Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has done exactly what was expected from him. The head of the world’s most valuable company by market capitalization says that his firm has not built any back doors into the devices it sells. Claims that the company allows devices to be easily hacked in order to give access to American security officials are harming the company’s business in China.
According to a statement released by the company, the backdoor that was reported in the company’s iOS 7, is actually just a way to allow the devices to work with enterprise IT departments. It’s not clear whether Tim Cook would be allowed to admit putting a back door in the company’s devices even if it were true, given the power of the NSA and other intelligence and law enforcement agencies in the United States.
Apple denies back door in China
A statement from Apple Inc. (NASDAQ:AAPL) read:
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“We have designed iOS so that its diagnostic functions do not compromise user privacy and security, but still provides needed information to enterprise IT departments, developers and Apple for troubleshooting technical issues. A user must have unlocked their device and agreed to trust another computer before that computer is able to access this limited diagnostic data. The user must agree to share this information, and data is never transferred without their consent.
As we have said before, Apple has never worked with any government agency from any country to create a backdoor in any of our products of services.”
The back door that is apparently in Apple Inc. (NASDAQ:AAPL) devices was reported on yesterday across the web. According to researcher Jonathan Zdziarski, the back door could have been used by the NSA, or another agency, to gather data on potential target. Whether Apple was complicit in the design of the back door is up for debate.
It’s not the first time in recent weeks that the device has been called a threat to China’s national security, and Apple is now clearly on the defensive about the value of its phones to Chinese consumers.
Apple faces big trouble in greater China
The iPhone 6 launch is just around the corner, and Apple Inc. (NASDAQ:AAPL) will be relying on Greater China to provide a big boost to its numbers. The company’s devices are now available on all of the major carriers in the People’s Republic of China, while its large screen additions to the iPhone family, which rumors say include a 4.7 inch and 5.5 inch iPhone 6, are sure to play on the area’s love for large-screened phones.
Despite the wild expectations about the iPhone 6, a huge amount of damage could be dealt to the company’s image in China because of worries over national security. That damage will not become clear until the company releases its earnings report for the fourth quarter of its fiscal 2014.
Those numbers are not due until three months from now, but the company’s third quarter earnings report is set to be held tonight. Expect a volley of questions about the damage the company’s brand could be dealt on Chinese security worries.