Apple BendGate Truthers Smell a Media Plot
Were news reports that the iPhone 6 is prone to bending actually a plot orchestrated by mainstream media? That's what some Apple fans are starting to say after forensically analyzing the original video that broke the BendGate story.
Here is a breakdown of the theory that suggests Apple is merely the patsy in a wider conspiracy to defame the company's not-bendable products. As Pocket-Lint reports, there may be something strange going on with the time shown on the iPhone 6 in the original video that caused the story to go viral. Reddit user "akrosdabay" has written this analysis of why people are starting to call foul over BendGate:
When he is bending it with his bare hands, the phone shows 2:26 p.m. Then, talking about it that later claiming it has bent as a consequence of his actions earlier in the video, the phone shows 1:58 p.m. Then later when he is summarizing, the time on the phone is 1:58 - 2:00 and has a bend in it. Then it shows 2 p.m. and the phone is straight with some possible damage near the volume button.
Canadian YouTuber user Unbox Therapy created the video, and Apple fans are beginning to accuse him of subterfuge to inflate just how bad the bending issue is.
Reddit user "tittywagon" was one online commenter who is skeptical of BendGate: "The hoodie, glasses, backwards hat. The guy is a side-show idiot who blew it way out of proportion for YouTube views."
The "iPhone In Canada" blog goes one step further, blaming mainstream media for the controversy: "Bendgate actually happened in 2012—but was missed by the mainstream media."
Reports had surfaced in 2012 that said the iPhone 5 was susceptible to a similar kind of bending as the iPhone 6 Plus. However, the issue didn't gain anywhere near as much attention as the current controversy.
Apple has weighed in on BendGate in a decisive manner. On Thursday the company revealed how it puts devices through a number of stress tests, allowing CNBC to film the company's testing facility.
A statement was also emailed to Business Insider that played down concerns over a widespread structural issue with the iPhone 6. Apple told us that "through our first six days of sale, a total of nine customers have contacted Apple with a bent iPhone 6 Plus."
Apple's full BendGate statement is below:
Our iPhones are designed, engineered and manufactured to be both beautiful and sturdy. iPhone 6 and iPhone 6 Plus feature a precision engineered unibody enclosure constructed from machining a custom grade of 6000 series anodized aluminum, which is tempered for extra strength. They also feature stainless steel and titanium inserts to reinforce high stress locations and use the strongest glass in the smartphone industry. We chose these high-quality materials and construction very carefully for their strength and durability. We also perform rigorous tests throughout the entire development cycle including 3-point bending, pressure point cycling, sit, torsion, and user studies. iPhone 6 and iPhone 6 Plus meet or exceed all of our high quality standards to endure everyday, real life use.
With normal use a bend in iPhone is extremely rare and through our first six days of sale, a total of nine customers have contacted Apple with a bent iPhone 6 Plus. As with any Apple product, if you have questions please contact Apple.
See Also: The iPhone 6’s Manufacturing Costs
Is Apple Accident-Prone?
The screw-ups at Apple keep on coming.
The company whose "philosophy's always been to be the best, not the first," as CEO Tim Cook said recently, is going through a rare period in which it just looks accident-prone. Apple's launch of iPhone 6 and iPhone 6 Plus has been dogged by these unfortunate incidents:
- Apple has pulled the update to iOS 8, the mobile operating system that disabled some phones from making calls.
- In addition, users found a ton of smaller bugs in iOS 8, like keyboards that suddenly disappear.
- "#Bendgate": People discovered that the iPhone 6 and 6 Plus can get bent, and stay that way. None of its competitors do that. Apple is offering some people replacements.
- Some iPhone users got annoyed that Apple replaced the "camera roll" photo album on their iPhones with a "recently added" folder that is linked to iCloud, making it more difficult (or at least different) to delete photos permanently.
- Apple upset law enforcement officials by saying that "it's not technically feasible for us to respond to government warrants for the extraction of this data from devices in their possession running iOS 8." Cook added: "If the government laid a subpoena to get iMessages, we can’t provide it. It’s encrypted and we don’t have a key. And so it’s sort of, the door is closed." Police believe this may help criminals hide information.
- Apple's launch in China, a market it hopes will become one of its biggest, has been delayed by bureaucrats in that country, causing bizarre fights among Chinese immigrants outside Western stores.
- The launch of iPhone 6 was marred when the video livestream crashed and was replaced, bizarrely, by a fuzzy test card image and a Chinese voiceover for the first 25 minutes of the show.
- Prior to that, hackers released naked photos of 101 celebrities like Jennifer Lawrence they had found on iCloud—a hack performed because of the way Apple handles account retrieval.
Apple will roll on regardless, of course. These are the kinds of glitches that any big company goes through. iPhone 6 will probably turn out to be the biggest, most successful launch of Apple's history, producing a record influx of revenues. (We asked Apple for comment, but its spokespersons were silent at the time of writing.)
Some of Apple's problems are mere optics. The warrant issue—in which cops believe that Apple's new security will prevent them from solving murders and kidnappings—is mostly just a PR issue. In fact, it's likely that Apple will actually respond to warrants and cops still have a way in to your locked iPhone, so this whole idea that it's not technically feasible for Apple to respond to warrants is simplistic at best and misleading at worst.
Others go to Apple's core: To release an operating system update that prevents a phone from being used as a phone, and then to retract it, is a shocker. It's a basic, fundamental, product-use error that causes users needless headaches. Consumers will have to hook their phones up to their laptops and reinstall an older version of the system from a backup. That's asking a lot from non-tech consumers (like your parents). It's the kind of thing PC users used to curse Microsoft for, back in the days when that company used to ship bug-filled Windows updates.
And the fact that Find My iPhone was susceptible to the most basic hacking technique—repeatedly entering new passwords until you get it right—also seems careless.
Apple is the company in which everything "just works," the brand that prides itself on being thoughtful and careful and obsessed with details. And its slip is showing.
We'll forget all about this in a month or two, of course. In addition to roaring iPhone 6 sales, there is one other thing that indicates the Apple ship is basically heading the right way: Since the new product launch on Sept. 9, the stock is up nearly 4 percent to $101.75.
See Also: The iPhone 6’s Manufacturing Costs
A Degree in “Unmanned Aircraft Systems” Might Pay Big
If you want to pull in a six-figure salary right out of school, you might want to start studying unmanned aircraft systems, more commonly and controversially known as drones. The young field is already lucrative—$11.3 billion globally—and set to grow exponentially. The Association for Unmanned Vehicle Systems International, a trade organization, predicts that the global market will be $140 billion in 10 years.
Studying UAS is relatively new, too. The University of North Dakota started offering the first bachelor's degree program in 2009, with other public schools like Kansas State and aviation-oriented private schools like Embry-Riddle following suit. In total, 30 universities now offer UAS degree programs, with community colleges offering two-year degrees as well.
While most of the news about UAS centers around their military applications, experts say the growth is going to come through private work in the US, whether it's farmers inspecting fields, meteorologists investigating hurricanes, or construction workers surveying sites.
Kurt Barnhart, who oversees Kansas State's UAS program, says that most of the program's graduates head to work for government contractors with military applications, many of which send grads overseas on deployment. But there's also an uptick of those joining US-based startups, he says.
The high salaries relate to the specialization and travel that comes with the job. "If it involves overseas deployment, starting salary is close to six figures, $80,000 plus deployment pay, an additional compensation package for being deployed and having to spend six months out of the year sequestered away in Afghanistan," Barnhart says. Domestic jobs — with startup companies like Roboflight or Precision Hawk—start at about $60,000 a year. Compare that with first-year pilots of conventional aircraft; they start out at as low as $21,000 a year.
Philip Ellerbroek, Roboflight's global director of sales, says that charting a career in UAS requires understanding the facets of the field. You could design the hardware itself, train in piloting the aircraft, or write software code to make the whole thing work. You also have to factor in scale of the vehicle itself: Flying a hobbyist plane won't require a degree, but if you want to pilot a $4 million military device like a Predator, you need specialization.
Ellerbroek advises would-be UAS grads to get close to the companies in the field, because a formal education won't give you all the knowledge you need. "Like everything else, you can't learn it all in a classroom or a book," he says. "You need to a do an internship, tinker a lot on your own, or read a lot online." His favorite online resource: DIYDrones, started by Chris Anderson, the former Wired editor-in-chief who started 3D Robotics, perhaps the "it" startup in the field.
What You Learn When You're Getting A UAS Degree
Ben Trapnell runs the UAS program at the University of North Dakota, the first of its kind when it started in 2009. After completing the program—which investigates the systems involved in the air and on the ground for a UAS; how to take photographs and other forms of remote sensing; and commercial-grade flight simulation—students become commercially certified pilots. "Many students get a flight instructor certificate as well," Trapnell says. "It's proven to be a real hiring advantage—companies want them to teach UAS to other employees."
UND students have received starting salaries of over $60,000, he says. That figure doubles or triples if they go overseas. But UND isn't just trying to develop operators of aircraft. It also aims to train people to build the devices themselves. "We're not trying to develop the operators," he says, "but develop the skill sets our grads need so they can become leaders in civil UAS that's developing. What they're going to do is hopefully percolate to the top and be the leaders of the civil UAS, and bridge the gap between engineering and the pure operators."
See Also: The Best Consumer Drones
Watch Steve Jobs Tell Michael Dell, “We’re Coming After You”
For some reason, this old clip of Steve Jobs resurfaced last week. It's amazing.
The clip is from 1997, and it shows Jobs responding to Michael Dell who said, Apple should shut down the company and return money to shareholders. Jobs says he thought that was "rude." And then, he says, "We're coming after you buddy."
It's a good reminder that Apple was an underdog that need to fight for its life back then:
The iPhone 6 Is a Magical Profit Machine for Apple
A realization is gradually setting in for Apple investors, customers, and devotees: Apple has basically, quietly, raised the price of the new iPhone. How? By shipping the basic model iPhone 6 and 6 Plus with such limited memory that buying one would be like buying a Porsche with a VW Beetle engine.
As Apple guru John Gruber pointed out last week, Apple is selling the basic $199 iPhone 6 and $299 iPhone 6 Plus with only 16 gigabytes of memory. That amount of base memory first shipped with the iPhone 3GS, a now discontinued phone from the smartphone Triassic age.
In the four years since Apple launched the 3GS, smartphones have become much bigger storage hogs. With the latest Apple mobile operating system (iOS 8), many-megapixel video and still cameras, HD movies, and TV shows, and ever-more-complex apps, 16 gigs is now an annoyingly small amount of storage. Unless you aggressively and fanatically manage what's on your iPhone—moving photos and movies to the cloud (where you have to pay for additional storage), deleting little-used apps, etc.—you're constantly going to run out of room. And that will create endless headaches and frustrations, which is not what you want and expect from a new iPhone.
The answer for most people will be to spring for more storage. And here, too, Apple has cleverly created an even bigger incentive to pony up. The new iPhones come with bigger supplemental tiers of storage than the earlier iPhones. Specifically, iPhone 6s comes with 16 GB, 64 GB, and 128 GB of storage, instead of the 16 GB, 32 GB, and 64 GB of prior models.
So, the decision-making logic for most iPhone buyers will probably go like this:
- I can get my new iPhone for $199 or $299 (depending on screen size), enjoy the bigger screen for five minutes, and then spend the next two years tearing my hair out about the tiny storage, OR
- I can shell out an extra $100 to buy four times as much storage.
When you amortize that $100 investment over the life of the phone, it's a small expense relative to the improved satisfaction. So many, many customers will most likely opt for option two.
Here's where more of the hidden genius comes in. According to Wall Street analyst Gene Munster and BI Tech Editors Jay Yarow and Dave Smith, the cost to Apple of 64 GB of memory vs. 16 GB of memory is small. Specifically, it's about $20. That means that, for every customer persuaded to spend an extra $100 to buy the 64GB iPhone 6 (or 6 Plus), Apple will make an extra $80 in profit. That's a lot of extra profit.
And because 16 GB is so little storage for customers who take a lot of pictures or movies, use a lot of apps, and/or watch a lot of movies or TV shows, they basically have no choice but to buy the 64 GB version. And that means that Apple has basically, quietly, jacked up the price and profit margin of its new iPhones. This in a market in which smartphone prices are dropping fast and most manufacturers are fighting to survive.
Piper Jaffray's Gene Munster did a survey of iPhone buyers over the weekend and found that only one in five customers were buying the 16 GB version of the iPhone 6, about half as many as bought the entry-level phone in the previous cycle. That bodes very well for the average selling price of this device. And it bodes even better for the amount of cash that Apple is going to drop to the bottom line over the next year as most of their customers upgrade to the iPhone 6.
And in case you're not impressed by that quiet pricing/profit magic, consider this: Apple is already collecting another extra $100 from every customer who wants the bigger-screened iPhone 6 Plus. Those start at $299, not $199. And it's unlikely that the bigger-screened iPhone 6 Plus costs anything close to another $100 to make. So Apple is most likely picking up another chunk of incremental profit there, too.
Now, selling the iPhone 6 and 6 Plus with such limited storage is not the most customer-friendly move that Apple could have made. Apple could have put 32 GBs of storage into the basic phone, vastly improved the phone, and saved many of its customers $100. Apple's decision to put only 16 GBs of memory in the 6s, in fact, so disappointed Apple guru John Gruber that he called this decision "the most disappointing aspect" of the new iPhone.
But Apple has always been as focused on its own bottom line as it is on making its customers happy. And Apple, probably correctly, is betting that almost all of its customers and potential customers will get over their annoyance, pony up, and help fatten Apple's bottom line.
All this bodes very well for Apple for the next few quarters.
Disclosure: I am overweight Apple stock, and I am looking forward to getting my new iPhone (though I'm not looking forward to paying an extra $100 for it). I think this will be the last huge iPhone upgrade cycle, however, and Apple is highly dependent on the iPhone for its profit, so at some point soon I will probably trim my "overweight" position and go back to "equal weight." This is to say, I will soon own Apple the way I own most stocks—via index funds.
Adrian Peterson Has a Terrible Contract, and Cutting Him Would Save the Vikings a Lot of Money
The Minnesota Vikings reversed course last week and decided Wednesday to bar Adrian Peterson from the team until his legal issues are resolved. The Vikings put him on the exempt/commissioner's permission list — which will keep him under contract while barring him from team activities. It's basically a paid suspension.
According to Ian Rapoport of NFL Network, Peterson will still earn the $11.75 million he is owed this season. In a statement announcing the decision, the Vikings said he would be away from the team "until the legal proceedings are resolved."
Even if you ignore the public-relations problems that would come with keeping Peterson on the team, the Vikings could save a ton of money by releasing him. Peterson is three years into a six-year, $96 million contract extension. However, the Vikings have already paid out the $36 million in guaranteed money that the contract contained, according to Spotrac. That means they can cut Peterson without paying him a dime of the ~$56 million he is owed between now and 2017. The only financial penalty of cutting him would be a small cap hit ($2.7 million this year and $2.4 million in 2015, Spotrac reports).
Because Peterson's contract is non-guaranteed from here on, the Vikings have no real incentive to keep him. Even before the allegations of child abuse, Peterson's contract was a knock against him. He's the 12th-highest-paid player in the NFL this year. In a time when running backs are less important than ever before, Peterson is getting paid like one of the league's most important players.
Grantland's Bill Barnwell had Peterson as only the 42nd-most valuable asset in the NFL this summer because his contract was so massive. Barnwell said that giving 11% of your salary cap money to a running back is nuts, no matter who he is:
Your typically good Adrian Peterson season is 15 games, 300 carries, 1,400 rushing yards, and 12 touchdowns. That comes with a cap hit, in 2014, of $14.4 million. No other back in football is above $10 million, and the median starting running back has a cap hit of somewhere around $3.4 million. That’s $11 million you can’t put toward an offensive line or a secondary or, yes, a quarterback. If you know you’re going to get a 2,000-yard season out of Peterson like you did in 2012, you would happily pay that extra $11 million. But you’re more likely to get the typical Adrian Peterson season, like 2013’s 279-1,266-10 line, which isn’t far off from what somebody like Alfred Morris can do for $500,000. Every team would love to have Peterson. Very few want to commit nearly 11 percent of its salary cap to a running back, even one as good as Peterson.
Peterson's cap hit is $15 million for each of the next three seasons. That's a huge financial commitment even if he's is playing at a high level. It's a crippling financial commitment if he's not even on the field.
ESPN’s Chris Mortensen reports that the Vikings “do not foresee Peterson in their future.” That contradicts earlier reporting from ESPN’s Adam Schefter, who said that the team still intended to keep the running back. If the Vikings do keep Peterson on their roster, they're gambling on his resolving his legal issues, avoiding a lengthy suspension from the NFL, and returning to his superhuman form from 2012.
The Man Making Bill Gates Richer
Bill Gates is worth an astounding $81.6 billion and he keeps getting richer every year. His secret weapon is a man you have probably never heard of: Michael Larson. Gates hired Larson 20 years ago, when his net worth was a relatively paltry $5 billion, Anupreeta Das and Craig Karmin report in a profile on the notoriously secretive Larson at the Wall Street Journal. Larson runs Gates' personal investment company Cascade Investment LLC, funded solely by Gates.
At one time, Gates wealth depended solely on Microsoft. But for years he's been selling off his Microsoft stake. The common perception is that he's been using the proceeds from those sales directly for charity. That's not entirely how it works. Although Gates makes his own investments in tech, it is Larson, though Cascade, who has taken Gate's money and diversified it. Gates now has vast holdings in real estate and non-tech companies like the Canadian National Railway Co., AutoNation Inc., and Republic Services Inc. It is these vast holdings that helps fund the Gates' donations.
And although Gates has given an astounding $38 billion to his charitable foundation, thanks to Larson, he's getting richer faster than he give his money away. His $81.6 billion is nearly $6 billion more than it was as of March 2014, when he was worth $76 billion, we reported at the time. And $76 billion was $9 billion more than he was worth in March, 2013.
In February, Gates celebrated 20 years of this partnership by throwing a gala to honor Larson at his Seattle mansion, reports the WSJ. It was a rare occasion where the two men socialized with each other. Apparently, they aren't buddies and don't hang out much, sources told the Journal.
At the party, Gates told guests that he has "complete trust and faith" in Larson, meaning that Larson invests Gates' money, buying and selling, with completely autonomy.
And he does it all under a cover of such ferocious secrecy that he's been nicknamed "the Gateskeeper."
Although publicly traded companies do reveal when Cascade has invested heavily in them, Larson has all sorts of tricks for keeping Cascade and Bill Gates' name out of other investments, sources told the Journal.
For instance, he makes employees sign confidentiality agreements which cover them even after they leave. He farms out more than $10 billion to up to 25 outside money managers. This helps him find new investment ideas, but it also helps cover the trail. When Cascade was part of an investment group that bought the Ritz-Carlton hotel in San Francisco, the publicist didn't even know Cascade, and Bill Gates, was among them.
He's also been known to fire up a limited Limited Liability Corporation to make real estate purchases, to keep Cascade's name off the deal and the deed.
He's so good at hiding the trail that most people don't know that Gates, through Cascade, owns a significant stake in the Four Seasons luxury-hotel chain.
And he's frugal with the boss's money, too. Apparently Cascade employees, of which there are about 100, are not allowed to stay at the Four Seasons when traveling on business, even if that business is on behalf of the Four Seasons. They must choose a lower-cost, less luxurious hotel.
"Melinda and I are free to pursue our vision of a healthier and better-educated world because of what Michael has done," Gates told guests at the party.
And ultimately, the money will go to charity. Bill and Melinda Gates have vowed to donate 95 percent of their wealth to their foundation, as part of Gates' Giving Pledge.
But until then, Larson is making it grow.
Why Urban Outfitters and Other Brands Troll Their Customers
Urban Outfitters is facing a public backlash for selling a "Vintage Kent State Sweatshirt" that is spattered with red stains resembling blood. The $129 sweatshirt is reminiscent of the Kent State Massacre of May 1970, when four unarmed college students were killed by the Ohio National Guard during a Vietnam War protest.
This is the latest in a long line of offensive fashion screw-ups by Urban Outfitters. Just within the last year, the company has had to pull three separate items from stores following a public outcry, including a "drunk Jesus" t-shirt, a "depression" shirt and "Lord Ganesh " socks.
So why does the company keep churning out problematic clothing?
Most of the blame is attributable to how rapidly Urban Outfitters produces and curates new styles, says Howard Davidowitz, chairman of Davidowitz & Associates Inc., a retail consulting agency and investment banking firm based in New York. There are more than 2,000 products available just on the women's' sale section of the company's website. "Given the environment of product development in this super, hyper-competitive business, crazy things are going to slip through," Davidowitz said. "This is just part of the business and it always will be." During fashion meetings at major apparel companies like Urban Outfitters, dozens of styles could be approved in a matter of minutes, he said. The Kent State sweatshirt, like other controversial items, could easily be overlooked, he said.
Some critics have wondered, however, whether Urban's fashion mistakes could be a deliberate campaign for the attention of its core customers: Angsty teens and young adults. Abercrombie & Fitch's edgy and sometimes offensive styles helped the brand rise to prominence among teens in the early naughts.
In a more recent example, Nine West offended swaths of women with a new advertising campaign that celebrates "husband hunting." Critics blasted the campaign as outdated and misogynistic, but branding experts said it was a smart move. "Nine West hasn't been doing well and they needed to get people's attention, to cut through the clutter at a very promotional time of year, and get people talking about the brand," said Aliza Freud, the founder and CEO of brand consulting agency SheSpeaks.
Nine West conceded the campaign was intended to generate buzz. Erika Szychowski, Nine West's senior vice president of marketing, told the New York Times she expected the campaign to "make noise and get attention."
"We have to change the way we talk about occasions because women are modern now and shop for a different reason," Szychowski told the Times. And it worked. At least a dozen national media outlets covered the ads and backlash, including Business Insider, the New York Times, the Washington Post, Businessweek, and Time.
Another notable instance happened in 2008 when the company that makes the pain reliever Motrin began airing a commercial that likened carrying a baby to a painful fashion statement in an appeal to young mothers. "Supposedly, it's a real bonding experience," the ad's narrator says. "But what about me?" The ad recommended Motrin to treat the pain of carrying a child.
Outraged consumers vowed to boycott the brand and Motrin was forced to apologize and pull the ads. But the campaign created widespread buzz around the pain reliever, and for that, the ad could be considered a success, Freud said. Within a matter of weeks the outrage simmered and what was left was greater brand awareness.
Like Motrin, most brands that execute this sort of strategy—called shock advertising—tend to suffer only short-term negative consequences, Freud said. The candy company that makes Lemonheads used a similar tactic in May when it launched a terrifying-looking new mascot in an effort to win millennial customers.
The strategy worked. Hundreds of people shared images of the new mascot on Facebook and Twitter. (And who could forget the reaction to McDonald's creepy Happy Meal mascot, released this spring?)
Burger King deployed a "Subservient Chicken" character to similar effect 10 years ago. The character, which is making a comeback this year, is "arguably one of Burger King's most popular campaigns in the last decade," according to Ad Age. It began as a man dressed up in a chicken costume who would respond to commands from website users.
The new iteration of the campaign is "apparently a bid to simultaneously court millennials online and general market through TV," writes Ad Age. In the age of social media, where online sharing can be critical to a brand's success, such a strategy makes sense.
When it comes to getting customers' attention, some brands consider any kind of publicity—even if it's negative—to be useful in spreading awareness.
See Also: The Best Burger in Every State
What Europe Would Look Like If All the Separatist Movements Got Their Way
The Scottish independence movement will embolden other active separatist groups in Europe to win their freedom, whether or not Scotland votes to secede from the UK on Thursday. From Catalonia and Basque Country in Spain to Veneto, South Tyrol, and the island of Sardinia in Italy to Flanders in Belgium, "the precedent of the vote on self-determination will reverberate around the Continent," the New York Times writes. If you want a rough idea of how European borders would have to be redrawn if regions with a separatist agenda got their way, you can look at the map below, put together by the European Free Alliance, to which "40 progressive nationalist, regionalist and autonomous parties throughout the European Union" belong.
Nate Silver Versus Princeton Professor: Who Has the Right Models?
Wang and Silver's forecasts have diverged significantly on their odds for party control of the Senate in November. Wang's model, which relies solely on available polls of races, gives Democrats an 80 percent chance of retaining control of the Senate. It has been much more bullish for Democrats than other forecasters, including Silver. Silver's forecast, though, has shifted noticeably in Democrats' favor over the past few days, and his model now gives Democrats a near-even chance of keeping the Senate.
In his post, Silver called out Wang's model for relying too heavily on polls he says have overestimated Democratic candidates' chances of winning:
I don’t like to call out other forecasters by name unless I have something positive to say about them—and we think most of the other models out there are pretty great. But one is in so much perceived disagreement with FiveThirtyEight’s that it requires some attention. That’s the model put together by Sam Wang, an associate professor of molecular biology at Princeton.
That model is wrong—not necessarily because it shows Democrats ahead (ours barely shows any Republican advantage), but because it substantially underestimates the uncertainty associated with polling averages and thereby overestimates the win probabilities for candidates with small leads in the polls. This is because instead of estimating the uncertainty empirically—that is, by looking at how accurate polls or polling averages have been in the past—Wang makes several assumptions about how polls behave that don’t check out against the data.
Silver went on to list some examples in which Wang's model has been wrong—in the 2010 Nevada Senate race between Democratic Majority Leader Harry Reid and Republican Sharron Angle, and in control of the House in 2010. In both of these cases, Silver wrote, Wang's forecast heavily diverged from the actual result. Silver's forecast also got Nevada wrong, but he argued Wang's model put Reid's odds of winning around 30,000-to-1. Silver's own model had Reid at a 5-to-1 underdog.
In an email to Business Insider, Wang said there was some "confusion" in Silver's article. "I do not want to turn this into a shouting match—it's really unnecessary," he said. "I would say that specifically in reference to PEC's predictive model, the same methods when applied to presidential races gave a cliffhanger in 2004 and likely Obama wins in 2008 and 2012." Wang also noted both models ended up missing the Nevada Senate race. "And Senate polls are also good. When poll medians are applied to Senate races, they perform slightly better than polls-plus-fundamentals [models like Silver's]. In 2010, both approaches worked—though they both got the Nevada Senate race wrong," said Wang.
Ultimately, Wang said, the difference is between his model and others like the Huffington Post and Daily Kos, which rely solely on polling averages. The reason they differ is because other models like Silver's and the New York Times have "said that at the start of 2014, conditions favored the GOP."
"However, for most of the year, polls have shown that Republicans are slightly underperforming, relative to those expectations," Wang said. "That's the real story."