Apple’s SSD Pricing is Bizarre

| Analysis

Apple has a Solid State Drive upgrade option for its newest MacBook Pros, but the pricing scheme is bizzarre. Here are some theories on what may be happening.

If you want to buy one of Apple’s newest MacBook Pros (MBP) with a 256 GB Solid State Drive (SSD), here’s the additional cost for each model.

13-inch, 2.3 GHz, 256 GB SSD option:       $650

13-inch, 2.7 GHz, 256 GB SSD option:       $600

15-inch, 2.0 GHz, 256 GB SSD option:       $600

15-inch, 2.2/2.3  GHz, 256 GB SSD option:  $500

17-inch, 2.2/2.3  GHz, 256 GB SSD option:  $500

The smaller the Mac and the less you pay, the more Apple charges for the upgrade. The largest difference is US$150.00 in the chart above. That appears bizzare.

MacBook Pro (early 2011) family

MacBook Pros, early 2011

First, I asked Apple public relations if there’s an explanation, and they declined to comment. Next, I asked a source, and the source said that it just could be the science of the pricing algorithm and didn’t know of anything special.

At TMO, we speculated that it might be due to the fact that the smaller case of the smaller MacBooks required a different kind of SSD that is more expensive. So I contacted a source at a company that sells SSD upgrades for the Mac. That person said that all these MBPs use the same 2.5-inch SSDs, and available space inside the case is not the issue. Scratch that.

My next theory was that Apple was blatantly trying to extract more money from those customers who were trying to spend less. I hoped that wasn’t true, but then I got another idea.

Apple is very much into product differentiation by price in order to avoid cannibalization and to preserve a sense of brand and proportional cost across its product line. So I started comparing to the MacBook Air and discovered the following:

MacBook Air, 13-inch, 2.13 GHz, 4 GB RAM, 256 GB Flash:   $1799
MacBook Pro, 13-inch, 2.30 GHz, 4 GB RAM, 256 GB SSD: $1849

If Apple hadn’t charged that extra US$150, the roughly equivalent 13-inch MacBook Pro would be less expensive than the corresponding MBA. But that wouldn’t make complete sense because the 13-inch MBP has an optical drive, additional ports like FireWire, and a much faster processor than the MBA. So the theory here is that Apple feels that customers should pay a premium for the low weight and small thickness of the MBA, but when it comes down to hard specifications, they’re not that confident that customers would (pun intended) buy into that.

The result is that Apple is artificially adding a price increment to the MacBook Pro SSD option to prop up design differences that didn’t fall into the “right” kind of schema. So the customer ends up paying for either Apple’s design shortfalls or marketing compulsions.

That’s a rather extreme way of looking at things, but not out of bounds for Apple.

Of course, one could argue that the retail price of the 320 GB on the 13-inch HD MBP is less than the price of the 750 GB HD on the 17-inch.  So you pay the difference. But, seriously? $150 difference? That’s also part of Apple’s inflated pricing scheme. By comparison, one can buy a TB internal drive these days for less than $100.

My final theory, saving the best for last, is that, based on information from one of my sources, SSDs are getting very popular and demand is going up. That’s creating a shortage and raising prices. Now in the case of Apple’s MacBook Pros, perhaps Apple knows from experience that they’ll sell more of the smaller 13-inch models than the more expensive 15- and 17-inch models. As a result, if the same percentage of people upgrade to SSDs across the line, the increased sales of 13-inch models means Apple must charge a larger premium for the SSD to maintain the desired profitability. Higher demand = higher price for a scarce commodity.

That doesn’t make complete sense to me because while some people who buy the 13-inch model are focusing on size and weight, I suspect (but I’m not sure) most are trying to keep the price down. And so I don’t believe that the same percentage of 13-inch buyers will opt for an SSD as the larger models bought by people with more money to spend.

However, maybe Apple isn’t sure. Or maybe I’m wrong about customer motivations. The net effect is that a premium is charged for SSDs on those models that are expected to sell the most and the 13-inch pricing scheme is also put into sync with MBAs. Welcome to the science of product pricing.

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Comments

kevinlane

No wonder Apple declined to comment.

Shadow9999

I don’t normally comment on articles, but I couldn’t resist here.

Did you actually consider that the more expensive configurations have more expensive drives that are being swapped out and that is the reason for the difference in upgrade price?

When you choose an SSD, you are not just adding an SSD drive, but REMOVING the ATA drive from the configuration.

If you take any of the above models and first select the “750GB Serial ATA Drive” drive, you will see that each of them has an identical $500 upgrade price for the SSD.

John Martellaro

Shadow9999: (and reader Martin). I understand, and I’ve noted that in the article. But that’s also part of Apple’s game.  $150 price span for a delta of 420 GB is equally bizzare and could be a whole new story.

MdMathias

Could be? I’m pretty sure that it IS a whole new story, considering that the entire premise for this article is flawed.

And besides, “Apple charges more for upgrades” is hardly news

John Lockwood

The MacBook Air does not use a standard 2.5” SSD which has a SATA controller, it uses a much smaller and presumably cheaper form factor. See http://arstechnica.com/apple/news/2010/11/tiny-macbook-air-ssds-for-toshiba-now-available-to-anyone.ars

While your price differentiation argument is a distinct possibility the above is another.

Shadow9999

To John Martellaro ... If you understood what I wrote, then you should delete the whole article as it is completely misleading. Apple charges the exact same price for the upgrades across all of the models.

These comments seem completely wrong to me:

“The smaller the Mac and the less you pay, the more Apple charges for the upgrade.”

“The result is that Apple is artificially adding a price increment to the MacBook Pro SSD option to prop up design differences that didn?t fall into the ?right? kind of schema.”

And if you understood that the pricing is not really different, then why write this:

“At TMO, we speculated that it might be due to the fact that the smaller case of the smaller MacBooks required a different kind of SSD that is more expensive.”

Now if you wanted to write another article talking about how Apple’s upgrade options are overpriced, I would agree with that 100%. Charging $150 for the extra 430GB is a lot (or $100 for the 250GB bump from 500 to 750). I love Apple computers, but I always order the bare bones model and then order upgrades from OWC and save hundreds of dollars.

However, back to the article, here is the pricing for hard drive upgrades across all models:

320GB Serial ATA Drive @ 5400 rpm
500GB Serial ATA Drive @ 5400 rpm [Add $50.00]
750GB Serial ATA Drive @ 5400 rpm [Add $150.00]
128GB Solid State Drive [Add $250.00]
256GB Solid State Drive [Add $650.00]
512GB Solid State Drive [Add $1,250.00]

p.s. Looking at OWC, the SSD upgrades are not as outrageous as some of the other Apple upgrade pricing (like RAM). OWC charges $250 for the 128GB drive, $510 for the 256 and $1579 for the 512.

DeveloperED

Seriously?  Just buy an SSD and install it yourself…  Its the cheapest way and you get exactly what you want…

jameskatt

Look into the OCZ Vertex 3 SSD.
It is TWICE AS FAST as the OWC SSDs and has a better Sandforce controller.

The OCZ Vertex 3 SSD 240 GB model is $499.

OldGuy

Shadow9999 has it right. The pricing of the replacement - the SSD - is the same. It is the credit for what is being removed that varies, and that difference is strictly based on size.

End of story.

John Martellaro

Not quite.  Apple inflates the pricing on the drives going from small to large in a way favorable to them.  Then, they turn around and exploit that inflation to charge more for the SSD on the smaller MBPs.

James

What about research and development costs, these must be factored into the price.

Chandra Coomar

Oh dear!
How sad!
But never mind, eh?
The sun will still rise tomorrow.
Ho hum.

daemon

What about research and development costs, these must be factored into the price.

You’re right! Thank god for Steve Jobs inventing the Solid State Drive! What’s that you say? Oh, Steve Jobs didn’t invent the solid state drive? Well surly Steve invented the Serial ATA interface!

John Mitchener

I understood that Al Gore invented all this stuff…

P1h3r1e3d13

John:
Apple DOES NOT charge more for the SSD on the smaller MBPs.
Shadow9999 has proven this to you.
Please delete this misleading ENTIRELY WRONG article.

John Daishin Buksbazen

Oh dear!
How sad!
But never mind, eh?
The sun will still rise tomorrow.
Ho hum.

Chandra’s a voice of sanity, and a breath of fresh air.

Thank you, Chandra!

Bill

The price is not determined by the components but by the value of the total device to the consumer.  The tech and cost don’t have to match.

i_newit

Yes, it cost more for upgrades.

Have you ever purchased a water pump for your car?  Have you ever paid to have it installed? Do it yourself? Yes there is always a price difference. 

Same for computer components. Especially when you know that the newly installed drive will be covered by the same Apple Care warranty that came with the computer.

I can buy and upgrade my own computer components in my shiny new laptop, but if it breaks and I bring it to Apple for warranty, what are they going to tell me????

cmfox1970

Sorry, John, but Shadow9999 has it right.  This is a non-story based on a completely flawed analysis of the pricing structures.

zingbot

You may get to the bottom of it, but I figure why bother.  It’s Apple which is primarily a hardware company, and they over charge by a little over double for the same hardware you could get for any pc not delivered by apple.  But even if that is not figured out.. 1TB HD’s can be had for $59-$79.  I have no idea why apple would even offer stone age 320GB or 750GB HDs, other than to cheat their customers out of something.  HEY, comcast still only gives out 120GB drives on their HD DVR’s.  That’s because these stone age drives are CHEAP for the company to get. Apple does the same by giving out older technology at inflated prices.  It’s even true on desktops.

I got an i7 based system a year before apple introduced i7.  I’d talk to friends with macs and they’d speculate what the new chip would be.  I told them, likely i7 and then figured it would be something unheard of.  My i7 setup was only $700, and can run rings around a typical $1600 core2duo imac in rendering and my friend saw it and it made him sick, lol.  but he said it was cool.  Months later they finally came out with i7 imac for like $2000.  I mean come on.  A year late and double the cost.  No wonder people hackintosh.  Oh, and I briefly showed him that too for kicks before putting windows 7 back on. 

The SSD option is just another example of them charging a premium.  Plus, the OS also doesn’t offer the much desired TRIM command that’s often mentioned in mac forums.  My SSD upgrade, which has higher specs than the one offered from apple, is 240GB and was $419 LAST YEAR! Actually this month, OCZ will offer an SSD with nearly double the performance of the apple drive for only $540!  No wonder people end up on OWC. But even that is priced higher than my deal.  I have, however seen some mac users buying my same drive.  But again no trim.  So it’s absurd that apple wants $500 to $650.  wow!  Main point is apple charges too much for hardware and they have a way of doing it.  So people are going to always see that reflected in the products pricing.  Basically, even if they didn’t play with pricing, they get you before you even start anyway.  And then sometimes they get you afterwards, taking advantage for simply popping in ram chips, or the price of their apple scare, or easily voidable warranty and so on.

Bill

Prices are driven by demand.

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