The Geek’s Reading List – Week of September 11th 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.
I would like to take this opportunity to announced two important professional developments:
- I recently joined BCA Research in Montreal as their Senior Technology Strategist. BCA is the largest independent research provider in the world and is mainly known for its macroeconomic research.
- On September 9, I was appointed to the Board of Directors of Evertz Technologies, one of the largest tech companies in Canada and one of the largest vendors of broadcast studio equipment in the world.
1) How Microsoft’s data case could unravel the US tech industry
Under the Orwellian named US Patriot act, and the even more Orwellian USA Freedom Act, the law is quite clear: US companies have to hand over data if ordered by a US court regardless of where it is hosted. We know from the Snowden revelations companies were doing so even without court orders and we can safely assume they will continue to do so, regardless of this ruling. The court case itself is simply theatre so Microsoft can appear willing to protect its customer’s privacy. If you use cloud storage you should assume you or your company’s secrets are an open book regardless of the outcome of this case.
“Saying “no” to the government is never a good idea. But Microsoft had little option. In a little under a week, Microsoft will again head to a Manhattan court in an effort to try to quash a search warrant, sought by the US Justice Department, in an international drugs-related case. The warrant itself isn’t out of the ordinary, but it does contain a crucial facet: It is demanding data on an email account stored by Microsoft in a datacenter in Ireland. Microsoft argued the search warrant goes way beyond the means of a traditional search warrant because it forces the company to hand over data it stores in another country, which in itself is subject to different laws and regulations. This one case will determine — effectively — how far the US can use its own legal system to compel companies doing business within its borders to hand over data it stores overseas.”
2) The Internet of Things comes to the NFL
This is an interesting project which will probably lead to all kinds of novel applications during broadcast. It would allow, for example, cameras to track individual players and enhanced play by play, or even dynamic web content. Sports is one of the broadcast segments which tends to be watched real time, so enhancements like this tend to make the offering “sticky” from a customer retention perspective.
“The Internet of Things (IoT) is coming to the NFL in a big way. On Thursday, when the defending Superbowl XLIX champion New England Patriots host the Pittsburgh Steelers to open the 2015 football season, each player will be equipped with a set of RFID sensors about the size of a quarter embedded in his shoulder pads, each emitting unique radio frequencies. Gillette Stadium (and every other stadium used by the NFL) has been equipped with 20 receivers to pick up those radio frequencies and pinpoint every player’s field position, speed, distance traveled and acceleration in real time. By using two sensors for each player — one embedded in the left shoulder pad and one on the right — the system will also be able to identify the facing of each player.”
3) Autonomous ships and underwater vessels will rule the seas by 2030
Nice headline, but that is not what the article actually says. I don’t know how many future wars will be fought with navies (ships being large, expensive, slow moving targets), but the US military seems to have an infinite budget to create weapons with no real value. Regardless, autonomous vessels are probably the future of cargo since the ships would be cheaper to operate and have more space for cargo. A skeleton crew would be brought on board only when nearing port but the ship would otherwise make its way under remote control.
“By 2030 the seas will be dominated by autonomous underwater and on-surface vessels, a new report has said. The report, conducted by academic researchers and those from commercial companies, said that autonomous systems will become more important for military operations, such as mine detection, but also for humanitarian aid missions. But it warned that while there would be many of the intelligent systems in place, a lot of ships and vessels that would be used by 2030 have already been commissioned so may not be fully autonomous. “Autonomous systems will play an increasingly important role in future naval systems” said the report by Southampton University, in the UK, Lloyd’s Register and QinetiQ.”
4) Toyota Announces Major Push Into AI and Robotics, Wants Cars That Never Crash
Self-driving cars get a lot of coverage but those are probably 20 years from being mainstream. Near term enhancements to vehicle systems will automatically intervene to eliminate accidents or at least significantly reduce the frequency and severity thereof. Technology such as auto-braking is available but still rather expensive. Prices will drop and this technology will become as common as anti-lock braking and airbags. We will probably see the impact on insurance claims within 10 years.
“Toyota says an immediate goal is to figure out ways to save lives on the road. But the company is very clear that it’s not trying to develop a fully autonomous car in the same way that Google and many others are. Instead, they’re working on assistive autonomy: you’ll be driving most of the time (or at least in control of the vehicle), but the vehicle will be continuously sensing and interpreting the environment around you, ready to step in as soon as it detects a dangerous situation. Toyota believes this approach could make cars virtually crash-proof.”
5) The Bloomberg Terminal, a Wall Street Fixture, Faces Upstarts
Bloomberg and its few competitors have had a good thing going for many years now. They take what is essentially cheap or freely available information, plunk it on a screen, and charge a few thousand a month for the privilege. Pricing is surprisingly sticky, but the financial services industry has plenty of money to waste. It is an industry ripe for disruption.
“For nearly three decades, the flickering orange-on-black screens of the Bloomberg terminal have been omnipresent on Wall Street trading floors and executive suite desks, maintaining a vital lifeline of data and communication. In knitting together the world of finance, those $21,000-a-year terminals have generated billions of dollars for Bloomberg L.P., almost single-handedly paying for the company’s journalistic ambitions, as well as the fortune, political career and philanthropic largess of its founder, Michael R. Bloomberg. Now that golden egg — and all that it pays for — is a target for new competitors looking to knock it from its dominant position. Bloomberg has fended off competition before, but the latest upstarts are gunning for the company at a time when Wall Street is already aggressively looking to cut its spending on Bloomberg terminals.”
6) New 3D metal printing technique combines lasers and advanced robotics
One of the challenges in 3D printing is the materials choice, or more correctly, the intersection of materials, speed, and precision. This machine uses a novel approach which looks a bit like precision MIG (Metal Inert Gas) welding. The use of a laser probably gives much finer control than would be possible with an arc.
“While traditional 3D printing using fused deposition modelling (FDM) techniques becomes evermore commonplace, engineers are looking to develop further 3D printing technologies to widen its application within the manufacturing industry. Selective Laser Sintering (SLS) is one of the key areas for 3D printing research, which uses laser beams to project and bind powdered materials, typically metal, creating solid 3D models. However, a new alternative to rival SLS is being developed by a team of manufacturing researchers at the Southern Methodist University. Led by Professor Radovan Kovacevic, the group have presented a technique called Laser-Based Direct Metal Deposition (LBDMD) which builds on traditional FDM and laser technology to create high-quality metal objects as parts for a range of fabrication uses.”
7) Cancer patient receives 3D printed ribs in world-first surgery
It seems every week a new medical application for 3D printing is announced. This one concerns the creation of a replacement sternum and partial rib cage for a patient whose cancer destroyed these bones. A custom made replacement was made using a 3D printer. Ain’t technology wonderful?
“A Spanish cancer patient has received a 3D printed titanium sternum and rib cage designed and manufactured right here in Australia. Suffering from a chest wall sarcoma (a type of cancerous tumour that grows, in this instance, around the rib cage), the 54 year old man needed his sternum and a portion of his rib cage replaced. This part of the chest is notoriously tricky to recreate with prosthetics, due to the complex geometry and design required for each patient. So the patient’s surgical team determined that a fully customisable 3D printed sternum and rib cage was the best option.”
8) 3D body scanning set to disrupt clothing industry
3D scanning is related to 3D printing but it is a lot easier to do. There are a number of ways of doing this, ranging from LIDAR (a scanning laser) to photographic techniques. The idea here is that you end up with an objective measurement of the subject’s body, rather than relying on them or a clerk to take the measurement. On challenge would be the fact these systems cost money, and the sorts of vendors sophisticated enough to use such a machine probably already know how to take measurements.
“It is estimated that up to half of the clothes bought online are returned to the seller, frequently because they are the wrong size. This costs sellers millions of dollars in extra shipping costs and warehouse fees, putting a dent into their profits. It also frustrates many of those buying the clothes. “The problem is to provide to the garment industry a reliable tool in order to give consistent size advice, fast and reliable for the customers,” says Lara Mazzoni , the founder of start-up Bodi.me. Her solution makes use of simple and inexpensive motion-capture devices like those found in video-gaming hardware. These take 35 precise body measurements and create a visual avatar, which is then stored online. This data can be made accessible to sellers to help them suggest the right size of clothing.”
9) Here’s how the new iPhone 6S and 6S Plus compare to the top Android phones
Apple had its big launch event this week and the result was a yawn as the chart in this article shows. The “new” iPhones are not even comparable to Android product already on the market. The real comparison is iPhone 6S plus vs. the Moto X or Nexus 6. The iPhone starts at $749 vs $399 and $499 and has inferior specs compared to the other products. The Nexus 6 has been on the market for almost a year now. Apple investors should be asking themselves how many non-Apple fanatics will pay twice the price for a demonstrably inferior, indeed dated, product. It didn’t work out well for Blackberry.
“What’s not too surprising is that Apple continues to, generally speaking, ignore the spec race that Android phones have gotten into. How much faster are these phones? Well, we only kinda sorta know. What exactly is their battery capacity? We’ll find out later, whenever someone cracks the phone open. Still, there’s a lot to glean from looking at how Apple specs out its phones compared to how other top manufacturers do. Apple’s displays are great, but they tend to be of a lower resolution. Apple’s cameras are great, but they tend to have fewer megapixels. There are good reasons to care about those numbers, and there are good reasons to ignore them, and the iPhone continues to do things differently.”
10) China’s smartphone brands go downmarket
You can pick up a decent Android phone for a couple hundred dollars unlocked and off contract in Canada. The market in places like China is large and significantly driven by price so you can get a sense for what is possible price-wise. If a phone can be sold in China for less than $100, it can be sold elsewhere for a similar price.
“The race to the bottom has begun in Chinese smartphones. When a Lenovo unit head tells the Wall Street Journal, “You can use someone else’s model to defeat them,” and he’s referring to the low-cost Xiaomi brand that prides itself on being an Apple imitator for half the price, you know almost everyone is jumping in. This has been building for a while. It began last year when the country’s legacy brands like Huawei and ZTE were rolling out special “available online only” phone-brands in a blatant imitation of Xiaomi, which earned a $45 billion valuation thanks to saavy distribution and cheap phones. Now as China’s smartphone sales growth peaks and the next wave of the competitive cycle begins, one in which already thin margins are squeezed and companies will survive because of new innovations or market share, almost everyone is rushing to capture low-cost market share while they still can.”
11) Neuromemristive Processor Breaks Boundaries in Machine Learning
I’ve mentioned neural networks a number of times in the past. In theory, these attempt to model the function of a brain and brains are really good at solving certain types of problems. Most research is done with modeling software run on a digital computer, and brains (and real neural networks) are not digital but analog. One promise of memristors is that, as sort of analog memories, they may be used to better approximate actual neural networks. This company claims to have made significant strides in this regard.
“Alex Nugent is working on making computers more human. Specifically, he and his team at Knowm Inc. have developed the world’s first adaptive neuromemristive processor along with Dr. Kris Campbell, a researcher at Boise State University and an expert on memrisistors. Product Design & Development interviewed him on Sept. 1 to find out how this adaptive neuromemristive processor came about, and how it could transform machine learning applications, autonomous platforms, and data center operations. Memristors provide the key to adaptive learning, said Nugent, who has been working for almost 15 years on how to make a chip that functions like a human brain. His product has leapfrogged past even IBM’s supercomputing abilities, he said, thanks to neuromemristive technology.”
12) Laser Breakthrough Could Speed the Rise of Self-Driving Cars
I think the article really refers to improvement in LIDAR sensors. LIDAR is a sort of light based radar, or a “camera” which forms an image based on a laser scanner. Unlike a camera, which is passive, a LIDAR sends out a beam, so you can chose a wavelength which is unaffected by fog, rain, or snow. LIDAR is by nature less precise than a camera, but a car doesn’t need to know who it is going to hit before applying the brakes. I figure a LIDAR system will cost a few dollars within 5 years: most existing systems were developed for military applications and it is only recently that any interest at all has been applied to cost reduction.
“The eyes of a self-driving car are called LIDAR sensors. LIDAR is a portmanteau of “light” and “radar.” In essence, these sensors monitor their surroundings by shining a light on an object and measuring the time needed for it to bounce back. They work well enough, but they aren’t without their drawbacks. Today’s self-driving cars typically use LIDARs that are quite large and expensive. Google, for instance, used $80,000 LIDARs with its early designs. “Most vehicles in the DARPA urban challenge put half-a-million-dollars worth of sensors on the car,” says Daniela Rus, the director of MIT’s Computer Science and Artificial Intelligence Laboratory, referring to the government-backed competition that helped spawn Google’s autonomous vehicles. But researchers at the University of California, Berkeley say they’ve developed a new breed of laser technology that could significantly reduce the size, weight, cost, and power consumption of LIDARs, potentially leading to a much broader range of autonomous vehicles. “This is important for unmanned vehicles on land and in the sky,” says Weijian Yang, one of the researchers behind the project.”
13) Germany promises 50Mbps broadband for all, 10 times faster than global average speeds
The abysmal state of broadband infrastructure in the US, Canada, and Australia should be a major priority for governments, however, they remain oblivious to the fact a modern economy requires a modern infrastructure. Not all countries feel the same way, as this article demonstrates. It is interesting to note that deregulation in North America has led to a steady slide in infrastructure whereas European reform has moved things in the opposite direction. In the 1980s, North American infrastructure was world leading and the EU was a joke while the reverse is true today.
“Germany has committed to rolling out 50Mbps broadband for all citizens by 2018, which is ten times faster than current global average broadband speeds. According to Akamai’s most recent State of the Internet connectivity report for Q1 2015 – published in June – the average global speed is just 5Mbps, which makes Germany’s plan to roll out minimum 50Mbps connections across the whole country even more ambitious. If successful, the country would have a minimum downstream connection of more than double the highest global average speed of South Korea (23.6Mbps). The current average connection speed in the US is 11.9Mbps.”
14) Verizon to be first to field-test crazy-fast 5G wireless
It is interesting how much progress has been made with wireless technology in packing more and more data into the same spectrum. Thus far that has been offset by demand for data, however, that will not always be the case. 5G could be used to rival wired broadband however, even wired broadband has practical upper limits to utility. A major challenge to 5G will be handset design: the math behind these advanced modulation schemes is not trivial and it requires a fair bit of computing power to run the receivers, which translates to short battery life.
“The nation’s largest wireless carrier will begin field trials on so-called fifth-generation, or 5G, technology within the next 12 months, Roger Gurnani, chief information and technology architect for Verizon, said in an interview last week. He expects “some level of commercial deployment” to begin by 2017. That’s far earlier than the time frame of 2020 that many in the industry have pegged for the initial adoption of 5G technology. The trials would make Verizon the world’s first carrier to seriously move into 5G. It also represents an initial step toward the broader telecom industry radically transforming wireless service by adding significantly higher speed and responsiveness. Just as the move to today’s 4G wireless technology drove an explosion of smartphone adoption and mobile services, 5G could similarly drive its own tech revolution.”
15) HAMR HDD capacities to scale from 4TB in 2016 to 100TB in 2025
I am of the opinion the HDD industry is set to implode as 250 to 500GB SSDs move into the sweet spot of around $50 wholesale, which should happen over the next 1 to 2 years. The HDD industry is not standing still and it continues to contrive new ways to cram more data onto disks. Those advances are irrelevant, except in data warehouses, because the performance and other advantages of an SSD outweigh the benefit of more storage, at least in PCs. Since PC demand makes up the majority of the market, HDD vendors will see revenues decline dramatically.
“Seagate plans to build the first HAMR (Heat-Assisted Magnetic Recording ) HDD prototypes towards the end of next year, reports Softpedia. Initially the drives will be produced in admittedly pedestrian capacities, for testing of the technology. However the head of HAMR development at Seagate, Jan-Ulrich Thiele, expects the technology to be able to facilitate the mass production of 100TB capacity drives by 2025. … With the HAMR prototype tests only due to start in a year or more from now and mass produced drives becoming in limited capacities starting from 2018, Seagate will have a job on its hands to combat the rise of SSD – in storage capacities and adoption. Seagate is reportedly making the new drives available to select cloud and hyper-scale datacentre customers to begin with. Only a fortnight ago, at the Flash Memory Summit, Toshiba said SSDs with its 3D NAND will reach capacities of 128TB SSDs sometime in 2018 (see slide below).”
16) New prion disease raises questions about whether Alzheimer’s and Parkinson’s could be infectious
Alzheimer’s and Parkinson’s are familiar diseases, but, for the most part, they are a mystery. This article suggests recent discoveries support the possibility they might be prion diseases, or diseases caused by proteins which miss-fold and which then encourage other proteins to miss-fold. The most familiar prior disease is BSE, or “mad cow” disease. We have to be careful with the term contagious: it doesn’t mean you’ll get Aunt Gertie’s Alzheimer’s by kissing her. More likely a transfer of brain matter would be required. Thanks to my friend Duncan Stewart for this item.
“Scientists have always kept – and still do – an open mind about whether Alzheimer’s disease and other neurodegenerative conditions are transmissible. We’ve known since the early 1960s that amyloid fibrils – the accumulations of Aβ-amyloid in the brain – are self-propagating entities. In diseases involving amyloid protein, the “amyloid enhancing factor”, which causes the disease to progress, is thought to be amyloid itself. In other words, the amyloid is self-replicating and makes copies of itself exponentially.”
17) 26 Android Phone Models Shipped With Pre-Installed Spyware
I found it hard to believe so many manufacturers were shipping malware with phones but the article clearly suggests the malware was being installed by middlemen. It seems fairly obvious that it is in the best interests of the major manufacturers to take action against these middlemen and to find a mechanism to reassure customer their devices are free from tampering. It is rather a pity the Chinese government does not make an effort to prosecute those responsible, but that seems to be part of a broader issue.
“A new report claims that some rogue retailers are selling brand-new Android smartphones loaded with pre-installed software. Security firm G Data has uncovered more than two dozens of Android smartphones from popular smartphone manufacturers — including Xiaomi, Huawei and Lenovo — that have pre-installed spyware in the firmware. G Data is a German security firm that disclosed last year the Star N9500 Smartphone’s capability to spy on users, thereby comprising their personal data and conversations without any restrictions and users knowledge. The pre-installed spyware, disguised in popular Android apps such as Facebook and Google Drive, cannot be removed without unlocking the phone since it resides inside the phone’s firmware.”
18) We Need the Right to Repair Our Gadgets
I avoid stores where they charge for plastic bags because the whole thing is a little more than a cynical money grab: with a price of $0.05 and a cost of 1/3 of a cent, the bags are the highest margin product in the store. I’m also baffled by protests against bottled water but not Coke or beer. Go figure. While people fixate on minutia, vast amounts of potentially perfectly function appliances are sent to the dump because it is not cost effective to repair them. I was quoted a $250 minimum repair for a microwave which cost $350 new. It seems obvious why the manufacturers would conspire to encourage disposal over repair, but why should they get away with it?
“Who hasn’t experienced a situation like this? Halfway through a classic Jack Lemmon DVD, my colleague Shira’s 40-inch TV conked out. Nothing showed up on the screen when she pressed the power button. The TV just hiccupped, going, “Clip-clop. Clip-clop.” This was a great excuse to dump her old Samsung and buy a shiny new TV, right? But before heading to Best Buy, Shira gave me a call hoping for a less expensive option, not to mention one that’s better for the environment. We ended up with a project that changed my view on our shop-till-you-drop gadget culture. We can fix more technology than we realize, but the electronics industry doesn’t want us to know that. In many ways, it’s obstructing us.”
19) Patent Law Shouldn’t Block the Sale of Used Tech Products
On a related note to item 18, companies who sell consumable for printers do all kinds of things, including litigate, to prevent you from replacing a couple dollars-worth of ink or toner rather than throwing away all that plastic and metal and spending 20x that for a new cartridge. It seems like much more of an abomination than a plastic shopping bag or an empty water bottle.
“American patent law should not be used to prevent consumers from reselling, altering or fixing technology products. A federal appeals court will soon hear a case that could clearly establish this principle. Lexmark International v. Impression Products, which is before the United States Court of Appeals for the Federal Circuit, involves toner cartridges produced by Lexmark for use in its laser printers. The company is suing Impression Products, which buys used cartridges, refills them with toner and sells them to consumers. The refilled cartridges cost less than new ones sold by Lexmark. Lexmark argues that Impression is infringing its patents, because Lexmark’s cartridges were sold to consumers under the condition that empty devices be returned to the company. Lexmark also asserts that the cartridges sold in foreign countries cannot be resold in the United States without its permission. The company bases this argument on a previous Federal Circuit ruling in another patent case.”
20) FAA Joins Probe of Drone Crash Into Stands at U.S. Open Tennis
Another week, another story of some lout who thought playing with his model airplane during a major sporting event was a good idea. Model airplanes have been around for decades and nobody thought flying them around aircraft or sporting events was a good idea but there seems to be something about people who buy drones which evokes this sort of behavior. This is all fun and games but eventually a drone is going to kill someone by accident or on purpose and all hell will break loose.
“The U.S. Federal Aviation Administration is joining an investigation by local authorities into a drone that crashed into the stands at the U.S. Open Tennis Championships in New York City late Thursday. The small, unmanned quadcopter crashed into an empty section of seats at a stadium in the Flushing neighborhood of Queens during an evening match between Flavia Pennetta of Italy and Monica Niculescu of Romania. A 26-year-old teacher, Daniel Verley, has been arrested for reckless operation and flying the drone outside an approved area, according to the Associated Press. No one was injured in the incident.”