But it only affects jailbroken devices running apps that haven't been approved by Apple
The virus, dubbed the ikee worm, breaks into iPhones, changing lock screen wallpaper to an image of 80s pop star Rick Astley with the message "ikee is never going to give you up".
It's the biggest hit Rick Astley has had for 20 years.
According security specialist Sophos the worm is confined to Australia, and is capable of breaking into jailbroken iPhones if owners have not changed the default password (alpine) after installing SSH.
Once in place, the worm attempts to find other iPhones on the network that are similarly vulnerable, and installs itself again.
Sophos researchers identified that the worm appears to have been created by a 21 year old student from Wollongong, New South Wales after discovering his Twitter page where he admitted writing the worm.
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Graham Cluley, senior technology consultant for Sophos, said: "The first indication that anything is wrong with your iPhone is if you see a picture of Rick Astley. Fortunately the worm doesn't do anything more malicious than that - it doesn't steal information, access your emails or snoop on your calls. But the source code has been made available on the internet - meaning other hackers could create more dangerous versions of the worm."
