The Geek’s Reading List – Week of October 17th 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 has beenanother very slow tech news week. The big news was multiple announcements of “breakthroughs” in fusion research. Unfortunately, the “breakthroughs” which were announced did not include the fusion reactor producing more energy than they consumed, which is actually the only thing which matters. Also of note was the release of some Apple and Google product refreshes, which were greeted with yawns with the exception of their respective fanboy sites.
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1) Lockheed Claims Breakthrough on Fusion Energy
I counted at least three “breakthroughs” in fusion energy over the prior week, but this particular item got, by far, the most coverage. At least 6 people sent stories to me, and I am very appreciative. Unfortunately, none of the purported breakthroughs actually announced true breakeven, or where the reactor produces as much energy as it consumes. There have been prior announcements of breakeven, but these designs were only breakeven if you count the energy impinging on the fuel, not the entire system. I have a lot of respect for Lockheed and, while it is easy to be cynical, I believe fusion will become viable. Just not today.
“Lockheed Martin Corp said on Wednesday it had made a technological breakthrough in developing a power source based on nuclear fusion, and the first reactors, small enough to fit on the back of a truck, could be ready in a decade. Tom McGuire, who heads the project, said he and a small team had been working on fusion energy at Lockheed’s secretive Skunk Works for about four years, but were now going public to find potential partners in industry and government for their work. Initial work demonstrated the feasibility of building a 100-megawatt reactor measuring seven feet by 10 feet, which could fit on the back of a large truck, and is about 10 times smaller than current reactors, McGuire said.”
2) Here’s how Google’s Nexus 9 stacks up against Apple’s iPad Air 2
You might have missed the announcements associated with a few Google and Apple products this week. The Apple hype machine seemed to have sputtered, at least with respect to the latest iPad and Google never gets the same coverage out of product releases in either event. Mind you, the future of tablets ain’t what it used to be, and I consider both products to be significantly overpriced, probably by at least a factor of two (you can get a decent tablet for less than $200 nowadays. As this shootout shows, with the exception of “thinness” there isn’t a lot of differene between the two devices. Save your money and buy a cheaper one.
“In the span of two days, the two hottest tablets of the fall have been announced. On Wednesday, Google took the wraps off the Nexus 9, a spectacular new high-end tablet manufactured by HTC. Thursday, Apple announced the iPad Air 2, a modest upgrade to last year’s stellar iPad Air. Naturally, one runs iOS 8 and its associated apps, and one runs Android Lollipop and its apps. For many users, that’s difference enough to choose one over the other. If you’re not married to either ecosystem, and you want to know where to dive in, consider these points of comparison.”
3) Xiaomi, Not Apple, Is Changing the Smartphone Industry
I have remarked frequently that pricing trends for smartphones (and tablets) is decidedly down, especially for the “new” buyer. You can get a pretty decent, unlocked, name brand, Android smartphone for less than $200 nowadays and, fashion statements to the contrary, it is hard to make a case to spend much more. I’ve never seen a Xiamoi phone so I don’t know what the quality is like, however, I expect this model with dominate in the future, with the expection that vendors will, in fact, cut prices over time. As a result, companies with high margins will see them evaporate.
“To sell high-quality cell phones at so low a price, Xiaomi keeps each model on the market far longer than Apple does. On average, a new version of a phone is launched every 265 days in the industry – down from 345 days in 2009. But Xiaomi doesn’t renew its product for two years. Then, rather than charge high prices to cover the high cost of state-of-the-art components, Xiaomi prices the phone just a little higher than the total cost of all its components. As component costs drop over the two-year period by more than 90%, Xiaomi maintains its original price, and pockets the difference. So essentially its profit formula is the opposite of Apple’s, which collects its highest profits with the introduction of each model and needs to come up with new model after new model to keep those margins up.”
4) Giant Battery Unit Aims at Wind Storage Holy Grail
I find it interesting that most people think battery prices will drop precipitously, with the notable exception of actual battery experts. After all, we are talking about a low tech electrochemical assembly, not a semiconductor device. Nevertheless, the byzantine world of alternate energy pricing, which demands distributors buy power from wind or solar regardless of demand leads to some pretty strange things where the distributors end up paying industrial customers to use power in order to stabilize the grid. If you get paid to take power and can resell at peak rates, maybe short lived, expensive, batteries make sense. Thanks to my friend Luigi di Pede for this item.
“Electric-car battery prices already have fallen by 50 percent since 2010 to about $500 per kilowatt hour, and “by drawing on auto-battery technology, battery makers may also be able to supply storage batteries at a lower price,” Citigroup said in a Sept. 25 report. Tesla Chairman Elon Musk said in July that battery packs for electric cars will drop to $100 in the next 10 years. The Tehachapi batteries are supplied by LG Chem Ltd. and are the same type used in General Motors’ Volt.”
5) Maybe Better If You Don’t Read This Story on Public WiFi
I use public WiFi all the time, without much thought so this article really hit home. You should read it, especially if you are responsible for corporate security.
“Wouter removes his laptop from his backpack, puts the black device on the table, and hides it under a menu. A waitress passes by and we ask for two coffees and the password for the WiFi network. Meanwhile, Wouter switches on his laptop and device, launches some programs, and soon the screen starts to fill with green text lines. It gradually becomes clear that Wouter’s device is connecting to the laptops, smartphones, and tablets of cafe visitors. On his screen, phrases like “iPhone Joris” and “Simone’s MacBook” start to appear. The device’s antenna is intercepting the signals that are being sent from the laptops, smartphones, and tablets around us.”
6) Dark matter may have been detected – streaming from the sun’s core
The odds are pretty high that this finding is in error, however, it is worth noting that some of the greatest scientific discoveries start with an unexplained resulted that somebody notices and bothers to investigate. So, as cool as it would be if this was dark matter, it probably isn’t, and even if it isn’t, it could lead to impressive science. Cosmology is progressing at a remarkable rate: I was listening to a planetarium presentation this summer and they had to pause the playback to update the audience on findings which had been made in the past year.
“An unusual signal picked up by a European space observatory could be the first direct detection of dark matter particles, astronomers say. The findings are tentative and could take several years to check, but if confirmed they would represent a dramatic advance in scientists’ understanding of the universe.”
7) CBS Offers Web Service as TV Unbundles Itself
As I predicted in 1996, substantially all TV will be delivered over the Internet and bandwidth increased. In many countries this will lead to disintermediation, first with respect to “broadcasters” from cable companies (think Netflix) then production companies from “broadcasters”. Of course, this is unlikely to happen in Canada as a result of the disturbing degree of concentration of media and telecommunications, and the fact that our Internet infrastructure is on a par with the third world, and falling. Setting all of that aside, I simply can’t imagine paying CBS, or all networks combined, $5.99 per month for their garbage programming.
“CBS announced a new subscription Internet streaming service on Thursday that allows people to watch its live television programming and thousands of its current and past shows on demand without paying for a traditional TV subscription. The new “CBS All Access” service, costing $5.99 a month, is the first time that a traditional broadcaster will make a near-continuous live feed of its local stations available over the web to non-pay-TV subscribers. At its start, the live stream will be available in 14 markets in the United States.”
8) The Day the Cloud Died: Planning for Cloud Failure
Cloud services are all the rage, however, they also represent a single point of failure. While I doubt Amazon will shut its cloud services any time soon, a business user of cloud services has to wonder what if their provider is hacked, what if the system goes down temporarily for whatever reason, what if the provider sells its operation to an undesirable new supplier, etc., etc.. This article simply looks at a couple basic “what ifs”. It’s not a pretty picture.
“One other thing to think about before even starting down the path of a plan B is what happens to your data if you cannot get it out of a cloud that has gone belly up? Having a detailed understanding of the fine print in the contract might not just be a good idea – it might save your business. Examples could include whether creditors would hold your data hostage. Who own the rights to your data? Who has the decryption keys? Just some food for thought as you start to think about what to do and what not to do.”
9) NTU develops ultra-fast charging batteries that last 20 years
This has been a great week for energy dreamers. Besides numerous “breakthroughs” in fusion (see item 1) we had a major announcement in the battery world. Well, maybe. Almost. Possibly. Suffice it to say that battery technology moves at a glacial pace and that I could probably have done 20 items a week about battery breakthroughs over the past 10 years if I had wanted to. The problem with breakthroughs like these is that they tend to never be heard from again. Besides, it’s often what they don’t tell you (self discharge, internal resistance, etc.), which matters most.
“Scientists at Nanyang Technology University (NTU) have developed ultra-fast charging batteries that can be recharged up to 70 per cent in only two minutes. The new generation batteries also have a long lifespan of over 20 years, more than 10 times compared to existing lithium-ion batteries. This breakthrough has a wide-ranging impact on all industries, especially for electric vehicles, where consumers are put off by the long recharge times and its limited battery life.”
10) Revealed: how Whisper app tracks ‘anonymous’ users
I had never heard of Whisper before, but if I had I would have been deeply suspicious of its claims of anonymity. It turns out that this may be more of a whistle-blower ‘honeypot’ that an an anonymous mechanism for whistle-blowing as the Guardian seems to have discovered. Of course, the service denies everything, as this update http://www.theguardian.com/media/2014/oct/17/-sp-whisper-tracking-location-users-facts-response shows. Thanks to my friend Humphrey Brown for bringing this to my attention.
“The company behind Whisper, the social media app that promises users anonymity and claims to be “the safest place on the internet”, is tracking the location of its users, including some who have specifically asked not to be followed. The practice of monitoring the whereabouts of Whisper users – including those who have expressly opted out of geolocation services – will alarm users, who are encouraged to disclose intimate details about their private and professional lives. Whisper is also sharing information with the US Department of Defense gleaned from smartphones it knows are used from military bases, and developing a version of its app to conform with Chinese censorship laws.”
11) The SIM card is about to die
Steel yourselves – I am about to say something nice about Apple: while I doubt Apple “invented” this technology, the physical SIM card is somewhat of an anachronism. In a connected world, with connected phones, mobile service can easily be enabled or disabled through encrypted tokens. Needless to say, I doubt major carriers would be keen on dispensing with the SIM card, but the smaller carriers and MVNOs probably regard it was a waste of money. The last MVNO package I got included no less than 16 SIM cards to match the phone to the network and the SIM card style to the phone.
“If there’s one thing I’ve learned about Apple’s dealings with SIM cards in the past seven years, it’s that Apple gets what Apple wants. The little gold-plated circuits — which identify you as a subscriber on a particular carrier — plug into phones, tablets, and basically anything else with a cellular radio. Customers of GSM carriers like AT&T and T-Mobile have been using them since time immemorial; CDMA carriers like Sprint and Verizon have started using them since switching to LTE. Apple hates SIMs, and has hated them for as long as the iPhone has existed: it is known to have explored the use of embedded, non-removable SIMs in the past.”
12) This tiny device turns every corner store into a convenient ATM
The are many problems in the developing world (don’t get me started about the hoops getting a birth certificate from Egypt) but access to the banking system by the poor is a major issue. Micro-credit providers like Grameen bank in Bangladesh address some of the challenges, but simply getting at your money is a major challenge which this system appears ot help solve.
“How would you like if your neighborhood mom-and-pop store could also double up as an ATM? A Bangalore-based payments processing company has made that its mission. Ezetap, which can be thought of as a service similar to Square, has tied up with State Bank of India (SBI) and is trying to reach millions of mom-and-pop stores in the country with its new service—’Chota ATM’—aiming to bring ATMs to every neighborhood. Chota is Hindi for small.”
13) IC Industry Slowdown: True or False?
It is truly remarkable what passes for growth nowadays. There was a time when sub 10% growth in the semiconductor industry was characterized as recession! Unfortunately, like the apocryphal “boiling frog” experiment, investors have been lulled into looking at relative growth rather than objective measures such as free cash flow. Long story short, the semiconductor industry is not going to grow any faster than the respective end markets, which are simply not growing.
“Did Microchip Technology get ahead of itself last week by suggesting that its downward revenue forecast was a negative bellwether for the whole semiconductor market? Or is there a macro-economic weakness, foreshadowed by Microchip, that bodes ill for the chip industry? Some in the industry are now describing signs of decline in the current quarter as “seasonal.” Others are calling it “a cycle” but not a correction.”
14) Google looks to test ultra-high-speed wireless Net technology
There are many advantages of wireless Internet, most significantly rapid roll out and modest infrastructure costs, but the main drawback is low speeds. One has to be cautious about tests such as these, and not just because of the technical challenges, which are likely surmountable. The problem is that most governments have come to rely on spectrum auctions as cash cows, and, in an auction, the guy with the deepest pockets wins. As a consequence, unless the auctions and associated license rights are carefully designed (and the never are) existing telecom companies simply scoop them up and effectively block innovation.
“Google is seeking FCC permission to test new technology that could marry the speed of Google Fiber to wireless services. In an application to the US Federal Communications Commission (FCC) on Monday, the tech giant requested permission to conduct tests in California across wireless spectra. Of particular interest, as noted by Reuters, is a rarely used millimeter-wave frequency that’s capable of transmitting vast amounts of information through the air.”
Somewhere in my house I have a thousand feet or so of paper tape which has the source code for a z80 assembler on it. I have no use for the assembler, but if anybody wanted to read that tape they could construct a paper tape reader for $20 and had at it. Not so much for the 8” floppy discs I have, let alone more advanced media. As this article suggests, 50 years from now, much of the data we have will be simply inaccessible due to deterioration and technological shifts. Thanks to my son Ali Piccioni for this article.
“A hundred years from now, there will be far fewer photo caches to find. Although the transition to digital photography has made photos almost unimaginably commonplace—one estimate puts the number of shutter activations at a trillion images worldwide per year—very few of those images become artifacts that can be left in a shoe box. We live in what has been named a Digital Dark Age. Because digital technology evolves so fast, we are rapidly losing the ability to understand yesterday’s media. As file formats change, software becomes obsolete, and hardware becomes outmoded, old digital files become unreadable and unrecoverable.”
16) Apple’s iPhone 6 Finally Makes Its Debut in China
Its funny I didn’t see this get the same sort fo fawning coverage most Apple launches receive in the media. Of course there are excuses: mail order, etc., but good marketing brings all kinds of excuses. I do feel rather sorry for people who “feel great” just because they bought a new gadget. Get a grip – its just a bloody phone.
“Apple launched its latest iPhone in China on Friday morning. But unlike some past debuts for its new gadgets, the event was decidedly low-key. About 100 customers waited in line Friday morning outside Apple’s store in Beijing’s upscale Sanlitun shopping district, which opened its doors at 8 a.m. for buyers who had pre-ordered their new wares—the iPhone 6 and iPhone 6+. That was in part because the phone also went on sale at midnight elsewhere, including offices of China’s biggest telecom carriers.”
17) Watersports-friendly e-reader: Kobo’s Aura H2O is literary when wet
My friend Duncan Stewart predicted the emergence of water-resistant and ruggedized phones and I completely agree with him. After all, as a hunter, I’d willingly pay an extra $25 for the $1 worth of o-rings needed to make a phone waterproof, even if I never use a phone in the shower. Frankly, I’m surprised any e-reader is still being manufactured since a cheap tablet does the same. Nonetheless, if I wanted an e-reader, I’d probably want a waterproof one, all other things being equal.
“In recent months Barnes and Noble has announced a partnership with Samsung to make Nook tablets. Meanwhile Sony has announced no new e-reader products in the last year and has closed down its content market altogether, redirecting users to the Kobo shop. Still, Bookeen continues to do business in French-speaking areas and, despite stoking up its Fire range of Android based tablets, Amazon has the Kindle Voyager e-reader waiting in the wings. Putting up a serious fight with some keenly priced tablets and e-readers is Kobo. Based in Canada, the company has continued to upgrade its E Ink models and its premium Aura range has now been expanded to include the H2O – the world’s first e-reader which can be totally immersed in water and live to tell the tale.”
18) Researchers find LEDs attract more flying invertebrates than conventional lighting
Well, I guess if you have bugs that are attracted to blue light and you use a blue light to attract them and compare that to a less blue light, you are going to find more bugs at the blue light. Which is probably how they actually determined, long ago, that bugs are attracted to blue light. The whole LED angle is pretty much irrelevant up to this point, except for the fact it is pretty easy to craft the spectrum of LED lights if, indeed, the looming environmental calamity is realized. So, you just make outdoor LED lamps which do not emit blue light. QED.
“To find out just how much more attractive moths, flies, etc., find LEDs (as compared to sodium vapor lamps) the researchers set sticky paper next to both types of lights out in a field for a period of time at night, then collected the results and counted how many specimens they’d captured. They found that the paper next to the LEDs had approximately 48 percent more bugs than those next to traditional lighting. This could be a problem they suggest because it could mean LEDs are interfering with food webs or drawing more flying critters into urban areas—in one extreme example they note putting LED lights at seaports could contribute to the spread of invasive species such as gypsy moths.”
19) Time for affordable metal 3D printing?
A bit of a correction to the article – they are not arc welding, but MIG (Metal Inert Gas) welding, which is a different process. It looks like they are using a standard Miller or Lincoln MIG welding head, much like you’d use in any welder, or welding robot. Essentially they produce crude castings which are then machined to the finished product. It is not immediately obvious what the advantage of this approach is, since they lack the fine detail of other metal printing techniques and they require machining with all the inherent limitations therein. Perhaps if the MIG head can be further modified to use finer wire the technique can be improved.
“Weld3D, started as a couple of Aerospace Engineers camped in their garage nights and weekends trying to prove a concept for metal 3D printing. After spending a significant time printing in plastic and becoming frustrated with the lack of materials they could use. When developing a large format plastic extruding 3D printer they pondered what would happen if instead of an extruder head they put an arc welder to the motors.”
20) The Rise Of Open Source Hardware
Most people have heard of Open Source Software but only a few have heard of Open Source Hardware (OSH). It is a big deal in the hobbyist community, and I believe OSH is behind many drones and 3D printers. Some OSH developments go on to be commercial products, which is a good thing. One interesting thing about OSH is that it is, in many cases, vigorously promoted by semiconductor companies which used to go out of their way to obstruct hobbyists and small companies from using their parts, often charging ridiculous prices for development tools, software, licenses, etc.. As semiconductor industry growth has ground to a halt, a kinder and gentler approach is beginning to emerge.
“So in the summer of 2012, Petrone (then an engineer at a Portland startup) launched a site where flexible matrix boards and laser motion sensors could be sold alongside build-it-yourself weather monitoring kits and robot birds. Almost immediately, Tindie began attracting favorable attention from the indie hardware community—and then expanded from there. Today, around 600 inventors sell more than 3,000 different hardware products, which have shipped out to more than 80 countries around the world. Some customers are hobbyists like Petrone, but others are large entities like the Australian government, Google and NASA. These days, Petrone says, “NASA’s purchasing department just calls my cell phone.””