Sneak Peek at the Top Tech Stocks in 2014

By Matt Egan

Tech stocks had a very strong 2013, with names like Netflix (NASDAQ:NFLX) and Facebook (NASDAQ:FB) leading the charge higher.

But as the Federal Reserve takes its foot off the stimulus pedal and the economy looks to ramp up growth, what tech names will sparkle in 2014?

These are the four tech stocks Jefferies predicts will do the best next year: Activision Blizzard (NASDAQ:ATVI), Intel (NASDAQ:INTC), Micron (NASDAQ:MU) and Microsoft (NASDAQ:MSFT).

Newly-independent Activision is known for its blockbuster video-game titles “World of Warcraft” and “Call of Duty.” The latter game shattered records earlier this year when it generated $1 billion of sales in just a one day.

“Gamers continue to overlook anything but the biggest, baddest titles” and Activision has a “small portfolio of mega-hit games,” Jefferies analyst Brian Pitz wrote to clients this week. He set a price target of $23 on Santa Monica, Calif.-based Activision.

One of the biggest catalysts behind the bullish bet on Activision is the company’s $8.2 billion move to gain independence from France’s Vivendi.Pitz believes Activision has set conservative guidance around the transaction.

At the same time, Activision should stand to gain from the first console cycle in seven years as Sony (NYSE:SNE) and Microsoft have rolled out their PlayStation 4 and Xbox One devices.

Pitz also pointed out a little-noticed policy change in “World of Warcraft” that allows gamers to pay to boost their characters to a required level to play the new game. He said the move removes an obstacle that turned off subscribers.

If sales of next-generation consoles and Activision beat forecasts, Jefferies sees the stock climbing to as high as $25. The firm also set a downside target of $19 if there are console supply constraints and “Call of Duty” fatigue.

As the world’s largest chip maker, Intel continues to show off its ability to innovate better than competitors.

In fact, Jefferies analyst Mark Lipacis believes Intel is one of just two semiconductor makers that is “able to sustain a leading edge manufacturing capability in the Moore Stress era.” Moore’s Law, coined by an Intel co-founder, says the number of transistors that fit on an integrated circuit doubles roughly every two years.

This innovation has allowed Intel to drive transistor costs down, while mobile rival Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) is bracing for costs to rise.

“As a result, we expect Intel to have advantages in cost, performance, and power for the first time in mobile in 2014, which should translate to share gains in tablets and handsets,” Lipacis wrote to clients.

Jefferies notes that Intel shelled out around $60 billion on research and development and capital expenditures between 2011 and 2013, roughly doubling the spending of TSMC.

If Intel’s tablet market share ramps up quicker than expected and other factors go the company’s way, Jefferies believes the stock could rise to $38. The downside scenario’s price target of just $17 would come into play if tablet cannibalization of PC accelerates and Intel’s gross margins compress.

The inclusion of this Flash memory maker on the Jefferies list is noteworthy given Micron’s incredible surge in 2013. The stock is up more than 230%, making it one of the best performers on the Nasdaq 100 year-to-date.

But Jefferies believes the gross margin expansion that Micron has enjoyed over the past 12 months is “permanent, not cyclical, in nature.” Analyst Sundeep Bajikar sees the company’s non-GAAP gross margins surging by 2,000 basis points over the next 12 to 18 months after jumping 1,400 basis points through the first three quarters of 2013.

Jefferies cited structural changes in the Dynamic random-access memory, or DRAM, market which has consolidated from 24 companies in 1987 to just three that have over 90% of the market now.

The firm also cited Micron’s $2.5 billion acquisition of Elpida, which should help contribute to the company’s margin expansion.

If PC unit demand recovers, Jefferies sees Micron’s stock hitting $35, while the downside scenario calls for the Elipida effects being delayed and a price target of just $14.

After frustrating shareholders for years with subpar gains, Mr. Softee had a stellar 2013 with a 38% rally. The tech titan has also undergone a transformation by announcing the departure of longtime CEO Steve Ballmer, streamlining its organization through a sweeping reorganizationand acquiring the devices division from Nokia (NYSE:NOK) for $7.2 billion.

Jefferies analyst Ross MacMillan believes the reorganization “helps to highlight the value in the commercial business,” which sports higher revenue and gross margins than the consumer side of the business. For example, the firm notes that about 85% of the value of Office resides on the commercial side.

MacMillan also cited the move to cloud-based Office 365, which he said will allow Microsoft lower costs for consumers and small businesses and drive recurring revenue.

“MS Office continues to be one of the stickiest apps in the market and serves as the personal productivity standard for enterprises and consumers,” MacMillan wrote.

Jefferies set an upside price target of $48 on Microsoft and said this is attainable if PC market share improves and Windows gains more traction in the tablet and smartphone market.

On the downside, Microsoft’s stock could drop to $30 if its Surface tablet struggles and Windows 8 adoption misses the mark.

Five Technologies That Will Soon Change Your Life

By Jennifer Booton

In the next few years researchers envision a topsy-turvy future, where classrooms learn from their students rather than other way around and brick-and-mortar stores make a comeback after years of suppression.

Driving this thought is a wave of soon-to-be released supercomputers that will be designed with cognitive function, meaning they’ll be able to think, learn, even reason.

The revelations were unveiled this week in IBM’s (IBM) “5 in 5” list, or five technologies it believes will drastically alter humanity over the next five years.

The list is based on the emergence of hyper-personalized technologies deriving from big data analytics, cloud computing and so-called “learning technologies.”

“IBM researchers are exploring the idea that everything will learn,” the company said.

These technological breakthroughs, it adds, will amplify human ability, assist in making good decisions and offer protection. In essence, they’ll help people navigate the complex world in new powerful ways.

Smart Classrooms

The idea is that in five years cloud-based learning systems will enable classrooms to create personalized lesson plans for systems based on their vastly different learning styles.

“Imagine a system that knows you’re a visual learner with a math phobia,” IBM says. “Not only will the classroom create a lesson plan to help you master algebra, it will preempt difficulties in calculus.”

In time, it says, teachers will be able to reach more students in more meaningful ways, ending the era of one-size-fits-all education and instead creating personalized, experiential learning.

Buying Local

With online sales reaching $1.0 trillion globally last year, local stores have been struggling to compete with the likes of (AMZN). But IBM believes that will all change within five years.

Smart mobile devices, from wearable technology to tablets, that tap cloud-based cognitive systems, will be able to learn about shopper’s personal preferences, it says.

The technology would enable customers to have personalized shopping experiences while still achieving the instant gratification of receiving purchased items instantaneously.

“Local shops will make online-only stores looking downright quaint,” Big Blue said. “As consumers share more personal information, they’ll see retail stores transform into immersive shopping destinations personalized just for them.”

Doctor DNA

From robots that can now conduct surgery to online medical records, technological advancements have already helped to modernize healthcare. But IBM believes doctors will soon be able to do much more using their patient’s DNA.

“In five years cancer will be treated down to a DNA level with treatment plans that will be more personalized and accurate,” it said.

Today, it may take several months to crunch a patient’s full DNA and formulate a targeted treatment. But soon sequencing DNA may take just hours or seconds, becoming the standard for treatment, IBM says.

Meanwhile, the cloud will enable smarter healthcare, helping doctors to access more information, faster, with fewer resources. That will enable them to create DNA-specific treatments for anything from strokes to heart disease.

Futuristic Cities

With predictive analytics, crowdsourcing and other emerging technologies, cities will be able to actually adapt to the wants and needs of its citizens.

“As we speak to our cities, they will listen and become a direct reflection of all of us who live there,” the computer maker said.

Instead of fixed bus schedules, for example, monitoring systems that predict storms during rush hour will be able to dispatch more buses to meet an expected influx in demand.

Traffic, accidents and potholes would be reported immediately through traveler’s mobile devices — something already seen through the app Waze, which Google (GOOG) acquired this year for about $1.0 billion.

“Systems will connect billions of events in real time to anticipate movement and react to human preferences, patterns and demand,” IBM said. “By engaging citizens, city leaders will be able to respond directly to our needs and dynamically allocate resources.”

Digital Guardians

With cyber security becoming an unflinching threat (just take a look at the Black Friday Target (TGT) debacle), advanced security systems will be able to use powerful cloud-based analytics to create personalized defense systems.

With 12.6 million victims of identity fraud in the U.S. last year alone, this so-called guardian will be able to spot unusual patterns that could be precursors to cyber attacks, fraud or identity theft.

“Security is evolving from being based on rules like passwords to being automatic and based on who we are,” IBM said. “In time, security will be less a barrier than an enabler, made stronger by us just being us.”

This comes as many security experts begin questioning the traditional username/password mechanism, with hackers and fraudsters increasingly advancing their tactics.

Other solutions to this are biometrics, such as using a person’s physical body — eyeball scans, for instance — or voices to unlock data.


Apple Seals iPhone Deal with China Mobile

By Matt Egan

Ending years of hard-fought negotiations, Apple (AAPL) unveiled an agreement over the weekend to sell its iPhone to China Mobile’s 760 million subscribers.

The landmark deal could help boost Apple’s growth prospects, which have slowed in recent quarters amid tough competition in the U.S. and other core markets.

“China is an extremely important market for Apple and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world’s largest network,” Apple CEO Tim Cook said in a statement.

The official announcement confirms recent reports that Apple wasnearing an agreement with the world’s largest wireless carrier.

Apple said its iPhone 5s and 5c will be available to China Mobile’s customers across mainland China beginning on January 17. Subscribers can pre-register beginning on December 25.

“We know there are many China Mobile customers and potential new customers who are anxiously awaiting the incredible combination of iPhone on China Mobile’s leading network,” said Xi Guohua, chairman of China Mobile.

The agreement comes as China Mobile rolls out its 4G network, which the company says will be the biggest in the world. Apple had signaled it would wait to introduce the iPhone until the launch of the new network.

Cantor Fitzgerald said it believes Apple will sell 20 million to 24 million iPhones to China Mobile in 2014. The extra sales should boost Apple’s earnings per share by about $4.00, the firm said.

“This has been the most difficult carrier agreement for Apple to negotiate in its history; however, we believe the opportunity for the iPhone to expand its reach within China Mobile’s wireless subscriber base will prove to be well worth the wait,” Cantor Fitzgerald Brian White wrote in a note to clients.

Shares of Cupertino, Calif.-based Apple rose 3.40% to $567.70 in premarket trading Monday morning. The rally positions Apple to extend its tepid 2013 rally of just 3%.

Japan’s 7-Eleven kingpin looks to U.S. to inspire online revolution


(Reuters) – The 81-year-old Japanese executive who built 7-Eleven into the world’s biggest convenience store chain has a new mission: turning more than 50,000 bricks and mortar stores in Japan into portals to a new online retail empire.

To do it, Toshifumi Suzuki, the chief executive of department store to mail order retailer Seven & I Holdings Co, is once again seeking inspiration in the United States. It’s over 40 years since he kickstarted a revolution in Japanese retail by bringing 7-Eleven stores across the Pacific, eventually buying the U.S. owners after they sought bankruptcy protection.

In Suzuki’s future vision, goods ordered online from Seven & I’s department stores and supermarkets, as well as outside partners, will be delivered to and picked up from the thousands of 7-Eleven stores spread across Japan at customers’ convenience. Most are open 24 hours a day.

“I’ve been talking for a while inside the company about integrating the real (bricks and mortar) side with the Internet, but nobody was taking it seriously,” Suzuki told Reuters. In September, the Japanese retail guru decided to change all that.

He dispatched about 50 heads of the group’s companies – his top lieutenants – on a mission to the U.S. He instructed them to visit retailers like Macy’s Inc, shopping malls and Internet companies, examples of what he called “omnichannel” integration that are beginning to yield results – with orders to figure out how to apply it in Japan.

“In the U.S. they observed, they listened and they realized that this was possible, and now they’re all motivated,” Suzuki said.


Suzuki said the company is already in discussions on point-of-pickup arrangements for Japan with online retailers, including major players.

“We’ve had lots of approaches from people wanting to be partners,” Suzuki said, is not among them.

At the moment, 7-Eleven’s stores in Japan don’t offer the range of e-commerce services available at their U.S. counterparts. On the other side of the Pacific, for example, 7-Eleven maintains dedicated lockers for picking up merchandise ordered online from Amazon.

Amazon does have point-of-pickup arrangements with 7-Eleven’s chief Japan rivals, FamilyMart Co Ltd and Lawson Inc. But 7-Eleven only offers such services for limited online product offerings, such as upscale cosmetics, purchased from other Seven and I retailers.

With no plans to step down any time soon, Suzuki has a reputation for a willingness toinnovate and make big plays. In 1991, his company acquired a majority stake in its U.S. mentor and original 7-Eleven Inc owner Southland Corp.

The Japanese company then turned its U.S. unit around, transferring sophisticated data systems developed in the U.S. but refined in Japan, to manage inventories and optimize merchandise strategy at individual stores.

The company also pioneered many of the services and products – freshly prepared “bento” box meals, 24-hour banking and bill payments, a premium private label brand – that made Japan’s convenience stores and especially 7-Eleven among the most profitable in the world.

To bolster its offerings in other retail segments, this month it acquired a 49.9 percent stake in the operator of 10 Barneys New York high-end apparel stores in Japan.

(Editing by Edmund Klamann and Kenneth Maxwell)

Biodegradable Batteries to Power Smart Medical Devices

Prototype batteries that dissolve safely in the body could power ingested devices.

By Katherine Bourzac

Batteries made from pigments found in cuttlefish ink may lead to edible, dissolvable power sources for new kinds of medical devices. Researchers led by Carnegie Mellon University materials scientist Christopher Bettingerdemonstrated the new battery. “Instead of lithium and toxic electrolytes that work really well but aren’t biocompatible, we chose simple materials of biological origin,” Bettinger says.

Conventional battery materials are not safe inside the body unless they’re encased in bulky protective cases that must eventually be surgically removed. Electronics that can either be swallowed or implanted in the body without causing harm could monitor wound healing and disease progression, release drugs, and enable more sensitive neural and cardiovascular sensors and stimulators.


The prototype sodium-ion battery from the CMU researchers uses melanin from cuttlefish ink for the anode and manganese oxide as the cathode. All the materials in the battery break down into nontoxic components in the body.

The CMU group is working on edible electronics that can be swallowed like pills. These electronic medicines could let doctors deliver sensitive protein drugs—which are ordinarily destroyed in the stomach—orally rather than by injection. This could make therapies such as arthritis drugs that currently have to be given intravenously at the hospital much easier to take. Smart pills, says Bettinger, could carry sensors and circuits and release drugs only after they’ve passed the harsh environment of the stomach and reached the intestine, where the drugs would be absorbed into the body. Edible electronics could also be used by athletes to monitor their core body temperature and other body metrics.

The melanin batteries don’t match the performance of lithium-ion batteries, but they don’t have to in order to be useful, says Bettinger, who was named one ofMIT Technology Review’s 35 innovators under 35 in 2011. The prototypes, described in the journal Proceedings of the National Academy of Sciences, currently provide enough power to run simple sensors. Bettinger says they’re working to improve their power output and storage capacity by experimenting with different forms of melanin.

Bettinger’s group is not the first to propose electronic pills. A few companies, including Olympus, already make capsules that contain cameras; but these kinds of systems, which use traditional electronic and optical components to image the digestive system, can’t be swallowed regularly, says Bettinger.

Another company, Proteus Digital Health of Palo Alto, California, makes a personal-health monitoring system that includes pills affixed with digital identification tags. A small chip that stores an identifying number is sandwiched between two metal foils that act as a partial battery that the company’s chief technology officer, Mark Zdeblick, calls a “biogalvanic cell.” When the pill is swallowed, the metals come into contact with ions in the stomach, activating the device by enabling current to flow between the metal foils. The chip modulates the current flowing between the metal foils to produce a weak electrical field that is sensed by a patch worn by the patient. This allows people and medical professionals to monitor when they take their drugs.

John Rogers, a materials scientist who makes biodegradable electronics at the University of Illinois at Urbana-Champaign, says more power will be required for more sophisticated edible and implantable electronics, and one way to provide that is with full batteries like Bettinger’s.

Rogers is also working on biodegradable batteries for medical use. In a paper that will be published in the journal Advanced Materials, his team describes batteries made out of the dissolvable metals and trace minerals magnesium and molybdenum. Biodegradable batteries, Rogers says, will enable “devices that go into the body monitor wound healing, deliver therapy as necessary, and then naturally disappear after the wound is completely healed, thereby eliminating unnecessary strain on the body.”

Intel Robot Puts Touch Screens through Their Paces

A robot able to play touch screen games like Cut the Rope can judge whether humans will find a new device responsive.

By Tom Simonite

In a compact lab at Intel’s Silicon Valley headquarters, Oculus the robot is playing the hit game Cut the Rope on a smartphone. Using two fingers with rubbery pads on the ends, the robot crisply taps and swipes with micrometer precision through a level of the physics-based puzzler. It racks up a perfect score.

It’s a far cry from the menial work that Oculus’s robot arm was designed for: moving silicon wafers around in a chip fab. But it’s not just a party trick. Intel built Oculus to try to empirically test the responsiveness and “feel” of a touch screen to determine if humans will like it.

Oculus does that by analyzing how objects on a device’s screen respond to its touch. It “watches” the devices that it holds via a Hollywood production camera made by Red that captures video at 300 frames per second in higher than HD resolution. Software uses the footage to measure how a device reacts to Oculus—for example, how quickly and accurately the line in a drawing program follows the robot’s finger, how an onscreen keyboard responds to typing, or how well the screen scrolls and bounces when Oculus navigates a long list.

Numerical scores are converted into a rating between one and five using data from cognitive psychology experiments conducted by Intel to discover what people like in a touch interface. For those experiments, hundreds of people used touch screens set up to have different levels of responsiveness. These tests were devised by psychologists in Intel’s interaction and experience group, which studies the relationships people have with computers (see “Intel Anthropologist Questions the Smart Watch”).

The scores produced by Oculus and the psychological research have proved valuable to engineers at companies working on touch screen devices based around Intel chips. They’ve also been useful to Intel’s chip designers, says Matt Dunford, the company’s user experience manager. “We can predict precisely whether a machine will give people a good experience,” he says, “and give them numbers to say what areas need improving.”

The conventional approach would be to have a user experience expert test a touch screen and give his expert but personal assessment, says Dunford. That doesn’t always offer a specific indication of what needs to be tweaked to improve the feel of a device.

Intel won’t share specific details of how it defines the difference between a touch screen that is sluggish and one that is snappy. But robotics engineer Eddie Raleigh, who helped build Oculus, says a good touch screen follows a swiping finger with only tens of milliseconds of delay.

Intel’s tests on human subjects have also shown that perceptions of quality can vary significantly depending on how people are using a device. People unconsciously raise their standards when using a stylus, for example, says Raleigh. “People are used to pens and pencils, and so it has to be very fast, about one millisecond of delay,” he says. Meanwhile, children generally expect a quicker response from a touch screen than adults, whatever the context.

Raleigh says his team can take such differences into consideration when setting up Oculus for a test. “We can mimic a first-time user who is being slower or someone hopped up on caffeine and really going fast,” he says.

Intel currently has three Oculus robots at work and is completing a fourth. The device can be used on any touch screen device, from a smartphone up to an all-in-one PC. It uses a secondary camera to automatically adjust to new screen sizes.

Intel has also built semi-automated rigs to test the performance of audio systems on phones and tablets. A soundproofed chamber with a dummy head containing speakers and microphones and a camera is used to test the accuracy and responsiveness of voice-recognition and personal assistant apps. A range of sophisticated cameras and imagers are used to check the color a display shows.

Jason Huggins, co-founder and chief technology officer of Sauce Labs, a company that offers phone and Web app testing, says Oculus has secret cousins inside most major phone and tablet makers. “The Samsungs, LGs, and Apples all have these kinds of things, but they don’t talk about it because they don’t want their competitors knowing,” he says. Intel’s Dunford says Oculus represents an improvement on previous devices in the industry because it compares devices using data on how people actually perceive touch screens. Other robots, he says, tend to see how devices perform against certain fixed technical specifications.


Huggins is trying to widen access to such robots because he believes they could help app developers polish their software. He has created an open source design for a robot called Tapster that can operate touch devices using a conventional stylus, with much less finesse than Oculus but at a fraction of the price. Many of the parts can be made on a 3-D printer. Huggins has sold about 40 of the machines and is working on integrating a camera into the design.

“If I can make a robot that can actually test apps, I suspect there’s going to be a serious market,” he says. Software developers currently pay companies like Sauce Labs to test apps using either human workers or software that emulates a phone or Web browser. Huggins says having a robotic third option could be useful, and predicts that robotic testing of all kinds of computing devices will become more common.

“We have to think about this because software is not trapped inside a computer behind a keyboard and mouse anymore,” he says. “You’ve got phones, tablets, Tesla’s 17-inch touch screen, Google Glass, and Leap Motion, where there’s no touching at all. These things depend on people having eyeballs and fingers, so we have to create a robotic version of that.”

Google’s Robot Recruits Dominate DARPA’s Rescue Challenge

Two companies acquired by Google demonstrate remarkable feats of agility and dexterity (albeit slowly) at a competition held in Florida.

Crowds gathered at a NASCAR racetrack in Miami this weekend to witness a more sedate sport than usual, as some of the world’s most advanced legged robots inched their way through a range of emergency tasks, including clambering over rubble, clearing debris, and operating a fire hose. And two of the robot-makers acquired recently by Google, Boston Dynamics and Schaft, dominated the contest, giving some sense of why the company was so keen to snap them up.

In all, sixteen teams took part in the challenge (see photo gallery: “Robots to the Rescue, Slowly”). The robots were operated remotely but still required sophisticated automation to cope with the complexities and uncertainties faced when dealing with the real world. Teams scored points by completely tasks inspired by a real emergency faced at Fukushima-Daiichi nuclear disaster in 2011: as hydrogen leaked from the stricken plant, human rescue workers risked their lives trying to reach and operate a valve that might’ve stemmed the leak. The robots faced eight tasks: walking over uneven ground; moving chunks of debris from a walkway; turning a valve; drilling a hole in a wall; climbing a ladder; maneuvering through several doors; manipulating a hose; and driving a golf cart along a snaking course.

Such jobs are, of course, simple for humans. But creating machines capable of stepping into role of a rescue worker is no easy feat. Walking across uneven, unfamiliar terrain and reliably manipulating everyday objects remain incredibly difficult engineering challenges (which explains why the robots worked at speeds that often felt exasperatingly slow). But if such skills can be mastered, they could also be useful for much more than just rescue missions.

Schaft, a spin-out of the University of Tokyo that acquired by Google in recent months, won the contest with 27 out of a possible 32 points. The teams that placed second and fourth both used a humanoid robot called Atlas, developed by another Google recruit, Boston Dynamics (see “Google’s Latest Robot Acquisition Is the Smartest Yet”).  The second and fourth placed teams, from IHMC and MIT respectively, had just a few months to learn how to program and operate these Atlas machines. A team from CMU placed third with robot called CHIMP.

While much has been made of the military funding Boston Dynamics has received in the past, to understand what Google has planned for its robot acquisitions it may be more instructive to look at Schaft. This machine is the culmination of many years of research in Japan, inspired in large part by concerns over the country’s rapidly aging population.

In fact, Gill Pratt, the DARPA program manager in charge of the contest, believes that home help is the big business opportunity humanoid robots.

“Most people don’t realize that the military market is quite small compared to the commercial market. And the disaster marketplace is even smaller than that,” he said from the sidelines. “My feeling is that where these robots are really going to find their sweet spot is care for folks at the home—whether that’s for an aging population or other uses in the home.”

Pratt added that the challenges faced by the robots involved in the DARPA event are quite similar to those that would be faced in hospitals and nursing homes. “The rough terrain requirements of going up and down slopes will not be as great, but the robots will certainly have to go up and down stairs; people will leave clutter all over the floor. Because we arrange our houses to suit human beings, it’s very important that the robots have the same competencies of locomotion and manipulation as human beings do.”

A Breakthrough for Speeding Satellite Feeds

Satellite companies see promise in new technology to double bandwidth.

By David Talbot

An emerging data-coding technology could more than double bandwidth on satellite Internet connections, boosting service to developing countries, planes, and cruise ships—and fixing jerky, stop-and-start images from live video news feeds.

The work is described in a recent paper by researchers at MIT and its Lincoln Laboratory, together with colleagues at the Hamilton Institute in Maynooth, Ireland. They say that the gains could be as much as 20-fold in conditions where data losses are exceptionally large.

The advance could be most noticeable to television news watchers because it could end glitchy feeds from overseas correspondents. The satellite communications company Inmarsat plans to test the technology in 2014. “We are hoping it would give us clean video with fewer disruptions,” says Ammar Khan, whose title is design authority at the London-based company.

The technology involved is a variant on TCP (transmission control protocol), which governs basic Internet data delivery. Regular TCP delivers small packets of digital data in a way that confirms that they reach the intended destination intact and in the correct order. Built into TCP are systems for checking errors, requesting replacements for lost packets, and retrieving them.

But when this regular TCP is used on wireless networks, some bandwidth gets wasted on back-and-forth traffic to recover the inevitably dropped portions of a signal. This is a particularly large problem with satellites, because retrieving the lost parts requires round trips that can take a half a second or more.

The tweaked version of TCP being honed by the MIT group and colleagues instead sends mathematical functions describing multiple packets so that a receiving device, such as a satellite terminal, can solve for missing ones without having to refetch them. “You transfer more packets than what you normally would, but you don’t have to retransmit,” Khan says.

Inmarsat has more than 500,000 terminals around the world, installed on cruise ships, fishing boats, passenger jets, rooftops of office buildings (common for backup service), and on trucks and other equipment used by news organizations. Users could benefit in all of these contexts, Khan says.


The new coding technology has been shown to work in lab simulations, and in 2014 is expected to be subject to testing in an environment that emulates the long travel times and typical data losses found on satellites. If it shows promise, it would be tested on real satellites and considered for commercialization, Khan says.

Satellites tend to deliver communications to the very richest and the very poorest, but at a high cost. In places like rural Africa, where there are no fiber-optic connections, it can cost $2,000 to $3,000 per month to provide one megabit per month of satellite service, leaving people unable to afford much more than crucial text transmissions. Doubling bandwidth from satellites “would make a marked difference,” says Riyaz Bachani, CEO of Wananchi, an Internet provider in Nairobi, Kenya.

The rich have their problems, too. In certain constrained environments, like cruise ships, it can be challenging to give crowds of smartphone owners the bandwidth they’re accustomed to having in Boston or Palo Alto.

Satellite technology already includes some interesting methods to beef up service. But while the industry has deployed a number of technologies to improve “spectral efficiency,” companies have almost run out of tricks. “We’ve efficiently juiced a lot from all the other technologies we’ve used,” says Khan. “Network coding is a strong contender to boost further what we can do.”

The satellite transmission work expands on work Muriel Medard and colleagues at MIT have been pursuing in recent years to improve Wi-Fi and other terrestrial networks (see “A Bandwidth Breakthrough”) and even to improve efficiency on wired connections in data centers (see “A Smarter Algorithm Could Cut Energy Use in Data Centers by 35 Percent”).

Novel Circuit Shrinks Laptop Chargers, Could Improve Appliance Efficiency

A new kind of power adapter is barely bigger than a plug.

By Kevin Bullis

A startup called FINsix has developed laptop power adapters that are 75 percent smaller than their conventional counterparts. The technology employed could also be used to improve the efficiency of a wide variety of devices and appliances, including washing machines and air conditioners.

FINsix’s first product, which the company will unveil next month at the Consumer Electronics Show in Las Vegas, replaces a conventional charging brick with a device just a little bigger than an ordinary plug. The 65-watt power adapter—which delivers more power than many laptops use—can charge multiple devices at once. It will be available by the middle of next year.


The power adapter is the first commercial application of a novel circuit design developed byDavid Perreault, a professor of electrical engineering and computer science at MIT (see “Power Electronics to Improve Computer Efficiency” and “Efficiency Breakthrough Promises Smartphones That Use Half the Power”).

FINsix’s power adapter is an after-market charger that can work with a variety of laptops and other devices. The company is also working with a laptop manufacturer to produce a dedicated charger. The power adapter has the potential to be far cheaper than conventional ones, because it’s smaller, it’s simpler to manufacture, and it uses far less material.

In addition to shrinking power adapters, the new circuit design could reduce the size and cost of a variety of devices known collectively as power electronics. These devices manipulate electricity, changing properties such as voltage and converting between AC and DC power; they can precisely control the power that goes to electric motors and compressors. Better power electronics can improve the efficiency of, say, household air conditioners, but they typically aren’t used in such applications because of their high cost.

FINsix’s technology shrinks power electronics by increasing the frequency at which these devices operate. The higher the frequency, the smaller the device can be. But ordinarily, higher frequencies also reduce efficiency.

The researchers at MIT and FINsix developed a way to recycle much of the energy that’s normally lost inside a power adapter, improving efficiency and making it practical to use frequencies 1,000 times higher than those used in conventional power adapters. “The rest of the field is making incremental changes and getting diminishing returns,” says Charles Sullivan, a professor of engineering at Dartmouth, who is not involved with the company. But FINsix, he says, is “leaping past that barrier.”

Other academic researchers and companies are working to shrink the size of power electronics by turning to new materials, such as gallium nitride, that can operate more efficiently at high frequencies than the silicon semiconductor materials used now (see “Eliminating the Laptop Charging Brick”). But the new materials can be expensive and are limited to specialty applications. As these materials get cheaper and are more widely adopted, FINsix’s technology could be used in conjunction with them to make power electronics even smaller and more efficient.

Most Telecom Italia investors sign up to vote on board’s future

(Reuters) – Investors with a combined 53.8 percent stake in Telecom Italia have registered so far for a key shareholder meeting on December 20 that will decide whether to oust the board, the company said on Tuesday.

It means Telecom Italia’s controlling investor Telco – which has a 22.4 percent stake – will need the backing of other investors to fend off a proposal by rebel shareholders to remove the board. To pass, the proposal needs a majority of 50 percent plus one vote of shareholders at the meeting.

In a statement, Telecom Italia said the shares registered include a stake of over 4.8 percent held by U.S. giant investor BlackRock and its affiliates.

More shareholders can register between now and the meeting, which was called by Italian businessman Marco Fossati, a rebel investor with a 5 percent stake in Telecom Italia.

Telecom Italia is controlled by Telco, a holding company grouping Telefonica, Italian banksIntesa Sanpaolo and Mediobanca, and insurer Generali.

The vote could be crucial for the future strategy of Telecom Italia, and especially for its position in Brazil, where it is a direct competitor to Telefonica.

Fossati believes the influence of Telefonica could lead Telecom Italia to sell its prized Brazilian unit TIM Participacoes, reducing growth options for the Italian group.

(Reporting by Danilo Masoni; editing by Tom Pfeiffer)