Xiaomi Security Concerns Fanning Old Flames in India

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November 30, 2014 by ...

Headlines:
1-‘Indian Air Force to ban Xiaomi phones.’

2-‘Chinese handset maker Xiaomi covertly shipping user data back to Beijing, India expresses concern.’

3-‘India to check all Chinese telecoms equipment for spyware’

Xiaomi is fast causing concern amongst its customers over security lapses and lack of concern for user privacy. As a consequence many countries are considering banning their kit. The first two bylines highlight this, but what about the third?

Chinese tech and Indian concerns

On June 9, 2010, the Indian government was so concerned with data security and Chinese hardware that they were to begin, ‘Appointing auditors to check that all telecoms equipment imported from China is free of software designed to monitor data transmissions.

The move comes after Indian authorities threatened to bar Chinese businesses from selling equipment in India because of fears of spyware, according to US reports.’ Link

Huawei effect
This concern was spurred on in great part by Concern over Huawei and ZTE gear. Both Chinese companies have deep contacts with the communist party in Beijing which is not in and of itself a bad thing. The problem, however, is that it has allegedly been proven that Huawei roots backdoors into its systems and accesses them at will. They supposedly do this at the behest of Beijing, meaning they are not just another private telecommunications company. It is alleged that the NSA had proof of this and the Snowden revelations tangentially proved this.

For their part, Huawei seems to have done little to improve their image. A few weeks ago Huawei allegedly hacked into the emails of South Sudanese governmental officials, which is bad enough. But what they did after that was just plain stupid. Huawei employees then posed as those officials and sent emails under their names! No shit, can you believe it?

Apparently Huawei had lost out on bids and was looking for answers. In order to find them, Huawei decided to pose as Sudanese civil servants and ask for clarification. I don’t know if it was their horrible English that gave them away, but they were caught.

Huawei, apparently has not learned a lesson from being black balled years before.

Et tu Xiaomi
Which bring us to Xiaomi, another Chinese firm with a short but sketchy history.

Security concerns abound on Xiaomi, its handsets and preacrices. Xiaomi has done little to avert backlash from their security faux pas and is in great part to blame. The Indian Air Force is considering a ban on Xiaomi kit due to this and several other countries are willing to do the same.

It is a fact of marketing that it is harder to dispel a myth about a company than to create a new image of one. This spells trouble for Xiaomi. As stated, they are young, but are raising concerns about security in markets they do not even directly serve.

India, for example, is their largest foreign customer and the Modi government is justifiably concerned. For their part, Xiaomi has begged forgiveness and stated they would store user data on Indian soil. This seems like a half-hearted attempt at shoring up its already tarnished image.

Xiaomi backlash, more to come
It is painfully obvious that Xiaomi is undergoing growing pains. They jumped from a nobody to number three producer in the world. This was due, in great part, to Xiaomi’s success on the Chinese mainland. More recently, sales were buoyed by the Indian market but are now slowing down.

Part of this has to do with component sourcing issues and Xiaomi’s lack of focus. It is also spurred on by security concerns and lack of trust. Think of it like this, Xiaomi just started selling handsets overseas this year and already India, Singapore, Hong Kong, China, Vietnam, Taiwan and India are reluctant to trust their kit. That speaks volumes, especially when Xiaomi gear is not directly being marketed in most of those places.

Xiaomi must decide to follow Huawei and eschew customer needs for corporate gains and political support from Beijing (the communist party has mandated that all officials use Huawei phones), or do the right thing and let data be free. If their past tells us anything, it seems like Xiaomi will do the former.

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