The Geek’s Reading List – Week of January 9th 2015
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!
Perhaps I am getting jaded but, despite the big Consumer Electronics Show in Las Vegas, there wasn’t much interesting tech news. I believe things are afoot in the mobile space (notably Xiaomi’s rise as a device vendor in China) which are far more significant than any announcement out of Las Vegas. There was a bit of show and tell in the self-driving car space, but, like most other “concept cars” the market opportunity is years in the future. This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
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1) Estonia’s Taxify, An Anti-Uber Taxi App, Raises €1.4M For Further European Expansion
This is the proper response to Uber. Instead of the widely reported histrionics designed to maintain the archaic taxi system, offer consumers a reliable and predictable alternative. Ultimately, whether governments preserve the rights of the wealthy to control taxi licenses, the great advantage of Uber has been superior customer service and offering that instead of the traditional taxi model will re-level the playing field. This is also why Uber is just a car service, and not the stupidly overvalued “tech” company people seem to think it is.
“Estonian startup Taxify is one of a number of taxi apps aiming to help traditional taxi firms and drivers fight back against behemoth Uber and its ilk. It does this by providing an iOS, Android and mobile web app that lets you order a cab online. This helps to bring the same convenience of Uber et al. to the licensed ‘taxi’ industry, helping it compete via technology instead of merely lobbying regulators or protesting loudly, Ubergeddon-style. Today the company has picked up an additional €1.4 million in funding, adding to the previous €100,000 raised — money it will use to consolidate what it claims is a leading position in Eastern Europe, and for further European expansion.”
2) Xiaomi Confirms It Sold 61M Phones In 2014, Has Plans To Expand To More Countries
Smartphone prices will likely plummet within the next your or so. Xiaomi will probably not enter developed country markets any time soon, but it doesn’t have to. Xiaomi enjoys the same sort of cult following in the developing world – in particular China – which has been enjoyed by Apple (and previously Blackberry, Nokia, etc.). By offering an acceptable, and affordable, alternative this will blunt growth in the developing world for major vendors such as Apple and Samsung. Recall that growth is at the margins and loss or even shrinking of large potential markets has a significant impact on growth even if it does not materially impact market size. When this is combined with collapsing prices, the premium priced smartphone industry seems headed for a train wreck.
“Xiaomi, the Chinese smartphone maker that raised $1.1 billion last month, has confirmed that it sold 61.12 million phones last year, bringing in an apparent revenues of 74.3 billion CNY ($12 billion) in the process. The new figures were released by CEO Lei Jun on Weibo and are right in line with the company’s expectation for the year. Xiaomi sold 18.7 million devices in 2013, and 7.2 million in 2012, so the four-year-old company is continuing to grow its business at a rapid rate — its recent funding round valued it at $45 billion and it is now the world’s third largest smartphone maker.”
3) BlackBerry’s IoT plans start close to home: cars, asset tracking
I don’t really know how seriously to take this, but, in general, companies rarely find success in which they have no expertise. Nonetheless, IoT is a big deal for the shills on Wall and Bay Streets, you you can see the appeal. Here are two major problems: IoT will only take off as an open standards platform (not open source, open standards) and this pretty much eliminates the opportunity for proprietary standards type margins. Furthermore, while by all accounts QNX is a good operating system, only a complete idiot would adopt a proprietary OS for IoT when there are emerging open source alternatives. As a general rule, betting on the stupidity of the market is not a sound strategy.
“BlackBerry is taking the same approach with its Internet of Things platform, launched Wednesday at International CES, as it is with its handset business: Aim at its core markets. In IoT, the struggling mobile vendor has found an emerging area of technology where it may have the right combination of strengths. The company signaled as much last May when it announced Project Ion, a future cloud-based service it said would make it easier for enterprises to develop IoT software.”
4) Autonomous Audi A7 concept steers itself from San Francisco to Las Vegas for CES
The advent of autonomous vehicles will be transformational in the developed world. It will have a profound positive impact across the economy. However, that day is long off – likely 20 years in the future. Plus, it will not be a stepwise change: cars will become increasingly autonomous with various capabilities and safety systems gradually taking over from the driver. These sorts of demonstrations are quite interesting but do not detract from the reality that the systems have limited capabilities and tend to function well under controlled conditions. Nevertheless, the technology is extremely important and merits close attention.
“Audi is making two world premieres at this week’s 2015 Consumer Electronics Show in Las Vegas, one of which is an autonomous A7 concept that drove to the event itself, after starting off Saturday in San Francisco. The total distance traveled was more than 550 miles, with a number of engineers and journalists given time behind the wheel. Not only is the stunt being used to gather data for an eventual production autonomous car from Audi, it’s also a means of demonstrating the viability of a self-driving car in existing traffic and road conditions. The trek took the A7 concept across roads in California and Nevada, both of which have given a number of automakers permission to test autonomous cars on public roads.”
5) The cars of the future?
One doesn’t tend to encounter many Canadian autonomous car stories so I had to include this one. I suspect 2023 is rather optimistic given the state of the art. In particular, Canada’s weather challenges are bound to be a major hurdle as is our 3rd world telecommuncations infrastructure.
“It seems fantastical, but automated vehicles are coming and will nearly certainly be on the roads in the coming decades. Many car manufactures are working on self-driving cars, and Google has been testing self-driving vehicles on open roads. A handful of states already have put legislation governing autonomous vehicles on the books. California is supposed to develop rules so the public can use them by Jan. 1. While Google is estimating its technology could be in public hands before 2020, Godsmark said that technology will not work everywhere all of the time yet. “So in terms of Canada, the figure I’ve been telling everyone is expect autonomous vehicles capable of all-year-round operation by 2023,” he said. There are also different technologies out there – Godsmark is an enthusiast for the fully autonomous vehicle, but there’s also what Godsmark calls a “parallel technology,” connected vehicles. Connected vehicles communicate with each other, but also the infrastructure and a central “brain” that will optimize everything.”
6) Sony is trying to make the Walkman cool again
Once upon a time I worked for Philips, which was well regarded for selling high quality state of the art consumer electronics at a premium. Over time, they lost their reputation for quality and being state of the art but they tried to retain premium pricing. That’s the problem with having idiots running a business: running it badly only shows up after a number of years. Sony seems destined to follow Philips’ lead in this regard. For about 15 years you could get good enough products at a lower price from, for example, Samsung, and now you can get better products at a better price from lots of companies not named Sony. I suspect a $1,200 Walkman targets mostly Sony executives because that’s roughly who they’ll sell it to.
“Sony’s latest take on its classic music player, the ZX2, supports high resolution audio playback and is Wi-Fi-, Bluetooth- and NFC-enabled. At first glance, the Walkman ZX2 looks more like an oddly shaped smartphone than a music player. The Android-powered device (it runs Android 4.2, Jelly Bean) features a touchscreen, and supports Android apps via the Play Store. ut its real power— and the reason for its $1,200 price tag — lies in its S-Master HX processor, which enables the high-resolution audio, though you’ll need headphones or a speaker that supports high-res audio to enjoy it.”
7) BitTorrent Adds First Feature Film And Pay-What-You-Want Option To Its Bundle Model
Torrents have a bad reputation because they have been used for piracy. They are also used for the distribution of open source and public domain material, facts which do little to counter that bad rep. BitTorrent has a number of interesting products, including Sync, and are trying to monetize their torrent technology for legitimate use. I am not sure that “Pay-as-you-want” is a viable large scale business model, though it might work for certain types of product. Nonetheless, a paid torrent system (no doubt with discounts for seeding) is probably a viable means to distribute paid content.
“Another step ahead in BitTorrent’s bid to expand its Bundle business model to all kinds of content, and all kinds of payment options. The company today said it would soon post a full-length feature film directed by David Cross, HITS, and people can get it by paying whatever they want. The film is set to go up on BitTorrent on February 13. HITS first debuted at Sundance in 2014 and this will be its first wide release, alongside another not-too-conventional push in physical theaters. Cross is also currently running a Kickstarter to get the movie to a select number of cinemas, also in a pay-what-you-want model for moviegoers.”
8) Has Curiosity Found Fossilized Life on Mars?
A bit of a stretch but worthy of a read. Relatively low resolution photography shows what might be fossilized bacterial or algal mats similar to what we see on Earth. Even though this is in the “too good to be true” file, these sorts of theories lead to the formulations of experiments by Curiosity or subsequent spacecraft to test the hypothesis. It would be very cool indeed if it were true.
“Time and time again, as we carefully scrutinize the amazing high-resolution imagery flowing to Earth from NASA’s Mars rover Curiosity, we see weird things etched in Martian rocks. Most of the time our brains are playing tricks on us. At other times, however, those familiar rocky features can be interpreted as processes that also occur on Earth. Now, in a paper published in the journal Astrobiology, a geobiologist has related structures photographed by Curiosity of Martian sedimentary rock with structures on Earth that are known to be created by microbial lifeforms. But just because the structures look like they’ve been formed by microbes on Mars, does it mean that they were?”
9) Body of Knowledge: New Machine Can See Bones, Organs in Stunning Detail
You really have to look at the article because the images are absolutely amazing. They look like something out of a science fiction movie they are that good. As I understand it, this novel CT scanner can take images in a fraction of a second, leading to much faster imaging in general but also the ability to track movement of things like heart valves and so on. It also means the patients do not have to be immobilized. Unfortunately, they do not mention the cost of the unit but you can imagine it is very, very expensive.
“In 2013, GE introduced a new, superfast scanner called Revolution CT that allowed doctors to routinely obtain clear images of the beating heart, lungs, liver and other organs. Starting in September 2014, the West Kendall Baptist Hospital in Florida became the first medical facility in the U.S. to use the machine. Its combination of low-dose exposure, organ-wide coverage and motion correction technology allows doctors to reduce radiation and still obtain high-resolution images of blood vessels, soft tissue, organs and bones.”
10) Samsung’s latest SSD is remarkably fast and consumes roughly zero standby power
Most of the “new product” announcements arising from the Consumer Electronics Show (CES) in Las Vegas this past week were disturbingly banal. This was pretty esoteric but it shows where Solid State Drives (SSDs) are headed and reinforces my view the Hard Disk Drive is destined to go the way of the floppy. No doubt, as a market leading product these are very expensive in absolute and “bang for the buck” terms, but you can safely expect prices to drop rapidly. In any event, the ultra low standby power means, for example, a laptop vendor can reduce the size and weight of their product and still offer either longer battery life or a smaller battery.
“Samsung Electronics has announced that it is mass producing a high-performance, low-powered PCIe SSD designed for use in both ultra-slim notebook PCs and workstations, the SM951. The SM951 is extremely small for space constrained applications. It comes in M.2 form factor, which is 80mm x 22mm or about one-seventh the size of a standard 2.5″ SSD. It also only weighs six grams but can run up to 512GB of capacity.”
11) Netflix: VPN crackdown claims ‘false’, says executive
This rumor caused a lot of excitement since the content available on Netflix is usually licensed on a regional basis. For example, a particular movie or documentary might be available in the US but not the UK, or vice versa, due to licensing. Tech savy users can bypass licensing restrictions through the us of VPNs (similar methods can be used to pirate with relative impunity). Frankly, I’m surprised the CEO would deny the claim of a “crackdown” since the licensees would at least want him to engage in theater to the effect they take the license terms seriously.
“The company denied reports it had stepped up its attempts to block access via virtual private networks (VPNs). Netflix said its existing policy against the use of VPNs to circumvent geographical content barriers remained unchanged. But it said its service would still work via some VPNs. “The claims that we have changed our policy on VPN are false,” said Netflix’s chief product officer Neil Hunt. Speaking at this year’s Consumer Electronics Show (CES) in Las Vegas, he said: “People who are using a VPN to access our service from outside of the area will find that it still works exactly as it has always done.” He was speaking in response to widespread claims that the popular media streaming firm had begun a crackdown on customers who used VPNs at the behest of studios unhappy at their licensing arrangements being ignored.”
12) Netskope Report Reveals High Frequency of Compromised Credentials in Enterprise Cloud Apps
Frankly I am not sure the numbers add up, but the general risk is very real. The great thing about cloud services is that they represent a single point of failure and therefore the greater the number of people using them in a company, the greater the odds of a breach since only one person needs ot download one malware app (or even lose their phone). Nevertheless, cloud computing is seen as the way to go by most CIOs so growth will probably continue. Thanks to my friend Humphrey Brown for directing me to this item.
“Recent research has identified that only one in ten cloud apps are secure enough for enterprise use. According to a report from cloud experts Netskope, organisations are employing an average of over 600 business cloud apps, despite the majority of software posing a high risk of data leak. The company showed that 15 per cent of logins for business apps used by organisations had been breached by hackers. Over 20 per cent of businesses in the Netskope cloud actively used more than 1,000 cloud apps, and over eight per cent of files in corporate-sanctioned cloud storage apps were in violation of DLP policies, source code, and other policies surrounding confidential and sensitive data.”
13) FCC chairman hints the Internet will soon be regulated as a public utility
North American broadband and mobile services are a morass of bad policy decisions which conveniently happen to have been made in favor of the service providers. While the US is not as bad as Canada, these bad decisions have lead to a steady erosion in position in the past 15 to 20 years, shifting us from world leading to third world status. Neither broadband providers nor mobile service providers generate value add: they simply exploit “rights” which they have purchased or, in many cases, been given, by governments. Both should be regulated as public utilities, but in a manner which would foster competition, instead of suppress it, as is the case today. Unfortunately, while the FCC chairman may have the best interests of the consumer in mid (though I doubt that) the consumer doesn’t stand a chance against the powerful and well financed lobbyists in Washington and Ottawa.
“In a speech given this week at the Consumer Electronics Show (CES) in Las Vegas, Wheeler spoke favorably of reclassifying broadband providers as common carriers under Title II of the Communications Act, saying that this would allow for “just and reasonable” regulation with “the best protections” for consumers. The FCC will vote on final regulations next month, and reporters say Wheeler’s CES speech is a strong indication that the Commission is leaning in favor of supporting the President’s stance on net neutrality.”
14) Revolutionary implant enables broken spinal cord to function again
A number of years ago we covered experiments which showed rats walking subsequent to spinal cord injury using electrical stimulation and drug treatment. Apparently, the major problem with the approach was that the implants were not well tolerated by the immune system. This new implant promises to last longer, though I should add that it would have to last many years ot be truly useful. Nevertheless it seems significant progress is being made in this area, which is a good thing.
“A team from EPFL and NCCR Robotics lead by Profs Stéphanie Lacour, Grégoire Courtine and Silvestro Micera published an article in Science today describing their e-dura implant that could revolutionise how we think about and treat paralysis. Until now, implants placed beneath the dura mater of the spinal cord have caused significant tissue damage when used over long periods. Research shows that the new e-dura implant is viable for months at a time in animal subjects. The team is now moving on to clinical trials in human subjects and is developing their prototype to take to market.”
15) Computer Masters Texas Hold’em, Poker Face and All
I don’t play poker because I’m not good at it, which means I always lose and I can’t see the point in financing my education any further. This development made the evening news, which is a bit surprising. Apparently, the researchers have developed a mathematical strategy which pretty much guarantees a win, provided enough hand are played. Of course, this only works for a very simple form of poker so you don’t have to worry about it being a major issue for online gambling sites which will simply continue to cheat in order to clean up. After all, who needs math when you have a crooked dealer and a rigged deck?
“If you lose at Texas Hold’em, don’t blame your cards. A breakthrough in artificial intelligence has allowed a computer to master the simplest two-person version of the poker game, working through every possible variation of play to make the perfect move every time. When performed without mistakes, just like the childhood game tic-tac-toe, there’s no way to lose. In this case the player is Cepheus, an algorithm designed by Canadian researchers.”
16) Quantum hard drive breakthrough
More of a quantum memory breakthrough in terms of the duration the quantum states can be stored. The article is a fair bit above my pay grade, but it sounds important.
“Physicists developing a prototype quantum hard drive have improved storage time by a factor of more than 100. The team’s record storage time of six hours is a major step towards a secure worldwide data encryption network based on quantum information, which could be used for banking transactions and personal emails. “We believe it will soon be possible to distribute quantum information between any two points on the globe,” said lead author Manjin Zhong, from the Research School of Physics and Engineering (RSPE).”
17) The Voltera V-One Makes Circuit Boards In Minutes
This sounds promising but I suspect the market is not likely to be as large as imagined. First, the price is way too high for home hobbyists, though some maker clubs might be enticed. Second, any buyer would be dependent on Voltera to continue to supply consumables, which is a dubious proposition for any start up. Third, the system uses no vias (holes from one side to the other), which limits the types of components you can use (or, limits the boards you can use the unit for. Finally, it seems it doesn’t really do two sided boards, meaning components are going to have to be all on one side. All this being said, if a company such as HP were to produce the product, thus delivering a low cost platform with high cost consumables, though from a reliable supplier, it would probably be quite successful.
““The Voltera V-One goes beyond printing single layer circuits on paper. We’re the first to be able to print two layer circuits onto FR4 (the industry standard substrate) with a product of this size and cost. But it doesn’t stop there… the printer is also cable of dispensing solder paste and baking the board to attach all the small components,” said Almeida.”
18) New lie detector relies on full-body suit for better accuracy
Even though lie detectors have been shown to be pseudoscience, and there are simple techniques which can be used to spoof even the pseudoscience, some employers and law enforcement authorities use them. This test is an example of the problem: they claim “much better accuracy”, and I won’t dispute that claim. The problem is, the folks likely to lie – criminals – tend to be skilled liars so the only meaningful test would be to see if the system detects lies told by skilled liars, not regular folk. Besides, even at 75% accuracy, most people are honest, not guilty, and telling the truth so the number of false positives is very high.
“When you are hooked up to a polygraph lie detector there is only a 60 percent chance a skilled examiner will spot a lie, giving you pretty good odds to get away with one or two untruths. However, Dutch and British scientists have found a way to amp up the accuracy of lie detection to 75 percent by monitoring a suspect’s movements with a full-body suit. Current lie detection methods aided by polygraphs are only slightly better than what people can achieve on their own. Without a machine, most people can only tell truth from lies about 55 percent of the time.”
19) Microsoft unveils Nokia 215, a $29 phone with Internet access
This probably belongs with item 2 about Xiamoi, but this product is actually directed towards the extreme poor in areas like sub-Saharan Africa. I was initially very skeptical as to whether a market for mobile services would emerge in such areas but I have been pleasantly surprised. Banking and all manner of services are being rolled out, resulting in a significant positive impact to standard of living. Many such services used cheap ‘candy bar’ phones and texting so even basic 2G Internet would be a major improvement. Not that this somehow makes Microsoft’s purchase of Nokia seem rational, but it is an interesting piece of kit.
“Smartphones may be more affordable than ever, but, for quite a few people, they are still too expensive. And they offer short battery life, pretty much across the board. It is not a winning combination, especially for those living in developing markets, looking to be connected to the Internet while on the go. Enter Nokia 215, a dirt-cheap Internet-ready phone, which Microsoft announced earlier today. It packs some of the most-important features people want in a smartphone, but without any of the major drawbacks. The software giant calls it its “most affordable Internet-ready entry-level phone yet”, costing just $29.”
20) Tech manufacturers join forces to bring cinema picture quality into our homes
This is a good first step along the way to UHD products which actually work together (how novel!), however, do not expect the technology to move the needle in the consumer electronics market. Marketing hype aside, the human eye is only so good at detecting detail and even then that depends on the size of the screen and the distance you are from it. UHD might be useful for games, especially when you are close to your screen, but even then not much. I figure that eventually all the TVs will be UHD for the same reason most are 3D: because there is little or no price gap. However, very few consumers will replace their existing TVs with UHD, or even pay more than 10% for a UHD set because there simply is no significant benefit.
“Major brands at global consumer electronics and consumer technology trade show CES have promised to do more to get high resolution in our homes, and have formed an alliance to prove it. Announced earlier this week by Samsung alongside their new SUHD TV line-up, the UHD Alliance is a partnership between the big name manufacturers, including themselves but also LG, Panasonic, Sharp and Sony as well as movie studios and streaming services.”