The Geek’s Reading List – Week of May 22nd 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) 2015 Patent Litigation Study A change in patentee fortunes
The details within the report are quite interesting. Setting aside the decline in cases, there were no “mega awards” in 2014 and the median damage award dropped to the second lowest level of the past 20 years – though the award for “Non Practicing Entities” (NPE) increased to 4.5x the median award of $2 million. A study of litigation does not provide the full story as many case are settled without resorting to court. Nevertheless, fewer cases and lower damage awards suggest the worm had turned for the traditional NPE patent trolls.
“Number of patent lawsuits filed in 2014 dropped by 13%; dramatic shift from recent years Driven by Alice Corp. v. CLS Bank, which raised the bar for patentability and enforcement of software patents. What will be the impact on future patent enforcement? Will existing patent cases before the US Supreme Court similarly impact litigation trends?”
2) Oregon to test pay-per-mile idea as replacement for gas tax
Years ago, when I followed Ballard Power, which, at the time, was hoping to sell fuel cells to the auto industry, I observed that one of the assumptions was that hydrogen “fuel” would not be taxed. The problem with this form of subsidy, as with any other subsidy, is that it only works when the numbers are small: if 1% of cars are subsidized, the government can afford it, 20% they can’t. Subsidies are therefore inherently self limiting. Evidently, Oregon’s politicians are facing that reality: generous subsidies result in a shift in driving habits which they have to roll back in order to make ends meet. Ending subsidies seems anathema to politicians so they have to come up with another scheme. The comments that the program “… targets hybrid and electric vehicles, so it’s discriminatory” is quite funny: the entire EV and Hybrid market only exists because of massive subsidies all all levels. It seems nothing is more of an outrage than a loss of privilege.
“Oregon is about to embark on a first-in-the-nation program that aims to charge car owners not for the fuel they use, but for the miles they drive. The program is meant to help the state raise more revenue to pay for road and bridge projects at a time when money generated from gasoline taxes are declining across the country, in part, because of greater fuel efficiency and the increasing popularity of fuel-efficient, hybrid and electric cars. Starting July 1, up to 5,000 volunteers in Oregon can sign up to drive with devices that collect data on how much they have driven and where. The volunteers will agree to pay 1.5 cents for each mile traveled on public roads within Oregon, instead of the tax now added when filling up at the pump. Some electric and hybrid car owners, however, say the new tax would be unfair to them and would discourage purchasing of green vehicles.”
3) China pushes for big jump in Internet speeds
Outside of North America (and in particular outside of Canada) governments understand that a modern telecommunications infrastructure is important to a modern economy. As such, many governments actually have plans to create and improve such an infrastructure or to cajole industry into doing to. This is not exactly rocket science from a policy or technological perspective: after all, these sorts of programs delivered electricity and telephone services to North Americans 50 years ago, when it was difficult and expensive to do so, and for the same reasons. Oddly enough the government of China appears to have a more lucid understanding of the importance of a modern telecommunications infrastructure than does that f the US or Canada. Imagine what would happen if they didn’t restrict actual Internet use …
“China’s government is pressing for faster Internet access speeds and lower prices, two moves that aim to boost the number of its citizens going online. On Friday, all three of China’s telecommunications operators announced plans to lower broadband and data plan costs for consumers. This came a month after China’s premier Li Keqiang said the country needed to do more to expand Internet access. China has the world’s largest Internet-connected citizenry at over 649 million users, but that’s still less than half of the country’s population. And average Internet speeds in China are 3.4 megabits per second (Mbps), far lower than the U.S. where average access speeds reach 11.1 Mbps, according to Akamai Technologies.”
4) European Internet users urged to protect themselves against Facebook tracking
These recommendations are apt even for Facebook users and non-Europeans. After all, why provide a large corporation with information about yourself, especially for no quid pro quo? Of course few people, even Europeans, will hear about, let alone implement these suggestions so the report itself will have little or no impact on privacy. What is needed is explicit, short term, opt in permission by users backed by serious fines for non-compliance.
5) ORNL demonstrates first large-scale graphene composite fabrication
Graphene is frequently in the news and I recently read a post questioning whether the material will ever be useful for anything. It is worth noting that graphene was first fabricated, in microscopic quantities, only 12 years ago. It took some time for the method to be widely known and for experimentation on the material to begin. Since then a number of potentially commercially significant uses have been discovered and the race is on to produce the stuff in large quantities. I am quite confident a cost effective high volume production process will be developed which will open the doors to those many applications. Unfortunately, I have no idea whether a particular scheme is “the one”, but progress is definitely being made.
“One of the barriers to using graphene at a commercial scale could be overcome using a method demonstrated by researchers at the Department of Energy’s Oak Ridge National Laboratory. Graphene, a material stronger and stiffer than carbon fiber, has enormous commercial potential but has been impractical to employ on a large scale, with researchers limited to using small flakes of the material. Now, using chemical vapor deposition, a team led by ORNL’s Ivan Vlassiouk has fabricated polymer composites containing 2-inch-by-2-inch sheets of the one-atom thick hexagonally arranged carbon atoms.”
6) Tiny grains of lithium dramatically improve performance of fusion plasma
Another technology with consider promise is nuclear fusion, which has been understood as the power source of the sun for about 85 years. Like volume production of graphene, creating a sustainable nuclear fusion reaction is an engineering problem, though not necessarily a solvable one. Attention tends to focus on large projects such as ITER but lots of labs are working on the problem as well. This discovery is another nugget which might lead along the path to a viable fusion reactor, but you never know. Of course there are also long shots like General Fusion, which recently received a $27M investment http://www.canadastandard.com/index.php/sid/232996165. Again – you never know.
“Scientists from General Atomics and the U.S. Department of Energy’s (DOE) Princeton Plasma Physics Laboratory (PPPL) have discovered a phenomenon that helps them to improve fusion plasmas, a finding that may quicken the development of fusion energy. Together with a team of researchers from across the United States, the scientists found that when they injected tiny grains of lithium into a plasma undergoing a particular kind of turbulence then, under the right conditions, the temperature and pressure rose dramatically. High heat and pressure are crucial to fusion, a process in which atomic nuclei – or ions – smash together and release energy—making even a brief rise in pressure of great importance for the development of fusion energy.”
7) New class of expanding magnets has potential to energize the world
I wish I had a better grasp of the implications of this discovery. What’s the deal with magnets and how do they work? Seriously, though the coverage of this article would have benefited from an animation or video showing the different effects rather than a photograph of what could easily be a wheat field. As near as I can figure, since this new material changes size, rather than simply changing shape, when exposed to a magnetic field, it can be used to create more powerful and compact actuators. Of course, that presupposes the material itself is stable, though the discovery of the effect might lead to materials which are even better for such applications.
“A new class of magnets that expand their volume when placed in a magnetic field and generate negligible amounts of wasteful heat during energy harvesting, has been discovered by researchers at Temple University and the University of Maryland. The researchers, Harsh Deep Chopra, professor and chair of mechanical engineering at Temple, and Manfred Wuttig, professor of materials science and engineering at Maryland, published their findings, “Non-Joulian Magnetostriction,” in the May 21 issue of the journal Nature.”
8) Brain implant controls robotic arm – with the power of thought
This is the best of many stories covering this development, however, I thought the video (second link) was somewhat better than the one embedded here. We have covered neural implants controlling prosthetic arms previously, but this approach is novel in that the patient is completely paralyzed and the area of the brain used for the implants is different. These are obviously early stage experiments, and, as the article notes, dexterity without a sense of touch is a challenge. Although it might make sense to control the patient’s limbs themselves, the use of a robotic arm removes many variables. This is an exciting and rapidly moving field.
“Until now, scientists have focused on the brain’s motor cortex, which generates the electrical signals that are sent down the spinal cord and control the contractions of every muscular movement. However, the resultant neuro-prosthetics, which have been trialled on a handful of patients, produced movements that were delayed and jerky: not the smooth and seemingly automatic gestures associated with natural movement. In the latest trial, scientists inserted implants into the “higher” brain region, called the posterior parietal cortex (PPC), that gives rise to the intention to move, rather than the details of how we execute the movements.”
A better video associated with the story https://youtu.be/j-DD3iUrjSs
9) New Approach Trains Robots to Match Human Dexterity and Speed
Robotics is another field which is rapidly advancing and this article ties to item 8 in that the faster a robot (or prosthetic limb) can be taught to perform tasks, the better. Factory robots typically deal with carefully controlled situations and can require a lot of programming to get them to perform their tasks. Robots outside the shop must deal with a much “looser” environment and perform a much wider variety of tasks meaning the cost of programming would be astronomic. This novel approach would allow for much quicker implementation, at much lower cost, and with greater flexibility.
“In an engineering laboratory here, a robot has learned to screw the cap on a bottle, even figuring out the need to apply a subtle backward twist to find the thread before turning it the right way. This and other activities — including putting a clothes hanger on a rod, inserting a block into a tight space and placing a hammer at the correct angle to remove a nail from a block of wood — may seem like pedestrian actions. But they represent significant advances in robotic learning, by a group of researchers at the University of California, Berkeley, who have trained a two-armed machine to match human dexterity and speed in performing these tasks. The significance of the work is in the use of a so-called machine-learning approach that links several powerful software techniques that make it possible for the robot to learn new tasks rapidly with a relatively small amount of training.”
10) World’s first 3D fabric printer to make future clothing custom, seamless and a perfect fit
The video is amusing given the rudimentary nature of the garments which would not look out of place on a medieval peasant. However, it is unfair to judge a new technology on the basis of an early prototype and things can improve quickly. Or not – not all problems can be solved cost effectively. The use of a simple 2 dimensional mold is bound to limit what can be done at the moment as modern designs are typically made on a 3 dimensional sewing form even if they are eventually cut out of 2 dimensional material. Another problem is the use of non-woven textiles, which may have limited strength and/or durability. Finally, such a system would not be likely to produce the sorts of volumes possible with traditional techniques. Nevertheless, many of these issues might be solvable and niche markets may emerge.
“In the future we could be both better and more uniquely dressed, thanks to the development of a 3D fabric printer; the first of its kind. Although not yet ready for large-scale production, the Electroloom is an exciting prospect, enabling its users to design and print seamless clothing that perfectly fits their frame. The printer, which is currently crowdfunding on Kickstarter and looks set to comfortably exceed its goal, uses a technique called field-guided fabrication to produce garments. This takes the form of a CAD-developed 3D mold placed inside the printer, which the printer deposits solid fibres onto, building up the final garment. The fibres themselves are shipped as a liquid solution, but the printer converts them using an electrospinning process, before guiding them onto the mold using an electric field.”
11) Huawei’s LiteOS Internet of Things operating system is a minuscule 10KB
Excitement over Internet of Things (IoT) ebbs and flows, though connected devices – which pretty much describes IoT are bound to increase. After all, a garage door opener or door lock you can open with your smartphone is pretty banal technologically even if it is IoT. Since many IoT devices will simply be non-IoT devices with a few cents worth of WiFi circuitry I don’t believe most of the hype cranked out by Wall Street or industry researchers. One challenge for IoT developers is a low footprint Operating System which can fit on most Systems On a Chip (SOCs) and leave room for application software. Huawei’s announcement us strange because there exists another (or perhaps the same), very similar, open source operating system called LiteOS (see http://www.liteos.net/). Parenthetically, the odds of a closed platform being broadly adopted for IoT are next to zero.
“Chinese firm Huawei today announces its IoT OS at an event in Beijing. The company predicts that within a decade there will be 100 billion connected devices and it is keen for its ultra-lightweight operating system to be at the heart of the infrastructure. Based on Linux, LiteOS weighs in at a mere 10KB — smaller than a Word document — but manages to pack in support for zero configuration, auto-discovery, and auto-networking. The operating system will be open for developers to tinker with, and is destined for use in smart homes, wearables, and connected vehicles.”
12) Google developing “Brillo” Internet of Things OS based on Android
LiteOS (see item 11) claims a Linux legacy, however, with a 10KB size there probably isn’t much Linux left. There are low footprint Linux versions out there which implement the vast majority of Linux functionality, in particular a full networking stack. Android, which is a Linux fork, seems like an odd choice for an IoT operating system due to the fact a large part of it is associated with the User Interface – a function which is not that important in a garage door opener or coffee pot. Of course Google knows this and we can assume that Brillo is something different. I can see lots of reasons I would not want my IoT devices to run Google software – even if it is open source – and very few reasons why I would want to.
“The Information is back with more Google news before I/O. The outlet claims that Google is developing another operating system, this time for low-power “Internet of Things” (IoT) devices. The OS is codenamed “Brillo,” and the publication claims Google “is likely to release the software under the Android brand, as the group developing the software is linked to the company’s Android unit.” We’re going to take that to mean “it’s based on Android.” The report says Brillo will be aimed at ultra low-power devices with as little as 64 or 32MB of RAM. With the abundance of smart home technology like connected light bulbs, door locks, sensors, and whatever other crazy connected objects the IoT crowd dreams up on Kickstarter, Google clearly sees an opportunity.”
13) Philips turns LEDs into an indoor GPS for supermarkets
I worked for Philips for many years, and, as with most ex-Philips engineers it absolutely shocks me when they come up with a good idea. Not that the engineers are dumb, but the entire organization seems constructed to stamp out any creativity or imaginative solutions. I am stunned that they have come up with this. Not so much the application since many stores are designed to not be easy to navigate (consider the mastery of the Ikea maze). However, there are many buildings where knowing how to get where you want to go is a good thing. Such a system could download a map and establish your location at minimal cost by encoding that data in imperceptible changes in the light which would be picked up by a smartphone camera. Of course, to have any use, such a system would have to become commonplace, but that is possible given Philips’ market position.
“Philips believes that the days of endlessly roaming around a store looking for the right kind of balsamic vinegar may soon be at an end. The company’s lighting division has developed an indoor navigation system that enables your smartphone to direct you straight towards the Oils & Vinegars (Specialist) section. In addition, the technology helps to light everything up nice and bright, and save a bucketload of cash in the process. Rather than using Bluetooth beacons, which others believe will being reliable indoor navigation for retail outlets, the company has swapped out the traditional lighting for banks of white LEDs above each aisle. Each bulb is equipped with visible light communication (VLC), enabling it to beam out a code that’s imperceptible to the human eye. When a user opens the corresponding smartphone app and holds it horizontally, the forward-facing camera reads the VLC. Once the software knows where you’re located, it’ll follow this overhead breadcrumb trail to get you where you need to go.”
14) You can hang this 55-inch OLED TV to a wall and roll it up like a newspaper after watching a movie
There was a time when large screen TVs went from 10s of centimeters in thickness to a few centimeters. I observed to a friend that, once thicknesses got to a couple centimeters nobody would care even if a 2 dimensional set were introduced. This prototype is essentially a 2 dimensional set so if it ever hits the market I’ll find out if I was right. Besides thickness there are other reasons to be excited about this: OLED produces a very high quality image and a “rollable” TV would be a lot easier to transport, install, and stock. More importantly, OLED has always had the potential of being produced in a continuous sheet like paper or fabric, rather than the fragile “batch” process used for LCDs and formerly plasma. It is possible OLED will reduce the cost of displays dramatically while delivering better picture quality.
“Televisions are changing everyday. Very soon you will be able to carry your TVs anywhere, as you would your smartphone, phablet etc. LG Electronics just showed off a 55-inch flexible OLED ”Wallpaper” television that you can hang to the wall like a calender or newspaper using a magnetic mat, and can be removed when you are through watching a movie by gently peeling it off the wall. The South Korean giant displayed the tech at an event in Korea on Tuesday.”
15) Why an Apple HDTV Never Made Any Sense
I was relieved when I saw the headlines that the “Apple TV” was officially dead. Not so much because I ever thought the product would see the light of day (it was a stupid idea, since TVs are very cheap) but because I will be spared nearly daily articles hyping how Apple would disrupt the TV industry. Actually, come to think of it, those articles will probably now simply focus on Electric vehicles (another really dumb idea for Apple).
“Last night, after a brief resurrection by vocal billionaire investor Carl Icahn (he’s like Tony Stark minus everything but the money), rumors that Apple would sell an HDTV were finally laid to rest. Which is good! Because they, much like the nonsensical television sets in question, never should have existed in the first place. The Wall Street Journal finally (hopefully?) ended the era of dumb Apple-idiot-box rumors last night. The WSJ patiently explained that Apple abandoned any HDTV plans well over a year ago, the way one might outline the ways Santa Claus doesn’t line up with the laws of physics to an especially guileless tween.”
16) Google offers cut-rate computing for low-priority jobs
Cloud computing is in a “race to the bottom” cost wise. Consider the costs of running a large data center: rent (or depreciation), electricity, networking, and depreciation of computers. Unfortunately, if you populate a computer center today, you are paying more for your computers than a guy who populates one six months from now, so the most recent entry always has a cost advantage. Add to that massive companies such as Google who deploy staggering numbers of computers to deal with their peak computing needs, even though much of that processing power is unused at least some of the time. The solution is to offer low priority cloud computing at cut rate pricing (I suspect the price is similar to the cost of the electric power to run them). Many task do not really require on demand computing and these can be shuffled to Google at minimal cost. Needless to say I would not invest in a cloud services provider.
“The service, now in beta, would be good for fault-tolerant workloads that can be distributed easily across multiple virtual machines. Although jobs such as data analytics, genomics, and simulation and modeling can require lots of computational power, they can run periodically, or even if one or more nodes they’re using goes offline. Google’s budget service is somewhat similar to Amazon Web Service’s Spot Instances, also designed for jobs that can be interrupted. AWS’ model is different because its price can fluctuate according to demand, whereas Google’s prices are fixed. The Compute Engine Preemptible Virtual Machine can cost as little as US$0.01 per instance per hour.”
17) A Way to Brew Morphine Raises Concerns Over Regulation
Opium is actually pretty cheap when produced legally (raw paste is about $30/kg), it is the illegality which makes it expensive. Nevertheless, there is a good chance cooking the stuff up in industrial scale reactors would be even cheaper. News this pathway had been more or less figured out caused a great deal of excitement in the media despite the fact that many drugs, and even far more dangerous drugs, can be cooked up in a basement lab or ordered in industrial quantities from China. No doubt laws will be drafted restricting this process, however, the cat is pretty much out of the bag and if it it turns out that you can, in fact, cost effectively brew up morphine at home it is simply a matter of time before it happens. It only takes insertion of the right DNA sequence in a single yeast cell to start an industry and you can be pretty confident that, even in carefully monitored labs, there is at least one researcher with onerous student debt willing to do it.
“All over the world, the heavy heads of opium poppies are nodding gracefully in the wind — long stalks dressed in orange or white petals topped by a fright wig of stamens. They fill millions of acres in Afghanistan, Myanmar, Laos and elsewhere. Their payload — the milky opium juice carefully scraped off the seed pods — yields morphine, an excellent painkiller easily refined into heroin. But very soon, perhaps within a year, the poppy will no longer be the only way to produce heroin’s raw ingredient. It will be possible for drug companies, or drug traffickers, to brew it in yeast genetically modified to turn sugar into morphine. Almost all the essential steps had been worked out in the last seven years; a final missing one was published Monday in the journal Nature Chemical Biology.”
18) Self-Driving Cars Without Passengers
More fun and games with self driving cars: self driving EVs which know to park themselves and plug themselves in. It is hard to believe there are likely to be enough self-driving EVs out there to fill any more than a few spaces in a parking lot. Even setting aside the EV issue, there would be minimal advantage to self parking cars given the likely high cost of the technology to self park. As a technology demonstration within the current legal framework, of course this makes much more sense.
“The key legal obstacles to self-driving cars are the dangers they present to passengers — even if a driver is ready to take over in the case of emergency. Researchers in Germany, however, have found usage cases where that legal hurdle can be surmounted and expect to be doing so by 2016. That’s how long it will take to equip one deck of a downtown parking garage with standardized electric charge outlets, and to finish the algorithms that can be burned into flash of drive-by-wire electric vehicles already on the road. The work is being done at Forschungszentrum Informatik (FZI, Karlsruhe), a research institute where 22 engineers have been working toward what they call the “cognitive car” (CoCar) for several years. In fact, they entered the Defense Advanced Project Agency’s (DARPA’s) self-driving vehicle contest and made it to the finals, but their concentration since then has been on usage cases where no passengers need be present in the car as a stepping stone to fully autonomous vehicles.”
19) Why Today’s Automobile Industry Looks A Lot Like IBM in 1985
Frankly, I don’t think the analogy holds. There is a lot of engineering and production around the design and manufacture of automobiles that have nothing to do with electronics. Making an oil pump which costs $11 and lasts 500,000 kms is a lot harder than you think. On the other hand, software for infotainment systems are relatively straightforward and even though the Bluetooth in my car radio craps out every now and then, the ramification of such a failure is nothing compared to a malfunctioning airbag. Autonomous Vehicle systems are crazy state of the art voodoo today, but they will quickly become commodities. In other words, it is a lot easier to add electronics to a car than it is to build a car around electronics. All the large manufacturers might screw it up, but I would not bet on it.
“With the number of mobile phone subscriptions shortly expected to exceed the total global population, what is the next great connected device going to look like? Hint: It’ll have four wheels. Gartner predicts that there will be 250 million connected cars on the road by 2020. That means one in every three cars on the road will be connected. By then, digital diagnostics, infotainment channels and enhanced navigation systems are expected to constitute a $270 billion industry, up from $47 billion today. The only problem is that, now, the automobile industry is looking a lot like IBM did in 1985.”
20) Self-Driving Trucks Are Going to Hit Us Like a Human-Driven Truck
Many articles on self-driving cars and robotics focus on the negative, in particular the job loss angle. This is pretty well written, although I doubt pilots will ever be removed from airplanes: the machine are far too valuable and they cannot “pull over and stop” in the event of an emergency. In my opinion it is quite likely the trucking industry, and logistics in general, will be transformed as autonomous systems become commonplace over the next 20 years. Nevertheless, just as the job losses due to the interstate system were more than offset but the resulting economic benefit of that system, the same will happen as a result of AV trucks. Since the beginning of the industrial revolution, mechanization has led to displacement of labor but a strong net economic benefit to society in general.
“Late last year, I took a road trip with my partner from our home in New Orleans, Louisiana to Orlando, Florida and as we drove by town after town, we got to talking about the potential effects self-driving vehicle technology would have not only on truckers themselves, but on all the local economies dependent on trucker salaries. Once one starts wondering about this kind of one-two punch to America’s gut, one sees the prospects aren’t pretty. We are facing the decimation of entire small town economies, a disruption the likes of which we haven’t seen since the construction of the interstate highway system itself bypassed entire towns.”