Apple is reaping a mind-blowing 93% margin on iPhone 5 memory

Apple is reaping a mind-blowing 93% margin on iPhone 5 memory
The Apple iPhone 5 might not have met Wall Street analysts expectations for mind-blowing sales over the first weekend, but at 5 million it is definitely selling great when it comes to our definition of great. With that come some great margins for Apple. Here is why.

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.

source: Barrons

Related phones

iPhone 5
  • Display 4.0" 640 x 1136 pixels
  • Camera 8 MP / 1.2 MP front
  • Processor Apple A6, Dual-core, 1300 MHz
  • Storage 64 GB
  • Battery 1440 mAh(8h 3G talk time)



1. Nathan_ingx

Posts: 4767; Member since: Mar 07, 2012

Anyone still think it's worth it??? Darn you Apple!!

24. hung2900

Posts: 966; Member since: Mar 02, 2012

Still. 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"


Posts: 2315; Member since: Jul 30, 2011

Apple = iThieves

60. jmoita2

Posts: 930; Member since: Dec 23, 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: May 19, 2012

You're right.. In india, 64gb ip5 would cost you around $1450 It's hell!! For comparison,sgs3 is $700

40. Mxyzptlk unregistered

Very well worth it.

85. Nathan_ingx

Posts: 4767; Member since: Mar 07, 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 unregistered

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: 4767; Member since: Mar 07, 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 does.

92. Droiddoes unregistered

LMAO. $100 for an extra 16 gigs. LMAO. A fool and their money...

110. Mxyzptlk unregistered

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: Mar 06, 2012

The heck.. with 100 dollars I could get a 64GB card already...

117. hellt1M

Posts: 20; Member since: Oct 10, 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: 5993; Member since: Dec 22, 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: 1626; Member since: Oct 27, 2011

Hey, it's totally worth it! Apple fans: iBuy

2. 09wbd03516

Posts: 140; Member since: May 30, 2012

Apple is born to be greedy...

42. Mxyzptlk unregistered

How is apple being greedy? They continue to provide support for their devices.

44. infinitemethod

Posts: 151; Member since: Sep 04, 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: 151; Member since: Sep 04, 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: 14605; Member since: Dec 19, 2008

yea sure, if you buy "apple care" or the extended warranty. Otherwise its Go F yourself.

55. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 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: 1999; Member since: Sep 16, 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: 107; Member since: Aug 04, 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: 1048; Member since: Dec 10, 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: Mar 06, 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: Jul 13, 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: 637; Member since: Oct 18, 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: 4767; Member since: Mar 07, 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.

* Some comments have been hidden, because they don't meet the discussions rules.

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