A US court was told how Apple was cheerfully helping the Chinese government unlock phones but was refusing to help American coppers catch terrorists.
The US Justice Department said Apple rhetoric on the case was “false” in a high-profile fight over the government’s bid to unlock an encrypted iPhone belonging to one of the San Bernardino shooters.
Last month, the Federal Bureau of Investigation obtained a court order requiring Apple to write new software and take other measures to disable passcode protection and allow access to shooter Rizwan Farook’s iPhone.
Apple has not complied. It said the government request would create a “back door” to phones that could be abused by criminals and governments, and that Congress has not given the Justice Department authority to make such a demand.
However the DOJ told the court that Apple has said the government’s request would open the company to pressure from repressive regimes to provide similar assistance. But the Justice Department on Thursday questioned whether Apple is actually resisting such requests.
“For example, according to Apple’s own data, China demanded information from Apple regarding over 4,000 iPhones in the first half of 2015, and Apple produced data 74 percent of the time,” prosecutors wrote.
Apple’s rhetoric “is not only false, but also corrosive of the very institutions that are best able to safeguard our liberty and our rights: the courts, the Fourth Amendment, longstanding precedent and venerable laws, and the democratically elected branches of government,” prosecutors added.
The government said Apple “deliberately raised technological barriers” to prevent execution of a warrant.
Apple General Counsel Bruce Sewell on Thursday said the brief reads “like an indictment” and called the claims about providing data to China a “smear” based on thinly sourced news reports.
Apple is trying to re-invent itself as the company that protects users’ privacy, however while it is prepared to pick fights with the government at home it is quite prepared to provide user data to the Chinese.
Desperate to keep its second largest market it has censored apps that wouldn’t pass muster with Chinese authorities. It has moved local user data onto servers operated by the state-owned China Telecom and submits to security audits by Chinese authorities.
Of course the Chinese do not allow Apple to have end-to-end encryption and do not accept a refusal to cooperate with their police, particularly in a terrorism case.
But there are signs that Apple might have to roll over even more. Beijing is increasingly tightening the screws on foreign technology outfits. It might be that Apple is worried that if it surrenders to the FBI then China might demand more.
James Lewis, senior fellow at the Centre for Strategic and International Studies in Washington said Apple’s moves in the US are part of Apple’s desire to persuade the global market, and particularly China, that the FBI can’t just pop in and ask for data.
The Chinese might also be worried that its users might equally be compromised if US spooks find it too easy to get into an Apple phone.
Former rubber wear maker Nokia reported better than expected profits for its telecom network equipment business but warned that its Chinese business might be a bit slow this year.
Nokia’s network gear business, which accounts for more than 90 percent of its stand-alone sales, reported fourth-quarter operating profit margin of 14.6 percent, compared with 14 percent a year earlier.
Net sales for the Nokia group decreased three percent in constant currency terms to $4.08 billion, it said.
Nokia last month started to combine its operations with Alcatel-Lucent, and this week it said it holds 91 percent of Alcatel shares.
Alcatel-Lucent said in a statement that its fourth-quarter adjusted operating profit grew to $632.86 million helped by stronger sales at the end of the year, notably in software.
Revenue over the period rose 13 percent to $7.70 billion.
Catch-up patent payments from Samsung helped Nokia’s total operating profit in the quarter grow 46 percent from a year ago to $829 million, roughly in line with market consensus.
Nokia said it would issue its full-year outlook for the combined networks business in conjunction with its first quarter results. The acquisition is aimed at helping Nokia compete with Ericsson and Huawei in the network gear market.
Qualcomm and the Chinese government have shown off a a $280 million joint venture for the design, development and sale of advanced server technology.
The move is being seen as a part of Qualcomm’s attempts to deepen involvement in China and perhaps avoid it being sued for anti-trust actions in the future.
Qualcomm officials in Beijing signed a strategic cooperation agreement with the government of Guizhou province and announced the Guizhou Huaxintong Semi-Conductor Technology, a joint venture with initial capital of 1.85 billion million.
Qualcomm also will establish an investment company in Guizhou that will provide future investments in China.
Derek Aberle, president of Qualcomm Ihe joint venture, cooperation agreement and formation of an investment company are important steps for Qualcomm as it deepens its cooperation and investment in China.
Aberle said that in addition to its capital investment, Qualcomm was licensing its server technology to the joint venture, assisting with research and development and would supply expertise to implement the project.
Licensing is a cruicial move for Qualcomm in China and was at the heart of the issues that the government had with the chipmaker.
While David Cameron is confident that he can stamp out porn and terrorism with Chinese style monitoring and censorship, he should know that the Great Firewall of China has been bought to its knees by word play.
According to the BBC the Chinese have worked out that you can defeat the filter by replacing words which the firewall is looking for with words that it isn’t.
For example if you want to say that the government is a bunch of capitalist, corrupt, bribe merchants you use the word “Zhao.” Zhao is the most common Chinese family name so the filters can’t pick it up, otherwise they will become completely clogged up in seconds.
But Zhao also happens to be the name of the Chinese Premier Zhao Ziyang who died in 2005. So you can say A “Zhao family member” to refer to someone with a vested interest, someone who holds actual power.
Vincent Ni of the BBC Chinese Service says the way social media users are using “Zhao” is in line with a Chinese linguistic tradition which pre-dates the internet. “Chinese people have long used what are known as ‘oblique accusations’ which enable them to express their opinion when it would not be possible to make a direct criticism of those in authority.”
The method can be easily adapted on western social networking and has actually been used on satirical magazines like Private Eye where euphemisms “tired and emotional” replace more litigious phrases like “drunk in public” or “bacon lover” becomes Tory British Prime Minister with a tendency to try to control things he shouldn’t.
In a sign that Apple’s days of printing its own tax-free money are over after people decided not to buy its iPhone 6s.
According to the Nikkei Apple will cut production of its latest iPhone models by about 30 percent in the January-March quarter as shedloads sit in storerooms unsold.
The Tame Apple Press insists that production will be scaled back to let dealers go through their current stock and then it will be business as usual. Normally in cases like this it means that the product has reached its end of life. It could explain why Apple is supposed to be fast tracking the iPhone 7. Normally those would come out in October, but it has been rumoured that Jobs’ Mob is releasing them halfway through the year instead.
The report prompted a 2.5 percent drop in Apple shares, which have lost about a quarter of their value from record highs in April, reflecting worries over slowing shipments. Shares in the mainly Asian makers of the iPhones’ screens and chips were also sharply lower on Wednesday.
Wall Street had been getting cynical about Apple’s ability to make record products sales when the smartphone market was saturated and the Chinese market was in the doledrums.
FBR Capital Markets analyst Daniel Ives called the cut “eye-opening.” He said that Wall Street was bracing for a cut but the magnitude was a bit more worrisome.
Some smelt a rat when China’s Zhengzhou capital city government issued $12.53 million in subsidies to companies under Foxconn, a major iPhone assembler.
Foxconn employs hundreds of thousands of workers in the province, and a subsidy of this kind suggests the government is concerned about the company’s ability to maintain its workforce.
Foxconn had granted its factory workers time off around Chinese New Year, which falls on February 8, rather than follow its past practice of paying overtime to keep its production lines humming through the biggest holiday in China.
The Chinese have beaten the US and UK to writing laws forcing their users to hand over encryption keys.
The Chinese “parliament” has just passed a law that requires technology companies to comply with government requests for information, including handing over encryption keys.
Using the concept of counter-terrorism, which is the same move touted by UK pig fancier David Cameron, the Chinese government’s hopes to curtail the activities of militants and political activists.
This latest move is one that will be viewed very suspiciously by foreign companies operating within China, or looking to do so.
While the government insists that there will be no requirement for companies to install backdoors, like prime minister Cameron wants the UK to, the country has already earned itself a reputation that is going to be very difficult to shake off.
The deputy head of the Chinese parliament’s criminal law division tried to play down the controversy surrounding the new law. Li Shouwei said:
“This rule accords with the actual work need of fighting terrorism and is basically the same as what other major countries in the world do.”
The new law also permits overseas action by the People’s Liberation Army — something which will be eyed with suspicion and likely opposed by for foreign nations.
There is also a provision that “media and social media cannot report on details of terror activities that might lead to imitation, nor show scenes that are ‘cruel and inhuman’ “– something else which will bring about an accusation of standing in the way of free speech.
The Chinese government attempted to tell foreign tech companies that they had nothing to fear from new anti-terrorism laws saying that they were only copying what was done in the US.
The draft anti-terrorism law has caused concern in Western capitals as it could require technology firms to install “back doors” in products or to hand over sensitive information such as encryption keys to the government.
The American government does not believe that anyone should be allowed to install backdoors other that its own spooks and gets rather twitchy when other governments want to do the same thing.
Chinese Foreign Ministry spokesman Hong Lei correctly pointed out that the US position was hypocritical and he hoped that the US respected China’s law-making process and did not adopt “double standards”.
China faced a serious threat from terrorism and needed to improve its legal framework to deal with the problem, Hong added.
“What we are doing is reasonable and fair,” he said.
Terrorists had been using the Internet to operate and China needed laws to cope with this, Hong added. Basically China only copied laws being drafted in the US and other European countries, he added.
“The draft of our anti-terrorism law mandates the obligation of telecommunications operators, Internet servers and service providers to assist public and state security organ in stopping and probing terrorist activities,” Hong added.
“This is both totally rational and necessary. This rule won’t limit the lawful operations of companies, does not provide a ‘back door’ and will affect neither the firms’ intellectual property nor Internet users’ freedom of speech.”
Officials say China faces a growing threat from militants and separatists, especially in its unruly Western region of Xinjiang, where hundreds have died in violence in the past few years.
However human rights groups, though, doubt the existence of a cohesive militant group in Xinjiang and say the unrest mostly stems from anger among the region’s Muslim Uighur people over restrictions on their religion and culture.
Software king of the castle Microsoft, said it will set up a joint venture with China Electronics Technology Group (CETC).
The two companies already have a relationship with each other but the new joint venture will license and provide technical support for Microsoft Windows 10.
Microsoft has had some local difficulties in China with its operating systems and CETC will give the Seattle company a boost to penetrate the market with legal copies of its operating system.
CETC will supply Windows 10 in a local version not only to businesses and to individuals, but also for military use.
According to Yusuf Mehdi, a senior Microsoft executive, the joint venture needs regulatory support.
Called C&M Information Technologies, the outfit will collect feedback from government customers to guide it in updates to government Window 10 image.
Beancounters at data analyst TrendForce have been shuffling their tarot cards and have decided that one day that Chinese chip designers will rival the big names like Qualcomm and MediaTek.
The Chinese have been spending a fortune trying to get self-reliance in semiconductors and have spawned a cluster of chip designers.
Trendforce said that China has nine companies that design and sell chips in the global top 50 from just one in 2009. Clients such as Chinese smartphone manufacturers have also helped compatriot chip designers amass a market share of almost a fifth, according to data analyst TrendForce.
Huawei subsidiary HiSilicon and Spreadtrum Communications are rising in prominence as the government ploughs funds into home-grown technology to reduce cyber-security risk, following revelations in 2013 of US global cyber-snooping programs.
It is harder for US tech firms to do business and Qualcomm is facing delays closing licensing agreements. In contrast, sales at Chinese designers are set to surge this year, some by as much as 40 percent.
Chinese chip designers lag top rivals in terms of technology by four to five years yet have the potential to disrupt the global chip supply chain, industry experts and executives said.
China’s list of chip design hopefuls include HiSilicon, Spreadtrum and RDA Microelectronics which are controlled by state-backed Tsinghua Unigroup. But there is also All Winner Technology, Leadcore, Galaxycore Microelectronics and Goodix Technology.
TSMC has indicated it thinks that the Chinese will become a strong force in a few years particularly in the integrated circuits market.
TSMC co-Chief Executive Officer Mark Liu warned the Chinese that they have to be careful not to just dump a ton of low price chips in the market.
This is what happened when the Chinese tried to develop industries, such as solar panels and liquid crystal displays. In that case the investment led to oversupply and plunging prices.