Is Google too 'lax' on piracy issues and its Android Market policies?

Taylor Martin
 from  Concord, NC
| September 9, 2011

According to a report coming from Ovum analyst Nick Dillion, Android may surpass iOS in total application downloads this year. Android could experience as much as 8.1 billion downloads in 2011, in comparison to last year's 1.4 billion, and 6 billion applications will likely be downloaded from the App Store, up from 2.7 billion in 2010, says Dillon.

This should hardly come as a surprise, though, as both platforms have faced explosive growth and interest this year; the coming of the mobile application age has been disseminated by analyst firms around the world; and Android users have flexibility in how they want their apps delivered – Amazon Appstore, GetJar and SlideME, to name a few. The Ovum report states that Apple's single App Store “can't compete with such diversity, but still leads in the value of its apps.” (Of course, Ovum's report likely doesn't take Cydia into consideration, which could easily put the two on a level playing field.)

What is interesting, however, is how the two platforms' application stores stack up in profitability. Ovum predicts that in 2016, all of the Android application stores combined will generate a revenue of $1.5 billion, while Apple's App Store alone will create 2.86 billion. This is based on the prediction that Android stores will see roughly 21.8 billion total downloads, compared to the 11.6 billion downloads from the App Store. That means with nearly half the downloads, the App Store will predictably receive twice the revenue. Impressive … at least for Apple.

So what's going on with Google's platform and app revenue? Piracy, for one. Data from a recent survey performed by Yankee Group of 75 developers reveals some interesting deets on Android and it's growing problem with piracy:

  • Piracy is a problem for Android and Google isn’t helping. Among Android developers:
    • 27 percent see piracy as a huge problem
    • 26 percent see it as somewhat of a problem
    • 53 percent say Google is too lax in its Android Market policies
  • Three-quarters of Android developers say it’s easy to copy and republish an Android app
    • Almost half say that pirating an Android app is “very easy.”
  • Piracy hurts developers’ top and bottom lines
    • About a third of developers say piracy has cost them in excess of $10,000 in revenue
    • 32 percent say it increases their support costs
    • 25 percent say they see increased server costs due to heavy loads imposed by pirated copies

Piracy was inevitable on Android, as it is with almost all digital media. In contrast with Apple's "walled garden," Android Market policies are very loose. Nearly anything can be uploaded to the Market and downloaded by users. The problem is, since developers are pulling in less revenue due to pirated apps and operating costs are increasing, so are the prices of applications. Seeing as Android users are less likely to purchase apps in the first place, an increase in price will likely make things worse for devs. If this perpetual standoff doesn't stop soon, developers will soon pack up shop and head to another platform.

Not only is piracy bad for developers, it's bad for Android users, too. The open ability to pirate applications makes things fairly easy for hackers to download an app, repackage it and upload it to third-party stores (and websites that host pirated apps) with malware. This severe vulnerability leads to Trojans, "Update Attacks" and "malvertizing."

Carl Howe of Yankee Group states, "Android apps are living in the Wild West without a sheriff,” and, “With five other major mobile OSs competing for consumer dollars, Google can’t afford to simply let pirates kill app developers’ businesses. They need to foster some law and order or developers will flee to other platforms and Android will lose customers.”

Google has done very little to combat this surging beast. They did introduce a licensing server last year, in which an installed application with the security feature would ping Google's servers and check for a valid license. Developers could either block an illegitimate application altogether or direct the users to a “lite” version of their app where they may be prompted to purchase the full version. Of course, it didn't take long for prying hackers to work their way around the license check. And Google has been pretty good about quickly removing malware from Android Market as of late, but with so many third-party stores out available, the issue could easily blow up in their face, virtually overnight.

Howe is right, Google needs to step up and take charge. The huge selection of applications, games, widgets and more within the Android Market is one of their largest selling points. Letting that deteriorate with little to no standards, piracy and malware could potentially force buyers and developers to look elsewhere and jump ship to other platforms.

Image via Android and Me