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iPad specs
- Thread starter selyndra
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Why does it cost $100 more for each upgrade in storage? Someone techie explain to me where the money is going please
Really?
I mean... Really?
Ok. More storage capacity requires more expensive flash RAM modules. More expensive for the manufacturer equals more expensive for the consumer... which is you. Thus, you pay more.
Apple is very profitable. Do the 3G & GPS aspects really cost $130 to implement over the equivalent memory WiFi model? No. There's a reason they recently had the third largest market cap in the country. They make a lot of money. That money is coming from you.
It's more like $50 in materials, tops, but nonetheless it costs more for Apple to build so they charge you more. But it's not like you can crack the back open and flip a switch to go from 16 to 64GB for free. The thought that you're charged $200 more for nothing isn't correct.
Why does it cost $100 more for each upgrade in storage? Someone techie explain to me where the money is going please
Why does the ZR1 cost $107,000 while the coupe cost $49,000. They are both Corvettes so please explain where the money is going.
While you are correct, the $130 price difference is actually pretty reasonable for Apple. Dell, HP and others also charge about $130 for cellular broadband cards built-in to their laptops. For Apple to "only" charge $130 for 3G and GPS is actually quite surprising.
Every time you add materials or an upgraded component as a manufacturer you have to add the same profit margin as you make on the rest of the device. This allows you to maintain your average margins, a good thing. If you add a $25 cost item to a $100 priced item and your average margin is about $50 on that $100, you had better add at least $ 50 to the price.
More than likely you would prefer to get a bit more margin for upgraded product as your low cost entry point, product often has the lowest margin because you were trying to " rope customers in with the low price" point and up sell them if possible.
Often you round up if you can so in the example above you add $40 to the list price, and there you have it more margin on the up sell. Even better, if you think the perception of the product bears a higher price, you try to get a bit more lets say $60-70 more more the above example.
Its fun to price things, a big balancing act.
More than likely you would prefer to get a bit more margin for upgraded product as your low cost entry point, product often has the lowest margin because you were trying to " rope customers in with the low price" point and up sell them if possible.
Often you round up if you can so in the example above you add $40 to the list price, and there you have it more margin on the up sell. Even better, if you think the perception of the product bears a higher price, you try to get a bit more lets say $60-70 more more the above example.
Its fun to price things, a big balancing act.
Yes, and if you end up actually charging too much for something, sales suffer and revenue goes down. Apple doesn't seem to be having any problems like that though.
Excellent answer to the question - - pricing is an entire art and science in itself.