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Scared yet?

By releasing the code of its Ice Cream Sandwich today, Google (NASDAQ:GOOG) has, at a stroke, made most of the smart phone market open source.

That's because phones running Android are now over half the smart phone market, according to Gartner Group. Samsung (OTC:SSNLF) is now the world's largest smart phone maker, selling 24 million units in the last quarter alone.

And whether or not Google considers itself a phone company, they are big business. After its acquisition of Motorola Mobility (NYSE:MMI), smart phones are expected to represent just under half the company's revenues.

This is an important marker because critics have been pounding the table for years about open source being inherently insecure. That's one (of many) reasons why Linux never made it on the desktop, with proprietary Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) dominating operating systems. But now, at a stroke, Linux dominates the hand-held market, because Android is, at heart, a Linux.

It's true that the number of Android viruses is increasing with Juniper Networks (NYSE:JNPR) reporting a six-fold increase in Android viruses since June. But is that because the software itself is insecure? Or is it because Google hasn't controlled the app market as Apple has?

But even if infections are increasing, that's also an opportunity. IBM (NYSE:IBM) has seized it with a “cloud-based” security service for enterprises called Device Security Management.

The consumer market is also growing. Intel's (NASDAQ:INTC) McAfee unit already is sending out press releases urging that Android users make a security application their first download. McAfee's own Android security product is called WaveSecure and it's just a matter of time before a trial version of such software becomes a standard carrier offering.

The bottom line is that, regardless of the dangers, Google has created new markets for both good guys and bad guys with Android. Your smart phone is likely to look a lot more like your PC than you thought.

Disclosure: I am long GOOG, INTC.

Source: Most Phones Now Open Source, Opening New Security Market