Why Did Apple Move Its Chinese iCloud Data Storage to China Telecom?

Source: Apple.com

Source: Apple.com

In a move that highlights the challenges that western companies face when doing business in China, Apple has started storing its Chinese users’ iCloud data on servers managed by government-run China Telecom. The change was first revealed in an announcement on the official website of the city of Fuzhou that has since been removed, reports Apple Insider. According to the announcement from Fuzhou’s city government, the data transfer was completed on August 8. Apple later confirmed the move with a statement provided to several media outlets.

“Apple takes user security and privacy very seriously. We have added China Telecom to our list of data center providers to increase bandwidth and improve performance for our customers in mainland China,” said Apple via Apple Insider. “All data stored with our providers is encrypted, China Telecom does not have access to the content.”

While Apple is emphasizing that the change will improve the performance of iCloud for Chinese users, some industry watchers have noted that the change follows recent comments from government-run media outlets in China that suggested Apple was helping the U.S. government to spy on Chinese users. In July, Reuters reported that Apple’s iPhone was described as a threat to national security by China Central Television because of the “Frequent Locations” service that is available in iOS 7. The CCTV report claimed that the feature could be used to surreptitiously track users and reveal “state secrets.” This has raised questions about whether Apple’s recent data storage shift was more about bowing to Chinese government pressure than it was about improving the experience for end users.

WANG ZHAO/AFP/Getty Images

WANG ZHAO/AFP/Getty Images

Of course, there is also the possibility that Apple made the change for both reasons. According to a translation of the Fuzhou city government’s announcement provided by iCloud.net, “Apple iCloud resource server availability will be higher than 99.99% a month” and will provide “hundreds of PB [petabytes]” of storage for Chinese users. Apple has also recently launched its own content delivery network (CDN) in the U.S. that is expected to eventually improve the performance of the iCloud for North American users. So it is possible that Apple’s data storage shift to China Telecom’s servers may simply be part of a general overhaul of its network.

On the other hand, despite Apple’s assurances that the data stored on China Telecom’s servers will be encrypted, the prompt removal of the announcement from the Fuzhou city government’s website suggests that the Chinese government has its own reasons to keep the news of this change under wraps. It should also be noted that CCTV’s recent report about the security threat presented by Apple’s iPhone took place against a backdrop of increased political tension between the U.S. and China over mutual accusations of cyber attacks and government surveillance. As a result of this recent increase in political tension and last year’s exposure of the NSA’s widespread electronic communications surveillance programs, China’s government has grown increasingly wary of U.S. tech companies.

Soon after the U.S. Department of Justice indicted five Chinese military officers for computer hacking earlier this year, China’s Central Government Procurement Center announced that it was banning governmental use of Windows 8, Microsoft’s latest operating system. As reported by Reuters, the Windows 8 ban was later followed by raids on Microsoft’s offices in several major Chinese cities as part of an anti-monopoly investigation. Apple may be trying to prevent a similar deterioration in its relationship with the Chinese government by storing its Chinese users’ data on state-run servers.

Apple has previously been criticized for censoring apps and content that the Chinese government objects to. In 2013, Apple was criticized by human rights activists after it removed the FreeWeibo app from China’s App Store at the government’s request, reports Radio Netherlands Worldwide. The banned app allowed users to view government-censored content on Sina Weibo, China’s popular microblogging website. Google relocated its servers to Hong Kong after a dispute over similar censorship demands from the Chinese government.

The Greater China region has become an increasingly important market for Apple and accounted for 16 percent of the company’s total revenue during the June quarter, a 28 percent year-over-year increase. This makes Greater China the company’s fastest growing region. This rate of growth will likely continue in the foreseeable future as Apple carrier partner China Mobile continues to roll out its 4G network. Considering the value that China adds to the Cupertino-based company’s bottom line, this will likely not be the last time that Apple’s relationship with the country’s government will be scrutinized.

More from Tech Cheat Sheet:

Follow Nathanael on Twitter (@ArnoldEtan_WSCS)