Nude celebrity photo leak throws Apple into a crisis
Sep 4th, 2014
Nude celebrity photo leak throws Apple into a crisis
Just As Apple prepares to launch iPhone 6 the brand suffers another crisis.
Here are the facts:
On August 31, 2014, ~200 private pictures of various celebrities were posted to the image board website. An investigation by Apple found the photos were stolen from its iCloud service by guessing usernames, passwords and security questions.
Here’s Apple’s full statement published on September 2, 2014 2:31 PM EDT:
We wanted to provide an update to our investigation into the theft of photos of certain celebrities. When we learned of the theft, we were outraged and immediately mobilized Apple’s engineers to discover the source. Our customers’ privacy and security are of utmost importance to us. After more than 40 hours of investigation, we have discovered that certain celebrity accounts were compromised by a very targeted attack on user names, passwords and security questions, a practice that has become all too common on the Internet. None of the cases we have investigated has resulted from any breach in any of Apple’s systems including iCloud® or Find my iPhone. We are continuing to work with law enforcement to help identify the criminals involved.
To protect against this type of attack, we advise all users to always use a strong password and enable two-step verification. Both of these are addressed on our website at http://support.apple.com/kb/ht4232.
On September 3, 2014 the shares of Apple fell $4.36, or 4.4%, to $98.94. Since Apple is the most valuable U.S. company, with a market value of more than $618 billion, Wednesday’s decline cost investors $26.1 billion and shaved 2.97 points off the S&P 500.
It is interesting to compare this event with an event that happened to the same company in 2007. The the event is covered more in depth in our book.
Nude celebrity photo leak throws Apple into a crisis.
The US$4 billion Apple’s Email:
At 11:49 EDT (GMT-6) on May 16th, 2007 a popular weblog and podcast about consumer electronics posted a message saying that the iPhone and Leopard operating system launches would be seriously delayed after an internal Apple email at 9:09 AM CDT (GMT-5) was forwarded to them. Apple’s stock promptly dropped on massive selling, going from US$107.89/share to US$104.61/share and even as low as US$103.42/share in six
minutes (11:56 – 12:02). NB: those share prices were way before the share split.This wiped just over $4 billion off of Apple’s market capitalization. A lot of people lost a lot of money very quickly. It turns out that the email was a hoax. In an update, the weblog and podcast said that the email was in fact sent from Apple’s internal email system, but that it was not accurate. Apple quickly notified the error with this email (see fig. below: 1h:38min delay). By 12:22 Apple stock had mostly recovered and it ended the day down just US$1.40/share, still US$1.25 billion lower in market cap.
The US$4 billion Apple’s Email
It is interesting to note that the drop in the shares of the 2014 crisis came on the day following the official statement and not directly after the triggering point like in 2007.
Contrary to the 2007 crisis which was almost instantly contained following the common procedure:
- management must take charge quickly,
- pinpoint the problem,
- explain how it happened,
- fix it, and
- show how it won’t happen again…
the 2014 seems a bit lackluster.
Tagged with: Apple, crisis, iCloud service, leak, Nude celebrity photo
Category: Consequences, Crisis management, Mitigations, Uncategorized
My name is Jerry Mike from the United States.