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Smartphone records

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The smartphone market continues to set records: In 2017, manufacturers sold of 1.478 billion smartphones with an average price of US$323. In terms of numbers, countries in Emerging Asia and Central and Eastern Europe are driving sales, while customers in North America, Western Europe and Developed Asia are snapping up premium phones – with larger screens, more data storage and processing power, longer battery life, faster charging, and features like better water and shock protection.

However, don’t write off feature phones just yet: in developed markets, feature phones specifically designed for the elderly are hugely popular, while in markets like Russia and India, sales of cheaper smartphones continue to gain importance.

2017 was the year when wearables started to gain traction. Leaders of the pack are Smartwatches, which are beginning to take over from more basic fitness trackers. One category to watch is “earables” – in-ear headphones that also carry sensors and plenty of memory for music, and double up as fitness coaches. Another popular segment is locators with in-built connectivity and GPS, to find children or seniors. That’s especially true for Asia, where every third wearable device sold is a locator. In Europe, demand for wearables is up more than 23% (and 35% in terms of value), with similar growth rates in Asia.

“Smartphones still rule supreme, but 2018 could also be the year of the wearables, as these devices reach the right balance between cost, features and usability,” said Jens Heithecker, Executive Director of IFA Berlin. “The most fascinating aspect of this markets is that so many different industries are offering their take on the category – from mobile phone manufacturers to healthcare specialists to traditional watchmakers and many in-between.”
Dr. Jan Wassmann, Global Analyst New Products at GfK, said: ”In countries like Germany, GfK insights reveal that smartwatches are having a tremendous impact on the sales of traditional wristwatches. For instance, we see that in the Euro300-500 price range, more than every second watch sold so far in 2017 was connected – or smart. It appears smartwatches are a sort of substitution for traditional watches, as the market for the latter is shrinking.”
Have we reached peak tablet?
The rise of the tablet and the decline of PCs were the big tech story of a few years ago, but now we seem to have reached “peak tablet”. During the past year, retail channel sales of media tablets fell by 18% compared to the previous year (January-October). This was particularly driven by a sharp decline in emerging markets, which account for 34% of demand for computers (desktop, laptops and tablet computers).

The fall in the tablet market coincides with a slow recovery for personal computer sales – after years of decline. Notebook channel sales slightly recovered to decrease “only” by 7% compared to the previous year (January-October), but were strongly supported by improved sales for convertible notebooks with touchscreens and ultra-thin devices. Ultra-thin notebooks meanwhile represent 10% of the global retail demand (excluding North America) for computing devices, particularly driven by Western Europe and APAC as key regions.

Make no mistake: tablets are still very popular and for many consumers the go-to device for media consumption and computing on the go, but the rise of the segment seems to have been stopped and even reversed for now.

“Today, computing means mobile computing and, until recently, consumers had to make a choice: devices that were geared either towards media consumption or productivity. Productivity is finally winning out, but new form factors like ultra-thin devices and convertible notebooks are making the choice easier,” said Jens Heithecker, Executive Director of IFA Berlin.

Carolin Weinmann, GfK Global Analyst Computing, said: “With increasing market penetration for media consumption-oriented tablets and subsequent decreased demand for this category, the replacement of productivity-oriented computing devices was re-initiated. Particularly in developed regions, this is currently helping more design-oriented Ultrathin and Convertible Notebooks to grow into the market, ultimately also paving the way for more premium devices. Hybrid Tablets are only partially able to stop the negative trend for tablets worldwide.”

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Crouching Yeti strikes

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Kaspersky Lab has uncovered infrastructure used by the Russian-speaking APT group Crouching Yeti, also known as Energetic Bear, which includes compromised servers across the world.

According to the research, numerous servers in different countries were hit since 2016, sometimes in order to gain access to other resources. Others, including those hosting Russian websites, were used as watering holes.

Crouching Yeti is a Russian-speaking advanced persistent threat (APT) group that Kaspersky Lab has been tracking since 2010. It is best known for targeting industrial sectors around the world, with a primary focus on energy facilities, for the main purpose of stealing valuable data from victim systems. One of the techniques the group has been widely using is through watering hole attacks: the attackers injected websites with a link redirecting visitors to a malicious server.

Recently Kaspersky Lab has discovered a number of servers, compromised by the group, belonging to different organisations based in Russia, the U.S., Turkey and European countries, and not limited to industrial companies. According to researchers, they were hit in 2016 and 2017 with different purposes. Thus, besides watering hole, in some cases they were used as intermediaries to conduct attacks on other resources.

In the process of analysing infected servers, researchers identified numerous websites and servers used by organisations in Russia, U.S., Europe, Asia and Latin America that the attackers had scanned with various tools, possibly to find a server that could be used to establish a foothold for hosting the attackers’ tools and to subsequently develop an attack. Some of the sites scanned may have been of interest to the attackers as candidates for waterhole. The range of websites and servers that captured the attention of the intruders is extensive. Kaspersky Lab researchers found that the attackers had scanned numerous websites of different types, including online stores and services, public organisations, NGOs, manufacturing, etc.

Also, experts found that the group used publicly available malicious tools, designed for analyzing servers, and for seeking out and collecting information. In addition, a modified sshd file with a preinstalled backdoor was discovered. This was used to replace the original file and could be authorised with a ‘master password’.

“Crouching Yeti is a notorious Russian-speaking group that has been active for many years and is still successfully targeting industrial organisations through watering hole attacks, among other techniques. Our findings show that the group compromised servers not only for establishing watering holes, but also for further scanning, and they actively used open-sourced tools that made it much harder to identify them afterwards,” said Vladimir Dashchenko, Head of Vulnerability Research Group at Kaspersky Lab ICS CERT.

“The group’s activities, such as initial data collection, the theft of authentication data, and the scanning of resources, are used to launch further attacks. The diversity of infected servers and scanned resources suggests the group may operate in the interests of the third parties,” he added.

Kaspersky Lab recommends that organisations implement a comprehensive framework against advanced threats comprising of dedicated security solutions for targeted attack detection and incident response, along with expert services and threat intelligence. As a part of Kaspersky Threat Management and Defense, our anti-targeted attack platform detects an attack at early stages by analysing suspicious network activity, while Kaspersky EDR brings improved endpoint visibility, investigation capabilities and response automation. These are enhanced with global threat intelligence and Kaspersky Lab’s expert services with specialisation in threat hunting and incident response.

More details on this recent Crouching Yeti activity can be found on the Kaspersky Lab ICS CERT website.

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R5m in software fines

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South African companies paid almost R5.2 million in damages for using unlicensed software in 2017 up from R3.6 million in 2016.

This is according to data from BSA | The Software Alliance, a non-profit, global trade association created to advance the goals of the software industry and its hardware partners.

The significant increase in unlicensed software payments – which includes settlements as well as the cost of acquiring new software to become compliant – is the result of more accurate leads from informers, says Darren Olivier, Partner at Adams & Adams, legal counsel for BSA. In 2017 BSA received 281 reports in South Africa alleging the use of unlicensed software products of BSA member companies – this up considerably up from 230 leads in 2016.

“BSA’s recent social media campaign also helped to create awareness among local companies about the need to comply with existing legislation in order to avoid legal action,” Olivier says.

The result has been a 13% increase in settlements paid in 2017, with the settlements total reaching almost R2.5 million.

While the average settlement paid by companies in 2017 was around R36 094, in some cases the amount owed was far greater, as is evidenced by Shereno Printers, a print and design company based in Gauteng, which ended up paying a hefty settlement amount of R260 000 last year in an out of court settlement.

The company’s case was in line with a broader trend, which saw the print and design industry as a whole rank among the top sectors plagued by unlicensed software.

Aside from settlements, companies also paid more than R2.6 million in licenses purchased to legalise their unlicensed software.

And the ramifications of software piracy extend beyond financial implications. “It also results in potential job losses and loss in tax revenue. This is not to mention the financial and reputational damage brought about by security breaches and lost data,” comments Olivier.

As unlicensed software has not been updated with the latest security features, it leaves businesses vulnerable to cyberattack, he explains.

This is a particular problem for companies operating in South Africa where economic crime has recently reached record levels, according to the Global Economic Crime Survey. Indeed, 77% of South African organisations have experienced some form of economic crime. What’s more, instances of cybercrime totalled 29% of economic crimes reported.

This in turn, raises questions around government policy and the adequacy of existing copyright legislation, which only enables the registration of copyright in films, but not in computer programs.

Olivier notes that it is likely the percentage of unlicensed software on South African computers has increased over the past year. “We received many more leads this year, which is an indicator that the amount of pirated software is greater than in previous years,” he comments.

Often unlicensed software is not so much a case of deliberate piracy as it is a result of poor software asset management (SAM).

“For this reason, the BSA encourages all businesses to ensure they have effective SAM practices in place. Companies should be able to confirm what software they are using and are licensed to use – this will help them to identify unlicensed software and can also bring about cost savings. Even the most basic SAM practices such as regular inventories and software use policies can help,” says Chair of the BSA SA Committee, Billa Coetsee.

With this in mind the BSA offers a range of SAM solutions, not only to help organisations reduce legal and security risks, but also to create business value.

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