Trend Micro Researchers were alerted to the discovery of a malware that came preinstalled on a Vodafone mobile phone handset. Its memory card was also believed to carry malware in it. A leading mobile telecommunication company, Vodafone, has been taking the heat for packing malware straight out of the box on their HTC Magic Android smartphones. The recipient of one of the malware-laden phones was, fortunately, an employee of the Spanish antivirus firm, Panda Security. Plugging the phone in via USB into any PC quickly led to an infection by WORM_SILLY.QT. Vodafone has already released an official statement saying that the infected phone problem was an isolated one.

Trend Micro threat researchers believe that it is likely that a computer in Vodafone’s production line has been infected by WORM_SILLY.QT.  And, because of the worm’s capability to propagate through removable drives, somehow SD cards in a certain batch of smartphones were infected and there is a possibility that other Smartphones coming out of the same factory might be carrying the same Malware.

Trend Micro in it’s 2010 Future Threat Report has predicted that Mobile Phones coming from the factories can carry Malware in 2010,This is the best example of how a Consumer can be affected directly from the Product coming from the factory and which is not even exposed to the Outside Virus Affected World.

 Users should be aware of potential threats created by devices that are already compromised or tampered coming off the shelves. Incidents about media players12 and digital frames shipped with malware have already been reported in previous years.

A similar risk is application compromise where a “known good” software has an embedded malware component. The user purchases and installs the software, and it does exactly what it is supposed to do, but it has a hidden purpose as well. The malware component is installed by engineers that have been either paid or coerced while in the employ of the company developing the software. The risk of tainted products extends to hardware. For instance, some credit card dataphone devices used in several retail outlets have been identified as having compromised hardware. This is what Trend Micro had predicted in its 2010 Threat Report forecast.The trend, which was predicted by Trend Micro has become a reality.