White House's National Economic Council head hints China may have stolen Apple tech

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The director of the White House's National Economic Council, Larry Kudlow, suggested on Friday that China may be stealing Apple technology secrets, without offering any examples or evidence.

Larry Kudlow


"I don't want to surmise too much here, but Apple technology may have been picked off by China and now China is becoming very competitive with Apple. You've got to have rule of law," Kudlow said in a Bloomberg interview. "There are some indications from China['s government] that they're looking at that, but we don't know that yet. There's no enforcement -- there's nothing concrete."

Earlier this week Apple slashed its guidance for the December quarter from between $89 billion and $93 billion to just $84 billion, linking the whole of its expected revenue shortfall to weak Chinese sales. Local smartphone makers like Huawei, Xiaomi, and Oppo have eaten into the iPhone's marketshare by improving the quality of their devices while selling for hundreds of dollars less.



Intellectual property theft is a problem many foreign companies have had to cope with in China, and better enforcement has been a key demand of U.S. President Donald Trump in his trade war. At the same time, there haven't been any other recent allegations involving Apple.

It could be that like South Korea's Samsung, Chinese smartphone vendors have simply imitated the look and features of the iPhone to keep up. That might still imply patent violations, something which Samsung ended up paying stiff penalties for, but many traits that were unique to the iPhone in 2007 have since become industry standards. In the current era, Apple and other vendors regularly leapfrog each other.
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Comments

  • Reply 1 of 36
    What did they steal? The only thing I could think of would be something related to their A Series processors, as most other components in iPhones are purchased from suppliers and not designed specifically by Apple.

    And given how far behind their processors are, I don't think they did a very good job of stealing anything.
    elijahgwatto_cobra
  • Reply 2 of 36
    rogifan_newrogifan_new Posts: 3,769member
    He’s only making things harder/worse for Apple in China. Just shut up.
    muthuk_vanalingambshankchasm
  • Reply 3 of 36
    gatorguygatorguy Posts: 19,998member
    What did they steal? The only thing I could think of would be something related to their A Series processors, as most other components in iPhones are purchased from suppliers and not designed specifically by Apple.

    And given how far behind their processors are, I don't think they did a very good job of stealing anything.
    I would have thought it obvious that it's not just about "the processor". There's several Apple features and the technologies that make them possible from face recognition to AI development, audio techniques and sensors, security chipsets and interfaces... That China may have "stolen" some of that from Apple is nearly a given IMHO. 
    racerhomie3berndoghodarmuthuk_vanalingammdriftmeyerSpamSandwichelijahg
  • Reply 4 of 36
    gatorguy said:
    What did they steal? The only thing I could think of would be something related to their A Series processors, as most other components in iPhones are purchased from suppliers and not designed specifically by Apple.

    And given how far behind their processors are, I don't think they did a very good job of stealing anything.
    I would have thought it obvious that it's not just about "the processor". There's several Apple features and the technologies that make them possible from face recognition to AI development, audio techniques and sensors, security chipsets and interfaces... That China may have "stolen" some of that from Apple is nearly a given IMHO. 

    Pretty much everything you listed is integrated directly into the processor, or is tightly tied to it.
    bshank
  • Reply 5 of 36
    I wouldn’t be surprised if this actually did happen. Apple needs to get outta China and get its manufacturing stateside, where we have actual laws protecting intellectual property and our workers.
    berndogmagman1979watto_cobra
  • Reply 6 of 36
    GaryGateGaryGate Posts: 3unconfirmed, member
    No evidence of anything. Just FUD. Typical of the current administration.
    muthuk_vanalingamsingularitybshankchasmlaoban00montrosemacslarrya
  • Reply 7 of 36
    Evidence: Every year Apple releases a new iPhone. Before the iPhone is announced, the first thing we learn about it is its exact shape in the form of cheap perfectly fitting cases from China made by companies without any connection to Apple. We also get to see perfect mock ups of the phone and usually the phone's entire shell. It is not a huge leap to suspect that the chips in the phone are also leaked to outside companies for analysis.
    edited January 4 berndogmagman1979elijahgbshankanantksundaram
  • Reply 8 of 36
    China needs to fix its IP system & enforce the rules. It’s quite pathetic they steal tech. Never using their stolen tech.
    edited January 4 hodar
  • Reply 9 of 36
    Evidence: Every year Apple releases a new iPhone. Before the iPhone is announced, the first thing we learn about it is its exact shape in the form of cheap perfectly fitting cases from China made by companies without any connection to Apple. We also get to see perfect mock ups of the phone and usually the phone's entire shell. It is not a huge leap to suspect that the chips in the phone are also leaked to outside companies for analysis.

    Why leak chips when anyone can simply go out and buy an iPhone and examine it?

    Remember the iPhone 5S and the A7 processor? Nobody knew it was going to be 64bit until Apple surprised everyone at the keynote. Likely because A) nobody had early access to the processor and B) iOS is developed in-house and therefore much easier to keep things secret.
    hodarmuthuk_vanalingambshankwatto_cobra
  • Reply 10 of 36
    maestro64maestro64 Posts: 4,452member
    What did they steal? The only thing I could think of would be something related to their A Series processors, as most other components in iPhones are purchased from suppliers and not designed specifically by Apple.

    And given how far behind their processors are, I don't think they did a very good job of stealing anything.
    This is what most people do not realize about technology, it not always the actual IP or the physical design of something which is more important, many times it is the actual manufacturing technology and processes (know how) which is the more important element of making something work. It called indirect transfer "stolen" of the know how that is  really the issue here. Apple develops and design most of the manufacturing tech for their products and you can be pretty sure most of what Apple developed for its supplier, has gone out the back door and made its way to competitor operations. 

    This is why China has demand if you are going to manufacture in china it is done with a Chinese own business or it has to be a JV with 51% ownership by a Chinese entity. It is very difficult to sell non-Chinese product in China and not have it made there and the fact Apple has had good success, means they knowingly allowed this information to be transferred and have not say anything about it. They made a deal with China for market access in exchange for the know-how transfer. There is no evidence to back this up, but all the indicators point in this direction.

    I see things coming out of China today which they could not do 10 yrs ago, there is no way these companies advance this fast without steal the know how. I have work with Chinese company for over 20 yrs and the hardest thing to do with them is to follow a process or do things a particular way, they had the good enough attitude, no reason to improve or make something better. Most time they are like this because they did not have skill and know how to do it any other way. Today this is not the case they turn out as good or not better than most US counter parts. 
    muthuk_vanalingamtmayanantksundaramwatto_cobra
  • Reply 11 of 36
    k2kwk2kw Posts: 1,644member
    Evidence: Every year Apple releases a new iPhone. Before the iPhone is announced, the first thing we learn about it is its exact shape in the form of cheap perfectly fitting cases from China made by companies without any connection to Apple. We also get to see perfect mock ups of the phone and usually the phone's entire shell. It is not a huge leap to suspect that the chips in the phone are also leaked to outside companies for analysis.

    Why leak chips when anyone can simply go out and buy an iPhone and examine it?

    Remember the iPhone 5S and the A7 processor? Nobody knew it was going to be 64bit until Apple surprised everyone at the keynote. Likely because A) nobody had early access to the processor and B) iOS is developed in-house and therefore much easier to keep things secret.
    Samsung (or a part of Samsung) knew about the A7 before the release since they manufactured it.
    elijahg
  • Reply 12 of 36
    tzeshantzeshan Posts: 1,876member
    What did they steal? The only thing I could think of would be something related to their A Series processors, as most other components in iPhones are purchased from suppliers and not designed specifically by Apple.

    And given how far behind their processors are, I don't think they did a very good job of stealing anything.
    Politicians and media have a habit of using incorrect words to distort, exaggerate, and lie about the truth. What China has done is copying Apple designs. Is COPY the same meaning as STEAL? According US laws the only time you can use the word steal is when patents or copyrights are violated. And it should be left to the Court to decide. Politicians and media are stupid in high tech. They don't know nothing. For example the Bloomberg news. 
  • Reply 13 of 36
    k2kwk2kw Posts: 1,644member

    red oak said:
    He’s only making things harder/worse for Apple in China. Just shut up.
    Maybe l, just maybe, he has more inside information than you do

    Why don’t you just shut the F**** up
    I think Cook made it worse for Apple by Blaming Trump.   I would not be surprised if he puts a 20% Tariff on all iPhones.
  • Reply 14 of 36
    magman1979magman1979 Posts: 1,110member
    China needs to fix its IP system & enforce the rules. It’s quite pathetic they steal tech. Never using their stolen tech.
    Although I full agree not to use anything designed by a Chinese “company”, I did have to LOL at your comment at China having to fix their IP system and enforce rules; two things they have NO inclination to do because it would hurt them if they did!
    elijahgwatto_cobra
  • Reply 15 of 36
    Maybe if were lucky China will steal intellectual property for the Mac so we can have upgradeable and expandable Mac clones. :-)
  • Reply 16 of 36
    Appointing Larry Kudlow as Director of National Economic Council is one in a long line of bad decisions/appointments. Kudlow is second only to Peter Navarro in terms of cluelessness...
    montrosemacs
  • Reply 17 of 36
    SpamSandwichSpamSandwich Posts: 30,710member
    k2kw said:

    red oak said:
    He’s only making things harder/worse for Apple in China. Just shut up.
    Maybe l, just maybe, he has more inside information than you do

    Why don’t you just shut the F**** up
    I think Cook made it worse for Apple by Blaming Trump.   I would not be surprised if he puts a 20% Tariff on all iPhones.
    Unless you have secret recordings or something, Cook didn’t blame Pres. Trump. He blamed trade issues. 

    Once the trade issues are ironed out (and it may take weeks or months) the effect on Apple stock will be short-lived.
    watto_cobra
  • Reply 18 of 36
    geekmeegeekmee Posts: 299member
    I think he’s got bigger problems than that.... are right under his nose.
  • Reply 19 of 36
    dewmedewme Posts: 1,934member
    While I think there is an undercurrent of IP concerns with China for everyone who does business there, including Chinese domestic entities, this specific message is pure FUD spew from the White House to try to deflect some of the impact of the administration’s policies are having on companies like Apple. They’re trying to use Apple as a pawn. Next thing you know they’re going to be touting the benefits their policies are having on Apple’s customer support costs in China. Fewer Apple customers = lower Apple customer support costs = add one more item to the WH “wins” list. Resolving the IP issues with China requires negotiations. You don’t put out a fire on a boat by sinking the boat. 
    montrosemacswatto_cobra
  • Reply 20 of 36
    auxioauxio Posts: 1,959member
    gatorguy said:
    What did they steal? The only thing I could think of would be something related to their A Series processors, as most other components in iPhones are purchased from suppliers and not designed specifically by Apple.

    And given how far behind their processors are, I don't think they did a very good job of stealing anything.
    I would have thought it obvious that it's not just about "the processor". There's several Apple features and the technologies that make them possible from face recognition to AI development, audio techniques and sensors, security chipsets and interfaces... That China may have "stolen" some of that from Apple is nearly a given IMHO. 

    Pretty much everything you listed is integrated directly into the processor, or is tightly tied to it.
    And pretty much everything the processor does is tied to the transistor.  How far do we reduce things before it becomes absurd?  There are creative ideas in the processor and there are creative ideas in the code which runs on it.  The combination of which create the value which people have for the device, and what set it apart from similar devices.  It's more than the sum of the parts.
    edited January 4 watto_cobra
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