The Geek’s Reading List – Week of July 8th 2016
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.
ps: Slow news week if not for Tesla.
1) Tesla Falls After Paring Delivery Forecast Amid Factory Strains
This has been a huge month for Tesla news. Besides the bizarre announcement Tesla would buy Solar City (a company with significant ownership by Musk and his relatives), we had a dead driver, a second suspicious accident, then this preannouncement of poor Q2 shipments. Apparently, the “extreme production ramp” has somehow led to shipments falling for the second consecutive quarter. Of course, I don’t fully understand Teslaspeak: where I am from “ramp” in that context usually means increase, though it could mean like a boat ramp. This seems to be the second sequential quarterly decline so I guess they are building to the climax. As for over 5,000 cars on trucks and ships you have to wonder: I can get most things shipped from California to anywhere in North America in a couple days. None of this seems to have hit the stock price, oddly enough.
“Deliveries of 14,370 vehicles trailed a projection of about 17,000, after an “extreme production ramp” came too late in the quarter to get the cars to their buyers, Tesla said Sunday. About half of the quarter’s output in the final four weeks. Second-half deliveries now will be about 50,000 cars, according to a Tesla statement. That would mean 79,180 Model S sedans and Model X sport utility vehicles shipped for the full year, slightly below its previous range of 80,000 to 90,000. … Tesla said 5,150 cars were still on trucks and ships making their way to clients who ordered them, and will be delivered in the first part of this quarter.”
2) Elon Musk says that about ‘500,000 people would have been saved (last year) if Tesla’s Autopilot was universally available’
It amazes me nobody calls him out on these things. There is no data to support the hypothesis Tesla’s autopilot is safe at all, let alone safer than human driver. He is comparing apples to oranges in terms of statistics and any high school student should be able to spot that. What educated person (not working in the media) doesn’t understand what an average is? If nothing else, there are 9 popular vehicles which did not record a single fatality in 2012 (see http://www.iihs.org/iihs/sr/statusreport/article/50/1/1 near the bottom). Although the figures are stated differently (deaths per registered vehicle year) we can make an estimate. This covers a 4 year period so, assuming half are 2WD, that would place about 425,000 in the fleet at that time. The average US driver travels about 15,000 miles per year so Kia Sorentos would have gone about 3.2 billion miles without a fatal collision in 2012 alone (that is 24x safer than a Tesla on “autopilot”). The Subaru Legacy fleet is much smaller (albeit double the Tesla fleet) and would have traveled about 2.6 billion miles in 2012 without a fatality. (see www.goodcarbadcar.net for sales figures). Perhaps all fatalities would have been prevented if everybody drove Subaru Legacies. It’s the roof rack, I tell you.
“Following the news of the fatal accident in a Tesla Model S on Autopilot, which happened in May but only came to light last week, Tesla CEO Elon Musk claims that about half of the approximately one million people who died in auto accidents last year would have been saved if the Tesla Autopilot was universally available. He made the comment in a somewhat strange email conversation with a retired journalist.”
3) How the Media Screwed Up the Fatal Tesla Accident
Just to show how completely Tesla has the media befuddled, even the usually competent Vanity Fair saw fit to reinforce the nonsense. You’d think a Vanity Fair journalist would have the knowledge to realise the problem with the stats or at least pick up the phone and ask a high school student to explain it to him but no he takes nonsense and runs with it. The other thing is he refers to self-driving cars, which the Tesla is not. If it were there would some doubt as to whether or not it is legal to operate in most states (see https://www.hg.org/article.asp?id=31687). For any journalists out there how managed to get edumacated without doin’ maths please read http://faculty.neu.edu.cn/cc/zhangyf/papers/How-to-Lie-with-Statistics.pdf)
“Since the news broke about this accident, the story has been picked up in thousands of outlets—including this one—around the world, many of which raised significant concerns for Tesla’s Autopilot feature and the future of driverless cars. The New York Times ran a front-page story on Brown, quoting experts who said that the accident was “a wake-up call” for the rapidly burgeoning self-driving industry—an incident, in fact, that should force us to “reassess” driverless cars. Fortune scathed Elon Musk and Tesla for misleading shareholders and not sharing the crash news sooner. And a local Florida ABC News affiliate said the crash was “raising safety concerns for everyone in Florida.” (Yes, the newscaster literally said “everyone.”)”
4) Second Tesla crash probed in US
“A second crash involving a Tesla car – which includes a self-driving feature known as Autopilot – is being investigated by the US authorities. The accident in Pennsylvania left the driver and his passenger injured. The carmaker said that there was “no evidence” that Autopilot was responsible. It follows an investigation into a fatal accident in Florida where the focus is on the apparent failure of Tesla’s technology. In the incident in Pennsylvania, the Model X car hit a guard rail and veered into the eastbound lane, ending up on its roof. In a statement, Tesla said: “Based on the information we have now, we have no reason to believe that Autopilot had anything to do with this accident.””
5) Theranos founder Elizabeth Holmes banned for two years
Theranos was another tech company who learned to get the media to eat out of its hands. Although it was private, articles were written about a “genius CEO”, paradigm shifts etc.. Nobody really bothered to ask any actual experts on the subject as to whether or not Theranos could, in fact, be doing what it said it was doing. I mean, why bother with facts that might get in the way of a good story, right?
“Embattled biotech company Theranos says that federal regulators have revoked the license of its California blood-testing facility and banned founder Elizabeth Holmes from owning or operating a laboratory for two years. Theranos said it was notified of the sanctions by the Centers for Medicare and Medicaid Services on Thursday. The company faces a civil financial penalty, and regulators have also canceled the lab’s approval to receive Medicare and Medicaid payments.”
6) iPhone 7: Seriously, this phone sounds boring to you?
It must be pretty exciting to think about the possibility the base model iPhone 7 is expected to come out with the same storage as the majority of devices on the market. Plus the features listed, except perhaps for the colors, have been on the market for years in lesser devices. Well devices for a fraction of the price. To think we are alive in such heady times. One thing though: in the US there are no more contracts so that just means people will hang onto their devices longer.
“Call me crazy, but the iPhone 7 is shaping up to be a leap that may be even more impressive than the one 2015’s 6s and 6s Plus made. This past week alone, we’ve seen a flurry of leaks that point to some exciting new features. In fact, one leak in particular revealed two hot new features we never saw coming. Then a report from The Wall Street Journal firmed up earlier leaks suggesting that the iPhone 7 will offer twice as much storage as previous iPhones, with the base model starting at 32GB. … Oh, and let’s not forget that it will go on sale just as millions upon millions of iPhone 6 and iPhone 6 Plus buyers come off of their two-year contracts.”
7) Mobile Ad Study Finds Interstitials Only Slightly Better Than Banners for Being Seen
The only ads I ever see on my mobile are fraudulent or gambling related (and therefor fraudulent by extension). The ads are small and necessarily “light” so it is hard to believe they create much in the way of commercial impact. I suspect most people are conditioned to simply ignore the noise. Thanks to Nick Tang for this item.
“To better understand why less than 1 percent of viewable display ads get clicked, the teams spent several weeks testing 30 adults in a lab using technology such as eye tracking, wireless EEG (electroencephalography) headsets to measure emotions and attention, biometric scanners to measure “overall arousal,” and facial trackers. Participants were then surveyed about what they remembered and what they did or didn’t like. The results, published in a paper by the Advertising Research Foundation, were revealing but not entirely promising for marketers. For example, time spent looking at ads was less than 200 milliseconds per view, while time spent looking at interstitial ads was slightly more than 800 milliseconds. According to Light Reaction scientist Paolo Gaudiano, that’s pretty “insignificant.””
8) Germany To Halt Construction Of Offshore Wind Farms
I suspect the source is biased but the facts in the article and the general commentary regarding the impact of unpredictable power sources on the grid seem to align with my understanding. One thing worth noting is that CO2 emissions are dropping like a stone in North America after a massive ramp in heavily subsidized solar and wind production. Although the “green” lobby is portraying this as a sign of success it is directly a result of cheap natural gas associated with fracking, and the natural gas is displacing coal as a cost effective source of power.
“Despite the cut backs to wind power, the German government estimates that it will spend more than $1.1 trillion financially supporting wind power, even though building wind turbines hasn’t achieved the government’s goal of actually reducing carbon dioxide (CO2) emissions to slow global warming.”
9) Samsung Introduces World’s First Universal Flash Storage (UFS) Removable Memory Card Line-up, Offering up to 256-Gigabyte (GB) Capacity
UFS is not just a replacement technology for SD and uSD memory cards, its performance figures almost match a traditional Solid State Drive (SSD), making it much faster than SD. This means that it will like also replace the eMMC technology used in smartphones, etc.. It will take some time for the new spec to catch on but as a major device and flash vendor Samsung can help jumpstart that transition. Although Samsung does own a lot of related patents this is an open standard I figure will be very successful.
“Samsung’s new 256GB UFS removable memory card ─ simply referred to as the UFS card will provide greatly improved user experiences, especially in high-resolution 3D gaming and high-resolution movie playback. It provides more than five times faster sequential read performance compared to that of a typical microSD card, reading sequentially at 530 megabytes per second (MB/s) which is similar to the sequential read speed of the most widely used SATA SSDs. With this UFS card, consumers have the ability to read a 5GB, Full-HD movie in approximately 10 seconds, compared to a typical UHS-1 microSD card, which would take over 50 seconds with 95MB/s of sequential reading speed. Also, at a random read rate of 40,000 IOPS, the 256GB card delivers more than 20 times higher random read performance compared to a typical microSD, which offers approximately 1,800 IOPS.”
10) Google acquires Anvato, a media streaming and monetization platform for broadcasters
Google’s success has mostly come at the expense of print ads (newspaper and magazines). Broadcast ad spending has been relatively stable while print ad spending has plummeted even though more and more people are watching more and more video via streaming or “over the top” services. This opens up a huge new market for Google to dynamically insert video ads into streaming content. Of course, in this case, the broadcasters are in a position to profit since they own the content but they will need Google’s data to target the ads.
“Anvato’s technology allows its customers, which include the likes of NBCUniversal, MSNBC, CBS, Univision, HGTV, Bravo and Fox Sports, to power live streams, edit videos in the cloud, insert ads and handle pay-per-view, TV Everywhere and subscription payments. With that, it offers an end-to-end service for video publishing and monetization, something Google’s own platform doesn’t currently offer.”
11) A bug in fMRI software could invalidate 15 years of brain research
Long ago researchers produced a few good scientific papers in their entire lifetimes. The current “publish or perish” environment means they have to keep cranking them out or they lose their funding. That means that very little effort goes into actually verifying whether a finding is replicable, let alone correct. This creates a house of card for when somebody actually does the math. Thanks to my friends Humphrey Brown and Duncan Stewart for this item.
“There could be a very serious problem with the past 15 years of research into human brain activity, with a new study suggesting that a bug in fMRI software could invalidate the results of some 40,000 papers. That’s massive, because functional magnetic resonance imaging (fMRI) is one of the best tools we have to measure brain activity, and if it’s flawed, it means all those conclusions about what our brains look like during things like exercise, gaming, love, and drug addiction are wrong.”
12) U.S. Senate finally ditches BlackBerry
It had to happen I guess. It is remarkable how fast you can fall that far. The company still has about $1B of net cash to burn through but unless somebody buys them, they are pretty much in a downward spiral.
“The U.S. Senate is finally making the switch from BlackBerry to Android or iPhone, a switch most of us made years ago. Senate staff will no longer receive new BlackBerry phones, according to a memo from the Senate Sergeant at Arms sent last week to administrative managers, chief clerks and system administrators that was posted by Politico and blogger Jim Swift. The reason, according to the memo: BlackBerry told telecom carriers Verizon and AT&T that production of all Blackberry OS 10 devices (Q10, Z10, Z30, Passport and Classic) is being discontinued and future fulfillment can’t be guaranteed.”
13) LG Display prepares POLED for cars and wearables
POLED displays have been in the works for a while. The potential here is huge: because the substrate is flexible they might be able to make these displays on a continuous process (i.e. a sort of printing press) which would have a huge impact on pricing.
“LG Display has brought in equipment for plastic OLED, or POLED, to its E5 factory line to ramp up the production of displays for automobiles, smartphones and wearables, starting next year. The display maker already produces small-sized OLED display panels mostly headed for wearables but the new equipment will boost production, allowing it to meet a diversifying demand. LG Display will set up the line for the displays at the factory in Gumi, South Korea, within the year and start supplying them to clients in the first half of next year. POLED uses plastic as substrate which is considered more malleable and durable than conventional glass, making it best for flexible display production and new usage.”
14) NSA classifies Linux Journal readers, Tor and Tails Linux users as “extremists”
I’m old enough to remember when you could tell the good guys from the bad guys and when the term “extremist” meant somebody other than a person with an interest in personal privacy.
“Are you a Linux Journal reader or use software such as Tor and Tails Linux? If so, you’ve probably been flagged as an “extremist” by the NSA. Leaked documents related to the XKeyscore snooping program reveal that the agency is targeting anyone who is interested in online privacy, specifically those who use the aforementioned software and visit the Linux user community website. XKeyscore is a collection and analysis software that was among a number of surveillance programs revealed by Edward Snowden last year.”
15) Antivirus software is ‘increasingly useless’ and may make your computer less safe
This is probably more correct on the enterprise side than on the personal side. Hackers go for the weak points and the hacks tend to be different for companies than for individuals. If you want to set up a bot net or something PCs are great because they are weekly defended and there are lots of them. If you want to steal a few million dollars you go after corporations and that often is a long game involving social engineering. So keep the virus scanner for now because it can protect against the most likely threats your personal computer will face.
“Internet security experts are warning that anti-malware technology is becoming less and less effective at protecting your data and devices, and there’s evidence that security software can sometimes even make your computer more vulnerable to security breaches. This week, the U.S. Department of Homeland Security’s Computer Emergency Readiness Team (CERT) issued a warning about popular antivirus software made by Symantec, some of it under the Norton brand, after security researchers with Google’s Project Zero found critical vulnerabilities.”
16) Set-top saga: Comcast says it’s “not feasible” to comply with FCC cable box rules
Cable companies make a lot of money renting set top boxes to consumers, just as the phone companies used to profit renting phones out. The FCC has decided to open up the market and that is not only going to lead to better set top boxes but cost the cable companies a lot of near zero cost profit. Just as the phone companies did when they claimed it was “dangerous” to allow consumers to actually own their own phones the cable companies are trying to make the case it cannot be done. So, we can send a probe to orbit Jupiter but we can’t make a set top box. Hmmmm.
“So why is Comcast opposed to the FCC plan? Among Comcast’s publicly stated reasons, the company claims that the FCC plan is such a mess that it would be nearly impossible to comply with. Could Comcast be making a valid point? FCC officials who have heard Comcast’s arguments told Ars that the company is exaggerating the difficulty of complying. Comcast critics also say the company is wrong. But let’s take a look at what Comcast is saying.”
17) 3D printed talus implant helps Chinese patient walk freely again
The talus is the bone at the bottom of your ankle which connects the tibia to the foot. Although this is an unusual case in that the patient’s bone died, it is not unusual for arthritis to attack the talus and lead to ankle fusion, which restricts mobility. 3D printing might lead to a better solution than that. By the way the headline and the article disagree. It seems the surgery was just recently performed and mobility isn’t expected for at least 6 weeks.
“Three years ago, 27-year-old electrical engineer Mr. Fang fell down the stairs and sprained his ankle. To treat the sprain, he initially underwent a traditional fracture surgery to reset the bone. Once the bone had reset, however, Mr. Fang began to suffer from talar necrosis, a condition where the talus bone is deprived from blood and oxygen and starts to die. The condition also prevented the patient from walking. Fortunately, Mr. Fang was brought to the Southwest Hospital seeking treatment and became the first ever patient to receive a biologically functional 3D printed talar implant. The talar joint implant, which uses high-tech materials and technology, not only has a support function, but can also allow for the patient to regain normal mobility.”
18) Wal-Mart-Mobile Payment Service
You would think the US would be relatively advanced in things like credit card validation. They are not: chip cards are only now rolling out and “tap” payments don’t even seem to be on the radar. I can imagine if you don’t travel much the prospect of paying with your phone can be quite exciting. If you do travel, you’d know a lot of countries already allow you pay wirelessly. What is the advantage of Wal-Mart or Apply Pay systems over having a modern credit card validation network?
“Wal-Mart will now let you pay with its phone app at all 4,600 stores nationwide. The effort is part of Wal-Mart’s strategy to make shopping easier and faster, while learning more about consumer behavior. With Wal-Mart Pay, the customer uses the phone’s camera to scan a QR code that’s displayed at the register to charge a credit, debit or Wal-Mart gift card linked with the account. It differs from Apple, Samsung and Android Pay, which involves tapping your phone next to a payment machine with a wireless technology called NFC. In December, Wal-Mart said it would develop its own digital wallet rather than honor existing systems from Apple and others, though Wal-Mart said it isn’t ruling out third-party wallets in the future.”
19) TP-Link forgets to register domain name, leaves config pages open to hijack
I’ve written a fair bit about how vulnerable you are to companies when they stop providing a service. In this case it was neglecting to renew domain names (which cost less than $100/yr.) which open TP-Link customers to a hack. TP-Link is a fairly reputable company so you can imagine what might happen to all your low end Internet of Things stuff.
“In common with many other vendors, TP-Link, one of the world’s biggest sellers of Wi-Fi access points and home routers, has a domain name that owners of the hardware can use to quickly get to their router’s configuration page. Unlike most other vendors, however, it appears that TP-Link has failed to renew its registration for the domain, leaving it available for anyone to buy. Any owner of the domain could feasibly use it for fake administration pages to phish credentials or upload bogus firmware. This omission was spotted by Amitay Dan, CEO of Cybermoon, and posted to the Bugtraq mailing list last week.”
20) In a nutshell, why do a lot of developers dislike Agile?
This is good for a chuckle as it tears down the most recent fad in technology development: “agile development” or, as many know it, design by successive approximation. This is the way it usually works out: rather than telling you what they need the bosses tell you that what you have done is not what they need so you need to change it. Documentation and justification are all kind of old hat so they go out the window.
“I got hired onto a team of construction workers to build a house. We set up a meeting with Management to find out what kind of house they wanted us to build, where’s the floor plan, what it’s going to be used for, who it’s for, etc. Management said that they didn’t know all that, we should just get started. They told us that we were going to use “Agile” which means that we just work on small deliverables and build the thing incrementally. The developer team lead argued that we at least need to know how big the thing is going to be so that we can get started pouring the foundation, but Management told him they just don’t know. “What we do know,” Management said, “is that the house is going to have a bathroom. Just start there, and we’ll know more when it’s done. You have two weeks.” So we just bought a port-a-potty, and screwed around on the internet for two weeks. Management was outraged. “You call this a house? This is the worst house ever! It doesn’t even have a tv!””