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Will the cloud curb interest in 64GB IPad 2?

Lucas Mearian | March 4, 2011
With consumers increasingly turning to cloud service providers for data storage needs, analysts say buyers might opt for 16GB or 32GB models instead of the top-end 64GB iPad 2.

According to Gregory Wong, an analyst with research firm Forward Insights, Apple tends to set the bar for mobile market storage capacity points. The iPad's average selling price in the last fiscal quarter was $600, which equates to the $599 32GB model, according to Wong.

"I think people are buying based on the price point and not necessarily the capacity it has," he said. "I think in general, people don't know how much capacity they're using."

In fact, early mockups of the iPad 2 showed a 128GB model . But that may have proved to be too close to Apple's MacBook and MacBook Air laptops.

Apple's treading a fine line, Wong said, because the least expensive MacBook Air, with a 64GB of SSD, retails for $999 -- $300 more than the most expensive Wi-Fi-only iPad 2.

"If Apple were to double the capacity on the iPad, for one, the prices would have to come down quite a bit, and they'd have to consider how much overlap they'd have compared to the MacBook Air.

Apple makes a significant profit margin off of its SSD capacity. A good example of Apple's pricing for SSD technology can be seen with its recent release of the new MacBook Pro.

An entry-level 13-in. MacBook Pro retails for $1,199. The most expensive 15-in. laptop runs $2,199, and the top-of-the-line 17-in model will set you back $2,499. If you want to add a 256GB SSD to those laptops, expect to shell out an additional $500 to $650 .

While SSDs are still an order of magnitude more expensive than consumer hard disk drives, lower-capacity (64GB drives) can be had for an affordable $100 or so.

"They're probably [NAND flash memory] cheaper than anyone else, so I think they're making quite a bit on it," Wong said.


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