Storage Pricing: Difference between revisions
Created page with "{{Infobox|title=Storage Markup Exploitation|image=nand_flash_chip.jpg|caption=128GB NAND flash chip - Costs $10, sold as $200 upgrade|type=Price Manipulation|companies=Apple, Samsung, Google, Most OEMs|markup=1000-2000%|affected=All smartphone users|annual_profit=Estimated $50+ billion industry-wide}} '''Storage markup exploitation''' refers to the practice of charging excessive premiums for storage upgrades while simultaneously removing expandable storage options like..." |
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{{Infobox|title=Storage Markup Exploitation|image=nand_flash_chip.jpg|caption=128GB NAND flash chip - Costs $10, sold as $200 upgrade|type=Price Manipulation|companies=Apple, Samsung, Google, Most OEMs|markup=1000-2000%|affected=All smartphone users|annual_profit=Estimated $50+ billion industry-wide}} | {{Infobox|title=Storage Markup Exploitation|image=nand_flash_chip.jpg|caption=128GB NAND flash chip - Costs $10, sold as $200 upgrade|type=Price Manipulation|companies=Apple, Samsung, Google, Most OEMs|markup=1000-2000%|affected=All smartphone users|annual_profit=Estimated $50+ billion industry-wide}} | ||
'''Storage markup exploitation''' refers to the practice of charging excessive premiums for storage upgrades while simultaneously removing expandable storage options like microSD slots. | '''Storage markup exploitation''' refers to the practice of charging excessive premiums for storage upgrades while simultaneously removing expandable storage options like microSD slots. | ||
== Overview == | ==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. | 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 == | ==Cost Reality== | ||
=== Actual Component Costs (2024) === | ===Actual Component Costs (2024)=== | ||
* 128GB NAND flash: $8-12 | *128GB NAND flash: $8-12 | ||
* 256GB NAND flash: $15-20 | *256GB NAND flash: $15-20 | ||
* 512GB NAND flash: $30-40 | *512GB NAND flash: $30-40 | ||
* 1TB NAND flash: $60-80 | *1TB NAND flash: $60-80 | ||
=== Consumer Prices === | ===Consumer Prices=== | ||
* 128GB → 256GB: +$100-200 | *128GB → 256GB: +$100-200 | ||
* 256GB → 512GB: +$200-300 | *256GB → 512GB: +$200-300 | ||
* 512GB → 1TB: +$300-500 | *512GB → 1TB: +$300-500 | ||
=== Markup Calculation === | ===Markup Calculation=== | ||
* Actual cost difference (128→256GB): $7 | *Actual cost difference (128→256GB): $7 | ||
* Charged difference: $150 | *Charged difference: $150 | ||
* Markup: 2,043% | *Markup: 2,043% | ||
== MicroSD Removal Timeline == | ==MicroSD Removal Timeline== | ||
=== The Elimination === | ===The Elimination=== | ||
* '''2014''': Most flagships have microSD | *'''2014''': Most flagships have microSD | ||
* '''2015''': Galaxy S6 removes microSD (backlash) | *'''2015''': Galaxy S6 removes microSD (backlash) | ||
* '''2016''': Galaxy S7 brings it back | *'''2016''': Galaxy S7 brings it back | ||
* '''2017''': Google Pixel never includes it | *'''2017''': Google Pixel never includes it | ||
* '''2018''': OnePlus claims "confusing for users" | *'''2018''': OnePlus claims "confusing for users" | ||
* '''2020''': Galaxy S21 removes permanently | *'''2020''': Galaxy S21 removes permanently | ||
* '''2023''': Only mid-range/budget phones retain | *'''2023''': Only mid-range/budget phones retain | ||
== Manufacturer Excuses Debunked == | ==Manufacturer Excuses Debunked== | ||
=== "MicroSD is slower" === | ==="MicroSD is slower"=== | ||
* '''Reality''': A2 cards reach 160MB/s | *'''Reality''': A2 cards reach 160MB/s | ||
* App performance identical in testing | *App performance identical in testing | ||
* Users can choose speed vs capacity | *Users can choose speed vs capacity | ||
* Internal storage also varies in speed | *Internal storage also varies in speed | ||
=== "Confuses users" === | ==="Confuses users"=== | ||
* '''Reality''': 2 billion Android users managed fine 2010-2015 | *'''Reality''': 2 billion Android users managed fine 2010-2015 | ||
* Windows has drive letters for 40 years | *Windows has drive letters for 40 years | ||
* Digital cameras use SD cards without issue | *Digital cameras use SD cards without issue | ||
* Nintendo Switch uses microSD successfully | *Nintendo Switch uses microSD successfully | ||
=== "Security concerns" === | ==="Security concerns"=== | ||
* '''Reality''': Encryption available since Android 4.0 | *'''Reality''': Encryption available since Android 4.0 | ||
* Adoptable storage merges SD securely | *Adoptable storage merges SD securely | ||
* iOS has no SD yet same security issues | *iOS has no SD yet same security issues | ||
* Corporate claim without evidence | *Corporate claim without evidence | ||
=== "Reliability issues" === | ==="Reliability issues"=== | ||
* '''Reality''': Quality SD cards very reliable | *'''Reality''': Quality SD cards very reliable | ||
* Internal NAND can also fail | *Internal NAND can also fail | ||
* SD failure = replace card, NAND failure = replace phone | *SD failure = replace card, NAND failure = replace phone | ||
* Redundancy improves reliability | *Redundancy improves reliability | ||
== Price Manipulation Strategies == | ==Price Manipulation Strategies== | ||
=== Base Model Crippling === | ===Base Model Crippling=== | ||
* Deliberately inadequate base storage (64-128GB) | *Deliberately inadequate base storage (64-128GB) | ||
* System/apps consume 20-30GB | *System/apps consume 20-30GB | ||
* Forces upgrade to usable tier | *Forces upgrade to usable tier | ||
* "Anchoring" makes upgrade seem reasonable | *"Anchoring" makes upgrade seem reasonable | ||
=== Bundle Forcing === | ===Bundle Forcing=== | ||
* Cannot buy just storage upgrade | *Cannot buy just storage upgrade | ||
* Must buy higher tier with unwanted features | *Must buy higher tier with unwanted features | ||
* Example: Want 512GB iPhone? Must buy Pro model | *Example: Want 512GB iPhone? Must buy Pro model | ||
=== Psychological Pricing === | ===Psychological Pricing=== | ||
* $999 vs $1099 seems "only $100 more" | *$999 vs $1099 seems "only $100 more" | ||
* Percentage markup hidden | *Percentage markup hidden | ||
* Compare to $50 microSD alternative blocked | *Compare to $50 microSD alternative blocked | ||
== Financial Impact Analysis == | ==Financial Impact Analysis== | ||
=== iPhone Storage Profit (Estimated) === | ===iPhone Storage Profit (Estimated)=== | ||
Base iPhone 15 128GB: $999 | Base iPhone 15 128GB: $999 | ||
* Component cost: ~$450 | *Component cost: ~$450 | ||
* 256GB version: $1099 (+$100) | *256GB version: $1099 (+$100) | ||
* Extra NAND cost: $8 | *Extra NAND cost: $8 | ||
* Pure profit per upgrade: $92 | *Pure profit per upgrade: $92 | ||
* Units sold with upgrade: ~60 million/year | *Units sold with upgrade: ~60 million/year | ||
* Storage upgrade profit alone: $5.5 billion/year | *Storage upgrade profit alone: $5.5 billion/year | ||
=== Industry Wide === | ===Industry Wide=== | ||
* 1.5 billion phones sold annually | *1.5 billion phones sold annually | ||
* ~40% buy storage upgrade | *~40% buy storage upgrade | ||
* Average upgrade premium: $150 | *Average upgrade premium: $150 | ||
* Annual storage markup profit: $90 billion | *Annual storage markup profit: $90 billion | ||
== Consumer Loss Calculation == | ==Consumer Loss Calculation== | ||
=== Direct Losses === | ===Direct Losses=== | ||
* Forced storage upgrades: $150-300 per phone | *Forced storage upgrades: $150-300 per phone | ||
* Lost SD card option: $50-100 value | *Lost SD card option: $50-100 value | ||
* Cloud storage subscriptions: $2-10/month | *Cloud storage subscriptions: $2-10/month | ||
* Total per user: $200-500 per device cycle | *Total per user: $200-500 per device cycle | ||
=== Indirect Losses === | ===Indirect Losses=== | ||
* Cannot transfer storage to next phone | *Cannot transfer storage to next phone | ||
* Locked into ecosystem (photos/videos) | *Locked into ecosystem (photos/videos) | ||
* Data overage charges | *Data overage charges | ||
* Lost productivity from storage management | *Lost productivity from storage management | ||
== Cloud Storage Conspiracy == | ==Cloud Storage Conspiracy== | ||
=== The Dual Profit Model === | ===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 | 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 === | ===iCloud Example=== | ||
* 5GB free (unchanged since 2011) | *5GB free (unchanged since 2011) | ||
* 50GB: $0.99/month | *50GB: $0.99/month | ||
* 200GB: $2.99/month | *200GB: $2.99/month | ||
* 2TB: $9.99/month | *2TB: $9.99/month | ||
* Lifetime cost: $1200+ vs $50 SD card | *Lifetime cost: $1200+ vs $50 SD card | ||
== Market Collusion Evidence == | ==Market Collusion Evidence== | ||
=== Simultaneous Changes === | ===Simultaneous Changes=== | ||
* All manufacturers removed SD slots within 2 years | *All manufacturers removed SD slots within 2 years | ||
* Identical storage tiers (128/256/512) | *Identical storage tiers (128/256/512) | ||
* Similar pricing gaps ($100-200) | *Similar pricing gaps ($100-200) | ||
* Same excuses given | *Same excuses given | ||
=== Patent Pooling === | ===Patent Pooling=== | ||
* SD card technology openly licensed | *SD card technology openly licensed | ||
* No technical barriers | *No technical barriers | ||
* Active choice to exclude | *Active choice to exclude | ||
* Coordinated market behavior | *Coordinated market behavior | ||
== Environmental Crime == | ==Environmental Crime== | ||
=== Forced Obsolescence === | ===Forced Obsolescence=== | ||
* Phone functional but storage full | *Phone functional but storage full | ||
* Cannot expand, must replace | *Cannot expand, must replace | ||
* 300 million phones discarded annually | *300 million phones discarded annually | ||
* Preventable with $20 SD card | *Preventable with $20 SD card | ||
=== Resource Waste === | ===Resource Waste=== | ||
* Rare earth mining for new phones | *Rare earth mining for new phones | ||
* Energy cost of manufacturing | *Energy cost of manufacturing | ||
* Shipping and packaging | *Shipping and packaging | ||
* All for want of storage slot | *All for want of storage slot | ||
== Legal Actions == | ==Legal Actions== | ||
=== Antitrust Investigations === | ===Antitrust Investigations=== | ||
* EU investigating storage pricing (2023) | *EU investigating storage pricing (2023) | ||
* South Korea fair trade probe (2022) | *South Korea fair trade probe (2022) | ||
* Class action lawsuits in preparation | *Class action lawsuits in preparation | ||
=== Proposed Regulations === | ===Proposed Regulations=== | ||
* Mandatory expandable storage | *Mandatory expandable storage | ||
* Price transparency requirements | *Price transparency requirements | ||
* Markup limitations | *Markup limitations | ||
* Bundling prohibitions | *Bundling prohibitions | ||
== Consumer Alternatives == | ==Consumer Alternatives== | ||
=== Current Options === | ===Current Options=== | ||
* USB-C flash drives (inconvenient) | *USB-C flash drives (inconvenient) | ||
* Wireless storage devices (battery drain) | *Wireless storage devices (battery drain) | ||
* Cloud services (privacy concerns) | *Cloud services (privacy concerns) | ||
* NAS devices (not portable) | *NAS devices (not portable) | ||
=== Resistance Methods === | ===Resistance Methods=== | ||
* Buy base model + cloud alternative | *Buy base model + cloud alternative | ||
* Support manufacturers with SD slots | *Support manufacturers with SD slots | ||
* Used market with adequate storage | *Used market with adequate storage | ||
* Demand transparency in pricing | *Demand transparency in pricing | ||
== See Also == | ==See Also== | ||
* [[MicroSD Card Removal Timeline]] | *[[MicroSD Card Removal Timeline]] | ||
* [[NAND Flash Pricing History]] | *[[NAND Flash Pricing History]] | ||
* [[Cloud Storage Lock-in]] | *[[Cloud Storage Lock-in]] | ||
* [[Planned Obsolescence]] | *[[Planned Obsolescence]] | ||
* [[Price Fixing]] | *[[Price Fixing]] | ||
== References == | ==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 | [1] NAND Flash spot prices - DRAMeXchange [2] iPhone component costs - TechInsights teardown [3] Samsung earnings reports 2015-2023 [4] EU Digital Markets Act investigation | ||