Huawei's Efforts To Steal Apple Trade Secrets Include Employee Bonus Program and Other Dubious Tactics: Report (macrumors.com) 131
In a report published Monday, The Information [paywalled] has detailed tactics used by China's Huawei to steal Apple's trade secrets. These tactics include Huawei engineers appealing to Apple's third-party manufacturers and suppliers with promises of big orders, but instead using the opportunity to pry on processes specific to iPhone-maker's component production. From a report: According to today's report, a Huawei engineer in charge of the company's smartwatch project tracked down a supplier that makes the heart rate sensor for the Apple Watch. The Huawei engineer arranged a meeting, suggesting he was offering the supplier a lucrative manufacturing contract, but during the meeting his main intent was questioning the supplier about the Apple Watch. The Huawei engineer attended the supplier meeting with four Huawei researchers in tow. The Huawei team spent the next hour and a half pressing the supplier for details about the Apple Watch, the executive said. "They were trying their luck, but we wouldn't tell them anything," the executive said. After that, Huawei went silent.
This event reportedly reflects "a pattern of dubious tactics" performed by Huawei to obtain technology from rivals, particularly Apple's China-based suppliers. According to a Huawei spokesperson the company has not been in the wrong: "In conducting research and development, Huawei employees must search and use publicly available information and respect third-party intellectual property per our business-conduct guidelines." According to the U.S. Justice Department, Huawei is said to have a formal program that rewards employees for stealing information, including bonuses that increase based on the confidential value of the information gathered.
This event reportedly reflects "a pattern of dubious tactics" performed by Huawei to obtain technology from rivals, particularly Apple's China-based suppliers. According to a Huawei spokesperson the company has not been in the wrong: "In conducting research and development, Huawei employees must search and use publicly available information and respect third-party intellectual property per our business-conduct guidelines." According to the U.S. Justice Department, Huawei is said to have a formal program that rewards employees for stealing information, including bonuses that increase based on the confidential value of the information gathered.
Thousand grains of sand (Score:1)
To say this has been their known strategy for a long time is an understatement.
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It doesn't pass the sniff test. Why bother going to all this effort to get details of the heart rate sensor when they could just buy an Apple watch, rip it open and take a look for themselves? Or just wait for iFixIt to do a teardown for them a day after it's released.
Re:Thousand grains of sand (Score:4, Insightful)
Re:Thousand grains of sand (Score:5, Informative)
Why go to the effort of tearing one apart and reverse engineering it when you can just ask somebody for the info?
A friend of mine did a job interview at Huawei and the interview was basically "tell us how you would design a node-b". My friends response was "hire me and I'll tell you, but for an interview that's not an appropriate question". This was over a decade ago. This is well documented behavior by this company.
Re:Thousand grains of sand (Score:5, Interesting)
1. "tearing one apart and reverse engineering it" would give you a lot more details than asking someone out of their memory.
2. asking interviewee for info is pretty prevalent in the Silicon Valley. for one, the company asking does not sign an NDA. it is the interviewee who has signed the NDA and hold the responsibility to guard such secrets.
3. in this country, this kind of things all come down to arguing over fine points by highly paid lawyers.
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"1. "tearing one apart and reverse engineering it" would give you a lot more details than asking someone out of their memory."
It would also take much longer than the useful life of the information.
Trade secrets and interviews (Score:2)
1. "tearing one apart and reverse engineering it" would give you a lot more details than asking someone out of their memory.
That depends on precisely who is being asked and what sort of documentation they have/had access to. Reverse engineering does not usually provide more details than could be obtained from the memory banks of a talented key engineer.
2. asking interviewee for info is pretty prevalent in the Silicon Valley. for one, the company asking does not sign an NDA. it is the interviewee who has signed the NDA and hold the responsibility to guard such secrets.
So let's ignore any legal implications for a moment. Would you hire someone who would so readily spill the trade secrets of their current/former employer? I sure wouldn't. Because if they'll do it to them they'll do it to you. That is a question that says more about the chara
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2. asking interviewee for info is pretty prevalent in the Silicon Valley. for one, the company asking does not sign an NDA. it is the interviewee who has signed the NDA and hold the responsibility to guard such secrets.
So let's ignore any legal implications for a moment. Would you hire someone who would so readily spill the trade secrets of their current/former employer? I sure wouldn't. Because if they'll do it to them they'll do it to you. That is a question that says more about the character of the interviewee than it does the hiring company. Assuming legal niceties are observed, this would be a question to determine NOT to hire someone if they answer anything other than saying they either do not know or cannot divulge.
The point of such interviews isn't necessarily to hire someone. It may just be to get the trade secrets.
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So let's ignore any legal implications for a moment. Would you hire someone who would so readily spill the trade secrets of their current/former employer? I sure wouldn't. Because if they'll do it to them they'll do it to you. That is a question that says more about the character of the interviewee than it does the hiring company. Assuming legal niceties are observed, this would be a question to determine NOT to hire someone if they answer anything other than saying they either do not know or cannot divulge.
if I recall Uber had no qualms about hiring a Waymo engineer on the basis of the proprietary information that he had, so some US companies certainly will do it.
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if I recall Uber had no qualms about hiring a Waymo engineer on the basis of the proprietary information that he had, so some US companies certainly will do it.
Yes, Uber did. But that doesn't mean nothing happen. Waymo didn't care about their engineer but went after the bigger one -- Uber -- and it actually ended up with a lawsuit and settlement [harvard.edu]. That's how you do in the U.S. I doubt you can do that in China.
Re: Thousand grains of sand (Score:2)
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A "tear-down" of something you don't fully understand does not tell you how to replicate it, especially if it's a technology you're not fully fluent in. For chips, reverse engineering can be a pretty involved process, since you not only have to back out the design (which is still somewhat difficult for many chips these days, but is getting even harder with 3D structures such as finFETs and the like*), but also the manufacturing processes that produced it - and that is NOT always easy from looking at the en
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In the case of the Apple Watch heart rate sensor there isn't really much to tell. The sensor at that time is just a basic capacitative pick-up stack and an off-the-shelf amplifier from Analogue Devices, as the teardown clearly shows. Any cleverness is in the software, and back the it wasn't even that clever - extremely average battery life, average sensitivity and accuracy.
It might make some sense if it was the newer optical type of sensor, but even then it's not an Apple specific part and they could just b
Re:Thousand grains of sand (Score:4, Informative)
People are missing the human component to the engineering.
There are important pieces of information, such as, what exact specs are necessary for QA purposes? Are they buying parts with a different performance guarantee than the basic ranges listed in the data sheet?
If you don't actually want the part, but you want to know, how good does this part actually have to be in this application so that when it is finally built and is running modern software, it works well enough to satisfy QA requirements?
You can find that out by asking the right people, but you can't actually calculate any of that from a product breakdown.
When you're negotiating with a Chinese chip supplier, you don't actually negotiate over price. Prices are basically fixed, with the markup varying based on your relationship with the company. When you ask for lower prices, you're actually asking for them to spend less money making the product. A lot of people don't understand this, and it leads to (false) accusations of contract dishonesty.
Huawei of course, being a Chinese company, understands that perfectly. They're not going to go to some local supplier and ask for a cheaper heart rate monitor. That would be stupid of them. Instead, they're going to try to figure out the actual minimum operating specs of the part, and then ask for the price of those specs. That will be the lowest price they can hope to get. But they can't learn that from a breakdown, because many of the parts actually made will (accidentally) be higher quality than the spec. And sometimes some of the specs will be higher than needed because of the manufacturing process, and they might have access to a different basket of processes. So they need to know which specs are actually important, and which involve tradeoffs.
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You could have asked AMD back in the day when they ripped apart intel chips. I know the article is meant to whip up anti-china sentiment, but US companies have been doing corp spying forever, Back to colony days. I know my marketing guy paid people to take other company training classes and report back.
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If can get information before it is sold....
Re:Thousand grains of sand (Score:5, Insightful)
They're not interested in the technical components; China has always been good at replicating that portion. They're interested in the manufacturing process - how things are made, integrated, and put together. That's the part that China needs to learn.
China only really knows how to make things manually in many areas, and doing something complex, say like building a plane, or making your own apple watch is rather challenging without the understanding of how it is made. In short, the process of making and designing the product is as valuable as the product itself to China.
Re:Thousand grains of sand (Score:5, Interesting)
Chances are the Chinese build the watches so the actual assembly is something they could get more easily at home but some of the specialized sensors are going to be much more difficult for them to figure out.
Anyone having anything built over there has to be damn careful! A friend has some automotive parts built over there. He intentionally designed the parts so it's not obvious what they will be used in and he designed them to fit more than one application with just some machining needed to fit one car or another. He told me that he bet it wouldn't be more than 3 months before they would be trying to sell his stuff. Sure enough parts showed up on Ali-Baba within 2 months! Jokes on them, they don't know about the needed machining he only did in-house and those parts aren't going to fit jack shit! :-) He had a good laugh over it but it was really surprising to see how fast they figured out what this was for and tried to sell it. There's a saying, their manufacturing plants run three shifts, two for you and one for them and it doesn't seem to be far from the truth...
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They're interested in the manufacturing process - how things are made, integrated, and put together. That's the part that China needs to learn.
That's the part that China taught Apple.
Apple doesn't do most of the manufacturing development for its products, Foxconn does. Foxconn has the expertise in that area, and they will sell it to anyone who pays.
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That's the part that China taught Apple.
Apple doesn't do most of the manufacturing development for its products, Foxconn does. Foxconn has the expertise in that area, and they will sell it to anyone who pays.
Foxconn is Taiwanese, not Chinese.
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With factories in China. If you want to do that kind of business in China building parts for Apple, you do what the Chinese Government tells you to do.
If you make ANYTHING in China you run the risk of having your intellectual property lifted - period.
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They're interested in the manufacturing process - how things are made, integrated, and put together. That's the part that China needs to learn.
Manufacturing processes for most products are typically not black magic. It's what I do for a living. There are some exceptions for some high tech or high complexity stuff where the magic is in how it's put together. But how most things are assembled are not big secrets - it's more in the execution than some secret sauce. That said, companies definitely have to be very careful about what technology they expose to manufacturing in China because the odds are VERY high it will be stolen and/or replicated i
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Reverse engineering a chip is not simple, fast, or cheap. It's dramatically more difficult than reverse engineering software and protocols and look at all the efforts that never finish in that area.
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There are a lot of products get released at the same time, that have had independent R&D and came up with a similar product.
If you were to steal the Specs in the design phase, you will have your product ready at around the same time Apple does.
If you are going to look like you didn't steal the data, but came up with it yourself, it would make sense to have it ready around the same time the competitor gets it out. Or even better a little before.
Re:Thousand grains of sand (Score:5, Interesting)
I don't mean to be rude to you, but that is how a lot of people outside of product design and manufacturing think.
As an (ex)engineer, I'm often more impressed by *how* Apple (and their suppliers) make things than *what* they make. For example, the (steel) front bezel on the original iPhone was something that looked basically unmanufacturable to me: for a start, you can't hold the same tolerances on a steel casting as a plastic part, so it was astonishing that the back plastic clamshell and the steel bezel met almost seamlessly.
Turn out that Apple were making the back clamshell in a number of different sizes (three, I hear) and the bezel in a single size. They finished the bezel and then used an optical system on the production line to pick out which parts would fit with which plastic clamshells.
It's an extremely unusual process that involved a lot more up-front investment in technology and process, but gave the result their designers wanted and the customers thought was 'pretty neat'. So Huawei want to know about those optical systems, as well as what's inside an Apple watch.
Tear-downs won't tell you anything about a lot of the most interesting solutions that a designer had to devise: Toyota used to famously say that they weren't designing cars, they were designing a process to make cars.
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Why bother going to all this effort to get details of the heart rate sensor when they could just buy an Apple watch, rip it open and take a look for themselves?
That's rather... naive, to be kind.
Of course, they'll rip open the device, as you suggest, but that is only good enough for a iFixit YouTube video. Somebody who wants to mass-produce copies needs much more than that. To be able to mass-produce copies competitively, you need to know not only what parts is a device made of, but also HOW and WHY. This crucial knowledge can't be easily got from simply opening some device and peering inside. Why use a specific part here, and not replace it with a cheaper equiva
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Totalitarian, Communist Dictatorship (Score:2)
China is a Totalitarian, Communist Dictatorship with a thin veneer of capitalism.
Never forget that.
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Their approach seems familiar. Many years ago your nation use to go to England, visit the plants, and steal textile manufacturing trade secrets.
https://www.ipwatchdog.com/201... [ipwatchdog.com]
https://foreignpolicy.com/2012... [foreignpolicy.com]
you forgot to find a way to include a reference to tiananmen square in your rant.
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This is 100% incorrect. Stealing trade secrets was agasint british laws at the time. High ranking US officials still encouraged its citizens to steal them, knowing it violated british laws.
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It gets a little hard to do that when you have a computerized system that tracks the activity of a country's citizens, scores them for how "appropriate" their beliefs, statements and associations are, and restricts their rights based on that.
You might see how countries that don't do that might be concerned about a country that does something like that trying to achieve dominance or parity. It will not be good for global freedom. And yes, freedom means something other than eagles and Michael Bay films.
By the
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Not sure your comments are dirrected to me or not:
"If they choose to have a Totalitarian, Communist Dictatorship so whats it to you? "
Agreed. They are 13,000 miles away, i really dont care if they are communist, or whatever. That is their choice and has very little to do with me.
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Don't think I've heard a more fucking ignorant comment than that.
You seriously believe that the people in China choose to be a a communist dictatorship?
Fuck you.
And Textiles? Seriously? the U.S. sent government agents there to steal textile secrets?
Holy crap you are the dumbest piece of shit I've had the misfortune to step on.
Re: Totalitarian, Communist Dictatorship (Score:2)
Thanks for the time you wasted responding. Your post really contributed to the conversation and is a key reason Slashdot is what it is today.
Nothing impresses others more then someone sending angry rants full of profanity... Well done.
Do show me your passport and all the Chinese entrance visa stamps you have. Clearly you speak for all 1.3 billion Chinese.
And yes, your government encouraged textile theft to jump start the US economic engine. This is a rack, regardless if you believe it or not.
Have a great
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Sorry, I get that way when some asshole defend a totalitarian government and suggest people volunteer for oppression.
Re: Totalitarian, Communist Dictatorship (Score:2)
I didn't defend it. I said that is their choice. If they wish to overthrow, leave, etc they can do so (not easily, but my 22 year girlfriend left as did a number of her friends). Heck, I have a friend staying with me right now, her family left China for the states when she was only 12.
I don't get why people are so worked up over china. They are probably 10-12k miles from most on slashdot.
PS. If you are ever there hit me up. I own a home in guilin, not far from elephant trunk hill.. so I might have mor
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with a thin veneer of capitalism.
Define "thin"?
Happened to a friend... (Score:5, Insightful)
I won't say what they manufacture but it's not electronics. Chinese company contacts them, says they want to buy some of their uber expensive stuff but could they come inspect it first? Sure thing! Several of the intended visitors unable to get visas... finally the TEAM of people shows up to inspect the product but want a TOUR of the factory. No sir, not allowed. Brings them to a room that's been walled off just for the inspection but members of this team keep trying to wander off and have to be corralled. Light no good, can't we do this somewhere else? Nope, here's more light! Table not flat enough for measurements don't you have someplace else we could do this? Nope, her'e s apiece of float glass deal. Finally they get frustrated and leave. Weeks later State Dept calls all freaked out by the team of scientists that visited - hmm! They explain the measures they took to the great relief of State Dept dude but he warns other folks might call and to just explain WTF. I ask friend about their network security - umm not good :( He tells me stories of employees plugging "music players" into production equipment USB ports to "charge them" and bringing the line to a halt as they got "infected". I swear sometimes we are our own worst enemy They did at least stop the direct physical inspection! I'm betting their network is owned up one side and down the other though...
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and that is VERY good advice indeed. I haven't heard of phones being stolen but you can pretty much bet it will be hacked and it will almost certainly be used to track you. I only know one person who travels over there these days and she takes a burner phone just for those trips. Why take a chance? End of the day it's often not just the Govt doing the attacking either, if they think you have something valuable that can be sold or you're somehow a target that could be damaged to help improve their competitiv
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Most big corps send executives over to China not only with a burner phone but with a burner laptop which both get shredded when the exec returns.
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Maybe they will with it turning out there is evidence against Hauwei after all. With evidence of their practices and the increasing actions by China as a whole in industrial espionage and stolen plans sent to them for manufacturing it is only a matter of time before this escalates to international scale and the WTO.
Anti-Trumpism is only going to carry staying in bed with China for so long.
One of the better articles I've seen on the theft. (Score:5, Interesting)
https://www.popularmechanics.c... [popularmechanics.com]
Make sure you note the date on that article. This has been going on a long time! Another anecdote, company I knew manufactured DVD and CD, one of the contracts they bid on was to do the service manuals for the DOD but they kept getting underbid. They knew damn well there were VERY few US companies left that could do this and couldn't figure out how they were being underbid. They finally figured it out - a Chinese company was being used to make the media with a front company setup in the US. It took them ages to get the DOD to wake up and figure out they were sending the repair manuals for a ton of our shit over to China to have the damn DVD made. Good grief, why not have them produce our missiles too? Sheesh! Obviously years ago but man we've done some stupid stuff
Big deal man (Score:4, Informative)
This happens all the time. Investment banks do this all the time in the name of interviews. A head hunter is hired to call up somebody from a rival bank, with the lure to double their pay. The candidate attends the interview at an unofficial location, such as a hotel, and the interview team questions him about the rivals products, algorithms etc. Once they get what they want, the interview is over. There are entire companies that are engaged in corporate espionage. They do this to extract insider information about companies on the pretext of interviews and sell the information to hedge funds for money.
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The answer to that scenario:
"If I can screw them (current/former company) like that, what's to stop me from screwing you like that?"
Proof employees are untrustworthy (Score:2)
If you will betray your past employer, how can I ever trust you with my secrets?
Huawei... (Score:2, Insightful)
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Having dealt with Siemens PLC hardware and software, if I had the option for third-party software at 70% the price I would take it in a heartbeat. That company could teach Cisco a thing or two about overpricing.
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Should the world also make the US pay for everything they've stolen? What about founding its industrial revolution on IP theft mainly from Britain? I'm sure the interest will be high after well over a hundred years... or let me guess, it's fine as long as WE are the ones doing it?
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Lend lease, support in the WW2 and Marshall plan was insufficient in your view?
Modus Operandi (Score:2)
Good artists copy, great artists steal. - Pablo Picasso
Who... Us? (Score:3)
The Chinese are very good at this (Score:5, Insightful)
When East meets West, you have a bunch of naive westerners blissfully running head-first into espionage methods which have been honed for over a century. It's a lot like how it must've been when the native Americans with bows and arrows were slaughtered by European firearms. Westerners have never put much thought into protecting themselves from this type of direct espionage because they've always been coddled and protected by their social norm that it was inherently wrong for companies to steal secrets from each other. So they will blissfully plug in their devices to recharge during a visit, or hand them over for "security checks" at the airport (during which the hard drive is removed and an image is made), or install a state-of-the-art manufacturing tool relying on a few screws holding the cover in place to protect the secrets that are held within.
A good example is China's high speed rail. China had no knowledge about how to construct high speed rail. They opened up bidding to foreign companies, dangling the carrot of building thousands of miles of track and trains. TGV wisely passed. Siemens took the bait. They inked a deal where Siemens would manufacture trains for China for a few years, but with the curious stipulation that the manufacturing had to be done in China. Siemens probably thought that after a few years, they'd be facing bids from other high speed rail companies again. What actually happened was the Chinese strip-mined everything they could from Siemens' manufacturing processes in China, duplicated it on their own, and gave Siemens the boot once the period of the original agreement was up.
Every company does it (Score:5, Informative)
I worked at the GE Appliance Park in Louisville, KY. They have an entire team that does nothing but tear down competitors appliances to see how they are put together. They are also nonchalant about their competitors doing the same. It is just what everybody does.
Huwawei is owned by the government of China (Score:1)
Which is communist. So Slashdot will love it.
Really? (Score:3)
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Our company is in the same building as Bloomberg. Once their employees in the elevator complained that they were asked by their boss to find something negative to write about China. I guess they are delivering what their customers want though.
Worked for Microsoft when Video for Windows sucked (Score:1)
When Apple's QuickTime came to Windows, Microsoft and Intel were astonished by its performance. When they couldn't compete, they just conspired to acquire the code from an Apple partner.
http://www.roughlydrafted.com/RD/RDM.Tech.Q1.07/5F0C866C-6DDF-4A9A-9515-531B0CA0C29C.html