Smartphones: A Bigger Target for Security Threats

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As carriers such as Vodafone (VOD) beef up their network and phone security, vendors including Cisco Systems (CSCO), Juniper Networks (JNPR), and CheckPoint (CKP), which sell security appliances for telecommunications networks, may also generate higher sales. "There's a ton of opportunity in mobile security," Wilson says. Vodafone sells some of its smartphones with third-party security software preloaded.

Earlier this year, Discretix, which makes software that checks for unauthorized cell-phone components and software, won a contract to monitor the larger-size smartphones known as mobile Internet devices based on Intel (INTC) chips. Discretix also works with handset makers such as Motorola (MOT), and has seen its sales rise 215% in the past five years, says Jacob Greenblatt, director of corporate strategy at Discretix.

Symantec is developing a product, due in 2010, that would let carriers offer customers Web filtering and parental control of Web sites accessed via smartphone. "Most carriers aren't [offering these services] today," Nguyen says.

Consumer Market Is Potential Bonanza

Corporations are also beefing up mobile security, acquiring everything from antivirus software to remote-wipe programs, which can remotely erase all information stored on a stolen smartphone. Currently, about 10% of companies with more than 1,000 employees have deployed such wiping software, according to Infonetics. BlackBerry maker RIM lets company IT administrators set more than 450 policies that bar downloads of unauthorized software.

Direct-to-consumer sales may represent the greatest opportunity. Callpod says its free Keeper software, which converts data into secret code to make it secure and protects personal information on the iPhone, is downloaded about 100,000 times a month at the Apple App Store. The company expects to release a similar app for the BlackBerry in the next month. Free apps may not stay free, and prices on for-sale software may rise. "I suspect our pricing will increase," says Carol Carpenter, a general manager at Trend Micro, which sells mobile antivirus software.

Eventually, consumers may pay $10 to $20 a year for mobile security software, Wilson estimates. "It has to be less than the PC [security software] because of the perception of the devices being smaller and less powerful," he says.

Smartphone precautions may become increasingly necessary, whatever the price tag. "No smartphone right now is 100% secure," says Jonathan Zdziarski, the author of iPhone Forensics, who helps police hack into suspects' iPhones. "I just don't put anything on my iPhone I'd not want somebody to see."

Kharif is a senior writer for BusinessWeek.com in Portland, Ore.

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