Oberheide's application was a proof-of-concept, and had no malicious intent. He was simply out to make a point about Android security. You can learn more about his research and the talk he gave at his site.
Essentially, Oberheide sheds light on a potentially serious weakness in how the apps in Android's App Market work. Those applications are free to download new code after they're installed by the user. That means that an application that starts out providing a benign function, such as collecting wallpapers, organizing photos, providing movie reviews -- anything -- could potentially become an application designed to snoop and steal data or launch denial or service attacks. These security warnings on mobile devices isn't new. Late last year we reported on botnets targeting Jailbroken iPhones in Mobile BotNets: A New Frontline. In February computer scientists from Rutgers University demonstrated how smart phones could be as susceptible to rootkit infiltration as PC and server operating systems.
Obviously, consumers will have to be careful about what applications they download, use, and trust. However, enterprises may need to go a step further and control what applications employees can install on phones that are used to connect to corporate assets. For years now it's been clear that relying on virtual-private networks alone wasn't enough to secure remote PCs accessing the enterprise network and they won't be enough to keep mobile device access secure, either.
As for the "Kill Switch" ability within iPhone and Android phones. That capability in vendors' hands is a bitter pill to swallow. No one likes the idea of a software or mobile handset provider having the ability to yank applications off of our devices. However, infected mobile devices pose a somewhat different set of challenges than PCs connecting to the Internet.
For instance, while tens of thousands of PCs infected with bots can launch a distributed denial-of-service attack that can take down a Web site, they can't threaten the availability of the Internet itself. Unfortunately, cellular networks aren't so resilient. It's much easier, relatively, to make an entire cellular network inaccessible through denial-of-service attacks. And vendor kill switch capabilities may be the only way shut those down.
Is that ideal? No. It'd be much more preferable to build more resilient wireless networks - and keep vendors from being able to reach into our handsets to uninstall whatever they wish.