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I expect this isn't gouging so much as Apple just liking consumer-friendly price points and upgrades. By "consumer-friendly" I mean numbers like $499/599/699 (W
by cletus 14y ago
I expect this isn't gouging so much as Apple just liking consumer-friendly price points and upgrades. By "consumer-friendly" I mean numbers like $499/599/699 (Wifi iPad) are "nice" numbers and $100 is a difference that gives choice without giving too much choice.
Apple isn't really in the habit of cutting prices (this has exceptions and I'm ignoring various FX price adjustments). They're more about giving you more for the same money. So at some point you'll probably see the same prices but for 32/64/128GB. I'm a little surprised this hasn't happened already. I expect we'll see it next year. 2014 at the absolute latest. Perhaps this would be too much of a constraint on flash chip supply though (IIRC Apple is already the largest consumer of flash memory so doubling their demand would be significant).
I, for one, will happily buy a 128GB iPad.
That all being said, I think there are now three serious missteps in the post-Jobs Apple:
1. The Maps debacle;
2. Elongating the iPhone 5 to create yet another resolution (the relative uniformity of the iOS line with only 2/4 (if you could retina) resolutions was a huge advantage for developers). I really don't see the point; and
3. The Mini. Sure they'll sell millions of them but by that same argument Windows Vista was a success. IMHO 16:10/9 makes far more sense on the 7-8" form factor rather than the "fat" 4:3. Also, 7-8" tablets are moving to be 720p+ and this is below that at 1024x768. The price is also (IMHO) too high.
Google OTOH (disclaimer: I work for Google) I think has a lineup that is starting to make a lot more sense between the Nexus 4/7/10 at some pretty nice price points.
I guess that's a good comparison for this article because the Nexus 7 upgrade from 16 to 32GB is only $50.
EDIT: Two points:
1. I'm not calling the iPad Mini a Vista-level failure. Seriously, please read what I actually wrote (the whole electric car was also a big example of people not reading what I wrote but I digress...). I simply said that selling a lot of something doesn't preclude it from being a misstep; and
2. The whole idea of "excessive profit" with a luxury good is fundamentally flawed. If you don't like it, don't buy it. Ultimately it costs what it costs because the market bears it.
EDIT2: I understand very well why the mini is 1024x768. Perhaps I didn't explain my point very well. My point is that's not a very good resolution for a 7-8" tablet (IMHO of course). IMHO the 16:10 ratio works much better (YMMV) but they have their hands tied.
- masklinn 14y agoIt's just a very simple (and standard) way of doing price discrimination, and getting the maximum amount of money each customer will pay for the product (while keeping a single set of prices). In fact, Google does something very similar on the '7, though they ask for half what Apple does they charge $50 for a flash bump with a BOM cost estimate of $17. And the article quotes that. (note: I'd be surprised if both companies didn't get their flash for less than the quoted BOM)
- alexchamberlain 14y agoBut 3x the cost from manufacturing to full price retail isn't terribly unreasonable.
- masklinn 14y agoThen why would 6x be "terribly unreasonable"? Because 6 > 3 and inbetween is your arbitrary cutoff point?
- alexchamberlain 14y agoNo, it's based on manufacturer and retailer using a 100% markup.
- masklinn 14y agoHow is "4" not a completely arbitrary cutoff point?
- mgkimsal 14y agoWhen Google does something, it's OK, but when Apple does it, it's not. ???? Just a guess. Another related guess - some of the same people that complain about Apple's 'excessive' markup also pay $2 for 8oz of bottled water flown in from 15000 miles across the globe.
- mtgx 14y agoIf that were so, then they should've doubled those numbers by now - 32GB for $500, 64GB for $600, like the competition is offering. This is especially needed on the bigger iPad with the much higher resolution, where apps are now 2-3x the size they were before, and their new textbooks are huge in size (2-3 GB each).
- masklinn 14y agoBut then you can't get the extra $100 out of those who'd pay $700 for their tablet as they top out at $600.
- mtgx 14y agoThat's probably a very niche market. They can either skip the $700 one for a year, or make it $800 for 128 GB, which should be acceptable for people wanting 128 GB of storage.
- masklinn 14y ago> That's probably a very niche market. I will not comment on that as I have no sales numbers breakdown. > They can either skip the $700 one for a year, or make it $800 for 128 GB If it was, somebody'd probably propose it. And yet we're still stuck at 64GB. We're stuck at 64GB on tablets, we're stuck at 64GB on smartphones and we're stuck at 64GB on PMPs. I'm guessing the 128GB single-chip modules either are expensive as hell or simply not available at the necessary scale (though they may not actually exist, Toshiba had a press release back in mid-2010 and supposedly test samples in Q4 2010, but I haven't seen anything since) edit: ah, it seems Toshiba is just now starting mass production of their 128GB modules: http://news.yahoo.com/samsung-starts-mass-producing-128gb-flash-chips-smartphones-165516882.html http://news.yahoo.com/samsung-starts-mass-producing-128gb-fl... so this is a case of manufacturers not even having the part available. I'm guessing we'll start seeing phones and tablets with 128GB options in early-to-mid 2013 (just in time for the next iWhatever)
- curiousdannii 14y agoIf they're really on about consumer-friendly numbers and reduced choices, then why not offer the biggest memory increase they can give with reasonable profit margins? They could offer to upgrade from 16GB to 64GB for $100, still making a decent profit while reducing the number of device options. No, this is simply exploiting people for excessive profit.
- rayiner 14y agoWhat is "excessive profit" in the context of a luxury item? We're not talking about price gouging for disaster relief supplies here.
- curiousdannii 14y agoWho gets to decide what is a luxury item? (I guess theoretically the tax office, ex: luxury car taxes...)
- rayiner 14y agoNobody gets to decide, but I don't think determining that an iPad is a luxury item takes a heroic feat of line drawing.
- illuminate 14y agoWhomever wishes to? If you already operate a desktop, a laptop, a smartphone, a tablet device could without too much trouble be considered a luxury and not a lifeline to modern society.
- Spooky23 14y agoBecause that doesn't shape consumer behavior. It also makes people focus on the "Should I get the cheap one or the better one?" question instead of the "Do I really need this thing question. Binary questions are yes/no decisions -- the purpose of marketing is to make it difficult to say no. Offering a good/better/best pricing model leads: - People with more money than sense to buy the "best" one. (I'm richie rich, I only buy the best.) - The mainstream joe consumer to buy the middle one. (Hmm, what do I really need?) - The aspiring consumer with more desire than money to pick the cheap one. (Man, if I get the 32GB I can't pay my rent, but I need this thing, and the 16GB is $100 less, plus I can finance it over 6 months for less than $100/mo!)
- jopt 14y agoIsn't it too early to count iPad mini as a Vista-level failure?
- taligent 14y agoCan we please stop with this post-Jobs "Apple isn't the same" nonsense. Jobs was ALIVE when almost all of these products were in the pipeline. He said so in his biography. Also your quotes about the Mini just shows your complete lack of understanding of how the iOS ecosystem works. It is 1024x768 for a very specific reason. iPad apps work unchanged. And it is because Apple is very deliberate with resolutions that the iPad apps are far, far superior to the Android scaled up rubbish.