Apple Inc (AAPL)

[Investors3]

Apple’s secret weapon is an unbelievable money-printing machine
Wednesday, August 11, 2021 8:25 am

The next-gen “iPhone 13” models are virtually guaranteed to put Apple’s secret weapon into action, as they’ll feature better cameras and faster Apple-designed processors than their predecessors.

Alex Webb for Bloomberg:

For all the technological wizardry, camera and chip improvements can seem a little uninspiring. The real magic is their effect on Apple’s earnings. Because… the chip and camera improvements bring a dual benefit to the Cupertino-based company: Not only do consumers pay a premium for the new features, they also usually end up needing more storage to make the most of those features. And storage, it turns out, is an unbelievable money-printing machine. In fact, it might even be Apple’s secret weapon.

Alongside other camera upgrades, the handsets will include a higher-quality video format called ProRes when they’re released in the next few weeks, Bloomberg News reported on Tuesday, as well as more chip updates.

With every improvement in image quality comes a commensurate increase in storage requirements. The new photo format that Apple added to the iPhone last year, branded ProRaw, is as much as 12 times larger than the standard JPEG. Bigger video files will exacerbate the trend.

Consumers’ need for more storage is enormously profitable. Where it costs the consumer $100 to add 128 gigabytes of storage, Apple is unlikely to pay more than $20 for the same chip. If you’d prefer to store the data remotely, Apple’s iCloud offering enjoys similar profit margins. Besides, those who have already made the choice to opt for a $1,099 iPhone 12 Pro Max may be less concerned ab

MacDailyNews Take: We don’t care that Apple’s “secret weapon” is an “unbelievable money-printing machine” (well, as shareholders, we do) just bring on the flagship 1TB iPhone 13 Pro Max!

https://macdailynews.com/2021/08/11/apples-secret-weapon-is-an-unbelievable-money-printing-machine/