The Geek’s Reading List – Week of May 31st 2013

Hello

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.

 

 

 

Brian Piccioni

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1.        Google to Fund, Develop Wireless Networks in Emerging Markets

Google is experimenting with gigabit Internet in the US, and now wireless Internet in the developing world. I don’t know for sure, but the capital costs associated with either suggest they are trying to stimulate action by other companies as much as deploying the respective networks themselves. More and better Internet means more customers spending more money for Google which is good. I wonder if they’ll ever take on the telecoms morass which is Canada? Nah: sub-Saharan Africa is probably easier.

“Google Inc. is deep into a multipronged effort to build and help run wireless networks in emerging markets as part of a plan to connect a billion or more new people to the Internet. These wireless networks would serve areas such as sub-Saharan Africa and Southeast Asia to dwellers outside of major cities where wired Internet connections aren’t available, said people familiar with the strategy.”

http://online.wsj.com/article/SB10001424127887323975004578503350402434918.html?mod=djemalertNEWS

2.        Broadband cord cutters? If this is a thing, ISPs, regulators and Silicon Valley have utterly failed

Physics likely determines that wireline broadband will always outperform wireless broadband despite whatever misleading nonsense wireless providers offer. However, wireless does offer portability and that can be an extremely important consideration depending on lifestyle. Therefore, wireless does not have to be as good as wireline for substitution to occur it just has to be good enough within the context of need and pricing. I should note that rising bills may reflect different utility (i.e. use of VoIP instead of landline, Netflix instead of cable).

“A story today on wireline broadband cord cutters fails to focus on the real issue — if people really are cutting wireline broadband because it costs too much and offers too little, consumers and industry are in trouble.”

http://gigaom.com/2013/05/30/broadband-cord-cutters-if-this-is-a-thing-isps-regulators-and-silicon-valley-have-utterly-failed/

3.        Light-beam ‘twins’ take data farther

Differential mode signalling (sending a signal and its inverse) is quite commonly used – it is how we send Ethernet over twisted pair wiring – but it is rather surprising that it works with optical cable, and even more surprising nobody thought of it before. The idea is that the same ‘noise’ is collected by both of the pair, so when you subtract the two, it is mathematically removed. Unfortunately, the comparison with ‘four times faster than the best commercially available speeds’ is of no value and the evil oligopolists of Nature want you to pay for the article, so I don’t know what the real situation is.

“An idea similar to that of noise-cancelling headphones has proved useful in increasing the data-carrying properties of light. Researchers reporting in Nature Photonics suggest putting not one beam of light down a fibre, but a pair, each a kind of mirror image of the other. When recombined on the receiving end, the noise that the signals gather in the fibre cancels out.”

http://www.bbc.co.uk/news/science-environment-22656238

4.        Carna Botnet Analysis Renders Scary Numbers on Vulnerable Devices

We had an earlier article on some preliminary results from this exercise, and it is worth revisiting. Long story short, a significant portion of Internet connected devices use default credentials (i.e. user: admin, password: admin) leaving them vulnerable to all kinds of attack. We aren’t just talking about your WiFi router here, but also important and sometimes critical equipment. Companies which leave their systems so readily open to attack potentially face litigation when those attacks occur.

“The Carna botnet, more formally known as the Internet Census 2012, stirred up a hornet’s nest of controversy when it was unveiled in March to a number of popular security mailing lists. An unidentified researcher had found more than 420,000 embedded devices that were accessible online with default credentials, uploaded a small binary to those devices and used them to conduct an Internet scan of the IPv4 address space.”

https://threatpost.com/carna-botnet-analysis-renders-scary-numbers-on-vulnerable-devices/

5.        Windows 8.1 will resurrect the Start button, but not the Start menu

If this is true – and there good reason to suspect it is – Microsoft shareholders should demand blood. Launching a touch-centric operating system into a market where a small minority of systems have touch capability is stupid enough, forcing that paradigm on customers is downright idiotic. Given the pushback by customers, you would think that Microsoft would be keen to at least deal with those concerns, instead they are doubling down. The mind boggles – people are starting to realize they have choices.

“According to the latest leaked build of Windows 8.1 (Blue), the Start button and menu will make their triumphant return — but they won’t look or work like the Windows 7 Start menu. With Windows Blue you’ll get a Start button in the bottom left corner — but when you click it, it’s the Metro screen that’ll jarringly greet you, not a resurrected Windows 7-style Start menu.”

http://www.extremetech.com/computing/156915-windows-8-1-will-resurrect-the-start-button-but-not-the-start-menu

6.        IDC predicts semiconductor market to experience 3-4% revenue growth in 2013

It takes a certain amount of genius to be an industry analyst. After all, you churn out reports and forecasts (which are rarely accurate) and you charge tens of thousands of dollars for the stuff despite its complete lack of utility. I predicted the end of growth in the semiconductor industry 10 years ago, in writing, for free. What is truly remarkable, and a complete mystery, is why semiconductor companies continue to be value as growth companies despite a lack of actual growth in most cases!

“Worldwide semiconductor revenues decreased by 2.2 percent year over year to $295 billion in 2012, according to the latest version of the International Data Corporation (IDC) Semiconductor Application Forecaster (SAF). The industry witnessed a slowdown during the second half of 2012 on weak consumer spending across PCs, mobile phones, and digital televisions (DTV), as well as in the industrial and other market segments. The European economic crises and a slowdown in China also had an impact on global demand while the lackluster launch of Windows 8 failed to stimulate PC sales and turn the tide. Meanwhile, competitive suppliers from China continued to pressure average selling prices, dragging down overall revenue growth. IDC expects the semiconductor market to return to growth in 2013 with revenues forecast to increase by 3.5 percent this year.”

http://www.electroiq.com/articles/sst/2013/05/idc-predicts-semiconductor-market-to-experience-3-4–revenue-gro.html

7.        Intel, ARM on even footing in Net of Things, says IDC

As usual, I express by skepticism regarding forecasts produced by industry researchers (I even don’t believe their historical figures). Nonetheless, this article covers some interesting ground. The Internet of Things (IoT) is what used to be called Machine To Machine (M2M), except there is no assumption cellular networks will be involved, and IoT is real.

“Intel, ARM and others are on a fairly even footing in the still emerging Internet of Things that will surpass 25 billion units and $4 trillion in 2020, a market watcher said. International Data Corp. aims to help form a trade association to provide education on the market it believes could ship 11 billion units using 20  billion processor cores by 2017.”

http://www.eetimes.com/electronics-news/4415408/Intel–ARM-on-even-footing-in-Net-of-Things–says-IDC

8.        BSA Study Demonstrates Open Source’s Economic Advantage

This is actually a full frontal assault on a piece of drivel put out by software propaganda association in the UK. Sorry – I should reword that – it is a piece of drivel, etc., based upon the sort of garbage economists crank out by the ton. (I’ve always though it a pity that the actual skill of economics research and/or modeling has not, in fact, ever been demonstrated.) In any event, a good read and lots of fun.

“Long-suffering readers of this column may recall my previous discussions of these reports and their egregious flaws. For example, back in 2010, I pointed out that the BSA’s claim that reducing PC piracy by 10% would create $142 billion in new economic activity was nonsense – the money saved by piracy does not simply disappear, but is spent elsewhere. In 2011, I noted that the BSA used the misleading phrase “commercial value of software piracy”, something repeated in 2012, when the BSA spoke of the “commercial value of this shadow market of pirated software” as if that had any relevance to what was happening on the ground.”

http://blogs.computerworlduk.com/open-enterprise/2013/05/bsa-study-demonstrates-open-sources-economic-advantage/index.htm

9.        Video Software Compresses Time, Aids Police

This application could have tremendous application across many fields besides law enforcement. In essence, it constructs an index of video information. For example, if you are reviewing a video for information, you want to know when something interesting is going to happen, such as the appearance of a potential miscreant. This zips you to that point and you can then either scan the video or watch it in real time.

“A computer scientist in Israel has developed a clever technique to help law enforcement track down criminals and terrorists. The software compresses hours of video into just minutes, enabling police to quickly review action captured on surveillance cameras.”

http://www.theworld.org/2013/05/video-software-compresses-time-aids-police/

10.   Why almost everyone gets it wrong about BYOD

I used to work for a bank which crippled corporate smartphones in the name of security. Similarly, any filed copied to a USB drive was encrypted, and a sort of virus was installed on said USB drive to ensure proper use. Meanwhile, you could email, unencrypted, any file to anybody from your computer, which was my preferred way of moving data around. In any event, BYOD presents some challenges in this regard: if it is my device, how can you draw the line between corporate security and even scrutiny for compliance purposes?

“The lead on just about every story these days has something to do with BYOD (bring your own device). It’s either a story about how many companies allow you to bring your own device, how CIOs are struggling with BYOD, or the fact that within three years most companies will require you to BYOD. Following that lead, it doesn’t take long for the talks and articles to spring up and mention why BYOD is such an issue or what pitfalls are posed by BYOD.”

http://www.infoworld.com/t/byod/why-almost-everyone-gets-it-wrong-about-byod-219241

11.   German railways to use mini drones to stop graffiti

It’s beginning to look like the skies will soon be thick with drones! Actually, this is a fairly benign application, unless you happen to be a vandal. The real power is probably not in catching people but in signalling that people will be caught, pursued, or even interrupted before completing their masterpieces.

“GERMANY’S railway operator plans to deploy mini drones to catch vandals who deface its trains with graffiti, with the aerial vehicles shooting thermal images of its train depots at night.”

http://www.news.com.au/technology/sci-tech/german-railways-to-use-mini-drones-to-stop-graffiti/story-fn5fsgyc-1226652022894

12.   Solar Industry Anxious Over Defective Panels

Combine an industry which is losing prodigious amounts of money (see next article) with a long term payback period and combine that with dubious business ethics and you are going to get this sort of problem. As a general rule, it is worth noting that suitability of a product has multiple dimensions (i.e. cost, performance, durability, etc.). Wall Street, and, indeed the general public, often fixate on one or two of these parameters (such as ‘price per watt’) which leads us to fiascos like this. I do have to wonder in what other industry can manufacturers of shoddy products hide behind ‘confidentiality agreements’?

“The solar panels covering a vast warehouse roof in the sun-soaked Inland Empire region east of Los Angeles were only two years into their expected 25-year life span when they began to fail. Coatings that protect the panels disintegrated while other defects caused two fires that took the system offline for two years, costing hundreds of thousands of dollars in lost revenues.”

http://www.nytimes.com/2013/05/29/business/energy-environment/solar-powers-dark-side.html?_r=1&pagewanted=all&

13.   Sunny uplands Alternative energy will no longer be alternative

Here is a counterpoint to the skepticism in the prior article, however, I think it is worth noting that Moore’s Law was not an interesting observation, but is based on a sound understanding of the physics behind semiconductors (in other words, there’s a damned good reason it is true). No such relationship holds for solar panels. Besides economies of scale, what has pushed solar prices lower has been the fact that solar manufacturers in China have seen fit to sell panels far below cost, egged on by central planners. Eventually that well will run dry, and then we’ll see what happens to pricing. Indeed, SunPower runs 10% Gross Margin and has chronically lost money, details which appear to have escaped ‘The Economist’. You can sell a lot of stuff if governments are willing to subsidize their purchase, and you pack them in dollar bills for shipment.

“Swanson’s law, named after Richard Swanson, the founder of SunPower, a big American solar-cell manufacturer, suggests that the cost of the photovoltaic cells needed to generate solar power falls by 20% with each doubling of global manufacturing capacity. The upshot (see chart) is that the modules used to make solar-power plants now cost less than a dollar per watt of capacity. Power-station construction costs can add $4 to that, but these, too, are falling as builders work out how to do the job better. And running a solar power station is cheap because the fuel is free.”

http://www.economist.com/news/21566414-alternative-energy-will-no-longer-be-alternative-sunny-uplands

14.   Don’t deflate the party

There has been considerable coverage in certain circles regarding the looming depletion of the US Federal Helium Reserve and the negative consequences associated therewith. Now, it’s good to know that the US has a strategic helium reserve, which was formed to supply military airships (i.e. Zeppelins), but you have to wonder how airships with factor in any future wars. Presumably, the reserve served as a net buyer of helium for the past 90 years or so, which would have distorted pricing and demand. Natural resource ‘shortages’ tend to sort themselves out over time, and I always figured that if there truly was a short I wouldn’t see kids walking around with helium balloons. Mind you, with the looming threat of Zeppelin attack, we may be in trouble.

“To date, extractors have been slow in developing helium supplies. This means the helium supply floats, if you will, at the mercy of the natural gas market. A decrease in natural gas prices has led to lower crude helium production overseas.”

http://www.cnn.com/2013/03/02/opinion/flynn-balloon-helium

15.   The better to see you with: Scientists build record-setting metamaterial flat lens

Metamaterial lenses are a potentially disruptive technology: imagine being able to produce superior lenses using lithography instead of grinding. However, this article is not about cameras because the lens is designed to work in the ultra-violet, rather than visible, spectrum. Nonetheless, the capabilities appear to have significant potential.

“For the first time, scientists working at the National Institute of Standards and Technology have demonstrated a new type of lens that bends and focuses ultraviolet (UV) light in such an unusual way that it can create ghostly, 3D images of objects that float in free space. The easy-to-build lens could lead to improved photolithography, nanoscale manipulation and manufacturing, and even high-resolution three-dimensional imaging, as well as a number of as-yet-unimagined applications in a diverse range of fields.”

http://phys.org/news/2013-05-scientists-record-setting-metamaterial-flat-lens.html

16.   Atom by atom, bond by bond, a chemical reaction caught in the act

Nanomaterials (along with robotics) will probably lead us to the next industrial revolution. The problem is that manufacturing costs remain astronomical excluding the most promising, carbon based materials, from commercial application. Therefore, research into nanomaterial production is extremely important, so this is an interesting article in that regard. Plus, the pictures are amazing! Whoever thought we would have actual micrographs of simple carbon rings?

“When Felix Fischer of the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) set out to develop nanostructures made of graphene using a new, controlled approach to chemical reactions, the first result was a surprise: spectacular images of individual carbon atoms and the bonds between them.”

http://www.nanowerk.com/news2/newsid=30728.php

17.   New wireless electronics could heal wounds and then dissolve

I find the technology interesting, but two things stand out: first, many semiconductor functions do not avail themselves to organic chemistry; second, if heat helps with wound healing, why don’t we have Band-Aids with little heaters built into them?

“Nestled inside a wound, a remote-controlled device perks up and begins releasing bacteria-killing heat, a form of thermal therapy that can fell even the most drug-resistant microbes. After it does its job, the electronic heater dissolves, and its biocompatible ingredients become part of the person it has helped to heal.”

http://www.wired.co.uk/news/archive/2013-05/28/dissolving-electronics

18.   Electric-Battery Startup Better Place to Fold

It is not that complicated to build an electric car, in fact it is easier than building one with an engine. The problem is with the batteries, which are too expensive, have short lives, and take a long time to charge. Better Place’s business model had two major advantages over other firms: the batteries were constantly being replaced, meaning you effectively leased them, and replacement (equivalent to charge time) was very quick.

“Better Place Ltd. Sunday said it has filed for liquidation, citing the lack of commercial success of a novel battery-switching system for electric cars that the Israeli company had developed in a partnership with French automotive group Renault. The financial collapse of Better Place, 28%-held by shipping-to-fertilizer conglomerate Israel Corp. is a blow for Renault and its chief executive Carlos Ghosn, who had championed the technology as one of the pillars of the French auto maker’s ambitious €4 billion ($5.17 billion) electric-vehicle strategy.”

http://online.wsj.com/article/SB10001424127887323855804578507263247107312.html

19.   Bio-Hackers, Get Ready

Bio-Hacking is really scary. Consider the example of a ‘glow in the dark’ tree: fun stuff, until it leaves the lab, as numerous examples of invasive species have shown. People who get hysterical about ‘weapons of mass destruction’ might consider what wold happen if somebody ‘Bio Hacked’ anthrax so it became more easily contagious to humans or even livestock. And there are some fungal strains which … well, I don’t want to give anybody ideas, but let’s just say it is very difficult to treat fungal infections.

“Using Drory’s software, a person can load up existing sequences for different life forms like plants and then manipulate them by inserting or taking out various genes. It corrects the code for basic errors like not having three codes for an amino acid or having a stop and a start code in the wrong place. “Wouldn’t it be nice in the future if someone could just load up a tree’s genetic code, drag another app from a file and make it glow in the dark?”

http://techcrunch.com/2013/05/26/cambrian-genome-compiler/

20.   Bacterium Planococcus halocryophilus Offers Clues about Microbial Life on Enceladus, Mars

The interesting thing about life is that you can find it pretty much anywhere you look on (or in) the planet. This does not imply that life emerged in these extreme environments because many chemical processes require certain conditions to occur, and temperature is not unimportant. Once life emerges, however, evolution results in organisms which are resilient to all kinds of conditions. This seems to imply that ‘Earth-like conditions at some period during the planets history’ may be more a prerequisite to finding life than current conditions.

“A novel aerobic, gram-positive bacterium that is able to thrive at minus 15 degrees Celsius  – the coldest temperature ever reported for bacterial growth – offers clues about microbial life on both Mars and the Saturn moon Enceladus, where similar briny subzero conditions are thought to exist, says a McGill University-led team of researchers.”

http://www.sci-news.com/space/article01105-planococcus-halocryophilus-bacterium.html

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