Apple spends just $35.20 more on producing a 128 GB iPad 4 over a 64 GB model, while consumers pay $100 more.
An analyst has said that consumers are 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.
The new models are priced at $799 for the 128 GB WiFi only model, while the version with 4G LTE connectivity will cost consumers $929. For both the WiFi only model and the 4G LTE enabled model the added price for doubling the storage capacity is $100 for each step.
Apple is spending around $35.20 more for the additional 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," said Andrew Rassweiler of IHS. "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."
Apple, which has been criticized for its premium prices (Defended using the iPad Mini's price point, which is priced at $329 but costs Apple $188 to build), recently lost its place as the world's most valuable company.