Most tech buzzwords turn out to be short - live fads . But cloud computing , an industry obsession long before AI and spatial computer science grabbed the glare , has quiet accomplish its early promise to a degree that is becoming a job for Apple ’s bottom crease .
The mind of swarm computer science is a simple one : Users offload data , apps , and operation from their twist and stack away them in the cloud , by which we simply mean a third party ’s server . offer you have access to a true internet connectedness , and believe the security and secrecy credentials of your cloud provider , this prepare life easier . It ’s easier to work across multiple devices , and the storage burden on each gadget becomes far lighter .
The problem , as far as Apple is concerned , comes when customer become so accustomed to a lighter entrepot incumbrance that they lower their ironware purchasing requirements .
The iPhone Pro Max has started at a hefty 256GB of storage for two years while the other models all have 128GB.
On Wednesday the analyst company Consumer Intelligence Research Partners ( CIRP ) published a new report entitledAre iPhone vendee in the end Ready to Rely on the Cloud?This found that premium iPhone customers are becoming less inclined to spend surplus for additional storage .
In the quarter end December 2024 , the proportion of top - ending buyers ( which means buyers of the iPhone 16 Pro and 16 Pro Max ) who paid for storage beyond the baseline allocation was 44 pct , down from 48 percent for the equivalent models in the equivalent one-quarter a year in the beginning . similarly , store upgrading among buyer of “ flagship ” fashion model ( the iPhone 16 and 16 Plus , or 15 and 15 Plus the year before ) fell from 48 percentage to 42 percentage .
This might not fathom like much , but those small percentages add up quickly , peculiarly when charge extra for more storage has long been one of Apple ’s most reliable revenue streams . A service line ( 256 GB , $ 1,199 ) iPhone 16 Pro Max has a big earnings allowance , but this pales in comparison with the 1 TB , $ 1,599 model because store component part only are n’t that expensive – not anywhere near . ( avowedly this is a huge simplification , but see for a1 TB SSD on Amazonand see if it costs you $ 400 . ) In ironware term , storage upgrades are about as close to pure gain as it gets for Apple .
The iPhone Pro Max has started at a hefty 256GB of storage for two years while the other models all have 128GB.
The iPhone Pro Max has started at a hefty 256 GB of storage for two years while the other manikin all have 128 GB .
Connor Jewiss / Foundry
This name it a problem when customers unlade more and more of their data to the swarm – streaming songs from Apple Music or Spotify , storing photo and videos in iCloud – and there is n’t the same need for a bombastic depot allowance . The amount of storage Apple presently offer with its baseline iPhones is enough for most people , and that ’s cost the company money .
Of course , an nimble and onwards - looking company can swivel to a certain extent and make money from this drift in other area . Apple Music itself is a tax income driver , as is iCloud . avail is indeed a uniform increment area … but then again , inQ4 2024the integral Services department ( which include the App Store , AppleCare , and a circle of other things that are n’t related to cloud computing ) brought in $ 25 billion in revenue , compared to the iPhone ’s $ 46.2 billion . It ’s not really comparable .
At the same clip , the course is not universal , and CIRP actually catch anincreasein depot rising slope among purchaser of the remaining “ legacy ” phones , which rose from 38 per centum to 48 percent . That ’s supernumerary money get in . Perhaps it can make up for the lose upgrades at the high close ?
Up to a compass point , and that ’s all . It ’s not surprising that bequest buyers are more inclined to pay for surplus storehouse , part because they start with less ( the baseline is just 64 GB for the iPhone SE ) and partly because both the phone and the upgrade are tawdry . The baseline 64 GB iPhone SE is currently $ 429 , while the 256 GB model is $ 579 . That ’s a maximal upsell of $ 150 on a equipment that starts with a far abject profit margin in the first place .
Can we expect a 64GBiPhone 17as Apple addresses this distressing vogue ? Probably not . I suspect that the cat is out of the bag as far as cloud computing is occupy , and dear storage upgrades may become a thing of the past , except for a little niche market that needs unusually large storage allocations for professional reason . But this is bad news for Apple , and we should n’t be surprised if price begin to cower up as the ship’s company looks to bolster its profit margins in other area .
