http://www.marketingwords.com/blog/psychology-pricing-produc...
Snippet from the classic experiment: For instance, a small popcorn would be $3.50. A medium-sized bucket of popcorn would be $7.50 and a large would cost $8.00. The mindset here is that “for only 50 cents more” you can get a much larger portion of popcorn. The same is true for fountain drinks at gas stations. Small = $.99. Medium = $1.49. Large = $1.59. Which sells more? Almost always the large for “just 10 cents more.”
For a parent buying for a smaller kid, a business/organization buying for its employees, or a senior citizen who just runs a few apps, it's ok.
It's obviously not for people wanting to record videos in 4K (or record videos in general -- lots of older people only record a few minutes or so a year, some grandchild's birthday or such).
If you do that a lot, you get a higher end model.
If entry level were 32 GB, many people would buy that.
However, anyone who's owned an iPhone before knows that 16 GB is far too little to hold even a small collection of songs, photos, apps, etc. By removing the 32 GB model and making entry level 16 GB, they cause most of us to bump up to the 64 GB instead --> $$$.
Not sure why I use so little. I take photos but generally use streaming music services rather that have a large collection of mp3s. Also I find the screen too small to watch movies.
Don't you cache music offline in Spotify or Apple Music? Streaming over cellular is pretty intense data usage and it seems like most of us don't have unlimited plans anymore, at least not without throttling.
I have a 32 GB which hovers around 1-2 GB available with me using 25 GB (assuming the size difference is OS and built-in apps). Around this point is when I start to notice apps getting killed from memory more aggressively and slightly more sluggish performance switching apps, etc.
If Apple had doubled the 16gb to 32, then many of the prior middle tier purchasers would now be drawn to Apple's cheapest tier, and Apple would lose that revenue, $100 per unit. At the same time, those that feel stifled by the 16 have more incentive to upgrade to the 64, at the same price as the prior 32.
Why is this still the case, years later? I think the issue is that 32gb remains the sweetspot for more than half of the potential customers, and if they offered it, their low end product will cannibalize their mid tier sales and cost them billions.
It happens all the time at parties. People try to take a photo, there is no room and they ask "What's wrong?". Their eyes glaze over when I try to explain how all those pix on their phone are using up the storage. Then they suggest deleting a couple SMS messages .... as if :-(
Maybe some people use phones differently than you.