Apple's iPhone Fingerprint Scanner Allegedly Hacked: Do Investors Care?
The Chaos Computing Club, a highly respected German hacking group, posted a video on its website depicting someone accessing an iPhone 5S with a fabricated fingerprint.
It didn't take long for a potential victor to surface. Yesterday, a video was posted to IsTouchIDHackedYet.com by the large and influential German hacking group Chaos Computing Club. It depicted someone accessing an iPhone 5S with a fabricated fingerprint. (Details on the process used can be found here.) As of now, DePetrillo and Graham are investigating the video further, but they may have found a winner, and that is, of course, very bad news for Apple (NASDAQ:AAPL).
Apple's fingerprint scanner was probably the most hotly anticipated feature of its new high end phone, the 5S. Along with a powerful A7 chip and 64-bit processor, the biometric scanner is what sets the new iPhone apart from its competitors, particularly from similarly high-end designs by Samsung (OTCMKTS:SSNLF), running Google's (NASDAQ:GOOG) Android operating system.
In an online post, a spokesperson for the CCC, Frank Rieger said, "We hope that this finally puts to rest the illusions people have about fingerprint biometrics. It is plain stupid to use something that you can't change and that you leave everywhere every day as a security token."
Despite this potential setback (I say potential because the video and the claim from CCC has to be verified), as of the time of this writing, Apple's stock is currently up 4.43% to $488.10 after strong initial sales of the new iPhones: the 5S and 5C sold 9 million units over their first three days of availability, up from the 5 million that the iPhone 5 moved over the same time period. Moreover, 200 million iOS devices were updated to iOS 7, the company's new operating system.
In a statement this morning, Tim Cook said of the new iPhone debut:
Will the fingerprint hack prove a significant detriment to ongoing sales of the 5S? Or will Apple find a way to overcome this news?
This is our best iPhone launch yet -- more than 9 million new iPhones sold -- a new record for first weekend sales. The demand for the new iPhones has been incredible, and while we've sold out of our initial supply of iPhone 5S, stores continue to receive new iPhone shipments regularly. We appreciate everyone's patience and are working hard to build enough new iPhones for everyone.
One security expert, Charlie Mill, the co-author of the iOs Hacker's Handbook, described the method shown in the video as a "complete break" of the Touch ID security. As he said to Reuters, "It certainly opens up a new possibility for attackers."
We'll be following the story to see how it all plays out.
Follow me on Twitter: @JoshWolonick and @Minyanville
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