Apple buys stolen iPhone parts on the black market in bid to beat leakers

Apple was forced to buy 30,000 iPhone 5c enclosures on the Chinese black market after they were stolen from a manufacturing plant just before the new model went on sale in 2013, according to a report at The Outline.

“Workers will stash parts in bathrooms, clench them between their toes, throw them over fences, and flush them down the toilet for retrieval in the sewer,” an Apple security specialist is reported to have told company employees.”We had 8,000 enclosures stolen a long time ago by women putting it in the underwire of their bra. They’re going to great lengths to steal this stuff. But it’s not just enclosures. It’s also anything that reveals product prior to announce.”

An internal briefing at Apple earlier this month obtained by The Outline sheds new light on how far the most valuable company in the world will go to prevent leaks about new products.  According to the hour-long presentation, Apple’s Global Security team employs an undisclosed number of investigators around the world to prevent information from reaching competitors, counterfeiters, and the press, as well as hunt down the source when leaks do occur.

Some of these investigators have previously worked at US intelligence agencies like the National Security Agency (NSA), law enforcement agencies like the FBI and the US Secret Service, and in the US military. The briefing, titled “Stopping Leakers – Keeping Confidential at Apple,” was led by director of global security David Rice, director of worldwide investigations Lee Freedman, and Jenny Hubbert, who works on the global security communications and training team.

Historically, Apple’s biggest leaks happened when parts were stolen from factories in China. However, Rice says, Apple has cracked down on leaks from its factories so successfully that more breaches are now happening on Apple’s campuses in California than its factories abroad. “Last year was the first year that Apple [campuses] leaked more than the supply chain,” Rice tells the room. “More stuff came out of Apple [campuses] last year than all of our supply chain combined.”

Steve Jobs ran a notoriously secretive ship during his tenure as Apple’s CEO, and in 2004 the company even unsuccessfully tried to subpoena a group of tech bloggers to unmask their sources. In the years since his successor Tim Cook pledged to “double down” on secrecy, Rice’s team has got better at safeguarding enclosures. “In 2014 we had 387 enclosures stolen,” he says. “In 2015 we had 57 enclosures stolen, 50 of which were stolen on the night of announce, which was so painful.” In 2016, Rice says the company produced 65 million housings, and only four were stolen.