The Geek’s Reading List – Week of February 13th 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!
This was a very slow week for tech news – indeed it was a struggle to find enough articles this week, let alone find good ones. There was no theme and really nothing of significance happened in technology. Nonetheless, we managed to find a number of articles covering batteries, smartphone market share, science, and medicine. This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
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1) Why We Don’t Have Battery Breakthroughs
This is more or less a book review, however, it would seem to me that investors interested in the space would do well buy studying spectacular flame outs like Envia and A123. One caveat would be to treat the comments about cost improvements to the Tesla battery pack with a very large grain of salt, in particular because people are prone to extrapolate from this. The real mystery regarding battery breakthroughs is how many get vast amounts of funding despite a history of failure in the industry. It would be far more reasonable to throw large amounts of money scaling up production of a technology only after it has been proven, not while there are a few (inevitably fatal) details to work out.
“LeVine describes what went wrong. In 2006 Envia had licensed a promising material developed by researchers at Argonne National Laboratory. Subsequently, a major problem was discovered. The problem—which one battery company executive called a “doom factor”—was that over time, the voltage at which the battery operated changed in ways that made it unusable. Argonne researchers investigated the problem and found no ready answer. They didn’t understand the basic chemistry and physics of the material well enough to grasp precisely what was going wrong, let alone fix it, LeVine writes.”
2) 4Q 2014 Smartphone OS Results: Android Smartphone Shipments Fall for the First Time
This article caused some degree of hysteria in Apple fanboz ranks, including such deep thinking as this article from Business Insider (Apple is now an existential threat to Android http://www.businessinsider.com/apple-is-an-existential-threat-to-android-2015-2). As a general rule, I suggest that extrapolation from a single data point is unwise, especially when that single data point refers to a single point in time and is obtained from industry research, which is in general utterly unreliable. Furthermore, Apple release iPhone 6 in the period and the accompanying boost in sales is more or less predictable. Apple’s strategy thus far has been to offer a premium priced product but the market is headed steadily down in price. Thus company has been fortunate in that, despite becoming an industry follower, its customer base places a high value on the brand and seem reticent to migrate to other platforms. Time will tell if this is a sustainable position.
“ABI Research reports that certified Android smartphone shipments fell quarter-on-quarter for the first time in 4Q 2014. In what is traditionally a shipment spike quarter, certified Android shipments fell from 217 million in 3Q 2014 to 206 million in 4Q 2014, mainly due to Apple iOS’ 90% growth from 39.3 million to 74.5 million iPhones shipped, but also due to forked Android. “Google’s Android is being attacked by Apple’s iOS at the high end and forked Android and AOSP at the low end in high growth emerging markets. The Android One initiative has slowed forked Android and AOSP growth outside China, but Apple’s success has taken the high end of the market away from certified Android’s premium tier vendors,” said Nick Spencer, Senior Practice Director, Mobile Devices, ABI Research.”
3) Interstellar Travel Not Possible Before 2200AD, Suggests Study
All of my grandparents were born in an era when heavier than air flight was impossible and yet they watched Neil Armstrong walk on the moon. Of course, interstellar travel is not trivial: besides the challenges imposed by distance and relativity, you have to deal with things like hitting a speck of dust at relativistic speeds (the kinetic energy released is similar to a small atomic bomb). Perhaps humanity will remain forever tethered to our solar system, however, as the pace of scientific progress continues to accelerate, these sorts of predictions are best not taken seriously.
“The big problem, of course, is distance. In the past, scientists have studied various factors that limit our ability to traverse the required lightyears. One is the speed necessary to travel that far, another is the cost of such a trip. By looking at the rate at which our top speed and financial clout are increasing, and then extrapolating into the future, it’s possible to predict when such missions might be possible. The depressing answer in every study so far is that interstellar travel is centuries away. Today, Millis takes a different approach. He looks at the energy budget of interstellar missions. By looking at the rate at which humanity is increasing the energy it has available and extrapolating into the future, Millis is able to estimate when we will have enough to get to the stars.”
4) HBI researchers find new therapy dramatically benefits stroke patientsNew therapy improves end results for stroke patients
Incredibly, this finding only got a minute or so of coverage on the news. Unfortunately, the article leaves out a few details such as the difficulty in doing the procedure – it is probably similar to coronary stent placement, which is routine. The dramatic improvement in outcome and reduction in mortality is very encouraging.
“Overall, positive outcomes for patients increased from 30 per cent to 55 per cent. In many cases, instead of suffering major neurological disability, patients went home to resume their lives. The overall mortality rate was reduced from two in 10 patients for standard treatment of care to one in 10 patients – a 50 per cent reduction with ET. “This is the most significant and fundamental change in acute ischemic stroke treatment in the last 20 years. These results will impact stroke care around the world,” says Dr. Michael Hill, the senior author of the study, professor in the Cumming School of Medicine’s departments of clinical neurosciences, and radiology and a neurologist with the Calgary Stroke Program of Alberta Health Services (AHS).”
5) Rapid and Unexpected Weight Gain After Fecal Transplant
Obesity is generally characterized as a moral failing, or ascribed to industrial food production and a sedentary lifestyle. While calories in/calories out is clearly very important, there have been suggestions intestinal bacteria may play a role. This is only a single case, however, the findings seem to align with mouse studies (http://www.the-scientist.com/?articles.view/articleNo/37367/title/Obesity-via-Microbe-Transplants/). If you think about it, causing obesity might be in the best evolutionary interest of a bacteria as it could result in a more suitable environment and a larger population of bugs. One can imagine an experiment where various bacteria are introduced to mice with a view to determining which strains, if any, might be responsible for obesity. Doctors could administer a “shock treatment” to wipe the system clean and reset it with a more appropriate ecosystem.
“Fecal microbiota transplant (FMT) is a promising treatment for relapsing C. difficile infections, a common cause of antibiotic-related diarrhea that in severe cases may be life-threatening. The case suggests that clinicians should avoid selecting stool donors who are overweight. The report also raises questions about the role of gut bacteria in metabolism and health. At the time of the woman’s fecal transplant in 2011, her weight was stable at 136 pounds, and her Body Mass Index (BMI) was 26. Then 32 years old, she had always been of normal weight. The transplant used donor stool from the woman’s overweight but otherwise healthy teenage daughter, administered via colonoscopy, to restore a healthy balance of bacteria in the woman’s gut, curing her C. difficile infection.”
6) ‘Virtual virus’ unfolds the flu on a CPU
Protein folding and the assembly of biomolecules is a very, very, hard problem from a computational perspective. The interactions between various atoms is such that there are a near infinite number of potential solutions even though the process is deterministic (thermodynamics means a protein will always fold a certain way in a certain environment). Massive computer clusters and game algorithms have been used to arrive at answers such as these, however, the real solution probably lies in quantum computing. After all, folding is a quantum level problem.
“By combining experimental data from X-ray crystallography, NMR spectroscopy, cryoelectron microscopy and lipidomics (the study of cellular lipid networks), researchers at the University of Oxford have built a complete model of the outer envelope of an influenza A virion for the first time. The approach, known as a coarse-grained molecular dynamics simulation, has allowed them to generate trajectories at different temperatures and lipid compositions — revealing various characteristics about the membrane components that may help scientists better understand how the virus survives in the wild or find new ways to combat it.”
7) Mysterious Galaxy X Found Finally? Dark Matter Hunters Would Like To Believe So
We like to think physicists have everything sorted out, and they do, but the niggling detail that 95% of the universe is made up of dark energy and dark matter (http://science.nasa.gov/astrophysics/focus-areas/what-is-dark-energy/) which they have absolutely no explanation for and which do not fit into any of their models. Of course, this doesn’t really invalid what they know, but until some explanation, the assumptions made in, for example item 3 regarding space travel may remain uncertain. One promising development is the fact they they have been able to crudely image the stuff by taking account its gravitational influence. Unfortunately, as an emerging field most dark matter experimental results have been brought into question. It is intriguing to consider this one might be real.
“Astronomers have long suspected strange ripples in hydrogen gas in the disk of our Milky Way galaxy are caused by the gravity of an unseen dwarf galaxy dominated by dark matter — and now they think they’ve found this “Galaxy X.” The prediction of an invisible dark matter dwarf galaxy orbiting our Milky Way, made in 2009, may have had its “observational confirmation,” say researchers at the Rochester Institute of Technology in New York.”
8) Smart TVs Are a Great Idea. Too Bad TV Makers Are Ruining Them
The consumer electronics industry prospered mightily during the transition to HDTV, investing large amounts of money in ever larger plants to built flat screen TVs which now mostly sell at well below $1,000. It is understandable they would want to transform their businesses into something other than what it is, namely a capital intensive business with large volumes but low margins. There has been a lot of excitement over smart TVs this week (see item 9) because, while they might be spying on you they are also sometimes foisting advertising on you. The spying may be blocked by government as most governments have privacy laws preventing anybody but the secret police from spying on you. There is the possibility the ads will stay for the same reason people continue to see Internet ads: they don’t know how to turn it off.
“There’s no reason smart TVs can’t be great. But they’re not great right now. You shouldn’t buy one. It’s all because TV manufacturers looked at that screen in the center of your house, where you spend hours a day, and saw only dollar signs. So they cynically turned “Smart TV” into a platform for unwelcome data collection and intrusive, inappropriate advertising. Somewhere in there, they also forgot to actually make something we’d want to use. They’re not giving users a reason to upgrade. They’re actually making me miss the 32-inch Polaroid TV my family bought for $1,000 a decade ago—sure, sometimes it makes a screeching noise and I have to restart it, but at least it’s not interrupting my movie to show a Pepsi ad.”
9) It’s not just your TV listening in to your conversation
Somebody actually read through Samung’s smart TV disclaimer and discovered the company essentially reserved the right to listen in on conversations and do pretty much whatever it wanted with the data. As this article points out, this is all part of a larger trend which is, purportedly, due to the increased use of voice recognition (VR) technology. Frankly, I have found VR to be utterly useless as it immediately devolves into me swearing at the device (resulting in further misinterpretation). Of course we should have no privacy fears from mega corporations like Apple, Google, or Samsung, history to the contrary, however, since most consumer electronics are manufactured in China by companies with ties to the Red Army, the truly paranoid might wonder if that is something to worry about.
“But, in recent years, voice recognition systems have changed. To deal with the limited processing power present in smartphones (and TVs), and to increase voice recognition accuracy, many voice recognition systems now record what you have said. They then upload this to a server in the cloud for analysis, before returning the result to your smartphone for action. Those with an iPhone will have noticed this due to the fact that Siri cannot take your commands when you are not on the internet, even if the request is a local one (like setting a timer). While this does increase accuracy and saves your phone’s processor, it also means that any request you make is being sent over the cloud, possibly to a third party organisation. Combined with the ability of devices to listen all the time, this may cause some people to worry that the machines are keeping track of everything we say.”
10) Five technologies that betrayed Silk Road’s anonymity
The Silk Road drug dealer website was brought down by the FBI and its operator has been found guilty for running it. That may be the least of his problems as he is also alleged to have tried to arrange contract killings of several people and that trial is pending. One generally thinks of computer criminals as masterminds, but as this article suggests, they may be very good at being drug dealers but not so much at being computer geniuses. The one exception I would make would be to the folks who run bitcoin sites since they appear to be pretty adept at getting away with “stealing” hundreds of millions worth of bitcoin and converting that into cash money. I put stealing in quotes because it is not clear that taking peoples’ bitcoin is even a crime.
“Pro tip for any would-be online drug kingpins: Don’t post vacation pictures on Facebook. Ross Ulbricht was convicted in a Manhattan federal court last week for his role operating the Silk Road online marketplace. He could serve 30 years or more behind bars. The market Ulbricht built was based on an expectation of anonymity: Silk Road servers operated within an anonymous Tor network. Transactions between buyers and sellers were conducted in bitcoin. Everything was supposedly untraceable. Yet prosecutors presented a wealth of digital evidence to convince the jury that Ulbricht was Dread Pirate Roberts, the handle used by the chief operator of the site.”
11) This is how App Store rankings are manipulated
One thing about the Internet is that if there is a ranking or rating system, somebody will figure out a way to game it. Heck if you can game the NY Times bestseller list (http://www.patheos.com/blogs/naturalwonderers/evangelical-authors-buy-their-way-onto-new-york-times-bestseller-list-giving-poorer-authors-the-moral-highground/) with the help of “marketing” companies, why would a virtual store be any different? What I have discovered is that it is best to completely ignore positive comments (which may or may not have been bought and paid for) but focus on the negative ones, which are more likely, but not certainly, real.
“In past years Apple has said it’s cracking down on the manipulation of App Store rankings through bot programs, but a recent image from Chinese social media site Weibo suggests the trade is alive and well using actual iPhones. The photo is captioned “hardworking App Store ranking manipulation employee,” and shows a young woman sat in front of a bank of around 50 iPhone 5Cs, all hooked up with a nest of cables. There’s an identical bank of iPhones on her right and what looks like two more smartphone-laden desks facing away from her on the other side of the room.”
12) iPhone 6 Plus Owners Use Twice as Much Data as iPhone 6 Owners
It seems reasonable that larger screens lead to more data usage, especially since video, which is a data pig, is more compelling from a larger screen. Unfortunately neither the article nor the Citrix report bother to compare data usage between iPhones and Android devices with similar sized screens and in similar markets. In other words, is it an iPhone 6 Plus phenomenon or the fact that Apple users finally seen why big screen Android phones have been popular for years and are catching up? The PDF contains a number of interesting facts, figures, and infographics you might also be interested in.
“There’s a new mobile analytics report out from Citrix [PDF] and it’s filled with interesting data on mobile usage, including a tidbit that suggests iPhone 6 Plus owners use far more data than other iPhone owners. People who own the 5.5-inch iPhone 6 Plus consume twice as much data as people who own the smaller 4.7-inch iPhone 6, and iPhone 6 Plus data usage is 10 times higher than data usage on the 3.5-inch iPhone 3GS. That last statistic isn’t surprising — along with a small screen, the iPhone 3GS is much slower with hardware that’s almost six years old.”
13) Xiaomi’s plan to take over the world: One handset, tablet at a time
Xiaomi is a rapidly expanding Chinese company which is starting to look like a Chinese version of Apple. Not because they seem to like knocking off Apple features (many of which are copied from other vendors anyway) but because they have a growing fanboy customer base keen on everything Xiaomi. The company’s success in the developing world may blunt efforts by all smartphone companies to continue growing, however, the real damage might come if and when they enter major markets in the developed world. This announcement implies as much, however, it appears they will not actually be selling mobile devices, possibly because of intellectual property concerns.
“Top Xiaomi executives announced plans to enter the American market this year, minus handsets—at least for now. “We intend to launch mi.com in the US in a few months,” Hugo Barra, a Xiaomi vice president, told reporters at a press event on Thursday. Mi.com is the Chinese startup’s answer to Amazon—a one-stop online shop currently only available in China where users can buy a vast assortment of consumer electronics under the Xiaomi brand. The company, previously known for making smartphones and tablets in China (and for frequently copying Apple’s designs), clearly wants to build a dominating ecosystem to sell products and services.”
14) 5 Years to 5G: Enabling Rapid 5G System Development
This is a highly technical article and the last page more or less focuses on the solutions offered by the employer of one of the authors. It goes over the technical details at a high level and notes that the specification hopes to include low-speed, power efficient, communications for Internet of Things (IoT). Although I believe the overwhelming majority of IoT applications will use something like WiFi to operate, there is probably some need for such a system for applications outside the home or factory. Regardless, 5G will probably be standard for mobile devices within 10 years, provided they can work out the technical challenges.
“The goal of 5G is to provide a 1,000x increase in capacity, supporting 100+ billion connections with data rates up to 10Gbps and less than 1ms latency. However, these new networks will not just support the fastest links and fattest data pipes; they also aim to improve upon the capabilities of current networks. For example, today’s wireless networks lack support for the low data rates and long battery life required for M2M (machine-to-machine) and sensor-type technologies. Developing 5G networks that meet these goals will require a combination of existing systems such as LTE-Advanced and WiFi, combined with revolutionary technologies designed to support new uses such as the Internet of Things (IoT), augmented reality, immersive gaming, and UHD (ultra-high-definition) streaming video.”
15) Tablet magazine starts charging commenters
I was outraged when I saw the headline, but then I read the article and it makes much more sense. Any online forum is subject to comments ranging from spam (www.thegeeksreadinglist.com gets hundreds a week) to hate speech to entirely off-topic rants. Frankly, the comment section of most media look sound like an insane asylum where snakes have been let loose. As a result, many outlets have just stopped allowing comments while Tablet has come up with a relatively novel approach: by adding a small charge they discourage nonsense. Unfortunately, the net result will probably be the complete elimination of comments, but such is the way things are going anyways.
“The value of comments sections has been a hot topic over the past few months, with news outlets like The Chicago Sun-Times, Popular Science, Reuters, Re/code, Mic, The Week and Bloomberg switching off readers’ comments. Moderating such forums is expensive for companies with limited resources, and a lot of reader conversations have moved to social media platforms, such as Facebook and Twitter. Comments sections can also, notoriously, devolve into exchanges of personal attacks and squabbles about subjects only tangential related to the posts they sit beneath. On the other hand, some critics argue that the movement away from comments jeopardizes news organization’s ability to engage with readers and analyze their preferences.”
16) Cars Without Drivers? Not Likely, Study Finds
I haven’t had the time to review the IBM study (http://www-935.ibm.com/services/us/gbs/thoughtleadership/auto2025/), however the headline does not appear to reflect the content. After all, 2025 is only 10 years away and, media (and Tesla) hype to the contrary, we are more than 10 years away from the sort of technology and infrastructure you need for a driverless car. Therefore it is not surprising that only 8% of respondents thought that fully autonomous vehicles would be commonplace by then. These were probably HR executives – I would be worried if a measurable number of auto industry experts thought otherwise. In contrast, semi-autonomous systems such as emergency braking and avoidance, land change assist, etc., are bound to be standard features by then. I continue to maintain that self-driving cars will not be a significant portion of the global fleet until around 2035 and that will precipitate another industrial revolution.
“The report, however, found considerable skepticism about fully autonomous vehicles, where no driver is required, yet the vehicle is integrated into normal driving patterns. Only 8 percent of executives see fully autonomous vehicles becoming commonplace by 2025. And only 19 percent believe that a fully automated environment — where the driving system handles all situations without monitoring, and the driver is allowed to pursue tasks not related to driving — will be routine by 2025. However, 87 percent of the survey’s participants felt that partially automated driving, such as an expansion of today’s self-parking or lane change assist technologies, would be common. Moreover, 55 percent said that highly automated driving, where the system recognizes its limitations and calls for the driver to take control, if needed, while allowing the driver to perform some non-driving tasks in the meantime, would also be adapted by 2025.”
17) Self-Driving Vehicles Could Cut Car Ownership Nearly in Half, Report Finds
The idea here is that, for example, somebody could drive to the train station and have their car drive itself home so their spouse can use it. This might reduce the number of cars owned per family, but it could equally result in significantly more miles being driven. After all, if your vehicle can go drop of or pick up your kids without your intervention, perhaps you are more likely to let it do so. What I envisage is a much larger number of much smaller vehicles, some of which would be exclusively for transport of goods and which may even lack seats for people.
“In the not-too-distant future, the typical picture of a big American household in the suburbs might include just one car in the driveway: A new report finds that self-driving cars have the potential to cut U.S. car ownership nearly in half. Today, most households in the United States have multiple cars that aren’t always being put to use at the same time. But a self-driving car wouldn’t have to languish in its parking spot. Instead, it could drop someone off at work, and then head back home to shuttle other family members back and forth between errands.”
18) This Incredible Hospital Robot Is Saving Lives. Also, I Hate It
These sorts of little self-piloting robots have been in use for some time in offices delivering mail and in factories moving stuff around. In fact any institution which pays people to move stuff around could probably use such a thing as they can be made entirely safe. The real question, of course, is the cost: robots are not cheap (I imagine hospital robots are relatively expensive) so the question of return on investment compared to hiring someone. Nevertheless the maker community and robotics engineering in general has been moving at quite a pace and it is easy to believe a robot/human cost crossover point for routine delivery is not that far away. Why this concerns people is beyond me: we no longer employ farmhands to scythe hay either.
“The robot, I’m told, is on its way. Any minute now you’ll see it. We can track them, you know. There’s quite a few of them, so it’s only a matter of time. Any minute now. Ah, and here it is. Far down the hospital hall, double doors part to reveal the automaton. There’s no dramatic fog or lighting—which I jot down as “disappointing”—only a white, rectangular machine about four feet tall. It waits for the doors to fully part, then cautiously begins to roll toward us, going about as fast as a casual walk, emitting a soft beep every so often to let the humans around it know it’s on a very important quest. It’s not traveling on a track. It’s unleashed. It’s free.”
19) Tesla to make battery for in-home use, production to begin in 6 months
Tesla delivered less than pleasing results the other day and investors showed a brief period of lucidity, leading to a modest sell off in the company’s shares. I even saw an article which looked at the balance sheet and chronic cash burn – a crisis which will almost certainly be solved by issuing even more shares instead of running a profit. This is, after all, New Economy 2.0. One of the more humorous stories to come out this past week is Tesla’s plan to sell a “home use” battery. I saw this characterized as a new invention as if Uninteruptible Power Supplies do not exist. While the prospect of having a large, explosively flammable lithium ion battery pack in my house does not have as much allure as you might expect, I suspect the major problem will be cost and short life: a problem which afflicts all large scale battery solutions.
“Electric-car maker Tesla is getting into the home-battery business, the company confirmed during an earnings call Wednesday. Speaking to investors, Tesla Chief Technology Officer JB Straubel said his company plans to unveil consumer batteries that will power a person’s home or business “fairly soon.” He went on to say that it’s possible the product could be unveiled “in the next month or two” and that production on the batteries will begin in approximately six months. Tesla declined to elaborate on Straubel’s remarks.”
20) End Of An Era: File Sharing Mammoth RapidShare Is Shutting Down
This is yet another object lesson as to why you have to plan your use of cloud service, in particular cloud storage, very carefully. If you had the copious misfortune of having a lot of data stored on RapidShare, chances are you are pretty much screwed because you won’t be able to download it all before the lights go out. Ultimately, the pricing of all cloud services will mover towards the cost of the hardware, the site, and the electricity to run it. Since hardware costs keep going down, you are always at a cost disadvantage relative to the most recent entrant. Of course, near term, this might be a growth market, but be warned: do not be surprised if your cloud storage provider pulls the plug eventually. Always keep a local backup.
“Online file sharing site RapidShare is going away come March 31st 2015, a note on the service’s website has announced. Users wanting to get their data out of the service need to do just that before April 1st. Launched all the way back in 2002, RapidShare was one of the first large file sharing sites around, and at one point boasted of having 10 petabytes of data that had been uploaded by its users. The problem here though was that the service had become popular with pirates, meaning an unknown number of the files hosted on RapidShare were being illegally shared.”