Jeff Kagan: Apple iCloud Short-Term, Long-Term Problems

Jeff Kagan |

apple icloud hack, jennifer lawrence hack, kate upton hack, iphone photo hack

Apple  (AAPL)  is experiencing a real iCloud break-in emergency. Not just for the theft, but for the PR nightmare they are going through. What makes it worse is we are only days away from their big, annual, well-rehearsed iPhone unveiling event. This is the worst timing. So will this high profile cloud security problem hurt Apple next week?

I am pleased to see Tim Cook taking responsibility for recognizing that Apple, while not responsible for this break-in, is responsible for not informing users how to protect themselves. We would never just give a gun to a person without training them. Now Apple realizes their responsibility for the first time and hopefully they will talk more going forward. That’s a good first step.

Bottom line I don’t think this cloud security issue will hurt Apple long-term. Customers love Apple. One unfortunate reality is break-ins on wireless phones, retail store credit cards and banks are happening on a regular basis and are getting lots of attention. It’s a growing problem.

So long-term, this kind of new movement for Apple will help them blunt the blow. Because of that I think Apple performance will continue to be strong long-term.

Short-term however is another question. To blunt the short-term blow Cook said they are adding security alerts for iCloud users. Apple does not think the security problem is on their end, but they are taking this additional step to keep the user in the loop.

This trust damage is the big loss for Apple. We always heard of attacks on other systems, but always thought Apple was somehow impervious. Now we see that even though Apple is stronger and better they are also not impenetrable.

The fault may not be on Apple technology, but on user apathy. The problem is user apathy was not stirred up by Apple for their own protection. So in a way, Apple did this to themselves.

Apple and their users must take precautions like everyone else. We just learned Superman has a Kryptonite weakness. We all know a chain is only as strong as it’s weakest link. So Apple users must now be on guard.

Additionally Apple itself now has to spend more time and money making sure to keep an eye on all their back doors. Even if this problem had nothing to do with Apple systems, it was still an Apple user who got burned. And Apple will pay the price.

Users must be made aware of the potential problems they face if they take security issues lightly.

Next week Apple launches their new iPhone at their annual event. This is usually tightly choreographed. I understand Apple executives and staff has been rehearsing for weeks. They want to make sure this event is perfect because that’s what sells iPhones.

Unfortunately, this cloud break in even though it’s not Apple fault will still do some harm to Apple short-term. However if Apple uses this as an opportunity to talk with and protect their customers, this disaster could actually turn around and become a golden opportunity for them.

Don’t ever sell Apple short. They always seem to do the right thing and long-term they continue to win.


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
AAPL Apple Inc. 114.98 -0.61 -0.53 14,818,734


Emerging Growth

Naked Brand Group Inc

Naked Brand Group Inc through its wholly-owned subsidiary is engaged in manufacturing and selling of direct and wholesale men's undergarments to consumers and retailers.

Private Markets

BioSculpture Technology, Inc.

BioSculpture Technology, Inc. (“BST”) is a commercial-stage medical device manufacturer of liposuction surgical instruments for surgeons. It offers the FDA-cleared Twin Cannula Assisted Liposuction ("TCAL") Airbrush Liposculptor II® controllers, Airbrush®…


Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…