Apple Attacked In China Again: Threat To National Security

Apple Attacked In China Again: Threat To National Security
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Apple Inc. (NASDAQ:AAPL)’s Frequent Locations feature is the source of the complaint, according to a report from CCTV. The Wall Street Journal reports that a researcher who spoke to the network called the location information “extremely sensitive data,” adding that if someone accessed it, the entire country’s “economic situation” and “even state secrets” could be revealed.

Apple battles for share in China

Research firm Analysys indicates that Apple holds 6% of China’s smartphone market and 80% of the greater-than $500 segment of the smartphone market. Many of China’s top government officials and the executives of the nation’s biggest companies use iPhones. Even Peng Liyuan, China’s first lady, used an iPhone as recently last year, although she has since apparently changed to a smartphone made by Chinese manufacturer ZTE Corporation (SHE:000063) (HKG:0763).

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Of course the views held by CCTV do not always represent those of the government, but the broadcaster’s reports do carry quite a bit of weight with Chinese officials and companies. CCTV’s reports have sparked recalls and policy changes among China’s largest companies.

What will happen to Apple next in China?

At this point, it’s still unclear whether Apple’s products will come with new limits or rules in China. However, state-run media has impacted the company before. Last year, Apple Inc. (NASDAQ:AAPL) CEO Tim Cook ended up apologizing after CCTV accused the company of discrimination in China through its warranty policies.

Chinese officials are already suspicious of the U.S. when NSA whistleblower Edward Snowden claimed that the agency was spying on them in cooperation with U.S. technology companies. However, Apple said in the past that it doesn’t give the U.S. government direct server access.

Apple not the only U.S. company targeted in China

U.S. companies have long been targets of Chinese state-run media. Cisco Systems, Inc. (NASDAQ:CSCO) and International Business Machines Corp (NYSE:IBM), as well as others, saw backlash as a result of the NSA leak as well.

Also last month, state TV questioned Microsoft Corporation (NASDAQ:MSFT)’s Windows 8 operating system. Beijing’s procurement center said in May that it would not allow government computers to run Windows 8. In addition, China has disrupted Google Inc (NASDAQ:GOOG) (NASDAQ:GOOG)’s services there for more than a month.

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