An analyst firm has concluded that millions of pounds worth of paid-for apps are being downloaded and installed illegally, resulting in massive potential losses for Apple and app developers.
24/7 Wall Street conducted the research that shows the extent to which hacked iPhones and illegally pirated apps are impacting the market.
After passing the 3 billion downloads mark recently, an independent company has estimated that around a fifth of the downloads at the App Store were for paid-for apps. But those who perform the 'jailbreaking' hack that unlocks their iPhone and allows the installation of unofficial software are bypassing the system.
The authors of the report said that they had made an optimistic estimate as to the actual number of apps that are pirated, with three illegal copies installed for every one app sold though official channels.
The report gathered data from app development companies and many said that within an hour of a new release hitting the App Store a pirate copy was made available online. Some estimate that around 90 per cent of the people who have installed apps on the iPhone or iPod touch have done so illegally.
Observers are confused by Apple's lack of action in the face of such widespread piracy, as the iPod was subject to such rigorous control in order to minimise any copyright theft associated with musicians and record labels.
An explanation given for Apple's inaction by 24/7 Wall Street is that it has little incentive to prevent app piracy as most of the money it generates comes from sales of the iPhone itself and not from the App Store.
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