In response to a recent push for cyber-security measures from the Chinese government, Apple has become the first foreign company to yield to these new laws which give far too much access to the Chinese government. This has come after the United States president Barack Obama has come out against China's request, calling it a way to snoop on users. The US president went so far as telling Reuters that China is "going to have to change if they are to do business with the United States."
Just what are these new demands by the Chinese government? The New York Times reports that at the end of last year the Chinese government laid all of this out in a 22 page document. The ruling is meant to effect anyone selling computer equipment to Chinese banks (though it is speculated that soon, via the passage of more stringent counter-terrorism laws, the law will apply to all foreign technology firms wanting to do business in China), and it specifically asks for access to source codes, submission to auditing by Chinese officials, and requests the construction of back doors into hardware and software alike. The purpose of all this would be to strengthen national cyber security within China, specifically within Chinese industries. In the same article, the NYT rightly predicted that "...the Obama administration will almost certainly complain that the new rules are protectionist in nature, the Chinese will be able to make a case that they differ only in degree from Washington's own requirements."
Unfortunately, Apple, the largest US based manufacturer of smartphones, not only has agreed to China's demand, but did so back in January of this year. Apple has yet to release a statement declaring exactly what it was that they have agreed to, but when one considers that Apple is currently the best selling smart-phone in China, despite having some extraordinarily fierce competition there, one can perhaps better understand why a negotiation was reached.
The consequences of Apple's actions may be far reaching. As of yet, most other technology firms have yet to yield to China's demands, and have began lobbying against the Chinese regulations. But it remains to be determined whether these companies resists or not, and there certainly does not seems to be much optimism