In one of those you-call-this-a-rational-market moments, Apple (AAPL) saw shares jump almost a full percentage point on the Tuesday following Labor Day. Driving the gains? A few things, really. Apple is planning a major event on September 9 where people are expecting the company to unveil multiple new products, rumored to include an iPhone 6 and the iWatch.
However, those rumors have been swirling for some time. Tuesday’s gains were more directly related to rumors that the iPhone 6 would effectively function as a digital wallet, allowing iPhone users to utilize near-field communication (NFC) to pay for items on the go. The company is reportedly in talks with multiple credit card companies and may reveal deals with American Express (AXP) , Visa (V) , and MasterCard (MA) next Tuesday that will allow people to pay for goods with their iPhone.
Trying to Ignore the Naked Pictures of the Elephant in the Room
And, for at least some of us, the excitement of the potential new iWallet should probably be reined in some, or even a lot, by the other major story involving Apple from this weekend. You know, THAT story.
Okay, so for those of you who don’t know about it, or are pretending you don’t know while your wife/girlfriend is in the room, Labor Day weekend brought with it the release of hundreds of naked photographs of dozens of female celebrities. The pictures were all intended to remain completely private but were obtained after a certain individual of considerably low moral standing stole them by hacking into iCloud, Apple’s cloud data storage service.
This means that the pictures in question were being held on people’s iPhones and got stolen off of them. Actress Mary Elizabeth Winstead insisted that the pictures of her had been deleted years ago, meaning that they were accessed through the cloud despite no longer existing on her phone.
I’m Thinking Jennifer Lawrence’s Credit Card Information May Not Be Forthcoming
Fortunately for the rest of us, we’re not interesting or attractive enough to have our nude photographs be the source of any real fixation. So having them splashed across the news in, to quote Jennifer Lawrence’s publicist, “a flagrant violation of privacy” is likely a much smaller concern for the average iPhone user.
However, the incentive for stealing credit card and other financial information from pretty much anyone, celebrity or not, has been a cornerstone of internet crime since, well, the beginning of internet crime. So with yet another example of how even our most secure online data, including things we probably didn’t even think of as being “online,” is far less secure than we realized, shouldn’t we expect to see Apple’s stock take a hit?
Clearly not. Apparently, the fact that the American public has, to this point, been content with simply ignoring the fact that none of their data is as safe as it probably should be hasn’t been lost on the markets. Apple’s pop on Tuesday sends a pretty clear message: until we see a change, we’re not buying people leaving their iCloud services.
Cultural Prevelance of Non-Privacy is Powerful
The thing is, the people buying into Apple’s stock in a big way are probably still right. The public clearly cares a great deal about privacy, as the Edward Snowden fiasco should make clear, but they also aren’t ready to sacrifice the levels of convenience and interconnectivity created by the products that put their privacy at risk.
This most-recent hack certainly isn’t the first one, as plenty of celebrities have been subjected to gross violations of privacy in the past. But, despite this fact, it’s clear that plenty of famous people weren’t interested in throwing out their iPhones and eliminating cloud services out of concerns for their privacy.
And the same could be said for much of the American public. Despite the increasing prevalence of data phishing scams and identity theft, people continue to bolt for services that put more and more of their life online and into potential hazard. Simply using Google’s (GOOG) gmail service involves allowing the company to scan all of your emails, a tool that wouldn’t be hard to exploit. And Google, unlike Apple, isn’t even making an effort to control its Android hardware, so security threats there may not be headlines today but could easily be tomorrow.
And what about Facebook (FB)? The fresh outrage this summer over the arguably-Machiavellian-in-nature psychological tests the service was conducting on their users was just another example of a familiar pattern: Facebook is revealed to have behaved in a way that they should not have, people expressed their outrage about this (mostly, ironically enough, on Facebook), and Facebook continued to increase its number of users and make more and more money.
The simple fact of the matter is the benefits of the services Facebook, Google, and Apple are offering, combined with the rarity of these sorts of hacks for the average user, means that it’s a relatively small piece of the consumer pie that’s seriously altering their behavior because of these well-publicized security lapses.
So…Apple Stock is Just Fine?
Apple has since publicized how the attack was made and patched the loophole that was exploited, but that’s hardly all that convincing. And, in the case of one’s financial data, you only need to have your identity stolen the once to have it cause a major inconvenience. Simply closing those loopholes that a hacker has identified for you isn’t really what good cyber security is all about.
But is it necessarily fair to compare the two? The proximity of these two news items has them getting put side by side, but it’s safe to say that this new digital wallet service wouldn’t be using iCloud. Financial information is typically guarded much more closely than other online information, and it’s hard to see this as being any different. Even if iCloud is revealed to be the digital equivalent of Swiss cheese, it’s unlikely that’s really going to mean using your iPhone as a digital wallet will be any more or less secure.
Either way, it seems as though people aren’t going to give up the convenience of this digital age in which we live. Edward Snowden didn’t do it. Target (TGT) didn’t do it. And it’s hard to imagine this criminal violation of Jennfier Lawrence’s privacy is going to make much of a dent, either.
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