iPad 4 With 128 GB Overpriced? Apple Spends Just $35.20 More For It

By Binu Paul email: b.paul@mobilenapps.com | Feb 04, 2013 07:08 AM EST

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Apple's move to introduce a 128GB iPad has definitely earned a huge fanfare, and it appears that Apple has identified 'storage' as the money-making aspect of its business. However, many are skeptical of the pricing of the newly announced higher-capacity iPad and it's widely reported that customers will end up paying considerably more than what it costs Apple for the added 64 GB of memory on 128 GB iPad 4 over the 64 GB model.

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According to Apple announcement, the Wi-Fi-only model is priced at $799 and the iPad Wi-Fi + Cellular model comes with a $929 price tag. The new pricing would mean that Apple has increased the iPad price by $100 for doubling the storage capacity for both the WiFi-only model and the 4G LTE enabled model.

However, according to Andrew Rassweiler of IHS, Apple spends just around $35.20 more for the 64GB of flash memory on the 128 GB model. "Apple's cost per GB in NAND flash is currently around $0.55/GB. Last year it was closer to $0.90/GB," Rassweiler said to CNET.

"So it's clear that pricing has eroded to the point that Apple can afford to offer 2X memory configurations while maintaining the kind of incremental profit margins they were making on the memory upgrades a year ago."

With the heavy price tag, Apple puts the device in competition with full-featured notebooks, ultrabooks, and hybrid PC/tablet devices and even to its own MacBook Air. The Cupertino tech giant seems to have its target quite clear as it identified its customers in the group of 'enterprises, educators and artists'. "With twice the storage capacity and an unparalleled selection of over 300,000 native iPad apps, enterprises, educators and artists have even more reasons to use iPad for all their business and personal needs," Apple said in its press note announcing the larger iPad.

The 128GB iPad will hit the stores on Feb. 5 in the U.S. The increasing criticism heard over its premium prices may have played a part in Apple's dethroning from the world's most valuable company position as its market capitalization was ranked below Exxon Mobil. While the iPhone maker's market capitalization was $412.7 billion with recent loses, oil and gas company Exxon Mobil reported a market cap of $417.2 billion.

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