If I were them I'd offer a 32 GB version for $600, for people who will only/mainly use it as a phone, and not a full-time computer. It's still plenty of space.

That price level seems to have been pretty popular, and at that price level they may be able to hit the target. I'm not sure why they absolutely need to sell only a 128 GB version.

Also, they'd be insane not to add 802.11ac Wi-fi.