Google’s (GOOG) Android has become the dominant mobile platform, accounting for most of the smartphones sold and a majority of tablets. But between the increased popularity of these devices and the wide array of things we do with them — everything from online shopping to paying for coffee, reading corporate e-mail or sending risque texts — criminal elements have taken note.
A new report from Intel’s (INTC) McAfee security division shows Android malware is, quite simply, a pretty big problem. Android was the target of 97% of mobile malware attacks in 2012. Plus, the number of known examples of mobile malware is rising exponentially, from 792 in 2011 to 36,699 in 2012.
Apple (AAPL) has been making the most of the news of Android malware — unofficially, of course. SVP Phil Schiller tweeted another report showing Android was the target of 99% of mobile malware attacks in 2013 and that 71% of Android users had encountered malware.
So far, nothing major has happened — no worldwide freezing of Android smartphones, no mass release of digital photos and no hack into a corporate network blamed on an employee’s Android smartphone. But the potential for a catastrophic event from Android malware is there. And if it happens, a few companies will benefit, instantly making them hot stocks to watch.
Here are a few names that are already hot stocks to watch, and that could cash in on Android malware if we experience a some big-time mobile cyber crime.
Hot Stocks to Watch: Amazon (AMZN)
Many people avoid Amazon’s (AMZN) Kindle Fire tablets, even though they’re consistently rated among the best around when it comes to hardware. One of the main reasons? Amazon’s decision to use its own version of Android (Fire OS) and force owners to its app store.
That perceived downside could turn into a big positive if Android malware hits in a big way. Amazon could leverage its locked-down Kindle tablets and its app store — which screens apps carefully and keeps out software that requires root access to the device — as the “safe” version of Android.
If Android malware, viruses and hacks become headlines, consumers who still want an alternative to the Apple (AAPL) iPad may well choose the safer Kindle Fire over pure Android tablets.
Given Amazon’s challenge in maintaining tablet sales volume outside of the holidays, an increase in year-round Kindle Fire sales is just another reason AMZN is one of our hot stocks to watch … especially if Android malware becomes a problem.
Hot Stocks to Watch: Citrix Systems (CTXS)
The bring-your-own-device (BYOD) movement remains extremely popular. But data shows that most employees bringing their own smartphones and tablets into work are using Android. So not only is the device itself at risk thanks to Android malware, but corporate data might be at risk too.
As a result, any company with an enterprise foothold and a solution for reducing the threat posed by BYOD is going to be one of the top hot stocks to watch if things get bad. Citrix Systems (CTXS) is a prime example. It stands to gain from an increased threat of Android malware because CTXS sells mobile device management solutions that can secure those smartphones and tablets.
Citrix Systems’ Xen Mobile may not prevent Android malware, but it lets corporate IT control the apps its users are installing (reducing risk) and offers the ability to “sandbox” critical apps — keeping their data from being accessible to other, possibly malicious apps.
Mobile device management could take off in a big way if BYOD results in cyber criminals hacking a company via Android malware. Companies will be under public pressure to do something, and deploying mobile device management is quicker, easier and less costly than replacing those personal smartphones and tablets with locked-down corporate issue versions.
Definitely count CTXS among the hot stocks to watch in the event of a wave of damaging Android malware.
Hot Stocks to Watch: Symantec (SYMC)
Like Citrix Systems (CTXS), Symantec (SYMC) offers enterprise-level security solutions. However, if there was a major incident involving hacking or Android malware, Symantec is the company that could see the largest windfall in terms of overall growth … especially if there’s consumer panic.
That’s because SYMC gets 42% of its revenue from PC and mobile security products, and is probably best-known to consumers for its Norton Security software.
In Norton, Symantec has a recognized security name. Plus, it already offers a Norton Mobile Security package for Android devices … and it’s priced at just $29.99, making Android malware defense cheap enough to be an impulse buy.
We are closing in on 1 billion Android devices activated and the vast majority of owners either don’t bother installing security software or make do with a free app. An Android malware scare could result in a run on Norton mobile security (a recognized name at an affordable price) and the potential for a resulting boost in sales volume makes SYMC one of our hot stocks to watch.
Hot Stocks to Watch: BlackBerry (BBRY)
How many years has it been since BlackBerry (BBRY) was on any list of hot stocks to watch?
But while BBRY is down in the dumps now, security is its thing (that and physical keyboards), which could come in handy if Android malware becomes a larger issue.
See, no one cares all that much about security these days. Sure, the Pentagon does, but most people take smartphone security for granted and many companies have grown lax on mobile security.
But if cyber criminals take advantage of the current state of affairs to launch the kind of high-profile attack on Android that steals headlines like the Windows PC siege did, BlackBerry might suddenly find its “uncool” smartphones in demand again based solely on their security cred.
BBRY is so low these days that any increase in business could move the needle. So if Android malware becomes a widespread problem, BlackBerry may again find itself as one of the hot stocks to watch.
Hot Stocks to Watch: Apple (AAPL)
Developers and consumers have criticized Apple (AAPL) for its “walled garden” approach to iOS. The locked-down mobile operating system keeps users from tinkering with their devices at anything but a superficial level, keeps key processes away from third-party app developers, can make it difficult for developers to get apps approved and makes it virtually impossible for iPhone and iPad owners to install apps outside of those offered through Apple’s iTunes.
But that makes iOS a tougher nut to crack if you’re up to no good — and that’s why Schiller was tweeting about Android malware vulnerabilities.
Of course, Apple doubters will point out that the relatively low numbers of iOS devices in circulation are one reason hackers aren’t targeting Apple products with the same persistence. But does that matter?
The iPhone and iPad offer the wealth of apps that BlackBerry (BBRY) and Microsoft’s (MSFT) Windows lack, along with hardware design that (most) people still love, a massive accessories ecosystem and no cyber criminal target on their backs.
Whatever the reason — tougher security or a smaller target — Apple could back some of its market share if Android malware causes buyers to think twice about an Android smartphone or tablet. The end result? AAPL rounds out of list of hot stocks to watch if Android malware becomes an even bigger issue.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.