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Why do we pay so much for extra storage in tablets and smartphones?

Have you ever wondered why we have to pay so much for extra storage in tablets? Is this just a sneaky way for manufacturers to boost their profits?
September 10, 2012

If you take a look on Amazon right now you’ll see that you can buy a 32GB microSDHC for under $20. You can get a 16GB card for under $10. An 8GB card is even less than that. So why are we paying so much extra for on-board storage in our tablets?

The 16GB version of the Nexus 7 costs $50 more than the 8GB version.

The 7-inch Kindle Fire HD is $199 for the 16GB version and $249 for the 32GB version. If we jump up to the 8.9-inch Kindle Fire HD then it is $299 for the 16GB version and $369 for the 32GB version. For the top of the line 8.9-inch Kindle Fire HD with 4G LTE you’ll pay $499 for the 32GB version and $599 for the 64GB version.

If you think those markups are extreme just wait for the iPad. The 16GB iPad costs $500, but you’ll pay $600 for the 32GB model and $700 for a 64GB model.

If you’re wondering why none of these devices has a microSD card slot then your answer is clear to see. Just to really rub it in, the price of Flash storage is actually dropping. An analyst at RBC Capital Markets estimated that the memory that Amazon uses costs about 70 cents a gigabyte, while Apple’s memory costs about 40 cents a gigabyte. So 16GB costs Amazon about $11.20 and it costs Apple about $6.40.

Apple does exactly the same thing with the iPhone. The higher the storage, the more you’ll pay, and the more profit Apple makes proportionately. Basically, it seems as if it is viewed, by the aforementioned, as a convenience fee to get a higher amount of storage at an increasingly higher cost per gigabyte.

It’s a straight rip off, pure and simple. Anyone disagree? Sound off in the comments.