Do memory costs make the iPhone “the biggest rip-off in tech?”

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

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LAPTOP mag Editor in Chief Mark Spoonauer says that according to Michael Yang, a senior principal analyst for market research firm IHS, smartphone makers pay a princely eight dollars for 16GB of mobile device RAM, which he contends makes 16GB iPhones (and by extension iPads) “the biggest rip-off in tech.”

Perhaps a trifle overstated, but as a 16GB iPad owner, I get where he’s coming from. Spoonauer’s iPhone 5s recently hit the memory capacity wall, obliging him to to delete a bunch of apps (some of which he liked) in order to free up room. He acknowledges that he “cheaped out” and bought the lowest-capacity 16GB iPhone 5s. Like me, he bridled at coughing up an extra hundred bucks for a 32GB model.


He notes that Mr. Yang says smartphone manufacturers pay a whopping 50 cents per gigabyte for smartphone memory. This means that increasing standard storage capacity from 16GB to 32GB would increase the OEM storage memory cost to just $16 per unit. I had presumed that memory upgrades for Apple mobile devices had to be windfall profitable for vendors, but Mr. Yang’s metrics reveal reality to be even more of a gouge than I had imagined.

Nevertheless, when I buy my next iPad (very likely this fall), it will very likely be a 16GB base Wi-Fi model again. That is unless Apple acknowledges that real world circumstances have changed, and that what with more and bulkier apps optimized for Retina display resolution, higher resolution cameras (the original iPad had no camera at all), and so forth, 32GB probably amounts to lower realistic capacity headroom today than 16 GB afforded you three or four years ago.

I’m still managing OK on my 16GB iPad 2 after more than three years of app, photo, and data accretion. The last time I checked, there was still about 4.3GB of free capacity on the storage drive. But my usage isn’t typical, being heavily oriented toward text content, and I don’t have a lot of entertainment stuff like games and movies loaded up.

However, a Retina iPad Air or mini is a different dynamic memory use wise from an iPad 2, and new upgraded models coming most likely in October are rumored to be getting the 8 megapixel camera from the iPhone 5s.

Consequently, stubbornly sticking with 16 gigs and entry level pricing will be a bit of a dice-roll, but I’m also pretty stubborn in my resolve not to let Apple hose me for a hundred bucks for eight bucks worth of storage capacity expansion.

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As Spoonauer observes, with mobile hardware transitioning from being principally content-consumption devices to content-creation devices, (viz. the celebrated Apple-IBM alliance), the industry isn’t keeping up with reality, the iPhone having shipped with 16GB standard since the 3GS in 2009, and the iPad since 2010.

Happily, he cites Mr. Yang predicting that baseline density is inevitably going to go up, and expecting the next wave of smartphones to ratchet at least one step up, perhaps two, with either 32GB or 64GB. Unhappily, there’s been no rumor buzz I’ve encountered suggesting it’s going to happen this year with Apple devices.

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  • J. Scott Anderson

    Mr. Moore, please researcher article a little more carefully or edit carefully. The type of memory or storage that you were citing in the article is RAM (random access memory). Yet when you speak of 16 GB or 32 GB devices, you were speaking of an entirely different type of storage call flash storage – to keep it simple. Hopefully, your article is accurate except for misuse of terms. However, it is my understanding that flash memory cost quite a bit more than random access memory.

    With that said, it is common knowledge that Apple has always charge a premium for memory and storage. This is nothing new and something that I would like to see change for a little bit more competitiveness.

  • Charles W. Moore

    Mr. Anderson;

    You’re right. That reference to RAM in the first paragraph is in error, the result of a brain-fade lapse on my part as near as I can fathom. I *do* know the difference.

    Thanks for the catch. We strive for accuracy.

    Charles Moore