A Cautionary Tale

A poor shepherd, known for his prudent ways, saved every penny he could all his life long. In 1895, near the end of his days and never having married, he hid the money in a box in one of the fields he'd so often wandered while tending his flock. Rumour of his hoard passed into local legend as Old Mister Brown's Folly, and many was the local lad who tried to find it, though none ever did.

Until one day in 2013 when a man from Birmingham parked his car in the local Borough Council's car park nearby, and ran like a lunatic around the fields waving a metal detector. What luck! The detector went off with a beep, and the man dug up a rotten wooden box with a rusty iron handle and hinges. Trembling, the man broke open the box. Inside it were some large, white pieces of paper with strange, curly writing on them!

"Crumbs," he thought, "what's this?"

What it was, was twenty old Five Pound notes, from 1895 or thereabouts. One hundred pounds, at that time a veritable fortune for an 'umble working man.

But the man from Birmingham scowled. He'd heard of Old Mister Brown's Folly, and he'd been expecting a good deal more than this. Why the metal detector alone had cost more than that (he'd bought it specially for the job)! With a truly dreadful imprecation he grabbed the money and dashed the box to pieces on the stony hillside. Then he got into his car and drove dangerously fast to the nearest bank. A hundred pounds was better than nothing, he reasoned, and he could probably sell the metal detector as unused on eBay.

Unfortunately, when he got to the bank, the clerk said, "I'm sorry, Sir," (and he made a kind of pantomime dame voice when he said "Sir," to let the other tellers know that he was going to have a bit of fun with this geezer), "but this is not legal tender. It's quite worthless I'm afraid!" (and here his voice sounded all dramatic for a moment). And then, being curious, and noticing that it was nearly closing time, he added, "Where ever did you get it?"

So the man from Birmingham told him the whole story, to much muttering from the people in the queue behind him, who could see that they were clearly not going to get their money out before the bank closed, but who nevertheless were determined to stay and make pointed and quite audible comments behind his back. Some of them had even heard of the legend of the Folly, and were intrigued that it had at last been found.

As closing time arrived, the bank clerk, who had been keeping his eye on his watch, interjected, "What a shame, Sir, that Old Mister Brown didn't bury the money in the form of gold Sovereigns, which I note from my computer" — and he clicked some keys very quickly on his actually-just-a-terminal — "would now be worth..." and here he stopped, just like the judges on X-Factor, and made them wait a little bit longer, "... three hundred and sixty pounds each! Why, that's thirty-six thousand pounds, Sir! What a Shame".

And all the people in the queue cheered, to think how much money the man had missed out on.

QE: global asset bubbles

A rather complacent article on the BBC website, What is driving the global stock market rally?, illustrates some of the circular thinking common on this subject. The basic thesis is that QE is driving stock markets up, because the QE asset purchases are driving down the return on "safe" government bonds. [Ha! remember when they used to call the short term government bond rate the "risk-free" rate?]

Althought he article goes on to find additional reasons for the stock market rise, it's its consideration of QE that I find most alarming, so I'll just make some notes on it here.

Firstly, the author asks how long QE can go on for:

Will this money supply continue?

Well, maybe not forever, but in the medium term, yes.

The reason it will continue is, appartnly, becuase governments will want it to: the BoE, the Fed and the BoJ all want to stimulate their econimies, and the QE will continue until they are popping. No thought of unintended consequences. Indeed it's difficult to see what's intended and what isn't. The initial impetus behind QE was said to be, when it was being considered, that it would spur banks to lend to firms, thus stimulating the economy. This famously hasn't happened, so I guess we are now supposed to think that the intention is to persuade people to spend by reintroducing a feel-good factor from rising asset prices, by creating bubbles in the stock market and eventually the real estate market too. God help us, we know how the last one ended.

The only thing I can see here is froth. Simultaneous QE in every continent, leading to simultaneous stock market and housing bubbles. When these burst, it will be like nothing we have ever seen: the world's first truly global bubbles, and several of them at the same time, likely accompanied or swiftly followed, by runaway inflation.

Funny washing machine advert

Quite the funniest advert I've seen all year.

Is Microsoft heading for a market share collapse in 2013?

In a previous post I argued that stick PCs ("Android Mini PCs" to give them their full name) could provide effective replacements for many of the functions of the average home desktop PC, and that we might see this becoming a trend in 2013. Then read that tablets have accounted for much of the lassitude in Windows 8 sales in 2012 — instead of replacing their old desktop PC with a new one, people are choosing to buy a new tablet instead. Now I hear that Acer's Chromebook [a notebook running Google's web-oriented Chrome OS], which was only introduced in late 2012, now accounts for nearly ten percent of its U.S. shipments.

Price, it seems, is key: Acer's C7 can be got for 180 to 190 quid, perfectly serviceable tablets for about the same price, and stick PCs for as little as forty or fifty quid. And while their absolute level of performance may be inferior to a desktop PC or an expensive Windows laptop, for the purposes that they are bought for, they will do just fine.

Windows seems to be under attack from all sides, its market growth opportunities — the sales that once would have been indisputably and rightfully its own — snatched away by cheaper alternatives. And all those alternatives are running OSes — Android and Chrome OS — provided, under Open Source licences, by Google.

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Apparently Michael Dell wants to take his eponymous company private. The idea, supposedly, is that Dell will no longer try to compete in the home PC market, nor even in the business desktop market, but will concentrate on the server room, and on consultancy and integration. Apparently Microsoft is interested in investing trwo or three billion dollars out of the twenty two or so billion that would be needed for him to do this. I wonder if Microsoft is also planning a retreat from the consumer market into Fortress Enterprise?

The truth is that there has been enormous growth in consumer computing in the past few years, at least in terms of the number of devices sold. Since those devices tend to be lower power and somewhat lower performance than desktops, spending has not gone up quite so much, buit it's still climbed very respectably of course, just look at Apple. The problem is that none of that money has gone Microsoft's way. Now, inevitably, the power of those replacement devices has grown, and they are serious contenders for complete desktop replacements. Microsoft's once-mighty empire is revealed as but an island in a far larger sea. And the sea level is rising...

The coming Android super-swarm

Stick computers spell doom for Intel, Microsoft and the PC.

In 2013 Android, which has moved steadily from mobile phones to tablets and set top boxes, seems poised to enter a “swarming” phase where dozens of manufacturers will release hundreds of devices, creating new markets and swamping (even destroying) established ones as it does.

To see what I mean, just: search Google for “Android Mini PC” and take a look at a few of the products that are available. These devices, which I'm calling “stick PCs” for short since they all have a USB-stick form factor, mostly run a current or near-current version of Android, but on some of them you can install Linux distributions such as Ubuntu, ported by enthusiasts.

To take one brand as an example, the Rikomagic MK802 series has been used as a home media center, a smart displays for commercial events, for home gaming on the TV, for internet browsing (not just websites, Twitter and Facebook, but also enough oomph for YouTube and Google Docs). Enterprising users hook up USB cameras and run Skype — yes, the whole family sitting comfortably in front of the TV, chatting on camera to relatives on the far side of the world.

Android mini PCs — an evolutionary frenzy

The stick PC market is in an evolutionary frenzy. From its first appearance in mid 2012, the MK802 brand has seen five different generations in six months: MK802, MK802+, MK802 II, MK802 III and now MK802 IIIS. No sooner does a feature such as Bluetooth appears in one product than it spreads to all the others. Single core CPUs (Allwinner A10) have given way to dual core CPUs (Rockchip RK3066), and quad core CPUs are on the very near horizon.

Though often marketed as set top box replacements or home media centres, stick PCs are fully-fledged general-purpose computers, with CPU, GPU, RAM and flash memory. Connectivity usually include a couple of USB ports, and HDMI port. wi-fi and often also Bluetooth.

Bolted to a desktop monitor, stick PCs can be controlled with USB mouse and keyboard; plugged into your TV they can be controlled by infrared or Bluetooth keyboards and mice. Some of the later models can be controlled by apps on your Bluetooth-enabled Android mobile phone, a feature I expect to become universal in the next few months.

A typical spec includes a dual-core Cortex-A9 (an ARM7-class processor), ARM Mali or Imagination PowerVR graphics, a gig of RAM and four or eight gig of flash. You’ll note that these are mobile phone specs — last year’s mobile phone specs to be exact — and there’s no doubt that these devices are sourced at small marginal cost. Of course, since stick PCs are generally not mobile but attached to a TV or monitor and fed from a power lead plugged into a mini-USB port, the limiting factor is heat dissipation, and they could easily manage an A15 or even higher CPU and more powerful GPU.

Stick PCs will kill the established PC market, from the bottom up

Now that the first generation of digital TVs are moving out of the living room and into the bedroom, replaced by ever bigger and better sets, why buy your kids a new desktop PC when they can plug a stick PC into the TV in their room? For the price of a decent spec desktop running Windows 8 you can get a stick PC for every member of the family. And no more losing your files on an old, slow hard disk that has to be regularly backed up: services like Google Drive, Flickr and Google Docs provide pretty much everything the home user needs, only more conveniently.

Those who’ve been around computers for a while will recognise that with the stick PC, Sun’s Network Computer idea has finally arrived on the scene, only a decade or so late. At the time, Sun got the details wrong and was unable to build such a machine for less than the cost of a much more highly specced desktop; today, dozens of Chinese manufacturers have already succeed.

Intel, so far almost completely absent from a mobile phone market ruled by Android on ARM, is now suffering due to recession in the traditional Wintel desktop market and the failure of its Ultrabook platform, eclipsed by ARM-powered tablets. Intel’s latest accounts show net income down 15 per cent year on year.

Indeed Intel seems to have seen the writing on the wall as it has just announced that it is leaving the desktop motherboard market. Its own foray towards this market, the Next Unit of Computing, looks timid and a little clunky in comparison. The best prices I could find for a NUC with no RAM in it was about four times the cost of a typical stick PC.

As for Microsoft, while all stick PCs come with media centre software, Microsoft’s entry in that market, Windows Media Centre, is only available as an add-on to Windows 8 Pro — you can’t even get it for the base-level Windows 8 product. At current upgrade prices, soon to be upped at the end of January, that will cost you £24.99 for W8 Pro, while Media Centre is then free for a limited period. And Microsoft’s entry in the low-power, tablet space? The crippled Windows RT.

People in emerging markets, whose first and so far only computer is an Android handset, may not purchase a traditional Windows or Apple PC at all. When and if they do need something more work oriented, they may seek the familiarity of the Android interface on a cheap stick PC, keeping the cost of the base unit right down and repurposing an existing TV. Ironically, Windows 8 with its new mobile-style interface legitimises the Android UI for desk work — surely not what Microsoft intended.

The implcations for Google itself are more nuanced. The writing may be on the wall for Google TV, as that market stands to be completely gobbled up by stick PCs. However Google can take comfort from the fact that every single one of the latest batch of stick PCs seems to incorporate access to the Google Play store — hinting that Google Play may be an invaluable asset for whipping into line the likes of Samsung and the no-name Chinese phone manufacturers who strip out links to other Google web properties and replace them with Alibaba.

Opportunities for others

Ironically, such turmoil could give an opening to the savvy and fleet of foot. Perhaps Imagination Technologies (LON:IMG) could persuade someone to produce a stick with an Ingenic JZ4780 SoC (dual core MIPS CPU plus PowerVR Series5 GPU) instead of the currently-favoured RK3066.

There might also, finally, be opportunities for some of the also-ran Linux-based OSes like Tizen (backed by Intel and Samsung) or Sailfish (all that remains of Nokia’s Meego effort), or Canonical with Unity on Ubuntu. Canonical, who are pitching at mobile phone makers, have had the idea that you will be able to plug your phone into a keyboard/monitor/mouse setup and use it as the heart of a desktop system, with installed software receiving notification that it’s now running on a larger screen, and changing its layour accordingly. You can see that such a system might be even more suited to stick PCs plugged into TVs than is Android.

Windows 8 - Microsoft's Itanium moment

No one likes Windows 8, people are saying it's even worse than Vista, and the head of the Windows division at MS has been sacked. What went wrong?

For my money, Win8 was a last, desperate throw of the dice. Microsoft decided it had to win the mobile space, and wagered the desktop as its stake. MS famously understands the value of developers, and knew that there just weren't enough people developing for Windows phone, so voilà! it was going to forcibly convert all its desktop developers into becoming mobile developers by foisting a unified GUI onto them. The initial release of the new Visual Studio was the big clue for this: free app development was going to be tied to the Metro interface - a decision they quickly had to revise, but it revealed the thinking behind their actions.

And now it looks like they've lost the bet. Enterprises are already allowing people to choose to bring their own devices to work. Now that a substantial workforce re-education appears to be necessary for Metro-or-whatever-it's-called-now, they may decide to go with Macs instead. Or maybe, just maybe, 2013 will be the year of Linux on the desktop?

Recipes: Sweet and Sour Pork, and Egg Fried Rice

Two nicely complementary recipes, courtesy of the Christian Science Monitor. Homemade sweet-and-sour pork and Five secrets to fabulous fried rice.

For those unwilling to follow the links, the key to getting rice to fry properly without turning into a mushy mess is to allow it to cool after boiling it and, if you can afford the extra time, to also allow the outside of the grains to dry. An hour or so should be about right.

I find that it can also be good to toast the rice in a dry frying pan for a minute or so before boiling it; that makes it a little more flavoursome and helps it maintain its integrity after boiling.