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In the last year, we have seen a further increase in mobile malware. This correlates with increasing numbers of Internetconnected mobile devices. Android has a 72 percent market share with Apple® iOS a distant second with 14 percent, according to Gartner.18 As a result of its market share and more open development environment, Android is the main target for mobile threats.

Typically, people use phones to store personal information and contact information and increasingly they have high-speed Internet connections. The smartphone has become a powerful computer in its own right, and this makes these attractive devices to criminals. They also have the added advantage of being tied to a payment system—the owner’s phone contract—which means that they offer additional ways for criminals to siphon off money from the victim.

We’ve seen a big rise in all kinds of mobile phone attacks:

• Android threats were more commonly found in Eastern Europe and Asia; however, during the last year, the number of Android threats in the rest of Europe and the United

States has increased.

• Privacy leaks that disclose personal information, including the release of surveillance software designed to covertly transmit the owner’s location.19

• Premium number fraud where malicious apps send expensive text messages. This is the quickest way to make money from mobile malware. One mobile botnet Symantec observed used fake mobile apps to infect users and by our calculation the botmaster is generating anywhere between $1,600 to $9,000 per day and $547,500 to $3,285,000 per year.20

• Mobile botnets. Just as spammers have linked networks of PCs into botnets to send out unwanted email, now criminals have begun using Android botnets the same way.21 This suggests that attackers are adapting techniques used on PCs to work on smartphones.

Historically, malware infected smartphones through rogue app markets and users sideloading apps directly onto their devices. However, legitimate app stores are not immune. In 2012, we saw rogue software masquerading as popular games on the Google® Play market, having bypassed Google’s automated screening process.22

Businesses are increasingly allowing staff to “bring your own device” (BYOD) to work, either by allowing them to use personal computers, tablets, or smartphones for work, even

subsidizing their purchase. Even when companies provide their own equipment, the trend towards consumerization means that companies often turn to consumer technology, such as file-sharing websites, and devices, such as consumer laptops or tablets, to reduce costs. These two trends open the door to a greater risk to businesses from mobile devices because they often lack security features such as encryption, access control, and manageability.

We have seen far more vulnerabilities for the iOS platform, which makes up 93 percent of those published, than for Android in 2012, but yet Android dominates the malware landscape, with 97 percent of new threats.

While seemingly contradictory at first, there is a good reason for this: jailbreaking iOS devices. In order to install applications that are not available on the Apple App Store, a user must run an exploit against a vulnerability in the software. While not the safest approach from a security standpoint, this is the only way to install applications that are not available through the Apple App Store.

In contrast, the Android platform provides the option to install apps from unofficial markets by simply changing settings in the operating system. Since no exploit is needed, the same incentives aren’t present as there are on iOS. Android users are vulnerable to a whole host of threats; however, very few have utilized vulnerabilities to spread threats.

While Android clocks in with 103 threats in 2012, this number may appear small compared to other estimates on the scope of the mobile threat landscape. Many estimates are larger because they provide a count of overall variants, as opposed to new, unique threats. While many of these variants simply undergone minor changes in an attempt to avoid antivirus scanners detecting them, Symantec counted at least 3,906 different mobile variants for the year.

There’s an important distinction between old and new Android versions regarding security features. Google added a feature in Android version 4.x to allow users to block any particular app from pushing notifications into the status bar. This came in response to feedback from users of older versions, annoyed by ad platforms that push notifications to the status bar.

Also, due to the rise of threats that silently send premium text messages—Android.Opfake, Android.Premiumtext, Android. Positmob, and Android.Rufraud, for instance—Google added a feature in Android 4.2 to prompt the user to confirm sending such premium text messages. This can be very helpful in protecting most users.

However, at around 10 percent market penetration at the end of 2012,23 Android 4.2 devices account only for a small percentage of the total devices out there. The Android ecosystem makes it harder to keep everyone up to date. Google released the official platform that works out of the box only on Nexus devices—Google’s own branded device. From there each manufacturer modifies and releases its own platform, which is in turn picked up by mobile network operators who also customize those platforms.

This makes it impossible for any change coming from Google to be quickly available to all in-field devices. Any change to the platform requires thorough testing by each manufacturer and then each operator, all adding to the time needed to reach users. Having so many device models also multiplies the amount of resources all these companies have to allocate for each update, leading to infrequently released updates or in some cases no updates for older devices.

For most exploits in the OS, Google released quick fixes; however, users still had long waits before they received the fix from their network operators. Some exploits are not in the original OS itself but in the custom modifications made by manufacturers, such as the exploit for Samsung models that appeared in 2012. Samsung was quick to fix it, but the fix still had to propagate through network operators to reach users. Tighter control from Google over the platform can solve some of the “fragmentation” issues, but this could affect the relationship it has with manufacturers. A cut-off point for older Android users could help to mitigate the risk, but it is usually the manufacturers that do this.

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