While it's doubtful the U.S. Navy will release this app into the wild, it is likely that some other group may release a similar application-after all, the capability to capture a celebrity or politician accidently making news, or to get critical intelligence on a foreign government, rival political party or business competitor, brings massive power. It also suggests that any smartphone may eventually be at risk, and that the only appropriate long-term fix may very well be the ability to ensure that monitoring software can't be used on phones in secure areas.
Is it any smartphone, though? Researchers indicate that PlaceRaider or similar malware could run on the iOS, Windows Phone and Blackberry platforms, but the highly curated nature of their related application stores makes it far less likely that such an app would "sneak through" and be available for download. That happened to the Google Play store earlier this year, when 100,000 Android devices were infected with malware after users downloaded mobile games, and that came on the heels of a report that Bouncer, the Google malware detection system, is easy to crack.
Google itself doesn't have a great reputation, either. Given the company's history with its mapping activities and its cavalier attitude toward privacy-both exemplified in the Google Street View spying incidents-it's entirely possible that an app such as this could actually be passed off as a feature for indoor navigation. (Google Maps already offers indoor floorplans at airports, malls and certain retail stores.)
Android Phones Represent an Unacceptable IT Security Risk
Simply put, the Android platform is downright unacceptable in any area where privacy is a concern.
Any phones that have been jailbroken, use side-loaded applications that bypass the Google Play store, or come from vendors who have aggressively moved against personal privacy should likely be barred by your corporate bring your own device (BYOD) policy unless their security can be assured by some other process. While any other practice may appear in hindsight to be negligent, appearing negligent may be the least of your worries if it is your unfortunate comments or videos that go viral.