Apple (AAPL) Dismisses iCloud Breach Allegations - Analyst Blog


Apple Inc. ( AAPL ) has strongly protested against claims that its iCloud service was under a hacking attack. Recently, private photographs of celebrities like Hollywood actor Jennifer Lawrence were leaked on the Internet, which resulted in a public furore over Apple iCloud's security system.

It was alleged that hackers were successful in breaching iCloud. However, Apple denied all such allegations and said that the incident was the result of the hacking of individual accounts and that the other accounts on iCloud remained safe. Currently, the Federal Bureau of Investigation (FBI) is investigating the matter.

Apple's iCloud service enables users to store photos and other content, which can be accessed from any Apple device. However, as with all cloud and web-based services Apple's iCloud have been prone to cyber-security issues. Post the leak of private photos,

Apple has asked its users to use strong passwords at the time accessing their accounts.

Moreover, Apple also ensured availability of a two-step verification process to access the accounts.  This process is already followed by the likes of Google ( GOOGL ) Facebook ( FB ) and Twitter ( TWTR ).

We believe that allegations of privacy breach just a week before the Sep 9 event will be a concern for Apple. The company is expected to launch iPhone 6 on that date. It is also rumored that Apple may likely unveil its anticipated wearable device at the same event.

However, both iPhone 6 and the wearable device touted as iWatch are expected to extensively use iCloud services. iPhone 6 is also rumored to offer Near-field Communication technology (NFC) that will enable payments by touch. iWatch is rumored to have the capability to collect and share health-related data, which will further increase the amount of private information stored with Apple.

Although Apple's iCloud is considered to be one of the best secured data repository, the recent allegation tarnishes its reputation. We expect Apple to be more cautious in protecting the personal information of its users and devote more resources in that respect going forward.

Currently, Apple has a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AAPL , FB , TWTR , GOOGL

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