“If you paid an extra $100 or even $200 for a smartphone with more storage, you got ripped off,” David Goldman writes for CNNMoney.
“Smartphone makers pay as little as a sixth of what they charge you for those extra gigabytes of storage,” Goldman writes. “And that applies to all of the four largest U.S. smartphone makers — Apple, Samsung, LG or Motorola.”
“The flash storage drives installed in the iPhone 6 cost Apple just $7.55 per 16 GB [$15.10 for 32GB], according to TechInsights, a patent consultant that performs gadget tear-downs,” Goldman writes. “The 32 GB of storage included the Galaxy S6 costs Samsung $14.50,” Goldman reports. “That means the difference between a base model 16 GB iPhone 6 and a top-of-the-line 128 GB iPhone 6 costs Apple about $53. It costs you $200. It’s even worse for a Galaxy S6. The difference between the base 32 GB model and the best 128 GB model costs Samsung $44. But Samsung charges you $200 more.”
Read more in the full article here.
MacDailyNews Take: Apple’s margins fuel R&D. The storage costs are the only differential within iPhone models and those costs “spread the pain” or “spread the wealth,” depending on your perspective, making it possible for Apple to offer such advanced devices at such low starting price points.
So, yes, in effect, 128GB iPhone buyers (like us) are subsidizing 16GB iPhone buyers to some degree. We help make iPhone accessible to hundreds of millions of iPhone users and those vast numbers (or users and dollars) keep the platform extremely vibrant and healthy. Without the storage markups, the iPhone would cost more overall and Apple’s R&D wouldn’t have the carte blanche we want them to have in order to continue pushing the envelope. This is how we get 64-bit smartphones years before everyone else. Ditto for Touch ID, Apple Pay, insanely thin and light MacBooks, etc. And, this is how we’ll arrive at Liquidmetal and sapphire devices which nobody else will be able to replicate. It’s a small price to pay. In fact, we consider it a wise investment.
So, no, if you’re an iPhone owner, you didn’t get ripped off.
Beleaguered Samsung, on the other hand, just uses that markup to keep afloat in the money-losing business of iPhone knockoffs. Oh, and bending the sides of displays for no good reason.
Non-iPhone users have very little or nothing to show for their expense, so, yes, they got ripped off. The whole Android mess is a rip off in myriad ways; of Apple’s patented IP, of users’ security, privacy, experience, etc.
