That's what 24/7 Wall St reckons, having crunched the numbers.
iPhone app piracy may have cost Apple and developers more than $450 million since the App Store's launch in July 2008, according to financial news site 24/7 Wall St.
It's the first time someone has tried to put a figure on the damage caused by iPhone piracy, and the site's reasoning is as follows:
- More than three billion apps have been downloaded from the App Store, of which between 13% and 21% are paid downloads according to analyst firm Bernstein.
- Taking the mid-point of that estimate, if 17% of downloads were paid, that means around 510 million.
- 24/7 Wall St's own research leads it to believe that for every legal paid download from the App Store, there are three pirated downloads: thus 1.53 billion illegal downloads.
- Based on the average price of an app being $3, that means $4.59 billion of lost revenues, in theory...
- ...But assuming only 10% of those people would have paid for the legit apps, you get to around $459 million in actual lost revenues.
The good thing about this analysis is that it doesn't assume that every pirated download is one lost sale - a trap the music industry has often fallen into when trying to calculate the cost of online music piracy.
However, you might quibble with 24/7's assumed piracy rate of 75% - three illegal downloads to every legitimate purchase. iPhone developers have reported rates that high and higher - but in the initial week of release.
Article continues belowAdvertisement
This usually drops off, as many pirates are downloading scores of apps every week, but then never using them again. Taken over the lifetime of an app, the actual piracy rate may be lower.
Still, the $450 million estimate at least brings more attention to the challenge of iPhone piracy. What can be done about it is another question entirely.
Developers are frustrated at Apple's public silence on the issue - and some even report disapproval from Apple when they have chosen to speak out about piracy rates.
On the other hand, what can be done? More use of in-app payments may be one deterrent for piracy, but it's hard to see how Apple could 'crack down' on the phenomenon other than targeting any specific iPhone warez sites with takedown notices and legal action.
