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Russian QR codes used to send malware to mobile devices

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October 3, 2011

Mobile hackers in Russia have started using new QR Codes (quick response code) as a platform for sending mobile viruses and malware to smartphones and tablets over the weekend.

A recently identified malicious QR code on a Russian website links through a series of redirections to a site that delivers a Trojan version of the Jimm mobile ICQ client with the sole purpose of infecting users.

Internet security firm Kaspersky warns that users with Android phones who follow the links and install the app will be infected with software that sends text messages to premium-rate SMS numbers.

Tricking users into scanning QR codes, which can encode URLs into barcode-like squares (depicted at the left) to lure them into installing malicious applications on smartphones is a new threat, dubbed "Attaging" (Attack Tagging).

And whether a user follows a link in a browser or follows a QR code to reach the same location isn't different either, apart from the fact that users might be more trusting about a non-human-readable QR code than a conventional URL, hence the gravity of the security issue.

QR codes have recently appeared in online Android application catalogues. Smartphone users can read about an application on their PC before scanning a QR code using the camera on their Android device in order to download it.

Some people may have already seen them but without knowing what they are-- small black and white boxes with tiny lines and meaningless graphics in the corner of a magazine advertisement, on a softdrink, a coffee shop, or even on a pack of cigarettes.

The approach gets around the need to type in a booby-trapped URL on a phone's keyboard but also creates new security risks which mobile users should be careful with.

In other mobile news today

The U.K.'s Chancellor of the Exchequer George Osborne has promised tax payers a sum of £150 million to improve mobile coverage in the country. Osborne promised a freeze on council tax and investments in developing mobile applications, and he also promised to find £150 million in cash to spend on building mobile phone networks to cover the UK's remaining hot spots, not just in London but in other cities as well.

However, the exact method that the money will be fed into the wireless industry still isn't clear at this time. The details won't come until Osborne addresses the Conservative Party conference later today.

And it looks like the money will go to Ofcom, the U.K.'s independent regulator and competition authority for the communications industry.

Handing the money over to wireless carriers would be the easiest way, but because of EU laws on government subsidies, the government has no other choice than to channel the funds to Ofcom.

Paying for mobile network infrastructure that could then be shared would make more sense, so perhaps mobile operator Arqiva could be one of the recipients. Arqiva already runs about 16,200 transmitter sites in the U.K. that it rents out, so it would be the logical partner.

We will be provided more details later today, which should give us a better idea of when U.K. mobile consumers can expect to get better national mobile coverage and when.

In other mobile news

Executives at Apple's iTunes division are trying to lock down global music rights. Apple wants to make sure that it gets paid for all the cloud music available on iTunes, and this latest move is proof of it.

Sources familiar with the discussions between Apple, record companies in the U.S. and music publishers, say Apple is seeking international music licenses for its iCloud service.

The licenses would be similar to those the company has already obtained for U.S. operations, the sources said. If iTunes managers wrap up negotiations in time, they could announce the offering at a Tuesday press event at Apple headquarters, where the company is expected to roll out the iPhone 5, the next generation of the iconic smartphone.

Sources say Apple is close to reaching a few deals with rights holders but nothing is signed yet. An Apple representative declined to comment.

In June, Apple's then-CEO Steve Jobs announced an online cloud storage service called iCloud that's designed to make it simple to wirelessly share music, e-mail, photos, calendars, and other data between mobile gadgets and desktop computers.

The new Apple service attempts to harness the power and flexibility of cloud computing for home users. It uses techniques that have already proved popular with businesses to make it easier to move data stored on Apple's servers back and forth between multiple devices and applications.

Apple said that only music bought "from iTunes" can be transferred to the cloud and shared with other devices-- a fact that may limit iCloud's allure for music lovers who have transferred gigabytes of music from legally purchased CDs to their computers.

Apple's answer to that is "iTunes Match," which allows users to store their "entire collection," including music copied from CDs, on iCloud servers for $24 a year.

It works by analyzing songs in your collection, comparing them against the 18 million songs in the iTunes Store, and then making those available immediately at 256 kbps, even if the originals were lower quality.

Some of the countries that could get access to iCloud include Germany, France, and the United Kingdom, the sources said. Apple is facing a growing number of competitors in the digital music sector, including Amazon and Spotify.

In other mobile news

AT&T is asking the Court to dismiss some lawsuits filed by Sprint and Cellular South against its merger with T-Mobile USA. AT&T challenged the two companies' motivations for signing on to the Department of Justice's antitrust suit against the acquisition in a motion filed yesterday, arguing that Cellular South and Sprint were merely out to protect their own interests. "Sprint knows that competition will be enhanced, not harmed, by the combination of AT&T and T-Mobile and that a post-merger AT&T will be a more formidable competitor," AT&T said.

"What is good for consumers is bad for Sprint, and that is why Sprint has filed suit. That is also why the Court should dismiss Sprint’s suit for lack of standing under the Clayton Act," added AT&T.

By filing complaints against the merger as a related case to the DoJ’s lawsuit, Sprint and Cellular South aimed to air their concerns in court and add additional weight to the government’s suit.

Several state attorneys general have also been added to the DoJ’s complaint, allowing their evidence to be presented before the court. The DoJ said today that Puerto Rico's attorney general had joined the seven other state attorneys general who signed on to its complaint two weeks ago.

Vonya McCann, vice president of regulatory affairs at Sprint, said it had expected AT&T to attempt to dismiss the case.

“There’s nothing surprising about AT&T’s motion to dismiss this litigation," McCann said in a statement. "AT&T’s motion is without merit, and Sprint will respond to it next Friday."

AT&T's motion against Cellular South, recently renamed C Spire Wireless, alleges that the regional operator's lawsuit is self-serving. "Like Sprint, Cellular South is concerned not about any reduction in competition, but intensified competition," AT&T said.

As proof, AT&T cited an e-mail sent by Cellular South chief Hu Meena to AT&T Mobility top executive Ralph de la Vega that attempted to bargain with the larger operator over the T-Mobile deal shortly after the merger was announced in March.

"We believe the proposed combination will only exacerbate the anticompetitive effects of mobile handset exclusive agreements, AT&T's reluctance or refusal to provide full data including 4G and voice roaming access and interoperability issues," Meena said, according to a copy of the e-mail provided by AT&T.

"On the other hand, we believe that AT&T is also capable of alleviating these issues for Cellular South through an internetworking agreement," added Meena.

He then asked de la Vega to agree to a reciprocal roaming agreement where Cellular South would use wireless spectrum from AT&T, T-Mobile or itself to “build, operate and own an LTE network in the entire state of Mississippi and any other area in southeast that ATT desires.”

Cellular South would in turn provide network services to AT&T “via attractive MVNO arrangement in the areas in which Cellular South builds.”

"In other words, Cellular South suggested that it would not oppose the merger if AT&T would agree not to engage in facilities-based competition in Mississippi,” AT&T said.

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“This inappropriate proposal confirms that what Cellular South fears is competition, not lack of competition.” Cellular South disagreed with AT&T's characterization of the e-mails between Meena and de la Vega.

“AT&T's accusations flatly distort the record,” said Eric Graham, vice president of government relations at Cellular South, in an e-mail response.

Graham denied that Meena suggested AT&T not compete in Mississippi or any of its other markets, and said the e-mails were initiated by AT&T.

“In the days surrounding the announcement of AT&T's takeover of T-Mobile, AT&T approached us in an effort to gain our support,” he said. “Mr. Meena raised the same issues that we have articulated for years. In typical fashion, AT&T declined to address those issues and we moved on.”

Oral arguments in Sprint and Cellular South’s lawsuits are slated to begin in October. The trial for the DoJ’s lawsuit against the merger is scheduled to begin Feb. 13, 2012.

In other mobile news

At a price of just $199, Amazon is selling its new Kindle Fire tablet at a loss, emulating HP's marketing phisolophy: sell printers really cheap (at a loss) but make money on the ink cartdridges. According to an early estimate by the research group IHS iSuppli, the Fire's total bill of materials cost is $191.65.

And that barely is below the $199 retail price, and giving the new seven-inch fondleslab a less-than-massive profit margin of just around 4 percent, clearly not enough in these days of high overhead and various rising advertising costs.

And add manufacturing costs to the mix on top of all this, and IHS calculates that the Fire costs almost $210 in total. As the old joke goes, "Yeah, we may be losing money on each sale, but we'll make it up in volume." Really? How can you make it up on volume if you're losing money on each sale?

But if IHS's preliminary analysis is correct, Amazon is more canny than that old thigh-slapper might suggest.

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Source: The U.K. Government.

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