Police say criminals like Apple iPhones because of encryption

3D printed Apple logo are seen in front of a displayed cyber code in this illustration taken February 26, 2016.

Reuters/Dado Ruvic/Illustration

Some criminals have switched to new iPhones as their "device of choice" to commit wrongdoing due to strong encryption Apple Inc has placed on their products, three law enforcement groups said in a court filing.
 
The groups told a judge overseeing Apple's battle with the U.S. Department of Justice on Thursday that, among other things, they were aware of "numerous instances" in which criminals who previously used so-called throwaway burner phones had switched to iPhones. They did not list a specific instance.
 
The brief by the Federal Law Enforcement Officers Association and two others also cited a jailhouse phone call intercepted by New York authorities in 2015, in which an inmate called Apple's encrypted operating system a "gift from God."
 
The government obtained a court order last month requiring Apple to write new software to disable passcode protection and allow access to an iPhone used by one of the shooters in the December killings in San Bernardino, California.
 
Apple asked that the order be vacated, arguing such a move would set a dangerous precedent and threaten customer security.
 
Tech industry leaders including Google, Facebook and Microsoft and more than two dozen other companies filed legal briefs on Thursday supporting Apple. The Justice Department received support from law enforcement groups and six relatives of San Bernardino victims.
 
The law enforcement groups said in their brief that Apple's stance poses a grave threat to investigations across the country.
 
The FBI says Rizwan Farook and his wife, Tashfeen Malik, were inspired by Islamist militants when they shot and killed 14 people on Dec. 2 at a holiday party. The couple later died in a shootout with police and the FBI said it wants to read the data on Farook's work phone to investigate any links with militant groups.
 
In a filing on Thursday, the San Bernardino County District Attorney's Office said at least two 911 calls from the time of the shooting reported three assailants, not two. 
 
Even though those reports were "not corroborated," if in fact there were three attackers it would be important to crack open the iPhone "to identify as of yet unknown co-conspirators," the District Attorney's filing stated. 
 
Apple has said it respects the FBI and has cooperated by turning over data in its possession. 
 
The latest request is different, Apple says, because it requires them to crack a phone with a software tool that does not currently exist.          
 
~ Dan Levine

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Apple expected to cut iPhone 6S, 6S Plus production: Nikkei

Apple Inc is expected to cut production of its latest iPhone models by about 30 percent in the January-March quarter, the Nikkei reported.

As inventories of the iPhone 6s and 6s Plus have piled up since they were launched last September, production will be scaled back to let dealers go through their current stock, the business daily reported.

Apple's shares were down 2.2 percent at $102.97 in afternoon trading. The stock has lost about a quarter of its value from record highs in April, reflecting worries over slowing shipments.
  
"This is an eye-opening production cut which speaks to the softer demand that Apple has seen with 6s out of the gates," FBR Capital Markets analyst Daniel Ives said. "The Street was bracing for a cut but the magnitude here is a bit more worrisome."

Shares of Apple suppliers Skyworks Solutions, Qorvo Inc and Cirrus Logic, among others, also fell following the report.

Other companies affected include Sony Corp, which makes image sensors used in iPhones, and electronic parts makers TDK Corp, Alps Electric Co Ltd and Kyocera Corp, the paper reported.

LCD panel manufacturers Japan Display Inc, Sharp Corp and LG Display Co Ltd will also be hit by the cut in production, according to the report.

Production is expected to return to normal in the April-June quarter, the Nikkei reported.

Tepid forecast by Apple suppliers such as Jabil Circuit, which manufactures casings for iPhones, and Dialog Semiconductor GmbH in December stoked fears that iPhone shipments could fall for the first time.

As well, consumers may not see the iPhone 6S and 6S Plus as enough of an improvement over its predecessors, some analysts have said.

Wall Street has also tempered its view on the high-flying stock in recent months. Since early December, about a third of the analysts tracked by Thomson Reuters have trimmed their estimates on Apple.

For fiscal 2016, Apple is expected, on average, to grow revenue by under 4 percent, a far cry from the 28 percent revenue growth it achieved in the fiscal year that ended last September.

Apple was not immediately available for comment. The parts suppliers cited in the Nikkei report were not available for comment outside their regular business hours.

(Reporting by Anya George Tharakan and Lehar Maan in Bengaluru; Julia Love in Las Vegas; Editing by Maju Samuel and Saumyadeb Chakrabarty)

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Apple customers report devices crashing on iOS 9 update

The new Apple iPhone 6S and 6S Plus are displayed during an Apple media event in San Francisco, California, September 9, 2015.

Reuters/Beck Diefenbach

A significant number of Apple Inc customers are reporting their mobile devices have crashed after attempting to upload the new iOS 9 operating system, the latest in a line of launch glitches for the tech giant.
 
Twitter and other social media were awash with disgruntled customers reporting two distinct faults, with one appearing to be linked specifically to older models of Apple iPhones and iPads.
 
"It is beyond inconvenient to not be able to use your phone for a day," said student Pip Cordi as staff in the Apple store in central Sydney looked at her phone on Friday. "I have a lot of apps that I use for school - things like language apps and dictionaries and that's all really important for my studies."
 
Another iPhone user, Zorry Coates, said she had spent three hours in the Apple store and had been left with the option of either returning her phone to factory settings - losing any non-backed-up data - or waiting until Apple technicians announced an update.
 
"They said they were aware of the problem and their engineers were working on it 24/7, but they couldn't tell me when - or how - I would get a solution," Zorry said.
 
"I'm very annoyed because it's wasted half my day. They pride themselves on being a company that's flawless."
 
Apple's headquarters in San Francisco did not respond to a request for comment late Thursday. An Apple spokesman in Sydney said the company had no comment.
 
Despite any troubles, significant numbers of iOS users had upgraded; more than 16 percent, according to Mixpanel, a San Francisco, California-based analytics company, as of 4 p.m. PDT (2300 GMT) Thursday.
 
ERROR MESSAGE
 
Charlie Brown, a technology expert at Sydney-based Cybershack, said any number of dissatisfied customers was significant in the social media era, particularly following the troubled rollout of iOS 8. Apple released several further updates to iOS8, but some of the bugs were never fully fixed. 
 
"The risk to Apple in terms of having dissatisfied customers is that as their customer base grows, so will the number of those dissatisfied customers," said Brown.
 
One group of users reported that iOS 9 upgrade would fail after several minutes, requiring them to start the process over. Many posted screen shots of the error message they received: "Software Update Failed".
 
That problem was likely caused by servers that were overloaded when too many people tried to download the upgrade simultaneously, tech analysts said. 
 
"It's like the Black Friday thing," said Bob O'Donnell of Technalysis Research, referring to the major U.S. shopping sale day after Thanksgiving. "Some websites get creamed on the traffic on Black Friday."
 
Other users, many of them with older devices, reported their devices seizing up on a "swipe to upgrade" page. The latest upgrade had been deemed by Apple as "friendly" to the older devices after the iOS 8 problems.
 
"Apple were saying the downloading mechanism doesn't take as much space to download," said Sydney-based Graham McKay, an IT support specialist. 
 
McKay and Brown said they always advised clients to wait several days before downloading any new upgrades from Apple, Google Inc or Microsoft Corp to make sure any glitches had been found and ironed out. 
 
Metering the upgrade, or allowing users to upgrade in waves rather than all at once, would have been a smarter approach, O'Donnell said.
 
"It's a lot about setting expectations," he said.
 
Apple did this week delay the release of watch OS 2, its updated operating system for the Apple Watch after it discovered a bug in development.                 
 
~ Heather Somerville and Jane Wardell

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Sprint's plan for new iPhone trumps other U.S. carriers

The new Apple iPhone 6S and 6S Plus are displayed during an Apple media event in San Francisco, California, September 9, 2015.

Reuters/Beck Diefenbach

Want to own the new iPhone without burning a hole in your pocket every month? Sprint seems to be the cheapest option in the United States.
 
Sprint Corp's offer for the 16 GB iPhone 6S with a basic data, calling and text plan costs between $3 and $10.50 less per month than a competing offer from the other three top U.S. carriers.
 
The competition in the U.S. wireless industry is fierce and the launch of the newest iPhone iteration on Wednesday is a chance for carriers to lure customers away from their rivals.
 
But, Apple Inc served up a curve ball by offering its own financing scheme for an unlocked iPhone, which gives a customer the liberty to switch between carriers, rather than be tied down by a contract with one carrier.
 
However, Sprint's plan works out to be cheaper, on a per month basis, than even buying the iPhone from Apple and going for the cheapest wireless plan on offer.
 
Sprint is charging $22 per month for the 16 GB iPhone 6S, under a 21-month lease. That along with a basic talk, text and data plan, worth $45, will cost a customer $67 per month.
 
A T-Mobile US Inc plan similar to Sprint's will cost about $70 per month – $20 for the phone with an 18-month agreement and $50 for a basic wireless plan.
 
Sprint and T-Mobile usually offer cheaper plans to lure customers from Verizon Communications Inc and AT&T Inc, the top two U.S. wireless companies, which analysts say have better networks.
 
Verizon's plan costs about $77.08 per month, $27.08 for the iPhone over two years and $50 for a wireless plan.
 
AT&T's plan, Next12, costs about $77.50 per month, $32.50 for a 20-month phone contract and $45 for a wireless plan.
 
Under Apple's offer, the iPhone 6S will cost $32.41 per month. Paired with a basic $45 wireless plan, among the cheapest available, the phone would cost $77.41 per month.
 
And what when a new iPhone is launched?
 
Sprint allows users to upgrade every time a new iPhone is launched, which typically happens once every year, and charges an activation fee.
 
T-Mobile allows a free upgrade at any time, while AT&T offers the option of a free upgrade after 12 months.
 
Verizon's plan also permits an upgrade at any time, but requires customers to pay off the remaining cost of the iPhone.
 
Still, there are advantages in opting for Apple's financing plan.
 
Apple's scheme includes AppleCare+, a warranty program that provides two years of hardware protection, instead of the standard one year, as well as coverage for two incidents in cases of accidental damage.
 
~ Devika Krishna Kumar

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Apple upgrade program seen driving demand for new iPhones

The new Apple iPhone 6S and 6S Plus displayed during an Apple media event in San Francisco, September 9, 2015.

Reuters/Beck Diefenbach

 
Apple Inc (AAPL.O) has just made buying a new iPhone every year more affordable - a move that analysts said will drive demand from now on, starting with the new iPhone 6S and 6S Plus.
 
Apple announced a program on Wednesday that will allow users to finance unlocked versions of the new iPhones through monthly installments starting at $32, regardless of carrier.
 
Until now, customers could only lease subsidized phones on two-year contracts requiring an up-front payment.
 
"We think this program should act as a tailwind for iPhone sales, since they serve to shorten the replacement cycle...," Susquehanna analysts wrote in a note on Thursday.  
 
The deal for iPhone owners, which will initially apply to the United States and 11 other key markets including China, emerged as one of the most positive announcements at Apple's annual launch event.
 
Along with the new iPhones - which come with better cameras, faster chips, new colors and a force-sensitive "3D Touch" - Apple also unveiled a bigger iPad and a new TV set-top box that responds to voice commands.
 
The new products got tepid response from investors, though, with commentators saying Apple had failed to deliver a truly transformative product that would merit a surge in its stock.
 
Apple shares were up about 1.3 percent at $111.60 in early trading on Thursday, after closing down nearly 2 percent after the product event.
 
The company's shares have lost more than 16 percent since they hit a year-high in April, hammered by concerns about demand in China and, more recently, by a broader stock market rout.
 
Apple's shares also fell on Sept. 9 last year when the company rolled out the iPhone 6 to lukewarm reviews.
 
But sales of the phone - and the company's stock price - soared in the following months, and Apple's revenue in the most recent quarter increased by nearly a third.
 
Analysts say there's still plenty of room for sales to grow, particularly with the new incentive program.
 
"We view it as the right strategy at the right time," FBR Capital Markets analyst Daniel Ives told Reuters, noting that less than 30 percent of customers have upgraded to an iPhone 6.
 
"Apple needs to aggressively do everything in their power to catalyze upgrades and this is another step in that direction."
 
Analysts at Morgan Stanley also said the upgrade program should shorten the iPhone sales cycle and boost shipments.
 
Assuming 10 percent of U.S. iPhone users choose this program in 2016 and upgrade to a newer version in 2017, the program would likely boost iPhone shipments by 6.5 million units in 2017 or add 25 cents per share to earnings, the brokerage said.
 
However, Canaccord Genuity analysts said that while the program should be popular with consumers, "(we) will watch for reaction by carriers to the proposal."
 
T-Mobile US Inc (TMUS.N) was first carrier to announce a plan for the new iPhones. The company said customers could pre-order an iPhone 6S for $20 a month for 18 months and an iPhone 6S Plus for $24 a month with no down payment, starting on Saturday. (t-mo.co/1LlXKrw)
 
No brokerages announced changes to their recommendations on Apple's shares, but two - Macquarie Capital and Jefferies & Co - cut their price targets, to $133 and $126 respectively.
 
Of the 47 analysts covering Apple, 35 have a "buy" or higher rating on the stock, 11 have a "hold" and only one rates it a "sell", according to Thomson Reuters data.
 
The median price target on the stock is $147.50.
 
~ Tenzin Pema and Devika Krishna Kumar                  

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Apple Pay stung in transactions using data stolen from retailers: WSJ

Customers enter the Fifth Avenue Apple store in Manhattan, New York September 19, 2014.
Credit: Reuters/Adrees Latif 
  (Reuters) - Apple Inc's (AAPL.O) mobile payment system Apple Pay has been hit by a wave of fraudulent transactions using stolen credit-card data from a spate of breaches at retailers, the Wall Street Journal reported, citing people familiar with the matter.  
 
The transactions stemmed from breaches at retail giants including Home Depot Inc (HD.N) and Target Corp (TGT.N), the Journal reported on Thursday. 
 
The majority of unauthorized purchases have been for big-ticket items bought with smartphones at Apple's own stores, the Journal said.
 
Apple could not be reached immediately for comment.   
 
~ Darshana Sankararaman

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Microsoft to give away Windows 10, unveils hologram glasses

An undated handout photo of Microsoft's HoloLens, a holographic lens device that allows users to see three-dimensional renderings of computer-generated images.

Credit: Reuters/Microsoft/Handout

 

(Reuters) - Microsoft Corp (MSFT.O) will give away its upcoming Windows 10 operating system as a free upgrade to users of the most recent versions of Windows and Windows Phone, as the world's largest software company tries to retain customers in the mobile era.
 
The 'free' strategy is a calculated gamble for Microsoft, designed to put Windows in as many devices as possible. The company would then make up for any lost revenue by selling services such as Office over the Internet, or cloud.
 
"It's a necessary evil as CEO Satya Nadella and Microsoft have recognized the 'golden goose' and major revenue opportunities will happen after the upgrades have taken place," said Daniel Ives, an analyst at FBR Capital Markets. 
 

An undated handout illustration of Microsoft's HoloLens, a holographic lens device that allows users to see three-dimensional renderings of computer-generated images.

Credit: REUTERS/Microsoft/Handout

  

"Microsoft needs to lay seeds for its cloud-centric strategy and Windows 10 is the epicenter of that strategy. It's all about making it attractive for the ecosystem to upgrade onto this next-generation platform."
 
The immediate revenue hit is unlikely to be large, as Microsoft gets no more than $500 million of its $20 billion or so annual Windows revenue from upgrades, analysts said. The vast majority of Windows revenue comes from hardware makers installing it on new personal computers and businesses paying for multi-year licenses.
 
Investors were not impressed. Microsoft shares fell 1 percent to $45.91 on Nasdaq shortly before the close.
 

An undated handout illustration of Microsoft's HoloLens, a holographic lens device that allows users to see three-dimensional renderings of computer-generated images.

Credit: REUTERS/Microsoft/Handout

  

The company is expected to say more about the financial effects of the new approach when it reports quarterly earnings next week.
 
Windows 10, expected on the market this autumn, will be available for one year as a free upgrade to users of Windows 7, Windows 8.1 and Windows Phone 8.1, Myerson said.
 
Industry and Wall Street analysts described the move as inevitable.
 

An undated handout illustration of Microsoft's HoloLens, a holographic lens device that allows users to see three-dimensional renderings of computer-generated images.

Credit: REUTERS/Microsoft/Handout

  

Windows only features on roughly 15 percent of computing devices including phones and tablets, and is largely irrelevant for many consumers. It lags Apple Inc (AAPL.O) and Google Inc (GOOGL.O), which regularly update their software systems free for customers.
 
"The way to motivate consumers is to make upgrades transparent and painless - meaning free and low-to-no effort," said Forrester analyst Frank Gillett. "Microsoft had to match the expectation set by the mobile and Web leaders."
 
At an event at its headquarters near Seattle, Microsoft also tried to burnish its flagging reputation for innovation.
 

Microsoft Corp's Ashley Frank talks about Windows 10 at the annual shareholders' meeting in Bellevue, Washington December 3, 2014.

Credit: REUTERS/Jason Redmond

  

Unexpectedly, it unveiled a holographic lens device that allows users to see three-dimensional renderings of computer-generated images. Microsoft HoloLens, which looks like a wireless visor, raises the stakes in the emerging market for virtual and augmented reality, being targeted by Facebook Inc's (FB.O) Oculus and Google's Glass project.
 
The device will be available around the same time as Windows 10 this autumn, a Microsoft executive said.
 
Executives also showed off an Xbox app for games on Windows 10 and a new version of its browser code named 'Spartan,' which lets users make notes on Web pages and share them.
 
Microsoft announced its new Windows 10 operating system in September, billing it as a move to unify all kinds of device users. It skipped Windows 9 altogether, to put some distance between the new system and Windows 8, which confused many users by ditching the start button menu and using a new layout.
 
(Reporting by Bill Rigby; Editing by Jeffrey Benkoe, Andre Grenon and Richard Chang)               

~ Bill Rigby

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U.S. government warns on bug in Apple's iOS software

A customer holds an iPhone 6 (R) and iPhone 6 Plus after the phones went on sale at the Fifth Avenue Apple store in Manhattan, New York September 19, 2014.

Credit: Reuters/Adrees Latif

 

(Reuters) - The U.S. government warned iPhone and iPad users on Thursday to be on the alert for hackers who may exploit a vulnerability in Apple Inc's (AAPL.O) iOS operating system that would enable them to steal sensitive data.
 
There was the potential for hacks using a newly identified technique known as the "Masque Attack," the government said in an online bulletin from the National Cybersecurity and Communications Integration Center and the U.S. Computer Emergency Readiness Teams.  
 
The network security company, FireEye Inc (FEYE.O), disclosed the vulnerability behind the "Masque Attack" earlier this week, saying it had been exploited to launch a campaign dubbed "WireLurker" and that more attacks could follow. 
 
Hackers could potentially steal login credentials, access sensitive data stored on iOS devices and remotely monitor activity on those devices, the government said.
 
Such attacks could be avoided if iPad and iPhone users only installed apps from Apple's App Store or from their own organizations, it said. 
 
Users should not click "Install" from pop-ups when surfing the web. If iOS flashes a warning that says "Untrusted App Developer," users should click on "Don't Trust" and immediately uninstall the app, the bulletin said.
 
Representatives of Apple could not immediately be reached for comment. 
 
~ Jim Finkle     

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