Broadcast by State-Run CCTV Cites Researchers Who Say Tracking App Could Expose 'State Secrets'
State-run China Central Television has labeled Apple's iPhone location-tracking feature a "national security concern," in the latest backlash against U.S. technology companies. The WSJ's Yun-Hee Kim speaks to reporter Eva Dou in Beijing.
BEIJING—China's influential state broadcaster on Friday called a location-tracking function offered by Apple Inc.AAPL in Your Value Your Change Short position 's iPhone a "national security concern," in the latest sign of a backlash in the country against U.S. technology firms.
In its national noon broadcast, state-run China Central Television criticized the "frequent locations" function in Apple's iOS 7 mobile operating system, which records time and location for the owner's movements. The report quoted researchers who said that those with access to that data could gain knowledge of China's economic situation or "even state secrets."
Apple didn't respond to requests for comment. The company describes the tracking function as an aid to iPhone users, for example by providing efficient travel routes.
The Chinese broadcast represents a potential challenge for Apple in an increasingly competitive market. The Cupertino, Calif., company holds only a 6% share of China's smartphone market, according to research firm Analysys, while models made by Samsung Electronics Co. and others running Google Inc.'s Android mobile operating system command a greater share.
Still, Apple dominates the higher end of the market. About 80% of smartphones priced at more than $500 in China are iPhones, research firm Umeng said. IPhone users include Chinese government officials and executives. Last year China's first lady, Peng Liyuan, was photographed using an iPhone, though she has since been seen sporting a smartphone made by China's ZTE Corp.
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While CCTV's broadcasts don't necessarily reflect the views of China's top leaders, they are influential in China. Some companies have shifted policies or recalled products after critical CCTV reports.
It isn't clear whether the CCTV report will be followed by new rules or limits on Apple. But the broadcaster's reports have had an impact on the company in the past. Last year Chief Executive Tim Cook publicly apologized after CCTV accused Apple of discriminating against Chinese consumers in its warranty policies.
U.S. technology companies have felt a chill in China since last year, when former U.S. contractor Edward Snowden alleged the National Security Agency was spying on Chinese leaders and that U.S. tech firms were providing data to the government. Apple has said it doesn't provide government agencies with direct access to its servers.
The broadcast on Friday cited the Snowden disclosures and called U.S. technology firms' databases a "gold mine." It also quoted officials who said that China needs stronger data-protection laws and that Apple would assume "legal responsibilities" if any data leaks were to cause harm.
The cybersecurity debate between Beijing and Washington has heated up since May, after the U.S. charged five Chinese military officers with spying by hacking into U.S. computer systems.
Chinese state television raised security questions about Microsoft Corp.'s MSFT in Your Value Your Change Short position Windows 8 operating system last month, after the government procurement center said in May that it wouldn't allow the purchase of new government computers if they ran Windows 8.
China, long Apple's manufacturing base, is an increasingly important consumer market. In the most recent quarter, 25% of Apple's global revenue came from greater China, which includes Hong Kong and Taiwan, and sales have grown 13% in the region during the past year.
China has long been uneasy about its heavy dependence on U.S. technology in crucial sectors and has poured billions of dollars into the development of its own technologies. Last year, the state-run China Economic Weekly magazine, with the English headline "He's Watching You," named eight U.S. companies—including Apple—that it said pose a danger to China's computing networks.
China's government has mentioned software, servers and high-end chips as areas where it is trying to develop home-grown alternatives. The China Academy of Sciences unveiled its own mobile operating system, the China Operating System, in January, but analysts say it stands little chance of becoming widely used in the competitive mobile market.
Meanwhile, Chinese tech firms themselves have bumped up against national-security concerns in foreign markets. In 2012, a U.S. congressional report recommended that U.S. telecom carriers avoid using equipment from Chinese suppliers Huawei Technologies Co. and ZTE, saying their gear could be used by Beijing to spy on Americans. Huawei fired back, saying that the report was a political exercise aimed at attacking China.
Also International Business Machines Corp.'s proposed $2.3 billion sale of its computer-servers business to Lenovo Group remains in limbo as the U.S. government investigates security issues surrounding the transfer of such technology, according to people familiar with the matter.
Write to Eva Dou at firstname.lastname@example.org