Encryption and Our Cyber Insecurities

Last week, Apple respond to a request by the U.S. District Court for the Eastern District of New York and explained that even if it could decipher encrypted data on a phone running iOS 7, the potential costs and burden argue against mandating the company to do so. And, by the way, if the court is looking at a phone running iOS 8 or higher, Apple cannot help.

Law enforcement personnel across the country are discovering that their ability to withdraw data from personal devices is becoming increasingly difficult. These include devices owned by murder victims, or devices owned by suspects who refuse to divulge their passwords. The public debate surrounding the needs of law enforcement and the privacy interests of private citizens has intensified as Google and Apple have released smart phones with native encryption. And, whereas Federal agencies previously took center stage in encryption matters, the impacts are now felt by local police who cannot access devices that may (or may not) hold critical information regarding either a suspect’s contacts or a victim’s final hours.

In a Brooklyn courthouse earlier this month, the judge deferred ruling on a request by the government to compel Apple to unlock a phone, instead asking Apple to “submit its views . . . as to whether the assistance the government seeks is technically feasible and, if so, whether compliance with the proposed order would be unduly burdensome.” Read more

One Billion Strong…..and Growing

For the first time ever, worldwide sales of smartphones topped one billion in 2014, according to IT research company Gartner, Inc.

The 1.2 billion units sold marked an increase of 28.4% from 2013. Smartphone sales now represent two-thirds of all mobile phone sales worldwide.

More than 367 million smartphones were sold in the 4th quarter of 2014 alone, representing nearly one-third of the annual total, up 29.9% from the 4th quarter of 2013. Also in the 4th quarter, Apple overtook Samsung to claim first place overall—a spot Samsung had held since 2012.

Driven largely by the release of its iPhone 6 and iPhone 6 Plus, Apple sold nearly 75 million smartphones in the 4th quarter of 2014, representing a 20.4% market share. Samsung was second, at 73 million and 19.9% market share, followed by Lenovo (24.3 million, 6.6%), Huawei (21 million, 5.7%) and Xiaomi (18.6 million, 5.1%). Read more

Timing is Everything

At almost the exact same time that Apple debuted its new Apple Pay service, reports have emerged that yet another retailer has likely been affected by a large scale data breach.

Although details are still emerging, office supply store Staples is investigating “a potential issue” with its customers’ credit card data. Previously, Home Depot, Target, Michael’s and Kmart, among others, were hit, with large numbers of their customers impacted.

The long-anticipated Apple Pay service is now available to iPhone 6 and 6 Plus users once they download Apple’s iOS 8.1. According to Apple, Apple Pay will allow customers to use their iPhone to pay for retail transactions in a simple, secure and private manner.

To make payment, the customer will simply hold his or her iPhone near the store’s contactless reader. The customer’s ID is verified by a fingerprint reader on the iPhone. The actual credit card number is stored in a secure, dedicated chip in the phone. When a purchase is made, the Device account number—rather than the actual credit card number—and a transaction-specific dynamic security code is shared with the merchant, who never receives the actual credit card number itself. If the phone is ever lost or stolen, Find My iPhone can be used to suspend Apple Pay. Apple does not retain any records of customer transactions.

Apple Pay supports credit and debit cards from American Express, Visa and MasterCard, as well as 500 financial institutions from across the country. Nearly three dozen nationwide merchants—including Macy’s, Bloomingdale’s, McDonald’s, Subway and Walgreens–currently accept Apple Pay, with more scheduled to come onboard in the coming months.

Will the recent well-publicized data breaches drive customers toward Apple Pay in a quest for greater data security? It certainly seems likely, at least until retail merchants are able to figure out a better way to protect their customers’ sensitive information.

And, in case you were wondering—Staples is among those merchants accepting Apple Pay, through its mobile app

Updates (Tesla), Happenings (Amazon), Taxes (Netflix), and TVs (Apple) – A Survey of Tech Things I Care About

Astute readers of the New Edge may assume that this column is the product of a lack of imagination or an unwillingness to come up with a new, original topic. You are partially correct. The other explanation for this “What’s Happening?” (what’s happening in the sense of this being an update, not the underrated 1970’s TV show) is that I tend to follow all of the topics from previous New Edge posts and found some of the updates and happenings discussed below fascinating and thought that you may agree. Hopefully it doesn’t feel too much like a Rerun.

Amazon is going to open a brick-and-mortar store. Seriously. Think back now to my previous ruminations on how Amazon is destroying the brick-and-mortar bookstore, one of my favorite institutions that is slowing dying. Now, Amazon is planning a brick-and-mortar store of its own. It will be in New York’s Herald Square next to the famous Macy’s of Thanksgiving Day parade legend and will accept returns and probably show off the Kindle and the Fire.

This article here actually has some great data and explanations for why Amazon would do this. In short, most purchases are still made in brick-and-mortar retail stores and so there is money to be made. Bezos is no dummy. Read more

Senate Bill Proposes to Spare Manufacturers Hassle of Engraving FCC Logo on Devices; Apple Watch Anticipated to Debut at $300

fcc-logo-300x200Come on, you’ve seen it on everything from the back of your LCD monitor to your remote garage door opener – that funky, 1970’s standard FCC logo that looks like the letter “F” either grabbing or eating the letter “C.” How that ever replaced the classic bird atop transmission wires seal of the agency is beyond my current knowledge, but the rub of it is that current federal regulations require the equipment manufactures to physically label their products as FCC compliant. Hence that touch of the 70’s on every latest device (to be fair, however, the soft, rounded edges of the F-C-C have been cleaned and angled in recent years, leading to a leaner, crisper logo – the FCC on Adkins, I suppose).

But . . . a new Senate bill proposes that this labeling can be implemented electronically, on the screen of the device and visible at the discretion of the device designer. Introduced by Sens. Deb Fischer (R-NE) and Jay Rockefeller (D-WV), the “E-Label” would authorize the FCC logo to appear on a “splash” screen when the device powers on, or elsewhere in menus or settings screens. The impetus for the bill was the growing number of shrinking devices (yes, I have been waiting to use that phrase).

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No respect: it’s not just the device world – even Rita’s Ices ignores Blackberry.

The news may be welcome to Apple (NASDAQ: AAPL), whose anticipated iWatch is anticipated to enter the market at $300. The release of the iWatch, the development of which has been watched (groan) with keen interest for the past several years, would be a breakout moment in the wear device industry. As noted in reports from last year’s CES, wearable health and diet monitoring devices designed for Apple and Android (sorry, Blackberry) were front and center on the trade floor in Las Vegas. A “ground up” device from Apple that would integrate seamlessly with existing devices and continue the firm’s design standards would likely be extraordinarily attractive to both prospective users who are actively interested in wearables as well as prospective users who, on balance, may simply be interested in anything Apple. Apple has not confirmed production, but trade media predict its debut within the year.

At the least, Apple may not need to find room to inscribe the ravenous “F.”

Report: iPhone “Kill Switch” Serves Intended Purpose

A recently released report by state attorneys general, prosecutors, police and other officials, conducted as part of an initiative known as “Secure Our Smartphones,” has concluded that Apple’s addition of a “kill switch” in its iPhone handsets has resulted in a drastic reduction in the number of thefts.

The kill switch allows the phone’s owner to render the phone unusable should it be stolen, thus eliminating any possibility of resale.

Consumer Reports estimated that 3.1 million mobile devices were stolen in 2013, twice the number reported in 2012.

Dramatic declines were seen across the country—robberies of Apple products in New York City fell by 19% in the first five months of 2014 compared to the previous year. Similar decreases were reported in San Francisco and London. Over the same time period, thefts involving Samsung smartphones increased by 40%. (Samsung introduced a kill switch feature in their phones in April.)

In response to these numbers, Google and Microsoft have announced that they will incorporate a similar feature into the next version of their smartphones’ operating systems.

“The statistics released today illustrate the stunning effectiveness of kill switches,” said New York Attorney General Eric Schneiderman. “The commitments of Google and Microsoft are giant steps toward consumer safety.”

Is Nike Exiting the ‘Wearables’ Market? Is the iWatch Coming Soon?

Some personnel moves at Nike in recent weeks have fueled speculation that the company is exiting the “wearables” market. The truth is that Nike is simply shifting its focus a bit, and the company may be paving the way for a partnership with the coming Apple iWatch.

To start, for those that don’t know the term, “wearables” refers to technology devices that are worn by consumers. Google Glass is the most famous, or most talked about example, right now. Other examples are discussed in this article.

Nike makes the Fuelband, a wrist unit activity tracker which counts steps taken and calories burned). Users sync it to their computer, where they can compare their activity against their goals, share their activity levels with friends, etc.

Nike recently laid off a number of employees that worked on the Fuelband and has announced plans to scrap a slimmer, updated version of the Fuelband that was likely to be released soon (I had even planned to buy it and issue a product review for New Edge). Nike responded to press inquiries by saying that the company is planning to focus on the software for wearables, not exiting the market entirely.

Nike has worked with Apple in the past, producing the Nike+iPod as far back as 2006. (I had one and loved it, until it broke when I got caught in a downpour). And, the Fuelband is an iOS-syncing device, with an Android version never having been released. All of this and the recent move from hardware to software has led to speculation that the Nike move to software is a step towards a partnership in the iWatch.

Just speculation, obviously, but very interesting nonetheless. I have the iWatch on the “things I need to buy soon” list, and I plan to likewise author a New Edge product review once it is available.

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