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Apple's Hack Hurts but It's Not Fatal (Update 1)

Updated from 7:58 a.m. EDT to provide developer comments in the seventh paragraph.

NEW YORK ( TheStreet) -- Apple (AAPL - Get Report) has been under attack for a lack of innovation, a falling stock price, and concerns that other companies have passed it by. Now, its developers may turn an angry eye towards the tech giant.

Apple confirmed its developer Web site was breached last week as a hacker tried to get personal information from its developers. The company has put out a statement regarding the issue.

Last Thursday, an intruder attempted to secure personal information of our registered developers from our developer website. Sensitive personal information was encrypted and cannot be accessed, however, we have not been able to rule out the possibility that some developers' names, mailing addresses, and/or email addresses may have been accessed. In the spirit of transparency, we want to inform you of the issue. We took the site down immediately on Thursday and have been working around the clock since then.

In order to prevent a security threat like this from happening again, we're completely overhauling our developer systems, updating our server software, and rebuilding our entire database. We apologize for the significant inconvenience that our downtime has caused you and we expect to have the developer website up again soon.

I've put in word to Apple for additional comment on the situation, and will update should I hear back.

This hack is not something Apple needs right now, though I suspect this will be little more than a black eye for the company and not something that is likely to be long-lasting. However, with earnings slated for later this week, Apple needs all the positive attention it can get.

"I'm actually impressed with Apple's openness of what happened," said Apple developer Scott Jenkins, creator of Optionsinsight, in an email. "Facebook has an issue that it denies for months. We live in a world where your data is at risk constantly. At risk means someone is actively trying to acquire your personal info through subversive means. The data that the hacker was able to get at was encrypted which is a situation we live with everyday on our personal devices. If I'm going to be upset I'm upset with those companies that take the head in the sand approach over full disclosure."

Developers are undoubtedly going to be agitated by this, especially as Apple recently announced new versions of its mobile and desktop operating systems, iOS 7 and OS X Maverick. The site allows developers to access the company's developer resources, as well as testing, registering and submitting their own apps to Apple for the App Store. Apple has prided itself on the App Store, as it looks to boost the lead it has over Google (GOOG) in this space.

While this is no doubt embarrassing for Apple, in light of the fact the company has always prided itself on privacy, I don't see this as a major issue provided Apple can remedy the situation soon. If not, then developers -- and investors -- may remember this for a long time to come.

-- Written by Chris Ciaccia in New York

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