The Geek’s Reading List – Week of September 4th 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) Windows 10 grabs 5.21% market share, passing Windows Vista and Windows 8 in just one month
I predicted Windows 10 would be a success and it clearly is. Of course, the “free upgrade” probably won’t translate to an immediate windfall for the company though it’ll probably pay off down the road. Some users have reported serious software issues as a result, though it may be that many of those are because Windows 10 uninstalls pirated Microsoft software.
“The effects of a free upgrade to Windows 10 are starting to trickle in. Available for just over a month, Windows 10 has now captured more than 5 percent market share, according to the latest figures from Net Applications. In just four weeks, Windows 10 has already been installed on over 75 million PCs. Microsoft is aiming to have 1 billion devices running Windows 10 “in two to three years,” though that includes not just PCs, but smartphones, consoles, and other devices as well. Windows 10 had 0.39 percent market share in July, and gained 4.82 percentage points to hit 5.21 percent in August. This is the fastest we’ve seen an OS hit 5 percent, and while we’re unlikely to witness growth like that again, we doubt the firsts will stop here.”
2) As energy push accelerates, battery costs set to plunge 60%
This article is an excellent example of information laundering, or how a guesstimate can morph into a fact. First, it is worth noting that lithium ion is a mature technology so a 10% per year price decline is extremely optimistic. The article cites a 130 page report (http://bit.ly/1JodpG8) published by the Australian Renewable Energy Agency, and which references (Page 32) an IRENA “forecast” from this report (http://www.irena.org/DocumentDownloads/Publications/IRENA_Battery_Storage_report_2015.pdf) which is mercifully only 60 pages long (see figures 20 and 21). Those figures are not, in fact, an IRENA forecast, and IRENA actually appears cautious regarding the need for assumptions and even points out that battery costs are not the whole story. The figures are plucked from a Navigant report (as does almost all the data of the IRENA study), which is expensive subscription industry research. I have found most industry analyst projections to have zero predictive utility and otherwise not worth much. Other than the belief of industry analysts who have a major stake in promoting a rosy outlook for the battery industry, and whose analysis is behind a pay wall and likely of questionable quality, there is no justification for this assertion. That will not stop the subsidies from flowing.
“An energy storage study claims that prices for certain battery technologies will plunge by as much as 60% over the next five years. The report was prepared by Australian consultancy AECOM and published by the Australian Renewable Energy Agency (ARENA). The 130-page study, originally published last month, expects all battery technologies to drop in price. However, the largest reductions are forecast for Li-ion and flow-battery technologies, which are expected to plummet by 60% and 40%, respectively by 2020. Lithium-ion (Li-on) batteries will drop from $550 per kilowatt hour (kWh) in 2014 to $200 per kWh by 2020; and flow battery prices will drop from $680 per kWh to $350 per kWh during the same time.”
3) Tesla has a new $29,000 battery upgrade for its old Roadsters
Despite (purported) plummeting battery prices, Tesla will happily sell you an “upgrade” for your Roadster for a paltry $29,000, or $400 per kilowatt hour. You see, if you are a Roadster owner and actually drive the car, chances are the battery is near end of life, rendering your heavily subsidized statement of wealth (and dubious environmental responsibility) pretty much a worthless piece of scrap metal. Happily, Tesla has an answer: for a mere $29,000 you can get a few more years of life out of it. Frankly I wouldn’t buy a used car if it needed $29,000 worth of work but Tesla owners are special.
“In August 2014, Tesla CEO Elon Musk talked about “a fairly exciting upgrade” (i.e., an improved battery pack) to the company’s first car, the Lotus-based Roadster. Today, we can finally put a price tag on what it’ll cost you to give your ageing all-electric sports car around 35-percent more energy capacity and around 40-percent more range. In short, getting the new, roughly 70-kWh pack will set you back $29,000. Be warned: The new pack is heavier than the older one.”
4) The Cheap Phones Quietly Winning the U.S.
These devices are at the extreme low end of the spectrum but they are a sign of things to come. It is true that two year old technology can be had for below $100, 1 year old technology can be had for less than $200 and soon enough up to date phones will be well below $300. Due to feature saturation, a state of the art a year from now will have almost identical features to a 1 year old (i.e. current state of the art) phone today. There is no question prices are going to remain under pressure across the sector.
“In most AT&T, Sprint, or T-Mobile stores, it takes a while to find the ZTE phones, buried in the back, past the latest from Apple and Samsung. But they’re there. In AT&T stores it’s the ZTE Maven, which has a screen, speakers, and a processor with capabilities somewhere between the iPhone 5 and 6. As Tony Greco, ZTE’s head of U.S. retail marketing, puts it, “These were state-of-the-art features two years ago.” The Maven’s draw, really, is price. Without any subsidies from a wireless carrier, the phone costs just $60. And it’s not even one of the company’s cheaper models.”
5) Google’s Prototype Self-Driving Cars Coming to Austin for Testing
Google continues on its self-driving car development. It makes a lot of sense the machines be tested in different places. It is not coincidence these machines are being tested in places with relatively benign weather and, importantly, no snow. I think the target of having these being on the market in four years is probably a reach.
“For two months, Google’s Lexus self-driving cars have been travelling around Austin with great success, said Haroon, head of business operations of Google’s Self Driving Car Project. Austin has six self-driving cars so far and three of the prototype vehicles on the way in the next few weeks. “One of the questions I get asked a lot is how does the vehicle deal with deer,” Haroon said. “Yes, it can handle deer, even at night.””
6) Google’s Driverless Cars Run Into Problem: Cars With Drivers
Ideally all drivers should follow the rules of the road but many do not. Even basic common sense and self preservation seems suspended when behind the wheel: last night I encountered an idiot driving down a dark highway with no lights on. This article shows that in order to share the roads with humans, driverless cars have to become more human and therefore less safe. The good news is, the machine’s reaction time would probably ensure no damage was done in a game of 4 way stop “chicken”.
“Google’s fleet of autonomous test cars is programmed to follow the letter of the law. But it can be tough to get around if you are a stickler for the rules. One Google car, in a test in 2009, couldn’t get through a four-way stop because its sensors kept waiting for other (human) drivers to stop completely and let it go. The human drivers kept inching forward, looking for the advantage — paralyzing Google’s robot. … “The real problem is that the car is too safe,” said Donald Norman, director of the Design Lab at the University of California, San Diego, who studies autonomous vehicles. “They have to learn to be aggressive in the right amount, and the right amount depends on the culture.””
7) Nielsen is finally using data from Netflix, Amazon, and Hulu streaming
It is good to see that Nielsen is adapting to the reality of streaming services as it should provide more objective information regarding “cord cutting”. Of course, streaming services know exactly what their viewers are watching, when they are watching, and so on, and could provide precise information but choose not to. This is probably done for competitive reasons though, as the article clearly shows, it may be to hide unwise deals from their investors.
“The business of television is currently trying to figure out how to deal with the reality that a growing number of households are using subscription streaming services to get their television programming. Streaming video services based on the internet like Netflix and Amazon don’t provide data to the public about how many people are streaming their shows and both companies are increasingly getting into content production on their own. The Nielsen company has started collecting data for almost 1,000 streaming shows, and that’s not necessarily good news for Netflix.”
8) Amazon Prime Video: Now with offline viewing on Android, iOS
Offline viewing makes perfect sense though it is important to appreciate the DRM (Digital Rights Management) issues. Streaming video is now limited to subscribers with access to reliable high speed Internet access, leaving a sizable portion of the market unreachable. Offline viewing allows the subscriber to download video through a slow pipe and then watch it later. This might further dampen interest in torrent driven piracy and actually be good for content owners.
“Now that most default on-the-go devices are bereft of ways to load DVDs and Blu-rays, offline options for streaming video services have become that much more desirable in areas with little to no reception. Sadly, the current king of the American streaming crop, Netflix, has said in no uncertain terms that offline viewing options are “never going to happen,” and the company’s reasoning was cold comfort for people in cabins, on airplanes, or with frequent local-ISP outages. For some time, Amazon Instant Video was the only major American streaming video subscription service with an offline option, but the service used to come with a pretty big catch: you needed a Kindle-branded tablet or phone to download those streaming-only videos. That changed on Tuesday with the relaunch of the video app, now simply named Amazon Video, for all iOS and Android devices.”
9) Beyond bitcoin: 7 ways to capitalize on blockchains
My disdain for Bitcoin has mostly to do with advocacy among neo-Libertarians who foolishly believe a “free” currency can emerge. There is some underlying technology which may have broader application in business world and this article looks into those. One word of caution, however: the chain of ownership strengths of Bitcoin are somewhat overstated as hacks of Bitcoin exchanges show that ownership is not evidently an obstacle to theft or fraud.
“From the beginning, bitcoin has assumed a shadowy, almost outlaw mystique. The technology’s origin and founder remain shrouded in mystery, even to this day. Add to that the Silk Road scandal, in which anonymous users traded bitcoins to buy drugs, landing its pioneer in prison for life, and it’s easy to see why many initially viewed bitcoin as a funding mechanism for the underworld. Even the mathematics of the technology are inscrutable enough to believe the worst. The irony is that the mathematical foundations of bitcoin create a solid record of legitimate ownership that may be more ironclad against fraud than many of the systems employed by businesses today. Plus, the open, collaborative way in which bitcoin processes transactions ensures the kind of network of trust that is essential to any business agreement.”
10) Australia Deploys Killer Robots to Terminate Reef-Eating Starfish
This is a pretty interesting idea and the video is cool. It may provide an answer to invasive species which are typically invasive because there are no local predators to keep the numbers down. This prototype wanders about looking for suitable victims and then injects them with a poison which is, presumably, relatively harmless to other critters. Assuming the project moves ahead, a number of such robots could prowl reefs and keep the population under control. The video is worth a watch.
“The Great Barrier Reef is under attack from hungry hordes of Crown-of-Thorns starfish, but Australia has an answer: killer robots trained to recognize the many-armed menace — and administer a lethal injection. It sounds like the plot to a bad sci-fi movie, but it’s very real. These starfish have multiplied in recent years, and are estimated to have caused 40 percent of the reef’s coral loss. Divers regularly do sweeps for COTS, as they’re called, but they don’t call it the Great Barrier Reef for nothing — there’s a lot of space to cover.”
11) Robots Lay Three Times as Many Bricks as Construction Workers
We recently carried an article about a cement block laying robot but that only showed an animation, calling into question whether the machine was real or simply a concept. This system shows an actual brick laying robot at work. Brick laying is a lot harder than it looks so the introduction of such a machine could have a significant impact on the trade. The machine itself looks like a prototype and I have my doubts how long the robot itself would last on a construction site, especially since mortar is a nasty material. Some degree of ruggedization is called for.
“Construction workers on some sites are getting new, non-union help. SAM – short for semi-automated mason – is a robotic bricklayer being used to increase productivity as it works with human masons. In this human-robot team, the robot is responsible for the more rote tasks: picking up bricks, applying mortar, and placing them in their designated location. A human handles the more nuanced activities, like setting up the worksite, laying bricks in tricky areas, such as corners, and handling aesthetic details, like cleaning up excess mortar. Even in completing repetitive tasks, SAM still has to be fairly adaptable. It’s able to complete precise and level work while mounted on a scaffold that sways slightly in the wind. The robot can correct for the differences between theoretical building specifications and what’s actually on site, says Scott Peters, cofounder of Construction Robotics, a company based in Victor, New York, that designed SAM as its debut product.”
12) Exploding IoT has semiconductor industry calling for government help
It just goes to show that it isn’t just electric vehicles and alternate energy players who look for subsidies – even the semiconductor industry extends a hand when it can. I think the Internet of Things (IoT) is way over hyped and most of the projections are downright silly. Setting aside for a moment the dubious forecasts, most such gizmos will have extremely limited function since they don’t need to do much and semiconductor content will cost only a few cents. If the industry can’t supply it, costs will go up and growth forecasts will moderate. No cause for panic or taxpayer money.
“As the Internet of Things sweeps the globe, the need for memory will exceed 3×1024 bits by 2040, the report claims – and the number of silicon wafers needed to supply that memory would outstrip the world’s known supply of silicon, unless new technologies are developed. The report also discusses the need for innovation to support the development and deployment of the myriad sensors that make up the IoT. Unlike mainframes of yore, these sensors will need to be highly specialized, and be able to operate on very low energy.”
13) US group develops 3D-printing technique for optical glass
This is an interesting development, however, it is hard to see broad based application. The surfaces may be transparent but they are not smooth and you are bound to end up with something that looks like art rather than a useful object. Reducing the size of the extrusion nozzle will probably lead to something akin to fibreglass, so I suspect this will be a dead end.
“Production of glass parts is said to be highly repeatable, while the glass constructs resemble those that are conventionally obtained: “the 3D printed glass objects can thus be extended to implementations across scales and functional domains including product and architectural design.” The MIT and Harvard group says its research lies at the intersection of design, engineering, science and art, and represents a highly interdisciplinary approach.”
14) Autodesk releases Within Medical to optimise 3D printing of medical implants
We’ve carried numerous articles about medical applications of 3D printers and it seems clear this will be a major application of the technology since it is high value add, low volume, and most applications need customization. Most medical applications have applied off the shelf solutions though medical specific solutions are likely to be better. Software and hardware vendors are rolling out products for specific application in medicine and this should speed adoption.
“Autodesk has announced a brand new venture into the medical industry today with the launch of Autodesk Within Medical, a generative design software that optimises 3D printing of medical implants for the orthopaedic industry. There are currently more than 600 living patients with implants designed using Within Medical technology. The software allows biomedical engineers to create orthopaedic implants with micro-lattice porous structures that help properly connect the implants to living bone (osseointegration), and promote development of blood vessels in the surrounding tissue to facilitate healing. “Within Medical uses various pore size configurations and rough lattice surfaces to help the porous implant integrate properly with the bone,” explained Mark Davis, senior director of design research at Autodesk. “Within Medical designs are also optimised for specific 3D printing processes – such as direct metal laser sintering and electron beam melting – that allow for highly accurate manufacturing.”
15) Is Silicon Valley in Another Bubble . . . and What Could Burst It?
Back in 1999 one of the major Wall Street banks had an advertisement admonishing investors that most bubbles are accompanied by claims “it is different this time” but then the ad hyped the Internet and concluded “but it IS different this time”. Needless to say, it is never different enough each time: hype is hype and a bubble is a bubble. Many of these companies have no prospect of ever having significant free cash flow and the greatest hope of their investors is that they can be fobbed off on an unsuspecting public by way of an IPO or, better yet, bought at a staggering valuation by larger firms who seem to believe it is better to blow money on stupid acquisitions than to give it to their own shareholders.
“While he conceded that there were some eerie similarities with the infamous dot-com bubble of 1999—such as the preponderance of so-called unicorns, or tech start-ups valued at $1 billion and upward—Kupor confidently buoyed his audience with slides that read, “It’s different this time,” and charts highlighting the decrease in tech I.P.O.’s, the metric that eventually pierced the froth in March of 2000. Back then, a company went public almost every single day; now it was down to about once per week. This time around, he noted, the money was flowing backward. Rather than entering a company’s coffers in the public markets, it was making its way to start-ups in late-stage investments. There was little, he suggested, to worry about.”
16) 65 per cent of Europe’s electronic waste is stolen or mismanaged
Electronic waste is a wonderful topic. It is such a blight on humanity that my clueless government in Ontario charges $1.50 for a $10 telephone with a gram of “e-waste”, more than what it charges for a personal computer with 5 kilograms of e-waste. The fee on a mobile phone is $0.07, 1/20th the cost of a wired telephone despite having 10x the content. And the halfwits charge nothing for a refrigerator, which is chock full of electronics. Not only that, but the fee is charged at purchase and the consumer is expected to locate a recycling depot and drop it off at his own cost. Needless to say, as a result almost all e-waste end up in land fill. Like any other such scheme it is a profit centre for those who collect the fees, increases the cost for consumers, and does absolutely nothing for the environment
“Something stinks about Europe’s trash. A two-year investigation into Europe’s electronic waste found that most of it is stolen, mismanaged, illegally traded, or just plain thrown away. The European Union has guidelines on how to correctly dispose of unwanted electronics, like IT equipment, household appliances, or medical devices. But, according to a report published Sunday by the United Nations University and INTERPOL, only 35 per cent of electronic waste was disposed of correctly in 2012. Meanwhile, criminals absconded out of Europe with 1.3 million tonnes of undocumented equipment, such as laptops, circuit boards, or refrigerators. The loss of functional components or the precious metals inside cost the European Union up to 1.7 billion euros each year, say the researchers. An additional 4.7 million tonnes of electronics were mismanaged or illegally traded inside Europe. That means that toxic materials that can be harmful to the environment or to people’s health, such as lead, cadmium, and mercury, are not being disposed of in a safe way.”
17) Quantum computer that ‘computes without running’ sets efficiency record
Quantum stuff is not the sort of thing my brain can understand and quantum computing is no exception. This sounds significant but I can’t hep but wonder if the next step is a quantum computer with computes without being built.
“Due to quantum effects, it’s possible to build a quantum computer that computes without running—or as the scientists explain, “the result of a computation may be learned without actually running the computer.” So far, however, the efficiency of this process, which is called counterfactual computation (CFC), has had an upper limit of 50%, limiting its practical applications. Now in a new paper, scientists have experimentally demonstrated a slightly different version called a “generalized CFC” that has an efficiency of 85% with the potential to reach 100%. This improvement opens the doors to realizing a much greater variety of applications, such as low-light medical X-rays and the imaging of delicate biological cells and proteins—in certain cases, using only a single photon.”
18) No, The FCC Is Not (Intentionally) Trying To Kill Third-Party Wi-Fi Router Firmware
Things like WiFi routers are extensively software driven which means that software could be written which would interfere with the radio function and allow, for example, my router to disrupt all other routers in the general area. It makes some sense to restrict modifications to the radio software, however, the FCC proposed rule appears to have been loosely written, leading people to conclude various open source router projects might be in jeopardy. That does not appear to be in the cards.
“For a few months now a rumor has been circulating that the FCC is intentionally planning to ban third-party custom router firmware. Wi-Fi hobbyists (and people who just like a little more control over devices they own) have long used custom, open source firmware like DD-WRT or Open-WRT to bring some additional functionality to their devices, with the added bonus of replacing clunky router GUIs. Custom firmware is also handy in an age when companies like to force firmware upgrades that either eliminate useful functionality, or add cloud-features and phone-home mechanisms a user may not be comfortable with. But at last July’s BattleMesh 8 event, Wi-Fi enthusiasts noticed the clunky wording of an FCC NPRM (notice of proposed rulemaking) discussing the FCC’s plan to modify the rules governing RF devices. The NPRM in question (pdf), like all NPRMs, is basically the FCC’s way of fielding questions about potential rule changes. It’s important to understand no rules have actually been passed yet before committing gadget-nerd seppuku.”
19) Meltdown-Proof Nuclear Reactors Get a Safety Check in Europe
I figure 100 years from now people will look at our reluctance to embrace nuclear power as bizarre. The experiences at Chernobyl and Fukushima may have underscored the hazards of nuclear reactors but these were all very old designs so the lessons are not that relevant to modern systems. Reactor design and control systems have com a very long way and I believe it is simply a matter of time before sanity prevails and more money goes towards perfecting and proving the value of these valuable energy sources.
“First built and tested in the 1960s, at Oak Ridge National Laboratory, molten salt reactors would be the first genuinely new technology for nuclear power generation to reach the market in the last three decades. Producing zero carbon, they use a radioactive solution that blends nuclear fuel with a liquid salt. They can run on uranium, but are also ideally suited for thorium, an alternative nuclear fuel that is cleaner, safer, and more abundant than uranium. Molten salt reactors also offer inherent safety advantages: because the fuel is liquid, it expands when heated, thus slowing the rate of nuclear reactions and making the reactor self-governing. And they’re built like bathtubs, with a drain in the bottom that’s blocked by a “freeze plug.” If anything goes wrong, the freeze plug melts and the reactor core drains into a shielded underground container. They can operate as producers of thermal power or as “burner” reactors that consume nuclear waste from conventional reactors. Essentially, molten salt reactors could solve the two problems that have bedeviled the nuclear power industry: safety and waste.”
20) Could diesel made from air help tackle climate change?
According to this article it seems were are getting close to powering our equipment with the air we breath. And money. And a whole lot of energy. The way it works you are never going to get more energy out of a synthetic fuel than you get in, and in the specific case of the Fischer–Tropsch process, you are going to waste at least half the energy. Not only that but it is going to be very expensive to pull CO2 out of the air (about $2 per litre equivalent of diesel). Long story short, back of the envelope calculations suggest diesel at around $4 per litre at wholesale, about 8x the current price.
“Making diesel out of thin air sounds like something from science fiction. But small companies in Germany and Canada are doing precisely this – capturing carbon dioxide (CO2) and finding ways to sell it. German company Sunfire produced its first batches of so-called e-diesel in April. Federal Minister of Education and Research, Johanna Wanka, put a few litres in her car, to celebrate. And the Canadian company Carbon Engineering has just built a pilot plant to suck one to two tonnes of carbon dioxide from the air daily, turning it into 500 litres of diesel. The process requires electricity, but if the start-ups use renewable electricity they can produce diesel that is carbon neutral.”