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Wednesday, 13th January 2010

Apple App Store Has Lost $450 Million To Piracy

UPDATE: Some Readers Might Also Want to Review, "$450 million iPhone piracy figure not grounded in reality" (via ars technica, January 14, 2010)

Apple App Store Has Lost $450 Million To Piracy

Apple and the companies that sell software for the iPhone and iPod touch at the App Store have lost over $450 million to piracy since the store opened in July 2008 according to an analysis by 24/7 Wall St. There have been over 3 billion applications downloaded since the App program began. Bernstein analyst, Toni Sacconaghi, estimated that between 13% and 21% of those downloads are from paid applications. According to this analysis, the average price of an application purchased at the App Store is $3. Sacconaghi estimated that Apple’s revenue from the App Store is between $60 million and $110 million per quarter. That amount has certainly increased since this research report was published because of the rapid growth of the number of applications.
...
While it is difficult to get a firm grasp on exact piracy rates, some developers have put features in their software that prompts it to “phone home” when the phone has been cracked. Developer testimonials put the figure much higher than many analyst would expect. Developers Neptune Interactive Inc and Smells Like Donkey Inc have reported piracy rates has high as 90% for their game $1.99 Tap-Fu, and claim that it was available in a pirated version within 40 minutes of its release on the App Store. Web Scout Inc. reports a 75% piracy rate for its $0.99 iCombat game. The developer of the $4.99 art program, Layers, reports a piracy rate of 75%, and Fish Labs reports 95% for its $7 Rally Master Pro 3D. Piracy rates almost certainly increase with the cost of an application. TomTom’s US & Canada GPS product for the iPhone, which retails for $79.99, ranks second in handheld application downloads on piratebay.com, a file-sharing torrent. The top 100 downloads listed at piratebay.com is littered with expensive TomTom and Garmin GPS products. A conservative estimate of the average piracy rate is that for every paid application developed and sold at the App Store 3 more are pirated.

Source: 24/7 Wall St.


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