Nick Bilton seems confused about the iPad

Nick Bilton of the New York Times answers the question that many iPad customers are considering this week: which model should I buy? Unfortunately, he goes off the rails in delivering an answer.

Bilton accurately notes that the entry-level iPad mini sells for $329 (16 GB, Wi-Fi), while the top-of-the-line model goes for $659 (64 GB Wi-Fi plus cellular). Then he gets into trouble:

“So what do all the extra Benjamin Franklins get you? Not much, really. Each rung higher on the iPad Mini ladder will cost you $100 for a slight memory increase.”

Here, Bilton makes the common mistake of confusing “memory” with “internal storage.” The terms are not interchangeable. Consider an office desk. It has a big, flat surface and many drawers underneath. The drawers, which are full of files, project materials, pens and so on, are like the internal storage. They hold your stuff until you want to work with it. To work with something, you pull it out of a drawer and place it on the desk’s suface. The surface is like the a computer’s memory. The more bigger it is, the more you can work with at once. I might be nit-picking, but this is a pet peeve of mine.

What Bilton says next really goes off the rails:

“The company charges $100 to go from 16 gigabytes to 32 gigabytes with the iPad Mini. Compare that to the same upgrade from a 16-gigabyte thumb drive to a 32-gigabyte thumb drive: the larger one is a whopping $10 more.”

What? Did he really just compare buying an iPad to buying a flash thumb drive? Because that would be ridiculous. iSuppli put the costs for iPad flash at $30/$60/$120 back in 2010, and most recently, $16.80/$33.60/$67.20. Even still, we have no idea what Apple pays for iPad flash, nor what its markup is. I’m confident, however, that it isn’t what manufacturers of cheap thumb drives experience. He also completely ignores that the iPads with cellular connectivity contain additional hardware that further drives the cost.

I agree with Nick’s conclusion, that customers willing to pay $15 to Rdio, $7.99 to Netflix and $7.99 to Hulu Plus every month [1. Consider, though, that a year of Rdio, Neflix and Hulu Plus costs $371.76. You could buy another iPad mini!] (and optionally $30 per year to Pandora) should consider the 16 GB iPad mini. Since cloud services reduce the number of space-hogging files stored locally, there’s less of a need for the high-capacity models. He just has a little trouble getting there.