Value Unleashed

The Geek's Reading List

The Geek's Reading List is a weekly publication written by Valitas advisor, Brian Piccioni. Brian has been part of the technology industry for a third of a century now. He has been a sell-side research analyst for the past 20 years, where he was ranked the #1 tech analyst in Canada for six consecutive years, named one of the best tech analysts in the world, and won a number of awards for stock-picking and estimating. The Geek's Reading List looks at recent developments in the technology sector by discussing articles that Brian compiled over the week. In his own words, the discussions are usually provocative, new, and counter-consensus. The sorts of things not being written anywhere else.

1) Language: Finding a voice

2) How an algorithm behind Deep Learning works

3) Seagate to Shut Down One of Its Largest HDD Assembly Plants

4) Qualcomm sued by US regulators for anti-competitive practices

5) Theranos closed its last remaining blood-testing lab after it reportedly failed an inspection

6) Google Maps will soon get you where you need to go, then help you park

7) Autodesk Moves EAGLE to Subscription Only Pricing

8) Juicero squeezes the price of its internet-connected juicer from $700 to $400

9) ISIS has converted commercial drones into bombers

10) The Tiny Robots Revolutionizing Eye Surgery

1) Language: Finding a voice

Recent advances in AI/Deep Learning have led to a fair amount of hysterics due to those concerned “AI is gonna take our jerbs” and a dystopian future where humanity is enslaved by Terminator style robots. Alas, it is just an algorithm which is useful for solving certain classes of problems (see the next item). Whether or not an intelligent machine might be developed in the future an array of number does not represent a meaningful threat to humanity.

“Creative and truly conversational computers able to handle the unexpected are still far off. Artificial-intelligence (AI) researchers can only laugh when asked about the prospect of an intelligent HAL, Terminator or Rosie (the sassy robot housekeeper in “The Jetsons”). Yet although language technologies are nowhere near ready to replace human beings, except in a few highly routine tasks, they are at last about to become good enough to be taken seriously. They can help people spend more time doing interesting things that only humans can do. After six decades of work, much of it with disappointing outcomes, the past few years have produced results much closer to what early pioneers had hoped for.”

http://www.economist.com/technology-quarterly/2017-05-01/language#section-2?fsrc=scn/tw/te/bl/ed/findingavoice

2) How an algorithm behind Deep Learning works

The video in this item provides a summary of how AI/Deep Learning works. As I noted in item one, it is just an algorithm, and, moreover, is not even remotely similar to the way a brain works. Unless you are doing arithmetic your brain does not do floating point math and does not create a multidimensional convolved array. Brains operate continuously (well – for most of us) rather than in discrete intervals like computers. Brains also merge computational function with storage. I could go on.

“There are many algorithms behind Deep Learning (see this comparison of deep learning frameworks for details), but one common algorithm used by many frameworks is Convolutional Neural Networks (CNNs). The mathematics behind that algorithm are complex, but Brandon Rohrer explains the process in plain language, and shows how AIs trained with CNNs can appear to mimic human processes like vision.”

http://blog.revolutionanalytics.com/2016/09/how-the-algorithm-behind-deep-learning-works.html

3) Seagate to Shut Down One of Its Largest HDD Assembly Plants

The Hard Disk Drive industry continues to evaporate as the technology is increasingly displaced by Solid State Drives which are better than HDDs in all ways except price. Mind you, tape storage is less than $10/TB right now so it is even cheaper than HDD. What is strange is that HDD stock prices have bounced back rather nicely over the past 6 months or so, demonstrating that financial engineering outweighs actual engineering – at least on Wall Street and at least for a little while. Anybody remember Kodak and AGFA?

“As a part of its cost-cutting efforts, Seagate has decided to shut down its HDD manufacturing plant in Suzhou, China. The factory is one of the company’s largest production assets and its closure will significantly reduce the company’s HDD output. Seagate intends to lay off ~2200 employees, but it is unclear what it intends to do with the facility, which it owns.”

http://www.anandtech.com/show/11037/seagate-to-shut-down-one-of-its-largest-hdd-assembly-plants

4) Qualcomm sued by US regulators for anti-competitive practices

A rather timely move by the FTV now that almost all the competitors have been destroyed and most of the profit of the smartphone industry has been banked. No doubt Qualcomm is quivering in their boots at the prospect of paying a small fine as a cost of doing business.

“The FTC says that Qualcomm maintained a “no license, no chips” policy, whereby it would refuse to sell modems to companies that wouldn’t agree to its onerous licensing terms. Companies didn’t have much choice but agree to its terms, the FTC alleges, because Qualcomm is one of the only companies that can supply large quantities of high-end modems. If companies didn’t agree, they wouldn’t be able to make enough phones. Qualcomm’s licensing terms required that smartphone manufacturers pay a higher-than-usual fee for phones built with a competitor’s modem, according to the commission. In effect, Qualcomm is said to have made competitors’ modems more expensive than they should be. The FTC calls this a “tax” on competitors’ products, which it says “excludes these competitors and harms competition.””

http://www.theverge.com/2017/1/17/14302932/qualcomm-ftc-lawsuit-anticompetitive-practices-modems

5) Theranos closed its last remaining blood-testing lab after it reportedly failed an inspection

Recently there was an article that Theranos had laid off 41% of its staff which led me to wonder what, exactly, the other 59% were to do. I guess they haven’t entirely run through investor money and now have a new project to promote. It is rather doubtful investors will be there for another round of funding though.

“Theranos closed its last remaining blood-testing facility after the lab reportedly failed a regulatory inspection, according to a Wall Street Journal report. The company, once valued at $9 billion, is shifting its focus to a portable ‘lab on chip’ virus-detection box after its blood-testing business, once labeled revolutionary, came under repeated fire for unreliable results, questionable methodology and inadequately trained staff.”

https://techcrunch.com/2017/01/17/theranos-last-lab-inspection-test-fail/

6) Google Maps will soon get you where you need to go, then help you park

This sounds like a pretty useful feature, but they don’t really give you an idea as to how accurate the information is, which is pretty important if you think about it. I’d love it Google Maps could be trained to not put you on toll roads without permission: around the Toronto area it will invariably route you to the 407 highway for a $30 toll if it can figure out a way to do so.

“Nothing ruins a day out like driving to an unfamiliar part of town, finally finding that hole-in-the-wall restaurant you’ve been hearing so much about… and realizing there are no open parking spots even close to the joint. It’s not the end of the world, but it certainly puts a damper on the fun. With an upcoming feature rolled out with the latest beta version of Google Maps, however, your turn-by-turn directions will soon be able to guide you to the best places to park around your destination.”

http://mashable.com/2017/01/18/google-maps-finds-parking-spots/#yLkcj59mCaqK

7) Autodesk Moves EAGLE to Subscription Only Pricing

Autodesk makes a range of low end to mid-range CAD tools. Like most software companies bereft facing a mature market and bereft of the capacity to do actual engineering they transitioned to a “Software as a Service” model which allows them to greatly increase the cost of using their software while lowering their R&D and Sales and Marketing expense. They recently bought Eagle, a low end PC CAD tool with a strong following among the maker community. As this article points out, a free, open source, alternative to Eagle is KiCad EDA, which if not only being free but in some ways more capable than Eagle. Let the outrage ensue.

“Lets break down the costs. Before Autodesk purchased EAGLE from CadSoft, a Standard license would run you $69, paid once. The next level up was Premium, at $820, paid once. The new pricing tiers from Autodesk are a bit different. Standard will cost $15/month or $100/year, and gives similar functionality to the old Premium level, but with only 2 signal layers. If you need more layers, or more than 160 cm^2 of board space, you’ll need the new Premium level, at $65/month or $500/year.”

http://hackaday.com/2017/01/19/autodesk-moves-eagle-to-subscription-only-pricing/

8) Juicero squeezes the price of its internet-connected juicer from $700 to $400

This is an an update on one of the silliest things associated with the Internet of Things: an expensive juicer which squeezes a similarly expensive bag of plant matter to make juice. The company somehow convinced investors to pour at least $70M into it at a $270M valuation, which just shows that the one thing dumber than an IoT juicer is IoT juicer investors. Apparently, a $700 price tag is not the optimal price for an IoT juicer and they have come to the conclusion cheaper things sell more. Mind you it is still $7 a pack for a single serving …

“Juicero, the company behind the luxury juicer that only works with proprietary fruit and vegetable pouches and requires a connection to the internet, is significantly dropping the price of its juicer today, bringing it from $699 down to $399. The price cut seems to speak to just how difficult it is to sell a nearly $700 juicer that can’t juice fruits and vegetables bought at the store. Juicero says that when it cut prices for Black Friday — dropping the juicer to $350 for a few days — its customer based “doubled,” which suggests that its install base probably wasn’t that high to begin with.”

http://www.theverge.com/2017/1/17/14296530/juicero-juicer-price-cut-after-ceo-shakeup

9) ISIS has converted commercial drones into bombers

The interesting thing about ISIS using commercial drones as bombers is that there are few restrictions on the sales of commercial drones, other than the need for a credit card. Not only that but it is possible to buy certain high explosives in North America with little in the way of restrictions. It is only a matter of time before some bright spark domestic terrorist puts two and two together.

“It’s well-known that ISIS uses weaponized drones, but new images out of Mosul confirm that the group is now using the quadcopters as bombers as well as single-mission vehicles. Kurdish media network Rudaw reported last week that the explosive-dropping drones have killed civilians and damaged equipment. So far, ISIS has not used these drones to deliver chemical weapons, Rudaw said.”

https://www.engadget.com/2017/01/16/isis-drones-weaponized-bombers-iraq-mosul/

10) The Tiny Robots Revolutionizing Eye Surgery

The article doesn’t provide much in the way of detail as to how the machine works but the www.preceyes.nl/ website has a helpful video even though it takes forever to load. Robot assisted surgery is more like drone surgery in that the surgeon is in complete control. The difference is that the device scales the hand movements and removes tremors, etc., which allows for extremely precise operations. I am a little confused by the surgeon’s comment that so many machines would be needed: the same could have been said about MRI machines as well.

“Last September, Robert MacLaren, an ophthalmologist and professor at Oxford University, plunged a tiny robotic arm into William Beaver’s eye. A membrane had recently contracted on the 70-year-old priest’s retina, pinching it into an uneven shape and causing him to see the world as if reflected in a hall of mirrors. Using a joystick and a camera feed, MacLaren guided the arm of the Robotic Retinal Dissection Device, or R2D2 for short, through a tiny incision in the eye, before lifting the wrinkled membrane, no more than a hundredth of a millimeter thick, from the retina, and reversing Beaver’s vision problems. It was the first operation performed inside the human eye using a robot.”

https://www.technologyreview.com/s/603289/the-tiny-robots-revolutionizing-eye-surgery/