In what is surely absolutely no surprise to anyone, it transpires that Apple makes quite a bit of money from its highest-end iPhone XS and iPhone XS Max – the 512GB version.
According to a report by Bloomberg, Apple makes an estimated $218 more profit per iPhone sold when it happens to be in the 512GB configuration when compared with the least costly of the bunch, the 64GB model. Apple charges an extra $350 to jump from 64GB to 512GB, a move that costs it just $132.
The news that Apple has a markup that it applies to the higher storage options of its iPhones comes as no surprise to anyone, although the sheer amount of that markup may be galling for many. However, given the astronomical prices Apple charges for storage upgrades on its MacBook Pro lineup, this should perhaps be of absolutely no surprise to anyone who has been tracking storage pricing in Apple products over the years.
Apple’s increase in profit comes thanks to the constant reduction in costs when it comes to the NAND flash that Apple uses in its devices, with those prices having fallen during the last year. Apple, predictably, hasn’t passed those savings on to its customers.
The iPhone uses Nand flash memory to store photos, video clips, and most of its software. The market price of this component is about half what it was a year ago, according to InSpectrum Tech data. But Apple isn’t passing the savings on to consumers: The 78¢-per-gig charge hasn’t budged since last year. Of course, Apple uses contracts to lock in the price of such components as Nand flash, so it may not be benefiting yet from recent price declines. So far, though, storage costs customers more on an iPhone than on, say, a Samsung Note 9. Samsung Electronics Co. charges 65¢ a gig to move from the 128GB Note 9 phone to the 512GB model.
Apple doesn’t generally share the mix of iPhone sales, although it is believed that the iPhone XS Max has proven considerably more popular than the iPhone XS during the opening weekend of sales.
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