Apple's 16GB iPhone 6S is a serious strategic mistake | Hacker News Reader

Apple's 16GB iPhone 6S is a serious strategic mistake

vox.com

7 pointslighthawk6 comments

"A 64GB flash storage chip is more expensive than a 16GB flash chip, but it's not anywhere near $100 more expensive, so pushing people up the chain increases not just revenue but profit margins. [...] This highlights the fact that the margin-boosting potential of the 16GB iPhone 6S doesn't serve any actual purpose."

That's not the strongest logic. If the 64GB one has higher margins, adding a 16GB option gives buyers the opportunity to go for a lower margin product.

I think the reason the 16 GB version exists is to give money-constrained buyers an option to buy an iPhone without giving less money-constrained, but money-conscious, buyers a reason to also go for the cheaper model.

It is a common pricing tactic to have a premium product that no one buys because it makes the mid-range product seem more reasonable vs settling for the low-end.

This could be same thing in reverse. By having a low-end that is so low, it sets the expectation floor so low that the others seem like reasonable upgrades even though they are actually low/mid-range implementations at mid/high-end prices.

16GB is very appealing to people who do not use the app store at all. A number of people just use the iPhone as a (gasp!) phone with just calendar and contacts and a bit of email. For such a small segment, that makes the 16GB a logical loss leader to get people who would not ordinarily think of getting an iPhone and who then might go for the 64GB model a year later.

The entry-level 16GB model is still practical if you rely on cloud services for the storage and retrieval of media files. 16GB is still enough room for iOS, bundled apps, and a moderate number of third-party apps. That said, I think it's likely that the 2016 iPhone will start at 32GB.

What about RAM? Please don't tell me the iPhone 6S still comes with only 1GB of RAM in 2015 for $650+.

There are a number of articles that have have "confirmed" it has 2GB (I'm VERY happy about that).

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