The Geek’s Reading List – Week of September 9th 2016
Welcome to the new abbreviated Geek’s Reading List. I have decided to cut back to a maximum of 10 articles per week as it is becoming harder and hard to find interesting tech or science articles which are not puffery, billionaire worship, or other nonsense.
These articles and the commentary are not intended 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.
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) Flat Smartphone Growth Projected for 2016 as Mature Markets Veer into Declines, According to IDC
You know things are looking bleak when even the industry analysts project a 1.6% unit growth rate. Whether or not that happens, price compression means that industry revenues will drop. Most of the action is in the low price end of the market and it is worth noting that today’s low cost phone is as functional as a flagship device from a few years ago. Apple continues to gouge customers for its two year old technology while companies like Samsung and other have their flagships as well as a full range of phones across a wide price range.
“Worldwide smartphone shipments are expected to reach 1.46 billion units with a year-over-year growth rate of 1.6% in 2016 according to the latest forecast from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. Although growth remains positive, it is down significantly from the 10.4% growth in 2015. Much of the slowdown is attributed to the decline expected in developed regions in 2016, while emerging markets continue with positive growth. Developed markets as a whole (United States, Canada, Japan, and Western Europe) are expected to see a compound annual growth rate (CAGR) of -0.2%, while emerging markets (Asia/Pacific excluding Japan, Central and Eastern Europe, Middle East and Africa, and Latin America) will experience a CAGR of 5.4% over the 2015-2020 forecast period.”
2) Jet-black Apple iPhone 7 is here with a water-resistant body, better cameras, 256GB capacity — and no headphone jack (hands-on)
I have to wonder how people who write about Apple products live with themselves. Unless you live in North Korea the most impressive thing about the iPhone 7 is its utter banality: I am not aware of a single feature which is truly novel and yet, with the except of articles mocking the lack of a headphone jack, the overwhelming majority of coverage somehow manages to be positive. I figure the iPhone 7 should be called the “Just Like” since most of its features are “just like” features which have been on the market for a couple years – albeit at much lower cost.
“We got to use one hands-on for a few minutes after Apple’s event. Obviously, you can’t appreciate water resistance in a demo room (at least, not Apple’s demo room). But the iPhone 7 seems like a bunch of upgrades — some of which iPhone users have wanted for a while. Did we mention no headphone jack? Yes, it’s weird. Also, the home button being a solid-state Force Touch-like panel means it doesn’t quite have the same feel. It took some getting used to. Jet black, Apple’s new glossy black color iPhone, looks beautiful. It turns the iPhone into a slim black obelisk. But it also might be a bit of a smudge magnet.”
3) How Spy Tech Firms Let Governments See Everything on a Smartphone
The article glosses over the fact that firms such as these are happy to help dictatorships deal with “dissidents” as much as they are happy to help spy on terrorists: the color of the money is the same. It is worth reminding people that Apple, the company with a “surprising” back door (and doubtless others) refused to help with an actual terror investigation. One countermeasure against phones being used as listening devices was to disable all the on board microphones and only use a wired headset (since you can then unplug the only microphone).
“Want to invisibly spy on 10 iPhone owners without their knowledge? Gather their every keystroke, sound, message and location? That will cost you $650,000, plus a $500,000 setup fee with an Israeli outfit called the NSO Group. You can spy on more people if you would like — just check out the company’s price list. The NSO Group is one of a number of companies that sell surveillance tools that can capture all the activity on a smartphone, like a user’s location and personal contacts. These tools can even turn the phone into a secret recording device.”
4) Battery Assault
Battery manufacture is as complex as making Pop Tarts and you can expect that any operation would already be highly automated. It is not at all clear why there should be an economy of scale to a massive plant and there is good reason to believe vertical integration is as bad an idea as it usually is. Regardless we have seen how the Chinese government seems to be willing to subsidize the manufacture of solar cells, thus creating the illusion of dramatic cost improvements, and the same may become true with batteries. Nevertheless, the highly imaginative cost curve suggests a typical 70 kWhr battery will remain far too expensive to allow the manufacture of a $30,000 car for some time.
“Remember when Tesla’s Gigafactory was going to be the world’s biggest lithium-ion battery plant? By the time it reaches full capacity in 2020, it will be producing 35 gigawatt hours of cells each year — more than the whole world manufactured in 2013. Impressive, huh? Well, as Gadfly pointed out in July, there’s a contender for Elon Musk’s crown: BYD, the Chinese electric carmaker that already has about 23 percent of the market for large-scale batteries and is planning to ramp up to 34 gigawatt hours in 2019.”
5) Why We Still Don’t Have Better Batteries
This is a bit of a superficial look at why battery technology is not progressing as fast as people expect. The article would have been much better if it had described how very little progress has been made in battery performance and price over the past decade or so.
“In fact, many researchers believe energy storage will have to take an entirely new chemistry and new physical form, beyond the lithium-ion batteries that over the last decade have shoved aside competing technologies in consumer electronics, electric vehicles, and grid-scale storage systems. In May the DOE held a symposium entitled “Beyond Lithium-Ion.” The fact that it was the ninth annual edition of the event underscored the technological challenges of making that step.”
6) White House Report Concludes That Bite-Mark Analysis Is Junk Science
It turns out that a lot of forensics in general is pretty much junk science but that hasn’t stopped it from sending a lot of people to prison, including, presumably, a lot of innocent people. The article gets interesting when they start discussing “industry” reaction to the claim their “science’ is bunk. Even the district attorneys seem uninterested in whether it gives the right answer or not.
“In the case of bite-mark evidence, the report is especially critical. “PCAST finds that bitemark analysis does not meet the scientific standards for foundational validity, and is far from meeting such standards,” it reads. “To the contrary, available scientific evidence strongly suggests that examiners cannot consistently agree on whether an injury is a human bitemark and cannot identify the source of [a] bitemark with reasonable accuracy.” Bite-mark analysis is conducted by forensic dentists and relies on two foundational premises: first, that human dentition is unique — as unique as DNA — and second, that human skin (or another malleable substrate) is a suitable medium on which to record such an impression. The problem is that neither premise has been proved. Nonetheless, bite-mark analysis has been used in criminal cases to match individuals to alleged bites since the 1950s, when Texas’s highest criminal court cleared the way for its use (in that case, a dentist claimed that a bite mark left in a piece of cheese found at the scene of a grocery burglary matched the teeth of a particular man).”
7) Exclusive: How Elizabeth Holmes’s House of Cards Came Tumbling Down
The media spends time building you up so they can start tearing you down. This article looks at the rise and fall of Theranos and the superficial coverage of the company’s purported technology and CEO. One thing they don’t cover is that the CEO had little education and, as a rule of thumb, you can’t “hack” biochemistry the way you can hack software. It’s a bit like believing an undergraduate would replace General Relativity through force of will.
“Holmes subsequently raised $6 million in funding, the first of almost $700 million that would follow. Money often comes with strings attached in Silicon Valley, but even by its byzantine terms, Holmes’s were unusual. She took the money on the condition that she would not divulge to investors how her technology actually worked, and that she had final say and control over every aspect of her company. This surreptitiousness scared off some investors. When Google Ventures, which focuses more than 40 percent of its investments on medical technology, tried to perform due diligence on Theranos to weigh an investment, Theranos never responded. Eventually, Google Ventures sent a venture capitalist to a Theranos Walgreens Wellness Center to take the revolutionary pinprick blood test. As the V.C. sat in a chair and had several large vials of blood drawn from his arm, far more than a pinprick, it became apparent that something was amiss with Theranos’s promise.”
8) Intel Sells Majority Stake in McAfee Security Unit to TPG
Large tech companies like to spread the wealth around through things like share buys backs, dividends, and appallingly stupid and overpriced acquisitions. Buybacks reward people for selling the stock (which seems odd), dividends reward people for owning the stock (which sort of makes sense) and idiotic acquisitions (where most of the money goes) rewards the shareholders of other companies. To be fair, there have been many acquisitions more destructive of value than this one, but this isn’t the only one Intel has done either.
“Intel, which bought McAfee for $7.7 billion six years ago, said on Wednesday that it had sold a majority stake in its cybersecurity business to the investment firm TPG, in a transaction valuing the security provider at approximately $4.2 billion, including debt. The move will bring McAfee independence at a time when cybersecurity businesses have grown more prominent amid seemingly omnipresent hacking threats. And its sale illustrates how much both the technology industry and Intel have changed since Intel purchased the company in 2010.”
9) Malawi and South Africa Pioneer Unused TV Frequencies for Rural Broadband
Radio works differently depending on frequencies and a lot of the TV spectrum is perfect for “reach” although it is not good for carrying a lot of digital traffic. Nevertheless unused TV spectrum can be very useful as a stopgap measure (pending deployment of more advanced radio technologies) for cost-effective rural broadband. Thanks to Nick Tang for this item.
“Some people have taken to calling TV white space technology “Super Wi-Fi” or “White-Fi,” but we find those terms misleading because the technology is very different. TV white space uses VHF and UHF frequencies that have been set aside primarily for television broadcasts but are not in use in particular geographic regions or at specific times. The transition from analog to digital TV has opened up quite a bit of that spectrum. For TV white space networks, UHF is more attractive than VHF because its shorter wavelengths mean that smaller antennas can be used. The exact frequencies vary from country to country; in the United States, for instance, the allowed TV white space frequencies cover channels 2 through 51 except for channels 3, 4, and 37. And rural regions, especially those in sub-Saharan Africa, have no shortage of unused TV frequencies—sometimes the entire UHF and VHF bands are available.”
10) Dutchman dies in Tesla crash; firefighters feared electrocution
Tesla fanboyz rant about how it seems that every Tesla fatality gets covered by the media but when a company claims to have technology nobody else has, advertises its vehicles as the safest ever tested, and the death toll starts rising, there is no reason to keep quiet about it. The twist in this article is that, even though the driver was apparently dead at the scene, another driver in a similar accident could have bled out because the EMTs didn’t want to die. I would not blame them either. I have been informally tracking Tesla fatalities. For a car rated “the safest ever tested” my figures suggest the fatality rate seems to be extremely high when calculated by registered vehicle years.
“A Dutchman died on Wednesday after his Tesla (TSLA.O) collided with a tree, according to local authorities, and it took firefighters hours to remove his body from the vehicle due to fears they could be electrocuted. The cause of the crash on a highway about 40 kilometers east of Amsterdam was not known. Photos of the crash scene published by local media showed the back of the car mostly intact but its front smashed in and parts strewn about.”