China Becoming the World's Malware Factory

With China's economy cooling down, some of the country's IT professionals are turning to cybercrime, according to a Beijing-based security expert.

Speaking at the CanSecWest security conference last week, Wei Zhao, CEO of Knownsec, a Beijing security company, said that while many Chinese workers may be feeling hard times, business is still booming in the country's cybercrime industry. "As the stock market dropped like a stone, a lot of IT professionals lost lots of money on the stock market," he said. "So sometimes they sell 0days," he said, referring to previously unknown software bugs.

"China is not only the world's factory, but also the world's malware factory," Zhao said.

China's red-hot economy has been hit by the global recession, and while the economy is still growing, technology companies such as Intel, Motorola and Lenovo have all laid off employees in China in recent months.

Last December, Chinese hackers found a previously undisclosed 0day vulnerability in Internet Explorer. When employees of Zhao's company inadvertently published details of the bug on a public forum, Microsoft was sent scrambling to patch the issue.

Chinese hackers tend to focus on hacking software that runs on the desktop, rather than the server, because the underground market pays big money for client-side bugs, which are then often used to install malicious software on millions of desktops.

While recently investigating a single, but widespread attack, Zhao's researchers counted more then 4 million infected computers over a one-day period.

China has an estimated 250 million computer users, so attackers can do pretty well targeting only Chinese systems. "We have a huge amount of users and a very big local market," he said.

Hackers have had a lot of success launching widespread 0day attacks against programs like RealPlayer and Adobe Flash, but they have also hit local Chinese programs, including Xunlei, QQ and UUSee.

Security is often little more than an afterthought for local software developers, Zhao said.

"In China you have all this third-party software that's very popular, but which is much less secure than Microsoft software," said Wayne Huang, CEO of Web security consultancy Armorize, which has research labs in Taiwan. Not only are exploits for Chinese programs like QQ much easier to find -- software companies tend to take much longer to patch the exploits. "QQ is not going to be able to react as quickly as Microsoft," he said.

Cyberattacks in the region can be ingenious. Earlier this month, criminals redirected Taiwanese traffic to the tw.msn.com and taiwan.cnet.com Web sites using what's known as a non-blind TCP spoofing attack.

In this attack, the hackers managed to compromise a switch in Singapore, the country where the Web sites were hosted, Huang said. They then monitored the switch for traffic and when they saw packets looking for the MSN and Cnet Web sites, they sent back spoofed packets that redirected the victims to a malicious Web site, which launched attack code.

The attack lasted about 10 days, in part because security experts had such a hard time figuring out how it was working. "No attack that I have known has persisted for such a long time," Huang said.

He agreed that the economic downturn has had an effect on computer security. "People are more reluctant to disclose vulnerabilities because now they sell them," he said, and Chinese newsgroups are now awash with postings about hackers receiving large payouts for their exploit codes.

"I think the downturn has definitely made the crime scene a lot more active," he said.

(PC world)

Lenovo plans to lay off 200 staff in Beijing

HONG KONG, Jan 2 - China's Lenovo Group, the world's No.4 personal computer maker, plans to lay off 200 employees at its headquarters in Beijing as it fights tough economic conditions, an influential Chinese magazine said.

Of those redundancies, only about 10 would be senior executives, Chinese-language Caijing magazine reported on its online edition, quoting unnamed company insiders.

Lenovo had also suspended hiring and planned to sack contractors at its factories, Caijing said.

Lenovo, which acquired IBM's PC arm in 2005 for $1.25 billion, making it once a model for ambitious Chinese companies expanding abroad, is expected to announce a major restructuring plan on Jan. 8 including changes of its top management, Caijing reported, quoting unidentified sources.

Lenovo's head of Japan market had resigned, due partly to slow business growth in Japan, Caijing said, adding Japan and India were Lenovo's two focuses in the Asia-Pacific region.

Friday was a public holiday in China and company officials were not available for comment.

Last week, China Business News, an influential Chinese-language business daily, said Lenovo might merge its Greater China and Russia operations with its Asia-Pacific operations.

David Miller, president for the Asia Pacific region, is expected to resign and Chen Shaopeng, now president of the Greater China region, would head the merged operations, China Business News said.

Lenovo posted a 78 percent plunge in net profit to $23.44 million for the quarter ended in September, its worst performance since its acquisition of IBM's PC business in 2005.

(Reuters)

OKI Expands its Keyboard Production Site in China

TOKYO, Dec 17, 2008 -- Oki Electric Industry Co., Ltd. (TOKYO:6703) today announced it has expanded its production site at Oki Electric Technology (Kunshan) Co., Ltd.(OKN), a wholly-owned subsidiary that manufactures and sells keyboards, and has started production at the new site. With the expansion, OKI will double its production capacity to 7 million keyboards per year by the fiscal year ending March 2011.

"We are pleased to expand our keyboard manufacturing site, which we have operated since June 2004. With the rapid growth in the laptop PC market, our business has also expanded steadily, and our space and production capacity was getting close to the limit, so we decided to expand the site," said Sadao Tachibana, President of OKN. "In addition to our conventional mobile PC keyboards, we will expand production by developing value added products, and strengthen our sales activities in the Japanese, Chinese, Taiwanese and Korean markets."

OKI's keyboards are highly valued by its customers due to its high level of quality and unique technology that enables light and thin keyboards to be built without losing its basic usability. With such advantages, OKN currently holds the top market share worldwide in the mobile PC keyboard market. The new production site, located next to the current site, is a one-story building with a total floor space of 1,680 m(2), which provides more than double the production space of the current site.

(BUSINESS WIRE)

Lenovo to enter U.S. consumer PC market

• it features by new software which can recognize users' faces, allowing them to log in to their PC and various applications without passwords.

• to face fierce competition with HP, Dell, Acer, Asustek in the U.S. consumer PC market,as well as in Asia and Europe

SAN FRANCISCO, China's Lenovo Group Ltd introduced its first consumer computers in the United States on Wednesday, expanding in a region it entered in 2005 with the purchase of IBM's PC business.

The unveiling of three new notebook computers with advanced features is part of a broader expansion by Lenovo into the global consumer PC market. The company also plans to sell the new consumer computers in France, Russia, South Africa, India, Australia, Singapore and Malaysia, among other markets.

It already sells consumer computers in China, India and Singapore, but is hoping the new products will help boost its global market share and brand recognition. In the United States, its sales have been limited to businesses.

Lenovo is introducing the new computers as it faces fierce competition from Taipei-based Acer Inc, which sells personal computers to consumers through Best Buy Co. and other major U.S. retailers, as well as in Asia and Europe. Acer bought U.S.-based Gateway Inc in October, part of an effort to edge out Lenovo as the world's third-largest PC maker.

Among the Lenovo computers' features is software that recognizes users' faces, allowing them to log in to their PC and various applications without passwords. The machines also have multimedia technology that lets users listen to music, play videos and view pictures. They come in a variety of colors including red, blue and black.

Lenovo, which had third-quarter revenue of $4.43 billion, plans to start selling one of the new computers in the United States this week for $799 and a second toward the end of January for $1,199. The third model, whose price Lenovo has not yet released, goes on sale in April.

Notebook computers are typically more expensive than similarly configured desktops and carry greater profit margins. They are also the fastest-growing segment of the consumer PC market, with an estimated 21 percent increase in U.S. unit sales in 2007, compared with a 3 percent projected decline in desktop sales, according to market researcher IDC.

Lenovo spokesman James Baussmann said the company is not disclosing sales projections or profit margins for the new products or how much market share it hopes to grab with them.

Lenovo, China's largest PC maker, is among several companies introducing consumer laptops for the U.S. market at the Consumer Electronics Show (CES) in Las Vegas, the industry's largest U.S. trade show, which starts next week.

Acer and Asustek Computer Inc also have new products lined up for the U.S. market that they will unveil at the event. The three Asian companies are trying to develop globally recognized brands and compete with Hewlett-Packard Co, Dell Inc and Apple Inc , the dominant U.S. PC makers.

Asustek, based in Taipei, has less than 1 percent of the U.S. PC market, according to market researcher Gartner Inc.

Lenovo has been growing in the United States through sales of PCs to business clients, many of whom had earlier bought computers from International Business Machines Corp. Lenovo bought IBM's PC business for $1.25 billion in 2005.

The company said it plans a marketing campaign focusing on how its consumer PCs help people capture and transform their ideas, but declined to say how much the campaign would cost.

Lenovo's U.S. notebooks will carry its IdeaPad brand, derived from Lenovo's ThinkPad-branded business laptops that it obtained through the IBM deal.

"To date, we have not made a major entry outside the consumer space outside China," Craig Merrigan, Lenovo's vice president of global consumer marketing, said in an interview. "This represents a significant move for us into a major space."

ASUS, HP

Asus Computer International, the Taiwanese company's U.S. business, is launching a cell phone with satellite navigation technology at CES. It will also unveil a consumer laptop with 1 terabyte, or 1,000 gigabytes, of data storage, the first-ever such device, according to the company.

The notebook and other laptops are part of Asustek's attempt to grab a larger share of the consumer notebook PC market in the United States, where it now has a share of less than 1 percent.

Hewlett-Packard, the world's largest PC maker, also plans to introduce new consumer machines at CES.

They include a light-weight notebook with a rotating screen for entertainment, a high-powered desktop computer that also functions as a television and gaming device and an entertainment hub that lets users download movies, videos, and songs and stream them to TVs and other devices.

The Palo Alto, California-based company also plans to introduce two liquid-crystal display TVs, a 42-inch model and a 47-inch version.

Reuters