App Store recording $459 million in piracy losses?
updated 04:50 pm EST, Thu January 14, 2010
Estimate makes several assumptions
The software industry is missing roughly $459 million in App Store revenue as a result of piracy, a new estimate claims. Using the median in a Bernstein analysis suggesting that between 13 and 21 percent of apps are paid, and a collection of other figures pointing to a piracy rate of 75 percent, 24/7 Wall St. suggests that pirated app downloads are in excess of 1.53 billion. While this would theoretically indicate $4.59 billion in losses with an average app price of $3, the figure only comes to $459 million if one assumes that 10 percent would actually have bought an app if a pirated copy were not available.
Apple's own losses would correspondingly be $140 million since the debut of the App Store in July 2008. The impact is said to be "significant," given that Apple may have accrued between $500 million and $700 million in App Store share during the same timeframe. The problem is however considered more of one for developers, as Apple generates far more income from iPhone and iPod touch sales than it does from the App Store.
BS
01/14, 05:36pm reply
This is assuming, just like all those other worthless studies on the value lost to piracy, that people would have bought the same apps had they not been able to pirate them. This is patently false and misleading.
WiseWeasel
Fresh-Faced Recruit
Joined: Apr 1999
RTFA
01/14, 05:45pm (1 reply) reply
"the figure only comes to $459 million if one assumes that 10 percent would actually have bought an app if a pirated copy were not available."
cmoney
Mac Enthusiast
Joined: Sep 2000
BS
01/14, 05:55pm reply
You can't lose money you never would have earned.
Made up numbers with made up facts.
Made up!
Eriamjh
Addicted to MacNN
Joined: Oct 2001
Total BS
01/14, 08:00pm reply
I want to play with numbers, too...
If only about 10% of iphones are jail-broken, yet 75% of app downloads are piracy, then that means only about 3% of non-jailbroken phones are installing apps. That means over 85% of iPhones/touches are not even bothering to use the App Store. I call BS big time!
brianosaurus
Fresh-Faced Recruit
Joined: Nov 2001
By MacNN Staff
01/15, 07:41am reply
What exactly does 'By MacNN Staff' mean here? Did someone run across this, and without applying any further thought or analysis, decided to post it, but didn't want it attributed to them? Or did a big committee of staff spend all of ten seconds looking at it and then decided to post it without really thinking about the issues it would raise if by some small chance the numbers are accurate. Even a superficial analysis should lead one to conclude that these numbers are simply not credible. And if this article isn't credible, are any of the others at this site credible?
However, the article does raise some interesting issues. How do pirates operate in the iPhone/iPod universe? How do vendors estimate the extent of piracy? Is jailbreaking an absolute necessity? Are users inclined to jailbreak their iPhone/iPods uniformly (or at least appreciably) less honest? Do they choose to deal with the shifting landscape of workarounds needed to jailbreak and maintain that state despite continual efforts by Apple primarily to install pirated versions of software? I used to jailbreak my iPhone before the emergence of the App store, and that wasn't true for me. Perhaps MacNN could do some real investigative reporting and a survey or two and try to establish some substance here.
davidlfoster
Fresh-Faced Recruit
Joined: Dec 2005
Huh? How?
01/15, 11:45am reply
How do you pirate iPhone apps? I know a lot of iPhone users, and none have pirated anything. 75% of apps are pirated means that almost everyone either pirates them or knows people who do.
Sounds to me like they're not being clear. 75% of titles may be pirated, but not actual installs. Furthermore, that is probably a desktop figure, and not about the app store.
Just sounds totally unrelealistic.
bfalchuk
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Joined: Jul 2003