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App Store Piracy Losses Estimated At $459 Million

Soulskill posted more than 4 years ago | from the arrr-me-hearties dept.

Piracy 202

An anonymous reader passes along this quote from a report at 24/7 Wall St.: "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." A response posted at Mashable takes issue with some of the figures, particularly the 75% piracy rate. While such rates have been seen with game apps, it's unclear whether non-game apps suffer the same fate.

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202 comments

How does it work? (1)

Anonymous Coward | more than 4 years ago | (#30778034)

I'm curious as exactly how piracy on the iPhone/iTouch works.

Re:How does it work? (1)

cayenne8 (626475) | more than 4 years ago | (#30778938)

"I'm curious as exactly how piracy on the iPhone/iTouch works."

I too wonder about this..how do you get something from the app store w/o paying for it...and get it on your phone? I'm guessing it has to be jailbroken first?

Re:How does it work? (0, Redundant)

delinear (991444) | more than 4 years ago | (#30779186)

I thought the same thing - if that's the case then a 75% rate seems unusually high, are that many iPhones really jailbroken, and if so, why not just open the bloody things up to everyone? I'm not sure if the far-eastern iPhone clones work with these apps though, maybe that's the source of this, but if so then it's still ridiculous to claim that anything like 100% of those pirated apps would have been legitimately purchased if there was no other choice, more likely they'd just not bother with it.

Re:How does it work? (2, Informative)

xch13fx (1463819) | more than 4 years ago | (#30779276)

from a youtube video i watched it appears you...

1)jailbreak
1)install cydia
2)add all repositories
3)find and install installous
4)you now have access to pretty much every app, browses very similar to app store just a whole lot slower

you can also download them to your pc, and sync with itunes

Re:How does it work? (3, Informative)

PsyciatricHelp (951182) | more than 4 years ago | (#30779376)

There are many torrent that offer many DRM free or cracked ipa files. You just drop them into itunes and they copy over like a regular app. I for one use a few that I have purchased in the past but for one crash or another no longer have. Though if you could get the full version of most apps on a trial basis I would be more inclined to buy some. I hate the fact that about 90% of the apps I download turn out to be utter crap.

How do you pirate? (0)

Anonymous Coward | more than 4 years ago | (#30778054)

I don't own an iPhone, but how are these apps pirated? I thought that they were all digitally signed and so forth to prevent this? I know you can "jail break" phones, but I didn't realize it let you do this.....I am just curious.

Re:How do you pirate? (1)

Rivalz (1431453) | more than 4 years ago | (#30778126)

I don't own an iPhone, but how are these apps pirated? I thought that they were all digitally signed and so forth to prevent this? I know you can "jail break" phones, but I didn't realize it let you do this.....I am just curious.

people jailbreak their phones and download a decrypted or unlocked version of the app... at least thats how I think they are doing it.

Re:How do you pirate? (4, Insightful)

DJRumpy (1345787) | more than 4 years ago | (#30778210)

That's exactly how it works. Unfortunately, the article makes a few (ok, a lot) of very bad assumptions (how many times can you use Assume and Estimate in a story?). They used a very popular app that 'phones home' as their yardstick, and then applied that yardstick to every app purchased in the store, all the way down to the dregs like the fart apps. Although copyright infringement on popular apps may indeed be that high, I find it very hard to give this credibility that every app in the store would have an 75% infringement rate.

"Assuming the proportion of those that are paid falls in the middle of the Bernstein estimate"

Do they even realize how ridiculous this sounds?

Who decided that ten percent is fair? (0)

Anonymous Coward | more than 4 years ago | (#30778056)

I'd guess it's closer to 1%. In free-to-play online games, that's the average percentage of players that use the game stores to buy stuff with real life money.

STFU about Apple for a moment (5, Insightful)

BadAnalogyGuy (945258) | more than 4 years ago | (#30778068)

Look at the bigger picture. There are hundreds of thousands upon millions of smartphone users out there who want applications for their phones.

Who is next to set up a viable store? Microsoft? Google? A carrier?

Piracy is a minor problem. Monetizing users is the major problem. Can you interest users into buying your phone? What sales model can you use to get them to part with their money?

Who cares about Apple? They are just another player.

Re:STFU about Apple for a moment (0)

Anonymous Coward | more than 4 years ago | (#30778704)

Who is next to set up a viable store? Microsoft? Google? A carrier?

You don't need a "store" per se. Software for phones can be sold like any other software. Blackberry software has been available for a long, long time. You purchase from a vendor, pay by credit card, download a file and install on your phone. RIM doesn't stop Blackberry owners from installing & using any software they want. The Blackberry SDK has been available for years, and it's free.

What Apple did was make it EASY. Apple allows you to buy software and charge it to your cell phone, so anyone can buy software with just a few finger clicks (like downloadable ringtones & "premium" SMS).

RIM doesn't do that - I have no contract with RIM. When RIM's Blackberry App World came out, you had to pay for software with a paypal account. I refuse to use paypal, so I can't buy software from App World. But I can buy software from anywhere else.

Re:STFU about Apple for a moment (1)

delinear (991444) | more than 4 years ago | (#30779270)

The main issue with this as far as I can tell (as a user and an interested observer) is the massive number of available platforms. It seems when an app or game is written for mobile devices, it tends to officially support only a subset of the most current (and some of the more popular older) handsets, I don't know if this is a calculated move on the part of the developers to force users to buy new versions every 18 - 24 months when they switch phone, or if it's a result of the fast pace of handset evolution. Either way it makes it incredibly difficult to have an "app store for everyone" approach, just supporting all those users with diverse devices and multiple software versions would soon become a nightmare.

What Apple have done is the same thing they did in the computer market, take control over the hardware in order to provide a relatively stable platform for software development - sure they're still adding features and functionality, but storage size aside, there are 3 major iPhone versions (okay and the iPod too but I guess cell phone aside the underlying technology is similar) compared to many thousands of other handsets. In that environment it's much simpler to create an app store where users can easily find the right software version and be reasonably sure that it will run without issue.

Re:STFU about Apple for a moment (0)

Anonymous Coward | more than 4 years ago | (#30779436)

The real story here is that they offer up a very very easy way to download, install, and use and app for a very low price point. The price point it pushed at people who have a large chuck of income that they use toward a phone experience. I seriously doubt someone that pays 100 bucks a month to have a functioning Iphone is going to waste time trying to steal a 99 cent app.

Re:STFU about Apple for a moment (0)

Anonymous Coward | more than 4 years ago | (#30779562)

If I were to monetize a game application store, it'd have physical cartridges, like the Nintendo entertainment system. I'd love to know what the piracy rate was back then as opposed to good 'ol regular theft.

I agree, people will always figure out a way to steal (not pay) for your shit. Figure out a way that makes them want to pay.

If that seems idealistic, then how do charities exist? Churches? Governments?

'Losses' (4, Funny)

Spatial (1235392) | more than 4 years ago | (#30778108)

I'm suffering massive losses too - nobody gave a billion dollars yesterday! That's a billion dollar loss in a single day!

Re:'Losses' (0, Flamebait)

sopssa (1498795) | more than 4 years ago | (#30778146)

Nobody neither took something you've created off you without giving a compensation back.

Re:'Losses' (0)

Anonymous Coward | more than 4 years ago | (#30778242)

That's not true, I have copied and pasted his /. post a few thousand times and am planning to distribute it...

Re:'Losses' (0)

Anonymous Coward | more than 4 years ago | (#30778268)

No, 75% of people did exactly that because we all know that's the piracy rate.

Re:'Losses' (1, Insightful)

Anonymous Coward | more than 4 years ago | (#30778368)

I think the point GP was trying to make is you can't really call it a loss of revenue when you likely wouldn't have received the money in the first place, irregardless of piracy.

Re:'Losses' (2, Interesting)

FlyingBishop (1293238) | more than 4 years ago | (#30778382)

Piracy doesn't necessarily imply that people are using it regularly, or even more than once. If I steal your car while you're asleep, and return it before you wake up, having refilled the gas tank with a value of gas commiserate with the IRS standard value of the mileage I've used, and I do this every night for one year, assuming your car is worth 10,000 dollars, have I cost you $365,000? Of course not. I've not cost you a cent.

Re:'Losses' (1)

raynet (51803) | more than 4 years ago | (#30778450)

Well, you would have cost something as there would be wear&tear and the mileage would be higher and that affects the resale value.

Re:'Losses' (1)

PIBM (588930) | more than 4 years ago | (#30778930)

that's why he fills the tank with more gas than there was relative to the depreciation of the car ...

Curiousity or piracy? (5, Interesting)

copponex (13876) | more than 4 years ago | (#30778396)

First of all, all of the numbers they have are pulled out of their ass. Second, there is no recognition of the fact that curiosity is not the same thing as a lost sale in the digital realm.

For me, I know that when I was younger I pirated all kinds of software, just because I wanted to see what it did. As I got older, I paid for it when I could afford it. This was the only option for those of us who didn't have an edu e-mail address to get the "taste" that the companies provide at ridiculously low prices.

I sincerely hope that Microsoft, Adobe, and Autodesk get together and create an unbreakable DRM scheme. Open source projects would immediately improve as the user base started to explode. Their marketshare would begin to reflect what everyone else already knows - that "piracy" is a vital part of their product cycle. It allows people to learn their software without burdening their support team, and hooks them into that workflow. When that person begins depending on the workflow, or begins work for a company, they are very likely to buy that product.

If they really wanted to see sales improve, they would charge according to the age of the user. If the price steadily increased from $50 to $1000 or whatever, with no upgrades unless you paid full price, and flattened once you hit age 30, there would be constant pressure to buy each year before your birthday. Companies would get thousands of curious new users every year to resell to, and they would get money, and the whippersnappers wouldn't have to worry about going to jail over the greed of some fat men feeding in Silicon Valley.

Re:Curiousity or piracy? (2)

Cruciform (42896) | more than 4 years ago | (#30778540)

If you're unemployed/low-income or a kid that pirates just because they like to sample anything and everything under the sun, I don't have a problem with that.
I was a game-collecting-maniac kid, right up into my 20s. And as soon as I had steady paying work it stopped being the rare exceptional game that got my money and started being all of them.
Even now I'm unemployed, broke, and still not pirating because I just don't need anything that badly or have the urge to. Modern Warfare 2 can wait until I have a few bucks.

Re:Curiousity or piracy? (1)

delinear (991444) | more than 4 years ago | (#30779500)

Working in web development a pattern I see repeatedly is that designers pirate Photoshop when they're young, play with it out of curiosity and go on to have a career using it which means big, legitimate sales to companies. No kid/student can afford to splash out several hundred pounds on a piece of software out of mere curiosity, this cycle directly drives the steady influx of designers who demand Photoshop in the workplace, if they locked it down and made it impossible to pirate, it might take a few years to reverse the trend and see a competitor take over, but I have no doubt it would happen.

Re:Curiousity or piracy? (1)

Voyager529 (1363959) | more than 4 years ago | (#30779554)

My thought was somewhat similar: Charge full price for the current latest-and-greatest version, less for the prior version, still less for two versions ago, etc. I figure it this way: Adobe (for example) is currently selling CS4 of everything. Wonderful, more power to 'em. If my machine can't handle the CS4 suite, but will handle CS2, then the only legit way of getting a copy of software my machine supports is to head to eBay. If they sold a no-upgrade, 30-day-support copy of that suite for $349, they can monetize a sale they otherwise wouldn't have been able to with no R&D costs, new users can start with an older more affordable version instead of pirated ones, students can buy copies that match their textbooks, everyone wins. The only issues would be distribution (they'd either have to continue producing discs of older versions, or end users would be downloading tens of GB of data), but I'm pretty sure that even mailing everyone discs is a small price to pay for free money.

Re:'Losses' (4, Interesting)

Cruciform (42896) | more than 4 years ago | (#30778474)

A few thousand people pirated our game after it was released.
Did we lose any money? No.
It pissed me off, but I didn't really lose anything because the people who rush out and pirate your game the second the crack is available are not the type of people who buy your game. There's the odd few that will pay for a game after they've pirated it (I used to do that when I was a kid), so they're not a loss either.

The app store price point is low enough that the people who would have bought the app/game otherwise... actually DO buy the game.
We're not dealing in 70 dollar console/PC games.

Re:'Losses' (-1)

Anonymous Coward | more than 4 years ago | (#30778582)

Nobody made a duplicate of something you've created without giving a compensation back.

Fixed that for you. Piracy is not stealing, they still have the product to sell.

Re:'Losses' (1)

deathlyslow (514135) | more than 4 years ago | (#30779518)

Nobody neither took something you've created off you without giving a compensation back.

And.... Where is the other half of the statement?

Re:'Losses' (2, Funny)

sonnejw0 (1114901) | more than 4 years ago | (#30778586)

That's called "opportunity costs", and it's a good way for businesses to cook their books, I mean lower their taxes.

Re:'Losses' (1)

couchslug (175151) | more than 4 years ago | (#30779456)

"I'm suffering massive losses too - nobody gave a billion dollars yesterday! That's a billion dollar loss in a single day!"

I'm being deprived of sex because other people are getting laid.

looking around (5, Insightful)

jonpublic (676412) | more than 4 years ago | (#30778124)

Looking around I have yet to see a single friend of mine with pirated apps. I'm just saying.

Re:looking around (1)

Frankenshteen (1355339) | more than 4 years ago | (#30778428)

Ditto. Who are all of these pirates? Is this why geeks have been supporting the so-called talk-like-a-pirate day? Is there an app that will turn you into a pirate?

Re:looking around (0)

Anonymous Coward | more than 4 years ago | (#30778714)

Somalia?

Re:looking around (3, Interesting)

xtracto (837672) | more than 4 years ago | (#30778494)

Looking around I have yet to see a single friend of mine with a paid app... Just saying.

Where I am from, nobody pays for Microsoft/Adobe/EA/Sony and others' software. Being it games or applications. Geez, the *first* time I saw a registered version of WinRar (not registered through a crack that is) was at my new job where I am now at (out of Mexico that is).

Re:looking around (-1, Flamebait)

Anonymous Coward | more than 4 years ago | (#30778662)

Fucking 3rd world trash.

Re:looking around (0)

Anonymous Coward | more than 4 years ago | (#30779544)

Kind of the same thing with our company. We actually "hire" people--mostly from Mexico, ironically--to work in our office. After 2 weeks, we let them go and don't pay them. We really just wanted to try them out for a few weeks - we had no intention of paying them, even though they did all that work with the expectation of being paid. They really didn't offer or agree to a "tryout period", but screw them.

We would have to be idiots to pay for work when others are getting it for free! Take advantage of everyone and everything whenever you can - it's a race to the bottom, people.

Re:looking around (0)

Hurricane78 (562437) | more than 4 years ago | (#30778820)

Well, there are just not many people around who own armed ships nowadays. ;)
(Hint: You just helped the **AA, spread their lies and FUD, by using that word. Don’t do it, please.)

I have tons of downloaded apps on my system. In fact everything that is not a good game, or part of my Linux systems, is downloaded.
Because it does not make sense to pay thousands of dollars for Adobe’s Master Suite CS4, when all you do is the occasional photoshopping. It hurts nobody, because I would and could not buy it anyway. In fact it even helps Adobe, as I’m now trained in using their software, instead of e.g. Gimp.

Also, as I said: Apps are not a product. Ever. They are information that resulted from a service. Not a physical object. That companies choose to use a business model that has nothing to do with physical reality, is their problem. They should have asked money for the service.

Re:looking around (1)

sznupi (719324) | more than 4 years ago | (#30779148)

Or we might start talking about the actions of **AA as piracy too. They simply equal infringing of copyrights with piracy. But robbing us of public domain, raping the social deal on which copyrights are based, lobbying for copyright modification infringes too...

Saw pirated apps in action - I ended up buying (0)

Anonymous Coward | more than 4 years ago | (#30778982)

My friend got an iPhone and never paid a single dollar for an application.
I just saw the applications he used that I really liked (education related, not games), I ended up buying an iTouch and the killer apps I wanted.
Sometimes piracy is just free publicity.

Re:Saw pirated apps in action - I ended up buying (1)

delinear (991444) | more than 4 years ago | (#30779574)

I'd say this is almost always the case. The time to worry is when people are not pirating your app.

Is there an app for bullshit? (4, Interesting)

Anonymusing (1450747) | more than 4 years ago | (#30778148)

I call bullshit. There's no way that the tiny percentage of jailbroken iPhones could account for 75% of the apps in use.

If this isn't through jailbroken phones, then how are people pirating it? It's not like anyone has built a homebrew iPhone...

Used once and thrown away (4, Insightful)

tepples (727027) | more than 4 years ago | (#30778324)

The statistics in a lot of these stories are such that if a pirated app is used once and thrown away, it's been "used".

Re:Is there an app for bullshit? (3, Insightful)

KitsuneSoftware (999119) | more than 4 years ago | (#30778340)

It could be that pirates have significantly more apps installed than anyone else - not an unreasonable possibility, as they won't be wondering if they *really* want to spend their money on, for example, fifteen almost identical clones of the same miniclip game.

Re:Is there an app for bullshit? (1)

sonnejw0 (1114901) | more than 4 years ago | (#30778616)

And honestly, I refuse to pay any amount of money for a stupid iPhone/Touch application. It's a goddamn PHONE/TOY. I'd only use the app as a novelty a FEW TIMES and then forget I have it. There is absolutely NO application I would be willing to pay any amount of money for. And I highly doubt anybody that has pirated an iPhone/Touch app would have actually purchased it otherwise. These developers should just be happy that they sneak GoogleAds into all of their apps so they get revenue from the "pirated" apps anyway.

Re:Is there an app for bullshit? (1)

Anonymusing (1450747) | more than 4 years ago | (#30779042)

I have an iPhone. I've downloaded dozens of free "trial" apps. I purchased three of them, and use them several times a week. Example: although there are some free apps that do essentially the same thing, I find TideGraph to be better at reporting tides... same data, sure, but much better interface. Worth the two bucks.

I also know doctors who have some rather expensive medical-related paid apps, but that's a niche category.

Re:Is there an app for bullshit? (1)

Dog-Cow (21281) | more than 4 years ago | (#30779392)

It's a good thing there are several thousand "smart" applications that are genuinely useful or entertaining.

You are an asshole. And stupid.

Re:Is there an app for bullshit? (0)

Anonymous Coward | more than 4 years ago | (#30779622)

Exactly how our company feels about temp workers - they're goddamn useless until they've been at our company for AT LEAST a month. We only hire them for A FEW WEEKS--have them sweep up, clean bathrooms, etc.--and then let them go without paying them anything. There is absolutely NO temporary worker we'd EVER pay ANY amount of money to. It's technically true that they didn't agree to come work for us for free--apparently they EXPECTED to be paid, not be "tried out". But screw them. They should just be happy they got to work for us for nothing in return - gets them out of the house, you know?

Re:Is there an app for bullshit? (2, Insightful)

yabos (719499) | more than 4 years ago | (#30778730)

The numbers are probably not close to the true value but I've read cases where 50% of the users of some apps are people who pirated the app within the first few weeks of it being released. Some apps rely on a back-end infrastructure and having to support the load of people who haven't paid for the app cuts into your profit.

In other news. (4, Funny)

Anonymous Coward | more than 4 years ago | (#30778154)

Big made up number is still made up.

Based on how much I pirate... (4, Interesting)

colin_n (50370) | more than 4 years ago | (#30778182)

I have an jailbroken and unlocked iPhone, but I haven't even tried to pirate apps from the app store. Frankly, I didn't know it was possible. In the past I have pirated almost everything. I just dont see the benefit of piracy to save $5 especially since it's probably a p.i.t.a to pirate an app store app. These figures look like hot air to me.

Re:Based on how much I pirate... (2, Informative)

alen (225700) | more than 4 years ago | (#30778536)

any app that requires a server for functionality the developers built in the ability to detect piracy. i've read it's pretty easy. in some instances there was a 4 to 1 ratio of devices hitting the server compared to the amount of purchases

Re:Based on how much I pirate... (1, Insightful)

Anonymous Coward | more than 4 years ago | (#30778732)

But Apple will allow you to install your purchased apps on multiple iPods. In my house, I have 5 iPods and they are all synced through 1 computer, thus 5 copies of the application for 1 purchase.

Re:Based on how much I pirate... (3, Informative)

MrCrassic (994046) | more than 4 years ago | (#30778976)

It's pretty easy for applications that don't have any anti-piracy measures in place, but applications that do, like BeeJive, find and, subsequently, lock out any apps that are detected to have been pirated. Thus, cracking some more popular applications is kind of a moving target. Additionally, one has to install some extra background application that disables the signing check that allows these pirated apps to install.

Lastly, finding a pirated app can be a bitch sometimes. From my experience, it usually consists of finding a cracked version (which is pretty risky, since it's the express route to getting your phone hacked), substituting the real version with the cracked one and hoping it will run after that. Considering the difficulty I had in finding a cracked version of a relatively popular jailbroken application, I highly doubt that pirating is popular.

Re:Based on how much I pirate... (0)

Anonymous Coward | more than 4 years ago | (#30779134)

Tom-tom is the only pirated app on my iphone, but with the price point they set I think they were kind of asking for it.

Losses? (0)

Rivalz (1431453) | more than 4 years ago | (#30778192)

I love how software companies complain about losses. They lose out on possible sales. A loss to me is when you have a physical good. It gets stolen. You have to pay taxes and the people who sold you the materials that make up that good. Call me crazy but I don't see Walmart / Bestbuy ect in the news constantly about their stolen merchandise. Anyone have comparisons to how much they lose when you compound merchandise, tax liability, security expenses. I'm pretty sure walmart has full time security monitors and expenses that far exceed Apple's and have to deal with clepto maniacs, senile old people, kids, homeless ect...

Re:Losses? (0)

Anonymous Coward | more than 4 years ago | (#30778426)

this is because people who pirate stuff don't have the fucking balls to steal real physical goods.
If 75% of walmarts products got stolen you bet your ass they would whine, and so would dorks like you if you ran a business.

welcome to slashdot, excusing pirates tight-assness since 1990

heartening to see tacit acknowledgement... (3, Interesting)

Speare (84249) | more than 4 years ago | (#30778222)

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.

I think the 10% figure is completely and totally made up, pulled from the aether, with very little to back it up. However, I was floored to see that this concept was even addressed at all in the "loss" estimation process. You know that MPAA and RIAA don't acknowledge the phenomenon that if someone finds something on the sidewalk, they're more likely to pick it up than if they find the same thing for sale, even if the price is just a nickel. I hope that with repeated exposure to the concept, the whole industry will finally concede this point, but let's just say I'm not holding my breath.

Re:heartening to see tacit acknowledgement... (1)

91degrees (207121) | more than 4 years ago | (#30778966)

We actually have useful data from the iPhone because it's locked down. Assuming reasonably that 100% of all pirated apps are on jailbroken iPhones, and taking a figure of 7% of iPhones being jailbroken (according to Pinch media), this means that for 100% of downloads to be equivalent to a purchase, and the purchase rates are equivalent, each pirated copy would equate to 13 purchased copies. This is not the case. Each pirated application accounts for at most 1/3 purchased copies. My calculations may be wrong but I think this gives an upper limit of about 2.5% and this is assuming that owners of jailbroken iPhones never purchase an application.

Someone check my calculations please:)P

Guesstimations... (3, Funny)

alexhs (877055) | more than 4 years ago | (#30778248)

I'm pretty sure that by tweaking a little their formula and figures, we can compute the probability of the article's authors to get laid with an alien life form.

Same bs stats, diff software (-1, Flamebait)

Fatal0E (230910) | more than 4 years ago | (#30778252)

The takedown @ Mashable is spot on!

Jokes about fart machine apps aside, are these devs really "losing" money everytime their apps are downloaded and not paid for? Or are they just not seeing the dollar they would otherwise have rec'd? Its the same bs we see with all piracy stories except for the fact that we're talking about a single publisher instead of a wider sw industry.

What I'd -really- like to know is what percentage of all phones and touches do jailbroken phones actually represent? Of those, how many are actually pirating apps? AND! Of those pirated apps, how many actually survive on ppl's devices for more then a day or three? I think those questions would make for a -much- more compelling App Store piracy story then this mental fart of a statistical analysis.

Pretty big assumption... (1)

lightblade (938965) | more than 4 years ago | (#30778262)

Their figures assume that the users of the pirated software would have even bought them had they not been able to get them for free.

And total loss to society (1)

Wildclaw (15718) | more than 4 years ago | (#30778266)

Negative $459 million. Assuming that 10% of the pirated stuff is use by people who would choose to go without if they couldn't pirate and use value equals the price. And that doesn't include the lower prices that competition from piracy always seem to bring, which increases the number of potential users among those who don't pirate.

Of course, I have made bullshit assumptions, but so did the article/story title, and my assumptions aren't really that far fetched. I could even be underestimating by a fair bit.

If you really want to talk about losses, I have spent quite a few hours making up for the deficiencies of the Iphone/Itouch lock down. Enough time that I am seriously regretting trying out an Apple product, even this once. Anyone who claims that Apple products are user friendly, seriously have no idea what they are talking about. When you have to spend hours working around the crippled photo application that Apple provides, or dealing with the sensitive video format (with the Itunes application having only the most basic converter that only works with very few actual files), or dealing with the crappy Itunes syncing interface (which is crappy because everything is built around the store). Or for that matter, not getting an application ported to the platform because it doesn't allow for Java.

Apple is idiot friendly, but that is it. That means that even people without brains can use it without problem for doing a few common tasks. But if you actually have more brain capacity than that, and can think of stuff that falls outside of those few tasks, Apple only gets in the way with their control-freak ideal.

Fun with Statistics (2)

Chameleon Man (1304729) | more than 4 years ago | (#30778278)

Lets assume the number was accurate to the cost of the all the pirated apps...how then can they assume, given the ability to not be able to jailbreak the phone, that the pirate would pay full price for the apps that they would have potentially pirated?

The pirated market is grossly misrepresented. Most pirated movies/music/games are pirated because of availability. If it wasn't available, the pirate still wouldn't pay the original price for it. Recent success in said industries proves this.

Unrealized Income (1)

Tisha_AH (600987) | more than 4 years ago | (#30778844)

One point as well is that many of these folks who would download a bunch of pirated apps for their phone would not purchase them in the first place. I think it is more accurate to say that the income was unrealized and not lost.

If you put something on the market for $1000 and only two people think it is worth the price to pay for it but six hundred people would have purchased it for $100 then you have significantly overvalued your product and lose money. I think that the prices on the app store are all inflated. This is a similar model to the entire music and movie industry. Most people steal your product because they do not believe that what you are asking for it is reasonable, not because they would not pay anything at all for it.

phony claims (0)

Anonymous Coward | more than 4 years ago | (#30778286)

Yet someone else regurgitating the music industry's same old, tired, phony claims and bogus madeup numbers about "losses".
Just because someone doesn't buy, doesn't make it a loss. It could be a 100% piracy rate, and it still wouldn't matter, because the vast majority wouldn't have purchased anything anyway, so there is no loss.

And yet more writeups that show how stupid these phony claims and their madeup numbers are:
http://www.techdirt.com/articles/20100113/1434217734.shtml [techdirt.com]
http://arstechnica.com/apple/news/2010/01/450-million-iphone-piracy-figure-not-grounded-in-reality.ars [arstechnica.com]

What about multiple iPhones on the sames account? (3, Insightful)

ofdan (609938) | more than 4 years ago | (#30778288)

I have 2 iPhones on the same iTunes account. Apple legally lets me installs app's bought on my first iPhone for free on my second. My guess is this would trigger piracy flag, as they would now see 2 iPhone unique ids for one purchase.

How about refunds? (1)

HaaPoo (696098) | more than 4 years ago | (#30778304)

How about refunding apps the people do not use anymore, i am sure there is plenty of those.

piracy numbers are almost always wrong... (0)

Anonymous Coward | more than 4 years ago | (#30778318)

The thing that these articles fail to realize is that just because an app (on any platform) has been pirated it does not mean it is a lost sale.
Many times, the people who have "pirated" the software would have never paid money for it. And out of these some people actually find they really like the app and go back and buy it.

Not saying piracy is all like this. But a large number of these "lost sales" are sales they were never going to have anyway.

Techdirt: Bogus Analysis. Rebuttal, with xkcd! (3, Informative)

mmurphy000 (556983) | more than 4 years ago | (#30778338)

Techdirt did a nice deconstruction [techdirt.com] of the 24/7 Wall Street analysis. In a nutshell, 24/7 Wall Street applied the Drake Equation to iPhone apps, piling on layers of hand-waving to come up with their figure.

And, to show off his geek cred, Techdirt's Mike Masnick included the xkcd Drake Equation comic [xkcd.com].

What about my losses? (-1, Troll)

AP31R0N (723649) | more than 4 years ago | (#30778360)

I sell Bottled Burps on BottledBurps.Biz. No one is buying because of piracy and it's wiping me out. People keep burping on their own instead of buying my product. What people don't realize is that i have bills to pay too. The bottles cost me real money, the labeling machine loan costs real money. I put a great deal of effort into these burps including research into what makes the loudest and smelliest burp. Not only that, but this is my passion! I pour my heart out into these belches. If my sales don't pick up I'm going to have to get a day job and give up my dream. But in the mean time I might lose my house!

Please accept this picture of a spider... (0)

Anonymous Coward | more than 4 years ago | (#30778402)

http://keboch.wordpress.com/2008/11/09/please-accept-this-spider-as-payment/

10%? (1)

KitsuneSoftware (999119) | more than 4 years ago | (#30778406)

While I'm glad to see someone finally NOT assuming 100% of pirates are potential customers, I don't see any justification for the 10% estimate they give here. Anyone have any sources? (Yes, I did RTFA!)

Can they be called losses (0)

Anonymous Coward | more than 4 years ago | (#30778444)

Digital property isn't like physical property. It's not lost when someone steals it. So unless you can show that those same pirates would have paid for that same app if stealing it wasn't an option, then it's not really a loss.

"Losses" (4, Insightful)

Spad (470073) | more than 4 years ago | (#30778462)

These losses from piracy are always talked about in terms of the damage they do to the economy, but I have to take issue with this; that money that isn't spent on pirated apps doesn't just vanish, it's still there to be spent on other things. Now, you might argue that maybe it won't be spent or will be spent on things that transfer money out of the economy (such as overseas businesses), but if you're spending money on the App store and don't live in the US then that's really the case anyway.

If I pirate a $10 app, that's $10 I can spend on a CD or going to the cinema or getting a takeaway or whatever, it's not $10 that magically disappears from circulation.

Good point (3, Insightful)

langelgjm (860756) | more than 4 years ago | (#30778830)

That's an excellent point, and something that is often forgotten when talking about numbers surrounding piracy.

So an iPhone user doesn't spend $20 on a couple apps because they pirate them. Apple and software developers lose out on $20. Then, the iPhone user buys four mochas at Starbucks with the $20 they didn't spend on apps. Net loss to economy = $0.

Even if people "save" money instead of spending it, if that saving consists in investment, it's often providing capital for those who want it elsewhere in the economy. These "losses" are almost never actual "loss" to the economy as a whole, they simply result in a different distribution of the same amount of money.

The same goes for all the piracy statistics thrown about for foreign countries. I was recently discussing this with a colleague; sure, maybe country X pirates $20 million worth of CAD/CAM software. Then, they turn around and spend $20 million purchasing CNC machines from US companies.

Re:Good point (0)

Anonymous Coward | more than 4 years ago | (#30779282)

YES! At last! Someone who understands the economy!

I'm so glad there's finally someone out there reassuring me it's ok to rob people. After all, the money I save from ransacking people's houses can go back into the economy when I buy other things! Not only that, but because the owner now has to buy a bunch of new stuff, the economy is doubly helped! Wow, thanks, you're AMAZING!

Apple changed the rules to cut down on piracy (2, Informative)

alen (225700) | more than 4 years ago | (#30778496)

Few months ago Apple changed the rules and they now allow in app purchasing from free apps. before you had to charge for an app to so in-app purchasing. This allows companies to give away stripped down demo type apps with limited functionality and charge for features, new levels, weapons or whatever. And from what i'm reading on the internet it's very easy to detect jailbroken iphones and not allow them to do in app purchasing. pretty much all the piracy that was out there was on jailbroken iphones because it was easy to rip out the app DRM. the solution is to not allow any jailbroken iphone to purchase in app content

Re:Apple changed the rules to cut down on piracy (1)

thePowerOfGrayskull (905905) | more than 4 years ago | (#30779498)

Few months ago Apple changed the rules and they now allow in app purchasing from free apps. before you had to charge for an app to so in-app purchasing. This allows companies to give away stripped down demo type apps with limited functionality and charge for features, new levels, weapons or whatever. And from what i'm reading on the internet it's very easy to detect jailbroken iphones and not allow them to do in app purchasing. pretty much all the piracy that was out there was on jailbroken iphones because it was easy to rip out the app DRM. the solution is to not allow any jailbroken iphone to purchase in app content

The problem with that solution is that you exclude the people who jailbreak their phones for legitimate reasons as well - such as wanting a different provider, or wanting apps not in the app store. Theoretically there are more of those than the type of jailbreak strictly to pirate.

Does the iphone have anything like BlackBerry's PIN, which is a non-private unique number assigned to each blackberry? The software I'm developing for BB will be tied to a specific PIN (which the user can change an unlimited number of times on the web site) in order to access the features of the purchased version. The app will do a 'call home' at startup to check for updates and to confirm available features for the given PIN. If network isn't available but it previously authorized, it will continue to run in full-featured mode for a limited amount of time. Otherwise it will run in limited/trial mode. (Side note: if I ever cease support/updates, I'll push out a version that no longer dials home...)

Anyway, is there such a unique ID for iPhones?

10000 apps $3 each (4, Insightful)

SharpFang (651121) | more than 4 years ago | (#30778502)

So if I download a torrent .zip of 10,000 paid apps, $3 each on the average, AppStore just lost $30,000 in sales?
Like, I would purchase them all otherwise?

Re:10000 apps $3 each (3, Insightful)

arkenian (1560563) | more than 4 years ago | (#30778614)

RTFS. They suggest that if you do that you MIGHT have paid for as many as a hundred of them, so the app store lost $300. I actually admire this examination of piracy insofar as its the first one trying to figure out 'losses due to piracy' that puts a number in for 'percentage of people who would've bought the app otherwise'. That percentage may be low, it may be high (actually 10% sounds like a good number to plug in to what is essentially a pile of guesses) but at least they're trying.

Re:10000 apps $3 each (0)

Anonymous Coward | more than 4 years ago | (#30779082)

Fucking stupid arguement that kids always make. You might not have purchased all of them, but youd likely purchase SOME of them.

If someone buys an xbox360 and pirates 50 games in a year, sure they wouldn't maybe have purchased 50 games, but maybe they would have purchased 2 or 3. Thats 2 or 3 * 60$ lost for that one consumer.

Dipshit.

Re:10000 apps $3 each (0)

Anonymous Coward | more than 4 years ago | (#30779538)

The more typical rate is 10%-20%. That means he didn't purchase 5-10 games, of those 50 he pirated. That makes for a loss of up to $600 from that consumer.

I wish pirates would stop lying to each other. The lies they tell to justify their theft is insane. The reality is, stealing is literally taking money away from people. If you work and expect to be compensated, and yet you pirate applications, especially like those from the Apple App Store and Android's market, you are a serious hypocritical asshole.

How would pirates like it if after they worked and it came time to be paid, their boss said, your times not really worth anything so I'm not going to pay you. You're not out any money because you're time isn't worth anything. And yet that's EXACTLY what pirates are doing when they steal applications, music, and movies.

I do agree its excusable if you play it once just to check it out, but if you keep it, you are assigning value to it. Any application you pirate and keep, is stealing. If you don't think its stealing, go steal some stocks or bonds and see what the police have to say about it. This is exactly the same. Pirating is exactly the same as stealing. As such, to say pirates are thieves is completely accurate.

If you pirate and accept a paycheck, or intend to in the future, please remember that you're a piece of shit hypocrite and no better than car thief or a mugger. Otherwise, just as you insist is the case of the people from who you steal, your time and/or skill isn't worthy anything.

Re:10000 apps $3 each (1)

maccodemonkey (1438585) | more than 4 years ago | (#30779414)

$30,000 in potential sales was lost, yes. Even if the potential was slim.

More importantly, though, if the app uses bandwidth from a server, or if you get support, you have caused real monitary damage by using things you haven't paid for. I have an app on the app store, and people who pirate cause significant amounts of damage by steal our bandwidth from our partners that we paid a lot of money for, and we pay per access.

If there was a way we could lock out those services to paying customers only, we would, but we can't. App store doesn't give us that data.

Stupid Numbers (0)

Anonymous Coward | more than 4 years ago | (#30778568)

"Apple and third-party developers have lost $450 million due to App Store piracy since the store launched in July of 2008, according to an analysis by 24/7 Wall Street. This number might seem shocking at first, but the buzz generated by this report is misleading—the estimate is based on questionable numbers and an optimistic assumption that pirates would otherwise buy the software they steal."

See http://arstechnica.com/apple/news/2010/01/450-million-iphone-piracy-figure-not-grounded-in-reality.ars [arstechnica.com] for details.

Anonymous Coward (0)

Anonymous Coward | more than 4 years ago | (#30778602)

Lost Income, now you're starting to sound like the Record & movie Companies. Worrying about what they lost. Better spend a billion on DRM quick.

For the last time: They are no *losses*! (-1, Troll)

Hurricane78 (562437) | more than 4 years ago | (#30778740)

Because they would not have been sold in the first place!
That is a false assumption.

It’s like me opening a sausage stand, and suing anyone passing by, because I lost money, because they did not buy my overpriced sausages!

Except of course, that ideas/information are no product/good in the first place.
They are the result of a service. You can ask money for that service. But the information is free. As soon as it’s out there, it’s gone, and you’re done. And if you don’t let it out there, you can’t prove that it exists at all.
So if you want money from it, you make damn sure to get money to put it out there the first time. And expect that to be the only time you get money from it.
(Yes, that is realistic, and I know more than one business model that can work that way, without one person having to buy it. Just imagine replacing the investor/producer by the end customers, cutting out the middle man, and you got an example. :)
From then on, everybody “owns” that information, and can do with it whatever he wants.

It’s sad that even nowadays, the headlines here on Slashdot are so full of shit!

Must be making huge losses (1)

91degrees (207121) | more than 4 years ago | (#30778760)

So, 510 million paid apps at $3 each. That's $1.53 billion

Piracy costs $4.59 billion dollars dollars dollars.

So that means losses of some $3.06 billion. It's amazing the app store has survived this long.

And the Earth is moving faster around the sun (1)

BitZtream (692029) | more than 4 years ago | (#30778874)

Simply put, no money was lost due to piracy. Stop putting these retarded articles on slashdot, all you do is justify the morons who write this crap.

Statistics have shown that I've lost about 30 billion dollars while reading retarded articles about piracy. Interestingly enough, another set of statistics shows that both myself and the guys writing about how much money is lost to piracy have about the same ability to talk out our asses and lie through our teeth. I have a slightly higher amount of sarcasm.

Do you even know any? (1)

argent (18001) | more than 4 years ago | (#30778914)

Do you even know anyone who rips or trades cracked software?

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%.

My experience with people who do this is that your estimate is at least a factor of 100 higher than reality. I mean, these guys have everything from ten buck games up to Maya, Photoshop CXSDwhatever, Windows Server Ultimate with Oracle Everything. And they don't buy *any* software. Their whole thing is getting the goods.

The Reason Slashdot Posted (1)

RobK (24783) | more than 4 years ago | (#30779004)

We're all missing why this was posted to slashdot. I too was outraged by the numbers and finally realized that this post was about the *RESPONSE* to the Wall Street article, not the article itself. I'll bet not one of us has read the response at http://mashable.com/2010/01/13/app-store-piracy/ [mashable.com] . Let's do that before hanging someone.

I'm Confused (1)

Tim C (15259) | more than 4 years ago | (#30779068)

Since when was failing to gain something the same as losing it?

No-one has actually lost $459 million (= had it once, don't have it now), they just haven't gained it. If they've lost anything, it's the opportunity to gain the money, which is a rather different thing...

Nothing says "unbiased source".. (1)

EriktheGreen (660160) | more than 4 years ago | (#30779634)

... like a writer who launches into an article about the "App Store" without specifying which app store or whose app store. After all, there's only one App Store in the world, right?

I'm sure a person with such a mindset would always offer a calm discussion of the facts without using inflammatory language, weasel words, or unsubstantiated facts.

Erik

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