Apple has come under fire for continuing to offer it's entry-level iPhone with just 16GB of storage. Its an invalid criticism for two very important reasons, only one of which is directly related to Apple's bottom line.
First of all lets talk about the obvious one: Apple knows that consumers will upgrade to the 64GB version which is infinitely more profitable thanks to Apple's ability to purchase storage at steep discounts. The base model doesn't have enough storage to be a viable choice for consumers. And the more websites ding Apple for that choice the more they reinforce the message that you need to upgrade. Apple shareholders can start smiling about now.
So far, so straightforward. What about the second reason?
That's the enterprise. The iPhone has proven to be a popular pick for enterprise customers. Providing employees with an iPhone is seen as a perk as well as a business tool. For Apple it's a business it wants to encourage. And because enterprise customers are used to buying at steep discounts Apple needs to keep the build price down. How much of a discount? Around 30% off the retail price charged to consumers.
These customers don't care about storage and 16GB will do it for them.
If Apple were to upgrade the base iPhone to 32GB it would make less money on the enterprise and also discourage consumers from upgrading to the 64GB version. That makes absolutely no business sense.
If you are a consumer then you should ignore the 16GB version of the iPhone and treat the 64GB version as the entry-level. Enterprise customers will of course be ignoring everything but the 16GB version.