Mobile Device Security Creates Attractive Growth Opportunity for Symantec

February 14th, 2011 by Trefis Team
SYMC: Symantec Corp logo
SYMC
Symantec Corp

Symantec (NASDAQ:SYMC) is the leader in the security software market and competes with McAfee (NYSE:MFE) (recently acquired by Intel (NYSE:INTC), Computer Associates, AVG, TrendMicro and Kaspersky Labs. As per our estimate, security software (for both consumers and businesses) constitutes more than 50% of our $21.36 price estimate for Symantec stock, while storage software makes up the balance. Our estimate for Symantec stock implies upside to the current market price.

We believe that the next area of growth for Symantec will come from the mobile device security market. The mobile device market primarily consists of phones, tablets and e-readers. According to Gartner, the mobile phone market grew at a year-over-year (YOY) pace of 32% in 2010, to reach 1.6 billion unit sales. [1] The tablet market is also expected to show fast growth going forward. [2]

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With the increase in mobile device sales, security requirements will also increase. This is where security software companies like Symantec will find opportunity to boost their business.

Mobile Security Market to Boost the Addressable Market for Symantec

We estimate that the overall consumer security market has increased from $2.5 billion in 2005 to $3.5 billion in 2009, and we expect it to continue to increase past $5 billion by the end of our forecast period.

[trefis_forecast ticker=”SYMC” driver=”0048″]

See our full analysis and $21.36 price estimate for Symantec

Mobile security is particularly important for enterprises, as companies must keep proprietary data confidential. We estimate that the enterprise security market will continue to increase from about $5.3 billion in 2011 to $7 billion by the end of our forecast period.

[trefis_forecast ticker=”SYMC” driver=”0065″ noanim=”1″]

According to Infonetics Research, a market research firm, the mobile security client market will form an increasing portion of the total security client market. [3]

The pie-charts below suggest that the mobile security market should become increasingly important for all security software companies including Symantec. According to a report from McAfee, the amount of mobile malware in 2010 increased by 46% compared over 2009; and, out of 55 million total pieces of malware that McAfee has identified, 36% were created in 2010 alone. [4]

Symantec stock stands to gain if the mobile security market does indeed become a meaningful portion of the overall security software market. You can modify the above charts to see the upside potential that Symantec’s stock possesses from faster security software market growth.

Notes:
  1. Gartner report: Mobile phone market grew at 32%, while smartphone market grew at an even faster pace of 72%, February 2011 [↩]
  2. Gartner report on tablets: Tablet market is expected to grow from around 20 million in 2010 to 208 million by 2014 [↩]
  3. Infonetics Research: Mobile security market is expected to show huge growth in 2010 and beyond, October 2010 [↩]
  4. McAfee report on Mobile Malware growth: February 2011 [↩]