Apple Execs Now Facing Jail Time for Deliberately Slowing Down iPhones

Apple stands accused of breaking a French law which makes it illegal to "deliberately reduce the lifespan of a product to increase the rate of replacement.”

NSA Whistleblower Snowden Launches Mobile App For Paranoid People

Famed NSA Whistleblower Edward Snowden has just launched Haven, an app for people to transform any Android smartphone into a high-tech security system for detecting intrusions.

Snowden, while currently on the run from the CIA, hiding somewhere in Moscow until 2020, has found enough time to launch his new mobile security app last Friday for the sufficiently paranoid person (e.g. activists, dissidents, journalists, & etc).

"When the lead developer explained the project to his young children, they found another use for it: "We’re going to catch Santa!" " https://t.co/Beangjk90g

— Edward Snowden (@Snowden) December 23, 2017

Haven is designed to be installed on any Android smartphone, particularly inexpensive and older devices. It operates like a home surveillance system, leveraging on-device sensors to provide surveillance of physical areas. Sensors within the Android phone monitor motion, sound, vibration and light, watching for unwanted guests to notify a user. Combining Haven with an array of sensors in any smartphone, coupled with the most secure communications technologies like Signal and Tor, the app is providing Snowden and other activists around the world with a mobile security system.

The app was developed by Freedom of the Press Foundation, Guardian Project, and Snowden. According to the Guardian Project, the app’s prototype funding was provided by FoPF, and donations to support continuing work can be contributed through their site: https://freedom.press/donate-support-haven-open-source-project/.

According to the Guardian Project, this is how the app works,

Haven only saves images and sound when triggered by motion or volume, and stores everything locally on the device. You can position the device’s camera to capture visible motion, or set your phone somewhere discreet to just listen for noises. Get secure notifications of intrusion events instantly and access the logs remotely or anytime later.

On-device sensors monitor for disturbance, and then logs the data:

• Accelerometer: phone’s motion and vibration


• Camera: motion in the phone’s visible surroundings from front or back camera


• Microphone: noises in the environment


• Light: change in light from ambient light sensor


• Power: detect device being unplugged or power loss

Further, the group explains why Haven is well suited for Android devices and does make the claim, a version for the iPhone is on the horizon.

While we hope to support a version of Haven that runs directly on iOS devices in the future, iPhone users can still benefit from Haven today. You can purchase an inexpensive Android phone for less than $100, and use that as your “Haven Device”, that you leave behind, while you keep your iPhone with you. If you run Signal on your iPhone, you can configure Haven on Android to send encrypted notifications, with photos and audio, directly to you. If you enable the “Tor Onion Service” feature in Haven (requires installing “Orbot” app as well), you can remotely access all Haven log data from your iPhone, using the Onion Browser app. So, no, iPhone users we didn’t forget about you, and hope you’ll pick up an Android burner today for a few bucks!

If one of the sensors was triggered, a notification would be sent to one of the following platforms:

• SMS: a message is sent to the number specified when monitoring started


• Signal: if configured, can send end-to-end encryption notifications via Signal

 

My partner has been testing Haven for a few months with a spare phone. Every time you open the closet, it sends a picture by Signal. In addition to impressive intrusion detection capabilities, you can also use it to send helpful reminders! ? https://t.co/FHi1bjFsLP pic.twitter.com/IS58HzDVha

— lex.txt (@lex_is) December 22, 2017

As for Snowden, he remains in an asylum somewhere in Moscow until 2020 when his residence permit expires.

With the launch of Haven, it seems as Snowden is attempting to change the calculus of risk for when US authorities come hunting for him once more.

If all else fails, Snowden might have just invented a baby monitor for the broke millennial. 

Apple Admits They Deliberately Slow Down Older iPhones As Software Updates Roll Out

Apple has admitted to deliberately slowing down older iPhones when they roll out software updates—and they claim it is a "feature."

Is The iPhone X Racist?

A woman in the eastern Chinese city of Nanjing has been offered a second refund after faulty facial recognition software on two iPhone X handsets allowed her colleague to unlock them.

As The South China Morning Post reports, the woman, identified only by her surname Yan, told the Jiangsu Broadcasting Corporation that despite activating and configuring each phone’s facial recognition software, her work colleague was able to get into both devices on every attempt.

Yan said the first time it happened, she called the Apple hotline, but the staff would not believe her.

Shen then went with her colleague to the nearest Apple store, where her colleague used facial recognition on the phone to demonstrate the issue to staff, according to the report.

The store said the camera might be faulty and gave Yan a refund. But the new iPhone X that she bought also had the same problem, prompting the shop to offer another refund, the report said.

No details were given about whether the woman decided to purchase a third iPhone X.

Apple did not respond immediately to a request for comment.

So the question is... does the iPhone X (or its operating system) think all young Chinese women look the same? ... and therefore, is it racist?

Do Not Break Your iPhone X

With the iPhone X, Apple’s re-designed anniversary iPhone, official launch today, we saw the familiar images of people lining up in front of Apple Stores around the world to be among the first ones to get their hands on the new device.

Despite the X’s lofty price – it starts at $999 for the smaller 64 GB model, making it the most expensive iPhone to-date – it’s safe to say that Apple could sell a lot more units on Friday than it can possibly produce by then. When the iPhone X became available for pre-order last Friday, it was sold out within minutes and the estimated delivery time currently stands at 5 to 6 weeks.

But, as Statista"s Felix Richter notes, to all those quick or lucky enough to get an iPhone X anytime soon, our advice is: do not drop it.

You will find more statistics at Statista

According to Apple’s official support website, the company’s latest smartphone is just as expensive to repair as it is to acquire.

Repairing the screen alone will set you back $279 or nearly twice what you pay for a new iPhone 8 screen. If you’re unlucky enough to break more than just your screen, you’ll be out $549 to get your phone fixed.

Oops...

Warning: iPhone Apps Can Secretly Turn On Your Camera And Take Pictures At ANY TIME

A new warning has been issued to iPhone users. Apps downloaded to the smartphones can turn on the phone’s camera and take pictures at any time, and it’s doing it secretly.

Felix Krause, an Austrian developer who works for Google, built an app that was able to take pictures of its user every second and upload them, without the app or the phone ever notifying the user. He called it a “privacy loophole that can be abused by iOS apps.” When an app wants to access the camera, for example, to scan a credit card or take a profile picture during the set-up process, the iPhone user must give the app permission to access the camera, in the same way that apps must ask to access the camera roll, location, and contact information and to send notifications. Once allowed, it has to be turned off via the settings menu. But most don’t do that.

Apple has now been urged to change the way in which iPhone apps are granted access to the phone’s camera after Krause boldly demonstrated how the apps can secretly record photos and videos without the user knowing. Krause said that once an app has been granted initial access, it can take photos and videos whenever it is opened up. Unlike on Mac computers, which have a small green light next to the camera when it is being used, there is no indication that an app is recording videos or taking photos, or when it sends them elsewhere.

The system works similarly with Android phones, but Krause’s apps were made specifically for iPhones. Google has recently deleted several apps that surreptitiously recorded users and masqueraded as legitimate apps.

The app permissions are indefinite too. They apply to both the front and back camera, as well a video. Allowing camera permissions can grant extra access in the latest version of iOS, which has a facial recognition engine that could allow apps to detect emotions.

The permissions system is not a bug or a flaw either. It works in exactly the way Apple has designed it to. Krause said malicious apps could take advantage of the permissions system to surreptitiously record users at any time.

He warned that other apps could monitor users’ emotions as they scroll through a social network news feed, record what they are saying, or live stream video of them in the bathroom as they tap away at a smartphone game. –Telegraph UK

Krause suggested that Apple introduce a system of temporary permissions. One which allows apps to take a picture during the set-up process, but revokes it after a period of time. Or they could introduce a warning light or notification to the iPhone that tells people when they are being recorded.

"This Is Very Rare" - Apple Slashes iPhone 8 Supplier Orders By 50% As Demand Dries Up

Following reports this morning that channel checks show iPhone 7 outselling iPhone 8, Taipei-based Economic Daily News reports that orders for iPhone 8 and Plus have been slashed by around 50% for November and December, citing an unidentified official at the supply chain.

As we detailed earlier, a new report by KeyBanc Capital Analyst John Vinh, channel checks have revealed that Apple"s older iPhone 7 models are outselling the recently launched iPhone 8 ahead of the early November debut of the premium iPhone X.

As traditionally new editions of the iPhone have sold quickly as fans queue for the latest upgrade, this time it"s clearly different...

 As pent up demand for the iPhone X is clearly cannibalizing sales, and the surveys add to signs that the iPhone 8 is not proving as popular as its predecessors.

"Many respondents indicated that a meaningful portion of customers are buying iPhone 7 in lieu of the new iPhone 8, given the lack of significant enhancements in the new phone," Vinh wrote in his research report, which relied on channel checks in the United States and United Kingdom.

"Feedback from stores indicate customers are waiting to purchase the iPhone X or to compare the iPhone X before buying the iPhone 8," wrote Vinh, who is rated four out of five stars by Thomson Reuters StarMine for his recommendation accuracy on the Apple stock.

Another reason for the slow uptick of the iPhone 8 could be the modest promotion by U.S. carriers, Vinh said. "While carriers continue to offer promotions for the new iPhone 8, they have been much more modest compared to the iPhone 7 launch last year," he wrote.

Which probably explains why Economic Daily News reports that Apple is now betting all-in on the iPhone X, cutting supplier orders on the iPhone 8 (and 8 Plus) drastically. [via Google Translate]

But the supply chain has said that "this year is quite rare", the new product has just been mass production for about one to three months, was asked to begin to decline, "is the first time in ten years."

Supply chain sources revealed that iPhone 8, iPhone 8 Plus expectations of 11 - 12 months of shipments of 1 to 1.2 million per month will be substantially reduced, down nearly half of the range, shipment will be only 500-600,000.

So, as we concluded earlier, with Apple bull hopes falling squarely on the shoulders of the iPhone X, a key unknown factor is what the price will be. The much-anticipated iPhone X, a glass and stainless steel device with an edge-to-edge display, will start shipping from Nov. 3 with the 10th-anniversary iPhone priced from $999, Apple"s most expensive mobile till date.

Qualcomm Files Lawsuit Seeking To Ban Sale And Manufacture Of iPhones In China

Apple experienced a sudden air pocket dip (which was promptly bought) after a Bloomberg report that Qualcomm has filed lawsuits in China seeking to "ban the sale and manufacture of iPhones in the country," a move which is the chipmaker’s biggest shot at Apple so far in a bitter legal fight between the two companies.

San Diego-based Qualcomm filed the suits in a Beijing intellectual property court claiming patent infringement and seeking injunctive relief, according to Christine Trimble, a company spokeswoman, and hopes to inflict pain on Apple in the world’s largest market for smartphones, cutting off production in a country where most iPhones are made.  Greater China accounted for 22.5% of Apple’s $215.6 billion sales in fiscal 2016.

"Apple employs technologies invented by Qualcomm without paying for them," Trimble said.

The two companies have lobbed legal shots and lawsuits at each other for years, and are currently months into a legal dispute that centers on Qualcomm’s technology licensing business. While Qualcomm gets the majority of its sales from making phone chips, it pulls in most of its profit from charging fees for patents that cover the fundamentals of all modern phone systems. The suits come at a sensitive time for Apple, which just introduced iPhone 8 and X models which aim at "reasserting leadership in a market that’s steeped in competition from fast-growing Chinese makers."

Suppliers and assemblers in China are rushing to churn out as many new iPhones as possible ahead of the key holiday season, so any disruptions would likely be costly. As reported yesterday, the iPhone X is already suffering major problems involving its facial recognition technology, which if unresolved could lead to product launch delays.

Some more details from Bloomberg on the latest litigation:

The legal battle started earlier this year when Apple filed an antitrust suit against Qualcomm arguing that the chipmaker’s licensing practices are unfair, and that it abused its position as the biggest supplier of chips in phones. Qualcomm charges a percentage of the price of each handset regardless of whether it includes a chip from the company, and Apple issick of paying those fees.

Qualcomm has countered with a patent suit and argued that Cupertino, California-based Apple encouraged regulators from South Korea to the U.S. to take action against it based on false testimony. Earlier this week, Qualcomm was fined a record NT$23.4 billion ($773 million) by Taiwan’s Fair Trade Commission, a ruling the company is appealing. Qualcomm is also asking U.S. authoriti

While on the surface the latest legal salvo may sound serious, the market"s reaction - to this as well as to everything else - has been largely negligible, as BTFD algos rushedin to quickly fill the gap created by triggerhappy sellers.

"This Is Embarrassing": 2 People Show Up For iPhone 8 Launch in China

Confirming reports that reception for Apple"s newly launched iPhone 8 may be "underwhelming" to put it lightly, as the phone provides little if any material improvement over its lower-priced predecessor even as sales for hardcore fans will be cannibalized by the iPhone X, is the following report from Hangzhou, China which shows that all of 2 people were waiting in line for the latest gizmo from Tim Cook.

As Chinese media reports, summarized by David Kersten, "note the barricades for the anticipated queue...

... that had to be put away because only 2 people showed up."

Some more details:

I"ve C&P"d this article, clumsily translated by Google, because, being from a Chinese site, it doesn"t adapt well to the Facebook environment, however, the link is provided as are the pictures.

"Embarrassing! IPhone 8 today, Hangzhou, security guards are busy removing the fence.

September 22, the Bank of China iPhone 8 officially opened in the major channels. Hangzhou Apple West Lake shop, more than six in the morning to thirty or forty security. Black fence posture full of a row of rows, turn a few 90 degrees bend. 8:00 to open the door, the door on the two line up. 8:43 security guards began to withdraw fence ...

According to Hong Kong media, and the mainland, Hong Kong, Apple shop customers have no more employees."

With the iPhone 8 a dud, at least in China, AAPL longs are hoping that the reception for the iPhone X in a few weeks will be notably more enthusiastic, or else Apple may have a major problem on its hands.

It's Not Just China: No Lines For New iPhone 8 Virtually Anywhere

Earlier we showed that in a striking lack of enthusiasm for Apple"s latest offering, the iPhone 8 which went on sale today, there were just two people in "line" in front of an Apple store in China: less than the security guards at the same location.

Unfortunately for Tim Cook, it appears that it was not just China as the entire world appears to have gotten collective cold feet when it comes to Apple"s newest gizmo,  because while Apple Stores are usually faced with shockingly long lines on the morning of a new iPhone launch, that wasn"t the case today. Anywhere.

As various reports have pointed out, some Apple Stores have very short lines out front for the iPhone 8, if they have anyone at all. According to Reuters, that there were fewer than 30 people at Apple’s Sydney store, which usually has hundreds out front. And it described a “less lively mood in Asia” than for previous launches.

In California, ABC7 reporter Chelsea Edwards posted a photo from outside of an Apple Store with no one in front of it.

Where"s the line? Apple"s #iPhone8 & #iPhone8Plus are being released today...but where are all the @Apple fans? Thoughts? @ABC7 pic.twitter.com/P1UZZlceYh

— Chelsea Edwards (@abc7chelsea) September 22, 2017

Other photos showed short (or no) lines in Brisbane, London, Leicester, and Ottawa

Handful of die hard fans queuing outside Apple’s Regent Street Store, waiting for the #iPhone8 pic.twitter.com/ilADnrtZsH

— Martyn Landi (@MartynLandi) September 22, 2017

Crazy queue for the #iPhone8 & #iPhone8Plus Today ???? pic.twitter.com/qtxRjzfp33

— Safwan Ahmedmia (@SuperSaf) September 22, 2017

$1200 Canadian for iPhone 8. No crowd control required @ctvottawa pic.twitter.com/BOp5nw7qFv

— Graham Richardson (@grahamctv) September 22, 2017

This is the extent of the line up for the new iPhone in Brisbane. Just a dozen deep. Clearly not as much excitement as in previous years. pic.twitter.com/iJGg6S3k3Z

— S Marshall-McCormack (@ShannonMM9) September 21, 2017

According to CBS LA, the Pasadena store was also missing a line of eager fans.

Previous releases of the iPhone attracted hundreds of Apple fans waiting in the early morning hours at several stores across Southern California. The Apple Store has a ticketing system, but that never stopped eager iPhone fans from camping out overnight.

But on Friday morning, all was quiet on Colorado Boulevard, except for employees inside the store handing out tickets.

To be sure, some pockets of enthusiasm remained, such as at Apple’s location at the World Trade Center and on Fifth Avenue in New York which did have a line this morning, and there appeared to be a big turnout in Singapore.

Apple"s #iPhone 8 launches in Singapore, first major product launch in Orchard Road store https://t.co/pJxZkTMerJ pic.twitter.com/0wutgCpBgZ

— The Straits Times (@STcom) September 22, 2017

As we commented earlier, and the Verge adds, there are reasons this launch might not be getting as much turnout. For one, this is the 10th generation of the iPhone, and hype has probably just died down. People are no longer lining up to buy their first or second smartphone, and this year’s model doesn’t have any revolutionary new features that people are willing to wait overnight for.

Furthermore, in November Apple is launching the next "revolutionary" iPhone — the iPhone X — not the iterative update that’s coming out today. It’s the same reason there wasn’t a rush for the iPhone SE, either.

More concerning is that there are signs that the iPhone X is cutting into iPhone 8 online orders, too. Speaking to BuzzFeed News, Angela Ahrendts, Apple’s retail leader, said “it’s kind of our fault” that lines are going away, because Apple gives customers a choice of where to buy their phone, online or in person. That’s been true for years, though. BuzzFeed also says it saw short lines in Toronto, London, and Los Angeles.

While it is too early to conclude if the sudden disappearance of customers is troubling for Apple"s future says, it is hardly the reception Tim Cook - who carefully cultivates the image of pent up demand by parading the lines of people greeting its every product launch - wanted. Still, more important will be what happens outside Apple stores on November 3rd, when the iPhone X comes out, although with concerns mounting about the public"s receptivity to the phone"s face-scanning technology which has already received scathing criticism among even pro-Apple outlets, some investors are unwilling to wait: AAPL stock is down over 1% today and is about to have its worst week since April 2016.

iPhone X So Expensive In India "You Can Fly To Hong Kong, Buy It, Come Back And Save Money"

One day after the most anticipated Apple product launch in 10 years, several problems have emerged for the much hyped iPhone X, face-recognition demo flop notwithstanding: it will be substantially delayed confirming all earlier reports of supply-chain bottlenecks, and it will be expensive, perhaps prohibitively so. The introductory prices of the iPhone 8 and the iPhone 8 Plus have gone up compared to the prices of the iPhone 7 and the iPhone 7 Plus. The iPhone X, meanwhile, will price in the 4 digits well equipped. Addressing this issue, the WSJ has a front page article titled "Apple’s New iPhones Gamble on Allure of Premium Pricing."

In one place that gamble may prove insurmountable. As India Today writes, when it goes on sale in India on November 3, the iPhone X will cost Rs 89,000 for the 64GB version. The top-end variant with 256GB is going to cost Rs 102,000. "In other words, this is one expensive phone, although you can say that the iPhone has always been expensive."

To demonstrate just how expensive, on a purchase price parity basis, the iPhone X will be in India, India Today writes that "the other thing that you can say about the iPhone X is that it is cheaper in some other places. As it always happens, the market where the iPhone X is going to be the cheapest is probably Hong Kong." 

In fact, the iPhone X is so expensive in India, and so cheap in Hong Kong, that you can go Hong Kong, buy the phone, and come back and yet save some money. And this includes the cost of flight ticket to Hong Kong. Just see the math."

iPhone X (256GB) in India: Rs 102,000

iPhone X (256GB) in Hong Kong: Hong Kong Dollar 9,888. This means using the current exchange rate, in Indian currency the price is Rs 80,999.

What does this mean? It is cheaper to go to Hong Kong and buy the iPhone X 256Gb variant there.

The iPhone X will be available from November 3. Now, if you book your flight to Hong Kong today, the cheapest flight in the first week of November that you can book from Indian will cost around Rs 20,000. If you book a flight from Kolkata, you can get a return ticket to Hong Kong for little over rs 17,000. From Bangalore it is around Rs 19,000. From Delhi, around Rs 20,000. From Mumbai it is a little more expensive.

Flight ticket: Air Asia Rs 17,800

iPhone X 256GB: 80,999
Some other expenses: Around Rs 2000 to Rs 3000
Total: Around Rs 1 lakh
Money saved: Around Rs 2000

The report"s conclusion:

Now, we know the whole thing sounds like a joke. And in a way it is. No one is going to go specifically to Hong Kong from India to buy the iPhone. Also, it works best with the 256GB variant. But it does show the ridiculousness of the iPhone prices. and particularly the iPhone X prices, in India. Is it because Apple can"t price the iPhone any cheaper? Is it because Apple wants big profit margins? Is it because of Indian government taxes? Is it because Apple wants to keep the iPhone prices high so that it continues to a status symbol in India? We don"t know. Only Apple can answer these questions, if it wishes to answer them.

For now Apple is ignoring these, and various other pressing questions - including the whole animated poop emoji. Overnight Doug Kass released the following assessment of why this time Apple may have gone too far:

Apple continues to deliver an expensive smartphone relative to its peers, with many features that are already available from its competition and most of which were anticipated, including face recognition, a full-screen interface and no home button.

The only exception to reality versus anticipation was the later-than-expected availability, which is toward the end of the year (orders will be accepted on Oct. 27 and deliveries are slated for Nov. 3). As a result, analysts could take 3 million to 4 million iPhones out of their December quarter projections and reduce full-year 2018 estimates by about $0.40 a share.

However, the new Apple phone will provide an animated poop emoji so you can talk crap to your friends.

The starting price for the 64GB model of the iPhone X is $999 and $1,149 for the 256GB model. The Apple smartphone continues to be a high-priced aspirational product accompanied by a remarkably effective marketing effort that is stretching its status symbol appeal. However, I see little incremental to the latest product offerings, leaving room for disappointment relative to optimistic expectations. (It is why I initiated an Apple put position yesterday morning and added to that position when the stock was up $2 early in the afternoon).

The expectations of an Apple replacement super-cycle accompanied by higher unit volumes and much higher average selling prices, leading to expectations of a "hockey stick" of earnings growth in the coming fiscal year coupled with a general confidence in sustainable growth from there, have spurred a rise of more than 50% in Apple"s one-year forward price/earnings multiple in the last 1 1/2 years.

I clearly have underestimated the strength of and the confidence in the Apple franchise over the last year. Recognition of this has led me to maintain more of a trading-oriented short position, whereas years ago I had more of an investment short position, which proved successful. Nevertheless, I continue to believe that these aggressive "going forward" expectations for Apple and the company"s current valuation remain too ambitious.

But the biggest threat facing the iPhone and perhaps the entire Apple business model, is if its products are no longer perceived as the pinnacle of "coolness." And while it is too early to conclude either way, following yesterday"s disappointing and badly leaked release, many appear to be taking aim at Apple not as the source of brilliant Steve Jobsian innovation and "hipness", but as the target of mockery, scorn and humor. Indeed, as one readers suggested, "The bloom may be coming off the rose.  Even folks in the twittersphere piling on.  In the past there was such a halo around apple, nobody would make fun of them.  Now it seems the opposite."

Iis the idol worship coming to an end? According to these widely publicized reactions to the iPhone release, the answer appears to be yes.

Watch Live: Apple Unveils Latest iPhone From Spaceship Campus

Update: This seemed to sum things up in Cupertino perfectly - Steve Wozniak is wandering around. He said he is excited to see the new iPhone features, especially the facial recognition. He likes the feature a lot on his Samsung phone.

1001ET BLACKBERRY ENTERPRISE UPDATED TO AAPL IOS 11 MOBILE OPER SYSTEM

The stock ran up excitedly into the event...

1007ET APPLE TURNS POSITIVE AS PRODUCT EVENT BEGINS

1019ET Apple Watch - *FOSSIL SHARES DIP AS APPLE CLAIMS TOP POSITION IN WATCHES

*  *  *

As we detailed earlier, anticipation is sky high as CEO Tim Cook prepares to unveil Apple"s latest iPhones (and "one more things") from The Steve Jobs Theater at the new Apple "spaceship" Campus.

As CNET reports, for the past eight months, we"ve watched a parade of flagship phone launches, from power players like Samsung with the Galaxy S8 to scrappy players like Motorola with its family of Moto phones. Premium phones with not-so-premium prices like the OnePlus 5 have also competed for our attention.

Meanwhile, rumors about the next iPhone kept trickling out thanks to leakers and established publications alike.

Apple is set to cut through all the noise with the official unveiling of at least one new iPhone (and maybe more), as well as the rumored release of updates to the Apple Watch and Apple TV. There"s also a chance we get more details on the forthcoming HomePod smart speaker.

Watch live here (if you"re on a Mac with Safari).

Live Feed (via CNET):

What are we expecting...

 A weekend leak of some unreleased iOS 11 code may have spoiled all the surprises Apple had in store for tech fiends at tomorrow’s big iPhone event, with John Gruber of Daring Fireball calling the leaker “the least-popular person in Cupertino.”

There is expected to be three new phones. Two will at least be modest upgrades to the iPhone 7, getting beefier chips and the like.

The phone people really care about -- in imagination, if not necessarily spending plans (yet) -- is the 10th anniversary version of the phone.

While Apple was typically quiet about its plans, by now the world has a pretty good sense of the feature set.

The phone is expected to be Apple’s first with an organic light-emitting diode, OLED, display, which will be larger at 5.8 inches, and sharper, than the previous LCD displays.

Hold on to your hats: Apple ditched the home button in the phone, which is expected to now be unlocked through facial-recognition technology.

The phone is also expected to offer wireless charging and 3D sensors that enhance the performance of coming augmented-reality apps.

What will the stock do?

UBS technology analyst Steven Milunovich says there’s a distinct pattern in how Apple’s stock price reacts to these product launches.

“Based on the last five iPhone announcements, the stock has a reasonably consistent pattern: down in the two weeks preceding the event; up/down 1-2% the day of the event; up between the event and launch (phone availability about two weeks later); weak in the two weeks post launch; and then up going into earnings,” he wrote in a note out Tuesday morning.

“We think there is somewhat greater near-term downside risk this time though we expect the stock to outperform over the next 6-12 months.”

Here"s how the stock has moved before, during, and after previous iPhone announcements, relative to the S&P 500:

Middle-Class Chinese Say A $1,000 iPhone Is "Too Expensive"

Apple Inc. had hoped that its iPhone eight might demolish the company’s sales records in China as the country’s burgeoning middle class embraced the phone, thanks in part to its name: Eight is considered a lucky number in Chinese culture, signifying wealth and fortune.

Unfortunately for the world’s most valuable company, this calculus isn’t playing out as well as its massive marketing operation had hoped for one simple reason: The price of the phone is simply too high for most members of the company"s target demographic.

However, Apple investors reacted positively to news Monday that the company"s iPhone 8 would be priced at $1,000 a unit. AAPL was up nearly 2% in early trade.

Two versions of the iPhone 8, along with a third premium model known as the iPhone X, will be officially unveiled at its product launch in Cupertino tomorrow. Details on price points of the new devices and their availability dates are still unknown, though even the cheapest of the latest top-of-the-line model is expected to cost about $1,000.

Unfortunately, the bulls could be a little short-sighted, especially considering that signs of slowing sales in some of Apple’s key growth markets have weighed on its share price in the past.

To wit, Reuters reporters spoke to regular Chinese citizens about the new iPhone – specifically, whether they intended to buy one. For Apple, their response was discouraging.

Here’s Reuters:

“Chinese shoppers, however, are already counting the cost, with the latest model tipped to have a price tag upward of $1,000 - roughly double the average Chinese monthly salary.

…

“I’ll wait for a drop in price, it’s too expensive,” said Angie Chen, 23, a project manager in Nanjing and iPhone 6 owner.

Chen said she might even wait for the new phone’s successor, when prices will fall. “It’s a nice number to hear, but there’s no rush.”

As Reuters points out, Greater China, which (according to Apple’s definition) includes Taiwan and Hong Kong, accounted for roughly 18 percent of iPhone sales in the quarter ended in July, making it the company’s third-largest market after the US and Europe. Meanwhile, the iPhone’s share of China’s smartphone shipments fell to 9% between January and June, down from 14% in 2015, according to data from Counterpoint Research.

Compounding the problem for the company is the fact that some analysts expect China to be a key driver of sales growth. Morgan Stanley analyst Katy Huberty told Bloomberg that she is watching for especially strong growth in China after the upgradeable, 2-year old iPhone base grew 56% this year, meaning more consumers are choosing to buy successive iPhone models.

Yet sales in China are down 10 percent from a year earlier, extending a nearly three-year series of declines. That contrasts with growth in all other regions. And although the Chinese currency has risen sharply against the dollar in 2017, a dramatic reversal of those gains could be imminent after Chinese authorities eliminated a requirement that sales desks set aside 20% of their revenues from sales of FX derivatives. The policy was intended to make it too costly to short the yuan, helping the PBOC fend of speculators as it sought to slow the currency’s depreciation against the dollar last year. But now, the central bank has ostensible switched off the “no” in the “no vacancy” sign at the yuan short-seller’s motel. And predictably, the yuan saw its largest drop in eight months overnight as the bears piled back in.

All of this means the phone will be more expensive for consumers, further suppressing sales as Chinese consumers stick with popular domestic brands like Xiaomi. But even with the company’s shares trading near all-time highs, despite reports of production problems that could limit supplies of the new models, whether or not another slowdown in China will actually impact the company’s shares remains to be seen.

* * *

In a preview of tomorrow"s product launch, several Apple analysts told Bloomberg what they felt would be the biggest reveals during CEO Tim Cook"s highly anticipated presentation. In terms of new features, while investors will certainly pay close attention to the iPhone"s hardware, the change that has the most significance with long-term implications is the addition of 3D-sensing capabilities that enable augmented reality applications, Gene Munster said.

While AR applications will be backward compatible to the 2015 iPhone 6S, the addition of designated 3D and computer vision hardware on the premium iPhone would be a “big step toward putting AR in the hands of everyday users” and a big step toward the “next generation of computing - beyond the smartphone," according to Munster via Bloomberg.

Performance of facial recognition on the OLED iPhone will be widely scrutinized, as the device probably won’t have a fingerprint sensor for login and Apple Pay usage, according to KeyBanc analyst Andy Hargreaves.

According to RBC analyst Amit Daryananianother, recent surveys suggest “sizable pent up demand” and excitement around the iPhone launch. With more of the hundreds of millions of iPhone users around the world expected to upgrade their devices this year, Daryananianother said the company could experience a "sales supercycle."

New iPhones are not enough to keep Apple’s stock going, it needs a new category

It is hard to find a bigger Apple stock cheerleader than me. I’ve been writing Apple stock love poems for years. For a long time, it was easy to love the shares because they were unloved by others and it was cheap.

Until recently, when Apple stock was still trading in the low $100s and at single-digit multiples, we were buying current product categories at a discount and were not paying for future product categories.

At today’s price that is not the case anymore. That is true with any company – the more expensive the stock gets, the more clairvoyance investors need to discern the company’s future growth.

At Apple’s size it is very hard for the company to increase its earnings significantly. Macs, iPads, and even iPhones are mature products.

The iPhone may have a few growth spurts left, but not many. It is facing an unavoidable headwind: the elongation of its replacement cycle. The iPhone improved substantially over the years, but as the i-marvels piled up, the incremental improvements that motivated people to buy a new phone every two years or so became less and less significant.

At some point the iPhone will face the fate of the iPad – its replacement cycle long in the tooth and sales stagnant and declining.

Will the iPhone’s sales stop growing in 2018, or 2020? I don’t know, but from a long-term perspective of the company’s valuation, a few years don’t make that much difference.

(A new iPhone is expected to be unveiled next week. The stock fell slightly Wednesday on concern supply disruptions could cause shipping delays with the new phone.)

Services is the only segment that can grow at a double-digit rate for a considerable period of time, but it only represents 13 percent of revenue. Even the Apple Watch doesn’t really move the needle.

They need another genius

But can Apple come up with new product categories? Let’s ponder on this question in the context of the following quote:

“Talent hits a target no one else can hit; Genius hits a target no one else can see.” – Arthur Schopenhauer

Apple has a lot of talented people designing and redesigning products in the categories that Apple already dominates. They are hitting a lot of targets no else can hit. Apple’s brand is as healthy as ever, and so is product satisfaction.

However, to create a new category of products Apple needs to “hit targets no one else can see,” and this requires a genius. But in an organization of this size with a lot of bright and talented people, it also requires a benevolent dictator – someone able to make bold, unconventional decisions (and own them), someone who in addition to everything else is able to inspire others to create what they may think is impossible. Yes, I am referring to the one and only Steve Jobs, he of the “reality distortion field.”

Here is an instance that comes to mind: Jobs asked his engineers to come up with a touchscreen computer – a tablet. They did. It looked like a bulky version of today’s iPad. Steve looked at and said “Let’s put the tablet on ice,” then refocused the company on miniaturizing that tablet and making a phone instead.

It is important to remember that at the time, though Apple was financially healthy, it was not swimming in cash the way it does today. Jobs made a benevolent dictator-like decision: He diverted engineers who were working on the MacOS to work on what would become the iPhone OS, causing the late release of some Mac products. And only years later, after the iPhone was a raging success, Apple brought the iPad back to life. That was Jobs’ Apple.

Now let’s visit Tim Cook’s Apple. The New York Times ran an in-depth article unearthing why Apple has (so far) failed to come up with an electric self-driving car. These few sentences jumped out at me:

“But the car project ran into trouble, said the five people familiar with it, dogged by its size and by the lack of a clearly defined vision of what Apple wanted in a vehicle. Team members complained of shifting priorities and arbitrary or unrealistic deadlines.”

Nokia spent a lot on R&D too

Even Jobs admitted that Cook is not a “product man.” Cook doesn’t have “the vision,” and thus he doesn’t have the authority to be a benevolent dictator. Nor does he have the charisma to project and maintain a reality distortion field.

Today Apple spends almost $12 billion on R&D – double what it spent just a few years ago. But as outside observers, we really don’t know where this money is going. Or more importantly, how productively it is being spent. I vividly remember how Nokia was increasing its R&D spend every year during the last years of its dumb-phone dominance, but all that R&D did not bring forth new products that would have saved the company from its eventual demise. Apple is not facing Nokia-like collapse, but the R&D argument still stands: R&D spend doesn’t always equal great new products.

The NY Times article said that Apple curtailed its ambition to make a car and is now focusing solely on self-driving technology. In other words, Apple is basically pulling out of the electric car space (at least for now).

If Apple develops and licenses its self-driving technology, it will recover some of its losses on investments made to date. But it will not be able to take advantage of the significant competitive advantage that comes with its incredible brand, its distribution network – hundreds of stores (potential car dealerships) sprinkled all over the world – its know-how in battery management, its design prowess, and its i-ecosystem.

We still own a little bit of Apple stock but have sold most of what we owned at current prices. Maybe Apple’s augmented reality products will become a huge success, or maybe the company is working on a brand new category of products that we have not even imagined. It is all possible.

In making investment decisions you never have perfect information. Apple is no exception. At today’s valuation we are paying for genius – Apple’s ability to successfully create and dominate a new, large product category. While the company is run by very talented people who will do a great job getting us excited about the categories of products they are already in, the company’s genius died with Steve Jobs.

Read addition thoughts on Apple, here.

I am the CIO at Investment Management Associates, which is anything but your average investment firm. (Seriously, take a look.)

I wrote two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. (Even in Polish!)

In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.” (They must have been impressed by the eloquence of the Polish translation.)

Smitten by this article? Don’t let your love remain unrequited. Sign up here to get my latest articles in your inbox.

AAPL Stock Slips After Reports Of New iPhone "Plagued By Production Glitches"

AAPL stock is sliding this afternoon as The Wall Street Journal reports the new iPhone is said to have seen "production glitches."

Apple Inc.’s new iPhone, which is expected to be unveiled Tuesday, was plagued by production glitches early in the manufacturing process this summer, according to people familiar with the situation, which could result in extended supply shortfalls and shipping delays when customers start ordering the device later this month. New iPhones are typically in short supply when first released. But if shortfalls of the new phone extend beyond the initial sales period, which is expected to begin September 22, they could weaken analysts’ and investors’ projections for sales in the crucial holiday period.
... 

The production glitches led to a setback of about a month in the manufacturing timetable. Foxconn Technology Group, the Apple contractor that assembles iPhones, has been ramping up production at its manufacturing complex in Zhengzhou, China. The company is paying bonuses to employees who can help bring new hires on board at its Zhengzhou plant, which Foxconn said in June employs about 250,000 people.

Ironically, this was predicted three months ago by Citi analyst Jim Suva who warned that "based on industry-wide checks, we believe the significant enhancements to the iPhone 8 OLED could experience delays as it ramps to high volume production in order to meet strong demand" and as a result slashed his September iPhone delivery estimate from 47 million to 40 million.

Of course, having ignored the news in June, the stock is acting quite surprised now that the exact same story is back in the headlines. 

On the other hand, who knows: this could all be just another clever AAPL PR move to create scarcity and buzz ahead of the looming launch.

3 Reasons Why James Comey Should Have Been Fired a Long Time Ago

(ANTIMEDIA Op-Ed) James Comey, the former director of the Federal Bureau of Investigation (FBI) appointed by President Barack Obama, has never been a man independent of the law. This is not because his heart wasn’t in the right place or because his intentions may have been malicious. Instead, Comey has always been a man of the state — much like any other person to have occupied this position in history. What does that mean? That personal responsibility, morals, and any other ethical framework aren’t applied if what’s at stake is the government’s hold on the narrative.

Ever since the days of J. Edgar Hoover, when the bureau became what it is now — a politicized powerhouse where anyone and everyone is the target — presidents have relied on the FBI as a tool, not a force for what’s right. But calls for an “independent” bureau, headed by someone who only has the U.S. Constitution in mind, have been popping up here and there, leading many to believe that the FBI could, under the right leadership, be a force for good.

Unfortunately, that wish will never materialize so long as the agency is an arm of the state.

But for the sake of argument, what constitutes a “good reason” to let go of an FBI director? And how low or how absolutely immoral can an action undertaken by said FBI director be for a president to make the decision to fire him? In this article, we attempt to look at instances in Comey’s career as the G-men’s boss that should have been enough reason to let him go.

We all know Dzhokhar Tsarnaev and Tamerlan Tsarnaev, the brothers responsible for the Boston Marathon bombing. What many may not know, or not remember, is that the FBI, under the watch of none other than Comey, interviewed Tamerlan in 2011 after the Russian Federal Security Service (FBS) tipped off the agency about his radical beliefs. After looking into this complaint, the FBI dismissed the Tsarnaevs. But during a trip to Dagestan in 2012, Tamerlan frequented a mosque believed by the FBS to be associated with radical Islamic activities.

After a second warning, the FBI again failed to keep track of the older brother and his moves. Ultimately, the duo produced two homemade bombs and had them detonated near the finish line of the 2013 Boston Marathon, killing three people and injuring several hundred others.

But the Tsarnaev brothers weren’t the only ones the FBI had the power to stop under Comey’s watch.

Ahmad Rahami was responsible for the September 2016 bombings of New York City and nearby towns, which injured 31 people. His father had called the authorities two years prior to the incidents, telling them his son was a terrorist. After briefly interviewing him, the FBI let him go. Two years later, Rahami attempted to kill people with three bombs and several explosive devices.

After former National Security Agency (NSA) contractor Edward Snowden stepped out of the shadows as a whistleblower, his revelations proved the NSA mass-spied on innocent Americans without due process. Not too long after we learned about this, it was also unveiled that the FBI conducted its own data mining, also targeting innocent Americans.

Unfortunately, Comey wasn’t upfront about any of the then-recent discoveries. Much like James Clapper, the former U.S. Intelligence Director who lied under oath when asked if the NSA collected “any type of data at all on millions of Americans” — to which Clapper said “No, sir” — Comey denied that the FBI was involved in any illegal activities.

During a 2014 speech at the Brookings Institution, Comey said:

“In the wake of the Snowden disclosures, the prevailing view is that the government is sweeping up all of our communications. That is not true.”

Who can forget the bloody and tragic San Bernardino shooting? No one. But what many appear to have forgotten is how the FBI pressed Apple to create a “backdoor” that would give them access not only to the two suspects’ phones but also to any of Apple’s phones.

This very public feud pitted the country’s most notorious tech companies against the most powerful law enforcement agency in the land, sparking everybody’s fears that, perhaps, Apple would cave.

But Apple didn’t. Due to this alone, Apple’s CEO Tim Cook may deserve to be given a new nickname, “the man with the balls of steel.”

***

If these three very important moments of irresponsibility and rights violations weren’t enough to prompt Obama to put an end to Comey’s career as the head of the FBI, then why not let him go now – even if over something else entirely?

Opinion / Creative Commons / Anti-Media / Report a typo

Apple Censors US-Drone-Strike-Tracking App

Authored by James Holbrooks via TheAntiMedia.org,

“At its core was a question: do we want to be as connected to our foreign policy as we are to our smartphones? My hypothesis was no. Americans don’t care about the drone war because it is largely hidden from view.”

That’s how Josh Begley, writing for The Intercept on Tuesday, described the concept behind an app he created five years ago. The app, he says, was a simple one. It merely sent users an alert every time a U.S. drone strike was reported in the news.

Apple rejected the app three times on the grounds that it was “excessively objectionable or crude content,” but Begley didn’t give up on the project.

“Over the years, I would occasionally resubmit the app, changing its name from Drones+ to Metadata+,” he wrote. “I was curious to see if Apple might change its mind. The app didn’t include graphic images or video of any kind — it simply aggregated news about covert war.”

He went on to tell how, after five rejections, Apple finally accepted the app in 2014. It remained in the App Store for a year and was downloaded by over 50,000 people. But then, the following September, Apple removed the app, once again citing “excessively objectionable or crude content.”

Begley persisted. The reason he was writing the post this week, in fact, was because that day — March 28, 2017 — Apple had once again accepted the app. He wasn’t writing to talk about his ordeal with Apple, though. He was writing about the issue that motivated him to create the app in the first place:

“As an artist who works with data, I think the story of this app is about more than a petty conflict with Apple. It is about what can be seen — or obscured — about the geography of our covert wars.”

He pointed out that over the past 15 years, people have worked tirelessly to document what’s happening on the ground where these drone campaigns are being waged. And that work is certainly praiseworthy. But Begley went further, pointing out what he calls the “difficult truth” of drone warfare — that at the end of the day, we don’t really know who these missiles are killing.

Again, rather than focusing on his spat with Apple, Begley stayed with the issue that inspired him and talked about the end product of that inspiration:

“Because the particulars of drone wars are scant, we only have ‘metadata’ about most of these strikes—perhaps a date, the name of a province, maybe a body count. Absent documentary evidence or first-person testimony, there isn’t much narrative to speak of.

“The name ‘Metadata’ has a double meaning: the app both contains metadata about English-language news reports, and it refers to the basis on which most drone strikes are carried out.”

The only time Begley questioned Apple’s earlier decisions to refuse his app was in his summation.

“Smartphones have connected us more intimately to all sorts of data,” he wrote. “Yet information about drone strikes — in Apple’s universe — had somehow been deemed beyond the pale.”

He used the past tense, of course, because Apple had, that very day, re-accepted Metadata. But as it turned out, the party was short-lived. Hours after Begley’s post ran at The Intercept, Apple pulled his app once more.

Highlighting the suddenness of Apple’s move, here’s how Reason opened its coverage of the news on Tuesday:

“This was supposed to be a post about how anybody who wants to easily keep track of U.S. drone strikes overseas can do so through an app on their iPhone. But never mind. They can’t anymore.”

Josh Begley chose not to go after Apple in his article when he easily could have. He took the high road and stuck to the far greater issues — the nature of drone warfare itself and how we, as a society, are responding to it in an age of instant communication.

This writer will follow Begley’s lead and not speculate on the myriad possibilities of why Apple seems afraid of his app. That’s the far less important aspect of what’s happening here. It all goes back to the core of the Metadata project and the question that drove Begley to get started: Given the option, would we really want to be as connected to U.S. foreign policy as we are to our smartphones?

Or, in other words, would we really want constant updates on all the killing?

Apple Doesn’t Think You’re Mature Enough to Know Truth About U.S. Drone Strikes

(ANTIMEDIA) “At its core was a question: do we want to be as connected to our foreign policy as we are to our smartphones? My hypothesis was no. Americans don’t care about the drone war because it is largely hidden from view.”

That’s how Josh Begley, writing for The Intercept on Tuesday, described the concept behind an app he created five years ago. The app, he says, was a simple one. It merely sent users an alert every time a U.S. drone strike was reported in the news.

Apple rejected the app three times on the grounds that it was “excessively objectionable or crude content,” but Begley didn’t give up on the project.

We"re revolutionizing the news industry, but we need your help! Click here to get started.

“Over the years, I would occasionally resubmit the app, changing its name from Drones+ to Metadata+,” he wrote. “I was curious to see if Apple might change its mind. The app didn’t include graphic images or video of any kind — it simply aggregated news about covert war.”

He went on to tell how, after five rejections, Apple finally accepted the app in 2014. It remained in the App Store for a year and was downloaded by over 50,000 people. But then, the following September, Apple removed the app, once again citing “excessively objectionable or crude content.”

Begley persisted. The reason he was writing the post this week, in fact, was because that day — March 28, 2017 — Apple had once again accepted the app. He wasn’t writing to talk about his ordeal with Apple, though. He was writing about the issue that motivated him to create the app in the first place:

“As an artist who works with data, I think the story of this app is about more than a petty conflict with Apple. It is about what can be seen — or obscured — about the geography of our covert wars.”

He pointed out that over the past 15 years, people have worked tirelessly to document what’s happening on the ground where these drone campaigns are being waged. And that work is certainly praiseworthy. But Begley went further, pointing out what he calls the “difficult truth” of drone warfare — that at the end of the day, we don’t really know who these missiles are killing.

Again, rather than focusing on his spat with Apple, Begley stayed with the issue that inspired him and talked about the end product of that inspiration:

“Because the particulars of drone wars are scant, we only have ‘metadata’ about most of these strikes—perhaps a date, the name of a province, maybe a body count. Absent documentary evidence or first-person testimony, there isn’t much narrative to speak of.

“The name ‘Metadata’ has a double meaning: the app both contains metadata about English-language news reports, and it refers to the basis on which most drone strikes are carried out.”

The only time Begley questioned Apple’s earlier decisions to refuse his app was in his summation.

“Smartphones have connected us more intimately to all sorts of data,” he wrote. “Yet information about drone strikes — in Apple’s universe — had somehow been deemed beyond the pale.”

He used the past tense, of course, because Apple had, that very day, re-accepted Metadata. But as it turned out, the party was short-lived. Hours after Begley’s post ran at The Intercept, Apple pulled his app once more.

Highlighting the suddenness of Apple’s move, here’s how Reason opened its coverage of the news on Tuesday:

“This was supposed to be a post about how anybody who wants to easily keep track of U.S. drone strikes overseas can do so through an app on their iPhone. But never mind. They can’t anymore.”

Josh Begley chose not to go after Apple in his article when he easily could have. He took the high road and stuck to the far greater issues — the nature of drone warfare itself and how we, as a society, are responding to it in an age of instant communication.

This writer will follow Begley’s lead and not speculate on the myriad possibilities of why Apple seems afraid of his app. That’s the far less important aspect of what’s happening here. It all goes back to the core of the Metadata project and the question that drove Begley to get started: Given the option, would we really want to be as connected to U.S. foreign policy as we are to our smartphones?

Or, in other words, would we really want constant updates on all the killing?

Creative Commons / Anti-Media / Report a typo

Turkish Hackers Threaten To Wipe Millions Of iPhones; Demand Ransom From Apple

Apple can"t seem to catch a break lately.  Yesterday we noted the latest WikiLeaks release which exposed yet another CIA spying scandal, this time revolving around efforts to bug "factory fresh" iPhones before they even reach the hands of consumers (see "Wikileaks Releases "NightSkies 1.2": Proof CIA Bugs "Factory Fresh" iPhones").

Also included in this release is the manual for the CIA"s "NightSkies 1.2" a "beacon/loader/implant tool" for the Apple iPhone. Noteworthy is that NightSkies had reached 1.2 by 2008, and is expressly designed to be physically installed onto factory fresh iPhones. i.e the CIA has been infecting the iPhone supply chain of its targets since at least 2008.

While CIA assets are sometimes used to physically infect systems in the custody of a target it is likely that many CIA physical access attacks have infected the targeted organization"s supply chain including by interdicting mail orders and other shipments (opening, infecting, and resending) leaving the United States or otherwise.

Today, courtesy of CIO, we learn that a group of hackers referring to themselves as the "Turkish Crime Family", has been in direct contact with Apple and is demanding a $150,000 ransom by April 7th or they will proceed to wipe as many as 600 million apple devices for which they allegedly have passwords.

The group said via email that it has had a database of about 519 million iCloud credentials for some time, but did not attempt to sell it until now. The interest for such accounts on the black market has been low due to security measures Apple has put in place in recent years, it said.

Since announcing its plan to wipe devices associated with iCloud accounts, the group claimed that other hackers have stepped forward and shared additional account credentials with them, putting the current number it holds at over 627 million.

According to the hackers, over 220 million of these credentials have been verified to work and provide access to iCloud accounts that don"t have security measures like two-factor authentication turned on.

Of course, if credible, with an ask of just $150k, this is the most modest group of hackers we"ve ever come across.

News website Motherboard reported seeing alleged emails between the hackers and Apple in which a member of the company"s security team said that the company does not plan to reward cybercriminals for breaking the law and that the communications have been archived and sent to the authorities.

Meanwhile, the hackers apparently told CIO the ransom demand was intended to "spread awareness" for their "boys" who got caught up in the Yahoo hacking scandal and likely face severe sentences. 

"We are doing this because we can and mainly to spread awareness for Karim Baratov and Kerem Albayrak, which both are being detained for the Yahoo hack and one of them is most probably facing heavy sentencing in America," a representative for the group said via email. "Kerem Albayrak on the other hand is being accused of listing the database for sale online."

The representative said that the group"s members are originally from Istanbul, Turkey, but that they now "rep" Green Lanes, an area in North London.

Karim Baratov, a Canadian national, was indicted last week for allegedly hacking into email accounts at various email providers at the request of two officers from the Russian Federal Security Service, the FSB. The same indictment accuses the two FSB officers and a Russian hacker for breaking into Yahoo"s infrastructure and gaining access to over 500 million Yahoo accounts.

As a concluding note, and not to suggest in any way that we"re experts on the subject matter, we would tend to question the underlying "value" of a password database that could be rendered instantly useless by a forced password update from Apple...just a thought on negotiating tactics for future reference.

Wikileaks Releases “NightSkies 1.2”: Proof CIA Bugs Your “Factory Fresh” iPhones

(ZH) — The latest leaks from WikiLeaks’ Vault 7 is titled “Dark Matter” and claims that the CIA has been bugging “factory fresh” iPhones since at least 2008 through suppliers.  The full documents are expected to be released after a 10 a.m. EDT “press briefing” that WikiLeaks promoted on its Twitter.

RELEASE: CIA #Vault7 “Dark Matter” https://t.co/pgnfeODXVB pic.twitter.com/vkI16f3vMD

— WikiLeaks (@wikileaks) March 23, 2017

Here is a live stream of the pending press briefing with Julian Assange:

LIVE: WikiLeaks press briefing in some minutes: CIA #Vault7 “darkmatter” ask questions with #AskWL https://t.co/ldG78exSsu

— WikiLeaks (@wikileaks) March 23, 2017

And here is the full press release from WikiLeaks:

Today, March 23rd 2017, WikiLeaks releases Vault 7 “Dark Matter”, which contains documentation for several CIA projects that infect Apple Mac Computer firmware (meaning the infection persists even if the operating system is re-installed) developed by the CIA’s Embedded Development Branch (EDB). These documents explain the techniques used by CIA to gain ‘persistence’ on Apple Mac devices, including Macs and iPhones and demonstrate their use of EFI/UEFI and firmware malware.

Among others, these documents reveal the “Sonic Screwdriver” project which, as explained by the CIA, is a “mechanism for executing code on peripheral devices while a Mac laptop or desktop is booting” allowing an attacker to boot its attack software for example from a USB stick “even when a firmware password is enabled”. The CIA’s “Sonic Screwdriver” infector is stored on the modified firmware of an Apple Thunderbolt-to-Ethernet adapter.

“DarkSeaSkies” is “an implant that persists in the EFI firmware of an Apple MacBook Air computer” and consists of “DarkMatter”, “SeaPea” and “NightSkies”, respectively EFI, kernel-space and user-space implants.

Documents on the “Triton” MacOSX malware, its infector “Dark Mallet” and its EFI-persistent version “DerStake” are also included in this release. While the DerStake1.4 manual released today dates to 2013, other Vault 7 documents show that as of 2016 the CIA continues to rely on and update these systems and is working on the production of DerStarke2.0.

Also included in this release is the manual for the CIA’s “NightSkies 1.2” a “beacon/loader/implant tool” for the Apple iPhone. Noteworthy is that NightSkies had reached 1.2 by 2008, and is expressly designed to be physically installed onto factory fresh iPhones. i.e the CIA has been infecting the iPhone supply chain of its targets since at least 2008.

While CIA assets are sometimes used to physically infect systems in the custody of a target it is likely that many CIA physical access attacks have infected the targeted organization’s supply chain including by interdicting mail orders and other shipments (opening, infecting, and resending) leaving the United States or otherwise.