How Smartphone Manufacturers Are Taking You to the Cleaners on Storage Cost

When smartphones were first introduced to the market, many people were perplexed to see that each storage tier jumped the cost of the device up $100. It was newer technology, so many people shrugged it off. Years later, the cost of flash memory (and storage in general) has decreased dramatically, but smartphone manufacturers are still charging $100 more for each upgrade. What’s the deal?

Manufacturing Cost

If you wanted to buy a subsidized 16GB iPhone 6, then you would be looking at spending $299. From there a 64GB version will run you $399, and a 128GB iPhone will run you a whopping $499–still subsidized, mind you. According to a new report coming from TechInsights, a patent consultant that performs gadget tear-downs, 16GB of flash storage runs Apple around $7.55. Doing the math, that means adding 64GB of memory should run Apple around $30, but we have to remember that Apple is already paying the cost for 16GB, since that’s what is included in the base model; that brings the cost down to $22.65, but they charge their customers $100 for the upgrade. Similarly, users buying the 128GB version are paying an extra $200 over the base model, while the extra storage only cost Apple around $60. Apple isn’t the only company to blame, however. Samsung actually has higher profit margins on its 128GB Galaxy S6 since it only costs them $44 to include the extra storage.

Micro SD Cards

For the longest time, microSD cards have been one of the best ways to mitigate the need for buying a smartphone with more on-board storage. Why pay an extra $100 for increased storage when you can purchase a microSD card for just around $25 on Amazon? The unfortunate reality is that many smartphone manufacturers are beginning to omit microSD card slots from their phones altogether, forcing power users to fork over their hard-earned cash. Now users are going to need to find an alternate way to store their information.

Looking to the Cloud

A lot of smartphone enthusiasts have been turning toward a cloud solution as an alternative solution to having extra on-board storage. Apps like Spotify and Google Music allow users to stream music to their phone, and many companies like DropBox, Amazon, Google, and Microsoft all have cloud storage solutions that are free for most users. The biggest caveat is that users will typically need to have a healthy data plan or be surrounded by Wi-Fi that is easily accessible. The unfortunate truth is that paying for larger data plans and subscriptions for streaming services end up being more expensive in the long run when compared to the $100 smartphone users were trying to save in the first place.


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