Mobile Viruses: If Not Now, Soon

As Research in Motion thwarts a BlackBerry threat, antivirus-software outfits warn that the real danger -- and a new market -- lies ahead

Another year, another would-be mobile-virus threat. On Jan. 3, BlackBerry maker Research in Motion (RIMM) said its popular handhelds could fall victim to virus attacks due to a software flaw in the company's BlackBerry Enterprise Server, which acts as a link between the devices and corporate applications. Open the wrong file, and wham! Forget about viewing other attachments.

Luckily for users of the addictive BlackBerry wireless e-mail service, RIM caught the vulnerability early and came up with a fix, which will become available with the next iteration of its enterprise server. RIM says it doesn't know of any customers who were affected by malware exploiting the flaw. Posted on RIM's Web site is a list of steps subscribers can take to safeguard devices from attacks until the new release.

Crisis averted. Again. For years, McAfee (MFE), Symantec (SYMC), and F-Secure -- all vendors of software aimed at combating mobile threats -- have been predicting a boom in viruses that so far has failed to materialize.


  Sure, there have been warning signs. In 2004, a group of professional virus writers developed Caribe, a proof-of-concept virus designed to show that viruses can indeed affect smartphones, the high-end cell phones that can run applications like e-mail. But as of the end of 2005, only a little over 200 mobile viruses were going around, according to McAfee Avert Labs research. That compares with an estimated 160,000 PC-related threats now on the Internet.

Still, it's no time to get complacent about bugs that may harm mobile phones, say analysts, software vendors, and corporate information-technology officers. The number of mobile viruses is expected to more than triple this year, says McAfee. Since its inception, mobile malware has grown almost 10 times faster than PC malware, McAfee says.

What's more, the number of devices that hackers could attack is growing fast. While only 5% of the phones and PDAs sold in the U.S. last year could be affected by a virus attack, that percentage will rise to 7% by the end of 2006, and 17% to 18% by 2009, according to tech consultancy Yankee Group.


  Mobile viruses also will have an easier time proliferating, now that wireless-download speeds have skyrocketed and technologies that connect wireless devices to other electronics have become more widespread. One such technology, called Bluetooth, could potentially spread a virus from one device to the smartphone of a passerby. And a crop of new services that let users upload music from computers to cell phones could conceivably allow the transfer of malicious code sitting on an PC.

What's bad news for users of smartphones and other devices that allow for wireless e-mail access could mean rising revenue for antivirus vendors. "There's an inflection point happening right now," says Sarah Hicks, Symantec's vice-president for strategic opportunities. "Symantec feels that it's beginning to happen, in terms of its becoming a real, tangible market." A Symantec-sponsored survey taken last summer showed that some 60% of the 600 smartphone users questioned keep confidential business data on their devices.

Indeed, worldwide market for mobile-security software, now less than $20 million, should grow by more than 10 times, to $250 million, by 2010, estimates Chris Hovis, an analyst with investment bank Morgan, Keegan & Co. "If you're an IT manager, you scare easily," says John Jackson, wireless analyst with Yankee Group. "You can't afford to not have your bases covered."


  That's why corporations and service providers are warming to mobile-antivirus software. Since security-software maker Trend Micro (TMIC) last fall released its Trend Micro Mobile Security 2.0, priced at $24.95 per year, "there have been steady sales and a significant amount of interest from enterprise customers," says Todd Thiemann, the company's director of device-security marketing.

In December, Trend Micro began offering its software through Chunghwa Telecom (CHT), Taiwan's wireless-services leader with more than 800,000 smartphone users. Chunghwa's customers can now try Trend Micro's software for free through March 31, 2006, then elect to pay areound $2 a month for the service. Trend Micro is also in trials with some American carriers, and it might be announcing a similar service in the U.S. this year, says Thiemann.

Meanwhile, Symantec last fall expanded its agreement with the world's largest cell-phone maker, Nokia (NOK), to preload its antivirus software onto more Nokia phones, such as series 60 smartphones. Symantec is also in talks with other device manufacturers, says Hicks.

Although mobile-antivirus software currently accounts for an insignificant percentage of Symantec's and other vendors' total sales, the market could become more lucrative. Today the software typically retails for about $2 annually per user, compared with about $20 for PC-antivirus software. Yet prices of mobile-antivirus software could double as mobile viruses surface, and as consumers store more valuable information on smartphones and PDAs, says Hovis. And once the real damage begins, the paying up may really start to kick in.

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