Apple 'Outraged' Over Photo Hack

Company says there was no system-wide security breach.
7:35 | 09/02/14

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Transcript for Apple 'Outraged' Over Photo Hack
I'm Michelle -- New York -- the financial markets close on Wall Street for this Tuesday September 2 this is story stock. -- one stop grabbing all the attention today. Apple the tech giant's shares hit new all time high. Over rumors that apple wants to replace your credit cards and -- you pay for things with your iPhone but there was some question over Apple's security measures. After provocative photos were released on line at some celebrities including Jennifer Lawrence and Kate Upton. Primary culprit was thought to be Apple's iCloud feature which automatically -- your photos from your iPhone online. But just a short while ago apple released this statement. On the -- when we learned of the -- we were outraged and immediately mobilized Apple's engineers to discover the source. After more than forty hours of the investigation we have discovered that certain celebrity accounts were compromised. By a very targeted attack on user names passwords and security questions a practice that has become all too common on the Internet. None of the cases we have investigated has resulted from any breach in any of Apple's systems including iCloud or find my iPhone. We are continuing to work with law enforcement to help identify the criminals involved. And here to explain all that's going on with apple I'm joined now by Jeff MacKey from Yahoo! finance hi Jeff. So apple there essentially saying hey it's not our fault. And that there isn't a system wide security breach with iCloud are you assured with that statement. And you know. Kind I mean it it what they used -- a call the -- force attack meaning that. Part and and I'm not sure how would get an -- statement how they'd be hackers went through this but what we seemed an -- level at least we knew earlier was that. They used the brute force attack which -- even guess try passwords and -- without ever getting locked out of the system at all which wasn't literature what at least something that apple changed immediately. Which would have prevented these attacks now the attacks being focused on certain celebrities. That kind of makes sense and it's a little bit of -- blame the victim if you will and I don't wanna toss that term around lightly but what they're saying essentially is these passwords were simply not secure enough. And reminding folks at home to -- better passwords update them all the time. You can use different levels of security and that there's a lot of different measures you can take instead of just using password. Or as I -- on a competing networking is password only use dollar signs that of the -- -- -- -- -- stupid use something a little more creative but that really doesn't solve the problem that passwords themselves are fairly antiquated as far as technology goes. So certainly along with a password question now and the rumors do you think that this -- puts a dent in the push to put everything. On -- Clough. I think it. We all should be hesitating about putting everything out -- -- we have something resembling an updated security system there's just not that much money. In coming up what kind of a password system I mean it's a nice idea. No one's been able to really crack the code and the code being finding a balance between convenience and actual security. But there is a whole bunch of money and being the repository of all of -- photos. I called Apple's recent operating system upgrade the hotel California upgrade -- you can check our anytime they like that you can never ever leave the system. All these companies apple Amazon Microsoft Google. They want to have all your stuff on their cloud. This raises an interesting point which is the way I got sure I want to put every single -- I haven't won an exact basket -- just how to be a password away from Webber wants to see it. The law that all gets sorted let's talk a little bit about apple and its stock today it actually hit an all time high despite rumors. Over the past words I clouds all of that business. Some idea of why that is were obviously -- -- -- to next week's announcement. US yeah we're -- in the next six -- or seven days away from from cool air comes I hope it's a phone national -- I can make calls but that may be taxed my friends. But we'll see what apple has up their sleeves next week. Now they're all time high prior to this was homeless couple years ago. When they -- with a five when Mack came out I waited in line and the stock was over seven honored at the time moves split Johnston taken out -- -- And the way that stock today mighty correction immediately afterwards and sell the news of -- apple faithful early shareholders of which I'm one of the latter. Are kind of hoping we don't repeat that the man -- stock has been one in like a scalded dog for quite awhile. We put up 10% or served as a last month and it's maybe a little ahead of itself but. We saw some action in the market today that indicates traders are kind of out of new idea visitors -- -- money into the old winners trying to play game of performance catch up as we call to invest. All right -- outside hybrid that down -- over the today's stock. Well is the FAA it's wanted to got a hundred. It really didn't. At this point when -- although -- eyes and why investors like to own the -- Is you run not a technical resistance which is what people called just that chart analysis not -- at all kinds of different resistance. The idea being that that it once you finally got to those old highs right around the split adjusted 100 level a couple weeks ago. You have people who have been under water that stocks they waited in line -- -- iPhone five's and immediately the stock -- 40%. Emotionally you look for sellers at those levels are some supply that comes on the marketplace when you see stocks. Get to those all time highs and sort of breakthrough. This is -- -- break out pattern and and -- and we're in uncharted territory it literally. And and that's typically pretty bullish there's not a lot of overhead resistance fundamentally. Apple's obviously a great company they -- the world is just a question how much -- the world is exactly what. All right let's talk a bit about that rumored that pays system that they're talking about and how it stacks up to -- say android phones that already have some of that technology are they playing catch up. And they're playing catch up to a degree may have been Tim Clark who -- of course replace Steve Jobs the the iconic Steve Jobs Cink Steve Jobs. His defining characteristic has been being a little -- -- and so what he's done so far is is. Really built up that -- focused on trying to get all the devices to work together and some of that has been playing catch up some of its been just. Shamelessly knocking off a lot of features of FaceBook events to Graham about their services -- are out there. Getting -- -- up to speed iTunes is really what it's all about -- the heartbeat of apple. It's where people not just didn't have their photos obviously I'm sorry as often as once but it's also -- -- -- your music and all your movies and it's very hard to migrate from one system to the others other want to make this as robust and friendly a little prison. -- environments as you can possibly make it and so they are playing catch up to degree now in terms of this payment system that's rumored. In apple -- -- play the rumor game and and they have to do a little catch up here. But you know I am not so sure that I won't run around bemoaning the lack of ways I can pay for stuff. I've been there at the -- my doors off before start from -- credit card anymore -- because at this point. It's pretty easy to buy stuff online and so. The holy Grail again is to make it as easy as possible to make your devices indispensable but it is a very good time to be a consumer -- there's an awful lot of competing offers. 01 thing's for certain a week from today we are likely going to still be talking about apple -- MacKey from Yahoo! finance thanks for joining us. Q and you've been watching a story stock stay with For your latest headlines I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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