Yahoo News is reporting today that as many as 1 million Chinese mobile phone users are infected with a new SMS trojan. The target operating system has not been mentioned in any of the reports (we'd guess Android or Symbian), but the effects of the virus are well reported. Once a phone is infected, it transmits the contact list to the virus authors, then begins sending out spam SMS messages to contacts with links leading to malware. It also sends messages to premium rate numbers. This has apparently racked up $300,000 bills in some cases.
To add insult to injury, the virus is masquerading as an antivirus app to lure in new victims. Chinese authorities have tracked down the company that allegedly made the antivirus app, but they claim no involvement with the trojan. They insist they are victims of the evil-doers as well.
As if things couldn't get worse, other malware authors have begun copying this virus to create their own mobile cash machines. The day might be coming when antivirus apps are an unavoidable necessity on smartphones.