Storage Pricing

Storage markup exploitation refers to the practice of charging excessive premiums for storage upgrades while simultaneously removing expandable storage options like microSD slots.

Overview

Manufacturers charge $100-300 for storage upgrades that cost them $5-15 in components. By removing microSD slots (2010-2020), consumers lost the ability to add 1TB for $50.

Cost Reality

Actual Component Costs (2024)

• 128GB NAND flash: $8-12
• 256GB NAND flash: $15-20
• 512GB NAND flash: $30-40
• 1TB NAND flash: $60-80

Consumer Prices

• 128GB → 256GB: +$100-200
• 256GB → 512GB: +$200-300
• 512GB → 1TB: +$300-500

Markup Calculation

• Actual cost difference (128→256GB): $7
• Charged difference: $150
• Markup: 2,043%

MicroSD Removal Timeline

The Elimination

• 2014: Most flagships have microSD
• 2015: Galaxy S6 removes microSD (backlash)
• 2016: Galaxy S7 brings it back
• 2017: Google Pixel never includes it
• 2018: OnePlus claims "confusing for users"
• 2020: Galaxy S21 removes permanently
• 2023: Only mid-range/budget phones retain

Manufacturer Excuses Debunked

"MicroSD is slower"

• Reality: A2 cards reach 160MB/s
• App performance identical in testing
• Users can choose speed vs capacity
• Internal storage also varies in speed

"Confuses users"

• Reality: 2 billion Android users managed fine 2010-2015
• Windows has drive letters for 40 years
• Digital cameras use SD cards without issue
• Nintendo Switch uses microSD successfully

"Security concerns"

• Reality: Encryption available since Android 4.0
• Adoptable storage merges SD securely
• iOS has no SD yet same security issues
• Corporate claim without evidence

"Reliability issues"

• Reality: Quality SD cards very reliable
• Internal NAND can also fail
• SD failure = replace card, NAND failure = replace phone
• Redundancy improves reliability

Price Manipulation Strategies

Base Model Crippling

• Deliberately inadequate base storage (64-128GB)
• System/apps consume 20-30GB
• Forces upgrade to usable tier
• "Anchoring" makes upgrade seem reasonable

Bundle Forcing

• Cannot buy just storage upgrade
• Must buy higher tier with unwanted features
• Example: Want 512GB iPhone? Must buy Pro model

Psychological Pricing

• $999 vs $1099 seems "only $100 more"
• Percentage markup hidden
• Compare to $50 microSD alternative blocked

Financial Impact Analysis

iPhone Storage Profit (Estimated)

Base iPhone 15 128GB: $999

• Component cost: ~$450
• 256GB version: $1099 (+$100)
• Extra NAND cost: $8
• Pure profit per upgrade: $92
• Units sold with upgrade: ~60 million/year
• Storage upgrade profit alone: $5.5 billion/year

Industry Wide

• 1.5 billion phones sold annually
• ~40% buy storage upgrade
• Average upgrade premium: $150
• Annual storage markup profit: $90 billion

Consumer Loss Calculation

Direct Losses

• Forced storage upgrades: $150-300 per phone
• Lost SD card option: $50-100 value
• Cloud storage subscriptions: $2-10/month
• Total per user: $200-500 per device cycle

Indirect Losses

• Cannot transfer storage to next phone
• Locked into ecosystem (photos/videos)
• Data overage charges
• Lost productivity from storage management

Cloud Storage Conspiracy

The Dual Profit Model

1. Remove local storage options 2. Provide inadequate base storage 3. Sell expensive upgrades 4. When full, sell cloud storage 5. Monthly recurring revenue forever

iCloud Example

• 5GB free (unchanged since 2011)
• 50GB: $0.99/month
• 200GB: $2.99/month
• 2TB: $9.99/month
• Lifetime cost: $1200+ vs $50 SD card

Market Collusion Evidence

Simultaneous Changes

• All manufacturers removed SD slots within 2 years
• Identical storage tiers (128/256/512)
• Similar pricing gaps ($100-200)
• Same excuses given

Patent Pooling

• SD card technology openly licensed
• No technical barriers
• Active choice to exclude
• Coordinated market behavior

Environmental Crime

Forced Obsolescence

• Phone functional but storage full
• Cannot expand, must replace
• 300 million phones discarded annually
• Preventable with $20 SD card

Resource Waste

• Rare earth mining for new phones
• Energy cost of manufacturing
• Shipping and packaging
• All for want of storage slot

Legal Actions

Antitrust Investigations

• EU investigating storage pricing (2023)
• South Korea fair trade probe (2022)
• Class action lawsuits in preparation

Proposed Regulations

• Mandatory expandable storage
• Price transparency requirements
• Markup limitations
• Bundling prohibitions

Consumer Alternatives

Current Options

• USB-C flash drives (inconvenient)
• Wireless storage devices (battery drain)
• Cloud services (privacy concerns)
• NAS devices (not portable)

Resistance Methods

• Buy base model + cloud alternative
• Support manufacturers with SD slots
• Used market with adequate storage
• Demand transparency in pricing

See Also

• MicroSD Card Removal Timeline
• NAND Flash Pricing History
• Cloud Storage Lock-in
• Planned Obsolescence
• Price Fixing

References

[1] NAND Flash spot prices - DRAMeXchange [2] iPhone component costs - TechInsights teardown [3] Samsung earnings reports 2015-2023 [4] EU Digital Markets Act investigation