The Geek’s Reading List – Week of June 7th 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. Chip sales: WSTS reduces 2013 market growth estimate
WSTS is more of an industry group than industry researcher so their data tends to be more credible (not their forecasts, just their data). Being half way through the year, June is when most researchers adjust their semiconductor growth forecasts downwards. If you want to save yourself some money, just assume that the semiconductor industry is going to grow at around global GDP growth, give or take a few basis points. You’ll be more accurate than the industry analysts and you can buy a new car with the savings.
“As a result of the downgrade WSTS now predicts the global chip market will be worth $297.8 billion in 2013, up 2.1 percent compared with 2012 and worth $312.9 billion in 2014, up 5.1 percent. For 2015 WSTS is predicting another low growth year of 3.8 percent.”
2. Over 1 billion Android-based smart phones to ship in 2017
I have a couple of Canalys articles this week, so, just to be clear, I ascribe no value to the forecasts or analysis provided by industry researchers. In fact, while I agree that it is highly probably Android will be the dominant mobile Operating System in the future, I do not think there is a place for 4 major players (Android, iOS, Blackberry, and Windows). Most likely, the market will be dominated by Android, include some presence from iOS, and that will be it.
“Worldwide, 1.5 billion smart phones will ship in 2017, according to the latest country level forecasts from Canalys, to account for 73% of all mobile phone shipments. In North America and Western Europe, virtually all phones shipped will be smart phones. Even in Greater China, smart phones will represent 95% of all mobile phone shipments in 2017.”
3. Samsung Galaxy S4 sales ‘to disappoint’
If true, this is not entirely surprising. The increase in utility of smartphones plateaued over a year ago, leading to my belief the market was going to plateau – after all people moving to smartphones or upgrading their smartphones is bound to be a more vigorous market than people replacing broken smartphones. Fundamentally I believe the only direction now is lower prices and smaller margins, with a consequential negative impact on vendor financial performance.
“Orders for the S4 smartphone, which went on sale last month, are slowing on weak demand in Europe that may impact profit margins, analysts led by JJ Park said in a report dated yesterday, citing supply chain checks. JPMorgan cut its share- price estimate for Samsung by 9.5 per cent to 1.9 million won and lowered its 2013 earnings estimates by 9 per cent.”
“Despite Samsung’s claims last month that its Galaxy S4 was performing quite well on store shelves, and had reached 10 million units sold in less than a month, analysts are concerned things are changing.”
4. Analyst: Just 25 Developers Grabbed 50% Of App Revenues On U.S. App Store, Google Play Last Month; Earning $60M Between Them
If these data are correct – and one should never believe data from an industry analyst – it shows why you don’t ever want to invest in an app developer. If 50% of the revenue in the US s $60M, then the market is $120M, or about $720M for the year – roughly Microsoft Office’s quarterly revenue.
“Proof, if proof were needed, that the apps gold-rush has resulted in the majority of the riches being concentrated in a few developers’ hands: analyst house Canalys says just 25 developers accounted for half of app revenue on the two dominant U.S. app stores, Apple’s App Store and Google’s Play, over a 20-day period last month.”
5. Any iOS device can be hacked within one minute with modified charger, say researchers
Given the number of discount chargers on the market, I’d be worried if I had an iPhone. One thing worth noting is that the restriction on size due to the use of a BeagleBone as a test platform is nonsense: BeagleBone is the size it is because of the connectors and I/O support. An embedded ‘malicious downloader’ could easily fit inside any existing charger.
“Security researchers have discovered a way to push software onto an iOS device using a modified charger. The team at Georgia Institute of Technology says its charger was able to upload arbitrary software to an iOS device within one minute of it being plugged in. According to the researchers, “all users” are at risk, as the hack doesn’t require any user interaction. Hackers are even capable of hiding the applications, so they don’t show up in the device’s app list. It’s not clear if the charger is able to upload malicious code — Apple’s iOS devices, by default, are “sandboxed” and will only install and run properly signed apps — but this is a worrying development regardless.”
6. A Tiny Cell-Phone Transmitter Takes Root in Rural Africa
A major challenge with deployment of practically anything in Africa and some other developing regions is the lack of a ubiquitous and reliable electrical grid. Low power solutions such as these (LED lighting is another) are very useful because it is much easier to supply a hundred watts than a few thousand, especially with respect to solar power, which is very expensive on a per watt basis. This might also expand the market for liquid fueled fuel cells as fueling could be limited to once or twice a month.
“Worldwide, at least a billion people don’t have access to cellular communications because they lack electricity to run traditional transmitters and receivers. A new low-power cellular base station being rolled out in Zambia could bring connectivity to some of those people.”
7. Prosecutors push for ‘kill switch’ to prevent smartphone thefts
A while back the Toronto Star had an article about a fellow whose stolen iPhone was tracked to an Apple store in Toronto, and the employees there refused to return it to him. The odd thing is, they (and the store) should have been charged with possession of stolen property, but, being an Apple store, they appear to have some form of immunity. Implementing a ‘kill switch’ should be pretty easy with a modern smart phone and there is little reason why it shouldn’t be implemented.
“In a push to curb cellphone thefts, prosecutors for New York State and the city of San Francisco said on Wednesday they plan to meet with industry representatives to urge them to install switches to disable stolen smartphones.”
8. NSA seizes phone records of Verizon customers
The interesting thing about this story is not that the NSA failed to learn the lessons of the Stazi (East German Ministry for State Security) that having too much information can be as useless as not having enough information because you follow so many false leads, you don’t have time to follow the real threats. No, the assumption seems to be that if you are a real, bona fide, terrorist you are not going to walk into Walmart and drop a $10 bill on an untraceable, disposable phone.
“The National Security Agency is collecting the telephone records of millions of U.S. customers of Verizon under a top-secret court order issued in April, according to a report Wednesday evening in the Guardian newspaper.”
9. High-Tech Sensors Help Old Port City Leap Into Smart Future
This is an example of the Internet of Things (IoT) which is a rapidly growing area of technology. IoT is a sort of successor to Machine To Machine (M2M) technology, except the latter is usually associated with mobile networks while IoT tends to use whatever is available, often WiFi. The advantage of a widespread sensor network is that you fix things when they need fixing, not before and not after. This optimizes scarce resources and extends the lifespan of products which are replaced before it is necessary to do so based upon rules of thumb such as age, hours used, etc…
“Aside from the occasional ferry down from England, the old Spanish port city of Santander doesn’t get too many foreign visitors. So imagine the locals’ surprise when delegations from Google, Microsoft and the Japanese government all landed there recently, to literally walk the streets. What they’ve been flocking to see is mostly invisible: 12,000 sensors buried under the asphalt, affixed to street lamps and atop city buses. The sensors measure everything from air pollution to where there are free parking spaces. They can even tell garbage collectors which dumpsters are full, and automatically dim street lights when no one is around.”
10. How Windows Red can fix Windows 8: The right strategy for Microsoft
This makes for an interesting read, more from the perspective that it provides on Microsoft’s oblivious and potentially suicidal Windows 8 strategy. Reviews of Windows 8.1 suggest the company is doubling down on its mistake, and it will keep giving customers what it demands they take, whether they want it or not.
“But that’s not what Microsoft did. In fact, it did the opposite: It created a horribly awkward mashup of two fundamentally incompatible approaches that worked poorly on both PCs and tablets. Microsoft made a peanut butter and pickle sandwich, and the world has recoiled at the thought ever since, with Windows 8 falling behind even Microsoft’s other big failure, Windows Vista, in adoption. As InfoWorld’s Woody Leonhard famously wrote in his review of Windows 8, “Yes, it’s that bad.””
11. Government £6,000 per year per desktop spend a frightening insight into public sector IT
If true, this is a pretty staggering figure. Mind you, it is not entirely incredible: after all, I have noted that IT departments in large corporations tend to take on a life of their own, every growing and ever expanding their influence. Because governments tend to be the largest organizations and they are not known for careful management or oversight this sort of figure become believable.
“The government has always faced criticism that its IT is slow, unwieldy, inflexible, unnecessarily complex and overpriced. It’s one thing when you face this criticism from your rivals, the press or members of the public – but you know you’ve reached a dire point when it’s your own chief operating officer (COO) twisting the knife.”
12. Graphene: the nano-sized material with a massive future
Once they figure out how to make carbon nanomaterials in volume the world will change. However, you have to wonder if anybody who knows anything edits this stuff: silicon is a fantastic insulator, not a conductor, so I have no idea what the journalists mean when they contrast graphene’s conductivity to that of silicon.
“Ever since it was discovered in 2004, graphene has been hailed as a natural wonder of the materials world destined to transform our lives in the 21st century. Graphene’s amazing properties excite and confound in equal measure. How can something one million times thinner than a human hair be 300 times stronger than steel and 1,000 times more conductive than silicon?”
13. Metal-free catalyst outperforms platinum in fuel cell
I haven’t seen a miracle fuel cell breakthrough in a while, so we are due! Actually, this does sound encouraging (though I note they do not seem to mention or address sulfur poisoning). And, parenthetically, while the cost of platinum is an important fact, most of it is recycled at end of life anyway – the real barrier to the ‘Hydrogen Economy’ is not platinum, but hydrogen.
“Researchers from South Korea, Case Western Reserve University and University of North Texas have discovered an inexpensive and easily produced catalyst that performs better than platinum in oxygen-reduction reactions. The finding, detailed in Nature’s Scientific Reports online today, is a step toward eliminating what industry regards as the largest obstacle to large-scale commercialization of fuel cell technology.”
14. New all-solid sulfur-based battery outperforms lithium-ion technology
Most days I come across a world changing advance in battery technology, but these typically involve very expensive materials such as graphene, which means they won’t see the light of day until somebody figures out how to make those materials cheaply. This reported advance uses very inexpensive and abundant materials so it sounds interesting. Of course, you never know the whole story regarding important parameters. Some things to ponder would be operating temperatures, self-discharge, output impedance (being able to deliver a lot of power), actual longevity (300 cycles is good, though), failure mode, etc..
“Scientists at the Department of Energy’s Oak Ridge National Laboratory have designed and tested an all-solid lithium-sulfur battery with approximately four times the energy density of conventional lithium-ion technologies that power today’s electronics.”
15. Boeing using robots to boost 777 output
Robotics and nanomaterials will be the tech story of the 21st century. Of course production robots have been around for some time, and have significantly impacted manufacturing, at least in the developed world. Still, this result is pretty impressive.
“Inside a sealed building in Boeing’s Everett widebody-jet assembly plant, two robotic machines glide along tracks on either side of a 106-foot 777 wing laid flat, their heads reaching out like animatronic dinosaurs nibbling at the giant wing. These new robot-painting machines can wash, apply solvent to remove dirt, rinse and then spray two different paint types. They reach, even into complex spaces inside the open wing root that must be painted for corrosion protection.”
16. 3-D printing goes from sci-fi fantasy to reality
An interesting article, but some credibility is lost in the comment about ‘printing’ ammunition: lots of people, including me, own a simple machine which allows you to reload empty shells a lot faster than you could ever print one, assuming you could print a useful shell. A 3-D printer would not be advantageous, but a drone supply helicopter would be.
“Invisalign, a San Jose company, uses 3-D printing to make each mouthful of customized, transparent braces. Mackenzies Chocolates, a confectioner in Santa Cruz, uses a 3-D printer to pump out chocolate molds. And earlier this year, Cornell University researchers used a 3-D printer, along with injections of a special collagen gel, to create a human-shaped ear.”
17. New vending machine aims to democratize 3D printing
I don’t know if an actual vending machine makes much sense, but a service bureau model does make a lot of sense for 3D printing. Hobby printers are cool but are limited in terms of output size, material selection, and speed. You’d get much better result from a professional machine, but they are much more (10 to 100x) more expensive. It makes better sense to print and pick up, or have the finished item shipped to you.
“There’s a new vending machine on the UC Berkeley campus, but it’ll be of no use to students during a midnight snack attack. The Dreambox is a 3D-printing vending machine, the first of its kind. Conceived and created by three Berkeley graduates, the machine is intended to democratize 3D printing, making it available to the masses.”
18. Obama’s Patent-Troll Fight: Pundits Take Both Sides…
It sounds like a good idea but don’t expect anything to change. The root problem is that patents have been issued for nonsense (software and business process patents being two examples). The prototypical patent troll exploits laws which are in place to protect certain industries, notably pharmaceutical, and are working within the bounds of sound law (look up King Instruments Corp. v. Perego for background). Plus, the largest patent troll in history is Microsoft which is attempting to extract payment for every Android device sold. Be careful what you wish for.
“Obama’s White House is attacking patent trolls. Good news or bad? On the one hand—if it works—this package of measures should close the loopholes that have seen patent-trolling double in size year-on-year. On The Other Hand, it doesn’t address other core problems, some say.”
19. Bionic eye prototype unveiled by Victorian scientists and designers
This device looks straight out of Star Trek (Geordi La forge’s visor) and that fictional device probably served as an inspiration. The sense I get is that the technology behind visual prosthetics is progressing rapidly and the number of ‘totally blind’ people will probably be lower in the future, at least in rich countries.
“A team of Australian industrial designers and scientists have unveiled their prototype for the world’s first bionic eye. It is hoped the device, which involves a microchip implanted in the skull and a digital camera attached to a pair of glasses, will allow recipients to see the outlines of their surroundings.”
20. To improve today’s concrete, do as the Romans did
A bit misleading, however, the Roman’s use of concrete was pretty amazing as you would have seen if you ever visit Pompeii. Basically the Roman Empire was built out of concrete using fairly modern building techniques, in contrast with many other civilizations which were essentially carved out of stone. Nonetheless, as the article points out, the slow curing times of Roman marine concretes meant they are not so useful in the modern era.
“In a quest to make concrete more durable and sustainable, an international team of geologists and engineers has found inspiration in the ancient Romans, whose massive concrete structures have withstood the elements for more than 2,000 years.”