The Geek’s Reading List – Week of February 7th 2014
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.
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1. Apple’s iWatch Will Be A $17.5 Billion Business After 12 Months, Says Morgan Stanley
I should start a regular segment called “Analyst or Jackass” for this sort of garbage. This genius is predicting sales (to three significant figures, no less) of a product which hasn’t been released and has an unknown price based upon assumptions as firmly rooted in reality as astrology. While professionals might laugh off this sort of stupidity, investors who don’t know any better might act upon the “insight”. So Analyst or Jackass? You decide.
“Morgan Stanley analyst Katy Huberty is out with a very bullish forecast for Apple’s iWatch. Huberty is predicting Apple does $17.5 billion in iWatch sales after the first twelve months it’s on the market. That’s 58.5 million units at $299 per iWatch.”
2. US to push for mandatory car-to-car wireless communications
I suspect this technology will be upon us sooner than we expect. There are bound to be bugs, of course, and it is unclear to me how much of the fleet will have to support the technology in order for it to be of value. After all, it’s a bit like a vaccine: herd immunity is an important component of public health but it only works once a significant portion of us have been vaccinated.
“The National Highway Transportation Safety Administration said Monday it’s finalizing a report on the subject based on a 3,000-vehicle study of vehicle-to-vehicle communications that began in Ann Arbor, Mich., in 2012. That report should be released in the coming weeks — and then the Department of Transportation’s push for using V2V technology in cars and light trucks will get serious.”
3. Disruptions: Paying to Travel in the Internet’s Fast Lanes
Net neutrality is an absolutely critical aspect of the web, especially in banana republics like Canada where it is most under threat. Telecommunications companies have managed to craft regulation which benefits them and maintains their oligopoly or duopoly (in the US) and presents an insurmountable obstacle to competition. If they can then selectively destroy content providers (the goal of subverting net neutrality) they will have more or less an OFF switch for the economy. In Canada, where cable and telephone companies control a substantial majority of media as well, the prospects are horrifying.
“The idea behind net neutrality is that the web material we see on our laptops and smartphones, whether from Google or a tiny little blog, should flow freely through the pipes of the Internet, regardless of origin, destination or content. No one gets special treatment.”
4. Kansas teen uses 3-D printer to make hand for boy
The fall of 3D System’s stock price probably means that investors have decided there may be no future for 3D printing. I tend to think it has been overhyped: after all, few people have power drills, let alone a complete workshop so the buy/build decision has already been made for most things. Nonetheless, one thing 3D print allows is for people to put an idea into practice without access to a complete shop. Hat tip to my friend Allan Brown for this story.
“Using a 3-D printer at the Johnson County Library, Wilde made a prosthetic hand that opens and closes and can even hold a pencil.”
5. Bionic hand allows patient to ‘feel’
This and the preceding articles are related: while touch is an important emerging feature for bionic limbs in general, mechanical innovation will be needed to take advantage of these new capabilities so the evolution of bionics should be helped by even amateurs working in the field.
“Scientists have created a bionic hand which allows the amputee to feel lifelike sensations from their fingers. A Danish man received the hand, which was connected to nerves in his upper arm, following surgery in Italy. Dennis Aabo, who lost his left hand in a firework accident nearly a decade ago, said the hand was “amazing”.”
6. Tim Berners-Lee: we need to re-decentralise the web
This is the beginning of an answer to item 3, above, however there are powerful economic and government interests keen on moving in the very direction Berners-Lee is warning against.
“Twenty-five years on from the web’s inception, its creator has urged the public to re-engage with its original design: a decentralised internet that at its very core, remains open to all.”
7. In One Month, Everyone In Iceland Will Own Cryptocurrency
Nothing like free money, or free make pretend money, to get people’s attention. Mind you, at the rate new ‘Bitcoins’ are beng launched, it is simply a matter of time before Oprah has a cryptocurrency.
“The cryptocurrency craze spun into a new realm of ridiculous with Kanyecoin, Dogecoin, Ron Paul Coin and the bounty of other clone-coins that sprung up to ride the Bitcoin wave. But the latest altcoin to enter the market, Auroracoin, wants to take the futurist trend back to its cryptoanarchist roots. The altcoin was designed specifically for Iceland, and the creator plans to give every citizen of the Nordic country a digital handful of Auroracoins to kickstart their use.”
8. Paging Mythbusters Again: Did Microsoft’s Windows Phone Really Grow More in 2012 Than Android or iOS?
This is an interesting and somewhat amusing deconstruction of claims an industry analyst has made regarding purported rapid growth in demand for Windows Phone. Of course, in my experience, industry research reports are scarcely worth the paper they are printed on, let alone the thousands they charge for them. Unfortunately, many investors and managers take them seriously and actually make decisions based on this sort of rubbish.
“Mark Twain quoted Benjamin Disraeli saying that there were three kinds of lies: lies, damned lies, and statistics. This is the mythbusters edition about Canalys the supposedly professional mobile industry analyst house who would like to sell you their expensive reports. its been a while since we’ve had to do some work as the industry’s stats police but unfortunately for the supposedly trustworthy Canalys, this is already the second time they are on our agenda.”
9. Bitcoin Miners Building 10 Megawatt Data Center in Sweden
Golly – 10 million watts of power to make magic numbers fools are willing to pay for. You’d think the normally environmentally sensitive Swedes would object to wasting so much electric power on a frivolous undertaking like this, but, hey, Bitcoin! Thanks to my friend Humphrey Brown for this item.
“Facebook has new neighbors in Sweden, and they’re building Bitcoin’s version of the Death Star – a 10 megawatt data center filled with high-powered computers mining for cryptocurrency.”
10. Evidence Emerges That Google’s Quantum Computer May Not Be Quantum After All
We noted recently that it seemed puzzling the burden of proof would be on D-Wave to show they actually have a quantum computer, but I assume they have some pretty impressive sales brochures.
“Back in 2011, the aerospace giant Lockheed Martin paid a cool $10 million for the world’s first commercial quantum computer from a Canadian start up called D-Wave Systems. In May last year, Google and NASA followed suit, together buying a second generation device for about $15 million with Lockheed upgrading its own machine for a further $10 million.”
11. Improved ultrasound imaging provides alternate way to visualize tumors
Hmmmm. Well, MRIs do not use radiation, just a very powerful magnetic field and a radio signal (the way they work is probably the most awesome thing I’ve ever seen), and contrast agents are invasive and therefor inherently dangerous. Still, this looks interesting.
“While ultrasound provides a less expensive and radiation-free alternative to detecting and monitoring cancer compared to technologies such as X-rays, CT scans, and MRIs, ultrasound has seen limited use in cancer treatment due to clarity and resolution issues. But researchers at the UNC School of Medicine have overcome this limitation by combining ultrasound with a contrast agent composed of tiny bubbles that pair with an antibody that many cancer cells produce at higher levels than do normal cells.”
12. Pet Lovers Beware: When The Drugs Don’t Work
One thing about treating animals is that you rarely get written complaints from patients. It is not surprising many of the treatments don’t work since some treatments and drugs used on people don’t work either. Heck – billions of dollars are spent on SCAM (Supplement, Complimentary, and Alternative Medicine) which are proved not to work and people buy them anyhow.
“At least we did, until an email hit my inbox some weeks back, sent to a discussion list of science writers. It referred to a study indicating that two food supplements—glucosamine and chondroitin—do little to help cats with disintegrating joints. I recognized the names as ingredients in Kaleb’s breakfast: Our dog-feeding ritual involves taking a chew containing these nutrients, then adding a dollop of peanut butter containing a couple of pills of a painkiller called tramadol.”
13. New lawsuit against Bitcoin miner manufacturer alleges fraud, negligence
I had to laugh when I read this article: Bitcoin miners being ripped off by Bitcoin mining appliance makers? Is nothing sacred? Is there no honor amongst thieves?
“One of the world’s most mysterious Bitcoin-related companies is now facing its first civil lawsuit in a United States federal court, with many more likely on the way.”
14. Semiconductor Industry Posts Record Sales in 2013
Solid State Drives (SSDs) are only around 13% of Hard Disk Drive (HDD) sales but growing rapidly while HDD sales are declining rapidly. It may be premature to announce the death of the HDD industry, but that fate clearly looms: HDD vendors’ efforts to enter the SSD market will ultimately prove futile as SSD market share shifts to Flash memory manufacturers.
“The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today announced that worldwide semiconductor sales for 2013 reached $305.6 billion, the industry’s highest-ever annual total and an increase of 4.8 percent from the 2012 total of $291.6 billion. Global sales for the month of December 2013 reached $26.6 billion, marking the strongest December on record, while December sales in the Americas increased 17.3 percent year-over-year. Fourth quarter global sales of $79.9 billion were 7.7 percent higher than the total of $74.2 billion from the fourth quarter of 2012. Total sales for the year narrowly exceeded expectations from the World Semiconductor Trade Statistics (WSTS) organization’s industry forecast. All monthly sales numbers are compiled by WSTS and represent a three-month moving average.”
15. Hunger Games to use CGI technology to replace Philip Seymour Hoffman’s final scenes
I don’t mourn celebrities who overdose, however much I may have enjoyed their work. This article shows how far animation (CGI) has come since the likes of Toy Story and The Mask.
“It had originally been thought that the death of Hoffman on Sunday from an apparent drugs overdose on Sunday had left a week’s worth of shooting unfinished. However, Filmmakers, Lionsgate have said that despite Hoffman’s character, Plutarch Heavensbee holding a major role in the film franchise, his death will have ‘no impact’ on production and the final two movies will be released on time.”
16. Facebook is 10 years old. And half of users are sick of the oversharing.
Facebook and social networking in general is a mystery to me, but, based on what I have seen and read, these are very popular. From an outsider’s perspective it seems that much of the media associated with Facebook is now negative. One issue worth pondering is the apparently aging population of users which seems to be driving kids (the next generation of users) away.
“Facebook is 10 years old today. And nearly everyone and their mom is on it — or to be more exact 57 percent of all U.S. adults and 73 percent of those ages 12-17 according to the Pew Internet & American Life Project. But that doesn’t mean everyone likes it.”
17. UMHS doctors implant first bionic eye
Bionic vision appears to be progressing rapidly and it is easy to imagine current breakthroughs will appear downright primitive within 10 years or so. I hope they can ‘upgrade’ today’s patients when that time comes.
“Ever thought about what it might be like to have a bionic eye? Surgeons at the University of Michigan Health System have. On Jan. 16 and 22, UMHS retina surgeons performed the first-ever surgeries that implanted artificial retinas into the eyes of patients with retinitis pigmentosa, a degenerative eye disease that eventually causes blindness.”
18. Sony Sells Off PC Division To Japan Industrial Partners, Reduces Forecast To $1.1 Billion Loss
It is interesting to watch an iconic technology company implode (yes – Sony once was leading edge). In many ways they modeled their demise on Philips, which went from being technological leader in consumer electronics to a premium brand to an ‘also ran’ with premium pricing. The company is also exiting the e-book business (http://techcrunch.com/2014/02/06/sony-closing-reader-store/).
“In an unexpected turn of events, Sony Corp (NYSE:SNE) sold off its Vaio personal computer business to investment fund Japan Industrial Partners. After slashing its outlook for the year to a loss of $1.1 billion, the company also plans to cut 5,000 jobs by March 2015 — 1,500 in Japan and 3,500 overseas — to fulfill its restructuring plans.
19. Veterans gather for Colossus 70th anniversary
The geniuses working at Bletchley Park cracking the German Enigma code made a huge impact on the course of WWII. Of course, it is simplistic to ascribe victory to a single weapon, let alone country, however, it is helpful to know what the enemy knows. I recently watched a documentary on the Atanasoff Berry Computer which appears to predate even Colossus, though it appears it was never really completed (http://en.wikipedia.org/wiki/Atanasoff%E2%80%93Berry_Computer).
“The 70th anniversary of the pioneering Colossus computer is being celebrated at Bletchley Park. The machine was first used to crack messages sent by Hitler and his generals on 5 February 1944. The celebration will bring together some of the machine’s creators and operators at The National Museum of Computing (TNMOC).”
20. Think wearables are the next tech boom? Cisco’s numbers beg to differ
Actually, I think people are fixated on iWatch because the Jobsian reality distortion is gone but people still assume Apple has a revolutionary product poised for release which will somehow justify their expectations. I haven’t seen a product description for wearable technology which threatens to become mass market: a watch with a 1 day battery life which shows a subset of your smartphone’s display seems more bother than it is worth, and as for Google glasses, well, I figure after you’ve been told to take them off and/or punched in the nose a few times the allure will dissipate.
“Excitement about the potential size of the wearables market is why we read about every rumour of an iWatch release date. It’s also why Samsung felt it had to respond with Galaxy Gear and why every wearable device patent is fallen upon with anticipatory glee.”