Tuesday, June 13, 2006

Following The Apple Money Trail

The title's lame but I thought better of "Oh Those Euro's - Part Deux." Next on the piracy hit-list is the popular Bit Torrent site PirateBay. The Bay Buccaneers don't actually host pirated content, they merely point the way to locations where Bit Torrent users can find such files. It's Swedish based & was recently shut down by a local police raid (the legality of which is causing some headaches for certain Swedish politicians). In true Whack-A-Mole fashion the site had returned within 48 hours.

All of which helps drive Apple's bottom line. Looking at the numbers the Cupertino folks make about 50% on every iPod sold and are set to hit the 50 million mark this year. Sites like Allofmp3, PirateBay and the traditional P2P networks help drive those sales. Even barely tech-savvy consumers know that there is an almost endless supply of cheap or free media to fill those hard drives. Apple's stock price has almost doubled in the past 12 months due in large part to this wide availability.

What about iTunes though? Don't the P2Ps & pirates eat into legitimate sales for Apple? Undoubtedly yes, but at an estimated profit of 4 cents per download it takes a lot of music sales to cover the profit in one Nano. Either way Apple gets their cake & eats it.

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