Apple Denies China Assertions on IPhone as Security Risk
Apple Denies China Assertions on IPhone as Security Risk
By Jeff Green Jul
12, 2014 9:24 PM PT
07/11/2014
Apple Inc. (AAPL) assured Chinese customers that location
tracking on its iPhone can’t be used to identify activity of individuals, a day
after China’s state-owned television broadcaster said the software poses a
security risk.
The iPhone function can collect data and may result in a
leak of state secrets, China Central Television reported on July 11, citing Ma
Ding, head of the online security institute at People’s Public Security
University of China.
In response, Apple said on its Chinese website that it
has never “worked with any government agency from any country to create a
backdoor in any of our products or services.”
The tracking function is used to speed up applications
designed to show iPhone users their own location or assist in driving directions
to avoid traffic. It can be turned off, Apple said in its statement. Personal
location information is stored only on the phone, protected by a user password,
and isn’t available to third parties, the company said.
“We appreciate CCTV’s effort to help educate customers on
a topic we think is very important,” the company said in the statement,
according to an English translation provided by Apple. “We want to make sure
all of our customers in China are clear about what we do and we don’t do when
it comes to privacy and your personal data.”
Apple, Microsoft Corp., Google Inc. (GOOGL) and Facebook
Inc. (FB) are among U.S. companies criticized by state-run media amid an
escalating spat over cyberspying and hacking allegations. The tensions follow
indictments by U.S. prosecutors of five Chinese military officers for allegedly
hacking into the computers of American companies and last year’s revelations by
former security contractor Edward Snowden of a National Security Agency spying
program.
Last month, a commentary on the microblog of the People’s
Daily newspaper said Apple, Microsoft, Google and Facebook cooperated in a
secret U.S. program to monitor China.
CCTV, the national broadcaster, said a provincial
government was told not to buy computers with Microsoft’s Windows 8 operating
system. It quoted a professor calling the software a potential threat to
China’s information security.
The report by CCTV on the iPhone came after China told
its three state-owned wireless carriers to cut marketing expenses because they
overspent on subsidies and advertising for devices such as the Apple handsets,
people familiar with the matter said.
China Mobile Communications Corp. (941) began selling the
iPhone in January after six years of negotiations. Discounts for the Apple
device are one reason why subsidies on all phones will rise 29 percent to 34
billion yuan ($4.4 billion) this year, Chief Financial Officer Xue Taohai said
in March. The company hasn’t received formal notification of the SASAC policy, said
Rainie Lei, a Hong Kong-based spokeswoman for the listed unit, China Mobile
Ltd.
A reduction of subsidies would make high-end devices like
the iPhone or Samsung Electronics Co.’s Galaxy S5 more expensive in the world’s
largest smartphone market. The cut would benefit domestic phone makers
including Xiaomi Corp., Lenovo Group Ltd. and Coolpad Group Ltd., which offer
less costly models.
The three state-owned carriers are China Mobile
Communications, China United Network Communications Ltd. and China Telecommunications
Corp. (728) Each has a Hong Kong-listed unit.
Apple, based in Cupertino, California, posted March
quarter sales of $9.3 billion from the greater China area, a region that
includes Hong Kong and Taiwan, according to data compiled by Bloomberg.
Apple shares were little changed at $95.22 on July 11 in
New York.
To contact the reporter on this story: Jeff Green in
Southfield, Michigan at jgreen16@bloomberg.net
To contact the editors responsible for this story:
Bernard Kohn at bkohn2@bloomberg.net Stanley James
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