Ahead of the Curve: Close tech's black market

The news of counterfeit Intel-based Macs surfacing in Asia shocked me into seeing the magnitude of the piracy/counterfeiting threat. Counterfeit or cloned Macs (I don't know if thieves are bothering to mimic the chassis designs) create the frightening possibility, perhaps even the likelihood, that Apple will gradually be shut out of lucrative new markets. China comes to mind. I can't calculate how many Macs Apple might sell in China, but I know that 40 percent of Apple's current revenue already comes from overseas sales. Organized piracy could eat away at the business Apple is already conducting by making legitimate Macs appear overpriced where knock-offs are readily available. That's already true for Windows, and the situation is not improving.

American computer hardware and software are key exports. Apple, Microsoft, Red Hat, Oracle, and the like don't deserve coddling. They must compete for business in world markets against other players. One of the advantages of new markets is that they create opportunities for smaller nonincumbents to get a foothold. So I'm not preaching protectionism. I am pointing out that negotiating intellectual property protection with other nations -- nations that will be American tech companies' majority source of revenue in decades ahead -- holds diminishing promise of success.

Faced with the likely failure of diplomacy and unwillingness to impose sanctions on countries that present the largest opportunities, the U.S. tech industry has to resort to technical means to protect itself. The only technology we have in our arsenal that affords protection to both hardware and software is the Trusted Computing Platform, manifested in the Trusted Computing Module. It isn't perfect, but it's what we've got. It is at the greatest risk from organized piracy and counterfeiting, but Apple also has the best last-resort that money can buy: Apple has a TPM baked into every Intel-based Mac.

The TPM equips OS X with the power to verify at boot time that, yes, this is a genuine Mac. It can further ensure that its install media hasn't been tampered with, and that no software has wedged itself between the firmware and the OS boot loader to trick OS X into mistaking a clone for a true Mac. What the TPM does for OS X it can also do for Mac applications, which is of great importance to all Mac developers. Apple Vice President Ron Okamoto told me a couple of years ago, prior to the introduction of the Intel-based Mac, that China is incomparably fertile ground for new Mac development. Those new shops won't last if their work "sells" better on the black market than through legitimate channels. Thieves aren't particular; they'll steal from their own countrymen. There's ample proof of that right here in America. No one who buys a Mac clone or runs a cracked copy of Windows or OS X will ever spend a dime on legal software.

To date, Apple has made such gentle use of the TPM that crackers have little trouble unlocking the OS to run on non-Mac x86 hardware. I believe that Apple fears a backlash if it fully exploits the TPM because that would, in the view of some users, give Apple control over what boots from the Mac's internal hard drive.

I see Apple's release of Boot Camp as an effort to stem that controversy before it heats up, proving that the Mac will remain open to non-Apple operating systems no matter how harsh the TPM is on pirates. I have more to say about the TPM and I encourage your feedback. It's my view that we need to use what we've got before criminals use the products of our efforts to lock us out of new markets.

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Tom Yager

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