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Huawei's Efforts To Steal Apple Trade Secrets Include Employee Bonus Program and Other Dubious Tactics: Report (macrumors.com)
In a report published Monday, The Information [paywalled] has detailed tactics used by China's Huawei to steal Apple's trade secrets. These tactics include Huawei engineers appealing to Apple's third-party manufacturers and suppliers with promises of big orders, but instead using the opportunity to pry on processes specific to iPhone-maker's component production. From a report: According to today's report, a Huawei engineer in charge of the company's smartwatch project tracked down a supplier that makes the heart rate sensor for the Apple Watch. The Huawei engineer arranged a meeting, suggesting he was offering the supplier a lucrative manufacturing contract, but during the meeting his main intent was questioning the supplier about the Apple Watch. The Huawei engineer attended the supplier meeting with four Huawei researchers in tow. The Huawei team spent the next hour and a half pressing the supplier for details about the Apple Watch, the executive said. "They were trying their luck, but we wouldn't tell them anything," the executive said. After that, Huawei went silent.
This event reportedly reflects "a pattern of dubious tactics" performed by Huawei to obtain technology from rivals, particularly Apple's China-based suppliers. According to a Huawei spokesperson the company has not been in the wrong: "In conducting research and development, Huawei employees must search and use publicly available information and respect third-party intellectual property per our business-conduct guidelines." According to the U.S. Justice Department, Huawei is said to have a formal program that rewards employees for stealing information, including bonuses that increase based on the confidential value of the information gathered.
This event reportedly reflects "a pattern of dubious tactics" performed by Huawei to obtain technology from rivals, particularly Apple's China-based suppliers. According to a Huawei spokesperson the company has not been in the wrong: "In conducting research and development, Huawei employees must search and use publicly available information and respect third-party intellectual property per our business-conduct guidelines." According to the U.S. Justice Department, Huawei is said to have a formal program that rewards employees for stealing information, including bonuses that increase based on the confidential value of the information gathered.
It doesn't pass the sniff test. Why bother going to all this effort to get details of the heart rate sensor when they could just buy an Apple watch, rip it open and take a look for themselves? Or just wait for iFixIt to do a teardown for them a day after it's released.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Because it's alot easier and better to copy chips that are still in the process of being made, than ones that are already built and glued together.
Why go to the effort of tearing one apart and reverse engineering it when you can just ask somebody for the info?
A friend of mine did a job interview at Huawei and the interview was basically "tell us how you would design a node-b". My friends response was "hire me and I'll tell you, but for an interview that's not an appropriate question". This was over a decade ago. This is well documented behavior by this company.
They're not interested in the technical components; China has always been good at replicating that portion. They're interested in the manufacturing process - how things are made, integrated, and put together. That's the part that China needs to learn.
China only really knows how to make things manually in many areas, and doing something complex, say like building a plane, or making your own apple watch is rather challenging without the understanding of how it is made. In short, the process of making and designing the product is as valuable as the product itself to China.
I won't say what they manufacture but it's not electronics. Chinese company contacts them, says they want to buy some of their uber expensive stuff but could they come inspect it first? Sure thing! Several of the intended visitors unable to get visas... finally the TEAM of people shows up to inspect the product but want a TOUR of the factory. No sir, not allowed. Brings them to a room that's been walled off just for the inspection but members of this team keep trying to wander off and have to be corralled. Light no good, can't we do this somewhere else? Nope, here's more light! Table not flat enough for measurements don't you have someplace else we could do this? Nope, her'e s apiece of float glass deal. Finally they get frustrated and leave. Weeks later State Dept calls all freaked out by the team of scientists that visited - hmm! They explain the measures they took to the great relief of State Dept dude but he warns other folks might call and to just explain WTF. I ask friend about their network security - umm not good :( He tells me stories of employees plugging "music players" into production equipment USB ports to "charge them" and bringing the line to a halt as they got "infected". I swear sometimes we are our own worst enemy They did at least stop the direct physical inspection! I'm betting their network is owned up one side and down the other though...
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Chances are the Chinese build the watches so the actual assembly is something they could get more easily at home but some of the specialized sensors are going to be much more difficult for them to figure out.
Anyone having anything built over there has to be damn careful! A friend has some automotive parts built over there. He intentionally designed the parts so it's not obvious what they will be used in and he designed them to fit more than one application with just some machining needed to fit one car or another. He told me that he bet it wouldn't be more than 3 months before they would be trying to sell his stuff. Sure enough parts showed up on Ali-Baba within 2 months! Jokes on them, they don't know about the needed machining he only did in-house and those parts aren't going to fit jack shit! :-) He had a good laugh over it but it was really surprising to see how fast they figured out what this was for and tried to sell it. There's a saying, their manufacturing plants run three shifts, two for you and one for them and it doesn't seem to be far from the truth...
Build it, Drive it, Improve it! Hybridz.org
https://www.popularmechanics.c...
Make sure you note the date on that article. This has been going on a long time! Another anecdote, company I knew manufactured DVD and CD, one of the contracts they bid on was to do the service manuals for the DOD but they kept getting underbid. They knew damn well there were VERY few US companies left that could do this and couldn't figure out how they were being underbid. They finally figured it out - a Chinese company was being used to make the media with a front company setup in the US. It took them ages to get the DOD to wake up and figure out they were sending the repair manuals for a ton of our shit over to China to have the damn DVD made. Good grief, why not have them produce our missiles too? Sheesh! Obviously years ago but man we've done some stupid stuff
Build it, Drive it, Improve it! Hybridz.org
This happens all the time. Investment banks do this all the time in the name of interviews. A head hunter is hired to call up somebody from a rival bank, with the lure to double their pay. The candidate attends the interview at an unofficial location, such as a hotel, and the interview team questions him about the rivals products, algorithms etc. Once they get what they want, the interview is over. There are entire companies that are engaged in corporate espionage. They do this to extract insider information about companies on the pretext of interviews and sell the information to hedge funds for money.
1. "tearing one apart and reverse engineering it" would give you a lot more details than asking someone out of their memory.
2. asking interviewee for info is pretty prevalent in the Silicon Valley. for one, the company asking does not sign an NDA. it is the interviewee who has signed the NDA and hold the responsibility to guard such secrets.
3. in this country, this kind of things all come down to arguing over fine points by highly paid lawyers.
"1. "tearing one apart and reverse engineering it" would give you a lot more details than asking someone out of their memory."
It would also take much longer than the useful life of the information.
You could have asked AMD back in the day when they ripped apart intel chips. I know the article is meant to whip up anti-china sentiment, but US companies have been doing corp spying forever, Back to colony days. I know my marketing guy paid people to take other company training classes and report back.
If you will betray your past employer, how can I ever trust you with my secrets?
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
In the very first year Huawei started to operate in Brazil, I was working for Siemens Telecommunications. We got very surprised to discover Huawei was getting contracts from our long term clients and Siemens was being left aside. Somene was able to get a hold of the equipment that has been sold and was operating in the customer and took many pictures of it working. We were surprised to found out Huawei had cloned all Siemens hardware and even the operating system for the devices, they did not even changed the prompt design, only replaced "Siemens" by "Huawei". And charged 70% cheaper than us. Nice company.
I don't mean to be rude to you, but that is how a lot of people outside of product design and manufacturing think.
As an (ex)engineer, I'm often more impressed by *how* Apple (and their suppliers) make things than *what* they make. For example, the (steel) front bezel on the original iPhone was something that looked basically unmanufacturable to me: for a start, you can't hold the same tolerances on a steel casting as a plastic part, so it was astonishing that the back plastic clamshell and the steel bezel met almost seamlessly.
Turn out that Apple were making the back clamshell in a number of different sizes (three, I hear) and the bezel in a single size. They finished the bezel and then used an optical system on the production line to pick out which parts would fit with which plastic clamshells.
It's an extremely unusual process that involved a lot more up-front investment in technology and process, but gave the result their designers wanted and the customers thought was 'pretty neat'. So Huawei want to know about those optical systems, as well as what's inside an Apple watch.
Tear-downs won't tell you anything about a lot of the most interesting solutions that a designer had to devise: Toyota used to famously say that they weren't designing cars, they were designing a process to make cars.
'This writing business. Pencils and what-not. Over-rated if you ask me. Silly stuff. Nothing in it' - Eeyore
"Why we'd never..." should be emblazoned on Huawai's letterhead and logo.
Actually, all of Asia is. The concept that companies shouldn't steal secrets from each other simply doesn't exist in Asia. The notion that you can protect an idea using a patent or copyright or NDA or non-compete agreement is alien. In Asia, if a company wants to protect its secrets, it should work to protect those secrets. If their secrets get stolen, people figure its their own fault for not protecting them well enough. Corporate espionage is the norm. You may have seen this in anime or manga, where an employee is required to infiltrate another company to spy on them. The employee can be fired if they refuse.
When East meets West, you have a bunch of naive westerners blissfully running head-first into espionage methods which have been honed for over a century. It's a lot like how it must've been when the native Americans with bows and arrows were slaughtered by European firearms. Westerners have never put much thought into protecting themselves from this type of direct espionage because they've always been coddled and protected by their social norm that it was inherently wrong for companies to steal secrets from each other. So they will blissfully plug in their devices to recharge during a visit, or hand them over for "security checks" at the airport (during which the hard drive is removed and an image is made), or install a state-of-the-art manufacturing tool relying on a few screws holding the cover in place to protect the secrets that are held within.
A good example is China's high speed rail. China had no knowledge about how to construct high speed rail. They opened up bidding to foreign companies, dangling the carrot of building thousands of miles of track and trains. TGV wisely passed. Siemens took the bait. They inked a deal where Siemens would manufacture trains for China for a few years, but with the curious stipulation that the manufacturing had to be done in China. Siemens probably thought that after a few years, they'd be facing bids from other high speed rail companies again. What actually happened was the Chinese strip-mined everything they could from Siemens' manufacturing processes in China, duplicated it on their own, and gave Siemens the boot once the period of the original agreement was up.
2. asking interviewee for info is pretty prevalent in the Silicon Valley. for one, the company asking does not sign an NDA. it is the interviewee who has signed the NDA and hold the responsibility to guard such secrets.
So let's ignore any legal implications for a moment. Would you hire someone who would so readily spill the trade secrets of their current/former employer? I sure wouldn't. Because if they'll do it to them they'll do it to you. That is a question that says more about the character of the interviewee than it does the hiring company. Assuming legal niceties are observed, this would be a question to determine NOT to hire someone if they answer anything other than saying they either do not know or cannot divulge.
The point of such interviews isn't necessarily to hire someone. It may just be to get the trade secrets.
Write boring code, not shiny code!
I worked at the GE Appliance Park in Louisville, KY. They have an entire team that does nothing but tear down competitors appliances to see how they are put together. They are also nonchalant about their competitors doing the same. It is just what everybody does.
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
People are missing the human component to the engineering.
There are important pieces of information, such as, what exact specs are necessary for QA purposes? Are they buying parts with a different performance guarantee than the basic ranges listed in the data sheet?
If you don't actually want the part, but you want to know, how good does this part actually have to be in this application so that when it is finally built and is running modern software, it works well enough to satisfy QA requirements?
You can find that out by asking the right people, but you can't actually calculate any of that from a product breakdown.
When you're negotiating with a Chinese chip supplier, you don't actually negotiate over price. Prices are basically fixed, with the markup varying based on your relationship with the company. When you ask for lower prices, you're actually asking for them to spend less money making the product. A lot of people don't understand this, and it leads to (false) accusations of contract dishonesty.
Huawei of course, being a Chinese company, understands that perfectly. They're not going to go to some local supplier and ask for a cheaper heart rate monitor. That would be stupid of them. Instead, they're going to try to figure out the actual minimum operating specs of the part, and then ask for the price of those specs. That will be the lowest price they can hope to get. But they can't learn that from a breakdown, because many of the parts actually made will (accidentally) be higher quality than the spec. And sometimes some of the specs will be higher than needed because of the manufacturing process, and they might have access to a different basket of processes. So they need to know which specs are actually important, and which involve tradeoffs.
So let's ignore any legal implications for a moment. Would you hire someone who would so readily spill the trade secrets of their current/former employer? I sure wouldn't. Because if they'll do it to them they'll do it to you. That is a question that says more about the character of the interviewee than it does the hiring company. Assuming legal niceties are observed, this would be a question to determine NOT to hire someone if they answer anything other than saying they either do not know or cannot divulge.
if I recall Uber had no qualms about hiring a Waymo engineer on the basis of the proprietary information that he had, so some US companies certainly will do it.
It gets a little hard to do that when you have a computerized system that tracks the activity of a country's citizens, scores them for how "appropriate" their beliefs, statements and associations are, and restricts their rights based on that.
You might see how countries that don't do that might be concerned about a country that does something like that trying to achieve dominance or parity. It will not be good for global freedom. And yes, freedom means something other than eagles and Michael Bay films.
By the way, the whole argument that the United States should shut up about this because they did it in the past is flat out stupid. People in the United States stole industrial secrets because it was in their best interest to do so. People in England tried to stop them because it was in their best interest to do so. People in the United States now should try to stop people from stealing their secrets because it is in their best interest to do so. It's as simple as that.
How bizarre. There's a lot of hatred happening over an article that details nothing much happened. I am yet to see anything that we should be getting upset solely with Huwawei for. From a slightly historical view it wasn't that long ago that people were screaming at Japan for stealing trade secrets. This just looks like someone stirring the China hatred pot. Not your country, not your rules, and if you don't like it then don't buy the product (or manufacture there). Really, this entire story should be marked troll.
I reserve the write to mangle english.