The Geek’s Reading List – Week of April 10th 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 edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
1) The Georgia Legislature Just Pulled the Plug on Electric Cars
Vice TV on HBO does some pretty good journalism, but their other stuff is dreadful. Not surprisingly, given their biases, this move is hailed as retrograde: apparently when subsidies let wealthy people get cars cheap, its good, provided those are the right types of cars. If the authors had any concern for the environment they might promote subsidies on Toyota Yaris or Fiat 500s, which probably leave a smaller environmental footprint than an EV. I think the “road use” charge makes some sense, however, most damage to roads are done by trucks, not cars, so the question remains as to whether the amount is fair. Regardless, I think it is a huge waste of taxpayer’s money to subsidize a non-viable techn ology like EVs.
“A generous state tax break has helped make Georgia the number two state for electric vehicles, and made Atlanta the top market for the compact Nissan Leaf. Both the Leaf and the higher-end Tesla sedans are now common sights in and around metro Atlanta, where more than 10,500 are registered. But this year, Georgia lawmakers needed to raise nearly $1 billion to patch up crumbling roads, highways, and bridges. So they are pulling the plug on that $5,000 tax credit — a move budget analysts say will contribute $66 million to the state’s coffers in 2016 and nearly $190 million by 2020.”
2) Aluminum battery from Stanford offers safe alternative to conventional batteries
Revolutionary battery developments tend to occur about once a week. This one stood out because of the Stanford connection, however, I would not ascribe it any more credibility than any other. As is often the case, they leave a lot unsaid. For example what is the energy density (kwHr/cm3) or specific energy (kwHr/gm)? Both are extremely important parameters for a battery (along with cost/kwHr, lifespan, etc.) because all such parameters matter at the same time, depending on the application. Unlike, say graphene, which is a novel material and one we can speculate about, basic chemistry is well characterized and breakthroughs are therefore rare. You can never say never, but “unlikely” is a good starting point. Thanks to Avner Mandelman and Bill Hasell for bringing this article to my attention.
“Stanford University scientists have invented the first high-performance aluminum battery that’s fast-charging, long-lasting and inexpensive. Researchers say the new technology offers a safe alternative to many commercial batteries in wide use today. “We have developed a rechargeable aluminum battery that may replace existing storage devices, such as alkaline batteries, which are bad for the environment, and lithium-ion batteries, which occasionally burst into flames,” said Hongjie Dai, a professor of chemistry at Stanford. “Our new battery won’t catch fire, even if you drill through it.””
3) For PC shipments, the slump is back
As we predicted a number of years ago, the PC industry is mature and machines are typically replaced on failure rather than replaced due to an inability to keep up with the demands of the job. Partly because of the fiasco known as Windows 8, replacement cycles have extended since consumers and businesses would prefer to put up with an old machine running an insecure operating system (Windows XP) rather than learn a new user interface and/or a pile of workarounds needed to make Windows 8 usable. I suspect Microsoft has learned its lesson and there is a good chance Windows 10 will be an easier choice. This should result in a brief upgrade cycle and boost the financial results of Microsoft and Intel for a year or so.
“The personal computer didn’t get a good start to the new year. Although things were looking up for PC makers by the end of 2014, with sales stabilizing, PC shipments slumped in the first quarter of 2015, research firms Gartner and IDC said separately Thursday. A big reason for last year’s gains came from consumers and businesses replacing old computers still running on the 13-year-old Windows XP operating system — Microsoft pulled technical support for that software last year. But that burst of new purchases appears to have died down in the first quarter, resulting in a tumble for worldwide PC shipments. Gartner estimated that decline was 5.2 percent from the year-ago period, while IDC reported a 6.7 percent drop. Total PC shipments worldwide were 71.7 million units in the first quarter, according to Gartner.”
4) Undersea Cables Transport 99 Percent of International Data
I have recently read, and been asked about, plans to build low earth orbit satellite constellations to provide Internet service, which just goes to show that bad ideas never die – they keep coming back. Setting aside cost (by far the most significant consideration) such approaches can never become a sustainable business model. Once you have proven that a market exists for true broadband in, for example, sub-Saharan Africa, cables will be laid to serve those markets, likely with a wireless “last mile”. Cabled solutions are no only superior in all respects, they cost much less and scale much better than space based systems.
“Most people probably don’t know that 99 percent of all transoceanic data traffic goes through undersea cables, and that includes Internet usage, phone calls and text messages. This route is also faster than satellite transmissions, by up to eight-fold.”
5) U.S. Smartphone Use in 2015
This survey provides interesting insight into the abysmal state of telecommunications in North America, even though the figures themselves refer to the US. Of particular note is the low smartphone penetration rate (65%). Slightly older figures show the US and Canada tied at 13th place and I suspect things have deteriorated since then. A significant number of smartphone users have no access to the Internet other than their smartphones, and it is a safe bet that the 35% without smartphones either cannot access or cannot afford to access, the Internet. All this is a consequence of ham handed regulation of the broadband and mobile industries at the same time as more government services are placed online. These sorts of number do not bode well for economic competitiveness down the road.
“The traditional notion of “going online” often evokes images of a desktop or laptop computer with a full complement of features, such as a large screen, mouse, keyboard, wires, and a dedicated high-speed connection. But for many Americans, the reality of the online experience is substantially different. Today nearly two-thirds of Americans own a smartphone, and 19% of Americans rely to some degree on a smartphone for accessing online services and information and for staying connected to the world around them — either because they lack broadband at home, or because they have few options for online access other than their cell phone.”
6) Apple sides with Microsoft in closely watched patent dispute with Google
This is rather funny: Microsoft, arguably the largest patent troll in the planet, is trying fighting Google over damages associated with its own infringement of patents own by Google. Apple, another company which vigorously uses a dysfunctional patent system to bludgeon innovators, is siding with Microsoft, meanwhile other companies have lined up along their own respective economic interests. How you can argue that banal “inventions” such as many of those asserted by Apple should have high damages while actual inventions by the likes of Motorola which underpin important industry standards should be low is something they must teach in law school.
“Lawyers for Microsoft and Google will appear Wednesday morning at the 9th Circuit Court of Appeals in San Francisco in a long-running dispute over patents that were originally owned by cell phone maker Motorola Mobility. The case involved the implementation of wireless and video standards in products including Microsoft’s Xbox 360.The case involved the implementation of wireless and video standards in products including Microsoft’s Xbox consoles. But this is no ordinary patent showdown. Other tech companies are watching the case closely for its potential to set a precedent for negotiations over “standard-essential patents” or “SEPs” — technologies required to implement industry standards. The case has already created some unusual alliances. Apple and T-Mobile are among the companies siding with Microsoft in the case, while Nokia and Qualcomm are seeking to overturn a lower court’s ruling that found in Microsoft’s favor.”
7) The Death of Moore’s Law Will Spur Innovation
This is a follow on article to one I carried recently which provided a sort of “reality check” with respect to unsubstantiated expectations associated with Moore’s Law. This article argues, correctly, that a leveling of the rate of innovation will essentially result in a broader base of innovation at the system level. It is easy to dismiss open source software and hardware as “geeky”, but it is probably mentioning that the most popular operating system, Android, is open source and that most of the Internet runs off open source software. This article is about hardware, but hardware is harder than software, especially when the hardware is changing as rapidly as it has over the past 50 years. In other words, what happened in software will happen in hardware over time.
“Companies that produce open-source hardware are few and far between. At least, they are if you define them in the usual way: an enterprise that provides documentation and permission sufficient for others to re-create, modify, improve, and even make their own versions of the devices it sells. And although open hardware has made strides in recent years—including an increasing number of companies adhering to these practices along with the establishment of the Open Source Hardware Association—it remains a niche industry. You might guess the reason to be simple—such companies must be set up and run by idealists who lack any hardheaded business sense. Not true! What’s held back the open-source hardware movement is not a lack of business acumen; it’s the rapid evolution of electronic technology.”
8) The new struggles facing open source
This article relates to items 7 and 9. The general perception of Open Source software is a bunch of highly skilled amateurs developing software for the greater good. The reality is somewhat different as a lot of the contributions are made by employees of for profit companies who are being paid to make those contributions. The very fact this has occurred does not undermine open source but it legitimizes it: lots of money is pouring in and that is a good thing unless the major players try to corrupt the system and privatize the collective work. Since there really is no “majority contributor” it is very unlikely this can occur. Indeed, if it would the open source community could simply “fork” the code, leaving the would be dominant player out in the cold.
“The early days of open source were fraught with religious animosities we feared would tear apart the movement: free software fundamentalists haggling with open source pragmatists over how many Apache licenses would fit on the head of a pin. But once commercial interests moved in to plunder for profit, the challenges faced by open source pivoted toward issues of control. While those fractious battles are largely over, giving way to an era of relative peace, this seeming tranquility may prove more dangerous to the open source movement than squabbling ever did.”
9) Armstrap is a community of engineers and makers determined to help make ARM prototyping easy and fun
As suggested in item 7 Open Hardware is primed to become an important factor in innovation. Hobbyists are probably aware of the likes of Arduino, which is an open source microcontroller platform, but few are aware of programs like the Open Compute project, which is assembling open hardware designed for corporate environments. I came across this project, which is much closer to the Arduino than Open Compute. Nonetheless, if you were considering designing a robot for a commercial application this would make an excellent starting point. The boards themselves are pretty costly, at US $69 and up, however the processors are themselves not cheap at around US $12 or so. Because this is an open platform, it is likely Chinese “clones” will become available in the not so distant future.
“Armstrap is a community of engineers and makers determined to help make ARM prototyping easy and fun. We focus on ease-of-use, helping real-world engineers bootstrap interactive objects or environments. Armstrap Eagle is an open-source electronics prototyping platform centered on the powerful STM32F4 ARM processor. The boards can be built by hand or purchased pre-assembled; the software can be downloaded for free. The hardware reference designs (CAD files) are available under an MIT license, you are free to adapt them to your needs.”
10) I’m addicted to the gruesome and beautiful photographs on Figure 1, an Instagram for doctors
Group think is usually problematic, but collective analysis – a group thinking about something – can be very powerful. For example, there are websites dedicated to helping homeowners solve basic plumbing an electrical problems and frequently the best solutions are offered by other homeowners who had already solved and identical problem. This application leverages the power of group problem solving to medical puzzles, so I doubt the casual observer’s comments are welcome. Nevertheless, it is a potentially very powerful tool, especially for unusual conditions. I can’t help but wonder if a similar system which offered anatomized test results in a database with a “finders fee” for the correct answer might extend the functionality beyond curiosity with the occasional “hit” benefiting a patient.
“Nick DeVito is a third-year resident at Tufts Medical Center working toward a career in hematology and oncology. During rotations, if he’s feeling bored, he likes to whip out his smartphone and browse through Figure 1, a mobile app he compares to Instagram for doctors. He will offer suggestions on difficult diagnoses and favorite particularly beautiful photos of growths, gashes, and gangrene. By and large the service is used by medical professionals, but every once and a while, a picture is worth sharing with everyone. “My dad works in hardware sales, so I had to show him this one picture of a patient with a two-by-four through his chest,” says DeVito. “There are images on here that anyone can connect to.””
11) Microbes Engineered to Prevent Obesity
There has been a number of recent findings which suggest that an individual’s microbiome might somehow have an influence on obesity. This article does not actually have anything to do with that. Instead it is about genetically engineering the little critters to produce a drug inside the patient. I would imagine that one problem with such a mechanism would be in controlling doses since the amount fo the drug would depend on the population and health of the bacteria. Nevertheless, it is interesting research.
“Genetically engineered bacteria can prevent mice offered a high-fat diet from overeating. The beneficial effects of the bacteria last for about four to six weeks, suggesting that they temporarily take up residence in the gut. Researchers developed the anti-obesity therapy to test a new way of treating chronic diseases. Sean Davies, a pharmacologist at Vanderbilt University, is modifying bacteria that live in and on the body—known collectively as a person’s microbiome. The hope is that engineered microbes could secrete drugs to treat diabetes, high blood pressure, or other conditions over the long term, eliminating the need to remember to take a pill. Another benefit is that many drugs—including the one tested by the Vanderbilt group—cannot be administered orally because they wouldn’t survive digestion. Bacteria could make it easier to administer such drugs.”
12) Cryptocurrency Exchanges Emerge as Regulators Try to Keep Up
We don’t hear as much about cryptocurrencies as we used to as the pace of speculation seems to have died down somewhat and “mining” tends to only be profitable if you do it on other people’s computers without their consent since the value of the currency tends to be below the cost of the electricity needed to produce it. The true value of cryptocurrencies, in particular to neo-Libertarians is that it is “money the government does not control”. Alas, the problem with this is that governments have laws and the power to enforce them. You will never see a concurrency which satisfies the non-Libertarians and the government at the same time and the government will always win this type of contest. In other words, regulating cryptocurrencies undermines their raison d’etre: a regulated cryptocurrency transaction is simply a Mastercard transaction by another name, albeit one which some other idiot spent a lot of money to create.
“Digital cryptocurrencies—including bitcoin and litecoin, along with dozens of others—have struggled to win mainstream acceptance in the U.S. Interest in this so-called “Internet money” is not going away, however, which is why regulators are developing rules that that they hope can avert a repeat of last year’s Mt. Gox meltdown, when the world’s largest bitcoin exchange unexpectedly shut down after losing hundreds of thousands of bitcoins in a cyber attack. The U.S. government has largely sat on the sidelines, leaving states to regulate digital cryptocurrency exchanges. The exchanges, with names such as BitPay and Coinbase, are Web sites for buying, selling and exchanging digital currency. Bitcoin and its ilk are referred to as cryptocurrencies for their use of cryptography to secure transactions and mint new virtual coins.”
13) Everything you need to know about NVMe, the insanely fast future for SSDs
We predicted the rise of Solid State Drives (SSDs) and the ultimate disappearance of Hard Disk Drives a number of years ago. The cost premium associated with SSDs remains, but it is more than offset by speed, power consumption, and reliability advantages. The speed advantages of SSDs remain masked by legacy hardware interfaces which were developed for HDDs and this limitation will become even more significant as SSD performance continues to increase. NVM Express is a solution, though it may not be the ultimate one. We expect that within 5 years HDDs will be as rare as floppy drives are today.
“As SSDs become more common, you’ll also hear more about Non-Volatile Memory Express, a.k.a. NVM Express, or more commonly—NVMe. NVMe is a communications interface/protocol developed specially for SSDs by a consortium of vendors including Intel, Samsung, Sandisk, Dell, and Seagate. Like SCSI and SATA, NVMe is designed to take advantage of the unique properties of pipeline-rich, random access, memory-based storage. The spec also reflects improvements in methods to lower data latency since SATA and AHCI were introduced.
14) 3D virtual objects that can be touched and felt
Virtual Reality (VR) is typically thought of as a visual system such as a special headset. While sight and sound are important senses so is touch, and this haptic technology strives to complete the experience. Humans have an extremely acute sense of touch, so it is hard to believe a system such as this will provide a credible alternative, but it might be an important step, kind of like 8 bit graphics and sound were 20 years ago.
“British company Ultrahaptics has developed a unique technology that enables users to receive tactile sensations from invisible three dimension objects floating in mid-air. Using ultrasound to precisely project sensations through the air, users can ‘feel’ and interact with virtual objects. Professor Sriram Subramanian, who co-developed the haptic technology at the University of Bristol’s Computer Science Department, explained that their device applies the principles of acoustic radiation force, whereby sound waves produce forces on the skin which are strong enough to generate tactile sensations.”
15) Has Your Network-Connected Back-Up Drive Been Indexed By Search Engines?
This is not an unexpected finding: many home backup systems offered by companies such as Seagate are accessible remotely. Some of these are bound to have security flaws or, more likely, still have the default password settings. Along comes Google and the next thing you know all of the stuff on your home back up is now duly indexed and searchable. Of course, this is all by accident: Google probably has little interest in your wedding photos. Nevertheless, if Google can index your personal stuff, somebody could go looking for your personal stuff. Long story short, make sure you properly secure online storage.
“Connecting a hard drive to your home network is a smart idea: it can let you access your files no matter where you are. But now it seems that, in some cases, Google has been indexing the private files held on such devices. An investigation by CSO reveals that some mis-configured personal cloud devices and external hard disks connected to routers with FTP enabled have been indexed by Google. That means that personal files have been treated as public archives, which can be found via Google searches.”
16) FAA allows AIG to use drones for insurance inspections
Drones can be used to invade privacy or safely inspect things which would otherwise be potentially dangerous or very costly. For example, they have been used to inspect power lines and wind turbines, or by law enforcement to take aerial photographs of car crashes. Going up on a roof to determine if the roof has been damaged can be pretty risky, so using a cheap, albeit industrial quality, flying robot makes sense. Expect this sort of thing to become commonplace within a few years.
“The Federal Aviation Administration has been rather stingy when it comes to giving companies the OK to test, let alone employ, drones. After getting permission this week, AIG joins State Farm and USAA as insurance providers with exemptions that allow them to use the UAVs to perform tasks that are risky to regular folks — things like roof inspections after a major storm. In addition to keeping its inspectors safe, the company says drones will speed up the claims process, which means its customers will, in theory, get paid faster. “UAVs can help accelerate surveys of disaster areas with high resolution images for faster claims handling, risk assessment, and payments,” the news release explains. “They can also quickly and safely reach areas that could be dangerous or inaccessible for manual inspection, and they provide richer information about properties, structures, and claim events.”
17) Paralyzed Again – We have the technology to dramatically increase the independence of people with spinal-cord injuries. The problem is bringing it to market and keeping it there.
This is a very interesting, and in many way frustrating, article focusing on implantable medical devices to help with paralysis. The firms which develop such things are businesses and businesses sometimes fold. Because devices eventually wear out or need replacement, this poses particular challenges for the patients who have come to rely on the devices: they may not be able to get spare parts or the implant itself may fail or begin to disintegrate. We tend to hear of the medical successes, but these can be quickly reversed by business failures.
“One night in 1982, John Mumford was working on an avalanche patrol on an icy Colorado mountain pass when the van carrying him and two other men slid off the road and plunged over a cliff. The other guys were able to walk away, but Mumford had broken his neck. The lower half of his body was paralyzed, and though he could bend his arms at the elbows, he could no longer grasp things in his hands. Fifteen years later, however, he received a technological wonder that reactivated his left hand. It was known as the Freehand System. A surgeon placed a sensor on Mumford’s right shoulder, implanted a pacemaker-size device known as a stimulator just below the skin on his upper chest, and threaded wires into the muscles of his left arm.”
18) Online Test-Takers Feel Anti-Cheating Software’s Uneasy Glare
Cheating is rampant in universities – it always has been and always will be. I did premed courses with wannabe doctors who cheated, an MBA with business students who cheated, and I would be willing to bet that someone cheated on every certification exam I’ve ever taken. Most students are honest but some are not. The honest students who complain about having their exams monitored would be at a competitive disadvantage relative to the dishonest student who would cheat without it. That’s life.
“Before Betsy Chao, a senior here at Rutgers University, could take midterm exams in her online courses this semester, her instructors sent emails directing students to download Proctortrack, a new anti-cheating technology. “You have to put your face up to it and you put your knuckles up to it,” Ms. Chao said recently, explaining how the program uses webcams to scan students’ features and verify their identities before the test. Once her exam started, Ms. Chao said, a red warning band appeared on the computer screen indicating that Proctortrack was monitoring her computer and recording video of her. To constantly remind her that she was being watched, the program also showed a live image of her in miniature on her screen.”
19) Astronomers: Keep iRobot’s lawnmower bot out of our back yard
I was initially attracted to this article because of the robotics angle, however, it turns out that iRobot is not yet in the robot lawnmower business, they just want an FCC waiver to use a particular bit of spectrum which is important for radio-astronomers. So, two things: first, they should not get a waiver if there is the risk they might disrupt staggeringly expensive and important science projects, especially if alternatives can be found, which they no doubt can be. Second, although I have never seen a robot lawnmower up close, the ones I have researched are very expensive and don’t seem likely to be very good lawnmowers. So there probably is a market for a good, sufficiently powerful robot lawnmower which does not escape and mulch the neighbor’s cats.
“iRobot, the maker of the Roomba, is hoping to find another consumer hit with robots that can mow your lawn. But those plans are causing some friction with astronomers who are mapping the galactic regions that produce new stars. Scientists from the National Radio Astronomy Observatory have formally objected to iRobot’s early plans for a lawn-mowing bot, telling the Federal Communications Commission that a radio-frequency fence meant to keep the product from wandering away would interfere with their sensitive equipment.”
20) The innovators: build and launch your own satellite … for £20,000
I am very skeptical of novel space related business models for reasons which would take many thousands of words to outline. Cost is a major factor, but by no means the only one. This article outlines some of the advantages of micro satellites (low cost, low launch cost) without going into any of the disadvantages (again, another few thousand words to outline). Unfortunately, by weaving tales of what traditional satellites can do within the context of an article about micro-satellites, the author gives the impression they are the same and they are not. Not everything scales with Moore’s Law – some things are the way they are due to other limits and restrictions. Another few thousand words. Of course, it is always possible some use might be a new application which exploits the low cost, despite inherent limitations. Still an interesting read.
“Dubbed ‘NewSpace’, this fresh market is based around technology which would have previously been prohibitive in cost. Now it can be bought off the shelf and small satellites like those sold by Walkinshaw can be launched into orbit at a price unthinkable in previous decades. Corentin Guillo, the head of missions at the Satellite Applications Catapult – one of the UK government’s centres for fostering innovation – said technology used in mobile phones and laptops can now be used in small satellites. This in turn makes them more disposable than their predecessors, which were typically large and lasted for more than five years. The new generation of satellites – like the PocketQube and the 10cm³ CubeSat – also offers a common platform.”