iPad specs

Discussion in 'iPad' started by selyndra, Apr 24, 2010.

  1. selyndra macrumors newbie

    Joined:
    Apr 22, 2010
    #1
    Why does it cost $100 more for each upgrade in storage? Someone techie explain to me where the money is going please :)
     
  2. xraydoc macrumors 604

    xraydoc

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    #2
    Really?

    I mean... Really?

    Ok. More storage capacity requires more expensive flash RAM modules. More expensive for the manufacturer equals more expensive for the consumer... which is you. Thus, you pay more.
     
  3. Jinkst macrumors 6502

    Jinkst

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    #3
    You don't need to know anything technical. It's called marketing.
     
  4. kirchnrd macrumors 6502

    kirchnrd

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    Jun 15, 2009
    #4
    I am sure there is a small amount of technical difference, but the broad gap in price is strictly a business decision. People want more memory, so they will charge for that.
     
  5. avaloncourt macrumors 65816

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    Oct 18, 2007
    #5
    Apple is very profitable. Do the 3G & GPS aspects really cost $130 to implement over the equivalent memory WiFi model? No. There's a reason they recently had the third largest market cap in the country. They make a lot of money. That money is coming from you.
     
  6. selyndra thread starter macrumors newbie

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    Apr 22, 2010
    #6
    Ok so it's more of a "because we can" type thing. That makes more sense to me than what xraydoc said. Going from 16g to 64g is $200 in materials? Seems weird
     
  7. xraydoc macrumors 604

    xraydoc

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    #7
    It's more like $50 in materials, tops, but nonetheless it costs more for Apple to build so they charge you more. But it's not like you can crack the back open and flip a switch to go from 16 to 64GB for free. The thought that you're charged $200 more for nothing isn't correct.
     
  8. Julien macrumors G3

    Julien

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    Jun 30, 2007
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    Atlanta
    #8
    Why does the ZR1 cost $107,000 while the coupe cost $49,000. They are both Corvettes so please explain where the money is going.
     
  9. xraydoc macrumors 604

    xraydoc

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    #9
    While you are correct, the $130 price difference is actually pretty reasonable for Apple. Dell, HP and others also charge about $130 for cellular broadband cards built-in to their laptops. For Apple to "only" charge $130 for 3G and GPS is actually quite surprising.
     
  10. robanga macrumors 68000

    robanga

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    Oregon
  11. robanga macrumors 68000

    robanga

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    Aug 25, 2007
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    #11
    Every time you add materials or an upgraded component as a manufacturer you have to add the same profit margin as you make on the rest of the device. This allows you to maintain your average margins, a good thing. If you add a $25 cost item to a $100 priced item and your average margin is about $50 on that $100, you had better add at least $ 50 to the price.

    More than likely you would prefer to get a bit more margin for upgraded product as your low cost entry point, product often has the lowest margin because you were trying to " rope customers in with the low price" point and up sell them if possible.

    Often you round up if you can so in the example above you add $40 to the list price, and there you have it more margin on the up sell. Even better, if you think the perception of the product bears a higher price, you try to get a bit more lets say $60-70 more more the above example.

    Its fun to price things, a big balancing act.
     
  12. selyndra thread starter macrumors newbie

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    Apr 22, 2010
    #12
    ZR1 probably has bigger RAM flash modules :D
     
  13. nsorrelle macrumors member

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    Apr 12, 2010
    #13
    I wish Apple wouldn't charge so much for their products, but that's business for you. I still end up buying their stuff anyway :)
     
  14. diabolic macrumors 68000

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    Jun 13, 2007
    Location:
    Austin, Texas
    #14
    Yes, and if you end up actually charging too much for something, sales suffer and revenue goes down. Apple doesn't seem to be having any problems like that though.
     
  15. avaloncourt macrumors 65816

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    Oct 18, 2007
    #15
    They did on the original iPhone but then everyone drank the Kool-Aid ever since.
     
  16. bobob macrumors 68030

    bobob

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    Jan 11, 2008
    #16
    Excellent answer to the question - - pricing is an entire art and science in itself.
     

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