A huge problem for Apple and the AppStore

Well, exactly as I predicted, piracy has become rampant for iPhone applications. If people can steal with no chance of getting caught then most people will.

Ngmoco VP Alan Yu now says that iPhone piracy is 50 to 90 %. Absolutely no surprise here because Apple put no anti piracy protection in AppStore when they easily could have. This reflects their initial belief that the AppStore would not make money for them, they only did it as a service for users.

There are two lessons here. One for the many other companies who are going down the application store route. They must put technical protection into the store, otherwise thieves will destroy the business model. The second lesson is for Apple and their upcoming home console. If they do it with exactly the same mechanism as they have done iPhone applications then it won’t work commercially. They need to be far closer to Xbox Live in what they do.

And, to finish off, Ngmoco are going to in-game payments on iPhone to beat the thieves. Doing this they would probably be best giving the game away.


  1. Except on the App Store currently, you can’t just provide a free game including microtransactions !

  2. Yeah… because putting technical protection on things has worked ever so well in the past.

    Also, since they stated it was a “service” to users, just what business model will they be destroying? The one in which third party companies are allowed to release hundreds of thousands of poor quality applications and overcharge iPhone customers for the privilege of using them? Not Apple’s problem. Not unless the underlying corporate nature (greed) now wants a piece of that pie.

    Fundamentally though, the internet was not created with profit in mind, therefore any company that wishes to profit from the internet will be fighting an uphill battle against the internets “open source” nature. That being the free distribution and use of intellectual property.

  3. @IronMask

    The fact that any security measure can be circumvented, with enough work, isn’t a surprise to security people.

    Bicycle locks are a good analogy. Most bike locks can be easily defeated by a determined thief with the right tools. But that doesn’t mean we should all start leaving our bikes unlocked in public. A good lock makes your bike harder to steal than the bike next to it with a cheap lock, so less likely to be stolen. I call that 20 quid well spent.

    The same is true of anti-piracy software. The fact that all anti-piracy tricks can be defeated doesn’t by itself make software manufacturers fools for using them.

    I prefer your implied positive argument in favor of different business models (eg. free to play) – and there I do agree. Smart companies are finding new ways to make money where older business models are finding it tough.

    But note that the “information wants to be free” argument isn’t quite as unique to the software world as it feels: one could argue that bicycles also want to be free (although perhaps not quite as strongly) and that the concept of property itself is not ultimately sustainable — yet still we cling to it, and always will.

Comments are closed.