Apple to China: iPhone not a national security threat

Apple wants Chinese customers to know that iPhones do not pose a national security threat. 

A day after Chinese Central Television (CCTV), a Chinese state media organization, reported that a feature on iPhones could possibly reveal important state secrets, Apple issued a statement on its Chinese website assuaging concerns that it violates users' privacy. 

"We work tirelessly to deliver the most secure hardware and software in the world," the statement reads. "Unlike many companies, our business does not depend on collecting large amounts of personal data about our customers. We are strongly committed to giving our customers clear and transparent notice, choice and control over their information, and we believe our products do this in a simple and elegant way."

CCTV, citing Ma Ding, head of the online security institute at People's Public Security University of China, specifically pinpointed the iOS 7 feature called "Frequent Locations." That feature gathers location-specific information to remember places users have been and to help them with directions and navigate traffic. 

As Elizabeth Goitein, co-director of New York University's Brennan Center for Justice's Liberty and National Security Program, said in a recent interview, this accusation underscores the potential dangers that can arise from collecting vast quantities of meta data, or data about data, from unsuspecting users. "Meta data can be used in a way that's harmful to national security," she said in the interview.

However, Apple denies these allegations. In fact, in its statement, it notes that "Apple does not track users’ locations – Apple has never done so and has no plans to ever do so." Rather, when determining a phone's location, the statement points out, Apple collects data on the locations of cell towers and WLAN hotspots that Apple receives from the iPhones. Still, "an Apple device does not transmit any data that is uniquely associated with the device or the customer," the statement reads. 

Apple further notes that users control what information gets collected from their devices. Moreover, it says that customers must voluntarily enable the tracking feature as it is not enabled on the device's default setting and that users can enable the feature for some apps while disabling it for others. 

"Apple does not obtain or know a user’s Frequent Locations and this feature can always be turned “Off" via our privacy settings," the statement reads. 

On Monday, an article in China Daily, an English-language newspaper published in China, seemed to qualify CCTV's initial accusation of the iPhone in the wake of Apple's statement. The newspaper cited Bryan Wang, China head of industry consultancy Forrester Research Inc., who said location-based services on iPhones do not in fact pose a threat to national security.

"Consumer data, particularly through authorization of personal data access on mobile devices, is not new and has been inadequately protected by many phone manufacturers and app developers in China," the newspaper stated.

"The tracking of location features is almost standard across all major smart phone vendors and platforms globally," Wang told China Daily.

This back-and-forth comes at a time of tension for US technology companies operating in China. In March, Chinese hackers broke into the computer networks of a US government agency that contains the personal information of all federal employees, The New York Times reported last week, citing "senior American officials." 

Last month, Chinese state media accused US technology companies such as Google, Apple, and Microsoft of spying on China to steal secrets. It was one of a slew of attacks made by Chinese media in the wake of revelations about the National Security Agency spying program made by Edward Snowden last year. 

"U.S. companies including Apple, Microsoft, Google, Facebook, etc. are all coordinating with the PRISM program to monitor China," the People's Daily said on its official microblog, commenting on one of the NSA spying programs revealed by Mr. Snowden, according to Reuters. 

This spat also marks a turning point for Chinese domestic technology companies. China is increasingly turning to domestic technologies as opposed to relying on foreign technologies. Last week, a Chinese court rejected a claim made by Apple that challenged the validity of a Chinese company's patent of a software application that closely resembles Apple's own Siri voice-recognition technology.

The iPhone began being sold by China Mobile Communications Corp. in January of this year. But discounts for the phone will raise subsidies for all phones sold in China this year, said Chief Financial Officer Xue Taohai in March, according to Bloomberg. However, if subsidies were to be reduced, more expensive products – like the iPhone – would likely not be as competitive as local, cheaper brands, such as Xiaomi Corp. or Lenovo Group Ltd., Bloomberg notes. 

Still, Apple is the most desirable mobile brand in emerging markets, according to a according to a 2013 report from the marketing firm Upstream undertaken with analysts from Ovum. That report surveyed consumers in Brazil, China, India, Nigeria, and Vietnam.