To stop cybercrime we need to think like the criminals

Efforts to combat cybercrime concentrate on enhanced security, but intercepting the kids drawn into its web might prove better

Whenever William Hague, our esteemed foreign secretary, speaks on the subject of cyberspace, what comes to mind is Dr Johnson's celebrated comment about seeing a dog walking on its hind legs: one is surprised, not that the thing is done well, but that it is done at all. And there he was last Monday evening, hosting a reception in the Science Museum to launch the government's lavish talkfest, the London Conference on Cyberspace. The subject was, he told his agreeably lubricated audience, "a phenomenon that has dramatically shaped the way we live, work and interact". The conference was "the first international conference of its kind", and would facilitate all kinds of dialogue on the "threats and opportunities" of cyberspace.
The conference was a testimony to how far the Foreign Office has travelled in the last decade and a half. From being an outfit that was wary of the net, it has become an admired example of how a government department can engage productively with the networked world. Earlier this year, I met a senior foreign diplomat who, concerned that his country's foreign service was way behind the curve, had come to Britain to observe how the FCO was harnessing the internet. He went away very impressed, nay stunned, by the way in which the department engages with online services (it even allows its diplomats to blog as individuals). When researching this column, I came across a couple of YouTube videos about the conference made, not by an official in Whitehall, but by Judith Macgregor, Britain's ambassador to Mexico – in both English and flawless Spanish.
William Hague talked of "threats and opportunities" but much of the talk at the conference inevitably focused on the former. And with good reason. Most governments have now woken up to the fact that cybercrime is a booming business. Reliable statistics are hard to come by: online crime is massively under-reported by banks and many of the organisations publishing scary numbers have a vested interest in raising hairs. But nobody doubts that cyberspace has become a really lucrative opportunity for crooks. The most recent "state of cybercrime" report from Symantec, a security firm, asserts that cybercrime now costs the world $388bn annually, of which $114bn is the direct cash cost of online fraud, and the remainder the indirect costs of dealing with its consequences. This is bigger than the black market in marijuana, cocaine and heroin combined.
Most people have at least a hazy idea of how the drugs trade operates, but ignorance about cybercrime is nearly total. The potential rewards of online skulduggery are as great as those from drugs, but the risks of detection and punishment are negligible by comparison. So if you were a rational criminal today you'd be much better off launching phishing expeditions to obtain people's bank details. That way you don't have to worry about being shot by your criminal competitors; and the risks of having your collar felt by PC Plod are infinitesimal.
To date, the best insight we've got into the arcane world of cybercrime is a recent book by Misha Glenny entitled Dark Market: Cyberthieves, Cybercops and You (Bodley Head). Mr Glenny is not a geek but an experienced investigative journalist and he had the interesting idea of focusing not on technology but on a number of individuals who were once bigshots in the cyber-underground but who were – for the most part – eventually apprehended by law enforcement.
Two things stand out from his account. The first is the uncanny way in which the cybercriminal community mirrors the real world of online commerce. Thousands of people regularly "skim" credit-card details, for example, but then have to find people who will feed cloned cards into ATM machines so that the resulting cash can be, as it were, harvested. How does one recruit such people? How does one sell stolen card details? And how can criminals (who by definition are untrustworthy individuals) establish online trading systems on which they can rely? The answer is by setting up trading and recruitment exchanges such as CardersMarket and Darkmarket and using escrow systems just like lawyers do in the real (legitimate) world.
The other striking thought triggered by Mr Glenny's book is that our current approaches to cybercrime are too focused on security technology (on which the governments represented at the London conference are spending billions) and too little focused on psychology. Cybercriminals have pretty distinctive personality profiles; they tend to be clever, young and overwhelmingly male. Often they wander into crime more or less by accident. They might therefore be easy to spot and perhaps divert before they ever skim a credit card. And if we could catch them young, then cyberspace might become a safer place.

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How Android swallowed the UK smartphone market in 18 months

Figures from Kantar ComTech show how dramatically Android has risen to prominence - but what does that mean for rival contenders such as Nokia, Apple and RIM?

In just 18 months, Android has come from nowhere to become the mobile OS powering just under half of all smartphones sold in the UK – and half the people owning a mobile phone in the UK have a smartphone.
In the process it has bested Nokia's Symbian (since declared dead, though still stumbling to its grave), RIM's BlackBerry OS (which is fighting back) and Apple's iPhone (which, given its comparatively high price until the latest cuts to the iPhone 3GS and iPhone 4, was never likely to dominate long-term).
It's an amazing run for Android which is likely to carry on into 2012, since it's taken four years to reach this point (longer if you count Nokia's, RIM's and Microsoft's offerings from 2005/6 as smartphones) but the number of smartphones being sold is accelerating.
What these figures don't show you is that the entire market is growing; Kantar ComTech WorldPanel, which provides the statistics, declined to give absolute sales figures (they want to have something to tempt clients to buy the full reports). A minor note: these figures go up to 2 October, just before the iPhone 4S launch; expect that Apple's share will recover slightly. Even so, Android is just going to keep growing.
It's very likely that in the next two years you'll see smartphones reach something like 90% penetration in the UK - if only because fewer shops and carriers will be selling feature phones, for two reasons: (a) they make less money selling them in the first place (b) carriers get less money from phones that don't have data plans.
Android is almost certain to sweep the board here: it could hit up to 70% market share in one or two years (remember, market share is "share of handsets being sold", not "share of handsets in peoples' hands"). That's because Android handsets from cheaper manufacturers such as China's Huawei and ZTE will come in at the bottom of the market (it's noticeable how the "Other" segment has fallen to zero in the past year). Pretty soon you're going to be able to get a smartphone for almost nothing in your local supermarket. And you can already get really cheap PAYG data options from Three or GiffGaff.
For the record, I think it's great that smartphones are becoming pervasive. Putting the internet in everyone's hands, wherever they are? (If only the mobile carriers would stop holding up the 4G auction.) That's got to be a really good thing.
Does it matter, though, whether the pervasive OS is Android, or what share this or that OS has, beyond the willy-waving horse race that some people love to indulge in? Here's Henry Blodget over at BusinessInsider, who slams on the CAPS LOCK to pronounce ATTENTION APPLE FANS: Samsung Blowing Past Apple To Become The Biggest Smartphone Vendor Is Not Good News". (By which he means not good news for Apple. Though by implication, it would also be Not Good News for RIM and Nokia either.)
Blodget's take:

As the history of the tech industry has demonstrated again and again, technology platform markets tend to standardize around a single dominant platform. Although several different platforms can co-exist while a market is developing, eventually a clear leader emerges. And as it does, the leader's power and "network effects" grow, while the leverage of the smaller platforms diminishes.

In the case of Android, this growing power will not lead to enormous profits for Google, because, right now anyway, Google is not selling Android. (Instead, Google is building a "moat" around its wildly profitable search business and making it easier for people to use Google search from their phones. This may change when Google acquires Motorola and starts selling integrated handsets itself.)

But the better Android phones get, and the more market share Android gains, the more Android's network effects will increase, and the more Apple's leverage over the iPhone ecosystem will diminish. And that can only be bad news for Apple's ability to continue to command exploding profits from iPhones, app developers, musicians, media companies, and others who now must pay it big distribution fees because they have no other choice.
Similarly, the bigger other global handset manufacturers get relative to Apple, the less (relative) leverage Apple will have over partners in the global parts-and-manufacturing supply chains.

There's three things there. Let's take the last one first: supply chains. Apple didn't do badly in 2007 when it was an entrant to the mobile phone supply chain, and it's got enough money in the bank that it can guarantee supplies any time it likes. (That's what it uses its cash reserves outside the US to do: buy up future outputs from various factories.) Most smartphone manufacturers don't have much scale; that's unlikely to change. Samsung is likely to get bigger (though it would be helpful if it would be more forthcoming about how many phones and how many tablets it has pushed out the door). That won't stop Apple making phones, though. And by proxy, it won't stop RIM or Nokia making phones - Nokia is still the world's largest in handset volume. Only mismanagement can mess that up.
Now to the first point, about "the history of the tech industry". Actually, the history of the tech industry is a wide and varied thing, which doesn't show any clear lessons about dominant platforms. Yes, you do get dominant platforms, but that doesn't prevent other players existing within niches and making good money from it. Cite 1: Apple, making nice money, thanks, from the PC market. Cite 2: Microsoft, making nice money, thanks, from the server OS market, despite Linux being the most-used. The leverage of Apple and Microsoft in those respective spaces is helped by the existence of standards, and it's those - plus the internet - which make the "platform" idea less powerful on smartphones.
Think of it like this: if the PC market had started when the internet was already pervasive, then operating systems would have had to have internet standards built in; that would have forced more interoperability. It was the threat that Netscape might force interoperability on all computing platforms that scared the bejeezus out of Microsoft in the 1990s. So smartphones, which are arriving when the internet is pervasive, will live by different standards.
Horace Dediu, who runs the consultancy Asymco, puts it like this: imagine a world where 5 billion people have a smartphone. In that case, a 10% share translates to 500 million users. Even a 1% share is 50 million. If you couldn't make a profit from 50 million users, you probably shouldn't be in the business at all.
And just a side note on that "wildly profitable" Google search from their phones. All the web stats, and Google's own stats, indicate that - for now anyway - about two-thirds or more of mobile web browsing and searching is mostly done by iOS users (iPhone, iPod Touch, iPad). In some places it's much higher. Now, past performance is not necessarily a guide to the future (you only have to look at the graph to see that). But you have to ask too: what exactly is the "network effect" that Blodget thinks Google will get from Android? People writing apps? They already do; but it hasn't dented the bigger platforms.
The interesting challenge will be for Nokia and RIM, which have to establish themselves at the higher end of the market as everything shifts to smartphones. But in a growing market, the only problem is how to supply enough people. Android's a whopping success. But that doesn't shut anyone out - yet.

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