Rene Ritchie, writing for iMore:
Capacity—how many gigabytes of data storage an iPhone, iPad, or iPod has—is just an easy way for Apple to market low, middle, and high-end versions of their iOS devices. It’s easy because everyone understands 128 is bigger than 64 is way bigger than 16. More money for more capacity is easy for Apple to do and for us to buy. Check out refrigerators, microwaves, television sets, cars, pasta—almost any consumer product. You’ll quickly see similar patterns.
I always had a feeling that the 16GB storage capacity was a sales tactic — “you could buy this one for $199, but you’re really going to wish you had the extra storage. I suggest buying the $299 model.” And because their using such a relatively low capacity compared to the middle tier, the customer thinks they’re getting a lot of bang for their buck by spending that extra $100.
There are still iPhone owners who are fine with lower capacities, though. My fiancée and several of our friends have 16GB and 8GB(!) iPhones and most of them don’t seem to run out of storage. These are people who never connected their iPhone to their computer, never purchased a single track from iTunes, and don’t take a lot of pictures — apps take up the bulk of their storage. They don’t have the same demands as power users do and they’re perfectly fine using an iPhone with (what we would consider to be) a paltry storage capacity.
Of that group, my fiancée is the outlier. She takes lots of photos and wants a sizable amount of music on her device, synced from iTunes. Because of that, installed applications is the area where she limits herself. She’d much rather have every Taylor Swift album accessible to her than install the latest Pac-Man endless runner. But, she’s also the sort of person who wants to buy an iPhone with a larger capacity. Her and I were both hoping Apple would increase the bottom tier storage to 32GB, so we’d both be able to save some money. But unfortunately, that doesn’t look like it’ll be the case.