Apple Inc.’s Security Flaw, Downgrade Generate Negative Publicity

apple buzzThis was a bad week for Apple Inc.(NASDAQ:AAPL). The company announced last Friday that it had found a serious security flaw in iOS 7. Communications that were supposed to be encrypted were being sent out without encryption, making passwords and emails sent over unsecured public WiFi networks vulnerable to hacker attacks.


The flaw, which came to be known as the “Gotofail bug,” generated a lot of bad publicity. Some critics were miffed because Apple had not given prior notice of the problem. Other negative reactions included conspiracy theories that the NSA could be involved in the security hole.


Apple released a patch on Friday for iPhones, iPads and iPods, but an outside researcher found that the bug also affected OSX applications on the Mac. A patch for OSX wasn’t available until Tuesday.


In other bad news, AAPL share prices dropped last Thursday when Barclays Capital downgraded its rating from overweight to equal weight. A Barclays’ analyst compared Apple to Microsoft and said that the future growth potential for the iPhone was limited, given the maturing smartphone market. He thinks share prices will remain “range bound” unless Apple creates “entirely new markets in the cloud.”


The rivalry between Apple and Samsung heated up when Samsung unveiled its new Galaxy S5 in Barcelona yesterday. The Samsung phone, which will go on sale in April, has a fingerprint scanner and health-monitoring apps, including a built-in heart rate monitor. Apple is widely expected to be coming out with health-monitoring capabilities in the long-awaited iWatch — but Samsung has gotten there first.


Yesterday, Apple filed an appeal in a case it lost last year when a judge ruled that Apple violated antitrust law by colluding with



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