Home Apple The Real Reason Apple Still Sells a 16GB iPhone

The Real Reason Apple Still Sells a 16GB iPhone

While now offering larger storage capacities, Apple still sells a 16GB iPhone, and here’s the real reason why.

With the release of the iPhone 6 back in September, Apple changed up its storage tier system for the first time in several years, getting rid of the 32GB version and adding on a 128GB model. However, the 16GB model remains alongside the 64GB variant.

After seeing this change, many users would simply think that Apple is keeping the 16GB model around because there are plenty of users that just don’t need a lot of storage, and while this may be true, that’s not what Apple is thinking.

The storage tier change also led to other questions, like why the 32GB variant isn’t the base model.

iPhone-6

Apple got rid of the 32GB storage tier for the iPhone and iPad, keeping the 16GB model around as the base model, which led to many iPhone users scratching their heads and asking, “Why didn’t Apple just make the 32GB version the base model?”

It certainly would be good for consumers, as they’d be able to spend the same amount of money on a 32GB model that used to be the same price as the 16GB model, but it wouldn’t be a very good business model for Apple. However, that’s not because of the higher cost of building a 32GB iPhone over a 16GB iPhone.

If the company did make the 32GB model the base model, there would be fewer and fewer buyers going for the 64GB iPhones, thus spending less money that doesn’t go into Apple’s pockets.

A 32GB base iPhone model would essentially cannibalize 64GB and 128GB iPhone sales.

iPhone-6 copy

The real reason Apple still sells a 16GB iPhone isn’t because they know plenty of people don’t need a lot of storage. It’s to get users to spend more money and upgrade to higher-capacity models.

While there are plenty of users who don’t need more than 16GB of storage on their iPhones, Apple also knows that 16GB isn’t enough for most users, and that’s precisely the reason why they still sell it, so that users will spend more money to get the 64GB version or even the 128GB model.

Furthermore, the reason why Apple got rid of the 32GB is because it most likely took a vast majority of sales away from the higher-priced 64GB iPhone.

If you take the 32GB model away, buyers are only left with the choice between too little storage and too much storage. Most of the time, users are going to go with the more expensive higher-capacity models “just to be safe.”

iPhone-6-pair

Yes, the 64GB model is now the same price as what the 32GB model used to cost in the past, making it seem like a better deal overall, since you’re spending $100 less than what you would spend in the past for a 64GB iPhone, but the difference in manufacturing costs between storage sizes is extremely negligible.

Putting an extra 48GB in the iPhone 6 doesn’t cost Apple $100, and putting an extra 64GB in the iPhone on top of that doesn’t cost them an extra $100. It actually only costs Apple a few dollars more to put 64GB into the iPhone 6 as opposed to just 16GB, and if you buy the 64GB model, you just put a lot of money into Apple’s pockets.

More specifically, Apple pays around $0.42 per gigabyte for storage in the iPhone, which means the difference between a 16GB iPhone 6 and a 64GB iPhone 6 is around $20, but you’re paying $100 more for the privilege.

In other words, Apple’s new 16GB/64GB/128GB storage tier is the most profitable storage tier system they’ve ever had.

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13 Comments

  1. Guido

    12/28/2014 at 1:23 pm

    Nonsense. They do it for the same reason they sell MacBooks with 128 GB hard drives and no CD/DVD: because they believe Cloud storage is the future.

    Reply

  2. Tun Win Naing

    12/28/2014 at 4:28 pm

    iCloud is there for 16 GB buyer. The profit reason might be also another factor.

    Don’t forget Apple sell system for customer not only device.

    Reply

  3. EJ

    12/28/2014 at 4:50 pm

    With automatic upload to iCloud and the ability to leave only low resolution photos on the device, 16gb goes a lot further now. No longer do you have to delete photos when you run out of space on your device.

    Reply

    • Pete

      01/23/2015 at 12:52 pm

      Sorry to break it to you I sheep, but A LOT of iPhone users still have to delete photos, apps, music, and anything else that takes up more than 2mb.

      Reply

  4. MediaNerd

    12/28/2014 at 6:02 pm

    I also disagree. The reason they turfed the 32 GB model is to keep the base iPhone at an affordable price, and then upsell the user on buying more storage space in the cloud. My wife bought a 16 GB iPhone 6 and immediately bought another 16 GB of cloud storage. She will now pay a monthly fee to Apple for the full two years of her contract as opposed to paying a flat fee for the extra space on the phone. Pretty smart if you ask me.

    Reply

  5. ChinaUser

    12/28/2014 at 7:09 pm

    Drivel. And horribly written. Didn’t your English teach tell you not to repeat yourself? And repeat yourself?

    Reply

  6. jimgramze

    12/28/2014 at 7:25 pm

    I can get along fine with 16 Gig, I have for years. Ever hear of cloud storage and streaming? Some people don’t want to keep a ton of stuff on a mobile device.

    Reply

  7. nadir

    12/28/2014 at 10:22 pm

    I agree.

    Especially in 3rd world where internet connection doesnt exsist or very expensive, selling 16g iphone 6 is same as selling a phone with dial up.

    Apple has became the new Microsoft

    Reply

  8. Tony Lancaster

    12/29/2014 at 3:31 pm

    On the subject of the writer’s English… ‘less and less buyers’ you mean fewer and fewer!!

    Reply

  9. English major

    12/29/2014 at 4:29 pm

    Are you dip shits really giving out English lessons on his article? Troll your mom

    Reply

  10. Tony Lancaster

    12/30/2014 at 12:21 am

    Hardly trolling to point out grammar mistakes, and why get all aggressive English Major? And besides it matters that this writer, who is handing out his wisdom and reasoning fails on basic education. Why would I trust someone who expresses his views through the medium of writing and yet fils to understand its most basic rules?

    Reply

  11. Tony Lancaster

    12/30/2014 at 4:23 am

    … oops hoist by my own auto correct… ‘fails to understand’

    Reply

  12. Johan

    03/10/2015 at 7:16 pm

    Could have been written in one sentence.

    Reply

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