Android is starting to pick up steam in the world's biggest nation – China -- in terms of both population and cell phone use.  With its rise in popularity, a number of third-party app stores have popped up alongside the official Android Marketplace.  While these third parties distribute paid software, they are also popular as they take more of a lax stance to potentially pirated or cloned apps.

The dark side of the under regulation of these third-party app distributors has reared its ugly head, with a new trojan virus preying on unsuspecting Chinese Android users.

According to Lookout Mobile Security, a startup that is emerging as promising party in the hot mobile security market, a sophisticated Trojan named Geinimi has infiltrated third-party app markets in China and is constructing what appears to be a smartphone botnet.

The firm writes in a blog, "Geinimi is effectively being ‘grafted’ onto repackaged versions of legitimate applications, primarily games, and distributed in third-party Chinese Android app markets.  The affected applications request extensive permissions over and above the set that is requested by their legitimate original versions."

Lookout Mobile Security's free and paid software has been updated to root out the nasty package.

The company is hot off a third series of venture capital funding in which it raised $19.5M USD.  It faces tough competition from DroidSecurity, a rival Israeli startup that was just scooped up by AVG.

According to mobile security experts we've spoken to, Android is generally more secure than iOS(the operating system used by the iPhone and iPad).  And Google does a good job scouring its Android Marketplace for potential malware.  Nonetheless, Android users are attacked almost as much as Apple users, given their tendency to modify their phones more and use third party app stores at a higher rate. 

Unlike Apple, which has actively opposed such practices, Google has practiced a more liberal policy concerning unofficial apps and phone modification.  The Chinese market, in particular, has seen a dramatic rise in cell phone malware of late.