Apple is publicly calling out leakers in its supply chain, explaining that leaked information and rumors could hurt its reputation or even have an adverse effect on its bottom line.
The company gave the warning about factory and supplier leaks in its latest 10K report filed with the U.S. Securities and Exchange Commission, which was published Friday. In it, Apple notes that its business requires it to share confidential information with third-parties — like component suppliers and assemblers — and expands on how that could be a problem.
“Although (Apple) takes steps to secure confidential information that is provided to third parties, such measures may not be effective and losses or unauthorized access to or releases of confidential information may still occur, which could materially adversely affect The Company’s reputation, financial condition and operating results,” the 10K report reads.
Secrecy
The company culture at Apple is famously secretive. Leakers within Cupertino are punished pretty harshly, and the company even has a secret group, staffed with ex-NSA and FBI agents, that hunts down and patches leaks.
But despite Apple’s best efforts, a wealth of information still manages to trickle out of the company’s supply chain in Asia, where Apple’s component suppliers and assembler factories are located. Indeed, most Apple fans, analysts and tech followers know that supply chain reports are one of the most reliable sources of rumors about Apple’s upcoming products and plans.
That’s because, at a certain point in a product’s development process, Apple has to send confidential and secret information and files to its partners — like Foxconn, Pegatron or others. While Apple’s security and information policy is as strict as they come at Apple HQ in Cupertino, its suppliers and assemblers may not run as tight of a ship.
iPhone X Wasn’t a Surprise
Of course, one of the clearest examples of leaks snarling Apple’s ability to “surprise and delight” is the iPhone X. Even before its release, the Apple news sphere knew quite a lot about the premium flagship. And months before its September unveiling, plastic mockup models of the device were available from online retailers — models that ended being nearly identical to the finished product as far as measurements.
And that’s not even considering the HomePod firmware or the iOS 11 Grand Master. Both of those leaks revealed, among other things, the name of the iPhone X and a slew of its secretive features. While these leaks didn’t seem to originate out of the supply chain, they were presumably published by an Apple insider or a close partner of the company.
While most companies and firms in the digital era are prone to attack, Apple says that it’s at an especially greater risk because of “its high profile and the value of the confidential information it creates.”
Some data, too, may be more sensitive than others. In the 10K report, Apple placed particular emphasis on its efforts to protect health data — the collection of analysis of which is becoming an increasing focus for Cupertino. “Health data may be subject to additional privacy, security and breach notifications requirements,” Apple wrote.
Learn More: 4 Major iPhone X Details Leaked By Disgruntled Apple Employee