Apple has proudly sold 3 billion apps on the iPhone platform. But the pirated apps market is booming, and estimations suggest that it has dented Apple’s revenues considerably. Had the pirated apps been purchased legally by Apple; app developers would have gotten an additional $450 million in revenues. For Apple alone,considering that they charge 30% of app revenue as commission the amount of loss comes close to $140 million.
While some smart developers like Ben did fight pirated apps in a pure innovative manner, Apple has largely remained silent about the issue. Though even Apple has tried its best to get Jailbreaking labeled as illega Hackers in any platform would also prevail, its just that Apple has to ensure that these Hackers do not take too much away from the developers by means of piracy. App Store being a key iPhone USP the issue is delicate for sure.
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 pirated 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 pirated apps would have been purchased 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. [247wallst]
