Capital One Hack Hits the Reputation of a Tech-Savvy Bank; Apple’s Revenue Rises Despite Continued iPhone Slump

  • Is cloud still a safe place for your data?
  • Long before Silicon Valley became enamored with financial-technology startups and the promise of using better data and algorithms to remake banking, Capital One Financial Corp. COF -5.89% was already blazing that trail.
  • Now, the data breach affecting 106 million past, present and prospective customers threatens to upend its long-held reputation for digital prowess.
  • Capital One leap into cloud computing about five years ago, making it one of the first big banks to migrate data and applications onto Amazon’s cloud services. That decision could prove to be a liability. The hacker accused of breaking into Capital One’s customer data, is a former employee of Amazon Web Services Inc.,
  • The hack is likely to put Capital One on the front line of concerns about what the trade off is for banks looking to emulate the practices of tech companies, which themselves have been criticized over their handling of consumer information.

• Apple Inc. countered another quarter of weak iPhone sales with strong revenue growth from its supporting businesses, the latest in a series of positive results from Silicon Valley’s tech titans.
• Profit slid for the third straight quarter, dropping 13% to $10.04 billion, though per-share earnings of $2.18 exceeded analysts’ expectations.
• Apple offset a 12% decline in iPhone sales during the period with revenue growth in every other area of its business, including iPad and Mac. Sales from services—a closely watched business that includes App Store sales, mobile payments and device insurance—rose 13% in the period, the smallest quarterly increase since 2015.
• China’s economic doldrums also hurt Apple, which counts on the country for about a fifth of its revenue. Sales in Greater China, which includes Hong Kong and Taiwan, sank 4%.