And yet the example I gave isn't BTO. The 512gb 8gb mini is a stock config, retailers should have it, in stock. Yet it is 33% more expensive than the 256gb 8gb base model, the only difference being an extra 256gb NAND. It's obvious Apple's margins are MUCH higher on the 512gb model. R&D costs are the same, distribution costs are the same, everything in the machine is the same, the only difference is that extra NAND added at the factory.
You'll also notice that your comment isn't the one I was responding to.
I agree with you that everything in the machine is the same except for the RAM/Flash and that the price of upgrading likely exceeds the cost of those components alone.
Remember, margin decisions are made for the product line, not a single product alone. Apple doesn’t say “let’s set the margin on the base model and see what we can squeeze from the suckers”, they say “based on decades of sales data we expect a particular mix of sales, and need this margin to justify the product line, so we recommend this pricing model to achieve those aims”.
CostOfMac=CostOfSystem+CostOfStorage
So, if the margin is higher on the higher cost products, and lower on the lower cost products and the difference between the them is more than than the difference in the CostOfStorage, then the discount is on the System.
You can't explain things to people who don't want to understand.
Yeah, I've been finding that too...
I doubt Apple is making buyers of higher configs subsidize buyers of the base model to increase market share etc, they're selling the base model at a profit too.
Subsidies don’t imply selling at a loss…. It implies a transfer among funding sources to make something more affordable.
My whole point was that margins (not merely prices) are higher on higher configs, which is undoubtedly true, and if they are paying more it's because they're getting something more than those extra bits of NAND, something buyers of the base model are not getting. I assume that to be longer expected service life. On the other end, grannies for whom 256gb are plenty also don't need an M2 chip or superfast thunderbolt ports, so why are they paying for that?
Thanks for fleshing that out a bit further. That helps me understand your thinking, at least. I still disagree with your take, though.
What I think the buyers of higher end machines are getting by paying more is a machine more capable of satisfying their higher end needs.
Remember: pricing is set at the level a customer is willing to pay and the company is willing to accept. A customer is willing to pay a price at which they value the product more than the money. At the higher priced end of the lineup customers either value the product more (eg. they can earn more from their business by using it, have a hobby they particularly enjoy, or find status in the item) or the money less (eg. they're wealthy enough they automatically buy up market because it saves them effort evaluating different products or it makes them feel good to spend it). At the lower priced end, they either value the product less (eg. all I need is something to browse the web, write a term paper on, or access my companies online accounting tools) or the money more (eg. they'd like the fancier one but also need to replace their refrigerator this year and can't afford both).
As far as why grannies are paying for an M2 chip they don't really need: they aren't. As you and I agreed above, those buying the base model aren't paying as much for it. Think of the discount as compensating for the parts they aren't using. Apple could add an M2 Gimp to the lineup below the M2 but they've probably done the math and decided it's not worth the added production and support cost and better for the product as a whole if people running Safari, Chrome, Excel and Word get the best single threaded performance they can.
Very often when a company does offer a gimped version of a system chip, it's actually the same basic device as a higher end component to maintain economies of scale but limited either by software or hardware (maybe by disabling functions on the die itself) to force the market segmentation. Apple chose not to play that game, and gives the full performance component and differentiates solely by storage.
What you call marketing I call a subpar pricing structure on a subpar lineup of configs that only exist because the wrong incentives are allowed to remain in this industry, specifically, but not only, the incentive to make devices less durable.
Your pricing theory relies on the assumption that the customer is an idiot and that Apple is conniving but naive. I don't believe that's generally true. I think the typical customer is quite aware of their needs. I think Apple is quite aware of the reputational damage that would come from selling people products that don't live as long as those customers expect and the fact there are other companies out there ready to take those customers if Apple disappoints them. If you take out the assumption that everyone but us is a fool, then your theory gets pretty weak.
