Apple is reaping a mind-blowing 93% margin on iPhone 5 memory
First, let’s mention that the iPhone 5 costs just as much as its predecessor the iPhone 4S. Prices start at $199 for the 16GB model, and go up to $299 for the 32 gig iPhone and $399 for the 64GB version.
That is interesting because those $100 increments do not have anything to do with declining memory prices. While other companies like Amazon now have lowered prices on their models with more memory, Apple continues to go with a $100 premium. What's the gross margin on that? How about 93%. Yes, that's right Apple is selling you a gigabyte of additional memory for $6.25, while it buys it for merely $0.42.
Don't you feel that's a bit too greedy even for Apple? Android phones and even Windows Phone 8 devices are now both supporting microSD expandable storage (the much, much cheaper option), but iPhones remain the only devices to rely only on built-in NAND memory.
1. Nathan_ingx (Posts: 2964; Member since: 07 Mar 2012)
Anyone still think it's worth it???
Darn you Apple!!
24. hung2900 (Posts: 714; Member since: 02 Mar 2012)
You can see a lot of articles and opinions which support internal memory on Internet.
With a more expensive iPhone, somethings here will be popular
- "Best quality get worth price"
- "Higher class" for somebody
- "You cannot afford it"
60. jmoita2 (Posts: 930; Member since: 23 Dec 2011)
Thieves? Yes, all that's left now is for Apple to open a trading firm on Wall Street, then they will have come full circle...
32. ZEUS.the.thunder.god (unregistered)
Pure Greed. hell in countries like India a 16GB ip5 gonna cost you approx. $1000 or more. I hate Apple.
91. kartik4u98 (Posts: 511; Member since: 19 May 2012)
In india, 64gb ip5 would cost you around $1450
For comparison,sgs3 is $700
85. Nathan_ingx (Posts: 2964; Member since: 07 Mar 2012)
Yeah right! You don't even know your money is going to Apple's pocket for free.
You're giving money away to the rich knowing they've got enough money to buy everything you have.
109. Mxyzptlk (limited) (Posts: 2846; Member since: 21 Apr 2012)
That could be said for any company. Apple isn't putting a gun to anyone's head and telling them to buy their products.
113. Nathan_ingx (Posts: 2964; Member since: 07 Mar 2012)
Yes, it could be said for any company and right
now, Apple is in the limelight.
No other company will charge that much and yet
their faithful customers so happy about it like Apple
92. Droiddoes (unregistered)
LMAO. $100 for an extra 16 gigs. LMAO. A fool and their money...
110. Mxyzptlk (limited) (Posts: 2846; Member since: 21 Apr 2012)
LMAO. $200 for something that will drop in price a month later and may get the EOL treatment in a year.
105. gwuhua1984 (Posts: 1237; Member since: 06 Mar 2012)
The heck.. with 100 dollars I could get a 64GB card already...
117. hellt1M (Posts: 15; Member since: 10 Oct 2012)
$63(sandisk microSDXC) for a 64 micro sd card. add that to the s3 32gb model and you have 96 gigs for only $312
46. Droid_X_Doug (Posts: 5282; Member since: 22 Dec 2010)
It is worth it to those buyers who kept the iP5 after purchase. Regardless, sales of the iP5 are off of analyst projections. Slow sales is less $ in profit, which is why Apple's share price is off its recent high. Apple could have 98% margin on memory, but without large sales volume, the profits don't follow. Sammy posted great profits off of heavy sales; Apple is yet to produce.
94. torr310 (Posts: 304; Member since: 27 Oct 2011)
Hey, it's totally worth it!
Apple fans: iBuy
42. Mxyzptlk (limited) (Posts: 2846; Member since: 21 Apr 2012)
How is apple being greedy? They continue to provide support for their devices.
44. infinitemethod (Posts: 122; Member since: 04 Sep 2012)
Charging people $100 for 16GB is pure greed. Charging people $200 for 48GB is the definition of greed. Not allowing the customer to remove the battery or have expandable memory is greedy.
99. Hemlocke (unregistered)
Expandable memory is another compromise. Do Nexus devices have expandable memory? Is Google evil?
Samsung sells you the Note 10.1 for $499, but only pays around $260 for each one. The new iPad costs $315 at the bottom end, has more expensive build materials and better components, and sells for the same $499. Is Samsung evil?
104. infinitemethod (Posts: 122; Member since: 04 Sep 2012)
So 1 out of 10 Android devices don't have expandable memory. Also, this is 2012, majority of phones come with 32GB standard and cost as much as the lowest iPhone.
The Note 2 hadn't come to the US yet. Not sure where you're getting that number. I'd imagine its in the $299 range, which given what you get, isn't bad. That does have expandable memory.
Samsung is response me for roughly 60% of the insides of I phones and iPads last time I checked. So the whole hardware thing makes no sense either. I do know though, for the note price, you get 1.5" more display, 2GB of ram, a quad core CPU and I can also be on the phone and use data at the same time. Not to mention Jelly Bean makes iOS 6 look like its Bastard child. I just assumed you were talking about cell phones. Note 10.1 doesn't even bleep up on my radar.
50. remixfa (Posts: 13902; Member since: 19 Dec 2008)
yea sure, if you buy "apple care" or the extended warranty. Otherwise its Go F yourself.
55. Droid_X_Doug (Posts: 5282; Member since: 22 Dec 2010)
Even with AppleCare, you only get Apple's love for the duration of the contract term. After the contract is over, it is time to buy a new iToy if you want to continue receiving love from Apple.
69. andro. (Posts: 1927; Member since: 16 Sep 2011)
As awful as it is for a customer I find sometimes I can't prevent myself from get a slight sadistic pleasure out of telling an obsessed ifan their faulty iphone is just outside the short one year warranty and apple now demand a 180-230 for repair. Very often the customers hasnt paid applecare for the legally obligated 2 year warranty. If they complain its ridiculous you can say"hey its an iphone"!
88. flamencoguy (Posts: 82; Member since: 04 Aug 2012)
Custom cables and connectors that cost $30 is greedy when a standard micro-USB cable will only cost $2 to $5. Gouging....
95. LionStone (Posts: 434; Member since: 10 Dec 2010)
Not to mention they are monopolizing the third party market and making those companies get "Certified", which means probably paying apple even more $ for the certification!
115. gwuhua1984 (Posts: 1237; Member since: 06 Mar 2012)
You do understand the extra 100 you dish out for the 16GB has nothing to do with support right?
3. Peter27 (Posts: 233; Member since: 13 Jul 2012)
this is the reason why I dont go for iPhone anymore, because it is just very very overpriced phone. I am not saying it is a bad phone. But the prices are just so inflated.
8. AppleConspiracy (Posts: 627; Member since: 18 Oct 2011)
When you say you don't go for iPhone *anymore* because it's overpriced, does this mean that you once went for it? I thought iPhone was always overpriced...
19. Nathan_ingx (Posts: 2964; Member since: 07 Mar 2012)
I think i know what Apple needs to do here, sell an overpriced gold PLATED necklace separatedly so that owners of the overpriced iPhones can hang it on their neck, yes like a pendant.
43. Peter27 (Posts: 233; Member since: 13 Jul 2012)
yes, I had iPhone 3gs before to find out what is the experience like that everyone was singing about it. I bought it almost 2 years after release when the price dropped. I know that I am bashing apple and we all hate it but we have to admit that first iPhone really revolutionized phone industry. at that time it was really good phone. I remember I wanted something else not to be like everybody else but at that time there was nothing better. apartfrom htc but that was not great at all. after a year I could not stand ios anymore and gave it to my wife who enjoyed it. she has i5 now so I have chance to see what is better about it compared to last one, and at least I know what I am bashing about.
102. bayusuputra (Posts: 941; Member since: 12 Feb 2012)
exactly, the first iPhone was mindblowing (at that time), because it revolutionized the whole industry.
But complacency has left apple catching up.
And yes, my gf has an iPhone, and I use that whenever she's using my phone to play those Kairosoft games. And from there I can see that although the UI is more polished with all the eye candy, sleekness and animations, the functionality is sub-par compared to android and WP.. It is easy to use, with big letters and so on, but if you have to go through so many sub menu just to turn on your 3G/WiFi, then it's not productive. So yeah, I know it's behind because although I don't have it personally, I use it almost everyday.
87. XPERIA-KNIGHT (Posts: 2384; Member since: 08 Aug 2012)
no hes not saying that! maybe hes saying hes begun to realize how overpriced apple products really are! and started to see other options! do you yet see that light?
11. anywherehome (Posts: 971; Member since: 13 Dec 2011)
for Apple to steal money from every one who buys an eBook = price fixing affair
16. darkkjedii (Posts: 9278; Member since: 05 Feb 2011)
Good point. And it's actually cheaper now than when it first launched.
5. Nikolas.Oliver (Posts: 1340; Member since: 01 Jul 2012)
That's how apple works, deal with it, if you don't wanna deal with it use another phone, stay away as far as possible from apple
im not apple fanboy and neither does i have apple products
7. adelta90 (Posts: 63; Member since: 14 Sep 2012)
In India, the unlocked iPhone 5 costs from $1k to $1.6k (roughly)
People will still buy it
34. ZEUS.the.thunder.god (unregistered)
yeah it costs over $1k but only idiots buy it. i am from India
93. Droiddoes (unregistered)
And yet only like 10% of the population has indoor plumbing and running water. Priorities, folks.
9. tiara6918 (Posts: 1242; Member since: 26 Apr 2012)
Apple continuously fooling its costumers...
17. darkkjedii (Posts: 9278; Member since: 05 Feb 2011)
Fooling them how? Please offer intelligent insight when u make a brash comment like that.
98. Nathan_ingx (Posts: 2964; Member since: 07 Mar 2012)
I guess you didn't read the article...you came
here and only went through the comments. The
intelligent insight you seek is up there, on the
math problem which when fairly subtracted
amounts to Apple taking more than they need
and more than the device actually costs. Is that intelligent enough?
101. Hemlocke (unregistered)
And this is unique how? The NAND is cheaper, but the processor, radio chip, and screen all cost more to make. Did the iPhone go up in price? The last 4 generations haven't changed in price. Does Samsung drop prices because the price goes down on a component?
Hell, Samsung has learned to copy Apple well, and even improve on the gouging. The Note 10.1 costs $70 less than the iPad 3 to make, but sells for the same price.
10. ahomad (Posts: 131; Member since: 15 May 2012)
are you sure about the prices you pasted. in the UK the iPhone 5 costs more than the iPhone 4 (when it is released). the iPhone 4 used to sell at £499 for the 16GB model while the iPhone 5 is selling for £529. so the price of the parts they are buying is going down, yet there phone's prices are going up. WTH is going on with this company???
29. ChrisG (Posts: 34; Member since: 22 Aug 2012)
The prices in the article are carrier-subsidized prices when the iPhone 5 is bought along with a two-year contract from AT&T, Verizon, or Sprint. The unlocked iPhone 5 is priced much higher, more in line with the prices you mentioned.
35. Slammer (Posts: 817; Member since: 03 Jun 2010)
I've often referred to Apple as being the equivelant of the oil industry in pricing. I've caught many an argument from people claiming Apple is a choice of people while oil is not. However, I think this makes it ultimately worse when people accept the price gouging just to fulfill self-gratification. It lowers a consumer's dignity while making the company very wealthy. Price gouging remains whether accepted by choice or not.
12. navidsina2004 (Posts: 4; Member since: 26 Sep 2012)
apple response to this claim: it's normal, we are rapists.
13. good2great (Posts: 1035; Member since: 22 Feb 2012)
its always been this way... nothing new... customers aren't blind they just feel its worth it having an iPhone... its the "IN" phone
hey Reebok is better than the Michael Jordan brand they offer a great design and thousands of different choices of shoes for a cheap price all the way up to over $150. Yet a pair of Michael Jordan shoes are close to $200 and up every new release.
People trust the brand...
18. darkkjedii (Posts: 9278; Member since: 05 Feb 2011)
Well said, very well said. Finally some one understands.
26. whysoserious (Posts: 313; Member since: 20 Jul 2012)
iShe3ps will just stop buying iProducts when they realize that Apple had taken away all their money by purchasing their yearly products. By the time they realize it, all their money is gone.
This is iShe3p reality. Deal with it.
64. good2great (Posts: 1035; Member since: 22 Feb 2012)
you just proved my point dude...lol
all this sheep talk is irrelevant don't you get tired of logging in and typing the same crap everyday? haha
once apple fans decide that apple is not as valuable anymore they will stop buying the products... until then... "why are you so serious" about worrying what apple users do with their money???
14. deacz (Posts: 147; Member since: 02 Nov 2011)
as long as idiots buy it apple is 100% correct to charge that much
15. Aeires (unregistered)
Sounds like Apple was founded by P.T. Barnum the way they gouge prices.
21. TalkingTechy (Posts: 97; Member since: 05 Dec 2011)
Apple may make a ton of return on these devices, but it doesn't bother me because of the value of the iPhone itself. So you bought a $299 32GB iPhone 5 on contract? You'll be able to sell it on Craigslist in 2yrs for more than $400. Heck, I just sold my 2yr old 16GB iPhone 4 for $320.
I agree that the initial cost of the iPhone is more than competitors, but the resale value and reliability more than make up for it. I think of the iPhone like the Honda Accord or Toyota Camry of the smart phone industry.
28. Slammer (Posts: 817; Member since: 03 Jun 2010)
Yeah, thank heavens for subsidary contracts. This is the only reason Apple exists. If no subsidary were offered, most iPhones would sit and rot on shelves. It would face the same dilema it did pre-wireless era. 2-3 times as expensive as its adversaries. Hense why its marketshare was below 8%.
Apple always touted premier products. It's just no one would purchase due to price. Only graphic artists, designers and some engineering users.
So yes, you're lucky the carriers have absorbed the cost and passed it on to all of us across the board through higher price plans and less attractive plan offerings. Even those not purchasing Apple products are paying for your iPhone.