet deep
I find it interesting they do not reflect upon the temperatures found at that depth. I’m guessing around 50 degrees, give or take, vs. near 80 degree close to the surface. In any event, coral appear to be able to thrive over a wide range of temperatures (as they have done over the past few hundred million years) and we are expected to believe they are all going to die off from predicted a couple degree shift over the next century. Perhaps the ones living at 10 feet depth will move to 11 feet, and the ones at 450 feet will move to 451 feet.
“The common coral Acropora is living 410 feet (125 meters) below the ocean’s surface, a discovery that expedition leader Pim Bongaerts of the University of Queensland called “mind-blowing.” The group had previously seen the coral living in the reef at a depth of about 200 feet (60 m).”