Wednesday, November 20, 2013

Apple's Profit Margins and Changing Mobile Storage Needs On iOS Devices

Everyone knows that when Apple increase the GB storage on the iPad with a $100 increase does not really mean that Apple's memory cost also double.  If anything, Apple is making more money when an user buys a 32 GB model of the iPad or iPhone over the 16 GB models.  And users are happy to fork over to Apple $100 for the 32 GB, $200 more for the 64 GB model, and $300 more for the 128 GB version.  I did with the iPad Air.

There are a couple of implications for Apple and mobile computing.  Both speaks volumes about where we are headed.

First, Apple's margins should increase for this quarter.  Why is this important to a blog only about state of Apple mobile?  It says that Apple is skating to where the puck is going to be and not where its at now.  So far, we don't see any competing devices at the 128 GB end and only a few mobile devices with 64 GB.  The Surface tablets have about the same amount of storage in name as the iPads but because of the bloated state of the Windows OS, much of that storage is unable to the end users.

Second, people are willing to pay more for value.  And users like myself like to be able to carry more media and apps with us when possible.  Heck, I would have bought a 256 GB iPad Air had there been one.

If you check around, you'll find that people are buying into the higher storage iPads.  Particularly evident is lack of 64 and 128 GB models available on a consistent basis for sale at the Apple stores and in other retailers.

And consider the whole mobile plan that Apple is cooking up, including the preemptive move to a 64-bit chip architecture with the A7 chip, it means iOS devices will be able to do more and faster with each upgrade.  That would also mean that users will require more storage for media and apps.

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