The standoff relates to the December 2015 terrorist shooting in San Bernardino, California. The mass shooting was a direct result, according to the U.S. government, of cybercrime. The terrorists who performed the shooting were alleged to have used their iPhones to communicate.
A huge part of Apple’s decades-old success has been its ability to provide its customers privacy and security through its products. The company, which has sales all over the world, is now pondering whether or not it will help U.S. government officials gain access to the iPhone of one of the shooters from the San Bernardino attacks. Since privacy is a huge part of the company messaging and corporate values, Apple’s management is worried that if they cooperate with the U.S. governments demands to build a back door into their operating software, they’ll have to do the same for others, including China where citizens value the privacy that Apple products offer.
Apple doesn’t seem to be wavering much. It looks as though the company is going to take a stance to protect consumer privacy and take the matter to court. Apple CEO Tim Cook addressed the matter in a letter to Apple customers saying, “The government suggests this tool could only be used once, on one phone. But that’s simply not true. Once created, the technique could be used over and over again, on any number of devices.”
Cook has received supportive emails from across the country regarding Apple’s decision to stand up for the privacy of its customers. Many critics are saying that this decision is simply a business stunt. However, Cook’s statements suggest Apple has taken this stance to protect their customers from potential hacking by government officials, an issue which speaks directly to the business’ core values.
So far, Apple shareholders have remained silent on the issue. In the past, some shareholders have complained about Apple’s strong social stance and argued that the socially driven initiatives of the company have been a bit too political. However, no one has spoken up about Apple’s stance as far as privacy goes.
On Friday, the U.S. government filed suit against the technology giant to get the tool that will help them gain access. Apple appears to show no signs of backing down.
Regardless of the law suit that has been file, Apple is continuing to sell phones. However, it will be important for those who hold stock in the company to keep a close eye on court proceedings in the coming months. This is because the movement of Apple stock has a massive impact on the US equity markets. For example, Apple is a part of the S&P 500, and many major pension funds hold Apple stock as part of their portfolios. Also, many individuals hold stock in Apple directly, and since the company’s market capitalization is in the billions, its sales have an demonstrable impact on the US economy – research shows that iPhone sales add between one quarter and one third of a point to gross domestic product growth.
All of this, plus the sizable impact Apple’s products have on the U.S. economy as a whole. The company’s yearly announcements are one of the most anticipated releases in the technology market every year. It is possible that if (and it’s a big if) the U.S. government puts a dent in Apple’s stock prices through the lawsuit that it will also put a huge dent in the economy.