Why Apple Is Laughing Straight to the Bank When We Buy 64 and 128GB iPhones

For years, Apple was able to swoon and hustle an additional $100 from its loyal customers, in exchange for an additional 16 GB of storage on their iPhone or iPad. And yet these faithful fanatics lined up around the block at the prospect of getting treated to that much sought-after memory upgrade.

Well, needless to say, we’re living in a slightly different environment now — one wherein Apple has found a way to essentially quadruple the memory offering in its devices, from 16 GB to 64 GB, and even from 64 GB to 128, for the same price increase of $100..

That sounds like a great deal, doesn’t it? four times, or double the memory, for what? Just what an extra 16GB used to cost? Sure, sure, that sounds great.. Sign me up, right? But, according to some new industry statistics, that excitement goes both ways, apparently, because upgrading to an iPhone — for instance, with 64GB of storage — will cost you an extra $100; however Apple only spends a small fraction of that when the company places orders for the bigger memory chips.

Both the iPhone 6 and 6s, for example, as well as the all-new iPhone SE, start out at just 16GB for the base model; while, for just $100 more, you can “treat yo self” to the substantially larger 64GB model.

That might be just fine and dandy for you, sure, but that’s exactly what Apple’s hoping you’ll think. That’s all a part of the company’s master plan, to eek out as much green as it can from its app hungry, photo happy customers who thrive off of those extra gigabytes.

According to the latest data from IHS Technology, it was revealed that Apple makes an additional $88 profit each time a user upgrades to the 64GB storage option.

Indeed. Longtime IHS analyst, Wayne Lam, recently told TechInsider that it only costs Apple about $12 more to build the 64 gigabyte model than the 16 gigabyte model — which is perhaps not all that shocking, seeing as how the company buys NAND flash storage for the iPhone, iPad, and iPod Touch in such massive quantities, their volume discount is likely unprecedented.

To break the math down for you: IHS estimated, last year, that it only costs Apple about $236 to produce an iPhone 6s Plus — however, the Silicon Valley tech-giant profits a whopping $513 from each handset sold, primarily thanks to the $749 price tag. In Apple’s defense, however, the cost of components doesn’t factor in the costs associated with engineering, software design and development, testing, marketing, and any other additional costs that might fall into the aforementioned categories.

IHS hasn’t as of yet done a component cost breakdown for Apple’s iPhone SE, unfortunately; however, Apple’s CEO, Tim Cook, has admonished these same types of component price estimations in the past — citing that they are far from the actual cost, when all other factors are taken into consideration. IHS, to be fair, has said that Apple’s incurred costs for components could change over the course of an iPhone’s life cycle — especially as extraneous factors, such as inflation and advancements in manufacturing techniques, unfold in the Far East.

Either way, though, it’s clear that Apple is making a considerable amount of money when you just gotta have all those extra gigabytes.

Learn More: iPhone SE vs. iPhone 6s vs. iPhone 5s Comprehensive Comparison – Which Is Right for You?

What are your thoughts about Apple making a bunch of extra money for extra storage? Do you think it’s fair of the company to profit so substantially? Let us know in the comments below!