The Geek’s Reading List – Week of May 23rd 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.
1) Fine Line Seen in U.S. Spying on Companies
The hypocrisy of the US indicting Chinese for hacking computers for commercial gain is particularly stark within the context of the Snowden revelations. Of course the whole thing is just a publicity stunt as the accused will never face a trial unless they are dumb enough to visit the US. Presumably a clever legal mind can differentiate between the NSA spying on Petrobas for commercial gain and the Red Army spying on Alcoa. I can’t.
“The National Security Agency has never said what it was seeking when it invaded the computers of Petrobras, Brazil’s huge national oil company, but angry Brazilians have guesses: the company’s troves of data on Brazil’s offshore oil reserves, or perhaps its plans for allocating licenses for exploration to foreign companies.”
2) Driverless cars could cripple law enforcement budgets
A bit silly, but here you have it: no speeding will mean less income for police departments. Then again, less speeding and fewer collisions also mean you will have less for the police to do so you can get buy with fewer of them. Its a bit like complaining that antibiotics made life difficult for gravediggers.
“Approximately 41 million people receive speeding tickets in the U.S. every year, paying out more than $6.2 billion per year, according to statistics from the U.S. Highway Patrol published at StatisticBrain.com. That translates to an estimate $300,000 in speeding ticket revenue per U.S. police officer every year.”
3) Facebook Reaps Billions from Your Data: It’s Time to Unplug
Some interesting stats and thoughts regarding Facebook. I don’t really see the solutions offered as solutions, however.
“Facebook’s entire business is based upon selling the “largest database of people ever built” to potential advertisers. It’s how the site reaped US$2.27 billion of the total $2.5 billion of its total profit in the first three months of 2014, according to its latest public report. It’s why, according to an analysis by Mashable and Statista, each global average user now has the value of $2 per quarter. A US American or Canadian is worth a bit more, at $5.85 per user. Europeans about $2.44. The individual user is the product.”
4) How to lie, cheat and steal like Snapchat — all the way to the bank
The article provides a summary on how Snapchat abused its costumers only to get tapped on the wrist with a wet noodle. The lesson should be clear: the relationship between corporations and consumers is highly asymmetrical under the law – they can steal from you, but you can’t steal from them.
“Two weeks ago the Federal Trade Commission announced a settlement agreement with Snapchat, formally acknowledging the app lied about user privacy and security, and took user data without consent. The settlement amounts to little more than the “private” photo-sharing app being told to stop lying, and to submit privacy reports to the FTC every six months for 20 years.”
5) Internet ‘Do Not Track’ system is in shatters
Not surprising, actually. Self regulation and voluntary programs are just smokescreens to provide the appearance of action or concern without actually doing anything about it. If you want a small amount of privacy run Firefox (or Iceweasel) with Adblocker and/or Ghostery.
“Chalk up another victory for corporate surveillance: Five years after advocates came up with an easy way to let you browse the Web with just a little privacy, the Do Not Track system is in tatters and that pair of boots you looked at online last month is still stalking you from website to website.”
6) The Real Cost of Transporting Data Wholesale Across the Internet
The paragraph below pretty much summarizes the article, which is pretty incoherent and poorly written (hey – its a slow week). The idea is this: why don’t consumers benefit from the dramatic reductions in cost over the past 15 years? There are many reasons for this: not all the costs of running an ISP are associated with bandwidth. More to the point is that fact than a non-competitive, unregulated market means ISP can gouge and they do.
“Transporting data wholesale across the Internet has come down in cost dramatically since 1998. At one point, Internet transit prices were at $1,200 per Mbps, but in 2013 the prices were at $1.57 per Mbps. Fifteen years is a long time in the technology world, so these numbers may not seem overly unexpected. However, predictions for 2014 place the price at $0.94 per Mbps and at $0.63 Mbps in 2015. At these low prices, you might expect Internet service providers (ISPs) to be struggling to come out ahead, yet they are flourishing and reporting record profits.”
7) Nest founder: No Google ads for you, Nest buyers
Good luck with that. Google didn’t spend money so it could supply overpriced thermostats to consumers. Setting aside for a moment the fact there is no rocket science behind Nest, Google presumably wants your data and, if they can to advertise to you (though the impact of a 2” square display would probably be pretty minimal. Whatever Fadell has to say about it is moot.
“Nest is being run independently from the rest of Google, with a separate management team, brand and culture,” Fadell said. “For example, Nest has a paid-for business model, while Google has generally had an ads-supported business model. We have nothing against ads — after all Nest does lots of advertising. We just don’t think ads are right for the Nest user experience.”
8) Data mining your children
Ah, the private sector and the education of children. What could go wrong? Frankly, this is rather creepy, especially since you can easily ignore the pleas it is being done to further education.
“The NSA has nothing on the ed tech startup known as Knewton. The data analytics firm has peered into the brains of more than 4 million students across the country. By monitoring every mouse click, every keystroke, every split-second hesitation as children work through digital textbooks, Knewton is able to find out not just what individual kids know, but how they think. It can tell who has trouble focusing on science before lunch — and who will struggle with fractions next Thursday.”
9) With Surface Pro, Microsoft Is Trying To Recreate The PC Market
I wonder if Microsoft would come out ahead by simply burning money rather than going through the process of designing an horrendously overpriced tablet with unimpressive specs for a laptop. Why would anybody want to pay top dollar for a Surface Pro when they can get a couple of tablets and a couple of laptops for more or less the same amount of money?
“In professional sports, a “tweener” is a player who’s not quite large, strong or fast enough to be a star. A tweener can be a good player, but his—because the term usually refers to men—in-between stature makes it difficult to find the right position and generally makes for an awkward fit on the team. The Microsoft Surface Pro 3 is a tweener.”
10) Why I’m sending back Google Glass
I figure wearing Google Glass is like carry a sign which says “please punch me in the face because I might be recording you”, but then that is just me. These sorts of display/computer gizmos probably have some utility in particular applications like repair and maintenance but I find it hard to believe they will become mainstream.
“As a longtime user of Google products, I had been awaiting this opportunity ever since I didn’t make it into the ranks of Glass pioneers last year. The ability to integrate a heads-up display with my Google+, Google Play and Google Maps accounts was promising indeed, so I was thrilled to receive my package. After three weeks of usage, I have changed my mind. Please find enclosed a charcoal-gray Glass Explorer Edition package. I anticipate my refund.”
11) Silicon Valley to Get a Cellular Network, Just for Things
I don’t think it is a cellular network, however, the idea of a purpose built network for Internet of Things (IoT) is probably a good one given the costs of using existing wireless technologies which are expensive in terms of the interface and power usage. The problem with SigFox’s system is that it seems to be a proprietary, meaning your products will be wedded to the company. Networking technologies tend to do better when they are open standards based.
“San Francisco is set to get a new cellular network later this year, but it won’t help fix the city’s spotty mobile-phone coverage. This wireless network is exclusively for things. The French company SigFox says it picked the Bay Area to demonstrate a wireless network intended to make it cheap and practical to link anything to the Internet, from smoke detectors to dog collars, bicycle locks, and water pipes.”
12) Secrets, lies and Snowden’s email: why I was forced to shut down Lavabit
The interesting thing about Lavabit is that it was a completely legitimate service which happened to be exploited by Snowden as he reached out to journalists. The owner’s ordeal is rather telling, especially as he related being convicted in a secret trial he was not a party to, then being denied appeal because he didn’t raise certain issues at the secret trial he did not attend because it was secret. Kaftka would have been impressed.
“My company, Lavabit, provided email services to 410,000 people – including Edward Snowden, according to news reports – and thrived by offering features specifically designed to protect the privacy and security of its customers. I had no choice but to consent to the installation of their device, which would hand the US government access to all of the messages – to and from all of my customers – as they travelled between their email accounts other providers on the Internet.”
13) Robots Are Strong: The Sci-Fi Myth of Robotic Competence
Indeed – robots are not as sophisticated as the ones in science fiction, however, neither are they sophisticated enough to decide that a motorcyclist wearing a helmet is more likely to survive a crash than one without, so the question of ‘robot ethics’ is, for the meantime, science fiction.
“Last week, I created a minor disturbance in the Internet, with a not-so-simple question—should a robotic car sacrifice its owner’s life, in order to spare two strangers?”
14) California bill would safeguard consumers’ rights to criticize firms online
“There has been a lot of attention lately on consumers’ legal rights when reviewing products online. In 2013, we followed the saga of a patient trying to sue his dentist after the medical professional tried to censor negative online reviews. And last week, a similar pro-consumer ruling came down against toy-maker KlearGear after it sued a customer for less-than-positive feedback on RipoffReport.com.”
15) In Letter to Obama, Cisco CEO Complains About NSA Allegations
Geez. Talk about crocodile tears. It seems pretty obvious that large US tech companies eagerly cooperated with the NSA – after all, the US government is a large tech customer. The real horror is that the shenanigans were exposed, necessitating damage control. I believe the protests by these companies is nothing more than that and these schemes will continue to be used.
“Failure to restore and repair that trust, Chambers said, could threaten the evolution of the Internet itself and lead to its fragmentation. The letter follows a May 13 blog post by Cisco General Counsel Mark Chandler saying the NSA had “overreached.” Chandler said that Cisco does not cooperate with any government, including the U.S. government, to “weaken our products.””
16) Don’t Diss Cheap Smartphones. They’re About to Change Everything
Smartphone pricing should drop to the $100 level (unlocked), but probably not much lower. There are those who continue to believe this will not impact margins in the business because people will, for example, continue to buy iPhones due to brand loyalty and/or as a fashion statement. That’s as may be, but there comes a time when fashion works against you as well.
“We’re rushing headlong into the era of cheap cell phones. The peace dividends of the smartphone wars mean you can buy a pretty amazing piece of hardware for what many people spend on lattes each month. That Alcatel has 4G, a quadcore processor, a 13-megapixel camera, and it plays 1080P video. It runs Android 4.2, which isn’t completely current but isn’t totally out of date either, and you can grab one for as little as $80 without a contract. That $129 Moto E ($79 if you get a contract, which you shouldn’t) runs Android 4.4.2, sports a Gorilla Glass screen, has an all-day battery and is even water resistant.”
17) Fiat CEO: Please don’t buy our electric car
The electric cars currently on the market only exist because of massive subsidies and California regulations requiring “Zero Emission Vehicles” and/or ZEV “credits” to comprise a certain percentage of each company’s fleet. Tesla’s “success” such as it is, is essentially due to regulation and little else. Large companies like Fiat are forced to put their own uneconomic EV on the road or buy ZEV credits from Tesla. The problem with situations such as these is only works provided a small portion vehicle are EV, otherwise governments have to pull the subsidies. And don’t get me started about the problems with batteries.
“In what must be a first for the head of a multinational car manufacturer, the CEO of Fiat Chrysler Automobiles has requested that potential buyers of the Fiat 500e electric car look elsewhere. Speaking at a conference in Washington yesterday, Sergio Marchionne revealed that Fiat was making a huge loss on each of the electric vehicles sold, and he’s fed up of losing money.”
18) Sentient robots? Not possible if you do the maths
On the one hand (see item 13) we have the idea robots are – or are not – clever enough to kill us in order to save two other people while on the other hand you have articles such as these which claim sentient machines might be impossible. Frankly, the fact we already have examples of sentient animals means you can, indeed, make a sentient machine. Its just a question of time.
“So long, robot pals – and robot overlords. Sentient machines may never exist, according to a variation on a leading mathematical model of how our brains create consciousness. Over the past decade, Giulio Tononi at the University of Wisconsin-Madison and his colleagues have developed a mathematical framework for consciousness that has become one of the most influential theories in the field. According to their model, the ability to integrate information is a key property of consciousness. They argue that in conscious minds, integrated information cannot be reduced into smaller components. “
19) LG Will Take The ‘Smart’ Out Of Your Smart TV If You Don’t Agree To Share Your Viewing And Search Data With Third Parties
Here we have another example of stupid EULA tricks: a software update is rolled out to TVs in the field and you have a choice of either agreeing to an EULA or losing a considerable amount of functionality. I can see why this would convince me to never buy an LG TV, but you have to wonder when this nonsense will end.
20) Google offers best argument for broadband competition
This is a pretty good read which summarizes how the issues associated with Netflix and ISPs are somewhat different than at least I understood. The idea of an “Internet fast lane” or non-net-neutrality is a separate issue. Fundamentally the problem is that there are numerous regulatory barriers to competition in the provision of Internet service, at least in North America. Whether these barriers are natural or due to bad regulation (or corruption) the fact is the large communications companies have simply exploited their dominant position which was established when the market was regulated leaving consumers with the worst of both worlds.
“Net neutrality isn’t the only thing needed to keep the Internet open and free. Competition may in fact be the best way to ensure that consumers get the best quality access to the Internet. Jeffrey Burgan, director of network engineering for Google Fiber, explained in a blog post Wednesday why Google doesn’t charge companies like Netflix or Akamai for connecting directly with its own broadband network to exchange traffic. And in so doing, he laid out the perfect argument for how best to protect the Internet and make sure consumers get a high-quality Internet experience.”