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Apple's Golden Hoard

By Richard Adhikari MacNewsWorld ECT News Network
Aug 3, 2011 5:00 AM PT

Apple's recent iCloud announcement was merely the icing on the cake of a week of positive news coming from Cupertino.

Apple's Golden Hoard

For one thing, iPhone sales made Apple the world's largest smartphone vendor in Q2 of 2011, according to Strategy Analytics.

For another, news has emerged that Apple has a cash balance of nearly $76 billion, which is more than the nearly $74 billion operating balance of the United States Treasury Department.

Meanwhile, Mac OS X Lion appears to be gaining momentum, seeing 1 million downloads in just one day after being introduced July 20.

Apple on Monday also extended Apple TV with a new update that lets users view video from Vimeo and stream previously purchased TV shows from the iTunes store to their Apple TVs.

Users can also stream videos, photos and music through the new AirPlay feature from their iDevices running iOS 4.2 or later to Apple TV.

However, Apple's forward momentum may be impacted by security concerns.

It seems that Mac OS X Lion and iOS have security vulnerabilities, and the more popular they are, the greater the number of victims impacted by them.

Apple did not respond to requests for comment by press time.

Storage in the iCloud

Apple's iCloud service is charging $2 per GB of storage after the first five free GB.

That looks pricey at first glance compared to other online storage services, but this is not necessarily the case.

"When you look at Apple's charges more closely, you'll see that you don't have to pay for music and photo storage, so they actually come out on par with everyone else," Laura DiDio, principal at ITIC, told MacNewsWorld.

Subscribers to iCloud can work on and view documents stored there, DiDio said.

Apple's adopting the right strategy for the iCloud, opined Dmitriy Molchanov, an analyst at the Yankee Group.

"You have iTunes music synced automatically with iCloud, iCloud automatically syncing content from iWork across all of a consumer's iOS devices, and device settings synced throughout the service," Molchanov told MacNewsWorld. This strategy will work for Apple, he stated.

Barclays Capital is positive about iCloud, which it told investors in a note Tuesday is a major benefit for Apple.

Security Storms on the Horizon

Despite Barclays' confidence in iCloud and Apple's moving ahead steadfastly with that technology, issues with security might create some problems for Cupertino.

Apple had to issue a security patch July 25 for what security experts describe as a very severe vulnerability in iOS.

The vulnerability prevents iOS from validating SSL certificates correctly. This could let hackers take over victims' iOS devices with fake certificates by using a nine-year-old tool called "sslsniff." They could then steal or modify data protected by SSL encryption.

With the growing number of iPhones and iPads in the corporate workplace as the consumerization of IT proceeds apace, this could pose a severe threat to the enterprise.

SSL capabilities will become even more important as they are used to protect the cloud, Michael Morgan, a senior analyst at ABI Research, pointed out.

"As iOS increasingly offers cloud-based services through iCloud, Apple's going to have to prove its services are secure," Morgan told MacNewsWorld.

"That's a losing battle because somebody will always come out with a new zero-day hack," Morgan stated.

Apple hacks in recent weeks reportedly included carry-overs from Snow Leopard such as the "Mac Defender" fake antivirus program;, the Olyx remote-controlled backdoor Trojan, password recovery from Macs over the FireWire port as disclosed by Passware, and a hack by Charles Miller of Accuvant Labs, in which he takes and disables chips inside Apple laptop batteries.

Apple needs to get up to speed with its approach to security, Chet Wisniewski, a senior security adviser at Sophos, told MacNewsWorld.

"The way Apple have been patching and their notifications indicate to me they aren't really ready for the enterprise," Wisniewski said.

Back to the Rosy Future

Overall, though, the news has been positive for Apple this past seven days.

Not only did In-Stat report that Apple became the world's biggest smartphone vendor in terms of units sold in Q2 2011, the analyst firm also predicted that mobile application download revenue will surpass US$29 billion in 2015.

Now, Apple is king of the mobile app world, and it's fairly well-known that Android app developers are suffering because Android device owners are reluctant to shell out for smaller purchases within apps.

Even if Android device owners were to suddenly loosen their purse strings, Apple would still be ahead.

Consumers spend $14 per transaction on average within iOS and Android freemium games, Flurry has found.

Since Apple has the vast majority of mobile apps, it's likely to harvest most of the money mobile gamers spend.

In yet another bit of good news for Cupertino, a survey by PriceGrabber found that 35 percent of consumers it surveyed plan to buy the iPhone 5 as soon as it's released.

Rumors about the date of the iPhone 5's release generally peg it at some time in September or October. That doesn't really matter; chances are Apple will unveil the device in time for the holiday shopping season and chalk up yet another banner quarter.

Apple shares closed at $388.91 Tuesday, down $7.84 in what could be a reflection of the overall market, which was depressed.

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