A new application has been created for the iPhone which is designed to not only get all the latest Apple apps free of charge, but to teach a commercial iPhone pirate a lesson by opening his servers to all.

Many users of jailbroken iPhones will be familiar with the Installous application. Installous, from the people at Hackulo.us, allows the simple installation of apps previously available from the official Apple App Store – but free of charge with Appulous, of course.

This system hasn’t had much serious competition but all that changed recently when a new service/app appeared. Known as ‘Mega’, this application/system currently offers direct downloads of a staggering number of App Store apps, over 4000 at last count – a full list is available here.

However, while Installous operates on a donation basis and doesn’t host any copyright infringing content itself, Mega offers its services via paid subscription – $9.99 for 1 month, $23.99 for 3 months and $41.99 for 6 months – which at least in part probably reflects the large costs associated with Mega hosting the content themselves.

It’s also alleged that Mega ‘borrowed’ some code previously developed for Installous and this along with the ‘pay for warez’ issue seemed to really motivate the Installous crew, and they set about ruining this money maker.

“If you’re forced to spend money to use a service, you should be spending it on the actual apps you get, not making some greedy pirate rich,” said coder Kyek. And with this Kyek created a new application known as ‘Grabulous’. Once downloaded from the Hackulo.us repo on Cydia, this software allows iPhone users to instantly download any of the 4000+ apps from Mega’s servers – free of charge. Grabulous was a command line app, but a GUI is now available.

The stated aim of Grabulous is to give iPhone users the Mega service for free, or alternatively crash the Mega servers through being overloaded by non-paying users. “Both options are cool with us,” says Kyek.

TorrentFreak spoke with Murda, founder of iPhone hack site FSMdotCOM who explained he had no time for Mega. “Grabulous should be saluted and applauded by consumers AND devs. This is common sense, it’s not cracking , it’s not hacking. Paying for cracked apps is a crime against common sense.”

“To be honest I think Mega tried it and thought they could outsmart everyone. But unfortunately (for them) the iphone/touch community proves itself to be a fantastic one once again,” Murda told TorrentFreak. “Mega had a major ‘uppercut’ from Hackulous when they released Grabulous but everybody smelled the fish right away, and we are not shy to send a message out to the people, and warn them. That is why we are here.”

Of course, the release of Grabulous didn’t go unnoticed by the people over at Mega and this ignited a round of technical cat and mouse as Mega tried to block Grabulous, with at least some initial success. Kyek promised a new version of Grabulous to get around these measures but at this point in time it looks as if Mega has taken the hint that charging subscriptions for access to warez is unacceptable to some.

In a statement, Mega has advised that they will no longer require monthly subscriptions but will instead ask for donations while supporting this revenue stream with advertising. Due to this new system, users will be limited on the number of apps they can download each day, dependent on server load.

“They should have done this since the very beginning,” noted Murda.

The Appulo.us service itself has been down for a week after they outgrew their hardware – and their budget. On the first day of taking donations Appulo.us received $1700 but said they wouldn’t return until they had received enough money to rent 3 servers (up from 1) for 6 months. The service is back in operation today.