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Report on ios piracy
Report on ios piracy
Report on ios piracy
Report on ios piracy
Report on ios piracy
Report on ios piracy
Report on ios piracy
Report on ios piracy
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Report on ios piracy

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An overview of the revenue lost due to piracy in mobile applications market

An overview of the revenue lost due to piracy in mobile applications market

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  • 1. 2011 Piracy of Mobile Applications Tip of the iceberg An overview of the revenue lost due to piracy in mobile applications market.27 September 2011 Radhika Chittoor Balani 10/31/2011
  • 2. Table of ContentsIntroduction ............................................................................................................................... 3Current Market Scenario ........................................................................................................... 4Pirated Applications Availability .............................................................................................. 7References................................................................................................................................. 827 September 2011
  • 3. IntroductionMobile developers, irrespective of the platform are faced with rampant piracy issues eating awayinto the probable revenues. The revenues expected from the mobile applications are going to bein the tune of USD 11 Billion by the year 2014 going just by the United States downloads alone.As per the Gartner report, the mobile apps worldwide download is going to cross the USD 21Billion mark by the year 2013 while the total revenues of the application stores inclusive of salesand advertising would be more than USD 29 Billion by 2013.But this growth in the mobile apps market does not necessarily translate into revenue for theapplication developers as the market is highly prone to piracy. One can safely assume thatalmost 75% of the applications downloaded on to the mobile devices are done without goingthrough the payment process, leading to huge revenue loss to the developers.Due to jail breaking in case of iPhone it is has become easy to install the pirated versions of themobile applications. Owners of these jailbroken devices can install pirated software using any ofthe applications available. There is a huge difference in the number of paid downloads for anygaming software and those using the paid version.Piracy has a three pronged effect on the mobile applications market as it affects the publishers’top line, leads to creation of sales reports which do not match the analytics reports and lasts italso increases the popularity of the application making it more susceptible to piracy.
  • 4. Current Market ScenarioThe Apple’s iOS powers the devices like the iPod, iPad and the iPhone. It is a Unix based systemand leverages on the basic security controls to ensure the security. These are primarily theaccess control, encryption, application provenance and isolation. Having said that it is still notsafe to assume jailbreaking is not possible in the iPhones. Though Apple is working towardscoming up with versions more secure than the previous, jailbreaking occurs within a few days ofthe new version’s launch.When Jailbreaking is donethe iPhones are open forrunning of piratedapplication. This makes itdifficult to find out the exactnumber of legal users for amobile application. Forexample, as per Apple’sGame Center, there areabout 1600 user scores forFingerkicks- the iOSsoccer application fromGameized. But the copiessold actually are only about1,160 as given by Gameized. This shows the extent of piracy in the mobile applications market.The ratio of applications available for free as against paid is 31:69, out of which almost 13% ofthe paid applications are available as pirated versions for free download. The magnitude of piracycan be better captured by noting that almost 97% of the top 100 mobile applications are pirated.Following are some of the key figures highlighting the magnitude of piracy in iOS:Piracy Loss Estimations 01 Jan 2010 01 Sep, 2010 Early 2011Total Applications 150,000 250,000 350,000Estimated Paid 3,000,000,000 6,500,000,000 10,000,000,000Application SalesEstimated Paid 17% 17% 17%Applications SalesTotal Paid Applications 510,000.000 1,105,000,000 1,700,000,000
  • 5. Piracy Loss EstimationsDownloadedAverage Applications USD 3.00 USD 3.00 USD 3.00CostApplications Revenue USD USD 3,315,000,000 USD 5,100,000,000 1,530,000,000Piracy 75% 75% 75%Lost Sales USD USD 9,945,000,000 USD 15,300,000,000 4,590,000,000Expected Purchases 10% 10% 10%Lack of Anti-piracy USD 459,000,000 USD 994,500,000 USD 1,530,000,000LossSource: 24/ 7 Wall St.Piracy does not simply mean direct revenue loss. This is primarily because more often than not,though a particular pirated software is installed it is most likely that it has not been used morethan once or twice initially. Most of the illegal installers of the software use it in the beginning andthen just stop using it.Keeping in view this it has been found out that as against the initialrevenue loss calculated to the tune of USD 459 Million the actual lossincurred due to the piracy was USD 30 million. As per one of the It is important to note that onestudies conducted it has been found that at least one pirated cannot calculate the loss ofapplication can be found in 38% of jailbroken iPhones. The revenue by simply multiplyingconversion rate for a pirated application to purchased is less than the cost and the pirated copies.0.43% showing that though most people go for pirated version toverify the apps before buying they end up either losing interest orgetting used to the pirated version.
  • 6. The market statistics in terms of USA alone for the iPhone applications piracy are as given in thepicture below:Source: 2011 mtiks, LLCSome of the companies which have acknowledged their revenue loss because of piracy are:Company Name Piracy Rate Application Cost Application NameNeptune Interactive 90% USD 1.99 Tap-FuInc & Smells Like aDonkey IncWeb Scout Inc 75% USD 0.99 iCombatFreelance Developer 75% USD 4.99 LayersFish Labs 95% USD 7.00 Rally Master Pro 3D
  • 7. Pirated Applications AvailabilityAppTrackr which is part of Hackulous, is a popular pirate collection webpage. One needs to haveAppTrackr along with Installous to download any pirated application easily. AppTrackr is a webbased directory which has a list of all the pirated applications available whereas Installous helpsin downloading these pirated versions to be downloaded on the jailbroken iPhone. FurtherHackulous furthers allows for sharing of the pirated applications, making it even easier for all togain access to the apps for free.Another site which allows users to download and install mobile applications for free is theGrabuolo.us. Other sites which promote piracy are the torrent sites out of which the top few areThe Pirate Bay, Torrentz, BTJunkie and so on.
  • 8. Referenceshttp://www.thinq.co.uk/2011/7/13/90-cent-iphone-games-are-stolen/www.yankeegroup.comhttp://www.mtiks.com/http://geeknizer.com/iphone-app-piracy/#ixzz1ZFfD39k2http://www.gameized.com/

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