The Geek’s Reading List – Week of February 8th 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.
1. New report shows Windows 8 sales remain sluggish; no significant growth in sight
I am not sure these types of surveys have much in the way of statistical rigor, however, the PC is a mature market, consumers are favoring network appliances (aka tablets) over PCs in new purchases, and Windows 8 provides a disincentive to replacing an existing PC so the results feel right.
“The latest NetApplications figures for January show Windows 7 with a 44.48 percent market share, Windows XP with 39.51 percent, Windows Vista with 5.24 percent, Mac OS X 10.8 with a 2.44% market share, and Windows 8 with 2.26 percent. Microsoft can’t be pleased. As CNet notes, at a comparable time in Windows 7’s release cycle, it had already garnered 7.71 percent market share, more than three times Windows 8’s uptake.”
2. Windows exec: Surface Pro isn’t expensive — you’re just thinking about it wrong
Here is some background as to Microsoft’s strategy regarding the Surface. I don’t buy it: offering a single overpriced device as a cheap alternative to two overpriced devices makes no sense to me, especially then an Ultrabook have much more resources, notably storage. After all, a lot of the Surface’s 64GB is taken up by bloatware.
“Why did Microsoft price the new 64 GB Surface with Windows 8 Pro tablet at $899 without a keyboard? The obvious answer: It runs full Windows 8, unlike the Surface RT, and its specs are comparable to touch-screen Windows 8 Ultrabooks, many of which cost more than $1,000 — roughly the same as the Surface Pro after buying one of the device’s signature keyboard.”
3. Surface Pro versus MacBook Air: Who’s being dishonest with storage space?
This author makes a good point, and one which is not in opposition to the comments made by the Microsoft executive in the article above. However, I was referring to the comparison between the Surface Pro and the Ultrabook – I don’t understand why people pay what they pay for MacBook Air’s either.
“Microsoft has been absolutely pummeled in the press and in reader comments this week by pundits and customers alike. They feel cheated by the amount of free storage space available to them on the new line of Surface Pro devices. But is that criticism fair or even valid?”
4. Microsoft Looking At Office For Linux In 2014
I can see Microsoft investigating Office for Linux, but I can’t imagine them actually releasing a product. Too many companies have systems running off the Office infrastructure and the cost to transition would be enormous. They are thus bound to Windows and Office and any options in that relationship would be a negative for Microsoft.
“It seems thanks to the increasing market-share of Android devices and the rise of Linux on the desktop thanks to the many commercial Linux gaming initiatives that have been shared in recent months, Microsoft is being forced to take a serious look at Linux and a meaningful look at releasing their popular Office software for Linux in 2014.”
5. LibreOffice goes for “cleaner and leaner code base” with major update
Speaking of Office, LibreOffice is a viable and high quality open source alternative. If lacks the Office ecosystem (macros, etc.), which means it will not free any corporate customer, however, anybody not using those features really shouldn’t waste their money on an Office license.
“LibreOffice was launched in 2010 to overtake OpenOffice as the preeminent open source office suite. Google Docs may still be the biggest threat to Microsoft Office, but LibreOffice has carved out a niche for itself, becoming the default productivity software on many popular Linux distributions.”
6. BlackBerry Z10 vs Samsung Galaxy S III
One of many product comparisons between the Z10 and competition. I am not sure I’d want to be compared to a product which will have been on the market for a year by the time the Z10 is broadly available. Although not addressed in this article, I found the ‘channel check’ comments made by sell-side analysts amusing: when will investors realize that talking to a couple of people at Best Buy is not statistically relevant.
“History buffs be aware! Some of us might forget it, but 2008 surely turned out to be a banner year in the history of smartphones. At the time, BlackBerry smartphones were hotly sought out by people for both their consumer and enterprise features, but when Android officially launched on a device in the fall of 2008, it signaled a changing of the guard of some sorts. Fast forward to the present, the Samsung Galaxy S III has seemingly become the prized darling for the mature platform – while the BlackBerry Z10 is intent on starting yet another revolution of its own. Will BlackBerry’s flagship have what it takes to sway people from the mighty features set found with the Samsung Galaxy S III?”
7. Microsoft and Huawei debut Windows Phone for Africa
I don’t know how this will sell in Africa, however, there is likely a sizeable market. However, at $150, these devices would sell like hotcakes everywhere else.
“Microsoft and Huawei announced today that they’re partnering to bring a new Windows Phone to Africa. The two companies are targeting the continent, which is one of the fastest growing technology markets in the world but has seen few smartphones to date and whose majority of users still rely on feature phones.”
8. Intel’s NUC illustrates why the company struggles in a post-PC world
I was a little confused as to what Intel’s NUC is (he gets to that later in the article), but the author makes a clear case against its odds of success. There is an opportunity here for AMD, if they were to go against their very nature and think strategically: a sub $100 x86, open, platform would probably find a ready market. Unfortunately, the full article is paid only, however most of what needs to be said is in the free part.
“Intel is desperately trying to save the PC from the quick death looming above it, and the NUC is their latest ill-conceived master plan. More importantly, they need to do this in a market that is quickly moving from proprietary to commodity devices. Trying to get a bigger share of a shrinking BoM is decent business, but it has limits. To make matters even more grim, the consumer market has spoken and it is saying that the current Wintel path is one is not wanted, regardless of price. Technology, marketing, and consumers all add up to the NUC crashing and burning in a spectacular fashion.”
9. Ouya preorders start today; retail availability set for June
This is the sort of thing AMD (or Intel, for that matter) could make a bundle on, except they are too conflicted to bring it to market. The game console market is lucrative of game console makers and much less so for game vendors. The platforms are extremely proprietary and yet, in this day and age, not that difficult to pull off. A low cost, open platform could be boon to game developers.
“Speaking to the Wall Street Journal in an interview published today, Ouya CEO Julie Uhrman said that the console will be made available at retail in June. At that time, a host of retailers, including GameStop, Best Buy, and Target, will be selling the hardware. Amazon will also be carrying the device. Until then, gamers will be able to place preorders starting today.”
10. Valve co-founder Gabe Newell: Linux is a “get-out-of-jail free pass for our industry”
These emerging trends within the gaming industry may be significant, and creep into other digital entertainment as well.
“He talked a lot about user-generated content and the importance of it. Newell said Valve has people who are making $500,000 a year selling content in the Steam Workshop. “Years ago, a game’s content was privileged. Now we’re seeing users doing a better job of generating content than we are. It’s all about enabling that productivity and engagement.” He also thinks that users should be able to go in and create their own versions of stores that can sit on the front end of the Steam store.”
11. Hard Disk Drive Market Revenue Set for Double-Digit Decline This Year
The Hard Disk industry will become marginalized in the future as these devices are displaced by SSDs in particular. It won’t go away completely: neither has the data tape industry, but it will morph back from whence it came namely, a product for institutional data rooms. This is why industry consolidation makes sense, at least for the sellers.
“Facing a relentless onslaught from tablets, smartphones and solid state drives (SSD), global hard disk drive (HDD) market revenue in 2013 will decline by about 12 percent this year, according to an IHS iSuppli Storage Space market brief from information and analytics provider IHS (NYSE: IHS).”
12. CompTIA Weighs in on Expanding Unlicensed Spectrum
Modern spread spectrum technologies make the century old, Marconi inspired spectrum licensing framework obsolete. Massive expansion of unlicensed spectrum would almost certainly result a boom in wireless applications, so we can only hope this goes through.
“The 2010 National Broadband Plan introduced the idea of incentive auctions as a tool to help meet the nation’s spectrum needs. Incentive auctions are a voluntary, market-based means of repurposing spectrum by encouraging licensees to voluntarily relinquish spectrum usage rights in exchange for a share of the proceeds from an auction of new licenses to use the repurposed spectrum. The incentive auction idea is the latest in a series of world-leading spectrum policies pioneered in the U.S., including unlicensed spectrum uses such as WiFi, Bluetooth, near field communication and other innovations, and the original FCC spectrum auctions in the 1990s.”
13. No, free Wi-Fi isn’t coming to every US city
The aforementioned proposed expansion of unlicensed spectrum resulted in a flood of articles suggesting this would result in ‘free WiFi for all’. You can’t really get there from the proposal: after all somebody would have to pay for the gear and infrastructure. Mind you, with ample unlicensed spectrum of the right sort, one could see the emergence of different business models such as non-profits and co-ops. The largest barrier to entry to a wireless service is a spectrum license, and it is what allows carriers to charge rent.
“The headlines were literally too good to be true, and so outlandish no one should have written them in the first place. “FCC Proposes Free Wi-Fi For Everyone In The US,” Popular Science reported. “FCC wants free Wi-Fi for all,” said The Daily Caller. On Mashable, it was “Government Wants to Create Free Public ‘Super Wi-Fi’,” and Business Insider breathlessly reported “Telecom Corporations Are Trying To Stop The Government From Offering Free ‘Super Wi-Fi'”
14. When Will the Rest of Us Get Google Fiber?
I have started reading “Captive Audience” which looks at the reestablishment of monopoly pricing power in the telecom industry in the US (it applies even more to Canada). If you think about it, this is completely the opposite of what should have happened due to the Internet. In any event, it is quite clear that eventually this must change: either through government action (which I favor) or technological innovation (which will happen in any event).
“Call it the miracle on Francis Street. Last year Ryan and Jenny Carpenter got a deal seemingly too good to be true in their Kansas City, Missouri, neighborhood: an installer from Google Fiber wired their bungalow to give them at least 50 times their previous Internet access speed and a substantially better TV service, all for only $125 a month, tax included—just a few dollars more than they’d been paying Time Warner Cable.”
15. As Music Streaming Grows, Royalties Slow to a Trickle
This story got a fair bit of interest, but it is nonsense: setting aside the rather dubious question that anybody who plays a musical instrument can earn a living from it (few do, especially cellists), Ms. Keating should be celebrating the fact she earned more than a dollar or two for her works, because if she had had 100 plays on a radio station with an audience of 20,000 each time, that is roughly what she would have been paid. People are not ‘buying’ her stuff – they are listening to it and the royalty model is different. You can be the number of people who would pay $0.01 each time they listen to avant-cello is pretty small.
“Even for an under-the-radar artist like Ms. Keating, who describes her style as “avant cello,” the numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cent a play.”
16. intelliPaper Disposable Paper USB Flash Drive May Save Paper & It’s Wireless Too
I have been seeing a number of articles about what amounts to disposable electronics lately. This sort of thing has many potential applications, especially in advertising, if the costs come down.
“All of the intelliPaper products have electronic components embedded into paper with the added capability of containing not only printed data, but also digital data which can be displayed or copied onto any computer via a standard USB port through small electrical contacts that are on the surface of the paper.”
17. Facebook: two thirds of users log off for weeks at a time
I don’t see the point of social networking, and I believe most usage figures are highly suspect. That being said, it is just a matter of time before people move on to the next big thing. Maybe it is already happening: no worries, Facebook’s private shareholders have already made a bundle selling stock to Muppets, so they’re good.
“Two thirds of Facebook users have taken a voluntary break from the site for several weeks or more, citing reasons ranging from “excessive gossip or drama from their friends” to “concerns about privacy”, according to new research.”
18. The Threat of Silence
This is a good idea whose time has come, but it might be a mistake to assume that a US based company (based in Washington), offering “highly secure encryption” services isn’t a front for the NSA or some other organization. Even if it isn’t (and my security professor told me to assume every encryption scheme has a back door) it is a subscription service, meaning governments have a ready-made “highlighter” for who has something to hide. An app like this should only be trusted if it is anonymous and open source.
“Back in October, the startup tech firm Silent Circle ruffled governments’ feathers with a “surveillance-proof” smartphone app to allow people to make secure phone calls and send texts easily. Now, the company is pushing things even further—with a groundbreaking encrypted data transfer app that will enable people to send files securely from a smartphone or tablet at the touch of a button.”
19. Block Telemarketers and Robocalls for Good with the Raspberry Pi-Powered Banana Phone
This is a great idea however a Raspberry Pi is probably overkill. This sort of application could comfortably sit on a cheap micro-controller. Telemarketers could dream up counter measures, but an open source project could keep ahead of them, especially if a random assortment of techniques is used. A smartphone app would probably be a good idea as well. Expect to see this become main stream pretty quickly.
“Here’s how the banana phone works. When a robocaller or automated dialer calls you, the Banana Phone picks up, plays a song (in this case, it’s Raffi’s earworm we all know) and while the song plays, text-to-speech tells the caller to enter a four-digit passcode in order to be connected to the actual line they’re calling. Automated dialers would give up at that point, but real humans would enter the number and get connected right away.”
20. Canadian Chamber Of Commerce Wants To Legalize Spyware Rootkits To Help Stop ‘Illegal’ Activity
I didn’t even know there was a Canadian Chamber of Commerce. In any event, I am pretty sure most organizations would like to be able to break the law, infringe on privacy, and so on. I like the part where companies get to enforce the laws of foreign states – after all, why shouldn’t a company be permitted to enforce, say, Sharia Law? Governments are suckers for this sort of thing, but any company which would actually do this would probably find recourse through the courts the least of its worries.
“… the Canadian Chamber of Commerce is proposing a very troubling idea: allowing rootkit spyware to be installed surreptitiously for the purpose of stopping illegal activity. As Geist notes, the last time this battle was fought, it was fresh on the heels of the Sony rootkit debacle, so there wasn’t much support for these concepts. But, with a few years distance, the industry groups are trying again. Specifically they either want to remove language that prevents the surreptitious installation of spyware — or they want specific exemptions.”