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Internal Memory Storage: Apple’s Next Market Strategy

128GB is part of Apple's newest market strategy

[Photo Credit: GSM Nation]

Apple has done well to bring a 128GB iPad (and soon, a 128GB iPhone) to its current lineup. The memory storage size increase is a positive step for businessmen and businesswomen who simply need more storage for more file uploads, downloads, and other executive tasks. Apple has taken Microsoft head-on with its new large-size devices with large memory storage that can be used as a PC/laptop/tablet. If Apple wants to show consumers that we currently live in a “post-PC” era, what better way to do that than to take the traditional laptop and reduce it to a mobile tablet with a physical keyboard, for instance? The additional memory size will be a huge hit with business consumers who do not want to resort to a USB flash drive whenever their device memory is exhausted.

Today, consumers know Apple’s memory storage versions by heart (16GB, 32GB, 64GB); there was a time, however, when Apple sold 8GB versions of its iPhone and iPods. At some point, Cupertino decided to kill the 8GB versions of its devices because consumers want more data. The new 128GB memory storage size brings up a question that surfaced and dominated in its past: what does the new memory storage size mean for the smallest memory storage size currently (16GB)? Could Apple be prepared to eliminate its 16GB device in favor of a product line that consists of only 32GB, 64GB, and 128GB devices?

While this thought may seem silly at first, there is some merit to it. After all, the memory storage increase revamp will add to consumer loyalty. Consumers have always chosen the 16GB device in large numbers because many consumers are not hard-core gamers, photographers, or businessmen. The 16GB device has a current price of $200 with a two-year contract, but to increase the lowest device memory two-hundred percent (from 16GB to 32GB) while keeping the price at $200 for a 32GB (once 16GB), $300 for a 64GB (once 32GB), and $400 for a 128GB (once 64GB) may be just the thing that adds customers to the newest 128GB iPhone.

Next, the memory storage increase, should Apple bump up the storage, may encourage more spending in the App Store and iTunes. After all, hard-core gamers are not the only customers that want more storage; music and movie lovers do, as well. Customers who want more storage for their favorite activities are more inclined to make greater purchases in the iTunes store than they would on a lower memory storage device. It was reported by Forbes magazine a little over a week ago that iTunes profits were up by only $0.7 billion (from $3 billion to $3.7 billion) in Q1 2013. While $700 million is not a bad profit, it does not look well for a company whose budget ranges in the billions and has a current bank account totaling $137 billion. The memory storage will bring in more revenue and profit for iTunes and help Apple stay competitive against the likes of Rdio and Spotify, two Internet music streaming services. A rumor surfaced some months ago that Apple wanted to bring a “Spotify-like” Internet music service to its current programs; once the rumor hit the press, Spotify stock dropped 25%, leading many to believe that Apple would capitalize if it produced an Internet music-streaming service.

Apple’s tablets and smartphones have always been perceived as nothing more than consumer leisure products. Apple, however, has a greater goal in mind: its push to see iPhones and iPads in the classroom and business workplace show that Apple, like Microsoft, wants to tailor itself for businesses, too. The company has always been about consumer electronics, but its image could be changing in 2013.