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No relief likely on Apple’s inflated memory prices

Sections: Features, iPad, iPad Air, iPad mini, iPhone, iPhone/iPod touch/iPad, iPod touch, Opinions and Editorials, Originals

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One of the reasons I advocate buying the entry level iPad and iPhone models if you can manage with just 16 GB of storage memory is the punishing premium Apple charges for capacity-doubling upgrades in $100 increments.

9To5Mac’s Mike Beasley draws our attention to Apple having blinked just a bit with the release of an updated iPod touch with price spreads of just $50 between the 16 GB, 32 GB, and 64GB configs, or half what has been the blanket norm since the original 2007 iPhone introduction. This pretty much proves that Apple has been gouging us on the price of higher memory capacities for iOS devices all along. Don’t hold your breath waiting for the welcome price rationalization in the iPod touch to carry over to its iPad and iPhone stablemates, even though, Beasley notes, doubling or quadrupling storage from the base 16GB configuration costs Apple somewhere in the range of $5-10. Aside from padding Apple’s profit margins, there is no justification for the $100 per step-up tariff, and we all know it.

Beasley observes that the iPod memory upgrade price cuts along with addition of a rear-facing camera have been implemented to help compensate for that machine’s pedestrian specification in the power department, with its 2010-technology A5 SoC originally introduced on the iPhone 4S and iPad 2, and now shared only with the holdover original non-Retina iPad mini.

iPod touch

Consequently, he thinks it likely (and I agree) that Apple will maintain the $100 increment gaps on new iPhones and iPads which people will line up to buy pretty much regardless of how much it costs. It would be much easier to justify a “premium” price for a next-generation smartphone than to justify such a price for a two-year old music player.

Of course, it would be great if Apple surprised us and went with $50 memory upgrade increments across the board. Price competition is heating up, especially in the smaller screen size categories.

Digitimes’ Aaron Lee and Joseph Tsai reported that Microsoft has aborted its plan to offer a smaller-size Surface Mini tablet to go up against Apple’s iPad mini and the Android hordes due to fierce competition in the smaller-screen tablet category. Lee and Tsai say Microsoft had finished developing the Surface Mini, which reportedly had a 7.5- to 8-inch display, ARM processors, and ran the Windows RT 8.1 operating system. However, with brand name small-size tablets now commonly priced below US$100, and white-box models only around US$50, plus Apple’s upcoming 4.7- and 5.5-inch iPhones projected to dilute demand for 7-inch tablets, a presumably premium-priced Surface Mini could be expected to struggle for market share even more than its larger stablemates have.

The Surface Mini would have come with 32 GB of storage memory, which is the lowest memory configuration Microsoft has ever offered in any size Surface tablet PC. However, direct comparison with Apple’s base 16 GB is misleading, because Microsoft is making a virtue of necessity; Windows 8.1/RT is so bloated it won’t fit on a 16 GB drive with room for much of anything else. The iOS, by contrast, is commendably economical with memory.

Still, one thing Apple might do to ease the sting of its iPad and iPhone memory upgrades would be to start at a higher base; say, matching Surface’s 32 GB base configuration and making the upgrade progression 32/64/128 instead of 16/32/64 in the iPhone and 16/32/64/128 in the iPad.

That would enhance the value equation for higher-end iDevice users, make for happier customers, and hopefully boost Apple’s balance sheets via higher-volume sales rather than arbitrary price inflation.

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