Piracy Costing App Store $450 Million

It might not seem like one person pirating apps would costs developers much money, but it really adds up when you consider all the people who do it. You have to jailbreak your device to get the most widely-used piracy tools, and after a recent report, it’s easy to see why Apple tries so hard to counteract it. A report earlier today estimates the total cost of pirated apps to be $450 million. 

The number was published today in the financial blog, 24/7 Wall St. Their estimate is based on a slightly older report from Bernstein analyst Toni Sacconaghi, which estimated lost revenue at between $60 million and $110 million, figures that are believed now to be low.

If their estimates are true, it means that for every legitimate purchase of an app from the App Store, three copies of apps are stolen through piracy channels. The same report also estimates that of the 3 billion app downloads that have taken place, 17% of them (510 million) have been purchases of paid apps.

If you consider that probably 10% of the people who pirated the apps would have opted to pay for it if the ability to pirate the apps was taken away, that 10% would translate into $459 million in revenue from the apps they would have purchased. That’s $459 million that isn’t going to Apple or to developers because of piracy.

That’s why it’s so unusual that Apple hasn’t done a great deal to stop it. They do try to thwart jailbreaking efforts when a new exploit is released, but they have yet to actually go after the parties responsible for enabling the piracy to happen by providing the channels they go through or the service of cracking apps to remove the DRM.

One of the best things Apple could do to stop jailbreaking is to build the features people jailbreak for into the next iPhone OS, such as multitasking.

[via 24/7 Wall St.]

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