iPhone Storage is 'Absolutely the Most Profitable iPhone Feature' says Analyst

[VulchR]

I am not surprised by all the profits Apple is making. As long as people are willing to pay, Apple will continue to price their products that will yield the most profits, including raising the base price and price for options.

I suggest you look up demand curve, elasticity of demand, and the definition of luxury. 😉 It is far from clear Apple is optimising anything. In general I love Apple products, but increasingly I get the feeling they're so far up their own backsides with hubris and vanity that they're losing touch with what people want. It is all very well designing products that people don't recognise the utility of now but will appreciate later, as Jobs steered Apple toward doing when he was alive, but it is quite another thing just to price-gouge all the time without rhyme or reason.

The demands of investors for dividends stock buy-backs etc. is ruining companies, and I get the impression that Apple is listening to investors far more than customers.

 

[mi7chy]

Did we read the same article? You should buy the intel for $90. Skip the Apple markup. Go for it.

Do you know basic math?

$90 Intel 512GB SSD drive bought from store vs $350 Apple markup going from 64GB to 512GB. That's almost 4x markup to end user.

 

[FFR]

Do you know basic math?

$90 Intel 512GB SSD drive bought from store vs $350 Apple markup going from 64GB to 512GB. That's almost 4x markup to end user.

Would it even fit into an iPhone?
Is the intel drive nvme?

 

[ProwlingTiger]

I suggest you look up demand curve, elasticity of demand, and the definition of luxury. 😉 It is far from clear Apple is optimising anything. In general I love Apple products, but increasingly I get the feeling they're so far up their own backsides with hubris and vanity that they're losing touch with what people want. It all very well designing products that people don't recognise the utility of now but will appreciate later, as Jobs steered Apple toward doing when he was alive, but it is quite another thing just to price-gouge all the time without rhyme or reason.

The demands of investors for dividends stock buy-backs etc. is ruining companies, and I get the impression that Apple is listening to investors far more than customers.

While I would love cheaper iPhones/storage, clearly the people still want iPhones at these price tiers.

 

[cmaier]

What is surprising isn't apple's greed, but that almost no one is surprised by it.
The iPhone Xs Max 512gb costs more than 2000$ in my country ,2000$ for a phone...

Then buy one with less memory or buy a cheaper phone.

It costs $3M for a 800 square foot house in the city I'm in right now. Is that greed? Or is that just what it costs?

 

[jdclifford]

From the desk of the “None of us are surprised by this news” department... Margins are put into lots of different components and storage space is the easiest place to stick in a higher margin.

That's why iPhone will NEVER offer a micro SD slot. GREED! Screw Innovation right TC.

 

[tks900]

I don’t understand some posts here saying, in essence a) you want premium, you pay premium and/or b) as long as people pay high prices, Apple will not lower them.

As for a), I don’t see how storage constitutes a premium, unlike the OLED for example. It‘s like a car company overcharging not for the fancy rims, but for the steering wheel. Of course people will complain about this and with good reason.

As for b), it’s not like it’s in my power then, is it? Prices won’t drop from me alone not buying something this time around.

 

[cmaier]

Never saw a fellow Porsche owner complain.

Between tequipment options and the exclusive program at Porsche. We love the ability to personalize the car to our specifications, and yes this comes at a cost, but one that customers are willing and eager to pay.

Most do complain about time involved in waiting for a car to be completed.

As a former long-time porsche owner, I did feel nickel and dimed with the tequipment, paint uncharges, etc. Just fwiw. Carbon doorsill? $2000. Seat trim color matched? $2000.

 

[antonis]

It took them a few years to discover wireless charging and grouped notifications. Maybe in a few years they'll discover the expandable storage. Or maybe it is better if they don't. Who knows how much they'll charge for another "innovation".

 

[alexnyc8]

They will continue to raise prices until people stop paying. This whole iPhone boom is fueled by debt, just like almost everything else in the world today. Cut carrier subsidies (0% financing) and Apple will no longer be able to charge these prices, as very few people will (and will be able to) shell out $1000 cash "right now". (and above).
If the "free"money ends (and it will, eventually), the whole kaboodle will collapse in an epic event.

 

[ambientdaw]

$1500 phone. 3x markup on storage. Your greed will will come back to bite you hard.

 

[MoreRumors?]

I suggest you look up demand curve, elasticity of demand, and the definition of luxury. 😉 It is far from clear Apple is optimising anything. In general I love Apple products, but increasingly I get the feeling they're so far up their own backsides with hubris and vanity that they're losing touch with what people want. It all very well designing products that people don't recognise the utility of now but will appreciate later, as Jobs steered Apple toward doing when he was alive, but it is quite another thing just to price-gouge all the time without rhyme or reason.

The demands of investors for dividends stock buy-backs etc. is ruining companies, and I get the impression that Apple is listening to investors far more than customers.

I can see clearly from a company and consumer perspective view and understand the economics of it all. I don't agree with how Apple is structuring the price of its products but at the same time I see why because of a consumer's willingness to spend. Overall, iPhone is profitable as there is no other Apple product line where we see a new model coming out yearly.

 

[loveandhavefun]

LOL. Even Google doesn’t like SD card since what, Galaxy Nexus? Even Samsung, Sony, and Xiaomi MIUI don’t allow copying programs to SD card nowadays. Worse, many OEMs use hybrid slots forcing users to choose between SD or second SIM. SD card slot has become marketing gimmick nowadays. At least with iPhone the whole storage is accessible for apps.

Enjoy paying $300 for an upgrade that costs Apple $30, making $270 extra for doing no innovation just limiting your device from having tons of storage and freedom to inter-change storage, wow so nice of Apple to stop that and charge you 10x more. Where do you guys come from?

 

[FFR]

That's why iPhone will NEVER offer a micro SD slot. GREED! Screw Innovation right TC.

Actually it’s because the don’t also produce sad cards like Samsung.

Are you calling pixels and other android oems greedy?

Or are you reserving your moral indignation solely for apple.

 

[Feenician]

Actually it’s because the don’t also produce sad cards like Samsung.

Typo, I know, but a rather fitting one imo. The difference in performance between the onboard storage and SD cards is a gaping chasm at the point. The UX of having content (and even worse, apps) you only have access to when you have a particular SD card is inserted is just horrible. Sad is right. They make the phone in up to 512Gb configuration. Buy the size you need.

 

[travelsheep]

Or they can reduce the cost of each upgrade and instead increase the base cost for everyone. That would make you happier?

What about reduce the base cost and reduce the upgrades?

 

[cmaier]

What about reduce the base cost and reduce the upgrades?

You want the same phone for less money? Not going to happen.

 

[FFR]

As a former long-time porsche owner, I did feel nickel and dimed with the tequipment, paint uncharges, etc. Just fwiw. Carbon doorsill? $2000. Seat trim color matched? $2000.

Lol, that happens with carbon, I won’t tell you how much my carbon fiber gt2 wing set me back.

In the cabin I prefer leather, blanket the cabin with leather, smells great.

Might need to go for a drive in a bit, it’s been a while.

 

[cmaier]

Lol, that happens with carbon, I won’t tell you how much my carbon fiber gt2 wing set me back.

In the cabin I prefer leather, blanket the cabin with leather, smells great.

Might need to go for a drive in a bit, it’s been a while.

porsche-logo'd tire valve stem caps? $2000. 🙂

 

[c1phers]

As an Apple consumer, I HATE this. As an Apple investor, I LOVE this. It's all a balance. 🙂

 

[FFR]

Typo, I know, but a rather fitting one imo. The difference in performance between the onboard storage and SD cards is a gaping chasm at the point. The UX of having content (and even worse, apps) you only have access to when you have a particular SD card is inserted is just horrible. Sad is right. They make the phone in up to 512Gb configuration. Buy the size you need.

Hahaha, totally unintentional. Getting used to the plus size again. 🙂

That’s an apt description, Not to forget all the corrupted cards having to be reformatted.

Personally I prefer apples approach.
Fastest storage with the highest available bandwidth.

 

[ThunderSkunk]

All companies offer as little as possible without alienating customers to maximize profits.

In my industry, it is true that eventually, all companies take that approach. It marks the company’s entrance into the death spiral. There is the founding of the company, its birth, growth, plateau, stagnancy, desperation, and death spiral, followed by rebirth and repeat. The only products produced over the lifecycle of a company that have any lasting value are those produced during its birth and growth phases, during which the company is generally chaotically led by product people/creatives/artists, maximizing real value into every product. This is the phase during which the company exists to give the customers products they will undeniably desire, and forges the companies reputation. The other phases are the best for business and finance people and exist to extract the cash value of that reputation while decimating the product line to only the best sellers and stripping as much cost of each, while keeping prices as high as possible. Apple is not unique. It has and continues to follow the same path hundreds of companies I worked with over the years have, that now exist only as logos on stickers. Luckily, electronics numbers are so large it should be able to weather the storm of more rebirth-death cycles.

 

[btrach144]

They should start at 128GB, but there’s a ton of profit in charging an extra $100 for the 256GB model.

64GB in a $1000 device is embarrassing.

Can you please update your post to reflect that the upgrade from 64GB to 256GB is actually $150? (Assuming you’re working with USD)

 

[CausticSoda]

Oh? No s**t Sherlock.

 

[Frantisekj]

On a positive note, google translate is getting better...

Haha