Skip the navigation
News

Apple claims 'huge' loss over iPhone leak

Company knew who sold prototype to Gizmodo same day story broke

By Gregg Keizer
May 17, 2010 06:03 AM ET

Computerworld - Apple officials told police investigators that the publication of photos of an iPhone prototype was "immensely damaging" to the company and represented a "huge" loss, recently released court documents show.

Those documents, released Friday by a San Mateo, Calif., county judge, reveal details of a meeting between police and Apple officials that ultimately led to the seizure of several computers from the home of Gizmodo editor Jason Chen.

Gizmodo published photographs and analysis of the iPhone prototype -- widely believed to be similar to the smartphone Apple will launch next month -- on April 19. Gawker Media, the company that operates Gizmodo, has admitted it paid $5,000 for the phone after it was left at a Redwood City, Calif., bar by an Apple software engineer.

The next day, April 20, Detective Matthew Brand of the San Mateo County Sheriff's Office met with Bruce Sewell, Apple's chief counsel, Rick Orloff, the company's director of information security, and George Riley, a lawyer from the Los Angeles law firm of O'Melveny and Myers, which represents Apple. During the meeting, Riley told Brand that the premature disclosure of iPhone details had been "immensely damaging" to Apple.

"By publishing details about the phone and its features, sales of current Apple products are hurt wherein people that [sic] would have otherwise purchased a currently existing Apple product would wait for the next item to be released, thereby hurting overall sales and negatively effecting [sic] Apple's earnings," Riley said, according to the affidavit Brand swore out for a search warrant of Chen's residence.

When Brand asked Riley to put a dollar amount on the loss, Riley said he could not estimate it, but believed it was "huge."

The affidavit also revealed that Apple knew the identify of the man who sold the prototype iPhone to Gizmodo on the same day that the blog published its story.

By Brand's affidavit, Katherine Martinson, who identified herself as a roommate of Brian Hogan, said Hogan had been in possession of the iPhone and had sold it to Gizmodo. Martinson had provided Orloff a photograph of a sticker bearing identifying markings that had been attached to the iPhone. Orloff told Brand that the markings matched those of the missing iPhone.

On April 29, Hogan, a 21-year-old college student from Redwood City, was named by his attorney as the person who took the iPhone from the bar and sold it to Gizmodo. Hogan has not been arrested or charged with a crime.

According to Brand's affidavit, Martinson told Apple of Hogan's involvement because she was afraid she would be dragged into any criminal charges. "Orloff said that Witness Martinson contacted him due to the fact that Suspect Hogan connected the stolen iPhone to her computer and she believed that Apple would eventually trace the iPhone back to her IP address," the document stated.



Additional Resources
Forrester Consulting - Optimizing Users and Applications in a Mobile World
WHITE PAPER
Solving application issues over the WAN requires careful consideration. Based on their independent research, Forrester Consulting offers recommendations on how to tackle application performance issues, insufficient bandwidth and the inability to quickly restore users in a disaster.

Read now.

Security KnowledgeVault
WHITE PAPER
Security is not an option. This KnowledgeVault Series offers professional advice how to be proactive in the fight against cybercrimes and multi-layered security threats; how to adopt a holistic approach to protecting and managing data; and how to hire a qualified security assessor. Make security your Number 1 priority.

Read now.

Cut Communications Costs Once and for All
WHITE PAPER
New IP-based communications systems are being deployed by small and midsized businesses at a rapid rate. Learn how these organizations are enabling faster responsiveness, creating better customer experiences, speeding office or mobile interactions, and dramatically reducing existing communications costs.

Read now.

Macintosh White Papers
Overcome Top 7 Admin Challenges of Active Directory
As Active Directory's role in the enterprise has drastically increased, so has the need to secure the data. Gain insight on creating repeatable,...
Insiders Can Ruin Your Company. Take Action.
Did you know that 80 percent of threats to an organization come from the inside? The threat from insiders is often overlooked in...
Top Solutions and Tools to Prevent Devastating Malware
Custom malware frequently goes undetected. According to Forrester Research, the best way to reduce risk of breach is to deploy file integrity monitoring...
Streamline Compliance and Increase ROI
Streamline, simplify, and automate compliance related activities; especially those that impact multiple business units. This white paper from NetIQ, outlines solutions that will...
X-Ray of the PCI Process-4 Proactive Steps
This white paper from Forrester Research Inc., helps break PCI into understandable components. Security and risk professionals will gain knowledge and insight into...
All Macintosh White Papers
Macintosh Webcasts
Optimizing Networks for the Cloud
Join guest speaker, Rohit Mehra, IDC Director of Enterprise Communications Infrastructure, to explore current trends, discuss best practices for optimizing Data Center and...
Apps QuickStart Series Part 2: Designing and Deploying SQL Server on VMware vSphere
Download this webcast to learn about the design considerations for virtualizing SQL workloads, performance and scalability information and high-availability options, as well as...
Apps QuickStart Series Part 1: Designing and Deploying Exchange 2010 on VMware vSphere
Download this webcast to learn the virtual hardware design considerations for Exchange 2010, deployment using the building block approach, options for high-availability and...
Customer Spotlight: How IPC The Hospitalist Company Implemented Oracle on VMware
Have you been looking to hear about customer's experiences with the new VMware vCenter Site Recovery Manager product? View this webcast to learn...
Virtualize Business-Critical Applications with Confidence
Virtualizing business-critical applications has become a key focus for organizations as they move along their virtualization journey. With the launch of VMware vSphere®...
All Macintosh Webcasts
Newsletter Sign-Up

Receive the latest news test, reviews and trends on your favorite technology topics

Choose a newsletter
  1. View all newsletters | Privacy Policy
IT Jobs