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How Apple reportedly gave up control of iCloud for business growth in China

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China is one of the biggest markets in the world for Apple’s products. In its recent quarterly results, the company registered a whopping $17.7 billion in iPhone sales in the region.

However, this stellar business performance comes at a cost of user privacy and ceding control over its own ecosystem. According to a new report from The New York Times, Apple gave in to China’s multiple demands, including custom hardware for iCloud and app removals.

The report noted that Tim Cook caved in to China’s demand of storing iCloud data of China-based customers in the country —Apple wanted to keep that data in the US. While storing user data locally is a common practice across the globe, Apple allegedly handed over iCloud’s encryption key to China and made it easier to retrieve user data.

This is unlike Apple in the US, where it has constantly battled with authorities to keep their hands off iPhone users’ data. The NYT report noted that the iPhone maker created a special loophole to give the government access to data: it partnered with a government-affiliated Guizhou-Cloud Big Data as a service provider. Plus, it made changes to the iCloud service agreement that included the clause, “Apple and GCBD will have access to all data that you store on this service.”