You’re paying too much to get a little more space on your iPad and iPhone
slate.com
slate.com
All that said, I'm sure that Apple still takes in a good profit on every low-end unit. But I don't see their overpriced storage as a gouge (or at least, an unreasonable one). Rather, it also acts as a subsidy: all the people who can afford a 64GB/3G iPad make up the difference profit-wise for the 16GB/WiFi, allowing them to offer it at a lower margin, both to entice users in and then up-sell, and also to grow the market share. Other industries do this kind of thing all the time, for cars, game consoles, etc.
Is Apple overcharging you on storage? Most certainly. But I don't think it's anything worthy of outrage. If it's not a good value proposition for you, don't buy it. There are plenty of alternate tablets which include micro-SD slots.
Take that data for what it is and don't expect from it what it isn't.
And they do estimate manufacturing costs BTW, plus boxing costs - basically all the costs of making the widget. They don't claim to, and don't, estimate other costs, that's just not what they do.
"On the high-end Wi-Fi model, which offers you 64GB of space for $699, Apple’s non-manufacturing profit margin shoots up to 48 percent."
As though you get to handwave away non-manufacturing costs and then call it a "non-manufacturing profit margin."
By all accounts it's a good thing, since it lets those with lower budgets still get the device, and yet still allows the manufacturer to make a profit.
You want to make a device for every price point your customers are willing to pay.
Cars do it too - those extras you can pay for don't cost anywhere near as much as you pay, they are simply there to make extra profit.
That's why you have the high/mid/low models of virtually every device, and the price difference is not anywhere near the performance difference (look at intel CPUs for example).
When you go to a car wash do you really think that extra shine/wax/whatever spray really costs that much? It doesn't, it's simply a way to make a little extra from those who are willing to spend it.
In contrast, the PCWorld review of the Nexus 7 (http://www.pcworld.com/article/258772/google_nexus_7_tablet_...) starts by harping on and on about the supposed storage constraints of the 8GB model.
Too many mainstream reviewers are still obsessed with specs. Normal people don't know or care about specs; they only care about the overall experience, which is why Apple is where it is.
IMO Android has caught up to iOS in terms of everyday usability but the hardware is generally much cheaper than Apple and improves faster. I think the Nexus 7 will mark a turning point in the Android ecosystem.
Personally, I'm using practically all of the 8 GB SD card that's in my Nexus One at the moment. (Much of it is music - I listen to fairly obscure stuff not readily available on streaming services.) I'm about to move up to a 16 GB card. Most people probably won't have 8 GB of music but 8 GB of video is very possible. Then there's downloadable content for media apps for the tablet.
I'm not going to buy a non-upgradeable device with storage space that's limited since yesterday, and paying a premium for what should be baseline kinda stinks. More than $15 for the 8 to 16 GB upgrade is just bad, as is no 32 GB option.
Maybe setup a streaming server on your own PC and download and cache a days worth each time you have wifi access.
I don't think it's uncommon for "normal users" to have more than 8 GB of music, video, apps, and downloadable content. Apple seems to agree.
Production cost is irrelevant. People don't buy things based on how much they cost to make. It's all about value, and Apple knows how to sell it. I would be interested to see a breakdown of how much of Apple's profits have come from selling Flash upgrades. I'm sure it has proven to be a brilliant pricing strategy earning them untold billions.
I mean, is Slate going to do a car comparison and create an argument for consider horsepower per dollar (or cubic feet of storage per dollar, or seats per dollar, or whatever metric you fancy most) when purchasing a vehicle? I mean, does it really cost thousands of dollars more to produce a 6-cylinder engine over a 4-cylinder, plus a beefier transmission and driveline components? Of course not.
The necessity of going through Apple, who is charging too much, is what makes this a valid point of complaint and Slate totally misses that, which makes them look dumb.
Flash memory of various types is not expensive these days, and it is small and low on power requirements. It's been easy to spot the price-gouging for a few years now.
About a year ago 4GB DDR3 SODIMM's were about $50/each but 8GB versions which required twice as dense chips were around $500/each - there was a huge premium on the dense chips.
Now the prices have dropped to roughly $30 and $70 respectively, which is much closer to a linear price/size curve.
Does anyone know if flash pricing follows a similar curve?
It's not typical to use different density chips since then you have to tune the rest of the system to match, and that's more complicated.
I'm thinking this would be the case as well on a tablet, unless the flash is in a bus topology already.
There is no speed difference between 1 or 2 chips in this context, they are just treated as separate banks and mapped to different memory addresses controlled by the flash memory controller in the SoC.
I think that would be a better subject to get worked up about than the feeling you're getting conned because the profit margins on one (optional!) part of your gadget are higher.