michael_c

radarthekat said:

For those new to the FBI versus Apple battle...

Here is what's going on.  

The iPhone is locked by a passcode that is combined with a hardware key built into each iPhone at manufacture.  This hardware key is randomly generated and encoded into the silicon inside each iPhone AND IS NOT KNOWN EVEN TO APPLE.  So to unencrypt data on an iPhone, you need the user passcode and the hardware key, which exists only in the phone's hardware.

To decrypt the data on an iPhone you need to enter the password ON THAT IPHONE so that the password gets combined with that iPhone's hardware encryption key.  Taking the data off the phone and trying to decrypt it elsewhere won't work because you won't have the hardware key portion of the combined encryption key.

So you need to enter each password guess into the iPhone you are trying to unlock.  And the iPhone has a security feature that wipes all the data in the phone after ten consecutive incorrect password attempts.  This feature is what makes a simple four digit passcode such a strong security measure.  Without that feature, it would be a simple process to manually sit there and try one password after another until you went through all 10,000 combinations.  The FBI, or a school kid with a couple extra days on his hands, could break into any iPhone.  But if the phone erases itself after ten unsuccessful password tries, then you won't dare even try to unlock it, as you'll have only a 10 in 10,000 chance of guessing the correct password and the consequences of that tenth incorrect guess is that you'll lose the data you're after.

The FBI is demanding that Apple remove this security feature so that they can simply brute-force the password.  10,000 tries, even if done manually, wouldn't take very long.  Of course, they are also asking for two additional weaknesses.  One is to allow passwords to be sent to the phone electronically (wirelessly).  That would save time over manually sitting there trying one after another passcode.  And the other is to remove a delay the software inserts between passcode attempts, so that it could blast passcodes at the phone at a very fast clip.  You'd ask for these two additional weaknesses only if you are planning on turning this into a tool for law enforcement to use over and over.  So that puts the lie to the FBI's stance that they want this only for this one time.

Apple is not being asked to use any method they want to just get the data.  Apple is being demanded to build a forensic tool for law enforcement's repeated use.  Apple, and those of us knowledgable about this sort of thing, knows that this tool will need to be maintained and documented, and submitted into evidence to be inspected by defense attorney experts, because defense attorneys will want to be certain that the tool does not modify the evidence it makes available.  This is how the tool will get out into the wild, and when it does then none of us will have any security unless we install additional encryption software on top of the operating system.  Which criminals and terrorists will immediately do, leaving them safe from law enforcement search while leaving the vast majority of casual users open to those same terrorists infiltrating their phones and grabbing their bank account passwords, etc.

Law enforcement will solve a few more crimes, committed by unwitting criminals who didn't think to add additional encryption on top of the weakened encryption in the operating system.

Casual users like you and me and your kids and wife will be more subject to snooping by hackers, some of which will be working for the fund-raising departments of terror organizations.

Terrorists will hold up this incident and the fallout from it as a major victory in their attempts to weaken and manipulate free society.

Well put, and worth forwarding to our representatives.  I can add an encryption layer to my communications, but would still be vulnerable to a thief, terrorist, or other group wanting to do harm having access to my keychain access, and access to my home (via home automation).  

This would be a step back in the progress made to reduce the desirability to steal iPhones.

sog35 said:

mr. h said:

Presumably, had Apple not been doing all these buybacks, the stock price would be even lower now? This notwithstanding, surely long-term investors would be better off if Apple spent all the capital return money on dividends?

Hoarding wealth is not necessary for Apple at this point - they have massive reserves and are making money faster than they can spend it. Returning money to investors is the right thing to do in this situation but I’m not sure the buyback is good value for money.

I don't think the stock would be worth less today if they didn't do the buyback.

They would have over $300 billion in net cash if they didn't do the buyback.

Sans cash the company's market cap would only be $264 billion. Do you seriously think Apple would be worth less net of cash than Facebook, which is worth $300 billion?  I don't think so.

IMO, Apple should hoard the cash right now. If the economy gets worse they can buy and acquire foreign and domestic companies for cheap.

Part of the pressure on AAPL stock price is due to large institutions view that AAPL is shifting from a growth stock to a value stock, and the growth funds have been selling at a higher rate than the value funds are adding positions. I still see AAPL in the growth phase, as the 2015 holiday quarter and following quarter iPhone sales were an anomaly and should have been treated as outlier data points - but, it doesn't matter what I, or you think as they will do what they will do. However, at some point they will have such large YOY comps to deal with AAPL will no longer fit any of the institution's growth funds definitions and their rules will force them to sell. It is what it is, regardless of whether the institutions have pulled the trigger early or not. But, at some point the buy/sell rates will equalize, and the buybacks effects will be seen. At this point, any positive effects of the buybacks have been obscured by the transition. Look at the reported activity for the Fidelity funds and you can see the imbalance buy/sell pressure. And, Fidelity is just one of the institutions transitioning. Fidelity Capital Appreciation fund sold all of its 2.48 million Apple shares since June while at the same time Fidelity Series Equity-Income fund bought 1.05 million shares (after having no previous stake) When you look at the 20 year view of AAPL, you see the latest drop (over the last 9+ months) as a 50% retracement - this has occurred multiple times with AAPL. AAPL appears to have bottomed out in Feb, and in the past have resumed their trajectory either one or two month after they have bottomed. Unexpected events can change things, but I have no reason to expect this retracement to be any different.

redraider11 said:

Not sure why Oculus needs such high end graphics cards to work. Sony has VR that will utilize the PS4. 

There are two reasons I can think of you need high end graphics.  One, if you are pushing the envelope and doing a lot of "stuff", and two if you are inefficient about how you do things.  I don't know if either fit Oculus, but just relying on the hardware specs is not necessarily telling.  It's been a while since I developed software for the Windows (Vista) world, but the OS was so inefficient, you needed as much horsepower as you could get to accommodate the OS design.  Don't know anything about Oculus designers, but wouldn't be totally surprised if the problem resided with Oculus.  But, to be fair, ... it could be they are pushing the envelope.

I can only hope the FBI, and Attorney General motives are pure and are just misguided.  Looking through history you see cases where people have regretted what they did, or their failure to foresee how their efforts would be misused.  

• The building of the atomic bomb was fraught with misgivings by Einstein and Oppenheimer   
• Creation of Africanized honeybees to increase honey production
• Bringing the Mongoose to Hawaii to control the rat population
• Numerous instances where insects are brought in to control pests only to wreak havoc of their own
• and, I'm sure everyone here can add to this list as there is no shortage of things society has rushed into only to regret at a later time.

While the goal of national security is good, this push by the government is ill thought out and filled with the typical incomplete thinking that has plagued them for decades.  As many have said, it's too easy for the "bad guys" to circumvent with their own security layer, and the negatives of this path are plentiful.

sog35 said:

GTQ said:

Apple is wrong and the people backing Apple are wrong. When a member of their family or someone close to them is murdered, will they take the same position if the name of the killer is on a locked Iphone. The killer walks free if the phone is not unlocked.

The killers have been killed already.  

The terrorist destroyed their two personal phones. You seriously think there was anything of value in the iPhone they didn't destroy?

Amen to that!  Also, do you (GTQ)  think it was an accident that the FBI instructed the county to reset the password forcing this standoff?  James Comey (FBI) has been pushing for a permanent back door to be built into the OS for a number of years, and now he's saying he's only interested in this one phone - Looks like some have fallen for the strategy ...   It's all theatrics.