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1 Introduction In 2008, mobile devices continue to rapidly replace desktop computers. Mobile devices create easier ways to communicate and work more efficiently while away from the corporate office. In addition, mobile workers are using devices for enterprise communication and for personal usage. The usage between business and personal is creating the need for better mobile security. Smartphones are becoming equivalent in processing power to a PC, but the lack of security technologies implemented on the mobile device is placing personal and corporate information at risk. Malware is defined as a code that is written with a malicious intent and designed to make changes to computer systems without the owner s knowledge. Malware includes a variety of different software, namely computer viruses, worms, Trojan horses, rootkits, spyware, adware. Malware is also picked up though phishing scams and other type of social engineering. Mobile malware in 2008 is a problem for mobile users. In addition can lead to potential financial losses for users and mobile operators. Recently, in the mobile security market, users witnessed the hacking of the secure iphone demonstrated at. Researchers found that an exploit is delivered through a malicious page which is then opened in the Safari Browser, resulting in an attacker gaining the access to the users personal information. The hacker can then gain full control of the iphone and have the ability to read message logs and passwords. Security companies continue to develop innovative technologies, which enable the protection from various types of malware and combine advanced functionality to help fight mobile malware. 7

2 Introduction (Contd ) Mobile anti-malware products include technologies that prevent and/or recover malware from being launched on a mobile device. Mobile anti-malware technologies are specifically developed for mobile networks, feature phones, or smartphones. A variety of security technologies used by endpoint security providers include: Signature-based detection Behavior analysis Heuristics This research is an update to the 2006, Frost & Sullivan Mobile Anti-Malware study, with an expanded scope to include Secure Mobile Endpoint. In this study, frost & Sullivan will look at security products that are designed to protect against malware and other risks associated with the mobile device. For the purpose of this study, secure mobile endpoint is defined as a product that includes at least one or all of these technologies: Anti-Virus Anti-Spyware Firewall SMS Anti-Spam Remote Data Wipe/Lock Phone Application and Feature Control Encryption/ Authentication Parental Controls 8

3 Research Overview The aim of this study is to evaluate the world secure mobile endpoint security products market which has been segmented into the following: Embedded solutions Direct to consumer Network-based solution Secondary research was conducted to provide an overview of the market in conjunction with primary research. A spectrum of key industry participants were consulted, and their insights were used to analyze the pertinent trends emerging in the industry. This research service provides vendors and exhibits the major forces and trends impacting on the market, provides Customer Horizontals Large Enterprises Midsize Enterprises Small Enterprises Consumer Customer Verticals Government growth forecasts within the different solution segments, key verticals, and demand analysis, and concludes with strategic recommendations for vendors interested in capitalizing on the opportunities presented. Healthcare Finance Education Source: Frost & Sullivan 9

4 Research Overview (Contd ) In the past four years, mobile endpoint has drastically changed along with the security landscape. Mobile anti-virus is no longer accepted as the only means of protection from mobile threats. It is common to find various technologies built into the mobile security product. The chart below exhibits the most common technologies found in a mobile device product. Anti- Malware, Anti- Spam, Anti-Spyware Firewall, Encryption and Authentication Remote Data Wipe/ Remote Lock Phone Application and Feature Control, Parental Control Source: Frost & Sullivan 10

5 Key Findings The world secure mobile endpoint market was valued at $xxx.x million in 2008, and is expected to reach $x.x billion by 2015, growing at a compound annual growth rate of xx.x percent from 2008 to Growth in this market is expected to increase in 2009 and 2010, largely due to the demand and launching of smartphones such as the iphone and Palm Pre. The mobile endpoint market is greatly influenced by the increase in the number of remote workers and the demand for smartphones in the enterprise. Stable growth is expected in 2011, as the market begins to mature. The potential mobile threats available in the future is likely to drive the secure mobile endpoint market similar to the PC market in the past. Frost & Sullivan believes that that a major outbreak on mobile devices is required in order to be the catalyst that starts this market. As more users uptake Revenues (2008) Revenues (2008) Potential Potential Revenues Revenues (2015) (2015) CAGR ( ) CAGR ( ) $203.1 $xxx.x million million $1.8 billion $x.x billion 29.0% xx.x% Secure Mobile Endpoint Products Market: Percent of Revenues by Product Type (World), 2008 Direct to Consumer xx.x% Embedded x.x% Network- Based xx.x% Note: All figures are rounded; the base year is Source: Frost & Sullivan 11

6 Key Findings (Contd ) Key Market Drivers mobile devices to produce work and personal tasks, attackers will find this a potential financially motivating market. Mobile security vendors are creating key partnerships to enable the distribution of mobile security to devices. Mobile security to an end user can be distributed through a mobile operators network, and embedded into a handset or purchased directly from a security vendor or partner. Network-based solutions are applied onto a mobile operator s network in the form of an appliance or software. Generally, this protection includes security technologies anti-sms/mms spam, content filtering, anti-malware, or firewalls. Mobile operators are choosing to offer security at the network as a first layer of protection to the end user. In 2008, the market accounted for 60 percent of the revenues. Increase sophistication of mobile threats Increase in the mobile workforce Increase and complexity of compliance regulations The high costs associated with SMS and MMS attacks, phishing, viruses, and spamming increase the need for users and mobile operators to implement security. The increased adoption of smartphones will outpace feature phones by 2014 Key Market Restraints No major outbreak has occurred yet causing complacency among users and organizations pertaining to the current level of mobile threats The slow economy causes budget concerns when implementing mobile device security Confusion in the availability of mobile security products Security fears restrain enterprises from implementing wireless devices with full remote functionality More mature mobile security technologies appear adequately efficient 12

7 Key Findings (Contd ) Consumers and enterprises are also looking at protection not only from the network, but as an added application to their handheld device. The direct to consumer market accounted for xx percent of the total mobile endpoint market. Growth in this segment is expected, as the security vendors combine mobile endpoint as a holistic solution to the enterprise endpoint security solutions and mobile operators begin to view the value of increasing ARPU by adding these applications as an optional service to end users. The embedded market accounted for x percent of the mobile endpoint security market. The market is restrained, as mobile operators in North America will dictate the type of applications that are added to smartphones. Most of these agreements will come from Europe or Asia Pacific territories. Government is the largest customer vertical in this market, accounting for xx percent of market revenues in The SMB and midsize customer horizontals contributed to xx.x percent of the market revenues in 2008, which was equal to $xx million. The enterprise market contributed to xx percent of the total market, and this is expected to remain stable throughout the forecast period. Enterprises are expected to continue embracing security on mobile devices, as remote workers becomes more prevalent in the current workforce. Top security vendors such as Symantec and McAfee have the highest market shares. Known as being top vendors in the security market allows the company to have a stronger foothold in providing software to handset vendors and mobile operators. 13

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