Talking tech since 2003

On Friday the 11th the Chinese state broadcaster CCTV (China Central Television) labeled Apple’s iPhone a national security threat. This accusation was made on account of a function that we all know and use, the location services. We use it to find restaurants on Yelp, get directions––mildly useful stuff. The hullabaloo comes from the fear that this function could be used to glean knowledge of state secrets, and China’s general economic situation.

At first glance this seems like the typical behavior of a paranoid Communist state, and while there is a healthy sprinkling of it for sure, there are also legitimate concerns. American tech companies tend to align more closely with, well, America. As was alleged/revealed by Edward Snowden, this alignment included providing the US government with data––what data, exactly, is unclear of course.

This would be concerning for any country embroiled in a cyber-war, which the US and China are. Companies like Apple are privy to so much of a user’s personal information, and Apple iPhones comprise 6% of the Chinese smartphone market. This number isn’t as high as Samsung’s approximate 18%, but it’s high enough that a lot of people doing sensitive work would own iPhones. The theory goes, I assume, that the US government could spy on these people through their iPhones.

This story has gained a decent amount of traction––being reported on by Time and the Wall Street Journal to name two––but it seems to be a lot of fuss about not all that much. No actual government action is being taken alongside this accusation. And while the Chinese government has banned specific technologies in the past––most notably when it prevented the purchase of new government computers that ran Windows 8 back in May––there’s no evidence as of yet that this announcement is on the heels of any decisions or actions.

More importantly, however, Apple outright states that it does not amass user data. “We have no interest in amassing personal information about our customers…. We do not store location data, Maps searches, or Siri requests in any identifiable form.” (Read the whole document here.) So the fears of spying, in actuality, shouldn’t hold much water. One could, of course, question wether Apple is telling the truth, but that would be a whole different ball game.

So what all of this does, essentially, is raise a lot of questions about the future. What should American tech companies expect in China? How does the future look? 25% of Apple’s global revenue came from China, Taiwan, and Hong Kong in the most recent quarter, and Apple sales have grown 13% over the past year in these regions. As the Chinese market continues to grow, so too will companies like Apple. Will this be seen as a threat? One thing is certain: as tech involvement in China inevitably increases, so too will new situations like this one arise. Companies may have to distance themselves from their political birthplaces to new markets, or find some way to work in the middle. We’ll just have to see how it plays out.


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