Obama’s spying addiction may dramatically weaken iPhone sales in China

How much more damage can the NSA, CIA and Barrack Obama’s spying addiction possibly inflict on America’s standing in the international community? How about jeopardizing iPhone sales in China. Yes, it is a global village, and actions inflicted elsewhere do have a funny way of coming home to roost.

The father, son and holy ghost of surveillance are now set to plague Apple’s bottom line, forcing the Cupertino company to issue assurances that they are not tracking Chinese citizen’s every move in order to feed the data hungry NSA and CIA.

Bloomberg is reporting that:

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.”

That is one uncomfortable statement coming out of Apple. Profits trump everything, including government spying, and we could not possibly imagine Apple jeopardizing the massive Chinese market for the U.S. government’s spy program.

Could this mean that Apple and other technology giants will start to lobby Washington to put a back off a bit on all the data collection stuff?

Apple, after all, is not the only technology company fighting off data collection and tracking accusations leveled against it by China’s CCTV:

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.

With Apple’s iPhone possibly facing a chilling fall and winter sales quarter in China, what handset options remain for Chinese consumers? How about home town hero Xiaomi mobile devices.

People familiar with the handset market in China are reporting that the Chinese government told its three state-owned wireless carriers (before the CCTV report aired) to cut marketing expenses because they overspent on subsidies and advertising for devices such as the Apple handsets. A reduction of subsidies would make high-end devices like the iPhone more expensive in the world’s largest smartphone market. The cut would benefit domestic phone makers including Xiaomi Corp., which offer less costly models…and hurt Apple real bad.

References:

http://www.bloomberg.com/news/2014-07-12/apple-refutes-china-assertions-on-iphone-as-security-risk.html