Privacy-conscious Apple suffering leaks in China

Three Foxconn employees have been arrested for selling iPad 2 info, while photos of alleged iPhone 5 prototype have emerged in China

Outsourcing to countries like China may cut a company's employment and manufacturing costs, but those savings come at a price, a lesson that Apple continues to learn the hard way through its controversial relationship with Foxconn.

According to Chinese-language news website, reports, three employees at Foxconn, the company that manufactures Apple's array of iProducts, were arrested at the end of last year for leaking iPad 2 design information to accessory companies in China. Police charged the trio with violating the company's trade secrets on March 23 of this year. According to the report, companies were able to use the leaked information to produce and sell protective cases for the iPad 2 before its launch.

The revelation inevitably raises the question as to what other information about the iPad 2 or other Apple products may have fallen into the hands of competitors. One must also wonder what steps Apple, a company famous for obsessively guarding its secrets, will take to prevent future leaks.

This week, also published photos of an iPhone 5 prototype that reportedly leaked from somewhere in China.

Apple has already suffered PR problems stemming for its relationship with Foxconn, due in part to the spate of suicides at the company last year. Apple isn't the only hardware company that does business with Foxconn, and Foxconn has since improved its working conditions and wages in an effort to boost company morale and polish its reputation.

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