Chinese Media Calls Apple iPhone a National Security Threat

Is the Chinese government anti-iPhone? Following subsidy cuts, a state-backed television report said an iPhone feature could threaten "state secrets."  

Chinese state media has labeled the Apple iPhone a threat to national security, Reuters reported June 11.

In a television report, state-owned broadcaster CCTV said the iPhone's Frequent Locations feature could reveal too much about users, making it possible for them to be tracked. A researcher interviewed by CCTV remarked that the feature could even lay bare "state secrets."

"I don't think any Chinese official thinks that Apple's 'Frequent Locations' tracking is a real threat. If they did, they'd do a lot more than complain about it in the press," Ezra Gottheil, principal analyst with Technology Business Research (TBR), told eWEEK.

"It's impossible to tell if this is the Chinese equivalent of press sensationalism or some attempt to weaken Apple sales in favor of Chinese device vendors," Gottheil added.

The Chinese government recently told several state-owned wireless carriers, including China Mobile—the largest carrier in the world, with more than a billion subscribers—to cut spending on subsidies and advertising by the equivalent of $6.4 billion within three years, according to a July 8 Bloomberg report. It added that the Chinese government believes too much is being spent to promote high-end devices such as the iPhone.

As the name suggests, the Frequent Locations feature stores, on the phone, locations that users visit often. Apple says this information is not sent to the company.

"The information makes the iPhone more useful," said Gottheil, "but it certainly could be abused. I believe Apple does not access the data, but it could be hacked. We are faced with many tradeoffs between privacy and convenience or security."

Apple offered no immediate response to the report.

Apple In China

China, now the world's largest smartphone market, represents an enormous opportunity for Apple, which only began selling the iPhone with China Mobile in January. Like rival Samsung, however, it's finding it no simple matter to compete against China-based brands with loyal followings.

Xiaomi, for example—which made headlines last summer when Google's head of Android product management, Hugo Barra, left to play a major role at the Chinese phone maker—enjoyed 271 percent growth year-over-year, it announced earlier this month. During the whole of 2013, Xiaomi sold 18.7 million phones, catapulting it ahead of Apple, Coolpad and Huawei.

During the month of April, the top-selling phone in China was the Xiaomi Redmi, followed by the iPhone 4S and then the iPhone 5S, according to Counterpoint Technology Market Research. Samsung's Note 3 was the number-four top seller, followed by the Xiaomi MI3.

ABI Research, in a springtime report, said vendors such as Apple should expect to soon enough also compete with these Chinese brands in markets around the world, including the United States. Lenovo, for example, a market leader in China—which held a 12 percent share of China's smartphone market in the first quarter, behind only Samsung, with an 18 percent share—made clear with its acquisition of Motorola that it intends to expand beyond its home turf.

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