Apple Stocks Plummet Amidst iCloud Security Concerns

This Labor Day weekend, online communities were shaken up by news of celebrity nude photo leaks and digital privacy breaches. Dozens of leaked images spread across discussion forums such as 4chan and Reddit, and are still currently indexed on many websites. Apple’s iCloud service was mentioned as a possible weak point during many early news reports, casting negative attention on this major tech company. On September 3, Apple’s stock dropped by 4.22 percent, a sharp decline considering the company’s rising stock prices due to media event anticipation.

Rocky Stocks

The dip in Apple’s stocks came during an inopportune time. The company is set to announce new products on Tuesday, September 9 at the Flint Center in Cupertino, California. Stock prices for AAPL have reached all-time highs, hitting $103 on September 2. Since the celebrity photo leak, prices sank all the way down to $98.12. It’ll be interesting to see if the media event will be enough to distract investors from the negative iCloud press.

Apple’s Photo Investigation

According to Apple’s official statement, their engineers investigated the celebrity photo breach for over 80 hours, learning that certain celebrity accounts were indeed compromised. However, the user names and passwords were not stolen directly from Apple. The malicious parties used common phishing techniques to discover user names, security answers, and then passwords for these accounts. If a hacker is able to obtain passwords or security answers someone uses on other accounts, it’s possible for them to break into services such as iCloud. Prior to the breach, Apple’s iCloud service did not notify users when iCloud data was restored to a new device. It is possible that hackers took advantage of this loophole to obtain sensitive data, such as the celebrity nudes.

Tim Cook Speaks Out

On September 5, Apple CEO Tim Cook spoke out for the first time regarding the celebrity photo breaches in an interview with the Wall Street Journal. He described several upcoming security initiatives that should take effect in the next two weeks, including user notifications whenever iCloud data is restored onto a device, when passwords are changed, and when an account is used for the first time on a new device. According to Cook, users will be able to alert Apple’s security team directly if they believe that their accounts have been compromised.

Two-Step Verification

Many tech companies, including Apple, leverage optional two-step verification processes to enhance account security. For example, Google users can enable this feature so that hackers cannot break into your accounts, even if they know one of your commonly used passwords. However, these features aren’t always successful, especially if users fail to enable two-step verification. Apple plans to raise two-step verification awareness in the upcoming iOS, so that consumers can protect their iCloud accounts with a longer password and an additional short pin code.

The recent celebrity photo leak has resulted in major headaches for both Apple and their investors. It’ll be interesting to watch how the upcoming media event announcements on September 9 impact the erratic stock prices.