At The Very Low Manufacture Cost, New iPhones’ Storage Upgrades Produce A Lot Of Revenue

Not it’s the first time Apple has charged a price premium for storage space upgrades, but the 512GB option has been introduced just this year and costs $350 more than the lowest 64GB variant.

Manufacturing analysts say that the price jump is unfair and Apple is just looking to build additional revenue by charging its consumers more than it should for the 256 and 512GB models. If you choose for the 512GB alteration, in case, you will be giving $134 more profit to the company compared to the 64GB choice.

As Wayne Lam from IHS Markit says, storage space upgrades are the most cost-effective feature as the manufacturing cost is minimum. It’s not like the screen size where it’s required to re-design the phone due to the crossways increase.

Lam adds that Apple pays 25 cents per GB but charges 75 cents/gigabyte. on the other hand, storage prices have fallen approximately partially since 2017, but it’s also possible that Apple’s usual “lock-in” contracts with its vendors may have precious prices unconstructively. So now, the Cupertino-based company is stuck with buying storage at higher prices.

However, such a cost difference between the 64 and 512GB model is far away from practical. It is even considering that owners of big-storage iPhones will tend to pay out more money in iTunes for apps and multimedia. Internal information shows that an average owner of the 512GB model is likely to spend at least $40 more per month.

In some case, the market researchers tell again us that there are a lot of factors involved when pricing mechanism and all the mentioned prices are estimates. No one outside of Apple knows the actual component prices of its contractors.