As well reviewed as the iPhone 6 was, even the biggest Apple fans had a major problem with it — the entry-level model comes with just 16B of storage.
John Gruber, who is often very positive about Apple, called it “downright punitive” to only include 16GB of storage, considering how much space apps, videos, and photos take up these days.
And as we learned when iOS 8 launched, not having enough space can be a huge barrier when people want to upgrade the software on their iPhone. Software updates aside, having a 16GB iPhone can mean you won’t have room to do a lot of stuff on your phone, even something as simple as checking Facebook.
But even though decision to only include 16GB of storage is bad for you, it’s good for Apple’s bottom line. Analyst Neil Cybart of Above Avalon did some number crunching and estimates Apple will earn $US3 billion next year thanks to the 16GB iPhone 6 and 6 Plus.
Here’s how Cybart breaks it down.
Even though Apple kept the entry-level iPhone at 16GB, the mid-tier iPhone’s storage has doubled from 32GB to 64GB. The top-tier model has 128GB. This will cause a lot more people to go for the 64GB model, which costs $US100 more. In fact, Cybart estimates the 64GB model will be the most popular of the three.
This, Cybart says, will lock people into the middle-tier iPhone, even if Apple increases next year’s entry-level iPhone storage to 32GB. That will keep the average selling price (ASP) of iPhones higher than before, even as the cost of storage goes down. Put it all together with the cost of storage, and Cybart estimates Apple is on track to earn about $US3 billion in 2015, simply by making the entry-level iPhone 16GB this year.
Most Android phones allow you to add extra storage with an SD card. And even then, many of the top-tier Android phones start with 32GB of storage. Apple’s decision to keep the entry-level at 16GB may be good for profits and forcing you to spend at least $US100 more on an iPhone, but it’s a bad long-term decision to keep users happy.
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