Apple Changes Policy In China

Apple Inc has started the processing of keeping the personal data of some Chinese users on servers in mainland China, marking the first time the tech giant is storing user data on Chinese soil.

The storage of user data in China represents a departure from the policies of some technology companies, notably Google Inc, which has long refused to build data centers in China due to censorship and privacy concerns.

Apple said the move was part of an effort to improve the speed and reliability of its iCloud service, which lets users store pictures, e-mail and other data. Positioning data centers as close to customers as possible means faster service.

The data will be kept on servers provided by China Telecom Corp Ltd, the country’s third-largest wireless carrier, Apple said in a statement.

“Apple takes user security and privacy very seriously,” it said. “We have added China Telecom to our list of data center providers to increase bandwidth and improve performance for our customers in mainland china. All data stored with our providers is encrypted. China Telecom does not have access to the content.”

A source with knowledge of the situation said the encryption keys for Apple’s data on China Telecom servers would be stored offshore and not made available to China Telecom.

Apple has said it has devised encryption systems for services such as iMessage that even Apple itself cannot unlock. But some experts expressed scepticism that Apple would be able to withhold user data in the event of a government request.

“If they’re making out that the data is protected and secure that’s a little disingenuous because if they want to operate a business here, that’d have to comply with demands from the authorities,” said Jeremy Goldkorn, director of Danwei.com, a research firm focused on Chinese media, internet and consumers.

“On the other hand if they don’t store Chinese user data on a Chinese server they’re basically risking a crackdown from the authorities.”

Goldkorn added that data stored in the United States is subject to similar U.S. regulations where the government can use court orders to demand private data.

A spokesman for China Telecom declined to comment.

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Is China Mobile Good For Apple?

The tame Apple Press has enthusiastically been running storied about how well Apple is doing in China. Reuters for example has been saying that the one million pre-orders that Jobs’ Mob has just collected is a triumph for Tim Cook’s negotiating ability. Getting a deal out of China Mobile was something the sainted Steve Jobs could not manage.

However saner heads are urging caution, While it is true that launching its iPhone on China Mobile vast network on Friday, opening the door to the world’s largest carrier’s 763 million subscribers and giving its China sales a short-term jolt, it is not likely to last. For a start the deal could start a war which China Mobile would not want. Some analysts predicting a costly subsidy war as rival carriers compete to lure customers. If China Mobile does not make its targets on sales for these phones, they are going to increase the subsidies.

China Mobile’s iPhone sales are expected to reach 12 million in its 2014 fiscal year, but its subsidies will leap 57 percent to $7 billion. In addition, the prices are still really high for the Chinese market. For the basic 16GB iPhone 5S, with no subscriber contract, China Mobile is charging $870.

China Unicom and China Telecom slashed their iPhone prices by as much as $210 following the announcement that a deal had been struck between Apple and China Mobile. The pair have also offered a range of cut-price deals on contracts. But there are also some problems with the pre-orders. Reuters checks showed that there were multiple registrations using fake ID numbers which means that people are buying up hoping to make a swift buck on resales.

All this is the least of Apple’s Chinese worries. The outfit has fallen out of favour with consumers who are increasingly opting for domestic products. Those who want an iPhone do not need to pay excessively to get one through China mobile either. In China, you can buy handsets typically smuggled from Hong Kong and then sign up for a China Mobile contract. This is a swings and roundabouts for Apple. If people buy from China Mobile, they will not buy from Hong Kong so it will lose sales there. If they don’t then the China Mobile contract is rubbish.

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at&t Partners With China Telecom

AT&T Inc and China Telecom have agreed to broaden the range of their partnership in China and the United States and will look into supporting each other in other regions.

AT&T said the agreement would expand its services for business customers in China and that the companies would consider jointly developing services, including video conferencing and managed hosting.

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