AVG Technologies (NYSE: AVG) announced that the free version of its AntiVirus Security for the Google (NASDAQ:GOOGL) Android platform has surpassed 100 million downloads and reached the coveted 100 million to 500 million downloads category in the Google Play store. The company successfully edged out its competitor Symantec (NASDAQ:NLOK) with virus protection application Norton Mobile Security that's in the 50 million to 100 million downloads category.
Android malware threats growing at a rapid pace
According to Kaspersky Labs:
Android has established itself as the cybercriminal's target of choice when it comes to mobile operating systems and can be considered the mobile world's equivalent to Windows.
Kaspersky Labs reported that in the second quarter of 2013, the company detected 29,695 new types of malicious malware that targeted mobile platforms. This represents a 23% growth in mobile malware from the first quarter of 2013, in which 22,749 new types of mobile malware were found.
Kaspersky Labs concluded that virtually all threats detected were targeting the Google Android platform. The rise in malicious malware offers an opportunity for AVG and Symantec to grow their subscriber base for antivirus related products.
The growing number of malicious malware threats is likely due to the open innovation model on the Google Android platform. According to a recent qz.com report, Adrian Ludwig, Google's Android Security Chief, gave a presentation at the Virus Bulletin Conference in Berlin to address the growing threat of malware.
Ludwig presented data that showed that less than 0.001% of application installations on the Android platform are capable of causing harm to users. Ludwig's argument was that there are several layers of defense mechanisms in place that ultimately make the platform secure.
Although the research presented by Google and Kaspersky Labs seems contradictory, the fact remains that consumers are concerned about the security of their mobile devices. This is clearly demonstrated by the fact that AVG recently broke the 100 million downloads barrier on the Google Play store.
AVG as an investment
AVG is capitalizing on the growth opportunity in the mobile security space. AVG's David Ferguson, General Manager of Consumer and Mobile, said:
In the last year, mobile has been an area of strategic focus for AVG and as we look ahead to 2014 and beyond, it is clearly going to continue to grow considerably.
The AVG AntiVirus Security application is available for free and is easily upgradable to the premium AntiVirus Security Pro application that features more advanced protection from viruses, malware, and spyware.
As an investor, AVG is a very attractive company: AVG recently reported sales of $100.4 million in the second quarter of 2013, which is a 22% increase over sales of $82.5 million reported in the second quarter of 2012.
The company is very profitable and recently reported $0.52 earnings per share. The company is well positioned to tackle growth in the mobile space. Investors should look for AVG to continue growth in both sales and profits.
There's plenty of room for Symantec
Although AVG currently edges out Symantec in Google Play downloads, Symantec is a major player in mobile security for the Android platform.
Investors should be cautious of Symantec's anemic sales growth. In the September quarter of 2013, the company reported sales of $1.64 billion compared to sales of $1.70 billion reported in the September quarter of 2012. The company also reported that license revenue has declined 31% year over year in the September quarter.
Symantec's revenue has remained flat in product maintenance and subscriptions. Surprisingly, the company posted $0.50 earnings per share, but explained that this number was driven by a favorable IRS settlement that increased net income for the quarter.
The company expects revenues to remain flat in future quarters. Symantec forecasts revenues to fall between $1.63 and $1.67 billion for the December quarter of 2013. As an investor, it would be prudent to wait for Symantec to prove that the company is capable of growing revenues.
The bottom line
AVG and Symantec are likely to grow revenues due to the ever-increasing threats to mobile security. As the number of mobile users and devices continue to grow, the number of hackers looking to exploit weaknesses in mobile platforms will likely increase. 100 million downloads of AVG's AntiVirus Security application is likely just the tip of the iceberg for the antivirus software company.
Editor's Note: The original version stated Lookout was a product of Symantec, that is incorrect. This version has been correct and Motley Fool apologizes for the error.