There’s a fly in this ointment. Using some curious math and dubious logic, Garrett W. McIntye and Phil MacDonald reached the conclusion that iPhone App Store piracy is raging in epidemic proportions. How bad? Their lies, damned lies, and statistics peg Apple’s losses at $450-million. How good is that number?
Lies, Damned Lies, Statistics
Software piracy exists for a reason. It’s there. Rather than pay, some people prefer to pilfer. Regarding iPhone apps, the questions are, How many? And, How much?
24/7 Wall St.com claims the App Store lost over $450-million to piracy since the store opened in 2008. How is that possible?
iPhones can be hacked, unlocked, jailbroken, and configured to run non-Apple approved software. This is not a secret, though the number of jailbroken iPhones remains a tiny percentage of all iPhones sold. 24/7 Wall St. admits:
Most iPhone users have not jailbroken their phones. This is likely a result of the perception that this process is incredibly technical for many non-tech savvy owners. Others may fear that Apple might retaliate.
And, Apple has retaliated numerous times with iPhone OS updates that break or brick jailbroken iPhones. How does one determine how many phones have been jailbroken and received pirated software?
It is difficult to get precise figures for the number of iPhones and iPod touches that have been jailbroken. Jay Freeman, operator of Cydia, a renegade app store that can be found on almost any jailbroken iPhone or iPod touch device is probably the best source for this estimate. Freeman told Wired Magazine in August 2009 that he has received over 4 million unique visitors to his store.
That’s crap. Checking his site’s stats on Alexa.com indicates a far lesser number is likely (yet those numbers translated, magically, into an equal number of downloads), yet 24/7 Wall St. presumes the number to mean that about 10-percent of all iPhones and iPod touches (they called them iTouches, so they lose credibility right away), or 7.5-million of the more than 75-million devices sold to date. Of course, apps with a price tag are pirated far more than free apps.
Here’s where the math goes to hell in a hand basket.
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.
Take The Air Out Of The Balloon
The flaw in the logic? It assumes all jailbroken iPhones download all pirated copies of paid iPhone apps (those with a price tag). While Apple’s App Store download figure does not include repeat downloads for upgrades, 24/7 WallSt. makes no such distinction. The numbers are flawed. If the pirates had to pay for all those apps, would they? Of course not. So the lost money isn’t really lost.
First, the estimate of pirated download numbers is too high, and doesn’t account for repeat downloads for upgrades and updates (Apple keeps track of that). Second, the estimated number of jailbroken iPhones is too high (do you even know anyone with a jailbroken iPhone, let alone pirated apps), and based on here say and flawed numbers. Third, the estimates assume all jailbroken iPhones download all pirated apps, which is unlikely, or mostly impossible.
I don’t know about you, but my iPhone is full of apps, games, utilities; paid and free. 11 pages with 16 apps each, plus the four on home row equals a grand total of 180 apps. I have probably 100 more that I’ve downloaded and tried. Apple and others estimate approximately 40 apps per iPhone and iPod touch sold (over 3-billion downloads divided by 75-million owners).
What is this $450-million figure? It’s Chicken Little Journalism™ that ventures to make a mountain of a mole hill without paying the price of good research.
UPDATE: Check out the comments on the bottom of Adrian Kingsley-Huges article, Pirates Plunder the iPhone App Store. Some iPhone users have no idea that they’ve become thieves.