The prices they charge just to go from 16GB to 32GB of RAM is outrageous ($400 for Macbook pro).
It should not cost that much! 2x Mac mini M4 16GB/256GB should not cost the same as 1x Mac mini M4 32GB/512GB!
Can someone help explain this in a way that isn’t just absolute price gauging of the higher end customer base? Are the components genuinely that much more expensive?
No, it's the same reason Nvidia has a vastly higher margin on datacenter cards:
It creates this weird dichotomy of having arguably the best value computer on the market in the base mac mini with 16gb of RAM and 256gb of storage and some of the absolutely worse value upgrades (like spending $400 on 16gb of RAM or $200 on 256gb of storage).
There's not much to explain here; they price gouge upgrades because they can. People that want/need MacOS for their work will pay for it, even if begrudgingly. I'm not necessarily happy about paying that much for these spec bumps but the benefits of using a Mac still outweigh the cons for me.
It's a pretty normal pricing strategy. It's more common than not. Most products or services you buy anywhere will be sold at higher margins for more premium offerings.
It might seem strange when compared to legacy PCs with socketed components, but this isn't that, nor are most products. Even among PCs this isn't strange anymore: go take a look at MS's pricing on their first-party PCs.
Calling this "price gouging" is not really the right use of the term -- usually it refers to price increases of basic necessities in emergency situations.
Either way, my point is that flat margin pricing is exceedingly rare. Everywhere from the grocery store to the car dealer is charging higher margins on more premium products.
Luxury cars have higher margins than economy cars. Organic milk has higher profit margins than regular milk. And Macs with 32GB of memory have higher profit margins than Macs with 16GB of RAM. The fact that the desktops PCs of our past priced RAM upgrades nearly at cost was an outlier; a courtesy, not anything normal.
https://en.wikipedia.org/wiki/Price_discrimination
It is basic microeconomics that a seller wants to be able to get as high of a price as buyers are willing to pay, but since different buyers have different abilities and willingnesses to pay, a seller can maximize their revenue by providing options at different price points.
Especially with societal wealth gaps, the people able and willing to pay higher prices are going to be able to pay higher price premiums, resulting in higher profit margins.
Price gouging, as a meaningful term, is restricted to:
https://en.wikipedia.org/wiki/Price_gouging
>Price gouging is a pejorative term used to refer to the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair by some. This commonly applies to price increases of basic necessities after natural disasters. Usually, this event occurs after a demand or supply shock.
Using the term "price gouging" anytime a potential buyer thinks a seller is asking for too much money renders it meaningless. I ask for as much money as the buyers for my labor will pay, as I assume the people selling to me do also.
It's just business, you try to earn as much as possible (and that could involve not maximizing in a specific transaction to incentivize repeat business in the future). But in no way is anyone under any duress when deciding to buy an Apple device, so if a buyer does not feel like being price gouged, they should buy something else.