The Geek’s Reading List – Week of December 6th 2013
I have been part of the technology industry for a third of a century now. For 13 years I was an electronics designer and software developer: I designed early generation PCs, mobile phones (including cell phones) and a number of embedded systems which are still in use today. I then became a sell-side research analyst for the next 20 years, where I was ranked the #1 tech analyst in Canada for six consecutive years, named one of the best in the world, and won a number of awards for stock-picking and estimating.
I started writing the Geek’s Reading List about 10 years ago. In addition to the company specific research notes I was publishing almost every day, it was a weekly list of articles I found interesting – usually provocative, new, and counter-consensus. The sorts of things I wasn’t seeing being written anywhere else
They were not intended, at the time, to be taken as investment advice, nor should they today. That being said, investors need to understand crucial trends and developments in the industries in which they invest. Therefore, I believe these comments may actually help investors with a longer time horizon. Not to mention they might come in handy for consumers, CEOs, IT managers … or just about anybody, come to think of it. Technology isn’t just a niche area of interest to geeks these days: it impacts almost every part of our economy. I guess, in a way, we are all geeks now. Or at least need to act like it some of the time!
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. Or feel free to email me to discuss any of these topics in more depth: the sentence or two I write before each topic is usually only a fraction of my highly opinionated views on the subject!
This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
Please note that I will be hunting in rural Michigan for the next week. Although wireless Internet access is much cheaper and more available in the US than in Canada (even when it is a 1 hour drive to the nearest store), I don’t know if I will be able to produce a Geek’s List next week until I actually connect.
ps: Google has been sporadically flagging The Geek’s Reading List as spam/phishing. Until I resolve the problem, if you have a Gmail account and you don’t get the Geeks List when expected, please check your Spam folder and mark the list as ‘Not Spam’.
1. Self-driving planes, trains, trucks will lead supply chain redesign
While I feel comfortable laughing off Amazon’s “delivery drones” (see below) I strong believe robotic vehicles, in particular cars and trucks, will transform society within about 20 years. The greatest impact will be in logistics – why pay somebody to drive a tractor trailer loaded with lettuce from California when the truck will be able to drive itself?
“Are robo-trucks already taking drivers off the road? It’s a possibility, though an indirect one, suggests Fred Andersky, director of government and industry affairs for Bendix Commercial Vehicle Systems. And truck-driving jobs won’t be the only ones impacted by technological changes coming to the supply chain.”
2. Sheep Marketplace Scam Revealed, $40 Million Stolen
Given the dynamics of the Bitcoin “marketplace” I am utterly convinced it is a fraud – most likely a “pump and dump”. After all, what commodity skyrockets in price when sources of liquidity are eliminated? One spin on this fraud is the setting up “Bitcoin Marketplaces”, which are essentially unregulated, anonymous, banks. Once enough sham currency has been accumulated the “bank” is “robbed” and the “money” disappears – no doubt to be laundered in useful hard currency.
“Bitcoin and online drug markets seem to fit together perfectly and unfortunately, sometimes they are “too good” to be true. While there are handful of these sites which still appear to be legitimate and not based around a scam, a growing number of illegal drug marketplaces are randomly shutting down and taking millions in Bitcoins with them.”
3. Delivery drones are coming: Jeff Bezos promises half-hour shipping with Amazon Prime Air
I am a big believer in robotic logistics however this is nothing but a publicity stunt. Yes, it is possible to move a small amount of mass a short distance with a small, electrically powered drone. However, the have an array of rotating blades in the general vicinity of people is not wise. Nor is it practical to deliver to most addresses (apartments, offices, etc.) with such a system. Between HyperLoop and this announcement it seems that all you have to do to do to ‘invent’ is to be famous nowadays – actually making something work isn’t needed.
“Jeff Bezos is nothing if not a showman. Amazon’s CEO loves a good reveal, and took the opportunity afforded by a 60 Minutes segment to show off his company’s latest creation: drones that can deliver packages up to 5 pounds to your house in less than half an hour. They’re technically octocopters, as part of a program called “Amazon Prime Air.””
4. Bittorrent Sync
Torrents are not just for piracy, despite what most people think. Bittorrent recently introduced Sync, which I have been using for about a week now. Bittorrent Sync uses torrent technology to synchronize selected files across multiple PCs, sort of like Drop Box. The thing is, you can get a home or office NAS (ALWAYS get a RAID NAS – mine is by QNAP) and install Sync in the NAS. This allows you to have your own synced storage system (which you control) and you can access or update your files from anywhere. It is awesome.
5. Kantar Worldpanel: WP breaks 10% market share mark in Europe
I don’t find industry research to be of much value, but for what it is worth, this company recons demand for Windows Phones is skyrocketing. Of course, the methodology is opaque, and the conclusion is bizarre – how can it been that WP, which is supported by, more or less a single vendor (Microsoft Nokia) has a 10% share when you never see the devices?
“Market analyst company Kantar Worldpanel has released its report for the 3-month period ending in October 2013. The study saw Windows Phone climb past the 10% market share mark in Europe. This is double what the OS had for the same period of 2012. Back then Microsoft’s mobile operating system was at a 4.7% market share. According to Kantar, most of the phones running WP were from the low-end spectrum, but that’s hardly a surprise considering that Lumia 520 alone accounts for about a quarter of all WP devices.”
6. Flash Shortages Drive SSD Shifts
This is not so much a story about Solid State Drives but how tech CEOs tend to blow their shareholders’ money on dumb acquisitions. Seriously an SSD is a controller plus Flash memory, so who in their right mind would think there would be a future for independent SSD makers? What possible competitive advantage would an independent bring to the market a Flash manufacturer could not?
“The dynamics of the solid-state state drive market are shifting, and for Abhi Talwalkar it’s been a disappointing shift in 2013. The chief executive of LSI hoped the market for SSD controllers from Sandforce, a startup he purchased in 2011 for $370 million, would grow as much as 35% this year. Instead it grew just 10%.”
7. Canadian broadband slow, expensive: Ookla
In other news, water is wet and fire is hot. This hugely understates the situation: while Canadian broadband is almost, but not quite, as bad and the US, most OECD countries have an actual broadband strategy and their service is getting better, more affordable, and more ubiquitous. Unfortunately, market driven solutions are not working and Canada is slipping further into the back of the pack.
“The folks at Ookla have released their latest Net Index broadband comparisons, so we all know what that means: it’s time for Fun With Charts (patent pending)! It’s also time for bad news for Canada, which is something that anyone who follows this stuff should be used to by now. But first, a note on Ookla’s methodology.”
8. Volvo to put 100 self-driving cars on Swedish roads in pilot project
Having owned three Volvos I’d be far more interested if I heard that the company had figured out how to make their cars run for more than a year without a major repair. Despite a record of unreliability, Volvo has somehow garnered a reputation for innovation, so this project will be closely watched.
“Volvo is about to take its biggest step yet towards bringing a self-driving car to market with a pilot project that’ll put 100 such vehicles onto public roads in the Swedish city of Gothenburg. The project, called ‘Drive Me’, will involve the autonomous cars using around 30 miles (50 km) of selected roads in the city, dealing with everyday driving conditions and situations.”
9. Automation, Not Domination: How Robots Will Take Over Our World
People have a vision of robots as human looking things, but the term really applied to automated machinery. By that definition, the robotic revolution has been underway for a few decades now – after all, ‘word processor’ used to refer to a person. The labor force adapts to technological change. It always has.
“The first question people tend to ask when they find out you are a roboticist is, “When are robots going to take over the world and become our masters?” The answer to this question is a big “Never!””
10. BOOM: A Major Wall Street Bank Just Initiated Coverage On Bitcoin And Identified A Fair Value
Assuming this is not an Onion parody (Wall Street and Bay Street research has become so bad, it is hard to tell), it should serve as a warning regarding how pathetic said research has become. The people orchestrating the Bitcoin fraud must be laughing themselves into seizures as their sucker game has, apparently, been legitimized by Bank of America. This genius has determined a “fair market value” for a speculative intangible asset – a number – with no utility, no oversight, no backing, etc., just the faith that some other idiot will exchange it for real currency. Staggering – why do I think Bank of America figures there are investment banking fees in Bitcoin?
“We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers,” wrote Bank of America currency strategist David Woo in a 14-page note to clients this morning. “As a medium of exchange, Bitcoin has clear potential for growth, in our view.”
11. Silicon Savannah: Africa’s Transformative Digital Revolution
An update on the impact of technology on the lives of Africans, though perhaps an optimistic one. It can take generations for infrastructure to catch up with the needs of an emerging economy, even without intense government corruption and frequent wars.
“In a loft with high windows, wooden floors and long tables, young women with their hair in small braids and men in colorful T-shirts sit bent over their laptops. They are students, bloggers, web designers and programmers. Their office, called iHub, could be somewhere in tech-obsessed California, but is actually located in a place few people associate with cutting-edge tech culture — Nairobi.”
12. NSA spy scandal prompts China push to favor local tech vendors
The article makes it clear that the Chinese government had moved to favor domestic vendors prior to the NSA revelations. Nonetheless, given how Western government had repeatedly accused Chinese vendors of being a security risk, it’s hard to blame them for that stance, especially after Snowden.
“While China’s demand for electronics continues to soar, the tech services market may be shrinking for U.S. enterprise vendors. Security concerns over U.S. secret surveillance are giving the Chinese government and local companies more reason to trust domestic vendors, according to industry experts. The country has always tried to support its homegrown tech industry, but lately it is increasingly favoring local brands over foreign competition.”
13. The Rise and Fall of Australia’s $44 Billion Broadband Project
I don’t know enough about Australian politics to understand why a good idea (near ubiquitous fiber broadband to the home) became a fiasco, but I suspect political had more to do with it than anything else. Fiber is as easy to run as telephone wire and I strongly suspect most homes in Australia have electricity and wired telephone access. The country was probably wired at a time when governments had vision and they told companies what they were going do, rather than the other way around. Regardless, even the present Australian plan shows how pathetic the broadband situation in Canada is.
“In April 2009, Australia’s then prime minister, Kevin Rudd, dropped a bombshell on the press and the global technology community: His social democrat Labor administration was going to deliver broadband Internet to every single resident of Australia. It was an audacious goal, not least of all because Australia is one of the most sparsely populated countries on Earth.”
14. Anti-Vaccination Movement Causes a Deadly Year in the U.S.
I got the flu prior to the vaccine being available and suffered a serious (and potentially fatal) complication. I am a big believer in vaccines and, while it is easy to dismiss the opinions of celebrity halfwits and naturopathic scammers, I remain astonished at the number of educated people who don’t “believe” in the flu vaccine, as though they are any different from the quacks.
“Disease outbreaks have killed millions of people, and scientists have spent generations developing ways to save those in jeopardy. Still, many people don’t think it’s a good idea to protect themselves or their children from preventable diseases, and choose to forego vaccinations. Even in 2013, the anti-vaccination movement continues to leave the door open to outbreaks of diseases that have been all but eradicated by modern medicine. These diseases include measles, polio, whooping cough, and more.”
15. Secure communications service Perzo will be open source
The only way you can ever hope to have secure communications, cloud services, etc., is if they are open source. Such visibility will permit experts to examine the code for flaws, backdoors, etc., and to create corrections and countermeasures.
“INDUSTRY STALWART and Skype co-founder David Gurle has told The INQUIRER that his new venture Perzo will be released as open source software. Gurle explained that is the only way to prove his software product’s secure credentials.”
16. GaN-on-Si LEDs to grow at 69% CAGR from 1% market share in 2013 to 40% in 2020
Gallium Nitride on Silicon could have a significant impact on LED pricing as alternative substrates are extremely expensive and available only on small wafer sizes. The impact on price would be so large that even if the results parts were inferior (not that they will be) they would sweep the market.
“The penetration of gallium nitride-on-silicon (GaN-on-Si) wafers into the light-emitting diode (LED) market is forecast to increase at a compound annual growth rate (CAGR) of 69% from 2013 to 2020, by which time they will account for 40% of all GaN LEDs manufactured, according to a new report from market research firm IHS Inc.”
17. Worldwide semiconductor revenue grew 5.2 percent in 2013
It’s that time of year when we discover how badly the semiconductor industry performed. If we are to believe Gartner’s figures (and there is no reason to do so) the industry grew a whopping 5.2%, which would have been a debacle 10 or 15 years ago. Looking into the future it is worth reiterating that there are no large, fast growing end markets for semiconductors (smartphone and tablet growth is surely slowing), so the future looks even worse.
“Worldwide semiconductor revenue totaled $315.4 billion in 2013, a 5.2 percent increase from 2012 revenue of $299.9 billion, according to preliminary results by Gartner, Inc. The top 25 semiconductor vendors’ combined revenue increased 6.2 percent, a significantly better performance than the rest of the market, whose revenue growth was 2.9 percent. This was, in part, due to the concentration of memory vendors, which saw significant growth in the top ranking.”
18. Microsoft moves to assure international business customers on spying
The Orwellian-named (and Orwellian themed) “Patriot Act” requires that US companies are required to turn over customer data to security agencies, regardless of where that data is located, so Microsoft can say whatever it wants. It would be foolhardy for any domestic or foreign company to rely on the assurances of any supplier that they will not be spied on: spies lie and there is little reason to believe Microsoft or any other large tech company gives a damn about your or your data beyond what the law compels. And the very thought customers would be able to inspect code for ‘back doors’ is absurd: ‘back doors’ are not flagged as such in the code and the next ‘security’ update could well include sanctioned malware.
“Microsoft Corp pledged late Wednesday to fight in court against any attempt by U.S. intelligence agencies to seize its foreign customers’ data under American surveillance laws, one of a series of steps aimed at reassuring nervous users abroad. The maker of the world’s most popular computer operating system said it had never turned over any such data under the Foreign Intelligence Surveillance Act and did not believe that authorities are entitled to the information if it is stored abroad.”
19. Israeli Startup Develops Wireless Mobile Chargers Using Infrared Light
This is another article which could easily be a joke as a description of a new technology. Mind you, they went through the effort of making an animation of their magical device, so you know it has to be true! Here’s the thing: a watt is a watt and you need a lot of watts to transfer power to charge a device. Maybe that’s the punch line: Infrared Light is heat, and they refer to a hotspot. At least it’ll keep your lunch warm.
“Every cellphone owner has experienced the depressing moment when their battery dies at the most inconvenient of times. Veteran Israeli entrepreneurs Victor Vaisleib and Ortal Alpert joined together to create a radical solution to charge a phone without a charger – using infrared light.”
20. The Moore’s Law blowout sale is ending, Broadcom’s CTO says
The “end of Moore’s Law” has been forecast many times so it is tempting to laugh this off. That being said, there are physical limits to the size things can be made before quantum effects come to dominate. I believe Moore’s Law will never die, just fade away: increments will become smaller and smaller and further apart. All in, we can look to breakthroughs in nano materials such as graphene to propel technology in the future. This does not necessarily imply faster or smaller transistors, but better batteries (by an order of magnitude) stronger materials, etc..
“At a wine bar in San Francisco on Wednesday, Broadcom Chairman and CTO Henry Samueli delivered some sobering news: Moore’s Law isn’t making chips cheaper anymore. The famed law of microprocessors predicts that packing more transistors onto a silicon wafer will make processors smaller, faster and cheaper with each generation. The ability to get more chips out of each wafer should cut the cost per transistor with each new generation, according to the logic of the law, which was first proposed by Intel co-founder Gordon Moore in the 1960s.”