The cost of memory

Discussion in 'iPhone' started by bchery21, Sep 5, 2013.

  1. bchery21 macrumors 6502

    bchery21

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    #1
    The main difference when it comes to iPhone models of the same generation is memory. The new 5S is rumored to have 32g, 64g, and 128g options ($199, $299, $399 respectively). My question - how is cost of memory determined? From 32g to 64g, there's 32 gigs in between and it costs $100; from 64g to 128g, there's 64 gigs in between yet the price increase is the same, $100. Is there some logic I'm not understanding?

    Thanks.
     
  2. The-Real-Deal82 macrumors 601

    The-Real-Deal82

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    #2
    I suppose they have to split each phone option by $100 because otherwise everybody would buy the phone with the highest memory. If they were split by 30 or so dollars, there would be no point manufacturing different options.
     
  3. cynics macrumors G4

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    #3
    It's all about making money. If you NEED 64 gb then your only option is to pay for over priced memory.

    Like you mentioned the higher amount you get the cheaper it's actually getting. Why pay 100 more for 16gb when you can pay 200 more for 48gb extra? That 200 is a lot of money comparatively speaking although being the best value.

    As a side note I doubt we will see the 16gb go away as the base model. I think they will do what they did with the iPad 4 and just offer 4 different sizes.
     
  4. bchery21 thread starter macrumors 6502

    bchery21

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    #4
    My thought process was along the same line - although it costs more it makes sense to buy the highest capacity since the memory becomes cheaper and cheaper the higher you go...
     
  5. Interstella5555 macrumors 603

    Interstella5555

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    #5
    I'd say within the next year of so they'll eliminate the 16 and replace with a 32 at the same price point, which is generally (or rather always) what happens when the capacity increases. Also
    [​IMG]
     
  6. Mercenary macrumors 6502a

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    #6
    The logic is simple profit. Each time a phone comes out some guy (I can't remember where) who does a breakdown of costs. The extra memory cost to apple is around 30 cents (yes, $0.30) to go from 16 to 32 and then 32 to 64.

    Apple makes a decent profit from the 16gb model and when they sell the higher capacitys it's simply a great money spinner to charge you $100 for a $0.30 part.

    The rule is not to buy the largest you can but buy what you need.
     
  7. cynics macrumors G4

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    #7

    With the iPhone that's been the case. But not with the iPad.

    But with 128gb I feel (prepared to eat my words) they are just going to tack on another option.

    Two reasons I feel that way.

    One, 16gb is still predominant with the competition. Apple doesn't need to catch up with the times. Just offering 128gb will put them ahead.

    Two, its more profitable to sell less for more. Why give an extra 16gb for the same price when you can just give the option to make more money.

    Keep in mind a very large percentage of people can easily use a 16gb device. So if Apple had the minimum at 32gb they are just giving free memory away to those people. This wasn't the case with 8gb, OS size and app size were on the fast track to making that obsolete so Apple changed it.
     
  8. Interstella5555 macrumors 603

    Interstella5555

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    #8
    If that was the case they never would have offered the same price for the upgrade from 4GB base to the 16GB base [as the cost of storage decreases], and why they didn't offer a 32GB option from the start at a higher price point.
     
  9. Mrbobb macrumors 601

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    #9
    There is the "what they can sell for" someone already mentioned.

    But something that's easier to understand is the law of Economy of Scale, which says it's expensive to produce just a few units, but after a certain quantity, the per-unit cost actually drops.

    It would apply to memories, doesn't cost them that much to double the number of transistors on a die.
     
  10. boomhower macrumors 68000

    boomhower

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    #10
    Apple makes an absolute killing on memory upgrades with iPhones. When the iPhone 5 was released 16GB cost Apple $10, 32GB $20 and 64GB $40. That's a gigantic profit margin for extremely small amount of work. $200 higher retail price at the cost of $30 in parts. This is the sole reason I don't see them axing the 16GB base model, they make so much from upgrades. We are another year down the road and those prices have likely fallen even lower making to profit even higher.

    Link where I got my numbers.

    Anyone ever seen a breakdown of percentages of phones sold broke down on memory size?
     
  11. bchery21 thread starter macrumors 6502

    bchery21

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    #11
    Good points. I, too, would be interesting in seeing such a graph.
     
  12. rgarjr macrumors 603

    rgarjr

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    #12
    Apple has been milking the storage upgrade for years now. Hope they stop soon.
     
  13. cynics macrumors G4

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    #13
    The cost of memory

    Hmm?

    They had to offer it. What use is a phone if the storage is already full from the OS and native apps.

    They didn't offer a 32gb back then for the same reason they didn't offer a 128gb on the last model, and won't offer a 256gb on the next model.

    I think I'm confused by what you are saying. I thought this was pretty obvious.

    The point I was trying to make is there is currently no need for more then 16gb even on iOS 7. Therefore like Apple did with the iPad I believe they will do with the iPhone. Instead of giving away free memory at the same price point they will just add an even higher cost iPhone for those that feel they may need it.

    Obviously my opinion though.
     
  14. Geckotek macrumors G3

    Geckotek

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    #14
    I know a lot of 16GB and 32GB iPhone owners that will disagree with that statement.

    You will always find someone who has the "need". The question for Apple is, is the market there at the price point the device would be priced at. THAT is the real reasoning Apple uses to decide where to draw the line on storage options.

    They eliminated the 8GB model because it wasn't selling....nothing more.
     
  15. cynics macrumors G4

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    #15
    Apple said the ditch the 8 gb model due to native storage requirements. The minimums alway sell which is why the 16 gb is the most sold currently. Especially in a business setting, my employer buys them by the hundreds.

    As a 16 gb user I can assure you that there is no NEED for more storage. The OS and native apps plus a few other things do not exceed storage space. If a particular user needs more its because of what they are trying to do with there phone. And in that case there are upgrade options available in the form of 32gb, 64gb and soon 128gb.
     
  16. Interstella5555 macrumors 603

    Interstella5555

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    #16
    Ok, I'm not going to go into the long winded reply of how ridiculously low 16GB of storage is when you have [and apple bills the phones as being able to handle] :
    Music,
    photos [taken with the camera]
    photos [loaded on the phone],
    videos [take with the camera]
    videos [loaded on the phone],
    games [up to 1.5GB these days],
    any navigation software with native maps
    ...and that's not even a stretch of the imagination for a LIGHT user. And the cloud? Please. Talk to me about how useful it is on a plane, metro, or any other easily imaginable situation where you don't have a persistent data connection.
     
  17. Geckotek macrumors G3

    Geckotek

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    #17
    The minimums DID NOT always sell. However, I think I misspoke. I meant to say the 4GB was the one that didn't sell well and that's why it was dumped.

    If you want to talk about "NEED", then there is no need for even an 8GB or a 4GB unit. Heck, you don't "NEED" an iPhone. So let's get real here and stop with the semantics. There is a strong MARKET DEMAND for 32GB and 64GB models. This is what drives Apple. NOTHING MORE
     
  18. cynics macrumors G4

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    #18
    What do you want me to tell you? That myself and the millions of other 16gb users can barely use the phone?

    You are talking to a 16gb iPhone user that uses the metro daily, flys bi weekly, uses the tomtom app (not anymore with though), 75 apps, over a thousand pics and still has over 4 gb left. Only thing I don't keep on my phone is music.

    [​IMG]

    Regardless, I'm just fine with it. If apple offers 32 gb stock then that's great I won't need to pay more for one when the 5S comes out. There in lies the problem, "I won't have to pay Apple more money". What kind of business is that? If Apple doesn't want an extra 100 dollars then great. Methinks they do however.
     
  19. powerstrokin macrumors 6502a

    powerstrokin

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    #19
    OP...they all charge more money for more memory because THEY CAN, and people will pay for it.

    That's capitalism working hard for you..er.....for them.

    Yes, it's a huge ripoff but that's how the game is played.
     
  20. smokescreen220 macrumors regular

    smokescreen220

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    #20
    I'd rather have the space and not need it, than need it and not have it....
     
  21. benji888 macrumors 68000

    benji888

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    #21
    The way memory is made, to double the size is practical, but, to make say 64 then 96 would use a different process entirely. So that's why they double the size. As far as $100 dollar allotments to each doubling...not sure that matches anything except consumer marketing trends.

    As far as ppl saying you don't need more than 16GB, I say, no way, I'm maxed out, always having to take stuff off. Between under 1000 songs at the reduced 128kbps rate, apps, photos, videos, it's nearly full all the time. I wish I would have spent the extra to get 32GB.

    Plus, they keep improving camera, photos & videos keep taking up more space, so, my opinion:

    5C 16GB, 5 16GB, 5S 32/64/128GB ...but, the 5C could come in at 8GB...I just don't think Apple will up the high end and not drop the low end...why by five types of memory when you can just do 4? (or, if you look at iPhone & iPad, maybe they will add 256GB to iPad and drop 8GB on iphone and 16GB on iPad?).
     

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