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White House Advisor Kudlow Says Apple Technology May Have Been 'Picked Off' by China (cnbc.com)

Posted by msmash on from the stranger-things dept.

Fred Imbert, writing for CNBC: Larry Kudlow, director of the National Economic Council, said Friday that Apple's technology may have been stolen by the Chinese. "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 an interview with Bloomberg. "There are some indications from China that they're looking at that, but we don't know that yet. There's no enforcement; there's nothing concrete." Kudlow's comments came shortly after China's Commerce Ministry said Chinese and U.S. officials will meet next week to discuss trade. Both countries have been engaged in a trade spat for months that has sent ripples through global markets. John Gruber at DaringFireball comments: I think what he's saying here is that the Chinese stole Apple technology, copied it, and are now flooding the Chinese market with phones based on that stolen tech. I'm 99.8 percent certain that hasn't happened -- if there were Chinese phones built with stolen Apple technology we'd know it because we'd see it.

33 of 181 comments (clear)

  1. Apple technology by Anonymous Coward · · Score: 2, Insightful

    Apple technology!!!

    Ahahaha that's so funny! Now the Chinese can round their corners add notches to screens and remove headphone jacks and extra mouse buttons!

    1. Re:Apple technology by sexconker · · Score: 2

      Apple doesn't have the fastest hardware. They leapfrog each other regularly. Their OS and the thermal design of the devices lets them use the hardware much more efficiently than the competitors, however.

    2. Re: Apple technology by cypherthor · · Score: 5, Insightful

      Well.... Chinese companies are flooding the whole world with dirt cheap copies of apple devices. Every single device since 2006 has a Chinese look alike clone... down to the non standard screws on the casing of the 2011 MacBook Air. Itâ(TM)s just like what they are doing to all design companies from gucci to Bose to mevodo. I know some of you think design of devices is something you should be free to copy, but a lot of money spent hiring the best designers and making designs. Apple cant just change their design Willy nilly because the entire product line is consistent. Honestly, the way these Chinese companies are operating is predatory, I think they are making these devices at a loss... probably subsidized by the Chinese government so that apple goes out of business. These products should be banned from sale in US and Europe. If they copied the outside almost exactly, you donâ(TM)t think they copied the insides too? Same logic board design, same component sets... same .... need I go on? Those are you defending these practices and saying its consumer freedom... ask yourselves, what kind of freedom are you going to have when apple, google, sony, even samsung are gone and you have to buy Chinese government subsidized smartphones and computers? You think thinks will be as cheap as they are now? Want a hint... look at any industry that has been decimated by Chinese clones.

    3. Re: Apple technology by Anonymous Coward · · Score: 2, Interesting

      A Chinese company has to, by their law, have Chinese government employees and Party members as part of the decision making company board. It would be equal to having a DHS/CIA/NSA employee on every US company's board and who has the deciding authority about everything.

      If you do a venture on Chinese soil, China has to own 51% of the venture, or you go to prison.

      So, where Chinese companies go, so does the Chinese intelligence, Chinese military, and Chinese government.

  2. Build something in a country by spiritplumber · · Score: 5, Insightful

    and the people in that country will learn how to build it. Big surprise, right?

    --
    Liberty - Security - Laziness - Pick any two.
    1. Re:Build something in a country by alvinrod · · Score: 4, Funny

      I’m assuming that they were referring to software. I don’t think Apple builds any of the manufacturing equipment that they use, so the Chinese manufacturers already know how to produce a lot of that stuff. If the Chinese stole anything having to do with iTunes I truly pity them though.

    2. Re:Build something in a country by Anubis+IV · · Score: 4, Insightful

      Being able to build things isn't the issue. That's fine. As is learning to design those things after building enough of them. That's fine too.

      But if they have a contract in place that stipulates that the parts are to be built exclusively for the client and the designs are to remain confidential, there's a problem if they start building the parts for other clients (including themselves) or sharing the designs with anyone else.

      To draw an analogy, it's fine if a contractor knows how to build homes. It's fine if they eventually learn how to design their own homes after building enough of them. But if your general contractor steals your custom home's blueprints and sells them to a developer who builds a neighborhood of copycat houses right next to yours, that's not fine.

      I don't know what's being alleged here, but it seems evident to me that they aren't simply talking about China learning how to manufacture and design stuff on their own.

    3. Re:Build something in a country by AmiMoJo · · Score: 3, Informative

      The whole world will learn how to build it as soon as you release it, because everyone can disassemble it and a lot of the parts of off-the-shelf or explained in patents.

      These days Apple learns as much from China anyway.

      For a start designing any product is as much an exercise in figuring out how to mass produce it as it is engineering the features. And since Foxconn builds Apple products for them they likely learned a lot from Foxconn and took their lead on a lot of the design decisions. Every time a new material or new way of assembling something is introduced, you can bet that it was Foxconn that did a lot of the R&D, quite possibly even originated the idea.

      Of course that's completely normal with US companies too. For example the touch wheel on the iPod was invented by Synaptec, they just couldn't find anyone interested in buying it until Apple came along.

      Modern Chinese smart phones often introduce features before Apple does, and Apple copies them. Wireless charging, for example, became a staple of Chinese high end phones long before Apple adopted it. Dual cameras too, although Korea gets some credit there as well.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    4. Re:Build something in a country by ewhenn · · Score: 5, Insightful

      Being able to build things isn't the issue. That's fine. As is learning to design those things after building enough of them. That's fine too.

      But if they have a contract in place that stipulates that the parts are to be built exclusively for the client and the designs are to remain confidential, there's a problem if they start building the parts for other clients (including themselves) or sharing the designs with anyone else.

      To draw an analogy, it's fine if a contractor knows how to build homes. It's fine if they eventually learn how to design their own homes after building enough of them. But if your general contractor steals your custom home's blueprints and sells them to a developer who builds a neighborhood of copycat houses right next to yours, that's not fine.

      I don't know what's being alleged here, but it seems evident to me that they aren't simply talking about China learning how to manufacture and design stuff on their own.

      Yeah, except you left out the part where you know that contractor you just did a deal with has stolen designs from 50 other designers and you still decide to do business with them anyways, and then act surprised when they steal your design too. Gee, who would have guessed that would happen?!?

    5. Re:Build something in a country by AmiMoJo · · Score: 2

      Their human rights record, their massive surveillance state, censorship, inequality, forced relocations... Loads of stuff.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
  3. Of course China stole Apple technology by Spy+Handler · · Score: 3, Insightful

    do the China phones have rounded corners? Yeah? Well there you go.

  4. What technology, exactly? by SuricouRaven · · Score: 5, Insightful

    Could he maybe offer some specifics? Exactly what is is that China is being accused of stealing? A claim this lacking in detail is suspiciously non-falsifiable.

    1. Re:What technology, exactly? by Artem+S.+Tashkinov · · Score: 3, Informative

      Yep, I guess the iPhone contains close to a hundred thousand different technologies and perhaps the most lucrative is the design/implementation of the A12X SoC.

    2. Re:What technology, exactly? by RuiFRibeiro · · Score: 3, Interesting

      Android phones were always years ahead of Apple on technology, at least in the last couple of years. So what exactly new technologies are we talking about?

    3. Re:What technology, exactly? by BringsApples · · Score: 2

      They didn't steal anything, they 'picked off'. What about THAT don't you understand??

      You can pick off your nose.
      You can pick off your friends.
      But you cannot pick off your friend's nose.

      --
      Politics; n. : A religion whereby man is god.
    4. Re:What technology, exactly? by ath1901 · · Score: 5, Informative

      Oh, come on, how bad can it be? I know nothing about they guy but I'm sure he has some talents. Let's check Wikipedia:

      https://en.wikipedia.org/wiki/...

      Wow! That was hilarious! One ridiculous statement after the other. Best summed up by this paragraph:

      In their 2015 book Superforecasting, University of Pennsylvania political scientist Philip E. Tetlock and Dan Gardner refer to Kudlow as a "consistently wrong" pundit, and use Kudlow's long record of failed predictions to clarify common mistakes that poor forecasters make

  5. The plus side of incompetence by T.E.D. · · Score: 3, Insightful

    I'd be much more worried about a White House advisor spouting nonsense if we had a White House that actually listened to advice.

    With this administration, if the Big T himself didn't say it, its just meaningless noise. And sometimes even if he DID say it.

  6. How would you know by dkman · · Score: 3, Insightful

    China builds Apple's phones. There was no "theft" necessary. Apple taught them how to build the phones.

    I assume what's in question here is "Is China building iPhones and selling them in China without giving Apple a cut?"

    That's an entirely different question, but quite plausible.

    As for DaringFireball's later comment: How would you know? If they technically are iPhones flooding the Chinese market they wouldn't look like "fake knockoffs" because they technically aren't. But if Apple isn't selling the phones or getting any cut then there's still shady activity going on.

    --
    I refuse to sign
    1. Re:How would you know by jodido · · Score: 4, Informative

      About ten years ago I bought a Prada-labelled shoulder bag in Vietnam for $10 from a street vendor. When I got it back to NY I asked around and it sold for around $400. Not only is it indistinguishable from the real thing, it IS the real thing. It's what I call a "real fake." As described above, the factory gets an order for 5000 of these bags, makes 6000 and sells 1000 out the back door. There is no difference between those 1000 and the other 5000. Did this happen in China with iPhones? Has Apple complained about it? Because they would surely know.

    2. Re:How would you know by jellomizer · · Score: 3, Insightful

      I worked for a company that bought out an other company including all its IP. The owner of the bought out company quit (because he didn't realize when you get bought out, you are no longer in command of such company). Being fed up he used his money he got from the purchase to start his own company. Then he used the software he wrote for the previous company which we now own. We sued him, we won.

      Now if he had written a new program then he would be OK. But the software that we bought the rights too. Thus he went bankrupt, and we got all our money back that was the cost of the company to be purchased.

      Just because you made it, doesn't make it yours. If you sell it, or get paid to build it for someone else, it belongs to them not you, they paid you for it, so it is no longer yours.

      What is yours though, is the experience gained in making it, so you will be on good footing to make something new, possibly better.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    3. Re:How would you know by magzteel · · Score: 5, Informative

      About ten years ago I bought a Prada-labelled shoulder bag in Vietnam for $10 from a street vendor. When I got it back to NY I asked around and it sold for around $400. Not only is it indistinguishable from the real thing, it IS the real thing. It's what I call a "real fake." As described above, the factory gets an order for 5000 of these bags, makes 6000 and sells 1000 out the back door. There is no difference between those 1000 and the other 5000. Did this happen in China with iPhones? Has Apple complained about it? Because they would surely know.

      I read a book some years ago on the many pitfalls of doing business in China. Issues raised included:

      - Selling unauthorized overproduction runs as you described
      - Making unauthorized changes to the product design or materials to make manufacturing cheaper. There were multiple cases cited where the product changes produced unsafe or defective products that cost the product owners dearly
      - Duplicating the product under another label and competing with the original

      The Chinese government has little incentive to crack down on such practices.

    4. Re:How would you know by AmiMoJo · · Score: 3, Interesting

      All those things happen in the west as well. And those responsible go out of business eventually, because they get a bad rep. Then they try to start again with a different name, but eventually people caught on.

      These days if you want high quality, secure manufacturing in China it's available. You might pay a bit more for it. Up to you, go with the cheapest or go with a reputable manufacturer. Do you think Foxconn has 3rd shifts making iPhones?

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    5. Re:How would you know by AHuxley · · Score: 2

      They don't happen in the West as the legal and security controls would be in place to stop illegal such events.
      No instant way to legally set up a new factory in the "West" with the same look and feel of the tech for export.

      --
      Domestic spying is now "Benign Information Gathering"
    6. Re:How would you know by AmiMoJo · · Score: 2

      Substitutions for inferior parts definitely happen. One place I worked we ended up buying components ourselves and sending them to the manufacturer, because every time we asked any of the several we used to source some expensive, rare bits they ended up with fakes and nothing worked.

      We even ended up having to specify certain fluxes and solders and reflow ovens because otherwise they would switch to the cheap stuff after a while and quality would go through the floor.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
  7. My cat probably knows more about economics... by rnturn · · Score: 2

    ... than Larry Kudlow.

    Apple's problem is that they think everyone on the planet has $1000+ to spend on a phone every couple of years.

    --
    CUR ALLOC 20195.....5804M
  8. It's not Apple's technology by Solandri · · Score: 5, Interesting

    Apple's phones use screens by Samsung or LG, RAM by SK Hynix, flash storage by Toshiba, cellular modem by Qualcomm, battery charger by TI, WiFi/Bluetooth by Murata, cameras by Sony, etc. The only parts Apple makes are the A10 processor and the software. Everything else is stuff made by other companies which anyone can buy to use in their own products. In that sense, aside from the processor and software, cloning an iPhone is relatively simple and does not require any theft of technology.

    Also, the median income in China is 18,371 Yuan, or roughly $2,674 per year. You're kidding yourself if you believe the Chinese would be buying $1000 iPhones if it weren't for the availability of cheap knockoffs.

    1. Re:It's not Apple's technology by klingens · · Score: 4, Informative

      Apple is not making anything at all, especially not any chips. They don't have fabs.
      The main chips for i-devices are made by TSMC and Samsung, no one else.
      They are designed by PA Semi an Apple subsidiary or maybe it is incorporated fully into Apple now.
      PA Semi designs custom ARM chips, they don't use the normal cortex A8 A53 or A73 designs from ARM at all. They start with the ARM v8 ISA and from there on, they do everything in their own way. And generally much much better than ARM itself, of course the chips are also quite huge and therefore expensive to manufacture compared to any ARM design. They are however always faster/better than the ARM ones. A current A12 Bionic chip from Apple is about the same size as a current Intel Quadcore CPU, 122mm^2.

    2. Re:It's not Apple's technology by bill_mcgonigle · · Score: 2

      If you're familiar with the Chinese income distribution, why are you quoting the median, rather than the percentile and the nominal number of people, who have incomes well north of $30,000 per year, and can afford to purchase an iPhone? Most Americans would be surprised at the raw number compared with the number of US citizens at the same earning level.

      --
      My God, it's Full of Source!
      OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
    3. Re:It's not Apple's technology by dk20 · · Score: 2

      Most americans want to pretend China is an economic wasteland, and they are years ahead of them.. They prefer this comfortable feeling instead of reality.

      "
      Who Has the World's No. 1 Economy? Not the U.S.
      By most measures, China has passed the U.S. and is pulling away.
      "

      https://www.bloomberg.com/opin...

  9. The greedy corporations gave it all to the China by Anonymous Coward · · Score: 3, Interesting

    We've been outsourcing US work to China.
    This means the greedy US corporations built factories in China, exploited the cheap labor and showed China how to
    make product X, Y and Z. Now the greedy US corporations are surprised that China knows our technology.
    This concept is best explained by Jib Jab's Big Boxmart video.

    https://www.youtube.com/watch?v=pKv6RcXa2UI

    In essence, US corporate greed created their own competitor.

  10. No, China has not! by DaMattster · · Score: 3, Insightful

    I am not an apologist for China but neither am I for Apple. Apple simply hit peak iPhone and had no ideas to really innovate further. Let's put the blame where it really lies, with Apple. The last 3 years the changes were basically a better screen and a better camera and hardly worth spending that kind of money for so little in return. In fact, we've really hit peak smartphone altogether. Whatever changes we will see forthcoming are hardly worth the additional price. In fact, I stopped chasing the smartphone craze three years ago. Now I only get free phones offered by prepaid carriers. I usually float between 3 different ones depending on which company has the best deal. I would rather spend the money on a real digital camera.

  11. Re:The situation is really grave. by rahvin112 · · Score: 3, Informative

    Old Sam didn't do what you think he did. When he ran the company it prioritized american made products.

    When Sam handed the company to his kids is when the made in china takeover happened. His kids had been raised with a silverspoon in their mouths and had no concept of american patriotism. Much like the current president.

  12. Making Up a Story to Deflect from the Trade War by CanadianMacFan · · Score: 2

    In addition to it being peak Apple there is a backlash against things American since Trump decided to start his winnable trade war with China. The iPhone is no longer the status symbol it was six months ago. The Chinese brands, which typically use Android, are seeing a huge surge of interest, especially Huawei.

    It wasn't that long ago that the US Government came out with the "report" that Huawei's telecom gear had backdoors in it but they couldn't say what it was. So far Germany has only come out and called their bluff. The other day Apple comes out with a warning about China and Trump's Trade War impacting their upcoming results. So now the White House comes out with a vague statement about China stealing Apple's technology. This is all a smokescreen to get you to forget about the damage that the trade war is causing but there's going to be a bunch of other companies with disappointing financial reports soon because Trump doesn't know the first thing about economics.