The Geek’s Reading List – Week of November 14th 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!
Back to slow news flow in tech. Setting aside comments made by Obama regarding “net neutrality” and the hysterical reaction on all sides, nothing really happened of significance this past week. (Net neutrality itself is a fascinating and important subject but not really the sort of thing I can cover in detail on the GRL).
This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
1) The Knowledge, London’s Legendary Taxi-Driver Test, Puts Up a Fight in the Age of GPS
This is a very long, sometimes tedious, story about the training a London cab driver goes through before being allowed to ply their trade. Their depth of knowledge of London is quite remarkable and I have always been impressed by their professionalism. Of course, the problem is we are not only in the GPS era but the smartphone era as well. Drivers can be guided just as well with GPS and knowledge of the local sites are just a Google search away. Sad to say, in 10 years or less, “The Knowledge” will be history.
“McCabe had spent the last three years of his life thinking about London’s roads and landmarks, and how to navigate between them. In the process, he had logged more than 50,000 miles on motorbike and on foot, the equivalent of two circumnavigations of the Earth, nearly all within inner London’s dozen boroughs and the City of London financial district. He was studying to be a London taxi driver, devoting himself full-time to the challenge that would earn him a cabby’s “green badge” and put him behind the wheel of one of the city’s famous boxy black taxis.”
2) Lyft Begins Commuter Service for Adobe to Stripe
Lyft and Uber are characterized as emerging tech titans engaged in a battle to the death over ride service supremacy. They do provide a useful service which is in many cases a lot better than traditional taxis, however, that it probably more due to the lack of motivation for improvement in the previously well-protected taxi industry. Ultimately, of course, there are no true barriers to entry to the Uber/Lyft model – no “secret sauce” and nothing either can do which the other, or a new entrant cannot easily reproduce. At the end of the day, these are just car services and not worth the valuations investors are placing on them. Thanks to my son Ali for this article.
“Lyft Inc., the mobile ride-sharing application that competes with car-booking service Uber Technologies Inc., has partnered with 29 U.S. companies to start a commuter service. Under the program, dubbed Lyft for Work, companies including mobile-payments startup Stripe Inc. and software maker Adobe Systems Inc. (ADBE:US) will give their employees credits to use Lyft to get to and from work, Chief Executive Officer Logan Green said in an interview. Companies can choose when to give out the credits so workers use the service at certain times, with Stripe only giving credits so people who work late can take rides home from the office after 7 p.m., he said.”
3) The pitfalls and promise of Internet.org and Project Loon
Rumors SpaceX would launch an LEOSat constellation for global Internet service caused a fair bit of excitement – at least for those who hadn’t heard of LEOSats when they we all the raged in the prior Internet bubble. In theory the idea makes sense, but in practice, well there are problems. LEOSats are inherently short-lived, and the reality of spacecraft is by the time the constellation is up and running it will be obsolete. This article provides some figures which suggest that Internet access in the developing world is moving at quite a pace which brings into question all such exotic schemes.
“Unfortunately, the understandable enthusiasm around these projects has totally outpaced their feasibility. The keystone components of each – exotic new airborne platforms to beam internet down upon the earth – are sheer technologist fantasy. Improving connectivity in the developing world is happening, and several “new billion” users are waiting to access the digital world – but very little of that will have anything to do with either Google or Facebook. Here’s why. It’s estimated that there will be three billion humans with internet access by the end of 2014. (That’s up from two billion in 2010 and and one billion in 2005 – the pace is accelerating.) For the majority of internet users today, and certainly going forward, fixed connections (PCs) are not the first or primary experience of internet connectivity – it’s mobile devices, primarily smartphones.”
4) Mac OS X Yosemite disables third-party SSD driver support
Aw shucks! It looks like an Apple security feature also happens to disable non-Apple Solid State Drives if you have the copious misfortune to upgrade your Apple OS, even if those SSDs worked perfectly well prior to the update. Go figure! Its almost like Apple prefers you pay them a sizable premium for their own branded SSDs. I figure if you are paying over a 100% premium for last year’s hardware in a new Apple laptop, why not?
“APPLE HAS QUIETLY DISABLED software driver support for third-party solid state disk (SSD) drives in Mac OS X 10.10 Yosemite by default, leaving some unsuspecting Mac users with third-party SSDs as boot drives unable to boot their machines. Mac users who have Apple SSDs in their machines won’t notice, of course, but the change can present a vexing problem for professional Mac users like graphic designers and video editors who have Macs with third-party SSD drives installed and use the third-party Trim Enabler software driver.”
5) Android User Takes Apple To Federal Court Over Undelivered Text Messages
No doubt it is just an oversight on Apple’s part than transitioning away from an Apple product results in lost text messages. Of course, it is hard to believe users of a proprietary system – especially one from Apple – would work smoothly after the change. I can scarcely claim to have complete knowledge of all such systems but people might consider moving to an app such as Viber, which is cross platform and includes remarkably high quality free voice calls.
“Apple will soon face a federal lawsuit brought on by a woman named Adrienne Moore, who, like many former iPhone users who have switched to Android, is upset that she did not receive text messages after switching from iPhone to Android. She is seeking unspecified damages, and to make the lawsuit a class action. Since the release of iOS 5, Apple has experienced issues with users not receiving text messages after switching from iMessage on an iPhone to an Android device. iMessage works by sending messages over the users data plan, theoretically saving that user money on text messages. If a message fails to go through on iMessage, it’s supposed to default back to text message.”
6) Apparently, Apple thinks a lot of you are going to buy its Watch
I have no idea whether or not 30 – 40 million units is more than investors expect, however, it doesn’t seem like a big number for Apple. In any event, wearables have shown themselves to be a solution in search of a problem and, since iWatches only work with the latest iPhones, I would be astonished if the product is a commercial success.
“According to a new report it looks like Apple is expecting a lot of people to buy Apple Watch. When Apple announced its wearable, it clearly had a lot of confidence, and it sounds like it’s putting its money where its mouth is. Chip suppliers that are involved with providing the parts for the Apple Watch have apparently been given orders for around 30 to 40 million units, according to DigiTimes.”
7) Neil Harbisson: The man who hears colour
Frankly, its hard to figure out if this story and video are a joke or the real deal. After all, it does discuss a guy who walks around with an “antenna” apparently permanently affixed to his skull. Setting aside the generalized goofiness of the this (which might actually appeal to an artist) there is the question about where the antenna goes when he wants to sleep. You’d think somebody would have mentioned that, say, an earpiece, might be a more elegant solution.
“Neil Harbisson is an artist who was born completely colour blind. His life changed when he decided to have an antenna surgically implanted into his skull that enabled him to “hear” colour. Now he identifies each colour with a particular musical note – even the ones we can’t see. In 2010 he founded the Cyborg Foundation, an international organisation that helps others to permanently implant technology into their bodies.”
8) Microsoft Open Sources .NET, Saying It Will Run on Linux and Mac
Open sourcing .NET (or, rather, parts thereof) is an interesting move on the part of Microsoft. Unfortunately, it may be too little too late as so much of the web has moved to Java or open source clones of the Java Runtime Environment. Plus, there remains dark and lingering mistrust of Microsoft’s motives: in the past it has often embraced, then strangled, open formats and there is no reason to believe this decision is any different. Time will tell whether Linux developers in particular adopt .NET now they have the option to.
“Satya Nadella’s rapid reinvention of Microsoft continues. In yet another bid to make up lost ground in the long march to the future of computing, Microsoft is now open sourcing the very foundation of .NET—the software that millions of developers use to build and operate websites and other large online applications—and it says this free code will eventually run not only on computer servers that use its own Windows operating system, but also atop machines equipped with Linux or Apple’s Mac OS, Microsoft’s two main operating system rivals.”
9) Lighter, cheaper radio wave device could transform telecommunications
I had to look this up. According to Wikipedia (http://en.wikipedia.org/wiki/Circulator) “A circulator is a passive non-reciprocal three- or four-port device, in which a microwave or radio frequency signal entering any port is transmitted to the next port in rotation (only).” This provides isolation to the various ports, allowing, for example, an antenna to be used for receiving and transmitting at the same time as with a duplexer in a two way radio. As the article suggests, traditional circulator designs tend to be quite bulky, therefor this sounds like it could be a big deal.
“Researchers at the Cockrell School of Engineering at The University of Texas at Austin have achieved a milestone in modern wireless and cellular telecommunications, creating a radically smaller, more efficient radio wave circulator that could be used in cellphones and other wireless devices, as reported in the latest issue of Nature Physics.”
10) LED lighting to grow to $25.7bn in 2015 as penetration of lighting market reaches 31%
My rule of thumb is that industry studies aren’t worth the paper they are printed on, and this is no exception. Nevertheless, this short piece provides some facts, figures, and forecasts, most of which are probably inaccurate. The important thing to remember about LEDs is that they are very long lived – unlike other light sources – and highly resistant to breakage. Therefore, the market will quickly plateau and decline once it is saturated.
“The global LED lighting market will reach $25.66bn and its market penetration will rise to 31% in 2015 as the overall lighting market grows to $82.1bn, according to a report by LEDinside, a division of Taiwan-based market intelligence firm TrendForce. Despite its lack of large-scale subsidies for LED lighting users, Europe is the largest LED lighting market, comprising 23% of the LED lighting market says LEDinside assistant manager Joanne Wu. She adds that in Europe (where electricity prices are high) demand for LED lighting for commercial and architectural lighting applications is increasing.”
11) Automakers pledge to protect driver privacy
This sure sounds nice, but don’t for a moment believe it. Essentially the automakers are attempting to head off regulatory action, not provide anything remotely resembling privacy. This sort of “commitment” and self-regulation has no legal weight, and, even if it did, you can rest assured you would have to sign off an “End User License Agreement” which would force you to sign away all your privacy rights and, doubtless, even the right to sue in the event of breach. The fact is, companies cannot be trusted with your data, and the only hope the consumer has is legal restrictions on its use. Unfortunately, governments oblivious to the importance of the Internet, let alone the power of data, are unlikely to act.
“The two major U.S. auto trade associations told the Federal Trade Commission they will pledge to protect driver privacy amid a rise in vehicle technology and increasingly connected vehicles. In a letter to the Federal Trade Commission on Wednesday, the Alliance of Automobile Manufacturers, the trade group representing Detroit’s Big Three automakers, Toyota Motor Corp., Volkswagen AG and others — and the Association of Global Automakers, representing Toyota, Honda Motor Co., Nissan Motor Co., Hyundai Motor Co. and others — said they were backing a set of principles guaranteeing the privacy of drivers.”
12) Startups can now buy insurance against threat of patent trolls
True patent trolls are basically legal firms engaged in a traditional shakedown racket. Since the price of defending a patent suit is quite high, especially in the US where “loser pays” is only now entering the equation, they offer a comparatively modest “license fee” to avoid and expensive suit. This is, of course, much like my cousin Guido offering to “protect” you against having your legs broken by him. “Patent Troll” insurance, completes the cycle: by offering to cover legal costs, it rebalances the situation, much like Guido might offer to protect you against having your legs broken by an unnamed third party (presumably, in this case, including RPX).
“RPX is sometimes called a “defensive patent aggregator.” The company’s main business is to sell expensive memberships to big companies, then buy up patents that are being used, or could be used in the future, by “patent trolls” to sue them. It’s an extremely profitable business—this year, RPX is expecting to earn $56 million on $256 million in revenue. That’s allowed RPX to expand into other business lines. Earlier this year, it started offering protection from trolls, which RPX calls non-practicing entities or NPEs, through an old-fashioned product: insurance. By paying an annual premium, companies could get their legal fees covered if (or when) they get hit with a patent troll lawsuit. RPX also became authorized as a coverholder at Lloyd’s.”
13) iPads, Chromebooks Are Winning the School Market
Once upon a time the school market was important because it set the stage for what students would use as they became adults. Today’s youth are much less wedded to specific operating systems and applications, therefore the education market probably no longer provides the leverage it once did for vendors. Nonetheless, as a parent it frustrates me to learn of a school “investing” in iPads when functionally equivalent Android tablets are available for one-quarter the price.
“While it is possible to purchase a small Windows laptop for about the same price of a basic Chromebook, the associated management and support costs are enormous in comparison. Also Chromebooks are pre-loaded with apps such as Google Docs, Sheets, and Slides, with similar functionality to Microsoft’s Office. Schools can easily provision each Chromebook with specific educational apps, remotely wipe the entire device in seconds, and reuse the laptop for a new class without purchasing any more licenses. There is no manual setup for different users and the machines are administered throughout the school, no matter how many Chrome devices they have, or where they’re being used. Google claims that there is no manual maintenance, security patching, or time-consuming support.”
14) A German Cloud Company Is Offering Free Heat If You Have Room for Some of Its Servers
Sure. Why not? Consumers pay for a system which costs about as much as a standard heating system (while producing a small amount of heat) and then they get “free” heat and cold water, except, of course, they paid for the server and heat exchanger. Unfortunately, as computing performance increases, the value of the cloud services produced by said server will be less than the value of the electricity within two or three years. Meanwhile investors in Cloud&Heat finance the operation of systems which offer a commodity service with rapidly dropping costs and which have a useful life measured in months. Losers all around.
“Cloud&Heat is a cloud infrastructure company that has started distributing its servers to people who want to store them in exchange for free heat in their homes or offices. Since servers generate so much excess heat and cloud companies have to spend a lot to cool them, the idea to repurpose the waste heat isn’t new. In fact, Qarnot, a French cloud company, is working on a similar program to Cloud&Heat’s. But as Datacenter Dynamics reports, Cloud&Heat is ahead in terms of implementing the idea.”
15) Graphene-Based Supercapacitors Could Lead To Battery-Free Electric Cars Within 5 Years
No. No it won’t. Graphene costs upwards of $1,000 a gram so reporting any breakthrough technology involving graphene is a bit like reporting about new windows made of diamond, except diamond is cheaper. Setting aside the overblown hype, graphene is carbon and once somebody figures out how to mass produce for about 100,000 to million times less than it costs now, this sort of theoretical research will become very useful. However, while progress is being made in reducing the cost of graphene you should not expect an order of magnitude improvement per year.
“Batteries seem to be the limiting factor in the popularity of electric cars. They are one of the most expensive components of the vehicle, and have limited range compared with gasoline powered vehicles. While there have been some impressive advances in recent years, a team of researchers have created a supercapacitor film that could replace the need for a battery altogether within the next five years. The collaboration between scientists at Rice University and Queensland University of Technology resulted in two papers, published in Journal of Power Sources and Nanotechnology.”
16) Pansaonic Eluga S now joins ‘selfie phone’ bandwagon: Is mobile innovation slowly dying?
The article is firmly tongue in cheek, however, I agree with the overall theme, namely that new smartphones have few novel features, relying on slightly larger displays, slightly higher resolution, slightly thinner, slightly better cameras, to motivate consumer purchases. When this happens in a technology market, pricing plummets, margins contract, and there is a shake out in the market. While I do not expect them to disappear, it strikes me Apple, which occupies the premium segment of the market, is the most vulnerable to a rapid and permanent decline in pricing.
“Panasonic is the next to jump on the selfie phone bandwagon with the Eluga S. However they are not the first. Sony pipped it to the post with the Xperia C3 and Microsoft has also followed with its Lumia 720, phones that are bound to figure on every narcissist’s bucket list. We’ve also seen budget selfie phones like the recently launched Lava Iris Selfie 50. All we need now is for Samsung to join the bandwagon and we can officially put selfie-phones into a separate category. That would also help in identifying people who are buying these phones and give us enough time to dispatch them off to Mars, because selfies look better with low gravity. We have to put a stop to this madness.”
17) Fast Internet access becomes a legal right in Finland
It is easy to criticize a move like this, but North Americans in particular might reflect on the fact that similar proclamations were made here with respect to electricity and telephone service in the early 1900s. Both electric and telephone are far more expensive to deploy than Internet service, however, the statesmen of the time (they existed back then) recognized these infrastructure programs where extremely important to the development of a modern industrialized economy. Alas, the vision of Finnish politicians is not shared here, where the entrenched interests of the telecommunications providers trump the needs of the public.
“Finland has become the first country in the world to declare broadband Internet access a legal right. Starting in July, telecommunication companies in the northern European nation will be required to provide all 5.2 million citizens with Internet connection that runs at speeds of at least 1 megabit per second. The one-megabit mandate, however, is simply an intermediary step, said Laura Vilkkonen, the legislative counselor for the Ministry of Transport and Communications.”
18) Seagate preps for 30TB laser-assisted hard drives
The Hard Disk industry is an excellent example of the power of innovation. Vendors have continuously pushed the envelope with respect to recording density and cost reduction, keeping pace or even exceeding the pace of Moore’s Law: a two TB hard disk is about 1 million times less expensive per bit that original PC-XT hard hard, a factor of 10, more or less, more than the improvement of the CPU. The thing is, HDD has achieved “feature saturation” meaning more storage is not as valued as the low power consumption, speed, and reliability offered by Solid State Drives. True disruption of the HDD business may occur if HP commercializes memristor storage as expected within a few years.
“Seagate Technology is boosting investments in laser-assisted hard disk drive technology that it projects will allow it to increase capacity five-fold. The laser technology, known as heat-assisted magnetic recording (HAMR), is able to write smaller, more-stable bits onto the magnetic surface of a spinning disk. Today, Seagate’s largest capacity drive using conventional recording is 6TB. Using HAMR, that capacity could theoretically increase to 30TB.”
19) Computers Are Writing Novels, But Do You Really Want To Read Them?
Most of the stuff on Singularity Hub is complete rubbish and this article is not an exception. However it does explore a number of relatively interesting topics and trends. The conclusion appears to be that if you define literature as art, and that “art” includes incoherent assemblages of words with no meaning (a la Burroughs) then the answer is yes. All things considered, such productions could be no less rambling or incoherent than a Dan Brown novel, and more likely better grounded in history or science.
“It’s 10pm, November 30th, 2013. An author, aiming to finish a novel in November, takes up his laptop and begins typing furiously. By midnight, he’s completed I Got a Alligator for a Pet. A world record? No, just a clever bit of code. I Got a Alligator for a Pet, written by a developer’s computer program, was part of National Novel Generation Month (NaNoGenMo), a competition in which programmers write apps that automatically generate at least 50,000 words. Emulating National Novel Writing Month (NaNoWriMo)—a November tradition where authors attempt to complete an entire novel (start to finish) in a month—developer and internet artist Darius Kazemi started NaNoGenMo last year.”
20) Blackberry slowly seeing success
The implosion of large high tech firms follow a familiar path. The managers who brought the company to the heights of success and hailed as geniuses depart one at a time. New managers are brought in, individually they are first promoted as saviors, then as being “unable to execute”. What is important is what is going on behinds the scenes: the most talented engineers are usually first out the door or a close second after layoffs begin. It becomes impossible to hire creative talent to a plague ship and you end up with a hollowed out shell of a company which outwardly looks like it is turning the corner. So, no, Blackberry is not “slowly seeing success” and this article presents no support for the hypothesis. It is simply in a different phase of its slide to irrelevance.
“Blackberry has sold assets, eliminated partnerships to lower manufacturing costs and received cash by selling real estate holdings in Waterloo, Ontario; the hometown of Blackberry. The company has also expanded app offerings to help create profit. Even though the company has not turned steady profits, yet; Chen has bought small companies to help the Blackberry company towards investing in growth.”