Apple's Core Business Is Selling...Flash Memory?

[jpeyton]

Here's an interesting perspective on why Apple has remained so profitable in the face of heavy competition:

http://tech.fortune.cnn.com/2013/04/04/apple-lazard-flash-memory/

"We propose," he writes, "that Apple is a 'storage' company, not only levered to data creation but instrumental in driving data creation in ways its competitors are not. Apple sells storage by delicately but deliberately incenting customers to purchase NAND flash memory at 80%-90% incremental margins.

 

[Dari]

This doesn't make any sense. Apple sells an ecosystem, not just hardware. Most people go for the cheapest iPad or iPhone because so those massive margins rarely come into play.

 

[Suspicious-Teach8788]

there are still massive margins on the iPad and iPhone.

But why single out Apple? The phone industry has been like this forever. If you find fault with that, it's due to an industry problem. Apple certainly has higher margins because they're on the higher end of the price scale. But seriously, why single out Apple again? Sony's probably 10x worse because it delivers inferior products while retaining the "Apple tax" and trying so hard to be an "elite product manufacturer." That may be changing with the recent Xperia products, but I can't remember the last time Sony delivered anything great since the K750 dumbphone/W800i.

 

[poofyhairguy]

One thing unique about the iPad compared to mainstream PCs is the fact the bottom model is the same as the top model with less storage. Apple must think the benefits of actually faster hardware for the top segment isn't worth the extra support costs.

 

[Red Storm]

But why single out Apple?

Because they make more than anyone else?

 

[Suspicious-Teach8788]

Because they make more than anyone else?

But is it their fault? Maybe they manage a more lean business model than other companies? Maybe they inflate their prices? But given standard supply and demand, shouldn't that result in less demand? They created a successful product. They make money. They deserve whatever they make.

Apparently we all think that it's despicable to charge $29.99 for a wall charger or whatever, and $100 more to go from 16gb to 32gb, but they're not the only ones doing that. Furthermore, if it's that ridiculous, why do we consumers put up with it? Plus it's not like Google's not doing the same with their devices. The Nexus 10 costs $100 more for the 32gb version as well.

Samsung's revenues mainly came from their mobile division, thus suggesting that phones and tablets have huge margins. Where's the outrage there? We all know Samsung makes general electronics too and TVs. So it's pretty clear they make massive margins through mobile as well. If people are upset with Apple, they should be with Samsung as well.

 

[ponyo]

$100 for 16 gb upgrade is robbery no matter what.

 

[Suspicious-Teach8788]

$100 for 16 gb upgrade is robbery no matter what.

agreed, but that's the market price right? i mean not market price for 16gb of NAND, but market price for going to a 32gb device. It's not just Apple. PC manufacturers charge an arm and a leg to go from 4gb to 8gb RAM. You get the same when you're doing a CPU upgrade.

You *could* technically just buy those things on your own and install for dirt cheap. Your car dealer isn't exactly cheap either.

But everyone's out to make money. My point is that we don't need any of these things, and in some cases there's doing it your own way. These prices are due to market pricing, and if consumers bite, it's not the company's fault.

 

[manko]

A non-proprietary memory card slot would be nice. Media storage certainly doesn't need to be on internal memory and although they're slower to load, apps run fine from memory cards on my non-ios devices.

 

[Suspicious-Teach8788]

A non-proprietary memory card slot would be nice. Media storage certainly doesn't need to be on internal memory and although they're slower to load, apps run fine from memory cards on my non-ios devices.

now if only we can get Google back onboard with that model

 

[Capt Caveman]

Google is doing the same with it's Nexus products.

 

[Skurge]

If you think Apple charge the same as other PC manufacturer for SSD and RAM upgrades then you are smoking some strong stuff. Yes in the mobile area they charge the same as everyone else for more storage, but they created that. Samsung will sell you a dirt cheap 32GB SD card to go with you brand new tablet or smartphone so I don't really think they are guilty of that.

Good luck finding a 32/64GB Galaxy phone.

 

[QueBert]

$100 for 16 gb upgrade is robbery no matter what.

$100 for a 16gb upgrade isn't bad, the 16gb Nexus 4 costs $50 more than the 8gb. So, Apple's pricing looks to be in line with pretty much every other company. Even if you think they overcharge at least they give you options, Google flagship Nexus 4 is offered with a whopping 16gb max.

Hell my roomie spend $60 on a charger for his GF's Nexus 4, I just spent $40 for the Amazon case for my Kindle Paperwhite. It's a fucking leather case for a small device...

 

[jpeyton]

Hell my roomie spend $60 on a charger for his GF's Nexus 4

Is your roommate mildly retarded? https://play.google.com/store/devic...sMSwxLDExMSwiZGV2aWNlLW5leHVzXzRfY2hhcmdlciJd

 

[QueBert]

Is your roommate mildly retarded? https://play.google.com/store/devic...sMSwxLDExMSwiZGV2aWNlLW5leHVzXzRfY2hhcmdlciJd

https://play.google.com/store/devic...iZGV2aWNlLW5leHVzXzRfd2lyZWxlc3NfY2hhcmdlciJd

and hell no, it's not worth no damn $60 bucks.

 

[Suspicious-Teach8788]

Is your roommate mildly retarded? https://play.google.com/store/devic...sMSwxLDExMSwiZGV2aWNlLW5leHVzXzRfY2hhcmdlciJd

it's obviously the wireless charger he's talking about, but no, you'll just take anything to throw at Apple.

Honestly, it's a ripoff too. Stop trying to single out Apple when this is an industry-wide practice.

 

[zaydq]

Its a rip off... But it didn't stop me from buying a 64gb iphone 5. Companies will take advantage of anything to make money, and it only works if the consumer pays for it. If it was that major of a concern to me, i would have simply bought a phone that could accept an external sd card.

With subsidized pricing, which many phones are sold under, the cost is generally minimal for those that require the storage space.

 

[s44]

agreed, but that's the market price right?

No.

$100 now gets you from the One 32 to the One 64.
$50 now gets you from the S4 16 to the S4 32.

Interesting to see if this shakes things up a bit.

EDIT: Crap, I can't post again now for a while. I'm at a magic post count.

 

[grkM3]

Guys go take a look how much apple rapes there sad pricing.

Unreal how much they get away with and from what I have personally seen kids with apple stuff brag what capacity they have.

 

[Suspicious-Teach8788]

No.

$100 now gets you from the One 32 to the One 64.
$50 now gets you from the S4 16 to the S4 32.

Interesting to see if this shakes things up a bit.

EDIT: Crap, I can't post again now for a while. I'm at a magic post count.

$100 gets you from an iPhone 32gb to iPhone 64gb. So HTC is a ripoff too? And Samsung is dirt cheap?

Plus you're quoting contract pricing, which is deceptive anyway.

 

[MrX8503]

I normally get the base device because the upgrades are at a premium.

The other thing that isn't mentioned in this forum is that Apple's high margins also comes from great discounts from their partners.

Apple is able to buy more displays, NAND flash, and other components than anyone. When you can secure that amount if materials, you get the best pricing.

 

[Red Storm]

But is it their fault? Maybe they manage a more lean business model than other companies? Maybe they inflate their prices? But given standard supply and demand, shouldn't that result in less demand? They created a successful product. They make money. They deserve whatever they make.

Apparently we all think that it's despicable to charge $29.99 for a wall charger or whatever, and $100 more to go from 16gb to 32gb, but they're not the only ones doing that. Furthermore, if it's that ridiculous, why do we consumers put up with it? Plus it's not like Google's not doing the same with their devices. The Nexus 10 costs $100 more for the 32gb version as well.

Samsung's revenues mainly came from their mobile division, thus suggesting that phones and tablets have huge margins. Where's the outrage there? We all know Samsung makes general electronics too and TVs. So it's pretty clear they make massive margins through mobile as well. If people are upset with Apple, they should be with Samsung as well.

Huh? I'm not blaming anyone for anything. Apple seemingly makes more money doing it than anyone else, so it makes sense to focus on them.

The same way you don't see stories about the average athletes, but rather those who are the most successful.

 

[poofyhairguy]

I think part of the shock is that this market hasn't moved in a while. The iPad's power has increased dramatically over the many generations, but the base model keeps the same amount of storage.

Samsung will sell you a dirt cheap 32GB SD card to go with you brand new tablet or smartphone so I don't really think they are guilty of that.

I have wondered if part of the reason each Galaxy keeps the Micro SD slot is so Samsung can make money on Micro SDs.

 

[QueBert]

$100 gets you from an iPhone 32gb to iPhone 64gb. So HTC is a ripoff too? And Samsung is dirt cheap?

Plus you're quoting contract pricing, which is deceptive anyway.

Look! Apple overcharges we all know this! So even both HTC & Apple charge $100 to go from 32 to 64gb's. I assure you, somehow Apple's the only one ripping people off here good sir!

On a serious note my Nexus 4's being delivered today, I would have gladly let Google rape me for $100 to get a damn model with more than 16gb's of space. But I don't even have the option to be molested out of monies by them