A long-time Apple software developer from Sydney fears he may have to lay off most of his staff after draconian Apple legal threats and a rare personal email from Apple chief executive officer Steve Jobs.

Mathew Peterson, 25, has been creating Mac software since he was 17 and one of his most popular products has been "iPodRip", which allows people to back up their music collections from their iPods on to their computers.

Steve Jobs.

It was an instant hit and particularly useful in emergencies because, if a user's computer dies and they attempt to connect their iPod to their new machine, all music and videos on the device are usually wiped.

Peterson's Manly-based company, The Little App Factory, now employs eight staff members, makes two other Apple-related software tools and claims to have approximately 6 million customers. But iPodRip, which sells for $US19.95, pulls in the lion's share of revenue.