Memories — a pricing game

One of the decisions I had to make with my new iMac was how much memory to put into it. There's one school of thought that says you can never have enough memory, while another school of thought says that you shouldn't overspend on memory unless you've got applications that need it.

Each school differs in its philosophy, but there's one comment point of agreement: buying memory directly from Apple is an expensive affair. Actually, strike that. It's a very expensive affair. To throw some straight numbers out there, the base Core i7 iMac costs — according to Apple's Australian online Store at the time of writing — $A2889.01. (To digress for a second, what is it that Apple does with that extra cent? I somehow have the feeling that "meeting an accounting standard" might be the answer I'd get from Apple, if I got one at all.)

Anyway, that model comes with 4GB of RAM. Doubling up that RAM to 8GB would cost you an additional $A290. Want the full 16GB experience? Apple would like $A1960 of your hard-earned. Spending just $A39 more than that would buy you a completely separate 21.5" Core 2 Duo 3.06GHz iMac, by way of comparison.

RAM in the real world doesn't cost that much, by the way. Shopping around online, 16GB of RAM isn't cheap by any estimation, but I could very quickly sort out getting 16GB of completely compatible RAM for about half Apple's asking price. (For the record, my current budget meant that I'm sticking with 4GB ... for now.)

If you've been an Apple user for any length of time, none of this should come as any particular surprise to you. Apple's got a long history of charging a premium for its memory upgrades, arguing all along that they're more compatible or less error prone than "cheaper" memory. There's a certain small argument there, in that memory sticks put together by a guy in a shed in Dubbo probably aren't quite as good as Apple's, even if you do get a slab of beer with every order. But not all memory is sourced from Dubbo. In fact none of it is, just in case anyone was going to get noses out of joint.

Hello Dubbo. Please don't send hate mail.

Getting back on track, the argument as to the quality of memory only goes so far, if only because in actual fact there aren't that many memory foundries out there, and they're all pushing out much the same stuff. You're certainly free to buy memory from Apple, and there are some benefits, like the fact that Apple shouldn't (I won't say won't) fuss when it comes time for in-warranty repairs if the memory supplied is its own. Heck of a price to pay for something that should be assumed, but anyway ...

The reason this came to mind this week was because of a raft of stories talking up a Korea Times report that accused Apple of memory chip price manipulation. Here's CNET's take, and here's Mac Blorge's. Essentially, so the story goes, Apple's been making huge orders for the kind of flash memory that goes into iPhones and iPods, but actually only buying a fraction of the amount it orders, depending on the going rate for flash memory.

Quite how that works in a contract sense I can't quite get my head around, but I've got to presume that Apple's not actually breaking any particular corporate rules, otherwise lawyers on both sides would be baring teeth at each other in public, while privately heading to the marina and ordering extra-large yachts for their poodles.

It seems to me that if the market's built in such a way that this is a legitimate strategy for Apple, then it's sensible strategy. I've commented in the past that I quite like Apple's products, but a lot of its business strategy leaves me (as a consumer and as a journalist) a little cold. Or sometimes seething with fury, but I'll bite my lip there as I can ill afford to make a down payment on yet another lawyer's poodle’s yacht.

Apple's a business, and if there's a legitimate way it can do its business at less cost, it's basically obliged to do so, especially with the way shareholders rights work.

It does make for a funny juxtaposition with Apple's pricing on RAM, though. Yes, I know, Flash NAND memory and RAM aren't the same thing exactly. Still, I'd suggest that if Apple's playing hardball on NAND memory prices it's not exactly a stretch to suggest that it’s doing the same with other memory types, especially as many of the behind the scenes players are exactly the same companies.

Then again, I guess it's all still "good business", buying memory cheap and selling it for as much as you feasibly can.

What do you think? Is Apple getting bad press for good business? Do you only buy "Apple" RAM, and if so, why?

Discuss it with me at MacTheForum!


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