Mobile Security Spending to Rise Through 2015
by Justin Dove, Investment U Research
Monday, October 10, 2011
As smartphone use increases in what’s sometimes called the “biggest tech trend ever,” hacking and security breaches are bound to increase, too.
Last week, Canalys released a report estimating an average investment growth of 44.2 percent per year in mobile security spending. By the end of 2011, investment in mobile security will reach $759.8 million. Canalys predicts it will turn into a $3-billion market opportunity by 2015.
IDC and Infonetics Research aren’t quite as bullish on the growth, but they do expect a moderate increase. Both recently predicted global spending on mobile security is on track to reach about $1.9 billion by 2015.
The IBM (NYSE: IBM) X-Force research team also recently released a prediction that mobile phone security threats will double by the end of 2011. Between the summers of 2010 and 2011, the volume of Android malware increased by 400 percent.
“For years, observers have been wondering when malware would become a real problem for the latest generation of mobile devices,” said Tom Cross, Manager of threat intelligence and strategy for IBM X-Force, in a statement. “It appears that the wait is over.”
Smartphone Security Vulnerability
Part of the problem is the vulnerability of today’s smartphones. Canalys reported that only four percent of smartphones and tablets shipped in 2010 had any security software pre-installed.
Canalys forecasts that by 2015, over 20 percent of smartphones and tablets will have mobile security software pre-installed.
Physorg.com reported that a recent Symantec survey of 12,704 respondents in 24 nations found that only 16 percent installed the most up-to-date security on their devices, while 10 percent reported being the victim of a mobile-related cyber crime.
Emerging economies in Latin America, Asia, Africa and the Middle East are expected to experience a sharp rise in mobile security investment from 2013 to 2015, Canalys predicts.
Canalys is expecting “a strong parallel to emerge between Android operating system growth and the volume of mobile malware threats, as the potential for more people to download compromised applications rises.”
Mobile Security M&A
The bigger companies have already seen this trend coming.
Over the last year or two, there has been a surge in mobile security mergers and acquisitions (M&A).
Investing in Mobile Security
Lookout Mobile Security is one of the leaders in the industry, with rapid growth and 12 million users. However, Lookout is currently private and just received s a $40-million funding round led by Andreessen Horowitz. Considering Lookout doesn’t appear to be going public anytime soon, there are other options to invest in mobile security:
Whether the market grows to $2 billion or $3 billion, mobile security investments will certainly grow over the next four years. Smartphone use will only expand, and as with the internet, the more it expands, the more predators it will attract. Keen investors may want to watch out for companies that emerge as early leaders when spending and awareness starts to ramp up.
Good investing,
Justin Dove
Article by Investment U