Apple Will Save $3Billion Next Year By Continuing To Offer iPhone 16GB Model

Apple's decision to offer 16GB storage, instead 32GB, in its base model iPhones has been demystified. Reportedly, the company will make an extra $3 billion by simply offering 16GB storage in base model of iPhones.

The 16GB is hardly enough for storing pre-installed software and apps, but Apple continues to sell it as an entry-level model.

According to an analyst Neil Cybart of Above Avalon, Apple makes an extra $3billion every year by not doubling the amount of minimum storage every time a new model is released.

According to Cybart, by limiting storage on entry-level phone, customers are more likely to upgrade to a larger, $100 more expensive model. Cybart also estimates that the 64GB model will be the most popular of the three.

'Apple's decision to keep the entry-level storage tier at 16GB for the iPhone 6 and 6 Plus, despite doubling the other capacities to 64GB and 128GB, continues to raise eyebrows,' Cybart writes.

'Apple's near-term motive behind keeping the 16GB capacity option is pretty clear: get people to buy the 64GB option.'

Cybart added that the Apple's strategy is more complex and forward thinking than what we all now think.