I'm going to be kind and assume English isn't your first language as you're misread some of the comments here. Nobody said the 64GB module costs 8 times more than the 16GB module. That comment was not aimed at me, it was pointing out that some of us had been writing Gb instead of GB and a byte is 8 times greater than a bit. It has nothing to do with this argument. In truth, the 64GB modules costs $9.39, about 3 times the $3.12 of the 16GB module. This was clearly stated in the article.
You may be right that Apple didn't make a saving in the deal itself, but they didn't do the deal to lose money did they? They did it because they knew in the long term it would make them money to not be hit by the shortages that hit their competitors and drive their prices up. Ultimately they make more money for having done these deals, so in the bigger picture they effectively make a saving.
Remember, there are 8 bits in a byte. NAND and RAM are usually sold in GigiBITS, not GigiBYTES. It's already been noted that the article could be wrong. 16Gb is 2GB and 64Gb is 8GB. 2GB x 8=16GB and 8GB x 8 = 64GB.
PS: I'm out. If you don't understand pricing from all companies there is nothing I can say to change that.
Remember, there are 8 bits in a byte. NAND and RAM are usually sold in GigiBITS, not GigiBYTES. It's already been noted that the article could be wrong. 16Gb is 2GB and 64Gb is 8GB. 2GB x 8=16GB and 8GB x 8 = 64GB.
I know what bits and bytes are but I didn't realise these modules were sold in bits. That's rather important! lol. I think they've changed the article since I read it as it now reads 'gigabits' not 'Gb' to make it clearer.
So for comparison, the Galaxy Tab costs $499/$599 for the 16GB/32GB versions.
So, does anyone think that 16GB of memory costs Samsung $100 (especially considering they are the manufacturers themselves).
You may not like the practice, but
(1) It is, and has been, true of nearly every industry for over a century.
(2) It obviously works.
I don't mind the practice, I just believed it was being stretched to ridiculous levels because when I read the article I read the Gb as GB. I think they've reworded the units now to make it clearer. I rescind my objection lol. Well argued though.
I don't mind the practice, I just believed it was being stretched to ridiculous levels because when I read the article I read the Gb as GB. I think they've reworded the units now to make it clearer. I rescind my objection lol. Well argued though.
Can someone explain to me how a 64Gb module that costs Apple just $6.27 more than the 16Gb module costs the consumer $200.00 more!?!
That's not taking into account the savings Apple makes by pre-buying in bulk.
I love Apple's products but disgraces like this do leave a bad taste in the mouth.
Even though the only difference advertised in the store is storage, that doesn't mean it should be the only factor in the price difference.
Don't think of it as 16GB vs. 32GB vs. 64GB. I'm sure a company the size of Apple pays one lump amount for their entire order of storage components. So Apple (or any company) decides how to distribute, subsidize or markup that cost across their product line based on their market strategy and product demand. And there's the R&D component, because the design of the iPad/iPhone has to first accommodate the size of the largest capacity. So one could argue that R&D cost should be carried most by the larger storage device.
And as for a Motorola Xoom or any other copycat tablet, I would argue their prices should be far below the iPad - instead of comparable. Since all they had to do was reverse engineer the iPad, shouldn't their R&D investment be a fraction of Apple's? The fact that they charge relatively the same prices and are still falling behind Apple speaks volumes of not only their greed, but their incompetence as well
My point was just that Motorola have released their base model with 32GB at nearly the same price point.
So, what you're saying is that because Apple makes the tablet that everyone wants, and competitors are forced to scrape by on thin margins to unload the crap they manufactured, that Apple has an obligation to suffer along with the idiots who made the crap because Apple's tablet is too desirable for the competitors to get away with comparable margins?
All iPads are equal in cost. The ONLY difference between a 16GB iPad and a 64GB one is the cost of the NAND flash inside it.
I don't assume the Xoom costs as much, but its memory is bought from the same place Apple buys theirs. So are its other components. Apple brags about the price point it can reach and understandably so, but if a competitor can offer twice the memory in a device that at least on paper is comparable and only costs $15 more, it suggests the memory is the not the reason Apple hits the lower price point. It's moot anyway as we can all see the costs of the memory.
LOL, like everyone said this is supply and demand?. basic economic 101. It is not how much cost added but the perceived value. Look at different car trim package and you will understand, they add some stupid trim and other items like power window and the cost went up $3,000. Does it cost $3,000 more to make?? Hell no and I would like to see you argue with the car dealer that they added only XYZ and it should cost them $500 more. Good luck.
This is a free market, you can either walk away or just buy it. Nobody is forcing you. Apple is in a business to make MAXIUM profit for their shareholders, like every other companies.
[...] he says people don't want to manage their storage. In that case, don't make 16Gb of storage the only option the majority of your customers can afford thereby forcing them to constantly manage their storage!
So, what you're saying is that because Apple makes the tablet that everyone wants, and competitors are forced to scrape by on thin margins to unload the crap they manufactured, that Apple has an obligation to suffer along with the idiots who made the crap because Apple's tablet is too desirable for the competitors to get away with comparable margins?
The headline cites "lackluster demand" for NAND flash. No surprise there. Apple has rearranged their product schedule this year to allow developers to get familiar with iOS 5 before releasing the next iPhone.
So naturally there is less demand for NAND flash this quarter. Next quarter, as iPhone production ramps up, demand will jump. (Assuming that you define "demand" as "the number of NAND flash memory units shipped to device manufacturers," and not "spot market price pressure.")
Horse crap! They bought in bulk. When you purchase nearly $4 Billion, up front, several months prior it's up to the supplier to forecast accordingly, and my bet is on them over forecasting for other third parties and when that didn't happen they are indicating lack luster from Apple.
Classic. The best part is that Apple can now buy another $4 or $5 Billion allocation and get a steeper discount this time around.
If customers are willing to pay a premium for an Apple product, it would be poor business to say, "I know you think it's worth $700, but we're feeling generous. Would $500 be too much?"
What some are missing is it can take a huge capital outlay to come up with the "next big thing". If you simply double the raw costs of your product there probably won't be enough profit to allow for serious development and investment in new tech and products.
LOL, like everyone said this is supply and demand?. basic economic 101. It is not how much cost added but the perceived value. Look at different car trim package and you will understand, they add some stupid trim and other items like power window and the cost went up $3,000. Does it cost $3,000 more to make?? Hell no and I would like to see you argue with the car dealer that they added only XYZ and it should cost them $500 more. Good luck.
This is a free market, you can either walk away or just buy it. Nobody is forcing you. Apple is in a business to make MAXIUM profit for their shareholders, like every other companies.
I'll ignore the patronising tone.
A car trim package is not a good analogy. Storage is fundamental to the very function of the iPad. A car trim package is for vanity, not function. A better comparison would be the size of the car's engine. I'm European so you might find the engine sizes strange!
If I got a 1,000cc engine in my car for $10,000 but had to pay $14,000 for a 1,200cc engine you bet your bottom dollar I'd be arguing with the dealer! And what's more, I'd have a chance of getting a deal out of it.
Another flaw in this argument is that it assumes market forces affect the iPad at this point. The competition is so at sea that the iPad is the only option for any sensible tablet consumer at the moment. That leaves Apple with a pseudo-monopoly position in this segment.
Anyway, I rescinded my complaint because the units weren't clear on the bits/bytes thing when I read the article this morning. I just wanted to argue this point because I didn't like your analogy :P
I'm quite relieved to not have to feel angry with a company I admire, truth be told.
A car trim package is not a good analogy. Storage is fundamental to the very function of the iPad. A car trim package is for vanity, not function. A better comparison would be the size of the car's engine. I'm European so you might find the engine sizes strange!
If I got a 1,000cc engine in my car for $10,000 but had to pay $14,000 for a 1,200cc engine you bet your bottom dollar I'd be arguing with the dealer! And what's more, I'd have a chance of getting a deal out of it.
Another flaw in this argument is that it assumes market forces affect the iPad at this point. The competition is so at sea that the iPad is the only option for any sensible tablet consumer at the moment. That leaves Apple with a pseudo-monopoly position in this segment.
Anyway, I rescinded my complaint because the units weren't clear on the bits/bytes thing when I read the article this morning. I just wanted to argue this point because I didn't like your analogy :P
I'm quite relieved to not have to feel angry with a company I admire, truth be told.
I wasn't going to continue with this discussion but I'm amazed that it sounds like you're suggesting that 200cc more engine should have a 1:1 ratio on the cost. You're not considering the increased performance, the other parts of the engine, or even if that additional size was achieved while keeping the average fuel usage the same as the smaller engine, not to mention the added value. What if the extra 200cc was accomplished whilst keeping the weight of the engine the same or lower through the use of a more complex physical design and/or alloy?
Furthermore, I don't think it's been mentioned that denser NAND are often slower even with increased costs. You can easily see this with MicroSD cards where the class number represents the Mb/s. Apple's on-board NAND appears to be quite fast compared to the competition as noted by AnandTech and other sites which may be one reason for it's perceived speed advantages over its competition. Despite the cost disparities being a industry phenomenon — not an Apple phenomenon — you can't look at one single aspect of any product and expect to make a valid comparison.
Can someone explain to me how a 64Gb module that costs Apple just $6.27 more than the 16Gb module costs the consumer $200.00 more!?!
That's not taking into account the savings Apple makes by pre-buying in bulk.
I love Apple's products but disgraces like this do leave a bad taste in the mouth.
Well, not to get all 'technical', but you need 8 of those parts, so 8x$3.12 = $24.96, and 8x$9.39=75.12, so it's a $50 difference, not a $6 difference.
Though even then it sure would be nice if it was + $50 to the 32GB and + $100 for the 64GB at least instead of the current $100/$200 spread...
I wasn't going to continue with this discussion but I'm amazed that it sounds like you're suggesting that 200cc more engine should have a 1:1 ratio on the cost. You're not considering the increased performance, the other parts of the engine, or even if that additional size was achieved while keeping the average fuel usage the same as the smaller engine, not to mention the added value. What if the extra 200cc was accomplished whilst keeping the weight of the engine the same or lower through the use of a more complex physical design and/or alloy?
Furthermore, I don't think it's been mentioned that denser NAND are often slower even with increased costs. You can easily see this with MicroSD cards where the class number represents the Mb/s. Apple's on-board NAND appears to be quite fast compared to the competition as noted by AnandTech and other sites which may be one reason for it's perceived speed advantages over its competition. Despite the cost disparities being a industry phenomenon ? not an Apple phenomenon ? you can't look at one single aspect of any product and expect to make a valid comparison.
I'm not suggesting a 1:1 ratio. Your reasoning is flawed. The engine is not the entirety of the product; it is only part of the cost of the car. The two cars have the same chassis, the same wheels, the same upholstery, the same electrics, the same windows, the same paint etc. etc. Increasing the cost of the engine would not increase the cost of the car in the same proportion because the base of the car has not changed.
E.g. If the car without the engine costs $4000 to produce and the 1 litre engine is $1000 and the 1.2 litre engine is twice the price (ridiculous, I know but I am exaggerating to make the point clear) at $2000 then car 1 costs $5000 and car 2 costs $6000 to produce. The cost of the engine is double but the overall cost of the car is only 20% more. The ratio of the two cars' costs is 1:1.2 but the price I'm paying is 1:1.4. And that's after a ridiculous imaginary price for the 1.2 litre engine.
If that cost then got passed on to me as a $4000 premium I'd not be happy.
I chose those two sums of money (10k and 14k) because they are the proportionally the same as the 16 and 64 GB iPad prices.
You make an interesting point about Apple's memory speed. I didn't realise that and it does explain a lot although why iOS devices seem so much more responsive on the touch level I don't know.
Comments
I'm going to be kind and assume English isn't your first language as you're misread some of the comments here. Nobody said the 64GB module costs 8 times more than the 16GB module. That comment was not aimed at me, it was pointing out that some of us had been writing Gb instead of GB and a byte is 8 times greater than a bit. It has nothing to do with this argument. In truth, the 64GB modules costs $9.39, about 3 times the $3.12 of the 16GB module. This was clearly stated in the article.
You may be right that Apple didn't make a saving in the deal itself, but they didn't do the deal to lose money did they? They did it because they knew in the long term it would make them money to not be hit by the shortages that hit their competitors and drive their prices up. Ultimately they make more money for having done these deals, so in the bigger picture they effectively make a saving.
Remember, there are 8 bits in a byte. NAND and RAM are usually sold in GigiBITS, not GigiBYTES. It's already been noted that the article could be wrong. 16Gb is 2GB and 64Gb is 8GB. 2GB x 8=16GB and 8GB x 8 = 64GB.
PS: I'm out. If you don't understand pricing from all companies there is nothing I can say to change that.
Remember, there are 8 bits in a byte. NAND and RAM are usually sold in GigiBITS, not GigiBYTES. It's already been noted that the article could be wrong. 16Gb is 2GB and 64Gb is 8GB. 2GB x 8=16GB and 8GB x 8 = 64GB.
I know what bits and bytes are but I didn't realise these modules were sold in bits. That's rather important! lol. I think they've changed the article since I read it as it now reads 'gigabits' not 'Gb' to make it clearer.
That changes a lot.
So, does anyone think that 16GB of memory costs Samsung $100 (especially considering they are the manufacturers themselves).
You may not like the practice, but
(1) It is, and has been, true of nearly every industry for over a century.
(2) It obviously works.
So for comparison, the Galaxy Tab costs $499/$599 for the 16GB/32GB versions.
So, does anyone think that 16GB of memory costs Samsung $100 (especially considering they are the manufacturers themselves).
You may not like the practice, but
(1) It is, and has been, true of nearly every industry for over a century.
(2) It obviously works.
I don't mind the practice, I just believed it was being stretched to ridiculous levels because when I read the article I read the Gb as GB. I think they've reworded the units now to make it clearer. I rescind my objection lol. Well argued though.
I don't mind the practice, I just believed it was being stretched to ridiculous levels because when I read the article I read the Gb as GB. I think they've reworded the units now to make it clearer. I rescind my objection lol. Well argued though.
Fair enough...That's an 8x differential!
Can someone explain to me how a 64Gb module that costs Apple just $6.27 more than the 16Gb module costs the consumer $200.00 more!?!
That's not taking into account the savings Apple makes by pre-buying in bulk.
I love Apple's products but disgraces like this do leave a bad taste in the mouth.
Even though the only difference advertised in the store is storage, that doesn't mean it should be the only factor in the price difference.
Don't think of it as 16GB vs. 32GB vs. 64GB. I'm sure a company the size of Apple pays one lump amount for their entire order of storage components. So Apple (or any company) decides how to distribute, subsidize or markup that cost across their product line based on their market strategy and product demand. And there's the R&D component, because the design of the iPad/iPhone has to first accommodate the size of the largest capacity. So one could argue that R&D cost should be carried most by the larger storage device.
And as for a Motorola Xoom or any other copycat tablet, I would argue their prices should be far below the iPad - instead of comparable. Since all they had to do was reverse engineer the iPad, shouldn't their R&D investment be a fraction of Apple's? The fact that they charge relatively the same prices and are still falling behind Apple speaks volumes of not only their greed, but their incompetence as well
Because it should be Gb not GB. That is b for bits and B for Bytes. That is 8 times different.
@ AI : This is not the first time you got it wrong.
People in this thread miss the information above.
16 gigabit cost 3.12 dollars (this is about 2 gigabytes)
32 gigabit cost 4.85 dollar (this about 4 gigabytes
64 gigabit cost 9.39 dollar (this is about 8 gigabytes)
16 gigabytes ipad about 20 dollar NAND flash price
64 gigabytes ipad about 80 dollar NAND flash price
I wondered about that since we're talking about components.
Either way it doesnt change Jonamac's argument as it's now 8x$6.27 and charging $200.
That would only be the case if Apple put 8 modules of 64 Gigabit in the iPad to reach the 64 Gigabyte.
I know that they only put two modules in the iPod touch. For the 64 Gigabyte iPod touch, this would require two modules of 256 Gigabit each.
If one assumes that higher density modules cost more (which is very plausible), then the price will be closer to the $200.
Fair point.
My point was just that Motorola have released their base model with 32GB at nearly the same price point.
So, what you're saying is that because Apple makes the tablet that everyone wants, and competitors are forced to scrape by on thin margins to unload the crap they manufactured, that Apple has an obligation to suffer along with the idiots who made the crap because Apple's tablet is too desirable for the competitors to get away with comparable margins?
All iPads are equal in cost. The ONLY difference between a 16GB iPad and a 64GB one is the cost of the NAND flash inside it.
I don't assume the Xoom costs as much, but its memory is bought from the same place Apple buys theirs. So are its other components. Apple brags about the price point it can reach and understandably so, but if a competitor can offer twice the memory in a device that at least on paper is comparable and only costs $15 more, it suggests the memory is the not the reason Apple hits the lower price point. It's moot anyway as we can all see the costs of the memory.
LOL, like everyone said this is supply and demand?. basic economic 101. It is not how much cost added but the perceived value. Look at different car trim package and you will understand, they add some stupid trim and other items like power window and the cost went up $3,000. Does it cost $3,000 more to make?? Hell no and I would like to see you argue with the car dealer that they added only XYZ and it should cost them $500 more. Good luck.
This is a free market, you can either walk away or just buy it. Nobody is forcing you. Apple is in a business to make MAXIUM profit for their shareholders, like every other companies.
[...] he says people don't want to manage their storage. In that case, don't make 16Gb of storage the only option the majority of your customers can afford thereby forcing them to constantly manage their storage!
Your wish just might be granted on Tuesday.
So, what you're saying is that because Apple makes the tablet that everyone wants, and competitors are forced to scrape by on thin margins to unload the crap they manufactured, that Apple has an obligation to suffer along with the idiots who made the crap because Apple's tablet is too desirable for the competitors to get away with comparable margins?
Hear hear. +1.
So naturally there is less demand for NAND flash this quarter. Next quarter, as iPhone production ramps up, demand will jump. (Assuming that you define "demand" as "the number of NAND flash memory units shipped to device manufacturers," and not "spot market price pressure.")
Horse crap! They bought in bulk. When you purchase nearly $4 Billion, up front, several months prior it's up to the supplier to forecast accordingly, and my bet is on them over forecasting for other third parties and when that didn't happen they are indicating lack luster from Apple.
Classic. The best part is that Apple can now buy another $4 or $5 Billion allocation and get a steeper discount this time around.
If customers are willing to pay a premium for an Apple product, it would be poor business to say, "I know you think it's worth $700, but we're feeling generous. Would $500 be too much?"
What some are missing is it can take a huge capital outlay to come up with the "next big thing". If you simply double the raw costs of your product there probably won't be enough profit to allow for serious development and investment in new tech and products.
LOL, like everyone said this is supply and demand?. basic economic 101. It is not how much cost added but the perceived value. Look at different car trim package and you will understand, they add some stupid trim and other items like power window and the cost went up $3,000. Does it cost $3,000 more to make?? Hell no and I would like to see you argue with the car dealer that they added only XYZ and it should cost them $500 more. Good luck.
This is a free market, you can either walk away or just buy it. Nobody is forcing you. Apple is in a business to make MAXIUM profit for their shareholders, like every other companies.
I'll ignore the patronising tone.
A car trim package is not a good analogy. Storage is fundamental to the very function of the iPad. A car trim package is for vanity, not function. A better comparison would be the size of the car's engine. I'm European so you might find the engine sizes strange!
If I got a 1,000cc engine in my car for $10,000 but had to pay $14,000 for a 1,200cc engine you bet your bottom dollar I'd be arguing with the dealer! And what's more, I'd have a chance of getting a deal out of it.
Another flaw in this argument is that it assumes market forces affect the iPad at this point. The competition is so at sea that the iPad is the only option for any sensible tablet consumer at the moment. That leaves Apple with a pseudo-monopoly position in this segment.
Anyway, I rescinded my complaint because the units weren't clear on the bits/bytes thing when I read the article this morning. I just wanted to argue this point because I didn't like your analogy :P
I'm quite relieved to not have to feel angry with a company I admire, truth be told.
I'll ignore the patronising tone.
A car trim package is not a good analogy. Storage is fundamental to the very function of the iPad. A car trim package is for vanity, not function. A better comparison would be the size of the car's engine. I'm European so you might find the engine sizes strange!
If I got a 1,000cc engine in my car for $10,000 but had to pay $14,000 for a 1,200cc engine you bet your bottom dollar I'd be arguing with the dealer! And what's more, I'd have a chance of getting a deal out of it.
Another flaw in this argument is that it assumes market forces affect the iPad at this point. The competition is so at sea that the iPad is the only option for any sensible tablet consumer at the moment. That leaves Apple with a pseudo-monopoly position in this segment.
Anyway, I rescinded my complaint because the units weren't clear on the bits/bytes thing when I read the article this morning. I just wanted to argue this point because I didn't like your analogy :P
I'm quite relieved to not have to feel angry with a company I admire, truth be told.
I wasn't going to continue with this discussion but I'm amazed that it sounds like you're suggesting that 200cc more engine should have a 1:1 ratio on the cost. You're not considering the increased performance, the other parts of the engine, or even if that additional size was achieved while keeping the average fuel usage the same as the smaller engine, not to mention the added value. What if the extra 200cc was accomplished whilst keeping the weight of the engine the same or lower through the use of a more complex physical design and/or alloy?
Furthermore, I don't think it's been mentioned that denser NAND are often slower even with increased costs. You can easily see this with MicroSD cards where the class number represents the Mb/s. Apple's on-board NAND appears to be quite fast compared to the competition as noted by AnandTech and other sites which may be one reason for it's perceived speed advantages over its competition. Despite the cost disparities being a industry phenomenon — not an Apple phenomenon — you can't look at one single aspect of any product and expect to make a valid comparison.
Can someone explain to me how a 64Gb module that costs Apple just $6.27 more than the 16Gb module costs the consumer $200.00 more!?!
That's not taking into account the savings Apple makes by pre-buying in bulk.
I love Apple's products but disgraces like this do leave a bad taste in the mouth.
Well, not to get all 'technical', but you need 8 of those parts, so 8x$3.12 = $24.96, and 8x$9.39=75.12, so it's a $50 difference, not a $6 difference.
Though even then it sure would be nice if it was + $50 to the 32GB and + $100 for the 64GB at least instead of the current $100/$200 spread...
I wasn't going to continue with this discussion but I'm amazed that it sounds like you're suggesting that 200cc more engine should have a 1:1 ratio on the cost. You're not considering the increased performance, the other parts of the engine, or even if that additional size was achieved while keeping the average fuel usage the same as the smaller engine, not to mention the added value. What if the extra 200cc was accomplished whilst keeping the weight of the engine the same or lower through the use of a more complex physical design and/or alloy?
Furthermore, I don't think it's been mentioned that denser NAND are often slower even with increased costs. You can easily see this with MicroSD cards where the class number represents the Mb/s. Apple's on-board NAND appears to be quite fast compared to the competition as noted by AnandTech and other sites which may be one reason for it's perceived speed advantages over its competition. Despite the cost disparities being a industry phenomenon ? not an Apple phenomenon ? you can't look at one single aspect of any product and expect to make a valid comparison.
I'm not suggesting a 1:1 ratio. Your reasoning is flawed. The engine is not the entirety of the product; it is only part of the cost of the car. The two cars have the same chassis, the same wheels, the same upholstery, the same electrics, the same windows, the same paint etc. etc. Increasing the cost of the engine would not increase the cost of the car in the same proportion because the base of the car has not changed.
E.g. If the car without the engine costs $4000 to produce and the 1 litre engine is $1000 and the 1.2 litre engine is twice the price (ridiculous, I know but I am exaggerating to make the point clear) at $2000 then car 1 costs $5000 and car 2 costs $6000 to produce. The cost of the engine is double but the overall cost of the car is only 20% more. The ratio of the two cars' costs is 1:1.2 but the price I'm paying is 1:1.4. And that's after a ridiculous imaginary price for the 1.2 litre engine.
If that cost then got passed on to me as a $4000 premium I'd not be happy.
I chose those two sums of money (10k and 14k) because they are the proportionally the same as the 16 and 64 GB iPad prices.
You make an interesting point about Apple's memory speed. I didn't realise that and it does explain a lot although why iOS devices seem so much more responsive on the touch level I don't know.