Xiaomi addresses cloud privacy scare in Taiwan

Firm releases statement, software update to stop data leaks for users

Beijing-based handset maker Xiaomi Inc has issued a statement after being embroiled in controversy in Taiwan regarding the leakage of user data over its cloud messaging service, but analysts said on Monday the issue won't trouble the up-and-coming Chinese manufacturer too much.

Recent Taiwan media reports claimed some local Xiaomi users were concerned that their personal data including their phone numbers had been transmitted back to Xiaomi's mainland servers over a free cloud messaging service without being authorized by the users.

In response, the company posted a statement Sunday on Xiaomi's Taiwan Facebook page saying that all of its Internet services are compliant with the company's privacy policy which prevents automatically uploading of users' private information and files without permission.

Xiaomi said in the statement that it places a lot of emphasis on such concerns and has been working on an over-the-air software update, which it issued on Sunday, that stops the cloud messaging service from automatically being activated on users' phones.

The update also adds a feature that encrypts the phone number used to enable the messaging service, which Xiaomi said equips users with an extra layer of protection.

The same statement was posted on the company's Hong Kong Facebook page on Sunday. But its official Weibo account has made no mention of either the privacy scare or its software update so far.

Xiaomi Vice President Hugo Barra also wrote a blogpost on Google Plus on Sunday, saying "we apologize for any concern caused to our users and Mi [Xiaomi] fans."

He also confirmed the cloud messaging will be an opt-in service and will "no longer automatically activate users."

"The messaging service actually has nothing to do with user data leakage, as the phone number is simply used to identify the users and allow them to access the service," Li Lei, a PR manager with Xiaomi, told the Global Times on Monday.

When asked whether Xiaomi's mainland users are covered by the update, Li said he has no knowledge of the exact situation, but "Hong Kong and Taiwan users and their mainland counterparts will definitely be treated equally."

There is a theoretical loophole in Xiaomi phones' security system if the company's servers cannot effectively deter hackers from accessing users' phone numbers that are not encrypted, Tang Wei, a mobile security expert at Web security firm Beijing Rising Information Technology Co, told the Global Times on Monday.

But it is more of a strategic issue rather than a security scare as the use of cloud services would naturally involve uploading and backing-up data, Tang noted.

For Tina Zhang, a fan of Xiaomi products, the revelation has taken her by surprise, although she will not be scared off by the claims.

"I hope the company would make an announcement about the issue if it turns out to be true, and unveil solutions [for its mainland users]," the 27-year-old resident of Shenyang, Northeast China's Liaoning Province, told the Global Times on Monday.

Still, she said she won't stop buying from the brand simply due to the privacy scare as "it is not only Xiaomi that has come under the spotlight over security concerns."

Apple Inc also said in July that personal data including photos and text messages can be extracted from its iPhones through techniques that had never been publicized.

On July 31, Taiwan's Fair Trade Commission said that Xiaomi's local branch was fined NT$600,000 ($20,002.74) for faking online sale figures of its budget phone in the market.

Despite a slew of media coverage that may slightly dent Xiaomi's image, the company is expected to retain its clout in the mainland, Wang Jun, an industry analyst with Beijing-based research firm Analysys International, told the Global Times on Monday.

UK-based market research firm Canalys said on August 4 that Xiaomi dethroned Samsung Electronics to be the top smartphone vendor in the mainland in the second quarter. However, Analysys International data had Samsung as the top smartphone vendor in the mainland with 15.4 percent of market share in the second quarter and Xiaomi second with 13.5 percent.