The app in question came from Jackeey Wallpaper, and it was uploaded to the Android Market, where users can download it and use it to decorate their phones that run the Google Android operating system. It includes branded wallpapers from My Little Pony and Star Wars, to name just a couple.
Update: Lookout notes it does not capture browsing history and text messages: It collects your browsing history, text messages, your phone’s SIM card number, subscriber identification, and even your voicemail password, as long as it is programmed automatically into your phone. It sends the data to a web site, www.imnet.us. That site is evidently owned by someone in Shenzhen, China. The app has been downloaded anywhere from 1.1 million to 4.6 million times. The exact number isn’t known because the Android Market doesn’t offer precise data. The search through the data showed that Jackeey Wallpaper and another developer known as iceskysl@1sters! (which could possibly be the same developer, as they use similar code) were collecting personal data. The wallpaper app asks for permission to access your “phone calls,” but that isn’t necessarily a clear warning.
Not much proof, but interesting.