Apple's huge memory markup
If you plan to buy Apple's new iPhone 5s, you're faced with an important choice: Go with the 16GB model for $199, the roomier 32GB model for $299, or the 64GB version at $399. That's a lot more money, but if you've been using a 16GB smartphone as I have, you're aware of how annoying it is to constantly juggle music, photos, and apps as you run out of space.
Is the higher price fair? Not exactly. It turns out that the price you pay for extra storage is significantly higher than what the memory actually costs Apple -- four times as much, to be exact, according to Bloomberg News. Of course, Apple isn't going to sell components for the same price it pays, but the exorbitant markup is a major factor in Apple's enormously profitable iPhone business. Notably, that markup is much higher than that of its competitors.
AT&T, for example, sells the 16GB Samsung Galaxy S 4 for $200 on contract. The same phone with 32GB of memory costs $250. Samsung may have a small cost advantage because it makes its own memory, but the savings can't explain the huge price gap. The mobile memory markup accounted for 25 to 40 percent of Apple's profits in the last quarter, according to Bloomberg.
Samsung's sneaky test results
As technology and technology users have grown more sophisticated, few of us pay much attention to what we used to call "speeds and feeds." But careful reviewers and some companies still take benchmarking seriously, and they spend a good deal of time and money to do it right. When a major company finds a way to game those results, it's a serious breach of trust.
Samsung is falsely inflating the scores of its new Galaxy Note 3 smartphone, according to a carefully reported story by Ars Technica. The story says Samsung plays games with its products that have the effect of inflating the new smartphone's performance scores by up to 20 percent when it specifically identifies popular benchmarking software is running, such as Quadrant, Geekbench, and Linpack.
Samsung has been caught gaming the system before, and while it has never, to my knowledge, admitted it, the evidence is clear; you'd think that at the very least it would stop doing so. Ironically, the products in question are quite good, and it's not likely that more than a relative handful of the millions of people who buy them know or care anything about benchmark results. (According to the respected tech site Anandtech's tests, the only mobile device makers who don't game their results in benchmarks are Apple and Motorola Mobility. Kudos to those two, and shame on everyone else.)
Samsung has also come under scrutiny for violating court directives regarding secret Apple-Nokia licensing arrangements disclosed to its outside lawyers. It appears that Samsung is now stonewalling the court's investigation after first being insouciant about its executives accessing the verboten information.
Am I picking on these three companies? I am. Google is not the only technology company that gives money to ALEC, and Apple isn't alone in overcharging for components. But they, and Samsung to a lesser extent, are the leaders of the technological revolution sweeping the world. They claim to live by a higher standard than the rest of the industry -- if only it were true.
This article, "Profit or principles? Google, Apple, and Samsung have made their choice," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.