Apple’s Clash With Feds Over IPhone Encryption Not Hurting Brand

By | February 23, 2016

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U.S. consumers are largely ambivalent about Apple ’s ( AAPL ) fight with the FBI over unlocking an encrypted iPhone, according to a new survey. Investment bank Piper Jaffray surveyed 1,002 U.S. consumers regarding their perception of Apple’s brand in the face of its legal clash with federal authorities. “Net-net, the data showed that there was no brand impact from Apple’s decision to refuse to unlock an encrypted iPhone, with essentially equal numbers of consumers viewing the brand more positively and less positively, with the rest viewing it the same or unaware of the situation,” Piper Jaffray analyst Gene Munster said in a research report Tuesday. Last week, a federal judge sided with the FBI and ordered Apple to create software to hack into an iPhone 5C belonging to one of the shooters in the Dec. 2 attack in San Bernardino, Calif., that left 14 people dead. Apple CEO Tim Cook said that complying with the order would set a “dangerous precedent” that would undermine the security and privacy for all iPhone users. Piper Jaffray’s online survey showed that 24.1% of respondents viewed Apple’s brand more favorably in light of its refusal to hack its iPhone security protections, while 23% viewed the brand less favorably. Of the rest, 17.8% said that they viewed the brand the same, and 35.1% said that they didn’t know anything about the story. “We believe that the U.S. market is likely more politically influenced than international markets (i.e. international markets would skew more favorably towards Apple if it continued to refuse to unlock the phone in question), but generally believe that regardless of the outcome of the dispute, it will not have a meaningful impact on Apple’s brand,” Munster said. On Monday, Apple CEO Tim Cook called for the formation of a government commission or panel to discuss the broader issues involved with smartphone encryption. Meanwhile, Facebook ( FB ) CEO Mark Zuckerberg came out in support of Apple in the case. Speaking at the Mobile World Congress trade show in Barcelona, Spain, Zuckerberg said that weakening the digital security of technology companies was a bad idea, the New York Times reported . “I don’t think building backdoors is the way to go, so we’re pretty sympathetic to Tim and Apple,” Zuckerberg said. In an interview with the Financial Times, Microsoft ( MSFT ) co-founder Bill Gates sided with the government in the case, saying that Apple should help the FBI in this instance. However, in a later interview with Bloomberg, Gates softened his stance, PC W0rld reported .  Ultimately, he said, Congress will decide the issue of smartphone encryption. Apple stock was down 1.5% in afternoon trading in the stock market today .   Scalper1 News

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