Cost of App Store Piracy Pegged at $450 Million

Discussion in ' News Discussion' started by MacRumors, Jan 13, 2010.

  1. MacRumors macrumors bot


    Apr 12, 2001

    24/7 Wall St. reports that Apple and App Store developers appear to have lost approximately $450 million to piracy since the marketplace for iPhone and iPod touch application opened in July 2008. The rough number is based on several estimates regarding the proportion of downloads that are paid applications, the piracy rate for paid applications, and the proportion of pirated app users who would have paid for the applications had pirated versions not been available.
    Based on Apple's take of App Store sales of 30%, the report concludes that piracy has cost Apple itself in the neighborhood of $140 million over the past year and a half, a significant loss for the company, especially considering Apple's estimated total App Store revenue of $500-$700 million.

    The report also notes that Apple has remained silent about the issue and taken no significant steps to address the issue beyond the initial security measures deployed in the App Store. Assuming Apple's true goal is to sell iPhones and iPods, then like the original iTunes Music Store, the App Store may very well be viewed as a means to that end. Consequently, the hit to Apple's bottom line may be considered somewhat acceptable to the company if it continues to drive device sales, leaving developers to bear the brunt of the revenue loss.

    Article Link: Cost of App Store Piracy Pegged at $450 Million
  2. powerbook911 macrumors 68040


    Mar 15, 2005
    What are they talking about???

    I didn't even know App Store piracy existed. This story seems a bit wild.
  3. dmmcintyre3 macrumors 68020

    Mar 4, 2007
    Who cares, how many of the people who pirated software would have really bought it? What about the people who pirate it before they buy it to know if it's any good?
  4. funkyp56 macrumors member

    Jun 27, 2007
  5. miketcool macrumors 6502a


    Jun 24, 2003
  6. jglavin macrumors regular

    Mar 21, 2006
    What? :eek:

    Edit: The most-snatched app on the site which I know of, has only been snatched 500 times. I'm not sure where they found these 1.5 billion downloads...
  7. ata macrumors member

    Mar 21, 2007
    I wonder how they came up with 10% as the number of illegal app downloads that would otherwise have been sales... whether it is based on any empirical data or if it is just an estimate (i.e. made up). I know it's probably meant to be a conservative estimate, but I would think it's likely even lower than that.
  8. ThunderSkunk macrumors 68020


    Dec 31, 2007
    Colorado & Ontario
    Cost? I would love to see an itemized detail of this cost. Show me where it has cost anyone anything.

    Not making money, is not the same as being cost it.

    Get your language right.

    And no, I don't pirate apps.
  9. HaXoR7Om macrumors member


    Jan 7, 2010
    United Kingdom
    Well what do they expect at the prices that some developers charge :D
  10. DTphonehome macrumors 68000

    Apr 4, 2003
    I understand that iPhone piracy is theoretically possible, but how can they possibly suggest that 75% of all apps in circulation are on the devices of users who are savvy enough to figure out how to do it?! That's simply absurd. You can't simply download an iPhone app like you would download a copy of Windows or Photoshop. The authors of this report obviously don't know that.
  11. Stella macrumors 604


    Apr 21, 2003
    A ratio 3 to 1 is very surprising. I wouldn't have imagined there were so many jail broken devices around for that kind of ratio to be so high.
  12. ChazUK macrumors 603


    Feb 3, 2008
    Essex (UK)
    That does look quite bad.

    How can they tell what has been pirated out of interest?

    EDIT: Another thing, don't articles do more harm than good by making people aware that you can pirate apps?
  13. aristotle macrumors 68000


    Mar 13, 2007
    Piracy among the jailbreaking community is rampant. That is one of many reasons why I am now opposed to jailbreaking. The other reason is because jailbreaking destroys the security model leaving the iPhone vulnerable to malware.

    I would rather see carrier customers pressure carriers in countries like Canada and the US to work with Apple to offer legal/official unlocking of iPhone after completion of a contract, sale of iPhones off contract and offer official unlocking to existing customers for a nominal fee.

    I never installed pirated apps when I did jailbreak my previous iPhone (3G) but I can see how some people get tempted into going down that road after the jailbreak to unlock their phones.

    I think Apple needs to work with carriers to offer unlocking without a jailbreak and also start banning IMEI's of jailbroken phones found to be running pirated apps.
  14. baryon macrumors 68040


    Oct 3, 2009
    How the hell can one pirate iTunes apps? And how come two thirds of all downloaded apps are pirated and I haven't heard about this at all? The whole iTunes thing is such a closed system I thought there wasn't a way to pirate it...
  15. jlasoon macrumors 6502

    Jun 1, 2006
    Orlando, FL
    How can you lose money to piracy when most pirates wouldn't think twice about buying the product?
  16. paradox00 macrumors 65816

    Sep 29, 2009
    With a jailbroken iPhone, yes.

    Deleted the rest as it was inaccurate.
  17. aristotle macrumors 68000


    Mar 13, 2007
    Like 99 cents? If you can afford an iphone and data plan, then you can afford to buy apps. A lot of pirates hoard apps that they never use.
  18. nickXedge macrumors 6502


    Feb 13, 2008
    Long Island
    I also didn't know that piracy of apps existed. I feel like we would have heard about this by now. Do they mean that if for example I buy an app, and I share it with my brother, I pirated it to him? Because as far as iTunes is concerned, we authorized both our computers so we could share music and thats perfectly okay in terms of Apple's policies, so that's not pirating. I think the author of this article is confused, and possibly stupid.
  19. WildCowboy Administrator/Editor


    Staff Member

    Jan 20, 2005
    That's exactly what they did...they estimated that only 10% of pirated downloads would have been a sale.
  20. funkyp56 macrumors member

    Jun 27, 2007
    As far as I know, apple does not think that is piracy
  21. ShiftyPig macrumors 6502a

    Aug 24, 2008
    Exactly. People download things from the App Store when the price of it is lower than or equal to what they are willing to pay. If someone downloads a pirated copy of Madden instead of paying the 99 cents, that just means they weren't willing to pay 99 cents, not that they stole 99 cents from EA.
  22. Digital Skunk macrumors 604

    Digital Skunk

    Dec 23, 2006
    In my imagination
    A good deal of the people buying the phone can't afford either! I've sold many a phone to customers with cold hard cash, full price, and some with terrible credit yielding deposits of $500 or more.

    I am a Pro Developer kind of guy, but with the money that the App store IS making, I could care less about that $0.99 that just left some devo's pocket.
  23. eawmp1 macrumors 601


    Feb 19, 2008
    A media outlet with piracy issues...really? Can DRM be far behind? :rolleyes:
  24. fergwad macrumors newbie

    Apr 22, 2009
    I read that as "we made an arbitrary decision about this figure".

    That may be a "fair" estimate, but it doesn't mean it is accurate.

    A very important distinction. Thank you for making it!
  25. Buschmaster macrumors 65816


    Feb 12, 2006
    Dear pirates,
    Don't try to justify it. You're stealing. Just stop.


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