The Geek’s Reading List – Week of April 12th 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. The end of Moore’s Law on the horizon, says AMD
He’s a great guy to listen to, but unfortunately, Kaku makes all kinds of pronouncements about things his has no particular expertise in. While there are physical limits on transistor size, Moore’s Law leaves room on other dimensions such as cost and performance. Plus, AMD has been enduring significant financial challenges since its ill-advised purchase of ATI, so they really aren’t the ‘go to’ guys when it comes to semiconductor technology. If Intel or Samsung or TI said this I’d start to worry.
“Theoretical physicist Michio Kaku believes Moore’s Law has about 10 years of life left before ever-shrinking transistor sizes smack up against limitations imposed by the laws of thermodynamics and quantum physics. That day of reckoning for the computing industry may still be a few years away, but signs of the coming Moorepocalypse are already here. Just ask chip maker AMD.”
2. The PC market is a horror show right now
It’s almost like somebody predicted this (http://www.forbes.com/sites/timworstall/2012/01/19/the-end-of-the-pc-era/). Oh, wait – here’s one from 2007 (http://books.google.ca/books/about/Intel_Corp_INTC_NASDAQ.html?id=xiWJtgAACAAJ&redir_esc=y) written by some clown named Piccioni. Once upon a time, you know, equity research was more than writing about what just happened.
“We can pretty much stop arguing about whether the PC industry is deathly ill or not: the numbers speak for themselves, with its worst quarter since tracking began in 1994.”
3. Is Android the new OS of the masses? Survey finds Galaxy phones simpler than iPhone
I have no horse in this race: I avoid Apple products like the plague, if for no other reason than Android is an open platform, so I have no experience with iPhones. What I find interesting is that this sort of article would have been anathema prior to the death of St. Jobs. In any event, this has potentially negative long term consequences for Microsoft and Intel: people used to Android (i.e. Linux) on their phones and tablets will not find it a large hill to climb to use in laptops or desktops.
“While Android has long been the leader in terms of smartphone operating system market share, pundits often claim that extensive vendor and carrier support are more responsible for Android’s proliferation than actual consumer desire. IOS, it is often said, is much simpler and more refined, and is therefore better suited for the mass market. There are certainly solid arguments to be made in both cases, but a new survey suggests that Android isn’t as complicated as many Apple (AAPL) pundits make it out to be.”
4. Microsoft, Nokia and Oracle moan to EC about Google Android dominance
This is rather comical, if you think about it. Android (Linux) does not limit the sort of applications you can install on the devices as iOS does. Plus, probably because it is free, it has large market share, but nowhere near the share Microsoft has in the PC space. Besides showing themselves as erstwhile monopolists grappling with the novelty of competition, what do these firms expect to accomplish?
“A diverse group of companies including Microsoft, Nokia and Oracle, has filed a complaint with the European Commission about what it dubs Google’s “anti-competitive mobile strategy” of allowing free use of the Android platform.”
5. IBM Wants To Bring Enterprise the Speed of Flash
As we predicted a number of years ago, Solid State Drives will destroy the Hard Disk industry. It will take a decade or more before they are completely gone (after all, digital tape drives still exist), but for Western Digital, Seagate, et als, the war is over. Over the near term, in an enterprise setting you can use SSDs for performance critical applications and HDDs for non-performance critical tasks, sort of like a large hybrid drive, with HDDs eventually displacing tapes.
“Flash’s economics and performance “are at a point where the technology can have a revolutionary impact on enterprises, especially for transaction-intensive applications,” said IBM’s Ambuj Goyal. For transaction-based processing, such as in banking, trading and telecom, IBM said flash can deliver as much as 90 percent reductions in time required.”
6. Why Retina Displays and 4K TVs May Not Be Worth the Trouble
This is a pretty good summary of the challenges associated with higher resolution displays. Poor quality display of low resolution image can be tempered somewhat by image processing, however, the problem with any sensory (sight, hearing, etc.) system is that human have a limited range of capabilities. Therefore, there is a decreasing marginal utility associated with further improvements. Beyond a certain point, everything else is marketing.
“When Apple unveiled its Retina screen on the iPhone 4, the world gasped. “There has never been a more detailed, clear, or viewable screen,” read a review on the tech Web site Engadget. “Staring at that screen is addictive,” said Wired magazine.”
7. LED Lights to Cut 60-Watt Bulb to Five Watts
LEDs are not only energy efficient they also last a long time. Most office buildings have guys who go around replacing florescent bulbs, just as municipalities have crews who go around replacing streetlamps. This ends up being quite expensive. A cost effective, energy efficient, fluorescent tube replacement would probably be adopted earlier by building owners than by consumers. It is interesting to note that Philips has a massive lighting business, which is mostly a replacement business, and inevitable LED adoption would have devastating consequences for the firm.
“Philips has cut the amount of power of its overhead LED tube light in half, a sign of continuing improvements in LED lighting geared at displacing incumbent technologies. The company says it has built a prototype of a tubular overhead LED light that produces 200 lumens of light with a watt of power. Its current products produce light at 100 lumens per watt, about the same as florescent tube lights. Even though the price of LEDs will be higher, Philips thinks that they can start to displace more of the florescent tube lights that are everywhere from office buildings to parking garages based on energy savings.”
8. Shodan: The scariest search engine on the Internet
While the media has been excited over the use of Chinese networking gear in the telecommunications infrastructure and mission critical applications, Shodan has shown that a huge number of web accessible devices are completely insecure or trivially hacked. Good thing the bad guys don’t know about this.
“Shodan runs 24/7 and collects information on about 500 million connected devices and services each month. It’s stunning what can be found with a simple search on Shodan. Countless traffic lights, security cameras, home automation devices and heating systems are connected to the Internet and easy to spot. Shodan searchers have found control systems for a water park, a gas station, a hotel wine cooler and a crematorium. Cybersecurity researchers have even located command and control systems for nuclear power plants and a particle-accelerating cyclotron by using Shodan.”
9. Massive energy cost hidden in wireless cloud boom
If you want good science you really want to cite reports from an independent source like Greenpeace. I think it’s a good think these wealthy ‘neo-environmentalist’ organizations weren’t around when the steam engine was invented (i.e. the good old days) or when mail delivery began. It boils down to this: civilization and improved living standards are directly associated with the exploitation of energy sources.
“The report – “The Power of Wireless Cloud” – warns that industry has vastly underestimated energy consumption across the cloud ecosystem as more people access services using portable devices. The popularity of services like Google Apps, Office 365, Amazon Web Services (AWS), Facebook, Zoho cloud office suite, and many others delivered over wireless networks, is driving a massive surge in energy consumption.”
10. Analysis – Rethinking the lithium-ion battery revolution over cost, safety
There is a rather odd consensus among electric car fans that we are in the midst of some sort of ‘battery revolution’. I suspect this is because they have never seen a battery factory (they are quaintly primitive). Physical chemistry does not changes that quickly, and Lithium Ion batteries are not likely to improve that much that fast (though there may be hope in nano-materials if anybody can ever figure out how to make them cost effectively. The major drawback with all current battery technologies is the fact they only last a certain number of charges before they need to be replaced.
“Experts are certain to point out red flags. Indeed, a growing number of engineers now say the lithium-ion battery revolution has stalled, undercut by high costs, technical complexity and safety concerns.”
11. Tesla’s Model S Lease and Financing Program Expensive, Misleading
If one were a cynic, one might interpret the barrage of – uh – “not what they seem” press releases and PR stunts from Telsa an attempt to boost the stock price and distract investors (and potential buyers) away from the company’s problematic balance sheet. I, for one, am keen to see how negative Gross Margins can translate to (purported) profitability on increased sales volume. In any event, they need to raise $500M to $1B to keep the lights on, and they can’t do that without a high enough stock price.
“With the help of two banks, federal tax credits for EV purchases, and math that even Wall Street would find fishy, Tesla now has an official loan program for the electric Model S sedan. Company founder (and noted pugilist) Elon Musk announced the news himself earlier this week, calling the deal a “revolutionary new finance product,” enabling buyers to get a $79,995 Model S for just $500 per month. Apart from the misrepresentation of the monthly price, there’s little that’s revolutionary about the loan deal—including the presence of hidden costs. If, then, Tesla truly is the car company of the future, one might call the company’s new financing offer the three-card Monte of the future.”
12. Do Wind Turbines Need a Rethink?
Despite the title, the article is decidedly ‘pro-wind’ and covers a number of emerging technologies. I remain skeptical about wind power for a variety of reasons, not the least of which is its unpredictability and our inability to cost effectively and efficiently store large amounts of electric power. Nevertheless, I could be wrong.
“Okay, so wind power had a very good year in 2012. But that doesn’t mean that it’s gone mainstream. Hardly. It accounts for only 4 percent of the energy produced in the U.S. Plus, a big reason for the spike last year was that companies scrambled to finish projects before a federal tax credit expired at the end of December. (It was renewed as part of the end of the year tax deal, but only for one more year.)”
13. Use for 3-D Printers: Creating Internal Blood Vessels for Kidneys, Livers, Other Large Organs
This sounds like an important breakthrough, however, other articles I have read suggest the major challenge with organ replication lies in the collagen “scaffold”. Perhaps some organs require this and others do not.
“A team of scientists from the University of Pennsylvania and the Massachusetts Institute of Technology has come up with a sweet solution to the problem. Instead of printing an organ and its inner vessels all at once, they print a dissolvable sugar mold of the vessels and then build up the appropriate cells around the mold. Later, the mold is washed away, leaving behind the structurally sound passageways that are able to stand up to the varying blood pressure levels found in the body.”
14. New Stem Cell Treatment Heals Arthritic Dogs
Assuming this story is accurate, it appears there is now an effective and inexpensive stem cell treatment for arthritis in dogs and other critters. Of course, this may not work on humans, and the introduction of stem cells may result in complications such as cancer, which may be a moot consideration for a 8 year old dog with a life expectancy of a few more years. Nonetheless, arthritis can be a terrible disease, especially for the elderly, so we can hope human clinic trial progress well. Above all, this demonstrates why there are no dog lawyers to sue over veterinary malpractice.
“Perry gave the dogs all sorts of medications, but nothing worked, and he knew such medications could result in kidney and liver damage. The dogs’ suffering became so great, Perry considered putting the pets down. But late last year he heard about a veterinarian in his area who performed stem cell therapy on dogs to regenerate and repair their joints and figured it was worth a try.”
15. Robot hot among surgeons but FDA taking fresh look
A surgeon once explained to me that there were two major variables which governed the outcome of surgery: the surgeon’s skill and the patient’s capacity to heal. The procedure he was performing (Lasik) was significantly computer controlled and thereby less reliant on his skill. The same could be said for ‘robotic surgery’ – things are going to go wrong, surgeons are going to make mistakes, and equipment will malfunction. The question becomes “is there a net benefit?”
“The biggest thing in operating rooms these days is a million-dollar, multi-armed robot named da Vinci, used in nearly 400,000 surgeries nationwide last year — triple the number just four years earlier. But now the high-tech helper is under scrutiny over reports of problems, including several deaths that may be linked with it, and the high cost of using the robotic system.”
16. Untappable Apple or DEA Disinformation?
You may recall the “leak” of a DEA document which purported to claim that Apple’s iMessage services was so secure it was out of reach of law enforcement. I suggested that this was most likely disinformation by the DEA. QED.
“Tech news site CNET has an interesting, but I suspect somewhat misleading, story today suggesting that text messages sent via Apple’s iMessage service—an Internet-based alternative to traditional cell phone SMS text messages—are “impossible to intercept” by law enforcement. Yet that is not quite what the document on which the story is based—an “intelligence note” distributed to law enforcement by the Drug Enfrocement Administration—actually says.”
17. Is Someone Recording This? It’s Harder to Find Out
I guess if you are making a movie about the mob, or espionage, or whatever, you need to build drama by hiding a ‘wire’ on the snitch with some probability the bad guys will find it. It has been a long time since recording devices have to be bigger than a button – even video cameras can be relatively easily concealed. Reality caught up with James Bond over 10 years ago.
“In the old days, they would say, ‘Let me pat you down for a wire’ and boom, everybody would just open their shirt and say, ‘I’m not wearing a wire,’ ” a retired undercover Federal Bureau of Investigation agent, Joaquin Garcia, said in a telephone interview on Friday. “Now there is no need to wear a wire. It’s become extinct. It’s all gone digital. But what are you going to say, ‘I’m wearing digital,’ instead of ‘I’m wearing a wire’? It’s just become part of the parlance of law enforcement.”
18. ‘Dark Lightning’ Zaps Airline Passengers with Radiation”
This is rather odd – I’m surprised the gamma radiation does not affect avionics. In any event the only solution I can see is lead airplanes.
“Dark lightning” that is almost invisible within clouds may regularly blast airline passengers with large numbers of gamma rays, scientists find. However, these outbursts do not seem to reach truly dangerous levels, researchers added.”
19. Fool’s Gold
Media coverage of Bitcoin ramped considerably over the past week, which is unfortunate because an important part of any bubble is stoking interest in it. As is to be expected, the media relies on ‘experts’ which, in this case, appears to have been mostly loonie Libertarians predicting the end of paper money, with the occasional befuddled economist as counterpoint. I think ‘Ponzi Scheme’ is overused, and in any event, describes a specific type of fraud, which is not what Bitcoin is. Think of it this way: this in an unregulated market with no oversight, rather like buying gold bars sight unseen from a Nigerian ‘prince’. The probability of fraud is approximately 100%.
“Bitcoin is a fantasy. The Internet’s currency—a secure, private, decentralized type of money that makes possible anonymous and virtually costless transactions across borders—contains the seeds of its own destruction. More than anything else, it resembles a Ponzi scheme—and the wild claims made on its behalf reveal a great deal about a libertarian strain of thinking with deep roots in the American psyche.”
I was the victim of an April Fool’s joke when I wrote about drone mail delivery in last weeks’ Geeks’ Reading List. Sorry about that – I thought I had weeded the silly out but they got me, probably because I believe we will likely have drone (robotic) delivery within the next 20 years or so provided the tort lawyers can be held at bay. As this article suggests, highway travel by self-driving trucks has its benefits and is inevitable.
“In February this year, a line-up of four large trucks circled an oval test track in Tsukuba City, Japan to help get so-called “truck platooning” technology ready for real-world use. This technology aims to create semi-autonomous road trains, where convoys of vehicles enter a snaking train of vehicles under the command of the lead vehicle. The drivers of the “drones” are then free to do whatever they like – read a book, take a nap or just sit. When they are ready to leave, the driver takes back control and exits the train. In theory the technology offers several benefits, such as cutting down on accidents and improving fuel efficiency.”