Report: Apple Has 3 Billion Reasons For Their 16GB iPhone 6

On launch, the iPhone 6 and 6 Plus were found to offer a base-level 16GB storage. Many wondered why Apple wouldn't up the entry level storage option to 32GB, but the answer was easy: they want you spending more. The next available option, 64GB, is a $100 premium over the 16GB variant, which blindly encourages you to spend more. How much more? A new report details how Apple may earn $3 billion in 2015 from their internal storage play on consumers.

Apple analysis blog Above Avalon points out that if Apple continued to offer more storage at their lowest tier, consumers would opt for that and stay there. That's a potential long-term concern for Apple and their bottom line.

If we stay on the lower end of the memory spectrum — and thus spend less overall — Above Avalon thinks this affects the average selling price of iPhones by hundreds of dollars. Similarly, an uptick in pricing for more memory (Apple, like all companies, makes a lot of net cash from memory in phones) protects the brand and encourages consumers to have a phone that can do more.

It also means the iPhone may someday edge itself from the 16GB base level, instead bringing back the 32GB option as the starting point — and charging more.

It's a similar play we find with the iPhone 5C, which is offered with a base 8GB storage from Apple. The difference there is that the iPhone 5C has no upgrade option; unless you want to buy an iPhone 5S, which offers 16GB or 32GB memory options.

Let's be frank about it, though: 16GB on any phone is totally inadequate unless you're just using it for the simplest of tasks. If you have the luxury of choosing between a 16GB iPhone 6 and 64GB, you're going to choose the 64GB every time. What Apple does with their base offering next year is unknown, but if it's still 16GB, you can safely assume the semi-forced upgrade scheme is working well.

Source: Above Avalon

Via: The Huffington Post