Apple 2.0: Outside Reality, As Usual.

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Philip Elmer-DeWitt rarely writes anything that makes much sense. He jabs at Apple, but his best shots are the kind Mohammed Ali would be throwing today.

Most of the time I just ignore the guy, shaking my head. Still, every now and then he exceeds a threshold and I feel like I should point it out.

Recently Philip decided that he didn’t like what Apple’s charging for storage. After showing prices for the iPod touch, he brilliantly asks this:

On second glance, however, there seems to be something wrong here. Why does a $100 bump in price buy you 8 GB of memory in the the first instance, but an extra 16 GB in the second?

Then, intrepid reporter that he is, he looks at iPhone prices, determines that Apple’s charging $100 for 8GB just like the touch, and asks another deep, probing question:

Why does Apple charge $12.50 per gigabyte in all models except the 32 GB iPod touch, where it’s $6.25 per gig?

He’s got Apple reeling now. Will they ever be able to wriggle out of his clutches? Ha! Before they can even try, he moves in for the kill:

Why does Apple charge $999 for the 64 GB solid-state drive in the MacBook Air? If you do the math, that’s $15.60 per gig of NAND Flash memory, more than double what Apple charges for the same stuff in the new iPod touch.

Philip’s hard-hitting expose is complete, and all the tech world trembles at what he might reveal next.

Well, except for one thing…

I think Philip Elmer-DeWitt is insane.

Here are some questions for you, Philip:

  • Why has every hard drive since the beginning of time provided more storage/$ as you go higher in capacity? I mean, if you “do the math” you’ll see more GB per dollar in a larger drive than a smaller one of the same make/model/manufacturer.
  • Why have I not seen the 64GB SSD drive available as a laptop option for less than $850 (and as high as $1,300)? Everyone is selling them for “more than double” the price of NAND Flash memory. That’s because it’s a new type of device, not just a big 64GB stick. You should really let that market mature a bit before criticizing the prices.
  • Why has Apple’s iPod line always provided more storage/$ in similar models as you move up the line? Yep, just like with hard drives.
  • Why has everyone else’s portable devices done the same?
  • Why does a 2GB RAM stick not always cost exactly twice that of a 1GB, and why does a 4GB not always cost twice that of a 2GB? (Don’t even get me started on 8GB sticks.)
  • Why does a 512MB SD (or any other storage card) not cost half that of a 1GB card?

Clearly, I could go on. The point is that Philip has not brought anything new to light. Had he bothered to “do the math” on just about any memory/storage prices he would have seen this.

OK, maybe Philip isn’t insane, but then he’s certainly ignorant of storage prices — no matter the medium, size, or reseller. I know he’s just trying to cast Apple Steve Jobs in a bad light, but it can’t be done from what he published.

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2 thoughts on “Apple 2.0: Outside Reality, As Usual.

  1. If that was the point of his article, then he made it very badly. You can’t say Apple is over-charging by comparing only Apple’s prices. You’d have to compare them to Dell, HP, Bob’s Storage Shack and Pizza Emporium, etc.

    Philip didn’t do that.

    He tried to make a case against Apple using only Apple’s prices, when the same relative thing is going on everywhere.

  2. I don’t know. I think there was a good point in Philip’s article. Apple does the same thing with RAM, which they grossly over-charge for.

    But…if people are willing to pay it, a company is going to take advantage of it.

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