The Ying and Yang of Insecurity Threats

Intelligence Agencies Banned Lenovo PCs After Chinese Acquisition

By Mathew J. Schwartz

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Since at least 2006, personal computers manufactured by Lenovo have been banned from being used to access classified government networks in the United States, as well as in Australia, Britain, Canada and New Zealand.

That revelation was first reported by Australia's Financial Review (AFR), which said the blanket ban on using Lenovo's equipment to access "secret" or "top secret" government networks stemmed from fears that the Chinese government may have altered the equipment's firmware or added back doors to the hardware to allow it to be monitored by its own espionage agencies.

Those fears started after Beijing-based Lenovo acquired IBM's personal computing division for $1.25 billion in 2005.

In 2006, the U.S. State Department purchased 16,000 Lenovo PCs, at least 900 of which were to be used on classified networks. But after facing pressure from Congress, the State Department said that it would restrict the devices for use on "unclassified" networks and alter future procurement policies to reflect that change.

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NSA Revelations Kill IBM Hardware Sales in China
By Wolf Richter

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The first shot was fired on Monday. Teradata, which sells analytics tools for Big Data, warned that quarterly revenues plunged 21% in Asia and 19% in the Middle East and Africa. Wednesday evening, it was IBM’s turn to confess that its hardware sales in China had simply collapsed. Every word was colored by Edward Snowden’s revelations about the NSA’s hand-in-glove collaboration with American tech companies, from startups to mastodons like IBM.

.... there was nothing to spin in Asia-Pacific, where revenues plunged 15%. Revenues in IBM’s “growth markets” dropped 9%. They include the BRIC countries – Brazil, Russia, India, and China – where revenues sagged 15%. In China, which accounts for 5% of IBM’s total revenues, sales dropped 22%, with hardware sales, nearly half of IBM’s business there, falling off a cliff: down 40%.

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