— Maya Angelou
Ben Lovejoy at 9to5Mac highlights Apple’s $100 pricing increase for doubling of memory on iOS devices:
There’s a certain marketing genius to Apple’s three-tier pricing for flash storage on its iPhones and iPads. Since customers can’t add storage via a microSD card later, they have to decide in advance how much storage they need, and many of us are going to err on the side of safety, bumping our purchase up to a higher price-band.
Take a look at SD card prices, and compare them to the price increments Apple charges:
- $100 for an additional 16GB, to go from 16GB to 32GB
- $100 for an additional 32GB, to go from 32GB to 64GB
- $100 for an additional 64GB, to go from 64GB to 128GB
How does this even make sense when storage capacities everywhere else is at a pretty consistent dollar per GB? Simple: Apple has a huge enough profit to price this arbitrarily, making this a consumer positioning and marketing exercise. As long as you think $100 more for the “next higher capacity model” is acceptable, ka-ching! It costs an estimated $19 more to make a 64GB vs a 16GB iPhone 5s! How egregious is that?
The $100 pricing tiers started with the iPod, especially with the flash-based iPod nano, which was launched at a time when flash memory was still costly and Apple’s huge market advantage allowed them to secure flash chips at volume prices. With the earlier iPhones, the lowest capacity model at the $299 price point was bumped up. But after the iPhone 4s, Apple decided to freeze the 16GB models at $299, take the profits and rip us off.
Lowest capacity $299 iPhones by model:
- iPhone (2008): 4GB
- iPhone 3G (2009): 8GB
- iPhone 4 (2010): 8GB
- iPhone 4s (2011): 16GB
- iPhone 5 (2012): 16GB
- iPhone 5s/5c (2013): 16GB
The iPad situation is worse. Every year’s iPad from the first one in 2010 to the current iPad Air is priced at $499 for a measly 16GB. This on a device that’s supposed to usher in the “post-PC era”. Bleah.
Due to Apple’s expanding ecosystem of retina screens, Universal apps (supporting both iPhone & iPad) and multiple screen sizes, iOS app sizes are bloating up. Apple’s own iLife and iWork iOS apps take up from 200MB to 700MB.
sadface. My next round of iOS devices definitely won’t be 32GB, that’s for sure… pic.twitter.com/kYpq0IIOcO— Steve T-S (@stroughtonsmith) April 30, 2014
This is the single most significant pricing trick that lets Apple rake in obscene profits year after year. Apple’s not going to cede this and give consumers a little more value, at least not until there’s some pressure otherwise. The 2014 launch of a new 8GB iPhone 5c SKU (instead of a price drop for the 16GB model) does not bode well for Apple giving consumers a little more storage at the same price.
My hope is that soon enough, consumers will realize that other device makers are charging just $20-50 more for the next step up in storage. (Still expensive compared to a SD card, but way more reasonable.) All it takes now is for the media to mention this in every review of new iPhones and iPads, increasing the visibility of Apple’s ripoff pricing, and turning consumer opinion against Apple.
I sure hope this happens sooner rather than later, because nothing else will wake Apple up as they continue to drown in their fat margins.
— Rebekah Cox