Slashdot Mirror
App Store Piracy Losses Estimated At $459 Million
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.
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.
Looking around I have yet to see a single friend of mine with pirated apps. I'm just saying.
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.