Several people have been trying to tell you this for years. Have no clue why it took until 2020 to come around, seeing as this has been a fundamental law of consumer technology from day 1.
My first PC cost well over $1,000 and came with 32 MB of RAM. I'm going to go out on a limb that a $1,000 machine will come with slightly more RAM than 32 MB these days.
Apple's markups for spec upgrades are obscene. They bear to relationship to actual costs. Never have.
1) Apple increases base specs when they can do so
without affecting margin—which rarely happens. When they can’t, you get things like the 2014 8/128 Mac mini at $749 vs the 2018 8/128 Mac mini at $799.
(It drove some crazy that I was right when I told them they weren’t going to see a 2018 8/128 mini for $499-599. But but but technology gets cheaper all the time!, they cried. Yeah, no. Sometimes prices go up. NAND is a perfect example. And even if component costs drop, those savings can be sucked up by increases in Apple’s operating expenses. Oh well.)
But within the past year, global supply finally caught up (and exceeded) the voracious demand we’ve seen for flash memory over the past 5-7 years. With the marked drop in NAND, you not only see Apple increase base spec SSD capacities, but also significantly cut prices in SSD upgrades, particularly at the higher capacities for obvious reasons. (Yes, Apple cuts prices. Again, when they can do so
without affecting margin.)
2) None of those market forces have anything to do with Apple’s pricing strategy for base model vs. upgrades. Apple keeps prices down on the entry level and lower-end SKUs by accepting lower margins on them, but subsidizing them with higher margin upgrades (to offset the lower margins of the low-end SKUs).
They still make their desired average margin across the mix of SKUs though; Apple is very good at forecasting the market share various SKUs will take. Lower margin, lower-end base models + higher margin upgrade prices = desired average margin. It’s simple!
Of course, if they so chose, they could lower the pricing on upgrades. But they’d have to raise the price on the base model to make up for the loss of margin. There’s no such thing as a free lunch 🙁 Either way—low base model with higher priced upgrades, or higher base model, with lower priced upgrades—you’re looking at an expensive Mac.
The only question is how tight a range do you want the base SKU vs. the max config SKU to be in. Apple chooses a wide range, you would prefer it tighter. (Just having all prices lower isn’t an option, since Apple isn’t suddenly going to decide their target gross margin is 22% instead of 32%.)
Would you be happier with a $1,500 base model Air, with upgrades priced at half (or less) of their current cost? Well, trick question lol. It doesn’t really matter what you want, because Apple wants a $999 entry level price point for the Air. So upgrades are going to be costly.
You call upgrade prices obscene, but they’re not. However they are high priced (expensive)—though not overpriced (too expensive). Exactly like iPhones, btw.
3) Many people make the mistake of conflating component cost with burdened cost. They think Apple should give them upgrades at Newegg prices lol. In fact, component cost is only just the starting point when calculating overall cost.
Why? Because Apple is a huge company, with relatively high overhead costs: $3 billion a month in operating expenses—half of that R&D. Those costs have to be covered by the prices Apple charges. If Newegg had 500 retail stores, 130,000 employees and spent $1.5 billion a month in R&D, do you have any idea how high their RAM and SSD prices would be lol?
4) Let me know if you still don’t understand why Apple’s prices in general are high, why upgrades in particular are priced high or why component costs aren’t the same as burdened (i.e. including overhead) costs. It’s really not that complicated, but sometimes people have a mental block that prevents them from understanding. I can probably help 🙂