iPhone App Piracy is Out of Control

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Piracy exists in many different media platforms - movies, music, books, video games and yes, even iPhone applications. Exactly how big is iPhone application piracy to date? According to 24/7 Wall Street, the App Store has lost over $450 million since it's inception.

It is estimated that for every application sold in the App Store, 3 more are then pirated. Who's to blame for this? Of course, all of the blame is being put upon the iPhone jailbreakers. While none of us here at TiPb are against the jailbreak process as it's intended purpose was not related to piracy, we all knew it was simply a matter of time before someone found a way to exploit it for the sole purpose of stealing iPhone applications. This hurts the developers the most as some have reported piracy rates has high as 95%.

To this very day, Apple simply toys with the process or they turn their head the other way. It should be interesting to see if, in the future, Apple helps developers battle jailbreaking similar to how Microsoft helped game developers when they started banning Xbox 360 owners from their Xbox Live service (Online Gaming Community) for playing pirated games while online. The developers cried out to Microsoft for help and they came through the only way that is currently possible. Again, we are not against jailbreaking but something does need to be put in place to help developers fight piracy.

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iPhone App Piracy is Out of Control

55 Comments

Where exactly do they get the 1-3 ratio? Thin air? Back of a cereal box? The homeless guy down the road?
I call bullsheet on that and as such the whole report.

These estimates are nonsense. If that were right then there would be 12 billion app downloads total for all iPhone users. The criteria used for determining if the app was stolen is if the phone reports itself as jailbroken. Jailbroken doesn't mean the app is stolen. My phone is jailbroken to run on T-mobile (where I get unlimited text and internet for $20 instead of the $60 AT&T wants to charge me)
I pay for all my apps. Most others do the same and why not. It isn't like the price point is that high. Most apps cost less than my lunch. The only place I could see this being a real point of contention is GPS apps. However I have Google Maps for that.
It just doesn't makes sense to call jailbroken phone owners thieves. Also having dealt with many friends into piracy over the years let me tell you, they don't use these apps. To them, the apps are about as gold coins in that coins don't do anything, they just happen to be worth something and they sit in a bank, or a chest I suppose if you are a pirate. These folks store and trade these apps and have them sitting on their computers in massive heaps like treasure, but they mostly don't play them. The value to them is in accumulation, not in actual use.

what you guys bitching about the article fail to realize is that a short torrent search will show pirated apps for the iphone on a NUMBER of sites. so its not a OH they are all downloading th apps for free from itunes. they are downloading th apps in torrents and finding instructions on the web copy them over to their jail broken phones. so if one person buys the app and then shares it on their favorite torrents site for people to download then yeah. the figures make sense. its not fair to the app developer that some people are tools. but thats the double edge sword of development. everyone wants something for nothing. and no matter what you do, some asses will steal not because they can afford but just cause they can.

How about this: Apple makes available features users want (ie. multitasking, themes, etc) and then plugs the holes in jailbreaking (do something intelligent like hire GeoHot or the DevTeam to show you how). The honest users just want a more functional iPhone. Screw the people who jailbreak for piracy.

I'd be more buy-happy if iTunes would let me use my PayPal account (Polish appstore doens't allow this), so I wouldn't have to pay, on top of the price of the app in Euro, a fee for making an international money transfer (it's funny because I pay more for the transfer than for the app itself).

Unique ID's generated when the app is purchased, any app that uses server-side data could block invalid ID's, making pirated apps not work (basically the same idea as video games using CD keys for multiplayer).

I have low piracy rates on my app. It is not a game.
What can Apple do ? I think that killing push if pirated apps detected would be great. Then require clean install and scan. Would not stop jailbreak or 3rd party.

Another piracy scare report - great. Yet despite all of this so-called piracy we are hearing about billions of dollars of revenue generated through the app store. Someone must be paying for all these apps. My phone is jail broken, but I haven't pirated one app. Why would I go through the hassle, most apps are only a buck or two.
I would be willing to venture that most "pirated" apps on the iPhone are resulting in ZERO loss to the developer as the user would not have paid for the app in any circumstance.
Quit bitching and go pack to making great software that people want to buy and use!!

You should blame the difficulties Apple introduces. Here in Brazil the whole Games category is just abstent, and I'm having issues buying with my credit card and I'm at the 26th e-mail with Apple and they insist not to solve my problem telling me to do the same things over and over.

another report blowing things out of proportion, piracy is here there is no question and its not going away any time soon. That said the number of people with jailbroken phones is reletivly small compared to stock and of those very few jailbreak users will be pirating, as they are honest users only using jailbreak for the great extensions and addons apple dont do, (like backgrounding and themeing etc)
as has been said above, some people just download for the sake of downloading, they wouldnt actually buy the app anyway, so in the same vein as record labels assuming that every download is a lost sale, the report assumes this as well.
However i agree nick above and the price of gps apps, and these are probably the most pirated apps due to the high price, and not everyone wants to drop a big wad on a gps app without even being apple to try it. At least in a real (physical store) shop you can return something within reason with the app store its not that easy. Maybe the likes of tomtom and navigon should list the app as free, but have an in app purchase to enable full use. Maybe have a time limited "demo" period. That would probably kill a lot of piracy overnight

@HungWell I agree. They could(and hopefully will with OS 4.0) give us more reasons not to jailbreak in the first place.
There will always be some who do it purely for the piracy of apps, but I'm sure the vast majority of jailbreakers, do so, for features in the OS that they feel are lacking.

In previous TIPB piracy articles they mentioned the overwhelming majority of piracy was in Russia and China.

The level of denial on the part of people blasting this report is predictable. In the longer version of this report that I read yesterday, they arrived at this financial figure by predicting that only 10% of the apps pirated would have been purchased otherwise. 10% So they're not claiming that every pirated app downloaded is a lost sale. They assume 90% are not! This is hardly alarmist.
Maybe I'm old fashioned, but I happen to believe that if you can't afford or don't want to buy something, you simply don't get that thing. Not that you can cheat and get it anyway, because deep down, you know that the seller hasn't lost money you wouldn't have given them anyway.

@chutz
If I understand iTunes accounts correctly, a unique ID per app would not be compatible with the ability to share iTunes store content between 5 computers, unless Apple is going to provide that data on a realtime basis to every third party (doubtful) or serve as a proxy for every call for server side data an app makes (even more doubtful).

Think, guys, THINK! The 3:1 piracy rate obviously can't be used to calculate loss. Why? Because this means that all iphones would have to be jailbroken. If only 10% of iphones are jailbroken, the loss is a maximum of 10% and even this number would mean, that no one with a jailbroken iPhone would EVER purchase any software!

I tried pirating games but the only reason was so that i could try it before I bought it. But I tried doing that to beejive and the app knew it was pirated. Not sure how but it wouldn't let me do anything and told me it was not genuine. So I ended up buying it because I figured that if they went through that much trouble to do that it was probably going to be worth it. But anyway, why can't apple or developers do the same thing that beejive does?

@Me & @DaCeige: The flaw in your logic is that not all iphone users download the same apps. For example, lets say there are 50 million ipod/iphones of which 5 million (10%) are jailbroken. Now lets say that of the 45 million non-jailbreakers, 50,000 download the app "YFA". To get the 3:1 ratio, only 150,000 of the 5,000,000 jailbreakers would need to pirate the same app. So mathematically, it is very possible to have this ratio.

These figures seem fishy. If the assumption is that 7.5M iPhones are jailbroken, and 40% of those use pirated apps, that yields 3M pirates (Arrr!).
1.5B pirated apps for 3M pirates yields 510 apps each (on average). Sounds like a lot to me...
Also, I'd love to know how the pirated app "detection" works. Is it based on detecting jailbreak? Or actual code to detect cracking? If it's the former, than lower all figures by 60%.

I'm scared to figure out how much money I have spent in the app store, I think its between 150 - 200 dollars, maybe more. Never though I'd spend that much on applications used on a device with a 3.5 inch screen.

As long as we are talking math, according to the article:

  • 10% of iPhones are jailbroken. (The article makes this assumption from unique visitors to Jay Freeman's site; unless there is a 100% conversion rate here, I would expect this to be a lower, but let's grant their assumption.)
  • 40% of jailbreakers have pirated software

Assuming those numbers are accurate, all piracy is performed by a maximum of 4% of iPhone users.
To achieve the 3:1 ratio cited in the article, assuming the worst case where a pirate never buys an app, these 4% of users would have to download 3 times as many applications as the other 96% of the iPhone community put together. That seems unlikely, but not out of the realm of possibility.
To check, let's apply those ratios to the most recent full month for which we have data, in December 2009, there were 70 million paid apps downloaded (Flurry's research says 280 million downloads, of which 25% were paid...280 million * 25% = 70 million.)
If the estimates in the article are to be believed, 210 million iPhone app copies were pirated by 4% of the iPhone base in the month of December alone. That sort of traffic, especially among a relatively small user base, would not go unreported by even the laziest of forensic trackers.
Is is certainly possible December numbers are distorted by Christmas sales, but I have no Oct/Nov data handy. Still, the scale of the alleged piracy rates is so large, and the number of users so relatively small, that these numbers should easily show up in analysis of traffic among torrent trackers, something which is not that difficult to uncover. This would seem an obvious and necessary next step both in stopping piracy and in establishing any credibility among these estimates, and yet the step never seems to be taken. Until it is, it is hard to take these sorts of estimates seriously.

"In previous TIPB piracy articles they mentioned the overwhelming majority of piracy was in Russia and China."
This still rings true for TV shows and Hollywood films, yet we have morons like Dianne Feinstein in office that think more draconian laws and felony prison sentences are going to stop piracy. (Google her, you'll see...)

Apps like TOM TOM deserve to be pirated. There is a general price level in the appstore and tom tom goes way over it. Plus,tomtom has enough money. If they didn't have enough money they wouldn't be giving giant bonuses to their CEOS
However, people who pirate from small time developers are doing some serious harm to the world. Any little start up company or one guy developer deserves to be paid for their hard work. I enjoy supporting this small developers and I think it is a real shame those apps are pirated.

Clearly these numbers are blown up and twisted to show more, but piracy is a problem.
I recently added a repo on my jailbroken phone for more notification options. I am now almost being forced to browse through cracked apps as the repo only has 1 legit app. Its really annoying. of course i can remove the repo, but then I loose easy updates.
I just looked through what is being hacked, they are mostly $1 apps. Really? just buy it!

People really believe that the Devs and Apple lose nothing if someone pirates an app cause "They were probably never going to pay for it anyways".
What about push services? The Developers have to pay for the extra server load from people NOT paying for the app. Apples has to pay for the server load of people downloading all of these apps and not paying for them. Many devs have had to disable push notifications cause they aren't making any money and not everyone has found a way to block pirated apps.

@frag
When you implement push notifications, you know the exact unit(s) to which you are pushing. Not that I am condoning piracy, but if a developer cannot distinguish between a pirated and legitimate copy in that context, they have much, much bigger problems.

@Oliver:
If TomTom's app is priced too high, then people not buying it will eventually lower the price. Stealing it is not the solution.

@TheDave
I'm calling bullsheet on you. What evidence do you have to present that makes you think YOU can call bullsheet on THEM? They've probably crunched way more numbers than you.

@CharFeld
Huh? Flaw in my logic?
In your example 3% of all jailbreakers should download the app, whereas only 0.11% of all other iPhone users would pick up the same app. If we are talking 100 users I see how those numbers could happen, but 50 millions? Never.
Why is it that the ones downloading pirate soft/music are always considered extremely rich and ready to spend 500x the amount of those paying for the stuff? Doesn't reality show us the exact opposite?
Btw I am jailbroken and haven't got any pirate software. On the contrary, I have spent more than $1.000 on the app store (got all major GPS soft).

I have a jailbroken Iphone and I dont pirate anything... I even pay for apps through cydia.... I want the developers to get paid because that way they keep developing... Thats why we donate... I donate because when they produce things for free I want them to keep producing.... Now if they tried to block jailbreaking all together I know I would not have a Iphone... As mentioned I do not like my phone looking like all the other billions of iphones out there... Also as someone said those numbers are false because if someone pirates an app 9-10 times they werent gonna buy it anyway..

"But we only jailbreak to customise the wallpaper".
Idiots. Apple should crack down more heavily on jailbreaking. And Renee, since time after time it's proven it's primarily about stealing apps - you should stop supporting it!

The number $450 million of total losses and 'for every 1 app bought 3 are pirated' is litterally impossible. Apple makes $500 million a month from the app store. See the problem?

@frog
Since they very article Rene links to here estimates 40% of jailbreakers pirate, most people with basic match skills would consider numbers less than 1/2 nowhere near "primarily", the only way to answer your post is
[citation needed]
It should be easy enough for you, if it is proven "time after time" -- just put in a link or two research supporting what you constantly assert as "proven."

"The level of denial on the part of people blasting this report is predictable. In the longer version of this report that I read yesterday, they arrived at this financial figure by predicting that only 10% of the apps pirated would have been purchased otherwise. 10% So they’re not claiming that every pirated app downloaded is a lost sale. They assume 90% are not! This is hardly alarmist."
10% of a made-up number is still a made up number. My point is that the App Store is an unqualified success for Apple, for Developers and for Consumers. Why anyone would want to mess with the current eco-system is beyond me. What we have today works, and works well. Yes, I'm sure there are people installing cracked apps. However, the overall impact is negligible, and I'd prefer that Apple, Devs, etc. not mess up a good thing by introducing more draconian DRM that only serves to hurt those of us that buy apps.
For those that seem to think we jailbreak just to steal. Two words - Background Tasks!! That's why I jailbreak. That and to enable tethering that AT&T promised and failed to deliver, oh and also to allow my SlingPlayer to work over 3G. I actually have paid for 2 jailbroken apps and still haven't pirated anything. If Apple prevents me from jailbreaking my phone, and doesn't deliver the functionality I'm getting from the jailbreak, then Apple and all of the iPhone developers lose me as a customer. Nothing like biting off your nose to spite your face.

Same stories... Why are most of the stories I read here I have already read on sites like Engadget or Tuaw.com. I read this yesterday on Tuaw but only now saw it here.... Are all blogs connected or is copy and paste the new blogging standard?

I call bullsh$t. Apps, for the most part, rarely cost more than $5 dollars and you are allowed to use them on 5 authorize computers and iPhones. Furthermore, when you buy it you get all the upgrades without having to wait and hunt down a new pirated copy.
About the only apps that may have issues with this is GPS and 20 dollar plus apps like NBA league pass.

I only Jailbroke my IPhone so I can go on Fido instead of being on Robbers, now with people pirating apps it's just sad to see a developers work go down the drain. If Apple does invoke an IMEI Ban on Jailbroken devices like Microsoft' ban on 360s would be devestating on apple's business because they would lose so many customers.
Even though they can't block IMEI's without having an agreement with the carriers. Man O' Man Apple needs to step up against pirating apps

Hasn't the app store only made about $100 million so far? How the heck could it have lost $450 million from pirating. LOL

1 download does not equal 1 sale.
How many apps were downloaded and used once and uninstalled with in 24 hours. How many apps were downloaded just because they were their?
These guys are using the same flawed argument as the film and music industry and the numbers don't add up.

Hey if they added theming, multitask and more open development as well a unlocked version I would have no reason to jailbreak

Most people JB their iPhone/Touch for the features Apple has, arrogantly, failed to add. I mean cmon. The phone was out for 2 years before copy/paste and MMS was added. I'm not paying $500 (the non upgrade price) for a phone that can't multitask, handle media outside of iTunes or simply customize the look, to name a few. Why TF can you not listen to an app like Pandora and surf the web? Because so-called "Think Different" Apple wants you confined to the iTunes enviroment to forcibly increase their bottom-line. So greed degrades features. Features give life to Jailbreak. Jailbreak, although not originally intended, gives life to app store piracy. So, in my humble opinion, Apple is getting what it deserves. Mostly for thinking that a touch-screen would jade us enough to forget about the iDevices obvious short-comings.
I'm an Apple loyalist. Purchased my first Mac in 1989. So I'll be damned if I let a PalmPre or Android out-do the capabilities of my iPhone. Now, when I pull my phone out, I can do all and Android & PalmPre owners hate me for it. To be 100% honest, an iPhone out-the-box str8 sux. Im on my 4th iPhone a when they stop JB'n, I'll stop buying them. I won't even buy an iPad if I can't JB it. Wise up Steve.

I have to agree with what DB said. Apple is really using some ethically questionable tactics with their handling of the iPhone. This applies to everything from pricing structure, to app censorship, to brutally holding back basic functions for future product updates. In my opinion, they are the ones to blame for this problem, not the jailbreakers.

They can go to hell. I have the right to pirate all my apps and Crapple cant do a thing about it. They deserve to lose. The devs should accept piracy or GTFO the App store. Damm nazis.

Isn't it ridiculous to believe every illegally downloaded app equals a not-happened purchase? Quite often, if not most of the time, people choose to illegally download apps to try them out, apps that aren't available in their local App Store, apps that are way too expensive, apps they just would rather not use at all than pay for them. Not all of the apps I have, say, on my computer, are legally acquired, because the other option often is not buying the app, but rather living without it. And for the devs, ANY user is better than a not-user. It doesn't matter to them if I download their app illegally or don't use their app at all, as neither way they gain or lose any money. If people would start replacing all of their app purchases with illegal downloads, the App Store would likely be only moderately successful. However, the opposite is the case. In fact, one could argue illegal sharing helps spread the word and actually boosts App Store purchases.

Apple can't just ban anyone they suspect of piracy. Most pirates also pay Apple money. That and Apple is not the carrier. It's not in their best interest to block what they can - iTunes.