The iPhone 4 will be $0.99, just like the 3GS is now. No freebies.
True.
Apple's paying I believe under a buck a gig now. The difference between the "free" model and the top model is negligible in cost-$50ish a unit v. $400 at retail. Huge ripoff.
Honestly, I don't know current prices, and I didn't see a source for the $1 per gig that Apple pays. But we'll still play by those numbers.
While it wouldn't hurt the switch from 8Gb to 16Gb for the 4S or 4 entry level models (less than $8), that could add up MUCH MORE on the higher end model.
The 4 and 4S (16Gb) both cost ~ $200 to manufacturer, and retail for $650. The 64Gb 4S costs about $250 to manufacturer (64-16 * ~ $1), and retails for $850.
Assuming production costs remain constant, switching the highest end iPhone 5 from 64Gb to 128Gb could increase the cost of materials from $250 to $300 (this is being conservative, since as the size of the Chip increases in size, it actually costs MORE per Gb, increasing quadratically, not in a linear sense of $1 per Gb). The existing margin, based solely on parts cost, would change from 70% to 59%. That's a huge dip, and likely the reason Apple won't budge on their space vs. pricing offerings this year.
OR
They could offer the entry level 4 and 4S at 16Gb, and then offer the 5 in the same flavors as last year (16, 32, 64). That would prevent the decrease in margin discussed above.
