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Computing

Bubbles, Light and Silicon Valley Nesting

The digital economy is making a comeback, but some worry we may be headed for another crash…Moore’s Law takes a beating from Moore…the bubble bounce had led to more savings, and less hiring.

Bubbles, Bubbles Everywhere?

“Gangbusters” doesn’t begin to describe the rate at which certain sectors of the tech market have been booming in the past few months. The search battles have had Google and Yahoo unveiling new services weekly, and not a day passes without news of some new mobile-media device or service. But industry watchers are facing down a familiar question: are these technology bubbles reaching the popping point?

For example, advertisers have been pouring money into online forums. The expectation is that these are tremendously successful ways of reaching interested consumers since online ads can be targeted at specific viewers based upon search terms.

This has been a major driving force behind the development of search tools and ramped-up versions of e-commerce websites. Many remain optimistic that, if done rationally, this could continue to be a profitable way to sell products for some time to come.

However, cynical market watchers continue to hold their breath with the realization that ad investments are typically cyclical, with periods of overzealous spending in new media followed by a return to more traditional forums.

The biggest potential bubble is digital entertainment.

Efforts to sell online music are still loss leaders – even for iTunes, which reportedly has 70 percent of the market. Sure, Apple posted a 558 percent increase in iPods sales for the quarter, and there are many who believe that digital music players are reaching the critical mass required to turn online retailers into sustainable businesses.

But iPod competitors are growing in number and quality, and are starting to strip Apple of its stronghold. What’s more, Apple has been stingy with its FairPlay DRM technology, which means that the only device that will play iTune’s tracks is the iPod. That reactive stance – similar to the strategy used by the company at the dawn of the personal computer age – is likely going to send users to competing services that encourage use across a variety of hardware devices.
 
Among the iPod challengers are smart phones, which mobile carriers are hoping turn the cell phone into an all-in-one entertainment center. The expectation is that such efforts will boost sales of phones and distribution of services.

These carriers, though, face their own dilemmas. Whether it be songs, news, or television programming, mobile carriers are typically not aligning themselves with service providers that can dole out any old content that a user’s heart desires. Instead, they have been working with specific content providers – meaning that different carriers will provide different content, thus limiting their appeal.

Additionally, many question whether there is a large enough market demand for this type of all-in-one packaging, particularly when it means more complex user controls and bigger power drain on a device that already has battery life issues.

Light-Hearted Processing

Gordon Moore announced this past week that his own law is probably going to break down in 10 to 20 years, which is about a decade earlier than what most industry experts quote.  On the other hand, there are a countless number of researchers trying to build the ultimate next leap in technology that will kick transistors (and thus, Moore’s Law) to the curb as if they were vacuum tubes. Many seem to be having early successes. In February, Hewlett-Packard revealed a nanowire-based “crossbar latch” technology that seems a likely replacement to the transistor.

But, as Gordon also predicted last week, transistors won’t go quietly into that good night. Scientists at the University of Illinois came up with a new structure (dubbed the pseudomorphic heterojunction bipolar transistor) that breaks the 600 gigahertz processing mark and could soon reach into the terahertz range.

Advancements such as this will keep more traditional computing in the game longer, and will make entirely different technologies a tougher sale when they become ready in 6 to 10 years. Looking even further down the line, there will be optical computers that use light instead of electricity to deal with data – as demonstration by a Harvard University researcher’s use of ultra-cold atoms to control light and form the core processing unit of such a device.

Nesting in Silicon Valley

Information Technology revenues are up, but IT employment continues to fall.

Companies in the Silicon Valley 150 posted a 14 percent rise in revenue in 2004, but that hasn’t stimulated the economy. In the first quarter of 2005, technology sector saw 59,537  jobs disappear. That’s almost double the amount from the same time last year.

According to the San Jose Mercury News, technology companies are putting rising some of their profits into infrastructure and raises – but mostly, the companies are building giant cash-on-hand nest eggs to guard against the possibility of rough times ahead.

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Computing

From the latest smartphones to advances in quantum computing, the hardware behind today's digital age is rapidly changing.

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