The Geek’s Reading List – Week of July 11th 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) 3D printing helps surgeons save 5-year-old’s life
This is another interesting application for 3D printing: basically to make a model of a difficult surgical situation and allow the surgeons to plan and practice on it. It makes you wonder if this couldn’t be used more generally: mass produce (for example) hearts with common defects and let surgeon ‘learn’ on models before tackling the surgery on an actual human.
“A practice surgical procedure on a 3D-printed tumor has helped surgeons successfully remove the tricky real one from a 5-year-old boy in Spain. The boy was diagnosed with neuroblastoma, a common form of cancer in children that typically occurs around the stomach. Because of the locations of these types of tumors, surgery to remove them requires copious skill to not slice an artery and put the patient’s life in danger. After two unsuccessful attempts to remove the child’s tumor, it appeared inoperable.”
2) Bitcoin Price Still Looking for New Floor after EBA Report
Bitcoin seems to be mostly past the hype-cycle, however there remain many true believers. Not surprisingly, most governments are less than enthusiastic for the pseudo-Libertarian dreams of an untraceable currency beyond state control. After all, if you don’t control your currency, you can’t really claim sovereignty. Nonetheless, the staggering number of Bitcoin related frauds haven’t dissuaded the true believers so its hard to believe laws will have an immediate impact.
“The European Banking Authority, a financial regulatory institution in the European Union, has released a 46 page paper voicing its opinion on the legal status of Bitcoin and crypto-currency in general. The paper, titled “EBA Opinion on ‘virtual currencies,’” outlines several things that the European Banking Authority believes are risks that individuals face when participating in the Bitcoin network.”
3) Judge denies Silk Road’s demands to dismiss criminal prosecution
I saw a few online comments which suggested that, based on this ruling, Bitcoin had to be money, which is kind of absurd. After all, you can use postage for money laundering but that does not make postage money. Regardless, if I were him, I’d be somewhat more concerned about the murder for hire charges.
“In a scathing opinion and order on Wednesday, the federal judge presiding over the Silk Road case denied the defense’s motion to dismiss all four criminal counts, rejecting every argument made. Absent a plea deal, the case will now go to trial scheduled for November in a New York federal courtroom.”
4) Automotive Grade Linux brings open source to the auto industry
Blackberry fans appear convinced the auto industry will standardize on QNX, the company’s real time operating system. Frankly, I consider that almost improbable: no industry is going to find itself in the position the PC industry found itself relative to Microsoft. More likely, a standardized open source alternative will be adopted and the most likely candidate is a fork of Linux. The customization angle mentioned in the article is, for the most part, silly. The auto industry is not interested if making it easy for you to customize (and screw up) your controls because the suport costs would be astronomical.
“Open source seems to be popping up everywhere. The collaborative nature of the license makes for the perfect foundation for which to develop a system, platform, application, etc. And open source isn’t content with being confined to your PC, laptop, or mobile device. Open source wants to travel… and travel it will. A brand new distribution of Linux, Automotive Grade Linux (AGL), is coming to fruition that targets the automotive industry. I’m not talking about embedded systems running the machines that build the cars you drive, but the cars themselves.”
5) Hints of Life’s Start Found in a Giant Virus
Giant viruses are pretty interesting critters (or however you classify them) and the article goes over some interesting topics. I can sort of understand the concept that life originated as self-replicating RNA, however, I don’t entirely follow the reasoning that that somehow leads to viruses as the first life form.
“In the world of microbes, viruses are small — notoriously small. Pithovirus is not. The largest virus ever discovered, pithovirus is more massive than even some bacteria. Most viruses copy themselves by hijacking their host’s molecular machinery. But pithovirus is much more independent, possessing some replication machinery of its own. Pithovirus’s relatively large number of genes also differentiated it from other viruses, which are often genetically simple — the smallest have a mere four genes. Pithovirus has around 500 genes, and some are used for complex tasks such as making proteins and repairing and replicating DNA. “It was so different from what we were taught about viruses,” Abergel said.”
6) New screen technology paves way for digital contact lenses
Being able to assemble something using an atomic force microscope is a bit far away from mass production as contact lens displays would have to be. Regardless, for the most part, people prefer not to have something sitting on their eyeball unless they have good reason to. I don’t see much future in this type of technology except in very specific applications.
“Imagine having an ultra high-resolution display built directly into a pair of contact lenses. This could be the future of digital displays thanks to scientists at Oxford University, who have adapted a material currently used to store data on DVDs and transformed it into a radical new display technology.”
7) Scholarly journal retracts 60 articles, smashes ‘peer review ring’
“Publish or perish” leads to some pretty strange behavior by scientists, for example, breaking a single, banal paper down in into ‘Least Publishable Units’ or LPUs in order to get 5 publishing credits out of some work rather than a single one. There there are the internecine dynamics of reviewers being easy on papers written by ‘respected’ scientists who could destroy the reviewer’s professional career if they should be too picky about a paper. This one takes the cake and it makes for some amusing reading. Thanks to my friend Humphrey Brown for this article.
“Every now and then a scholarly journal retracts an article because of errors or outright fraud. In academic circles, and sometimes beyond, each retraction is a big deal. Now comes word of a journal retracting 60 articles at once. The reason for the mass retraction is mind-blowing: A “peer review and citation ring” was apparently rigging the review process to get articles published.”
8) Google, Dropbox band together to fight patent trolls
This is how is should be, and has been for many years in certain industries, though in most cases it is an informal arrangement. For example, car companies do not spend their days suing one another because they realize that only the lawyers win in such a scenario. This will not have a measurable impact on patent-trolling however because the trolls don’t really need good patents. Indeed, the world’s largest patent troll is Microsoft and it is not even clear they have a relevant patent portfolio.
“Members of Lotnet retain full ownership and licensing rights of their patents, but they agree to provide each other with a royalty-free license should any of the patents ever be sold. That means if Dropbox, for instance, sells a patent on data storage to a third party, Google and the other members will first receive a license to the technology. That should insulate them from any lawsuits brought by the patent’s new owner.”
9) Foreign airport scrutiny focuses on electronic devices
Security theater at its very best: any self respecting terrorist would be able to provide enough of a battery to endure the “turn on” test. Even I can figure that out. You have to wonder if TSA officials sit around trying to find frivolous rules to harass paying customers. Think about it: tons of drugs and contraband are smuggled through airports every day, mostly by co-opting airport employees so what’s to stop them from using the same channel for moving a ‘special package
“Don’t bring dead phones or laptops to those overseas airports for flights heading to the USA. Department of Homeland Security officials warned last week that security would tighten at airports where flights head directly to the USA but without providing much detail about how the scrutiny would change. But security officials said Sunday that the attention is focused on explosives that could be disguised as electronic devices.”
10) Truck of the future aims to drive itself
This is a pretty timid test of a self-driving truck but it is a sign of the times. I can see an extended period where humans act as co-pilots for the computers, if for no other reason than to have a fail-safe. Mind you, its hard to pay attention to driving if you are a passenger and driver boredom will probably be a major challenge.
“Tractor-trailer drivers, if you text while driving in the middle of the freeway, then the future may belong to you. If you can afford a Mercedes truck, that is. The German vehicle maker sent an 18-wheeler barreling down the Autobahn recently, while the driver surfed the Internet for food recipes on tablet computer — at least that’s how media photos told the story. Its test drive was brief, covering about three miles, German media reported.”
11) Algorithm-Generated Articles Don’t Foretell the End of Journalism
I can’t disagree with the article, but I disagree about the end of journalism. Take business journalism, for example. Time was newspapers had actual business journalists following companies. Over time they increasing relied on wire services for their business coverage and, fairly quickly, the wire services moved all its “business reporting” to boiler rooms, often in India (as did much of Wall Street research). So, what is happening is that the now content-free summary of press releases (I’m referring to the journalism, not the Wall Street research) is being replaced by algorithms. This does not mean the end of journalism. That is coming about because very little of what makes its way into print nowadays is actual journalism. Journalists still exist, they just can’t make a living.
“Earlier today, the Associated Press announced that the bulk of its corporate earnings stories will be, starting in July, written automatically. The new project is powered by a company called Automated Insights, whose algorithms will constantly trawl the servers of Zacks Investment Research for new earnings information and then publish stories about those figures in seconds.”
3) Lettuce See the Future: Japanese Farmer Builds High-Tech Indoor Veggie Factory
I had this idea a number of years ago: since plants only use a narrow part of the spectrum and you can customize the output of LEDs so you could develop energy efficient grow lights which only emit at those wavelengths. Its easy to bash the idea of growing food under artificial lighting but it is actually pretty common. After all, it boils down to the cost of the electricity for growing vs. the costs of transporting the product. Another benefit to ‘grow-LEDs’ is that a major cost of lighted greenhouses is air-conditioning, and that burden can be reduced when less power is wasted.
“Humans have spent the last 10,000 years mastering agriculture. But a freak summer storm or bad drought can still mar many a well-planted harvest. Not anymore, says Japanese plant physiologist Shigeharu Shimamura, who has moved industrial-scale farming under the roof. Working in Miyagi Prefecture in eastern Japan, which was badly hit by powerful earthquake and tsunamis in 2011, Shimamura turned a former Sony Corporation semiconductor factory into the world’s largest indoor farm illuminated by LEDs. The special LED fixtures were developed by GE and emit light at wavelengths optimal for plant growth.”
13) Gartner Raises 2014 Chip Market Growth Forecast
Its funny what a decade can do to an industry. Not long ago, this headline would have read “Gartner slashes 2014 Forecast!!!”. Like the boiling frog experiment, as semiconductor industry growth has dropped to a modest amount over global GDP growth, nobody seems to have noticed. I fully expect mobile and tablet sales, measured in dollars, to drop due to pricing pressure and see no other growth (let alone high growth) market on the horizon. In the future, 6% growth may be looked upon as good times.
“The global chip market will be worth $336 billion in 2014, up 6.7 percent from 2013, according to market analysis company Gartner Inc. This is higher than the forecast of 5.4 percent growth Gartner gave three months before. The sequential growth of the second quarter of 2014 is outpacing previous expectations Gartner said.”
14) 14,000 draft notices sent to men born in 1800s
Cast your mind back to the late 1990s and the looming Y2K crisis. Planes were going to fall from the sky, nuclear reactors were going to melt down and modern society was in peril. Or so we were told by the various consultants, etc., who offered their expensive services to save us from our fate. Billions were spent by governments and corporations, except in Italy, which characteristically never got around to it, and emerged unscathed. The few calamities which did emerge were like this one. I assume the recipients of these draft notices can safely ignore them.
“No, the United States isn’t trying to build a military force of centenarians. It just seems that way after the Selective Service System mistakenly sent notices to more than 14,000 Pennsylvania men born between 1893 and 1897, ordering them to register for the nation’s military draft and warning that failure to do so is ‘‘punishable by a fine and imprisonment.’’”
15) Amazon Goes After Box, Dropbox And Huddle, Launches Zocalo For Secure Enterprise Storage
The Porter business model is a pretty powerful analytical tool and it shows why you have to be very careful when investing in cloud based businesses. These run the gamut from having very high barriers to entry (i.e. hosted proprietary software) to almost no barriers to entry (cloud storage like Dropbox). One item of note is that there is no such thing as “Secure Enterprise Storage” on the cloud. It might make for good marketing but I would be astonished if the EULA carefully avoids responsibility for actual security, let alone reliability.
“E-Commerce giant Amazon has made huge competitive inroads into the cloud services market with Amazon Web Services, and today it’s adding another feature that will put it into direct competition with the likes of Box and Dropbox: It’s launching Zocalo, a secure enterprise storage service. The company is launching Zocalo — Spanish for plaza or town square — in a limited preview from today.”
16) Kickstarter project spent $3.5M to finish a working prototype—and ended in disaster
This is an object lesson in the perils of crowd funding, at least from the perspective of the crowd funders. Ideally, a Kickstarter campaign should be used to gauge demand for a product through pre-sales and then to use the proceeds to pay for the manufacture of the unfortunately, there is very little in the way of quality control (it is pretty easy to mock up a prototype) and the system can easily be gamed for those keen to do so. As the recent “Solar Roadways” showed, crowd funding can devolve into an auction house for dreams.
“Delivery of the final gadget was promised by September 2013. Yet over the next 18 months, Arkami and its product became a case study for mismanagement. Only a small number of myIDkeys have actually shipped, and numerous backers who received one complained about failing buttons and freezing displays. In the end, all $3.5 million was spent without much to show for it.”
17) LG Display unveils flexible TV panel that can be rolled up to 3cm
There is considerable potential to OLED displays, however, pricing has been an issue for larger ones. I rather doubt the ability to roll up a display is significant for consumers but having a truly flexible display would significantly extend their application. For example, a flexible display would be easier to use as advertisements on, say, the sides of buses.
“LG Display has come up with a new flexible TV panel that people can roll up just like a newspaper. The South Korean company on Thursday unveiled two 18-inch OLED panels — one that’s rollable and another that’s transparent. This means televisions using this type of technology can be easily hidden on home and office walls. According to LG, the flexible panel has a high-definition class resolution of 1,200×810 with almost 1 million megapixels. And the panel can be rolled up to a radius of 3 centimeters without affecting the function of the display.”
18) 10 Jobs That Robots Will Dominate Within 20 years
Frankly, this is a silly story and should be read as such. Robotics is not really advanced enough to do more that rote tasks and some of the tasks, such as waiter/waitress are actually selling tasks (i.e. interpersonal roles), not simply shlepping food. Then there are occupations like pharmacists and medical doctors which are highly regulated in order to erect barriers to entry. After all, even today, why do you need anything other than a vending machine to dispense the same pills you’ve been taking for the past five years? One job robots would be very good at is tech support. That is because tech support provides little to no actual service besides to frustrate consumers.
“Oxford University recently released a study concluding that almost half of today’s jobs performed by humans will be taken over by robots and software automation within the next two decades. Bill Gates has warned us that “technology over time will reduce demand for jobs, particularly at the lower end of the skill set … 20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.” It’s hard to imagine a world where half of today’s jobs have been transferred over to robots, but it’s coming. Here are some of the most likely candidates.”
19) SK Hynix Licenses BeSang’s 3D IC
Integrated circuits are more or less two dimensional devices so a number of companies have tried to ‘stack’ ICs in order to increase circuit density. These efforts have been not entirely successful for a variety of reasons. One issue that would be hard to deal with is power dissipation: ICs give off heat, and, for the most part, the more powerful the computer or faster the memory the more heat is given off. Traditional packaging, along with the occasional heat sink, manage to keep temperatures down but ‘stacking’ would increase the amount of heat given off while limiting the paths through which it can be dissipated, so this is not a panacea.
“SK Hynix Inc. in Icheon, South Korea, has licensed the 3D chip technology of BeSang Inc. of Beaverton, Oregon. SK Hynix, which mainly makes DRAM and flash memory chips, will license what BeSang (which in Korean means “flying high”) calls its “True 3D IC” process, which uses a low-temperature process to build multilayer 3D integrated circuits one layer at a time using traditional vias, instead of stacking finished die using through-silicon-vias (TSVs).”
20) Tablet market to lose attention as competition rises in wearable industry
Well that’s a shocker. Actually it isn’t: tablets are nice devices for consuming content but not much else. Once you’ve got a decent tablet (readily available for less than $199) you don’t need to replace it until you drop it so the market saturated pretty quickly and as a result prices are dropping fast. The problem with the article’s thesis is the assumption that ‘wearables’ will be the next big thing. Unfortunately, there has not been a ‘wearable’ product put on the market which had any significant consumer appeal. Nonetheless, the tech media are breathlessly awaiting Apple’s offering based on the assumption it will somehow rock your world. It will not.
“As tablet shipment growth for 2014 is expected to only reach less than 5%, and Apple’s iPad sales also declined 16% sequentially in the first quarter, the IT industry is gradually turning conservative about tablet’s future, according to sources from the upstream supply chain. Several first- and second-tier vendors have significantly reduced the number of new projects and order volumes for tablets, and turned to focus on wearable devices.”