360° Coverage : Apple Makes Big Margins on Memory Used in the iPhone

Apple Makes Big Margins on Memory Used in the iPhone

Big profits on memory at Apple

Sep 18 2013, 12:56pm CDT | by

Apple Makes Big Margins on Memory Used in the iPhone
Apple

One way for smartphone manufacturers to gain market share in a crowded marketplace is to reduce the price of their devices. That is a method of gaining market share that Apple doesn't want to use. Bloomberg reports that buying memory to store photos, video, and other apps on a smartphone typically costs about $50 for the consumer.

However, the publication reports that for Apple customers memory costs about four times more than that. The iPhone 5S with 16 GB of memory will cost $199 while the 64 GB version costs $399. Apple charges of $200 for additional memory in the iPhone even though pricing for memory itself has declined significantly.

Analytics firm's claim that a gigabyte of flash memory costs about $.60 today. This premium is evidence that Apple plans to squeeze all profit can out of it smartphones rather than trying to reduce prices to gain market share. The plan makes sense, why discount the device when it's already incredibly popular and profitable.

 
 
 

<a href="/latest_stories/all/all/3" rel="author">Shane McGlaun</a>
Shane is a self described car aficionado. He loves muscle cars, but also knows how green cars work. He has years of experience in testing cars and writes about cars with deeply felt emotions.

 

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