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.
Well, golly, the folks at Google were right: Nest was worth $3.2 billion because utilities will pay $40/customer per year to know how much electricity Nest users are using! Well, sort of. Except the sort of thermostats Nest make are usually for gas or oil heat and not electrical heat. Then there is the fact that lots of utilities have smart meters which pretty much tell them how electricity you are using, and not just for the heating which you are probably doing with gas or oil anyway. Other than that, brilliant!
“Google purchased Nest back in January this year for $3.2B and people everywhere are still wondering why. The Nest is a handsome device to be sure, but at around $250 a pop, it’s not exactly a household name. To recover its purchase price, Google would have to sell a lot of Nests…except they won’t have to.”
2) Spark of life: Metabolism appears in lab without cells
Abiogenesis presents a conundrum for science: evolution is very well and good (and completely proven) but the are orders of magnitude in complexity between non-living matter and the most basic living organism. Not only that, but it is not entirely clear what environment the earliest life forms evolved it. This sounds interesting, but it will be a long time before the question is really answered.
“Metabolic processes that underpin life on Earth have arisen spontaneously outside of cells. The serendipitous finding that metabolism – the cascade of reactions in all cells that provides them with the raw materials they need to survive – can happen in such simple conditions provides fresh insights into how the first life formed. It also suggests that the complex processes needed for life may have surprisingly humble origins.”
3) Forget Your ISP: Mesh Networks Are The Future Of The Internet
Mesh networking has its uses, however, in the current regulatory environment it would necessarily have limited coverage. Something worth pondering, however, is that the abysmal regulation of telecommunications, in particular in North America, has led to massive wealth for the companies who gamed (and influenced) the regulatory environment. That is, after all, the major skill of any telecommunications company. This presents a powerful incentive for complete disintermediation of the telecom service providers which I believe is inevitable over time.
“Gathered on sites such as the subreddit r/darknetplan, entrepreneurs and activists discuss plans to create an alternative to the current Internet by beaming data packets from router to router, circumventing ISPs. This is called mesh networking, where each node on a network is both a recipient and a relay station for data.”
4) Verizon Wireless sells out customers with creepy new tactic
Its one thing to get a ‘free’ service and let people exploit your personal information, and yet another to pay for that very abuse. The problem is that people appear to have become completely comfortable with companies exploiting their data and the regulatory regime, at least in North America, seems fully aligned with it. In the unlikely event my carrier implemented such a program I would immediately discontinue the service. Mind you, the great thing about the telecommunications industry (and finance) is that consumer abuse is widely and concurrently adopted – no doubt due to the “intensely competitive” nature of the market.
“As far as corporate notices go, they don’t get much creepier than this recent alert from Verizon Wireless. The company says it’s “enhancing” its Relevant Mobile Advertising program, which it uses to collect data on customers’ online habits so that marketers can pitch stuff at them with greater precision. “In addition to the customer information that’s currently part of the program, we will soon use an anonymous, unique identifier we create when you register on our websites,” Verizon Wireless is telling customers. “This identifier may allow an advertiser to use information they have about your visits to websites from your desktop computer to deliver marketing messages to mobile devices on our network,” it says.”
5) Early Life in Death Valley
This is not about abiogenesis but the detection of signs of microbial life appearing on land at a time when they are unexpected and the implication complex, macroscopic, life (most likely plants and arthropods, I’m guessing) might have been on land far earlier than expected. This is not as crazy as it sounds: environments tend to get exploited as soon as possible, and ‘barren land’ – or land with only microbial life – would be the ideal environment to exploit as there would be no competition and over the years, dead microbial life would add up to a sizable food resource.
“At last we reached our goal in this forbidding terrain: an approximately 750-million-year-old cave that Knauth, 69, a geochemist and geologist at Arizona State University, and the late Robert Horodyski, a paleontologist, had stumbled across two decades ago. The shape of the cave is stamped into a wall of dolomite; it is big enough to hold a human, but packed solid with a finely powdered quartz. The scientists discovered the cave while searching for microfossils to buttress their then-radical theory that microbial life flourished on land more than a billion years ago.”
6) Touch panel makers face falling revenue thanks to faltering touchscreen PC sales
Rising volumes and declining revenues are a very bad thing for any business as it means margins are about to get crushed, which is going to inflict a world of pain on the industry. Not only that but the display is an important cost item for phones and tables, so this trend supports my hypothesis that smartphone and tablet prices are set to plummet. Thanks to my friend Duncan Stewart for this item.
“Increased competition among the growing number of touch-panel makers is causing overall ASP and revenue declines, even as shipment volumes continue their upward trajectory,” NPD DisplaySearch research director Calvin Hsieh said. The revelation came as part of NPD’s most recent quarterly analysis of the touch panel industry.”
7) Liquid Metal Used to Reconnect Severed Nerves
Its hard to tell how real this advance is, but it sure sounds cool. Nerve repair is another problem which is due to be solved, though I’d put my money on stem cells before something like this.
“Today, Jing Liu at Tsinghua University in Beijing and a few pals say they’ve reconnected severed nerves using liquid metal for the first time. And they say that in conducting electrical signals between the severed ends of a nerve, the metal dramatically outperforms the standard saline electrolyte used to preserve the electrical properties of living tissue.”
8) What Running Out of Power in a Tesla on the Side of a Highway Taught Me About the Road Trip of Tomorrow
I am rather suspicious of the tow truck story: based upon what I have seem tow truck operators are not generally too concerned about damaging vehicles. Nonetheless, a dead battery is a very big deal with an EV, and range drops with every charge. As for ‘Superchargers’ well, yes, they do charge somewhat faster, but rest assured each use takes an even greater toll on battery life.
“Four hours later we’re awake again, on the phone to AAA. They can’t find anyone who’s willing to take on the liability of towing a fancy car. After hours of calls back and forth, they say they’ve finally found a truck willing to jump and tow us. We convince a local cabbie to drop us off on the side of the interstate where we left the car 8 hours earlier, but our hero truck never comes. I call AAA after an hour, and they promptly hang us out to dry, saying, essentially, “Sorry, we aren’t willing to take on the liability of helping you.” We have entered an episode of The Twilight Zone written by Franz Kafka.”
9) Microsoft ‘must release’ data held on Dublin server
This is simply a reminder that under the Orwellian named “Patriot Act” US companies are required to hand data over to law enforcement regardless of the location of the data or the customer. Microsoft surely knows this, which suggests these legal moves are just theatrics.
“A judge in the US has ordered Microsoft to hand over a customer’s emails, even though the data is held in Ireland. The company had attempted to challenge the search warrant on the basis that the information was stored exclusively on computer servers outside the US.”
10) In 9-0 vote, Supreme Court makes it easier to get fees in patent cases
This looks like very bad news for the patent litigation business. The 9-0 decision sends a very strong signal to lower courts to award damages more readily, and that is the last thing a ‘non-practicing entity’ wants. The name of the game for the typical patent troll is to provide its victims with a lose/lose scenario whereby settling might be costly, but less costly than legal expenses even if the alleged infringer prevails. This ruling will balance risks such that, in many cases, the loser will end up paying legal expenses, presenting a clear danger to those with a weak case – as is often the situation with ‘trolls’
“This morning, the US Supreme Court published opinions in two of the five patent cases it will decide this term. Both will make it easier for parties who win patent cases to collect fees when the other side has engaged in outlandish behavior or filed an exceptionally weak case.”
11) Materialise Updates Their ‘Mimics Innovation Suite’, Turns X-Rays Into 3D Models
This is a really interesting piece of software, however, as you can imagine, the article doesn’t get into much in the way of specifics or limitations. For example, it is hard to believe you can derive all the information a CAT or MRI can provide with only two X-Ray images. Nonetheless, there may be many applications where a small number of X-Rays can be synthesized into a ‘good enough’ picture.
“Every year tens of millions of dollars are spent by patients and their insurance companies on expensive magnetic resonance imaging (MRI) scans. The scans can be time consuming, as well as a pain in the neck to sit through. Another medical imaging technology, commonly used, is the computed tomography (CT) scan. These scans are not only expensive, but they also direct a great deal of radiation towards the body.”
12) Toyota Describes Combustion Engine That Generates Electricity Directly
As the article links this is not a new idea and I have my doubts as to whether these will ever hit the market. The interesting thing is that if you decouple the engine from the wheels as in a hybrid vehicle, for example, many limitations in engine design are eliminated, which allows for innovation with respect to the type of engine you can put in a car. For example, perhaps turbines, radial engines, etc., would fit a hybrid application.
“Despite the recent advent of usable, talented electric vehicles, combustion engines are likely to persist for quite some time, often as a component in plug-in hybrid and range-extended electric vehicles. The onus then is on refining combustion power to work harmoniously with increasingly electrified vehicles–and Toyota’s new Free Piston Engine Linear Generator (FPEG) could be one solution.”
13) Stanford bioengineers create circuit board modeled on the human brain
Neural networks are seriously cool, however, they have never lived up to their promise. This does not, of course, imply they never will: one problem has been ‘programming’ and these researchers seem to appreciate that. One word of caution, however: neural networks, like quantum computers, are not general purpose computers but are best applied to certain classes or problems. I suspect that, unlike quantum computers, there are many more ‘real world’ applications for neural networks than for quantum computers.
“Stanford bioengineers have developed a new circuit board modeled on the human brain, possibly opening up new frontiers in robotics and computing. For all their sophistication, computers pale in comparison to the brain. The modest cortex of the mouse, for instance, operates 9,000 times faster than a personal computer simulation of its functions.”
14) A is for algorithm
The teaching of programming, logic, and other computer related skills is, probably as important as reading, writing, and arithmetic, as the article suggests. Nonetheless, I have my doubts as to whether the teachers have the skills necessary to teach the subject. After all, in many developed world countries, even basic education seems to be on a long term decline.
“LET’S do it again,” calls a ten-year-old. Once more, pupils clasping printed numbers follow tangled lines marked with white tape on the floor of their school hall. When two meet, the one holding the higher number follows the line right; the other goes left. Afterwards they line up—and the numbers are in ascending order. “The idea is to show how a computer sorts data,” explains their teacher, Claire Lotriet.”
15) Why Japanese watchmakers have no time for smartwatches
Even though I agree with the conclusion that interest in wearables will fizzle, it is rare that incumbents predict their own demise. In other words, you wouldn’t ask a horse breeder or a railroad engineer to predict the impact of newfangled horseless carriages.
“If the Rufus Cuff smartwatch is anything to go by, some people want a lot of hardware on their wrists. The crowdfunded watch is truly massive: 8 centimeters wide, with a 3-inch touchscreen, Wi-Fi, GPS and other features that make it seem like a smartphone strapped to your arm. The US$279 behemoth might look unwieldy to some, but backers love it. They’ve pledged over $230,000 to Rufus Cuff’s Indiegogo fundraising campaign, more than meeting its goal of $200,000.”
16) Report: Google Glass parts make up 5.3%—roughly $100—of $1,500 price tag
Apparently, this is a rather controversial conclusion, but I don’t really see why: $100 gets you one hell of a lot of electronics nowadays so I’d be surprised if the real figure was that much higher. Even volume pricing wouldn’t matter much: pricing for 25,000 or 1 million would be pretty close, though higher volume would likely reduce assembly costs.
“With the expansion of Google Glass’ Explorer program earlier this month came more digital-eyewear shoppers—and, not long after, more scrutiny. Once Glass’ second purchasing wave got its hands on Google’s wearable tech, a few cost-curious shoppers didn’t wait long to take their new, $1,500 devices apart.”
17) Implant Lets Patients Regrow Lost Leg Muscle
There were a fair number of stem cell announcements over the past week, so there must be a conference going on or something. I knew someone who lost a large chunk of muscle which never grew back, and it was a debilitating injury. This new treatment offers some hope.
“Five people who suffered serious leg injuries have been able to regrow muscle tissue in their legs thanks to a new regenerative medicine treatment. The new treatment requires intensive surgery to remove scar tissue, after which a biological scaffold is sutured in. Within two days, the patients began an intensive physical therapy regimen that helps direct the development of stem cells in the body that are drawn to the implant. Once the stem cells reach the implant, they start making new muscle tissue.”
18) Quantum telescope could make giant mirrors obsolete
As usual with quantum mechanics I only have a vague idea what they are talking about, however, it certainly seems link an interesting approach. It is clear from the article that this is only at the discussion stage today, though nobody seems to be saying it won’t work. Perhaps a lot can be done if the theoreticians focus their efforts.
“Quantum mechanics, rather than a huge telescope, could be the best route to high-resolution space images, according to new research carried out in the UK. If confirmed, a telescope of any size could resolve ever-smaller features of the night sky, allowing astronomers to discover exoplanets and other distant objects much more easily than is currently possible.”
19) Google’s IBM motherboards a dark omen for Intel
Last week we mentioned that IBM was opening its Power architecture. This announcement was, no doubt, in the works for at least a year, if not two. Should Intel be worried? Well, with x86 Windows desktop and laptop sales in secular decline (they will plateau) loss or erosion of your most profitable segment could be problematic.
“The latest blow to Intel’s future arrived on Monday in the form of a red server motherboard touted by Gordon MacKean, the man responsible for building the hundreds of thousands of servers that power Google’s online empire. In a Google+ post, MacKean said he was “excited” to show off the red motherboard, which was built using not an Intel chip, but IBM’s Power8 processor.”
20) It’s no joke – the robots will really take over this time
The new Luddites have stated to array against our future robot overlords. One good thing about these authors is that they are at a business school, and, lets face it, the predictive skill of economists and business professors is about the same as the average chicken. Economies are, by their nature, adaptive, and I am pretty sure few people starved to death when we stopped cutting grain with scythes. Plus, “thinking” robots are far enough into the future and their limitations so unknown, its nothing to worry about. I am hoping the robots remember my position on this.
“Not often do you hear a Newsnight presenter using an arcane mathematical term, but last week was an exception. The culprit was David Grossman, who made an excellent film for Newsnight about the threat to employment from advanced robotics. In the course of this, he made the standard pilgrimage to MIT to interview Erik Brynjolfsson and Andrew McAfee, who have made much of the running in this area with a number of books, of which the most recent is The Second Machine Age. Their argument, said Grossman, was that our society has reached an “inflection point”, a concept beloved of those who studied differential calculus in their youth, but probably unfamiliar to the average viewer.”