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I have noticed that mp3 players around the 32Gb area seem to be fairly expensive; I haven't seen any for less than £150. Conversely, players with smaller storage can be found at a much lower price, for example 4Gb players are usually about £20.

32Gb MicroSD cards can be bought for around £12, so the price of storage does not appear to be the main factor.

If I were a cynic, I might think that companies are artificially inflating the prices of their higher-end models. However, I would like to know if there are any electrical or electronic limitations on creating cheap players with larger storage capacity. Perhaps there are problems with the battery life when using larger storage? Or difficulties with the ability to search the larger memory efficiently? Or is there a difference between MicroSD and the flash memory used in mp3 players?

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    \$\begingroup\$ "If I were a cynic, I might think that companies are artificially inflating the prices of their higher-end models." You are not cynical. Apple does this all the time with their devices, as do other companies of course. \$\endgroup\$ – Chris Laplante Oct 29 '12 at 15:50
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    \$\begingroup\$ Actually, I think the cynicism is well-founded :-). Also, the same logic extends to pricing of smart-phones and tablet computers from the likes of Apple, HP (while it was producing/selling Palm), RIM (Blackberry). Storage is one of the key price differentiators for a product line. \$\endgroup\$ – icarus74 Oct 29 '12 at 16:06
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    \$\begingroup\$ Cynicism has nothing to do with it; it's just good business to charge whatever the market will bear for a particular product. If you try to enter the market with a cheaper product, they'll just immediately drop their prices and eat your lunch. They've already amortized their startup costs and you'll be left holding the bag for yours. \$\endgroup\$ – Dave Tweed Oct 29 '12 at 16:38
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    \$\begingroup\$ It's called market segmentation. If you had just one model, then to maximize your profit you'd have to sell it at a low price. But at any price point, there are some people who would still have bought it at a higher price. So, to capture this potential revenue just sitting there in those customer's pockets, you create a "premium" model, which is the same as the cheap one, except it's slightly shinier and costs 3x as much. Now you're still selling a ton of cheap ones, and also making more money off of people willing to pay more. Profit! \$\endgroup\$ – Theran Oct 29 '12 at 17:29
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Companies just like having a line of products with increasing cost. It's just a marketing thing to separate the folks who don't care about price as much. Oh and to separate you from your money :) There's no technical reason for the price difference...

Source? I once worked for a company that made millions of mp3 player chips ;)

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  • \$\begingroup\$ This is what I feared. It just seems like there is such a gap in the market for a budget mp3 manufacturer to release a 32Gb player in the £80-£130 range, and make a killing. \$\endgroup\$ – Bill Cheatham Oct 29 '12 at 15:54
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    \$\begingroup\$ I've heard of people that have reflowed the memory chip off of their device and replaced it with a higher capacity chip. Fractions of the cost of buying the device with the higher capacity memory already installed. \$\endgroup\$ – Chris Laplante Oct 29 '12 at 16:04
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One metric is the cost of memory in $/GB which appears to be constant in your two examples around 4~5£/GB. This shows the inflated value of several layers of distribution, where the price often doubles after each in low volume, so you cannot compare bulk memory costs with MP3 products that incorporate similar memory. Keep in mind flash memory costs are rapidly reducing as density is increased by packing in more bits per cell.

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A number of years ago, Joel Spolsky wrote a great article on pricing. This is a must-read for every consumer as well as anyone doing business trying to decide how much to charge for something.

http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html

Joel explains how vendors can make more money if they charge different prices for exactly the same thing, such as a "pro" versus "personal" edition of a computer program, or adjacent seats on the same flight.

And note that this is done even when the products are not even differentiated, like having four gigabytes versus 32.

You can pay a lot more for exactly the same thing from the same vendor, such as as one-way air fare which costs more than round-trip fare.

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