The Geek’s Reading List – Week of September 6th 2013
I am an independent analyst and consultant with 20 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!
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1. Rumor pegs Windows 9 release for next year, Windows 10 as a cloud OS
I can see why Microsoft would want to distance itself from Windows 8 as soon as possible, so a quick rebranding from 8.2 to 9 would make sense from a marketing perspective, even if it is the same unusable steaming pile of crap. I can also see why Microsoft would want to foist a ‘cloud OS’ on an unsuspecting public, however, for the life of me I cannot fathom why anybody would actually use it. Besides the security holes (not counting NSA access) and the Patriot Act (which is different from NSA/PRISM), a cloud OS is useless without low latency broadband. Any business which would actually use such a system would place its existence in the hands of a company with a very modest reputation regarding reliability. Cloud OSs might be fine for videogames but nothing critical.
“A user calling himself WZOR had a few insights to offer about the next versions of Windows. Apparently Microsoft plans to leap straight from Windows 8.1 to Windows 9, with retail availability coming next year. The new OS is said to be “similar” to its predecessor, which stands to reason. Microsoft can’t really afford to shake things up dramatically again — not so soon after releasing Windows 8.”
2. HDMI 2.0 officially announced: 18Gbps bandwidth, 60fps 4K, 32 channel audio HD
HDMI 2 is pretty important to the success of 4K TV (see below), so you really don’t want to go near a 4K TV which doesn’t have it, and none do yet, for obvious reasons. Owning a 4K TV without HDMI 2 will be like owning an HDTV without HDMI – it’ll still work, it just won’t work properly.
“Only just after it leaked out, the folks at HDMI Licensing are announcing HDMI 2.0 officially. Arriving just in time for the wide rollout of a new generation of Ultra HDTVs, it adds a few key capabilities to the connection standard. With a bandwidth capacity of up to 18Gbps, it has enough room to carry 3,840 x 2,160 resolution video at up to 60fps.”
3. Reversing Sinclair’s amazing 1974 calculator hack F- half the ROM of the HP-35
This is a great read if you are an old geek, like me, or if you have some interest in math. These antique calculators didn’t have much in the way of computational resources so they have to figure out how to deliver results with what they had. In contrast, even a cheap ARM processor has full floating hardware point capability.
“In a hotel room in Texas, Clive Sinclair had a big problem. He wanted to sell a cheap scientific calculator that would grab the market from expensive calculators such as the popular HP-35. Hewlett-Packard had taken two years, 20 engineers, and a million dollars to design the HP-35, which used 5 complex chips and sold for $395. Sinclair’s partnership with calculator manufacturer Bowmar had gone nowhere. Now Texas Instruments offered him an inexpensive calculator chip that could barely do four-function math. Could he use this chip to build a $100 scientific calculator? Texas Instruments’ engineers said this was impossible – their chip only had 3 storage registers, no subroutine calls, and no storage for constants such as π. The ROM storage in the calculator held only 320 instructions, just enough for basic arithmetic. How could they possibly squeeze any scientific functions into this chip?”
4. The Internet’s next victim: Advertising
More on ad blocking – I had trouble reading the article because of ad-blocking and other safeguards I have in place! Personally, I don’t give a damn as to the travails of any web service: if they go broke, I’ll go to something else. I do care about my privacy and my staggeringly expensive bandwidth costs. If Adblock were to go broke, somebody will just put out an open source browser with blocking built in.
““Everyone agrees that advertising on the Internet is broken,” says Till Faida, CEO of Adblock Plus, creator of by far the most popular ad-blocking software on the Web. The soft-spoken German, visiting the San Francisco Bay Area to network and drum up support for his company’s “Acceptable Ads” initiative, sketches out a distressing scenario: Ads aren’t generating enough revenue, so websites are forced to run ever more “aggressive” ads — a maddening deluge of pop-ups, blinking banners, and autoplaying video and audio commercials. But as ads steadily become even more annoying, users click even less, forcing revenues down even further.”
5. Oyster: A Gorgeous New App Offering Unlimited Books for $9.95 a Month
I can’t imagine reading a book on a smartphone, but a 7” tablet (or a phone with a similar size display) is about the same as a Kindle. This is an interesting application if you are a ‘volume reader’ – at 3 or more ‘books’ a month – depending, of course, on what sort of books they carry. Mind you, many public libraries ‘lend’ ebooks for free.
“By now, we’ve all gotten pretty used to not owning stuff—at least in the traditional, hold-it-in-your-hands sense. If you’re anything like me, your DVD collection stopped growing a few years back once Netflix and Hulu bolstered their offerings. And that CD storage stand (hell, even your iTunes account) has probably gathered dust thanks to Spotify and Rdio. But books? Turns out, we’re still content to pay $10 for a paperless novel that we’re not even certain we’ll like or finish. The publishing industry is among the last holdouts in the ongoing transition from owning media to accessing it through a monthly service, but that’s about to change with the launch of Oyster, an app released today for the iPhone that’s looking to transform the way you read and pay for books.”
6. Germany’s Energy Poverty: How Electricity Became a Luxury Good
Spiegel is one of the few European publications to look beyond the veneer of politically inspired alternative energy schemes. There are serious, unmet challenges associated with an intermittent energy source and those problems because larger the more significant solar and wind become as part of the mix. At the end of the day you have to ask yourself: at the limit, can a modern industrial economy system function with electricity rates of $0.50 per kilowatt hour, which would be the case if a significant component of power generation was ‘green’.
“On the other hand, when the wind suddenly stops blowing, and in particular during the cold season, supply becomes scarce. That’s when heavy oil and coal power plants have to be fired up to close the gap, which is why Germany’s energy producers in 2012 actually released more climate-damaging carbon dioxide into the atmosphere than in 2011.”
7. Lasering in on tumors
Some impressive science here: the brain is pretty much fatty goo and any surgeon trying to remove a tumor has to device whether he wants to be conservative and risk rapid return of the tumor, or be aggressive and risk seriously harming (or killing) the patient. I can’t help but wonder if the next step isn’t coupling the imaging system to a laser cauterizer, perfecting the ‘clean up’ of the margin.
“In the battle against brain cancer, doctors now have a new weapon: an imaging technology that will make brain surgery dramatically more accurate by allowing surgeons to distinguish between brain tissue and tumors at a microscopic level.”
8. Honda Demonstrates Advanced Vehicle-to-Pedestrian and Vehicle-to-Motorcycle Safety Technologies
Probably the start of a good idea, however, it is a little hard to believe I’m going to carry around a device with an application designed to fend off Hondas. That being said, an active system which could alert drivers to pedestrians or cyclists could save lives, unless, of course, the net effect is to encourage reckless drivers who could then mow down people without said system.
“Honda today demonstrated two experimental safety technologies aimed at reducing the potential for collisions between automobiles and pedestrians and between automobiles and motorcycles. These advanced Vehicle-to-Pedestrian (V2P) and Vehicle-to-Motorcycle (V2M) technologies, while still in the research and testing phase, demonstrate Honda’s vision to advance safety for all road users, including pedestrians and motorcycle riders, as well as automobile occupants. These new technologies are part of a comprehensive effort being undertaken by Honda to develop leading-edge safety and driver assistive systems that can help predict and avoid traffic accidents through advanced sensing and communications technologies.”
9. Researchers discover breakthrough technique that could make electronics smaller and better
It took me a while to figure out what was going on here: basically the problem appears to be how to you remove excess metallization. The solution is ingenious, however, tapes generate enormous voltages which might cause other problems. It is probably not coincidence that the solution involves Scotch Tape and was discovered at the University of Minnesota, home of 3M.
“An international group of researchers from the University of Minnesota, Argonne National Laboratory and Seoul National University have discovered a groundbreaking technique in manufacturing nanostructures that has the potential to make electrical and optical devices smaller and better than ever before. A surprising low-tech tool of Scotch Magic tape ended up being one of the keys to the discovery.”
10. Samsung’s Galaxy Gear is a smartwatch like no other
I don’t get the point of these ‘smartwatch’ gizmos – so now I have to carry around another device in order to help me use my smartphone/tablet? Plus, maybe, a Bluetooth headset? And I’ve gotta charge it every day, along with the phone? The watch I have right now never needs to be charged and adjusts itself to the atomic clock reference every night. True – it doesn’t alert me to ‘tweets’, but I figure that is a good thing.
“The Galaxy Gear, Samsung’s latest foray into the smartwatch category, is now official and it’s quite unlike anything you’ve seen before. Yes, it’s a smartphone accessory that can pick up notifications, control music playback, and keep time with a rich variety of watch faces, but Samsung takes it a few steps further by integrating a 1.9-megapixel camera, a speaker, and two microphones — allowing you to shoot short 720p movies and even conduct phone calls with the Galaxy Gear.”
11. R.I.P. Windows
This article is mostly drivel, but it may reflect how a significant portion of the world looks at the Microsoft/Nokia acquisition. The idea that you make more money selling hardware and software implies you can sell your hardware above cost, and how much above cost depends on a number of factors ranging from marketing (Apple’s forte) to the value an utility of the software. Software, being intangible has no variable cost, but it costs money (or at least sweat equity) to develop. There is no reason whatsoever to assume Microsoft will be more successful selling both that it was (or wasn’t) selling just the software.
“Finally, vertical integration helps Microsoft’s bottom line. Today, for every Windows-powered phone that Nokia sells, Microsoft gets less than $10 in software licensing fees. When it owns Nokia, Microsoft will be able to book profits on hardware, too. Rather than make less than $10 per phone, it will make more than $40.”
12. N.S.A. Foils Much Internet Encryption
There is some question as to whether the story is correct in its details, but this is probably more accurate than inaccurate. Frankly, I’m surprised the NY Times published it – perhaps they still have flashes of journalistic integrity. In any event, none of this is surprizing, but it does provide a segue to a discussion regarding how secure any system is (after all, if the ‘good’ spooks can do it, so can any other variety, and so can crooks, though it’s getting hard to tell the difference). If nothing else, this should drive the adoption of fully open standards and software so at least these hack can be exposed in due course. Needless to say, the businesses compromised by the NSA sell closed equipment, which is now shown to be insecure.
“The National Security Agency is winning its long-running secret war on encryption, using supercomputers, technical trickery, court orders and behind-the-scenes persuasion to undermine the major tools protecting the privacy of everyday communications in the Internet age, according to newly disclosed documents.”
13. Good news: Boom times for Carrier Wi-Fi hotspots and Wi-Fi networks
One simple solution to wireless spectrum congestion is to simply offload things onto the wired Internet as quickly as possible. This is a pretty brief article, but it shows there is a growing market in ‘carrier class’ WiFi solutions.
“Carriers — a euphemism for phone and cable companies — are known to hate any new technology that threatens their existing business models. For phone companies, it is always about getting back to billable minutes. For cable companies, it is all about charging more for the bundle and channels no one really watches. This group of reluctant technology adopters also hated Wi-Fi and fought it tooth-and-nail using all sorts of nasty tricks.”
14. Why Apple’s iPhone 5C pricing is fraught with peril
Another unfortunately brief article which just touches on the challenges of pricing when you have a premium brand. There is no reason to suspect Apple has a cost advantage since they use more or less off the shelf components produced by others, and I firmly believe smartphone pricing is due for significant downward pressure. Gross Margin percentages might be maintained by deft advertising, but Gross Margin dollars are bound to drop.
“If you enjoy watching high-wire acts, then you should be closely fixated on how Apple will price its budget iPhone 5C that will launch next week. Enders Analysis strategy consultant Benedict Evans runs down all the pros and cons of possible prices for the iPhone 5C and concludes that there’s no easy way for Apple to strike a happy balance between sales volume and high margins.”
15. Intel’s Laser Chips Could Make Data Centers Run Better
Because optical interconnect has been around for some time, I suspect the major breakthrough here is the cost of the system or at least price/performance. Optical has numerous benefits over copper besides speed, and the only drawback, besides cost, is that the cables require special termination. Most copper cables are too fine to be terminated by a human nowadays, so perhaps this issue is becoming less and less significant. All in, optical interconnect is the way to go.
“The initial version of what Intel calls its silicon photonics technology can transmit data at speeds of 100 gigabits per second along a cable approximately five millimeters in diameter. Intel will offer it for use connecting servers inside data centers, where it can take the place of PCI-E data cables that carry data at up to eight gigabits per second and networking cables that reach 40 gigabits per second at best. The latest version of the USB standard common in consumer gadgets can move data at only five gigabits per second.”
16. Pirates Plan to Beat Up Amazon & Disrupt the Ebook Market
The publishing industry is certainly due for further disruption and even the publishers are probably not keen on Amazon’s dominance of the business. The German situation is not unique – there are plenty of places where book prices are controlled by government fiat (most recently this has been discussed for Quebec). Mind you, when dealing with bits and bytes, a deft buyer can circumvent any such restrictions.
“Last week we reported on Torboox, an unauthorized download site causing waves in the German eBook market. Speaking with TorrentFreak the site’s operator has revealed a plan to disrupt the status quo and bring book publishers to the negotiating table. Working with Toorbox will not only be in the publisher’s best interests, the admin explains, but will also help them to bring down a shared rival – distribution giant Amazon.”
17. Sony’s New 4K Film Service Will Obliterate Your Bandwidth Cap
This goes without saying, however, the problem is probably that Sony thinks Japanese (and Korean) access speeds are the norm. They aren’t, especially in North America. So, setting aside the questionable benefit of 4K TV, online distribution is going to be a challenge in most markets. Incidentally, 4K TVs pricing is falling rapidly and I suspect they will sell at a modest premium to mainstream HDTVs within a year or two so you might as well wait.
“Sony today held a press conference to unveil a number of new 4K TVs and cameras, though most interesting perhaps to our readers being their new 4K Film download service. The new “Video Unlimited 4K” service will launch this fall and requires Sony’s new 4K Ultra HD Media Player (FMP-X1), though Sony has stated previously they’ll offer 4K downloads via the Playstation 4.”
18. The average global smartphone user has downloaded 26 apps
An ecosystem is important for a successful smartphone platform (as Blackberry and Microsoft/Nokia has discovered) but that doesn’t mean there is a lot of money in selling apps. Indeed, I suspect that the ‘spread’ of paid apps is very wide – besides the odd one, few sell in any volume and they simply aren’t worth developing to sell.
“According to Google’s Our Mobile Planet data, the average global smartphone user downloads just 26 apps, a bit over 20 free apps, and a bit over 5 paid apps each. Of course, depending on where you live, your region will likely have different numbers. South Korea, unsurprisingly, comes in number one on the list with the average smartphone user there downloading about 40 app, although South Korea is also the least likely of the top countries to go for paid apps as 37 of the average 40 downloads are free apps.”
19. The patent troll crisis is really a software patent crisis
Well sort of, but not really. The problem lies in the fact the US Patent Office allows you patent anything, more or less, because it has largely adopted the view that the courts should sort things out. Software and business processes should not be patentable to begin with, but there are still a lot of garbage patents issued which are neither software nor business processes. Because it is unlikely the USPTO will change (it would require a lot of money and introduce long delays) I humbly offer a solution which would be completely effective starting almost immediately: introduce “loser pays” into patent litigation rules. This means the overwhelming majority of real ‘patent trolls’ would be forced to pay all legal expenses in the event they lose so only bona fide cases would proceed to trial. Problem solved.
“That’s because trolls are filing an unprecedented number of expensive lawsuits. Over 5,000 firms were named as defendants in patent troll lawsuits in 2011, costing them over $29 billion out-of-pocket. Today’s patent trolls are wreaking damage on a scale not seen in the past. And there’s a specific reason for this: The last two decades saw a dramatic increase in the number of patents on software, and these patents are particularly prone to abuse, both by trolls and by other types of patent holders.”
20. Survey: Almost 90 percent of Internet users have taken steps to avoid surveillance
This is a funny article because it shows the limited value and utility of surveys: 90% of people answering a survey about something they don’t understand and going back to their Facebook account or using any service offered by Google or practically any other provider. Even if the NSA weren’t on the prowl you are pretty much an open book unless you take extreme action, and nobody is going to bother, not even me.
“A majority of U.S. Internet users polled in a recent survey report taking steps to remove or mask their digital footprints online, according to a report from the Pew Research Center’s Internet Project and Carnegie Mellon University. While 86 percent of the Internet users polled said they made some attempt hide what they do online, more than half of the Web users also said they have taken steps to avoid observation by organizations, specific people or the government, according to the survey.”