Start Up No.1,073: Huawei’s problems deepen, Australia’s role in 5G concerns, fingerprinting iPhones, Qualcomm loses on antitrust, and more

Is the internet becoming a dark forest, where you don’t want to disturb the nastier denizens? CC-licensed photo by Oliver Henze on Flickr.

A selection of 10 links for you. Not written in turquoise ink. I’m @charlesarthur on Twitter. Observations and links welcome.

Hobbling Huawei: inside the US war on China’s tech giant • Reuters

Cassell Bryan-Low, Colin Packham, David Lague, Steve Stecklow and Jack Stubbs:


In early 2018, in a complex of low-rise buildings in the Australian capital, a team of government hackers was engaging in a destructive digital war game.

The operatives – agents of the Australian Signals Directorate, the nation’s top-secret eavesdropping agency – had been given a challenge. With all the offensive cyber tools at their disposal, what harm could they inflict if they had access to equipment installed in the 5G network, the next-generation mobile communications technology, of a target nation?

What the team found, say current and former government officials, was sobering for Australian security and political leaders: The offensive potential of 5G was so great that if Australia were on the receiving end of such attacks, the country could be seriously exposed. The understanding of how 5G could be exploited for spying and to sabotage critical infrastructure changed everything for the Australians, according to people familiar with the deliberations.

Mike Burgess, the head of the signals directorate, recently explained why the security of fifth generation, or 5G, technology was so important: It will be integral to the communications at the heart of a country’s critical infrastructure – everything from electric power to water supplies to sewage, he said in a March speech at a Sydney research institute.


As the article (cast of thousands writing it!) points out, the current concerns about 5G and by extension Huawei originated in Australia when it was looking at its Next Generation Network scheme. From that, everything we see now flows.
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US says Europeans coming around on threat posed by Huawei • Bloomberg

Nick Wadhams:


The US has strong indications that European nations are coming around to the severity of the threat posed by China’s Huawei Technologies and the dangers of incorporating its equipment into their coming 5G networks, according to an administration official.

The official said that while European nations probably won’t impose an outright legal ban on Huawei, the US anticipates that many nations will effectively bar the company’s equipment from their next-generation telecom networks. The official asked not to be identified discussing private discussions.

Such moves would represent a victory for the Trump administration, which has warned against the use of Huawei in 5G systems and has opened its own campaign to blacklist the company and limit its access to American suppliers over security concerns. The official declined to name specific countries prepared to change their position.

In April, Bloomberg News reported that the UK is set to toughen the rules under which Huawei operates there, while stopping short of an outright ban.


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Vodafone and EE just killed Huawei’s 5G launch in the UK • Android Authority

Scott Scrivens:


Things are going from bad to worse for Huawei. In the wake of the US Government executive order that restricts US companies from doing business with the Chinese tech company, the repercussions are mounting. Huawei and Honor phones could lose Google services and access to future Android updates and HiSilicon’s Kirin chips are also under threat. Now, two major UK carriers have dropped Huawei from their 5G launch plans.

BT-owned network EE was the first to announce that it would be pulling Huawei phones from its 5G selection, with the service to be turned on in 16 UK cities this year, starting May 30. Google’s enforced decision that could see Huawei devices lose access to the Play Store and Android version updates is the key factor, with an EE spokesperson releasing the following statement:

“We’ve put the Huawei devices on pause, until we have more information. Until we have the information and confidence that ensures our customers will get support for the lifetime of their devices with us then we’ve got the Huawei devices on pause.”

In a further blow, Vodafone has followed suit and will also not sell the Huawei Mate 20 X 5G when its new network goes online on July 3. The UK’s third largest mobile operator has said only that the device “is yet to receive the necessary certifications,” but it’s likely similar pressures faced by EE were also behind the decision.


It never rains but it absolutely pours for days on end.
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Huawei: ARM memo tells staff to stop working with China’s tech giant • BBC News

Dave Lee:


Huawei currently sources some of its chips from HiSilicon, which it owns. However, while produced in China, HiSilicon’s chips are built using underlying technology created by ARM.

While HiSilicon and Huawei are free to carry on using and manufacturing existing chips, the ban would mean the company could no longer turn to ARM for assistance in developing components for devices in future.

HiSilicon’s upcoming processor, Kirin 985, is due be used in Huawei devices later this year. According to a source at ARM, it is not expected to be affected by the ban. However, the next iteration of the chip has not yet been completed – and is likely to need to be rebuilt from scratch, the source said.

Huawei also uses ARM’s designs for its recently unveiled Kunpeng chips. These are used to power its TaiShan-series computer servers, which are designed to provide cloud computing and storage to clients.

In addition, the company told analysts in January that the Tiangang chip at the heart of its 5G base stations is also ARM-based.

“The problem of the whole telecoms industry is that so much of it is based on the exchange of technology between different companies – whether that’s chip companies, software providers or the makers of other hardware,” commented Alan Burkitt-Gray, editor-at-large of the telecoms news site Capacity Media.

He added that Huawei would likely face other problems licensing 5G-related tech from others, and in turn US-based companies would now be unable to licence the Chinese company’s 5G inventions.


Terrific scoop by Lee. But this is going to destroy all of Huawei’s business. Without ARM, the networking side gradually dies.
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SensorID: sensor calibration fingerprinting for smartphones • Cambridge Computing Lab

Jiexin Zhang, Alastair Beresford and Ian Sheret:


We have developed a new type of fingerprinting attack, the calibration fingerprinting attack. Our attack uses data gathered from the accelerometer, gyroscope and magnetometer sensors found in smartphones to construct a globally unique fingerprint. Overall, our attack has the following advantages:

• The attack can be launched by any website you visit or any app you use on a vulnerable device without requiring any explicit confirmation or consent from you
• The attack takes less than one second to generate a fingerprint
• The attack can generate a globally unique fingerprint for iOS devices
• The calibration fingerprint never changes, even after a factory reset
• The attack provides an effective means to track you as you browse across the web and move between apps on your phone.

Following our disclosure, Apple has patched this vulnerability in iOS 12.2.

…Our approach works by carefully analysing the data from sensors which are accessible without any special permissions to both websites and apps. Our analysis infers the per-device factory calibration data which manufacturers embed into the firmware of the smartphone to compensate for systematic manufacturing errors. This calibration data can then be used as the fingerprint.

We found that the gyroscope and magnetometer on iOS devices are factory calibrated and the calibration data differs from device to device. In addition, we find that the accelerometer of Google Pixel 2 and Pixel 3 can also be fingerprinted by our approach.


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Huawei ban nudges Chinese iPhone fans to switch sides • Tech In Asia

Meng Jing and Zen Soo:


Both sense and sensibility played major roles when diehard iPhone fan Wang Zhixin finally made the decision to become a first-time Huawei user after sticking with the US brand for almost a decade.

“There is a calling from my heart that I need to show support for Chinese brands, especially in the trade war climate,” said the manager at one of China’s largest solar module manufacturers. When the time finally came to retire his three-year-old iPhone 7 earlier this month, Wang went with a Huawei P30.

Huawei was not entirely chosen out of sympathy. “The company has a reputation for better quality at a cheaper price,” Wang said. “[The P30] is faster and can take better pictures.”

For Sam Li, who works at a state-owned telecom company in Beijing, switching from Apple to Huawei was also driven by an emotion. “It’s kind of embarrassing to pull an iPhone out of your pocket nowadays when all the company executives use Huawei.”


And in today’s example of “irony”: “Huawei’s CEO says he admires Apple and buys his family iPhones when they’re not in China”.
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Qualcomm’s practices violate antitrust law, judge rules • WSJ

Tripp Mickle, Brent Kendall and Asa Fitch:


Judge Koh found that Qualcomm violated antitrust law, charging unreasonably high royalties for its patents and eliminating rivals. She challenged its practice of collecting billions of dollars by charging royalties on a percentage of a smartphone’s price.

“Qualcomm’s licensing practices have strangled competition” in key parts of the modem chip market for years, “and harmed rivals, OEMs, and end consumers in the process,” the judge wrote. She added that the company’s lead in developing modem chips for smartphones using 5G, the new generation of cellular technology, made it likely that behavior would continue.

The judge ordered that Qualcomm negotiate or renegotiate licensing agreements with customers free of unfair tactics, such as threatening to cut off access to its chips. Qualcomm also must license its patents to rival chip makers at fair and reasonable prices, and can’t sign exclusive supply agreements with smartphone makers like Apple that block rivals from selling chips into devices.

Judge Koh said Qualcomm must submit to monitoring for the next seven years to ensure it abides by the remedies.

Qualcomm on Wednesday said it plans to seek an immediate stay of the judgment and an expedited appeal to the Ninth US Circuit Court of Appeals in San Francisco.


I wonder if Apple is going to ask for a refund on all the money it paid Qualcomm after Intel couldn’t cope with the demands of building 5G modems. But Qualcomm’s tactic of charging based on the final pricing didn’t work for Motorola against Microsoft on Wi-Fi patents. Couldn’t work here.
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The dark forest theory of the internet • OneZero

Yancey Strickler:


Imagine a dark forest at night. It’s deathly quiet. Nothing moves. Nothing stirs. This could lead one to assume that the forest is devoid of life. But of course, it’s not. The dark forest is full of life. It’s quiet because night is when the predators come out. To survive, the animals stay silent.

Is our universe an empty forest or a dark one? If it’s a dark forest, then only Earth is foolish enough to ping the heavens and announce its presence. The rest of the universe already knows the real reason why the forest stays dark. It’s only a matter of time before the Earth learns as well.

This is also what the internet is becoming: a dark forest.

In response to the ads, the tracking, the trolling, the hype, and other predatory behaviors, we’re retreating to our dark forests of the internet, and away from the mainstream.

This very piece is an example of this. This theory was first shared on a private channel sent to 500 people who I know or who have explicitly chosen to receive it. This is the online environment in which I feel most secure. Where I can be my most “real self.”

These are all spaces where depressurized conversation is possible because of their non-indexed, non-optimized, and non-gamified environments.

Podcasts are another example. There, meaning isn’t just expressed through language, but also through intonation and interaction. Podcasts are where a bad joke can still be followed by a self-aware and self-deprecating save. It’s a more forgiving space for communication than the internet at large.

Dark forests like newsletters and podcasts are growing areas of activity. As are other dark forests, like Slack channels, private Instagrams, invite-only message boards, text groups, Snapchat, WeChat, and on and on. This is where Facebook is pivoting with Groups (and trying to redefine what the word “privacy” means in the process).


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The North Korean restaurant [in Vietnam] accused of using software sales to bypass sanctions • CNN

Joshua Berlinger, CNN:


North Korea is barred from selling weapons abroad – though the UN alleges that the country is still attempting to do so – but it’s not clear if high-tech software that isn’t used for military purposes is subject to that arms embargo. The UN Panel of Experts on North Korea, the body charged with monitoring sanctions enforcement, did not respond to an email seeking comment.

Facial recognition software could provide a loophole in existing sanctions that seek to limit Pyongyang’s ability to make money overseas.

“(Information technology) services aren’t covered by the United Nations sanctions,” said Cameron Trainer, an analyst studying North Korean illicit finance at the James Martin Center for Nonproliferation Studies (CNS). “It’s still a way North Korea can procure currency that is then funneled to its nuclear program.”

…Experts say the Hanoi restaurant’s alleged software sales raise concerns that other North Korean restaurants around Asia could also be used to sidestep sanctions. Police and investigators usually detect sanction evasions at points of entry, like harbors. Customs officials from countries in the region do not track online software sales, said George Lopez, a former member of the UN panel charged with investigating North Korean sanctions enforcement and efficacy.

“The irony that these operate in such plain sight make it more difficult to discover what exactly they are contributing to sanction evasion, other than wages being sent back,” Lopez said.


This is real spy novel territory.
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Sony confirms which countries it has dropped for mobile • Xperia Blog



Sony confirmed it wants MC [mobile communications, its smartphone arm] to be profitable by FY 2020, by reducing operating costs by 50% (vs FY 2017). It also aims to leverage its reorganisation under the EP&S segment to strengthen its product appeal for smartphones. It highlights the Xperia 1 as the first example of this.

However, the most interesting slide was confirmation of which regions around the world it is now focused on, and by consequence which regions were ‘defocused’. Sony confirms that the focus regions are Japan, Europe, Taiwan and Hong Kong. However, there is a long-list of ‘non-focus’ regions which you can see shaded red in the slide below.

These “defocused” regions include India, Australia, Canada, South America, Mexico, Africa, the Middle East and others. We have been hearing from many in these regions that Sony has pulled out quietly, but this is the first official confirmation.

It shows that Sony is not expecting a quick bounce back in smartphone volumes any time soon.


And yet, despite all the “defocussing”, Sony’s CEO says it sees the smartphone business as “indispensable”: “We see smartphones as hardware for entertainment and a component necessary to make our hardware brand sustainable. And younger generations no longer watch TV. Their first touchpoint is smartphone.” It used to be a Sony remote TV control, of course.
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Errata, corrigenda and ai no corrida: 1) thanks to Seth Finkelstein for pointing out that the phrase “fierce urgency”, which was used by Microsoft about the importance of gameplay moderation, was originally used by the Reverend Martin Luther King in 1963 in reference to the need for civil rights for minorities. Decide for yourself whether Microsoft’s use was appropriate.
2) Lots of disagreement for the idea that China only adds $8.46 of value to the iPhone. It leans very heavily on how you value the sheer ability to be able to build iPhones and iPads in the volume and speed Apple demands, basically.

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1 thought on “Start Up No.1,073: Huawei’s problems deepen, Australia’s role in 5G concerns, fingerprinting iPhones, Qualcomm loses on antitrust, and more

  1. I’m unsure about the Huawei brouhaha.

    I understand there are important security concerns esp. on the infrastructure side, and since the US has been proven to bug devices, we can assume China is too. But since everything is becoming “smart”, banning Huawei doesn’t solve much. Laws and regulations, open source, 3rd-party audits… would. What’s sad is that nowadays I’m not sure I care more about Chinese spying than about US spying, between iffy internal and external behaviour at the state level, and commercial companies’ unchecked fecklessness.

    Huawei has probably broken a few embargoes, but everyone’s done it all the way back to IBM selling computers to the nazis and Iran-Contra (really, that guy is head of the NRA now ? Chips, called in ?). Up to now, it’s been huge fines, and very few prison sentences, never a death sentence on a company.

    There’s also IP theft, though I’m not sure if it’s more prevalent than for other companies (Apple and Samsung seem to have lost more trials), and the current IP protection setup smells of overreach, more about locking out competitors than fostering innovation.

    The whole thing seems a) out of proportions and b) missing the mark. If it’s Trump pulling another ZTE everything will go back to normal in a few weeks, but consumers on one side and the Chinese on the other side will probably draw long-term lessons. I don’t think Chinese insistence on IP transfers will lighten ^^

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