What’s Up With Apple: Ransomware Attacks, iOS 14.5, and Earnings

Last week, a hacker group known as REvil reportedly demanded that Taiwan-based laptop manufacturer Quanta pay a $50 million ransom to stop the hackers from posting files REvil had stolen. The Taiwanese company reportedly refused and REvil began seeking the ransom payment directly from Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction), one of Quanta’s customers.

Not long ago, attackers would gain access to a company’s files, encrypt the data and demand that the company pay to get the key needed to decrypt the data. As often as not, if the demand for payment was met, the decryption key failed to recover the files. The result was that fewer firms paid for the decryption key and the attackers’ demands were ignored.

Attackers soon sensed an opportunity for extorting more money by threatening to publish proprietary data. In a report at Wired, Jake Williams, founder of the cybersecurity firm Rendition Infosec, commented:

A couple of years ago, we didn’t really see much ransomware plus extortion at all, and now there’s an evolution all the way to extortion-only events. I can tell you as an incident responder that people have gotten better at responding to ransomware events. Organizations I work with are more likely today to be able to recover and avoid paying a ransom with traditional file-encryption techniques.

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Apple has not commented publicly on the report that it is being extorted. REvil has demanded payment by May 1, but it seems unlikely that Apple will comply with the demand.

Although the exact date has not been specified, Apple is going to roll out its latest iPhone, iPad, Mac and Apple Watch operating systems this week. iOS 14.5  for the iPhone has gotten most of the attention for its App Tracking Transparency feature that requires app developers to get explicit permission from iPhone owners to track their activities around the web.

Tae Kim, in an opinion article for Bloomberg, notes that while the change “would seem to be a victory for consumers, the reality is it may increase the dominance of the biggest platforms.” Those would be Alphabet/Google, Facebook and Apple. Facebook CEO Mark Zuckerberg already has said he expects his company’s ad revenues to increase over time. Kim cites a BofA report that estimates Facebook’s revenue will decline by just 3% as a result of Apple’s new tracking requirement.

Finally, after markets close on Wednesday, Apple will announce its fiscal second-quarter results. We will have a preview Tuesday of what to expect from the report. For now, let’s just note that Apple’s share price has gone up a paltry 1.4% so far in 2021, but most analysts still have a Buy rating on the shares.
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