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Private I: Apple's Chinese market share may affect security judgment

Glenn Fleishman | May 4, 2015
Apple's latest earnings show a huge uptick in revenue from China, now the company's second biggest market after the US. But China demands a lot from companies that do business within its borders.

The Chinese government has adopted new regulations requiring companies that sell computer equipment to Chinese banks to turn over secret source code, submit to invasive audits and build so-called back doors into hardware and software, according to a copy of the rules obtained by foreign technology companies that do billions of dollars' worth of business in China.

(The United States has allegedly attempted to insert its own back doors in equipment made by Chinese firms, notably Huawei.)

While these rules apply to the banking industry, and haven't been put into enforcement yet, pressure apparently exists across many industries for the same sorts of requirements, partly to turn purchases to Chinese firms that will have no choice but agree to the conditions.

While Apple failing to boot CNNIC and failing to discuss its reasoning for not doing so isn't a minor point when hundreds of millions of computers and devices are affected by its decision, and two other firms--one a competitor and one not really in the same business or in any real business at all--with different constraints in China acted quickly and publicly.

The importance of China to Apple's continued growth can't be understated. This is why they should be held to just as high a standard of disclosure about issues affecting security there, as they are when Tim Cook bucks the FBI and NSA.

 

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