Just like lunches, apps are not free. Even free apps take time and cost money to be developed. However, a growing segment of app users believe that the cost is not one that they should have to help shoulder. Currently, Apple, Microsoft and Google consider app pirates little more than a minor nuisance, but it may not be long before we reach a point where app piracy could impact the very foundation of the app ecosystem.
While prophecies like this may seem outlandish, you only have to look at the once infallible music industry to realise how quickly the tides can turn. Record labels were making money hand over fist until a band of digital pirates started downloading free music from sites like Napster. When music piracy went mainstream, almost overnight the labels’ profits plummeted.
If the app market is going to continue to grow, it’s important that the industry addresses the growing cadre of app pirates, like those at Hackulous, who freely market and distribute their Installous app store from which the majority of even paid apps are available free of charge. Consumers simply jailbreak their smartphones and install the free App Store. Carriers aren’t able to compete and end up not even trying to offer a content portal, satisfying themselves instead with the data revenues that they earn from all the free app downloads.
At the moment, device manufacturers are happy making margins and building market share on the back of the hardware rather than the software. In some cases, they see apps and content as a consumer retention tool rather than a revenue generating profitable business line. However, in the near future, the proliferation of advanced smartphones and tablets will make it difficult for hardware manufacturers to distinguish their products based on hardware alone. The platforms that will succeed in the future are those which attract the best developers and, accordingly, the best apps. One of the best ways to attract developers is to ensure that your hardware and operating system are well equipped to maintain the integrity of each developer’s app.
Before it’s too late, there are a number of ways we can begin to stave off app piracy. First, hardware manufacturers need to make security a priority on their operating systems. Within a day of opening, both the Mac App Store and the Windows Phone 7 store were hacked – that is entirely unacceptable. Additionally, app developers need to continue to be innovative with pricing in order to attract a loyal consumer base that is willing to pay for content. Freemium pricing models and other in-app purchases are proven ways of doing exactly that since they haven’t (yet) been hacked and are therefore pretty much the only way for app developers to protect their intellectual property against piracy. Furthermore, app security and monitoring of installations of these free app stores should be prioritised in future operating system builds and hardware modeling and by industry standards bodies and platform vendors.
If both hardware manufacturers and app developers commit to prioritising security, we can keep piracy as a fringe nuisance rather than an epidemic in the apps ecosystem. Who knows, if we succeed in nipping the piracy of apps in the bud now, we may even see the return of the two hour martini lunch.
Simon is Founder and CEO of the cross-platform social app store Appitalism
The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members