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China Imposes Prison Terms in iPad Value Chain Information leak

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In case you might have missed the Wall Street Journal report last week (paid subscription may be required) a Chinese court sentenced three people to prison terms for collaborating to steal information from a supplier to Apple’s iPad2 products. In this case, the head of a Chinese electronics accessories manufacturing firm Shenzhen MacTop Electronics Co. allegedly paid a former employee of Hon Hai Precision Industry research and development employee for information relative to the iPad2 back cover, in order to get a jump on producing protective cases for this device. Xiao Chengsong was sentenced to 18 months in prison and fined 150,000 yuan. Lin Kecheng, the former Hon Hai employee was sentenced to 14 months in prison and fined 100,000 yuan.

Supply Chain Matters has commented often on the secrecy surrounding Apple’s vale-chain and how any and all information leaked from various nodes of Apple’s supply chain are often valuable to financial, competitor and other manufacturing groups.  In March, a former Apple Supply Manager pleaded guilty to 23 counts of felony and fraud in connection with an alleged kickback scheme involving multiple Apple suppliers. The recent Galleon trial involving the exchange of massive amounts of insider information also included supply chain related sources.

This latest verdict appears to be sending a message from China’s legal system that leaks are to be taken seriously.

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