A detailed analysis of the most malign in a recent spate of iPhone worms points to future mobile botnet risks.

The IKee-B (Duh) iPhone worm, released in late November, exploited default root passwords on jailbroken iPhones to turn the smartphones into botnet clients under the control of a server based in Lithuania. The worm affected iPhone users in The Netherlands, and specifically targeted customers of Dutch online bank ING Direct.

Security researchers at SRI International - noted for top notch work in dissecting the Conficker botnet - published an analysis of the iPhone botnet on Monday that warns users of Apple's device and similar smartphones to expect more of the same in future. Warnings about mobile malware have been circulating for years. But it's only since the advent of iPhones and other smartphones, allowing decent internet access with what's essentially a mini-computer, that such risks have become tangible, rather than the stuff of anti-virus vendor PowerPoint slides, SRI warns.

Unlike the previous generation of cell phones that were at their worst susceptible to local Bluetooth hijacking, modern Internet-tethered cellphones are today susceptible to being probed, fingerprinted, and surreptitiously exploited by hackers from anywhere on the internet.

Although the iKee.B botnet discussed here admittedly offers a rather limited growth potential, iKee.B nevertheless provides an interesting proof of concept that much of the functionality we have grown to expect from PC-based botnets can be easily migrated into a lightweight smartphone application. iKee.B demonstrates that a victim holding an iPhone in Australia can be hacked from another iPhone located in Hungary, and forced to exfiltrate its user's private data to a Lithuania C&C server, which may then upload new instructions to steal financial data from the Australian user's online bank account. While it is unclear just how well prepared smartphone users are to this new reality, it is clear that malware developers are preparing for this new reality right now.

SRI's researchers conclude that although the Ikee-B worm is simpler than its PC relatives, it comes with the potential to evolve in something even nastier.

The iKee bot is one of the latest offerings in smartphone malware, in this case targeting jailbroken iPhones. While its implementation is simple in comparison to the latest generation of PC-based malware, its implications demonstrate the potential extension of crimeware to this valuable new frontier of handheld consumer devices.

The analysis, based on reverse engineering of the malicious code, by SRI's researchers can be found here. ®