Apple

Another iPhone worm has been spotted in the wild.

Unlike the previous exploitation, which merely changed a jailbroken iPhone's wallpaper to a picture of Rick Astley of "Rickrolling" fame, this new threat allows hackers to steal sensitive information.

According to security firm Sophos, which wrote about the exploitation after a Dutch ISP spotted it late last week, the worm attacks jailbroken iPhone and iPod Touch devices only.

The worm "uses command-and-control, like a traditional PC botnet," Sophos wrote in a blog post on Saturday to warn users about the exploit. "It configures two startup scripts, one to execute the worm on boot-up, and the other to create a connection to a Lithuanian server to upload stolen data and cede control to the bot master."

Jailbreaking, which has been around for about two years, is a hack that enables iPhone and iPod Touch users to download applications unavailable through Apple's App Store.

Sophos wrote that the worm attacks users on several ISPs, including UPC in the Netherlands, Optus in Australia, and T-Mobile in several countries worldwide. Worse, the worm spreads faster on a Wi-Fi connection than a 3G connection. Users with affected devices might notice extremely short battery life while on Wi-Fi. According to Sophos, that's mainly due to the worm engaging in "so much network activity."

When a device is infected, it's assigned a unique number so that the attackers can easily pinpoint a single device. It also looks for authentication systems that use SMS, better known as mTANs. mTANs are frequently used by banks that send an SMS message with a password to mobile phones, allowing people to log in to their online accounts, Sophos wrote.

In essence, this threat is serious.

Sophos recommends that people with infected iPhones and iPod Touch devices restore them back to Apple's most recent firmware update. For now, there is no other way to fix the problem.

U.K. wireless carrier Orange just started selling the iPhone, and it is trumpeting first-day sales numbers for the device.

(Credit: Apple)

The carrier signed up 30,000 people with a new iPhone contract on Tuesday, its first day selling Apple's smartphone, according to a post on Twitter from a member of Orange's marketing department.

While 30,000 isn't necessarily a lot, compared to the "hundreds of thousands" of iPhones AT&T sold in its first weekend selling the iPhone 3GS in the United States, it's not bad for being the second carrier in a much smaller country, where the iPhone 3GS has been available for four months.

Until Tuesday, wireless provider O2 was the exclusive carrier of the iPhone in the United Kingdom. Orange currently has 16 million mobile customers, compared to O2's 22 million. Incidentally, Orange's experience as the second carrier of the device in a country would seem to make a decent case for Apple releasing the iPhone to more than one carrier in many other countries, including the United States.

The numbers were far more impressive than the iPhone's debut on China Unicom's network last week. China's first crack at selling the iPhone was by most accounts disappointing, with 5,000 units sold over the first four-day period.

Of course, China Unicom is dealing with factors Orange is not. Besides having to sell the iPhone without Wi-Fi connectivity, China has to contend with something U.K. and U.S. carriers largely do not: a vast market for iPhone knockoffs, or gray-market phones.

In the race for mobile phone profits, Apple has overtaken Nokia, according to figures for the latest quarter.

Apple earned $1.6 billion in the third quarter from the iPhone, outpacing Nokia's $1.1 billion cell phone profit to grab the top spot among all mobile phone vendors, said research firm Strategy Analytics on Wednesday.

(Credit: Strategy Analytics)

This is the first quarter that Strategy Analytics has seen Apple surge past Nokia in mobile phone profits, according to Alex Spektor, the author of the research, who spoke with CNET News.

The contest between Apple and Nokia for top phone profits has been tight in recent months. ... Read more

A Mad Magazine contributor has been told by Apple that his iPhone app featuring drawings and contact information of members of the 111th Congress has been rejected because it depicts politicians in an objectionable light.

Richmond's iPhone app in action.

(Credit: Tom Richmond)

According to Tom Richmond, who wrote about his app's rejection on his personal blog, his app--dubbed Bobble Rep-111th Congress Edition--in no way should have been construed as objectionable.

Richmond said that the focus of the app was to create a "database of all the members of the United States Congress which allowed the user to find the names and contact information of their senators and congressional representative either via Zip code or by using the iPhone's GPS location services." Rather than use the politicians' individual portraits, the app depicts each senator and representative in caricature form, which Richmond drew himself. All told, the app features 540 caricatures of the politicians.

Everyone and their band seems to be leaping on some kind of wagon with an Apple logo and attempting to rob it of its jewelry and gold coins.

The latest to try to capitalize from poking a little fun at Apple's treasure chest are the Florida Keys and Key West.

In an ad that would feel like it was for the iPhone if it was executed with slightly more style, the Keys hope to persuade you that "There's no app for this."

"This" refers to the fun of wondering if a disgruntled local houseboat resident who believes tourists are venal vermin might ruin your vacation.

No, wait, I think I have read one too many Carl Hiassen novels, in which pretty much every resident of Florida is trying to cheat every other resident of Florida (or unsuspecting visitor) out of house, home, dog, wife or, well, life.

So, in fact, what I meant to say was that the Keys believe that no iPhone app can substitute for a real Florida Keys experience, in which the sun will set beautifully, the canoe will never capsize, and no shark will ever approach you as you snorkel your way to a new level of consciousness.

If you were to choose an app over a vacation, one imagines that several schools of psychiatric medicine had already given up on your ghost.

I am concerned, though, that should someone from Apple be making like Grumpy the Dwarf, they might be upset at the Keys' use of the iPhone's rather characteristic finger wipe.

Well, this hacker has quite the sense of humor.

Reports started spreading this weekend that iPhone users in Australia had been falling victim to "ikee," a worm that replaces default wallpaper with a picture of Rick Astley, the British pop singer whose song "Never Gonna Give You Up" has gained eternal infamy thanks to the mainstreaming of the "Rickrolling" prank craze. The photo is accompanied by the message "ikee is never gonna give you up," and it's apparently quite difficult to remove. According to security firm Sophos, this is the first worm detected that targets the iPhone.

The vulnerability is pretty specific: the phones must be jailbroken in order to be affected, and it appears to spread by searching an infected phone's contacts to find other jailbroken-phone users who have installed the Unix software SSH (secure shell) but haven't yet changed their passwords from Apple's default root password, "alpine."

Sophos says that it has not heard of any occurrences of the worm outside Australia, and that while it doesn't appear to do anything worse than irritate and embarrass affected users, that it highlights the vulnerabilities that jailbroken phones face.

As Apple and Research In Motion have won a greater share in the Wi-Fi handset market over the past year, Nokia has lost share.

Though Nokia is still the leading vendor for dual-mode smartphones (Wi-Fi and cellular), its market share dropped to 35 percent in the second quarter, compared with 50 percent in the same period a year ago, according to a report released Monday from In-Stat.

The report "Wi-Fi in Mobile Phones: Dual Mode Becomes the In Thing" tracked the major Wi-Fi phone vendors, including Nokia, Apple, Research In Motion, HTC, and Samsung. Among those, Apple has enjoyed the greatest growth in market share, from 3 percent in the second quarter of 2008 to 20 percent in this year's second quarter.

Market share for both RIM and Samsung has also weakened the past few quarters, though less so than Nokia's. RIM's 15.7 percent chunk of the market for the second quarter of the year was down from its first-quarter high of 17.6 percent. Samsung's share has been relatively flat but usually dips a bit from the first to the second quarter, notes In-Stat.

In sheer unit volume, Nokia has done well the past few quarters, with 9.3 million Wi-Fi handsets shipped in the second quarter of the year compared with Apple's 5.2 million shipments. However, Nokia's shipments have dropped since the first quarter of 2008 when it saw 12 million units fly out the door. Over the same period, Apple, RIM, and HTC have seen their shipments grow.

As the No. 2 Wi-Fi handset vendor, Apple has also outsold third-place RIM in dual-mode phone shipments, says In-Stat. Though RIM still has a larger market presence, not all of its Blackberry devices include Wi-Fi. HTC and Samsung rounded out In-Stat's list as the fourth and fifth top Wi-Fi handset vendors, respectively.

(Credit: In-Stat)

The report also detailed the growth of the Wi-Fi smartphone market overall. The industry shipped 37 million handsets in 2007, and 103 million units in 2008. That rise is because of several factors, notes In-Stat, including greater functionality, lower prices, and carrier promotions. Initially targeted to the business market, smartphones are also now an entrenched hit with consumers, which In-Stat attributes to the success of the iPhone.

Wi-Fi handset shipments are expected to rise just 25 percent to 128.4 million units for 2009. That compares with a nearly 180 percent jump in 2008.

But In-Stat sees gains ahead. By 2010, the growth rate is likely to climb to 43 percent. Though that rate may not be sustainable, it should remain strong in the coming years. Wi-Fi will also become more prevalent in mobile phones. This year, 11.5 percent of handsets include Wi-Fi; by 2012, that figure will grow to 25 percent, predicts In-Stat.

To compile the report, In-Stat relied on its own data as well as interviews with Wi-Fi equipment vendors.

The iPhone didn't get quite the reception in China as it did in other markets.

The exclusive carrier for the device in the country, China Unicom, said Tuesday that it signed up 5,000 iPhone subscribers in the first four days it was available. While that's certainly not a blockbuster opening weekend, the carrier says it's pleased nonetheless.

The mob scene at the iPhone's 2007 debut in San Francisco. The phone's reception in China was a bit cooler.

(Credit: Erica Ogg/CNET)

"We are satisified with iPhone sales so far, and we aim to have an additional 1 million new 3G subscribers each month in the near future," China Unicom Chairman Chang Xiaobing told Reuters.

It's a difficult comparison when you measure the first weekend sales in China against the 146,000 AT&T signed up in the U.S. during the original iPhone's first weekend in June 2007. Besides having to sell the device without WiFi, China has to contend with something U.S. carriers largely do not: a vast market for iPhone knockoffs.

Referred to as gray-market handsets, these are cell phones made in China that are not legally licensed by the government. Manufacturers don't pay taxes on them and they use fake Mobile Equipment Identity numbers. As a result, the phones are cheaper and can be used with prepaid wireless accounts, and, perhaps unsurprisingly, they're increasingly popular.

China's gray-market phone shipments are expected to reach 145 million units this year, a 44 percent increase over the 101 million shipped in 2008, according to market research firm iSuppli. For perspective, the worldwide (legally licensed) cell phone market is 1.13 billion, so the 145 million is a sizable chunk of that, almost 13 percent.

Still, Apple analysts are already calling the phone's debut in China "a disappointment." Piper Jaffray's Gene Munster said he was expecting China to contribute 1 million to 2 million iPhone sales to the worldwide total of unit sales for next year. Based on the weak opening numbers, he is revising China's contribution to 550,000 next year.

China is also in the middle of building out more of its 3G network, so it could take time before devices like the iPhone truly takes hold, the way it has in other markets.

"We believe that eventually China will emerge as a major market for iPhone sales," wrote Jaffray in a research note Tuesday, "but it could take a year or two to gain meaningful unit traction as it did in the U.S."

AT&T said Thursday it activated 3.2 million iPhones during the third quarter, a record for the wireless carrier. That's out of 7.4 million iPhones sold by Apple during the quarter, also a record for Apple.

(Credit: James Martin/CNET)

That means AT&T handles about 43 percent of all iPhones, the rest going to international carriers, and of course a smattering of jailbroken devices on other U.S. wireless companies.

In the same quarter a year ago, Apple sold 6.9 million iPhones, and AT&T activated 2.4 million of them, or 35 percent of them. That's a rise of 8 percentage points for AT&T.

What's more interesting is that despite more international carriers selling the iPhone this year--there were to be 80 by the end of summer--AT&T's share of them is still rising.

Expect that number to change soon. Later this month China Unicom will start selling Apple's smartphone for the first time at 1,000 locations, with more sites to be added over the next few months, Apple COO Tim Cook said on the company's earnings call Monday.