BBC: Future connectivity

This is a version of my Reuters piece on connectivity (Reuters.com version: From balloons to shrimp-filled shallows, the future is wireless) which I recently recorded for the BBC World Service’s Business Daily. 

The Internet may feel like it’s everywhere, but large pockets of sky, swathes of land and most of the oceans are still beyond a signal’s reach. This of course, may be something you are actually quite pleased about, given that airplanes, boats and the occasional peak seem to be some of the few places left where you can get some peace. 

But not everyone looks at it like that. Three decades after the first cellphone went on sale half the world remains unconnected. For some it costs too much, but some 1.4 billion people, live without even basic network infrastructure. 

And then there are the places that for now don’t seem important, but will be: like the oceans. We may not spend much time below the seas that cover more than two-thirds of the planet but increasingly we realise we need to: climate recording, pollution control, predicting natural disasters like tsunami, monitoring oil and gas fields, protecting harbours. And if China gets its way quite a few of us will live down there if only to stake territorial claims to the seas above or the riches below. 

So, these all present interesting technological challenges. Not least because most of the people presently unconnected are too poor for the big telcos to worry about. Surprisingly, perhaps, it’s the Facebooks and Googles of this world who are interested, partly because of philanthropic goals but mostly because they’re the last bunch of people who don’t have Gmail and Facebook accounts. 

So Google are launch balloons. And Facebook are considering drones. These, though are experimental, leaving an opportunity for niche players like Kacific, which is aiming to build a satellite network it says will provide cheap communications to some 40 million people from eastern Indonesia to the Pacific islands. 

Others are finding cracks in the existing technologies and spectrum to forge their own mini telcos. Like Endaga, a Berkeley startup which has used part of the GSM spectrum to build a village level network in a Papuan village. 

Some say there’s no need of a network at all. Using a technique called mesh, they string together devices — handphones, or laptops or whatever — which become both nodes and transmitters, meaning they not only do what a device would normally do on a network, but they also help pass on signals to others. 

That removes the need for lots of fancy infrastructure like towers, base stations and dishes. Activists in Nigeria have used mesh for lobbying against the demolition of slums, and the technology is being tested by the New Zealand Red Cross. Mesh networks aren’t necessarily small, rural and poor: Athens, Berlin and Vienna have them, too.

Then there’s underwater. Soon our internet will be as much a network of devices as of people with devices. The so-called internet of things, or machine to machine, or whatever you want to call it. Cisco reckons there will be 2 billion such connections by 2018. Connecting these things above ground by wireless is fine but underwater is another thing.

Using the same overground wireless methods for underwater communications isn’t possible, because light travels badly in water. Although technologies have improved greatly in recent years, underwater modems still rely on acoustic technologies that limit speeds to a fraction of what we’re now used to. 

This is gradually getting solved, but slowly. Noisy things like pistol shrimps, whose oversized claw snaps a bubble of hot air at its prey, confuse underwater modems.

The oceans and the deserts and mountains and jungles will all eventually get their wireless signals. And we’ll be the better for it. But because of money, and technology, and pesky things like shrimps, it’s not about to happen any time soon. One day we’ll look back and wonder why it took us so long. 

Microsoft’s Naked PC problem

This is a piece that I wrote with Gerry Shih in Beijing about Microsoft’s challenges in emerging markets beyond the recent raids.

‘Naked PCs’ lay bare Microsoft’s emerging markets problem

BY JEREMY WAGSTAFF AND GERRY SHIH

Sun Aug 10, 2014 9:42pm EDT

(Reuters) – On a trip to Beijing a decade ago, Bill Gates was asked by a senior government official how much money Microsoft Corp made in China. The official asked the interpreter to double check Gates’ reply as he couldn’t believe the figure was so low.

It’s a problem that hasn’t gone away. Indeed, Microsoft’s current issues in China conceal a deeper problem for the U.S. software giant – despite the popularity of its Windows operating system and Office suite, few people in emerging markets are willing to pay for legitimate copies.

This not only costs Microsoft in lost revenue, but is also holding back the spread of its newest Windows 8 version – analysts say even buyers of pirate software prefer older versions. According to StatCounter, a website that tracks what software is loaded on Internet-connected computers, more than 90 percent of PCs in China – now the world’s biggest market – are running pre-8 versions of Windows.

Microsoft is trying to tackle this. This year it’s offering Windows 8 at a discount to PC manufacturers who install its Bing search engine as the default. And it’s giving away versions of Windows 8 for phones and some tablets.

But, as the industry shifts from desktop to mobile, the cloud and free or cheap software, China sums up both the old and new challenges Microsoft faces in making money in emerging markets – and, increasingly, in developed ones.

“The great danger for the company is that what has happened to them in emerging markets – basically no revenue from new PCs because of piracy – is not far off what’s happening everywhere,” said Ben Thompson, the Taiwan-based author of stratechery.com, a popular technology blog.

CORE COST

For sure, China is a major, and unique, headache for Microsoft. Many of the problems are tied to a broader push by the Chinese government to limit foreign firms’ dominance and encourage local technology firms to become viable competitors.

After years of healthy relations with Beijing, Microsoft last month was suddenly targeted by anti-monopoly regulators who raided its China offices as part of a price-fixing investigation.

But the spats mask the fact that Microsoft has never really cracked how to get people in emerging markets to pay for its software. The company rarely breaks out revenues by geography, but it has provided clues about the size of the problem.

In 2011, then CEO Steve Ballmer reportedly told employees that, because of piracy, Microsoft earned less revenue in China than in the Netherlands – with 1 percent of its population – even though China bought as many computers as the United States.

According to the BSA anti-piracy lobby group that Microsoft co-founded, emerging markets account for 56 percent of all PCs in use, and 73 percent of software piracy. Of the $77.8 billion revenue Microsoft generated in its 2013 financial year, China, Brazil and Russia each “exceeded” $1 billion, according to a Microsoft presentation. For comparison, Apple Inc generated $27 billion in Greater China, which includes Hong Kong and Taiwan, in its 2013 financial year.

For Microsoft, that’s a lot of lost revenue from the heart of its business. “Windows and Office are still very much the core of Microsoft,” says Sameer Singh, an India-based analyst.

The most recent breakdown by Microsoft of its results by product line – for the first quarter of fiscal 2014 – shows that 56 percent of its global revenue and 78 percent of operating profit came from Windows and Office.

Microsoft doesn’t just lose the revenue from pirate copies, it also loses access to customers who might buy other Microsoft products that work with or on top of Windows and Office.

Across most markets, Windows and Office account for more than half of revenues, says Andrew Pickup, Microsoft’s Asia PR chief. This, analysts say, is because many of Microsoft’s other products, such as Exchange and Windows servers, depend on customers already using Windows and Office.

“The Microsoft ecosystem is obviously pretty interconnected,” says Jan Dawson of U.S.-based Jackdaw Research. “So it makes sense that the proportion of revenue would be similar in emerging markets.”

NAKED PCS

Part of the intractability of piracy in emerging markets is that each part of the chain poses a problem.

For PC makers working on wafer-thin margins the operating system is one of the costliest parts of the machine, while mom-and-pop shops which form the bulk of retailers in such markets can’t afford to turn away price-sensitive customers who are comfortable buying pirate software.

The problem, therefore, starts with computer makers, Singh says, since “convincing them to ship every PC with Windows pre-installed is difficult.” Margins on PCs for a company like Lenovo Group Ltd are “near single digits,” says Bryan Wang, an analyst at Gartner.

The result is that up to 60 percent of PCs shipped in the emerging markets of Asia, says IDC research manager Handoko Andi, have no Windows operating system pre-installed – so-called ‘naked PCs’, which usually instead carry some free, open source operating system like Linux. That compares with about 25 percent in the region’s developed markets like Japan and Australia.

A quick scan of Taobao, the popular Chinese e-commerce site operated by Alibaba, shows a vast selection of PCs shipped with Linux rather than Windows. Once the machines hit the retailers, it’s hard to tell where legitimate software stops and piracy begins.

On a recent morning in Zhongguancun, a teeming electronics hub in north Beijing, shopkeepers offered to bundle what they said were legitimate versions of Windows with a new laptop, either for free or the equivalent of about $30.

Microsoft began lobbying Lenovo in 2004 to stop shipping naked PCs, but the Chinese firm countered that its margins were too low, a person familiar with the negotiations said. Two years later – just days before then-President Hu Jintao visited Gates’ U.S. home – China announced a new law requiring PCs to be shipped with operating systems. That merely dented piracy rates, which fell to 79 percent in 2009 from 92 percent in 2004, according to the BSA.

Lenovo said it reached an agreement with Microsoft in June of this year to ensure that Lenovo PCs sold in China would come pre-installed with a genuine Windows operating system.

“MOBILE ALSO-RAN”

Microsoft’s new approach is to push the price of Windows low enough to make it worth a PC maker’s while. The cost of a Windows license has fallen to below $50 from as high as $150, said IDC’s Andi, taking Microsoft down to “levels where they’ve never competed before.”

Microsoft’s Pickup said it was too early to gauge take-up.

In any case, making Windows cheaper for PCs is just part of a broader response to deeper shifts in the industry. The rise of mobile, tablets, cloud-based services and free operating systems has marginalized Microsoft and challenged its business model.

While Windows is on more than 90 percent of traditional computers – according to data compiled by analyst Ben Bajarin – that figure drops to below 14 percent once mobile devices such as phones and tablets are factored in, estimates Gartner.

More than half those devices run Google’s Android mobile OS, which is effectively free to handset and tablet makers. Apple, a key player in all types of devices, gives away upgrades to its operating systems for free.

Pickup says Microsoft has listened to phone makers’ complaints and relaxed what hardware they need to install the mobile version of Windows. It has also made the operating system free on any mobile device of 9 inches or less.

Taken together, the moves are “about bringing down the cost as more and more of the populations in these emerging markets are having their first computing experience,” Pickup said.

These are significant concessions, analysts say, but Microsoft will have to learn to be a bit player, where its software and services run on other people’s operating systems.

“The biggest threat to Microsoft,” Dawson said, “is the shift from a PC-based world where Microsoft dominated to a mobile world where Microsoft is an also-ran.”

(Additional reporting by Noel Randewich in SAN FRANCISCO and Bill Rigby in SEATTLE; Editing by Ian Geoghegan)

The Facebook Experiment: Some Collated Views

A few pieces in the Facebook Experiment. I’m still mulling my view. 

Paul Bernal: The Facebook Experiment: the ‘why’ questions…:

 Perhaps Facebook will look a little bad for a little while – but the potential financial benefit from the new stream of advertising revenue, the ability to squeeze more money from a market that looks increasingly saturated and competitive, outweighs that cost.

Based on the past record, they’re quite likely to be right. People will probably complain about this for a while, and then when the hoo-haa dies down, Facebook will still have over a billion users, and new ways to make money from them. Mark Zuckerberg doesn’t mind looking like the bad guy (again) for a little while. Why should he? The money will continue to flow – and whether it impacts upon the privacy and autonomy of the people on Facebook doesn’t matter to Facebook one way or another. It has ever been thus….

(Via Paul Bernal’s Blog)

A contrarian view from Rohan Samarajiva: Confused objections to Facebook emotional contagion research:

I am puzzled by the predominantly negative reaction to the manipulation of Facebook content, in the recent published research article in the mainstream media (MSM), though perhaps less in blogs and such.

It seems to me that MSM’s reaction is hypocritical. They manipulate their content all the time to evoke different emotional responses from their readers/viewers/listeners. The difference is that conducting research on resultant emotional changes on MSM is not as easy as on Facebook. For example, magazines have used different cover images, darkening or lightening faces and so. Their only indicator of success is whether version A sold more than version B. Not very nuanced.

(Via LIRNEasia)

And Ed Felten: Privacy Implications of Social Media Manipulation:

To be clear, I am not concluding that Facebook necessarily learned much of anything about the manipulability of any particular user. Based on what we know I would bet against the experiment having revealed that kind of information about any individual. My point is simpler: experiments that manipulate user experience impact users’ privacy, and that privacy impact needs to be taken into account in evaluating the ethics of such experiments and in determining when users should be informed.

(Via Freedom to Tinker)

And finally from Robin Wilton: Ethical Data Handling and Facebook’s “Emotional Contagion” Study:

Once, in a workshop, while discussing mechanisms for privacy preference expression, I said I would be happier for data subjects to have some means of expressing a preference than none. An older, wiser participant made the following wry remark: “That only brings a benefit if someone is prepared to give weight to their preference. If not… well, ten million times zero is still zero”. And that’s the weight Facebook appears to have given to the legitimate interests of its data subjects.

(Via Internet Society Blog Feed)

BBC: Old Scams Made New

This is a column for a BBC World Service piece. It’s not Reuters content. 

Of all the scams you’d have thought the old ‘I’m a general’s widow and am sitting on a whole pile of cash I want to share with you” one would have gone away by now. But it hasn’t. The scammers are now recruiting church organists. 

Take, for example, LinkedIn, the business networking service. Think Facebook but for suits. People use to flaunt their resume only in the hope of winning contracts, promotions, job offers and to share trade gossip with others. Companies use it to recruit, promote themselves etc. And so do scammers. 

They make a fake profile, add a fake photo, and then start inviting potential victims to connect to them. Once connected, they approach marks with the usual ‘I’ve got lots of money tied up in a bank and i want to share it with you if you’d only send a bit my way to help me grease some bankers’ palms.’ They can also now mine your address book and connect to your contacts and do the same to them. 

I was recently approached, for example, by a lady called Alisha, who claimed to work at a dental clinic (the giveaway there: she called it a detal clinic),by Qatari billionaire Sheikh Faisal Bin Qassim Al Thani (email address sheikfaisalbinalthani at gmail.com) and before her recent troubles by the now deposed prime minister of Thailand — Yingluck Shinawatra, not the other one — who could be reached at angeleena rosa 1967 at yahoo.com

Why do I know these folk are not for real? Well, one red flag is a limited number of connections: 67 in Alisha’s case, 127 in the Sheikh’s and 56 in Ms Yingluck’s. But each was able to reach me because despite the relatively measly number of people they’d persuade to accept their invitation to connect were contacts of mine.

I knew it was getting serious when I was approached by someone claiming to be a manager at Standard Chartered. Let’s call him Mr Christopher to save some blushes. Mr. Christopher claims to have 10 years’ experience in banking and finance management — and, most impressively, more than 500 connections. Among them a colleague, a CEO at a local energy group and the finance director of an Indonesian company. He even has a Facebook page. 

These scammers are putting in the hours. 

 But even then, these scams aren’t really that hard to spot.

Usually a glance at the profile is enough. A guy called Nigel Rozzell, for example, approached me, ostensibly from NatWest Bank. (It turns out there really is a Nigel Rozzell who works for Nat West Bank, but I’m pretty sure his email address isn’t Natwest Nigel at accountant.com, which is what this profile had.) 

And if I still wasn’t sure, I could search google for images that look like his mug shot — it’s actually easier than it sounds. And sure thing, the headshot of fake Nigel Rozzell belongs to an engineer who works on rail projects in Qatar.

And our bank manager friend Mr Christopher, with the 500+ connections and the Facebook page? After I recklessly accepted his LinkedIn invitation he offered me half of 9,649,400 pounds he said he was about to get his hands on. My confidence in him deflated when I discovered via Google that his mug shot belonged to that of the organist at a church near Bristol, who was none too pleased when I told him his visage being used as part of a scam. 

Now, LinkedIn to their credit have taken down all these profiles. And they defend their failure to stop these profiles ever appearing or gathering steam by saying that it’s basically up to users to be careful who they link to and to report anomalies. They also say they see no spike in these kinds of scams. 

But the truth is that scammers like networks and networks don’t police themselves. It took me anything between 10 seconds and two minutes to spot these scams, but I’m a nerd. That vetting process that could easily be automated. LinkedIn should, in my view, try doing that. I’ll miss rubbing shoulders with deposed prime ministers, billionaire sheiks and church organists, but I’ll suffer for the greater good of keeping scammers off my buddy list. 

[Update: Got another scam this morning, from a Douglas Mattes, who once again had 500+ connections and a quite well populated profile. And whom actually I thought might be legit as I hadn’t looked at the image which belongs to one Shaun Goeldner. I’m frankly unclear how these profiles work — are they legitimate accounts hacked or built from scratch?] 

[Update: Is this all part of some Iranian spying scam? ]

From balloons to shrimp-filled shallows, the future is wireless

From balloons to shrimp-filled shallows, the future is wireless

BY JEREMY WAGSTAFF

(Reuters) – The Internet may feel like it’s everywhere, but large pockets of sky, swathes of land and most of the oceans are still beyond a signal’s reach.

Three decades after the first cellphone went on sale – the $4,000 Motorola DynaTAC 8000X “Brick” – half the world remains unconnected. For some it costs too much, but up to a fifth of the population, or some 1.4 billion people, live where “the basic network infrastructure has yet to be built,” according to a Facebook white paper last month.

Even these figures, says Kurtis Heimerl, whose Berkeley-based start-up Endaga has helped build one of the world’s smallest telecoms networks in an eastern Indonesian village, ignore the many people who have a cellphone but have to travel hours to make a call or send a message. “Everyone in our community has a phone and a SIM card,” he says. “But they’re not covered.”

Heimerl reckons up to 2 billion people live most of their lives without easy access to cellular coverage. “It’s not getting better at the dramatic rate you think.”

The challenge is to find a way to connect those people, at an attractive cost.
And then there’s the frontier beyond that: the oceans.

Improving the range and speed of communications beneath the seas that cover more than two-thirds of the planet is a must for environmental monitoring – climate recording, pollution control, predicting natural disasters like tsunami, monitoring oil and gas fields, and protecting harbours.

There is also interest from oceanographers looking to map the sea bed, marine biologists, deep-sea archaeologists and those hunting for natural resources, or even searching for lost vessels or aircraft. Canadian miner Nautilus Minerals Inc said last week it came to an agreement with Papua New Guinea, allowing it to start work on the world’s first undersea metal mining project, digging for copper, gold and silver 1,500 metres (4,921 feet) beneath the Bismark Sea.

And there’s politics: China recently joined other major powers in deep-sea exploration, partly driven by a need to exploit oil, gas and mineral reserves. This year, Beijing plans to sink a 6-person ‘workstation’ to the sea bed, a potential precursor to a deep-sea ‘space station’ which, researchers say, could be inhabited.

“Our ability to communicate in water is limited,” says Jay Nagarajan, whose Singapore start-up Subnero builds underwater modems. “It’s a blue ocean space – if you’ll forgive the expression.”

BALLOONS, DRONES, SATELLITES
Back on land, the challenge is being taken up by a range of players – from high-minded academics wanting to help lift rural populations out of poverty to internet giants keen to add them to their social networks.

Google, for example, is buying Titan Aerospace, a maker of drones that can stay airborne for years, while Facebook has bought UK-based drone maker Ascenta.

CEO Mark Zuckerburg has said Facebook is working on drones and satellites to help bring the Internet to the nearly two thirds of the world that doesn’t yet have it. As part of its Project Loon, Google last year launched a balloon 20 km (12.4 miles) into the skies above New Zealand, providing wireless speeds of up to 3G quality to an area twice the size of New York City.

But these are experimental technologies, unlikely to be commercially viable for a decade, says Christian Patouraux, CEO of another Singapore start-up, Kacific. Its solution is a satellite network that aims to bring affordable internet to 40 million people in the so-called ‘Blue Continent’ – from eastern Indonesia to the Pacific islands.

A mix of technologies will prevail, says Patouraux – from fiber optic cables, 3G and LTE mobile technologies to satellites like his HTS Ku-band, which he hopes to launch by end-2016. “No single technology will ever solve everything,” he said.

Indeed, satellite technology – the main method of connectivity until submarine cables became faster and cheaper – is enjoying a comeback. While Kacific, O3b and others aim at hard-to-reach markets, satellite internet is having success even in some developed markets. Last year, ViaSat topped a benchmarking study of broadband speeds by the U.S. Federal Communications Commission.

And today’s airline passengers increasingly expect to be able to go online while flying, with around 40 percent of U.S. jetliners now offering some Wi-Fi. The number of commercial planes worldwide with wireless internet or cellphone service, or both, will triple in the next decade, says research firm IHS.

WHITE SPACE

Densely populated Singapore is experimenting with so-called ‘white space’, using those parts of the wireless spectrum previously set aside for television signals. This year, it has quietly started offering what it calls SuperWifi to deliver wireless signals over 5 km or more to beaches and tourist spots.

This is not just a first-world solution. Endaga”s Heimerl is working with co-founder Shaddi Hasan to use parts of the GSM spectrum to build his village-level telco in the hills of Papua.

That means an ordinary GSM cellphone can connect without any tweaks or hardware. Users can phone anyone on the same network and send SMS messages to the outside world through a deal with a Swedish operator.

Such communities, says Heimerl, will have to come up with such solutions because major telecoms firms just aren’t interested. “The problem is that these communities are small,” says Heimerl, “and even with the price of hardware falling the carriers would rather install 4G in cities than equipment in these communities.”

The notion of breaking free of telecoms companies isn’t just a pipe dream.

MESH

Part of the answer lies in mesh networks, where devices themselves serve as nodes connecting users – not unlike a trucker’s CB radio, says Paul Gardner-Stephen, Rural, Remote & Humanitarian Telecommunications Fellow at Flinders University in South Australia.

Gardner-Stephen has developed a mesh technology called Serval that has been used by activists lobbying against the demolition of slums in Nigeria, and is being tested by the New Zealand Red Cross.

Mesh networks aren’t necessarily small, rural and poor: Athens, Berlin and Vienna have them, too. And Google Chairman Eric Schmidt has called them “the most essential form of digital communication and the cheapest to deploy.”

Even without a balloon and Google’s heft, mesh networks offer a bright future, says Gardner-Stephen. If handset makers were to open up their chips to tweaks so their radios could communicate over long distances, it would be possible to relay messages more than a kilometre.

In any case, he says, the Internet is no longer about instantaneous communication. As long as we know our data will arrive at some point, the possibilities open up to thinking of our devices more as data couriers, storing messages on behalf of one community until they are carried by a villager to another node they can connect to, passing those messages on several times a day.

It’s not our present vision of a network where messages are transmitted in an instant, but more like a digital postal service, which might well be enough for some.

“Is the Internet going to be what it looks like today? The answer is no,” said Gardner-Stephen.

PISTOL SHRIMPS

As the Internet changes, so will its boundaries.

As more devices communicate with other devices – Cisco Systems Inc estimates there will be 2 billion such connections by 2018 – so is interest increasing in connecting those harder-to-reach devices, including those underwater, that are beyond the reach of satellites, balloons and base stations.

Using the same overground wireless methods for underwater communications isn’t possible, because light travels badly in water. Although technologies have improved greatly in recent years, underwater modems still rely on acoustic technologies that limit speeds to a fraction of what we’re now used to.

That’s partly because there are no agreed standards, says Subnero’s Nagarajan, who likens it to the early days of the Internet. Subnero offers underwater modems that look like small torpedoes which, he says, can incorporate competing standards and allow users to configure them.

This is a significant plus, says Mandar Chitre, an academic from the National University of Singapore, who said that off-the-shelf modems don’t work in the region’s shallow waters.

The problem: a crackling noise that sailors have variously attributed to rolling pebbles, surf, volcanoes, and, according to a U.S. submarine commander off Indonesia in 1942, the Japanese navy dropping some “newfangled gadget” into the water.

The actual culprit has since been identified – the so-called pistol shrimp, whose oversized claw snaps a bubble of hot air at its prey. Only recently has Chitre been able to filter out the shrimp’s noise from the sonic pulses an underwater modem sends. His technology is now licensed to Subnero.

There are still problems speeding up transmission and filtering out noise, he says. But the world is opening up to the idea that to understand the ocean means deploying permanent sensors and modems to communicate their data to shore.

And laying submarine cables would cost too much.

“The only way to do this is if you have communications technology. You can’t be wiring the whole ocean,” he told Reuters. “It’s got to be wireless.”

(Editing by Ian Geoghegan)

Behind the iPad’s sluggish sales

Sameer Singh offers some possible reasons for the fall in iPad sales: 

Pocketable vs. Tablet Computing | Tech-Thoughts by Sameer Singh: “With this background, the sudden decline in iPad sales may have been caused by a combination of the following factors:

  • Most high-end consumers who need iPads already own them (and as some analysts have pointed out, replacement cycles are long) 
  • Large screen smartphones have made media tablets somewhat redundant, i.e. the iPad is no longer a ‘necessary’ purchase for ‘phablet’ owners 
  • The iPad is priced out of the market segment that still finds media tablets ‘necessary’ 
  • Upmarket movement is limited because tablet use cases still haven’t evolved to cannibalize more productivity-related computing tasks (I may have overestimated the pace at which this would occur)”

To which I’d add: 

The iPad is in some ways closer to a PC than a phone in its utility vs luxury ratio. People upgrade their phones because they’re visible accessories, something that says something about the person holding it. Computers have barely hit that bar, and maybe iPads — especially since users usually cloak them in a stand/cover — don’t quite make it either. So unless there’s a really compelling performance/spec reason to upgrade, most don’t bother.

I’ve not seen data on this, but anecdotally most people I know get an iPad and then settle, rather than upgrading when the next one comes out. Of course the lack of telco subsidy for most iPad purchases adds to this. 

It’s not that iPad isn’t a great idea, but it turns out that the smarter move in a way has been to increase the size of the phone (phablet) rather than shrink the size of the computer (the iPad), at least in terms of getting people to upgrade. 

All at sea: global shipping fleet exposed to hacking threat

[Original link: this one includes links to the source material where available]

(Reuters) – The next hacker playground: the open seas – and the oil tankers and container vessels that ship 90 percent of the goods moved around the planet.

In this internet age, as more devices are hooked up online, so they become more vulnerable to attack. As industries like maritime and energy connect ships, containers and rigs to computer networks, they expose weaknesses that hackers can exploit.

Hackers recently shut down a floating oil rig by tilting it, while another rig was so riddled with computer malware that it took 19 days to make it seaworthy again; Somali pirates help choose their targets by viewing navigational data online, prompting ships to either turn off their navigational devices, or fake the data so it looks like they’re somewhere else; and hackers infiltrated computers connected to the Belgian port of Antwerp, located specific containers, made off with their smuggled drugs and deleted the records.

While data on the extent of the maritime industry’s exposure to cyber crime is hard to come by, a study of the related energy sector by insurance brokers Willis this month found [PDF] that the industry “may be sitting on an uninsured time bomb”.

Globally, it estimated that cyber attacks against oil and gas infrastructure will cost energy companies close to $1.9 billion by 2018. The British government reckons cyber attacks already cost UK oil and gas companies around 400 million pounds ($672 million) a year.

In the maritime industry, the number of known cases is low as attacks often remain invisible to the company, or businesses don’t want to report them for fear of alarming investors, regulators or insurers, security experts say.

There are few reports that hackers have compromised maritime cyber security. But researchers say they have discovered significant holes in the three key technologies sailors use to navigate: GPS, marine Automatic Identification System (AIS), and a system for viewing digital nautical charts called Electronic Chart Display and Information System (ECDIS).

“Increasingly, the maritime domain and energy sector has turned to technology to improve production, cost and reduce delivery schedules,” a NATO-accredited think-tank wrote in a recent report. “These technological changes have opened the door to emerging threats and vulnerabilities as equipment has become accessible to outside entities.”

TIP OF THE ICEBERG

As crews get smaller and ships get bigger, they increasingly rely on automation and remote monitoring, meaning key components, including navigational systems, can be hacked.

A recent study by security company Rapid7 found more than 100,000 devices – from traffic signal equipment to oil and gas monitors – were connected to the internet using serial ports with poor security. “The lines get blurry, and all industries and all technologies need to focus more on security,” said Mark Schloesser, one of the authors of the study.

Mark Gazit, CEO of ThetaRay, an internet security company, said an attacker managed to tilt a floating oil rig to one side off the coast of Africa, forcing it to shut down. It took a week to identify the cause and fix, he said, mainly because there were no cyber security professionals aboard. He declined to say more.

Lars Jensen, founder of CyberKeel, a maritime cyber security firm, said ships often switch off their AIS systems when passing through waters where Somali pirates are known to operate, or fake the data to make it seem they’re somewhere else.

Shipping companies contacted by Reuters generally played down the potential threat from hackers. “Our only concern at this stage is the possible access to this information by pirates, and we have established appropriate countermeasures to handle this threat,” said Ong Choo Kiat, president of U-Ming Marine Transport, Taiwan’s second-largest listed shipping firm by market value. The company owns and operates 53 dry cargo ships and oil tankers.

VIRUS-RIDDLED

A study last year by the Brookings Institution of six U.S. ports found that only one had conducted an assessment of how vulnerable it was to a cyber attack, and none had developed any plan to response to any such attack. Of some $2.6 billion allocated to a federal program to beef up port security, less than 1 percent had been awarded for cyber security projects.

When CyberKeel probed the online defences of the world’s 20 largest container carriers this year it found 16 had serious security gaps. “When you look at the maritime industry there’s extremely limited evidence of systems having been breached” compared to other sectors, said CyberKeel’s Jensen. “That suggests to us that they’ve not yet been found out.”

Michael Van Gemert, a security consultant to the oil and gas industry, said that on visits to rigs and ships he has found computers and control systems riddled with viruses. In one case, he said it took 19 days to rid a drilling rig en route from South Korea to Brazil of malware which had brought the vessel’s systems to a standstill.

“The industry is massively in need of help, they have no idea what the risks are,” he said.

The main ship navigation systems – GPS, AIS and ECDIS – are standards supported by bodies such as the International Maritime Organisation (IMO). Indeed, that body has made AIS and ECDIS mandatory on larger commercial and passenger vessels.

Researchers from the University of Texas demonstrated last July that it was possible to change a ship’s direction by faking a GPS signal to dupe its onboard navigation system.

Marco Balduzzi and colleagues at anti-virus vendor Trend Micro last month showed that an attacker with a $100 VHF radio could exploit weaknesses in AIS – which transmits data such as a vessel’s identity, type, position, heading and speed to shore stations and other ships – and tamper with the data, impersonate a port authority’s communications with a ship or effectively shut down communications between ships and with ports.

In January, a British cyber security research firm, NCC Group, found flaws in one vendor’s ECDIS software that would allow an attacker to access and modify files, including charts. “If exploited in a real scenario,” the company concluded, “these vulnerabilities could cause serious environmental and financial damage, and even loss of life.”

When the USS Guardian ran aground off the Philippines last year, the U.S. Navy in part blamed incorrect digital charts. A NATO-accredited think-tank said the case illustrated “the dangers of exclusive reliance upon electronic systems, particularly if they are found vulnerable to cyber attack.”

“Most of these technologies were developed when bandwidth was very expensive or the internet didn’t exist,” said Vincent Berk, CEO of security company FlowTraq.

NO QUICK FIX

Fixing this will take time, and a change in attitude.

“Security and attack scenarios against these technologies and protocols have been ignored for quite some time in the maritime industry,” said Rapid7’s Schloesser.

Researchers like Fotios Katsilieris have offered ways to measure whether AIS data is being faked, though he declined to be interviewed, saying it remained a sensitive area. One Google researcher who has proposed changes to the AIS protocol wrote on his blog that he had been discouraged by the U.S. Coastguard from talking publicly about its vulnerabilities.

Indeed, AIS is abused within the industry itself.

Windward, an Israeli firm that collects and analyses AIS data, found 100 ships transmitting incorrect locations via AIS in one day – often for security or financial reasons, such as fishing boats operating outside assigned waters, or smuggling.

In a U.N. report issued earlier this year [PDF] on alleged efforts by North Korea to procure nuclear weapons, investigators wrote that one ship carrying concealed cargo turned off its AIS signals to disguise and conceal its trip to Cuba.

It’s not clear how seriously the standards bodies treat the threat. Trend Micro’s Balduzzi said he and his colleagues were working with standards organisations, which he said would meet next year to discuss his research into AIS vulnerabilities.

The core standard is maintained by the International Telecommunications Union (ITU) in association with the IMO. In a statement, the IMO said no such report of vulnerabilities had been brought to its attention. The ITU said no official body had contacted it about the vulnerabilities of AIS. It said it was studying the possibility of reallocating spectrum to reduce saturation of AIS applications.

Yevgen Dyryavyy, author of the NCC report on ECDIS, was sceptical that such bodies would solve the problems soon.

First, he said, they have to understand the IT security of shipboard networks, onboard linked equipment and software, and then push out new guidelines and certification.

Until then, he said, “nothing will be done about it.”

($1 = 0.5949 British Pounds) (Additional reporting by Keith Wallis; Editing by Ian Geoghegan)

Meshing and Stacking Away from Disaster

I’m often haunted by the folk in Wall-E, the movie where humans have abandoned Earth to trash, a small waste-collecting robot and a cockroach. That’s not the bit that scares me: it’s the space-bound humans who are ferried around on pods, their eyes permanently glued to a screen in front of them.

Is this, I ask my worried self, our future? Or has it already happened?
In some ways it has. But for what it’s worth I think it’s a blip. The future won’t in fact look like that at all.

Right now we definitely have a problem. The problem is that screens have gotten smaller, or rather more portable, more convenient, and the content on them has become so compelling that we risk life and limb to watch them as we walk, stand and sit.

But this is just a phase.

I detect the beginnings of a shift. Not of our behaviour – sadly we’ll always be vulnerable to fixating on any screen with bright colours and movement. But the sheer multiplicity of screens is forcing change on us.

Consider the following: Of the seven hours a day spent gazing at a screen, at least two of those hours are actually watching two or more screens. Millward Brown, a brand consultancy, calls it meshing and stacking.

Whereas before we’d pop off to the kitchen to put the kettle on, now we scroll through our tablet to see what people are saying on Twitter about what we’ve just watched. Then there’s shifting, where we start watching something on one screen, and then finish it on a laptop, a smartphone or a tablet.

This may seem like appalling behaviour, slicing our attention into ever thinner chunks. And in some ways it is, but it means that we’re unlikely to be subsumed by any one screen. And that’s good, because we’re dominating the screens, not them dominating us.

There are other things afoot. Screens don’t need to be big to do big things for us: the latest version of Google’s Android operating system allows the user to stitch together separate photos of a view and then relive the panorama by moving the phone around in the air, the image moving as if the scene was in front of the viewer. It’s a extraordinary feeling, recreating a mural on a screen the size of your hand.

Then there’s something called Spritz, an app that allows you to speed read a book in a viewer no larger than 18 letters. The maker of the app says by shuttling words past your vision at speed 80% of your effort is saved for reading and absorbing. I was pretty amazed; it seemed to work, and makes you think about whether you really need a book-sized screen to recreate the experience of reading a tome.

Then there’s something called Snapchat, where users can send photos to each other which can only be viewed for a few seconds before disappearing forever. It’s hard to see the value in this, until someone pointed out that the value lies in the intimacy of the moment. Users don’t open the picture immediately, preferring to find a quiet, private space to enjoy it. Counterintuitively, by making the photo ephemeral, the app makes the process of viewing it special and the memory of it longer lasting.

Some might say I’m grasping at straws. But I see in these examples the beginnings of a new approach to how we relate to our screens. For sure, some of us will remain their slaves. But for others we may find new ways to derive pleasure from them, whether it’s recreating a vista, reading a tome or viewing a photo.

WhatsApp: Silly Money or New Front in the Platform Wars?

It’s been a few days since Facebook announced to the world it had bought WhatsApp. And Rakuten bought Viber. You are forgiven if only one of those names rings a bell. so while I’m at it, let me throw in a few more: WeChat, LINE, KakaoTalk. Nimbuzz. Mig33. Fring. Telegram. Tango.

OK, that’s enough names. But while I’m at it I’ll throw out a prediction: You’re going to hear a lot more of these messaging services in the years to come. That’s because we’re entering a new phase of what we might pompously call the platform wars. One where those with the biggest network win.

It sounds arcane and complicated but it’s not really, if we strip it down to the fundamentals. Phones were always about the network effect. The first phone, for example, was pretty useless, like the first subway station. But the more phones were added to the network, the more useful the network became, and the more worthwhile it was to get a phone and plug it in.

Networks are about communicating. When SMS came along folk loved it because it offered a less intrusive option for the mobile phone; you didn’t have to talk to people to communicate with them.

Messaging applications like WhatsApp are a return to this simplicity. And of course, it’s cheap. So it’s not surprising that more than 450 million people use it.

And this is the thing. Facebook and Rakuten, the Japanese ecommerce company that bought a smaller version of WhatsApp called Viber, want to get as close to you, the mobile user, as they can. They want to get you to buy stuff, or share stuff, or see stuff because that’s how their business models work.

In that sense it’s simple. But under the hood there’s a larger shift at work in the layout of the engine. In the old days, to get close to the user you built a browser. Remember all those wars over the default browser in Windows?

That’s all old hat now. The conventional wisdom is that on mobile phones, where all the action is, the chokepoint is the operating system. That’s the software that the device runs, and comes with. That means Apple, with their iOS, and Google, with their Android, are in pole position. If you want to do something, like sell an app, you have to go through their app store. Upset them and you’re out. Oh, and they get a cut of anything you make on their device.

Only hang on a minute.

What happens if the choke point, the place where the rubber hits the user, as it were, wasn’t the app store but, say, a messaging app? Or if you wanted to order a taxi? Or buy insurance?

This is what is happening already, in China, South Korea and Japan. And it’s big, because it threatens to undermine a lot of what these big players, not just Apple and Google, but phone makers like Samsung, and telephone operators, and everyone in the mobile game, has been trying to do.

In short, if you can insert yourself in the what folk call the value chain so all the user sees is you, you’re good to go. And that’s what’s happening with the likes of WeChat, KakaoTalk and Line.

You may not have heard of these guys, and you may not again. But if you think them about in that way you’ll have a clearer idea about why Facebook splashed out $19 billion on their Western equivalent WhatsApp, and Rakuten $900 million on Viber.

Big money. But when you’re elbowing big names aside to get to be the first and only thing the nearly 7 billion mobile phone users in the world interact with, maybe it doesn’t look like silly money.

This is a piece I wrote and recorded for the BBC World Service’s Business Daily program riffing off the Facebook and Rakuten purchases. Podcast here.

You’re Never Alone With a Drone

Drones is a bad word to describe the future. We hear drones and we think bombs dropped unseen, we think surveillance and we think somebody talking incessantly about something not very interesting.

But I’m a big fan of drones. Drones are unmanned aerial vehicles and while inevitably the military is ahead in leveraging the technology, and governments are restricting their usage, they represent as powerful an opportunity for the future as the mobile phone.

You average drone is a quadrocopter — a helicopter with four rotors. The design is more than a century old, but it has only been in the past decade that they’ve gotten cheap enough for any tom or dick or harry to have one. Now they can be as small as a butterfly, controlled by your iPhone.

Outside of the military, they’re still somewhat in the domain of hobbyists, but this is beginning to change. Journalists have been using them to cover protests, floods and sports. Oil and gas companies are using them to survey terrain and check out potential leaks. Conservation groups are using them to map terrain and track wildlife and poachers.

This is just the start. Drones could be deployed as sort of flying webcams so drivers can check traffic conditions ahead. Refugee agencies could do rapid surveys of movements of people to assess their needs before they turn up at a camp.

And that’s just by attaching a camera to a drone. You could attach a lot more.

Amazon has half-jokingly released a video showing how a drone could deliver a package. Attaching near-infrared sensors could detect the health of vines and crops. Surveyors could use distance sensors to quickly assess the size of a plot — or even the rooms inside a building.

This is beginning to happen, and in some industries it’s been happening for a while. Regulations are a little slow to keep pace — I spoke to one entrepreneur who moved his startup from California to Singapore because he said it was taking too long for the regulations to catch up with the reality. In Southeast Asia, he says, governments are more receptive to his drone as a service business.

The next step after commercial adoption, I think, is going to be when we as individuals see drones in the same way we see phones. The smartphone was originally just a phone — now it’s pretty much everything but a phone. Think computer, internet device, social tool, health monitor, stopwatch, radio, music player, tv, satnav, TV remote, calorie counter.

We’ll deploy a drone to water the garden, to check whether the bus is on its way, to deliver a pina colada to our spouse lounging by the pool. We’ll send one out to scare away the birds raiding our strawberry patch, to check out storm damage on a chimney, to figure out where there’s a parking spot in a crowded lot. We’ll have them accompany us on walks and runs as a kind of mobile security guard, providing direction, assessing threats and, in the event of rain, an umbrella.

For sure, there are privacy concerns. But we’ve been surprisingly sanguine about the sudden appearance of billions more cameras in our face — either on phones or streetlamps — so it may not take us long to figure out that the skies above us are not empty. We’ll develop ways to block intrusive sensors and cameras. And hopefully we’ll make the most of being able, for the first time in our lives, to be able to look down on ourselves from above.

This is a longer version of a piece I’m recording for the BBC World Service. I no longer upload the podcasts here because of time constraints, but they can usually be found from time to time at the tail-end of the Business Daily podcast available here. While I’m a staff correspondent at Reuters, this is not written for Reuters.