5 Tech Companies Suffering ‘Bug’ Infestations

by Anthony John Agnello | October 12, 2011 11:53 am

Never forget the first rule of the technology business: Things break. Machines stop working, machines behave in ways that both the manufacturer and consumer don’t want them to, and malicious elements try to use those machines to gain access to both consumer and manufacturer information. Bugs happen, and no company’s ever completely safe.

Apple (NASDAQ:AAPL[1]) might be the most valuable technology company in the Western world, but even it isn’t immune to the rule. Take the best-selling iPhone 4 as a prime example. Some 600,000 people pre-ordered that device ahead of its release in June 2010 (a record just beaten by the iPhone 4S[2]), and each one of those buyers received a device with a faulty antenna that caused calls to drop if the phone was held too tightly[3].

So who’s taking flak from rule No. 1 now? Here are five tech companies suffering “bug” infestations:

Research In Motion

It’s bad enough that Research In Motion (NASDAQ:RIMM[4]) has watched its share of the global smartphone market shrink from nearly 19% in 2010 to less than 12% as of this August[5]. It’s bad enough that shares in the once-powerful company have fallen from $70 in February to $24 as of Wednesday. So the last thing RIM needed was technical problems for its BlackBerry services[6] in most of the world, affecting some 70 million users.

Across Monday and Tuesday, BlackBerry users in the Middle East, Latin America, Africa and Europe reported problems using the BlackBerry Messenger[7] service, and many were cut off from the Internet entirely. Although the company claimed the problems were fixed by Monday night, they persisted into Tuesday in the U.K. and the United Arab Emirates.

HTC

The Taiwanese smartphone maker has been making waves in the U.S. this year thanks to the success of phones like the HTC Thunderbolt. As of the second quarter, HTC held a 14% share of the U.S. smartphone market[8] — the largest of any company manufacturer using Google‘s (NASDAQ:GOOG[9]) Android operating system.

It was especially unfortunate, then, that the company released an update for its phones at the beginning of October that threatened the privacy of millions of users. The flawed update left users of the HTC Thunderbolt, EVO 3D/4G and Sensation phone models vulnerable to malicious information tracking through apps. Users’ text messages, email accounts, phone records and GPS location history were vulnerable to being recorded[10]. The breach also looks bad on Google, considering that HTC’s devices are the most popular Android handsets around.

Microsoft

HTC hasn’t been the only thorn in Google’s side this fall. Microsoft‘s (NASDAQ:MSFT[11]) Microsoft Security Essentials program in Windows began going through users’ computers and deleting the Google Chrome web browser Sept. 30. The program mistakenly identified Google’s app, a competitor for Microsoft’s own Internet Explorer, as malware and removed it from users systems[12]. The incident didn’t cause a blip for Microsoft shares, but it certainly gave a great many consumers pause.

Sony

Sony (NYSE:SNE[13]) has had a rough year[14] so far. The PlayStation Network — Sony’s online gaming network linking users on the PlayStation 3 and PSP gaming machines, as well as other devices — was hacked, and the personal details from 77 million user accounts were stolen. The company reported a loss of $191 million for that quarter and spent an additional $170 million to offer users fraud insurance and free content.

The problems continue. The company announced Tuesday that it experienced yet another security breach[15]. An unknown party led a hacking attempt on both the PlayStation Network and the Sony Online Entertainment network, trying to access 93,000 accounts using stolen information.

The attack demonstrates that Sony still is a target, but the relatively small size of the attack is a small reassurance, and Sony’s immediate announcement of the problem shows the company is hoping to bolster consumer trust through transparency.

United States Air Force

OK, General Atomics Aeronautical Systems is not one of the many publicly traded weapons manufacturers working with the United States military, but private or not, the recent troubles affecting that company’s Predator drones show that not even monumentally dangerous devices are safe from hackers.

A Friday report at Wired detailed how the ground control stations used to pilot the drones at Creech Air Force Base in Nevada have been infected with “keylogger” viruses[16]. These viruses record user inputs into the machine. The viruses have been purged from the system multiple times but, according to Wired‘s source, they keep coming back.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello[17] and become a fan of InvestorPlace on Facebook[18].

Endnotes:

  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. beaten by the iPhone 4S: https://investorplace.com/2011/10/monday-apple-rumors-iphone-4s-shatters-pre-order-mark-aapl-vz-t-s/
  3. that caused calls to drop if the phone was held too tightly: https://investorplace.com/2010/07/apple-inc-offers-free-iphone-cases-to-assuage-antenna-angst/
  4. RIMM: http://studio-5.financialcontent.com/investplace/quote?Symbol=RIMM
  5. to less than 12% as of this August: http://www.gartner.com/it/page.jsp?id=1764714
  6. technical problems for its BlackBerry services: http://www.nytimes.com/2011/10/12/technology/blackberry-outages-recur.html
  7. BlackBerry Messenger: http://Smartphones%20Hacking%20Away%20at%20Telecoms%E2%80%99%20Revenue%20Legs
  8. 14% share of the U.S. smartphone market: http://blog.nielsen.com/nielsenwire/online_mobile/in-u-s-smartphone-market-android-is-top-operating-system-apple-is-top-manufacturer/
  9. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  10. vulnerable to being recorded: http://www.bbc.co.uk/news/technology-15171106
  11. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  12. and removed it from users systems: http://venturebeat.com/2011/09/30/baleted/
  13. SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
  14. has had a rough year: https://investorplace.com/2011/08/consumer-outrage-internet-company-costs/2/
  15. that it experienced yet another security breach: http://blog.eu.playstation.com/2011/10/12/an-important-message-from-sonys-chief-information-security-officer/
  16. have been infected with “keylogger” viruses: http://www.wired.com/dangerroom/2011/10/virus-hits-drone-fleet/
  17. @ajohnagnello: http://twitter.com/#%21/ajohnagnello
  18. InvestorPlace on Facebook: http://www.facebook.com/pages/InvestorPlace/178906405484848

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