The success of iPhone and the App Store has spawned a new bunch of entrepreneurs who now earn their livelihood developing applications for iPhone users.
With close to 135,000 iPhone apps on the App Store today, the revenues made from the App Store constitute a very significant chunk of income not just for the app developers but for Apple as well.
Back in September of last year, Toni Sacconaghi, an analyst with Bernstein Research had estimated the revenues from the App Store to be between $240 million to $440 million a year for Apple. The sale of iPhone apps also brought a cumulative revenue of nearly $560 million to $1 billion to the developers. Since then a lot of things have changed - The number of iPhone apps downloaded have nearly doubled to 3 billion today. Also, with in-app purchasing enabled, the revenues the developers stand to make from their apps is much higher.
However, this only constitutes the tangible part of the app economy. As with the producers of any other digital content like music or video, iPhone app developers too have been victims of piracy. An analysis conducted by the folks at 24/7 WallSt reveals the extent of impact that piracy has been causing to these small time app developers. According to their study, there are nearly 7.5 million jailbroken iPhones in the world today and close to 40% of these devices make use of pirated software.
In their study, the authors point out that paid applications have an average piracy rate of 75% which would mean that the total value of pirated apps today stand at $4.59 billion. Conservatively assuming that only 10% of these users would have actually purchased the app in the absence of piracy, the revenue lost comes close to $459 million.
While it is to be noted that most of the information used for the study are from secondary sources, the numbers still depict the stark reality of piracy of iPhone apps and the harm that it has caused to the app developers. As the folks at 24/7 WallSt point out, Apple loses close to $150 million of these in their own revenues which is not very significant when compared to the revenues from the App Store and handset sales put together. However, considering that a lot of app developers earn their livelihood from the App Store, it is high time Apple intervened to bring an end to piracy.
What do you think? Is it right to put the onus of eliminating piracy on Apple? How do you think the company can help? Please tell us in the comments.
[via 24/7 WallSt]
My iphone is jailbroken… is it for pirating apps? no… its to allow me to do what i want with my own damn phone that i paid good money for!
I love all these made up figures, it's just glorious! Sure developers are losing out on money, so what that's part of life! They can either keel making aps or try and play cops and robbers with hackers. If they do they will lose! Plus there are probalbly 100,000 crap apps in the 125,000 apps available in the app store! It's almost a good thing there are cracked apps, because we would of been ripped on by developers!
Damn, Tim, I couldn't agree more!!!
i agree with tim, my 3gs is jailbroken and i don't pirate apps.
i just don't like it when nazi apple tells me what i can an can not run on my device that i paid for.
Couldn't agree more with the posters above. This is MY iPhone, and it's jailbroken. However, there are no pirated apps on it. Your implications are very unfounded.
I also have a JB iphone and there is prolly more like 110,000 out of the 125,000 that are crap.
I have Paid for several APPS that simply dont work as indicated on my iPhone..!! To my knowledge there is no way to obtain refund for them..? I have now Jailbroken my phone so I can obtain 3rd party Apps that do what I want.. I would certainly be willing to buy apps should there be more availability of 'try-b4-buy'
Screw Apple. I'll jailbreak and unlock and use ANY app I want. I don't care what they say. If I want to run hacked apps I will. Nuff said.
FUCK APPLE. I RUN PIRATED APPS. END OF STORY
The Golden Rule isn't followed so well these days anymore. If I made an app, I'd want all the profits I deserve. Knowing this, I can't in good conscience do this to developers. Conscience is a thing of the past though, I guess. Alester Crowley did say "Do what thou wilst." and people always will. I hope their is a way to stop stealing app without stopping jailbreaking, which is perfectly legal.
ok well im sorry but if you make any kind of sofeware its going to be pirated it doesnt matter what you do its going to happen
fuck apple & at&t. iphones including all apples products should,must,ought have to be jailbroken and use pirated apps. apple& at& t are already ripping customers. we must jailbreak,unlock,install cracked apps always. i have installed pirated apps in 1000s of my friends iphone to screw apple and will continue to screw apple and at&t.
I would not run pirated apps only if they had a trial on them for the full version… if I like it enough I would buy it… no trial of the real think… i just wont buy it.
The 24/7 research figures have already been contested and proven to be wildly inaccurate. They simply throw out a number like "75% of all software is pirated" without providing one single shred of proof as to how this figure is obtained. They most likely just "guessed" based upon their assumptions of people in general. Regardless, most software in the appstore is reasonably priced, 99 cents for a game aint bad. The problem is the sheer number of crap the appstore hosts. There have already been scandals showing PR firms hired to post phony reviews and rate app's with 5 stars to boost ratings for developers. Since the ratings system is now corrupted, you simply cant trust anything you buy from the app store. As a result, I always pirate what I'm looking for first to see if I like it or not. To date, there have been zero paid apps worth my time. A couple I have kept, but if I were forced to buy them I would just delete them instead, so the developer has not lost any money to me.
In fact, I have a hard time browsing the library of cracked apps b/c so many of them are so bad, the entire app store really isnt even worth my time.
Oh, and whats funny, the best apps are free! Weather channel, banking stuff, pandora etc… These are actually worth money lol.