Start up: bias in the machine, Spotify’s financials, is Watson a fraud?, Cook talks iPhones, and more

How can an unsafe car be safe? It’s all in the framing. Photo by Arslan on Flickr.

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A selection of 12 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Machine bias: there’s software used across the country to predict future criminals. And it’s biased against blacks • ProPublica

Julia Angwin, Jeff Larson, Surya Mattu and Lauren Kirchner:

»Borden and her friend [both aged 18, who had stolen two bicycles] were arrested and charged with burglary and petty theft for the items, which were valued at a total of $80.

Prater was the more seasoned criminal. He had already been convicted of armed robbery and attempted armed robbery, for which he served five years in prison, in addition to another armed robbery charge. Borden had a record, too, but it was for misdemeanors committed when she was a juvenile.

Yet something odd happened when Borden and Prater were booked into jail: A computer program spat out a score predicting the likelihood of each committing a future crime. Borden — who is black — was rated a high risk. Prater — who is white — was rated a low risk.

Two years later, we know the computer algorithm got it exactly backward. Borden has not been charged with any new crimes. Prater is serving an eight-year prison term for subsequently breaking into a warehouse and stealing thousands of dollars’ worth of electronics.


You can read how the analysed the data, and download the dataset.
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Unsafe cars can save lives • Marginal REVOLUTION

Alex Tabarrok:

»David Ward, secretary general of Global NCAP told the Wall Street Journal:


Global NCAP strongly believes that no manufacturer anywhere in the world should be developing new models that are so clearly sub-standard,” he said. “Car makers must ensure that their new models pass the UN’s minimum crash test regulations, and support use of an airbag.


Let’s take a closer look. These cars are very inexpensive. A Renault Kwid, for example, can be had for under $4000. In the Indian market these cars are competing against motorcycles. Only 6 percent of Indian households own a car but 47% own a motorcycle. Overall, there are more than five times as many motorcycles as cars in India.

Motorcycles are also much more dangerous than cars.


So easy to overlook the prevailing market conditions. How many motorbikes have airbags? A car without one is still safer.
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Spotify revenues topped $2bn last year as losses hit $194m • Music Business Worldwide

Great scoop by Tim Ingham delving into Luxembourg filings:

»Spotify brought in a whopping $2.18bn (€1.95bn) in revenues in 2015, growing its income by 80% in the year.

Net losses stood at a painful  $194m (€173.1m), but these grew much slower – widening by just 6.7% compared to 2014.

In a financial filing in Luxembourg uncovered by MBW, Spotify told its investors that “in many ways, [2015] was our best year ever”.

Advertising revenues nearly doubled in the 12 months, up 98% to $219m (€195.8m).

Meanwhile, subscription revenues grew by a slightly slower pace, up 78% to $1.95bn (€1.74bn).

In terms of Spotify’s total $2bn+ income (negligible ‘other’ revenues aside), ads therefore claimed 10.1% – an improvement on the 9.2% share seen in 2014, but another reminder of how heavily the company relies on people paying for premium accounts.


The costs of sales and marketing, and general and administrative, are growing very fast. R+D not so much. Is there a point where it can swing to profitability?
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Adblocking puts $32bn at risk globally by 2019 • Optimal

Rob Leathern:

»We recently collaborated with Wells Fargo Securities on a survey of US smartphone users, asking them about their ad blocking preferences, and as a result we produced a US model of display ad revenue lost to blocking ($12.1 billion by 2020, the full model is available with registration here). The data we shared also assisted Wells Fargo (along with MagnaGlobal figures) to produce the following estimates of global ad spend at risk from ad-blocking. You’ll need to be an accredited investor to read their report and see their reasoning, but they gave us permission to reproduce the top-level figures here ($ in millions):


Leathern thinks those figures are “conservative”.
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Fraudulent claims made by IBM about Watson and AI • Roger Schank

»I started a company called Cognitive Systems in 1981. The things I was talking about then clearly have not been read by IBM (although they seem to like the words I used.) Watson is not reasoning. You can only reason if you have goals, plans, and ways of attaining them, and a comprehension of the beliefs that others may have and a knowledge of past experiences to reason from. A point f view helps too. What is Watson’s view on ISIS for example?

Dumb question? Actual thinking entities have a point of view about ISIS. Dog’s don’t but Watson isn’t as smart as a dog either. (The dog knows how to get my attention for example.)

I invented a field called Case Based Reasoning in the 80’s which was meant to enable computers to compare new situations to old ones and then modify what the computer knew as a result. We were able to build some useful systems. And we learned a lot about human learning. Did I think we had created computers that were now going to outthink people or soon become conscious? Of course not. I thought we had begun to create computers that would be more useful to people.

It would be nice if IBM would tone down the hype and let people know what Watson can actually do can and stop making up nonsense about love fading and out thinking cancer. IBM is simply lying now and they need to stop.

AI winter is coming soon.


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Why the virtual reality hype is about to come crashing down • WSJ

Christopher Mims:

»Makers of virtual reality headsets think 2016 will be the year of VR. The experience “is radically different than any computing experience you’ve had before,” says Marc Metis, a vice president at HTC Corp., maker of the Vive headset.

Content creators, however, tell a different story. VR isn’t ready for prime time.

This gap between expectations and reality means the VR hype train is about to crash into a wall.

In my experience, VR demos can be very impressive. The problem is that most are just that—demos.

As new, highly touted headsets arrive this year, how much content will be available, and how deep will these experiences be? The short answers: not much, and fairly shallow…

…Unfortunately, much nongame VR content, including so-called “360 video,” doesn’t support that illusion. Rather than feeling that you are in a place, experiencing an event, current 360 video tends to make you feel like your head is “in a fishbowl of video,” as Mr. Pinnell puts it. Such experiences make me fear that 360 video will be the next 3-D TV, something nobody asked for and few will use.


By definition, hype crashes at some point. But this points to an essential thing about VR: it’s content-based. Without the content – or unless you can create the content yourself easily – it’s completely wasted. Imagine if the web had had to rely on professionals to create content, and we were in 1995; that’s sort of where VR is now.
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CMA response to BIS consultation on the future of the Land Registry • Publications – GOV.UK

The Competition and Markets Authority is the UK’s monopolies regulator. Here is its summary on the government’s proposals to sell of Land Registry:

»Government’s preferred option would create a privatised vertically-integrated business engaged in both monopoly and commercial activities. The CMA believes that as a result, the business may fail to maintain or improve access to its monopoly data, and may seek to weaken competition to its own commercial products, despite the best efforts of oversight bodies to regulate prices and impose safeguards.


There’s more detail in this PDF. I find this amazing: a government oversight body essentially criticising government policy.

I hope that it will affect that policy, but it needs the right minister to hear it. I don’t know if there’s anyone listening beyond the dogma whistle.
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Tim Cook acknowledges iPhone cost high in India • Business Insider

Jim Edwards:

»Apple CEO Tim Cook just gave his most detailed commentary yet on the effect the high price of the iPhone has on the device’s declining sales. In an interview with NDTV’s Vikram Chandra in India, Cook was asked a tough question about whether the iPhone — which costs about $600 in the US but is more expensive almost everywhere else in the world — was really worth its price.

iPhone sales fell 16% in the most recent quarter, and the iPhone is losing market share to Android almost everywhere. Analysts believe iPhone sales will continue to decline all through this year.

Cook replied that he did think the iPhone might be priced too high in India, and he said the company would consider lowering the price: “I recognise that prices are high. We want to do things that lower that over time to the degree that we can.”

That is a significant acknowledgement.


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Apple’s Touch ID rules may be designed to protect human rights • Macworld

Glenn Fleishman:

»Consider a restriction to Touch ID’s continuous use that I just uncovered. Apple didn’t intend for this addition to be a secret, but it somehow added it in September 2015 and didn’t document the change until a few days ago. (Apple confirmed the change for me.)

You can read about it in detail, but the gist is that on top of the 48-hour countdown between Touch ID uses before a passcode is required, the “new” change adds a separate timer.

After six days of unlocking with just Touch ID (and not restarting), the 48-hour clock is replaced with an eight-hour one. If you go eight hours or more between unlocking with Touch ID, you’re required to unlock with the passcode. As soon as you enter the passcode, the 48-hour and 6-day countdowns are reset.

Why add an eight-hour timer? Apple declined to offer any insight into why it was added, nor why it wasn’t documented until last week. I have some thoughts, mostly in the form of analogy.


I’d wondered, like many, why TouchID was being more pernickety about wanting my passcode. Fleishman’s argument makes a lot of sense.
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Exclusive: Xiaomi revenues were flat in 2015 • Fortune

Scott Cendrowski:

»Xiaomi, the Chinese smartphone maker and second highest-valued startup in the world at $45 billion, barely grew sales at all last year.

Revenue for 2015 reached 78 billion yuan ($12.5bn), a 5% rise from 2014’s 74.3bn yuan, a person in the company’s public affairs office said for the first time over the weekend. Taking into account the falling value of the Chinese currency, the yuan, sales rose 3% in US dollar terms.

Xiaomi has been mum about the 2015 sales total since founder Lei Jun gave a revenue target of 100 billion yuan ($16bn at the time) at a government meeting in March last year. The Xiaomi public affairs official, Ge Liang, announced the 2015 figure in an interview this weekend at a Beijing tech conference. The interview later ran on a few Chinese news sites, including the conference’s own. (One of the news sites, China News Net, has since deleted it.)

A Xiaomi spokeswoman says, “We have never shared the revenue figure and we are not able to comment on the figure that you shared. What we have shared is we sold over 70 million smartphones in 2015 despite the shrinking of the smartphone market.”


Xiaomi’s smartphone shipments were up 14.5%, so if its revenues – which now also include TVs and set-top boxes and air conditioners and so on – rose 5%, that’s not a healthy sign. Could it just be that all the money pumped into Xiaomi was chasing the wrong business model?
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The definitive guide to decoding Washington’s anonymous sources • Huffington Post

Ryan Grim and Jason Linkins:

»You have surely noticed that story after story is powered by the musings of anonymous congressional aides, lawmakers and White House officials. Can you believe any of this? Yes. But it depends. To a non-initiated reader, the description of these anonymous creatures may appear to be quite random. But embedded within them are major giveaways about the reliability of the information being passed on, and how much credit you should give it. For example, if the author of the story you’re reading is an experienced Capitol Hill reporter, the description of the source you’re reading is likely the result of an explicit agreement between the source and the reporter.


Useful primer for the US elections; roughly the same works for UK politics too.
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How Thync, startup behind brain-zapping gadget, almost died • Bloomberg

Ellen Huet:

»Khosla Ventures, a VC firm known for investing in out-there businesses like plant-based egg substitutes, biofuels and artificially intelligent toys, made an early investment in Thync when it led the Los Gatos, Calif., startup’s $13 million funding round in 2014. Thync, which created one of the first consumer brain-stimulation devices on the market, advertised a $199 white dongle that sticks to a person’s forehead with an accompanying strip on the back of their neck. The wearer presses a button on their phone and gets a 10- to 20-minute “vibe session.” The electric current that followed would give them quick energy or calmness, helping them perk up without coffee or sleep without drugs.

The concept drew in tech’s early adopters and quantified-self devotees, eager to try the Valley’s newest frontier-busting trend. Industry socialite Susan MacTavish Best hosted an “evening of vibes” last year at her Victorian home in San Francisco, where startup founders, executives and artists could sample Thync’s electrical pulses alongside a buffet of grilled romaine, pork-belly candy and blackberry-smash cocktails while jazz pianist ELEW performed live.


Note that: one of the *first* brain-stimulation devices. This makes Silicon Valley, the TV series, look more and more like a documentary.
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Errata, corrigenda and ai no corrida:

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