Technology

Most of the data in this blog was pulled from Business Insider, Reuters, and various news organizations.  I don't know for a fact that these numbers are accurate.

We all know this but we ignore it. As a society we seem to selectively pick our battles and since there's so much love for Apple products, we just turn the other direction. On top of slave labor, child labor, hourly pay of .70 cents per hour, abhorrent living and working conditions... Apple charges top dollar and are raking in record breaking profits. As stock holders, we love the super-high profit margins of Apple, Inc.

And that's why it's disconcerting to remember that the prices of iPhones and iPads — and the super-high profit margins of Apple — are only possible because our iPhones and iPads are made with labor practices that would be illegal in the United States.

And it's also disconcerting to realize that the folks who make our iPhones and iPads not only don't have iPhones and iPads (because they can't afford them), but, in some cases, have never even seen them.

This is a complex issue. But it's also an important one. And it's only going to get more important as the world's economies continue to become more intertwined.

(And the issue obviously concerns a lot more companies than Apple. Almost all of the major electronics manufacturers make their products in China and other countries that have labor practices that would be illegal here. One difference with Apple, though, is the magnitude of the company's profit margin and profits. Apple could afford to pay its manufacturers more or hold them to higher standards and still be extremely competitive and profitable.)

Last week, PRI's "This American Life" did a special on Apple's manufacturing. The show featured (among others) the reporting of Mike Daisey, the man who does the one-man stage show "The Agony and the Ecstasy of Steve Jobs," and The NYT's Nicholas Kristof, whose wife's family is from China.

You can read a transcript of the whole show here. Here are some details:

• The Chinese city of Shenzhen is where most of our "crap" is made. 30 years ago, Shenzhen was a little village on a river. Now it's a city of 13 million people — bigger than New York.
• Foxconn, one of the companies that builds iPhones and iPads (and products for many other electronics companies), has a factory in Shenzhen that employs 430,000 people.
• There are 20 cafeterias at the Foxconn Shenzhen plant. They each serve 10,000 people.
• One Foxconn worker Mike Daisey interviewed, outside factory gates manned by guards with guns, was a 13-year old girl. She polished the glass of thousands of new iPhones a day.
• The 13-year old said Foxconn doesn't really check ages. There are on-site inspections, from time to time, but Foxconn always knows when they're happening. And before the inspectors arrive, Foxconn just replaces the young-looking workers with older ones.
• In the first two hours outside the factory gates, Daisey meets workers who say they are 14, 13, and 12 years old (along with plenty of older ones). Daisey estimates that about 5% of the workers he talked to were underage.

The dormitories.

• Daisey assumes that Apple, obsessed as it is with details, must know this. Or, if they don't, it's because they don't want to know.
• Daisey visits other Shenzhen factories, posing as a potential customer. He discovers that most of the factory floors are vast rooms filled with 20,000-30,000 workers apiece. The rooms are quiet: There's no machinery, and there's no talking allowed. When labor costs so little, there's no reason to build anything other than by hand.
• A Chinese working "hour" is 60 minutes — unlike an American "hour," which generally includes breaks for Facebook, the bathroom, a phone call, and some conversation. The official work day in China is 8 hours long, but the standard shift is 12 hours. Generally, these shifts extend to 14-16 hours, especially when there's a hot new gadget to build. While Daisey is in Shenzhen, a Foxconn worker dies after working a 34-hour shift.
• Assembly lines can only move as fast as their slowest worker, so all the workers are watched (with cameras). Most people stand.
• The workers stay in dormitories. In a 12-by-12 cement cube of a room, Daisey counts 15 beds, stacked like drawers up to the ceiling. Normal-sized Americans would not fit in them.
• Unions are illegal in China. Anyone found trying to unionize is sent to prison.
• Daisey interviews dozens of (former) workers who are secretly supporting a union. One group talked about using "hexane," an iPhone screen cleaner. Hexane evaporates faster than other screen cleaners, which allows the production line to go faster. Hexane is also a neuro-toxin. The hands of the workers who tell him about it shake uncontrollably.
• Some workers can no longer work because their hands have been destroyed by doing the same thing hundreds of thousands of times over many years (mega-carpal-tunnel). This could have been avoided if the workers had merely shifted jobs. Once the workers' hands no longer work, obviously, they're canned.
• One former worker had asked her company to pay her overtime, and when her company refused, she went to the labor board. The labor board put her on a black list that was circulated to every company in the area. The workers on the black list are branded "troublemakers" and companies won't hire them.
• One man got his hand crushed in a metal press at Foxconn. Foxconn did not give him medical attention. When the man's hand healed, it no longer worked. So they fired him. (Fortunately, the man was able to get a new job, at a wood-working plant. The hours are much better there, he says — only 70 hours a week).
• The man, by the way, made the metal casings of iPads at Foxconn. Daisey showed him his iPad. The man had never seen one before. He held it and played with it. He said it was "magic."

Importantly, Shenzhen's factories, as hellish as they are, have been a boon to the people of China. Liberal economist Paul Krugman says so. NYT columnist Nicholas Kristof says so. Kristof's wife's ancestors are from a village near Shenzhen. So he knows of what he speaks. The "grimness" of the factories, Kristof says, is actually better than the "grimness" of the rice paddies.

So, looked at that way, Apple is helping funnel money from rich American and European consumers to poor workers in China. Without Foxconn and other assembly plants, Chinese workers might still be working in rice paddies, making $50 a month instead of $250 a month (Kristof's estimates. In 2010, Reuters says, Foxconn workers were given a raise to $298 per month, or $10 a day, or less than $1 an hour). With this money, they're doing considerably better than they once were. Especially women, who had few other alternatives.

But, of course, the reason Apple assembles iPhones and iPads in China instead of America, is that assembling them here or Europe would cost much, much more — even with shipping and transportation. And it would cost much, much more because, in the United States and Europe, we have established minimum acceptable standards for the treatment and pay of workers like those who build the iPhones and iPads.

Foxconn, needless to say, doesn't come anywhere near meeting these minimum standards.

If Apple decided to build iPhones and iPads for Americans using American labor rules, two things would likely happen:

• The prices of iPhones and iPads would go up
• Apple's profit margins would go down

Neither of those things would be good for American consumers or Apple shareholders. But they might not be all that awful, either. Unlike some electronics manufacturers, Apple's profit margins are so high that they could go down a lot and still be high. And some Americans would presumably feel better about loving their iPhones and iPads if they knew that the products had been built using American labor rules.

In other words, Apple could probably afford to use American labor rules when building iPhones and iPads without destroying its business.

So it seems reasonable to ask why Apple is choosing NOT to do that.

(Not that Apple is the only company choosing to avoid American labor rules and costs, of course — almost all manufacturing companies that want to survive, let alone thrive, have to reduce production costs and standards by making their products elsewhere.)

The bottom line is that iPhones and iPads cost what they do because they are built using labor practices that would be illegal in this country — because people in this country consider those practices grossly unfair.

That's not a value judgment. It's a fact.

So, next time you pick up your iPhone or iPad, ask yourself how you feel about that.

Google... I'm not happy about this and you are once again infringing on my privacy. I seriously feel the need to erase myself from the web!

This move means that all comments on any publicly visible website could show up in Google search results. Previously, search engines were unable to read comments because Facebook, Disqus and Intense Debate used programming that was not easy to read automatically.

This meant that comments could play any part in a website’s search ranking. Now, however, the web tools that Google uses to trawl the web and index content are able to read comments that have been made using Facebook’s Connect add-in for other websites, as well as other equivalent services.

Some website owners have declined to use add-ons for comments that do not help their search rankings, but as Facebook has become a more popular tool for interaction outside Facebook.com itself, Google has effectively been ignoring a growing part of the web.

The update means links featured in comments will also enhance websites’ standing.
Although comments are not likely to immediately appear high up search results, specific searches for them will bring them up.

Very interesting stuff here. On one hand, I was surprised but it seems like logical progression of technology. As we progress in our technology driven world, I hope innovators are aware of the potential problems that their breakthroughs may cause. It seems that we only look at one side of the coin.

AT&T has great hopes for applications that use wireless sensors embedded in clothing to monitor people's vital signs. Last June, the company signed an agreement to provide the wireless network for Zephyr, which makes a clothing sensor array called the BioHarness. As compared to 10 years ago, when "connected clothing" first became available, the prices of clothing sensors have come down; Wi-Fi and wireless networks have become ubiquitous; and mobile apps have become vastly easier to design and simpler to use.

What initially attracted AT&T to Zephyr was the use of its BioHarness in college athletes' Under Armour shirts at last year's NFL Scouting Combine. The BioHarness measured the athletes' vital signs, heart rate, and temperature. AT&T's plans with Zephyr go beyond athletes. The clothing sensors could also be used by marathon runners, so their loved ones know how they're doing, or by people who simply want to track their vital signs when they work out. The sensors could also be useful in first-responder applications, including apps for police and fire departments and the military.

Other applications could tap even bigger markets, such as the care of infants and the elderly. For example, parents of babies could cover them in connected clothing to check on their children when they were out of the house. And relatives of elderly people who are "aging in place" in their homes could check on their vital signs and make sure their loved ones haven't fallen. This could help the elderly stay out of assisted living facilities, as most prefer to do.

In addition, the clothing sensors could help elderly people live more active lives because of the ability to transmit their vitals wherever they go. Seniors want more freedom, but at the same time, their loved ones want to know where they are and how they're feeling. When you look at the percentage of Americans who are aging and the number who fall into that category every day, it's going to be a very big marketplace to deliver products and services to make their lives better.

Transmitting clothing sensor data to providers would open up another market. Zephyr already offers a physician dashboard to view patients' vital signs. The BioHarness can also generate a remote electrocardiogram, according to the company. Although the application is not yet commercially available, it was demonstrated at a meeting of the American Telemedicine Association last spring.

Similar devices have required FDA approval--and in fact, the BioHarness itself was approved by the federal agency in December 2010. AT&T has been expanding its product line of "connected devices" for healthcare. Besides the clothing sensors, AT&T serves as the wireless network for a few other products in this area. The GlowCap uses lights and wireless alerts to remind consumers to take their medications and has been shown to increase adherence.

Marc Andreessen, one of Silicon Valley’s biggest venture capitalists, and Warren E. Buffett, of Berkshire Hathaway, have two things in common: They are both worth huge amounts of money, with billions of dollars at their investing disposal, and they both try to invest in companies that are undervalued.

But these two business titans disagree about the importance of investing in technology.

In an interview in New York Times Magazine, Mr. Andreessen argues that compared with blue-chip companies like General Electric, big technology companies, including Microsoft, Cisco, Google and Apple, are very undervalued. Citing this point, Mr. Andreessen says the talk of a bubble is nonsense.

“Not only is there no bubble — these prices are reflective of the fact that the market still hates tech,” Mr. Andreessen said in the interview, referring to the stock price of many large tech companies. “This bubble talk is about everybody being unbelievably psychologically scarred from 10 years ago.”

Mr. Buffett disagrees. In an interview with the DealBook blog, he said he did not plan to invest in social networks and was still weary of the price of some tech stocks.

Mr. Buffett said he was looking for tech stocks to invest in that were “not crazy.”

“Most companies I don’t know how to value, there’s a few that I think I know how to value, and every now and then one of those are a price number that falls within my valuation range,” Mr. Buffett said.

But who is right? Are tech stocks overvalued? Is investing in Facebook at a $100 billion valuation a good bet for investors, or is this the same mentality that brought on the bubble that burst 10 years ago?

Search is about to change quite radically. For more than a decade, search has been stagnant: the core product has not changed much. Users have changed radically in that time frame. Even though the kind of content users consume is different, search engines are still focused mostly on web pages. Users have become less patient and have less time on hand, while search engines still require users to dig through and extract information from the web pages to find what they’re looking for. In addition, users are spending more and more time on their mobile phones and other connected devices, which require a completely different kind of user experience for search. 

When I talk about Search, keep in mind that Search, Discovery, Recommendations, and Serendipity are all essentially the same thing. Why? Well, to start with, one would need a comprehensive index of content for each of these things to work. This gives you a world view, so to speak. How that index is created has changed over time, and what goes into that index has changed. About ten years ago, the index only consisted of HTML pages, but that information has been changing. How the index was created was heavily focused on signals provided by HTML pages, links, consumption, etc. 

Today, many social signals are consumed, including how often and how quickly an entity or URL is being embedded elsewhere, whether it is with positive or negative intent and sentiment, and is it trending up or down since last week/month. Search engines have mostly focused on the backend and infrastructure, and rightly so, because search requires a delicate balance between some of the most complex technologies, and a vast amount of infrastructure. Solving today’s user needs requires a different focus: a special blend of science, a finely tuned user experience, cutting-edge design skills, and a slightly different mix of engineering and infrastructure. 

The question now is—how do search engines respond to this new world?

The answer, to put it simply, is to re-imagine search. The new landscape for search will likely focus on getting the answers the user needs without requiring the user to interact with a page of traditional blue links. In fact, there may be cases where there are no blue links on a search results page at all. 

Search engines will keep assimilating content from many different sources and aim to provide immediate and rich answers. You ask a question and you get answers, nothing else. The user may not even type the full question. Search engines will have to become more and more personal, understand the individual user’s preferences, location, type of content preferred, context from previous search and browse behavior, signals from social graphs, and much more. 

Search has been a pull mechanism for information and content, while social sites such as Facebook and Twitter are push. For search to succeed in today’s world, it has to become more push. A contextual search is when a user happens to be away from a search box, maybe reading an article, and comes across a name, or place that he/she wants more information on, yet they don’t want to spoil the reading experience and leave the page, open a new tab, and do a search. 

Imagine a future where this information is entirely pushed to you without prompting the search, so engagement with the content you want is immediately at your fingertips. This will prompt more and more searches to happen away from traditional search results pages, and will happen more in context of wherever the user may be—reading a news article and wanting to know more about a topic or entity, accessing information on a commuter train, getting recommendations pushed while writing an email or social conversation on that topic, and much more. 

In the near term, innovation in search will provide more in-depth answers. For example, if someone types the name of a Major League Baseball team, they get a search results page with the team’s homepage and likely a couple pieces of recent news. In the next phase of search, you will type the name of that baseball team and without hitting the search button or leaving the search box, you will be presented with an interactive display that includes a link to their homepage, recent news, the results and box score of their last game, their overall record and standing in their division, a schedule of upcoming games, photos, videos, and social media streams. 

How about searching for a restaurant? In search today, you find links to the restaurant’s homepage, address, phone number, and rating. In new iterations of search, you will type the name of that restaurant and be provided with its address and map, a view of its menu, the option to reserve then and there via OpenTable, see its ranking on Yelp, CitySearch, Zagat—along with photos, tweets, what your friends have said about it in your private social networks, and a quick and simple way to compare it with other similar restaurants. 

The next chapter of search is going to be about providing answers and not just answers from Q&A sites. Most search indexes are in the 10s of billions of URLs, trending towards 100s of billions of URLs. Information is dynamic and changes frequently. For example, the movies running in a theater next to you are changing every week, and the timings may change even more frequently. The San Francisco Giants score changes frequently too, as do the players stats. So, while Q&A sites are really interesting in solving a certain set of needs for users, they are only a piece of the puzzle. 

But the rise of Q&A sites across the Web speaks to the underlying need for better answers. A new era in search is just around the corner that will make it easier to access the information, services and answers people are looking for. A list of links just doesn’t cut it anymore.

SOME time after the dotcom boom turned into a spectacular bust in 2000, bumper stickers began appearing in Silicon Valley imploring: “Please God, just one more bubble.” That wish has now been granted. Compared with the rest of America, Silicon Valley feels like a boomtown. Corporate chefs are in demand again, office rents are soaring and the pay being offered to talented folk in fashionable fields like data science is reaching Hollywood levels. And no wonder, given the prices now being put on web companies.

Facebook and Twitter are not listed, but secondary-market trades value them at some $76 billion (more than Boeing or Ford) and $7.7 billion respectively. LinkedIn, a social network for professionals, said it hopes to be valued at up to $3.3 billion in an initial public offering (IPO). They were wrong, the market valued LinkedIn at $9 billion! Microsoft announced its purchase of Skype, an internet calling and video service, for a frothy-looking $8.5 billion—ten times its sales last year and 400 times its operating income. And those are all big-brand companies with customers around the world. Prices look even more excessive for fledgling firms in the private market (Color, a photo-sharing social network, was recently said to be worth $100m, even though it has an untested service) or for anything involving China. There has been a stampede for shares in Renren, hailed as “China’s Facebook”, and other Chinese web giants listed on American exchanges. 

Same again, Only different

So is history indeed about to repeat itself? Those who think not point out that the tech landscape has changed dramatically since the late 1990s. Back then few people were plugged into the internet; today there are 2 billion netizens, many of them in huge new wired markets such as China. A dozen years ago ultra-fast broadband connections were rare; today they are ubiquitous. And last time many start-ups (remember Webvan and Pets.com) had massive ambitions but puny revenues; today web stars such as Groupon, which offers its users online coupons, and Zynga, a social-gaming company, have phenomenal sales and already make respectable profits. 

The this-time-it’s-different brigade also points out that the 1990s bubble expanded only after numerous web firms were floated on stockmarkets and naive investors pumped up the price of their shares to insane levels. This time, there have been relatively few big internet IPOs (though that is likely to change). And there is no sign of the widespread mania in the high-tech world that occurred last time around: the NASDAQ stockmarket index, a bellwether for the tech industry, has been rising but is still far below its peak of March 2000. 

In one respect the optimists are right. This time is indeed different, though not because the boom-and-bust cycle has miraculously disappeared. It is different because the tech bubble-in-the-making is forming largely out of sight in private markets and has a global dimension that its predecessor lacked. 

The bubble is being pumped partly by wealthy “angel” investors, some of whom made their fortunes in the late-1990s IPO boom. Their financial firepower has increased and they are battling one another for stakes in web start-ups. In some cases angels are skimping on due diligence to win deals. When it comes to investing in more established companies like Facebook and the bigger web firms, traditional venture capitalists now face competition from private-equity companies and bank-led funds hunting for profits in a bleak investment environment. Gucci-shod leveraged-buy-out kings may appear to be more sophisticated than the waitresses buying dotcom shares a decade ago—but many of the newcomers are no more knowledgeable about technology. 

This boom also has wider horizons than the previous one. It was arguably started by Russian investors. Skype was born in Estonia. Finland’s Rovio, which makes the popular Angry Birds smartphone game, recently raised $42m. And then there’s China. Renren and Youku, “China’s YouTube”, supposedly offer investors a chance to profit both from the country’s extraordinary growth and from the broader impact of the internet on commerce and society. Chinese web start-ups often command $15m-20m valuations in early financing rounds, far more than their peers in America. 

These differences will have important consequences. The first is that the bubble forming in the private market could be pretty big by the time it floats into the public one. Facebook may turn out to be the next Google, and LinkedIn has a fairly solid revenue plan. But they will be followed by less robust outfits—the Facebook and LinkedIn wannabes—with prices that have been dangerously inflated by the angels’ antics. 

The froth in China’s web industry could also lead to unrealistic valuations elsewhere. And it may be China that causes the web bubble eventually to burst. Few of those rushing to buy Chinese shares have thought through the political risks these companies face because of the sensitivity of their content. A clampdown on a prominent web firm could startle investors and prompt a broader sell-off, as could a financial scandal. 

And after the angels have fallen?

With luck the latest web bubble will do less damage than its predecessor. In the 1990s internet euphoria caused a dramatic inflation in the price of telecoms firms, which were creating the infrastructure for the web. When internet firms’ share prices plummeted, telecoms investors suffered too. So far, there has been no sign of such a spillover effect this time around. But the globalization of the internet industry means that many more people could be tempted to dabble in web stocks in the current boom, adding to the pain of the bust. 

When will that be? This paper warned about both the last internet bubble and the American property bubble long before they burst. Irrational exuberance rarely gives way to rational scepticism quickly. So some bets on start-ups now will pay off. But investors should take a great deal of care when it comes to picking firms to back: they cannot just rely on somebody else paying even more later. And they might want to put another bumper sticker on their cars: “Thanks, God. Now give me the wisdom to sell before it’s too late.”

Careful folks... While Washington appears to be addressing voter sentiment.  We need to see both sides of the coin.  What rights are we giving up this time??

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US lawmakers announced plans on Friday to introduce "Do Not Track" legislation that would let Internet users block companies from gathering information about their online activities.

Senator Jay Rockefeller, a Democrat from West Virginia, said his "Do Not Track Online Act of 2011" will offer a "simple, straightforward way for people to stop companies from tracking their every move on the Internet."

"Consumers have a right to know when and how their personal and sensitive information is being used online -- and most importantly to be able to say 'no thanks' when companies seek to gather that information without their approval," Rockefeller said in a statement.

In the House of Representatives, Joe Barton, a Republican from Texas, and Edward Markey, a Democrat from Massachusetts, released a draft of a separate "Do Not Track" bill aimed at protecting children online.

US senators John Kerry and John McCain introduced an online privacy bill last month that would require companies gathering data to allow a consumer to "opt-out" of having their information collected.

The former Democratic and Republican presidential candidates said their bill seeks to strike a balance between protecting the personal information of Web users and the needs of businesses to conduct electronic commerce.

The flurry of legislation comes amid a series of high-profile data theft incidents, including the theft of personal information from more than 100 million Sony accounts, and controversy over tracking technology in Apple's iPhone and in smartphones running Google's Android software.

Apple and Google are to attend a congressional hearing on privacy next week following claims the iPhone and Android devices regularly track a user's location and stores the data.

"We look forward to engaging with policymakers about how we protect our users' mobile privacy," Google said in an email to AFP.

Google explained that people must opt-in to use location-sharing on Android-powered smartphones and get to control how data is used.

"Any location data that is sent back to Google location servers is anonymized and is not tied or traceable to a specific user," the Mountain View, California-based Internet titan said.

Apple vice president of software Guy Tribble was listed as representing the Cupertino, California-based iPhone, iPad and iPod maker at the hearing.

Apple on Wednesday released updated software for iPhones to fix "bugs" that resulted in location data being unencrypted and stored for up to a year.

The changes came in an iOS 4.3.3 software update.

Apple has denied tracking iPhone users, maintaining that locations of Wi-Fi hotspots and cell towers was used for services such as navigation or targeted ads.

Rockefeller, chairman of the Senate Commerce Committee, said his bill would create a "legal obligation" for all online companies to honor the choice of consumers who say they do not want to be tracked online.

It would give the Federal Trade Commission the power to pursue any company that does not honor the request.

Barton and Markey, the co-chairmen of the Bi-Partisan Congressional Privacy Caucus, said their "Do Not Track Kids Act of 2011" establishes new protections for the personal information of children and teenagers.

"For millions of kids today, the Internet is their new 21st century playground," Markey said in a statement. "But kids growing up in this online environment also need protection from the dangers that can lurk in cyberspace."

The bill would notably require online companies to obtain parental consent before collecting children's personal information and prohibit them from using personal information of children and teens for targeted marketing.

It would also create an "Eraser Button" for parents and children that would allow users to eliminate publicly available personal information content "when technologically feasible."

Now’s a good time for startups: VCs are investing more money now than they have since the recession hit. But do you have to be in Silicon Valley to get the contacts, staff, and VC attention you need to build a venture-backed company?

There’s no doubt, Silicon Valley is frequently the first choice for startups. And there’s a reason why: 39 percent of 2010 venture capital dollars were spent there, according to the National Venture Capital Association and PricewaterhouseCoopers. But the second largest region is along the I-95 corridor on the east coast, which attracted $6.8 billion, or 31 percent in 2010. And there are several great places for venture-backed startups there.

The best place to start your particular business ultimately depends on the field you’re in, but clearly, it’s best to stick to the coasts, because that’s where the money is.

Since much has been written about Silicon Valley, let’s look at the major startup ponds on the opposite side of the country that VCs are fishing right now.

1. New York

Over the last five years, New York’s share of east coast investments has increased from 18.3 percent in 2005 to 33 percent in 2010, almost doubling. What has fueled this? Digital media and e-commerce. And how have those industries performed? Over the same five years, net internal rates of return in these sectors have been 29 percent, according to the Mid-Atlantic Venture Association. New York is on a roll.

2. Boston

Biotech, material sciences, clean energy and mobile. These industries are vibrant and have eclipsed the region’s hardware and enterprise software businesses for venture capital funding. With an abundance of universities and lab space, this town has always attracted young people with creative ideas. Its educated workforce is unrivaled, and the region has reinvented itself over the last decade.

3. Washington D.C.

The Internet’s backbone started here. It is no coincidence Network Solutions, PSInet, MCI/Worldcom, AOL, Nextel, Sprint, Verizon and Mobile365 all operated in our Nation’s Capital they were dependent on changing telecommunications regulations. A decade later, we’re seeing a revival of the DC tech scene, built on the very Internet backbone that was created here.

This is the place to be if you’re in the business of cybersecurity: DC is a strategic hub, and that will only intensify as political uncertainty continues abroad. Ventures with affiliations to government agencies like DARPA, NSA or the CIA will do well here too.

Finally, look no further than the White House: the government is making efforts to be entrepreneur-friendly. Just weeks ago, the President joined forces with AOL co-founder Steve Case to spearhead Startup America, an initiative to spur investment in innovative American startups.

DC is emerging as a hotbed for startups and investment firms.

Global revenue from sales of wireless telecommunications modules for Machine-to-Machine (M2M) systems are set to rise nearly sevenfold between 2010 to 2014, according to market research firm iSuppli. M2M modules are part of the phenomenon known as the Internet of Things and allow devices to communicate with each other using mobile technologies like GRPS, EDGE and CDMA 2000. Isuppli predicts that the M2M communications module market will generate total revenues of $1.0 billion in 2010 and will rise to a massive $6.5 billion by 2014.

To date, the largest markets using M2M modules have been wireless gateways and remote monitoring. Isuppli's report predicts that by 2014, the automotive industry and utilities will be the heaviest users of M2M technology. Utilities require wireless connectivity for smartgrid applications like advanced metering infrastructure and grid monitoring. In terms of meters alone, every household will probably eventually have connected electricity, water and gas meters. However, meters use multiple communications technologies, including powerline and connected broadband communications. Isuppli estimates that only 40% will use wireless telecommunications. The utilities vertical is still expected to grow from $121 million in 2009 to a whopping $1.5 billion in 2014. 

The automotive sector will use wireless telecommunications almost exclusively, the report says. That market is expected to increase from $133 million in 2009 to $565 million in 2014. Healthcare is currently one of the smallest market sectors but Isuppli says it is the fastest-growing, with the market projected to swell to $364 million by 2014 from a mere from $4 million in 2009. Applications range from monitoring of patients with chronic diseases to virtual video consultations. 

Because of its lower cost, older 2G mobile technology currently dominates with 92 percent of market share. However, 3G modules are growing at 3 times the rate of 2G as prices drop and the link speeds required by M2M applications increase. 3G modules are predicted to comprise 40 percent of the market by 2014.

There are still many problems to overcome before the M2M communications market can really take off. The market is very fragmented due to the disparate and often conflicting requirements of the various verticals.The emergence of dominant verticals like utilities and automotive should help constrain those requirements. 

Another issue is that mobile carriers have traditionally mandated a long and complex certification process for communications modules supplied to their handset manufacturers. Certification can take 3-12 months to complete and hampers the M2M market considerably when applied to devices there. Some carriers are starting to develop “fast-track” certifications for devices that will be used in M2M applications as well as devising new data plans for such devices. Most M2M applications do not use a large amount of bandwidh, or use it in off-peak hours. 

Finally, the market supplies components rather than solutions. Many device manufacturers are adding communications to their devices for the first time, so they lack internal expertise. This is a similar situation to utilities that are adding smart meters to their infrastructure and suddenly have to deal with all the new communications and data management requirements that involves. Device manufacturers still have to deal with multiple suppliers, such as the M2M module manufacturer, device manufacture and user interface developers, to meet their requirements.

Some of you may not even know what a Femtocell is.  Let me explain and explain why this is significant.

At first that may seem like a huge deal but there are currently around 256,000 cellular towers in the US compared to femtocells which now number at about 350,000. These femtocells are called different things by each carrier with Verizon going with Network Extender, AT&T choosing MicroCell, and Sprint with its Airave. The one thing these all have in common is that customers are dishing out $150+ to install and use a mini cellphone tower in your house which uses your broadband internet and your electricity bill to provide you service the carrier was supposed to offer in the first place. I simply feel like we have this equation wrong. Carriers should be paying us to install these devices!

Either way sales of femtocells is not slowing down anytime soon. Carriers are being flooded with connections that their infrastructure can barely handle. Some are turning to Wi-Fi to offload heavy data usage but all of these solutions seem like a bit of a cop out. I am truly hoping that LTE will alleviate some of these pain points but my conversations with experts in LTE do not suggest it will be any easier without a huge influx of additional frequency bandwidth for carriers.  Experts in WiMax feel strongly that it will not have problems handling the seemingly exponential demands on their networks. In fact, many WiMax experts are puzzled at the global movement and accpetance of LTE in their 4G arsenal. 

I was curious how many of you have a femtocell in your home? I've been using the Sprint Airave in my home because there are rooms that are basically wrapped in concrete and reception has always been spotty in these corners. After the Airave we all have 5 full bars of signal and better battery life.  However, we sometimes experience a delay as is common in VoIP communications.