Apple’s App Store: Yet Another Victim of Piracy

In a recent analysis by 24/7 Wall St., it was found that Apple’s App Store, as well as the companies that create software for Apple’s devices, has lost approximately $485 million due to piracy. Since its inception in July 2008, there have been around 3 billion applications downloaded for both the iPhone and the iPod Touch. How many of these were pirated, you may ask?

25%? Try again.
50%? Keep trying.
Surprisingly enough, a whopping 75% of all applications downloaded are pirated copies.

A number of software developers have reported piracy rates that are even more shocking than the aforementioned 75% rate. Neptune Interactive Inc. and Smells Like Donkey Inc. have reported a piracy rate of up to 90% for their game Tap-Fu, which is normally $1.99. These developers claim that there was a pirated copy of Tap-Fu available 40 minutes after the primary release of the game. Even worse than this? The software developer Fish Labs has reported a 95% piracy rate for their $7 game Rally Master Pro 3D.

While this abhorrent neglect for intellectual property rights is bad enough, it is only becoming easier and more prevalent. The process to attain these pirated apps requires a phone to be “jailbroken.” This configuration allows the owner of the device to skip over the restrictions placed upon them by Apple. By doing so, it allows the owner to buy applications from app stores other than iTunes. In China, most iPhones are sold with this jailbreak configuration. While the jailbreaking process was once only done by the most technologically-savvy buyers, it is becoming increasingly easier to jailbreak phones. 24/7 Wall St. has estimated that approximately 10% of Apple’s iPhones and iPod Touches are configured as such due to reports given from pirated app store, Cydia.

While Apple gets 30% of the profits received for paid apps, the people that really get the poor end of the deal in this case are the developers. It is estimated that Apple has had a net loss of $150 million due to pirated copies of applications; the developers have lost $310 million due to piracy. While Apple still has the other parts of their industry to back up their losses due to piracy, the software developers do not have quite the same luxury. The profits of these developers are severely lowered by the pirates’ neglect for property rights, thus making the developers suffer the burden of decreased innovation and development.