Tags: Apple | Cyber War | Apple | Global Growth

Expanding Cyber War Kills Apple's Global Growth Plans

Expanding Cyber War Kills Apple's Global Growth Plans

By Wednesday, 27 April 2016 07:28 AM Current | Bio | Archive


Tim Cook’s much-rumored plan to lead Apple into the car business hit the guardrail last week. German auto makers want nothing to do with the American giant.

That’s bad enough, but the reasons BMW and Daimler dropped out of the deal are even worse.

German newspaper Handelsblatt, citing unnamed industry sources, said one problem is the Germans disliked Apple’s plan to collect location-based data from the new cars. The data would drive new iCloud services.

We don’t know what those services would be. Presumably Apple thinks drivers would like them. But BMW and Daimler reportedly thought European consumers would object to having an American company handle their personal data.

Apple (AAPL) is not just any American company.

It spent the last three months facing public FBI demands to penetrate its own security measures and reveal data the U.S. government wanted to see. That German companies would object to this is no surprise. They recall a time when their own government’s agents routinely demanded “Your papers, please.”

Unlike many Americans, Germans are still sensitive to such intrusions.

Having seen the U.S. government demand data from Apple, and having seen Apple’s inability to stop it, BMW and Daimler probably made the right choice. The deal would not have worked. That’s not Apple’s fault, but Apple will pay the price. So will its American shareholders and employees.

Apple has another headache, too.

This month China’s government shut down Apple’s iBooks store and iTunes Movies. Then President Xi Jinping summoned Chinese tech executives to a meeting.

According to Xinhua News, Xi “required that cyberspace be imbued with positive energy and resonated to mainstream ideology, in the hope of creating a clean and righteous environment.”

Cyberspace is many things, but “clean and righteous” is low on the list. Xi surely knows this. He must have other motivations. Is Xi angry at Apple for both competing with Chinese companies and making it hard for Beijing to spy on its citizens?

These are only the latest examples of the ongoing cyberspace trade war. Toll booths and border checks are clogging the worldwide information superhighway. This makes it difficult for tech companies to sell their products globally.

IBM had similar headaches last year. Juniper Networks (JNPR) is another victim.

A free and open Internet is in everyone’s best interest – except political leaders who want to exploit and control it. From China to the U.S. and Europe, that’s exactly what is happening. The resulting Balkanized network may be the most under-noticed trend of the decade.

All of us will pay the price, in the form of a slow-growing world economy that runs into hurdles everywhere it turns.

Patrick Watson is an Austin-based financial writer. Follow him on Twitter @PatrickW

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Tim Cook's much-rumored plan to lead Apple into the car business hit the guardrail last week. German auto makers want nothing to do with the American giant.
Apple, Cyber War, Apple, Global Growth
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2016-28-27
Wednesday, 27 April 2016 07:28 AM
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