It was estimated last year that Apple takes home a stunning 94% of all profits made by all players across the entire smartphone industry. Its gross margin across all products hovers around the 40% mark. Apple knows how to make money from its products.
One way it does this is to sell its iPhones with a base level of flash storage that is just barely usable, and charge a hefty markup for higher storage tiers. Sure, you can buy a shiny new iPhone 6s for $649, but that gets you a measly 16GB. It’ll cost you another hundred bucks to get a more reasonable 64GB and another $100 again if you want to max out at 128GB.
I’ve touched on this topic before as part of a more general piece about whether Apple was getting a little too greedy, but it seems to me that when the company is supplying iPhones with 4K camcorders built into them, this is the point at which a 16GB tier becomes completely indefensible …
The storage requirements for 4K video vary with the implementation. For the iPhone, Apple gives a figure of 375MB per minute. A 16GB iPhone gives you around 12GB of user-accessible space. That means that even if you didn’t install a single app, store a single song or take a single photo, your shiny new iPhone can shoot just 32 minutes of 4K video.
Anyone who has ever attempted even the most amateurish of edited videos will tell you that you need to shoot way, way more video than you’ll have in the finished edit. A ratio of 10:1 is probably not untypical. So you could shoot enough material for about a three minute video.
With a more realistic mix of apps, music and photos, well, forget it. Even if all you wanted to do was create a video of your kid’s birthday party, copying it to your Mac the same day to recover the space, you’re going to be struggling.
But even a 64GB phone isn’t going to cut it on vacation. Let’s be generous and say that once you’ve installed some apps, added a few tunes and taken some photos that you’ve got 32GB of it free. That gets you less than an hour and a half of video. The only way that’s going to work is if you take a MacBook with you, faithfully transfer your footage every day or two and then delete the video from your phone. Not quite the carefree vacation spirit, somehow.
There are two ways Apple could provide iPhone users with more realistic amounts of storage: one is happening too slowly, the second is almost – but not quite – unthinkable.
The first approach is to increase the storage tiers to more realistic levels. Apple made a small step in this direction when it moved from 16/32/64GB in the iPhone 5s to 16/64/128GB in the iPhone 6. But we still have that 16GB starting tier, and even 128GB is looking a little tight at a time when a single app can be up to 4GB in size.
I bought the 128GB iPhone 6 and then 6s because I didn’t ever want to think about storage. I like to have a decent amount of music on board because I don’t yet live in the wonderful cloud-based world Apple seems to think we all do. There are plenty of times when I have poor or zero mobile connectivity, whether it’s on an underground metro system, on a plane or just out in the sticks somewhere. Streaming all my music just isn’t realistic.
Right now, I have 66GB free with next to no video (I tend to delete them after transferring to my Mac). If I’d gone for the 64GB model, I’d have space for just a few GB of video. As it is, I could shoot a little under three hours of 4K video. Personally, I’m a photo guy not a video one, but if I were a video guy that would already be a little tight for a vacation.
Realistic tiers in the age of 4K video and 4GB apps would, I think, be 64/128/256GB.
The second approach Apple could take would be to offer an microSD card slot. It wouldn’t need to enable app storage on it, just music and video would be enough. That way, it can continue to sell a 16GB iPhone and anyone who wants more storage for the heavy lifting can add it themselves.
And Apple itself of course includes an SD card slot in some of its MacBooks (both Retina MacBook Pros, and the 13-inch MacBook Air). But that slot is really only intended to provide a convenient method of transferring photos and videos from standalone cameras.
You can use an SD card for additional storage, and there are even some products specifically designed to essentially create a DIY fusion drive, where the combination of MacBook storage and SD card appears as a single drive. The TarDisk starts from $148 for an extra 128GB. But I very much get the impression Apple hopes most people won’t realize that.
But a microSD card in an iPhone is almost unthinkable for four reasons.
First, it’s notable that there’s no SD card slot in the 12-inch MacBook, and that design, I think, represents the future of the MacBook range. Apple’s mantra today is that connectivity should be mostly wireless. The SD card slot, even in MacBooks, is on the way out.
Second, there’s the iOS/UI issue. iOS has only a limited concept of what files are, so to store them externally, you’d need some tweaks at least to accommodate them. This isn’t necessarily a big deal. Apple could, for example, treat it like Apple Music, where files stored on the card are shown greyed-out with a card icon next to them, and you have to insert the card to get access. But Apple has steadfastly resisted the idea of a visible filesystem in iOS, and that would take us some way in that direction.
Third, there’s the Jony Ive factor. Suggest to him that we break up his sleek designs with an extra port, and I think his response would probably comprise three words, the first being ‘no’ and the third being ‘way.’
Indeed, we’re already headed in the opposite direction, the 3.5mm headphone socket almost certainly disappearing next time around, and I also expect Apple to switch from a physical SIM card to a virtual one as soon as possible. iPhones are going to get fewer ports, not more.
Finally, and most persuasively of all, there’s the financial argument. Techies may realize they can buy a low-storage MacBook and increase the capacity with an SD card, but that would never occur to the average person on the street. If they need more MacBook storage, they pay the Apple tax for it. But add an SD card slot to an iPhone, and it would be big news in the mainstream press. Everyone would see that they could do it. Apple would be losing $100 or $200 of almost free margin on its higher-tier phones. That’s just not going to happen.
There is a third possibility: an iPhone Pro.
We started to see a small differentiation between the iPhone 6 and 6 Plus with the optical image stabilization in the larger model. For the iPhone 7, it’s rumored that the Plus model will get a dual-camera system while the smaller model won’t. I’ve suggested before that Apple may be heading down the route of increasing differentiation between the two models.
I don’t think the iPhone Plus will get a microSD card slot, but I could see a possibility that, at some point, Apple could rebrand it as the iPhone Pro. That would justify a significant difference in specs, and it may then be that this model gets 64/128/256GB storage tiers.
To anyone complaining that there’s not enough storage in the standard iPhone for 4K video, Apple could point to the iPhone Pro and say ‘that’s the model we recommend for those who are serious about video.’
What do you think Apple should do? Are you happy enough with the existing tiers? Do you want more? Should Apple add a microSD card slot? And could the iPhone Pro be the way to go?
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