FBI signed $15 million contract with Apple vendor, Cellebrite; parent company’s stock soars

Fortune reports: The U.S. government’s announcement Monday that it hacked into the San Bernardino terrorist’s iPhone ended the FBI’s legal feud with Apple. But while many observers thought the incident left both the FBI and Apple looking foolish, there does appear to be a winner emerging from the case.

Shares of Suncorp, a Japanese technology company traded on the Tokyo stock exchange (ticker: 6736), soared 17% on Tuesday following the government’s court declaration that it “successfully accessed the data stored on [Syed] Farook’s iPhone.” In all, Suncorp’s shares have more than doubled in the six weeks since February 16, when Apple published its letter refusing to help the FBI.

Suncorp, which specializes in mobile data transfer as well as equipment for a popular Japanese pinball-like game called pachinko, owns Cellebrite, the Israel-based company that reportedly helped the FBI crack the iPhone.

Apple’s stock, meanwhile, was up just about 2% Tuesday afternoon, despite the fact that it is now free of legal expenses relating to the FBI case as well as the technological burden the government tried to impose.

Suncorp’s shares started rising last month, and really took off after the government said last Wednesday that an “outside party” had demonstrated “a possible method for unlocking” the iPhone. An Israeli newspaper quickly identified the unnamed company as Cellebrite, a government contractor that makes a mobile forensic device for extracting and decoding data from smartphones and tablets. Since then, Suncorp’s stock has risen nearly 40%, while Japan’s Nikkei 225 stock market index has been basically flat, and fell slightly on Tuesday.

The odd thing about the company’s dramatic stock rise is that neither the FBI nor Suncorp has confirmed the company was involved in unlocking the phone. In fact, the FBI has said very little so far about how it might have cracked the iPhone. [Continue reading…]

The Daily Beast reports: The FBI has said practically nothing about the “tool” that helped the FBI get inside the phone, as a U.S. law enforcement official called it in a hastily arranged press conference on Monday evening. Nor would the official say whether investigators might use it again on the dozen or so other iPhones the FBI is reportedly trying to gain access to, or whether the bureau would share the tool with local law enforcement agencies, who are believed to have hundreds of phones just waiting to be cracked.

“I think the best answer I can give you is it’s premature to say anything about our ability to access other phones,” said the official, who discussed the case with reporters on condition of anonymity and said almost nothing about where the FBI will go from here.

But he didn’t have to. Comey’s earlier remarks, coupled with the government’s decision to drop the warrant request, sent a message to other tech companies: Work with us, or don’t. We’ll get what we need without you.

Notably, the U.S. official didn’t say whether the FBI would disclose its newfound technique to Apple, which has a vested interest in protecting the security and privacy of its customers. But Cellebrite, an Israeli company, has been identified in some news accounts as the company that came to the FBI’s rescue. It signed a contract with the bureau worth more than $15 million last week.

In other words: The American government may have used foreign hackers to crack the signature product of America’s top technology company.

But it’s hard to imagine Apple didn’t have some idea what was coming. One of Cellebrite’s other clients is Apple itself. [Continue reading…]

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