The Geek’s Reading List – Week of March 31 2017

The Geek’s Reading List – Week of March 31 2017

Hello,

Welcome to the Geek’s Reading List. 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.

 

Brian Piccioni

 

 

 

1)            Uber suspends self-driving car program after Arizona crash

It turns out that the collision, which was the worst ever for a self-driving car (except the Tesla fatalities which appeared to happen because the drivers thought they were in a self-driving car). Nonetheless, there are dozens of examples caught on video of Uber’s self-driving cars doing things like going through red lights, a number of which were caught on camera. In this case the car sped through a yellow light and hit a car making a left hand turn into its lane. Based on Uber’s track record I would not be surprised if next time it’s even worse.

“Uber Technologies Inc suspended its pilot program for driverless cars on Saturday after a vehicle equipped with the nascent technology crashed on an Arizona roadway, the ride-hailing company and local police said. The accident, the latest involving a self-driving vehicle operated by one of several companies experimenting with autonomous vehicles, caused no serious injuries, Uber said. Even so, the company said it was grounding driverless cars involved in a pilot program in Arizona, Pittsburgh and San Francisco pending the outcome of investigation into the crash on Friday evening in Tempe.”

http://www.reuters.com/article/us-uber-tech-crash-idUSKBN16W0UZ

2)            SpaceX Falcon 9 rocket relaunch: start time, live stream, and what to expect

I give them credit: they managed to do it. The thing is, SpaceX’s record is already pretty poor when it comes to destroying payloads and the customer is keen on not destroying payloads because they are very, very expensive and it usually takes a long time to replace them. So if the price is 30% lower but the risk is higher customers have to decide if they want to be penny wise and pound foolish.

“Elon Musk’s private spaceflight company is going to take another swing at history today: for the first time, SpaceX plans to take a Falcon 9 rocket that successfully launched and landed in April 2016 and try to launch it to space once again. … Ideally, this is a proof-of-concept for reusing rockets, one of Elon Musk’s main goals for SpaceX. By recovering each rocket after launch instead of discarding it, Musk hopes to cut the cost of a rocket launch by millions of dollars. This could eventually allow SpaceX to offer launches at a 30 percent discount, which is a huge advantage in the tiny but hyper-competitive space launch market.”

http://www.theverge.com/2017/3/30/15114044/spacex-launch-live-stream-start-time-schedule-used-falcon-9-rocket

3)            Paralysed man moves arm using power of thought in world first

This technology is still in its early stages but it is evolving rapidly. It only works in the lab but that is to be expected given that researchers lack the expertise and financial resources to miniaturize the systems fully. I imagine the impact on the life of those affected is profound despite the limited capabilities they demonstrate here. Expect big things over the next 10 years.

“A man who was paralysed from below the neck after crashing his bike into a truck can once again drink a cup of coffee and eat mashed potato with a fork, after a world-first procedure to allow him to control his hand with the power of thought. Bill Kochevar, 53, has had electrical implants in the motor cortex of his brain and sensors inserted in his forearm, which allow the muscles of his arm and hand to be stimulated in response to signals from his brain, decoded by computer. After eight years, he is able to drink and feed himself without assistance.”

https://www.theguardian.com/science/2017/mar/28/neuroprosthetic-tetraplegic-man-control-hand-with-thought-bill-kochevar

4)            ESPN Has Seen the Future of TV and They’re Not Really Into It

A lot of the subscriber losses at ESPN are actually people “cutting the cord” and dropping cable service in general. Some – perhaps many – of those may actually want ESPN but the company’s revenue stream, like many cable companies, is based on them getting $7 per cable subscriber whether the subscriber wants ESPN or not. On a “pick and play” basic, fees would be more like $30/subscriber or more. I find it strange Google has bundled EPSN with their streaming service and I’d be surprised if all other such services do so, especially since a major reason for “cutting the cord” is the high prices due to the “take it or leave it” cable TV pricing model.

“As subscribers leave the network, and often cable altogether, ESPN is stuck with rising costs for the rights to broadcast games. Programming costs will top $8 billion in 2017, according to media researcher Kagan. Most of that money goes to rights fees through deals that extend into the next decade. Last year profits from Disney’s cable networks, of which ESPN is the largest, fell for the first time in 14 years. The dip was small, about half a percent, but nonetheless alarming. Rich Greenfield, a media analyst at BTIG Research, says ESPN has been “over-earning,” with cable customers paying for the channel as part of their subscription bundle, whether they watch it or not. “It’s pretty clear that the years of over-earning are going to end,” says Greenfield, who’s made a name for himself as an ESPN naysayer. “The question is does it end slowly or fast.””

https://www.bloomberg.com/news/features/2017-03-30/espn-has-seen-the-future-of-tv-and-they-re-not-really-into-it

5)            Smartphones may be to blame for unprecedented spike in pedestrian deaths

When I saw the headline I thought for a moment somebody finally realized that “distracted walking” is dangerous, but, alas, this is another article about distracted drivers. Distracted driving is probably a cause of some or even most of the fatalities but I’ve come close to running down idiots crossing the street while looking at their phones more than once.

“A new report estimates that in 2016, the United States saw its largest annual increase in pedestrian fatalities since such record keeping began 40 years ago. … The Governors Highway Safety Association estimated there were 6,000 pedestrian deaths in 2016, the highest number in more than 20 years. Since 2010, pedestrian fatalities have grown at four times the rate of overall traffic deaths. “The why is elusive. We don’t know all the reasons,” Retting said. “Clearly lots of things are contributing. But not one of these other factors have changed dramatically.” The thing that has changed dramatically in recent years is smartphone use. The volume of wireless data used from 2014 to 2015 more than doubled, according to the Wireless Association.”

http://money.cnn.com/2017/03/30/technology/pedestrian-safety-smartphones/

6)            Intel Warns Partners: Expect Tight SSD Supply Through 2017, With Shipment Priority On Data Center SSDs

It’s not real news that memory prices (DRAM and flash)have “firmed” as they do every 5 years or so. This cycle is a bit different because it includes, and is associated with demand for both DRAM and flash at the same time. To me this is the ultimate “head fake” for the Hard Disk industry: SSD shortages means HDD sales are collapsing as quickly as expected and stock have rallied strongly. The thing is, whatever you read, memory prices are going to start trending down at some point in the future and when that happens SSD prices will essentially collapse, taking the HDD industry with them.

“The SSD shortage stems from a combination of fast-growing demand for SSDs as the per-gigabyte price falls closer to that of slower-performing spinning hard disks, and a transition by manufacturers of NAND memory, the key component in SSDs, toward 3D NAND technology, according to multiple industry sources. … The delays are already impacting shipments to major customers, the solution provider said. “One of our government customers wants servers with SSDs but has been delayed multiple times,” the solution provider said. “We checked with a major competitor, and found the same. So we feel this is an industrywide challenge.” The solution provider said about 50 percent of new sales have shifted from hard drive-based storage to SSDs. “New technologies like deduplication and compression are helping drive demand,” the solution provider said. “And hyper-converged infrastructure works better with all-flash architectures.””

http://www.crn.com/news/data-center/300084309/intel-warns-partners-expect-tight-ssd-supply-through-2017-with-shipment-priority-on-data-center-ssds.htm

7)            Speck-Size Computers: Now With Deep Learning

There are two main phases to deep learning: training and doing. Right now both are done at data centers due to the computational demands of dealing with as deep learning array. That will change and “doing” will eventually done by the client (i.e. a smartphone or PC). It may take a while but the current GPU approach – which has stoked so much excitement around NVIDIA – will be displaced by purpose built accellerators.

“Another micromote they presented at ISSCC incorporates a deep-learning processor that can operate a neural network while using just 288 microwatts. Neural networks are artificial intelligence algorithms that perform well at tasks such as face and voice recognition. They typically demand both large memory banks and intense processing power, and so they’re usually run on banks of servers often powered by advanced GPUs. Some researchers have been trying to lessen the size and power demands of deep-learning AI with dedicated hardware that’s specially designed to run these algorithms. But even those processors still use over 50 milliwatts of power—far too much for a micromote. The Michigan group brought down the power requirements by redesigning the chip architecture, for example by situating four processing elements within the memory (in this case, SRAM) to minimize data movement.”

http://spectrum.ieee.org/semiconductors/processors/specksize-computers-now-with-deep-learning

8)            We need a New Deal to address the economic risks of automation

Fears over automation is stoking anxiety among millennials, pretty much as it has done for every generation since the start of the industrial revolution. There is nothing significantly different about now vs prior “generations” of automation if you bother to investigate the subject. Where are all the farm workers who have been unemployed by tractors and combines; machinists unemployed by NC milling machines; bank tellers unemployed by ATMs; and keypunch operators unemployed by terminals and PCs? Automation means greater productivity and it is a major reason for improvements in the standards of living in the industrialized world since the 1800s. There is absolutely no difference between all hose prior cycles and what will happen in the next 20 or 100 years.

“There’s been downward pressure on jobs since the Industrial Revolution due to leaps in productivity brought about by human ingenuity and lucky discoveries. This has accelerated since the ’80s with the mass adoption of computers, but the market has more or less kept up, creating new openings to fill the eradicated ones, albeit not in the same places (coastal cities have gained, Rust Belt areas have lost out). However, we have a tsunami on the horizon: automation using AI. It will place intense downward pressure on employment, and threatens to catch a generation (really, three generations) off guard, with unemployment levels higher than the Great Depression.”

https://techcrunch.com/2017/03/31/we-need-a-new-deal-to-address-the-economic-risks-of-automation/

9)            IBM Bets The Company On Cloud, AI And Blockchain

Based on IBM’s financial performance and aptitude for blowing money on acquisitions, I’d say as gamblers they are not so good. While they have great engineers their management can’t seem to monetise what they have. Even their engineering talent is probably sparse as new graduates do look upon IBM as the sort of place they want to work. With respect to cloud services and AI, well, they aren’t the only name in the games and it is hard to imagine companies who are not IBM customers in the first place going to IBM for this. That is doubly true for startups.

“IBM Chairman and CEO Ginni Rometty laid out IBM’s strategy at a packed keynote. “The IBM Cloud is the platform for the next era of business,” Rometty said, expressing the central theme of the keynote. The IBM Cloud combines the Cloud Foundry-based Bluemix Platform-as-a-Service environment with SoftLayer, IBM’s public Infrastructure-as-a-Service Cloud. But the key to IBM’s Cloud strategy is its reliance on AI. “IBM Cloud is cognitive at the core,” according to Rometty. “You’re going to want a cloud that has a full range of cognitive capabilities.””

https://www.forbes.com/sites/jasonbloomberg/2017/03/22/ibm-bets-the-company-on-cloud-ai-and-blockchain/#540f6fd6776d

10)        ‘Supermassive’ black hole rocketing through space at five million miles an hour, Nasa reveals

This is pretty amazing if for nothing more than the amount of energy involved to move a mass as big as a supermassive black hole at this speed. The article explains how that happened, but it is not any less amazing.

“Their observations confirmed the Hubble finding. They also helped pin down the black hole’s mass (equal to that of a billion suns) and the speed at which the gas around it was travelling (4.7 million mph). Meanwhile, the Hubble image offered a clue about what dislodged the black hole from its galaxy’s centre. The host galaxy bore faint, arc-shaped features called tidal tales, which are produced by the gravitational tug-of-war that takes place when two galaxies collide. This suggested that galaxy 3C 186 had recently merged with another system, and perhaps their black holes merged too.”

http://www.independent.co.uk/news/science/nasa-supermassive-black-hole-discovery-a7650656.html?

 

The Geek’s Reading List – Week of March 24 2017

The Geek’s Reading List – Week of March 24 2017

Hello,

Welcome to the Geek’s Reading List. 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.

 

Brian Piccioni

 

 

1)            Why American Farmers Are Hacking Their Tractors With Ukrainian Firmware

I have 3 tractors and, lucky for me, they run perfectly well without even a battery. Larger equipment tends to require a lot of computers for emissions controls as well as advanced functions such as auto-steer (which helps you line up your machinery for maximum efficiency) and other functions. Companies like Deere have found this is a great segue for keeping tinkerers and independent repair shops from touching any part of “their” tractors. Many farmers have a limited choice of equipment vendors and risk their crop if they can’t get a timely repair. Oddly enough Deere’s approach is legal.

“To avoid the draconian locks that John Deere puts on the tractors they buy, farmers throughout America’s heartland have started hacking their equipment with firmware that’s cracked in Eastern Europe and traded on invite-only, paid online forums. Tractor hacking is growing increasingly popular because John Deere and other manufacturers have made it impossible to perform “unauthorized” repair on farm equipment, which farmers see as an attack on their sovereignty and quite possibly an existential threat to their livelihood if their tractor breaks at an inopportune time. “When crunch time comes and we break down, chances are we don’t have time to wait for a dealership employee to show up and fix it,” Danny Kluthe, a hog farmer in Nebraska, told his state legislature earlier this month. “Most all the new equipment [requires] a download [to fix].”|

https://motherboard.vice.com/en_us/article/why-american-farmers-are-hacking-their-tractors-with-ukrainian-firmware

2)            IBM unveils Blockchain as a Service based on open source Hyperledger Fabric technology

Just to be clear this is generic blockchain technology, not Bitcoin, which is a particular implementation of blockchain. Given increased interest in the use of the technology by banks and other large institutions – which are IBM’s traditional customers – this makes a lot of sense. Of course there is nothing whatsoever to stop Amazon, Microsoft, and Google from offering exactly the same thing.

“IBM Blockchain is a public cloud service that customers can use to build secure blockchain networks. The company introduced the idea last year, but this is the first ready-for-primetime implementation built using that technology. The blockchain is a notion that came into the public consciousness around 2008 as a way to track bitcoin digital-currency transactions. At its core blockchain is a transparent and tamper-proof digital ledger. Just as it could track bitcoin’s activity in a secure and transparent fashion, it’s capable of tracking other types of data in private blockchain networks. This could allow any private company or government agency to set up a trusted network, which would allow the members to share information freely, knowing that only the members could see it, and the information couldn’t be altered once it’s been entered.”

https://techcrunch.com/2017/03/19/ibm-unveils-blockchain-as-a-service-based-on-open-source-hyperledger-fabric-technology/

3)            Intel claims storage speed record with first large-capacity Optane SSD

Optane, also known as 3D Crosspoint memory is rapidly becoming a disappointment. The article sure sounds bullish but the speed advantages are in very specific use cases. It is also wroth noting that the “older” Intel drive they are comparing it too has been on the market for 3 years and the past 3 years have seen a lot of improvement in the SSD arena. I remain hopeful Intel will eventually justify at least some of the hype around Optane but so far they really haven’t shown anything to justify it.

“The first large-capacity Optane SSD drive is the DC P4800X, which has 375GB of storage and started shipping on Sunday. The $1,520 SSD is targeted at servers. (Intel didn’t provide regional availability information.) … In a nutshell, Intel said that if you run sequential tasks, it would be better to use conventional SSDs. Optane lights up when running random reads and writes, which are common in servers and high-end PCs. Optane’s random writes reach up to 10 times faster compared to conventional SSDs, but only when utilization is being pushed to extremes, while reads are around three times faster. In a standard 4K data block, with 70 percent read and 30 percent write, the P4800X was five to eight times faster than the older P3700. The responsiveness of the drive increased with the data load.”

http://www.pcworld.com/article/3182547/storage/intel-claims-storage-speed-record-with-first-large-capacity-optane-ssd.html

4)            What Happens If Uber Fails?

This is the sort of article you see when valuation bubbles are getting long it the tooth, except in this case the author seems to acknowledge it is a bubble. The trope is that, while one or two companies may have suffered down rounds the party will go on for all the companies that haven’t imploded yet. What tends to happen in real life is that investors shake off a few disappointments until some ill-defined critical mass happens and they have a collective “what was I thinking” moment which leads to a rush for the exits. Unfortunately, unless you have the good fortune of selling your stock to the unsuspecting public through an IPO, for most Unicorn investors there will be no exit.

“But how much is the tech industry’s fate actually wrapped up in Uber’s? If Uber implodes, will the bubble finally pop? It’s a question that’s full of assumptions: Uber’s fate is uncertain, and nobody really knows what kind of bubble we’re in right now. Yet it’s a question still worth teasing apart. Trillions of dollars, thousands of jobs, and the future of technology all hang in the balance. “These bubbles swing back and forth in fear and greed,” McGrath told me, “and when Uber stumbles, it triggers fear. Part of this bubble is created basically in a low-interest-rate environment. Money from all over the world is pouring into this sector because it has nowhere else to go.” This is a key point—perhaps the key point that will determine whether Uber lives or dies. Uber isn’t worth $70 billion because it is actually worth $70 billion. Its valuation is that high despite the fact that it’s not profitable, and despite the fact that it has little protection from competitors baked into what it is and does. Uber’s valuation, in other words, is a reflection of the global marketplace and not a reflection of Uber’s own durability as a company.”

https://www.theatlantic.com/technology/archive/2017/03/uber/520302/

5)            T-Mobile busy testing 5G but not on the fixed wireless bandwagon: CTO

Of course he doesn’t believe in fixed wireless: he’s a mobile operator! It is true that range is bound to be pretty poor at 28 GHz but 5G technologies like MIMO and Beam Forming are not confined to particular spectrum. The real advantage is regulatory: there is loads of unlicensed spectrum which can be exploited by ISPs for the last 100 meters to the customer. Plus in the US wireless is federally regulated, and state and local laws shielding wireline ISPs from competition will not affect 5G ISPs.

“T-Mobile US CTO Neville Ray reiterated his disdain for the fixed wireless 5G model that Verizon has been pursuing—saying at this point in time, “I am not a huge believer” in that model—but that doesn’t mean T-Mobile is sitting idle when it comes to 5G. Speaking at the Citi European & Emerging Telecoms Conference in London on Tuesday, Ray said T-Mobile is testing 5G and he believes there’s a lot of potential for true innovation in the wireless industry, including with things related to virtual reality and eyewear, but mobility won’t come in earnest until the next decade. “We’ve done a huge volume of 5G testing, we have 5G radio, 28 GHz, all those pieces,” he said. “We’re trialing, testing, doing all the things,” he added, noting Verizon announced some larger scale trials this year.”

http://www.fiercewireless.com/tech/t-mobile-busy-testing-5g-but-not-fixed-wireless-bandwagon-cto

6)            Average PC DRAM Contract Price Jumped Over 20% Sequentially in October with 4GB Modules Coming to US$17.5, Says TrendForce

With DRAM, Flash, and SSD prices trending up (as are, apparently, displays) PC prices and features are bound to be impacted. This is bound to be traumatic for consumers used to continuous improvements in price/performances. Don’t worry it will be a temporary affect: the memory vendors will add a lot of capacity and price will drop even faster than usual in a year or so.

“DRAMeXchange, a division of TrendForce, reports the average contract price of 4GB PC DRAM modules increased over 20% between September and October from US$14.5 to US$17.5 as DRAM suppliers completed their fourth-quarter contract negotiations with first-tier PC-OEMs. Spot prices of DDR3 and DDR4 4Gb chips also rose 17% to 24% respectively in October compared with the prior month to US$2.46 and US$2.48 on average. This strong showing indicates that the DRAM market outlook is rosy and further price increases are expected in the future. “From the supply side, PC DRAM currently accounts for less than 20% of the total output from the global DRAM industry because suppliers are focusing on the mobile and server DRAM markets,” said Avril Wu, research manager of DRAMeXchange. “From the demand side, branded device makers have fairly low DRAM inventories while facing higher-than-expected demand in the busy season. Hence, prices of PC DRAM have risen sharply in the recent period.””

http://press.trendforce.com/press/20161102-2677.html#EFRZdPoLvKZaUOO6.99

7)            Apple says recent Wikileaks CIA docs detail old, fixed iPhone and Mac exploits

In case you missed it surprise, surprise, surprise Apple products are vulnerable to hacking. If you believe current products have all the backdoors patched I have some swampland in Florida to sell you.

“As any security expert will tell you, once you gain physical access to a device, nearly all bets are off. Remote intrusion is a much more real and dangerous threat to the security of either end users or company-wide systems. Basically if you have the device in hand and all the time in the world it’s just a matter of plugging away. That said, Apple’s devices have been engineered to be particularly resilient to even in-person attacks. Which is why the CIA docs garnered attention by the press and users today. To wrap — these appear to be older exploits but government agencies are always seeking new vectors and likely have new methods in place already that Apple is or will be patching out as soon as they are disclosed by researchers or disclosed by legal discovery.”

https://techcrunch.com/2017/03/23/apple-says-recent-wikileaks-cia-docs-detail-old-fixed-iphone-and-mac-exploits/

8)            Theranos investors who pledge not to sue get Elizabeth Holmes’ shares for free

This is so funny it has to be true. The deal is apparently to the “investors” in the last round of financing who, presumably, were sold a pig in a poke. It turns out that, choosing my words carefully, there wasn’t much there there. Now, why somebody would want shares of Theranos for free is beyond me, especially since that is roughly what they are worth. The advantage to the people behind the company is pretty obvious: no lawsuit and therefore no legal discovery. It all just goes away.

“Theranos CEO and founder Elizabeth Holmes is planning to give up some of her personal shares to investors who pledge not to sue the disgraced blood-testing company, the Wall Street Journal reports. The deals would only involve investors from the last round of funding, which ended in 2015 and brought in more than $600 million. These investors include the family of US Education Secretary Betsy DeVos, the family behind Walmart stores, and John Elkann, who controls Fiat Chrysler Automobiles. Investors could get about two free shares of the company for every share they bought. The deals would also mean that Holmes could lose her majority stake in Theranos.”

https://arstechnica.com/science/2017/03/theranos-investors-who-pledge-not-to-sue-get-elizabeth-holmes-shares-for-free/

9)            KABOOM! Incredible moment rockets fizz across a Ukrainian city after an arms warehouse packed with ammunition and weapons was ‘bombed by a drone’

I don’t know how reliable the Daily Mail is in general but BBC is reporting the same thing as suspicions (http://www.bbc.com/news/world-europe-39363416). It certainly makes sense: as I’ve written before consumer grade drones are perfectly capable of dropping bombs and have been used by ISIS for doing exactly that. Whether or not this particular attack was carried out by one it is a matter of time before the things are used for this purpose.

“Last night, Defence Minister Stepan Poltorak said authorities were considering a theory that the fire was caused by ‘explosive devices dropped from an unmanned aerial vehicle’.”

http://www.dailymail.co.uk/news/article-4346328/Clips-blast-Ukrainian-arms-depot-bombed-drone.html

10)        Intel Forms New AI Group Reporting Directly To CEO Brian Krzanich

If I were NVIDIA I would have expected this day. NVIDIA’s stock has done really well over AI-related excitement even though their financials are mostly associated with gamers and PC applications. AI researchers used GPUs because they happen to be good at the sort of calculations used in AI even though they are very expensive and not particularly power efficient. It is a matter of time before Intel and others incorporate “AI Accelerators” into their processors which take you most of the way along the performance curve. After all, Intel sells more GPUs embedded in its processor than anybody else sells GPUs. This may not have a material financial impact on Intel but it will have a huge impact on AI related GPU sales.

“GPUs, with NVIDIA being the biggest recent beneficiary, have become the most recent standard for cutting edge deep neural network training, and inference today is spread across CPUs, GPUs, FPGAs, ASICs and even DSPs. AI is a quick moving target and I think it’s unwise to think the engines today will be static in the future. The engines that drive AI are a very competitive space and not only are we seeing startups engaging, but the largest semiconductor companies like Intel. Intel has been on an absolute tear in their goal to be the leader in AI. It acquired Altera for $16B and FPGAs are key to DNN inference.”

https://www.forbes.com/sites/patrickmoorhead/2017/03/23/intel-forms-new-ai-group-reporting-directly-to-ceo-brian-krzanich/#49dfa93b462b

 

The Geek’s Reading List – Week of March 17 2017

The Geek’s Reading List – Week of March 17 2017

Hello,

Welcome to the Geek’s Reading List. 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.

 

Brian Piccioni

 

 

1)            Hospital Stumbles in Bid to Teach a Computer to Treat Cancer

Remember all the hoopla about IBM’s Watson computing being applied to medical diagnosis? Ever wonder what happened? Well it turns out things haven’t gone as well as expected. The article seems to try and distance Watson from the program’s failure but, seriously, if the technology worked nearly as well as people thought it would do you really think they would have thrown in the towel?

“In 2012, the University of Texas MD Anderson Cancer Center launched an ambitious project with International Business Machines Corp.’s Watson program that promised to transform cancer care with the help of artificial intelligence. Almost five years and more than $62 million later, the sprawling Houston-based public institution has little to show for it, according to a special review conducted by the University of Texas System Audit Office that details a number of stumbles in the progress and management of the project. The audit doesn’t evaluate IBM Watson’s scientific capabilities or whether the technology works for this purpose. But instead, the report details the management and technology challenges at MD Anderson that make it hard to integrate artificial-intelligence software into complicated health-care settings. The Watson-based program isn’t in clinical use, according to the audit. The plan for a pilot focused on leukemia was “suspended mid-project” and the focus shifted to lung cancer to try to speed up progress, according to audit documents. Clinical trial and drug-protocol data in the system are outdated, and the pilot program doesn’t work with the hospital’s current electronic health records, according to the audit.”

http://news.morningstar.com/all/dow-jones/us-markets/201703082772/hospital-stumbles-in-bid-to-teach-a-computer-to-treat-cancer.aspx

2)            Sony’s new wireless charging patent could let you borrow juice from other devices

This article generated a fair bit of online interest this week even though what is being described in the article is essentially “radio”. There is no chance whatsoever any significant amount of power could be transmitted wirelessly between two smartphones, even if they were a few millimeters apart. I’m sure Sony engineers get a bonus for patent applications but it’s rather hard to believe any patent clerk would accept such a thing. Overall it’s a pity so few people paid attention in physics class.

“This isn’t the first time we’ve seen patents and patent fillings related to new wireless charging techniques. Even Apple joined the fray by filing a patent for an inductive wireless charging technology. The company is now rumored to be working with Energous, a wireless charging company that has built tech that can charge wirelessly from a distance — so if you’re at home, your device can be charging no matter where you are in the house. There’s no question that the ultimate goal is for charging to be completely hassle free, and these companies all seem to be working toward that. Sony’s tech could be a piece in that puzzle — or it could just help you keep charged in an emergency, if it ever sees the light of day.”

http://www.digitaltrends.com/mobile/sony-wireless-charging-patent/

3)            Why laptops won’t come with larger SSDs this year

The SSD is going to kill the Hard Disk Drive (HDD) industry but it may take a bit longer than I expected. It turns out they are so much in demand that suppliers can’t keep up, which means prices are dropping as they should. HDD stocks have bounced back as though investors seem to think the hazard has passed but it hasn’t: this is the ultimate head fake – massive flash (and therefore SSD) capacity will come online within 12 to 18 months and SSD pricing will drop precipitously. That will result in a veritable implosion of demand for HDDs.

“A dearth in NAND flash chip supply will cause the prices of mainstream solid-state drives (SSDs) to leap by as much as 16% this quarter over the previous quarter, meaning laptop makers won’t likely offer consumers higher capacity SSDs in their new systems, according to a report from market research firm DRAMeXchange. On average, contract prices for multi-level cell (MLC) SSDs supplied to the PC manufacturing industry are projected to go up by 12% to 16% compared with the final quarter of 2016; prices of triple-level cell (TLC) SSDs are expected to rise by 10% to 16% sequentially, according to DRAMeXchange. In the second quarter of 2017, the average prices of mainstream client-grade SSDs will keep climbing, but at a more moderate rate.  … The SSD adoption rate in the global notebook market is estimated to reach 45% this year, according to DRAMeXchange. The uptick in SSD adoption will be greater in the consumer-class notebook segment than the business-class segment.”

http://www.computerworld.com/article/3180176/data-storage/why-laptops-wont-come-with-larger-ssds-this-year.html

4)            The Uber Bombshell About to Drop

I have no issue with Uber as a service but I figure anybody who believes it is worth over $60B is delusional: it is a car service, not a tech company. Nevertheless, like so many “unicorns” Uber has to keep stoking excitement in order to keep raising money in order to continue existing. Its self-driving car project is an example of this: AVs will not be commercially available for at least 10 year years and a car service is not going to be the company leading the charge. In any event, if this article is to be believed, their technology is “borrowed” and they might have to give it back.

“In the last few weeks Alphabet filed a lawsuit against Uber. Alphabet and Waymo (Alphabet’s self-driving car company) allege that Anthony Levandowski, an ex-Waymo manager, stole confidential and proprietary information from Waymo, then used it in his own self-driving truck startup, Otto. Uber acquired Otto in August 2016, so the suit was filed against Uber, not Otto. This alone is a fairly explosive claim, but the subtext of Alphabet’s filing is an even bigger bombshell. Reading between the lines, (in my opinion) Alphabet is implying that Mr Levandowski arranged with Uber to: 1) Steal LiDAR and other self-driving component designs from Waymo; 2) Start Otto as a plausible corporate vehicle for developing the self-driving technology; and 3) Acquire Otto for $680 million. Below, I’ll present the timeline of events, my interpretation, and some speculation on a possible (bad) outcome for Uber. The timeline references section numbers from Waymo’s amended filing, so you can read the full context yourself.”

https://danielcompton.net/2017/03/14/uber-bombshell

5)            Uber’s autonomous cars drove 20,354 miles and had to be taken over at every mile, according to documents

Uber may or may not have taken Google’s self-driving car technology but it sure doesn’t look like they took the good stuff. It turns out their vehicles don’t go very far before a human has to wrestle control back from them. It’s just a matter of time before they kill somebody.

“For example: During the week ending March 8, the 43 active cars on the road only drove an average of close to 0.8 miles before the safety driver had to take over for one reason or another. This metric, called miles per intervention, includes all the times drivers have had to take back control from the system over the course of a week. The reasons for these interventions can vary, but that can include navigating unclear lane markings, the system overshooting a turn or driving in inclement weather. The stat excludes “accidental disengagements, end-of-route disengagements and early takeovers.””

http://www.recode.net/2017/3/16/14938116/uber-travis-kalanick-self-driving-internal-metrics-slow-progress?cmpid=BBD031717_TECH

6)            Millions of Smart Meters May Over-Inflate Readings by up to 600%

Smart meters allow the utility to do things like time of use billing and remote meter reading. You might think that the one thing a meter should be able to do is provide a correct reading of electricity consumption but that does not seem to be the case. It may be simply a case that the nature of the electric load is different nowadays as suggest by the issue with LED bulbs. Since the utility selects the smart meter they are probably far less concerned with accuracy than you might believe – especially if the meter overstates actual energy consumption.

“Lab tests carried out by Dutch scientists have shown that some of today’s “smart” electrical meters may give out false readings that in some cases can be 582% higher than actual energy consumption. … Test results varied wildly, with some meters reporting errors way above their disclosed range, going from -32% to +582%. Tests with uncommon results were repeated several times and the results were within a few percents of the original. …The greatest inaccuracies were seen when researchers combined dimmers with energy saving light bulbs and LED bulbs.|

https://www.bleepingcomputer.com/news/hardware/millions-of-smart-meters-may-over-inflate-readings-by-up-to-600-percent/

7)            FBI Used Best Buy’s Geek Squad To Increase Secret Public Surveillance

Heck – who needs a warrant when you can just pay employees to break constitutional guarantees for you? I admit that it is hard to have pity for alleged criminals, especially those dumb enough to turn electronics over to Best Buy, but this is pretty pathetic, even for the FBI. One thing to consider is that if Best Buy is snooping through your computer looking for signs of criminal activity they are also finding personal information, passwords, credit card information, and so on.

“Recently unsealed records reveal a much more extensive secret relationship than previously known between the FBI and Best Buy’s Geek Squad, including evidence the agency trained company technicians on law-enforcement operational tactics, shared lists of targeted citizens and, to covertly increase surveillance of the public, encouraged searches of computers even when unrelated to a customer’s request for repairs. To sidestep the U.S. Constitution’s prohibition against warrantless invasions of private property, federal prosecutors and FBI officials have argued that Geek Squad employees accidentally find and report, for example, potential child pornography on customers’ computers without any prodding by the government. Assistant United States Attorney M. Anthony Brown last year labeled allegations of a hidden partnership as “wild speculation.” But more than a dozen summaries of FBI memoranda filed inside Orange County’s Ronald Reagan Federal Courthouse this month in USA v. Mark Rettenmaier contradict the official line.”

http://www.ocweekly.com/news/fbi-used-best-buys-geek-squad-to-increase-secret-public-surveillance-7950030

8)            Why Intel Bought Mobileye

Actually the reason Intel bought Mobileye is pretty much the reason they buy almost everything else: they prefer financial engineering over actual engineering and would rather give their money to Mobileye shareholders than their own shareholders. Intel has absolutely no understanding of the auto industry and buying Mobileye doesn’t change that. The auto industry is a high volume low margin business and there is not a chance in a thousand that auto vendors are going to rely on Intel as a major supplier for important technology. All this deal does is to give Mobileye’s competitors a boost. The big question is how long it will take before Intel writes the transaction off.

“Intel, the world’s largest chipmaker, announced it will acquire Mobileye, a leading automotive supplier of sensor systems that help prevent collisions, for $63.54 per share, which has a fully-diluted equity value of $15.3 billion and an enterprise value of $14.7 billion. The deal has left some scratching their heads such as Citron Research, a short-selling firm that once called the company “the short of 2016” in a tweet. Others have questioned the acquisition price, asking if Intel is paying too much? But the deal isn’t so surprising after a review of Intel’s acquisition and partnership history in the past two years. And it represents the next wave of deals in the automotive tech space, said Stefan Heck CEO of NAUTO, self-driving car tech startup that uses a combination of its own artificial intelligence algorithms, cameras, motion sensors, and GPS to detect what’s happening on the road and inside the car.”

http://fortune.com/2017/03/13/why-intel-bought-mobileye/

9)            Top Three iPhone 8 Rumors You Should Know

I suspect that Apple could launch a large stick of chewing gum with an iPhone label and sell a few million copies provided it charged a high enough price. None of the “top” rumors I have seen discuss any features which haven’t been on the market, in some cases for years. My Nexus 5 had wireless charging and that phone came out in 2013 and wireless charging wasn’t new then.

“Apple Inc. is expected to launch a new cool iPhone model this year. New reports leaked out of Japan claim the Cupertino-based tech giant has been testing multiple iPhone models. It has yet to finalize a 10th-anniversery iPhone to be launched this year alongside iPhone 7s and iPhone 7s Plus models. Rumors suggest that Apple will launch a 5.8-inch flagship handset with edge-to-edge OLED display in September. It is said to feature a long-distance wireless charging, an edge-to-edge OLED display, and a “revolutionary” front-facing 3D camera.”

http://www.toptechnews.com/article/index.php?story_id=101005UN0YLZ

10)        Worldwide Augmented and Virtual Reality Headset Market Expected to Grow at a Compound Annual Rate of 58%, Reaching 99.4 Million Units in 2021, According to IDC

Gartner, IDC, and the like are in the business of selling research reports and believe me people prefer research reports which paint sunlit meadows far more than they like research reports which tell the truth. This is especially the case in the tech industry where bullish forecasts drive stock prices and funding valuations. Quite frankly I think you have to be on drugs if you believe the growth forecasts in this summary: it is pretty clear that, while there will be a market for VR and AR, that market will be a fraction of the size the size people predicted a year ago.

“New device launches, an expanding array of content for both consumer and enterprise users, and lower price points will propel the worldwide augmented and virtual reality headset device market at a breakneck pace. According to data from the International Data Corporation (IDC) Worldwide Quarterly Augmented and Virtual Reality Headset Tracker, total headset device shipments will reach 99.4 million units in 2021, up nearly 10-fold from the 10.1 million units shipped in 2016. This results in a compound annual growth rate (CAGR) of 58% across the five-year forecast period.”

http://www.idc.com/getdoc.jsp?containerId=prUS42371517

 

 

The Geek’s Reading List – Week of March 10 2017

The Geek’s Reading List – Week of March 10 2017

Hello,

Welcome to the Geek’s Reading List. 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.

 

Brian Piccioni

 

 

 

1)            WikiLeaks: The CIA is using popular TVs, smartphones and cars to spy on their owners

This really shouldn’t surprise anybody but yet another branch of the US government has been exploiting vulnerabilities to spy on people instead of having those vulnerabilities fixed. Now, I know what you are thinking: why would the CIA want to close up an information channel? Well, it turns out that there are all kinds of smart people in the world and some of those don’t work for the CIA. Some might even work for, say, the Russians or the Chinese or even organized crime and they know about those vulnerabilities as well. I had to chuckle when one commentator said that Americans don’t have to worry because the CIA is not allowed to spy on them. Right …

“The latest revelations about the U.S. government’s powerful hacking tools potentially takes surveillance right into the homes and hip pockets of billions of users worldwide, showing how a remarkable variety of everyday devices can be turned to spy on their owners. Televisions, smartphones and even anti-virus software are all vulnerable to CIA hacking, according to the WikiLeaks documents released Tuesday. The capabilities described include recording the sounds, images and the private text messages of users, even when they resort to encrypted apps to communicate.”

https://www.washingtonpost.com/news/the-switch/wp/2017/03/07/why-the-cia-is-using-your-tvs-smartphones-and-cars-for-spying/

2)            Microsoft Pledges to Use ARM Server Chips, Threatening Intel’s Dominance

ARM has been going to disrupt the server business for the past 10 years or so. That does not mean it won’t happen: one thing about cloud services is that the computes are more or less abstracted, unlike traditional client/server systems. This means you really don’t care if you have 100 ducks or two strong horses, provided the performance is there. So maybe this isn’t just another effort by Microsoft to negotiate price with Intel – maybe this time it’s for real.

“Microsoft has developed a version of its Windows operating system for servers using ARM processors, working with Qualcomm Inc. and Cavium Inc. The software maker is now testing these chips for tasks like search, storage, machine learning and big data, said Jason Zander, vice president of Microsoft’s Azure cloud division. The company isn’t yet running the processors — known for being more power-efficient and offering more choice in vendors — in any customer-facing networks, and wouldn’t specify how widespread they eventually will be. “It’s not deployed into production yet, but that is the next logical step,” Zander said in an interview. “This is a significant commitment on behalf of Microsoft. We wouldn’t even bring something to a conference if we didn’t think this was a committed project and something that’s part of our road map.”|”

https://www.bloomberg.com/news/articles/2017-03-08/microsoft-pledges-to-use-arm-server-chips-threatening-intel-s-dominance

3)            IBM will sell 50-qubit universal quantum computer “in the next few years”

IBM may indeed have a real quantum computer, and it may even cost the same as a D-Wave “quantum computer”. I suspect that quantum computing as a service (QCaaS – registered trademark) may be the only way to go since the infrastructure needed to care and feed for a quantum computer is immense. You don’t just need the cryogenics: if something is delivering results at several orders of magnitude faster than prior approaches you need to be able to handle that data with regular computers. Plus, there are probably very few commercially relevant applications for QCs and a scarcity of people who understand the math needed to program the things.

“IBM will build and sell commercial 50-qubit universal quantum computers, dubbed IBM Q, “in the next few years.” No word on pricing just yet, but I wouldn’t expect much change from $15 million—the cost of a non-universal D-Wave quantum computer. In other news, IBM has also opened up an API (sample code available on Github) that gives developers easier access to the five-qubit quantum computer currently connected to the IBM cloud. Later in the year IBM will release a full SDK, further simplifying the process of building quantum software.”

https://arstechnica.co.uk/gadgets/2017/03/ibm-q-50-qubit-quantum-computer/?comments=1

4)            Apple Losing Out to Microsoft and Google in U.S. Classrooms

I’ve always thought it strange that underfinanced schoolboards selected overpriced Apple products for anything, let alone to put then in the hands of kids. Chromebooks are wildly popular in education because they are capable and cheap – with the emphasis on cheap. I believe that kids with less exposure to Apple products early in life are less likely to seek them out as adults, but time will tell.

“Use of iPads and MacBooks in U.S. schools hit a new low last year, with Apple struggling to make further inroads into the education sector, according to new figures (via The New York Times). According to research company Futuresource Consulting, in 2016 the number of devices in American classrooms that run iOS and macOS fell to third place behind both Google-powered laptops and Windows devices. … Out of 12.6 million mobile devices shipped to primary and secondary schools in the U.S., Chromebooks accounted for 58 percent of the market, up from 50 percent in 2015. Meanwhile, school shipments of iPads and Mac laptops fell to 19 percent, from about 25 percent, over the same period, while Microsoft Windows laptops and tablets stayed relatively stable at about 22 percent.”

https://www.macrumors.com/2017/03/03/apple-losing-to-microsoft-google-us-classrooms/

5)            Facebook asks BBC for sexual images found in Facebook groups; calls police when BBC complies

Ah, Facebook. Pretty much evil incarnate. So the story is that BBC did an investigation of child porn posted on Facebook and brought the image to their attention. When BBC determined that those images were still on Facebook, it kinda said “guys …”. Facebook asked for proof and then called the cops on BBC for supplying it. Long story short, if you come across illegal content on Facebook you should probably call the police yourself.

“Facebook, like just about any other social network — and, indeed, countless websites — is home to all manner of objectionable and even illegal content. A BBC investigation found that Facebook was failing to remove sexualized images of children from groups after they were reported, calling into question Facebook’s moderating procedures. Accounts for convicted pedophiles also remained online after they were reported. When the BBC pointed out to Facebook that less than 20 percent of the reported images were removed, Facebook asked to see the images that were being investigated. When the BBC complied with the request, Facebook reported the corporation to the police for distributing illegal images. The social network’s response to the investigation has been derided as “extraordinary”.”

https://betanews.com/2017/03/07/facebook-reports-bbc-to-police-over-sexual-images/

6)            Google’s smarter, A.I.-powered translation system expands to more languages

Translation and voice recognition are two “killer apps” for AI. Hard coded approaches don’t work particularly well and you need some form of feedback to tweak the system so it “learns” from its mistakes. I don’t use translate enough to notice but Google Assistant is miles ahead of previous voice recognition tools – at least once you’ve figure out all the privacy settings, etc., on your new phone.

“Neural translation is a huge leap over prior translation systems, as it’s able to take advantage of the progress made in the machine learning field to make translations more accurate, and sound more like the way people speak the language. What makes the difference is that the system doesn’t translate each part of a sentence piece by piece, but looks at the sentence as a whole. This helps the system figure out the broader context and the most relevant translation. It then rearranges and adjusts the sentence using proper grammar. In addition, the Neural Machine Translation system learns over time and improves, resulting in better and more natural translations the longer it works.”

https://techcrunch.com/2017/03/06/googles-smarter-a-i-powered-translation-system-expands-to-more-languages/

7)            Dangerous backdoor exploit found on popular IoT devices

I have to wonder if there are any IoT devices which don’t have backdoors (well – except the ones put in by the CIA/NSA). As I’ve noted in the past, the companies making IoT devices are not usually tech companies even if there is a tech company name on the box. Backdoors may be installed for benign (i.e. testing) or malignant purposes but they are there nonetheless. It may sound silly (who cares if my lightbulbs get hacked) until somebody grabs all your banking information off your network through an IoT device.

“The backdoor is in the Telnet admin interface of DblTek-branded devices, and potentially allows an attacker to remotely open a shell with root privileges on the target device. What’s perhaps even more worrying is that when Trustwave contacted DblTek regarding the backdoor last autumn – multiple times – patched firmware was eventually released at the end of December. However, rather than removing the flaw, the vendor simply made it more difficult to access and exploit. And further correspondence with the Chinese company has apparently fallen on deaf ears.”

http://www.techradar.com/news/dangerous-backdoor-exploit-found-on-popular-iot-devices

8)            Turner, Warner Bros. to Launch Boomerang Cartoon Streaming-Subscription Service for $5 Monthly

Another week, another streaming service. Turner and Warner have a massive catalogue of content, much of which is kid friendly, and getting even a modest monthly fee out of parents to let their kids have access to it makes perfect sense. While a lot of this content is syndicated, there is considerable merit to “on demand access”, especially for kids, and the lack of ads is a huge plus for most parents.

“Boomerang also will be the exclusive home to new original series including Warner Bros. Animation’s Dorothy and the Wizard  Of Oz, which follows the ruby-slipper adventures of its brave and feisty princess protagonist, and Wacky Races, an overhaul of the late-’60s Hanna-Barbera series. The ad-free SVOD service also will be the only place to watch new episodes of Scooby-Doo, Looney Tunes and Tom & Jerry. Also featuring such favorites as The Flintstones, The Jetsons, Popeye and many others, the service will launch domestically in the spring on web, iOS and Android devices for $4.99 per month (with a 7-day free trial) or $39.99 a year (with a 30-day free trial).”

http://variety.com/2017/digital/news/boomerang-cartoon-streaming-subscription-time-warner-turner-wb-1202003660/

9)            Nielsen: Millennials Registering Less TV Time, More Streaming

This is another data point in an ongoing demographic shift: whereas youth pined for their own TVs in the past they are more than content to watch video on their smartphones or laptops. Consuming media through these devices means a wider array of content rather than the standard network and cable channel fare. Hence increased opportunities for streaming services such as that reference in the above article: if you think about it when millennials have kids they’ll want to stream cartoons.

“According to Nielsen, millennials spend about 27 percent less time watching traditional TV than viewers over the age of 35. Nielsen’s inaugural Millennials on Millennials report finds that TV-connected devices—DVD players, VCRs, game consoles and digital streaming devices—compose four times the percentage of millennials’ total video minutes than adults 35 and older. TV-connected devices account for 23 percent of millennials’ total time with video, compared with just 6 percent for consumers 35 and older. This group spends 66 percent of average weekly gross minutes watching traditional TV, compared to 89 percent reported among those over 35.”

http://worldscreen.com/tvusa/nielsen-millennials-registering-less-tv-time/

10)        Snapchat wanted $150,000 to NOT run NRA ads on gun control group videos

Nice content you got there gov’ner – pity if something should ’appen to it. This is actually one of the issues with online content: you might end up with ads which contradict your message. There is nothing wrong with that if you end up getting paid for the content but another thing altogether if your content is advocacy. Needless to say, very few advocacy groups have the money the NRA does. The real message is don’t use Snapchat to get your message out.

 

“Everytown for Gun Safety is an advocacy group that focuses on gun safety and violence issues. According to Mic, it reached out to Snapchat in 2016 to enquire about an advertising campaign for its #WearOrange event, held on National Gun Violence Awareness Day. … A Snapchat representative, Rob Saliterman, responded to Everytown with a quote of $150,000. This would allow Snapchat users to engage with the event using custom filters and lenses created specifically for it. But here’s where it gets particularly sordid. Because what Saliterman, who works as Snapchat’s Head of Political Sales, didn’t realize is that the Snapchat news team had reached out to Everytown, offering to feature the event as a Live Story for free. Realizing that another department within Snapchat had undercut him, he fired off an email suggesting that Everytown pay up, lest National Rifle Association (NRA) adverts appear on their videos.”

https://thenextweb.com/insider/2017/03/02/snapchat-wanted-150000-not-run-nra-ads-gun-control-group-videos/

 

The Geek’s Reading List – Week of March 3 2017

(This is a corrected and edited post)

The Geek’s Reading List – Week of March 3 2017

Hello,

Welcome to the Geek’s Reading List. 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.

 

Brian Piccioni

 

 

 

1)          Uber Is Doomed

The bankers handling Snap’s IPO did their job and ensured the favored clients who got an allocation of the IPO profited handsomely. The company itself is doomed, but as long as the private equity investors unload their positions on the public no hard no foul. The success of Snap’s IPO shows the investment climate is primed for an even larger pile of garbage so don’t be surprised if Uber files for an IPO in the near future. After all, money doesn’t grow on trees and a company incapable of making a profit needs to pay its customers somehow.

“After a discombobulated 2016, in which Uber burned through more than $2 billion, amid findings that rider fares only cover roughly 40 percent of a ride, with the remainder subsidized by venture capitalists, it’s hard to imagine Kalanick could take the company public at its stunning current valuation of nearly $70 billion. And now, in the past few weeks alone, Uber has been accused of having a workplace that fosters a culture of misogyny, accused of stealing from Google the blueprint of a successful self-driving system, and has lost 200,000 customers over ties to President Donald Trump and how it responded to a taxi driver boycott.”

http://jalopnik.com/uber-is-doomed-1792634203

2)          YouTube announces cable-free TV subscription service

It was a matter of time before Google got into the Over the Top streaming business. The company has a massive infrastructure for video delivery but it takes time to negotiate rebroadcast rights, and that will have to be done one country at a time. This sets the stage for Google to offer advertisements customized to the interests of its subscribers, which should be a very lucrative business.

“YouTube is giving viewers a way to tune in live to their favorite shows, without a cable or satellite subscription. The company announced a live and on-demand streaming TV service called “YouTubeTV” on Tuesday. The subscription, which will cost $35 a month for a family plan of up to six accounts, is expected to launch in the next few months in the U.S. Currently there are no plans for international service. Subscribers will have access to up to 40 networks, as well as YouTube creator content like original content from subscription service YouTube Red. Channels include all broadcast channels and cable channels like USA, FX, Freeform, ESPN, Fox Sports and NBC Sports. Users can add Showtime and soccer programming for an additional fee.”

http://www.cnbc.com/2017/02/28/youtube-announces-skinny-tv-bundle-.html

3)          Why Hollywood as We Know It Is Already Over

This article covers a lot of territory ranging from the impact of unions on the movie business to the emergence of Netflix and other streaming services and their impact on media in general. Long story short, as I predicted in an article in 1996, streaming video channels like Netflix, Amazon Prime, and YouTube TV are making for boom times for content producers. This is bad for Hollywood, which has huge production costs and a distinct lack of imagination (the ad for the video associated with the article is for yet another King Kong remake, complete with over the top and likely very boring special effects). You don’t need to spend hundreds of millions of dollars on a story if it is a good story.

“But the real threat isn’t China. It’s Silicon Valley. Hollywood, in its over-reliance on franchises, has ceded the vast majority of the more stimulating content to premium networks and over-the-top services such as HBO and Showtime, and, increasingly, digital-native platforms such as Netflix and Amazon. These companies also have access to analytics tools that Hollywood could never fathom, and an allergy to its inefficiency. Few have seen the change as closely as Diller himself, who went from running Paramount and Fox to building his own tech empire, IAC. “I don’t know why anyone would want a movie company today,” Diller said at Vanity Fair’s New Establishment Summit in October. “They don’t make movies; they make hats and whistles.” (Half of the people in the audience, likely representing the tech industry, laughed at this quip; the other half, from Hollywood, cringed.) When I spoke to Mike Moritz, the iconic venture capitalist, backstage at the event, he noted that a nominal investment in a somewhat successful tech company could generate more money than Hollywood’s top-grossing movies. “In my mind,” he said, “Hollywood is dying.””

http://www.vanityfair.com/news/2017/01/why-hollywood-as-we-know-it-is-already-over

4)          Amazon Cloud Services Outage Takes Down Amazon Video, Websites and Internet-Connected Light Bulbs

The great thing about cloud services is that they are inexpensive and an expense rather than a capital item. The bad thing about cloud services is, when they go down, they go down big. Amazon demonstrated that with a major outage which appears to have reverberated for many hours. The company blames a mistake by an employee but the mess up probably cost their customers millions.

“A number of internet services were affected by an outage of Amazon’s cloud infrastructure lasting multiple hours Tuesday. Amazon’s S3 servers, which are often used to store images and other media, suffered an outage across the East Coast region Tuesday morning, affecting services ranging from Amazon’s own media services to Medium to Slack. Amazon acknowledged the outage on its cloud services status page, writing that “customer applications depending on S3 will continue to experience high error rates as we are actively working to remediate the errors in Amazon S3.””

https://variety.com/2017/digital/news/amazon-aws-s3-down-1201998994/

5)          If you think NASA is frustrated with SpaceX, you’re probably right

Musk is the consummate stock promoter. Although SpaceX is private, there is an aura which must be maintained, so news that the company was going to send a couple of paying customers around the moon (and hopefully back) was greeted with hysterical excitement by his many fans. I’d love a chance to go to space, but SpaceX’s safety record with cargo is bad enough and, as is pointed out, they haven’t even got a crew into low Earth orbit yet. I’m not saying it is suicide to go on this trip but, well, they had better pack cyanide capsules just in case.

“Roughly translated, this means: Dear SpaceX, we have stood by you. We have given you $3 billion for crew services, the majority of your revenues in recent years, and we are desperately tired of relying on Russia to get our astronauts to the space station. Could you please focus on our contract? Like, now? A more blunt assessment was offered by Mary Lynne Dittmar, who is familiar with the thinking of NASA’s human spaceflight program managers. “I find it extraordinary that these sorts of announcements are being made when SpaceX has yet to get crew from the ground to low-Earth orbit,” she told The New York Times.”

https://arstechnica.com/science/2017/02/if-you-think-nasa-is-frustrated-with-spacex-youre-probably-right/

6)          Oculus slashes price of Rift headset + Touch controllers to $598

A little while ago we learned that Best Buy was pulling the plug on VR demo booths at many stores due to lack of interest. Although price drops are not unusual in the technology space it is hard to believe demand for Oculus VR is living up to expectations. We continue to believe that, although there will be a demand for VR and AR, these will mainly be niche markets.

“The $599 Rift headset and $199 Touch controllers have both had their prices cut by $100, bringing the bundled price of the two VR products to $598. Consumers can also purchase them separately, with the Rift priced at $499 and the Touch controllers, which were released just three months ago, now costing $99. These aggressive price cuts suggest Oculus is doubling down on getting the device in more consumers’ hands, especially as analysts suggest the company’s headset is being outsold by competing products from Sony and HTC. No official numbers have been shared by either Oculus or HTC, but Sony announced in an interview last week that the company had sold nearly one million PS VR headsets since releasing the device this past October.”

https://techcrunch.com/2017/03/01/oculus-slashes-price-of-rift-headset-touch-controllers-to-598/

7)          So you want to invest in VR or AR?

This piece is written by my friend Duncan Stewart and it provides some context for the price drops around the Oculus VR headset and related gadgetry as mentioned above. The thing with a peripheral such as VR or AR is that utility is closely associated with software. Unfortunately, lots of media software like games and even specialty applications require a large market for it to make any sense to develop software for it.

“You have to be very careful about potential enterprise use cases. As an example, what if I came up with a cool AR headset that someone could wear while taking blood? It would show exactly where the veins are, and help me select the right place. Great idea, right? The problem is that while DUNCAN needs help in knowing where to find a vein, almost all (99% or more) of blood tests are being done by nurses and technicians who do this for a living. They are extensively trained, and have likely done it tens of thousands of times…they don’t NEED an expensive AR headset; it would only get in the way! Many of the AR business plans I see are along these lines: they look impressive to the average person, but have very poor real world utility.”

https://www.linkedin.com/pulse/so-you-want-invest-vr-ar-duncan-stewart

8)          Gene therapy ‘cures’ boy of blood disease that affects millions

Nobody has figured out how to safely deliver a corrected gene to an entire body though it has been done to embryos. The most viable approach is to take stem cells, fix those, and re-implant them. This should work wells for a variety of ailments with the most obvious candidates being those related to blood. In this case they used a monoclonal antibody/retrovirus to modify the stem cells so they now produce red blood cells unaffected by the sickle cell gene. This technology was developed before CRISPR Cas9 and I suspect it would be a lot easier using that technique. This is a whole new world in terms of new medical treatments.

“Now a team in France seems to have developed a treatment that would work for everyone with the disorder. First, the team took bone marrow stem cells from the boy when he was 13, and gave them extra, mutated versions of the gene that codes for beta-globin. These were designed to make beta-globin that would interfere with the boy’s faulty proteins, stopping them from clumping together. The researchers then put these stem cells back into the boy’s body. After around three months, he began producing large quantities of haemoglobin that behaves normally (New England Journal of Medicine, DOI: 10.1056/NEJMoa1609677). “The patient is now 15 years old and free of all previous medication,” says Marina Cavazzana at the Necker Children’s Hospital in Paris, who led the team. “He has been free of pain from blood vessel blockages, and has given up taking opioid painkillers.””

https://www.newscientist.com/article/mg23331154-800-gene-therapy-breakthrough/

9)          Researchers store computer operating system and short movie on DNA

I though the 2 megabytes was a typo, because I don’t know of any 2 MB operating systems but that is the figure also cited in the research paper. Nevertheless it is highly unlikely DNA would be used as a storage medium for the simple reason that the larger the data storage on a media the more important random access and access times are. So if you can imagine a magnetic tape which store 1 petabyte of data (1000 terabytes) you have to go from one end to the other looking for data. 1 petabyte is a lot of data so if you read a terabyte per minute, or 133 gigabits per second, it would take you 8 hours on average to find the data you are looking for. Suffice it to say you can’t read DNA at anywhere near 133 gigabits per second so you better not be in a hurry.

“Finally, the researchers show that their coding strategy packs 215 petabytes of data on a single gram of DNA—100 times more than methods published by pioneering researchers George Church at Harvard, and Nick Goldman and Ewan Birney at the European Bioinformatics Institute. “We believe this is the highest-density data-storage device ever created,” said Erlich. … Cost still remains a barrier. The researchers spent $7,000 to synthesize the DNA they used to archive their 2 megabytes of data, and another $2,000 to read it. Though the price of DNA sequencing has fallen exponentially, there may not be the same demand for DNA synthesis, says Sri Kosuri, a biochemistry professor at UCLA who was not involved in the study. “Investors may not be willing to risk tons of money to bring costs down,” he said.”

https://phys.org/news/2017-03-short-movie-dna.html

10)      U.S. appeals court tosses patent verdict against Apple

The worm continues to turn against patent licensing companies. The US Patent Office is pretty liberal when it comes to granting patents and this has been turned to the advantage of many patent licensing firms. Ideally, you’d want a patent to be very broad so it can apply to things which never occurred to the inventor. As this case shows, litigation is so expensive that lots of companies agreed to pay licenses regardless of the dubious quality of the patents. The 3 to 0 ruling shows the Federal Circuit appeals courts is getting serious about reigning in low quality cases.

“A federal appeals court has thrown out a jury verdict that had originally required Apple Inc to pay $533 million to Smartflash LLC, a technology developer and licenser that claimed Apple’s iTunes software infringed its data storage patents. The trial judge vacated the large damages award a few months after a Texas federal jury imposed it in February 2015, but the U.S. Court of Appeals for the Federal Circuit said on Wednesday the judge should have ruled Smartflash’s patents invalid and set aside the verdict entirely. A unanimous three-judge appeals panel said Smartflash’s patents were too “abstract” and did not go far enough in describing an actual invention to warrant protection.”

http://www.reuters.com/article/us-apple-lawsuit-patent-idUSKBN1685D5