The Geek’s Reading List – Week of April 19th 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.
ps: Sorry for the poor quality of articles this week. Tech news was pretty thin on the ground.
1. Microsoft’s Windows 8 Plan B(lue): Bring back the Start
The way Windows 8 should have worked was that user could either switch between a ‘classic’ user interface dynamically, or at least have the option to configure the UI. For reasons which will be discussed in business case studies for decades, Microsoft decided to impose a touch centric UI on PCs which lacked a touch interface and went so far as restricting their ability to ‘downgrade’ to Windows 7, resulting in the fiasco known as Windows 8.
“What if Microsoft relented and granted users who are lukewarm about Windows 8 two of their biggest requests: Allow those who want to boot straight to the desktop, and bring back the Start button with Windows Blue, a.k.a. Windows 8.1? Though supposedly not part of the original plan for Blue, these two UI options are looking more likely.”
2. Intel’s mobile transition struggles are Microsoft’s advantage
I don’t really see the logic here however, the net result is probably the same: as the PC industry has matured, people will buy fewer PCs – it’ll be a replacement market mostly. This is bad for sales of new machines and almost nobody ‘upgrades’ their OS anymore, certainly not to the dreadful Windows 8. However, Microsoft gets a lot of revenue from its installed base, in particular in the corporate and institutional market. Intel has no such annuity, so it needs a vibrant replacement market for PCs which is unlikely, even if Windows 8 wasn’t the disaster it is.
“But the lag time between Intel’s design wins with device manufacturers and shipments is significant. Tablet shipments doubled and are expected to double again next quarter, but Intel hinted that tablet volumes would not grow materially until the fourth quarter when Intel Bay Trail processor-powered tablets reach stores for the holidays. Smartphones will have to wait for 2014.”
3. Cheap smartphone boom bodes ill for Intel
A bit more of the same, but an interesting look at the market, though I don’t see a causal relationship to Intel’s looming woes. The company has no significant exposure to smartphones, however it would have the potential to penetrate the tablet market if they had the right sort of product and/or the right business model. I remain intrigued that AMD hasn’t realized they would have an opportunity in that space if they were to switch to a core licensing model.
“The keys to success for the next round of smartphone processors will be integration and low cost, and Intel is not well poised for the battle, according to a keynote address from a veteran market watcher.”
4. Microsoft tries a new Windows 8 damage control message
Kind of long and rambling, but amusing and pretty much bang on. Of course, macro conditions, in particular a saturated PC market won’t help, but launching a touch centric OS into a market overwhelmingly devoid of touch interfaces (with good reason), well that’s just stupid.
“If you have never seen how a large company does damage control from the inside, the somewhat surreal proceedings are a bit hard to understand. Microsoft’s current strategy to re-brand the failure of Windows 8 is equal parts masterful and disingenuous.”
5. When the PC is obsolete, how will you do this, and this, and this?
While I called the end of the PC era quite a few years ago, I meant it as the end of the era of growth in the PC market, and the end of the dominant role played in tech. This slide show makes a few good points, but it could go a lot further. Tablets, etc., are for consuming content, not doing much else.
“At PCWorld, we wonder how humankind would survive on tablets alone. Tablets are great for casual Web browsing and catching up on email, but can they deliver everything we need in the so-called post-PC era?”
6. If It Ain’t Broke, Don’t Fix It: Ancient Computers in Use Today
A fun read but one by one these people will rue their decisions to run ancient software on ancient hardware. Nobody knows how to maintain or debug these systems and replacement parts are essentially unobtainable. I liken this situation to walking around with a pebble in your shoe – you know you are going to eventually have to take it out, so why walk around in pain? Ancient computers belong in museums, not running accounting software.
“It’s easy to wax nostalgic about old technology–to remember fondly our first Apple IIe or marvel at the old mainframes that ran on punched cards. But no one in their right mind would use those outdated, underpowered dinosaurs to run a contemporary business, let alone a modern weapons system, right? Wrong!”
7. Apple Slowdown Threatens $30 Billion Global Supplier Web
CRUS was trading at $24 a few weeks ago, as is currently $17.50 from a 52 week high of $45.49, which makes it an object lesson in why you should not invest in ‘derivative’ stocks (this will do well if that does well) and never, ever, invest in a company with high revenue concentration. The major issue is the latter: if the customer stumbles, you break a leg. If the customer switches suppliers, you are dead. It happens.
“Cirrus Logic Inc. (CRUS), a maker of audio chips that gets 91 percent of its sales from Apple, this week reported an inventory glut that suggested slowing iPhone sales, and forecast fiscal first-quarter revenue below analysts’ estimates. Hon Hai Precision Industry Co. (2317), Apple’s top supplier, this month posted its biggest revenue decline in at least 13 years, indicating slower sales of smartphones, tablets and computers.”
8. Archos 35 Carbon $99 Android smartphone revealed
I figure there is a sizeable market for an inexpensive (non-subsidized) smartphone, especially if and when North American consumers realise that wireless contracts are a simplistic bait and switch scam. For the record, due to the fact that smartphone and tablet specs are probably plateauing, Average Selling Prices in both segments will come down a lot over the next couple years.
“Today Archos has revealed a set of smartphones that begin on the low end with the “Archos 35 Carbon”, a $99 Vanilla Android handset you’ll absolutely have to take a peek at. This machine isn’t by any means meant to break the high-end market open with its specifications set, but at $99 USD, you might need to see how low you can go for an off-contract smartphone. It all begins with a lovely 3.5-inch 320×480 pixel IPS LCD display.”
9. LED lamp shipments to grow at 44.3% from 68 million to nearly 1.3 billion units by 2021
My usual comments as to the lack of value of industry research apply here. In any event, unit volume sales are pretty much irrelevant to the fortunes of the industry. I do agree that pricing will significantly (perhaps more than) offset unit volume growth. I can help but wonder if anybody has modeled the impact of LED lighting on electricity demand.
“Unit shipments of LED lamps worldwide will grow from 68 million in 2013 to 1.28 billion annually by 2021, according to the report ‘Energy Efficient Lighting for Commercial Markets’ from Navigant Research, as falling prices and improving quality are driving widespread adoption of LEDs and affecting every part of the commercial lighting industry. The markets for every other lighting technology will contract over 2013-2021, while LED technology appears likely to surpass all others in nearly every metric of quality and efficiency, the firm adds.”
10. Parallella: The $99 Linux supercomputer
There are supercomputers and there are supercomputers. It looks like this is a building block for a supercomputer, rather than an actual supercomputer. Faster computers require memory, and this one ain’t got a lot. Plus, GFLOPs can be a pretty misleading figure when gaging performance because peak numbers often cannot be sustained. Nonetheless, the price/performance point seems pretty impressive.
“What Adapteva has done is create a credit-card sized parallel-processing board. This comes with a dual-core ARM A9 processor and a 64-core Epiphany Multicore Accelerator chip, along with 1GB of RAM, a microSD card, two USB 2.0 ports, 10/100/1000 Ethernet, and an HDMI connection. If all goes well, by itself, this board should deliver about 90 GFLOPS of performance, or — in terms PC users understand — about the same horse-power as a 45GHz CPU.”
11. NBN customers set for world-leading download speeds to happen by end of the year
Whenever people take the time to explain why Canada telecommunications prices are so high, and performance so poor, they inevitably hit upon low population density as an explanation. One could contrast this with the situation in Australia, which, apparently, has managed to do a fair bit better. I have to assume Australia doesn’t happen to have an oligopoly which controls telephone, mobile, Internet, TV, radio, cable TV, magazines, and newspapers.
“Australians linked to the national broadband network will be able to get world-leading internet download speeds of one gigabit per second by the end of this year, the company building the network will announce on Friday. While some countries such as Japan are moving even further ahead with 2Gbps connections, Australia’s coming 1Gbps capability is the same speed as Google’s cutting edge fibre network in several US cities.”
12. LG’s curved OLED TV wants to make flat screens obsolete
I didn’t make CES this year, so I missed this. OLED displays tend to have great color and contrast, though they have been very pricy. I don’t think the ‘curved’ display will be a hit with consumers, especially since the benefit may be greatest with 3D which has not exactly piqued the interest of buyers.
“At the 2013 CES in Las Vegas, LG revealed a 3D OLED screen that featured a curved design. While audiences were wowed, we assumed it was only for show. Now, the company has announced plans to bring the uniquely shaped monitor to market. So what does this mean for the faithful flat screen?”
13. Proceed with Caution toward the Self-Driving Car
Absolutely, proceed with caution otherwise there’ll be pedestrians flying through the air in no time. The points made about the attention bell curves are good ones and I can see that having a car which drives itself but transfers control back to the human when something bad happens might be problematic. Nonetheless, fully autonomous vehicles, in particular unmanned delivery and transportation vehicles, are probably going to have a revolutionary impact on our economy 20 years out.
“Completely autonomous vehicles will remain a fantasy for years. Until they’re here, we need technology that enhances human drivers’ abilities rather than making those abilities increasingly obsolete.”
14. Miracle mix looks like liquid but shatters like glass
Non-Newtonian fluids are seriously cool, but I admit it never occurred to me that they would have practical uses.
“WALKING on water is possible – just as long as it contains corn starch. Now it seems this miracle mixture, dubbed oobleck, can also shatter like glass. Knowing how and why could help guide its use in soft body armour and car suspensions.”
15. Researchers use Moore’s Law to calculate that life began before Earth existed
This article got a lot of coverage during the week. I say article, rather than research, because it is pretty much crap, and I don’t have a problem with panspermia. Unfortunately, despite being crap, we can be sure it’ll be cited by creationists and all sorts of pseudo scientists. Here’s the thing, there is no reason to believe the evolution of life on earth was, in any way, ‘smooth’. In fact, earth’s first few hundred million years was marked by almost continuous asteroid and comet impacts, several ‘iceball earth’ cycles and numerous other mass extinction events. I guess it’s publish or perish.
“Geneticists Richard Gordon of the Gulf Specimen Marine Laboratory in Florida and Alexei Sharov of the National Institute on Aging in Baltimore have proposed, in a paper uploaded to the preprint server arXiv, that if the evolution of life follows Moore’s Law, then it predates the existence of planet Earth.”
16. The 90% question
This research also got a lot of coverage over the past week. I call this research because somebody actually bothered to check the math on a widely cited, highly influential, economics article and found out that it was wrong. Personally, I think it stands to reason that you can only borrow so much before people stop lending to you (a lesson soon to be learned by many Canadian consumers), but I also think what passes for economics is unworthy for the bottom of a ferret cage. The idea that the math in a seminal paper wasn’t even verified is priceless.
“Paul Ryan, a Republican congressman, cited their “conclusive empirical evidence” in a budget plan calling for swingeing cuts to public spending. In a February letter to European Union finance ministers Olli Rehn, the vice-president of the European Commission, touted the “widely acknowledged” 90% limit as a reason to press on with European fiscal cuts. Such rhetoric has helped to make the Reinhart-Rogoff number the subject of bitter dispute. And this week a new piece of research poured fuel on the fire by calling the 90% finding into question.”
17. Nano-Suit Protects Bugs From Space-Like Vacuums
Interesting work and might be of considerable use in electron microscopy. Previously, careful preparation was required to ensure that the sample isn’t distorted or otherwise affected by the vacuum and imaging process. I rather doubt it will have any long term benefit to space travel, however.
“Put a fruit fly larva in a spacelike vacuum, and the results aren’t pretty. Within a matter of minutes, the animal will collapse into a crinkled, lifeless husk. Now, researchers have found a way to protect the bugs: Bombard them with electrons, which form a “nano-suit” around their bodies. The advance could help scientists take high-resolution photographs of tiny living organisms. It also suggests a new way that creatures could survive the harsh conditions of outer space and may even lead to new space travel technology for humans.”
18. Kidney grown in lab successfully transplanted into animal
This seems like a breakthrough, though it is hard to predict when it will be tested on humans. Apparently the device (?) does not function nearly as well as a real kidney, however, that would not be unexpected for an early prototype. In any event, it may be that a poorly functioning kidney is better than none at all. The need for a ‘scaffold’ should not be a major obstacle because this could first be obtained from an unsuitable human kidney, then later from a suitably sized animal like a pig.
“Scientists have grown a kidney in a laboratory and shown that it works when implanted into a living animal. The work is an important step towards the longer-term goal of growing personalised replacement organs that could be transplanted into people with kidney failure.”
19. Small in size, big on power: New microbatteries a boost for electronics
This item got a huge amount of coverage on science, technology, and alt energy websites. Unfortunately, the information content is pretty thin though there might be more in the journal article. Hell not having frozen over yet, I’m not going to pay for that. I don’t see any indication the device had been made or simply modeled (there is a big difference) or whether there is any assurance it can be scaled. Some of the comments in the article are gibberish – radio signal reach is not directly related to battery size or even power.
“Developed by researchers at the University of Illinois at Urbana-Champaign, the new microbatteries out-power even the best supercapacitors and could drive new applications in radio communications and compact electronics.”
20. Merkel’s No-Nuke Stumble May Erode Re-Election Support
Any discussion of energy – fossil fuel or alternate – should be treated with deep suspicion. There is too much money and too much smoke and mirrors involves to know what the truth it. Alternate energy proponents tend to point to Germany as a beacon, however, continental European countries have the advantage of exploiting the grid to use ‘dirty’ power to make up for whatever deficiencies might be associated with a ‘clean’ power strategy. The problem with a massive, long duration infrastructure program is that it can take many years to correct your mistake. Not that government subsidy programs are ever misdirected, of course.
“More than two years later, the chancellor’s wind farms have been slow to appear, stymied by the difficulty of planting towers in deep ocean waters, an outmoded electrical grid and investors who are losing faith in the project. The delays hammered 110-year-old Emden-based Nordseewerke, which filed for bankruptcy before DSD Steel Group GmbH bought it in February, retaining only a third of its 750 employees, Bloomberg Markets will report in its May issue.”