This weekend Wil and I went to a gathering of friends in Brooklyn, the majority of whom work in tech or design, and most of those, it seemed, were iPhone users. As expected one of the conversation topics was Apple’s new iPhone 6s, the price tag, the iPhone Upgrade Program, and what I thought might be disdain for the 16GB iPhone as the baseline retail price.
Surprisingly, out of nearly two dozen friends and co-workers, one third of those with iPhones had the 16GB model. That’s the one that gets heavily criticized by nearly everyone, so why was it so popular?
The 16GB model is entry-level, the lowest price iPhone 6 or 6s you can get, but there’s no 32GB model, so $100 more gets you four times the storage, all the way to 64GB. So, why didn’t those 16GB iPhone owners spring for the 64GB model?
For a few, it was price. Not everyone wants to spring for an extra $100 and they don’t (but they might later) think they need all those extra gigabytes of storage because all they use the iPhone for is a few basic apps, occasional photos (which get uploaded to Mac or PC, respectively, texting, phone calls, and email, none of which are huge storage grabbers.
For the rest, it was not the price they paid, it was usage. Their employers paid for the iPhone and for two reasons that meant the 16GB iPhone was in vogue. Why? First, employers wanted to pay the lowest price possible for an employee’s phone. Second, employers didn’t want too much storage because they found that employees tend to load up those phones with photos, movies, music, games, and social apps– instead of using it just for work connected productivity.
In other words, there are valid business and economic reasons why many employers prefer to buy 16GB iPhones vs. spending an additional $100 to get the 64GB model. For them, price is more important than excessive storage which may also impact employee productivity.
That makes sense, so we can almost excuse Apple for making a 16GB iPhone even if it’s obvious to those in the Apple Watcher Community that it’s a ridiculously low storage capacity.
There’s also a mathematical reason why the entry-level iPhone starts at 16GB. Apple would sell a 32GB model to those who buy a 16GB model now, but the iPhone’s cost is higher (probably not, much, though). However, many of those who buy the 64GB because 16GB is too low might also opt for the 32GB model, thereby denying Apple of the additional $100 in revenue (which is mostly profit).
What does Apple know about the 16GB iPhone model that we don’t know?
Apple knows that many customers will buy the 64GB model instead, and be perfectly satisfied with spending an additional $100. The company also knows that some people, especially businesses, don’t need or want the extra storage, so the minimum amount will suffice. For now. Apple still makes the sale, still gets the customer into the company ecosphere, and they also know that many of those will find 16GB to be too little storage and in the future will upgrade to a 64GB model, but not blame Apple for the situation.