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Pirates make away with $450 million in App Store booty?


24/7WallSt. reports that Apple and third-party developers have lost approximately $450 million in revenue from App Store piracy since the store opened in July of 2008. Out of this, $140 million of this counts as lost revenue for Apple – a huge chunk of the $500 - $700 million in revenue the App Store has generated for the company so far – with the remaining $310 million revenue loss falling on developers.

Their analysis is based on several assumptions, however, any one of which could easily be wide of the mark. They argue that with three billion downloads on the App Store (not an assumption), 17% of those are paid apps (assumption), with a piracy rate of 75% (assumption), and the number of pirate downloads at 1.53 billion. If the average price of a paid app is $3 (assumption), then there's $4.59 billion in losses. Assuming that only about 10% of the pirates who downloaded apps would have actually bought them, that makes the total $459 million. Still with us?

According to 24/7WallSt.'s analysis, around 10% of iPhone/iPod touch users have chosen to jailbreak their devices, and it's only about 40% of these jailbroken users who are responsible for this torrent (ahem) of piracy. This means that, according to 24/7WallSt.'s numbers, out of a rough total of 75 million worldwide iPhones and iPod touches, a mere 3 million devices are responsible for the 1.53 billion apps 24/7WallSt. is claiming have been downloaded illegally.

For those of you calculating along at home, that works out to an average of 510 pirated apps per device. That snap you just heard was suspension of disbelief.

[Via MacRumors]

There's no question that App Store piracy is a huge problem, especially with some developers noting that as much as 90% of downloads of their apps are pirated versions. But 24/7WallSt.'s numbers seem outlandish to say the least. Analyzing how much money a company would have made if not for the dirty, dirty pirates is always a guessing game at best and economic voodoo at worst. Although 24/7WallSt. claims that Apple doesn't see this lost revenue as a priority because the App Store essentially exists only to sell iPhones and iPod touches, it's hard to believe that even a company as stuffed with cash as Apple would simply look the other way and twiddle its thumbs over $140 million in lost revenue.

Developers: how bad is App Store piracy, really? What have your experiences been? Let us know in the comments.

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