Apple 2.0

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Wired's guide to iPhone piracy

March 31, 2009: 11:34 AM ET

iphonepirateFor iPhone owners who get sticker shock from a 99-cent application, Wired.com's Brian X. Chen has posted a round-up that points readers to a variety of websites where users can download thousands of apps for free.

According to Chen, Apple's (AAPL) iTunes App Store is becoming an increasingly juicy target for software pirates. He cites an estimate by the research firm Medialets that 20% of the store's titles have already been pirated. There are dozens of apps, according to Medialets, that have pirated-to-paid ratios as high as a 100-to-1.

What Chen doesn't tell readers is that following the links he provides will lead them into a world of BitTorrent downloads and underground websites that offer easy access to the software but not necessarily to the codes needed to authorize their use.

Given that most applications for the iPhone and iPod touch cost less than a dollar, it's little wonder that the software developers Chen contacted didn't seem overly concerned.

"Like any piracy scheme, it's just a matter of time until hackers find their way around," said Pangea's Brian Greenstone, developer of the $3.99 game Enigmo, an App Store bestseller. During the first week of Enigmo's launch, according to Greenstone, only 5% of downloaded copies were pirated versions. In subsequent weeks, piracy dropped to nearly 0%.

"There are things we can do as developers," he told Chen. "But since the piracy rate is so low, my thought is 'Who cares? It's not even worth the trouble.'" (link)

Not every developer is so sanguine. Kai Yu, president of BeeJive, thinks the problem is more widespread than most developers realize. When he installed analytics software on his $16 BeeJive instant messaging app, he discovered that 60% of the activity originated from pirated copies. He's now offering the software for the sale price of $9.99.

For more information about App Store piracy, click here.

[Illustration courtesy of Wired.com.]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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