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Global smartphone growth stalled in Q4, up just 1.2% for the full year: Gartner

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Gartner’s smartphone market share data for the just gone holiday quarter highlights the challenge for device makers going into the world’s biggest mobile trade show, which kicks off in Barcelona next week: The analyst’s data shows global smartphone sales stalled in Q4 2018, with growth of just 0.1 percent over 2017’s holiday quarter, and 408.4 million units shipped.

tl;dr: high-end handset buyers decided not to bother upgrading their shiny slabs of touch-sensitive glass.

Gartner says Apple recorded its worst quarterly decline (11.8 percent) since Q1 2016, though the iPhone maker retained its second place position with 15.8 percent market share behind market leader Samsung (17.3 percent). Last month the company warned investors to expect reduced revenue for its fiscal Q1 — and went on to report iPhone sales down 15 percent year over year.

The South Korean mobile maker also lost share year over year (declining around 5 percent), with Gartner noting that high-end devices such as the Galaxy S9, S9+ and Note 9 struggled to drive growth, even as Chinese rivals ate into its mid-tier share.

Huawei was one of the Android rivals causing a headache for Samsung. It bucked the declining share trend of major vendors to close the gap on Apple from its third-placed slot — selling more than 60 million smartphones in the holiday quarter and expanding its share from 10.8 percent in Q4 2017 to 14.8 percent.

Gartner has dubbed 2018 “the year of Huawei,” saying it achieved the top growth of the top five global smartphone vendors and grew throughout the year.

This growth was not just in Huawei “strongholds” of China and Europe, but also in Asia/Pacific, Latin America and the Middle East, via continued investment in those regions, the analyst noted. Its expanded mid-tier Honor series helped the company exploit growth opportunities in the second half of the year, “especially in emerging markets.”

By contrast, Apple’s double-digit decline made it the worst performer of the holiday quarter among the top five global smartphone vendors, with Gartner saying iPhone demand weakened in most regions, except North America and mature Asia/Pacific.

It said iPhone sales declined most in Greater China, where it found Apple’s market share dropped to 8.8 percent in Q4 (down from 14.6 percent in the corresponding quarter of 2017). For 2018 as a whole iPhone sales were down 2.7 percent, to just over 209 million units, it added.

“Apple has to deal not only with buyers delaying upgrades as they wait for more innovative smartphones. It also continues to face compelling high-price and midprice smartphone alternatives from Chinese vendors. Both these challenges limit Apple’s unit sales growth prospects,” said Gartner’s Anshul Gupta, senior research director, in a statement.

“Demand for entry-level and midprice smartphones remained strong across markets, but demand for high-end smartphones continued to slow in the fourth quarter of 2018. Slowing incremental innovation at the high end, coupled with price increases, deterred replacement decisions for high-end smartphones,” he added.

Further down the smartphone leaderboard, Chinese OEM, Oppo, grew its global smartphone market share in Q4 to bump Chinese upstart, Xiaomi, and bag fourth place — taking 7.7 percent versus Xiaomi’s 6.8 percent for the holiday quarter.

The latter had a generally flat Q4, with just a slight decline in units shipped, according to Gartner’s data — underlining Xiaomi’s motivations for teasing a dual folding smartphone.

Because, well, with eye-catching innovation stalled among the usual suspects (who’re nonetheless raising high-end handset prices), there’s at least an opportunity for buccaneering underdogs to smash through, grab attention and poach bored consumers.

Or that’s the theory. Consumer interest in “foldables” very much remains to be tested.

In 2018 as a whole, the analyst says global sales of smartphones to end users grew by 1.2 percent year over year, with 1.6 billion units shipped.

The worst declines of the year were in North America, mature Asia/Pacific and Greater China (6.8 percent, 3.4 percent and 3.0 percent, respectively), it added.

“In mature markets, demand for smartphones largely relies on the appeal of flagship smartphones from the top three brands — Samsung, Apple and Huawei — and two of them recorded declines in 2018,” noted Gupta.

Overall, smartphone market leader Samsung took 19.0 percent market share in 2018, down from 20.9 percent in 2017; second-placed Apple took 13.4 percent (down from 14.0 percent in 2017); third-placed Huawei took 13.0 percent (up from 9.8 percent the year before); while Xiaomi, in fourth, took a 7.9 percent share (up from 5.8 percent); and Oppo came in fifth with 7.6 percent (up from 7.3 percent).

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The cryptopocalypse is nigh! NIST rolls out new encryption standards to prepare

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Enlarge / Conceptual computer artwork of electronic circuitry with blue and red light passing through it, representing how data may be controlled and stored in a quantum computer.

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In the not-too-distant future—as little as a decade, perhaps, nobody knows exactly how long—the cryptography protecting your bank transactions, chat messages, and medical records from prying eyes is going to break spectacularly with the advent of quantum computing. On Tuesday, a US government agency named four replacement encryption schemes to head off this cryptopocalypse.

Some of the most widely used public-key encryption systems—including those using the RSA, Diffie-Hellman, and elliptic curve Diffie-Hellman algorithms—rely on mathematics to protect sensitive data. These mathematical problems include (1) factoring a key’s large composite number (usually denoted as N) to derive its two factors (usually denoted as P and Q) and (2) computing the discrete logarithm that keys are based on.

The security of these cryptosystems depends entirely on classical computers’ difficulty in solving these problems. While it’s easy to generate keys that can encrypt and decrypt data at will, it’s impossible from a practical standpoint for an adversary to calculate the numbers that make them work.

In 2019, a team of researchers factored a 795-bit RSA key, making it the biggest key size ever to be solved. The same team also computed a discrete logarithm of a different key of the same size.

The researchers estimated that the sum of the computation time for both of the new records was about 4,000 core-years using Intel Xeon Gold 6130 CPUs (running at 2.1GHz). Like previous records, these were accomplished using a complex algorithm called the Number Field Sieve, which can be used to perform both integer factoring and finite field discrete logarithms.

Quantum computing is still in the experimental phase, but the results have already made it clear it can solve the same mathematical problems instantaneously. Increasing the size of the keys won’t help, either, since Shor’s algorithm, a quantum-computing technique developed in 1994 by the American mathematician Peter Shor, works orders of magnitude faster in solving integer factorization and discrete logarithmic problems.

Researchers have known for decades these algorithms are vulnerable and have been cautioning the world to prepare for the day when all data that has been encrypted using them can be unscrambled. Chief among the proponents is the US Department of Commerce’s National Institute of Standards and Technology (NIST), which is leading a drive for post-quantum cryptography (PQC).

On Tuesday, NIST said it selected four candidate PQC algorithms to replace those that are expected to be felled by quantum computing. They are: CRYSTALS-Kyber, CRYSTALS-Dilithium, FALCON, and SPHINCS+.

CRYSTALS-Kyber and CRYSTALS-Dilithium are likely to be the two most widely used replacements. CRYSTALS-Kyber is used for establishing digital keys two computers that have never interacted with each other can use to encrypt data. The remaining three, meanwhile, are used for digitally signing encrypted data to establish who sent it.

“CRYSTALS-Kyber (key-establishment) and CRYSTALS-Dilithium (digital signatures) were both selected for their strong security and excellent performance, and NIST expects them to work well in most applications,” NIST officials wrote. “FALCON will also be standardized by NIST since there may be use cases for which CRYSTALS-Dilithium signatures are too large. SPHINCS+ will also be standardized to avoid relying only on the security of lattices for signatures. NIST asks for public feedback on a version of SPHINCS+ with a lower number of maximum signatures.”

The selections announced today are likely to have significant influence going forward.

“The NIST choices certainly matter because many large companies have to comply with the NIST standards even if their own chief cryptographers don’t agree with their choices,” said Graham Steel, CEO of Cryptosense, a company that makes cryptography management software. “But having said that, I personally believe their choices are based on sound reasoning, given what we know right now about the security of these different mathematical problems, and the trade-off with performance.”

Nadia Heninger, an associate professor of computer science and engineering at University of California, San Diego, agreed.

“The algorithms NIST chooses will be the de facto international standard, barring any unexpected last-minute developments,” she wrote in an email. “A lot of companies have been waiting with bated breath for these choices to be announced so they can implement them ASAP.”

While no one knows exactly when quantum computers will be available, there is considerable urgency in moving to PQC as soon as possible. Many researchers say it’s likely that criminals and nation-state spies are recording massive amounts of encrypted communications and stockpiling them for the day they can be decrypted.

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Google allowed sanctioned Russian ad company to harvest user data for months

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ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

The day after Russia’s February invasion of Ukraine, Senate Intelligence Committee Chairman Mark Warner sent a letter to Google warning it to be on alert for “exploitation of your platform by Russia and Russian-linked entities,” and calling on the company to audit its advertising business’s compliance with economic sanctions.

But as recently as June 23, Google was sharing potentially sensitive user data with a sanctioned Russian ad tech company owned by Russia’s largest state bank, according to a new report provided to ProPublica.

Google allowed RuTarget, a Russian company that helps brands and agencies buy digital ads, to access and store data about people browsing websites and apps in Ukraine and other parts of the world, according to research from digital ad analysis firm Adalytics. Adalytics identified close to 700 examples of RuTarget receiving user data from Google after the company was added to a US Treasury list of sanctioned entities on Feb. 24. The data sharing between Google and RuTarget stopped four months later on June 23, the day ProPublica contacted Google about the activity.

RuTarget, which also operates under the name Segmento, is owned by Sberbank, a Russian state bank that the Treasury described as “uniquely important” to the country’s economy when it hit the lender with initial sanctions. RuTarget was later listed in an April 6 Treasury announcement that imposed full blocking sanctions on Sberbank and other Russian entities and people. The sanctions mean US individuals and entities are not supposed to conduct business with RuTarget or Sberbank.

Of particular concern, the analysis showed that Google shared data with RuTarget about users browsing websites based in Ukraine. This means Google may have turned over such critical information as unique mobile phone IDs, IP addresses, location information, and details about users’ interests and online activity, data that US senators and experts say could be used by Russian military and intelligence services to track people or zero in on locations of interest.

Last April, a bipartisan group of US senators sent a letter to Google and other major ad technology companies warning of the national security implications of data shared as part of the digital ad buying process. They said this user data “would be a goldmine for foreign intelligence services that could exploit it to inform and supercharge hacking, blackmail, and influence campaigns.”

Google spokesperson Michael Aciman said that the company blocked RuTarget from using its ad products in March and that RuTarget has not purchased ads directly via Google since then. He acknowledged the Russian company was still receiving user and ad buying data from Google before being alerted by ProPublica and Adalytics.

“Google is committed to complying with all applicable sanctions and trade compliance laws,” Aciman said. “We’ve reviewed the entities in question and have taken appropriate enforcement action beyond the measures we took earlier this year to block them from directly using Google advertising products.”

Aciman said this action includes not only preventing RuTarget from further accessing user data, but from purchasing ads through third parties in Russia that may not be sanctioned. He declined to say whether RuTarget had purchased ads via Google systems using such third parties, and he did not comment on whether data about Ukrainians had been shared with RuTarget.

Krzysztof Franaszek, who runs Adalytics and authored the report, said RuTarget’s ability to access and store user data from Google could open the door to serious potential abuse.

“For all we know they are taking that data and combining it with 20 other data sources they got from God knows where,” he said. “If RuTarget’s other data partners included the Russian government or intelligence or cybercriminals, there is a huge danger.”

In a statement to ProPublica, Warner, a Virginia Democrat, called Google’s failure to sever its relationship with RuTarget alarming.

“All companies have a responsibility to ensure that they are not helping to fund or even inadvertently support Vladimir Putin’s invasion of Ukraine. Hearing that an American company may be sharing user data with a Russian company—owned by a sanctioned, state-owned bank no less—is incredibly alarming and frankly disappointing,” he said. “I urge all companies to examine their business operations from top to bottom to ensure that they are not supporting Putin’s war in any way.”

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Google closes data loophole amid privacy fears over abortion ruling

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Google is closing a loophole that has allowed thousands of companies to monitor and sell sensitive personal data from Android smartphones, an effort welcomed by privacy campaigners in the wake of the US Supreme Court’s decision to end women’s constitutional right to abortion.

It also took a further step on Friday to limit the risk that smartphone data could be used to police new abortion restrictions, announcing it would automatically delete the location history on phones that have been close to a sensitive medical location such an abortion clinic.

The Silicon Valley company’s moves come amid growing fears that mobile apps will be weaponized by US states to police new abortion restrictions in the country.

Companies have previously harvested and sold information on the open market including lists of Android users using apps related to period tracking, pregnancy and family planning, such as Planned Parenthood Direct.

Over the past week, privacy researchers and advocates have called for women to delete period-tracking apps from their phones to avoid being tracked or penalised for considering abortions.

The US tech giant announced last March that it would restrict the feature, which allows developers to see which other apps are installed and deleted on individuals’ phones. That change was meant to be implemented last summer, but the company failed to meet that deadline citing the pandemic among other reasons.

The new deadline of July 12 will hit just weeks after the overturning of Roe vs Wade, a ruling that has thrown a spotlight on how smartphone apps could be used for surveillance by US states with new anti-abortion laws.

“It’s long overdue. Data brokers have been banned from using the data under Google’s terms for a long time, but Google didn’t build safeguards into the app approvals process to catch this behavior. They just ignored it,” said Zach Edwards, an independent cyber security researcher who has been investigating the loophole since 2020.

“So now anyone with a credit card can purchase this data online,” he added.

Google said: “In March 2021, we announced that we planned to restrict access to this permission, so that only utility apps, such as device search, antivirus, and file manager apps, can see what other apps are installed on a phone.”

It added: “Collecting app inventory data to sell it or share it for analytics or ads monetisation purposes has never been allowed on Google Play.”

Despite widespread usage by app developers, users remain unaware of this feature in Android software—a Google-designed programming interface, or API, known as the “Query All Packages.” It allows apps, or snippets of third-party code inside them, to query the inventory of all other apps on a person’s phone. Google itself has referred to this type of data as high-risk and “sensitive,” and it has been discovered being sold on to third parties.

Researchers have found that app inventories “can be used to precisely deduce end users interests and personal traits,” including gender, race and marital status, among other things.

Edwards has found that one data marketplace, Narrative.io, was openly selling data obtained by intermediaries in this way, including smartphones using Planned Parenthood, and various period tracking apps.

Narrative said it removed pregnancy tracking and menstruation app data from its platform in May, in response to the leaked draft outlining the Supreme Court’s forthcoming decision.

Another research company, Pixalate, discovered that consumer apps, like a simple weather app, were running bits of code that exploited the same Android feature and were harvesting data for a Panamanian company with ties to US defense contractors.

Google said it “never sells user data, and Google Play strictly prohibits the sale of user data by developers. When we discover violations we take action,” adding it had sanctioned multiple companies believed to be selling user data.

Google said it would restrict the Query All Packages feature to only those who require it from July 12. App developers will be required to fill out a declaration explaining why they need access, and notify Google of this before the deadline so it can be vetted.

“Deceptive and undeclared uses of these permissions may result in a suspension of your app and/or termination of your developer account,” the company warned.

Additional reporting by Richard Waters.

© 2022 The Financial Times Ltd. All rights reserved Not to be redistributed, copied, or modified in any way.

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