Apple is raising its profit margins by charging a premium for storage: Report

tech2 News Staff
Amazon will add Apple products to its official Apple at Amazon page.

If Apple's ludicrous iPhone pricing isn't bad enough, a handful of new reports now indicate that the company could be minting money by overcharging for the 512 GB variants of the phones.

Apple is apparently charging its customers up to three times more per GB of storage than they're paying their suppliers. According to a report in Bloomberg Businessweek, Apple is making more money by >"wringing more profits from parts." The report states that upgrading components like storage is cheap since it's only a small chip that needs to be replaced. Bloomberg estimates that Apple is earning an additional $241 in profit over the cost of the 64 GB variant of its new iPhones.

In other words, Apple's profits per unit phone, just on storage alone, is higher than the cost of a brand-new >Moto One Power smartphone. And this is just based on US pricing. The 512 GB variant of the iPhone XS Max is priced at a whopping Rs 1,44,900 in India, Rs 47,000 higher than equivalent US pricing.

As GSMArena notes, there is also evidence that those who purchase the higher capacity iPhones tend to spend $40 more per month, on average, on Apple services, than the average consumer.

There is also speculation that Apple is only paying its suppliers 25 cents/GB, but charging its customers 75 cents.

Of course, these figures are just estimates and the exact profit margins for Apple are an unknown quantity.

Also See: Airtel to start doorstep delivery of Apple iPhone XS, XS Max from 28 September

Apple iPhone XR, XS, XS Max prices out: XS Max with 512 GB comes for Rs 1.45 lakh

The iPhone XS, XS Max, XR worth the cost as they replace other gadgets: Tim Cook

Read more on News & Analysis by Firstpost.