The Geek’s Reading List – Week of February 6th 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 12 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!
The big technology news of the week was associated with moves by the FCC to foster competition in broadband services. I believe most of the coverage makes the mistake of assuming policy will become law, which is unlikely in a sector so carefully controlled by lobbyists. Other than that we have a good mix of articles ranging from news on Windows 10 to scientific advancement. This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
1) Adblocking goes mainstream
I believe this report cam out in Q3 2014 but I appear to have missed it. Adblocking is a rapidly emerging trend where browser plugins are used to block internet advertizing. The most popular software allows “whitelisted” ads provided they meet certain requirements, in particular paying the company money. It is easy to configure the software to block all ads and I have been using it that way since it was introduced. Note how penetration is highest among more sophisticated users (i.e. those capable of downloading a browser and the plugin). Most likely, use will spread as more people become aware of it, resulting in countermeasures by the likes of Google.
“The adblock community is expanding rapidly. In Q2 2014 there were approximately 144 million monthly active adblock users globally (4.9% of all internet users); a number which has increased 69% over the previous 12 months. Google Chrome is bringing ad blocking to the masses and seeing the largest increase of adblockers, up by 96% to approximately 86 million monthly active users between Q2 2013 and Q2 2014. Share of ads blocked by “end-user installed” browsers is 4.7x higher than by “pre-installed” browsers.”
2) Test shows big data text analysis inconsistent, inaccurate
Big data doesn’t make the headlines it used to, at least if you ignore the Snowden/NSA spying news. This study strongly suggests the conclusions arrived at through standard techniques are of questionable quality, which is scarcely surprising as it is am emerging field. Another consideration would be what the analysis is used for: if used as part of a matrix for a decision the implications are different than if it is used to directly drive a decision. Human nature being what it is I suspect more the later than the former.
“The team tested LDA-based analysis with repeated analyses of the same set of unstructured data – 23,000 scientific papers and 1.2 million Wikipedia articles written in several different languages. Even worse than being inaccurate, the LDA analyses were inconsistent, returning the same results only 80 percent of the time even when using the same data and the same analytic configuration. Accuracy of 90 percent with 80 percent consistency sounds good, but the scores are “actually very poor, since they are for an exceedingly easy case,” Amaral said in an announcement from Northwestern about the study.”
3) The FCC is moving to preempt state broadband limits
The North American broadband market is characterized by extraordinary profitability and sub-par performance and availability. This is almost exclusively due to corrupt and/or incompetent regulation which has benefited carriers at the expense of business and consumers. Remarkably, the notoriously ‘free-market’ US has all kinds or regulations restricting competition whereby the purportedly anti-‘free-market’ Canada maintains a more or less hands off approach to oligopolism and widespread anticompetitive practices by carriers. As least the US seems to be moving in the direction of permitting increased competition, though this might only persist as long as the current administration.
“Federal regulators are moving ahead with a proposal to help two cities fighting with their state governments over the ability to build public alternatives to large Internet providers. The Federal Communications Commission this week will begin considering a draft decision to intervene against state laws in Tennessee and North Carolina that limit Internet access operated and sold by cities, according to a senior FCC official. The agency’s chairman, Tom Wheeler, could circulate the draft to his fellow commissioners as early as Monday and the decision will be voted on in the FCC’s public meeting on Feb. 26.”
4) Windows 10 Installs Automatically On Windows 7 And Windows 8
This certainly is interesting news. I wiped the hair shirt that is Windows 8 off my development machine and replaced it with Linux. My “writing” computer is a very long in the tooth Windows 7 machine with a host of mechanical troubles. I have been considering replacing it, however, the pain of using Windows 8 held me off. Since an evaluation copy of Windows 10 can’t possibly be as bad a Windows 8 I might reconsider. Depending on how stable evaluation versions of Windows 10 is, this might actually serve to rejuvenate PC sales prior to its launch.
“In a media event Microsoft unveiled that their latest build of Windows 10 will make updating from older operating systems much easier than it has ever been before. Windows 7 and 8 users will be able to update to Windows 10 directly through Windows Update, negating the need for us to burn a DVD or making a USB boot drive to then fiddle about with the Bios. It is great to see Microsoft make the upgrade process so easy now, especially given how it will be a free upgrade for Windows 7 and 8 users for the first year.”
5) Microsoft to support Raspberry Pi 2 with a free version of Windows 10
There was a lot of excitement in the maker community this week with the announcement of Raspberry Pi 2. Raspberry Pi is a relatively open platform consisting of a board the size of a credit card and the computing performance of a 5 year old PC, all for $35. The version 2 of the board promises much more performance and resources at around the same price as the original. This was, in itself pretty interesting, however, the announcement Microsoft would offer a free version of Windows 10 made it really interesting as it suggests the company might be trying to position itself for the Internet of Things (IoT). This may not work out as planned since Windows 10 is a lot more resource hungry than the versions of Linux which tend to be used on the platform. At least they are trying.
“It’s not clear exactly what version of Windows 10 will be available, but Microsoft is handing it out for free to the Maker community through its Windows Developer Program for IoT later this year. With the pricing of the Raspberry Pi 2 and Microsoft’s free copy of Windows 10, you could have a full PC for just $35 later this year. We’ll have to wait to hear more information from Microsoft on how Windows 10 will function on the Raspberry Pi 2, but the company says it’s planning to reveal more “in the coming months.” It’s likely that this version of Windows 10 will only run modern universal apps, as the Raspberry Pi 2 includes an ARM-based processor.”
6) Google Is Developing Its Own Uber Competitor
The Uber business model is not that hard to replicate (nor are most of the business models associated with Doc Com 2.0) though I admit to being a bit surprised to hear Google might be interested. This is especially the case being as Google is an Uber shareholder, which has got to lead to some very awkward board meetings. I must admit I am more baffled by the rumors of Uber developing self-driving cars. Are they that daft that they actually believe they can compete with the auto industry?
“Uber faces an ever-growing cast of adversaries that includes dubious regulators, litigious drivers, hostile members of the press, and some well-funded rivals. But the most significant threat to the app-based transportation company may be much closer to home: one of its biggest investors, Google.”
7) Exploring the Universe with Nuclear Power
This is a very interesting overview of some of the technologies being considered for space travel. Long story short, current chemical rockets burn a fuel in an engine which provides a lot of force for a relatively short time (on account of the fact you run out of fuel). The force produced is limited by the nature of the chemical reactions – basically how fast you can fling mass out the back of the rocket. You can actually achieve much higher velocities, and therefore quicker trips, if you constantly fling a small amount of mass at extremely high speeds, which you can do with nuclear power.
“Basically, this means finding ways to power rockets that are more fuel and cost-effective while still providing the necessary power to get crews, rovers and orbiters to their far-flung destinations. In this respect, NASA has been taking a good look at nuclear fission as a possible means of propulsion. In fact, according to presentation made by Doctor Michael G. Houts of the NASA Marshall Space Flight Center back in October of 2014, nuclear power and propulsion have the potential to be “game changing technologies for space exploration.””
8) NASA’s Europa Mission to Hunt Down Life’s Niches
The headline is a bit misleading: a mission to Europa to search for life would require a landing of some sort, or at least a very close fly by to scoop up aerosols and therefore this appears to be more of a survey mission. In fact, there has only been one Mars mission which included a test for life and that yielded equivocal results, so it might be a better idea to send a mission there than Europa. In either event, it is true that Europa does have a lot of water and therefore eventually a landing and analysis mission make a lot of sense.
“Although Europa’s ocean may be up to 100 kilometers (62 miles) deep, the conditions at the bottom of that monstrous abyss may be akin to the environment at the bottom of Earth’s comparatively shallow Mariana Trench, the deepest region of the Pacific Ocean, which is 11 kilometers (6.8 miles) deep. Complex biology has evolved in Mariana’s cold, dark environment, so it’s not such a stretch to think that if there is life in Europa’s ocean, it may also be thriving, extracting energy not from the sun (via photosynthesis), but from chemosynthesis near hydrothermal vents.”
9) 4G LTE Rollout Makes India The World’s Next Big Smartphone Market
Emerging markets have become important drivers to smartphone sales and, after China, India is bound to be the most important such market. I don’t know enough about that market to predict what sorts of applications will be enabled by LTE, however, it stands to reasons the networks are being rolled out due to anticipated demand. Sales into emerging markets require inexpensive handsets and we continue to forecast significant pressure on handset pricing globally unless somebody develops an important feature. Since handset features have more or less stagnated over the past couple years, pricing must drop.
“The U.S. smartphone market is well saturated, and a good portion of China’s 1.4 billion citizens have been using mobile devices for several years. So the next hot market for cell phones looks to be India, where carriers are in the early stages of rolling out high-speed 4G LTE networks for the first time. With billions in future sales at stake, handset makers, from China’s Xiaomi to local startups, are scrambling to get the first-mover’s advantage. India is the fastest-growing country in the Asia-Pacific region for smartphone sales, but 4G is currently just a fraction of the market. Almost all of the more than 23 million smartphones it added in the three months ended Sep. 30 were those that are compatible only with relatively pokey 3G networks.
10) How mobile is transforming healthcare
This item links to a 27 page report which contains a fair bit of information so you have to download that if you are interested. The major weakness I see with the document is that it is based on survey data, and survey on this sort of topic can be misleading because there is no reason to believe respondents are well informed on the topic: they may simply be engaging in wishful thinking.
“According to a new survey, mobile technology has the potential to profoundly reshape the healthcare industry, altering how care is delivered and received. Executives in both the public and private sector predict that new mobile devices and services will allow people to be more proactive in attending to their health and well-being. These technologies promise to improve outcomes and cut costs, and make care more accessible to communities that are currently underserved. Mobile health could also facilitate medical innovation by enabling scientists to harness the power of big data on a large scale.”
11) Scientists Invent a New, Lighter Steel That’s as Strong as Titanium
I didn’t know this was even possible. Apparently the alloy is a mixture of iron and aluminum. Titanium is a very abundant metal, however, production of the metal is very expensive and Titanium is also hard to work with (eg. Machine), nevertheless it is the gold standard for strength-to-weight. If this process can be cost effectively scaled up it would have a profound impact across a number of industries and possibly tank the value of titanium.
“Today a team of material scientists at Pohang University of Science and Technology in South Korea announced what they’re calling one of the biggest steel breakthroughs of the last few decades: an altogether new type of flexible, ultra-strong, lightweight steel. This new metal has a strength-to-weight ratio that matches even our best titanium alloys, but at one tenth the cost, and can be created on a small scale with machinery already used to make automotive-grade steel. The study appears in Nature. “Because of its lightness, our steel may find many applications in automotive and aircraft manufacturing,” says Hansoo Kim, the researcher that led the team.”
12) Keurig’s attempt to ‘DRM’ its coffee cups totally backfired
I love coffee and drink it by the gallon, but only if it tastes the way I like it. I have tried the output of the Keurig machines once or twice and concluded the stuff tastes like swill – which is typical for mass market coffee. Not only that, but the coffee is very expensive though the price dropped as the patents expired on the pods. Not surprisingly, Keurig tried to use Digital Rights Management (DRM) to sustain its market position, a typical move for a company which no longer wishes to innovate. Predictably, the effort backfired, but not in the way I expected. I figured people just wouldn’t buy the machines, instead folks have figured out a variety of ways to circumvent the system. I’m sure it still makes crappy coffee though.
“Indeed, the 2.0’s Amazon reviews overflow with caffeine-deprived fury, the idiosyncratically capitalized wrath of people who bought 2.0 machines only to find that their old cups don’t work. “Talk about GREEDY corporate ridiculousness,” said one guy who tried to use his refillable pods. “On principle alone, I hate that they are dictating which coffee I’m using in my machine,” said another. “It is a HUGE SHAME that the company decided to remove the ability to use your own coffee grounds in the home brew k-cup. … They should have just said we made these changes so our products would sell more so we could make a bigger profit,” reads a typical review. “They took a potentially killer machine and added horrible DRM – a rights management system, in the greedy attempt to get all other coffee pod manufacturers to pay them so their pods work,” reads another of the hundreds of one-star reviews. Many lamented the ability to give no stars. If you Google “Keurig 2.0,” the first thing that autocompletes is “hack.””
13) Neil Young raises $6.2 million, releases a portable music player called Pono, and my 4-year-old can’t tell the difference
If there is one human sense we should not be proud of it is our hearing: compared to most other critters we have limited dynamic range and only hear in a narrow frequency band. Not only that but we more or less start losing our hearing from birth. This is especially the case for rock musicians, most of whom are missing more than their fair share of the ‘hair cells’ we use to detect sound. Probably because of our poor hearing coming up with a contraption or marketing campaign which promises to provide an improved music experience can be a gold mine (witness Beats headphones, Monster Cables, and $25/foot speaker wire). It is all bunkum, however: few people can tell the difference, let alone tell there is a difference.
“With a list price of $400, the Pono could theoretically be a bargain. Sony’s new, high-def Walkman is likely to sell for three times that when it debuts. So is the Pono really as bad or, more specifically, as ordinary as the critics say? I admit I had been procrastinating to find out. I paid $200 last year as part of Pono’s $6.2 million Kickstarter campaign and, in return, got one of the first players to roll off the line – and at half price. At the time, I opened the box and realized it might take some mental effort to download programs, figure out memory capacity, and tinker. I put the box under my desk.”
14) Robot firefighter puts out its first blaze
The US has a massive military industrial complex which is also used to subsidize all sorts of projects and technologies. The idea of a robotic firefighter is a good one: it gets damned hot in fires, apparently, so this article grabbed my interest. Unfortunately, as the video shows, the implementation is downright silly: and bipedal robot holding a fire hose and helped along by a couple of guys. If you are going ot make a robot, chances are styling it after a monkey is probably not the best approach. I suspect a 6 legged bug-like system would be a far more effective platform.
“In Mobile, Alabama, a humanoid robot looked on as a fire burned aboard the USS Shadwell. Its infrared eyes scanned the blaze to find its heart, and its robot arms grabbed a hose to spray water into the inferno. This was the first live test for SAFFiR – the Shipboard Autonomous Firefighting Robot – and the first time a robot has ever fought a fire. Developed by roboticists at Virginia Polytechnic Institute and State University (Virginia Tech) in Blackburg for the US Navy, SAFFiR is intended to be part of the firefighting equipment of the future on board every Navy ship, tackling fires without risking human life.”
15) Robot Scientist to Discover Drugs Dramatically Faster
Another somewhat misleading robot story: the robot is not a scientist, the scientists programmed the robot to perform standard tests and analyze the results at a much faster rate than a lab technician can. In fact, a lot of medical tests are done in exactly this manner because companies have developed what amounts to an assembly line to do them. That the actual inspiration for this article bascially says http://rsif.royalsocietypublishing.org/content/12/104/20141289#sec-18, and even though it correctly uses the term “artificial intelligence” that doesn’t mean what most people think it means.
“A new robot just discovered that a mixture of elements that can fight cancer can also treat malaria. Will artificial intelligence be able to unearth life-saving drugs quicker and more inexpensively than humans can? Each day, the robot scientist checks whether 10,000 chemicals are toxic to humans. One human can typically screen only 10 to 20 chemicals a year. According to a co-author of the study that documented the usage of the robot scientist, Professor Steve Oliver from the University of Cambridge department of biochemistry, by doing this the robot, called Eve, can eliminate the use of toxic compounds in drug candidates and identify elements that can treat disease.”
16) Are Smartwatches Already Dead?
It is probably a bit early to declare smartwatches as dead, but they do seem to be coughing up blood. A smartwatch can refer to anything from a fitness band (basically pedometer, heartrate, and maybe GPS) all the way to a Dick Tracy style wristwatch communicator. There is probably a market for fitness products provided the price is low enough, but the Dick Tracy style watches of the type breathlessly anticipated by the Apple fanboy crowd appear to be a solution looking for a problem. Setting aside battery life issues, which are profoundly significant, unless and until somebody can explain why consumers should want smartwatches their sales will languish.
“It feels like more gallons of (figurative) ink has been spilled about the virtues of Pebble—and the company’s incredible journey from Kickstarter to Best Buy—than actual smartwatches sold. When was the last time a product was so universally recommended in a category on the tip of everyone’s tongue… and yet didn’t move loads of product? Despite competition and a love-it-or-hate-it design, the first Android phone only took six months to hit a million. The original Microsoft Zune (yes, the ugly one) took seven months. Pebble started shipping two years ago.”
17) Should you leave your smartphone plugged into the charger overnight? We asked an expert
Yes you should. While the article’s point about heat is valid, major sources of heat are charging and radio operation. Once the phone is charged, the charger shuts off and the heat associated with charging disappears. Unless your phone is doing a lot of downloads, overnight the display is bound to be off. Since you don’t want to ‘cycle’ the battery, which wears it out, leaving it plugged in as much as possible is the best option.
““Leaving your phone plugged in overnight is okay to do, it will not drastically harm your device,” says Shane Broesky, co-founder of Farbe Technik, a company that makes charging accessories. “Your phone is very smart. Once it’s fully charged, it knows when to stop the current from coming in to protect your phone from overcharging.””
18) Smart TVs Are Stupid: Why You Don’t Really Want a Smart TV
For the most part, consumer electronics companies are not known for their software, at least not in a good way. That is the problem with Smart TVs: the software usually is pretty bad and often out of date and that is a situation which is likely to persist until somebody comes up with an open platform which is broadly supported by the industry. The conclusion – that it is better to have dumb TV and external boxes – is probably the correct one despite the hassles and aggravation of having all those damned cables.
“In practice, smart TVs just aren’t that great. Smart TVs have software made by TV manufacturers like Samsung, Sony, LG. Their software is generally not very good. Smart TVs usually have confusing, often baffling interfaces. Controlling the smart TV’s features will generally involve using a remote, probably using on-screen buttons on the the TV. The menu interfaces usually feel old. But don’t take our word for it. A report from NPD last year indicated that only 10 percent of smart TV owners has used the web browser on their smart TV and about 15 percent had listened to music from online services. The majority of them had used video apps, however — for example, to watch Netflix on their TV without plugging in additional boxes.”
19) Major labels keep 73% of Spotify premium payouts – report
Every time a new channel for entertainment emerges we hear outrage about the struggling artists whose very livelihood is imperiled. Frankly, I weep when I hear the likes of Bono lamenting the injustice of the world and the fate of the poor struggling artist. It should be noted than few recording artists ever make money and it is only the wealthiest who “suffer” as a consequence of these new channels. Furthermore, as this study shows just as with movies most of the loot ends up in the pockets of the labels and not the artists. After all, if you paid the artists, how would the record company executives earn a living?
“As you can see below, in terms of the turnover that these platforms generate, the major labels (‘producteurs’) take home the lion’s share, pulling in an average of €4.56-per-subscriber every month after tax. In terms of the total subscription payment, that’s a 46% share of the spoils. However, further analysis from MBW gives a more interesting split: who takes home what from the revenues paid out by streaming companies to music rights-holders. If SNEP’s figures are correct, €6.24 of every €9.99 subscription is paid to music rights-holders – that’s what’s left after tax and the digital platforms’ fee. That would means the labels keep 73% of payouts from Spotify/Deezer etc. They’re followed by writers/publishers with a 16% share, and then artists – mostly paid by their labels – who get 11%.”
20) Anthem failed to encrypt customer data prior to cyberattack
There was news of yet another major corporation being hacked this week. Fortunately, according to this article, no medical records were taken, however, virtually every other important piece of information about the customers was. So, they may not have Aunt Blanche’s pathology report but they have everything else they need to steal her identity. Incredibly (actually, not surprisingly) the information was not encrypted so once the hackers got in the hit the jackpot. Not surprisingly (actually incredibly) the hack is being blamed on ‘Chinese’, with the suggestion somehow the government of China wants people’s Names, Social Security Numbers, Addresses, etc.. Imagine if a bank forgot to lock the vault and blamed that on North Korea.
“Anthem didn’t encrypt the personal data of its customers prior to the massive hack it suffered last month, according to a report in the Wall Street Journal. Citing a person familiar with the matter, the Journal reports that encrypting the data would have made it more difficult for hackers to access, though it would have made it harder for the health insurance company to analyze and share the data with providers and states. It was revealed this week that hackers stole millions of records on customers and employees at Anthem, the second-largest health insurer in the US. The hackers obtained the names, birthdays, addresses, and social security numbers, though there is no sign that they accessed any medical records. Authorities are investigating a possible link to a group based in China.”