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Originally Posted by pl001
You are responding to me but you are taking bits and pieces from several people as if we are one.
Here's the bottom line. It is my opinion that the main reason Apple has non-removable storage is greed. I base that on the large overall profit margins on their hardware, which far exceed any other mobile device manufacturer. I stated early on that I don't feel it is the only reason. And I and others also stated we don't support Google doing it either. Yet you chose to act as if that was never said. Why?
If you don't agree with my opinion, that's fine. It is after all an opinion and by no means an indisputable fact. So long as you read all of what I actually wrote instead of forcing pieces into the anti-Apple stereotype you like to argue about while ignoring the pieces that don't.
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I am responding to multiple bits and pieces because you addressed a reply I made to someone else, while referencing the arguments that person made. You're not being stereotyped, it's just the flow of conversation.
As I said earlier, 'greed' is not a very useful term for advancing our understanding of the economics of smartphones. It is a pejorative. 'Apple is greedy' is simply shorthand for 'Apple is bad.' People may tut tut at Google charging the same amount for upgraded storage, but they don't say things like 'Google is greedy.' They say, and I paraphrase, "oh, well, Google is offering the Nexus for so little money that they're justified in charging $100 for expanded storage" (c.f. Dave and Pat in this thread). So there is no rule or reason being applied, there is just brand loyalty and clannishness. Again, I am
not confusing their positions with your own. I am simply pointing out the overall tendency in this forum to abuse words like "greed" and "price gouging."
Back to your point about greed. First, it is a psychological term to describe people. Using it to describe a company is anthropomorphic and as such, tells us little that is useful or specific. A public company's purpose is to maximize shareholder value. Some make money selling at low cost (Walmart, Amazon), some do it by selling lesser volumes at higher cost (Apple, BMW). If both make money, which is the greediest business strategy? Is it greedier to target the high end of the market or to undercut one's competitors? It is greedier to sell devices that are subsidized by embedded advertising or is it greedier to derive 100% of your profits from your customers? You can't answer those sorts of questions by just saying "it's greedy."
Second, when people talk about greed, they always refer to the difference between the selling price and the cost of the components, e.g. $7 of storage for $100. This comes down to a question of value. Where is value? Does it reside inside the components? Is $7 distributed somewhere in the circuits and microchips? No, value is a negotiation between suppliers and distributors, inventors and manufacturers, customers and companies. Once you understand that value is not inherent in material objects, that it is a free-floating variable that depends on the perceived benefit someone derives from something measured according to what they're willing to give up to have it, then you can start having a serious conversation about pricing. People (again, not you) who say things like "An iPhone only costs $188 to build, therefore it's a rip-off" are either not sophisticated enough to grasp this concept or are trolling.
Apple's storage upgrade prices are definitely part of a business strategy to maximize profits. We are in agreement there. Beyond that, there are many more contributing factors. Apple, despite its growing mainstream success, is a luxury brand, or at least one that targets the high end of the market. As such, its pricing is a way of communicating the cachet of the brand. Joel Spolsky wrote a
great essay about pricing which explains this rather well:
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The only reason we assumed that the demand curve is downward sloping is that we assumed things like "if Freddy is willing to buy a pair of sneakers for $130, he is certainly willing to buy those same sneakers for $20." Right? Ha! Not if Freddy is an American teenager! American teenagers would not be caught dead in $20 sneakers. It's, like, um, the death penalty? if you are wearing sneakers? that only cost $20 a pair? in school?
I'm not joking around here: prices send signals. Movies in my town cost, I think, $11. Criminy. There used to be a movie theatre that had movies for $3. Did anyone go there? I DON'T THINK SO.It's obviously just a dumping ground for lousy movies. Somebody is now at the bottom of the East River with $20.00 cement sneakers because they dared to tell the consumer which movies the industry thought were lousy.
You see, people tend to believe that you get what you pay for. The last time I needed a lot of hard drive space I invested in some nice cheap hard drives allegedly designed by Mr. Porsche himself that went for about $1 a gigabyte. Within six months all four had failed. Last week I replaced them with Seagate Cheetah SCSI hard drives that cost about $4 a gigabyte because I've been running those since I started Fog Creek four years ago without a glitch. Chalk it up to "you get what you pay for."
There are just too many examples where you actually do get what you pay for, and the uninformed consumer is generally going to infer that the more expensive product is better. Buying a coffee maker? Want a really good coffee maker? You have two choices. Find the right issue of Consumer Reports in the library, or go to Williams-Sonoma and get the most expensive coffee maker they have there.
When you're setting a price, you're sending a signal. If your competitor's software ranges in price from about $100 to about $500, and you decide, heck, my product is about in the middle of the road, so I'll sell it for $300, well, what message do you think you're sending to your customers? You're telling them that you think your software is "eh." I have a better idea: charge $1350. Now your customers will think, "oh, man, that stuff has to be the cat's whiskers since they're charging mad coin for it!"
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Moreover, in Apple's mind, the value of storage is related to the overall value of an iOS device. A 32GB SD card plugged into a turd sandwich isn't very interesting. But a 32GB upgrade to your iPhone storage means twice as many apps from the word's largest App Store, twice as much music and as many movies/TV shows from iTunes, the world's largest music store, twice as many photos with the best mobile camera, and so forth. In their minds (or at least their sales pitch), they're not selling dumb space, they're selling an improved user experience. You cannot reduce the product to merely the sum of its components.
A disclaimer: I am not trying to defend Apple's pricing, merely explain it. I find their upgrades very expensive for the benefits they offer and almost only ever buy the base models of their products, which I consider offer the best value. But to explain Apple's pricing as greed is uninteresting, and to describe those who find their products represent a good value as sheeple is ignorant.