The Tablet Memory Mark-up Scandal

[Arthur]

Isn't it about time we had more storage in our tablets (and smartphones) for less money?

 

Source: Which?

 

It costs tablet manufacturers such as Apple less than £6 to add an extra 16GB of tablet memory. But they'll charge you as much as £80 for the privilege.

 

Which? research has uncovered outrageous pricing mark-ups in the tablet industry. If you buy a tablet with extra space for storing your apps and files, you could pay up to £80 for a piece of extra storage that costs manufacturers less than £6 at market prices.

 

The true cost of tablet memory

There can be huge differences between tablet manufacturers in what they choose to charge customers for extra storage space. If you step up from a 16GB model to a 32GB model, the difference can be anything from £40 to £80.

 

Most tablet manufacturers don't produce their own Flash storage. Instead, they buy it from third-party component manufacturers. Although individual deals between suppliers and manufacturers remain secret, Flash memory is a traded commodity, and prices are tracked by market watchers such as DRAMeXchange.

 

According to market prices of Flash memory tracked by DRAMeXchange from August to October this year, the memory used in tablets costs on average £5.95 for a block of 16GB of storage. For large companies buying in bulk, the prices can be even lower. Apple uses a different Flash memory (MLC) to its rivals, and this traded at an average price of £5.85 for 16GB in October.

 

Yet despite these paltry market costs, Apple charges its customers £80 more for its 32GB iPad than for its 16GB model. That’s a profitable mark-up of at least 1,267%, based on the market price of £5.85.

 

Apple charges a premium that’s far above what most of its rivals add on for an extra 16GB of storage space. Amazon, for example, charges £40 more for a 32GB Kindle Fire HDX 8.9, compared to the 16GB model. Google adds a sizeable £70 if you opt for a 32GB Nexus 10 rather than a 16GB model.

 

Insider verdict: ‘scandalous’

These shocking figures are backed up by industry insiders who buy blocks of storage from the same supply chains used by tablet manufacturers.

 

Chillblast is a UK-based computer manufacturer specialising in high-end machines. It buys its Flash memory from some of the same suppliers who make the Flash storage components found in tablets. ‘16GB of Flash memory is mind-numbingly cheap now,’ says Chillblast’s Ben Miles. ‘As a general rule, for manufacturers like ourselves, Flash costs less than 40p per GB, so for companies to charge so much for an extra 16GB seems scandalous.’

 

And it seems there are few additional manufacturing overheads created by the addition of extra storage. ‘The difference in cost between manufacturing a product with 16GB and 32GB of memory would probably equate to less than $10,’ says Miles.

 

http://snag.gy/NAGuy.jpg

[rich_tech]

its always been a ripoff the memory available to these devices installed by manufacturer, 16gb on an ipad is low if you dont want to be syncing it a lot (I know that feeling), will be interesting to see if anything changes with this, I very much doubt it though

[Garacesh]

Bit of a necrobump.

 

This is why I refuse to buy any phone/tablet/etc without expandable memory. I have plenty of MicroSD cards I can use.

Heck, even my MP3 player has a MicroSD slot!

[laserblazer]

16Gb internal in a Hudl and a slot for a microSD card. Cheap as chips.

[Garacesh]

16Gb internal in a Hudl and a slot for a microSD card. Cheap as chips.

Was going to buy my own - Mother's done that for me for Christmas. I'll be doing exactly that, stick a microSD in it.

[localzuk]

Yup. Same concept as any manufacturer and adding extra RAM. Buy the RAM on its own, £80. Buy it as part of a system build? £200+.

[Arthur]

will be interesting to see if anything changes with this, I very much doubt it though

The OnePlus One smartphone comes with 64GB of flash memory for £269. About time!

 

www.engadget.com/2014/04/23/oneplus-one-launch-ceo-pete-lau-interview

 

Now we just need the same to happen with tablets!

[Bananas]

Sounds nice, I want one

[hawc]

My nexus 5 was £299 for 16gb and £339 for 32gb. This works out at £40 for 16gb which means that each gb is worth £2.50. This means that each megabyte costs £0.002. So actually, looking at it that way, it is quite good.

[Arthur]

This works out at £40 for 16GB which means that each GB is worth £2.50. This means that each megabyte costs £0.002.

Each gig costs £0.83 on the OnePlus One. A megabyte would therefore be £0.000814.

 

looking at it that way, it is quite good.

It could be much better though!

 

Even with 'cheap' smartphones like the Nexus 5, we are still being charged more than we should be.

[matt40k]

Doesn't that extra 16gb get backed up to the cloud?

 

Personally I often find the people who get the extra storage\ram are the fools who'd buy anything if it was "better", I know Microsoft DBA who has a £2k+ MacBook Pro which he uses for Facebook and not much else.

[Arthur]

Doesn't that extra 16GB get backed up to the cloud?

Unfortunately not.

[Garacesh]

The OnePlus One smartphone comes with 64GB of flash memory for £269. About time!

 

www.engadget.com/2014/04/23/oneplus-one-launch-ceo-pete-lau-interview

 

Now we just need the same to happen with tablets!

 

Ooh, fancy. Looks slick, sounds promising, and comes with CyanogenMod so it either doesn't come with crapware, or you can actually remove (rather than simply disable) the programs you don't want

[tmcd35]

I'm actually surprised Which? consider this a "news" story! really? Next they'll be telling us the sky is blue!

 

Playing devils advocate - When storage capcity is the only real differentiator (sp?) between models what are manufacturers supposed to do? Make one model with the highest possible memory capacity and leave it at that? Have a £16 price gap between two models in a range (who'd buy the cheaper model, what would be the point)? Sell the lower memory model at a loss? Provide SDHC card slots for cheaper end user expansion (I'm looking at you Apple)?

[Garacesh]

Provide SDHC card slots for cheaper end user expansion

Yes. Precisely.

[Oaktech]

I'm actually surprised Which? consider this a "news" story! really? Next they'll be telling us the sky is blue!

 

Playing devils advocate - When storage capcity is the only real differentiator (sp?) between models what are manufacturers supposed to do? Make one model with the highest possible memory capacity and leave it at that? Have a £16 price gap between two models in a range (who'd buy the cheaper model, what would be the point)? Sell the lower memory model at a loss? Provide SDHC card slots for cheaper end user expansion (I'm looking at you Apple)?

 

I've never understood the need to offer multiple memory options.

 

"I spend teh moneyz I wnat all teh memoryz"

 

How much can you design your device to take... Put that much in, price it accordingly, customers either want the device or don't and will pay up accordingly. You simplify your marketing, and your manufacturing.

 

These days I would be expecting 64gb from anything other than a basic phone, and yet the manufacturers insist on bringing them to market with 4gb and a slot or 16/32 no slot and a price premium.

[Garacesh]

These days I would be expecting 64gb from anything other than a basic phone, and yet the manufacturers insist on bringing them to market with 4gb and a slot or 16/32 no slot and a price premium.

I'm perfectly happy with 4GB internal as-standard and an SD card slot in theory. The bit that messes it about is when apps can't natively be stored on the SD card (even though the majority of them actually work if you force them to move over). If that 4GB fully supports the operating system (and has adequate space for any upgrades that might be pushed out by the supplier/network in the future) then can we not just let the consumer decide how much memory they need?

[localzuk]

I have yet to fill the space on any phone I've had - and I use them heavily. I've now had 3 android phones over the last 5 or so years, and never swapped the MicroSD cards in the first 2, and my current phone has no expansion capabilities.

 

Why do people *need* that much space on a phone?

[Arthur]

Playing devils advocate - When storage capcity is the only real differentiator (sp?) between models what are manufacturers supposed to do?

The obvious thing to do would be to give the base model 32GB of storage, the next model up 64GB and the top-end model 128GB. The prices could either remain the same or be lowered and manufacturers would still make plenty of money.

 

Provide SDHC card slots for cheaper end user expansion.

SD cards have their own set of problems though.

[Oaktech]

Why do people *need* that much space on a phone?

 

I've got 4gb on board my Huawei P1, it's filled with apps and the 2 beefy OS updates i've had... I've got a 32gb card which has 12gb of map data for Maverick on it, 8 gb of gym music, 400mb of tapped out and about 2gb of photos.

 

Thats why I need that much space on a phone. I also use it to watch TV when I'm away from home and the buffering for some of the streaming services demand a significant wadge of storage.

[Garacesh]

I have yet to fill the space on any phone I've had - and I use them heavily. I've now had 3 android phones over the last 5 or so years, and never swapped the MicroSD cards in the first 2, and my current phone has no expansion capabilities.

I've used the same SD card across three phones now, so nearly 5 years. At 8GB, I should probably get a new one soon, but I still have difficulty filling it. I'm not a family man so I don't take a lot of photos of my kids etc (which seems to be the most common way to eat up smartphone storage). I'm a firm believer of not using your phone as an mp3 player to save battery life, so I have a separate physical device for that, any photographs/screenshots I take get transferred to my PC pretty quickly or I decide 'meh' and delete them.

 

The obvious thing to do would be to give the base model 32GB of storage, the next model up 64GB and the top-end model 128GB. The prices could either remain the same or be lowered and manufacturers would still make plenty of money.

 

SD cards have their own set of problems though.

Bit of a dilemma. For the extra £6 (if priced at-cost) I'd buy the version with more memory (probably the 64GB one), even though I definitely don't even need 32GB. Thing is, if they priced memory at-cost or near-cost, there's no reason to produce multiple different handsets, which means no profit-whoring on overpriced memory upgrades. I suspect a large portion of their revenues come from this.

 

Also, what're the 'own set of problems' that SD cards have? I can't say I've experienced any issues across phone and tablet.

 

I've got 4gb on board my Huawei P1, it's filled with apps and the 2 beefy OS updates i've had... I've got a 32gb card which has 12gb of map data for Maverick on it, 8 gb of gym music, 400mb of tapped out and about 2gb of photos.

 

Thats why I need that much space on a phone. I also use it to watch TV when I'm away from home and the buffering for some of the streaming services demand a significant wadge of storage.

Proof that limited internal storage and an SD card slot works just fine

[Oaktech]

 

 

Proof that limited internal storage and an SD card slot works just fine

 

I limit myself... Trust me, if I had the space, I'd have an offline copy of the internet in there!

[Garacesh]

Yes, but if you really wanted to do that, you could go and buy a bigger SD card.

(Not one big enough to backup the internet, mind you, but you get my point.)

[tmcd35]

I've never understood the need to offer multiple memory options.

 

It's marketing, and appealing to the widest demographic. One customer might be put off by paying extra, be it only £16, for 64gb when they don't even need 16gb. Another might be put off by no 64gb model being available.

 

Multiple memory options make sense, the problem comes with pricing them too closely as you then end up pricing lower models out of the market.

 

Why do people *need* that much space on a phone?

 

My phone performs two essential functions, for me - MP3 player and sat nav. Sat nav isn't so bad on memory - but we are talking locally stored maps, not Google "cloud based" Maps. For music, I wan't al my music available all the time. I use MP3 for widest compatibility. Prefer 320kbps encoding, etc. I have over 5000 songs, and growing. My 64Gb iPhone has 12Gb left available! I'm seriously considering a 128Gb SDHC witht he next phone (future proofing).

 

The obvious thing to do would be to give the base model 32GB of storage, the next model up 64GB and the top-end model 128GB. The prices could either remain the same or be lowered and manufacturers would still make plenty of money.

 

Playing devils advocate - from a manufacturers point of view. There's a market for these different storage options. But reflecting the true cost differential will destroy that market. Only having the highest option, at the best price, might be off putting to customers who don't need that much storage.

 

I'm not saying I agree with the markups being given. It's just hard to see how companies are supposed to differentiate between two/three/four otherwise identical products?

 

Personally I'd favour the lowest memory config approach, supply an SDHC slot, and use processor and screen size as the model differentiators. But then I'm not in business and don't have to answer to shareholders...

[Oaktech]

Yes, but if you really wanted to do that, you could go and buy a bigger SD card.

(Not one big enough to backup the internet, mind you, but you get my point.)

 

I do, and I could... but this phone only reads the first 32gb of it. I tried with the 64gb card from my Missus' tablet!

 

Roll on new phone time in September!