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It's called price discrimination (http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination). Windows does it with th
by confluence 14y ago
It's called price discrimination (http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination).
Windows does it with their entire operating system/office line - student licenses are the cheapest because it's all they can afford (otherwise they just pirate - since value to them is so low), home the next (same reason), then the office, then corporations (they can afford a lot - and they derive a lot of value).
You charge what people can afford in terms of value to maximise your profit and increase your chances of continuing to supply said value (or not) into the future. Apple sells most of their tablets very competitively, but they know that there are plenty of people out there who get plenty more value, and are perfectly happy to pay up. So to extract these profits they create stacked price/entry levels to actively help those who can afford overpriced memory and perceive large amounts of derived value to happily pay up for it.
Value perceived/extracted and not the price of creation are what's important to consumers in non-commodity markets and the suppliers who supply them.
- leviathan 14y agoA relevant good read is Joel Spolsky's "Camels and Rubber Duckies" http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...
- gavanwoolery 14y agoYep, and Apple has traditionally capitalized on this big time. For example, on a Mac Pro: http://store.apple.com/us/configure/MD772LL/A http://store.apple.com/us/configure/MD772LL/A? You pay about $150 per 4 GB of RAM, or $37.5 per GB. Current ram prices are about $4.5 per GB! (See: http://www.newegg.com/Product/ProductList.aspx?Submit=ENE&N=100007611+600078206&QksAutoSuggestion=&ShowDeactivatedMark=False&Configurator=&IsNodeId=1&Subcategory=147&description=&hisInDesc=&Ntk=&CFG=&SpeTabStoreType=&AdvancedSearch=1 http://www.newegg.com/Product/ProductList.aspx?Submit=ENE... for example.)
- bonaldi 14y agoAt least with the Pro you can go to Crucial. If an SD card slot was available on the iPads the OP's complaint would go away, I'm guessing
- curiousdannii 14y agoYou call it price discrimination, I call it artificial scarcity. When the price difference is a single feature, more memory, I think most people do not perceive a value difference that is in proportion to the price difference. (It would arguably be different if there were differences other than memory as you might be buying a more holistic upgrade, even if the overall profit was the same.) But as Apple will not add SD card expansion slots, what can you do? Value extracted indeed.
- bunderbunder 14y agoThey don't need most people to perceive a value difference in proportion to a price difference. Just enough members of their customer base to increase their profits overall. If you don't like it, you're perfectly free to stomp away and go buy an Android tablet with an SD card slot. Don't worry, Apple won't mind. They'll be too busy counting their enormous stacks of cash to take notice.
- guan 14y agoExactly. You could just as easily say that the 16 GB buyers are getting a discount that’s funded by 32 GB and 64 GB buyers.