White House's National Economic Council head hints China may have stolen Apple tech

The director of the White House's National Economic Council, Larry Kudlow, suggested on Friday that China may be stealing Apple technology secrets, without offering any examples or evidence.

"I don't want to surmise too much here, but Apple technology may have been picked off by China and now China is becoming very competitive with Apple. You've got to have rule of law," Kudlow said in a Bloomberg interview. "There are some indications from China['s government] that they're looking at that, but we don't know that yet. There's no enforcement — there's nothing concrete."

Earlier this week Apple slashed its guidance for the December quarter from between $89 billion and $93 billion to just $84 billion, linking the whole of its expected revenue shortfall to weak Chinese sales. Local smartphone makers like Huawei, Xiaomi, and Oppo have eaten into the iPhone's marketshare by improving the quality of their devices while selling for hundreds of dollars less.

Intellectual property theft is a problem many foreign companies have had to cope with in China, and better enforcement has been a key demand of U.S. President Donald Trump in his trade war. At the same time, there haven't been any other recent allegations involving Apple.

It could be that like South Korea's Samsung, Chinese smartphone vendors have simply imitated the look and features of the iPhone to keep up. That might still imply patent violations, something which Samsung ended up paying stiff penalties for, but many traits that were unique to the iPhone in 2007 have since become industry standards. In the current era, Apple and other vendors regularly leapfrog each other.

36 Comments

ericthehalfbee 4489 comments · 13 Years

About 5 years ago

What did they steal? The only thing I could think of would be something related to their A Series processors, as most other components in iPhones are purchased from suppliers and not designed specifically by Apple.

And given how far behind their processors are, I don't think they did a very good job of stealing anything.

rogifan_new 4297 comments · 9 Years

He’s only making things harder/worse for Apple in China. Just shut up.

gatorguy 24611 comments · 13 Years

ericthehalfbee said:

What did they steal? The only thing I could think of would be something related to their A Series processors, as most other components in iPhones are purchased from suppliers and not designed specifically by Apple.

And given how far behind their processors are, I don't think they did a very good job of stealing anything.

I would have thought it obvious that it's not just about "the processor". There's several Apple features and the technologies that make them possible from face recognition to AI development, audio techniques and sensors, security chipsets and interfaces... That China may have "stolen" some of that from Apple is nearly a given IMHO.

gatorguy said:

ericthehalfbee said:

What did they steal? The only thing I could think of would be something related to their A Series processors, as most other components in iPhones are purchased from suppliers and not designed specifically by Apple.

And given how far behind their processors are, I don't think they did a very good job of stealing anything.

I would have thought it obvious that it's not just about "the processor". There's several Apple features and the technologies that make them possible from face recognition to AI development, audio techniques and sensors, security chipsets and interfaces... That China may have "stolen" some of that from Apple is nearly a given IMHO.

Pretty much everything you listed is integrated directly into the processor, or is tightly tied to it.

crtaylor 80 comments · 17 Years

I wouldn’t be surprised if this actually did happen. Apple needs to get outta China and get its manufacturing stateside, where we have actual laws protecting intellectual property and our workers.