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

By Kamal Nayan - 24 Dec '14 00:24AM
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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.

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