Tag Archives: iPhones

Apple’s Rotten Core, by Charles Hugh Smith

A company is lucky to have one product like Apple’s iPhone—very high margin with tremendous consumer demand—during its entire lifespan. It’s a success Apple will almost certainly not be able to duplicate. From Charles Hugh Smith at oftwominds.com:

Entering commoditized, fiercely competitive low-margin services cannot substitute for the high-margin profits that will be lost as global recession and saturation erode iPhone sales.
Apple has always been equally an enterprise and a secular religion. The Apple Faithful do not tolerate heretics or critics, and non-believers “just don’t get it.”
So the first thing any critic must do is establish their credentials as a Believer: My first Mac model 0001 was the 21,447th made in week 32 of 1984 in Fremont, California. Now that we’ve established that, we can move on to my profound sense of anguished abandonment that Apple ceased producing the iPhone SE, the only form factor that works for me.
But Apple Faithful are accustomed to repeated bouts of anguished abandonment; it’s just one of the burdens the faithful must bear.
Focusing on the enterprise rather than the religion, Apple’s core–its revenue and profit potential–is rotten. As the charts below illustrate, despite all the happy talk about growing “services,” the hardware-software iPhone generates nearly 60% of Apple’s revenues. The iPhone ecosystem is also the foundation of the “services” currently being hyped as replacement sources of revenue.
The problem is that the proprietary features of the iPhone that have generated strong demand as prices kept rising are reaching diminishing returns. People want the status of owning an iPhone, but there are limits on what the bottom 90% can pay for that status.
The new features of the $1,000 iPhones have also reached diminishing returns. This is analogous with adding memory to a computer or increasing the pixel count in a digital camera: at some point, the added feature no longer has any impact on the user experience.

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CIA sought to hack Apple iPhones from earliest days: The Intercept, from Reuters

This might not help iPhone and Apple Watch sales, From Reuters:

Reuters) – CIA researchers have worked for nearly a decade to break the security protecting Apple (AAPL.O) phones and tablets, investigative news site The Intercept reported on Tuesday, citing documents obtained from NSA whistleblower Edward Snowden.

The report cites top-secret U.S. documents that suggest U.S. government researchers had created a version of XCode, Apple’s software application development tool, to create surveillance backdoors into programs distributed on Apple’s App Store.

The Intercept has in the past published a number of reports from documents released by whistleblower Snowden. The site’s editors include Glenn Greenwald, who won a Pulitzer Prize for his work in reporting on Snowden’s revelations, and by Oscar-winning documentary maker Laura Poitras.

It said the latest documents, which covered a period from 2006 to 2013, stop short of proving whether U.S. intelligence researchers had succeeded in breaking Apple’s encryption coding, which secures user data and communications.

Efforts to break into Apple products by government security researchers started as early as 2006, a year before Apple introduced its first iPhone and continued through the launch of the iPad in 2010 and beyond, The Intercept said.

Breaching Apple security was part of a top-secret program by the U.S. government, aided by British intelligence researchers, to hack “secure communications products, both foreign and domestic” including Google Android phones, it said.

Silicon Valley technology companies have in recent months sought to restore trust among consumers around the world that their products have not become tools for widespread government surveillance of citizens.

Last September, Apple strengthened encryption methods for data stored on iPhones, saying the changes meant the company no longer had any way to extract customer data on the devices, even if a government ordered it to with a search warrant. Silicon Valley rival Google Inc (GOOGL.O) said shortly afterward that it also planned to increase the use of stronger encryption tools.

Both companies said the moves were aimed at protecting the privacy of users of their products and that this was partly a response to widescale U.S. government spying on Internet users revealed by Snowden in 2013.

An Apple spokesman pointed to public statements by Chief Executive Tim Cook on privacy, but declined to comment further.

“I want to be absolutely clear that we have never worked with any government agency from any country to create a backdoor in any of our products or services,” Cook wrote in a statement on privacy and security published last year. “We have also never allowed access to our servers. And we never will.”

Leaders including U.S. President Barack Obama and British Prime Minister David Cameron have expressed concern that turning such privacy-enhancing tools into mass market features could prevent governments from tracking militants planning attacks. The CIA did not immediately reply to a request for comment.

http://www.reuters.com/article/2015/03/10/us-apple-cybersecurity-idUSKBN0M610V20150310

He Said That? 1/26/15

From Anatoly Kucherena, Edwin Snowden’s lawyer:

Edward never uses an iPhone, he’s got a simple phone. The iPhone has special software that can activate itself without the owner having to press a button and gather information about him, that’s why on security grounds he refused to have this phone.

http://libertyblitzkrieg.com/2015/01/26/edward-snowden-wont-use-an-iphone-heres-why/

For anybody who has been paying attention, the relationships between Big Government, Big Intelligence, Big Military, and Big Tech are not news. Apple recently introduced an encryption feature on its latest iPhone that the government can supposedly not break, but according to Mr. Snowden, and there is little reason to doubt his expertise, iPhones still allow the government to track you. When the US finally descends into a totalitarian police state, there will be a special spot in hell for the tech company executives who enabled the government to play electronic Big Brother.