Apple App Store Has Lost $450 Million To Piracy

Apple (NASDAQ:AAPL) 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.

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.