Analyst: Apple’s iTunes App Store for iPhone and iPod touch has lost $450 million to piracy

New Parallels Desktop 5 for Mac. $15 discount!“Apple and the companies that sell software for the iPhone and iPod touch at the App Store have lost over $450 million to piracy since the store opened in July 2008 according to an analysis by 24/7 Wall St. There have been over 3 billion applications downloaded since the App program began. Bernstein analyst, Toni Sacconaghi, estimated that between 13% and 21% of those downloads are from paid applications. According to this analysis, the average price of an application purchased at the App Store is $3. Sacconaghi estimated that Apple’s revenue from the App Store is between $60 million and $110 million per quarter. That amount has certainly increased since this research report was published because of the rapid growth of the number of applications,” Garrett W. McIntyre and Phil MacDonald write for 24/7 Wall St.

“However, behind all this success lies an insidious force that has plagued the music, software, and movie industry for decades. Developers of iPhone applications have reported alarming piracy rates for their software, and the ease with which users may obtain pirated versions of paid applications for free is only increasing. The total number of applications available at the store, including those which are free and those which require payment, is in excess of 100,000,” McIntyre and MacDonald write.

McIntyre and MacDonald write, “Apple, which takes 30% of the revenue generated by downloads at the App Store has lost about $140 million from piracy.”

Full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


  1. I don’t know how you can pirate an app on the iPhone and I don’t care. I am concerned about copyrights as a software developer and a photographer. Some of my pictures being sold on ebay illegally. I wish they would have my credit on it at least.
    Still I believe this type of evaluation is purely wrong. People who pirate are not concerned at all about copyrights or simply don’t care. I saw many photographers using pirated software btw which is for the least disturbing… Regarding iPhone Apps I believe those pirates would not buy the apps anyhow. Maybe a very little %age would buy really. Is it really a loss after all. Now I don’t think the problem must be overlooked. Education would be a good start.

  2. Here we go again… Another “analyst” trotting out the old “money lost to piracy” logical fallacy. “There were this many apps stolen, which means $X million in lost sales”. Bullshit.

    While piracy is certainly a problem, and Apple should take whatever reasonable steps it can to protect developers from the leaches of the world, there’s only so much they can do.

    The fact is that there will always be turds who steal movies, music, and software. Most of those are the types of people who won’t pay for anything, no matter how cheap it is. They have no consciences; they’re just “takers”, and their thefts do NOT represent “lost sales”.

  3. Money lost market gained.

    Apple may have lost a few coins on App piracy, but by ‘allowing’ their iPhones to be jail broken afforded Apple the opportunity to try various other markets unofficially. Namely, T-Mobile (US), underground GSM supported Chinese market etc.

    I think, in the end, Apple would like to be free of the network providers (as it’s in Apple’s DNA to control total user experience in house), hopefully someday soon. Having unlocked phone allows that vision to be tested at the expense of the carriers.

    All in all, I don’t see Apple sweating over a few hundred million dollar R&D;cost shared by ‘developers’ who would love to complain about Apple’s closed garden but now can’t. I mean, there’s always Nexus one.

  4. Most of those are the types of people who won’t pay for anything, no matter how cheap it is. They have no consciences; they’re just “takers”, and their thefts do NOT represent “lost sales”.

    Companies like Coach and Gucci try the same argument for the knock offs being sold in China town. A $10 fake sale does not mean a $500 lost sale for the company.

  5. So, we’ve got 2 iPhones and 2 Touches in the house that all sync to the same computer. When I buy an app for my phone, iTunes AUTOMATICALLY loads it to the 3 other devices when they sync.

    Am I pirating the software? No. Did the analyst take multiple device households into account? No.

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