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What's Behind Apple's Epic Memory Markup

Costs have plunged, but Cupertino’s prices aren’t budging
What's Behind Apple's Epic Memory Markup
Photograph by Lam Yik Fei/Getty Images

While all those new iPhone sales send Apple’s profit forecasts sailing past previous estimates, one big reason isn’t getting much attention: The company charges four times the going rate for extra file-storage space.

As with previous models, Apple is asking for an additional $100 to double the storage memory on the iPhone 5s and 5c, and $200 to quadruple it to 64 gigabytes on the 5s. A similar 64GB memory chip for phones running Google’s Android operating system sells for about $50 on Amazon.com. While the cost of smartphone memory has fallen 71 percent in the last four years—to about 60¢ per gigabyte, according to researcher IHS iSuppli—“Apple has never followed the trend in passing along the savings,” says IHS analyst Michael Yang. Apple spokeswoman Natalie Kerris declined to comment.