Would you pay $600 (£446) for something that costs $192 (£142)? Apple is betting you will. The company is charging iPhone buyers $600 (£446) for extra storage, while the components behind it are estimated to cost just $192 (£142).
Apple says parts are getting more expensive and its profit margins are under pressure. Yet a new analysis shows that when you buy an iPhone, one of the costliest add-ons, more storage, still carries a hefty markup.
A comparison of Apple's latest models reveals that, even as memory prices have soared, the company continues to charge more than three times its estimated direct cost for additional storage.
And the gap is even more striking when compared with last year's model.
Apple's $600 Storage Upgrade Leaves Customers Paying a Huge Premium
According to a Wall Street Journal analysis, upgrading an iPhone 18 Pro from 256GB to 1TB costs customers an additional $600 (£446).
However, Apple's estimated direct cost for providing that extra storage is just $192 (£142). That means the company is charging buyers more than three times what it spends on the additional components, despite the significant increase in memory costs.
For customers, that is a substantial amount of money to spend simply to have more room for photos, videos, apps and other files on their phones.
The pricing also comes as Apple warns that higher memory costs will put pressure on its profit margins during the holiday quarter.
But the latest figures suggest the company is still maintaining a considerable premium on storage upgrades, even as its own costs rise.
The iPhone 17 Pro Comparison Makes the Markup Even More Striking
The difference becomes even more eye-catching when looking at Apple's previous generation. With the iPhone 17 Pro, customers paid an extra $400 (£297) to move from 256GB to 1TB.
According to the Wall Street Journal's analysis, the estimated additional component cost to Apple was just $42 (£31). That represented a markup of almost 852 per cent compared with the estimated direct cost.
While Apple has since seen its expenses increase dramatically, the latest figures show that the company has not abandoned its lucrative storage pricing strategy.
Apple's cost for the storage upgrade rose from an estimated $42 (£31) to $192 (£142). The price customers pay rose from $400 (£297) to $600 (£446). That means Apple's cost went up by $150, but your price went up by $200.
In other words, Apple is paying considerably more for the components, but customers are also being asked to pay substantially more for the upgrade.
Why Apple's Storage Prices Have Attracted Criticism
Apple has long faced criticism for charging premium prices when customers configure its devices with additional memory or storage.
However, not every comparison is necessarily fair. For example, the solid-state drives used in Mac computers can offer significantly faster performance than cheaper third-party storage cards often used to highlight Apple's pricing.
That means comparing their prices directly does not always provide an accurate picture of what Apple is charging.
Nevertheless, the latest iPhone figures offer a more direct comparison because they examine the estimated component costs against the actual price difference customers face when choosing a higher storage tier.
And while Apple's rising memory expenses are a genuine concern for its business, the figures suggest that customers are still paying a substantial premium.
For anyone planning to buy an iPhone, it may be worth thinking twice before automatically selecting the more expensive storage option.
Check how much space you actually use, compare the available storage tiers and consider whether paying an extra $600 (£446) is really worth it before handing over your money.
