24/7 Wall St. is reporting that App Store developers and Apple have lost some $450 million to app piracy since the App Store’s inception back in July of 2008. This number comes from a collection of estimates regarding the ratio 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 apps if pirated versions weren’t available.
There have been over 3 billion downloads since the inception of the App Store. Assuming the proportion of those that are paid apps falls in the middle of the Bernstein estimate, 17% or 510 million of these were paid applications. Based on our review of current information, paid applications have a piracy rate of around 75%. That supports the figure that for every paid download, there have been 3 pirated downloads. That puts the number of pirate downloads at 1.53 billion. If the average price of a paid application is $3, that is $4.59 billion dollars in losses split between Apple and the application developers. That is, of course, assuming that all of those pirates would have made purchases had the application not been available to them for free. This is almost certainly not the case. A fair estimate of the proportion of people who would have used the App Store if they did not use pirated applications is about 10%. This estimate yields about $459 million in lost revenue for Apple and application developers.
With Apple taking 30% of App Store profits as compensation for hosting developer’s apps, it still appears Apple is losing $140 million over the last 18 months, which is a significant amount of money considering Apple still reportedly rakes in $500-$700 million in App Store revenue.
It still appears that Apple has not moved to address this issue. The best explanation for this, is that the App Store exists solely to drive device sales. That means Apple is seeing this loss in revenue as an acceptable loss. Developers will just have to deal with it.
Continue reading:
- Everything New Apple Just Announced (Septembe
- Apple Watch Pre-Order
- Apple Research Kit launches with 5 Apps
- Apple TV now only $69
TAGS:
